EXPECTING FOR A FAIR RULE ON LOGISTICS

Ocean Week
No. 141 / VI, November 7-20, 2007


Indonesia might soon issue a new transportation law, a new rule to synergize the three transportation modes : land, sea, and air transportation, in bid to prevent overlapping among operators.

Commending the new law, a source from Transportation Department disclosed in a discussion with Ocean Week, "We have to update our concept, meaning that transportation cannot be segmented anymore. Transportation is now running in multimodal system."

The source further said that in the future, Indonesia will need to adopt a total logistic system, toward the free trade system including the Asean open market. In addition, the system also needed to anticipate the new investment law, a new rule that gives wider opportunity to foreign companies to do investment.

But many parties, including local logistic providers, are so wondering with the new transportation concept, saying it is so potential for foreign companies' domination.

Moreover, according to the new bill relating investment, foreign companies can build a joint venture with local companies with shareholding of 49% at maximum. But, the transportation draft law (RUU) does not say in detail the sector of transportation that the foreign companies can be involved.

"They (foreign companies) can do investment from up-stream to down-stream," Bambang K. Raswadi, Chairman of Indonesian Stevedoring Companies Association (APBMI) told Ocean Week. "If they are allowed to invest in up and down stream, the national companies are threatened due to less competitive."

Bambang also explained that, though they would invest under JV with local companies, foreign companies would dominate in view of their strong capital. "Local companies might only get business in document handling," he said.

The progress of global integrated logistic system is also something that should be worried by national companies because under the system, the government connot do protection. "Indonesia must be affected by the system. Moreover the government tends to adopt the integrated logistic system (ILS)."

ILS that has been adopted by some neighboring countries remains the global business trend to cut borders among countries in doing business activities, though some of them still run protection. Some developing countries to protection through obliging the foreign companies to build JV with local companies.

Adoption of the ILS in the transportation draft law, according to Bambang, would threaten the national logistic providers. "ILS will be a threat for national logistic providers." Echoing the view, an executive from Indonesian National Forwarders' Association said, "ILS will give us disadvantage, the national logistic providers in particular."

Meanwhile, M. Kadrial, General Secretary of Indonesian Express Association (Apresindo), expect the national companies not to be paranoid. "I don't see any points that threaten the national companies in the draft. The government must be committed to make the national companies survive, I guess," Kadrial, who is also a Director of PT RPX Group, said.

RPX is a national leading logistic provider with seven business segments. The company is also acting as representative of US Fedex in Indonesia. "In addition to transportation RUU, post RUU also protects the national logistic providers," he said. [dj/ow]