A Blast From The Past.....Was The Oil Royalty 5% Or 20%?

Is the Petroleum Development Act 1974 unconstitutional? Petronas doesn't answer to Parliament and is only answerable to the Prime Minister of the day-hence if my memory still serves me correctly the Prime Minister of the day is Najib Tun Razak.But 36 years ago,the time the Petroleum Act was enacted,the Prime Minister was Tun Abdul Razak (22th.Sept.1970-14th.Jan.1976), while Tun Hussein Onn serve as the Prime Minister from 14th.Jan.1976-16th.July.1981.

Ironically,call it just pure coincidence,we are now seeing off springs in a similar capacity.But today we're more keen to re-discover the events that took place in Sabah,which could have change the fate of Sabahans,especially when oil was actually first discovered in 1882.

On the morning of June 6th.1976 @10am,Sabah Chief Minister born as Donald Aloysius Marmaduke Stephens and ,later known as Tun Haji Mohammad Fuad Stephens boarded a Nomad Aircraft from Kota Kinabalu and bound for Labuan. Along with him on the flight were State Ministers Datuk Salleh Sulong, Chong Thien Vun, and Assistant Minister Darius Binion. The purpose was to welcome Malaysian Finance Minister Tengku Razaliegh Hamzah and Sarawak Chief Minister, Datuk Pattingi Hj.Abdul Rahman Yakub,who were visiting the oil refinery at Labuan.

On the 7th.June.1976,the visiting Finance Minister cum Petronas Founding Chairman, Tengku Razaleigh Hamzah was scheduled to sign an Oil Agreement in Kota Kinabalu between the State Government of Sabah and Petronas. Unfortunately the signing ceremony never took place, not on the 7th.June.1976 anyway. The reason.... Chief Minister Donald Stephens, Salleh Sulong, Chong Thien Vun, Peter Mojuntin (the Golden Son of the Kadazans) along with 7 others perished in the controversial accident of the Nomad Aircraft carrying them on the 6th.June.1976, in Kota Kinabalu. That tragedy is also known as the DOUBLE SIX TRAGEDY or DOUBLE SIX CRASH.

The question lingering in the minds of Sabahans till this day is - was the final discussion prior to the signing of this Oil Agreement 5% or 20% ?? Will we ever know?


Catastrophically, after only eight days after the First Huguan Siou, Donald Stephens, perished in that controversial crash, and on the 14th.June.1976,the Government of Sabah signed an agreement with Petronas, granting it the right to extract oil and earn revenue from the territorial waters of Sabah in exchange for 5% in annual revenue as royalty.

Today, after 34 years, its questionable if National oil firm Petronas could be unlawful as its founding law was approved before it signed agreements with all the states, according to law professor Datuk Dr Shad Saleem Faruqi.

He also explained that according to the Malaysia Federal Agreement, land belongs to the states, which complicates the provision in the agreement surrendering control of petroleum found onshore under the Petroleum Development Act 1974.

“I think there are some aspects of the Petronas Act that is unconstitutional,”

Under the agreements signed in the mid-1970s all state governments were promised cash payment or royalty of five per cent for petroleum extracted onshore or offshore in return for surrendering their control of petroleum resources to the national oil company.

Shad also pointed out that the Act was passed before all the states had signed the agreement.

“The constitution says when you take somebody’s property you have to pay adequate compensation,” said Shad.

Federal powers:

In Schedule 9, List I of the Federal Constitution, the following topics are assigned to the Federal Government:

> Except as to State rights over permits and licenses, the Federal Government has rights over development of mineral resources, mines, mining, minerals and mineral ores, oils and oilfields, petroleum products, safety in mines and oilfields: Para 8(j).

> Gas and gas works, production and distribution of power and energy: Para 11(c).

> Foreign and extra-territorial jurisdiction: Para 1 (g).

> Treaties, agreements and conventions with other countries and all matters which bring the Federation into relations with any other country: Para 1(a) and 1(b).

Peninsular Malaysian States:

When it comes to Peninsular Malaysian States, the following matters fall in State hands:

> Land: Schedule 9 List II, Para 2(a). Under the Interpretation Acts, 1948 and 1967, Section 3, land includes “the surface of the earth … all substances therein… all vegetation and other natural products… whether on or below the surface… and land covered by water”. The territorial waters of Kelantan will come within the definition of “land covered by water”. Territorial waters are defined by Section 4(2) of the Emergency (Essential Powers) Ordinance No 7, 1969. Subject to some exceptions, they refer to three nautical miles.

> Revenue from lands: Schedule 10, Part III Para 2.

> In addition to the income from land, one notes that in Article 110[3A] there is provision for discretionary payment on such terms and conditions as maybe prescribed by or under federal law of the export duty on “mineral oils” produced in the state. Petroleum comes within the meaning of “mineral oils” under Section 10 of the Petroleum Development Act.

Sabah & Sarawak:

In addition to the rights of other states, Sabah and Sarawak enjoy some special sources of revenue.

> Schedule 10, Part V, Para 1 assigns import duty and excise duty on petroleum products to Sabah and Sarawak.

> Schedule 10, Part V, Para 3 assigns royalty and export duty on “mineral oils” totaling 10% to Sabah and Sarawak. “Petroleum”, as defined in the Petroleum Development Act, falls within the meaning of “mineral oils” and, therefore, 10% combined royalty and export duty on it constitutes part of the guaranteed revenue for Sabah and Sarawak.

From the above, it follows that the constitutional right of Peninsular Malaysian states is confined to fees for permits and licences and for extraction of any petroleum that is derived from their land and territorial waters.

Anything beyond territorial waters, e.g. on the Continental Shelf, is entirely in federal hands. All gas is in federal hands.

Legally, the oil and gas belongs to the states. The only way the federal government can ‘steal’ this oil and gas would be to come out with a new law that allows them to do so. If not it would be illegal for the federal government to touch the oil and gas. It belonged 100% to the states.

And this new law or Act called the Petroleum Development Act 1974 allowed the federal government to unilaterally (note the word ‘unilaterally’ and not ‘bilaterally’) amend the terms of the Federal Agreement. Normally, it requires all the parties to the Agreement to agree to any amendments to that Agreement before it can be amended. In this case, only one party made the changes (unilaterally) and the other parties were forced to remain silent.

The Federal and State Government of Sabah have a whole load of explaining to do.Were there two sets of agreement - one dated on the 7th.June 1976 and the other 14th.June 1976? Was the oil royalty 5% or was it more?

Why didn't any of the Chief Ministers after Donald Stephens demand for more oil royalty for Sabah? Sabahans have been hoodwinked long enough and the time has come for Sabahans to demand what rightfully belongs to them.The State Government of Sabah has been silent and it's quite obvious,they will remain silent-hence a puppet government.If history could be reversed would Sabahans today enjoy a much higher oil royalty had the illustrious sons and freedom fighters of Sabah did not perished?

Interestingly,Tengku Razaleigh Hamzah has been invited and has agreed to deliver a talk and answer questions in relation to the petroluem issue on the 2nd.April.2010 @8pm at the KDCA Buiding in Penampang,Sabah.I would encourage all Sabahans to attend this event and probably listen to all the unanswered questions.

Of 2nd Hand Gen-Sets & 2nd Class Fixed-Deposits

While our fellow Malaysians in Peninsular Malaysia are enjoying the luxury of un-interrupted power, WE Sabahans, on the other hand, continue to be marginalized as second class citizens and condemned to living in darkness. Forty-seven ( 47) years after the formation of Malaysia, Sabah still needs to "BEG" for development, which should be rightfully and duly provided. Foreign Investors as well as tourists are devastated that a state rich in natural resources, Petroleum, Timber and Palm Oil among other things is the poorest state in Malaysia.

The latest fiasco in Sabah is the discovery of second-hand generator sets, installed and commissioned by Sabah Electricity Sdn. Bhd. (SESB). Hundreds of millions are claimed to have been spent by the Federal Government. Ironically, after all the hoo-ha, Sabah gets 2nd hand sets. What an insult! Yet, imagine, the BN goons want Sabah to be their ever-dependable “fixed-deposit”. More insult!

Ordinary Sabahans are forced to swallow all the excuses, hoodwinks and bull-shit. It was a big surprise that the State Minister of Resource Development and Information Technology, Datuk Dr.Yee Moh Chai came out to ask the Managing Director of SESB, Baharin Din, to tender his resignation for failing to address the power woes in the state. It's rather amusing that Yee Moh Chai has unfurled his imaginary wings by portraying himself as an angel. Nevertheless, well done Dr. Yee. I suggest that if action is not taken against Baharin, the Minister resign his job to show he is sincere and means business.

To add insult to injury, Federal Minister of Energy, Green Technology and Water, Datuk Peter Chin has vowed to resign by December 2010 if he fails to reduce Sabah's System Average Interruption Duration Index(Saidi) from 2,780 minutes per subscriber to 700 minutes per subscriber. This kind of political rhetoric - resignations or sabbatical leave are stone-age tactics. All these might well be a political ploy in forcing a coal-fired power plant down the throats of Sabahans.

And what stupidity .... with all the latest technology available and all the big and bold talk about "PRODUKTIVITI" , "MALAYSIA BOLEH" & "1MALAYSIA", …… the entire Federal and State Government has miserably failed Sabahans. Maybe someone forgot to inform these politicians that this is the 21st Century. Stop fooling the rakyat. A leader bears the responsibility of earning the respect of the people, not forcefully demanding it.

Looks like our political leaders’ wish is to become ‘emperors’.

In the process of being elected to run the government, we let our leaders gain control of the state’s ideological apparatuses and we let them own the Fourth Estate (the media). And that makes it easy for them to feed us with political propaganda and bull-shit daily. We let these ‘emperors’ portray themselves as bigger than life which is mere fallacy.

We have allowed our leaders to become autocrats and even kleptocrats.

But 47 years is a long time, too long a time. We cannot allow the situation to continue … NO, We cannot allow this mafiosos to continue to spill verbal diarrhea and pillage the nation.

The time has come and it is NOW - to make that inevitable change. The future generation's very existence depends very much on what you and I decide today.

Sabahans: It is time to speak up. The truth is undeniable, it is so evident.

Charity Begins With The Voters

Why would a state encourage illegal immigration in spite of strong opposition from its citizens?

According to objectives and norms the immigration department should be protecting citizens from being overwhelmed by migrants, that they and the state will monitor and restrict illegal immigrants’ entry into the country and strictly control citizenship applications on behalf of its citizens.

This is what happens in all democratic countries run by decent leaders.

“My research on Filipino immigration to Sabah shows how Malaysia utilizes census practices and documentation to incorporate an illegal immigrant population from the Philippines. Illegal immigrants play an electoral role in Sabah because of the loosely institutionalized nature of citizenship, a feature common to many other developing countries. Our examination of Malaysia reveals several elements of illegal immigration and citizenship that are common to migratory flows in other developing countries”.........KAMAL SADIQ, University of California-Irvin.

Barisan Nasional's "victory" in the 12th general election could not have happened had Sabah and Sarawak turned the chips around. But how did this happen?



Sabah's population has escalated from 3.1 million in 2003 to 5.1 million in 2009, according to reliable sources. Where did this 2 million people come from? Are these the " FIXED DEPOSIT " that Najib has been bragging so much about? Perhaps an immediate investigation should be conducted by the relevant authorities such as the, Registration Dept, Immigration Dept, Health Dept, the Police and the Malaysian Anti Corruption Commission. There again, on seconds thoughts, it’s a vain cause. The outcome will sure draw blanks...’NO FURTHER ACTION’ as it has been in the past.

In a press statement issued by two(2) parrots aligned to UMNO/BN, namely John Ambrose and Clarence Bongkos Malakun, both have proven their worth as boogey men of UMNO/BN. Ambrose had this to say " developments in all areas are on-going and with the present undertaking among the people there is a strong tendency that the BN will again be retained when the next general elections is held".

Malakun however had said the BN government in Sabah, under the leadership of Chief Minister Datuk Seri Musa Aman, had been performing excellently, not only on matters concerning physical development but also on matters related to social development, particularly maintaining racial harmony among various ethnics here - “Indeed the level of tolerance among the various races residing in Sabah has been acknowledged at large, as unique, if not the best.”

Now, allow me to ask these self-proclaimed very "distinguished gentlemen" … what ‘people’ is Ambrose referring to and which ‘race’ is Malakun talking about? Either both are totally blind or they must be living on the moon.

On behalf of the people of Sabah and all Malaysians, we demand an explanation from Najib Tun Razak and Musa Aman to explain how in the world could "illegal immigrants" qualify to obtain cash payouts in the name of KUMPULAN WANG AMANAH PELAJAR MISKIN (KWAPM), through BANK SIMPANAN NASIONAL , BANK RAKYAT??



Ironically, schools are being used to authenticate the legality and authenticity of the applicant and recommend the students for such payouts. Is there a conspiracy guided by instructions from certain quarters in the government?



It's common knowledge that the issuance of Malaysian Identity Cards through fraudulent means is being used to legitimize "illegal immigrants" as voters. They automatically become bumiputras, are given land, projects and even stand as candidates as well as become Cabinet Ministers.

Documentary evidence has been produced such as in the publication of “I.C. Palsu” and sworn declarations of involved people. Till today, no action has been taken and the government refuses to set up a Royal Commission on the illegal immigrants and “Project I.C.” issue. Though unethical it may be, it’s not at all surprising as the word ethics does not exist in the dictionaries of the corrupted.

Claiming ignorance when there’s negative publicity is bliss in the political arena.

As such I wouldn't be in the least shocked if the present UMNO/BN government of Sabah denies or claims ignorance on this revelation. Such will be the arrogant statements of UMNO/BN "Pollute-cians" as their main priority is smooth sailing to victory in the 13th general elections.

The Opposition parties in Sabah should get their act together and start unearthing what's going on behind the scene of UMNO/BN and expose them, rather than demanding seats for the next election and clamouring for publicity.

A government’s main purpose and mission is to ensure the livelihood and wellbeing of its citizens in a fair, liberal and just manner.

Besides that, its primary objective is to ensure SAFETY and SECURITY of and for ALL ITS CITIZENS.