No limit on percentage of oil royalty to states in Federal Constitution — See
October 30, 2015, Friday KUCHING: There is no provision in the Federal Constitution barring the state governments of Sarawak and Sabah from asking for 20 per cent or more in oil royalty from the federal government.
Batu Lintang assemblyman See Chee How believed Sabahan author Zainnal Ajamain’s interpretation of the Tenth Schedule Part V Section 3 of the Federal Constitution was misguided and erroneous and without judicious basis, when the latter talked about the rights of the two East Malaysian states in the federation.
He added that Section 3 of Part V was clear and unambiguous. It enables the states of Sarawak
and Sabah to levy or collect export duty from minerals chargeable with export duty, including mineral oils, to make the total of royalty and duty on exported mineral up to 10 per cent ad valorem (according to value) so calculated.
“What it means is, if the royalty levied on any mineral or mineral oil is less than 10 per cent, it can impose or collect export duty on the exported minerals or mineral oil up to 10 per cent ad valorem so calculated.
“Hence, with the petroleum royalty standing at five per cent presently, the states of Sarawak and Sabah are entitled to the whole or part of the export duty on petroleum to the
sum corresponding to 10 per cent of the value of petroleum and petroleum products exported from these two states,” he said in a statement to The Borneo Post yesterday.
See was defending the State Legislative Assembly’s resolution to demand for 20 per cent oil
royalty from the federal government against Zainnal’s contention, when launching his book ‘The Queen’s Obligation’ here on Wednesday, that Sarawak and Sabah cannot ask for anything more than 10 per cent in oil royalty.
“However, if the royalty is 10 per cent or more than 10 per cent, Sarawak and Sabah are not entitled to the export duty which is or are levied on the petroleum or petroleum products. It is therefore clear that the provision does not bar the state governments from asking for 20 per cent or more in oil royalty from the federal government.
“On the contrary, Sarawak and Sabah may demand for royalty of up to any percentage for the mineral or mineral oil but they will not have any share in the export duty levied on the particular mineral or mineral oil,” See who is a lawyer by training continued.
In addition, he said it would be useful if the state can reveal the total value of oil that was taken from Sarawak and the duties derived for the government to assess and demand the additional revenue which should be assigned to the state.
“In 2014, our actual state revenue from compensation in lieu of Oil Rights was RM1,236 million and the compensation in lieu of excise and import duties was RM120 million. For 2015, it is estimated that the state revenue for these 2 sources are RM772 million and RM120 million respectively.”
With regards the Malaysia Territorial Sea Act 2012 [Act 750] that is said to apply throughout Malaysia, See will seek the coming State Legislative Assembly to make a firm stand that the Act has no application in Sarawak.
He explained that the Federal Constitution provides that any law which seeks to alter the boundaries of a State shall not be passed in Parliament without the consent of that State in the form of a law made by the legislature of that State.
However, See agreed with Zainnal that section 3(3) of the Malaysia Territorial Sea Act 2012 had made reference to the Continental Shelf Act 1966 [Act 83] and the Petroleum Mining Act 1966 [Act 95], to determine the limits of the territorial seas of Sarawak and Sabah, is wrong as the relevant provisions in Acts 83 and 95 were made pursuant to the Emergency (Essential Powers) Ordinance No. 10 of 1969, the proclamation of which was lifted on November 23, 2011.
“I would urge that the State Legislative Assembly make a statement in this coming sitting to safeguard the integrity of the DUN and solemn rights of the state with regards its territorial boundary,” he continued.