Last week we talked about the historical events that led up to the Malaysia Act 1963. The events leading to the Treaty also showed the British to believe that they had an obligation to protect the interest of the peoples of Sarawak and North Borneo.
Zainnal Ajamain had stated in his book “the Queen’s Obligation,” that the British had discharged their obligation and they are to be found in the Malaysia Act 1963 {MA63} as well as the Inter Government Committee Report (ICGR)
The British had ensured that the MA63 became an international treaty and that being the case, the treaty was beyond the reach of the Malayans and there was no arbitrary amendments to all the protections inserted.
This is contrasted with the Federal Constitution which is a local Federal legislation which has had multiple amendments. Although the Federal Constitution has been said to be the legal backbone of our country, yet the status between the Confederation of nations has been amended to one of being a federation of 13 states.
Indeed Article 1 of the Federal Constitution has watered down the status of Sarawak and Sabah from the status of nations entering into a confederation of nations within Malaysia, to one of two mere states equal in status to that of the nine within the Federation of Malaya.
We certainly do not hear USA amending their Declaration of Independence or the rewriting of the Magna Carta. That is a sacrilege but we chop and chip off our Federal Constitution as and when we want – so much for sanctity of the piece of legislation.
Thus, to understand the protection that has been given us, we must look to the MA63 and the ICGR. That is where the investigation has to be carried out.
It looks like the Sarawak request for 20 per cent royalty from Petronas through the Federal coffers will come to nought. It is most likely that most other requests will fall on deaf ear what with the economic upheaval the Federal side is facing. Sure, we will get the polite answers but substance will be slow in coming, if at all.
But Zainnal Ajamain first stated that previous payment to the states were as cash payout. This implies that Petronas was the owner of the resources. If it was royalty then it would imply that Sarawak and Sabah owns the resources of which Petronas pays a fee for coming into her profitable business venture with the owner of the resources. Likewise, any other overseas oil companies.
However, the Petroleum Development Act 1974 (PDA74) disallow Petronas, from which legislation it was formed, to pay royalty. This contravenes paragraph 24 (2) (d) of the IGC which states
“…..the revenue to be assigned to the States of Sarawak and North Borneo should, …..consists of the revenue levied in the States:-
(d) export duty on mineral up to joint total of royalty and export duty of 10 per cent ad valorem calculated on the manner laid down from the payment of export duty.”
Further the Federal Constitution states in Article 112 (c) (4)
“Subject to Clause (5) of article 112 d, in relation to the states of Sabah and Sarawak, clause 3(B) of Article 110 – (b) shall not authorise Parliament to prohibit the levying of royalties on any mineral by the State or to restrict the royalties that may be so levied in any case so that the State is not entitled to receive a royalty amounting to ten per cent ad valorem (calculated as for export duty).”
Thus, if oil and gas was state prerogative, then the state government will collect revenues from these resources just as we collect for timber and land premium. The level of extraction and their management will likewise be controlled by the state.
Thus, provisions for royalty of
10 per cent to be paid to the Borneo states are provided for in the IGC and the Federal Constitution. While 10 per cent of royalty may not be larger than the cash payout based on the “Gross Sale” of crude petroleum, it nevertheless ensures and maintains ownership with us.
It is interesting to note that state legislative honourable members, See Chee How and Tan Sri Dr James Masing have, however disputed Zainnal’s assertion that our royalty is pegged at 10 per cent and hence our state legislative house has claimed from Federal for 20 per cent.
Whether it is 10 or 20 per cent, at least all are unison that royalty is due to Sabah and Sarawak and stems from a legal source.
Similarly the rule on cabotage is a punishment on the State from controlling its transport. Notwithstanding that Bintulu Port is under the federal government, it is learned from the Sarawakians in their higher management there that they have for years requested for consent to allow shipment from the Philippines and Hong Kong as well as other regional ports. This of course has fallen on deaf ear as shipments must first be directed to Port Klang.
Zainnal had argued that the 1962 IGC Report had clearly agreed that the Federal Government will not interfere in administration of ports. In respect of port fees and dues, discrimination should not be introduced to divert shipping from current trade routes.”
In 1980 the federal government introduced the national shipping policy that forced all foreign flagged ships to divert to Port Klang instead of the local ports. That in a nutshell is cabotage. Given the size of Malaysia, where ships coming from Hong Kong or Philippines or anywhere in the Far East would have reached Sarawak and Sabah first, they are now diverted to Malaya and transhipped to these two states. It represents a sabotage of the local state shipping business.
A natural consequence of the policy is of course costs of most things increased. Otherwise, why would most things have a Malayan price and Sarawak price, and if further Sabah price. This is indicative of transport charges from Port Klang.
This policy also results in the demise of the BIMP-EAGA policy for our states. If otherwise Sabah or Bintulu with their natural deep-sea ports, would have been the geographical centre of that region, we now cannot take advantage of that position. It also deprives the two States from challenging Singapore or Port Klang in being the entreport of the region.
How much damage has that done to our shipping industry in Sibu? If foreign shippers come into Sarawak, the servicing of ships and the launching of new ones in Sibu could take off.
Similar damage has been done to our air transport and tourism where Kuala Lumpur was used as the distribution of incoming flights before being allowed to fly to Sarawak and Sabah. Tourism paraphernalia could not advertise Sabah and Sarawak as being in Borneo, a name that more people knew, but must show the name Malaysia.
So what is to be done?
Those in the relevant trades have to start complaining loudly. Forwarding agencies, shippers, port unions and workers association. Petitions have to be made to the State legislative bodies as well as the Federal representatives from Sarawak. For too long Sarawakians and Sabahans have been quiet by-standers to this mistreatment.
Politicians only fear the masses so the masses have to get organised in an orderly and smart fashion. Our local representatives in both Houses have to realise that they have to work for Sarawak and Sabah’s special interest entrenched in the MA63 and the ICG Report. The people must lobby for their representatives to work for the state and her people.
Write Straight, Write Sharp!