Crucial to reclaim our financial autonomy, says state legal counsel

State Legal Counsel Dato Sri JC Fong.

By Lian Cheng

KUCHING, Dec 8: State Legal Counsel Dato Sri JC Fong said Sarawak could attempt to reclaim whatever it wanted, including being a “super state”, but all these claims would be useless if the state lacked the financial resources to move forward.

He said Sarawak’s aim to reclaim its financial autonomy, which refers to its rights to the revenue sources that rightfully belonged to Sarawak, is crucial if ‘equality’ is to have any real meaning beyond the fact that “we are more than just a state in the federation”.

“We can claim to be even a super state, but if we do not have the financial resources to move Sarawak forward and sustain its progress towards a high income or developed state, territorial equality or even supremacy has little meaning or purpose, except perhaps for its political value,” opined Fong.

He said the Malayan government had agreed that upon the formation of Malaysia, special grants be given under the Tenth Schedule of the Federation Constitution and to be reviewed every five years.

Apart from these special grants, Sarawak was also entitled to other revenues, such as import and excise duties on petroleum products, export duties on forest and timber products and minerals, including mineral oils.

However, Fong said the special grants had not been reviewed since 1969, and Sarawak was stuck with the amount of grants decided pre-1974.

“Import and excise duties are not collected because Malaysia has become a party to the Asean Free Trade Agreement, but the loss of this source of revenue (valued at more than RM300 million annually) was not replaced by substituted sources of revenue or equivalent value as required by the Federal Constitution.

“Export duties on petroleum were charged on crude oil and no record of those duties have been paid to Sarawak when these monies should have been paid, as our ‘cash payment’ for oil and gas from Petronas was only five per cent,” said Fong, who was one of the two speakers at the `Sarawak Rights under MA63 (the Malaysia Agreement 1963) Forum’ held here yesterday.

The forum, which was held at the Sarawak Islamic Information Centre, was organised by Sarawak Patriot Association. The other speaker was former Repok assemblyman cum trained lawyer Datuk David Teng.

Fong emphasized that until and unless Sarawak could get the federal government to proceed with the mandatory financial review under Article 112D of the Federal Constitution, the original intent under MA63 that Sarawak would have all these sources of revenue to accelerate its development to achieve equality in terms of development with Malaya would not have been honoured.

The other source of revenue – petroleum – that Sarawak could use to propel its growth was also taken away by the federal government.

“Parliament enacted the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 to empower the federal government to exercise control over oil and gas resources onshore and offshore in the Continental Shelf, where the oil and gas resources are known to be in abundance,” he pointed out.

Second Chief Minister Tan Sri Tawi Sli had resisted the extension of these laws to Sarawak. However, using emergency powers after the Proclamation of Emergency in 1969 following the May 13 unrests, the two Acts were extended to Sarawak vide Emergency (Essential Powers) Ordinance No 10.

“In 1971, the taxes accrued to the state (Sarawak) under Mining Lease issued in 1952 to Shell was assigned to the federal government. The Petroleum Development Act 1974 was passed to vest petroleum onshore and offshore Sarawak on Petronas in return for ‘cash payment’ of five per cent of the f.o.b (fresh off the boat) price of the oil and gas found and produced in Sarawak,” said Fong.

He said it was only in 2011 when the 1969 Proclamation of Emergency was lifted that the Emergency Ordinance No 10 lapsed and the extension of the Continental Shelf Act and Petroleum Mining Act to the Borneo states lapsed and ceased to have effect.

Following that, the late Chief Minister Pehin Sri Adenan Satem and his successor, Datuk Patinggi Abang Johari Tun Openg, had firmly committed to secure Sarawak’s rights over oil and gas by enforcing the Oil Mining Ordinance 1958. — DayakDaily