ACCORDING to the Federal and
State Constitutions, it was agreed that land and all that is in and under it
belongs to the State and not the Federal Government. The state decides on what
happens to their land, forest, plantation, petroleum, and whatever resources
found in the ground, on the ground, and offshore.
Kota Kinabalu Member of
Parliament Hiew King Cheu had search into various related documents and he
feels that some vital information should be disclosed in order to straighten up
matter concerning the series of changes involving our precious “Black Gold”.
When the Federation
Agreement was drawn up, the subject of the ownership of petroleum was not
thought of in the Malaysia Agreement, with the result that no safeguards were
written into the Constitution of the Federation of Malaysia on the ownership of
oil found in the two East Malaysian states.
No one expected that one day
the Peninsula Malaysia states would discover oil – although oil was already
discovered in East Malaysia and had benefited the states since its extraction
that started in 1910.
Under the Federation
Agreement, petroleum belongs to the state and that was why the ex-PM Tun Razak
instructed Tengku Razaleigh to come out with the draft of a new law.
The only way the Federal
government could take over the rights of the oil and gas would be to come out
with a new law that allowed them to do so. If not it would be illegal for the
Federal government to touch the oil and gas found in the East Malaysian states,
and it belonged 100% to the state.
Hiew said this new law or
Act called the Petroleum Development Act 1974 allowed the Federal government to
unilaterally amend the terms of the Federation Agreement. Normally it requires
all parties to the Agreement to agree to any amendment to that Agreement before
it can be amended. In this case, only one party made the changes (unilaterally)
and the other parties were forced to remain silent.
In return for the ownership
and the rights, powers, liberties and privileges vested in it by virtue of this
Act, Petronas shall make to the Federal government and the government of the
relevant state such cash payment as may be agreed between the parties
concerned. And there shall be established a Council to be known as the National
Petroleum Advisory Council consisting of such persons including those from the
relevant states as the Prime Minister may appoint.
Of course, in Sabah, not all
parties initially agreed to these new amendments to the Federation Agreement.
Sabah and Sarawak had 100% control of their oil production long before Petronas
was incorporated. Therefore, they did not agree to ‘hand over’ their oil to the
Federal government 13 years after forming Malaysia together.
Datuk Harris Salleh,
witnessed by Joseph Pairin Kitingan, signed the Agreement with Petronas to
accept 5% cash payment for the surrender of ownership rights of the Sabah
petroleum to Petronas, and further agreeing to waive or reject the collection
of royalties that were the rights of the Sabah government under Section 24(2)
of the Sabah Land Ordinance.
But the Federal government
did not take everything, they just grabbed 95%. They agreed to leave 5% for the
state. The 1976 Supplementary Agreement that was signed between Petronas and
Sabah stipulated that the 5% will be paid in cash twice a year, in March and
September of every year, and that it will be called Royalty. Unfortunately, Kelantan was given nothing and
Terengganu was granted with a pity token sum only.
Petronas, is a creature of
the ruling BN government, which is the owner of all the oil in the country, and
the Prime Minister decides on how the cake is to be shared. The Prime
Minister’s permission, approval and delegation are required for all upstream
and downstream activities and operations.
“Now we know why the BN
cannot afford to lose the next general election!” said Hiew.
With Petronas being granted
the rights, powers, liberties and privileges in respect to petroleum under the
Federation Agreement, the distressing part is that the Petroleum Development
Act 1974 itself cannot be challenged in a court of law.
The Petroleum Development
act 1974 should not have even been passed in the first place because according
to the Federation Agreement 100% of the petroleum found in Sabah belongs to
Sabah, and the Federal government should not have taken it away from Sabah.
If the Sabahans want to see
more share of their precious “Black-Gold” which can relief them from poverty
and to enjoy prosperity and development in the state, the only way out is to
repeal this Act in Parliament through a
new government.
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