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The announced that the government is
studying the possibility of making
Labuan as a centre for registration
of international vessels requires
careful consideration as the
proposal, under the budget 2003, may
not only prove counter-productive as
it offers weak linkage to the
economy but could subvert the
economy as well.
At a time when concerted efforts are
being made globally to wipe out the
menace of flag of convenience,
considerable care must be taken to
ensure that the proposal to create
an international registry does not
end up a dumping ground for obsolete
ships and a haven for brass-plate
shipping companies as well as those
with dubious ownership background.
International ship register requires
close inspection and control as is
monitored by Singapore which is one
of the most successful registries in
the region.
The concept of international
registry was first initiated by
Norway more than 20 decades ago to
stem the flagging out of Norwegian
flag vessels due to high manning
costs (arising from conditions
required by the national register
for vessels to be manned by
Norwegian nationals).
Since then a few other European
countries set up similar registries
with some mixed results.
However, the same countries are
looking at tonnage tax recently
initiated by United Kingdom as an
instrument of the government policy
to retain national flag vessels as
well as to sustain the development
of the shipping industry.
Under the tonnage tax, relief from
tax is offered to companies which
commit their vessels under the
programme and contribute towards the
development of seafarers which is
seen as a critical link to
sustainability of national fleet.
In Malaysia, the international ship
register was considered more than 10
years ago and although the enabling
legislation was introduced, the
matter was quietly buried until now.
The national ship registry in
Malaysia is one of the world's most
attractive registries as it offers
shipping companies incorporated in
Malaysia a blanket tax exemption on
income derived from shipping.
An international ship register in
Labuan, which is a tax haven, could
prove attractive, but could
potentially and unwittingly
undermine the national register
which despite various measures to
boost the national merchant fleet,
remains inadequate to meet the
demand for national shipping
tonnage. |
