How do you ‘give’ the oil producing states oil royalty for something that already belongs to them in the first place?

By Raja Petra Kamarudin

Give or take, give and take, they are both four letter words, just as Umno is (pun intended). Nevertheless, we can expect Umno to be confused about when to use the word “give” and when to use “take”. However, Pakatan Rakyat too?

As Julius Caesar said, “Et tu Brute?”

I am talking about the 5% oil royalty “given” to Sabah and Sarawak (and, of course, to Terengganu, as well as to all the other states as well: in the event that they too have oil and gas).

Yes, both Barisan Nasional and Pakatan Rakyat are currently discussing how much royalty should be “given” to those states that have oil and gas.

How do you “give” them something that already belongs to them in the first place? Should not the word we use be “take”? We should instead be discussing how much we should “take” from them, not how much we should “give” them.

Let me explain the history of this entire thing.

The oil and gas already belongs to the states. This is what the Malaysia Agreement and the earlier Federation Agreement was all about. And, in that agreement, it was agreed that all natural resources would be the property of the states.

No doubt, some things such as defence, security, foreign policy, etc., were federalised. But religion and natural resources are supposed to be the prerogative and property of the states.

Water, timber, land, sand, minerals, etc., all belong to the states. As do oil and gas. These are what we call natural resources. Hence they belong 100% to the states, not 5% or 20% or 50% or whatever.

Now, Umno is, of course, misleading us. They are talking as if all natural resources, except oil and gas, belong to the states and that oil and gas belong to the federal government. That is not true. And to suggest otherwise is a violation of the Malaysia Agreement.

And I would expect better from the opposition. Why is the opposition sounding like Barisan Nasional and talking about how much oil royalty to “give” to the states?

Discovery of oil

Oil was first rumoured to have been discovered in Terengganu even before 1972, during the time that Nik Hassan Wan Abdul Rahman was the MenteriBesar of Terengganu and Tun Abdul Razak Hussein the Prime Minister of Malaysia. And I said rumoured because the discovery of oil was never officially announced but was something that was being whispered in the corridors of power.

Why the hush-hush? Well, because the government had to first sort out some “loose ends” before announcing the discovery of oil.

So they did not want anyone to know about it until the federal government could ensure that the oil was “transferred” to the federal government. If not, 100% of the oil revenue would go to the state of Terengganu.

In the meantime, they secretly sold the oil to foreign buyers. The oil was transferred from the oil rigs to the ships in the middle of the sea and was exported. Only some people knew about it, the Petronas officers being some of those people.

Lim Kit Siang came to find out about this secret arrangement and there was a hue and cry when he revealed that the oil was being stolen from Terengganu. It seems a Deep Throat in Petronas had told him about it. Exxon, in collaboration with Petronas, were fingered as the chief conspirators.

A crisis was about to explode. There were rumours that all the documents in the Exxon office in Kuala Lumpur suddenly disappeared and reappeared inSingapore the following day.

Then, suddenly, the whole thing mysteriously died down and nothing more was said about the matter. No denial or rebuttal was ever issued.

Soon after that, the Menteri Besar went into conflict with the Sultan and was forced to resign. He was also exiled from Terengganu and was not allowed to ever set foot on Terengganu soil again as long as the Sultan was still alive. He never returned to Terengganu until the Sultan died.

The tense moment in that entire episode was when the Sultan’s brother stormed the Menteri Besar’s office and pointed a gun at the Menteri Besar’s head. The Sultan’s brother too was exiled to Pahang and only returned to Terengganu to attend the Sultan’s funeral.

The BN oil plan

Meanwhile, Tun Razak came out with a plan on how to bring PAS into the federal government. PAS had to be neutralised if the federal government wanted to grab Terengganu’s oil.

The idea to form Barisan Nasional was mooted and all the opposition parties such as PAS, PPP, Gerakan, etc., were invited to join Barisan Nasional.

In 1973, BN was launched and PAS became part of the federal government. In 1974, the new ruling coalition in Parliament (where all the opposition parties except DAP were now members of) passed the Petroleum Development Act and the oil and gas were transferred from the states to the federal government, meaning Petronas.

To keep the states quiet, they were given 5% as a token “oil royalty”.

This was like the whites taking away the Native American lands (then called Red Indians) by giving them worthless beads as payment.

Now, if the federal government had power over oil and gas, why the need to pass the Petroleum Development Act in Parliament? Just take it! But they couldn’t just take it. Oil and gas are the property of the states. So they needed to pass an Act of Parliament to legalise the illegal takeover of state property.

There was, of course, some resistance to this move, in particular from Sabah. But all resistance was silenced when the dissenters died in a mysterious plane crash that has never been properly explained until today.

Pakatan should stop talking about how much oil royalty to “give” the states and whether it should be increased from the current 5% to 20% or 50% or whatever. That is BN type of talk.

Correcting the injustice

The federal government is actually taking what belongs to the states. Therefore, you should be talking about how much you should take: whether 95% like now, or whether you reduce what you take down to 80% or 50%.

If we go by the spirit of the Federation Agreement, then you should take nothing. You should return 100% to the states. The most you can do is to levy a tax, like the timber export tax, palm oil tax, etc. That is all the federal government can earn. Even if the tax is 35% or 45%, never mind. But it has to be tax on the profit of the sales or a form of export tax or sales tax, whether you make a profit on the sale or not.

We always talk about Rule of Law and not Rule by Law. The Petroleum Development Act is a classic example of Rule by Law. They passed a law tolegalise something illegal: meaning, nationalising state property.

We must now correct this injustice and call a spade a spade. The federal government has been robbing the states of their oil for the last 40 years and has been giving them a mere 5% of the proceeds when it should be 100%. That is the reality of the situation.

Lim Kit Siang of DAP knows about this. He was the one who revealed what was going on even before most people knew that oil was being extracted fromTerengganu.

And Tun Salleh Abas of PAS also knows about this. He was the “architect” who drafted the Petroleum Development Act.

So no more talk about how much to give the states. We must now talk about what we are taking from the states.

Raja Petra Kamarudin is a popular blogger based in Manchester, UK.

are we goin too fast ?

i was wondering.. as we had lots of things happened lately in the country such like economy down fall, by-elections, political wars, passing of late sultans.. could things gone easier rather than this one shot plans by our latest prime minister, najib which really did shocked the citizens.. subsidy cuts.. no more oil subs, edu subs, food subs and lots and lots more. this results to.... there you go, PRICE HIKE ! seriously i'm telling you.. my vision for next few years would be hard ones. oil price up, groceries up, even goods are up. tax tax tax. tax here and there. this will go till 2014 said him and i don't think people could hang on till next 4 years with these kind of prices unless, the workers.. govt. sector and also prvt. sector's salary are raised. somehow i don't see that coming as the government said the reason for all these ideas are because of the debts.

let's say the current price for a pack of cig would cost $10.. when in MY, they subsidized it for the people by making it rm6.40 (min) . they are losing money right there. same goes to other stuffs such as attires, foods, transportation and ect. yeah, it wouldn't be fair to some people whom are unaffordable or to say doesn't have enough income to survive himself and his family. not just that.. person's wants and needs are there together guys. you would love to go for movies, you would love to shop a few clothes sometimes and such foods like mcdonald's, kfc, pizza and other chain fast food restaurants lovely to dine with. maybe this would hurt most of them. the result/feedback would be devastating. the govt would probably lose their campaigns in by-elections, lose their supporters and such just because of a price hiking. hey, let's not get too absurd. somehow the govt. trying to pull our country to a better future leading to the famous vision 2020 by tun dr. mahathir mohd.. ? who knows. i'm betting that things would be according to plans IF they do it bit by bit.. one step at a time. or it'll lead to what i've said earlier isn't it ?

let's not get too stuttered ladies and gentlemen. they are all educated personnels just trying to serve the nation.. might as well gaining a reputation or name among the citizen.. who knows. different people, different thoughts right ? let it alone and us, the people.. keep an eye on it, watch and see how it'll go.. and how good/bas it'll turn. i'm just hoping the best from our pm, do ya thing bro. hope it goes well without effecting us BADLY. the news itself already shook us to the pits of hell. lol c'mon govt.. cheer us up a lil bit by just limiting it rather than cutting it all off. right people ? hands down, malaysia is really on track for development and one of the top developing countries which are on fast pace of movement in terms of gaining status as developed and recognized by the world or simply said, first world countries which are in optimum level.

i'll end this post by just giving you something to think. how to act and confront this issue when it do really happens in the near future. be prepared, save some cash for future, spend with care.. live long and prosper :)