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Understand nature of business before implementing cross-border policies
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The Sabah government is urged to cancel the policy decision to stop wooden ships from the Philippines to enter Sabah waters for cross border-trading activities as this decision would literally kill the east coast transhipment businesses, especially in the east coast.

BIMP-EAGA Business Council (BEBC) chairperson Roselan Johar Mohamed has recently announced that the State Security Council has decided to stop wooden ships from operating and that meant they would be using metal ships in the future.

This announcement has already caused much worries for the transhipment traders along the east coast and they have pleaded to help highlight their concerns.

The relevant authorities must understand the nature of the cross-border trading business before making decisions that could have negative impacts on the businesses and stakeholders.

Firstly they must understand that the cross-border trading is selling on Free On Board (FOB) basis because Sabahan traders are not interested to sell on Cost Insurance & Freight (CIF) basis.

On the CIF basis, our traders would need to send the goods to the final destination in Mindanao, then our traders would get paid at the Port of Discharge.

It is risky for our traders to send our Sabah ships since our flag possesses very high potential for kidnapping. Therefore our traders have worked out a preferred method with the Philippines traders. That is their ship to come over and load the goods and they pay our traders immediately.

Secondly, most Philippines ports are relatively smaller ports so they can only accommodate wooden ships. There is no reason for them to change their boats into steel hulled vessels.

Ports of Discharge in Mindanao are located at Bongao, Basilan, Holo, Zamboanga, etc. These are the main ports. Then the goods will be distributed to the small islands by smaller boats.

Thus if the Sabah government insists to disallow wooden ships to operate by next year, definitely the Philippines traders would move their trading somewhere else such as Nunukan, Bitong or Tarakan, etc.

These ports are not only business-friendly and flexible but they are fully operated in line with the BIMP-EAGA spirit.

Since they are still not ready for steel hull (metal) vessels, our ports will be shunned by Philippines traders.

If it’s for security purpose, they must explain why metal boats can be better monitored than wooden boats as I don’t see any sense in such implementation.

I remind the Sabah government that according to Customs Department statistics, nearly RM1 billion in trade is recorded every year.

In 2015 on currency exchange peso against ringgit within the east cost, the value of cargo traded was RM868 million, mainly from Kudat, Sandakan, Lahad Datu and Tawau Ports.

The types of goods traded are such as sugar, rice, instant noodles, noodles, sundry goods, electrical appliances, fertilisers, cooking oil, used clothes, cigarettes, seaweed and much more.

About 80 wooden ships are plying to our waters from the Philippines for border trading activities.

The Customs Department has issued about 138 transhipment licences for the four ports and the impact it can have on east coast traders is huge if not dealt with carefully.

Thus I urge the Sabah government to announce cancellation of this incoherent condition for border trading businesses. Help the traders, given the challenging economic years ahead, not make things more difficult for them.


JUNZ WONG is vice-president of Parti Warisan Sabah and state assemblyperson for Likas.

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