by DayakDaily Team
KUCHING, June 12: Sarawak Legal Counsel Dato Sri JC Fong says that the Distribution of Gas Ordinance 2016 (DGO) is a valid and enforceable law in Sarawak, as granted under the Borneo States (Legislative Powers) Order 1963, asserting that PETRONAS has breached it by continuing to supply gas to Petroleum Sarawak Bhd (PETROS) without the required license.
According to a report by the Sarawak Public Communication Unit (Ukas), PETRONAS had agreed in Article 24.2 of the Sarawak Gas Supply Agreement (SGSA) with Petros that neither party would act against any Malaysian law while carrying out the agreement.
Yesterday, in a high-stakes legal battle challenging PETRONAS’ call on a Bank Guarantee for RM7.95 million, Fong, representing the Sarawak government, informed the court that by supplying gas to Petros without a license issued under the DGO, PETRONAS has rendered the agreement illegal and unenforceable.
As such, the call on the Bank Guarantee to obtain payment of gas supplied in contravention of section 7 of the DGO is unconscionable.
He highlighted that Parliament has consistently respected Sarawak’s constitutional right to legislate on electricity and gas distribution, as granted under the Borneo States (Legislative Powers) Order 1963. That Order extended the State’s legislative authority to include both sectors.
“Therefore, the following laws passed by Parliament are not made applicable to Sarawak, namely, the Electricity Supply Act, 1990, the Gas Supply Act, 1990, the Energy Commission Act, 2001 and the Energy Efficiency and Conservation Act, 2004,” Fong told UKAS when contacted today.
He explained that the Order made under Article 95C (1) of the Federal Constitution means that by virtue of Article 76A (3) of Federal Constitution, distribution of gas is deemed a subject matter in the Concurrent List, whereby both Parliament and Sarawak State Legislature can enact laws.
To ensure that the State has full legislative and executive control of distribution of gas in Sarawak, he explained that the Notification of Exemption (Amendment) 2021 signed by the then Prime Minister was gazetted to exempt the business of marketing and distribution of natural gas and liquefied petroleum gas from the requirement of Section 6(1) and (3) of Petroleum Development Act, 1974 (PDA) to secure the permission of the Prime Minister.
As Federal laws on the distribution of gas do not apply to Sarawak, the Dewan Undangan Negeri decided to fill the vacuum by passing the DGO 2016 to regulate the business of gas supply and distribution in Sarawak and appoint its own gas aggregator.
Fong said that the DGO and the appointment of gas aggregator cannot be inconsistent with section 6(1) and (3) of PDA as Sarawak is exempted from these sections.
The DGO is also a valid law and was never invalidated by any Court in Malaysia. – DayakDaily
