Sarawak has been taken for a ride for over 50 years by Putrajaya

By See Chee How

In presenting the Supply (2017) Bill 2016, Right Honourable Chief Minister had laid emphasis that, for the total provision for development expenditure for 2017, RM5.646 billion will be funded by the State while RM282 million will be financed by the Federal government through reimbursable loans and grants.

 Needless to say, Sarawak is the biggest contributor in terms of oil and gas production and petroleum revenue earning for the Federation. But Sarawak’s revenue earning from the oil and gas production was only a small fraction of that of the Federation, being just the diminutive royalty.- See Chee How

In percentage term. For 2017, to finance the development expenditure for Sarawak that will cost RM5.928 billion, the contribution from the federal government is a mere 4.75%.

RM4.75 will be given to Sarawak for every one hundred Ringgit of our need for development. The Right Honourable Chief Minister has been most diplomatic and benevolent in his choice of word, to remarked that the allocation from the federal government is “barely sufficient”, and that “It is just not enough”, referring to page 17 of the unedited version of the Hansard dated 21 November 2016.

That is no much difference from this year, and the year before.

For 2015 Budget, the development expenditure was RM4.546 billion. We ourselves funded RM4,038 million while the federal government financed RM508 million.

In the budget for this year, the total provision for development expenditure was RM5.971 billion. The federal government’s contribution was a mere RM231 million and the State has to finance 96% of the development expenditure, RM5.74 billion.

For every one hundred Ringgit that Sarawak needs for development, the federal government gives us RM3.80!

“Tidak cukup”… This was repeated twice by YAB Chief Minister as recorded in page 9  of our Hansard dated 7 December 2015, when referring to the federal allocation.

We are diplomatic, we have been diplomatic, but is the federal as benevolent as we think they should be?

I think we have been taken for a ride, by Putra Jaya.

So, I thought we should take it with a pinch of salt when the Prime Minister publicly said in UPKO meeting in Kota Kinabalu on 12 November 2016 that he is ready to discuss the Malaysia Agreement and any wrong interpretation of constitution provisions, that he would not take away our rights but would defend them.

Hence I cannot comprehend the basis for our Deputy Chief Minister to expressed “deep appreciation” to the Prime Minister “for his willingness to discuss issues relating to the Malaysia Agreement and the federal constitution with us and for his assurance that he will defend our constitutional rights”, in his ministerial statement delivered on 22 November 2016.

There is no need to sing the praises about his support, understanding and assurance.

I would respectfully invite the Honourable DCM to look at this Budget and enlighten this Honourable Dewan, where is the spirit of goodwill, diplomacy and mutual respect that have been shown by Putra Jaya, to convince all the Honourable members and Sarawakians outside this Chamber that we should give the federal government time to deliver what are due to Sarawak under the Malaysia Agreement and the Federal Constitution.

This Honourable Dewan had unanimously passed 2 motions on Sarawak’s rights and entitlements in the last 2 years. I would like to believe that Sarawak’s administration had, also as revealed by YAB Chief Minister, had made strong representations to Putra Jaya, on:

1.         a review of the special grants for Sarawak pursuant to Article 112D (4) of the Federal Constitution, promised to be reviewed every 5 years after the formation of Malaysia;

2.         the return of sums of stamp duties for land transfer, mortgage and other dealings on land collected from Sarawak, which should rightly be state revenue, have been wrongly paid to the federal treasury for all the 53 years; and

3.         review and amend sections 3 and 4 of the Territorial Sea Act 2012 (Act 750).

If the Prime Minister and the federal government has any respect for Sarawak’s rights under the Malaysia Agreement and the Federal Constitution, that there is spirit of goodwill, diplomacy and mutual respect to Sarawak, what are the outcome of the Sarawak government’s requests for these basic rights and entitlements guaranteed under the Malaysia Agreement and the Federal Constitution?

Datuk Speaker, while we should continue to remind the federal government of their obligations to grant Sarawak equitable financial allocation to catch up in our development of public facilities and infrastructure with the Peninsular Malaysia, we should transform and develop strategic financial measures to amplify and multiply our state revenue through prudent management of our resources.

We could and should have better managed our forest resources, emulating Peninsular Malaysia and Sabah, to zealously develop value added downstream industries and ensure that our timber and timber products are able to be traded in the “high value markets” hence generating more revenue while better conserve and sustain our forest resources.

Foremost in our mind, critical in our pursuit to conserve depletable natural resources, is the petroleum justice that we owe it to ourselves, to Sarawak and our future generations, to strategically conserve and utilize in the best interests of Sarawak.

We are blessed with this natural endowment, but it is fast depleting.

Onshore and offshore, Sarawak has been demarcated into 48 blocks or fields of oil and gas potentials. Through the years, production sharing agreements (PSC) had been awarded over 27 of these fields and 13 others are presently been vigorously promoted this year and the last.

It is imperative for us to revivify Sarawak’s sovereign rights to this valuable natural resource, to assert our autonomy and authority over the remaining blocks and fields of oil and gas potentials yet to be awarded with PSC.

We have sacrificed too much of our petroleum resources to the Federation.

At the time when the Petroleum Development Act was tabled in Parliament and passed, in 1974, there were nine oil companies that are prospecting for oil in the country’s territory – 3 in West Malaysia and 6 in East Malaysia. Amongst them, only Sarawak Shell Berhad was producing oil of about 93,000 barrels per day. The production was increased by more than 2-folds after the Petroleum Development Agreement was signed and soon more than 4-folds production, i.e. 400,000 barrels per day, to finance the Federation’s development.

In June 2009, Petronas then president and acting chairman Tan Sri Hassan Merican revealed that Petronas had until that year paid RM471 billion to the federal government and assumed a cumulative gas subsidy of RM97 billion.

For that particular financial year ended in March 2009, Petronas had paid to the government RM30 billion in dividends, and the national petroleum company had paid RM29.4 billion in taxes, RM6.2 billion in royalties and RM2.2 billion in export duties. Thus contributed RM67.8 billion to the federal government that year, as compared to RM56.8 billion in 2008. 

Dividends alone, Petronas had paid to the federal government RM30 billion, RM30 billion, RM28 billion, RM27 billion, RM29 billion, RM26 billion and RM16 billion respectively from 2010 to 2016, hence RM671 billion for the 42 years since its incorporation.

All these besides the estimated RM500 billion in taxes, royalties and export duties, together with RM200 billion in gas subsidy.

Needless to say, Sarawak is the biggest contributor in terms of oil and gas production and petroleum revenue earning for the Federation.

But Sarawak’s revenue earning from the oil and gas production was only a small fraction of that of the Federation, being just the diminutive royalty.

There is no justice in this.

We should laud the state administration to devise the petroleum regulatory framework to assert better safeguards for the interests of Sarawak, but I must again reiterate the need for Sarawak to set up a state petroleum company under the state sovereign wealth fund to venture into upstream and downstream oil and gas industries, for the betterment and long term interests of Sarawak.

I would respectfully seek the assurance of YAB Chief Minister that any future signing and awarding of PSC, such as Block SK410B, will not be done without our knowledge and sanction, and we must insist on direct participation in the ventures.

“We cannot be satisfied by being just spectators. We want to participate actively and meaningfully in the oil and gas industry in our State,” our YAB Chief Minister has famously said this in Bintulu earlier this year. Our Honourable DCM had repeated it in his ministerial statement in this august House.

Lets do it.

Rome cannot be built in one day. But we can wait forever and federal will not build Rome for us in Sarawak. We must build all that are necessary in Sarawak, on our own.

To conclude, I wish to share this quote with all Honourable Members in this House:

“We are commanded to loose the chains of injustice

and untie the cords of the yoke,

to set the oppressed free