As the world’s largest archipelagic state, Indonesia relies heavily on the carriage of goods by sea to sustain both domestic connectivity and international trade. Given its pivotal role as the backbone of the national economy, the carriage of goods by sea has become a highly regulated area of law.
In Indonesia, the legal framework governing the carriage of goods by sea is primarily set out in the Commercial Code, supplemented by sector-specific regulations. This framework comprehensively regulates various aspects of maritime transportation, including the rights and obligations of all parties involved, most notably carriers who play a central role in the execution of sea carriage.
The Term “Carrier”
In maritime transportation, carriers generally refer to parties that undertake and organize the carriage of passengers or goods by sea. The term “carrier” is not necessarily synonymous with “shipowner”, as the party providing carriage service may differ from the party holding legal title to the ship. This distinction is recognized under the provisions of the Commercial Code, which employs the term “ship entrepreneur” (in Bahasa Indonesia “pengusaha kapal” which is derived from the Dutch term “reeder”). The choice of terminology underscores that the party performing the carriage of goods by sea is not always the shipowner operating their ships, but may also include other parties, such as those engaged through charter arrangements. Hence, a carrier performing carriage of goods by sea may be shipowners, charterers, or other parties that undertake the carriage obligations under the relevant contracts of carriage.
Extent of Carriers’ Liability in the Carriage of Goods by Sea
Carriers’ duties arise principally from contracts of carriage, such as charterparties, bills of lading, and other governing documents. Under the Commercial Code, however, the carriers’ primary obligation is to transport and deliver goods safely in accordance with the terms of the contract.
Meanwhile, carriers’ liability stems from their duty to transport and deliver goods safely in accordance with the contract of carriage. Under Article 468 of the Commercial Code, carriers are required to safeguard the goods from the moment they are received (loaded on board) until delivery to the rightful recipient and are held liable for any loss or damage occurring during carriage.
Such liability may be excluded only when the loss or damage results from circumstances beyond the carriers’ control, the inherent nature of the goods, or the fault of shippers.
Moreover, Article 477 of the Commercial Code extends carriers’ liability to delays in delivery, thereby broadening their responsibility beyond the physical condition of the goods.
In addition to the Commercial Code, carriers’ liability is further regulated under Law Number 17 of 2008 on Shipping as lastly amended by Law Number 66 of 2024 on its Third Amendment (“Shipping Law”). Pursuant to Articles 40 and 41 of the Shipping Law, carriers are responsible for the safety of the goods carried and may be held liable for losses arising from destruction, loss, damage, or delay in delivery. The provisions also expand the scope of liability to encompass losses suffered by affected third parties.
Limitation of Carriers’ Liability
Although carriers may bear liability for the goods they transport, such liability is not absolute. The purpose of limiting a carriers’ liability is to maintain affordability and predictability in global shipping. Without statutory limitations, the loss of a single container of high‑value cargo could bankrupt a shipping company and disrupt international trade. The concept of limitation of liability was first introduced in England through the Responsibility of Shipowners Act of 1733, enacted after the high‑profile case Morse v. Slue (1674), where shipowners faced the prospect of full liability for cargo stolen by pirates. In the international sphere, the Hague Rules of 1924 (“Hague Rules”) marked the first treaty to standardize carriers’ liability limits worldwide, capping liability at £100 per package or unit. The most current treaty addressing limitation of liability for ships is the Convention on Limitation of Liability for Maritime Claims (LLMC) of 1976.
It should be noted that Indonesia is not a contracting party to any international treaties on maritime limitation of liability. Nevertheless, the concept of carriers’ limitation of liability is embedded in Indonesian law. While the Commercial Code currently applicable in Indonesia was promulgated in 1847 during the Dutch colonial era, its maritime provisions were significantly amended in 1938 under Dutch colonial administration, reflecting the influence of the Hague Rules and its limitation of liability framework. However, the monetary values prescribed therein are widely regarded as outdated and, in practice, are rarely applied by Indonesian courts.
Concluding Thought
Carriers’ liability remains a cornerstone of Indonesia’s maritime legal framework. While Indonesian law acknowledges that such liability is subject to certain limitations, these provisions are seldom applied in practice due to outdated monetary values. Against the backdrop of historical legal influences and evolving international maritime developments, the regulation of carriers’ liability continues to play a vital role in balancing commercial interests with legal accountability in maritime transportation.
