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Shipmonitor
(
A
publication
of
MASA)
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| Need to tighten cabotage rules |
Recent development relating to the issuance of licences by the Domestic Shipping & Licensing Board has given rise to concern among members of the Malaysian Shipowners' Association on the effectiveness of the implementation and administration of the cabotage policy.
While noting that the number of temporary licenses to foreign registered vessels has always been high, MASA has, from time to time, urged DSLB to exercise restraint and care in issuing licenses by verifying the authenticity of the applicants.
MASA is well aware that DSLB is required to issue the temporary
licences, mostly to foreign registered tankers, because of insufficient Malaysian-registered tankers.
However, the present of a few "black sheep" in the Malaysian shipping industry (acting as fronts for foreigners to circumvent the DSLB regulations) seem to be taking advantage of DSLB by placing unnecessary pressure and misleading the licensing agency. There are attempts by some of these companies to abuse the process of the regulation administered by the
DSLB.
MASA, which works closely with
DSLB, is aware of the tendency by some of the applicants for temporary licences to make eleventh hour application to the Board to issue the licences on grounds that no Malaysian registered tonnage is available. The short notice given to DSLB and MASA to verify the availability of Malaysian tonnage is both unfair and unwarranted.
To stem the practice and also to bring about greater transparency in the process of issuing the
licences, MASA urges DSLB to tighten the procedures taken to issue licences to foreign-registered ships.
MASA calls on DSLB to make it mandatory for applicants of temporary licences to notify all relevant parties, including MASA, at least five working days in advance in order for the Association to inform its members. The lead-time will allow MASA members to look for ands secure suitable Malaysian-registered vessels.
More effective enforcement and monitoring of the cabotage policy would be needed to prevent the policy from being abused and benefits to the nation being undermined.
MASA also wants the government not to respond to any suggestion to relax, or abandon the cabotage policy under the pretext of
globalisation.
The Association feels strongly that ant attempt to liberalise the component of domestic shipping, including suggestions to relax the cabotage trade between Peninsula Malaysia and Sabah/Sarawak would only undermine the development of the local shipping industry.
Removal of the protection provided under the cabotage law would only lead to more foreign shipping lines dominating the domestic trade. Domestic shipping should be viewed no more than other modes, similar to road and rail transportation of goods and passengers within the country.
A large number of shipping companies which emerged as a result of the introduction of the cabotage policy in 1980 would not be able to stand the unfair competition posed by the foreign operators who are interested to serve their short-term interest only.
Licenses Issued by Domestic Shipping Licensing Board and Percentage of Foreign-Flag Ships (1994-1998)
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| Year |
Total Licenses (overall) |
Licenses to
Foreign Ships |
% of foreign-flag
Ships |
| 1994 |
1276 |
633 |
50 |
| 1995 |
1460 |
700 |
48 |
| 1996 |
1612 |
771 |
48 |
| 1997 |
1590 |
637 |
40 |
| 1998 |
1630 |
542 |
33 |
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