KUALA LUMPUR: A leading maritime lawyer has called for honesty about Malaysia’s capabilities as the government moves to address the controversy surrounding its cabotage policy.
Sitpah Selvaratnam, who co-chairs the Malaysian Bar Council’s Shipping and Admiralty Law Committee, said the government needed to be frank with itself in assessing those capabilities.
As FMT reported last week, the revocation of the cabotage exemption for submarine cable repairs has received vocal criticism from tech giants and politicians alike. They are blaming it for Malaysia’s loss to neighbouring countries of a number of high value investments.
The Cabinet is expected to discuss the matter at its meeting today.
Sitpah said there must be truthfulness regarding the skills Malaysia had and the skills it lacked.
“It’s about acknowledging,” she told FMT. “Do we or do we not have the skills? In areas where we have the skills, great. Keep the cabotage. Where we don’t, give an exemption.”
She said that in the case of offshore supply vessels, for example, protectionist policies were less disruptive as Malaysia had the resources to service the sector.
In other areas, such as cable repairs, policymakers must assess whether the current capabilities of the country’s own vessels could justify keeping international counterparts at bay.
“The basis for cabotage is that you already have sufficient local skills to provide certain services,” she said.
“If you don’t have them, you are stunting the growth of the country. You can’t do it, and yet you aren’t letting others do it.”
She said policymakers must also look at how market forces were affecting the development of specialist vessels.
“If the demand isn’t there, then shipowners aren’t motivated to invest in vessels for a highly specialised job. And if that’s what the industry decides on, the government must allow others to come in.”
Sitpah noted that many countries had moved away from cabotage policies to encourage free trade since protectionist policies would limit foreign participation in an industry.
The cabotage debate was recently ignited by decisions from Google and Facebook to open data centres in Singapore and Indonesia.
Some critics of the government have pointed to the transport ministry’s decision to revoke the exemptions given to submarine cable repair vessels as a reason these investments had gone elsewhere.
At a time when foreign investment is seen as an important source for the country’s recovery from the economic effects of Covid-19, opponents of the policy, such as Umno deputy president Mohamad Hasan and DAP secretary-general Lim Guan Eng, have said Malaysia could not afford to lose out on big projects because of the revoked exemption.