KUCHING (Nov 25): Batu Lintang See Chee How assemblyman said that he is happy with the Chief Minister Datuk Patinggi Tan Sri Abang Johari Tun Openg’s disclosure that his administration is looking at setting up a sovereign wealth fund, emulating Norway.
See however cautioned Abang Johari that Sarawak’s sovereign wealth fund must start with the right footing.
He said the terms of reference that are given to the team of experts to study the fund’s formation should be the same as that of Norway, and that must include the ownership, management and production of Sarawak’s natural resources including our oil and gas.
“It should not be designated merely for the management of the revenue that we have received or will receive from Petronas, with the national petroleum company being given the proprietary rights, and the privileges to exploit our oil and gas resources,” See said in a statement today.
The Parti Sarawak Bersatu (PSB) presidential council member explained that the Norwegian Government’s Pension Fund Global is a sovereign wealth fund into which the surplus wealth produced by Norwegian petroleum income is deposited.
The surplus wealth comes from taxes and license payments to explore, develop and generation incomes from oil resources, and particularly from the country’s direct financial interests and dividends from the state-owned energy company called Equinor, which controls, manages and accounts for 60 per cent of the total oil and gas production on the Norwegian continental shelf.
He revealed that in 2018, Equinor recorded a revenue of 22.5 billion U.S. dollars, or RM94.75 billion, in oil and gas production.
The Norwegians, through its sovereign wealth fund, own the ‘wealth of the nation’, and have large surplus wealth from the petroleum incomes or called ‘oil fund’ for it to invest for the future of Norway and the Norwegian population, See added.
“For Sarawak, we cannot claim to own the petroleum wealth of Sarawak. The revenue generated from the production of oil and gas from the territory of Sarawak was RM62 billion in 2018. But the oil and gas income for Sarawak was less than RM5 billion,” he said.
With Sarawak, particularly the rural areas, being largely under-developed and still lacking in infrastructural development and basic amenities, he said that such little return can hardly constitute or be considered ‘surplus wealth’.
He said Abang Johari had revealed that the ‘expert study’ on the fund formation will be done in the next five years and be brought to the state legislative assembly for approval.
He thus would suggest that the next elected state government will table a motion in the next State Legislative Assembly (DUN) sitting to deliberate and debate on the setting up of this Sarawak Sovereign Wealth Fund, to constitute the Wealth Fund to be answerable and accountable to the state legislative assembly, open, transparent and reflect the wishes and aspirations of all Sarawakians.
He opined that it would be prudent, and in fact the only constitutionally and legally viable course open to the state if the Sarawak Sovereign Wealth Fund was to be modeled in the same way as the Norway’s Pension Fund Global.
“We will need the DUN to take the necessary action to revisit and reexamine the constitutionality and legality of the application of the provisions in the Petroleum Development Act (PDA) 1974, to nullify and void all executive and administrative arrangements and agreement which had ceded all our oil and gas ownership rights within the territory of Sarawak,” said See.
This, he said, would assist the state administration to avoid the grossly inequitable and prejudicial terms of the Commercial Settlement Agreement that had been entered into between the Sarawak government and Petronas last December.
See revealed that since on August 7 this year, former Petronas chairman Tan Sri Ahmad Nizam Salleh had told the High Court in Sibu that the Sarawak Government had agreed to, and recognized the validity and enforceability of the provisions and terms of the PDA 1974, together with the prior arrangements and agreements, in the negotiation for settlement.
“Irrespective of the political divide, all the elected representatives in this coming state election will want to give their best to serve the best interests for Sarawak, to restore and further the autonomous power and special rights and privileges bestowed upon Sarawak pursuant to the Malaysia Agreement 1963, to safeguard our full sovereign rights to Sarawak’s territory and all our natural resources.
“I am most pleased that the Gabungan Parti Sarawak leadership is with us on the constitution of the sovereign wealth fund, to ensure that all Sarawakians and our future generations will have a share in Sarawak’s ownership of the wealth of our nation,” said See.