Sarawak, Sabah never had to give up colonial-era continental shelf rights, boundaries to federation

Robert Lau

By DayakDaily Team

KUCHING, Feb 26: There was no provision requiring Sarawak and Sabah to surrender their continental shelf rights to the new Federation, as both Borneo Territories retained their colonial-era continental shelf laws and pre-existing boundaries, which became part of Malaysia’s legal framework upon its formation on Sept 16, 1963.

This was emphasised by Senator Robert Lau during the debate on the motion of thanks for the Royal Address 2026 in the Dewan Negara yesterday (Feb 25). He highlighted the historical, legal, and constitutional basis for the Borneo States’ control over offshore resources, stressing that these rights predate the formation of Malaysia.

Lau explained that the Federal Constitution vests land and mineral rights, including petroleum, under State jurisdiction (State List). Articles 47 and 48 of the Sarawak Constitution, annexed to the Malaysia Agreement 1963 (MA63), vested all land, including minerals on or under it previously held by the British Crown, in the State of Sarawak—not the Federation.

“Had it been made known to Sarawak and Sabah in 1963 that the new federation of Malaysia would claim the 200 nautical mile continental shelf and its petroleum resources, the Borneo Territories would not have agreed to join Malaysia,” he stressed.

The senator traced the history of continental shelf laws in Sarawak and Sabah, which meant that both Borneo States had sovereignty over resources off their coasts long before Malaysia was formed:

• In 1954, the United Kingdom, as colonial authority, issued the Sarawak (Alteration of Boundaries) Order in Council on June 24, extending Sarawak’s boundaries to include “the area of continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of Sarawak.” This Order was proclaimed by Queen Elizabeth II, the sovereign head of the United Kingdom and her colonies. This became Sarawak law. A similar proclamation applied to North Borneo (Sabah).
• These measures were aligned with international developments, including the 1958 United Nations Convention on the Laws of the Seas (UNCLOS 1958), which defined the continental shelf in terms of exploitability to 200 metres depth or beyond. The 1982 UNCLOS later updated the default limit to 200 nautical miles, with scientific extensions possible to 350 miles.

Following UNCLOS 1958, Sarawak’s legislature passed two key laws in 1958:

1. The Land (Code) Ordinance 1958, defining “land” to include the seabed within the extended boundaries, vesting it in the State.
2. The Oil and Mining Ordinance, regulating petroleum and mineral extraction.

In contrast, Malaya, independent in 1957, had no continental shelf law until 1966, when Parliament passed the Continental Shelf Act 1966.

Lau explained: “Why didn’t Parliament extend this Act to the whole of Malaysia? The answer is obvious: Sarawak and Sabah have its own continental shelf laws inherited from the colonial days and formed part and parcel of Malaysia’s laws. Sarawak and Sabah have their own boundaries. When Malaysia was formed on Sept 16, 1963, Sarawak and Sabah brought their pre-existing boundaries and laws, including continental shelf rights. There was no provision that required them to surrender these to the new Federation.”

He suggested that the reason Federation of Malaya did not have the continental shelf law earlier was because it had gained independence in 1957 from United Kingdom and United Kingdom no longer has responsibility to see that Malaya introduce the relevant law on continental shelf.

“Its government institutions were either not ready or aware of the development of the laws governing the seas at the United Nations. They were not ready to formulate the continental shelf laws until 1966, nine years after Merdeka.”

Lau elaborated that the federal government later attempted to assert control over Borneo’s offshore resources via Emergency Ordinances in 1969 following the May 13 riots. Ordinance No. 7 limited territorial waters to three nautical miles, and Ordinance No. 10 extended the Continental Shelf Act 1966 and Petroleum Mining Act 1966 to Sarawak and Sabah without their knowledge or consent.

“These unilateral actions effectively seized control of petroleum mining in State waters.

“However, when the emergency was lifted in 2011, the ordinances lapsed, legally restoring Sarawak and Sabah’s rights. The Continental Shelf Act 1966 and Petroleum Mining Act 1966 ceased to apply to the two Borneo Territories,” he said.

Lau noted that recent developments have brought the issue back into focus. On Jan 12, 2026, Petroliam Nasional Berhad (PETRONAS) filed an application at the Federal Court to clarify its regulatory framework in Sarawak, naming both the federal and State governments as respondents.

He pointed out that PETRONAS, created by an Act of Parliament, is subject to the direction of the Prime Minister under Section 3(2) of the Petroleum Development Act 1974, with any directions issued being binding on the corporation.

In response, the Sarawak government filed a petition with the Federal Court to determine the continued constitutional validity of the Petroleum Development Act 1974, the Continental Shelf Act 1966, and the Petroleum Mining Act 1966 as they relate to Sarawak.

“The simplest solution lies in the political arena. It requires the Prime Minister to act. Will the Prime Minister issue such direction to PETRONAS to respect and comply with the laws of Sarawak?,” he asked.

He added: “Sarawak and Sabah have lost decades of development opportunities, its petroleum resources and revenue. It is time to reclaim our future—by restoring the spirit of MA63: unity through mutual respect, partnership, and fairness. We lost our past, now we want our future back.” — DayakDaily