Ratification of ILO Convention 188 and its Implications for the Indonesian Fisheries Industry

1. Introduction and Legal Context

For decades, Indonesia—the world’s second-largest fisheries producer—operated with a fragmented legal framework regarding the protection of fishers. On May 1, 2026, President Prabowo Subianto signed Presidential Regulation No. 25 of 2026, officially ratifying ILO Convention 188. This move bridges the gap between domestic maritime law (Law No. 17/2008) and migrant worker protections (Law No. 18/2017).

2. Legal Consequences: Strengthening the Regulatory Framework

The ratification transforms Indonesia’s legal obligations from “best effort” to international accountability.

• Standardization of Employment: All fishing vessel owners must now provide written Sea Working Agreements (Perjanjian Kerja Laut) that specify wages, rest hours, and social security.
• Expansion of Jurisdiction: Indonesia now has the legal authority as a Port State to inspect foreign-flagged vessels in its waters for labor compliance, not just illegal fishing (IUU).
• Liability and Recruitment: The regulation tightens oversight on manning agencies (manning agents), making them legally liable for predatory recruitment practices that often lead to debt bondage.
• Minimum Standards at Sea: Establishes mandatory requirements for:
  • Minimum Age: Preventing child labor in hazardous sea work.
  • Medical Care: Mandatory health certificates and on-board medical equipment.
  • Occupational Health and Safety (OSH): Standardized safety protocols to reduce the high rate of fatalities at sea.

3. Addressing Forced Labour in the Sea

Forced labor in the fisheries sector often manifests through “Modern Slavery at Sea,” characterized by physical abuse, document withholding, and non-payment of wages.

• Eliminating Debt Bondage: By regulating recruitment fees and requiring transparent contracts, the law targets the primary mechanism used to trap migrant fishers.
• Combating Transshipment Risks: C188 provides a legal basis to monitor and restrict long-term transshipment (the practice of keeping ships at sea for years by transferring catch to carrier vessels), which is a high-risk environment for forced labor.
• Enforcement Synergy: The ratification empowers the Maritime Security Agency (BAKAMLA) and the Ministry of Manpower to conduct joint inspections, treating labor violations as a core component of maritime security.

4. Economic Consequences: The Cost of Compliance vs. Market Access

The economic impact is a dual-edged sword, necessitating short-term investment for long-term sustainability.

Economic Aspect	Impact Description
Market Access	Positive: Enhances Indonesia’s “Blue Economy” reputation. Many global markets (EU/US) now require proof of “slave-free” supply chains. Ratification acts as a quality seal for Indonesian seafood exports.
Operational Costs	Negative/Increase: Fishing companies will face higher overheads to meet standards for vessel accommodation, food, insurance premiums, and minimum wage compliance.
Competitiveness	Positive: Reduces the “unfair competition” from operators who use forced labor to undercut prices. It levels the playing field for ethical Indonesian operators.
Worker Productivity	Positive: Better rest hours and health standards lead to fewer accidents and higher long-term productivity for the estimated 12 million people employed in the sector.

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5. Consequence Matrix for Fishing Companies

Failure to adhere to the standards set by C188 and the 2026 Regulation triggers a tiered system of sanctions designed to enforce compliance while maintaining industry continuity.

A. Administrative Sanctions (The “First Response”)

The Ministry of Marine Affairs and Fisheries (MMAF) and the Ministry of Manpower now utilize a “compliance-first” model.

• Written Warnings & Fines: Immediate administrative fines (ranging up to Rp1 billion or more depending on the scale of the violation) for failing to provide written Sea Working Agreements (PKL).
• Freezing of Business Licenses (SIUP): Companies found with repeated safety violations or health certificate lapses face a temporary suspension of their right to operate.
• Revocation of Fishing Permits (SIPI/SIKPI): The ultimate administrative “death penalty” for a vessel. If a company is caught employing child labor or failing to provide adequate food/medical care, their permits are permanently revoked.

B. Legal & Criminal Liability

The 2026 framework clarifies that corporations are legal subjects that can be held criminally responsible, moving beyond just punishing the ship’s captain.

• Corporate Prosecution: Under the harmonized Law No. 45/2009 and the new 2026 Regulation, companies can be prosecuted for “Systemic Negligence” leading to fisher fatalities.
• Forced Labor & Trafficking Charges: Evidence of debt bondage, document withholding, or physical abuse can trigger the Anti-Trafficking Law (Law No. 21/2007), which carries heavy prison sentences for management and massive asset forfeitures for the company.
• Blacklisting: Non-compliant manning agencies are placed on a national “Red List,” preventing them from recruiting or placing any crew members for a period of 5–10 years.

C. Economic & Market Consequences

The “invisible hand” of the global market acts as a secondary enforcement mechanism.

• Loss of Export Certification: Under the IEU-CEPA (2025) and US trade agreements, Indonesian seafood must be certified “slave-free.” Violating C188 standards leads to a loss of Human Rights Certification, effectively barring the company from EU and US markets.
• Operational “Port State” Detention: Foreign ports that have ratified C188 can now legally detain Indonesian vessels if they find labor violations. This leads to massive daily losses in berthing fees and spoiled cargo.
• Increased Insurance Premiums: Insurance providers are adjusting risk profiles; companies without C188-compliant safety and health protocols face prohibitively expensive premiums or a total denial of coverage.

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Summary of Risk for Management

Violation	Immediate Consequence	Long-term Impact
No Written Contract	Administrative Fine + Permit Suspension	Ineligibility for Government Subsidies
Child Labor	SIPI Revocation + Criminal Charges	Permanent Global Brand Damage
Forced Labor/Debt Bondage	Asset Seizure + Arrest of Directors	Total Market Exclusion (US/EU)
Poor OSH Standards	Vessel Detention in Foreign Ports	200%+ Increase in Insurance Costs

Strategic Recommendation for Companies

To mitigate these risks, companies must transition from a “catch-at-all-costs” model to a “Rights-Based Management” model. This includes:

1. Immediate Audits: Reviewing all Sea Working Agreements (PKL) for 2026 compliance.
2. Manning Agency Due Diligence: Only working with certified agencies that do not charge recruitment fees to the workers.
3. Vessel Upgrades: Phased improvements to accommodation and safety equipment to meet the “practicable” standards of the new regulation.

6. Conclusion

The ratification of ILO Convention 188 via Presidential Regulation No. 25 of 2026 is a landmark shift from viewing fishers as “tools of production” to “rights-bearing workers.” While the fishing industry will face a period of economic adjustment to cover compliance costs, the long-term benefits—securing international market access and eradicating the systemic scourge of forced labor—position Indonesia as a global leader in ethical maritime governance.

The ratification of ILO Convention No. 188 (C188) via Presidential Regulation No. 25 of 2026 shifts the legal landscape from “guidelines” to “strict liability” for fishing companies. For corporations, the consequences of non-compliance are no longer just ethical—they are existential risks to their operations and bottom line.