Secure revenue with laws

Malaysia

Secure revenue with laws, Sarawak lawyer tells Sabah ahead of MA63 meeting

Legal counsel says state should not get caught up in negotiations over unfulfilled rights.

Updated 9 hours ago · Published on 12 Sep 2024 7:00AM

SABAH should not get caught up in negotiations over the return of eroded and unfulfilled rights, but instead, focus on utilising the existing legal framework to claim what is rightfully theirs, said Sarawak government's special legal counsel, J.C. Fong.

Malaysia

Secure revenue with laws, Sarawak lawyer tells Sabah ahead of MA63 meeting

Legal counsel says state should not get caught up in negotiations over unfulfilled rights.

Updated 9 hours ago · Published on 12 Sep 2024 7:00AM

19

Shares

facebook sharing buttontwitter sharing buttonemail sharing buttonwhatsapp sharing buttonwechat sharing buttonprint sharing button

Secure revenue with laws, Sarawak lawyer tells Sabah ahead of MA63 meeting

The Sarawak government's special legal counsel J.C. Fong says Sabah should explore ways to secure its revenue within the existing legal framework. - Bintulu Port website pic, September 12, 2024.

by Desmond Davidson

SABAH should not get caught up in negotiations over the return of eroded and unfulfilled rights, but instead, focus on utilising the existing legal framework to claim what is rightfully theirs, said Sarawak government's special legal counsel, J.C. Fong.

Speaking at a recent symposium, Fong highlighted that both Sabah and Sarawak have been engaged in negotiations with Putrajaya for years, with many issues still unresolved.

"Don't be dragged down by negotiations. While discussions may continue, it is essential to explore ways to secure your revenue within the existing legal framework," he advised.

How much of Fong’s advice will influence Sabah’s approach may be revealed at today’s Malaysia Agreement 1963 Implementation Action Council (MTPMA63) meeting in Kota Kinabalu.

Prime Minister Datuk Seri Anwar Ibrahim arrived in the Sabah capital yesterday ahead of Malaysia Day and is expected to bring notable progress on MA63. He will chair the MTPMA63 meeting today, where Sabah Chief Minister Datuk Seri Hajiji Noor and Sarawak Premier Tan Sri Abang Johari Openg will be in attendance.

Both states are advocating for greater autonomy and financial entitlements from Putrajaya. While some aspects of the agreement have been fulfilled under Anwar’s administration, MA63 remains a key issue for Sabahans and Sarawakians in their dealings with the federal government.

A major concern for Sabah, which is expected to be raised during negotiations, is the state’s entitlement to 40% of the revenue collected by the federal government within Sabah. Under MA63 and Article 112C and Part IV of the Tenth Schedule of the federal constitution, the federal government is supposed to return 40% of the revenue it collects in the state.

This provision was intended to ensure a fair distribution of resources, allowing Sabah to benefit from its wealth and support its development.

Fong, who advises the Sarawak government on constitutional, administrative, and legal matters related to Sarawak's rights and autonomy within Malaysia, encouraged Sabah to seek ways to compel the federal government to comply with state laws and the constitution.

"They (the federal government) cannot stop you if you're demanding compliance with the law or the constitution," he said, referencing Sarawak’s success in asserting its rights over oil and gas resources. For example, in January 2019, Sarawak imposed a 5% state sales tax (SST) on petroleum products, including liquefied natural gas (LNG), crude oil, and condensates.

This measure allowed Sarawak to claim a larger share of the revenue from oil and gas extraction and export.

Fong also pointed out the importance of financial autonomy, stating that without sufficient funds, states remain dependent on Putrajaya.

“If you have no money, you are nothing. You will still be under some form of colonisation. To build a road or a bridge, you have to go to Putrajaya to ask for money, and they might refuse or give you less than what you need.”

Fong suggested that Sabah explore the Labuan Act 1990 to determine if there is any special provision regarding oil and gas. "Since Sabah’s oil and gas industry is centred around Labuan, there may be legal grounds to argue that the island should be considered part of Sabah under the Petroleum Development Act 1974."

In Sarawak's case, the state asserted its rights under the Oil Mining Ordinance 1958, a law specific to Sarawak that regulates the exploration and extraction of oil and gas within the state’s boundaries. This ordinance requires companies, including Petronas, to obtain licences from the Sarawak government to operate.

“We told them (Petronas and Putrajaya) we are taking back onshore mining and must be allowed to farm in offshore oil fields,” Fong explained. He added that the continental shelf off Sarawak, a disputed area, is considered state land under Article 95D of the federal constitution.

The Territorial Sea Act 2012, which limits the authority of Sabah and Sarawak to a mere three nautical miles from the coast, violates the pre-Malaysia 1954 Order in Council by Queen Elizabeth, which extended the boundaries of Sabah and Sarawak to cover the seabed and subsoil of the continental shelf.

Fong argued that Petronas and the federal government cannot apply the Petroleum Development Act on the continental shelf, as it is within state territory.

In Section 2 of the Petroleum Development Act, Fong noted, only the rights to petroleum are vested in Petronas, not the land itself.

“That is how Sarawak asserted its rights and curtailed Petronas’ activities. Now, we are involved in both offshore and onshore oil and gas exploration, and they cannot stop us.” – September 12, 2024.