MALAYSIA Tanah Tumpah Darahku



Tuesday, November 30, 2021

Stop denying Kelantan their right to oil royalty


From Zaid Ibrahim

Tengku Zafrul Aziz is a lucky man. He became finance minister, although he has not been politically involved in any meaningful way.

He is not a renowned economist but I am sure he must be well connected, as this is a sure way to move up in this country. I don’t begrudge his good fortune but his rejection of Kelantan’s claim for oil royalty is pathetic.

It shows his indifference to the plight of the poor people of Kelantan. It also shows his lack of understanding on how the states coexist with the federal government.

Kelantan is one of the poorest states, where the annual budget of RM600 million is just enough to pay civil servants’ salaries. There is no money for development yet Tengku Zafrul denies the people what has been due to them since 1975.

The Kelantanese (with the exception of the Niks and the Wans in the Klang Valley) are largely destitute and poor. They fell victim to this political party PAS which sells them redemption in the afterlife to ease the burden of the present life.

There has been no money to build essential infrastructure or provide clean water and proper latrines in the last 50 years.

Kelantan would have received more than RM20 billion (my rough calculation) if honourable politicians were running the country. If given what was due to them, Kelantan would be one of the more developed states.

Tengku Zafrul has joined a long list of leaders in Putrajaya who have deliberately denied carrying out the intent of our beloved former prime minister Abdul Razak Hussein.

The Petroleum Development Act which established Petronas and gave it exclusive rights and privileges to explore and exploit oil and gas resources (be it onshore or offshore) was passed by Parliament in October 1974.

Under the Petronas Production Sharing Agreement in 1975, Razak directed Petronas to give cash payment of 5% to the coastal states contiguous to the oil wells in exchange for the exclusive rights.

There was never any law that says oil wells must be within the territorial waters of 12 nautical miles from the shoreline before a coastal state could claim their 5% as alluded to by Tengku Zafrul. The requirement was an afterthought that federal politicians adopted to deny Kelantan and Terengganu the oil royalty.

In any event, the claim for oil royalty does not depend on territorial waters. Sabah and Sarawak’s territorial waters are limited to three nautical miles and yet their oil wells (where oil royalty are fully paid) are found way beyond the three-mile limit.

A simple agreement designed to equalise resource sharing between states in the Federation was what we had intended when Petronas was set up in 1974. The 1975 Petronas Production Sharing Agreement stated that the federal government will get 10% royalty and that money is to be shared with the relevant coastal states where oil is found.

This is consistent with the demands of federal political system models where rights, ownership of assets of the states conferred to the federation are irrevocable, but so is the cash payment made in exchange.

Canada has the same sharing of resources between the federal government and the provinces. Canada is like us – a federation. The difference is that they do not discriminate against the regions that elect the opposition government to power.

In Malaysia, the federal government under Barisan Nasional (BN) reneged on the agreement after Kelantan and Terengganu fell to the then opposition PAS.

Special treatment for Sabah and Sarawak

If the 12-mile limit is so sacrosanct, can Tengku Zafrul explain why the definition of the 12 nautical miles limit does not apply to Sabah and Sarawak?

The fact remains that despite the frequently heard statements that Sabah and Sarawak were denied their rights, in truth, they both received special treatment since the early years of joining Malaysia.

In 1964, Sabah and Sarawak were allocated 40 Parliamentary seats (gone up by now), whereas the peninsula only received 104, totally disproportionate to their respective population. Tunku had to give in because Singapore’s Lee Kuan Yew and Sabah’s Donald Stephens (Fuad Stephens) insisted on increasing “Parliamentary seat allocation” before agreeing to form Malaysia.

Now, politicians in the peninsula go overboard in defending Sabah-Sarawak demands on autonomy and oil royalty of up to 20%. Sarawak has also started to levy sales tax on petroleum products.

Sabah and Sarawak have been flavours of Malaysian politics for many years now. Will Kelantan and Terengganu get the same undivided attention for a change? Can Kelantan take some of the limelight?

That these Peninsular Malaysia politicians choose to ignore the legitimate rights of states such as Kelantan and Terengganu is tragic beyond words. No wonder the Malays have this saying, “Anak kera disusukan, anak sendiri mati kelaparan”. (The baby monkey is fed milk while your own child dies of starvation).

I now call on the proud people of Kelantan, descendants of Cik Siti Wan Kembang and Puteri Saadong, to rise. Tell the politicians from PAS, Umno, Bersatu and Pakatan Harapan that unless we get what is due to us (approximately RM20 billion) and restore the rights to the 5% royalty from Petronas, we will remove them as “wakil rakyat” in the next general election (GE15).

Tell them it is about time they discard the phoney “perpaduan ummah” if they can’t even get together to bring back the rightful oil revenue to the state.

Tengku Razaleigh Hamzah and Husam Musa are the only true Kelantan warriors on this issue. It is pointless to have so many ministers and deputy ministers from Kelantan in the Cabinet if they behave like eunuchs – by keeping mum and conspiring with those who want to deny the rights of the poor in Kelantan. Let us select new leaders who are willing and prepared to do justice for a change.

The rakyat must stop the nauseating charade being played by our leaders. All they talk about is how to collaborate and gang up so that they can maximise their chances to win their respective seats.

They are only interested in securing their positions. The people must reject “wang ehsan” (gratuity payments) because that money from Petronas does not belong to these eunuchs. They belong to us all and so we do not need their “ehsan” (grace) to get what is due to us.

The Malays from the coastal states need to show these leaders that they have the strength to fight for what is due to them. They must cease to beg, recover their dignity and fight till the end for a better life. - FMT

Zaid Ibrahim is a former law minister.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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