‘Lifting of Cabotage Policy Spells Doom for Shipping Industry’


Sarawak and Sabah Ship Owners Association (SSSA) president Soon Tin Woo said the Malaysian shipping industry is heading for doomsday once the cabotage policy is lifted.

He said neighbouring countries like Indonesia had 18,000 ships while about 3,000 ships are registered in Sarawak and when the cabotage policy is lifted, these Indonesian and other foreign-owned vessels would roam freely in Sarawak waters to service the domestic cargo routes from Sibu up to Bintulu and even Kapit.

“When that happens, our shipping industry will be heading for oblivion as there is no way the local ships can compete with foreign vessels,” he said during a meeting attended by more than 20 local shippers here yesterday.

He said the local seafarers would be out of a job, the local marine training institutes would be out of business and the local shipyards tremendously affected.

“As the global shipping industry is currently going through a tough and challenging phase, we are puzzled whether it is the right time now to relax the cabotage policy,” he said.

Soon said the cabotage policy had in fact been partially liberalised since 2009 to allow foreign vessels to carry transhipment cargo  from major ports in Peninsular Malaysia (Port Klang and Tanjung Pelepas Port) to Kuching, Bintulu and Sebangar Bay.

“Before the liberalisation exercise, we used to have 10 local shipping lines between Peninsular and East Malaysia but after the liberalisation, only four shipping lines are plying the routes.”

“Even then, these four shipping lines are struggling for survival to assist in delivering their social obligation rather than making profit. Even the major players such as MISC have exited the service.”

“We strongly support the cabotage policy because it is our sovereign right to protect local ship owners, seafarers and the shipping industry as a whole.”

Prime Minister Datuk Seri Najib Tun Razak announced on May 7 the proposal for Sabah, Sarawak and Labuan to be exempted from the cabotage policy, effective June 1.

This followed a proposal submitted by Chief Minister Datuk Amar Abang Johari Tun   Openg that it was time to abolish the cabotage policy so that ships from overseas could sail directly to Sarawak.

The chief minister also said the abolition of the policy would reduce the prices of goods for Sarawakians as the policy had been widely blamed for the disparity in the prices of goods between Peninsular and East Malaysia.

Soon added it was not the cabotage policy which impeded trade but the imbalanced economic development between East and Peninsular Malaysia which had to be addressed systematically and strategically.

“The government should look at the real cause of the price (disparity)of goods and tackle it promptly and appropriately,” he said.

Citing the freight charges, Soon said it had not been increased for the past 15 years, yet the prices of goods continue to go up.

“How can they explain that it was due to the cabotage policy?” he questioned.

Soon said the cabotage policy was in line with the International Shipping Conventions (UNCLOS) and a common policy practised by both developed and underdeveloped countries.

“In many countries, government assistance plays a key role in boosting shipping activities and protecting the local ship owners. Keeping the cabotage policy will ensure that the Malaysian shipping industry is sustained and will once again be growing healthily.”

Soon said they were not objecting to the government’s proposal to allow foreign vessels to sail directly to all East Malaysian ports and vice versa but hoped the government would take a holistic view and reconsider the proposal.

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