Gov’t Issues Presidential Regulation on Public Service Obligations for Freight Transport

INDUSTRY.co.id - President Joko “Jokowi” Widodo Monday (12/04) signed Presidential Regulation Number 27 of 2021 on  the Implementation of Public Service Obligations for Freight Transport to and from Frontier, Remote, Outermost, and Border Areas.

The regulation was issued to replace Presidential Regulation Number 70 of 2017 which was not optimal in lowering the goods’ price disparity to ensure sustainability of freight transport services to and from frontier, remote, outermost, and border areas.

The Implementation of Public Service Obligations for Freight Transport referred to by the Presidential Regulation is carried out by the Central Government including land, sea, and air transport services.

In this regard, the Minister who oversees Government affairs in the trade sector conducts arrangements for freight distribution, data collection, monitoring, and evaluation of the goods’ type, quantity, and price from and to each region by coordinating with regional government.

Further provisions on other types of goods and the goods distribution regulation are regulated by a Ministerial Regulation that oversees Government affairs in the trade sector by considering inputs from Ministers and regional governments, as well as coordinating with Coordinating Minister who oversees Government affairs in the maritime and investment sector.

Freight Transport by Sea

It is further stated in Article 5 that the principles of the Implementation of Public Service Obligations for Freight Transport at sea are required as follows:

1. freight transport voyages are carried out based on tariffs and route networks regulated by the Minister and announced transparently on the IMRK portal;
2. providing treatment and service for all service users in accordance with the service standards set by the Minister;
3. maintaining safety and security of shipping and freight transport;
4. fulfilling the port facilities and infrastructure regulated by the Minister; and
5. considering efficiency and smoothness of freight transport.

The Minister assigns state-owned ferry operator PT Pelayaran Nasional Indonesia (PT Pelni) to carry out the Public Service Obligations for Freight Transport by sea as stipulated in Article 6.

The Minister may also select other service providers in accordance with the provisions of legislation in the procurement of Government goods / services sector if there are limited fleets from PT Pelni.

It is mentioned also in Article 9 paragraph (1) that “Every good transported through the Implementation of Public Service Obligations for Freight Transport by sea must be equipped with a Shipping Instruction Letter.”

Land Freight Transport

In terms of land freight transport, the Implementation of Public Service Obligations includes road transport and cross transportation. The Minister assigns state-owned transportation company Perum DAMRI for road transport, and / or state-owned ferry operator PT ASDP Indonesia Ferry for cross transport. It is stated in Article 11.

Air Freight Transport

Furthermore, regulations for air freight transport are set in Article 13 paragraph (1) which reads, “The Implementation of Public Service Obligations for Air Freight Transport is carried out through the Air Bridge program.”

The Air Bridge program includes Pioneer Cargo Air Transport activities and Cargo Air Transport’s Subsidy activities.

The Air Bridge program is implemented by the Minister through the assignment to state-owned enterprises engaged in air transportation sector for Cargo Air Transport’s subsidy and / or the auction process or other forms as stated in Article 14.

Funding

Provisions related to funding that are required for the Implementation of Public Service Obligations for Freight Transport are stipulated in Article 18, which is allocated from the State Budget, regional budget (APBD), and / or other legitimate sources in accordance with the provisions of laws and regulations.

Task Force Establishment

The Task Force is established by Coordinating Minister who oversees Government affairs in maritime affairs and investment sector to ensure smooth implementation of the tasks in supervising the Implementation of Public Service Obligations for Freight Transport. The Task Force consists of related ministries and institutions.

It is stated in Article 20 paragraph (1) that “Coordinating minister who oversees Government affairs in maritime affairs and investment sector coordinates and supervises the Implementation of Public Service Obligations for Freight Transport and also reports to the President at least one time in one year or any time if necessary.”

It is stated in Article 21 that in implementing the public service obligations for freight transport, the Minister who oversees Government affairs in trade sector may coordinate with regional governments in terms of:

1. providing supports in coaching and dissemination,
2. monitoring and supervising the Logistic Center activities; and
3. increasing trade of regional superior products to maximize the chargebacks.

Furthermore, Article 22 to Article 32 of the Presidential Regulation also describes the duties of several ministers and regional governments who are members of the Task Force, namely the Minister who oversees Government affairs in marine and fisheries sector; Minister of Villages, Disadvantaged Regions and Transmigration; Minister of Cooperatives and Small and Medium Enterprises; Minister of Agriculture; Minister of Industry; Minister of State-owned Enterprises; Minister of Home Affairs; Minister of Communication and Information Technology; Minister of Finance; Minister of Public Works and Public Housing; and Minister of Energy and Mineral Resources.