KUALA LUMPUR: There is a need to make clear the uncertainties surrounding implementation of exemption of the cabotage policy for Sabah, Sarawak and Labuan, the Malaysia Shipowners Association (Masa) said.
Prime Minister Datuk Seri Najib Tun Razak had announced the exemption of the cabotage policy from June 1, 2017.
Masa chairman Faizul Ismail said in a statement a clearer explanation is required on whether the exemption will only affect general and containerised cargo or in a worst case scenario, is applicable to all cargoes.
He said a major implication to the local shipping industry on implementation of the exemption is the potential abuse of controlled and subsidised goods distribution by the federal government, when it is carried by foreign-flagged ships.
“These goods may not land in East Malaysia, when proper controls are not in place for the foreign flagged ships. This is not the case when goods are carried by Malaysian-registered ships and discharged fully at ports there,” he added.
There is also the risk of the lack of presence of local ship-owners, due to the non-competitive environment for them in comparison to the foreign-flagged shipowners and operators. In addition, the exemption of the cabotage policy will lead to the potential “dumping” of old ships from neighbouring countries to trade in Malaysian waters and should as such be capped at a certain age for entry. Masa is encouraging the government to consider a review of the policy, including exemption being restricted to the International Transhipment Container trade to all East Malaysian ports and not include, the indigenous products locally produced in West Malaysia and all types of cargoes. — Bernama