Background

On the 27th of December 2018, the Government of Republic of Indonesia enacted the Minister of Transportation Regulation No. 125 of 2018 on Dredging and Reclamation. This regulation revokes the Minister of Transportation Regulation No. PM 52 of 2011 on Dredging and Reclamation as last amended by the Minister of Transportation Regulation No. PM 136 of 2015 and revokes Article 14 point d the Minister of Transportation Regulation No. PM 23 of 2015.

Dredging

Dredging is the work of changing the shape of the bottom of the water to reach the desired depth and width or to take the basic water material that is used for certain purposes.

Dredging work activities include the construction and maintenance of shipping lanes, port pools, port construction, construction of wave barriers, mining, construction of terminals, special terminals, and/or self-interest terminals. The implementation of these activities must meet the technical requirements as follows:

  1. Sailing safety and security, namely:
    1. design, lane width, pool area, and depth according to the size of the vessel that will pass through the lane;
    2. dumping area located both at sea (depth more than 20 meters low water spring and/or distance from coastline more than 12 NM) and/or on land; and
    3. pay attention to the area of marine cables, underwater installation pipes, offshore buildings, removal of the ship’s skeleton, ship to ship transfer, traffic separation scheme, anchorage area and mine area.
  2. Environmental sustainability, in the form of environmental feasibility studies conducted in accordance with the provisions of legislation in the environmental field.
  3. Water layout, namely:
    1. obtain approval from the Minister of Transportation related to compliance with the national strategic zoning plan/certain national strategic areas; or
    2. obtain approval from the governor and/or regent/mayor regarding compliance with the regional spatial plan or zoning plan for the management of coastal areas and small islands.
  4. Irrigation layout specifically for work in river and lake

Dredging work activities must be approved by the competent authority, namely:

  1. Minister of Transportation through the Director General of Sea Transportation:
    1. for dredging work activities in the shipping lanes and the territorial waters of the main port, collecting ports, and special terminals; and
    2. for dredging work activities in the shipping lanes and the territorial waters of the feeding port whose source of funding comes from the State Revenues and Expenditures Budget (“SREB”).In order to obtain approval the applicant must submit an application to the Director General of Sea Transportation. If the application is accepted, the Minister of Transportation through the Director General of Sea Transportation will issue the approval of the dredging work. The approval is valid for a maximum of 4 years based on the schedule of the activities submitted by the applicant. If the dredging work has not been completed, the owner of the activity can submit an application for an extension of the approval of the dredging work to the Director General of Sea Transportation. This extension can only be given for 1 time. The holders of approval for dredged work activities are prohibited from transferring and/or transferring such approval to other parties.
  2. Governor
    For dredging work activities in the territorial waters of regional feeder ports whose funding sources do not originate from the SREB.
  3. Regent/Mayor
    For dredging work activities in the territorial waters of the local feeder sea port and river and lake ports whose funding sources do not originate from the SREB.
  4. Port Organizer
    For dredging work activities with a dredging volume of  100.000 m3 in the work environment area and port interests environmental area. To obtain approval the applicant must submit an application to the port organizer. The approval period is valid for a maximum of 4 years based on the schedule of the activities submitted by the applicant. If the dredging work has not been completed, the owner of the activity can submit an application for the extension of approval for dredging work activities to the port organizer. This extension can only be given for 1 time. The holders of approval for dredged work activities are prohibited from transferring and/or transferring such approval to other parties.
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Reclamation

Reclamation is the work of embankments in waters or coastal areas that change the coastline and/or contours of the depth of the water. Reclamation work activities include the construction of seaports, terminals, self-interest terminals, special terminals, and/or other activities in the port sector. The implementation of these activities must meet the technical requirements as follows:

  1. conformity with the port master plan for reclamation work activities that are located within the work environment area and port  interests environmental area or general plans for spatial planning of the local district/city for terminals construction activities that are outside the the work environment area and port interests environmental area or special terminals;
  2. sailing safety and security
  3. environmental sustainability; and
  4. technical design.

Reclamation work activities must be approved by the competent authority in accordance with the reclamation work area, namely:

  1. Minister of Transportation, in the event:
    1. that the reclamation work activities are within the work environment area and port interest environment area in the territorial waters of the main port and collecting port, then the application shall be submitted to the Minister of Transportation through port organizer and the Director General of Sea Transportation;
    2. that the reclamation work activities are in the territorial waters of the terminals area outside the work environment area and port interest environment area or special terminals, then the application is submitted to the Minister of Transportation through the Director General of Sea Transportation; and
    3. that the reclamation work activities using funds originating from the SREB, then the application is submitted to the Minister of Transportation through the Director General of Sea Transportation.To obtain approval, the applicant must sumbit an application to the Minister of Transportation. If the application is accepted, the Minister of Transportation will issue the approval of the reclamation work activities. The approval is valid for a maximum of 4 years based on the schedule of the activities submitted by the applicant. If the reclamation work has not been completed, the owner of the activity can submit an application for an extension of the approval of reclamation work activities to the Minister of Transportation through the Director General of Sea Transportation. This extension can only be given for 1 time. The holder of the approval for reclamation work is prohibited from transferring and/or transferring the approval to another party.
  2. Governor
    for reclamation work activities in the work environment area and port interest environment area in the territorial waters of the regional feeder port.
  3. Regent/Mayor
    for reclamation work activities within the work environment area and port interest environment area in the territorial waters of the local feeder port and river and lake ports.
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While in the case of work activities it includes dredging work activities in the shipping lanes and the territorial waters of the main port, collecting ports, and terminals that are outside the work environment area and port interests environmental area and special terminals, and dredging work activities whose source of funds comes from the SREB and dumping area used for reclamation work activities, then the approval of dredging and reclamation work activities is submitted to the Minister through the Director General of Sea Transportation. The approval is valid for a maximum of 4 years based on the schedule of the activities submitted by the applicant.

Dredging and Reclamation Business Permits

Implementers of dredging and reclamation must have a dredging and reclamation business permit. The business permit is given by the Minister of Transportation to the applicant by submitting an application through the Director General of Sea Transportation. The applicant must fulfill the following requirements:

  1. in the form of a state-owned company, a regional-owned company, or an Indonesian legal entity;
  2. attach deed of establishment and deed of amendment to the articles of association and ratification from the Minister of Law and Human Rights in the application;
  3. have a place of business or office proven by proof of ownership;
  4. valid company domicile certificate;
  5. company financial statements of at least the last 1 year audited by a registered public accounting firm;
  6. have at least 1 unit of Indonesian-flagged dredger;
  7. have at least 5 Indonesian experts who have the following educational qualifications:
    1. Level I Nautical Expert;
    2. Level I Technical Expert;
    3. Civil Engineering;
    4. Geodesy Engineering; and
    5. Marine Engineering,
      proven by a work agreement;
  8. attach minutes of field review by the integrated technical team of the head office of the Directorate General of Sea Transportation by involving the Secretariat General of Sea Transportation; and
  9. for dredging and reclamation companies in the form of joint ventures as evidenced by a joint venture agreement, must have at least 1 unit of dredger type trailing suction hopper dredger that is seaworthy with a hopper size of at least 5000 m3.

Dredging and reclamation business permits are valid as long as the company carries out its business activities and must be evaluated every 2 years by the Director General of Sea Transportation by involving the Secretariat General of Sea Transportation. The business permit is prohibited to be transferred and/or transferred to another party.

Nazila Nurfina Sari Lubis