Legal UpdatesPublicationsPrivate-interest Terminal and Special Terminal to Serve Public Interest

Transportation infrastructure has a very important role in supporting business chains. Without the availability of decent transportation infrastructure, businesses will face many obstacles i.e delays in shipping goods. One of transportation infrastructures is port. Port based on Article 1 (1) of Government Regulation No. 61 of 2009 on Ports (“GR 61/09”) is a place consisting of land and/or waters with certain borders as a place of administrative and management activities used as a place for ships to berth, embark and disembark passengers and/or load/unload goods, in the form of terminal and berthing place for ships equipped with navigation safety, security facilities and seaport supporting activities as well as place for intra and intermodal transportation shifts.

Business entities can construct a port facility used for their own interest to support certain activities. Certain activities based in Article 1 (7) of Regulation of the Minister of Transportation No. 20 of 2017 on Special Terminal and Private Terminal (“MR 20/17”) are activities to support main business activities not served by the port closest to the location of business activities relating to the nature of goods or business activities that need special treatment, or the business location is too far away from the existing ports.

Business entities intending to construct a port facility must have either of the following main business activities: (a) mining; (b) energy; (c) forestry; (d) agriculture; (e) fisheries; (f) industry; (g) tourism; (h) dock and shipyard; and (i) other activities needing port facilities to support their business activities. To serve their main business activities, the aforementioned business activities are allowed to construct and operate port facilities in the following types:

a. Special Terminal (Terminal Khusus)

Special terminal based on Article 1 (3) of MR 20/17 is a terminal located outside the work area (Daerah Lingkungan Kerja, DLKr) and the area of interest of the port (Daerah Lingkungan Kepentingan, DLKp) which is part of the nearest port to serve private interests in accordance with the owner’s main business.

b. Private-Interest Terminal (Terminal Untuk Kepentingan Sendiri)

Private Terminal based on Article 1 (4) of MR 20/17 is a terminal located inside DLKr and DLKp which is part of the main port to serve private interests in accordance with the owner’s main business.

Based on the above explanation of special terminal and private-interest terminal, both terminals only serve for private interests. However, they actually have the possibility to serve public interests. The Special Terminal may serve public interests after obtaining a permit from the Minister of Transportation (“MoT”), and that is based on the cooperation between Port Operator and Special Terminal manager. Meanwhile, the Private Terminal may serve public interests after obtaining a permit from the Director General of Sea Transportation (“DGST”), which is based on the cooperation between Port Operator and Private-Interest Terminal manager.

The permit for Special Terminal to serve public interests may be granted by submitting an application applied by Governor or nearest Port Operator to the MoT, but that is only in an emergency state, as follows:

  1. there is a natural disaster or other events causing malfunction of the port. For this condition, the permit for a Special Terminal to serve public interests may be granted for a maximum period of 1 year; or
  2. there is no port in the area concerned, or no other transportation facilities available, or lack of port facilities to serve port services which in turn hampers the distribution of goods. For this case, the permit for Special Terminal to serve public interest may be granted for a maximum period of 2 years.

The above period can be extended based on the evaluation results from the DGST and information from the authorized agency.

The permit for a Private Interest Terminal to serve public interests may be granted in case the Port Operator submits an application to the DGST in certain conditions, as follows:

  1. there is an insufficiency of dock capacity and other facilities in the nearest port to serve port service requests;
  2. there is the availability of the Private-interest Terminal that can be used for public interests; and/or
  3. there is an effort to improve services to users of port services.

The permit for Private Interest Terminal to serve public interests may be granted for 1 year, and it can be extended based on the evaluation results from the DGST.

 


 

 

For further information, contact us;

Dendi Adisuryo
dendi.adisuryo@adcolaw.com

Endah Sulastri
endah.sulastri@adcolaw.com

@2019 ADCO Law. All rights reserved.
This publication has been prepared for general informational purposes only to provide clients with information on recent legal developments and is not intended as legal advice or opinion.

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