Impact on decision to exempt Sabah and Sarawak from cabotage policy

“A combination of cabotage policy exemption and a declaration making Sapangar a National Load Centre coupled with incentives to the manufacturing industry would be a perfect solution that Sabah business had been waiting for”

Decision to exempt Sabah and Sarawak from cabotage policy with effect from 1st June 2017 appears to have been well received by the affected parties especially from the manufacturing sector in Sabah. It was generally felt that it would be the prelude to getting the prices of goods in Sabah down.

This is generally the feeling especially of ordinary man on the street. This is irrespective how the mechanics of the law will actually take effect. However after some days people begin to realise and question if at all there was indeed an exemption. The announcement leads to more confusion as a result of the use of the word ‘exemption’.

What is confusing to the layman is the word used to describe the apparent liberalisation of the law. The word ‘exempt’ was used and the media has translated this as akin to abolition of the all too familiar section 65 of the Merchant Shipping Ordinance 1952 (MSO 1952). If it is abolition of a law then there must be a process to this which is through parliament and other administrative mechanisms. If this is the mechanics perhaps some years in waiting is expected for it to take effect, meaning it is a short lived euphoria which cannot be celebrated as yet until its effect is translated in the future.

The public also becomes more confused when the Minister of Transport once said that the law cannot be revoked as it is Malaysia’s sovereign rights to have it within the Merchant Shipping Ordinance 1952 that no ship other than Malaysian ships may engage in domestic shipping. So what the minister is saying is since the law cannot be revoked or repealed, only an exemption is given. But we will see later if exemption if at all is workable and beneficial for Sabah.

This is different from how the government introduced the concept of the national load centre in 2009. This concept of National Load Centre was issued via an administrative General Directive issued by the Minister of Transport in 1993. The purpose of which is to help Port Kelang achieve a respectable status in the Global Port ranking which fortunately has now placed them as the 12th busiest port in the world. So is the word ‘exempt’ as used in the announcement as a form of Government Directive? Is this legal? Perhaps the simple answer is to issue a clear directive to make SBCP as another Load Centre besides Port Kelang.

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