Story updated at 3.16pm
PUTRAJAYA: The Federal Court will deliver its decision tomorrow (June 22) on Petroliam Nasional Bhd’s (Petronas) application for leave to commence proceedings against the Sarawak government.
Chief Judge Of The High Court of Malaya, Tan Sri Datuk Wira Ahmad Maarop who presided over the proceeding, said he will take time to consider and will announce his judgement at 9.30am.
Ahmad said the court would deal with Petronas’ stay application tomorrow depending on the court’s decision whether to grant leave to the national oil company to commence its legal challenge against the Sarawak government.
Petronas is seeking a stay order in respect of the Sarawak government’s commencement to regulate upstream activities in the state under the Sarawak Oil Mining Ordinance 1958 (OMO) beginning July 1 this year.
Petronas was required to comply with the OMO and must have the requisite licences or leases by July 1 this year, failing which the upstream activities carried out by Petronas would be illegal and appropriate action would be taken.
This is because Sarawak Chief Minister Datuk Patinggi Abang Johari Tun Openg said companies operating in the upstream oil and gas (O&G) sector in Sarawak must obtain the necessary licences and leases from the state beginning July 1.
“Sarawak has imposed July 1 as cut off date on Petronas,” said the lead counsel for Petronas, Datuk Malik Imtiaz Sarwar who briefed reporters after the proceedings.
The Sarawak attorney-general officially wrote to Petronas on April 13 to communicate the state’s intention to enforce the requirements.
The Sarawak attorney-general also stated that continuing such operations in the state without the necessary licences and approvals would be “illegal” after July 1.
Petronas had filed an application for leave to commence proceedings under Article 4 (4) of the Federal Constitution, seeking a declaration that the Petroleum Development Act 1974 (PDA) applied with regard to the regulatory control of upstream activities in Sarawak.
The company is also seeking a declaration that the OMO was impliedly repealed by the PDA.
Petronas is seeking a declaration that the PDA was duly enacted by Parliament and stated that Petronas is the exclusive regulatory authority for the upstream industry throughout Malaysia, including in Sarawak.
Malik revealed that Sarawak insisted Petroleum Development Acts (PDA) 1974 does not apply to Sarawak.
“This is part of the argument because before Sarawak join Malaysia, it was a British colony and for a short time it was independent, I supposed, I leave it to them to argue that. If it would have laws, it will carry through.
“Once they joined the federation of Malaysia, Federal Constitution apply. Certain powers are no longer within the state competence to make laws,” he argued.
Malik also stressed that Sarawak is not saying PDA is not valid but insisting that it doesn’t apply to Sarawak.
“They just say PDA doesn’t apply to Sarawak. This is what we are talking about, which is the issue. Since 1974 there is only one single regulatory scheme (PDA) until 2018 they (Sarawak) make the demand,” he said.
“In my personal view, it is not something that can be dealt with by the high court but subject to what the court says,” he added.
Malik said Sarawak insisted that OMO is a valid law that Sarawak is entitled to enforce.
” (But) We are saying that the power to control and regulate upstream activities meaning the exploration and exploitation of oil is something that fall under the purview of parliament exclusively. If that is right, that means the state has no power to enforce.
“What Sarawak saying is that, OMO is not a law pertaining to oil and oil fields,” he concluded.
Meanwhile, Sarawak Legal Counsel, Dato Sri JC Fong said Sarawak government opposed Petronas’ application for leave to bring the matter to the apex court, stating that it should be heard by the High Court instead.
Fong also insisted that the case is not about challenging parliament or Sarawak state legislature to make any law.
“Petronas wants to say under constitution that Parliament have exclusive power to make laws on upstream activities of petroleum.
“This issue is not within the power of Federal Court to decide. It is a matter of judicial interpretation by the high court,” he argued.
Fong insisted that Oil Mining Ordinance 1958 is the law passed by State Council Negri before Malaysia Day.
“After Malaysia Day, that ordinance remains good law and apply only to Sarawak,” he stressed.
OMO, he added, is not about oil and oil fields. It is about regulating the exploration and exploitation and mining of petroleum in Sarawak.
“The OMO covers all these activities on shore and continental shelf. So, in the nutshell we says that, Petronas has to comply with State laws particularly in OMO and Sarawak Land Code,” he summarised.
Apart from Fong, Sarawak legal team comprised of State Attorney-General (SAG) Datuk Talat Mahmood Abdul Rashid, deputy SAG Saferi Ali, and legal officer Mohd Adzrul Azlan.
Malik was assisted by Khoo Suk Chyi and Surendra Ananth.
Present at the court to give moral support were Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman, SUPP Secretary General, Datuk Sebastian Ting, PBB Legal Advisor, Datuk Awang Bemee Ali Basah and Chief Minister of Sarawak special officer, Dr Muhammad Abdullah Zaidell.
Videos of interview with Datuk Malik Imtiaz Sarwar and Dato Sri JC Fong