Sabah to ensure the 'best deal' from MA63
Published on: Tuesday, August 14, 2018
THE State Government will ensure that the 20 per cent oil royalty payment issue remains among its top priorities. Chief Minister Datuk Seri Mohd Shafie Apdal said the 20pc royalty payments would also be in line with what was promised in the (Warisan) manifesto and as such the State Government would ensure Sabah gets the "best deal" vis-à-vis the Malaysia Agreement 1963 (MA63). "There is already agreement on that but we need to fine tune the formula as there is a question whether it is based on gross, nett or 5+15 per cent profit which we are receiving at the moment."
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Shafie said this was among the demands of the state and it is something that was brought to the attention of the Prime Minister, adding the President of Petronas would also be meeting him on the matter. He was replying to Datuk Jahid Jahim (PBS-Tamparuli) on what steps have been taken to ensure whatever was agreed to in MA63 would be carried out by the Federal Government.Shafie also said that among the actions that had been taken by the state government in line with the MA63 is the setting up of several ministries i.e. the Law and Native Affairs Ministry, Education and Innovation Ministry and the Health and People's Well Being Ministry."This shows the commitment of the State Government to carry out its responsibilities regarding the law concerning Sabahans and to empower the State Government in health and Education.
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He said among the demands of the State Government was also to review the revenue from gas and oil received by the state and that the current petroleum cash payments not only need to be relooked but also increased. Star Tambunan Assemblyman Datuk Dr Jeffrey Kitingan asked a supplementary question on what are the State Government plans to ensure that the State rights that are not ensured under the State constitution can be carried out through executive legislation or otherwise, and secondly to pursue the 40 percent state revenue owed by the Federal Government to Sabah, as stipulated in the Malaysia Agreement 1963 and thirdly pursue the matter of 20pc oil royalty for the State.
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Shafie said although it's still early, to date there was already a general understanding that 20pc (royalty) will be given although it is not clear whether that is based on gross or on profit."Thus we have set up a Law and Native Affairs Ministry for the first time so that when claims are carried out it is under the basis of law. Those issues that do not fall under the laws, the law ministry will also look at closely for example the income received from tourism, although not spelt out under MA63. "This tourism income represents a big income for the State and Country but a system needs to be set up so the matter can be fine-tuned so we can receive this income." He said on the issue of the 40pc state revenue due, he said he had announced it before and he himself will lead to look into the matter. This is a serious matter for the state so we can receive the 40pc revenue in near future due to the current lack of funds. Shafie said other sources income (for the government) can be things as deep sea fishing licences, or labour levy."I realise It is not something that can be done in a short time but we have the determination to ensure it is carried out. "We don't want to see it is only based on 20pc (of nett) profit. If there is no profit then there is no income for the State. Thus I will press to ensure that each Petronas activity at the state level would involve the State Government in its operation."There must be the involvement of the State Government in all aspects of Petronas operations in the state where the state government must have a stake in the matter. "We also need a viable (State) vehicle to be involved in (Petronas) operations including in its downstream operations to ensure its success."I don't want there to be a monopoly at the Petronas level when there is downstream activities at the state level because we are aware if we have a stake in Petronas activities, even if the royalty profit drops our income from our engagement with Petronas is assured."Jeffrey then asked another supplementary question on whether the state government will activate the Mining and Land laws in the State where the State government will regulate the oil industry.Shafie said the State Government was looking into the matter."Soon I will have an enactment regarding minerals and lands (mining activities on land) to strengthen the powers of the State Government."Umno Keranaan Assemblyman Datuk Seri Masidi Manjun then asked a supplementary question on whether the State Government can ask to get a higher royalty. He said under the Petroleum Development Act 1974, the state government is given five per cent cash payment and the federal government receives five per cent cash payment (royalty) from Petronas.He urged the State Government to ask the Federal government for its commitment to give a bigger allocation from the oil revenue by surrendering its five percent share to the state government. I.e. the state receive a gross allocation of 10 per cent.Masidi said the federal government can do so because they already received other remuneration from dividends. He said this is because the federal government is the sole owner of Petronas and receives dividends when Petronas makes a profit plus they also receive taxes from the profit. Masidi suggested as an early move, while waiting for them to calculate the best formula, why don't ask the federal government to surrender their share to the state government.Shafie replied although it is a good idea, the State would stick to its demands of 20pc rather than just an extra 5pc as it is something that has been spelt out under the constitution and party manifesto. To a supplementary question from Umno Apas Assemblyman Datuk Nizam Abu Bakar Titingan on whether Shafie has allegedly said to the people (during the last General Election campaigning ) that only 5pc (income) should be given to the Petronas and 95 percent was to be used for the State, Shafie said he (Nizam) was probably confused and did not understand what he actually said.Stay up-to-date by following Daily Express’s Telegram channel.
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