KUALA LUMPUR – The cabotage policy has long been in place to protect the local shipping industry and should remain as practical as possible, said Malaysian shipping icon Datuk Capt Ahmad Sufian Abdul Rashid.
He emphasised that the cabotage policy is not unique to Malaysia, and that it has been practised by countries to protect their shipping and the growth of shipping services, and that local companies should be prioritised when it comes to works within national waters.
“There is nothing wrong with protecting the local industry. However, in the past, and (it should continue), when there is a need for specialised services and an exemption, permission is granted to (foreign) shipping companies that applied for it.
Ahmad Sufian is the former chairman of Global Maritime Ventures Bhd, Alam Maritim Resources Bhd and Malaysian Bulk Carriers Bhd.
Permission should be granted if the need is urgent and foreign companies, such as multinational technology companies that specialise in Internet-related services and products, require it immediately. The cabotage policy should not be overly restrictive, but Malaysian companies should be given preference,” he said.
However, he cautioned that, while cabotage policy should be geared toward protecting locals, the government must ensure that local businesses have the necessary capabilities and assets.
“We don't like local companies that charter foreign services, if we don't have the asset to be deployed, we don't broker it as it leads to higher costs,” he said, adding that “having a rigid cabotage policy can backfire on us.”
Citing the Jones Act of the United States, which is a federal law that governs maritime commerce in the United States, Ahmad Sufian said be it the US, Indonesia or some other countries, they have their ways of protecting the local industry although it might be under different names.
The Jones Act requires that goods shipped between US ports be transported on ships built, owned and operated by citizens or permanent residents of the country.
Meanwhile, Malaysia's cabotage policy, which is hotly debated in parliament, is a policy that governs the transport and shipping of goods or passengers between two places along coastal routes in the same country by a transport operator from another country, and is practised by many nations worldwide, including developed nations.
It is so strictly enforced in some of these countries that no foreign-owned vessels are even permitted to operate in their domestic waters.
This policy was implemented in 1980 with the goal of increasing Malaysian ownership and local shipping in general, while reducing Malaysia's reliance on foreign vessels and the outflow of foreign exchange in the form of freight payments.
It also serves as a springboard for local shipping companies to gradually expand into international waters. – Bernama, October 28, 2021
