KUALA LUMPUR – The cabinet will make recommendations in two weeks on the disputed cabotage exemption for submarine cable repairs, said Science, Technology and Innovation Minister Khairy Jamaluddin.
In a tweet today, he said the issue was brought up in the weekly cabinet meeting, and ministers and the Economic Planning Unit were instructed to deliberate on the policy’s impact on digital investments and the local shipping industry.
They will report back in two weeks’ time with recommendations, he said.
The cabinet members involved are International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali, Datuk Seri Tengku Zafrul Tengku Abdul Aziz (finance), Datuk Saifuddin Abdullah (communications and multimedia), Datuk Seri Wee Ka Siong (transport), Datuk Seri Wan Junaidi Tuanku Jaafar (entrepreneur development and cooperatives) and Khairy himself.
Wee has come under fire over the cabotage policy, which was blamed for Facebook Inc’s decision to put on hold the deployment of another two submarine internet cables.
The Vibes reported that the social media giant had wanted to deploy the cables following the completion of an earlier project, namely the Bay to Bay Express Cable System, which has a pit stop in Malaysia.
But following Wee’s removal of the cabotage exemption put in place by his predecessor, Anthony Loke, Facebook has “KIV-ed the landing of two more cables”, said an insider.
This might in turn affect the country’s digitalisation push, including investments, therefore hampering efforts to provide better internet connectivity nationwide, said the source.
Wee has received brickbats from stakeholders for undoing Loke’s policy, which had been in place since April 2019. Back then, internet giants lauded the move as it would help speed up repairs and allayed fears of prolonged internet disruptions.
The latest flashpoint arose earlier this month, when news outlets reported that Facebook was deploying two cables – Echo and Bifrost – from the United States to Indonesia, with a pit stop in Singapore.
Market participants, such as the Malaysian Internet Exchange (MyIX) and opposition politicians, chided the missed opportunity as a sign that the country is paying a high price for Wee’s about-turn.
The reversal has been criticised as “protectionist” by stakeholders, and is riddled with delays due to the requirement that foreign-flagged vessels apply with the Transport Ministry and Malaysia Shipowners’ Association (Masa), pending a mediation process.
Masa has the right to jam applications in favour of Malaysian-flagged ships, but that move has been rapped as only a single company, namely the Optic Marine Services group, can undertake repairs.
Correspondences with government agencies showed there were concerns about its track record in performing repairs, among them the lack of proper equipment, including vessels.
After undoing Loke’s policy, Wee issued a few statements, including a lengthy interview with business publication The Edge, to clarify his policy choices, including reassuring stakeholders that Masa will not jam applications or interfere moving forward, but will work to expedite applications from foreign vessels.
More recently, he issued a statement rebutting MyIX over Echo and Bifrost, saying previous projects bypassed Malaysia, tensions in the South China Sea have spooked companies from installing undersea cables in the region, and the country lacks data centre infrastructure.
He said the revocation of the cabotage policy will reduce the outflow of foreign money, lower the country’s dependence on foreign vessels, and increase local capacity for such jobs.
Wee’s latest remarks drew further criticism, including from the likes of Malaysia Digital Economy Corporation chairman Datuk Rais Hussin, who tweeted that the minister should verify his statements as data centres have existed in the country since the 1990s.
Microsoft, Google, Facebook and Amazon wrote to Prime Minister Tan Sri Muhyiddin Yassin in a joint memorandum “to express our urgent concerns” about Wee’s decision. – The Vibes, April 14, 2021
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