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Abolition of cabotage may result in job losses, says DAP

 | May 9, 2017

Sarawak DAP chief Chong Chieng Jen says new policy may not be able to reduce costs of imported goods as some already import directly, from places like China.

Chong-Chieng-Jen

KUCHING: Doing away with the cabotage policy may bring about repercussions to the local shipping industry and job losses, warns Sarawak DAP.

Sarawak DAP leader Chong Chieng Jen said the move may also not be able to reduce cost of imported goods as widely expected.

The cabotage policy had required all tradeable goods to pass through Port Klang first.

It was imposed by the federal government 30 years ago to integrate maritime laws under the transport ministry and to promote Port Klang as the transport hub.

Foreign shipping agents were restricted to one or two ports in the country and transfer of cargo within the country was done by domestic shipping agents.

On Saturday, Prime Minister Najib Razak, responding to appeals, announced that Sabah, Sarawak and Labuan would be exempted from the cabotage policy from June 1.

As a result, political leaders had expected prices of goods to go down, more goods to be exported from the two states directly and the local marine industry to get a boost.

However, Chong said in recent years, changes in rules had allowed imports to be shipped directly from overseas.

“Over the past few years, there has been liberalisation of this cabotage policy whereby ships from China, the Middle-East and other countries were allowed to come directly to Sarawak ports without going to Port Klang.

“So there’s a direct shipping line (to Sarawak). It’s there already.”

There are currently 3,000 ships registered in Sarawak, manned by some 18,000 workers, according to the Sarawak and Sabah Shipowners Association (SSSA) and Sarawak Shipping Association (SSA).

The associations said in a statement that abolition of cabotage would result in significant job losses and called for a review of the decision to abolish the policy.

Chong said he expected to see layoffs by the domestic shipping industry within a year.

“Half of them will be out of a job. They will have to close down their businesses once this sector is open to foreign vessels,” Chong said.

He added that the cost of imported goods may also not be reduced.

“Shipping costs as a whole do not add much to the cost mainly because a lot of imported goods are already being shipped directly from China to Sarawak.

“The main cost is our depreciating ringgit. That is the main cause of inflation in Malaysia and in Sarawak, in particular,” Chong said.

He said the situation may be different in Sabah where there is no direct foreign shipping route to the state.

Yesterday, Sarawak Chief Minister Abang Johari Openg had expressed hope that the abolishment of the cabotage policy would reduce the cost of living in Sarawak.

“I know a certain sector is not happy but we have to consider the needs of the consumers. Hopefully, it will reduce costs and help bear with the rising cost of living.”

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