Cabotage simply must go: Chamber

Kota Kinabalu: The Chinese business community has made a stand that the Cabotage Policy must be abolished because it not only increases business costs but is a stumbling block for investors to come to Sabah.

Sabah United Chinese Chamber of Commerce (SUCCC) President Datuk Seri Gan Sau Wah said the policy has been the main reason for higher freight charges and directly causing the price of goods to rise steeply.

“It is the main reason for the prices of goods in Sabah being 30 per cent higher than in Semenajung,” he said in his speech at the 68th Association Chinese Chamber of Commerce and Industry Malaysia (ACCCIM) in Shangri-La’s Tanjung Aru Resort and Spa, Saturday.

Under the 30-year old policy only Malaysian-flagged ships are allowed to transport locally-manufactured goods from the peninsula to Sabah.

This means probably less than 200 containers a month may be coming into the state.

After numerous calls, the Federal Government finally agreed in 2009 to liberalise the cabotage policy for containerised transshipment cargoes for sectors between Sepanggar, Bintulu, Kuching and Tanjung Pelepas and vice-versa.

But this was only partially or selective liberalisation since foreign ships carrying containers meant for Sabah still have to go to Port Klang before being re-directed to the port in Sabah.

Gan said the policy not only caused problems to companies in Sabah to venture out to overseas markets but is also burdening the people who have to face a higher cost of living.

There was no doubt that the Cabotage Policy was formulated to protect the country’s shipping industry but the chambers felt it was not suitable for Malaysia in view of the geographic differences between Peninsular Malaysia, Sabah and Sarawak.

“If the Peninsular and East Malaysia are located on the same land mass it is a different story but the problem is we are separated by the vast South China Sea whereby the distance between Port Klang is quite far from East Malaysia.

“If protecting the interest of shipping companies in the country means having to sacrifice East Malaysians’ right to enjoy similar price of goods then this is not fair.

“For this reason, the Cabotage Policy must be abolished or rectified for the sake of all the people in the country,” he said.

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