Oil Mining (Amendment) Bill, 2018 passed

A State Legislative Assembly (DUN) CCTV grab of Awang ​Tengah delivering his speech this afternoon.

KUCHING, July 10: The Oil Mining (Amendment) Bill, 2018 was passed in the State Legislative Assembly (DUN) today after debate, particularly from Opposition assemblymen.

With the passing of this Bill, Sarawak will now be able to strengthen regulatory controls over the exploration and prospecting for petroleum and the mining thereof on the land in the state, both onshore and offshore in the Continental Shelf.

In his winding-up speech, Minister of Industrial and Entrepreneur Development Datuk Amar Awang Tengah Ali Hasan addressed some of the concerns raised by members of the august House during the debate session this morning.

One of the concerns raised pertained to the perceived inadequacy of penalties provided in the amended bill. To that, Awang Tengah said, “I do appreciate that the amount of penalty could have been higher. We do not anticipate a lot of non-compliance due to the high impact it would cause to those who breach the Oil Mining Ordinance (OMO).

“However, we can assure this august House that if a real need were to arise, the necessary amendments will be made to increase the penalties.”


On the enforcement against existing industry players, he replied that the state government had decided to give a grace period until the end of 2019 for them to comply and regularise their operations.

Awang Tengah said what was important was that the state government had taken steps to ensure that all parties would take all necessary actions to align their operations within the ambits of the state law.

“In fact, the state government has conducted an engagement with all industry players since May 16, 2018, where all necessary information and directions have been given to those involved in the oil and gas industry, including Malaysia oil giant Petronas,” he pointed out.

On the concern raised by Bukit Assek assemblywoman Irene Chang, Awang Tengah asserted that the Territorial Sea Act would not have much effect as it deals with the question of territorial waters, while the OMO deals with mining activities on land.

He added that as defined in Section 2 of the Land Code, state land extends to the Continental Shelf.

On why the amendment was not made retrospective in its effect, he reminded the lawmakers that the amendment involved criminal penalties, and Article 7 of the Federal Constitution prohibits criminal laws to have retrospective effect.

Furthermore, he said, to have retrospective laws on the non-criminal penalty provisions would disrupt the industry unnecessarily.

On Chong Chieng Jen (DAP-Kota Sentosa)’s opinion that income from the imposition of licence fees under OMO was too minimal and thus would not benefit the state, Awang Tengah said, “This is an extremely myopic view of the OMO. With the strengthening of our regulatory framework, the state would be in a far better bargaining position to ensure greater participation by Sarawak in the oil and gas industry.

“For instance, it will facilitate a higher return of investment and ownership of equity on the industry. In MLNG3, now the state holds 25 per cent of equity. At this juncture, I hope that the PH (Pakatan Harapan) government will honour their promise in their manifesto of granting at least 20 per cent oil and gas royalty to Sarawak.”

Awang Tengah also addressed Chong’s concern about the OMO being inconsistent with the Petroleum Development Act (PDA) and, therefore, would attract consequences under Article 75 of the Federal Constitution.

“With due respect to the Honorable Member of Kota Sentosa, he is oversimplifying the provision in Article 75. Before that Article comes into the picture, the question is whether Parliament has the capacity to make such a federal law in the first place.

“It has always been the stand taken by the state government that due to the wordings of Item 8(j) of the Ninth Schedule of the Federal List read against Item 2(c) of the State List, any law made by Parliament on development of petroleum has to be read subject to the competency of the State Legislature to make laws on permits and licences for prospecting for mines, mining leases and certificates.”

Awang Tengah said he would anticipate that PH DUN members who are now part of the federal government would take the necessary steps to have the PDA amended or repealed in the coming Parliamentary sitting.

He gave his assurance that such an initiative would have the full backing of the state government.

“We, as true Sarawakians, should work together to achieve this objective and aspirations of the people of Sarawak,” emphasised Awang Tengah. — DayakDaily