Costs of maritime security inspection to merchant ship operations – the Indonesian shipowners’ perspective

Abstract

ABSTRACT Indonesia’s aspiration to become a global maritime fulcrum lacks synergy between its maritime security and its maritime economy. This paper explores the dynamics between maritime security and maritime economy by investigating the current practices of maritime security inspections at sea and how they affect Indonesian shipowners. It also seeks to find solutions for more efficient and corruption-free maritime security inspections. To understand the Indonesian shipowners’ perspective on current practices of maritime security inspections at sea and how they impact businesses, the authors conducted an interview, a focus group discussion and a survey involving the Indonesian National Shipowners Association (INSA). From these methods, the authors found a common issue - that merchant ships operating in Indonesian waters face stoppages and demands for paying illegal fees during maritime security inspections at sea. Consequently, these inefficient and corrupt maritime security inspections are costly to Indonesian shipowners because they lower the ship’s productivity, increase voyage costs, give rise to claims related to contracts of affreightment and reduce profit. To improve efficiency and deter corrupt practices during maritime security inspections, this paper proposes a few solutions such as consolidating inspections, changing the mindset of maritime security agencies, and improving transparency and accountability.