Billion RM Trade Could Be Lost If Govt Insists Barring Wooden Boats

Junz Wong
Junz Wong

KOTA KINABALU – Parti Warisan Sabah has urged the State government to rescind the policy stopping wooden-made ships from Philippines to enter Sabah water for cross-border trading activities.

This decision, if left unchanged, would literally kill the east coast trans-shipment businesses, said Warisan vice president Junz Wong.

“The relevant authorities must understand the nature of cross-border trading businesses before making decisions that could have a negative impact on the sector as well as its stakeholders,” he said.

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

“On CIF basis, our traders need to send the goods to the final destination in Mindanao then our traders get paid at port of discharge.”


Speaking at a Press conference Friday, Junz was commenting on the statement made by Roselan Johar, chairman of Bimp-Eaga Business Council (BEBC) who had recently announced that the State Security Council has decided to stop wooden ships from operating.

This announcement has already caused much worries for the trans-shipment traders at the east coast and they had approached Junz, who is also Likas Assemblyman, to help highlight their concerns.

Junz pointed out that it is risky for Sabah traders to use Malaysian-flag ships since our flag possesses a very high potential for kidnapping and piracy in regional waters.

“Therefore our traders have worked out a preferred method with their Philippines counterparts; that is their ships come over and load the goods and they pay our traders immediately,” Junz told the media.

“Secondly, most Philippines ports (in the southern part) are relatively smaller so they can only accommodate (smaller) wooden ships. There is no reason for them to change their boats into steel hull vessels.”

The smaller ports in southern Phillipines are best suited for the wooden type cargo boats, and also there is that security risk for Malaysian-flagged ships in the region.
The smaller ports in southern Philippines are best suited for the wooden type cargo boats, and also there is that security risk for Malaysian-flagged ships in the region.

The 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 on disallowing 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.

Junz also said that if the decision to ban wooden boats is 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.”

Junz reminded the Sabah Government that according to Customs statistic, nearly RM1 billion trade (between Sabah and Philippines) is recorded every year.

In 2015 on currency exchange Peso against Ringgit within east coast, value of cargo traded was RM868 millions, mainly from Kudat, Sandakan, Lahad Datu and Tawau Ports.

There are about 80 wooden ships plying to our water from Philippines for the border trading activities, and goods traded include sugar, rice, instant noodles, sundry goods, electrical appliances, fertilizers, cooking oil, used clothes, cigarettes, seaweed etc

The Customs dept 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.