KUALA LUMPUR (Jan 16): Malaysia Shipowners’ Association (Masa) argued that pinning the blame on the association for delays in undersea submarine cable repair works is an “oversimplification”, as it is only involved in one part of the process — in the review of applications in the granting of licence to foreign-flagged vessels to work in Malaysian waters.

According to the 247-member association, it is only involved in vetting through foreign-flagged vessel applications, and that the issuance of the Domestic Shipping Licence or DSL is entirely under the purview of the Ministry of Transport (MOT).

“With regard to undersea submarine cable repair, pinning Masa for the delay of work is an oversimplification. Masa acts as one part of the process, which is proven time and time again that the process only takes two- to three working days. Masa wishes to correct this notion, as it puts the association in a bad light,” it said in a statement on Monday (Jan 16).

The statement came after The Edge reported over the weekend that the government is in the midst of reviewing its cabotage policy restrictions for submarine cable repair vessels, a move that would potentially open up Malaysian waters to foreign-flagged ships to provide such services. Cabotage laws in essence prevent foreign-registered ships or foreign-flagged vessels from operating in a particular market to protect local companies.

Issues with this arose in mid-November 2020, when the transport minister then, Datuk Seri Wee Ka Siong, revoked an exemption to the cabotage policy for vessels involved in submarine cable repairs. Prior to that, Loke had approved submarine cable repair vessels to be exempted from cabotage laws in March 2019, following complaints of delays for the repair of undersea cable by tech giants such as Facebook, Google and Amazon.

The tech companies complained that without the exemption, the submarine cable repairs were taking too long because the DSL exemption, which allows a ship to undertake submarine cable repairs, could take up to 27 days to obtain in Malaysia, in contrast to 20 days in the Philippines, 19 days in Singapore and 12 days in Vietnam.

They also claimed that Masa, which has to confirm that no locally-registered vessels was capable of handling a required function that a foreign-flagged vessel is selected to undertake, was looking to protect its members and blocked foreign-flagged shipping companies from operating in Malaysian waters, which led to the delays.

In its statement, Masa, a non-governmental organisation established in 1976, explained that it was given a board seat in the government’s Domestic Shipping License Board because it was entrusted to review all applications by charterers who wish to use foreign-flagged vessels in Malaysia.

“It is important to note that Masa does not block any foreign-flagged vessel application for the DSL. That right is given to the Malaysian-flagged vessel owners, as the MSO (Malaysian Shipping Ordinance 1952) had ordained. In this regard, MOT holds the final say, as any application that is blocked will be mediated to make sure that all parties involved get the opportunity to state their case,” Masa said.

As caretaker of the vetting process, Masa said it remains neutral, and “acting only as the secretariat when any Malaysia-flagged shipowners decide to offer their ship against a foreign-flagged vessel in any application”.

“This is done with the highest degree of professionalism, as Masa does not meddle with anything related to the business side of chartering,” it said.

“Should there be no (domestic) vessels available, Masa will produce a consent letter to the MOT, which issues the DSL. This letter serves only to inform the government of the unavailability of a Malaysia-flagged vessel.

This practice is important to uphold Section 65KA of the MSO, which prohibits non-Malaysian ships from engaging in domestic shipping, Masa said, adding that the process gives Malaysia-flagged vessel owners a level playing field and helps the nation reduce over-reliance on foreign transport services.

This information is also key for Malaysian shipowners to get valuable information to invest towards catering for the domestic market, it added.