Thursday, June 19, 2008

A Federation of Independent Malay States in the making

A Federation of Independent Malay States in the making
19 June, 2008

And this is what the federal government has been doing all this while. It unilaterally changes the terms of the agreement and forces the states to agree to these changes. If also forces the states to sign contracts that are one-sided and a breach of the Federation Agreement or the 20-point Agreement.


Malaysia Today

Kedah approves logging activities

The Kedah Government has approved logging activities at the Pedu, Muda and Ahning dam catchment areas, a move that is expected to generate about RM16 billion in revenue for the state. Mentri Besar Azizan Abdul Razak said the move was necessary to cover the high expenditure incurred by the state following the petrol price increase.

He added that the state would call for tenders soon and award the logging contract to the highest bidder. “We will discuss the logging method to be used with the Forestry Department,” he told newsmen after chairing the state executive council meeting yesterday.

He added that the Federal Government had promised to pay an annual compensation of RM100 million in 2003 following the state’s decision to cancel its proposed heli-harvesting project to log timber in catchment areas. “However, until now the payment has not been made. We have also asked the Federal Government for financial assistance for the water supply to Penang and Perlis and for the rice we are producing for the country. Since the Government cannot assist us financially, we will carry on with the logging activities,” Azizan added.


This is what happens when the federal government squeezes the opposition-led states and denies it the funding it requires. The federal government seems to forget that the granting of funds to the states should not be tied to which political party is running those states. The granting of funds to the states is a clause in the Federation Agreement.

At one time, the Malay states were independent and were known as the Straits Settlements, the Federated Malay States, or the Unfederated Malay States. Then they all agreed to merge into the Federation of Malaya. In doing so the states agreed to relinquish certain rights like national defence, security and foreign policy while they retained certain rights like land matters, natural resources and religion. Each state would then be given an annual grant plus loans for development, calculated based on the size of its population.

These were the terms agreed in the Federation Agreement and which was the basis for all the states to merge under the Federation of Malaya. And any first-year law student can tell you that an agreement made on the basis of mutual consent can no doubt be changed with the signing of a supplementary agreement, but must also be based on mutual consent. One party can’t unilaterally change the terms of the agreement without the consent of the other party. In the event one party violates the terms of the agreement, then the aggrieved party can either give notice for the termination of the agreement or sue for specific performance, with or without damages (unless there is a specific clause in the agreement that stipulates what happens when there is a breach -- like going for international arbitration, etc.).

Therefore, in this spirit, the federal government has no choice but to give the states grants and loans for development. If the federal government fails to do so then, for all intents and purposes, the federal government has violated the terms of the Federation. And the states will therefore also have no choice but to fend for themselves the best way they can -- which will include cutting down all the trees to turn them into much-needed cash with which to pay for the cost of running the states and to finance development.

Oil and gas is a state resource. Under the terms of the Federation Agreement, oil and gas, which is a state resource, belongs to the states, 100% (just like water, timber, tin, iron, gold, coal, etc.). However, in 1974, the federal government nationalised oil and gas and then forced all the 13 states to sign an agreement with Petronas -- whereby the newly created national oil company will become the owner of all the oil in gas and the states would just enjoy a 5% ‘commission’. Later, the states were forced to sign a supplementary agreement stating that the 5% ‘commission’ would be officially and legally called ‘royalty’.

The states really had no choice in the matter. This was not mutually agreed. What the federal government did was to pass a law in Parliament called the Petroleum Development Act 1974. By law, the states had to relinquish all rights over oil and gas and the federal government, through Petronas, took what belonged to the states ‘by force’. That not being enough, the federal government even violated the Petroleum Development Act plus also the agreement that the states were forced to sign with Petronas. In 2000, the federal government cancelled the 5% royalty due to Terengganu and handed it over to Umno to manage. And they also changed the name ‘royalty’ to ‘goodwill money’ -- which does not appear anywhere in the Petroleum Development Act or the agreement the states were forced to sign with Petronas.

Yes, the federal government has, time and time again, violated the terms of the Federation Agreement. And they violated it again in 1974 by nationalising a state resource -- oil and gas. And they violated it yet again in 2000 by cancelling the 5% royalty in spite of the 5% being morally wrong in the first place (but made legally right through an Act of Parliament). And now, after the 8 March 2008 general election, the federal government is up to its tricks again by denying the opposition-led states the funds it is legally obligated to give the states.

Sure, the states can’t send the federal government a notice of breach of agreement with 30 days notice to terminate the federation or to sue the federal government for specific performance and possibly for damages as well. But it can do the next best thing. The states still have land, water, timber, tin, gold, iron, coal, and much more. The jungles bordering Kedah, Perak and Kelantan are rich in resources, much of it explored but untouched since the beginning of time. The states can open up these lands and exploit whatever they can find there, timber included. The states have no choice but to do this. But what a great loss to the world when after some time not a single tree is left standing in this country and Malaysia eventually turns into a hot desert and Malaysia’s contribution to global warming will turn this world into a mess.

What will happen when there are no longer any trees in the catchment areas? Well, there will no longer be any rain and the dams will dry up. Then water will cost more than petrol like in Saudi Arabia. And this will happen because Umno wants to punish the opposition-led states by denying it funds although, when these states joined the Federation of Malaya in 1957, it was agreed that the states would receive funding and the agreement did not say that funding will be given only on condition that Umno rules these states.

Sabah too has been expressing its unhappiness all these many years but the grumblings of the Sabahans have fallen on deaf ears. But Sabahans no longer want to take any shit just like how the Sultan of Terengganu decided he too will no longer take any shit and he made this very clear by rejecting Umno’s choice of Menteri Besar. Now, Umno is going to return the 5% oil royalty it stole from Terengganu since 2000. But Terengganu does not want just the 2008 royalty. They want the royalty stolen since 2000, which comes to about RM7 billion, or RM8 billion with this year’s included.

Okay, if Umno does not want the eight Members of Parliament and 28 State Assemblymen from Terengganu to leave Barisan Nasional and become ‘independents’, then the federal government has to hand over RM8 billion this year. If not, then Terengganu Darul Ehsan will become the Independent Sultanate of Terengganu. The ball is at Umno’s feet.

Sabah too is pressing for the federal government to not only honour the Federation Agreement but the 20-point Agreement as well. Under the 20-point Agreement, Sabah is not one of the states of Malaysia equivalent to Kedah, Kelantan, Penang, Perak or Selangor. Sabah is equivalent to Malaya.

This is what Wikipedia has to say about the matter:

The 20-point Agreement was written for the main purpose of safeguarding the interests, rights, and the autonomy of the people of Sabah upon entering the Federation of Malaysia. It was originally envisaged that Sabah will be one of the four entities in the Federation, the others being Malaya, Singapore, and Sarawak. However, as times passed, Sabah and Sarawak ended up being merely one of the 13 states in the Federation.

Many do not understand this very important fact. Sabah is not a state as such. Sabah is of the same status as Malaya. Sabah lawyers can freely practice in Kuala Lumpur but Kuala Lumpur lawyers need permission to practice in Sabah. Sabahans can freely travel to West Malaysia but West Malaysians can be denied entry into Sabah (once upon a time West Malaysians needed to show their international passport before they could enter Sabah).

Is this unfair and smacks of double standards? This was what was agreed when Sabah teamed up with Malaya, Sarawak and Singapore to form Malaysia. Whether it is fair or not is not the issue. The issue is: this was what was agreed and if it is not fair then why agree to it? You can’t agree to something, fair or unfair, just to entice a state to join the Federation and then, after it has joined, you scream about the terms being unfair and unilaterally change the terms against the wishes of the other party.

And this is what the federal government has been doing all this while. It unilaterally changes the terms of the agreement and forces the states to agree to these changes. If also forces the states to sign contracts that are one-sided and a breach of the Federation Agreement or the 20-point Agreement. But now the states are fighting back. Now the states will no longer take any shit. And this is what is happening in the Terengganu, Kedah and Sabah situations. The aggrieved parties are fighting back as they rightfully should. And Terengganu wants back its RM7 billion. Kedah is going to cut down all its trees. Sabah will go for a new government that can increase its 5% royalty to 20% (which should be 100% in the first place) plus a government that can honour the 20-point Agreement, which was the basis for it to team up with Malaya to form Malaysia.


Yong: Problems remain unsolved
The Star

The continued insensitive attitude of the Government towards serious issues in Sabah is the main reason Sabah Progressive Party (SAPP) decided to move a motion of no-confidence against the Prime Minister. Its president Datuk Yong Teck Lee said the party had to make a stand before the “window of opportunity” closed by August after which Sabah would be forgotten again.

“The nation’s attention will switch to MCA and Umno elections, people will be pre-occupied with the fasting month, Hari Raya, school exams and year-end events,” he said in a statement yesterday. “Political fatigue in the national mainstream over 'Sabah-Sabah-Sabah' issues will set in.”

He said the momentum for Sabah to recover autonomy, obtain 20% oil royalties instead of the present five per cent and the return of Labuan would be lost. “Unfair federal laws, excessive taxes and structural imbalances in the economy will remain entrenched. Sabah will remain the poorest state subservient to central leadership. The illegal immigrant problem will reach boiling point. With our political move today (yesterday), SAPP hereby initiates the political process to claim 20% in oil royalties, which is after all the natural resource of Sabah,” he added.

Yong said the extra billions could be invested in agriculture, education, capacity-building and achieve self-sufficiency in many areas. “We can therefore insulate ourselves from external shocks or an economic tsunami,” he said.

He added that the people of Sabah were also suffering from high inflation because of recent “astronomical” and “unexpected” fuel price hikes, which was contrary to a Barisan election promise. He said fuel prices have caused the business sector to stagnate and predicted that unemployment and social problems would rise. “But the Government’s responses seem ad-hoc, flip-flop and lacking in foresight with a fire-fighting style.”

Among the problems that Yong said would remain unsolved were poverty eradication, rural development, racial politics, illegal immigrants, crime and drugs.

The Sabah 20-point agreement

Point 1: Religion

While there was no objection to Islam being the national religion of Malaysia there should be no State religion in North Borneo, and the provisions relating to Islam in the present Constitution of Malaya should not apply to North Borneo.

Point 2: Language

* a. Malay should be the national language of the Federation
* b. English should continue to be used for a period of 10 years after Malaysia Day
* c. English should be an official language of North Borneo for all purposes, State or Federal, without limitation of time.

Point 6: Immigration

Control over immigration into any part of Malaysia from outside should rest with the Central Government but entry into North Borneo should also require the approval of the State Government. The Federal Government should not be able to veto the entry of persons into North Borneo for State Government purposes except on strictly security grounds. North Borneo should have unfettered control over the movements of persons other than those in Federal Government employ from other parts of Malaysia into North Borneo.

Point 11: Tariffs and Finance

North Borneo should retain control of its own finance, development and tariff, and should have the right to work up its own taxation and to raise loans on its own credit.

Point 12: Special position of indigenous races

In principle, the indigenous races of North Borneo should enjoy special rights analogous to those enjoyed by Malays in Malaya, but the present Malays’ formula in this regard is not necessarily applicable in North Borneo.

Point 15: Education

The existing educational system of North Borneo should be maintained and for this reason it should be under state control.

Point 17: Representation in Federal Parliament

This should take account not only of the population of North Borneo but also of its seize and potentialities and in any case should not be less than that of Singapore.

Point 20: Land, Forests, Local Government, etc.

The provisions in the Constitution of the Federation in respect of the powers of the National Land Council should not apply in North Borneo. Likewise, the National Council for Local Government should not apply in North Borneo.

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