UNITED BORNEO Front Chairman Datuk Dr. Jeffrey Kitingan told the High Court on Tuesday that the oil agreement between Sabah and the Federal government is invalid as there were no negotiations between them.
In relation to this, Kitingan, 64, also told Judge Dato's Abdul Rahman Sebli that he tended to believe that there was coercion and pressure from the Federal Government.
Kitingan, who is also chairman of the Common Interest Group of Malaysia (Cigma) a non-governmental organisation, was asked about his press statement which he made after attending the talk by Tengku Razaleigh Hamzah on the topic of 'Minyak Sabah untuk Siapa’ on April 2, 2010 at KDCA Penampang.
He said he prepared a statement, which among others, called for a probe or re-investigation into the air crash that killed Tun Fuad Stephens and others on board the Nomad aircraft 35 years ago and that he thought the oil royalty agreement maybe void, for publication in the alternative media.
According to him, the statement was made following the revelation relating to the air crash tragedy of June 6, 1976 by Tengku Razaleigh on April 2, 2010, which disturbed him, after discussion with his people and activists.
Kitingan was testifying as the defendants' sixth witness during examination-in-chief by counsel Datuk Simon Shim in the hearing of a suit against Sabah Progressive Party (SAPP) and its President Datuk Yong Teck Lee which was brought by former Chief Minister Tan Sri Harris Salleh against the defendants for insinuating that he was involved in causing the Double Six tragedy on June 6, 1976.
Harris, represented by counsel Yunof Maringking and Trevor Maringking, is claiming general damages, aggravated and exemplary damages of not less than RM50 million from Yong, who he named as first defendant and SAPP as second defendant, for libel.
Shim: Can you explain to the court why you think the oil agreement maybe void?
Kitingan: From this new information, it seems to me that there are so many unanswered questions, so many doubts that lead me to believe that if you put together this doubt and this question, you begin to wonder why the oil agreement was not signed in Labuan, why some people left the plane against protocol, why the plane mysteriously crashed, why certain people left the plane just to see a cattle farm, why this said people survived to sign the agreement, why the agreement was rushed to be signed given the tragedy of such magnitude, why didn't the State government take the opportunity to bring this to the State Legislative Assembly or the Cabinet before it was signed.
"It seemed to me that when you look at the whole scenario before, in between and after the incident, it gives you the feeling that something is at play here, meaning, could the State government be under pressure to succumb to the demand of the Federal Government.
"If so, are we being coerced into signing the agreement that we do not want to sign. If you think about this, why would any State government or leader want to surrender or give away fundamental state resource at five per cent?
Don't you think this is ridiculous, where is the negotiation?
I have not heard of any negotiation about the oil agreement between the State and Federal government.
"If you look at the Petroleum Development Act, Article 4, the cash payment to the Federal government or the State government is subject to agreement between the parties, meaning, we should negotiate and as I said before, it would be stupid of the State to simply agree to give away this fundamental State resource called oil and gas at merely at a payment of five per cent.
"And not only that most stupid in addition to this, why would the State government in this agreement that they signed even waive the five per cent royalty i.e. fundamentally be there already, which means you not only give away the oil resources but you also give away a royalty of five per cent and accepted a cash payment of five per cent when you could have 10 per cent even if you have given away the oil for five percent cash payment.
"So, because of this, I tend to believe that there is coercion and pressure from the Federal government that lead me to say that this agreement is invalid and I am not surprised of this Federal play because it has happened many times before."
Shim: From your understanding of the oil revenue in Sabah, is the royalty payment fixed by Parliament or statute?
Kitingan: The royalty payment is fixed by the cash payment over the oil is not but to be agreed between the parties according to Article 4 of the Petroleum Development Act. There are two separate issues.
Shim: Do you agree that the signing of the oil royalty agreement is a mere formality only?
Kitingan: No and I don't want to mention the word royalty payment because it is not called royalty. The payment or cash payment to owners of the resource is to be agreed upon between the parties, meaning that, it has to be negotiated and I understand from speaking to the late Tun Mustapha that they did not agree to the five per cent but they had demanded a higher percentage and I think for this, we need to refer to Cabinet papers.
Earlier, Kitingan said the Double Six tragedy was more than a historical event because it was a tragedy of a huge proportion which not only affected the families of the crash victims but also affected the State and the future of its people.
Shim: The incident happened so long ago, why are you still interested to know what happened and do you have anything to do with that incident?
Kitingan: Because there has been so many unanswered questions.
This is a big tragedy involving half the Cabinet ministers and they were supposed to be in Labuan to sign an oil agreement and from what we know, the agreement was not signed and there was a crash, including the Chief Minister, who was supposed to sign the agreement.
"And then one week later it was signed by the next Chief Minister, who took over, who was not in that plane and who invited the Petronas chief - the other party to the agreement out of the plane to another plane.
So won't you want to know? Would that not raise so many questions?
Would that not lead to so many speculations? Some may even speculate that this incident may have been planned otherwise why would this tragedy happen?
"Why was the agreement not signed? Why some people went out of the plane? Why was the agreement rushed when the State and the families (of the victims) were still in mourning?"
Kitingan also said the new information as revealed by Tengku Razaleigh merited a new investigation into the incident.
Meanwhile, during cross-examination by the plaintiff's counsel, he disagreed with Yunof when asked that based on Section 2 of the Act, whether he agreed that Parliament had passed the Act and vested ownership of petroleum whether onshore or offshore of Malaysia onto Petronas and therefore it would be too late in the day for Sabahans to cry over spilled milk.
In this question, Kitingan was referred to the Petroleum Development Act 1974 - Section 2 and Section 4.
Yunof: Put that since the ownership of petroleum onshore or offshore of Sabah had already been vested into Petronas by virtue of this Act, there was no need to sacrifice so many leaders in order to force Sabah to sign or accept the five per cent cash payment under the agreement that was supposed to have been signed on June 6, 1976. Do you agree?
Kitingan: No, I don't agree because according to Section 4 of the same Act, with regard to the cash payment by the corporation, it says that such payment to the Federal government É meaning that it has yet to be decided, agreed and negotiated and I think this is absolutely important that the five per cent is not yet decided under this Act and therefore I don't agree that by vesting the resources to the Petronas, it automatically takes away the State ownership and the rights to this resource.
"Remember, that we came into the Federation of Malaysia based on certain conditions and rights as incorporated in the Malaysia Agreement which include under Article 8 of that agreement, rights of the State, promises made to the State as well as assurances made to the State including those conditions mentioned in the 20 Points."
Yunof: Do you agree with me that it was the fault of our Members of Parliament, who supported the passing of the Act to give discretionary power to Petronas in fixing the amount of payment to the State which is now becoming an ongoing political issue?
Kitingan: I don't agree because the passing of the Petroleum Development Act alone or by itself take away our rights of negotiation as I said under Article 4 of the same Act shows very clearly that the amount of cash payment to the State or Federal Government has to be agreed between the parties and so that is why it has become a very important ongoing dispute politically.
The defendants have so far called six witnesses to testify including Kitingan.
The first defendant, Yong and Tengku Razaleigh Hamzah, are expected to testify on Dec 22, 23, 28, 29 and 30.
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