Airport Security Rules In Indonesia Amended
Recently, Indonesia’s minister for Transport, Mr Ignasius Jonan signed an air cargo and supply chain safety regulation and figuratively stirred up a hornet’s nest. The irritation was felt almost globally. It has made the Indonesian industry feel uneasy. The freight forwarding companies are nervous. The financial problems that the decision causes are not very insignificant. The airport security rules are not the only ones to be changes.
The amendment brings a few changes into the world of freight, and especially into the air cargo branch of economy. One of the amendments is the raising of the minimum capital for logistics companies. The earlier amount of 200 million IDR has now been raised 20 25 billion IDR (EUR 1.78 Million/USD 1.93 Million), This has obviously stirred the anger of the Indonesian Logistics and Forwarders Association (ALFI). The association has threatened to pull the government into court and challenge the regulation.
The amendment foresees the change of air port security rules that are related to the regulated agent system (RA). The regulated agents will need to, as per the new rules, inspect the cargo in the unrestricted area (called LINE 2) . The freight will be move to the secure area (LINE 1) only after this inspection. This will increase the processing time for air cargo, which should, in fact, be handled fast. The new airport security rules is not going to help the economy, if the above mentioned fears are to come true
The difficulty is that most of the regulated agents do not have screening machines, as the investment is quite high. Once the freight is move to the secure area (LINE 2), the screening has to be done again, as there is the danger of the freight being manipulated during the transit. This will cause not only increase in investment but also the time used for handling. More staff need to be inducted and more money invested in screening machines. In addition to these expenditures the logistics companies have to increase their minimum capital.
The implementation of the new airport security rules will, if carried through, cause many medium level companies to lose business. the Jakarta Post reports that the minister has talked to the ALFI chairman, Mr Hanafi. As per the newspaper the ALFI is reported to have agreed to provide recommendations to companies that have a capital of less than 25 million IDR. Putting the changes into practice itself will need a lot of time and the International Air transport Authority (IATA) has criticised the move. It has also requested Indonesia to have a transition period of one year for the smooth shift to the new rules. IATA also criticised that Indonesia will not prove to be competitive if the new rules are implemented. As per Mr Albert Tjoeng, the director for IATA Asia-Pacific, this will go against the economic growth of the country.