News Flash ...


April 2007


WEEK 1  (1 - 7 April 2007)

Bank Pembangunan's shipping NPLs 'negligible' by Presenna Nambiar
The number of non-performing shipping loans (NPLs) in Bank Pembangunan Malaysia Bhd is negligible, says a top official. Bank Pembangunan vice-president and head of maritime business development and advisory, Norulhadi Md Sahariff, said the NPLs that the bank has now were brought forward from the days prior to 2000. "From 2000, whatever we have disbursed right up to now, is negligible, as the market has been seeing strong growth," Norulhadi told Business Times. He said the current shipping scene is the best the industry has experienced in 400 years. "Now , even if you are a small shipowner, you can make a profit," he added. Banks have traditionally been reluctant to give out loans to shipping players due to the high capital expenditure involved and the fear of NPLs. Norulhadi said escalating ship prices have hiked the barrier of entry into the industry, allowing only genuine people who are well backed, with strong financial standing, to go into the business. This has succeeded in minimising the occurrence of NPLs in the shipping industry. Meanwhile, Norulhadi is suggesting that a shipyard fund be set up to further promote the development of the shipyard industry in Malaysia. He said in order to create more local tonnage, existing shipyards need to expand so that it can build bigger ships. The biggest local shipyard today is only capable of building vessels with a 12,000-tonne capacity. Norulhadi said there is a need to expand these shipyards because he believes vessels of 20,000 tonnage is the ideal size for Malaysia. These smaller vessels can be used as feeder services between Asia and the inland waters of China. Demand for smaller vessels is expected to increase further as more chemical plants in Asia are used to cover the short distance to consumers in the region. Norulhadi said the Sarawak Government's initiative to allocate special industrial zones for shipyards, has many shipyards thinking of relocating to the zones. These shipyards have informed Bank Pembangunan of their intention to apply for financing for shipyard expansion, exceeding RM200 million, once the infrastructure in the zone is up. © The New Straits Times Press (Malaysia) Berhad.

Malaysia seeks shipbuilding funds
Singapore - Malaysia is to seek additional funding to support its indigenous shipbuilding activities. This was confirmed by Encik Rozaid, press secretary to Minister for Entrepreneur and Co-operative Development, Datuk Seri Mohamed Khaled Nordin. More than $376M, he said, was used for “the development of the shipbuilding industry, including for vendors and supply chains”, leaving just $26M in the bank co-ordinating the ship building fund, Bank Pembangunan & Infrastruktur. Rozaid confirmed reports that Malaysian shipbuilders are seeing greater interest, and are “headed towards building Panamax vessels”. Proof of Malaysia’s global recognition, claimed Rozaid, came in the signing yesterday of an agreement between Bakri Navigation from Saudi Arabia and Malaysia’s NGV Tech. Malaysia, through its co-ordinating bank, has so far given out loans for the building of 281 ships. Minister Khaled told reporters that support for indigenous shipping companies is vital to developing the local ship building industry. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Singapore to unveil LNG terminal plan
Singapore - Singapore will soon have an LNG terminal, according to Ear Chow Foo, deputy director of the Republic’s Energy Market Authority. He told delegates at the Sea Asia conference in the yesterday that details would be released in two weeks’ time. Fairplay understands the terminal will have a jetty capable of handling Q-Flex vessels of 260,000m³. The terminal’s location is yet to be identified but its land holdings will be on a 30-hectare plot, Ear said. There will be two storage tanks. Although the proposal is for an on-shore terminal, an off-shore facility has not yet been ruled out “despite the constraints we face in sea-space,” Ear commented. Singapore has been seeking to secure a constant supply of gas. A massive power failure in 2003, caused by disruptions in the Natuna gas station in Indonesia, hammered home the importance of self-reliance. LNG is the preferred option as there are a number of suppliers. Singapore imports about 5M tonnes of LNG a year. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Week 2 (8 - 14 April 2007)

IMO needed to improve shipping's environmental status by João Vieira
Shipping is sometimes the forgotten means of transport. There seems to be a general assumption that it is generally environment-friendly, although that may be mainly because the contribution of ships to climate change, air and marine pollution has been outside public debate for many years. But there are signs that this may be changing, which could be good news for shipping, as people are starting to wake up to the environmental damage caused by maritime transport. Studies making use of geographic marine activity data have estimated that about 70-80% of all ship emissions occur within 400 kilometres of land. Estimates put the amount of sulphur dioxide and nitrogen oxides emitted by ships at about 30% of land-based emissions. And these emissions are growing – the Commission believes emissions of SO2 and NOx from ships will exceed those of land-based sources by 2020. The reason this can happen is that there is very little policy control on maritime transport. Given its international character, any regulation has to be transnational, and the obvious body to do the regulating is the International Maritime Organisation (IMO). IMO’s most relevant policy tool to address ship emissions is the Marpol Annex VI, and it is due to review the annex this month, with a final decision to be taken in July. IMO has then a great opportunity to show that it is serious about changing the environmental profile of shipping. It also has a slowly changing attitude in the industry towards regulation. Intertanko, an industry organisation, made a first move in proposing a mandatory shift from the use of Heavy Fuel Oil or bunker oil (a highly viscous unrefined residual oil with a very high sulphur content) to distillate, low-sulphur, fuels. This proposal has found many opponents, but it is a clear sign that many players are prepared to face major changes. Given the urgency of the growing contribution of maritime transport to air pollution and the availability of cost-effective abatement measures, T&E has teamed up with a coalition of international NGOs to call for:
* a reduction in NOx emission standards of about 90% for both existing and new ships, no later than 2015
* reductions in SOx emissions of 70-90% by 2015
* substantial reductions in particular matter, both through the side-effects of reducing NOx and SOx, but also through working on specific targets or PM in the Marpol Annex VI (to be adopted no later than 2009).
The EU could well play a significant role in whether the IMO seizes its opportunity to set shipping on a more en- vironmental course. Europe’s position to date has been that the EU should “negotiate within the framework of the IMO to strengthen current air emission standards”. But what if the revision of Marpol Annex VI is once again delayed or does not deliver the reductions urgently needed? That is where EU threats of unilateral action on shipping emissions are necessary. The EU must ensure its threats are not empty – though hopefully the threats alone will be enough to make unilateral action unnecessary. © 2007 European Federation for Transport and Environment AISBL.

Indonesia to tighten maritime safety
Jakarta - Indonesia is to consider amendments to its 15-year-old Maritime Act, a source at the Directorate of Sea Transportation told Fairplay. “Deliberations are now before parliament” on the question of amendments, he said. The contents of Clause 21 appear to be of particular concern, with parallel amendments slated for all transport departments in Indonesia. The country has suffered in recent months from a number of maritime disasters, mainly involving its ferries. The sinking of the Senopati Nusantara on 30 December and the fire and subsequent sinking of the Levina on 22 February caused the loss of about 600 lives, with many more unaccounted for. Endemic political corruption is largely blamed for the poor state of Indonesia’s maritime industry, compromising the naval auditing and maritime safety. In January, Indonesia’s Jakarta Post blamed corrupt harbour masters for the overloading in ferries. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Malaysia, Philippines agree on joint border patrol procedure
Kota Kinabalu - After years of discussions, Malaysia and the Philippines today agreed on the Joint Border Patrol Procedure aimed at preventing criminal activities at their maritime boundaries. The pact was signed by First Admiral Mohd Rashid Harun of the Malaysian Maritime Enforcement Agency and West Mindanao Province Commander Lieutenant-General Eugenio Cedo, who is also chairman of the Border Patrol Coordinating Group (BPCG). Speaking at the closing of the 14th Malaysia-Philippines BPCG meeting here, Mohd Rashid said that the border patrol would involve nine Malaysian agencies, including marine police, Immigration and Customs departments. Cedo, meanwhile, said that the agreement would enhance relations between the two countries through the sharing of ideas, knowledge and experience in enforcement matters involving the maritime border areas. © 2007 BERNAMA.

Malaysia and Philippines ratify SOP
Kota Kinabalu - Malaysia and the Philippines on Friday ratified the PhilMal Standard Operation Procedure (SOP) after policing the common border operations under a draft SOP for 12 years. The Border Patrol Co-ordinating Group (BPCG) chairman for Malaysia, First Admiral Mohd Rashid Harun described the ratification of the SOP at the 14th PhilMal BPCG meeting hosted by Malaysia here as a landmark in the history of joint border operations between the two countries. "This ratified SOP will undoubtedly have a far-reaching benefit for our respective country and people," he said at the closing of the meeting at Le Meridien Hotel, here. Nonetheless, he was thankful that due to the close relationship, cooperation, commitment and a high sense of operational fraternity between the two countries the overall operational outcome over the last 12 years have been achieved remarkably smoothly with only minor glitches faced in respect of communication. Mohd Rashid also reminded them that they were bound to face myriad of problems and challenges, especially those pertaining to border crimes and other irregularities in the continuing task of managing the common borders. "It is heartening to note that the highly cooperative and positive deliberations demonstrated not only in the past but also during the last three days, bears testimony to our sincere desire to resolve issues pertaining to border patrol and coordination, prior to reaching a consensus," he said. The ratification of the SOP would see the BPCG mechanisms in both countries to be implemented smoothly and even subjected to improvement and refinement from time to time, he said. At the press conference, Mohd Rashid said members of the BPCG had deliberated on various matters of common interests to both nations in the context of shared goals in reshaping policies towards a responsive and effective implementation of the border patrol agreements. However, he said it was not possible for him to disclose the details of the SOP due to its confidentiality. To a question, he said the cooperation in guarding the common borders had been enhanced from once a year since it was incepted in 1995 to twice a year. Apart from that, there were also several other similar cooperation involving the maritime and military services of both countries. So far about joint operations had been implemented focusing the Malaysia-Philippines maritime border in the East Coast of Sabah. Meanwhile, Commander of Western Mindanao Command, Lt Gen Eugenio V Cedo of the Armed Forces of the Philippines, who jointly chairs the PhilMal BPCG with Mohd Rashid, said they were looking forward to forge closer ties with Malaysia. He said the joint border patrol would be held next month involving nine maritime agencies including the military from both countries and another in October, in Zamboanga and Sandakan. © Daily Express, Sabah, Malaysia.

Malaysia, RP start naval drills along border used by al-Qaida-linked groups
Manila - Malaysia and the Philippines began joint annual naval drills Tuesday that will include live-fire exercises in waters considered a key conduit for al-Qaida-linked militants, human traffickers and arms smugglers, officials said. The 10-day exercises, involving six navy ships and about 300 personnel from the Southeast Asian neighbors, would allow their navies to communicate faster and jointly catch pirates, suspected terrorists and other outlaws, Philippine navy Captain Orwen Cortez said. "Maritime terrorism is a big problem, but it's not the only crime being committed in the maritime environment," Cortez told a news conference in Manila, where a ceremony marked the exercises' start. "We have other transnational crimes such as trafficking of drugs, human beings, military hardware." Guarding the sprawling sea border has been daunting, especially for the impoverished Philippines, which has one of Asia's weakest militaries. A major problem is the influx of illegal Filipino migrants from the southern region of Mindanao to Malaysia's eastern Sabah state. Al-Qaida-linked Indonesian militants also have been traveling to Mindanao for terrorist training in Filipino rebel strongholds via Malaysia, Filipino security officials have said. (AP) © 2007 Sun.Star Publishing, Inc.

Pirates take over products tanker
Kuala Lumpur - The IMB Piracy Reporting Centre this week records what was effectively the hijack of a products tanker in Indonesian waters on the afternoon of 14 March. Ten heavily-armed pirates intercepted and boarded the vessel from two grey fibreglass speedboats while the tanker was 30n-miles east of Bintan Island. The crew activated the AIS Alert System and broadcast a distress message. The pirates, holding the crew at gunpoint, demanded that they comply with the raiders’ orders. The crew was tied up and blindfolded. The pirates took control of the ship and the master was ordered to turn the ship northeast towards Malapas Island. They stole crew personal effects and ship’s property. After the ship had been underway for 45 minutes the pirates smashed all communications equipment. The ship’s engines stalled 40n-miles from Horsburgh Lighthouse. When the pirates could not re-start the engines they abandoned the ship and escaped in their speedboats. The crew managed to free themselves, VTIS was informed and the ship made its way to Singapore. No injuries to crew were reported and all cargo was intact, the IMB says. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Singapore strait 'not piracy hot spot'
Kuala Lumpur - The IMB's Piracy Reporting Centre is watching the situation off the Indonesian island of Bintan near Singapore, but director Noel Choong has stopped short of classifying the area as a piracy hot spot. The development follows the 14 March boarding of the 1,800dwt product tanker Ai Maru by pirates near Bintan at the entrance to the Singapore Strait. Indonesian authorities have been informed, Choong said. It has been more than a year since such an incident has been reported from the area, where piracy incidents were once fairly common. In the past, ships have been hijacked either for crew ransom or for the sale of cargo or the vessel itself under a different name by hijackers. “We cannot comment on the pirates' intentions [in this case],” Choong added, referring to the incident in which armed pirates in speedboats boarded the tanker and forced the crew at gun point to divert the vessel. But the pirates fled, leaving the crew unharmed after the engine had stalled. Piracy in the Malacca and Singapore straits has dropped drastically since co-ordinated patrols and other security measures adopted by the Navy and coast guard of the littoral states of Indonesia, Malaysia and Singapore. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Vietnam gas project plan angers China
Beijing - China on Thursday accused Vietnam of encroaching on its territory by exploring gas near the disputed Spratly Islands in the South China Sea in a joint project with British Petroleum. “The Nansha Islands and adjacent waters have been an indisputable part of Chinese territory since ancient times,” foreign ministry spokesman Qin Gang told a media briefing, using the Chinese name for the rocky island chain. “Any unilateral action taken by any other country in these waters constitutes infringement into China’s sovereignty, territorial rights and jurisdiction. We are firmly opposed to this.” The isolated Spratlys, believed to contain large oil and gas deposits, are also claimed by Taiwan, Brunei, Malaysia and the Philippines. A Vietnamese foreign ministry spokesman earlier defended the joint project between the Vietnam National Oil and Gas Group, formerly known as PetroVietnam, and BP to exploit and build a gas pipeline on the Spratly Islands. “Vietnam has enough historical evidence and sufficient legal basis to confirm its sovereignty over both the Paracel Islands and Spratly Islands,” said Vietnamese foreign ministry spokesman Le Dung on Wednesday. Vietnam’s operations on its islands and territorial waters, including plot divisions, exploration and exploitation of oil and gas, were “completely normal” and in line with Vietnamese and international law, he said. The planned two-billion-dollar project would deliver gas from offshore fields to southern Vietnam, from close to other fields from which BP already produces gas, state-controlled media in Vietnam has reported. No Vietnam BP officials were available for comment. China and Vietnam who in 1979 fought a short border war after Vietnam expelled the Beijing-backed Khmer Rouge from Cambodia fought a brief naval battle in 1988 near the Spratly Islands. On Thursday Qin said that China and Vietnam had already reached consensus on resolving their disputed maritime delimitation, including on “the principle of shelving differences and seeking common exploration.”. © Daily Times (Pakistan).

Vietnam plays new anti-terror role by Grant McCool
Hanoi - The United States is nudging former enemy Vietnam toward joining a global anti-terrorism front aimed at searching planes and ships to prevent trafficking in weapons of mass destruction and other illegal cargo. Security analysts and Vietnamese and U.S. officials say Hanoi is warming to the idea, but the communist-run country has concerns about the implications under international law and national jurisdiction. Hanoi participated in an Asia-Pacific forum of the loosely-knit association called the Proliferation Security Initiative (PSI) in New Zealand on March 29, U.S. and Vietnamese officials said. "My sense is that Hanoi is seriously thinking about it to demonstrate international credibility, willingness to cooperate with Washington and 'independence' from China," said Ralph Cossa, president of the Pacific Forum Center for Strategic and International Studies think-tank. Vietnam's fellow-communist northern neighbor is not taking part in the PSI, which is not a formal group. Participants include scores of countries, including several European nations and Australia, Japan, New Zealand and Singapore. "If Hanoi elects not to become more involved, it may reflect concern about antagonizing China or just a desire to not be drawn too deeply into the U.S. camp," says Cossa. Former war enemies Washington and Hanoi have gradually established a friendship, mostly founded on trade and business ties, since Washington ended an economic embargo in 1994 and the two sides restored diplomatic relations in 1995. U.S. President George W. Bush established the PSI in May 2003 as part of his administration's response to the Sept. 11, 2001 hijacked plane attacks on New York and Washington. Vietnam has a 3,200 km-long coastline, a population of 84 million and it is an up-and-coming leading member of the Association of South East Asian Nations. In November it hosted a Pacific Rim summit, including Bush. In a separate state visit President Nguyen Minh Triet and Bush discussed cooperation on global and regional security. U.S. military officials are keen to forge ties with the Vietnamese military beyond the continuing search for servicemen listed as missing in action from the war that ended in 1975. "There are significant sea lines of communication that sit astride Vietnam and by giving them the opportunity to expand their participation in maritime security they would become tremendous contributors to the counter-terrorism effort," said Brigadier General John Toolan, principal director, office of the deputy under secretary of defense Asia & Pacific. As a sign of the changing military-to-military relationship, Washington in December made Vietnam eligible to receive non-lethal military equipment. Much of it will be used for humanitarian disaster relief and search and rescue operations. Also in December, Vietnam agreed for the first time to allow U.S. Navy ships to search at sea for Americans missing from the war, but no maritime searches have taken place yet. The one-party state has no serious internal or external threats, according to political analysts. Vietnam is enjoying an extended period of peace, although it is still under-developed. Vietnam's foreign policy is to be friends with all countries as it pursues more rapid economic reforms to reduce poverty. It has signed most international treaties banning nuclear and chemical weapons and cooperates with the U.N. nuclear watchdog. "In accordance with that policy, Vietnam welcomes the spirit of PSI, which is to prevent the proliferation of WMD," Vietnam Ministry of Foreign Affairs spokesman Le Dung said. Whether it takes part in PSI activities or not, Vietnamese may be called for United Nations peacekeeping duties in coming years. Vietnam is the only candidate from Asia for a non-permanent seat on the U.N. Security Council in 2008-09. "They are very aware that these kinds of responsibilities are going to come their way," U.S. Brigadier General Toolan said after meeting senior Vietnamese military officials in March. © Reuters.

Week 3 (15 - 21 April 2007)

Brunei to host BIMP-EAGA meets by P Marilyn
The 2nd Customs, Immigration, Quarantine and Security Task Force Meeting (CIQS) and the 6th BIMP-EAGA Small and Medium Enterprise (SME) Development Working Cluster Meeting will be held, from April 19 to April 22, at Centrepoint Hotel, Gadong. According to a press release by the Entrepreneurial Development Centre, under the Ministry of Industry and Primary Resources, the meetings are part of the coordination mechanisms and synergy approaches to facilitate, enhance and strengthen the development of SMEs in Brunei, Indonesia, Malaysia and the Philippines amid the era of globalisation. "Considering that approximately 98 per cent of the region's business establishments are SMEs, they are the engine for socio-economic development. SME development is heavily driven by a response to consultations with private and public sectors. Synergy, incentives and assistance should be given to empower relevant entrepreneurs and potential entrepreneurs in order to enable them to become more competitive in the global market," it said. The Brunei Darussalam, Indonesia, Malaysia and The Philippines East Growth Area (BIMP-EAGA) was formally launched on March 14, 1994 during the Inaugural Senior Officials and Ministers Meeting (SOM/MMM) in Davao City, Philippines. The sub-regional economic cooperation is a key strategy of the participating governments to promote socio-economic development in their less developed and more remote territories. The ultimate goal of the BIMP-EAGA is to narrow the developmental gap across and within the EAGA member countries as well as Asean. The CIQS Meeting will run from April 19 to April 20 and will be attended by BIMP-EAGA officials and the BIMP-EAGA Facilitation Centre (BIMP-FC). The event will also be attended by officials from Australia and the United States as well as representatives from the Asian Development Bank (ADB), the German Technical Cooperation Agency, Australian Agency for International Development (USAID), World Customs Organisation (WCO), International Organisation on Migration (IOM), International Labour Organisation (ILO), World Health Organisation (WHO), Food and Agriculture Organisation of the United Nations (FAO), International Maritime Organisation (IMO), and Asia Pacific Economic Cooperation (APEC) Task Force on Counter Tourism. Brunei Darussalam will be represented by senior officials from the Ministry of Industry and Primary Resources, the Ministry of Home Affairs, and the Ministry of Foreign Affairs and Trade. The meeting, chaired by Napoleon L Morales from the Philippines, will focus on issues directed by the leaders during the 2nd BIMP-EAGA Summit on December 11, 2005 in Kuala Lumpur, Malaysia requesting respective ministers to work closely in addressing the issues and concerns, and if necessary, undertaking policy improvements on trade facilitation, particularly through joint security patrol to address transnational crimes and terrorism. The meeting will open with welcoming remarks from the host country. Among the agendas to be discussed are updates and proposed CIQS Task Force Action Plan and next steps forward; organisational concerns and operational BIMP-EAGA reports on the third BIMP-EAGA Summit, 11th BIMP-EAGA Ministerial Meeting, and the 14th BIMP-EAGA Senior Officials Meeting. The meeting will also see the discussion of the 5th SMED Cluster Meeting, the 2nd BIMP-EAGA CIQS Task Force Meeting, BIMP-EAGA strategic planning and status of implementation of action plan, and a presentation by ADB on the RETA and CIQS. Other discussions include: the 3rd Darwin Dialogue on April 26-27 and the 2nd NRD/SMED Convergence Meeting. The event will end with a press conference by the heads of delegations and other related officers from various organisations at the meeting. Meanwhile, the 6th BIMP-EAGA SME Development Working Cluster Meeting will run from April 21 to April 22, and will be attended by BIMP-EAGA officials as well as delegates from the BIMP-EAGA Business Council (BEBC), the BIMP-EAGA Facilitation Centre (BIMP-FC) and the German Technical Cooperation Agency (GTZ). Brunei Darussalam will be represented by senior officials from the Ministry of Industry and Primary Resources, the Ministry of Foreign Affairs and Trade, and the private sector. The meeting, chaired by Merly M Cruz from the Philippines, will begin with welcoming remarks from the host country, Brunei Darussalam, followed by an opening statement from the Cluster Chair. Among the agendas are: reports by the BIMP-EAGA Facilitation Centre; the 3rd BIMP-EAGA Summit, the 11th BIMP-EAGA Ministerial Meeting; the 14th BIMP-EAGA Senior Officials Meeting; a presentation by SMED Secretariat on the 5th SMED Cluster Meeting, the 2nd BIMP-EAGA CIQS Task Force Meeting; BIMP-EAGA strategic planning and status of implementation of action plan; and a report by BIMP-EAGA Business Council (BEBC), reviewing the BIMP-EAGA Roadmap Action Plan. The meeting will also see the discussion of issues to be tackled during the upcoming 3rd Darwin Dialogue in Australia and the 2nd NRD/SMED Convergence Meeting. © 2007 Brunei Press Sdn Bhd.

Malaysia warms to joint patrols in Malacca
Malaysia said Tuesday that it is ready to study ways to boost security in the piracy-prone Malacca Strait, including conducting sensitive joint maritime patrols with Indonesia and Singapore. Deputy Prime Minister Najib Razak said there were “regional sensitivities” to overcome—since joint patrols could allow warships from one country to enter another’s territorial waters—but flagged Malaysia could warm to the plan. “We can examine them. Hopefully we can make it [the strait] more secure in the future,” Najib told reporters on the sidelines of a five-day maritime security conference organized by the US Pacific Command. “Of course, we have to overcome some of the sensitivities,” Najib added, without elaborating. Maintaining and securing the waterway has always been regarded as the responsibility of the littoral states who border the sea lane—Singapore, Malaysia and Indonesia. The three Southeast Asian countries have implemented several security measures, including coordinated air and sea patrols, to secure the Malacca Strait, regarded as one of the world’s most important waterways. Najib said the challenge for the maritime forces now was to look at some of the procedures and issues related to questions of jurisdiction in the strait to keep it secure. “Perhaps there is a need to think outside the box and identify ways and means to forge greater cooperation, thus reducing the opportunities for undesirable elements to continue to exploit the loopholes,” he said in a speech to the conference. More than 30 percent of world trade passes through the strait, and Najib had said that the volume of traffic had increased dramatically, with more than 62,600 ships using the strait in 2005, up 42 percent from 44,000 ships in 1999. Half of the world’s oil shipments travel through the waterway, including 70 percent of Japan’s and 80 percent of China’s oil imports from the Middle East. © 2007 The Manila Times.

Malaysia says joint patrols with Indonesia, Singapore in Malacca Strait can be examined
Kuala Lumpur - Joint patrols by Malaysia, Singapore and Indonesia to secure the Malacca Strait, the world's busiest maritime trade route, are possible but there are hurdles to overcome, Malaysia's deputy prime minister said Tuesday. The three countries straddling the waterway launched coordinated maritime and air patrols in recent years to curb piracy and address fears that terrorists may target some of the 65,000 vessels that pass through it every year, carrying half the world's oil and more than a third of its commerce. Asked if the coordinated patrols could eventually be turned into joint patrols, Najib Razak said: "We can examine them but we have to overcome some sensitivities. "At the end of the day, the objective is to make the Straits of Malacca very, very secure and we have done that. Hopefully we can make it even more secure in the future," Najib, who is also defense minister, told reporters at a military legal conference here. The three countries' enforcement agencies are working closely in sharing information as well as to intercept ships that carry suspicious cargo, he said. Najib did not elaborate on what these sensitivities are but officials said there are concerns that joint patrols could impinge on one another's territorial rights. The Strait of Malacca is notorious for robberies and kidnappings by pirates directed against commercial shipping but attacks have fallen following increased security patrols, with 11 cases last year compared to 18 in 2005 and 38 in 2004. Maritime experts said joint patrols between the three states could help plug loopholes by allowing a navy vessel to pursue suspected pirates into another country's waters to prevent escape. "Joint patrols would be effective and would help further improve the situation in the Malacca Strait," Captain Pottengal Mukundan, director of the London-based International Maritime Bureau, told The Associated Press. "The governments will have to agree on this for it to happen. We need to keep on looking for ways to strengthen security in the strait," he said on the sidelines of the conference. In a speech earlier, Najib called for greater exchange of information and maritime cooperation in the region to combat assaults at sea as pirates become more organized with advanced communication, weapons and high speed crafts. Malaysia welcomes international initiatives to enhance maritime security but such measures must be in accordance with international laws, he said. He said Malaysia has not signed the proliferation security initiative (PSI), which allows inspection of ships suspected of trafficking in nuclear and other illegal material, because it feels certain aspects of the PSI do not conform to international norms. Malaysia however, supports the objectives of the PSI and has been participating as an observer in PSI exercises for the past two years, he added. He did not give other details. © 2007 the International Herald Tribune.

Najib: New KLCI high shows economy is strong
Kuala Lumpur - The closing of the Kuala Lumpur Composite Index at an all-time high on Monday proves that the economy is strong, said Deputy Prime Minister Datuk Seri Najib Razak. He said he was delighted with the high index of 1,322.91, which beat a record that had stood for 13 years, as well as the appreciation of the ringgit against the US dollar. "This underscores the strength of the Malaysian economy and the prudent macro-management of the country, which has led to a growing sense of confidence in the macro policies of the government. "(Our) prospects look very good," he said at a press conference after delivering his keynote address at the Military Operations and Law Conference 2007 held at a hotel here yesterday. The KLCI’s previous record closing high of 1,314.46 was achieved on Jan 5, 1994. Strong buying of blue chips helped the KLCI rise on Monday, adding 14.71 points to close the day’s high. The ringgit also rose on Monday to its highest in 10 years against the United States dollar, touching 3.4390/4410 against the greenback. On maritime security issues, Najib said Malaysia was still studying the possibility of signing the Proliferation Security Initiative (PSI), as it had reservations about certain aspects of the initiative which "we feel do not conform to accepted international norms". The PSI is an informal arrangement among countries which share non-proliferation goals to co-operate with each other to intercept and disrupt illicit export of weapons of mass destruction (WMD) and its components. This global initiative aimed at stopping shipments of WMD, their delivery systems and related materials worldwide was announced by US president George W. Bush on May 31, 2003. "We’re still studying it as there are some items that the legal side is not so comfortable with. "But as far as the objectives of PSI are concerned, Malaysia supports it. Even if we are not a signatory to it, there are instances where we can co-operate with the international community to combat the proliferation of WMD, and we have done so. "In actuality, we are more or less de facto co-operating within the ambit of the PSI objectives," said Najib, who is also defence minister. He added that more than 70 countries supported this initiative either as members or observers, and Malaysia had been participating as an observer in the PSI exercises for the past two years. Participation in the PSI is voluntary. Najib said further manifestation of the country’s commitment towards the non-proliferation of WMD was its support of the United Nations Resolution 1718, which calls for a series of economic and commercial sanctions on North Korea in view of its recent nuclear tests. On the duration of the Malaysian troops’ deployment to Lebanon, Najib said they would be there for a minimum of three years. Asked if Malaysia planned to increase the number of peacekeepers there, he said that decision lay with the UN. Malaysia initially offered to send a contingent of 1,000 soldiers but the number was capped at 360 by the UN. On the delivery of the PT-91M main battle tanks from Poland, Najib said six would be on parade at the nation’s 50th anniversary celebrations, and they would be operational by the end of next year. © 2007 NST Online.

Official: Malacca Strait security better by Audrey McAvoy
Kuala Lumpur - Countries lining the Malacca Strait have vastly improved security in the strategic shipping route over the last five years, the top U.S. commander in the Pacific said on Monday. Adm. Timothy Keating also said that sharing maritime security information among military officials, diplomats, and commercial shipping operators was an integral part of U.S. goals to boost regional stability. "It's of critical importance to us," Keating told a joint news conference with Gen. Abdul Aziz Zainal, the chief of Malaysian defense forces, to mark the start of a military legal issues conference co-sponsored by Malaysia and the U.S. Pacific Command. Keating, who became the head of the Pacific Command three weeks ago, arrived in Malaysia on Sunday on the last leg of his Asia-Pacific tour that has also taken him to Tokyo, Seoul and Guam. Keating's endorsement of a safer Malacca Strait is welcome news for Southeast Asian countries, who have been fighting perceptions that the vital trade route is vulnerable not only to pirate attacks but also to Islamic terrorists. About 50 percent of the world's oil trade and about a third of all global commerce passes through the narrow strait between Malaysia, Indonesia and Singapore. Abdul Aziz said the three countries have boosted confidence of the safety of the sea route by increasing surveillance of suspect vessels in the area. "We are providing full security measures in the Straits of Malacca to provide confidence for the movement of ships lining the straits," he said, adding that there had been a "tremendous reduction" in pirate attacks. Keating agreed, saying security in the Malacca Strait was "much different and much improved in just the last five years." Attacks in the Malacca Strait have been on the decline with only 11 cases last year compared to 18 in 2005 and 38 in 2004, according to the International Maritime Bureau, a martime watchdog. The oil Japan, China, and South Korea import from the Middle East passes through the strait, making it a vital waterway for global economic health. Pirates have plagued the area for decades, however. And after the Sept. 11, 2001 terrorist attacks on the United States, U.S. military officials grew increasingly concerned that terrorists might try to exploit the lax security in the area to mount attacks that could shut down the Malacca Strait. But Indonesia, Malaysia and Singapore began stepping up their surveillance by coordinating sea patrols in 2004 and following with air patrols a year later. Last August, the British insurance market Lloyd's lifted its "war-risk" rating for the waterway, saying the safety of the 550-mile-long strait had improved due to long-term security measures. There still remain some questions, however, about how well the nations lining the strait are able to transfer responsibility for chasing suspect ships once the vessels cross international maritime borders. © BusinessWeek.Com - 2000-2007 by The McGraw-Hill Companies Inc.

Piracy attacks lowest in 10 years
Singapore - Reported piracy incidents in Southeast Asia have fallen to the lowest level for 10 years, according to a Singapore research report. Just 12 “armed robbery and piracy incidents” have been reported in Southeast Asia in the first three months of 2007, a drop of 50%, said Jane Chan and Joshua Ho, researchers attached to the Maritime Security Programme at the S Rajaratnam School of International Studies, a Graduate School of Nanyang Technological University, Singapore. “Increased vigilance by authorities has played a major role in cutting down piracy,” Chan told Fairplay. Indonesian ports and anchorages remained the regional hot spots while only three incidents were recorded in the Strait of Malacca. None of the attacks resulted in injuries to crew and were mostly “small scale” operations. The researchers have drawn from incidents compiled by the International Maritime Bureau and local press reports. The news comes as Malaysia is reviving talk of an oil pipeline from the Middle East to northern Malaysia to beat piracy attacks on tankers by avoiding the Malacca strait. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Set up mutual fund to invest in shipping sector: Bank by Presenna Nambiar
Malaysia should emulate Germany and South Korea and set up a mutual fund to invest in the shipping industry, says a Bank Pembangunan Malaysia Bhd official. Mutual funds are a form of collective investment that pools money from many investors and invests their money in stocks, bonds, short-term money market instruments, or securities. Bank Pembangunan’s vice-president and head of maritime business development and advisory Norulhadi Md Sahariff said such a mechanism would serve to release the Government from its role of funding development of the industry. Malaysia should follow South Korea and Germany, which abandoned direct government financing in their shipping industry, and instead set up an independent mutual fund that will allow high net worth individuals invest in the industry. The fund would be a shipping investment company that will be handled as a fund and be managed by fund managers. Under this fund, high bracket tax payers will be given the choice to invest in the shipping investment company instead of paying taxes. The money gathered from these investors will then be used to strictly fund shipping projects. Profits from this investment company will then be taxed so that the Government recoups the earlier loss in tax income. Norulhadi said the structure can be used in Malaysia if the Government amends the law, enabling tax payers in the higher bracket to invest in a company that is approved and sanctioned by the Government to do ship investment. He said even if the company make a loss, investors would bear it with no qualms as the money would have gone to the Government anyway. This way the Government would eliminate the need for an established fund to be given to Bank Pembangunan, and help increase shipping tonnage as well as foreign exchange earnings. The German KG System today is a key source of ship finance. In 2005, an estimated €3 billion (RM14 billion) of equity was invested in shipping KG funds, contributing to a total KG investment volume in ships of €7.8 billion (RM36 billion). © The New Straits Times Press (Malaysia) Berhad.

Trans-peninsular pipeline driven by commercial reasons, says Najib
Kuala Lumpur - The Kedah-Kelantan oil pipeline project, which is still at the proposal stage, is mainly driven by commercial reasons to reduce costs as well as bypass the Straits of Malacca should that become necessary, Deputy Prime Minister Datuk Seri Najib Tun Razak said Tuesday. "Primarily for commercial reasons. They think they can transport the oil at a lower cost and avoid some risks," he said. "They have not finalised the proposal yet," he said when asked about a refinery to be be built in Yan, Kedah, and another in Bachok, Kelantan, with a pipeline linking them. The project is expected to materialise as part of a joint venture between local firm SKS Development Sdn Bhd and the National Iranian Oil Company (NIOC). The proposal sees tankers from the Middle East anchoring off Kedah and their oil cargo transferred via the 320-km pipeline to Kelantan to be loaded onto tankers bound for countries in the Pacific Rim like China, Japan and South Korea. On reports that preliminary work on the project is scheduled to take off in August, Najib said: "Well, I think it is not at that stage yet. I know this is still at the discussion level and nothing has been formalised yet." In total, he said, there are three initiatives for the proposed project. According to reports, the project will cost RM50 billion. © 2007 BERNAMA.

US commander says security vastly better in Malacca Strait
Kuala Lumpur - Countries lining the Malacca Strait have vastly improved security in the strategic shipping route over the last five years, the top U.S. commander in the Pacific said on Monday. Adm. Timothy Keating also said that sharing maritime security information among military officials, diplomats, and commercial shipping operators was an integral part of U.S. goals to boost regional stability. "It's of critical importance to us,'' Keating told a joint news conference with Gen. Abdul Aziz Zainal, the chief of Malaysian defenc forces, to mark the start of a military legal issues conference co-sponsored by Malaysia and the U.S. Pacific Command. Keating, who became the head of the Pacific Command three weeks ago, arrived in Malaysia on Sunday on the last leg of his Asia-Pacific tour that has also taken him to Tokyo, Seoul and Guam. Keating's endorsement of a safer Malacca Strait is welcome news for Southeast Asian countries, who have been fighting perceptions that the vital trade route is vulnerable not only to pirate attacks but also to Islamic terrorists. About 50 percent of the world's oil trade and about a third of all global commerce passes through the narrow strait between Malaysia, Indonesia and Singapore. Abdul Aziz said the three countries have boosted confidence of the safety of the sea route by increasing surveillance of suspect vessels in the area. "We are providing full security measures in the Straits of Malacca to provide confidence for the movement of ships lining the straits,'' he said, adding that there had been a "tremendous reduction'' in pirate attacks. Keating agreed, saying security in the Malacca Strait was "much different and much improved in just the last five years.'' Attacks in the Malacca Strait have been on the decline with only 11 cases last year compared to 18 in 2005 and 38 in 2004, according to the International Maritime Bureau, a martime watchdog. The oil Japan, China, and South Korea import from the Middle East passes through the strait, making it a vital waterway for global economic health. Pirates have plagued the area for decades, however. And after the Sept. 11, 2001 terrorist attacks on the United States, U.S. military officials grew increasingly concerned that terrorists might try to exploit the lax security in the area to mount attacks that could shut down the Malacca Strait. But Indonesia, Malaysia and Singapore began stepping up their surveillance by coordinating sea patrols in 2004 and following with air patrols a year later. Last August, the British insurance market Lloyd's lifted its "war-risk'' rating for the waterway, saying the safety of the 885-kilometer-long (550-mile-long) strait had improved due to long-term security measures. - AP © 1995-2005 Star Publications (Malaysia) Bhd.

Week 4 (22 - 30 April 2007)

8 Vietnamese boats, 82 crew held for illegal fishing in Malaysia
Kuala Lumpur - Eight Vietnamese fishing boats have been seized and their 82 crew members detained since last week for illegally entering and fishing in Malaysian waters, officials said Monday. The Malaysian Maritime Enforcement Agency detained three boats and 36 crew members Sunday off the coast of northeast Terengganu state, the state maritime enforcement chief Syed Mohamad Fuzi was quoted as saying by national news agency Bernama. Authorities seized 300 kilogram (660 pounds) of fish worth 4,000 ringgit (US$1,143, €952), he said in the report. Another three Vietnamese boats and 23 crew members were detained Saturday, while two other boats and 23 crew members were caught Thursday, Syed Fuzi told Bernama. He said the high level of illegal poaching could be because it is cuttlefish season in the state. Most of the boats were spotted near oil platforms off Terengganu and their activities could pose danger to oil workers, he said, vowing to increase patrols to curb illegal poaching. Mohamad Faizarol, a Terengganu maritime official, confirmed Syed Fuzi's comments. The Vietnamese will be charged in court for illegal entry and poaching, he said. If found guilty, the skippers could be jailed for up to six months and fined up to 1 million ringgit (US$285,714; €238,095), and the crew members could be fined up to 100,000 ringgit (US$28,571, €23,810) and jailed for up to four months, he added. (AP) © 2007 the International Herald Tribune.

Are Malaysian regional ports ready for upsize in ships? by Kang Siew Li
Regional ports in Malaysia are urged to equip themselves to handle the increase in the size of ships deployed on intra-Asia liner trade and feeder services or risk being relegated to becoming feeder ports. Major ports like Port Klang, which comprises Northport and Westports, and Port of Tanjung Pelepas (PTP) in Johor have taken steps to improve their infrastructure and services to do this. However, much needs to be done by smaller regional ports such as Bintulu Port, Penang Port, Kuantan Port and Johor Port, which serve the short sea trades intra-Asia and act as feeder ports to primary hub ports like Singapore, Port Klang and PTP. "The size of vessels worldwide is increasing over the years. Major ocean carriers are introducing a new generation of container ships ranging in size from 8,000 to 10,000 TEUs (20-foot equivalent units) into long-haul trades," International Shipowners Association of Malaysia vice-chairman Ooi Lean Hin told Business Times in an interview. As these mega container ships replace the existing tonnage deployed in these routes, a cascading effect on bigger vessels replacing the smaller vessels is going to take place across almost all trade routes, resulting in a general upsizing in the vessels deployed in each trade segment. Already, the new benchmark for the intra-Asia trade vessel size has moved to 2,000 TEUs and above. Concurrently, feeder operators are also upsizing to vessels with capacity of 1,000 TEUs and above. For example, RCL, one of Asia's top feeder and liner operators, is today deploying the 1,000-TEU feeder ships to ply the Straits of Malacca, while in larger feeder corridors like the Laem Chabang, Singapore and PTP loop, some operators are already deploying vessels up to 2,000 TEUs. "These upsized ships will require regional ports to expand their infrastructure and deepen their channels in order to accommodate longer and wider vessels which also require a deeper draught," said Ooi. Ooi, who is also Evergreen Marine Corp (Malaysia) Sdn Bhd vice-chairman, said apart from the "cascading effect", the robust volume growth in the region, fuelled by the demand in China for intermediate and raw materials to support its production, and the rationalisation initiatives taken by operators in the intra-Asia and feeder trades through slot exchange cooperation are also contributing factors to the upsizing trends of vessels deployed. "Thus, the question that arises is do our regional ports have enough quay length or is the draft alongside and at the approach channel deep enough to accommodate these longer and wider vessels?" he asked. "For example, Johor Port in Pasir Gudang, currently has a quay length of 760m and is already facing some congestion. With the upsize of the intra-Asia and feeder ships, will it have enough quay length to accommodate them?" He foresees further complications for these upsized ships at Johor Port in that they will be subjected to the "no night navigation" ruling currently imposed by the Singaporean Government from 7am to 7pm every day. This ruling is imposed on ships exceeding 220 metres in length overall and is to protect the safety of Singapore's fisherman, kelong and pleasure craft during the night which effectively means that vessels exceeding 220m will only have 12 hours daylight navigation per day to transit between Pasir Gudang and Singapore. Faced with such constraints, which will greatly restrict the future of intra-Asia vessels from servicing Pasir Gudang, which is inevitable, it may well be for the entire community to welcome the proposed rationalisation plan where all container operations will be relocated to PTP. Most regional ports including Kuantan Port, Bintulu Port, Penang Port and Johor Port currently have draught limitations. "But for shipping lines in the intra-Asia market to continue calling at these ports, they would have to look at increasing their draught to 13m to handle ships of up to 3,000 TEUs," said Ooi. Correspondingly, the ports will have to look at expanding their port supporting equipment on the shoreside to support the upsized vessels coming onstream. Ooi said port infrastructure is a strategic investment which contributes to the economic well-being of its hinterland's exports and imports. "It is important that the import and export community of our regional ports continue to be able to benefit from the economies-of- scale brought about by the vessel upsizing trend by being able to attract such vessels to continue serving their ports. "Many regional ports may harbour the vision of becoming a hub port, but they have to be realistic. They have to focus on their niche markets like in the case of Penang Port, its niche is in handling south Thai cargo exports which make up 30 per cent of the port's total throughput," he said. Ooi also pointed out that the Government does not determine or have any influence over the shipping lines' choice of port calls. "It is not the Government who will decide. The Government at best can give incentives for development. "As a port operator, you got to prepare your terminal to be able to handle the type of container ships or the upsize of ships coming on stream. "Then the shipping lines will decide whether or not to come, depending on the facilities and rates offered for transhipment traffic and the cargo potential that you have in the region as a catchment," he said. He said Port Klang has done "very well" as a transhipment port, considering the fact that it is not as strategically located as Singapore and PTP. "Transhipment traffic through the port is projected to hit four million TEUs this year. This is a big achievement. "The terminal operators, the Government and the shipping community have done very well in promoting Port Klang," he added. Meanwhile, Ooi believes that given time, PTP will become one of the primary hubs for South-East Asian cargo due to the latter's strategic geographical location. "Because of its location, PTP has strong potential for growth. On top of that, in terms of productivity in most areas the port has far exceeded its clients' expectations as shipping lines look for productivity, cost of operations and reliable services. "PTP being a new port also offers opportunities for shipping lines to expand their services in terms of linear berth and land," he said. © The New Straits Times Press (Malaysia) Berhad.

Australia aims for Asian arbitration
Sydney – Australia has launched a specialist maritime arbitration commission, in a bid to offer an alternative to arbitration in London or New York. The move, announced by Australia's Attorney-General, is aimed firmly at the booming Asia-Pacific region, and has already secured Chinese endorsement with a co-operation agreement signed between the new Australian body and the China Maritime Arbitration Commission. The Australian Maritime and Transport Arbitration Commission (AMTAC), as the new body will be called, will come under the auspices of the Sydney-based Australian Centre for International Commercial Arbitration. The first appointment to AMTAC will be made within the next month or two. A leading Australian judge, Justice James Alsop, apparently called for an Australian maritime arbitration commission in a speech last year, making the point that Chinese shipowners, for example, might not necessarily support arbitration in London or New York. A spokesman for Attorney-General Philip Ruddock told Fairplay that: "People are looking for an alternative". He said that Australian legal costs were also likely to be cheaper than those in the traditional arbitration centres, and that Australia already had an excellent reputation for maritime law expertise. “Given the expertise in Australia, there is no reason why more arbitrations should not take place in Australia,’’ Ruddock said in a statement. "The Commission paves the way for Australia to play a leading role in maritime and transport arbitration and mediation, both domestically and internationally." © Lloyd's Register - Fairplay Limited 1999 - 2006.

Caution urged for seafarers in Malacca Strait
The International Maritime Bureau is warning seafarers to remain on alert while travelling on the piracy-prone Malacca Strait, despite a fall in attacks. The Bureau says there is no room for complacency, and says it believes pirates normally found in the area are hiding due to aggressive patrols by Indonesia, Malaysia and Singapore. It says if the patrols cease, pirate attacks will rise again. Maintaining and securing the waterway has always been regarded as the responsibility of the littoral states that border the sea lane -- Singapore, Malaysia and Indonesia. The three Southeast Asian countries have implemented several security measures, including coordinated air and sea patrols, to secure the Malacca Strait, one of the world's most important and busiest waterways. © Australian Broadcasting Corporation.

Malacca Straits sees drop in pirate attacks by Kang Siew Li
The Malacca Straits saw two pirate attacks on ships in the first quarter of 2007 compared with zero attacks in last year's first quarter, but the ICC International Maritime Bureau (IMB) said that there is no cause for alarm. "The first quarter of the year is not indicative of the actual piracy situation in Malacca Straits because three months are too short to make definite conclusions. So, no, the two incidents do not indicate that piracy rates have worsened," IMB's Piracy Reporting Centre head for Asia, Noel Choong, told Business Times. "We will get a better overall picture of piracy patterns usually after nine months," he added. The Malacca Straits saw 11 pirate attacks on ships last year, against 12 in 2005. Indeed, IMB in its Piracy and Armed Robbery Against Ships report for the first quarter of 2007 said that the increase in cooperation between governments and local law enforcement agencies has proved to be successful in curbing the enthusiasm of the pirates. "The Malacca Straits and the Singapore Straits are a prime example as the total attacks dropped to only two in the first quarter of 2007 compared with five in the last quarter of 2006," it said. IMB, however, warned that though the number of attacks has dropped due to the increase and constant patrols by the littoral states relevant authorities of Malaysia, Indonesia and Singapore since July 2004, ships are advised to continue maintaining a strict anti-piracy watch when passing the straits. "There is no room for complacency as pirates are just lying low due to vigorous patrols by Indonesia, Malaysia and Singapore. Any let-up of anti-piracy enforcement will see the attacks quickly increasing," said Choong. Worldwide, piracy attacks dropped to 41 in the first quarter, from 61 in the same period last year. The report stated that ships were boarded in 29 instances and two ships were hijacked by heavily armed attackers. There were 38 crew taken hostage with 17 crew kidnapped. The report also identified Balongan in Indonesia, Dar es Salaam in Tanzania and Lagos in Nigeria as more prone to piracy attacks with four, three and four incidents, respectively. © The New Straits Times Press (Malaysia) Berhad.

Malaysia arrests 36 Vietnamese fishermen
Malaysian naval forces on April 24 said that they had arrested 36 Vietnamese fishermen and impounded three fishing boats because those boats and people trespassed into the country’s territorial waters. Vietnam’s consular representative in Malaysia said that the Vietnamese consulate in Malaysia had not received any information about this case from the local government. Director of Malaysia’s Maritime Enforcement Agency Syed Mohamad Fuzi Syed Hassan said that they detected the three above ships offshore Terengganu, northeast of Malaysia, on the morning of April 22. There were 36 fishermen aged from 12 to 60 and 300kg of fish worth around US$1,176 on those boats. The fishermen will be prosecuted for illegal fishing. Captains may be fined up to $294,118 and sailors up to $29,412 each. (Source: Tuoi Tre, TTXVN). © VietNamNet Bridge.

Malaysia leads plan for ambitious undersea fiber optic cable directly linking U.S. and S.E. Asia
Kuala Lumpur - Seventeen major telecommunicationscompanies signed a pact Friday to build a US$500 million undersea fiber optic cable between Southeast Asia and the United States they claim will be relatively safe from earthquakes and tsunamis. The link will offer "a timely increase in both the capacity and diversity of Internet links between Asia and the U.S., bearing in mind the disruptions caused by the recent Taiwan earthquake," Abdul Wahid Omar, chief executive of Telekom Malaysia, said at the signing ceremony. Internet users will get faster and more reliable service once the high-bandwidth cable starts operating in December 2008, he said. Telekom Malaysia, which is leading the consortium of companies, said construction of the 20,000-kilometer link would begin immediately. It said it would be the first submarine cable system linking Southeast Asia directly to the United States. The fiber optic cable, dubbed the Asia-America Gateway, will connect the U.S. West Coast with Malaysia, Singapore, Thailand, Brunei, Hong Kong, the Philippines, Guam and Hawaii, as well asoffer "seamless interconnection" for those locations with Europe, Africa and Australia, Telekom said in a statement. It will "provide an alternative and a more secure link for traffic from the region to the U.S.A.," Telekom said. "This low-risk route was designed to avoid the volatile and hazardous Pacific Ring, thus mitigating the effects from natural disasters like earthquakes and tsunamis." A magnitude 7.1 quake snapped undersea cables near Taiwan on Dec. 26, disrupting phone and Internet communications across Asia as companies scrambled to reroute traffic through satellites and undamaged cables. Services were gradually restored in the days after the quake. © 2007 The Jakarta Post.com.

Malaysia open to joint patrol talks in Malacca Strait
Kuala Lumpur - Malaysia's defence minister urged neighbouring states on Tuesday to consider joint sea patrols in the busy Malacca Strait. Piracy has dropped since Indonesia, Malaysia, Thailand and Singapore began joint air patrols as well as coordinated sea patrols in the Strait two years ago. But the threat still remains. Joint sea patrols by the four countries lining the strait will mark a major shift in regional maritime policing. But it will also spark the sensitive issue of territorial rights. "We have to think out of the box," Defence Minister Najib Razak told reporters after addressing a conference on military legal issues co-sponsored by Malaysia and the U.S. military. "It is up for conferences like this to discuss new ideas, new initiatives and then we can examine them. "But of course we have to overcome some sensitivities but at the end of the day, the objective is to make the Strait of Malacca very, very secure," he added. Analysts said allowing joint patrols could also help overcome the issue of pursuits in the strait. Currently, there are no clear guidelines on chasing suspect ships once vessels cross into another territory. "The challenge for the maritime forces now is to look at some of the procedures, protocols and issues related to jurisdiction," Najib told the conference, attended by some 200 military officers from 48 countries. The narrow Malacca Strait links Asia with the Middle East and Europe and carries about 40 percent of the world's trade, including 80 percent of Japan's and China's energy supplies. More than 60,000 merchant ships ply the waterway every year. © Reuters 2007.

Malaysia says joint patrols with Indonesia, Singapore in Malacca Strait can be examined
Kuala Lumpur - Joint patrols by Malaysia, Singapore and Indonesia to secure the Malacca Strait, the world's busiest maritime trade route, are possible but there are hurdles to overcome, Malaysia's deputy prime minister said Tuesday. The three countries straddling the waterway launched coordinated maritime and air patrols in recent years to curb piracy and address fears that terrorists may target some of the 65,000 vessels that pass through it every year, carrying half the world's oil and more than a third of its commerce. Asked if the coordinated patrols could eventually be turned into joint patrols, Najib Razak said: "We can examine them but we have to overcome some sensitivities. "At the end of the day, the objective is to make the Straits of Malacca very, very secure and we have done that. "Hopefully we can make it even more secure in the future,'' Najib, who is also defence minister, told reporters at a military legal conference here. The three countries' enforcement agencies are working closely in sharing information as well as to intercept ships that carry suspicious cargo, he said. Najib did not elaborate on what these sensitivities are but officials said there are concerns that joint patrols could impinge on one another's territorial rights. Robberies and kidnappings by pirates directed against commercial shipping have fallen following increased security patrols, with 11 cases last year compared to 18 in 2005 and 38 in 2004. Maritime experts said joint patrols between the three states could help plug loopholes by allowing a navy vessel to pursue suspected pirates into another country's waters to prevent escape. "Joint patrols would be effective and would help further improve the situation in the Malacca Strait,'' Captain Pottengal Mukundan, director of the London-based International Maritime Bureau, told The Associated Press. "The governments will have to agree on this for it to happen. We need to keep on looking for ways to strengthen security in the strait,'' he said on the sidelines of the conference. In a speech earlier, Najib called for greater exchange of information and maritime cooperation in the region to combat assaults at sea as pirates become more organized with advanced communication, weapons and high speed crafts. Malaysia welcomes international initiatives to enhance maritime security but such measures must be in accordance with international laws, he said. He said Malaysia has not signed the proliferation security initiative (PSI), which allows inspection of ships suspected of trafficking in nuclear and other illegal material, because it feels certain aspects of the PSI do not conform to international norms. Malaysia however, supports the objectives of the PSI and has been participating as an observer in PSI exercises for the past two years, he added. He did not give other details. - AP © 1995-2005 Star Publications (Malaysia) Bhd.

Maritime attacks at a 10-year low, says watchdog
Kuala Lumpur - Sea pirates: the first-quarter total of 41 attacks was the lowest recorded since 1998, as companies tightened security rules for their commercial ships. Pirates attacked 41 commercial vessels worldwide in the first three months of this year, the lowest figure reported in the past decade, a global seafarers' watchdog said yesterday. The January to last month figure was a significant drop from the same period last year when 61 attacks were reported, the London-based International Maritime Bureau (IMB) said in a statement through its piracy reporting center in Malaysia. It was the lowest first-quarter total reported by the IMB since at least 1998. The highest figure was 103 attacks in 2003, IMB statistics showed. The IMB attributed the decline partly to crew members "taking more precautions during their transit through the hot spot areas, as well as companies adopting more in-house [security] rules and regulations for their ships." However, the improving situation "should not induce complacency," the bureau warned, stressing that "increased vigilance has been and will always be the best form of defense." Indonesian waters remained the world's most dangerous, accounting for nine attacks, the IMB said. That number did not include another two attacks in the Malacca Strait -- a bustling shipping route that is shared by Indonesia, Malaysia and Singapore. Nevertheless, the IMB said Indonesia -- which has tried to boost naval patrols across its sprawling archipelago -- "should be applauded for the proactive efforts it has taken to tackle the problem." The IMB reported that there were 19 attacks in Indonesia in the period from January to March last year. Bangladesh also reported a substantial on-year decline, from nine to two attacks, partly because of shorter waiting times at anchorages where many past attacks happened, the IMB said. The IMB, however, voiced concerns about deteriorating security in Nigeria, where the number of attacks climbed on-year from four to six in the three-month period. Other countries that suffered rising attacks were India, which had three, Sri Lanka with two and Tanzania, with three. All three had reported no attacks in the first three months of last year. (AP) © 1999-2007 The Taipei Times.

Ministry to fund archeological research in Bukit Tengkorak
Semporna - The Culture, Arts and Heritage Ministry will allocate sufficient funds to enable the archeological research in Bukit Tengkorak to continue. The National Heritage Department, meanwhile, will fully finance the repair of public facilities in the area for visitors' comfort. Minister Datuk Seri Dr Rais Yatim told reporters this when visiting Bukit Tengkorak, about 10km from Semporna town, today. The archeological research in Bukit Tengkorak, located about 500ft above sea level, and its surrounding areas began in 1994 by a team from the Malaysian Archeological Research Centre of Universiti Sains Malaysia (USM) in cooperation with the Sabah Museum Department. The research shows that Bukit Tengkorak was probably the biggest porcelain manufacturing site in Southeast Asia, especially during the Neolithic age. Over five million pieces of ceramic wares with various patterns, aged about 3,000 years, have been found there. Rais said the finding had not only enriched the country's historical treasures but also offered another tourist attraction in Sabah east coast. Bukit Tengkorak, gazetted as an archeological site three years ago, is now open to the public. Malaysian Archeological Research Centre Director Assoc Prof Dr Mokhtar Saidin said several discoveries at the site had given arise to new hypothesis on the migration of man and pre-historic trade or maritime exchange in the Southeast Asian and Pacific islands. There were evidence that the world's longest maritime trade during the Neolithic period existed from the east of Sabah to New Britain di Malanesia, spanning over 3,500km, about 3,000 years ago, he said. "We have found an obsidian stone, aged over 3,000 years, that can only be found in New Britain in the Pacific Ocean," he said. The evidence, he said, indirectly showed that pre-historic man had some sort of sailing technology and able to cross the ocean from Malanesia to Southeast Asia about 2,000 to 3,000 years before Captain James Cook explored the Southeast Asian islands and the Pacific Ocean in 1768-79. © 2007 BERNAMA.

MISC reserves comment on bond issue
Kuala Lumpur - The world’s largest LNG operator, MISC Bhd, has reserved comment on reports that it issued bonds in a bid to raise capital. A well-placed source told Fairplay reports of the shipping line trying to raise $2Bn were ‘at best the result of Malaysian newspapers tending to editorialise’. This tendency to speculate, said the spokesman, could be the result of the myriad projects the shipping company is now undertaking. A MISC website makes express mention of a deepwater floating storage and offloading (FSO) facility at its yard in Pasir Gudang in Malaysia’s southern Johor province. Mention is also made of some 26 newbuilding projects. According to Anwar Ibrahim the country’s former deputy prime minister, speaking at a Foreign Correspondents’ Association meeting in Singapore earlier this month, MISC’s parent company Petronas is ‘rich with $90Bn’. Though the source did not confirm that the parent company’s financial strength was allowing it to support MISC, he did not deny such a probability, either. MISC curently operates 23 LNG carriers and has another six newbuildings in its inventory. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Pirate attacks worldwide are down sharply so far in 2007
Kuala Lumpur - Pirates attacked 41 commercial vessels worldwide in the first three months of 2007, the lowest figure reported in the past decade, a global seafarers' watchdog said Wednesday. The January-to-March figure is a significant drop from the same period last year when 61 attacks were reported, the London-based International Maritime Bureau said in a statement through its piracy reporting center in Malaysia. It was the lowest first-quarter total reported by the IMB since at least 1998. The highest figure was 103 attacks in 2003, according to IMB statistics. The IMB attributed the decline partly to crew members "taking more precautions during their transit through the hot spot areas, as well as companies adopting more in-house (security) rules and regulations for their ships." However, the improving situation "should not inducecomplacency," the bureau warned, stressing hat "increased vigilance has been and will always be the best form of defense." Indonesian waters remained the world's most dangerous, accounting for nine attacks. That number did not include another two attacks in the Malacca Strait, a bustling shipping route that is shared by Indonesia, Malaysia and Singapore. Nevertheless, the IMB said Indonesia - which has tried to boost naval patrols across its sprawling archipelago - "should be applauded for the proactive efforts it has taken to tackle the problem," noting that there were 19 attacks in Indonesia in January-March 2006. Bangladesh also reported a substantial on-year decline, from nine to two attacks, partly because of shorter waiting times at anchorages where many past attacks happened, the IMB said. The IMB, however, voiced concerns about deteriorating security in Nigeria, where the number of attacks climbed on-year from four to six in the three-month period. Other nations that suffered rising attacks were India, which had three, Sri Lanka with two, and Tanzania with three. All three had reported no attacks in the first three months of 2006. © 2007 The Jakarta Post.com.

Pirates losing ground
Pirates attacked 41 commercial vessels worldwide in the first three months of 2007, the lowest figure reported in the past decade, a global seafarers' watchdog said today. The January-to-March figure is a significant drop from the same period last year, when 61 attacks were reported, London's International Maritime Bureau said in a statement through its piracy reporting center in Malaysia. It was the lowest first-quarter total reported by the bureau since at least 1998. © 2007 The Albuquerque Tribune.

Plans for oil pipeline across Malaysia: global changes could make project viable despite doubts by Leslie Lopez
A multi-billion dollar proposal to build an oil pipeline across northern peninsular Malaysia is drawing scepticism from industry executives who say the economics of the project do not add up. But promoters of the ambitious infrastructure undertaking argue that global politics, China's insatiable appetite for energy and rapid changes in sea transportation could make the plan to build an integrated oil transmission hub in the north financially viable. 'The doubts over the project are based on current conditions but, from a longer term perspective, this plan has many merits,' said a senior executive of SKS Development Sdn Bhd, a private company controlled by entrepreneur Syed Mokhtar Albukhary, and the prime mover of the proposed northern oil hub. The project, which has received the Malaysia government's go-ahead, is entirely a private-sector initiative and does not involve the country's national oil corporation Petronas. The project calls for the construction of two refineries; one in the state of Kedah's Yan district on the west coast, and the other in Bachok in north-eastern Kelantan state. The two refineries will be connected by a 320km pipeline, and a substantial portion of the funding for the entire project, estimated at around RM50 billion (S$22 billion) over the next 15 years, will come from foreign investors. The Yan refinery will be built by SKS and the National Iran Oil Company at a cost of roughly RM7.7 billion. Other elements of the project, such as the RM15 billion pipeline and the refinery and storage facilities in Kelantan, have yet to be hammered out. Malaysian government officials say that state-controlled United Engineers Malaysia Bhd, a large construction outfit, and Merapoh Resources Sdn Bhd, a little-known private concern, have submitted preliminary plans to participate in the planned oil transmission project. Promoters of the project say that the planned pipeline would connect the Indian Ocean and the South China Sea and reduce congestion in the busy Malacca Strait, currently the main international shipping passageway and the lifeline to Singapore's port. Plans for oil facilities on the Malaysian east coast are not new. In the mid-1980s, a Malaysian entrepreneur announced plans to acquire a second-hand oil refinery from Strasbourg in France and relocate it to Perak. And about a decade ago, a consortium of Malaysian firms obtained approval to carry out a massive land-reclamation project that, among other things, would cater for a petroleum hub and a pipeline that cut across northern Malaysia to Songkla in Thailand. But that project was scrapped after the 1997 regional financial crisis. Several oil industry executives say that the SKS-led venture is also a non-starter. From a purely financial standpoint, oil industry executives say that the handling expenses for potential customers of the proposed northern Malaysian oil hub would outstrip the current cost of shipping oil along the Malacca Straits. Apart from refining charges, the customers would have to pay for storage charges on both sides of the coast and the cost of transporting oil in the pipeline. 'If the charges aren't competitive, oil users won't mind the delay of a couple of days for their shipment and still stick it out with Singapore,' said a chief executive of a listed oil and gas services company in Malaysia. Other industry officials also say the shorelines along Kedah and Kelantan are shallow. This means that the construction of an oil trans-shipment facility would require large amounts of money spent on dredging the waters along the coast to cater for large oil tankers. SKS executives say the problem of shallow waters can be overcome by building single buoy moorings, which are offshore loading facilities that allow for the transfer of oil and gas from tankers to land-based storage depots and refineries. The SKS executives also say that concerns that the project is not financially viable are misplaced. SKS is already in talks with the National Iran Oil Company for the supply of crude, unfazed about the prospect of international sanctions against Teheran over its nuclear ambitions. SKS company executives argue that predominantly Muslim Malaysia is unlikely to recognise any trade embargo against Iran, and that in turn will ensure the steady supply of crude for the oil processing facility in Kedah. As for markets for the processed crude, SKS executives say negotiations are under way with several potential customers from China. 'China wants security of supply of energy. Cost isn't their main concern,' said one SKS executive who is involved in the oil hub project. Changes in sea transportation could also make the project financially viable, proponents of the plan say. As the size of oil tankers grows, the Malacca Strait passageway could become too shallow for very big ships. That would force the large ships bound for Singapore's refining facilities to take the longer route along the Sunda Straits on the west coast of Sumatra. 'In time, the idea of having refining and storage facilities in the mouth of the Malacca Strait will become economically sound,' said the SKS executive. © The Straits Times (Singapore).

Report piracy incidents, IMB urges
Kuala Lumpur - The International Maritime Bureau has stressed the need for piracy attacks to be reported to its Piracy Reporting Centre in Kuala Lumpur. Releasing the piracy watchdog’s first quarterly report for 2007, IMB director Captain Pottengal Mukundan said the Centre "remains the only 24-hour point for reporting incidents worldwide. It is only when attacks are reported that it is possible to trigger effective law enforcement responses from the coastal states”. Noel Choong, head of the Centre, told Fairplay that ship owners are being advised to continue reporting incidents. It has also appealed to Rescue Co-ordination Centres to copy reports of incidents as “suddenly things have gone quiet.” Choong was referring to reports now being relayed by government agencies to the new Information Sharing Centre in Singapore under ReCAAP, an agreement signed and ratified by 14 Asian countries. “The practice of copying reports to the Centre has almost stopped,” he said. Yoshiaki Sato, executive director of ReCAAP, said both agencies can co-operate. “There are no plans to shut out IMB,” he told Fairplay. © Lloyd's Register - Fairplay Limited 1999 - 2006.

Singapore scores some superior subs
Singapore, which received four refurbished Swedish coastal submarines in the last decade, is about to receive two more modern, and much more capable, boats. The four older Challenger class subs each displace 1,100 tons on the surface, have a crew of 28 and are armed with four 533mm and two 400mm torpedo tubes. Sixteen torpedoes are carried, as well as several dozen mines externally. The four A-11 Challenger Class (ex-Sjöbjörnen Class), were purchased in 1995. These are old boats, first was launched in 1968. The Challenger Class were modified for tropical conditions (air conditioning and better corrosion resistance), and also received weapons system and sensor upgrades. The Challengers have done very well in training exercises against American and Australian warships. Two years ago, Singapore bought two Swedish A-17 Vastergotland submarines, which are expected to enter service within two years. These more modern boats will replace two of the current Challenger-class submarines. These boats were built in the late 1980s for Sweden, but were taken out of service in 2004 as a result of downsizing. For Singaporean service, the two Vastergotlands have received air conditioning and the Stirling Air Independent Propulsion (AIP) System. The AIP uses diesel fuel and Liquid Oxygen in a closed system, and enables the sub to stay underwater for weeks at a time. The new combat and sensor systems in the two Vastergotlands are rumored to include a lot of American technology. Singapore is one of Americas best allies in the region, and Singapore has received modern military technology from the U.S. before. The Singapore Vastergotlands are a little larger than the Challengers, to accommodate the AIP system. With the AIP and the state-of-the-art sensors, these boats will be the most capable submarines in the region. Since Singapore sits astride the Straits of Malacca, the busiest shipping channel in the world, that is no small thing. The new subs will be capable of hunting down and destroying any of the subs or surface warships owned by nations in the region. But just two of these subs is not an offensive force, but a deadly defensive one. That sends a message. © 1998 - 2007 StrategyWorld.com.

Singapore, New Zealand navies conduct maritime exercise by Aaron W-Tan
Singapore - The Singapore and New Zealand navies conducted a joint maritime exercise this week. Exercise LION ZEAL, which was held in Singapore, comprised shore and sea phases. The shore phase involved a planning and tactical gaming exercise at the Tactical Training Centre. The sea phase involved a variety of naval vessels from both navies and a patrol aircraft, exercising together under both maritime security and conventional warfare scenarios. The Defence Ministry said this year's exercise was the eighth in the series of bilateral exercises, which began in 1999. © 2007 MCN International Pte Ltd.

Six names shortlisted for Malaysia's first submarine
Lumut - RMN chief Laksamana Datuk Ramlan Mohamed Ali said Friday the navy had shortlisted six names for the Scorpene-model submarine that would be Malaysia’s first, and expected to be delivered by mid-2009. He said the six names had been selected from the 801 suggestions that the navy had received from the public in a contest launched to name the submarine. “We will present the six names to the Armed Forces Council of Malaysia, which will pick and announce the official name by the end of the year,” he added. Malaysia will obtain the Scorpene submarine from Armaris, a joint venture between French shipbuilder DCN and Thales, the prime contractor for the Malaysian submarine programme. © 1995-2005 Star Publications (Malaysia) Bhd.

Tens of isles in South Kalimantan remain nameless
Kotabaru, South Kalimantan - Tens of isles in Kotabaru District, South Kalimantan Province, are still nameless and have not been identified, according to a local official. Kotabaru District has a total of 90 isles measuring 9,422.73 square-km or 25.21 percent of South Kalimantan territories, but some of those isles were not yet identified, Akhmad Rivai of Kotabaru Border line office, said Saturday. "Identification of those isles is crucial for public service administration and to avoid conflicts with neighboring provinces of South and West Sulawesi," he said. © 2007 The Jakarta Post.com.

US$14b oil pipeline across northern Malaysia
Kuala Lumpur - A massive Malaysian oil pipeline project to process and pump oil shipped from the Mideast could lower transportation costs and avoid risks of pirate attacks on tankers at the Malacca Strait, Deputy Prime Minister Najib Razak said Tuesday. The 50 billion ringgit (US$14.2 billion; euro10.6 billion) project would involve building a 320-kilometer (200-mile) pipeline across northern Malaysia, from the port of Kedah on the west coast to the east coast in Kelantan state, officials have said. Plans also called for one coastal refinery that could process 200,000 barrels daily scheduled to be operational by the end of 2010. Najib told reporters the project, which could help tankers sidestep the busy Malacca Straits, was still in a discussion stage and has not been finalised. "There are proposals to have a refinery and a pipeline that will take it across. As far as I know, it is still at a discussion stage. Nothing has been finalised,'' he said. "It's primarily for commercial purposes because they think they can transport the oil at a lower cost and also avoid some of the risks relating to heavy traffic at the Straits of Malacca.'' Najib didn't say when the project will be finalised. Investors from China, Iran and Saudi Arabia are expected to take a stake in the project, which will allow Middle East oil shipments to reach the South China Sea without traveling through the Malacca Strait, which lies off peninsular Malaysia's west coast, they said. There have been global concerns that terrorists could link up with pirates in the Malacca Strait to blow up an oil tanker or use it as a floating bomb, but Najib said such threats were "almost quite negligible because incidences of piracy have no connection to regional and international terrorism.'' The strait, which carries half the world's oil and more than a third of its commerce, is shared by Malaysia, Indonesia and Singapore. Investment bank Aseambankers, in a research report earlier this month, said about 70 percent of fund for the pipeline project would likely come from foreign direct investment. However, it warned laying the pipes could be an "arduous and challenging feat'' as environmental and land issues would need to be addressed. The company recently signed a US$16 billion (euro12 billion) deal with Iran to develop two gas fields in southern Iran. - AP © 1995-2007 Star Publications (Malaysia) Bhd.

 

[News compiled are extracted from various news sources and updated by MIMA Resource Centre. The copyright of the news remain with the copyright owner of the news reports. The information compiled are distributed with good intention and we do not in any way accept responsibility for any error or misfortune resulted from the news. The information does not in any way represent any opinion or comment from the Maritime Institute of Malaysia (MIMA)]

 

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Updated 30042007
© 2007 Maritime Institute of Malaysia