Tuesday, August 11

PSB: Petronas deal is an agreement, not just an understanding  

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George Lo

KUCHING: Parti Sarawak Bersatu (PSB) secretary-general George Lo said it was obvious that the joint statement by Assistant Minister in the Chief Minister’s Department Datuk Sharifah Sayeed Aman Ghazali and Petroliam Nasional Berhad (Petronas) speaks of an agreement rather than just an understanding.

“It is plain and obvious that the joint announcement speaks of an agreement reached,” he said in a statement.

He was referring to a recent media statement by Sarawak government and Petronas which indicated both parties have reached an settlement whereby they will drop their legal suits against each other and the oil giant would pay the outstanding state sales tax (SST) of RM2 billion for the year 2019.

“If it was just ‘an understanding’ subject to recommendation of the Malaysia Agreement 1963 Consultative Committee and also subject to approval of the State Legislative Assembly (DUN), as the Deputy Speaker Dato Gerawat Gala would have us believe, then such important provisos would have been in the joint announcement by Sharifah and Petronas.

“They were not in that announcement because they are clearly after-thoughts,” Lo said.

He remarked that if not for the massive public backlash over the Gabungan Parti Sarawak (GPS) state ruling coalition’s concession that the Petroleum Development Act (PDA) 1974 is valid, the public would not be hearing the so-called ‘understanding’ subject to MA63 Consultative Agreement and DUN approval.

Chief Minister Datuk Patinggi Abang Johari was reported to have said the joint statement by the state government and Petronas was only an understanding and not a final and binding agreement, while the state retains its rights over oil and gas resources under the Oil Mining Ordinance.

Lo also observed that Petronas has been strangely silent on this issue despite it being a party to the joint statement.

“PSB requests that Petronas or its counsel come forth with a statement to confirm that the agreement referred to in the joint statement was never an agreement but only a conditional understanding,” he said.

It was ‘ridiculous’ for Gerawat to say that the federal court can still decide otherwise if Sarawak accepts PDA as valid and biding in the state, he added.

“If the validity of the PDA is going to be contested between Sarawak and Petronas in the Federal Court as he (Gerawat) suggests it should be, why in the world would we prejudice our own position by entering into an agreement to acknowledge that the PDA has force of law in Sarawak?” he asked.

“If DUN approves an agreement that states that the PDA is valid in Sarawak, it would destroy the entire foundation of Sarawak’s contention that PDA does not apply in Sarawak because it never received the approval of the DUN.

“In simple terms, if the DUN approves the agreement which states that the PDA is valid in Sarawak, we can forget about challenging the PDA in the federal court,” Lo said

He added that the state government and all Sarawakians should ‘resolutely oppose’ any agreement to accept the PDA and the related petroleum agreements as valid or legally binding.

He also called for transparency on the SST collected from oil companies since the 2019 state budget had anticipated income from the tax to be at RM3.897 billion.

“So, tell us that the amount of SST on petroleum products collected is at least RM3.897 billion and do not fudge by simply telling us it is more than RM2 billion,” he asked further.

Adding on, he questioned why GPS members have been rushing to issue press statements on the matter without disclosing the total amount of SST imposed on petroleum products collected for the year 2019. He opined that the actual amount would be far less than the RM3.897 billion.

“And if that be the case, then the 2019 budget was unrealistic and presumptuous.”

As it is now midway through the year 2020, Lo said the GPS state government must disclose to the people how much SST on petroleum products has been received to date.

“We suspect the amount will be shockingly negligible.”