Two geese cackling over one golden egg

WHEN Petronas decided to seek judicial clarification on the regularity framework governing its petroleum operations in Sarawak, some Sarawakians got a bit suspicious.

It was a surprise to many observers, having read the report of a meeting between the Prime Minister and the Premier of Sarawak and thus, assuming that some kind of pragmatic understanding had been reached between the two leaders.

This was the approach taken during the time when Tun Abdul Razak was the prime minister of Malaysia, and Tun Abdul Rahman Ya’akub was the chief minister of Sarawak.

Apparently, this ‘formula’ did not work; hence, the current wrangling.

Last week, following closely on the heels of the Petronas’ move, the government of Sarawak filed a petition seeking the court’s help to determine the constitutional validity, and continued applicability of the Petroleum Development Act (PDA) 1974, the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 to Sarawak.

Now there appears to be a state of conflict, both in the courts of law and the court of public opinions.

There appears to be no other option.

Let us wait for the outcome – touch wood!

Should the judicial decision be in Sarawak’s favour, we will rejoice, of course; should the reverse happen and Sarawak’s rights be adversely affected thereby, expect the haggling to continue until all the cows come home.

Back to square one: Petronas will run the show as usual, while Sarawak will continue to receive the five per cent royalty – no more, no less.

Petroleum Sarawak Berhad (Petros) and Petronas will remain partners in business under the cloud of uncertainty as to who actually has the legal rights to the ownership of the product, and how the federal laws govern the deals.

If this puzzle is not solved soon, the next state government and the federal government will inherit the problem.

Our politicians in power now are hard at work to assure the voters that all is well. This is the sort of situation in which the politicians aiming at walking in the corridors of power in the state would exploit to the full.

Disclaimer: I have no intention whatsoever to influence the court’s decision one way or the other.

On this score, I don’t have the clout anyway.

However, like many stakeholders, I would like to see a fair solution to this issue the sooner the better.

The debate whether or not PDA 1974 possesses the exclusive rights over the petroleum found inshore and offshore of Sarawak has been going on for a long time.

Fifty years ago, a former judge told me that legal opinion was sought on this very issue, considered controversial, and required skills to handle so as not to rock the ‘Alliance boat’.

Quietly, two, not one, of such opinions were obtained from two Queen Counsel in England.

Both lawyers concluded that Sarawak had indeed the right to the petroleum found within its boundaries as enshrined in the Order in Council of Her Majesty Queen Elizabeth II in 1954.

There appears to be no other option than the court of law.

The ownership of the petroleum found in Sarawak and the powers under the existing federal laws governing dealings in that petroleum must be ascertained once and for all so that the future governments, state and federal, will not continue to quarrel over its ownership.

Foreign investors are not interested in a country where this kind of problem keeps on pestering endlessly.

We need foreign investment – lots of it!

Referring to the court is to acknowledge the importance of the rule of law and the impartiality of the judiciary.

Spot on, state government!

On reflection, the sensible thing that the federal government should have done was to increase the percentage of the royalty from Petronas, say from five per cent to 20 per cent.

It is my surmise that it would not have been necessary for Sarawak to produce a goose of its own if the state has had a fair share in those golden eggs for the past 60 years.

Whatever happens, Sarawakians may rest assured that the rights to the petroleum found under their feet or offshore belong to their state, as long as that state’s boundaries remain intact.

On June 14, 1954, the Sarawak (Alteration of Boundaries) Order in Council fixed the area of our ‘pemakai menoa’ (territorial domain) and ‘pulau galau’ (forest reserves), and this has been legally recognised by all countries.

The operative provisions of that Order:

1. the boundaries of the Colony of Sarawak are hereby extended to include the area of the continental shelf being the sea bed and its subsoil which lies beneath the high seas contiguous to the territorial waters of Sarawak;
2. nothing in this order shall be deemed the character as high seas of any waters above the said area of the continental shelf.

Then on May 30, 1956, the Governor of Sarawak, via the Supplementary Deed, extended the area under the mining lease to include the area of the continental shelf mentioned in that Order.

Sarawak Shell Bhd had enjoyed the right to prospect, explore and mine for our petroleum before the formation of Malaysia.

More importantly, Sarawak’s boundaries have never been altered since Sarawak was merged in a federation of states called Malaysia nine years later.

Its boundaries were never altered in any way; underline, they have remained the same to this day!

Thank God!

I am looking forward to the day when the mother goose and the goslings stop cackling over the golden egg.

We can share, fair and square.