Southern Philippines boycotts Sabah, Labuan after rice transhipment fiasco

Buyers in the Philippines have decided to boycott Sabah and Labuan for the transhipment of rice. (Bernama pic)

KOTA KINABALU: Philippines rice buyers have decided to leave Sabah and Labuan out of future business in a move that could cost the state more than RM2 billion in annual trade, following court action by customs against a company charged with attempted rice smuggling.

Rafael Al Habibi, a spokesman for the 20 end-buyers of the 351 containers, said rice would now be transhipped from Vietnam and other countries through Tarakan Port in North Kalimantan, Indonesia.

“We still cannot believe that the containers were seized on suspicion of smuggling,” he told FMT.

“We have been doing this business for decades. All 351,000 bags of rice were clearly marked for transhipment to the Philippines.”

Adding that the bill of lading showed the containers were for transhipment to the Philippines only, he said it was “unbelievable” for the customs department to accuse them of smuggling.

Rafael said the consignees no longer feel they can trust the Sabah customs, especially as they had broken no law.

Being aware of the strict customs law in Sabah, he said, they had always tried to adhere to the rules.

Now that one of the rice trading companies involved in the transhipment has landed in court, though, their confidence in the administration of Sabah and Labuan ports has been shaken, he said.

“The rice was not bought from private companies. It was bought in legal rice trade already agreed on by the governments of Vietnam and the Philippines,” he said.

He added that all of the rice was bought by the Philippines National Food Authority directly from BINA Food, a government-linked rice authority in Vietnam.

“These are similar to Bernas in Malaysia,” he said, adding that it was a slap in the face for both Vietnam and Philippines for customs to say that the rice was smuggled.

“So we have decided to cut off Sabah and Labuan completely from future trade.”

On Tuesday, a rice trading company was charged in the Kota Kinabalu Magistrate’s Court with smuggling 16,000 sacks of Vietnam white rice worth RM862,752 last year.

The 16,000 sacks were part of 351,000 sacks in 351 containers bound for Labuan which were seized by customs on Sept 11 after being unloaded at Sepangar Port.

The officer in charge initially said the consignment was seized for not having an import permit. The charge was later changed to smuggling.

The containers were supposed to reach the Philippines between Oct 10 and 12 last year. They are currently still held by customs.