Jeffrey hails Harris take on oil, gas resources

It’s high time to put things right, return oil and gas resources to Sabah, Sarawak.

KOTA KINABALU: Bingkor assemblyman Jeffrey Kitingan agrees with former Sabah Chief Minister Harris Salleh that local oil and gas resources should be returned to the Sabah and Sarawak Governments. “The time has now come for the Federal Government to put things right to undo the injustices of the past,” he said.

“As Harris has suggested, the Petroleum Development Act 1974 (PDA) should be abolished.”

Jeffrey noted that Harris made his statement on the PDA on June 6, the anniversary of the air crash in 1976 which took the lives of Sabah Chief Minister Fuad Stephens and most of his Cabinet members. They were then on their way back to Kota Kinabalu from Labuan where Fuad put off the signing of the oil agreement surrendering Sabah’s oil and gas resources to the Federal Government.

There is no doubt that the PDA was a piece of unconstitutional and illegal legislation passed to seize Sabah and Sarawak’s oil and gas resources, added Jeffrey. “Oil and gas rights belong to the states and were within the ambit of the State Lists in the Federal Constitution and the Federal Parliament had no lawful authority to pass the PDA.”

In hindsight, he lamented, Harris should not have signed the Oil Agreement on 14 June 1976, a mere eight days after the crash while Sabah was still in mourning, agreeing to receive 5 per cent as the cash payment and waiving all rights to further claim for royalties under Sabah laws. “The cash payment was often wrongly referred to as oil royalties.”

If Harris had not signed, continued Jeffrey, like Stephens before him and Mustapha earlier, the vesting of Sabah’s oil and gas resources by then Prime Minister Abdul Razak Hussein with Petronas on 26 March 1975 would not have been completed or perfected and Sabah would not have lost its ownership rights.

According to Sabah’s State Budget 2015, he noted, the 5 per cent cash payment for 2015 was expected to be RM1,146,889,000 which means Petronas will get a whopping RM21.79 billion. “Such is Sabah’s annual loss from its oil and gas resources which comes out of Sabah’s soil but the bulk is sent by Petronas to fund Malaya’s development.”

“The Umno Sabah leaders are happy with the present 5 per cent arrangement,” said Jeffrey. “They are not seeking an increase to 20 per cent as requested by the Sarawak lawmakers.”

“This means Sabahans will remain the second poorest in the nation, after Sarawakians. Now, they are further burdened with the 6 per cent GST which will take another RM1.2 billion from them for the Federal Government.”

Harris said that Sabah and Sarawak can form oil companies to undertake the exploration and development of their oil and gas resources. “The Federal Government’s revenue from oil and gas can come from the income tax from these companies,” he said. “This move would streamline the Federal policy on the management of assets found in the states, such as timber and land.”