I. Definition and Purpose

As outlined in Article 1 number 49 of Law Number 17 of 2008 concerning Shipping (“Law 17/2008”) as last amended by Law Number 66 of 2024 (“Law 66/2024”), underwater works are works related to installations, constructions, or vessels that are carried out under water and/or underwater works of a special nature, namely the use of underwater equipment that is operated from the water surface.

Subsequently, Article 19 paragraph (1) of Ministry of Transportation Regulation Number 71 of 2013 (“MOT Regulation 71/2013”) states that the purpose of underwater works are as follows:

1. to construct, move, and dismantle buildings or installations on waters;
2. to conduct inspection, maintenance, replacement, and repair of buildings or installations on waters;
3. to conduct inspection, maintenance, and repair underwater vessels;
4. to perform activities of a special nature, namely the use of underwater equipment which is operated from the surface of the water; and
5. to conduct underwater activities by employing divers for inspection or repair or replacement, or maintenance of buildings or installations on waters, including pier piles, bridges, and offshore platforms.

These aforementioned activities may be implemented through: (i) surveys; (ii) construction; (iii) relocation; (iv) inspection, maintenance, replacement and repair; (v) dismantling.[1]

II. Performing Underwater Work

1. Business licensing of the company
   The underwater works are part of shipping activities, so it is important to note that the company responsible for shipping activities is restricted from engaging in other business activities, making it a single-purpose business entity according to Government Regulation Number 31 of 2021 (“GR 31/2021”).
   
   Additionally, based on Appendix of Ministry of Transportation Regulation Number PM 12 of 2021 (“MOT Regulation 12/2021”), the underwater activities are categorized as medium-high-risk business activity. Thus, based on Article 14 of Government Regulation Number 5 of 2021, the company must have business licensing as follows: (i) Business Identification Number (Nomor Induk Berusaha); and (ii) Standard Certificate.
   
   Furthermore, based on MOT Regulation 12/2021 and MOT Regulation 71/2013, in obtaining the standard certificate, the company must fulfill the administrative requirements and the technical requirements. For the technical requirements, the company must have the following items:[2]
   1) 1 (one) expert that has skills to plan and perform underwater works
   2) Have at least 1 (one) team of divers consisting of 4 (four) divers who have the relevant competence and certificates;
   3) Own work equipment consisting of: 

• 1 set of underwater welding and cutting equipment;
• 1 set of salvage pump and/or underwater work;
• 1 set of survey equipment;
• 1 set of low-pressure submersible compressor; and
• 4) ??1 set of high-pressure submersible compressor.

4) Own 4 sets of Self-Contained Underwater Breathing Apparatus (SCUBA) or 1 (one) set of Surface Supplied Breathing Apparatus (SSBA);
5) For underwater work activity, shall have at least 1 unit of pipe/cable laying barge/vessel or tug boat bearing Indonesian flag.

1. Permit for the activity

According to Ministry of Transportation Regulation Number 33 of 2016 (“MOT Regulation 33/2016”) in conjunction with MOT Regulation 71/2013, In implementing every underwater work, business actor must obtain underwater work activity permit from the Ministry of Transportation provided that the business actor fulfill the following requirements:[3]

1. Have work contract and/or letter of intent (LOI) from the project owner;
2. Photocopy of salvage/underwater work permit (the current name is standard certificate for underwater works);
3. List of work vessel equipped with crew;
4. Photocopy of valid certificate/document of seaworthiness and vessel operation;
5. Work plan which consists of work schedule, work method, work labour, work equipment, activity work area map which marked with geographic coordinates; and
6. Power of Attorney Letter/Appointment Letter from the Head of Company.

The issuance of the underwater work activity permit will take 3 working days since the application accepted completely by the Ministry of Transportation.[4] The permit is applicable for a maximum of 6 months and can be extended after company conduct the application. It should be noted that the underwater work activity permit cannot be transferred to other company without approval from Directorate General of Sea Transportation, Ministry of Transportation.[5]

1. Obligations

Business entities which hold the business licensing for underwater works have the following obligations:[6]

1. Implement the provisions set out in the business licensing for underwater works;
2. Comply with all provisions of laws and regulations in the shipping sector and other laws and regulations;
3. Report periodically every 6 months on the activities and conditions of the company to the Director General of Sea Transportation, Ministry of Transportation;
4. Report in writing to the Director General, Ministry of Transportation, if there is a change in the name of the director or person in charge or owner, domicile of the company, and taxpayer identification number, as well as the ownership status of the vessel by no later that 14 days after the said change occurred.

Moreover, business entities which hold underwater work permit must immediately implement underwater works and install Sailing-Navigation Aids in accordance with provisions of laws and regulations. In addition, Article 216 paragraph (2) of Law 17/2008 regulates that every underwater work activity must be reported to the Head of Port (Syahbandar).

III. Cooperation with Foreign Entity

Pursuant to Article I Number 10 Law 66/2024 in conjunction with Article 29 paragraph (2) Law 17/2008 as well as Article I Number 29 Law 66/2024, the Indonesian single purpose company that established to carry out water transportation activities whose shares are wholly owned by Indonesian citizens may cooperate with foreign water transportation companies and form joint ventures provided that the majority of shares are owned by the said Indonesian single purpose company. Furthermore, the established joint venture company must own, register and operate Indonesian-flagged vessels with a minimum size of GT 50,000 (fifty thousand gross tonnage) per vessel and manned by Indonesian crew members. The joint venture company must also fulfill obligations in the prevailing laws and regulations in shipping.

IV. Sanctions

Business actors who violate the obligations and/or prohibitions stipulated in laws and regulations related to Shipping that cause losses to goods, property, ship accidents and/or damage to health, safety, security, and/or the environment but do not cause casualties and/or injuries to humans may be subject to administrative sanctions in the form of (i) warning letters; (ii) not provided with services; (iii) suspension of business activities; (iv) revocation of business licensing; and/or (v) administrative fines, as stipulated in Article 220 of GR 31/2021. It is important to note that these administrative penalties do not preclude the application of criminal sanctions, depending on the fault of the business entity.