Academy seeks more training berths on board Malaysian ships
Kuala Sungai Baru - The lack of training berths on board local ships for practical stints for its student undergoing training is a major concern for the Malacca-based Akademi Laut Malaysia (Alam). Lack of such facilities hampers its efforts in producing competent and qualified seafarers to meet the shipping industry’s needs. A substantial number of berths are required because it is a mandatory requirement for all seamen to work in a ship for a period of one year before they complete their formal training, said chief executive officer of Malaysian Maritime Academy Sdn Bhd, M Adthisaya Ganesen. He noted that despite the rapid pace of growth in the the maritime industry, not many companies engaged in the sector are willing to invest in human resource development. The number of sponsorships for training of cadets and ratings is rather limited, he said. Only six maritime companies have agreed to sponsor the nautical and engineering cadets in the July 2005 intake. These firms include MISC Bhd, Johor Port Authority, Jasa Marine, Petronas Maritime, American Eagle Tankers and Vriny Marine. “Even if local shipping companies do not want to sponsor our cadets for training, we are asking them to at least allocate some berths on board their ships for our students to undergo their practical training,” he urged. — PortsWorld © The New Straits Times Press (Malaysia) Berhad.

Bank Pembangunan Hopes To Finalise Structure Of RM9 Bln Fund
Kuala Lumpur - Bank Pembangunan Malaysia Bhd hopes to finalise the structure for raising of RM9 billion fund before year-end, says its president and managing director Datuk Abdul Rahim Mohd Zin. At the moment, he said the bank was in talks with the regulatory authorities to finalise the structure, he said. "We hope to finalise it before the end of this year," he told reporters after the newly created Bank Perusahaan Kecil dan Sederhana Malaysia Bhd (SME Bank) officially opened its doors here Monday. Abdul Rahim said out of RM9 billion fund, the bank was initially allocated RM2 billion for the SME Bank. In Budget 2006, the government allocated RM10 billion for Bank Pembangunan, with RM1 billion for venture capital fund and the balance of RM9 billion for the bank. The RM9 billion fund is expected to be raised from the capital market. Abdul Rahim said with the opening of SME Bank marked the completion of the rationalisation exercise between two development financial instituitions, Bank Pembangunan & Infrastruktur Malaysia Bhd (BPIMB) and Bank Industri & Teknologi Malaysia Bhd (BITMB). SME Bank was the result of the merger between BPIMB and BITMB, he said. BITMB, renamed as SME Bank, is focused on small and medium enterprises (SMEs) while BPIMB, renamed as Bank Pembangunan, concentrates on infrastructure, maritime, capital-intensive and high technology projects, he added. For SME Bank, Abdul Rahim said the bank would act as a one-stop centre for SMEs by providing a comprehensive end-to-end advisory support to meet their business development and knowledge requirements. Meanwhile, SME Bank's managing director Datuk Azmi Abdullah said the bank has targeted about 20 percent of its RM2 billion loans portfolio to be disbursed in the first year of operations. He said as a one-stop financial services centre, SME Bank would be working closely with various government and non-government agencies as well as other financial institutions to offer end-to-end funding and business advisory services to all SMEs. "To ensure that the SMEs have access to these integrated services, we shall be leveraging on the competencies of a network of strategic partners and external service providers to deliver these integrated services," Azmi said. "With the group's combined asset value of more than RM22 billion and a capital base of RM4 billion, SME Bank is definitely in a better position to meet the requirements of SMEs," he added. Currently, most of the bank's customers are involved in the manufacturing, logistics, construction, real estate and the tourism businesses. In line with government policies, SME Bank will also be focusing on new sectors such as the development of service providers, strategic industries within information and communications and technology (ICT), agro-based manufacturing and biotechnology as well as programmes for regional development. © 2005 BERNAMA.

Change in the air at Petronas
Market talk in Kuala Lumpur suggests a major shake-up of the top management of Malaysia's national oil and gas company Petronas is on the cards. This follows yesterday's announcement that Mohd Hassan Marican, Petronas president and chief executive officer, has resigned as chairman/director of Petronas Dagangan, a listed Petronas subsidiary that markets a range of high quality LPG, petrol, kerosene and diesel. Since becoming prime minister almost three years ago, Abdullah Ahmad Badawi has targeted government-linked companies such as Petronas for corporate excellence, making gradual changes at top management in each of the companies. It is understood that the latest change in the Petronas subsidiary indicates the time has come for top management change within Petronas to generate a greater return from government investments both in Malaysia and overseas. Petronas, in partnership with foreign investors, operates the world's largest integrated LNG plant in Bintulu, Sarawak and owns the world's largest LNG fleet. It also holds more than 60% of MISC, which is increasingly focusing on energy transport. © Lloyd's Register - Fairplay Ltd 2005.

China aims to safeguard its oil imports
Beijing - China is taking new measures to safeguard its rising oil imports from disruption by hostile forces, analysts say, putting teeth into a high level directive from President Hu Jintao. In November 2003 Hu told a major economic conference the country had to adopt a revised strategy to deal with the possibility that foreign countries might try to control the Straits of Malacca, the funnel for 80% of Chinese oil imports, mostly from the Persian Gulf and West Africa. The official Xinhua News Agency reported that Hu said the strategy was necessary because "some big countries attempted to control the transportation channel at Malacca." Xinhua did not elaborate, but the U.S. is the only power with sufficient naval forces to enforce a blockade of the 900-kilometer waterway that borders Malaysia, Singapore and Indonesia. The U.S. denies it has any intention of blocking Chinese access to the Straits of Malacca. It says the key threat in the area comes from pirates and other rogue elements disrupting commercial shipping. Analysts say a key element in the new Chinese strategy is to conclude oil import deals with neighboring Russia and Kazakhstan, consigning shipments to overland pipelines, exempt from the threat of naval disruption. Under a proposed deal with Russia, China would obtain 1.6 million barrels per day from prospective fields in east Siberia. The oil would move by pipeline to the major distribution center at Daqing in China's northeast. Japan is pressing Russia to construct the pipeline to a Russian Pacific port for onward shipment to Japan and South Korea, but Russian President Vladimir Putin recently said the preferred option was northeast China. The Kazakhstan deal involves the construction of a 200,000 barrel per day line to move Kazakh oil to western China's Xinjiang province. The line is expected to be completed in December, and should supplies become sufficient, capacity could be doubled. In 2004 China imported about 3 million barrels of oil per day, mostly from the Middle East. Projections for 2010 range from 5 million to 10 million barrels a day. Kuen Woon Paik, a researcher at Chatham House, a London think tank, said the principal imperative of the Russian and Kazakh deals is to give China new sources of oil supply, but their exemption from maritime disruption is obviously a key selling point for a worried Chinese leadership. "As China increases oil imports the safety of its transport links is going to become increasingly important for it," he said. "For that reason it will feel very comfortable with the Russian and Kazakh lines. They will really help it a lot." However, Paik said, Russian and Kazakh oil shipments will constitute a minority of in the expected increment in China's future oil imports. "The dependence of China on Middle Eastern crude is very high and will continue to be so," he said. "This means the security of the Malacca Strait is going to be a very high Chinese priority." Some commentators maintain that China is already moving to secure its Middle Eastern supply chain, developing a "string of pearls" of bases and alliances between the Straits of Hormuz in the Persian Gulf and the Straits of Malacca, just to the south of its major oil ports. Major elements in the chain, they say, include a new naval base in the Pakistani port of Gwadar, an electronics listening site on a Burmese island near Malacca's western approach, and substantial investment in upgrading the operational readiness of the Chinese navy. The commentators say the Chinese strategy is motivated by increasing friction between Washington and Beijing over trade and strategic issues, and the expectation that the U.S. would attempt to cut off Chinese oil supplies in response to any Chinese move against Taiwan, the self-governing island from which it split amid civil war in 1949. Robert Karniol, the Asia-Pacific editor of Jane's Defense Weekly said China is moving rapidly to increase the quality of its navy, but doubts its ability to fend off an American naval challenge, even in the long term. Karniol acknowledges stepped up Chinese construction activity in Burma, Pakistan, and elsewhere along the Middle East oil supply route, but says it's still too early to conclude that the main purpose is military. "It's unclear whether there is a strategic quid pro quo here, or if the construction is basically commercial," he says. David Zweig, director of the Hong Kong-based Center on China's Transnational Relations, says China's navy is pressing for an increased role in safeguarding the country's energy transportation links, but that no final decision has been made by the country's military or political leaders. "We have seen some reports about Chinese development of high speed ships to come to the aid of (oil) tankers in trouble," he says. "But there is still no serious effort to expand the navy to patrol in the Straits of Malacca." Zweig said that rather than planning on a confrontation with the U.S. over oil shipments, China should work with it and the states of the Straits of Malacca area to develop transportation protocols that would benefit everyone. He said intelligent action by Washington could do much to reduce Chinese fears about a potential oil blockade. "The U.S. should invite China to watch how it patrols the area," he said. "That would do much to increase their sense of security because it would show them that the U.S. has no intention of limiting Chinese access there." © 2005 Dow Jones & Company, Inc.

China bulk demand strong post-2008
CHINESE dry bulk demand will continue well after 2008, declared Dr Philip Rogers, group head of research at Galbraith’s, at the Marine Money conference in Athens today. “We have moved well beyond the 2008 [Olympic Games] era – that construction has finished,” he said. Dr Rogers added that demand is now being driven by personal and corporate consumption needs and for building infrastructure such as ports. He revealed that China is today importing more than 300M tonnes of dry bulk material a year. Rogers posed the question of whether fleet growth would be sufficient to cope. He concluded that the fleet was expanding at a rapid pace and appears adequate to cope with demand growth over the next two years. In relation to the freight markets he revealed there are mixed views for the prospects of the last quarter of this year. “Owner sentiment is changing – most now expect a strong stable market in contract to the exceptional fireworks of the final quarter of last year.” But he warned congestion could prevent demand being satisfied and freight rates could reach record levels. © Lloyd's Register - Fairplay Ltd 2005.

Indonesia to slash handling charges
INDONESIA is clamping down on container handling charges levied by state port operator Pelindo. The transport ministry is soon to introduce a regulation to limit the handling charge for empty containers to $62 per TEU from the existing charge of $93, minister Hatta Radjasa has said. The new regulation could be in place as early as next week. The move aims to slash Terminal Handling Charge levied by container lines, which exporters complain is unreasonable. Existing regulations do not permit foreign lines to charge THC exceeding 50% of the container handling charge levied by port operators. Radjasa expects THC at Tanjung Priok port in Jakarta to come down from $150 per TEU to $90 per TEU. Licences of foreign operators, who flout the 50% limit, will be revoked, the minister has warned. © Lloyd's Register - Fairplay Ltd 2005.

More Than 450 Companies To Attend LIMA 05
Kuala Lumpur - More than 450 companies from 18 countries are expected to take part in the Langkawi International Maritime and Aerospace (LIMA) 2005 exhibition scheduled for Dec 6 to 11 on the resort island. Among them are companies from Australia, Canada, France, Germany, Italy, Russia, Singapore, Sweden and the United States, said Defence Ministry Secretary-General Tan Sri Subhan Jasmon. As in the previous exhibitions, several memorandums of understanding and contracts are expected to be signed, involving governments and manufacturers and suppliers of maritime and aerospace equipment, he said. "Ten warships and sailing ships from the naval fleets of Australia, Bangladesh, France, India, Indonesia, Pakistan, Singapore and the United States have confirmed their participation," he told a news conference, here. He said the exhibition of sailing ships was a new feature at LIMA, a biennial exhibition that was introduced in 1991. Subhan said the exhibition, carrying the theme "Defence Industry: Meeting Future Needs", would enable local and overseas companies engaged in the defence industry to showcase their capabilities and pave the way for the establishment of smart partnerships. The exhibition on the first day is open to guests, VIPs and journalists, and the second and third day to trade visitors and personnel of uniformed services. The public can visit the exhibition on Dec 11. The air exhibition will take place at the Mahsuri International Exhibition Centre (MIEC) and the air show at the Langkawi International Airport while the maritime exhibition, involving leisure and commercial ships and naval vessels, will be held at Tanjung Malai. "Special air shows scheduled include parachute jumps by the Paratroopers Brigade, a flypast by six MiG-29 aircraft as well as by four F/A 18D and Hawk 108/208 aircraft," he said. There will also be an air show by helicopters of the Royal Malaysian Air Force, Royal Malaysian Navy, Fire and Rescue Services Department, Royal Malaysia Police, Projek Lebuhraya Utara Selatan (PLUS), Eurocopter, Westar and Sabah Air, he said. LIMA 05 is organised jointly by the Defence Ministry, HW Lima Sdn Bhd and Le Proton Lima Sdn Bhd. © 2005 BERNAMA.

Pirates hijack Indonesian cargo ship, Malaysian-based watchdog says
Kuala Lumpur - The Indonesian navy is searching for pirates who hijacked a Singapore-bound cargo ship carrying tin ingots worth US$4.5 million, a maritime watchdog said Tuesday. The pirates armed with guns attacked the Indonesian-registered Prima Indah on Friday after it left the port of Pangkal Balam on Bangka island, about 400 kilometers (240 miles) northwest of Jakarta, said Noel Choong, head of the International Maritime Bureau's piracy reporting center. Fourteen crew members of the ship, which was carrying 660 metric tons (730 U.S. tons) of refined tin, were safe in Indonesia after the pirates let them leave on a small boat, Choong said. "We have sent out an alert for authorities and ports to look out for the vessel," Choong said. "The Indonesian authorities have sent an aircraft and patrol boat to the area." Indonesian waters are the world's most pirate-infested, with 42 sea attacks - a third of the global total - reported in the first half of 2005. But that figure did not include another eight attacks in the Malacca Strait, a busy shipping lane shared byIndonesia and Malaysia. © The Jakarta Post.

Relook motivation to be maritime nation: Malaysian shipowners
Kuala Lumpur - The Malaysian Shipowners’ Association (Masa) wants a relook of the country’s motivation for becoming a maritime nation. Giving too much priority to the balance of payments (BOP) issue, it says, may be an over-simplification. “Are we placing undue emphasis on developing our national shipping capacity simply because of the high freight bill and the severe outflow of payments to foreigners?” asked the chairman of the association, Nordin Mat Yusof. “There is nothing inherently wrong with the policy planning initiatives that emphasised on wanting to make Malaysia a maritime nation. But if this policy was premised on the basis that we have to do so because of the country’s high freight bill and our heavy dependence on foreign shipping lines, this seems to me to be somewhat flawed or an over-simplification,” he noted. He said Malaysia’s freight bill was higher than many other bigger countries because the country exports and imports more than others. Nordin also said that because of the country’s high dependence on foreign direct investment (FDI) it was inevitable that there was a heavy reliance on foreign shipping lines. “About 80 per cent of our manufactured exports are sourced from FDI industries. It is therefore not unusual to expect German investors in Malaysia to use Hapag Lloyd or Japanese investors to use NKY for their shipments. Taiwanese investors would want to use Evergreen and Wai Hai Lines,” he said. “We need to prioritise our objectives and look beyond the BOP-linked initiative. If we continue to prioritise purely on the issue of BOP, not only we will not make much progress but there is a real danger that we may be promoting an uncompetitive and inefficient national fleet as well,” he said. He noted there were even calls by some quarters recently to set up another state-owned shipping company ostensibly because the current national shipping companies are not carrying their cargo, freight charges are high or there is lack of capacity. “I think it is time that the Government should de-link the BOP related issue to the promotion of the maritime objective and instead look at measures to foster the development of an internationally competitive shipping industry. In other words it is time that we take a look at the demand side,” Nordin said at a luncheon address in conjunction with the World Maritime Day, organised by the Malaysian Institute of Maritime Affairs. “We must focus more on shipments of our own cargo such as exports of palm oil and related products, crude oil and petroleum products, LNG, LPG, fertilisers as well as imports of chemicals, sugar, rice, project cargoes and a host of other bulk cargo,” he stressed. “We export more than 7 million tonnes of palm oil but our share of this shipping trade to world markets is less than 10 per cent. “It is time the palm oil producers start committing shipments of cargo on a longer-term basis so that in return shipowners are able to given back security of supply chain and stability of freight rates,” he said. “Policy initiatives in the formulation of shipping or maritime policy must therefore be more broad-based in its objectives than just calling for building more ships,” he added. — PortWorld. © The New Straits Times Press (Malaysia) Berhad.

Southeast Asia’s porous borders serve terrorists by Karl Wilson
Manila - The vast maritime borders of Indonesia, Malaysia and the Philippines make it virtually impossible to eradicate terror groups such as Jemaah Islamiyah (JI), which has been blamed for the Bali bombings, analysts say. Every day thousands of people travel virtually unhindered between northern Indonesia and the southern Philippine island of Mindanao. And the picture is repeated between the eastern Malaysian state of Sabah and the Sulu Archipelago and Mindanao. No one knows for certain how many Indonesians live in Mindanao. Philippine National Security Adviser Norberto Gonzales in a recent interview with AFP said the figure could be as high as 40,000. In Malaysia's Sabah, the number of illegal Filipinos working on plantations is also not known. Gonzales conceded the Philippines did not have the capability of policing its maritime borders effectively and as a result had become "sort of a magnet" to terrorist groups in the region, most notably the JI. The outfit, which has been blamed for some 50 attacks since 1999, wants to carve out a pan-Islamic state across Southeast Asia. In the Philippines' Sulu Archipelago, travel between the islands and some of the Malaysian islands off Sabah doesn't even require passports, visas or travel documents. A security analyst with a foreign embassy, who did not want to be named, told AFP it was virtually impossible for Indonesia, Malaysia and the Philippines to control the flow of people and weapons. "People have been travelling these sea routes for centuries, long before these countries became sovereign states. I don't think anyone knows with any degree of accuracy just how many vessels or people travel these waters daily. It makes the job of policing almost impossible. The best you can do is increase surveillance on the ground ... in this war good and reliable intelligence is the key." © Sify Ltd.

WEEK 2: (9 - 15 October 2005)

Australia’s special forces chief shows up in Zambo by Al Jacinto
Zamboanga City - The chief of Australia’s elite special forces held a series of closed-door meetings with Filipino military commanders in this city Thursday, local security officials said. Officials said Maj. Gen. Mike Hindmarsh was briefed on the government’s anti­terrorist campaign in the southern Philippines, where US-backed Filipino soldiers are hunting down two senior Jemaah Islamiah bomb-makers, Pitono alias Dulmatin and Umar Patek, suspected of being behind the 2002 Bali bombings that killed more than 200 people. Hindmarsh also met separately with the Southern Command chief, Lt. Gen. Edilberto Adan, and the Navy commander, Cmdr. Rufino Lopez. “We briefed the visiting Australian military officials on the security situation in the southern Philippines,” a regional military spokesman, Maj. Gamal Hayudini, said without elaborating. A small squad of US Marines escorted Hindmarsh’s group inside the tightly guarded Southcom base. Hindmarsh did not speak to reporters about his visit here. But Canberra said elite Australian soldiers from the Special Air Service Regiment and members of the spy agency Australian Security Intelligence Organization were closely working with the Philippine military to hunt down Dulmatin and Patek, who are believed to be in the company of Abu Sayyaf terrorists. Washington is offering $11 million for the capture of Dulmatin, a Malaysian electronic expert, and Patek, an Indonesian, who helped assemble the bombs used in the Bali attacks. The US is also helping Manila fight homegrown terrorism and has even trained Filipino soldiers since the past four years. In a faxed statement to Camp Aguinaldo, Adan announced said Southcom will intensify maritime security in southwestern Mindanao. The area is known to be a favorite entry point for terrorists, poachers, smugglers and illegal fishermen coming from Malaysia and Indonesia. The Philippine National Police has activated its barangay intelligence networks and tasked its police intelligence units to intensify the hunt for members of the Jemaah Islamiah who are reportedly in the country. PNP spokesman Chief Supt. Leopoldo Bataoil said the police will continue to coordinate with the Armed Forces and other intelligence agencies in hunting some 33 Indonesians, believed to be members of the Jemaah Islamiah, and Abu Sayyaf bandits. The Barangay Intelligence Network or BIN is a community-based information gathering system composed of selected civilians screened by police to aid in the campaign against crime. The networks also assist in anti-insurgency operations against the New People’s Army to counter its pasabilis operations, which transmits information gathered by communist infiltrators in barangays to NPA leaders. Asked if the presence of 33 Jemaah Islamiah members in the country has been confirmed, Bataoil said, “We don’t give confirmation as to how many. They are here and we have to keep them on the run.” He said that in the absence of an antiterrorism law, suspected terrorists may be arrested only for violating existing laws, specifically possession of firearms and explosives. The Department of National Defense revealed the presence of the 33 foreign terrorists Wednesday in a briefing paper it submitted to the House Committee on Appropriations during the hearing for the department’s P45.1-billion budget for 2006. The group called “Wakalah Hedeibiah,” led by a certain Mantiqui 3 and linked with the Jemaah Islamiah, has reportedly been in the country since 2004. A police intelligence source belittled threats of a Bali-type bombing in Metro Manila. The source told The Manila Times the Jemaah Islamiah, Abu Sayyaf or the Rajah Soliman Group have no funds to carry out such a large-scale of attack. He said government forces recently intercepted fresh funds for the terrorist groups. In the House of Representatives, the Committee on National Defense and Security has asked the Moro Islamic Liberation Front to help the government hunt down terrorists hiding in Mindanao. Administration Representatives Benasing Macarambon of Lanao del Sur and Monico Puentevella of Bacolod City, vice chair and member of the committee, said now is the best time for the MILF to prove its sincerity in helping the government fight terrorism by helping arrest the Jemaah Islamiah members who have taken refuge in Mindanao. Macarambon and Puentevella said in a joint statement that the cooperation of the MILF is vital to the government because the secessionist group’s forces are more familiar with the terrain in Mindanao and have direct information from the ground about the movement of the Jemaah Islamiah. © The Manila Times.

Bombers hide in hundreds of tiny islands
In a crowded office in Jakarta in June 2003, officers from Indonesia's counter terrorist group Detachment 88 held a secret briefing with Australian Federal Police agents. High on the agenda that morning was talk of a small motorised boat that had travelled from Bandung in West Java to Surabaya and Tawangmangu in central Java. The boat had entered Indonesia from Mindanao in the southern Philippines and was carrying a number of highly trained Indonesian suicide bombers. They were to meet Azahari Husin and his deputy Noordin Mohammed Top, who were mission controllers for a planned series of martyr attacks on Western targets. Shortly after the briefing the AFP agents and Indonesian counterparts swooped on a boarding house in Surabaya but their main targets – Azahari and Top – had left hours earlier. The pair have been on the run since and this week emerged as the prime suspects behind the latest Bali bombings, which killed four Australians. The AFP, under codename Operation Carlisle, and Detachment 88 are meeting again, and again their focus is turning to the source of the plot and terrorists – the Philippines. Not only do they suspect the two fugitive bomb masterminds have a safe house there, but it is there that police suspect unholy alliances of terrorists are being formed. Australian and Indonesian police have been concerned for some time about an apparent alliance between leaderless Jemaah Islamiyah members looking for a cause and a recently formed group in the south of the Philippines known as Rajas Sulaiman. The Rajas group is a splinter formation from the infamous Abu Sayyaf organisation, which has been involved in a campaign spanning many years of bombings and kidnappings of Westerners and authorities in the Philippines. "What we are seeing is more and more alliances forged between individuals or groups looking toward the same common cause," an intelligence officer said. "It basically comes down to the ease in which they can move about the Philippine archipelago without being detected. There are hundreds of islands there." Such is the concern, the AFP has stationed agents in the Philippines to hunt terrorists. The Philippine Government rejects the claim that the masterminds behind last weekend bombings in Bali had undergone military training in guerilla camps run by their country's separatist Muslim rebels. But the evidence is mounting. National police chief director-general Arturo Lomibao said the armed forces had overrun all major Muslim militant camps in the southern region of Mindanao. "With the dismantling of enemy camps in Mindanao, they now move from place to place. There are no established training camps like what they are talking about," Mr Lomibao said. But Filipino officials still privately say that local Muslim guerillas are still sheltering foreign extremists in their camps. President Gloria Arroyo concedes that with the porous maritime borders between Indonesia, Malaysia and the Philippines, "it is easy for terrorists to move from one country to another". And that is the nature of the campaign of terrorism, an invisible enemy moving with ease throughout the region. The authorities can do little but wait. © Sunday Times, Perth.

China report supports energy cooperation with neighbours Under five-year plan
Beijing - A resource security research report written by relevant state departments for the 11th Five-Year Plan puts forward: In fields such as resources prospecting and exploitation, China will lay stress on strengthening close cooperation with the surrounding countries. In oil and gas importation, in particular, China will also keep a foothold in the countries and regions surrounding it. Russian, Kazakh oil, gas can relieve near-term worries It has been learned that the prospects for China's utilization of oil and gas resources in the surrounding countries depend mainly on their capacities in three areas: 1. latent capacity in the resources; 2. production capacity; and 3. export capacity. According to the experts' analysis, the neighbours surrounding China can be roughly divided into three kinds according to the state of supply and demand in oil resources: 1. countries or regions presently highly dependent on foreign countries for their oil demand, e.g. Japan, South Korea, Mongolia, North Korea and India; 2. countries or regions that in the near term can basically balance the supply and demand of oil or can export a certain quantity, e.g. Indonesia, Malaysia and Vietnam; and 3. countries or regions with oil that in the near term can cater for massive exports, e.g. Russia and Kazakhstan. The experts proposed: China should actively make use of Russia and Kazakhstan's rich oil and gas resources and further deepen the strategic partnerships with them to achieve mutually beneficial, win- win results. It is revealed that west China's overland oil passage will have been basically opened up following the completion at the end of this year of the construction of the China-Kazakhstan oil pipeline in China's western region; in the northeast, in addition, the Taishet- Nakhodka line, a Russian cross-border oil pipeline, will first lead to China before reaching Nakhodka on Russia's Pacific coast. With the smooth materialization of these two major overland oil transportation lines, China's secure oil supply will effectively lower its dependence on the strategic maritime passage in the western Pacific and at least have cleared away its near-term worries over energy supply security. Joining hands with competing countries in exploitation It has been learned that the basic similarities of all countries' energy security strategies are: to actively open up oil bases at home and abroad by taking the safeguarding of oil and gas security as the core; to build up and reinforce strategic oil and gas reserves; to spare no efforts in pursuing a policy of economizing on energy; to actively develop new energy sources; and to vigorously popularize the use of clean and alternative energy. In light of the present international situation, those competing most intensely with China in energy security are mainly major energy consuming countries like Japan, South Korea, India and the United States. Furthermore, future competition in fields such as oil and gas supply and oil transportation line security protection will be carried out mainly among the countries mentioned above. Nevertheless, the experts pointed out: There are also opportunities for cooperation amid competition. China should build a mechanism of beneficial interaction, rather than a passive and mutually impactive relation, with the world's resource setups. Strengthening cooperative exploitation with competing countries is not only conducive to gaining their trust but also very beneficial to building a diversified system of oil supply. It is said that the "Agreement on Joint Marine Seismic Work in the Agreed Region of the South China Sea" signed in March this year between China, the Philippines and Vietnam realized the international cooperation conception of "laying aside disputes for joint exploitation" and symbolized that a breakthrough was already achieved in joint exploitation and cooperation among China, the Philippines and Vietnam in the disputed sea areas in the South China Sea. In addition, China is doing all it can to adopt a similar mode for the exploitation of East China Sea oilfields. © 2005 Earl G. Graves, Ltd.

FreeFlow: Thai plan: not just a fleeting idea? by Nick Cumming-Bruce
Bangkok - Among the national shipping lines of Southeast Asia, Thai Maritime Navigation is an oddity. Neptune Orient Line of Singapore, for example, operates nearly 100 ships, and Malaysia International Shipping has more than 100. But while Thai Maritime has operated for 65 years, it still does not own a single ship. According to the Thai Shipping Association, that's all about to change. Recent reports that the deputy transport minister, Phumtham Vejjsayachai, has proposed the introduction of a national fleet drew a few wry chuckles. Politicians have mentioned the idea several times over the past decade or so, but it was abandoned each time. But the initiative by Phumtham looks ready to go. The plan is for Thai Maritime to join private shipowners in a joint venture that will be called TMN. The proposal is expected to be submitted in November for consideration by the cabinet. "I'm pretty sure everything will be complete by the end of the year," said Chanet Phenjati, chairman of the Thai Shipping Association. If it is, TMN could have its first vessel by the end of the first quarter of 2006, at a cost of $20 million to $30 million, and could add a second ship around midyear and a third by the end of the year. "In 10 years' time, hopefully TMN will be like NOL or MISC now," said Chanet, referring to the Singaporean and Malaysian lines. The reason the proposal may thrive this time is that Thai Maritime has shown its willingness to concede management control of the new line to its private-sector partners. In the past, TMN wanted to be in charge, but that vision changed when a new board of directors, which includes transport experts, took over at the end of 2004. "They realized they can't continue as they have," Chanet said, "but they can't become ship owners on their own as they have no experience." Based on a memorandum of understanding signed in September, TMN will take a 30 percent stake in the new line, investing 200 million baht, or $4.9 million. The remaining 70 percent will come from a consortium of 23 of the 30 members of the Thai Shipping Association. While the chairman of the shipping line will come from the Thai government, private companies will get six of the nine seats on the board as well as the appointments for president and managing director. Private shipowners are paying more than lip service to the idea. "I said this time they should put their money where their mouth is to show the government you're serious," said Chanet, who is also president of Jutha Maritime, one of the companies joining the venture. Each of the companies is to give a deposit of about 4 million baht, and the Thai Shipping Association has already collected 95 million baht. The members of the Thai Shipping Association are interested, Chanet said, because they see a compelling commercial opportunity. Thailand is spending 300 billion baht a year for shipping related to international trade, and only about 10 percent of that is with Thai-owned vessels. More to the point, Chanet estimated that more than 60 percent is accounted for by Thailand's crude oil imports, all arriving on foreign ships. The immediate aim of the shipping company will be to break into the crude oil shipping market in 2006. It hopes to achieve this by buying one to three second-hand crude carriers with a capacity of around 200,000 deadweight tons each. As none of the members of the maritime association are currently involved in shipping crude oil, there is no conflict of interest. Nor are any of the members large enough to undertake such an enterprise on their own, Chanet said. Thai Maritime has operated as a freight forwarding service for 60 years. Its roughly 30 employees have no experience running ships. So why should Thai Maritime bother at all with the TMN joint venture? One answer is that, as a national flag carrier, the new line would have easier access to financing from Thailand's Export-Import Bank and from the state-owned Krungthai Bank. The financing would help meet the cost of buying very large crude carriers. As a government-owned agency, TMN can expect a virtual monopoly on shipping freight for state enterprises. These include PTT, which accounts for most of Thailand's oil imports and whose support will be critical to the success of this enterprise. But government support will also be useful in what Chanet identified as another area of rich potential: Thailand is the world's biggest exporter of rice, little of which is carried in Thai ships. As with crude oil, expansion in this sector would complement, rather than compete with, the existing business of the partners in the venture. "There's enough oil and rice for all the members," said Chanet. "We're aiming at these two commodities. That's plenty." © 2005 the International Herald Tribune.

MNI launches affordable insurance for small marine firms
Kuala Lumpur - Local insurer Malaysia National Insurance Bhd (MNI) has launched an affordable insurance cover that caters to small marine operators. Dubbed “Maritime Safeguard”, this plan allows small marine operators more control over their protection costs as they can now budget for it more accurately with a fixed insurance cost. Maritime Safeguard provides coverage by protecting the shipowners against liabilities to third parties arising from the shipowners’ operating activities. The four main areas covered by this product include personal injury claims to crew, passengers and stevedores, damage to fixed and floating objects, cargo shortage and fines such as Custom and immigration fines. “The market potential for this product in Malaysia is expected to be steady as shipowners become more aware of their potential liabilities,” MNI chief executive officer and director Mohd Najib Abdullah said in a statement yesterday. “With the introduction of new maritime rules and regulations such as the International Ship and Port Facility Security Code, many port authorities now require vessels calling at their ports to have adequate liability cover,” he added. With Maritime Safeguard, MNI becomes the first Malaysian insurer to offer fixed premium protection and indemnity cover to brown water vessels. Currently, only international insurers have the ability to provide fixed premium on such coverage. There are about 2,800 brown water vessels in Malaysia and less than 10 per cent of them have proper premium protection and indemnity cover. Maritime Safeguard can be sold together with Hull and Machinery Insurance or as a stand-alone product. © The New Straits Times Press (Malaysia) Berhad.

Malaysia's maritime body to patrol Malacca Strait
Kuala Lumpur - A new integrated maritime enforcement agency of Malaysia is expected to begin its operation in the Strait of Malacca on Nov. 30 this year, Malaysia's Deputy Prime Minister Najib Tun Razak said on Monday. The agency, named Malaysian Maritime Enforcement Agency (MMEA),would be primarily responsible for maritime enforcement, search and rescue, surveillance of the waters, and providing support services to other related agencies, Najib said at Malaysia's administrative center Putrajaya as he unveiled the agency. Najib said that MMEA would take over 72 boats and ships from the existing enforcement agencies, including the Royal Malaysia Navy, the Royal Malaysia Police, the Fisheries Department and the Customs Department. The agency will consist of more than 4,000 people, but for the first phase, only 500 people would be employed and trained, he said. Najib, who is also the defense minister, said that the agency will be officially launched by Malaysian Prime Minister Abdullah Ahmad Badawi some time later. On Aug. 21, 2002, the Malaysian government decided to set up MMEA as an integrated maritime enforcement body through the mergerof existing maritime enforcement agencies. Najib said that at the early stage, the new enforcement agency's duties would focus on the Malacca Strait. When fully operational,its enforcement will cover 250 nautical miles from the country's coastline. MMEA will discuss with the Malaysian Navy, Police, Customs and other agencies to identify the areas along the Malacca Strait which need attention, he said, adding that the existing enforcement agencies would operate in other areas as usual. MMEA would share its base with the Malaysian Navy or other enforcement agencies, he said. © Xinhua News Agency.

Maritime Enforcement Agency starts operations on Nov 30
Putrajaya - The Malaysian Maritime Enforcement Agency (MEA) will begin operations on Nov 30, with an initial focus on the Straits of Malacca. Datuk Seri Najib Tun Razak said the agency would start with 500 personnel, a fraction of the 4,035 posts which have been approved for it. The deputy prime minister and defence minister said it would guard one fifth of the 250 nautical mile zone placed under its jurisdiction. “The agency’s steering committee has also asked the navy, police and other agencies to determine which area along the Malacca Straits needs attention. “In due course, the agency’s responsibilities will grow, and its facilities and staff numbers will be expanded to full capacity to ensure effectiveness. “We have to acknowledge that the agency is new and has limited personnel, assets and experience. “So, the agency will have to give full attention to crucial areas in the initial stage to be effective,” Najib said after the agency’s soft launch, during which its logo, flag and uniform were unveiled. Najib said the agency, which was given an initial allocation of RM69mil, would receive RM509mil next year. The decision to create the agency was made in 2002, to act as an integrated maritime enforcement agency involving the navy, police, fisheries, Customs and Excise Department and marine departments. The agency, which comes under the purview of the Prime Minister’s Department, will report directly to Najib, who is also Defence Minister. The MEA would be responsible for enforcing 20 Federal laws in the country’s maritime zones and airspace, and watch over Malaysia’s territorial waters, conduct search and rescue operations and combat piracy. To a question, Najib said there would be no overlapping of responsibilities between the MEA and existing agencies, adding that all would have to cooperate to ensure security in the country's maritime zones. “The assets that have been passed to the agency will be upgraded to ensure it will have the capability to conduct search and rescue, and enforcement operations. “A fleet of 72 vessels will be used for MEA operations,” he said, adding that the agency's vessels would be displayed during the Langkawi International Maritime and Aerospace Exhibition in December. On Umno matters, Najib, hoped that action taken against those involved in money politics would be a strong deterrent to others. © 1995-2005 Star Publications (Malaysia) Bhd.

Maritime Enforcement Agency to focus of Melaka Strait
Putrajaya -The newly-incepted Malaysian Maritime Enforcement Agency (APMM) will start its operation in the Straits of Melaka on Nov 30, said Deputy Prime Minister Datuk Seri Najib Tun Razak Monday. He said the agency was primarily responsible for maritime enforcement; search and rescue; surveillance of the waters; and providing support services in the maritime zone to other related agencies. Najib said APPM would also takeover ownership of 72 boats and ships belonging to existing enforcement agencies, adding that they would become APPM's assets. It covers the Royal Malaysia Navy (19 units), the Royal Malaysia Police (15), the Fisheries Department (12), the Marine Department (21) and the Customs Department (5). A total of 4,035 posts have been approved for APMM's operation but for the first phase, 500 officers and staff would be employed and given training, he told reporters at an event to introduce APPM to the public here. Najib who is also Defence Minister said the government approved an allocation of RM69 million for APMM this year and it would be increased to RM509 million next year, in addition to an allocation under the Ninth Malaysia Plan. He said Prime Minister Datuk Seri Abdullah Ahmad Badawi will officially launch the enforcement agency at a date to be fixed later. Earlier, Najib chaired the APMM's national steering committee to discuss the latest development related to the agency's set-up covering such aspects as organisation and service, operation, assets, legal and training. The government decided on Aug 21 2002 to establish the APMM as an integrated maritime enforcement agency through the merger of existing maritime enforcement agencies. On enforcement duties in the Melaka Strait, Najib said the committee felt that for the first phase, it would be appropriate for APPMM to focus on certain areas only. "At this early stage, the proposal is that we focus on maritime areas covering as far as 50 nautical miles from the coast. Beyond this, that is if it is extended to cover the entire country, then, it would be too big an area. "As such, the steering committee decided that under the first phase, APMM would focus on the Melaka Strait, he said, adding that, when fully operational, APMM's enforcement areas would cover 250 nautical miles from the country's coastline. The committee also decided that APMM discuss with the Malaysian Navy, Police, Customs and other agencies to identify the areas along the Melaka Strait which needed APMM's attention. The focus of APMM's operation in the Melaka Strait would be made at a certain time to be decided later, said Najib, adding that the existing enforcement agencies would operate in other areas as usual. Importantly, he said, the new agency showed its effectiveness in achieving its objectives. To a question, he said the APMM would firstly ensure that all assets acquired from other agencies would be given a new lease of life. "Secondly, we will see from the aspect of capability that is, using helicopters to carry out search and rescue operations as well as enforcement. Other capability aspects are being considered," he said. On the APMM's operational location, Najib said a proposal was made so that the agency would share its base with the Malaysian Navy or other enforcement agencies. He also said that the delivery of the boats and vessels to APMM would not affect the operation of other enforcement entities. He said APMM's officers and staff might be sent to other maritime agencies for training to strengthen its capabilities. © 2005 BERNAMA.

Maritime watershed (Editorial)
The idea has been debated for more than a decade, the go-ahead to set it up was made more than three years ago, and Parliament passed the legislation in the middle of last year. Now, it seems that the Malaysian Maritime Enforcement Agency (MMEA) is finally set to begin its task of looking after the country’s maritime interests at the end of next month. Even then, it appears that it will not be full steam ahead for the country’s version of a national coastguard. It will initially play a limited role in monitoring the security of the 4,500 kilometres of Malaysian coastline. As Deputy Prime Minister Datuk Seri Najib Razak pointed out, it cannot be expected to blossom into a fully-developed organisation overnight. When he was still head of the Royal Malaysian Navy, armed forces chief Laksamana Datuk Mohamad Anwar Mohamad Nor had reckoned that it would take "up to five years for the MMEA to be effective on its own". Given the expectations that the establishment of the MMEA would lead to improved law and order at sea, the agency should be provided with the appropriate manpower and equipment to eventually develop into the effective organisation that the country needs. In the meantime, since the MMEA is far from being the finished article, it is vital that the other agencies not only work closely with it but also pull their weight in policing the seas and rivers. In view of its fledgling status and the constraints on its ability to operate at full capacity — a mere RM69 million as a starting budget, one-eighth of the total staff strength required, and a modest fleet of 72 vessels — it is just as well that the MMEA is not going to strain its resources but patrol only certain stretches of Malaysian waters. It would certainly be difficult to take issue with its focus on the Straits of Malacca. On the contrary, it would have been astonishing if the security of one of the world’s busiest waterways had not been made its priority. For far too long, the country’s efforts to check cross-border smuggling of contraband goods, curb drug trafficking, stem the flow of illegal immigrants, prevent illegal fishing, or contain piracy on the open seas, have been hampered by the absence of a single powerful authority. With 11 government agencies responsible for enforcing maritime laws, responsibilities tended to overlap, and misunderstandings over jurisdictions and poor co-ordination among them had led to slow responses to maritime threats. Moreover, the strategic importance of the Straits of Malacca to global trade had made the safety of ships passing through it a major international concern after Sept 11. As Najib reiterated, it became clear that a sectoral approach to maritime security was "no longer suitable" and it was time to create a single organisation with a "strong collective thrust in maritime enforcement". The long-awaited start to the operations of the MMEA could mark a watershed in maritime security. It may well turn out to be the missing element that is crucially needed to deal with the challenges that the nation faces at sea. © NST Online.

New agency to streamline maritime law enforcement in Malaysia by Yvonne Gomez
Malaysia has set up a new agency to streamline its maritime law enforcement. Called the Malaysian Maritime Enforcement Agency, it will work with other government departments to tackle the piracy problem in the Malacca Straits. Since there are already existing initiatives aimed at enhancing security in the Straits, what has been the impetus to set up the new agency? A question Yvonne Gomez put to Mr Mak Joon Nam , Maritime Defence Analyst from Singapore’s Institute of Southeast Asian Studies. The idea behind setting up this agency was due to the multiplicity of agencies that were charged with enforcing maritime laws in Malaysia. At one time, there were 22 agencies involved in it, so there was duplication of efforts, craft and personnel, and sometimes there were agencies that could do certain things but couldn’t perform other maritime functions, like the Customs guy couldn’t do anything about illegal migrants because they’re not empowered to deal with them. So it was decided that what was needed was a single agency that can deal with all these issues. This idea was mooted more than 5 years ago, and there were visits to coastguard agencies in Japan, India, Canada, the UK and US, to look at the best model to follow. What actual work will the new Agency be involved in? Basically, it will be involved in the enforcement of Malaysia’s maritime laws. That is its basic function. If it has to handle piracy, then that will also its responsibility because pirates, or sea-robbers as we call them, will be breaking Malaysian law. So it will then handle the problem and issue of enforcement, taking over from both the marine police and from the navy. In one sense, it will, hopefully, be quite effective, because it will have its own distinct operating philosophy, which is based on enforcement and maintenance of law. The navy, for instance, has a very different operating philosophy, which is based on the use of firepower. Hopefully this will address issues of enforcement. There are reports that the Agency has limited resources, so how will it complement the current coordinated sea and air patrols of the Straits of Malacca? I don’t think you can expect too much from this agency at this point in time because it’s very new and its officials or officers are all seconded from the various agencies like the navy, the marine police and the Customs, and to expect it to be effective and take part in coordinated patrols. That’s a little bit premature at this point in time. Having said that though, the Agency will reportedly have its own fleet of vessels and there are plans to add to this in future. To what extent will there be a duplication of resources with existing maritime security programmes? Oh, in that sense, there won’t be any duplication because eventually, it will take over the responsibility of the navy, which is actually meant to fight during war, not for law enforcement. It will also take over the role of the marine police in many areas, and that of customs and immigration as well. So anything that has to do with the sea, from territorial sea onwards, will be the responsibility of this agency. In that sense, it will be a uniform, coordinated agency with one Head, where people will be trained in all aspects of maritime law. So it will be taking over many functions of the other agencies. © 2005 MCN International Pte Ltd.

WEEK 3: (16 - 22 October 2005)

Berhala: another Sipadan and Ligitan if we're still ignorant by I Made Andi Arsana and Clive Schofield
On Sept. 26, 2005 Antara official news agency carried a report on the concerns of a North Sumatra's provincial legislator regarding a website promoting Pulau Berhala as one of Malaysia's tourist destinations. When reading this, Sipadan and Ligitan come to mind. The two islands were secured by Malaysia when the International Court of Justice (ICJ) ruled that sovereignty over them rested with Malaysia in 2002. In Indonesian minds this scenario raises disturbing questions: Is Malaysia now pushing its luck and seeking to secure small, isolated islands in boundary areas one by one? Is Pulau Berhala vulnerable and could there be a repeat of the Sipadan and Ligitan case? As far as we are aware, there are five different islands called Berhala. The first island is the one mentioned by the legislators in the Malacca Strait, around 48 Nautical Miles from Port Belawan, North Sumatra. The second Berhala is in Berhala Strait close to the Riau Archipelago that has been a longstanding source of conflict between the provinces of Jambi and Riau. The three others are the one close to Sandakan, North Borneo, one near Johor close to the Philippines, and the one in Perak called Batuan Berhala. The last three islands are clearly part of Malaysia and some of them are tourist destinations. Unfortunately Antara did not clearly identify the website. Therefore it is not clear which Berhala Malaysia promotes as its tourist destination. If the island it promotes is the one belongs to Malaysia Nurzal may have been unnecessarily alarmed. If the Pulau Berhala in question is the one in Malacca Strait, then it will be a different story. This case highlights the attention the Indonesian government must accord to small but potentially critically located islands. Pulau Berhala, as stated by the Hidro-Oceanographic Office of the Indonesian Navy (Dishidros), is one of the 12 small islands which are critical due to their position in international boundary areas. The other eleven islands are Pulau Rondo (Indonesia-India); Pulau Nipa (Indonesia-Singapore); Pulau Sekatuang (Indonesia-Vietnam); Pulau Marore, Pulau Mianggas and Pulau Marampit (Indonesia-Philippine); Pulau Batek (Indonesia-Timor Leste); Pulau Dana (Indonesia-Australia); Pulau Fani, Pulau Fanildo, and Pulau Brass (Indonesia-Palau). Let's look closely to Pulau Berhala in Malacca Strait and review the maritime boundary agreement between Indonesia and Malaysia. In 1969, Indonesia and Malaysia entered into an Agreement dividing the continental shelf between the two countries in Malacca Strait and ratifications were exchanged on Nov. 7, 1969. Ten points are agreed as the turning points of the boundary line. Some commentators have opined that the agreement is not an equitable solution as Malaysia applied straight baseline connecting its outermost islands. This causes the boundary line lies closer to the Indonesian coast than a strict median line. Nonetheless, Indonesia and Malaysia freely signed the agreement and it has now been legally binding for both countries for over 35 years. At this stage, therefore, the equitableness of the original agreement is irrelevant as the boundary line is well established and can only be altered through mutual agreement. However, it is relevant to note that the 1969 agreement only concerns the position of the boundary in respect of the seabed and subsoil between Indonesia and Malaysia and not the water column above where no boundary has yet been agreed. Unlike the uncertainty surrounding Sipadan and Ligitan where there was no definite maritime boundary in Celebes Sea, the continental shelf boundary in Malacca strait serves to make the status of Pulau Berhala clear. Based on the 1969 agreement, Pulau Berhala clearly falls on the Indonesian side of the line. Furthermore, experiences tell that arguments concerning chain of title based on historical evidence can be problematic and difficult to prove due conflicting evidence and historical interpretations. In the Sipadan and Ligitan case neither Indonesia or Malaysia was able to establish their claims to title based on treaty evidence. Instead, the ICJ decided the case of Sipadan and Ligitan by considering the principle of effectivitis -- acts of administration that demonstrate effective exercise of authority over the islands. In the case of Pulau Berhala, not only is the island on the Indonesian side of an agreed international maritime boundary line but the balance of effectivitis also draws one to the conclusion that sovereignty over the island rests with Indonesia. In 1984, the Indonesian Government built a lighthouse on the Island and since then has been maintaining the lighthouse by continually assigning lighthouse attendants. This can be considered as a legal action proving that Indonesia has done the appropriate things as the owner of Pulau Berhala. Maintenance of the lighthouse requires the Indonesian Government to take care the environment; otherwise the lighthouse will not be able to function properly. This also proves the role of the Indonesian Government in Pulau Berhala fulfilling the principle of effectivitis. There are therefore substantial effectivitis in support of Indonesian sovereignty over Pulau Berhala. We will see how Indonesia and Malaysia deal with this kind of problem. It is very important for all citizens to clearly understand the problem and support the governments to do their best. Instead of being over-reactive, let's be calm and patient. © of The Jakarta Post.

CP to clarify 'marine cops allowing drugs' with Bung, Ghapur
Sabah CP (Chief of Police) Datuk Mangsor refuted allegations by two Sabah Members of Parliament that marine police are allowing drugs into Sabah. He said he intends to clear the air with Datuk Bung Moktar Radin (BN-Kinabatangan) and Datuk Abdul Ghapur Salleh (BN-Kalabakan) when they return to the State. "I think they are addressing the problem generally (in Malaysia) but when you splash it in the news like that, with both MPs being from Sabah, the impression is that it is a Sabah situation. "I am looking to clarify with them, not to say we do not have the problem (drugs) but we are doing our best to curb it. To put the blame on the marine police is not accurate because it gives the impression they are not doing anything³t is not true. "So I am putting the facts right," he stressed. Several MPs attacked agencies involved in fighting the drug problem in Parliament on Monday, including Bung and Abdul Ghapur. Bung said he could not see earnest efforts by the agencies in combating the country's main enemy and also supported Abdul Ghapur who claimed that marine police were "untrustworthy as they allowed smuggling by sea". Mangsor said he has reservations about the accusation, adding everything would be clearer when he learns more of their rationale or basis for their statements in Parliament. He assured that a thorough investigation would be conducted should there be proof of misdemeanors or corruption. He also explained during a press conference at the Kepayan police headquarters, about the shortcomings and predicaments faced by the police, especially from the marine and narcotics department, when dealing with drug issues in the State. "The marine police (presently) under ACP Mohd Sueb Abdullah have 61 types of vessels and more than 600 officers and personnel to cover about 1,600km of coastline in the State³t is a very wide area. "And only about 50 per cent of our vessels are operational whilst the rest are docked awaiting repairs because of insufficient funds," he said, adding four PZ-type vessels were also handed over to the coast guards previously. Apart from that, Mangsor revealed that the marine police have cope with an average of about 2,500 vessels and boats crossing the State's borders monthly. "This means they have to cope with about 73,500 vessels yearly. It is not easy to search a boat as there are 1,001 places where the drugs could be hidden." He said the maximum they could thoroughly check is about 20 per cent of the total of vessels coming in. Mangsor also said drug issues are not the only concern of the marine police as there are also possibilities like piracy and sea kidnappings to handle as well as enforcement of maritime laws. On the narcotics department, he said he was aware of the department's limitations in terms of personnel. "A proposal to double the manpower for the department (here) had been submitted to Bukit Aman but until now it has not been approved," he said. © Daily Express, Sabah, Malaysia.

Counter terrorism initiatives to target Southern Philippines
Sydney - Defence Minister Robert Hill today met the military and community leaders of Zamboanga, in Mindanao, to discuss joint counter terrorism initiatives to prevent the growth of terrorist networks within the Philippines. Senator Hill's visit to the southern Philippines region is part of a three-day visit focussed on counter terrorism and maritime security issues. Senator Hill said there are growing concerns that Mindanao could be targeted by the extremist group Jemaah Islamiyah to develop links with Abu Sayaf in the Philippines and use Mindanao as a sanctuary to grow and train terrorists. The particular concern is the movement of Jemaah Islamiyah from Indonesia north through the archipelago to Mindanao. The Howard Government doubled its counter terrorism assistance package to the Philippines to $10 million last year and is looking at new ways to help the Philippines better protect its borders and waterways as part of the international fight against terrorism. Senator Hill today met with the Philippine Commander of Southern Command (SOUTHCOM), the Commander of the United States Special Forces group at Headquarters Joint Special Operations Task Force and the Zamboanga Mayor Celso Lobregat to discuss ways in which Australia can provide further assistance to the southern Philippines. Senator Hill will tomorrow meet with Philippine President Gloria Arroyo, Secretary of Defense Avelino Cruz Jr, and Chief of Staff of the Armed Forces of the Philippines GEN Generoso Senga to discuss strengthening our defence cooperation. "The Philippines is an important strategic partner to Australia in the fight against terrorism," Senator Hill said. "It is important that we help the Philippines continue to build its armed forces to better protect the south from terrorist groups looking to grow their support base and establish training camps and links within the region. "I was pleased to meet with the Mayor and the military leaders in Zamboanga to discuss areas where Australia may be able to help, such as providing further intelligence and Special Forces training. "A major concern is that the southern riverine and marshland areas of Mindanao will be used by JI. Today I discussed ways of working with the Philippines Armed Forces to develop a small watercraft capability to better patrol that key area. "Australia and the Philippines are also committed to strengthening maritime security in the region and developing greater cooperation in maritime surveillance with neighboring countries, such as Malaysia, Indonesia and Thailand." (Source: Australian Department of Defence). © Blackanthem™ Military News.

Global significance of Malaysian mangroves by Tan Cheng Li
Mangroves are a diverse group of predominantly trees, shrubs, palms and ground ferns, which have adapted to extreme saline conditions between the tides. They grow along parts of the country’s coastline and in sheltered estuaries, deltas and lagoons. Malaysian mangroves are of global biodiversity significance – they harbour 41 mangrove species, or two-thirds of the world’s total. Some rare species that have very restricted distribution such as Sonneratia griffithii, Bruguiera hainessi, Aegiceras floridum, Osbornia octodonta, Algaia cucullata, Heritiera formes and Heritiera globosa are at risk of localised extinction as there are no significant efforts to conserve them. Mangroves are important for:
- Shoreline protection. Mangroves stabilise shorelines, prevent coastal erosion and act as a buffer against storm surges and strong winds.
- Coastal fisheries: Mangroves provide feeding, breeding and nursery ground for many commercially important fish, prawns, crabs and shellfish.
- Biodiversity: Mangroves are habitats for marine life, birds, animals and plants.
- Socio-economic well-being: Mangroves can be harvested for logs, tannin, honey, herbal medicines and food.
- Tourism: Mangrove ecotourism provides a source of revenue. © 1995-2005 Star Publications (Malaysia) Bhd.

IOPC protestor ejected from IMO
A TENSE week of negotiations over the future of oil spill compensation was briefly halted yesterday at the IMO when security guards were called in to forcibly eject a protestor. Alain Malardé, who has led a lengthy campaign against the International Oil Pollution Compensation Fund on behalf of Erika oil spill claimants, attempted to disrupt the meeting with an intervention of his own. Malardé has twice attacked IOPC Fund offices, once with a fork-lift truck in 2001 when he caused considerable damage to the fund’s office in Lorient, France. Delegates attending the IOPC Fund meeting this week are attempting to resolve the question of whether the existing compensation regime should be revised. A joint submission from 11 countries has proposed a limited revision of the Civil Liability and Fund Conventions. However industry and P&I groups have strongly opposed any revision. Delegates attending the meeting have told Fairplay there is currently a 50:50 split of opinion within the meeting, but a decision is expected by the end of the week. Delegates will also be asked to vote for a new director this week to replace Måns Jacobsson who retires at the end of next year. © Lloyd's Register - Fairplay Ltd 2005.

Integrated approach vital in designing marine protected areas by Tan Cheng Li
Wade into the sea at low tide and sometimes, you will sea blades of seagrass sprouting in between small coral boulders. Similarly, just off mangrove-fringed coasts, there are flourishing seagrass beds. In Malaysia, many known mangrove areas are associated with either seagrass or coral reef ecosystems. Sometimes all three exist together. Collectively, they form a complex coastal-marine ecosystem that is inter-dependent and intricately linked. Mangroves trap sediment, filter polluting runoffs, regulate freshwater flow, buffer changes in salinity as well as produce detritus and nutrient – all of which help create an environment which supports coral reefs and seagrass beds. Seagrass beds and coral reefs, on the other hand, act as barriers which dissipate wave energy and action, thus providing a low energy zone that enables mangroves to thrive and to expand farther from protected estuaries and coastlines. The existence of mangroves enhances fishlife in coral reefs since many species of fish, prawns and crabs spend a part of their life cycle in mangroves and seagrass beds before migrating to coral reefs or the open sea. Unfortunately, the importance of these interactions appears to have received little attention among policy-makers. These ecosystems, says Maritime Institute of Malaysia senior researcher Tan Kim Hooi, are now managed based on a single component or endangered species. So while mangroves and coral reefs have received protection in some sites, there are no protected areas or specific conservation programme or management plans for seagrass beds. “There is no point conserving and managing coral reefs when their associated ecosystems such as mangroves and seagrass beds are not protected,” says Tan. “Similarly, it is impossible to conserve dugong populations without protecting seagrass and mangrove ecosystems.” Tan says there is an urgent need to change the current approach in designing and managing marine protected areas – which often conserve and manage single ecosystem or single species – to integrated management and a large marine ecosystem approach that considers the linkages of coastal and marine ecosystems. He says conservation efforts must protect the corridors of mangroves, seagrass beds and coral reefs to preserve their resilience. “Impact on one ecosystem can destroy or degrade the associated ecosystems. For example, logging in mangroves can make coastal waters turbid, thus affecting the growth and health of seagrasses and coral reefs.” In the bigger picture, Tan says conservation and management of mangroves, seagrasses and coral reefs should be part of the overall integrated coastal zone management plan. © 1995-2005 Star Publications (Malaysia) Bhd.

Source: Maritime Institute of Malaysia.

Source: Maritime Institute of Malaysia.

Malaysia's new Coast Guard
The Malaysians have just created a Coast Guard. By transferring personnel from the Navy, fisheries protection service, and other maritime agencies, the Malaysians have created a sea-going maritime constabulary similar to the U.S. Coast Guard. The new service is expected to improve policing of Malaysian waters, and particularly the critical Straits of Malacca, plagued by piracy. © 1998 - 2005 StrategyWorld.com.

Mangroves in need of protection by Tan Cheng Li
At least 37 fringing coastal mangroves are in need of protection, if the nation’s shores are to be buffered from future giant waves. Sprawling over 27,600ha or 4.7% of the nation’s total mangroves, these sites are now state-owned land – which makes them vulnerable to development threats. Tan Kim Hooi, senior researcher at the Maritime Institute of Malaysia, says these coastal forests should remain intact as they are important for coastal and riverbank protection. “Mangroves play an important role in minimising destruction to lives and coastal properties from coastal calamities such as tsunamis, as they reduce current speeds and dissipate surface wave energy. Mangrove is a natural defence system that prevents coastal and riverbank erosion. Low-lying coastal areas without mangroves are more susceptible to damage from typhoons and storm surges.” Tan says failure to protect the 37 tracts of mangroves, which range in size from 10ha in Kuala Sanglang, Perlis, to 4,000ha in Rajang Delta, Sarawak, would result in their being taken over by houses, mixed development, aquaculture ponds, resettlements, landfills, oil palm plantations, highways, an airport or illegal encroachment. Protecting whatever mangroves left in the country is critical, says Tan, in view of the uncertainties caused by global warming and rise in sea level. Scientists have estimated a 30cm rise in sea level by 2050 and 1m by 2100, and predicted more typhoons and storm surges in the future. Tan points out that despite a 1996 Federal Government moratorium on development in mangroves, these forests continue to be axed. There is no shortage of guidelines on development in mangroves, but these are not widely adopted and implemented. Tan says mangrove cover in Malaysia has declined by 30% over the past five decades: from 800,000ha in the 1950s to 575,000ha now. Mangrove losses are highest in Perlis, Selangor, Johor, Sarawak, Negri Sembilan and Penang. The underlying cause for mangrove loss is very simple, Tan attests. “Mangrove land is cheap as the goods and services which they provide are grossly undervalued or do not have market value and often labelled as ‘wastelands’. State governments see no immediate benefit in protecting their mangroves. As a result, mangroves are converted for other uses that generate more revenue.” Large tracts of mangroves have been cleared for agriculture, aquaculture, infrastructure, industries and housing development. Even protected mangrove forest reserves, were not spared. Over 50,600ha of mangrove reserves were degazetted between 1980 and 2003, mostly in Johor, Selangor and Sabah. Sarawak, on the other hand, accorded protection status to over 24,770ha of mangroves. Tan says in many instances of mangrove conversion, state governments and state agencies are the culprits. He notes that agencies such as State Economic Development Corporations, the Penang Regional Development Authority, Fisheries Development Board and farmers’ associations were involved in prawn aquaculture in mangrove sites. Tan has forwarded his recommendation that the 37 sites be turned into forest reserves to the Government. But he is aware that the status of “forest reserves” is uncertain as they can still be logged and degazetted. In fact, the bulk (85%) of Malaysian mangroves are gazetted reserves – but largely for log production. However, Tan says apart from the Matang mangrove in Perak, most of the mangrove reserves are not logged in a sustainable manner. “Except for Matang, most of the reserves remain as ‘paper reserve’ and do not have forest function classification, management plan or conservation activities.” And although the law requires a degazetted forest reserve to be replaced by an area of equal size, it fails to spell out that it must be the same type and quality of forest. Presently, says Tan, replacements of degazetted mangrove reserves, if done at all, are often with other degraded forests and not mangroves. He says there is also no public hearing in instances of conversion of reserves, although the National Land Code provides for this. Tan suggests a review of current forestry policies and legislations to plug these gaps. He says existing mangrove reserves need to be gazetted as “Totally Protected Forests” under the Forestry Act 1984 to ensure that they are protected in perpetuity. Currently, less than 1% of these reserves are totally protected (as Virgin Jungle Reserves, Conservation Forest or Catchment Forests.). He also urges for a reclassification of forest types in the Act. “Mangroves are unique habitats, and so need their own classification. They cannot be lumped together with terrestrial forests.” Because the Act is largely based on terrestrial forests, Tan says the various roles and functions of mangroves, such as for fisheries, coastline protection, biodiversity and cultural preservation, are not spelt out in the legislation. As different types of mangroves provide different goods and services, Tan says these sites should be classified according to various key uses such as sustainable forestry, protection forest (coastal protection), fisheries, ecotourism, education and research. “This will not only maximise the benefits derived from mangrove ecosystems, but also help to prioritise conservation and management objectives.” For instance, the 37 mangrove forests in need of protection not only shield coastlines. Those in Klias Peninsula and Labuk Bay in Sabah are habitats for proboscis monkeys, while those in Sungai Juru and Sungai Jejawi in Penang are important for cockle culture. Tan is now classifying the use of over 60 major mangrove sites. He points out that mangrove forests are rare in the country compared with other terrestrial ecosystems; they constitute a mere 1.75% of the nation’s land area. “Given their small size, protecting mangrove forests would not affect the availability of land for development,” he says. What is urgently needed, he adds, is strong political will from the Government, especially state governments, to save the mangroves so that future generations can continue to enjoy the benefits derived from these forests. Statistics sourced from Maritime Institute of Malaysia. © 1995-2005 Star Publications (Malaysia) Bhd.

The Manila-Canberra Axis
Both Australia and the Philippines have long looked to the U.S. for military assistance. Recently, however, the two nations have been developing direct ties to help coordinate responses to regional problems that the U.S. may overlook. Among several developments is the recent conclusion of a status of forces agreement, which will allow Australian troops to assist Philippine troops against the Islamist separatists of the Moro region in south. In addition, Australia has offered to support the Philippine effort with joint naval patrols, which is said to be very welcome in Manila. These initiatives have long-term diplomatic importance for the U.S. Most southeast Asian nations are friendly to the U.S., but tend to be wary of America’s enormous power and motives. Thus, the security initiatives between Australia and the Philippines are viewed as much less threatening to their neighbors. © 1998 - 2005 StrategyWorld.com.

Philippine foreign secretary praises relations with China
Manila - Philippine Foreign Secretary Alberto Romulo Friday praised the momentum of development in relations between the Philippines and China as well as those between Association of Southeast Asian Nations (ASEAN) and China, while expecting the momentum of such development of relations to continue. In a keynote address to an international conference on Philippine-China relations with the theme of "Charting New Directions in a Changing Global Environment" being held here Friday and Saturday, Romulo said that through nearly two decades of economic growth, China has become a source of regional investment. "China invests in Indonesia's natural gas, in Malaysia's palm oil, in Philippine infrastructure and in Singapore's services sector. It also supports the building of a network of rail, highway and navigation links in the Mekong Delta. It has committedto support infrastructure-building in the BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines Early Growth Area) region," said Romulo. On Philippine-Chinese relations, Romulo said Philippines' ties with China, while existing within this regional milieu, is also "one emanating from a deep and abiding people-to-people agenda". "It is a relationship between two Asian nations with common goals of development, complementing strengths and the shared desire to realize secure and prosperous societies for our nations," he said. "Our relationship also contributes to the dynamics of change in Asia." Romulo said the future of bilateral relations will be shaped by"the momentum of our current cooperation in trade, agriculture, mineral resources and infrastructure". He said growing trade between the two countries, the fastest between China and an ASEAN member, will continue to be a defining element of Philippines-China relations in the years to come, and so will partnerships in resource and infrastructure development. "The South China Sea is vital to the security and maritime interests of both the Philippines and China, and ASEAN and the Asia Pacific," he said. "We took a landmark step early this year when we agreed to undertake together with Vietnam a joint seismic study in the South China Sea." "Our ongoing collective efforts to implement the ASEAN-China Declaration on the Conduct of Parties in the South China Sea helps provide the conditions and the norms that will lead to a comprehensive, permanent and peaceful settlement of the South China Sea issue," he added. ©2003 Xinhua News Agency.

PSA reports 20% more container movement
State-owned Singapore port operator PSA said its terminals moved 20% more containers in the first nine months of 2005 than a year earlier, thanks to heavy trade between Asia and Europe and North America. The firm, which operates ports in Singapore and abroad, said in a statement it handled 29.66 million TEUs in the period, compared with 24.68 million TEUs in the same period last year. PSA International's container growth has received an additional boost since August, when it began including container data from its newly acquired Hong Kong operations. In June, PSA bought its second set of port assets in Hong Kong in four months to give it better access to China's booming export and import market. The Singapore firm, which is owned by government investment group Temasek, spent close to US$1bil to buy a stake in a container terminal in the territory from conglomerate Hutchison Whampoa. In February, PSA had secured a psychologically important foothold in Hong Kong when it bought stakes in two terminals from NWS Holdings for US$387mil. The volume of TEUs moved through its flagship Singapore port increased 8.7% in the first nine months of the year to 16.66 million, putting it ahead of its rival Hong Kong and making it the world's busiest container port (Reuters). © 1995-2005 Star Publications (Malaysia) Bhd.

Russia contributes to IMO security fund
IMO's International Maritime Security Trust Fund has received a significant boostfrom the Government of the Russian Federation --a financial contribution of $120,000. The fund was established in June 2003 to enable IMO to respond to requests for technical assistance on maritime security issues. Other contributors to the fund have included the Governments of Denmark, Egypt, Germany, Republic of Korea, Sweden, United Kingdom, United States and a training institute (the U.S.-based Northeast Maritime Institute). All contributions help in implementing IMO's Global Technical Cooperation Program on Maritime Security. The program has included many activities aimed at enhancing maritime security and in particular the implementation of the maritime security measures adopted by IMO--including SOLAS chapter XI-2 (Special measures to enhance maritime security) and the International Ship and Port Facility Security (ISPS) Code, which were adopted in 2002 and entered into force in July 2004. By the end of 2005, 22 regional seminars/workshops and 87 national training courses/advisory missions will have been organized, resulting in some 4,000 people being trained globally. In addition, a total of 17 sub-regional maritime security "Train-the-Trainer" courses will have been successfully delivered. © 2005 Marine Log.

Sea security now more secure than ports: Marine body
Copenhagen - Global maritime anti-terror laws introduced last year have broadly enhanced sea security, but many challenges lie ahead, a principal architect of the measures said in an interview. James F. Wall, until 2004 chair of the UN International Maritime Organisation’s (IMO) security arm responsible for drawing up the law, said merchant ships were generally more secure than the ports which still need more security. The International Ship and Port Security (ISPS) code, drawn up in the aftermath of the September 11 attacks in the US, has been described as the toughest the industry has faced since World War II. The code requires the training of onboard security officers, emergency procedures to deal with attacks and a raft of other measures in ports and terminals that tighten security. “We believe that given the speed at which it was drafted, the limited time for implementation, the position is satisfactory if not necessarily excellent,” Wall said on the sidelines of a maritime security conference here last Wednesday. Wall said that while there were some doubts as to which ships were compliant with the security code, control measures in place were giving positive feedback. “Those control measures to date have shown ships are in broad compliance and that their performance is no worse and possibly better than with safety and pollution requirements,” he said. Wall said the port side was the weakest link — an area IMO has no jurisdiction over — save for some of the world’s largest ports which have signed up to a separate US effort called the Container Security Initiative (CSI). “There are lots of apocryphal stories about the lack of security at certain ports,” Wall said. He said IMO had encouraged governments to carry out self-assessments, but was some way off from carrying out spot inspections like the UN International Civil Aviation Organisation did at airports for instance. “It will be up to the signatories to decide whether they want to move away from port security being the responsibility of the nation state,” he added. Apart from bolstering port security future challenges include tackling the whole of the supply chain, Wall said. This is from sealing containers to their carriage by truck, transfer to rail or waterway and final dispatch to ship terminal. “Making sure all of those elements are secure will be the future challenge and we believe that the framework for that is in place — but don’t believe it will be easy,” he said. Germany’s BGA export industry association estimates that the world’s companies are footing a US$120.7 billion (US$1 = RM3.77) bill to safeguard against terrorism. It said a large slice of that was spent in the maritime and air transport sphere. © The New Straits Times Press (Malaysia) Berhad.

Singapore, UK strengthen charts tie-up
SINGAPORE’S Maritime and Port Authority and the United Kingdom Hydrographic Office (UKHO) have moved to strengthen their partnership even further. The introduction of the Singapore Electronic Navigational Chart (ENC) into the UKHO’s worldwide Admiralty Electronic Chart Display and Information System (ECDIS) service was officially launched in Singapore yesterday. BG Tay Lim Heng, chief executive of MPA, emphasised that Singapore’s entry into the UKHO’s 'world series' of electronic charts will enable mariners all over the world to gain access to official data covering a major shipping route. Singapore hopes to release ENCs covering the vital waterway of the Malacca Strait by the end of the year, Tay said. Singapore is working with Malaysia, Indonesia and Japan to produce the chart. Conceding that users had voiced problems such as “inaccessibility and inconsistencies” in ENCs, Dr Wyn Williams, UK National Hydrographer and chief executive of UK Hydrographic office, pointed out that the UKHO now has agreements with 65 nations for ENCs and these will go a long way in addressing the problems. “We are seriously listening to mariners,” he told Fairplay. © Lloyd's Register - Fairplay Ltd 2005.

Star Cruises SuperStar Virgo rescues crew members from sinking ship for the second time in two months
Star Cruises SuperStar Virgo once again came to the rescue of a sinking ship while sailing along the Straits of Malacca from Singapore to Port Klang yesterday. The incident occurred in the morning when three crew members were spotted in the water by lookouts on the bridge of SuperStar Virgo, after their fishing vessel had sunk in unfavourable weather conditions. The onboard Man Overboard Team (“MOB”) was immediately activated as the ship alerted the Malaysian Vessel Traffic Information System and prepared to rescue the survivors. Having launched the rescue team, all three survivors were picked up and brought onboard where they rested until the ship arrived in Port Klang. This is the second such rescue incident involving SuperStar Virgo in two months where the constant training and preparedness to deal with any eventuality at sea were once again put to the test. © Agents Support Systems P/L.

Submariners to get service allowances
Kuala Lumpur - The Government today announced service allowances of between RM1,100 and RM3,000 a month for Royal Malaysian Navy submariners. Submarine trainees will receive a monthly allowance of RM800 if they are officers and RM600 if they are of other ranks. Announcing this, Deputy Prime Minister Datuk Seri Najib Razak said the Government approved the incentives recently in view of the importance of maritime safety. "The Government hopes this will lift the morale of in the submarine unit," he said, after presenting Hari Raya Puasa goodies to personnel at the Defence Ministry. Najib said the ministry had submitted a proposal and the Government approved it after careful study. RMN submariners are scheduled to be commissioned in 2008, when the Scorpene submarines commence operations in Ma- laysian waters. The commanding officer of the vessel will receive RM3,000 and executive officer RM2,400 in monthly allowance. Officers will be paid RM1,900 and other ranking personnel RM1,500 monthly in "expertise allowance". There is a "qualification allowance" of RM1,400 a month for officers and RM1,100 for other ranks. Sixty-three submarine trainees, including 31 officers undergoing training in France since late last year, will benefit from incentive allowances, to be backdated to Jan 1 this year. Altogether, there will be 156 submarine trainees, including the support force, making up the submarine workforce. Trainees will undergo four years’ training at the Ma- laysian Submarine School at the DCN Navy Base in Brest, 500km from Paris. On another matter, Najib said the armed forces’ 30-member medical team and six Health Ministry staff will leave for Pakistan tomorrow and on Oct 24 to help in relief efforts following the recent earthquake. Both teams will be in Pakistan for three months. Najib said the armed forces would build a field hospital in Bagh which is seven hours’ drive from Islamabad.

INCENTIVES
Monthly
Comm. Officer: RM3,000
Exec. Officer: RM2,400

Expertise
Officers: RM1,900
Other ranks: RM1,500

Qualification
Officers: RM1,400
Other ranks: RM1,100

Training
Officers: RM800
Other ranks: RM600
© 2004 NST Online.

SuperStar Virgo rescues crew members of sinking boat in Malacca Strait by Hasnita A. Majid
Singapore - A cruise ship, sailing along the Straits of Malacca from Singapore to Port Klang, on Friday rescued the crew of a sinking fishing vessel. A spokesperson for Star Cruises said its 'SuperStar Virgo' ship spotted three crew members in the water after their boat sank in unfavourable weather conditions. The cruise ship alerted the Malaysian Vessel Traffic Information System and picked up the crewmen, who rested on board the ship till it arrived at Port Klang. Star Cruises said this was the second rescue incident involving the 'SuperStar Virgo' in two months. © 2005 MCN International Pte Ltd.

Thailand's naval Reform
The Thais, who already have a pretty good navy, are planning a major reorganization and modernization of their naval forces, for the purpose of improving their ability to insure maritime security in their region. © 1998 - 2005 StrategyWorld.com.

US should remain as benign superpower by Lee Kim Chew
Never before in the recent dossiers of American foreign policy has so small a group of neo-cons wreaked so much damage and divided so many in so short a space of time. Could this be the epitaph of a one-term Bush presidency? Now that the Iraq war has proved to be an unmitigated disaster of unintended consequences for President George W. Bush's unilateralism, one proposition is for Americans to start anew by changing their leader. This is something only American voters can decide in November's presidential election. Mr. Bush's foreign policies had divided "new" and "old" Europe, in US Defence Secretary Donald Rumsfeld's parlance, just as they stirred controversy among Asians. Like their European counterparts, Asian policy-makers are forced to make a stark choice. They were either "for" or "against" the Bush administration's policies on Iraq. There is no middle way, even for Americans themselves. This week, yet another group — this time comprising former senior US diplomats and military leaders — felt compelled to openly condemn President Bush's foreign policies for making the US more isolated and less safe, and damaging its standing in the world. The trouble with the Bush administration's policies is that its good intentions had often paved the way to hell. The fact is that the world has become a much more dangerous place after the invasion of Iraq because Mr. Bush went after Saddam Hussein, who proved to be a paper tiger with neither weapons of mass destruction nor terrorist links, instead of the true enemies — Al Qaeda and Osama bin Laden. All this makes the Bush administration's policies controversial. Worse, the impact can be negative even when they make sense. Take shipping security in the narrow Malacca Strait, one of the busiest waterways through which a quarter of the world's trade and half the world's oil passes each year. The deep distrust in Kuala Lumpur and Jakarta over Washington's policies diminishes the prospect of any US move to improve security and forestall terrorist attacks in the Malacca Strait, where piracy is rampant and difficult to police. Given the limited resources of the littoral states, Malaysia and Indonesia can benefit by working closely with the US. Yet Washington's unpopularity and the prevailing anti-America sentiments in the Islamic world effectively limit such cooperation. Malaysian Deputy Prime Minister Najib Tun Razak said "a foreign military presence will set us back in our ideological battle against extremism and militancy." US military presence in the Malacca Strait "would trigger public anger and breathe new life into terrorist groups," he warned. True or not, the message is that America is not welcome, even when there is clearly a role it can play in safeguarding maritime security. But Mr. Najib did not entirely close the door to Washington. He said: "We should definitely expand our cooperation with the US and others, in terms of acquiring and sharing quality intelligence, collaborating on the latest intelligence techniques and working together to choke the financial and logistics networks of terrorist groups." The US Pacific Fleet commander Adm. Thomas Fargo will be visiting Kuala Lumpur for talks later this month. Like it or not, the Bush administration has to live with the reality of a two-faced policy in Islamic countries as a fallout of the Iraq war and its Middle East policies. Working on the premise that prevention is better than cure, Singapore has urged Malaysia and Indonesia to join hands with the US in meeting the threat of maritime terrorism in the Malacca Strait. But the two countries, cool to the proposal, choose instead to dwell on sovereignty, maintaining that the strait's security is solely a matter within their national jurisdiction. Because of this, Washington has back-pedalled on its Regional Maritime Security Initiative, which entails joint action to combat terrorism, piracy and trafficking in people and drugs. Indonesia's attitude is telling. "These types of proposals should be initiated and led by countries of the region," its foreign ministry spokesman said. "We are keen to avoid the impression that ours is a region in need of dire help, one that needs an external fire brigade to put out our fires for us. We are not that desperate." Indonesia, which wants to set up an ASEAN Security Community, clearly sees itself, not the US, playing a key role in Southeast Asia. In any case, US credibility has suffered on account of the Bush administration's undisguised support for Prime Minister Ariel Sharon in the Israeli-Palestinian conflict. Ironically, the Middle East road-map which the US helped to draw is in tatters because of this. The central flaw in Mr. Bush's initiatives stems from his unilateralism and handling of the Arab-Jew conflict. He alienates when he should coalesce. What makes the Bush White House particularly dangerous is its self-righteous conviction that everything it does is justified in the war against terror. The consequences, highlighted by the Iraq invasion, have become the divisive issues of American foreign policy. US Deputy Secretary of State Richard Armitage, speaking at the Australian American Leadership Dialogue in Washington on June 11, said: "We're both Asian powers with a common stake in the future of an Asia that is prosperous, democratic, and increasingly at peace." "We're destined for partnership, in Asia, in the Middle East, and in a whole host of challenges and opportunities that defy narrow geographic definition." Pity this is true only for Australia. America under the Bush presidency has far fewer friends today than it had after the Sept. 11 attacks. America badly needs to rebuild a new global alliance through the United Nations. Mr. Bush lately realized that he had to change course, like enlisting the UN's diplomacy, as part of his exit strategy from Iraq. Despite the Bush administration's unpopularity, its commitment to stay engaged in Southeast Asia is palpable. This is evident from its close collaboration with Singapore, and its allies — the Philippines and Thailand — both of which designated major non — NATO allies, a status which gives them privileges in the acquisition of US military hardware. Despite opposition from the anti-America leftist groups in the Philippines, President Gloria Arroyo has struck a deal with Washington to let US troops "train" Filipino forces to fight Muslim separatist rebels in the southern Philippines. Japan, which hosts 50,000 American troops, has upgraded its collaboration with the US since Sept. 11 to deal with terrorists as well as the threat of North Korea's intercontinental missiles and nuclear programme. Tokyo's defence stance has undergone a profound change. New laws will give the US access to Japanese facilities such as seaports and airports. At any rate, Japan's move to deploy an anti-missile defence system in an uncertain security environment is best done in collaboration with the Americans. This will help to allay the fears and suspicions of its Asian neighbours. Washington's decision to cut by one-third its 37,000 troops stationed in South Korea won't change the military balance on the Korean peninsula. Which is why it has caused few ripples in east Asia. To be sure, China is not disinterested. As long as Beijing reckons it can count on the US to rein in Taiwanese President Chen Shui-bian's quest for independence, tensions in the Taiwan Strait can be managed and war averted. As long as Washington is preoccupied with Iraq and needs Beijing's help to rein in North Korean President Kim Jong-Il, the quid pro quo holds. Will US military commitment in Asia be drawn down drastically to leave it exposed with the global redeployment of its troops? Not if the Pentagon's revised strategy — putting greater reliance on mobile forces armed with superior weapons and technology — is to be believed. What the Americans want is access to facilities rather than establishing huge military complexes like the ones they once operated in Subic Bay and Clark Air Base in the Philippines. Singapore, a staunch believer in strong US military presence as a force for stability in Asia, provides logistical support. The Americans are also eyeing their former naval base in Cam Ranh Bay but the Vietnamese are coy about this even though the first US warships sailed into Ho Chi Minh port recently for the first time since the end of the Vietnam war. As long as the US remains a benign superpower, Asian acquiescence is expected. But more than this, its strong military presence helps to shore up regional stability. Far better an America which remains deeply committed to Asia than one which vacillates and temporizes. A giant with feet of clay can neither serve its own strategic interests nor ensure the peace in Asia. © 2005 The Seoul Times Company.

US to search vessels outside its territory
The United States wants to search foreign ships far outside its territorial waters to stop a possible terrorist attack on the country coming from the sea, a US coastguard leader said. “If the threat is significant enough we will board that ship as far from our coast as we can,” said vice-admiral Harvey Johnson who is Pacific Area commander of the US coastguard. Johnson, who oversees key trade routes with Asia, told a maritime security conference in Copenhagen the policy of the US was to “push back” its sea borders for searches as much as possible – perhaps by as much as 2,000 nautical miles. In August, Washington said it planned to put sensors on oil rigs and weather buoys to spot security threats at sea and said it might use satellites to track suspect vessels. Johnson said that, from an intelligence perspective, there was ample justification to worry about a terrorist threat. “And I believe the maritime sphere will be the avenue for that threat,” he said. He said if the threat level from an incoming foreign-flagged ship was deemed to be low, the United States might choose to board and search it closer to home, perhaps within its own territorial waters at 12 miles. But he said he would like to be able to carry out forced searches much further from shore. Governments require permission from the flag-state to board a ship in international waters, where it is seen as sovereign territory, or risk a diplomatic row. Nations would have to agree a new legal framework to allow countries to inspect or board ships outside their own territorial waters. “I don't intend any sabre-rattling here. I'm talking from an operations perspective,” he told Reuters. “I'm not trying to bring any undue international pressure to get permission to board without flag-state approval. What I do want though is enough time to interdict the vessel,” he said. “Even if I did decide to board a vessel at sea, even as a three star admiral I couldn't make that decision, it goes back to Washington and it doesn't all happen in 15 seconds.” He said the exact parameters would be worked out with partners at a global level and within the international laws of the sea. © 1995-2005 Star Publications (Malaysia) Bhd.

WEEK 4: (22 - 31 October 2005)

China to work with Singapore and region to fight terror and sea piracy by Ca-Mie De Souza
Beijing - China has agreed to work closely with Singapore and the other regional countries to tackle the threat of terrorism and piracy in the Straits of Malacca. The agreement was reached during a meeting of Chinese and Singapore delegates led by Singapore Prime Minister Lee Hsien Loong and his Chinese counterpart Wen Jiabao in Beijing on Tuesday. In a statement released to the media, Mr Lee's press secretary added that the Chinese leader has agreed to maintain the momentum of high-level visits. Mr Wen extended an invitation to the Singapore Senior Minister, Minister Mentor and other leaders to continue regular visits to China. Mr Wen also agreed with PM Lee's proposal for an open and inclusive approach to regional cooperation such as the upcoming inaugural East Asia summit in December. The two leaders also discussed the cross-strait position and Mr Lee reiterated Singapore's one-China policy and opposition to Taiwan independence. The two sides also discussed the bilateral free trade agreement. China takes a positive view of it and sees that it will benefit both countries in the long term as well as the region. They agree to launch negotiations soon. Premier Wen also advocated cooperation in investment and also in security and other non-traditional areas. PM Lee's meeting with Premier Wen came on the second day of his visit to China. Arriving at the Great Hall of the People on Tuesday, Mr Lee was greeted by a tri-service guard of honour. Mr Lee and his wife also received a warm, red carpet welcome from Premier Wen. Mr Lee and Mr Wen last met in January in Indonesia at the tsunami summit. But this is the Singapore leader's first official visit to China since becoming prime minister in August last year. Congratulating his Chinese counterpart on the success of the recent Shenzhou 6 space mission, Mr Lee said it was an impressive achievement that had been closely watched not only by the Chinese but the whole world. The two sides also exchanged views on a variety of bilateral and international issues. Earlier Tuesday, Mr Lee addressed students and staff at the Central Party School in Beijing. Addressing some 700 Communist Party cadres and future leaders of China, Mr Lee said China's growth would shift the centre of gravity of the world economy towards Asia. And the rise of China would be a major plus for Asia not just economically but also in world affairs. Mr Lee explored China's relations with the US and Japan. China and the US, he said, would have to find ways to engage each other constructively to avoid misunderstanding and miscalculation. As for China-Japan ties, the Singapore leader said both sides must move on and not be imprisoned by their history. Asean countries, Mr Lee said, welcome closer ties with China but do not want to be exclusively dependent on China. They do not want to be forced to choose between China and the US, or China and Japan. Rather, Asean favours an open and inclusive approach which gives all the major powers a stake in Asia's regional architecture. Prime Minister Lee said Singapore has benefited from a stable regional order and the best way to enhance this favourable environment is to have a successful China take an active interest in the region, alongside India, Japan and US which continue to play significant roles. Singapore, he said, wants China to succeed and will participate in its transformation in whatever small way it can. The Singapore leader also noted that as China becomes more interlinked with the rest of the world, it will have to adopt international norms, help tackle global problems like avian flu, and play an active role in global bodies. The Prime Minister spoke for about 30 minutes before fielding questions for about an hour. Later in the day, Mr Lee met Singaporean students, businessmen and professionals living, working and studying in China. He stressed the importance of good Singapore-China ties and urged them to keep the Singapore flag flying high. Singapore established diplomatic ties with China 15 years ago and since then relations have broadened and deepened. As the biggest trading partner of China among Asean countries, Singapore has been keen to seal a free trade agreement with China within the framework of Asean. This desire to speed up free trade talks is also shared by Premier Wen. © 2005 MCN International Pte Ltd.

Extra cost for box deliveries bY Sharidan M. Ali
The cost of delivering containers to and from Northport and Westport will go up by an additional RM48 and RM96 effective tomorrow. The Association of Malaysian Hauliers (AMH) and Container Hauliers Association of Malaysia (CHAM), in a notice to the logistics fraternity, said the new rates were fully justified and were within the tariff gazetted. The operators will be charging RM48 for a 20-foot container delivered to any location within Selangor and RM96 for a 40-foot box destined for all other locations. Currently, the hauliers are collecting RM174 for a 20-foot container and RM348 for a 40-foot box deliveries to any location within Selangor. The notice, jointly signed by CHAM executive secretary Mohd Hanif Abd Ghani and AMH secretary Jimmy Loh, said that when Westport began operations in 1995, CHAM had introduced a separate tariff for the port to cover container deliveries in view of the port’s distance. However, at the request of Westport and other government agencies, CHAM did not implement the separate rates. It said this sacrifice by CHAM members was taken to assist and to promote the development of Westport. However, in view of rising costs of operations to service the longer distance between the city and Northport and Westport, members from both associations are no longer in any position to bear the burden. Due to this they are forced to revise the Central Region Haulage Tariff which will take effect for deliveries to and from the two terminals. Both the groups advised that the revisions made are in compliance with the existing gazetted tariff by the relevant authorities. Mohd Hanif, when contacted, said that rising commercial diesel price was hampering haulage operations. “Commercial priced diesel fluctuates from RM1.20 to RM1.50 per litre,” he said, adding that one litre of diesel was equivalent to one kilometre of operating a prime mover. He said in addition Westport had grown tremendously over the past years that it could sustain its market on its own now. “We have agreed to average and even out the tariff for both ports because we do not want one port to suffer on the expense of the other,” he said. Port users view the increase with concern because the move will make Port Klang and expensive port. A Northport official said such an increase is taking place almost in all major ports in the world the effects would be neutralised. He said the increase would only affect import and export boxes and not transhipment containers in the Free Trade Commercial Zone. “The direct effect will be shippers and exporters having to bear the extra cost,” he said. Last week, Star Maritime reported that swelling oil prices is worrying the logistics sector of the local fraternity and many are calling for higher fuel adjustment factor (FAF) to stay in business. Haulier companies are also pressing the government for a higher FAF because escalating prices is affecting their profit margin. © 1995-2005 Star Publications (Malaysia) Bhd.

Freight rates remain shy of last year’s peak
FREIGHT rates for seaborne commodities will stay well shy of last year's peaks into 2006 as ship capacity outpaces robust growth in demand from economic powerhouses like China, industry experts said. Ocean freight costs across oil tanker, dry bulk and container markets have been eroded after a rare two-year boom on the back of blistering Chinese demand growth, a global economic recovery and expanding international trade. All the major freight indices, though strong by historical standards, are down on last year's records, although demand remains positive. “Overall (cargo) demand volumes for raw materials, like iron ore, coal and grains are still strong,” said Peter Norfolk a dry trade analyst with Simpson, Spence & Young (SSY) ship brokers. “Earlier in the year there was a lot of talk about an economic slowdown, but we have yet to really see evidence of that,” Norfolk said. In September, the International Monetary Fund forecast world growth of 4.3% for 2005 and 2006, well above the long-term average. China's economy expanded at a faster-than-expected 9.4% in the third quarter from a year earlier and is showing little sign of cooling. However, the supply-demand dynamic for shipping has changed this year, and this is reflected in freight rates, experts say. “The big story in the last year has been the growth in the world tanker fleet,” said Lee Rowley, an analyst with Clarkson ship services group. He said there was overriding demand, which was still firm and growing. Rowley said the global Very Large Crude Carrier (VLCC) fleet grew 4.4% last year and another 4.1% to October 2005, equivalent to another 10 million deadweight tonnes in 22 months. Between 2001 and 2003 the VLCC fleet barely grew at all, he said. Citing World Shipyard Monitor figures, he said the overall world oil tanker fleet was forecast to grow 7.5% to 346 million tonnes through 2005. It grew only 4.1% between end-2001 and end-2003. For oil transportation, freight rates on major export routes are well down on last year when they hit more than 30-year highs as OPEC pumped at historic levels to match soaring oil demand. On the benchmark Gulf to Japan VLCC tanker route, rates are 60% lower despite the OPEC cartel still pumping close to flat out. OPEC and the International Energy Agency, the West's energy watchdog, have trimmed demand-growth forecasts for 2005 because of high oil prices, but only fractionally. Analysts point out that a lack of ship scrapping, as ship owners seek to cash in on historic returns, has also kept rates off the boil this year. Rowley said he could recall only one VLCC being demolished this year. Beyond that, you had to look back to May 2004. Analysts say rising ship capacity, along with low scrapping, will also keep dry freight rates well below last year, and it's been a similar story for container shipping of finished products like toys and electronic goods. The Baltic Exchange's Dry freight Index, a composite of key world voyages for iron ore and coal trade, grains and sugar, is trading more than 50% lower than last October. Norfolk at SSY said the world fleet dedicated to moving dry commodities is forecast to grow 6% in 2005 – an extra 21.5 million tonnes - compared with 4% last year and 2.5% in 2003. Container shipping, another distinct sector, which carries about half of the world's traded goods by value and 90% of general cargo, has also seen trade grow at breakneck speed. Analysts and container-shipping specialists forecast growth rates of between 10% and 12% this year against world fleet growth of 11% and 15% in 2006. Last week, analysts at SHK Financial said long-term investors should seek to exit the sector on growing ship capacity forecasts. Rates have dropped 15% between Europe and Asia since September, while costs from China to the west coast of the United States are 20% lower than year-ago. With order books at Asian yards full to brimming, and oil tankers slated for construction on order as far out as 2009, the pressure can only grow. “It's going to fall off a cliff sometime,” an analyst who declined to be named said, recalling the recessionary years of the 1980s when overcapacity and low growth threatened much of the industry with bankruptcy. © 1995-2005 Star Publications (Malaysia) Bhd.

Greenpeace to pay fine for damaging Philippine reef by Nadim Ladki
Manila - Greenpeace said on Tuesday it will pay nearly $7,000 in damages after the environmental group's flagship, the Rainbow Warrior II, hit a coral reef at a world heritage site in the southern Philippines. The accident on Monday was "very regrettable", Greenpeace said in a joint statement with the Tubbataha National Marine Park, but it laid some of the blame on maritime charts showing its ship was 1.5 miles from the reef. Officials from the marine park assessed the area of damaged reef at 96 square metres and valued it at 384,000 pesos. "This accident could have been avoided if the chart was accurate," Red Constantino of Greenpeace Southeast Asia said in the statement. "We feel responsible, however, and this amount will be transferred on Wednesday." The visit to the reefs in the Sulu Sea was part of a four-month tour by the Rainbow Warrior II to Australia, China, the Philippines and Thailand to raise awareness about global warming and promote renewable energy. The ship suffered no serious damage while briefly running aground, Greenpeace said. The area of the maritime park is designated as a world heritage site by the United Nations. © 2005 Reuters.

Indonesia opposes foreigners in Malacca Strait protection
Jakarta - The chief of the Indonesian Navy on Thursday rejected the presence of foreign troops, including the United States, in helping to safeguard the strategic, high-traffic Malacca Strait. During a meeting with a senior U.S. diplomat last week, Malaysian Defence Minister Najib Razak said the United States could launch reconnaissance planes to support the Malacca Strait patrols while stressing such involvement was merely supportive and protection remained in the hands of Indonesia, Malaysia, Singapore and Thailand. "The Malacca Strait is our own territory," Admiral Slamet Subianto said. "It is we who have to guard it," the state-run Antara news agency quoted Subianto as saying. He added that Indonesia will stick to the joint patrols it conducts of the strait with neighbouring countries. "No foreign country is allowed to be directly involved in patrolling there," he said. "If foreign countries are keen to assist in the pacification of the Malacca Strait, it would be enough for them to provide us with equipment." The United States has expressed its interest in taking part in patrolling the strait to deter terrorists who might target shipping in the waterway that connects ports in Europe, the Middle East and Asia. Indonesia last year established a joint task force with Malaysia and Singapore to safeguard the strait, and Thailand joined this year. The narrow waterway that cuts between Indonesia, Malaysia and Singapore is a key commercial maritime route. More than a quarter of the world's shipping passes through it, including tankers carrying oil from the Gulf, freighters laden with Japanese nuclear waste en route to Europe for reprocessing, and the products of China's booming economy. Pirates have been active in the strait for years, but the problem has increased recently. The International Maritime Bureau, a piracy watchdog, said the strait is the most dangerous part of the world for such attacks. While the attacks so far are believed to have been simply the work of criminals, the bureau has warned that terrorists could also attack slow-moving ships. © The Post Publishing Public Co., Ltd.

Iraq can learn from BN formula
Kuala Lumpur - Barisan Nasional's time-tested power-sharing formula for ruling the country has caught the attention of a top United States official, who said it could be applied in Iraq. US Under-Secretary for Public Diplomacy and Public Affairs Karen Hughes brought the subject up in her meeting with Deputy Prime Minister Datuk Seri Najib Razak today. "She (Hughes) said they (Iraqis) should learn from Malaysia's experience and that it was important to get all the groups, especially the Sunnis, to be on an inclusive basis and to accept the new (Iraqi) Constitution and Government," Najib said after the meeting. He said Hughes was impressed with the stability and security in Malaysia and the concept of Islam Hadhari that was being promoted by Prime Minister Datuk Seri Abdullah Ahmad Badawi. She hoped Malaysia would engage in international dialogue and discourse, including in the US, to relate its experiences. At a Press conference earlier, Hughes said Malaysia was a role model for power-sharing as the country had had peace and stability for decades. "We think it is an important example for countries such as Iraq right now, as Iraq is seeking to establish its own government and seeks to have different factions work together." She is here to learn about Malaysia and how co-operation between the US and Malaysia can be boosted. Najib said Malaysia wanted in co-operation on education with the US and hoped to see the US opening more university campuses here and have collaborative arrangements. Malaysia also welcomed co-operation with US companies, especially in ICT, he said. On the Straits of Malacca security issues, Najib said the US was keen on being to involved in the Eye-In-The-Sky aerial surveillance by the littoral states - Malaysia, Singapore and Indonesia - to protect ships from pirate and terrorist attacks. However, he said the US' participation in the exercise should not undermine the littoral states' sovereignty. © 2004 NST Online.

Malaysia welcomes the SailAsia Darwin-Bali-Langkawi Yacht Rally 2005
The yacht rally started from Darwin, Australia on 23 July. A total of 57 yachts carrying 150 sailors of 20 different nationalities are congregating at the Telaga Harbour Park in Langkawi on 10 November. A week-long programme of festivities will be held on the island to commemorate the last leg of their journey which covered two continents and four countries comprising Australia, Indonesia, Singapore and Malaysia. The rally’s participants will join various tours and cultural activities including the Hari Raya Aidilfitri open house celebration. They also have the opportunity to watch the Raja Muda International Regatta, Malaysia’s own annual sailing event on 26 November 2005. Organiser SailAsia Sdn Bhd aims to develop a greater interest in maritime activities among the Malaysian public. The event is expected to carve a niche in yachting tourism for Malaysia. The yacht rally is open to those who started from Darwin and those located along the navigational route to Langkawi. To date 57 yachts have registered for the week-long event in Langkawi – 53 from Darwin (69 started from Darwin), and four from Singapore. The registration is still open but will close at 80. Telaga Harbour Park Langkawi is the official venue for the whole event. The SailAsia Yacht Rally will be an annual event. The rally is endorsed and supported by the Ministry of Tourism, the Kedah State Government and the Langkawi Development Authority (LADA). © Travel Media Applications.

Maritime fraternity urged to take up certifications
Malaysian maritime fraternity could be more globally competitive by achieving a standardised communication level through International Supply Chain Education Alliance (ISCEA) certification programme such as the Certified Supply Chain Manager (CSCM). ISCEA executive director Lalith DeSilva said CSCM was a globally well-accepted certification in the supply chain industry and had the undertaking that covers the total supply chain operation. “The course certifies that the holder is both expert in supply chain theory and a practitioner, who can manage and lead a modern supply chain organisation,” he said. DeSilva said such a move would result in companies using the same business terminology thus speaking the same “language” which would cut time and cost. He said the local maritime industry would get a boost by learning the standardised 'international business terminology' because many American companies are outsourcing services to Asian counterparts. “Physical distribution from Asia to Western World will continue to grow as more and more companies have started outsourcing their production to Asia,” he said. DeSilva said in order to be compet