The Truth Revealed

Wednesday, November 7, 2007

Japanese timber ships still ‘stranded’ in Sarawak ports

Malaysiakini.com, Sat, Nov 3, 2007, 3:11pm
By Tony Thien

Numerous Japanese-registered ships are still being made to wait at various ports in Sarawak for their ‘entry permits’ to load timber products destined for Japan.

Sources in the shipping industry attribute this long-standing problem to Achi Jaya Shipping, which holds exclusive rights as the agent for all vessels dealing in timber exports.

Malaysiakini understands that only Japanese-registered ship are being affected because their owners reportedly refused to pay between US$2 and US$3 per metric tonne as ‘rebates’ to an offshore account linked to the agent.

About a dozen such ships are presently made to wait at various ports, including Kuala Baram, Bintulu and Tanjung Manis. Their owners are said to be haggling with agents over the matter.

This ships belong to a Japanese cartel which has been appointed by the Japanese timber buying houses to import timber from Sarawak.

Due to Japanese probe?

The stand-off is likely a result from an international scandal involving RM32 million in kickbacks paid by Japanese shipping companies for timber from the resource-rich state.

According to a Japan Times report, the multi-million ringgit ‘commission’ - made over a period of seven years - was paid to a Hong Kong company said to be linked to Sarawak Chief Minister Abdul Taib Mahmud and his family.

This was uncovered by Japanese tax authorities who deemed the payments made by the shipping companies as ‘illegitimate expenses’ since the Hong Kong agency, believed to be a paper company, did little ‘substantive work’ to justify the payments.

According to tax authorities, the shipping companies had tried to disguise the payments as ‘business expenses’ and were thus not taxed. The companies were then fined heavily for the offense.

A shipping industry source said cartel members have since refused to pay the rebates to Achi Jaya - which incidently is linked to Taib’s brother, Onn Mahmud - and thus cannot obtain their ‘entry permits’.

“It is definitely a retaliatory move (against the Japanese). There is no indication when the issues are going to be resolved,” said the source.

Industry affected

Local shipping firms are also said to be unhappy with Achi Jaya’s monopoly over timber carriers in Sarawakian ports.

“We had a request from a Miri-based timber conglomerate to arrange for ships to carry their finished timber products contracted to Japanese buyers,” said a senior official from a Bintulu-based shipping company.

“It is very unfortunate, that only they control the ‘entry permits’,” said the official who revealed that some shipping firms are trying to become Achi Jaya’s sub-agents.

The senior official added that the present stand-off between Japanese ships and Achi Jaya has taken a toll on Sarawak's timber industry.

Industry sources indicate that timber prices have dipped recently due to over supply and reduced Japanese demand. The stand-off at the ports are also making matter worse.

Sarawak plywood mills have allegedly also slashed production, some as much as 50 percent.
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