This picture taken on August 7 shows a blown-up ship that was thrown onto the land at Beirut Port three days before by a massive blast that shook the Lebanese capital. Photo: Joseph Eid / AFP

In 2013, MV Rhosus, which previously sailed with a Moldovan flag, was supposedly projected to travel from Batumi Port, Georgia, to Biera, Mozambique. The vessel was carrying 2,750 metric tons of ammonium nitrate as cargo. However, because of technical problems that hindered its seaworthiness, the vessel was forced to enter Beirut Port in Lebanon.

Upon inspection, Beirut Port State Control officers found deficiencies and banned the vessel from sailing. This situation subsequently left the vessel stranded in Beirut along with its cargo.

Records show that the majority of the ship’s Ukrainian crew were repatriated around 2013-14 on grounds that they were in “imminent danger” due to the explosive nature of the cargo on board. However, four crewmen and the ship’s master were detained for a longer period before being successfully released through the application “of urgent matters” to a court in 2014.

Their counsel relied on the basis of violations of the right to personal freedom, which is protected under the constitution of Lebanon and the International Convention of Human Rights and Personal Freedoms.

Possible cause of the Beirut explosion

While the crew and master were finally released, the confiscated cargo and the vessel were to be auctioned or otherwise disposed of. However, the auction never took place and the highly explosive cargo was poorly stored. Improper storage of the cargo is suspected to be the cause of the recent explosion in Beirut. It is worth noting that poorly stored ammonium nitrate is notoriously known to be highly explosive.

Lebanese officials stated that the cargo was stored for years in unsafe conditions at the port. This poor management of the confiscated and stranded cargo resulted in the abandonment of the cargo with lack of surveillance and control.

It is worth noting that the master of the vessel at that time, Boris Prokoshev, told an interviewer that the Lebanese government should have gotten rid of the vessel right away instead of confiscating it and demanding fees for harboring. This indicates that the involved officials may have contributed to the negligence that ultimately led to the massive explosion.

Legal framework in Indonesia

After consolation and support poured in from various organizations worldwide, the incident presents an opportunity for countries to reflect on this catastrophic event. Notably, countries should consider how the management of cargo is often neglected, especially on confiscated and/or abandoned cargo.

As mentioned above, explosions stemmed from poor management of ammonium nitrate is not unheard of. The Texas Historical Association mentioned that an explosion in Texas City in 1947 was caused by 2,300 US tons (about 2,090 metric tons) of ammonium nitrate. The explosion resulted in fires that damaged more than 1,000 buildings and killed nearly 400 people.

The report related to the Beirut incident showed that the cargo was stored at the site for the past six years after the court order. This showed not only slow uptake by the Lebanese government in handling the goods, but also the potential absence of relevant regulations that could have prevented the explosion.

The Indonesian government should view this incident as a sign to focus on the management of confiscated goods. This is of great importance in order to reduce the possibilities of such incident from occurring in Indonesia.

Viewing the circumstances of the Beirut explosion from an Indonesian regulatory framework, one may take the view that the cargo may have been treated as a state-confiscated asset (barang rampasan negara), as the cargo was confiscated and moved to a warehouse after a court order and was intended to be auctioned off later on.

According to Ministry of Finance Regulation No 8 of 2018 on Management of State Owned Assets Sourced from State Confiscated Assets and Gratification, a state confiscated asset is an object originating from the state-seized asset (barang sitaan negara) or evidence rendered for confiscation by the state based on a final and binding court decision, or other confiscated assets based on a court order or decision. Meanwhile, state-seized assets are objects seized by the state for judicial-process purposes.

Additionally, Article 45 of the Indonesian Criminal Code provides that in a criminal case, the auction of seized evidence/assets may be conducted mid-proceeding if such assets are deemed dangerous for storage until the final and binding court decisions are rendered. However, there is an unclear ambit as to what constitutes dangerous evidence under the said provision.

It worth noting that in the worst scenario, generally speaking, the issuance of a final and binding court decision in Indonesia may take four years or more since the first court hearing.

In practice, we may instead refer to a recent court decision to see whether concentrated ammonium nitrate may be deemed dangerous evidence. Luwuk District Court Decision No 25/pid.Sus/2020/PN.Lwk dated April 2, 2020, ruled that the evidence of unregistered ammonium-nitrate fertilizers amounting to 5.5 tonnage should be permanently confiscated and destroyed.

It can be seen that ammonium-nitrate fertilizers are confiscated and destroyed after a court decision is rendered by the Luwuk District Court, instead of auctioning them off before the court decision is rendered.

Dangerous assets

The above court decision showed that there are no mandatory immediate measures that should be implemented upon seizing dangerous assets. This is also due to lack of implementing regulations on the characteristic of dangerous seized assets. In that regard, the same fertilizer that was allegedly viewed as the cause of the explosion in Lebanon was not treated as a dangerous asset that requires immediate auction.

Further, Regulation 8/2018 also provides a legal framework in managing these assets through various means, including sale, destruction, or even utilization. However, the said regulation is silent in terms of the time frame required to manage the said assets or even how the assets are to be managed during the management process. This resulted in varying lengths and non-standardized procedures in managing the assets.

This fact is also supported by Indonesian Ombudsman’s findings in August 2020, wherein there is a lack of standard in managing the state-seized asset.

Considering the foregoing and by reflecting on the Beirut explosion case, the Indonesian government, through the Ministry of Law and Human Rights, may urgently formulate a specific regulation on the management of state-seized and state-confiscated assets, particularly on dangerous assets. This regulation may also include, among others, clarity of the dangerous-assets category, management procedure and standard of the assets, time frame of asset execution (for example, auction and destruction of assets).

In addition, the regulation may emphasize the roles and coordination of relevant law enforcers and government institutions, such as judges, prosecutors, and other relevant government officials who handle the management of seized and confiscated assets.

Considering the above situation in Indonesia, and the actual devastation in Beirut due to such negligence, the Indonesian government should indeed focus on ensuring that the management of assets is within the appropriate standard to avoid unwanted consequences, notably in these unprecedented situations with the pandemic.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

Ketut DP Yoga

I Ketut Dharma Putra Yoga is a litigation lawyer specializing in shipping, international trade, Insurance and reinsurance. He graduated magna cum laude in 2018 from the University of Lampung, Indonesia, majoring in business law.

Boni Facius Justin

Boni Facius Justin earned his Bachelor of Laws degree at Parahyangan Catholic University in Bandung, Indonesia, and obtained his master’s degree at the National University of Singapore with focus in international arbitration and dispute resolution (IADR). He is a litigation lawyer specializing in shipping, international trade, insurance and reinsurance, and other corporate matters.