Equal Status or Partnership for Sabah and Sarawak within the Federation of Malaysia

State Legal Counsel Dato Sri JC Fong.

STATE Legal Counsel Dato Sri JC Fong shared his view on “Equal Status or Partnership for Sabah and Sarawak within the Federation of Malaysia” at the Sarawak rights under the Malaysia Agreement forum organised by Sarawak Patriot Association at the state Islamic Information Centre, Kuching, on Friday evening (Dec 7).

For readers pressing for time, DayakDaily has extracted a few excerpts. However, it is our hope that readers will go through the full text to get his complete view.

  • Constitutionally the Federation that we have now is a Federation formed under the Federation of Malaya Agreement, 1957 and NOT under the Malaysia Agreement, 1963.

 

  • This Federation established on the terms and basis of the Federation of Malaya Agreement 1957 does not provide for equal partnership either between the Federal Government or any of the component States or between the contituent States themselves.

 

  • At the time of Malaysia’s formation, the Malayan Government acknowledged that North Borneo and Sarawak were under-developed and that development in the 2 States needed to accelerate for them to “catch up” with the States in Malaya or to reach “parity” with the developed States in the Peninsular. That was the Malayan leaders’ view on how the Borneo States could become “equal” to Malaya in terms of development.

 

  • So until and unless Sarawak can get the federal Government to proceed with the mandatory Financial review under Article 112D of Federal Constitution, the original intent under the Malaysia Agreement that Sarawak would have all these sources of revenue to accelerate  its development tempo to achieve equality in terms of development with Malaya, has not been honoured.

 

  • 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.

 

  • In addition to providing the Borneo States with the sources of revenue which have been assigned to the States, the federal Government has the responsibility over two important subject matters which would have tremendous impact on the development of talents and towards the social-economic well being of the peoples of the Borneo States and the younger and future generations of Sarawakians. These subject matters are Education and Medical and Health.

 

  • In summary, clamouring for “equal status” itself or by amending Article 1(2), would not give us the financial resources and the autonomy to plan and determine our own development strategies to sustain our progress towards a successful and progressive State that is able to contribute to the economic growth and unity and advancement of Malaysia. We need the financial resources, appropriate level of autonomy and human resource capacity, to serve our people and meet the aspirations of all Sarawakians.

The full text of “Equal Status or Partnership for Sabah and Sarawak within the Federation of Malaysia” is as follows:

Recently, there was a proposal, from the Minister for Law, Datuk VK Liew (a Sabahan) that Article 1(2) of the Federal Constitution be amended to restore its original form to reflect that the Borneo States of Sarawak and Sabah are of equal status with Malaya and that the Borneo States were equal partners with Peninsular Malaysia.

Will this amendment be sufficient to give Sarawak its rightful position in the Federation and have the benefits of the constitutional safeguards and revenues promised at the time of the formation of Malaysia in 1963? This is the issue I seek to address tonight.

Speaking to the Press on August 12, 1962, Tun Abdul Razak Dato Hussein, then Deputy Prime Minister of Malaysia said:

“We will bring the other territories into Malaysia equal partners. We will consult them .The people of the Borneo territories are far away from us and we must do everything to allay their fears and give them confidence to come into Malaysia as brothers”.  

The Inter-Governmental Committee (IGC) was set up, after the Cobbold Commission, to make recommendations for safeguards to protect the special interests of Sabah and Sarawak upon the formation of Malaysia.

But, the IGC made no recommendations relating to the status of the Borneo States as “equal partners” with the Federation of Malaya and Singapore when Malaysia is formed. The IGC stated at para 10 of its Report, “the Federation will consist of the existing Federation of Malaya, Sabah (at present North Borneo), Sarawak and Singapore…”  In fact, the IGC recommended that the Malayan Constitution be adopted as the Constitution of the new Federation and NOT to have an entirely new Constitution for  Malaysia.

This recommendation of IGC was accepted by the Parties to the Malaysia Agreement and the Malaysia Act, passed by the Malayan Parliament, amended Article 1(2) of the Malayan Constitution (which was to be adopted as the Constitution of the new Federation) to read that the Malaysia shall comprise:

(a) the States of Malaya;

(b) the Borneo States of Sabah and Sarawak;

(b) the States of Singapore.

Although, the Parties to the Malaysia Agreement agreed that Malaysia shall comprise three regions or territories, namely Malaya, the Borneo States and Singapore, there was to be NO amendment to the defintion of “Federation” in Article 160(2) of the Constitution which was adopted to be the Federal  Constitution. That constitutional defintition still reads:

“the Federation” means the Federation established under the Federation of Malaya Agreement 1957”.

This means, constitutionally the Federation that we have now is a Federation formed under the Federation of Malaya Agreement, 1957 and NOT under the Malaysia Agreement, 1963. It is a Federation based on the federal structures put in place in 1957 with the Federal or Central Government yielding vast political powers, legislative and executive authorities and a lion’s share of the sources of revenues as well as taxation powers.

This Federation established on the terms and basis of the Federation of Malaya Agreement 1957 does not provide for equal partnership either between the Federal Government or any of the component States or between the contituent States themselves. Amending Article 1(2) as proposed, without more, cannot confer equal status or partneship for Sabah and Sarawak.

At the time of Malaysia’s formation, the Malayan Government acknowledged that North Borneo and Sarawak were under-developed and that development in the 2 States needed to accelerate for them to “catch up” with the States in Malaya or to reach “parity” with the developed States in the Peninsular.

That was the Malayan leaders’ view on how the Borneo States could become “equal” to Malaya in terms of development. The 2 Malayan representatives in the Cobbold Commission, Tan Sri Ghazali Shafie and Dato Wong Pow Nee, wrote:

“By a great majority of the population, who are little concern with the development of world politics, Malaysia will be judged by whether or not it delivers the goods in the form of rural development, schools and medical and other services. It is essential that, from its inception, Malaysia should offer, and be seen to offer, definite advances in these fields.”

Therefore, from the Malayan standpoint, parity or eventual equality with Malaya for the Borneo States, was to be achieved through “development” not through granting the two new States the same level of legislative and executive powers and the enormous sources of revenue and taxing authority that the Malayan already or a future Federal Government would have.

The Malayan Government agreed that upon formation of Malaysia, the 2 Borneo States will have some additional legislative and executive powers and some sources of revenues to enable them to “catch up” in development terms (in the words of Tunku Abdul Rahman – Bapa Malaysia).

Special grants were given under the Tenth Schedule of Federal Constitution, to be reviewed every 5 years, together with some other revenues like import and excise duties on petroleum products, export duties on forest and timber products and minerals including mineral oils. But if these measures were designed to enable the 2 States to achieve equality or parity with Malaya, they were not complied with and the Borneo States did not have all these sources of assigned revenues.

The Special Grant had not reviewed under since 1969, and we were stuck with the amount of grants decided pre 1974. Import and excise duties not collected because Malaysia had become a party to the Asean Free Trade Agreement But the loss of this source of revenue (valued at more than RM300m annually) was not replaced by a substituted source of revenue or equivalent value as required by the Federal Constitution.

Export duties on timber was exempted as the State was charging royalty on timber which was its constitutional right to do so. Export duties on petroleum or mineral oil up to 10% ad valorem was assigned to Sarawak provided the total of export duties and any royalty imposed by the State does not exceed 10%).

Such export duites were levied by the Federal Government at 2% of sale value of petroleum but there is no record of those duties been paid to Sarawak when these monies should have been paid as our “cash payment” for oil and gas from Petronas was only 5%.

So until and unless Sarawak can get the federal Government to proceed with the mandatory Financial review under Article 112D of Federal Constitution, the original intent under the Malaysia Agreement that Sarawak would have all these sources of revenue to accelerate  its development tempo to achieve equality in terms of development with Malaya, has not been honoured.

The other sources of revenue which Sarawak had before Malaysia Day, which could be used to propel its development agenda, was from petroleum.

Federal Government, way back, in 1966 had wanted to take control of oil and gas both onshore and offshore throughout Malaysia, including Sarawak. Parliament enacted the Continental Shelf Act, 1966 and the Petroleum Mining Act, 1966 to empower 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.

The State Government under the Second Chief Minister, Tan Sri Tawi Sli, resisted the extension of these laws to Sarawak because the Continental Shelf is “State land” under the control of the State Government by reason of section 12 of the Land Code; and constitutionally only the Sarawak Legislature can pass laws relating to the issuance of mining leases and exploration licences for petroleum.

But, using emergency powers after the Proclamation of Emergency, 1969, following the May 13 unrests, these 2 Acts were extended to Sarawak vide Emergency (Essential Powers) Ordinance No. 10. In 1971, the taxes accrued to the State under Mining Lease issued in 1952 to Shell, was assigned to the Federal Government.

The Petroleum Development Act 1974 was passed to vest petroleum on shore and offshore Sarawak, on Petronas in return for “cash payment” of 5% of the f.o.b price of the oil and gas found and produced in Sarawak. Of course, the 1969 Proclamation of Emergency was annulled in 2011, and the Emergency Ordinance No.10 lapsed and the extension of the Continental Shelf Act and Petroleum Mining Act to the Borneo States, lapsed or ceased to have effect.

When the late Pehin Sri Adenan  became Chief Minister in February, 2014, he made a bold move towards securing the State’s rights over oil and gas by enforcing the Oil Mining Ordinance, 1958 which the present Chief Minister, Datuk Patinggi (Dr) Abang Haji Abdul Rahman Zohari is also firmly  committed to do.

So with all these measures, the State seeks to reclaim its financial autonomy promised at the time of formation of Malaysia. The recovery of our rights to the revenue sources which 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.

In addition to providing the Borneo States with the sources of revenue which have been assigned to the States, the federal Government has the responsibility over two important subject matters which would have tremendous impact on the development of talents and towards the social-economic well being of the peoples of the Borneo States and the younger and future generations of Sarawakians. These subject matters are Education and Medical and Health.

Education was agreed by the IGC to be a Federal Subject on certain conditions such as the continued use of English as a medium of education, the Director of Education having to consult the State Government and the local communities on matters relating to management of schools and administration of the education system etc. We must say the Federal Government’s performance in the discharge of its obligations on Education leaves much to be desired.

On any independent assessment, the result of the Federal Government’s performance is a failure. Not only has the standard of English declined, the standard of education in Government Schools also dropped so much so that increasing numbers of parents, especially in the urban areas are sending their children to private schools. The late Tok Nan had publicly criticised the Education Ministry and previous Education Ministers on this dereliction of responsibility.

The late Chief Minister famously described in public that the Federal Government’s policy on Education, particularly on the medium of instruction, “stupid”. The evidence of this failure is reflected by having in Sarawak, 1020 dilapidated schools in Sarawak, 371 schools without electricity, 428 Schools with not treated water supply. 651 Schools with low enrolment – 150 students or less. Of these 190 schools  have less than 50 students. These are undisputed facts compiled by our State’s own Ministry for Education headed by Dato Sri Michael Manyin, himself a former Headmaster.

On Health services, there are overcrowded public hospitals. Many rural clinics with no treated water or can be reached only through roads which are not tar-sealed, and a doctor:population ratio of 1:1788 for Sarawak well below the national ratio of 1:1554. Many newly graduated medical doctors are unable to secure placement to be housemen.

If the long delayed hospital projects in Lawas, Sri Aman and Petra Jaya had been completed on the schedule previously announced,, many of these newly qualified graduate doctors would have been gainfully employed.

IF the Federal Government wants Sarawak to reach parity with Malaya in development terms, and as PM Tun Mahathir said recently in New York, “Sabah and Sarawak want autonomy not independence”, then the Federal Government should transfer executive authority over Education and Health to the State Government under Article 95C(1) read with Article 80(4) FC and to provide adequate funds to the State Government of Sabah and Sarawak to carry out the functions and responsibilities attached to these subject matters under Article 80(5).

If the quantum of the funds cannot be agreed they could be fixed by a Tribunal appointed by the Chief Justice of Malaysia.

In summary, clamouring for “equal status” itself or by amending Article 1(2), would not give us the financial resources and the autonomy to plan and determine our own development strategies to sustain our progress towards a successful and progressive State that is able to contribute to the economic growth and unity and advancement of Malaysia.

We need the financial resources, appropriate level of autonomy and human resource capacity, to serve our people and meet the aspirations of all Sarawakians.

Before I conclude, I wish to touch on the following matters:

I. Reclaiming our rights under MA 63: Many people have advocated this approach. But we must remember that Sarawak’s agreement to join in the formation of Malaysia as negotiated in 1963, over half a century ago. At that point in time the economic condition and expectations of the people are different from what is today.

We had asked for things which in today’s globalised economy and pace of development could be considered inadequate for the transformation of Sarawak and to meet the aspirations of our people. The special grants which are set at 1974 levels would not be adequate to meet the State’s Government’s escalating operating and development expenditures annually and the State road grants are grossly inadequate to maintain our roads and bridges let alone expand the road communication network to the rural areas.

The assigned revenues would not be adequate to sustain the present development needs. We have to seek more sources revenues and in addition to the right to impose State Sales Tax. We should not have to continually appeal to the Federal Government for funds and to receive which the Federal Government feels able to give. We must therefore, move beyond reclaiming our rights towards seeking greater legislative, executive and financial autonomy.

II. Building Capacity towards better performance: If we succeed to secure greater autonomy we must be able to perform and meet the aspirations of our people and make a real difference in their livelihood whether they live in the rural or urban areas. To do this we must have the capacity and talent pools to carry out the tasks to performing better than what the Federal Government had achieved.

To do so we must ask the Federal Government to remove the restrictions imposed by Article 112 of FC on the creation of posts in the State Public Service. The present limits are ridiculously low. The Agong should be advised by the Federal Cabinet to make an Order under Article 112(2) to increase the salary level of non pensionable and pensionable posts to reflect the remuneration levels which would draw talents and dedicated persons to join and remain in the Public Service to serve the people and to implement the new State’s development agenda based upon the new levels of autonomy which the State would have.

III. Towards a united and prosperous Malaysia: As Malaysians of Sarawak origins, we trust the Federal Government will seriously consider what the State’s quest for “equality” with Malaya and greater financial, executive and legislative autonomy so the our beloved Nation will remain strong, united, harmonious and prosperous and an example of how a Federal System of Government regulated by a Federal Constitution, can work successfully.

The views expressed herein are those of the Speaker personally and NOT that of the State Government. These views are expressed with intent to improve the constitutional literacy of fellow Sarawakians. — DayakDaily