Petronas’ SST payment is recognition of state laws, says lawyer

Shankar Ram Asnani

By Peter Sibon

KUCHING, May 9: Petronas’ willingness to pay the 5 per cent State Sales Tax (SST) is proof that the national oil company recognised the SST Ordinance and the Sarawak Oil Mining Ordinance (OMO) 1958, opined prominent lawyer Shankar Ram Asnani.

“What emerged crucial from the settlement with Petronas is that they now recognise our Sarawak Sales Tax (SST) Ordinance and OMO, which cannot be thrown to the wind by any settlement. The State Legislature or Dewan Undangan Negeri have not repealed these laws.

“In fact, all Sarawak laws that existed prior to Malaysia Day (which is 16th September 1963) not repealed, rank in pari-passu with the other Acts of Parliament and are treated as Federal Laws, not only applicable as State Laws but stands as a Federal Legislation that governs the certain rights of the State,” Shankar said in a statement issued here today.

He reiterated that the settlement of the SST with Petronas was for the best interest of Sarawak and its people.


“As a legal practitioner, a settlement of the Sarawak Sales Tax issue (SST) with Petronas is always in the best interest of Sarawak and its people. We all should give the due credit to our Right Honourable Chief Minister of Sarawak Datuk Patinggi Abang Johari Tun Openg and his very able team for having moved against Petronas and fought hard to get this 5 per cent SST, is always a better deal than having no deal at all with uncertainties of litigation appeals,” he said.

Shankar asserted that one must know that if the matter is heard by the Appellate Courts, the coram would also comprise judges from Malaya, Sabah and Sarawak to keep the Constitutional balance and any decision of the High Court may be overruled. One classic example is the case of The Speaker of DUN Sarawak Datuk Amar Asfia v Ting Tiong Choon (2020) 3 CLJ 757.

“We must understand that CM Abang Jo is the first to take Petronas to Court on Sarawak MA63 Rights. Those who have read and understand Malaysia Agreement 1963 and our Malaysian Federal Constitution will know there are many open-ended aspects that should have been provided for with greater details but we cannot blame anyone now because the way the Federal Constitution was drafted over 57 years ago in 1963, I would say, we could do a better job today with the able legal brains in Sarawak,” he said.

Shankar cited Section 73 of the Malaysia Act 1963 (No. 26 of 1963) which declared this position specifically that the present laws of the Borneo States shall on and after Malaysia Day be treated as Federal laws insofar as they are laws which could not be passed after Malaysia Day by the State Legislature, and otherwise as State Laws.

He explained that under provisions of Sections 73 (1) to (5) of the Malaysia Act 1963 (No. 26 of 1963) passed in Parliament of the Federation of Malaya which reads as follows:

1. Subject to the following provisions of this Part of this Act and to any law passed or made on or after Malaysia Day, all present laws shall, on and after Malaysia Day, have effect according to their tenor, and be constructed as if this Act had not been passed: Provided that references to the Federation (except in relation to a time before Malaysia Day) unless the context otherwise requires or it is otherwise expressly provided by any written law including any orders made under section 74, shall be construed as references to Malaysia, and expressions importing such a reference shall be construed accordingly.

2. Any present law of the Federation passed or made on or after the day this Act is passed shall extend to any part of Malaysia to which it is expressed to extend; but save as aforesaid no present law of the Federation shall extend to any of the Borneo States or to Singapore, unless or until it is so extended by a law passed or made as aforesaid.

3. Subject to the following provisions of this Part, the present laws of the Borneo States and of Singapore shall, on and after Malaysia Day, be treated as federal laws in so far as they are laws which could not be passed after Malaysia Day by the State Legislature, and otherwise as State laws.

4. This section shall not validate or give effect to any provision contained in the present law of the Federation which is inconsistent with the Constitution, or any provision of present law which is invalid for reasons other than inconsistency with the Constitution.

5. In this Part of this Act “present laws” means the laws of the Federation, or of any part thereof of each of the Borneo States, and of Singapore passed or made or applied to any part of the Federation or to either of the Borneo States or Singapore before Malaysia Day, but does not include the Constitution of the Federation or of any State in Malaysia or this Act.

Shankar also asserted that even the Petroleum Development Act (PDA) 1974 is subjected to the Constitution where Sarawak’s OMO 1958 had been accepted as Federal Laws after Malaysia Day.

“Many people in supposedly powerful positions in Sarawak and given a chance to prove themselves have failed and they even failed to keep their promises.

“So, there is no basis to attack our CM Abang Jo who has done a marvellous job. Imagine if he did nothing at all, kept quiet all the while, we will not get the additional 5 per cent SST now,” he said.

Shankar stressed that acknowledging Petronas or PDA 1974 did not mean that Sarawak has given up its rights or its quest for a fairer share of the oil resources.

“With the information, people should not be confused. We must also look at the broader aspects of the world frontier, where oil will not be the thing forever. One must know that the oil and gas industry is a sunset industry.

“During the times of President Barack Obama, he declared that the world will in the next 10 years move towards renewable energy, away from the reliance on petro-carbon energy. In the next 10 years or so, Sarawak should also move away from petro-carbon resources and our Right Honourable CM has planned well ahead for the future of Sarawak,” added Shankar.—DayakDaily