SPG raises concerns over AG’s remarks on PDA

Suarah Petroleum Group (SPG) logo

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Letter to the Editor

Tommy Thomas has recently been appointed as Attorney-General (AG) of the Pakatan Harapan (PH)-led Federal Government.

One of the AG’s tasks is to advise the government on legal-related matters. With his previous statements on PDA (Petroleum Development Act 1974), we can expect what is his stance on this heavily-debated Petronas-Sarawak issue.

Some of points made by Tommy Thomas when he talked about PDA in 2010 are a concern to us.

1. PDA is the only relevant statute governing Sarawak and Petronas.

2. Order in Council 1954 (alteration of boundary) disappeared when PDA came into effect.

3. If oil or any petroleum is found on the land, it certainly belongs to the State. There is no doubt about that. But if outside the State, offshore, then it is quite ambiguous.

4. Territory of water has got nothing to do with ownership of petroleum.

5. This (PDA) is the only Act in Malaysia in which deals with the issue of the ownership of petroleum.

However, a few of his points are questionable.

1. What is his legal basis that Order in Council (alteration of boundary) disappeared when PDA is in force? Was it repealed in Sarawak DUN (State Legislative Assembly) or Parliament? If it disappeared, by right (the jurisdiction over) continental shelf as described in Order in Council also disappeared.

Then, how it should be when Article 1(3) in the Federal Constitution mentions that the territory of State (i.e. Sarawak) is the territory before Malaysia Day? By virtue of this clause, territory of Sarawak based on Order in Council still applies and any alteration of boundary can only be passed with two conditions, i) DUN consent through legislation and ii) approval of Conference of Rulers.

2. In a written answer to House of Commons UK Parliament in May 1960, Mr Iain Macleod, the then Secretary of State for colonies stated that the jurisdiction of the Sarawak Government over the continental shelf for the purposes of exploring and exploiting its mineral resources derives from the Sarawak (Alteration of Boundaries) Order-in-Council, 1954, which extends the boundaries of Sarawak to include the adjacent continental shelf.

The right to such jurisdiction is now embodied in the 1958 United Nations Convention on the Continental Shelf. Apart from exercising over continental shelf sovereign right, the convention states that no one may undertake activities (i.e. exploration and exploting mineral resources) without the express consent of the coastal State. Even though the Federal Government is given a legislative power to mine and develop oilfields, it is still subjected to State legislative power.

The State List in the Ninth Schedule of Federal Constitution mentions that the State has the power to issue permits, licences and leases related to mining.

This clearly tells us that the Federal Government (in this case Federal versus Petronas) does not have the say regarding mining licence and lease issuance. Thus, Petronas cannot explore for and exploit Sarawak’s petroleum without Sarawak giving the permit or licence. The jurisdiction is in the hand of State.

The one who has the jurisdiction has the right to regulate and control over what it owns. One cannot have the power to regulate something he or she does not own. It is weird to say that a person can lease a house that is not his or hers. So, which part is ambiguous when the territory of Sarawak does clearly include the continental shelf and (the state) has the right to it? Unless Tommy can prove that Order in Council 1954 or Sarawak’s (jurisdiction over the) continental shelf is invalid.

3. When Tommy Thomas said that territory of water has got nothing to do with ownership of petroleum, it is like saying I have an orchard with fruit trees which was inherited from my ancestors but I do not own it. It is owned by someone else and that someone else is empowered to regulate and have control over it. In layman terms, does this make sense? It is misleading to say as such.

Why in the first place does a person have the jurisdiction to regulate something? Because it legally belongs to that person and no one can simply grab it from the person without you approving it. When a person has the power over something (i.e. issue licence and permit), doesn’t it mean that the person has the right to it? When the person has the right to it, doesn’t it mean that the person is legally entitled to keep, preserve and utilize as he or she wishes since it belongs to the person?

4. Tommy Thomas talked about relevancy of PDA but he did not talk about its constitutionality. According to Article 76 of the Federal Constitution, legislation made by Parliament cannot be enforced in the State unless it is consented by means of legislation made by the State. Perhaps, Tommy Thomas can explain this in detail.

By Suarah Petroleum Group (SPG)

SPG is an independent advisory made up of oil and gas professionals from Sarawak.