Sarawak-Petronas deal isn’t really a breakthrough, says MA63 activist

Under an agreement, Petronas will pay RM2 billion to Sarawak as state sales tax for 2019 and the state has agreed that all future payments of the petroleum sales tax will be lower. (AFP pic)

KOTA KINABALU: A Sabah activist says the agreement Sarawak has reached with Petronas on the petroleum sales tax is not a breakthrough in terms of gaining state rights.

Malaysia Agreement 1963 (MA63) activist Zainnal Ajamain said all the civil suits brought by the state government have all ended up with nothing.

Instead, the Sarawak government continues to recognise the Petroleum Development Act 1974, the validity of which is in question from a constitutional standpoint, he said.

Zainnal said the resolution of the dispute also further allowed Petronas to continue to lord over Sarawak’s oil and gas resources.

He likened the state’s action as history repeating itself again as past Sarawak leaders had signed away their state rights in the Petroleum Development Act (PDA1974) in 1975.

MA63 activist Zainnal Ajamain.

“Next, Petronas or Putrajaya will remind the Sabah government that the Sarawak government has agreed and, therefore, it must agree as well.

“But as the Malay saying goes ‘pisang tidak akan berbuah dua kali’, Sabah is likely to resolve not to adhere to the PDA 1974 twice,” he said here today.

The Sarawak government and Petronas announced yesterday their decision to resolve their tussle on the management of the oil and gas assets in the state.

Under the agreement, Petronas will pay RM2 billion in settlement for the Sarawak state sales tax for 2019 and the state has agreed that all future payments of the state petroleum sales tax will be lower and staggered, based on future negotiations.

Sarawak will also drop all claims in its civil case against Petronas and the state will have to honour all the agreements in the PDA 1974.

Sarawak was also told to recognise Petronas as the nation’s oil company with the authority to regulate the development of the entire oil and gas industry in the nation, in line with the Federal Constitution.

This deal comes on the heels of Sabah just starting to impose the same tax on all oil and gas companies operating in the state.

Zainnal said both Sabah and Sarawak had fought extremely hard for these assets to be returned back to the state from Petronas and Putrajaya.

He maintained that the PDA 1974 was invalid and went against the Federal Constitution, quoting Article 112 C 4(b) that Parliament cannot pass laws that can deny Sabah and Sarawak being paid royalties.

He said the actions of the Sarawak leaders compromised the struggles of the people in Sabah and Sarawak, allowing their rights to be taken over by Putrajaya and Petronas again. - FMT