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KUCHING, June 21: Sarawak put forward “a solid argument” in the Federal Court today to uphold its rights over oil and gas resources in its territories, said Assistant Minister of Law, State-Federal Relations and Project Monitoring Sharifah Hasidah Sayeed Aman Ghazali.
“We did very well during the court hearing (Petronas vs Sarawak government), and we have a solid argument on the issue pertaining to the regulatory authority over upstream oil and gas activities in Sarawak,” Hasidah told DayakDaily.
The Federal Court will deliver its decision at 9.30am tomorrow.
The Sarawak legal team was led by attorney-general Datu Talat Mahmood Abdul Rashid and legal counsel Dato Sri JC Fong, while Petronas was represented by lawyer Datuk Malik Imtiaz Sarwar.
The hearing was before the Chief Judge of Malaya, Tan Sri Ahmad Maarop.
According to a Bernama report, Ahmad said the court would deal with Petronas’ stay application tomorrow — whether to grant leave to the national oil giant to mount a legal challenge against the Sarawak government.
Petronas is seeking a stay order in respect of the Sarawak government’s commencement to regulate upstream activities in the state under the Sarawak Oil Mining Ordinance 1958 (OMO) beginning July 1 this year.
Petronas would be required to comply with the OMO and must have the requisite licences or leases by July 1 this year, failing which the upstream activities carried out by Petronas would be deemed illegal and appropriate action would be taken.
The national oil giant had filed an application for leave to commence proceedings under Article 4 (4) of the Federal Constitution to seek a declaration that the Petroleum Development Act 1974 (PDA) applies with regard to the regulatory control of upstream activities in Sarawak.
The company is also seeking a declaration that the OMO was impliedly repealed by the PDA.
In addition, Petronas is seeking a declaration that the PDA was duly enacted by Parliament and that it is thus the exclusive regulatory authority for the upstream industry throughout Malaysia, including in Sarawak.
In today’s proceedings, Malik Imtiaz argued that Petronas had rightly brought the matter to the Federal Court as it intended to seek the court’s declaration that the Sarawak government was not entitled to exercise powers to regulate the exploration and exploitation of oil (upstream activities) pursuant to the OMO.
He said the intended proceedings would focus on the question of the power to enact laws concerning the authority to regulate upstream activities.
Malik Imtiaz argued that Parliament was exclusively vested with the legislative competence and power to enact laws pertaining to oil and oil fields.
Fong countered by saying that Petronas should file the matter at the Kuching High Court as the declarations sought by the company were not a challenge to the authority of Parliament to make laws under the Federal Constitution but that the PDA was duly enacted by Parliament.
He said the Federal Court did not have the jurisdiction to grant leave to Petronas to commence proceedings against the Sarawak government for declarations.
Fong added that Parliament did not have the exclusive legislative authority or competence to legislate on upstream activities, adding that its legislative authority was subject to the rights of the Sarawak state legislature to pass laws on permits and licences for prospecting for mines, mining leases and certificates.
“The OMO is a law where the Sarawak state legislature has the legislative authority, which regulates the granting of oil prospecting licences, oil exploration licences and oil mining leases,” he said.
Therefore, the state of Sarawak has the executive authority over the permits and for prospecting for mines and over mining leases and certificates. — DayakDaily