Mahathir’s 20 pct oil payment raises concern

MIRI: The recent announcement by Prime Minister Tun Dr Mahathir Mohamad regarding the restructuring of royalty to petroleum-producing states in Malaysia has triggered concern among many Sarawakians, who believe that it would be necessary for the premier to clarify his statement.

On Thursday, Dr Mahathir announced in Parliament that the Pakatan Harapan (PH)-led federal government would honour its promise of providing 20 per cent royalty to petroleum-producing states but later, he clarified the statement saying that the 20-per cent payment would be based on profit instead of royalty.

Datuk Sebastian Ting

Former Miri mayor Datuk Lawrence Lai viewed the announcement as being different from what was pledged in PH’s election manifesto.

“Though I am not an oil expert, I do believe that those interested in the future of Sarawak would like to ask a simple question regarding the comparison between the 20 per cent royalty and 20 per cent profit. A common interpretation would be this – if the oil production generates RM1 billion, then the 20 per cent oil royalty would be RM200 million, which is the gross (figure) before the deduction of expenses; however, if it’s 20-per cent profit that Tun Dr Mahathir is talking about, it would only be the balance after deduction of all expenses.

“This is a very controversial issue – Tun Dr Mahathir as well as the Parliament must give explanation to the people of Sarawak,” said Lai, who is a lawyer by profession, adding that in mathematically, 20-per cent royalty would definitely be more than a 20-per cent profit.

Datuk Lawrence Lai

Lai also expressed his hope that the Sarawak government and Petroleum Sarawak Bhd (Petros) would have a say in this matter and come out with appropriate statements.

Additionally, he said while some might accuse Dr Mahathir of ‘downgrading’ Sarawak’s status as having equal payment as of other states in Malaysia, he clarified that Sarawak and Sabah ‘are legally among the 13 states in Malaysia’.

“Malaysia was formed on Sept 16, 1963 when Malaya, Sabah, Sarawak and Singapore signed the Malaysia Agreement 1963 (MA63) – Singapore has left the Federation in 1965.

“However upon the amendment to the Federal Constitution in 1976, Sarawak and Sabah were demoted from being members of the three-nation federation (Sarawak, Sabah and Malaya), to becoming among the 13 states in Malaysia.

Fong Pau Teck

“Perhaps, the first step would be a joint exercise by both GPS (Gabungan Parti Sarawak) and Parti Warisan Sabah (Warisan) to lobby for and table a Bill in Parliament to repeal the 1976 Constitutional Amendment Act to the Federal Constitution, and to reinstate or restore the rightful place of Sarawak and Sabah together with Malaya as equal partners of the Federation; and thereafter, the debate on Sarawak’s oil rights as stated in MA63.”

Similarly, Piasau assemblyman Datuk Sebastian Ting regarded the Prime Minister’s announcement as ‘being very conflicting’ to what was mentioned in the PH manifesto.

“For Sarawak, many people voted PH because of its manifesto.

“Previously, Sarawak had five-per cent royalty. Should the 20-per cent oil profit become the final decision, we would not know how much Sarawak would get — the (amount from 20 per cent) profit could possibly be much less than the five per cent. I think the majority of Sarawakians would be very disappointed,” he said.

Erick Chin

In his opinion, Sarawak for Sarawakians Movement (S4S) co-founder Erick Chin believed that the 20-per cent  payment based on profit would be applicable only to other petroleum-producing states in Malaysia – not Sarawak  and Sabah.

As such, he called upon the Sarawak government to oppose this move.

“There is no reason for Sarawak to agree to this. Sarawak and Sabah must look into the MA63 and understand our rights to our natural resources.

“As for the Sarawak government, it must stand firm in its fight for the rights of Sarawak and Sarawakians.

Former Pujut assemblyman Fong Pau Teck, on the other hand, viewed the PH government as ‘lacking sincerity’ with regard to the issue.

“For years, Sarawak has been receiving five-per cent oil royalty. If they (PH government) are talking about 20-per cent profit, it (value) is far lower than 20-per cent royalty.  The drop in fuel price could also mean lower profit. There are more disadvantages than advantages, and there is no reason for Sarawak to agree to this.”

Fong also said upon referring to Sarawak’s rights to natural resources as stated in MA63, ideally 100 per cent of the rights should return to Sarawak.

“Apart from the 20 per cent royalty, the remaining 80 per cent of rights should be given to Sarawak-based oil and gas companies, contractors and sub-contractors as well as employees.

“We do not hope for Sarawak’s natural resources to continue being in the  hands of outsiders,” he said in a press statement yesterday.

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