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Abolishing cabotage for Sabah, S'wak and Labuan a bold decision: CM
Published on: Tuesday, May 09, 2017
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Kota Kinabalu: The State Government welcomed the announcement by Prime Minister Datuk Seri Najib Tun Razak to abolish the cabotage policy that has been blamed for higher prices in Sabah and Sarawak compared to Peninsular Malaysia."The policy has been a source of contention among industry players and small businesses alike," said Chief Minister Datuk Seri Musa Aman.

He said the bold decision would certainly help the manufacturing and export industry, making Sabah's goods more competitive and would in the long run help in the State's economic development.

He said aside from the cabotage policy, Najib was also attentive to numerous issues raised during the meeting with the Sabah Cabinet such as restoration of the State's rights and devolution of powers.

"It is very easy to highlight only the bad and overlook the good that the BN has done.

The BN's leadership is not only receptive but is daring enough to make bold decisions and undo policies that do not serve the rakyat," he said.

He said the Barisan Nasional government is not only attentive but dares to make bold decisions to overcome issues affecting the people.

Musa said Barisan Nasional under the leadership of Prime Minister Datuk Seri Najib Tun Razak was receptive to Sabah's request for more socio economic development.

He thanked Najib for granting an RM80 million allocation for the Sandakan Airport runway extension, requested by tourism industry players in the district.

"Those in the tourism sector voiced their concern on the limitations of the present Sandakan airport, which poses an obstacle to the growth of tourism in the area," he said, adding Najib's approval for the extension was testimony of his ability to act promptly to the people's grouses.

State Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun said the Cabotage policy exemption for Sabah, Sarawak and FT Labuan by June 1, won't necessarily mean it would reduce the rising prices of goods in Sabah.

He said there are many other factors that need to be taken into account such as the freight forwarding systems, roads and the efficiency of Sabah ports in handling shipping goods from overseas.

"We welcome the announcement by the Prime Minister as this is what we want for the State and the concerned region. In this context, I also thank the Prime Minister and I believe the people in Sabah have also been waiting for such a decision.

"What we need to do now is to ensure the benefits or advantages that come from the abolition of the policy can really be translated into lowering the prices of goods from overseas, especially from the peninsula.

"This is because there other factors that can also contribute to the rising prices in Sabah," he said.

Masidi said the best approach to ensure such recent announcement to be effective is by making sure the freight forwarding systems at the ports operate more efficiently.

This is because the time normally takes to unloading the goods from the cargo vessels at the port and when loading the goods into a vessel before leaving the port, is too long.

As a result, the vessels would impose a demurrage fee or payment for costs as the vessel has to wait for so long for all the goods to be loading or unloading and such costs would be passed on to the consumer.

"A system or distribution network for the goods must also be more efficient so that it would not involve any high bureaucratic costs.

"At the same time, its marketing network also need to be efficiently implemented so as to reduce the cost that should not be passed on the retail prices of the goods.

Parti Warisan Sabah Deputy President Darell Leiking said Sabahans should not be overly enthusiastic about the announcement as long as the Merchant Shipping Act is still intact.

And especially because Najib had the chance to abolish the policy ages ago.

"The abolishment of the Cabotage policy had been the manifesto of many opposition parties during the last general election and had been debated over and over again over the last few years.

"In fact, even when I debated against the issue, some BN MPs had as well debated against Cabotage.

"The strangest thing is the Barisan Nasional MPs, being part of the government, could not even convince Najib to abolish it at an instant. It took Najib four years to finally announce the abolishment but again which abolishment is not very clear at the moment," he said, when contacted, Monday.

Darell wondered if Najib meant the policy will be abandoned completely particularly after the Federal Government had long defended the policy saying that it is a normal policy used internationally.

The Government, he said, had also consistently denied that the policy was to blame for cost disparity between the peninsula and Sabah.

"Yet, according to Najib on Sunday, the exemption is to ensure no more price hike of consumer goods in Sabah."

"I would like to see if the Merchant Shipping Act will be amended to reflect this announcement.

And the Malaysian Shipping Association to fully support this abolishment as they have been the most obvious against the abolishment as campaigned by many of us all these years."

He also asked what the government plans to do about the budgeted Streamlining of Prices between Sabah and the peninsula.

"I trust that it will not be taken out of the yearly budget so that actual price disparity will be resolved once and for all especially since cabotage will no longer be there," he said.

On Sunday, Najib announced that cargo vessels heading from the peninsula to East Malaysia will be exempted from the cabotage policy, effective June 1.

However, Najib also said the exemption does not apply to ships operating between Sabah, Sarawak and the Federal Territory of Labuan.

The policy was implemented on Jan 1, 1980 through the amendment to the Merchant Shipping Ordinance 1952 (MSO) that introduced Part IIB on Section 65A that reserves domestic shipping to Malaysian registered vessels.

Section 65KA of the MSO prohibits non-Malaysian ships from engaging in domestic shipping and section 65L of the MSO prohibits any ship, unless exempted, from engaging in domestic shipping without a licence from the Domestic Shipping and Licensing Board (DSLB).

In order for the Cabotage policy to be fully abolished, this requirement for licensing under DSLB must also be revoked.

On another note, Darell also questioned what will happen to the Sepangar Port and would it remain under the State or are there plans to privatise it. "If the latter is true, I urge the government not to carry on with the plan to privatise the port but to keep it under State control," he said.

While welcoming the exemption, DAP Sabah felt that it is only the first step. "It would not entirely resolve the differences of price of goods between east and west Malaysia.

"A holistic approach must be taken to ensure that Sabah can fully develop at its full capacity and potential through liberalization of sea trade."

Its Sabah Chairman Stephen Wong welcomed the initiative but he also urged the government to put priority on developing Sabah's industries as well as manufacturing and encourage exports of local products.

"In order to gain advantage from this exemption, the federal government should at the same time put in more resources to develop Sabah's industries so that we have own products to export," he added.

Wong who is also MP for Sandakan claimed that DAP and Pakatan Harapan had been consistently pushing for abolishment of the policy.

He further added that it was one of the main promises in Pakatan Rakyat's (now Pakatan Harapan) election manifesto during GE13.

He elaborated that it is proven that with existence of two-party system, the policy debate competition between BN and PH would eventually benefit the people and Sabah as a whole.

As election is near, Wong hoped that it is not mere election goodies. He said, its better late than never, the government must have political willingness to prioritize Sabah's development and thereafter provide more jobs and opportunities to local Sabahans so that they won't need to leave their home to elsewhere to look for a decent job.



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