Indonesia Shipping Law Guide 2027: Framework, Key Rules, and Recent Developments

Originally published in Lexology Panoramic: Shipping 2027.

By Setyawati Fitrianggraeni, S.H., LL.M., FCIArb., FAIADR, Reynalda Basya Ilyas, and Tiyana Sigi Pertiwi, S.H., LL.M.

In brief

Indonesian shipping law governs the full life cycle of a vessel in Indonesian waters, from construction and registration to operation, casualties, arrest, judicial sale, and dispute resolution. Domestic sea transportation is reserved under the cabotage principle for Indonesian shipping companies using Indonesian-flagged vessels crewed by Indonesian nationals, and foreign investment in shipping joint ventures is subject to strict shareholding and vessel ownership requirements. This guide presents the Indonesia chapter of Lexology Panoramic: Shipping 2027 in eleven parts, reflecting the law as stated on 22 May 2026.

The legal framework

The principal statute is the Indonesian Shipping Law, as amended by Law No. 6 of 2023 on the stipulation of Government Regulation in lieu of Law No. 2 of 2022 on Job Creation, and by Law No. 66 of 2024. Implementing regulations issued by the Minister of Transportation give the framework operational detail, including Minister of Transportation Regulation No. 39/2017 on the registration and nationality of vessels, which governs vessel registration, mortgage registration, and related property rights. General contract principles in the Indonesian Civil Code apply alongside the shipping regime, including article 1320 on the validity of contracts and the Civil Code provisions on force majeure, while the Indonesian Commercial Code remains relevant in particular to limitation of liability. Sectoral rules on ports, safety, and the environment sit within the same framework and are addressed in the relevant parts of this guide.

Update and trends

The most recent developments concern foreign investment, traditional shipping, port management, ship arrest, the Maritime Court, corporate criminal liability, and risk-based licensing. Joint venture companies in shipping are restricted to 49 per cent foreign shareholding, with the remaining 51 per cent held by a national shipping company wholly owned by an Indonesian national, and the joint venture must own at least one Indonesian-flagged vessel of 50,000 gross tonnage crewed by Indonesian nationals. Traditional shipping activities with certain characteristics, owned by Indonesian individuals or entities using Indonesian-flagged ships that meet seaworthiness standards and are crewed by Indonesian nationals, are now recognised. Port management has been simplified. Ship arrest may now be conducted by the harbour master under a written court order without a civil or criminal lawsuit, although implementing regulations unifying arrest procedures are not yet available. The authorities of the Maritime Court have been expanded.

Separately, the Indonesian Criminal Code (Law No. 1 of 2023), which came into effect in January 2026, treats corporations as direct subjects of criminal law, so a corporation may be held criminally liable where the act falls within the scope of its business or activities, unlawfully benefits the corporation, is accepted as corporate policy, or results from its failure to take preventive measures. Minister of Transportation Regulation No. 1/2025 integrates risk-based licensing assessment for sea transportation companies, under which a company must obtain government-issued marine insurance to obtain an operating licence.

Other noteworthy points

Three further points from the chapter deserve attention. First, the cabotage principle: domestic sea transportation must be carried out by an Indonesian shipping company using an Indonesian-flagged vessel and Indonesian crew. Foreign vessels may only be used for specified activities other than domestic carriage of passengers or goods, or both, under Minister of Transportation Regulation No. PM 2 of 2021, namely oil and gas surveys, drilling, offshore construction, offshore operational support, dredging, salvage and underwater works, electricity activities performed by power plant vessels, and jetty construction, and only after obtaining approval and the standard shipping licence. Second, all vessels sailing in Indonesian waters must install and activate an automatic identification system (AIS) under Minister of Transportation Regulation No. 18 of 2022, with violations subject to administrative sanctions or a fine of up to 75,000,000 Indonesian rupiahs. Third, Indonesia has ratified the Maritime Labour Convention 2006 through Law No. 15 of 2016, with Maritime Labour Convention certification governed by Minister of Transportation Regulation No. PM 58 of 2021, and has ratified the ILO Convention No. 188 on work in fishing through Presidential Regulation No. 25 of 2026, extending protection to Indonesian crew on fishing vessels.

Contents

1. Indonesia Shipping Law Guide 2027: Framework, Key Rules, and Recent Developments (this page)
2. Ship Registration and Mortgages in Indonesia: Eligibility, Documents, and the Mortgage Register
3. Newbuilding Contracts in Indonesia: Title Transfer, Refund Guarantees, Delivery, and Defects
4. Limitation of Liability and Limitation Periods in Indonesian Shipping
5. Port State Control and Classification Societies in Indonesia
6. Collision, Salvage, Wreck Removal, and Pollution in Indonesia
7. Ship Arrest in Indonesia: Claims, Maritime Liens, Security, and Procedure
8. Judicial Sale of Vessels in Indonesia: Procedure, Priority, and Effects
9. Carriage of Goods by Sea and Bills of Lading in Indonesia
10. Shipping Emissions and Ship Recycling in Indonesia
11. Jurisdiction and Dispute Resolution for Shipping in Indonesia

For advice on Indonesian shipping law, including vessel registration, ship arrest, carriage of goods, and shipping disputes, contact Anggraeni and Partners at connect@ap-lawsolution.net.