It’s not about just a few dollars more

Unbeknownst to Temenggong Oyong Lawai Jau in 1962, downstream of his young farms in Ulu Baram, the potential of the rich oil deposits of the Baram Delta and  that of the huge gas deposits of Central Luconia was already in the eyes and later  the pockets of the new Paramount Chiefs from Malaya.  

Not only was Sarawak ‘overshadowed’ by the big fruit garden across the sea, but the ‘plucking’ of its natural resources remains an inequitable tradition. In other words, the ‘wealth sharing’ principles were never transparently resolved ever since the formative years and have reared its ugly head recently.

With resounding calls from members for SPG to speak out on the current phase of Sarawak’s Oil & Gas state of affairs, the SPG Media Communications Unit is compelled to respond with strong words of caution: “Be transparent in the fight for our rights!”.

Our last SPG event was a public forum in Kuching entitled ‘Fight for your Rights, Fight it Right’ in February 2020. In that forum, we presented a paper on the ‘History of Oil & Gas in Sarawak’ and briefed the audience on a journey throughthe ‘ups’ and mostly ‘downs’ of our fight for the indisputable and inalienable rights to our own Oil & Gas resources. 

We now want to share a presentation that we made back in 2015.

Maybe SPG was punching beyond its weight when it gave its first presentation to Sarawak’s Ministry of Industrial Development (as it was named then) in 2015 in a  paper entitled ‘Sharing of Resources – Universal Principles of Resource Sharing’.  

While in the same presentation SPG’s assertion that the PDA74 was ‘illegal’ and unconstitutional as far as Sarawak is concerned was seen by some quarters as a ‘radical’ view, it has now become an acceptable argument for the basis to negotiate, redress or revise the control and governance of our Oil & Gas resources and revenues, perhaps going even further back to MA63 itself.

What might not have sunk in then was SPG’s call for a comprehensive framework and treatment on the issues of Ownership, Authority and Revenue (“OAR”) of our Oil and Gas resources.

As such, a political solution culminating in a ‘commercial arrangement’ is a flawed presumption towards solving the fundamental issues of OAR, which is a multi- dimensional concept encompassing constitutional, regulatory, authority, economics and political solutions based on equitable ‘wealth-sharing’ principles which Sarawak’s founding fathers in Malaysia had earlier cautioned on.

To reduce all of these to a mere ‘commercial arrangement’ would not only be unwise but in utter disregard of the inherent interests and undeniable birthright of present and future generations of Sarawakians. 

We hereby share the global experience and examples of OAR framework and treatment as an effort towards ensuring transparency and clarity in negotiating for the return of Sarawak’s estranged rights to its own Oil and Gas resources.

1) Ownership of Oil and Gas resources

The rights and ownership issues have always been a delicate and emotional balance between Federal, State, Provincial, Communal and Individual. The most common resolution on the issue is via the nation’s constitutional provisions.

Hence, there must be clarity in the constitutional provisions regarding ownership of natural resources that not only must meet the legitimate aspirations of domestic stakeholders but also the confidence of the international community and investors. 

However, ownership is often misunderstood or mistaken, purposely or otherwise, with issues relating to management, control and sharing of revenues from the natural resources.

As such, if we are careless, there is the grave danger that ownership is lost forever in return for mere additional revenues allotted, just ‘for a few dollars more’, a difference between tens of billions and hundreds of billions of ringgit, as we have already witnessed right in front of our own eyes over the last 46 years at least.

Here are global examples of who are the ‘owners’ of natural resources:

3) Treatment/Sharing of revenue derived from Oil & Gas Resources  

The issues of ‘revenue-raising’ and ‘wealth-sharing’ (who collects and how is it distributed) of revenues derived from Oil and Gas and other natural resources is often the key issue challenges of a nation’s political and economic stability. 

In most cases, it is handled by those with the authority to manage and develop the Oil and Gas resources (e.g. National Oil Company).

However, it can also be undertaken by separate mechanisms in accordance with agreed ‘wealth-sharing’ principles as shown below.

The overriding concern should be to ensure an equitable and transparent collection and sharing of wealth process.

Conclusion

There is a need to negotiate for a holistic and transparent OAR framework; Ownership, Authority and Revenue. Never for the sake of mere political expediency and chicanery.

However, we cannot start from a position of inequality. The nation’s wealth sharing principles must be clearly established on an equitable and sustainable basis and made known to and accepted by all.

It must also be acknowledged that each State in the Federation has absolute inalienable rights over its own natural resources and the revenues therefrom and none may be deprived of the same. 

Thus the need that all stakeholders, be they politicians, technocrats, businessmen

or the rakyat must be in the open, with no avenue for ‘back door’ deals, such as those that led to the illegal, inequitable and unsustainable PDA74 in the first place.

Sarawak is in a position to create and make the ‘new deal’ for the future generations of Sarawakians and if it entails the review, revisit, revision and repeal of the PDA74, PSC or PETRONAS itself, so be it.

In the name of all future generations, it’s not about just a few dollars more.

SPG Media Communications Unit

1st July, 2020