Cabotage Policy again part 1 of 3


After more than 28 years of the Federal government, looking after the interest of less than 50 ship owners against the wishes of more than 7 million people in Sabah and Sarawak detail independent study was underway to determine the need and effectiveness of the Cabotage policy.

In response to question from the floor, from Tan Sri Muhyiddin Yassin, the then Ministry of International Trades, and Industry Malaysia, said “we hope the study can be completed soon and decision made by the year end”.  The dialog was held in a grand ballroom in a prominent hotel in Kota Kinabalu on August 14th 2008.

July 1st 2010, the Sabah Domestic Investment Dialog and Seminar gives you a sense of déjà vu, I believe the same people, the same dignitaries, the same Cabinet Ministers from Sabah, only the Minister of International Trade and Investment attending it is NEW.  Today it is the turn of Datuk Sri Mustapha Mohamed to put up a straight face, earn his keep, and LIE once more to the Sabah people.

He acknowledges the Cabotage Policy is the reason for the high cost of living in Sabah.  He said, “I will discuss with Ministry of Transport (MOT) to see how MITI can work together with them and review the policy, ensure this policy is effective in terms of reducing freight charges and opening up the sector to be more competitive”.

Why the Federal government is procrastinating?  The Federal Cabinet meets every fortnightly, from 2008 to 2010 is nearly 2 years means the Federal Cabinet already met 52 times and all this time the Minister in MITI is ignorant of the Cabotage Policy.  It is as if the Federal Cabinet is not interested to discuss the plight of every man, women and child in Sabah and Sarawak.  It is very clear; the 7 million people of these two states are not their priority and perhaps not even their concern.

To do away with the Cabotage policy the Minister simply declares through the government gazette that Malaysian ports can now receive any ships from any countries.  To ensure that these ships fulfill the international standards, which should be consistent with the Malaysian standards for licensing, then it, is a matter of these ships registered in any acceptable ship registry.  This should protect the standards of ships calling at Malaysian ports.

Today July 8, 2010 the Malaysian Ship-owners refute the claims by the Federation of Sabah Manufacturers (FSM) that the cabotage policy are the cause of the high cost of living in Sabah.  This is to be expected because they want to maintain the status quo.  It is to their benefit to maintain control over the freight charges.  However, this will be a loss for the people in Sabah and Sarawak.

In the 80’s Sabah and Sarawak has their own Merchants Shipping Ordinance 1952.  Among other things, this ordinance actually provides Sabah and Sarawak the powers to license merchant ships.  However, in 1980 the Federal government wants to streamline the Malaysian laws of the seas.  The legislative list in the Federal Constitution was invoked, Sabah and Sarawak has no choice but to repeal their shipping ordinance, which gives the power of licensing ships to the Federal government.

Unfortunately, once the Sabah & Sarawak Ordinances becomes a Federal law, the Federal government made it compulsory only allowing Malaysian registered ships to call at all Malaysian ports.  Port Klang wan an exception because this port was the Malaysian “load centre” for containers.  This means any ship from international destination can only call at this port.  Using Malaysian registered feeder ships the containers are transported to Sabah and Sarawak.  The people of Sabah and Sarawak have to suffer the consequences of the government policy to protect Malaysian shipping industry.

Imagine, in Malaya the rates for the government determines highway toll.  If the toll operator wants to increase the toll, the government must approve.  If the government does not approve, the government will compensate the toll operator.  Sabah and Sarawak does not use this toll, yet our money is being used to compensate the toll operator.  We use the feeder ships every week for supplies especially from industries in Malaya.  The government does not have control over the freight charges.  If there is any increase in charges the ship, the Federal Cabinet, people in Sabah and Sarawak have no say.  Sabah and Sarawak is at the mercy of the ship owners.

The leadership at the centre is not totally at fault, the leadership at the state level must share the blame equally.  The leaders at the centre will look at national development as a whole.  As far as they are concern, the political backlash for them making the decision is practically nil.  Shipping only concern the two states of Sabah and Sarawak, it is therefore the duty and responsibility of the leaders of these two states to convince the Federal government.

Sabah Sifu

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About sifusiber
A husband & a father who wants his children to have a better future

4 Responses to Cabotage Policy again part 1 of 3

  1. lderple says:

    Maybe the best way is, all parties concerned must co-operate to settle this problem.
    Hopefully they will do their best 🙂

    • sifusiber says:

      Well after requesting nicely for 27 years (that is hoping they will do their best), do you honestly think the leadership is interested to cooperate and settle this problem? In the first place they created the problem with the excuse to protect the domestic shipping industry. After seeing how lucrative the shipping business for themselves, it becomes their right. Sabah and Sarawak have no right at all. Sabah and Sarawak is expected to support the policy with their hard earn money. That is discriminatory and plain daylight robbery. Where then should Sabah and Sarawak seek justice?

  2. lucgrant says:

    This form of ‘protection’ by the government should be abolished once & for all, because its not only burden the people but also not a good way to expand the shipping industry. without the competition from foreign shipping company, the local company will continue to prosper, but the industry is in a stalemate & the consumer has to bear the burden of higher cost of services…

    I remember that the federal government has tried to create a sense of pride towards the local shipping company by advertising the MISC success…honestly, i will only have that sense of pride if there is a real competition out there without any protection from the government…

    • sifusiber says:

      I think over all the government really have their priority screwed. On one side they want to help national shipping but at the expense of the people and industries in Sabah and Sarawak. They will go all out to help the highway users from paying the tolls, Sabah and Sarawak has been asking to review the Cabotage Policy for the last 27 years to no avail.
      When the whole global economy inclusive of Malaysian economy is declining, Sabah and Sarawak need to raise their voice higher about the discriminatory nature of this policy. The Federal leaders inclusive of the people from Malaya will say Sabah and Sarawak is ungrateful. But wait a darn minute, is it not Malaysia progressing at our expense? How else can the gomen listen to us?

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