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A State in Need, A System in Paralysis In Sabah, development is not stalled by lack of land, money, or demand. It is stalled by a planning system that routinely violates its own rules — choking investment, driving up costs, and turning approvals into moving targets. Projects don’t fail in construction. They fail at the planning desk.

Whether it is housing, roads, investment or employment, the state has the demand and the opportunities. Yet at the very front gate — the point where a development plan must be approved — many projects come to a grinding halt, trapped in a web of delays, shifting demands, and decisions that defy both logic and law.

The problem begins with the timeline. In Kuala Lumpur, development plans are approved within 90 days under the streamlined OSC 3.0 system. In Sabah, the process routinely drags on for over a year — sometimes several. But delay is only the symptom.

Beneath it lies a deeper failure - a planning system in which unlawful pre-conditions are imposed before approval, and legally binding approvals are later unravelled by post-approval demands, all without proper redress.

Pre-Approval Demands - Unlawful and Excessive

Before any development plan is approved, applicants are often faced with conditions that are not only unreasonable, but unlawful. Developers have been instructed to build roads far outside their development boundary to connect to unrelated areas. Others have been asked to relocate trees that are not on the development site, and not on land under the local authority’s jurisdiction.

Contributions are also routinely demanded for sewerage infrastructure, even though sewerage provision in Sabah is not under the jurisdiction of local authorities. Unless clearly authorised under state law, local councils have no legal power to impose or collect contributions for sewerage systems they do not build, maintain, or control.

In practice, major sewerage infrastructure is managed by state departments — not the local councils — making such demands legally questionable and administratively unsound.

These financial demands are also alarmingly arbitrary - a developer may be told to contribute over RM1 million, only for the figure to be revised downward to RM100,000 with no explanation and no change in scope. The message is unmistakable - it’s not about the law; it’s about leverage.

These conditions are illegal — ultra vires, with no basis in law. Under Sections 4A and 4B of the Town and Country Planning Ordinance (Cap. 141), local authorities are empowered to regulate, control, and plan the development of land and buildings within their area. 

They are not authorised to impose conditions unrelated to planning purposes or beyond their jurisdiction — such as constructing offsite infrastructure or contributing to utilities like sewerage systems that fall under the control of other state departments. Imposing such demands without express legal authority violates the limits of their statutory powers.

Post-Approval Interference - Undermining Legal Finality

Even after the long and expensive process of securing Development Plan approval, developers in Sabah continue to face unlawful interference. The most common weapon used in this second phase is the Occupation Certificate (OC).

Local authorities regularly impose fresh demands at the OC stage — leveraging their control over certification to extract additional works that fall entirely outside the scope of the approved plan.

The OC is the final regulatory sign-off that allows a building to be legally occupied. No OC means no handover, no sales, and no return on investment.

One particularly egregious case involves a drainage system that was approved under the DP, constructed exactly as required, inspected, and completed. And yet, when the time came to issue the OC, the developer was told the drains must now be widened — or the certificate would be withheld. No new technical justification. No change in regulatory standards. Just a new demand, imposed after the fact, with no legal basis.

The Ordinance does not authorise local authorities to impose unilateral changes to approved plans without a proper legal process. Where changes are needed after approval, they must be justified, formally processed, and mutually agreed — especially where they result in significant additional cost. Otherwise, such demands are not only outside the Ordinance, but also contrary to the principles of administrative fairness and planning certainty.

Other developers have been asked to demolish buildings or redesign road access that had already been approved. These are not clerical issues or minor clarifications — they are material changes imposed without legal process and without compensation.

Legal Precedent Reinforces the Need for Certainty

The High Court in Peak Sunrise Development Sdn Bhd v Koo Tuk Su & Ors [2023] 8 CLJ 942 underscored the legal effect of planning approvals and the authority of local councils under Cap. 141.

There, the court held that land surrendered for road reserves under an approved development plan is held in trust for the local authority, and that such approvals — once granted — cannot be casually revoked.

More significantly, the Court found that a local council's statement of “no objection” amounted to a deliberate approval, and it was legally unjust for the council to later backtrack.

This judgment reinforces a key concern in Sabah’s planning environment - that once a development plan or related approval is given, it must carry legal weight. Post-approval reversals — whether regarding road access, drainage specifications, or car park heights — not only damage investor confidence but violate the principle of administrative finality.

The court’s reminder that public authorities must not “backpedal” on approvals is especially pertinent in Sabah, where the absence of an operational Appeals Board leaves developers vulnerable to precisely this kind of arbitrary behaviour.

A Case in Point — The 1Jessleton OC Delay

Nothing illustrates the depth of Sabah’s planning dysfunction more vividly than the recent case involving the 1Jessleton condominium in Kota Kinabalu. Despite completing construction, the project was denied its Occupation Certificate (OC) over a supposed ceiling height issue at the car park entrance — 2.05 metres, in a basement lot.

This condition was not part of the original approved plans. It was imposed after the fact.

More troubling, the justification cited was the Uniform Building By-Laws 2022 (UBBL 2022) — a regulation that does not even apply to Kota Kinabalu, as the local authority (DBKK) is not bound by the UBBL unless it has been lawfully adopted. It hasn’t. 

The officer simply invoked a non-applicable law, created a new standard on the fly, and withheld the OC unless the condition was met. It took ministerial intervention to resolve the impasse — not because the issue had merit, but because it clearly didn’t.

This wasn’t about compliance. It was about control.

When new conditions can be invented at the certification stage — citing regulations that don’t even apply — the message is loud and clear - approvals mean nothing, and legal certainty is an illusion. This is exactly the kind of post-approval interference that has become endemic to Sabah’s planning process.

The Law Already Anticipates Harm from Post-Approval Changes

The very fact that section 28G(7) of the Town and Country Planning Ordinance provides for compensation when planning permission is modified — even lawfully — confirms that such changes are serious and potentially damaging.

The provision requires local authorities to compensate developers for costs already incurred if a permission is changed after works have begun.

And yet in practice, post-approval changes are routinely imposed without any legal modification process, and with no compensation offered. This amounts to not only an abuse of process — but a disregard of the Ordinance itself.

Where the Ordinance provides compensation for formal, lawful changes, the imposition of informal, unlawful modifications is plainly worse — and entirely without legal foundation.

The Human and Economic Cost

The consequences are not academic. Every post-approval demand increases construction costs, delays completion, and drives up the eventual selling price. Homes become less affordable. Infrastructure is delayed.

The trust of investors — particularly those from outside the state — is quietly eroded. Projects become unbankable, and capital migrates to jurisdictions with clearer, fairer, and faster planning systems.

Sabah’s underdevelopment is not just due to lack of resources. It is the direct outcome of a planning culture that behaves less like a public regulator and more like a private gatekeeper.

The Appeals Board - A Solution Still on Paper

Sections 53 to 58 of the Town and Country Planning Ordinance provide for an Appeals Board — a statutory tribunal to hear appeals on any planning-related decision, direction, or condition.

In Peninsular Malaysia, such Boards function as a vital check against abuse and arbitrariness. In Sabah, however, the Board exists on paper but has never been properly constituted or made functional. This legislative silence effectively leaves developers with no legal recourse.

The 1Jessleton case shows why the Board’s absence is so damaging. When a non-applicable by-law can block a completed project — and there’s no appeal — the system isn’t just broken. It’s actively hostile to development.

Without a functioning Appeals Board, developers cannot challenge ultra vires demands or unlawful preconditions. As a result, planning conditions are treated as tools of leverage, not as matters of law. This undermines the entire framework of planning law and invites abuse.

The Sabah government must act. The Appeals Board must be activated. Local authorities must be required to justify all conditions in writing, with clear legal authority cited. No more verbal instructions. No more unexplained financial demands. No more abuse of the OC process to extract concessions outside the law.

Why the Courts Are Not Enough

While judicial review in the High Court remains available in principle, it is a remedy of last resort. The process is often costly, time-consuming, and procedurally limited — focusing only on the legality of the decision-making process, not the merits or fairness of the conditions imposed.

In practice, this makes judicial review an inadequate substitute for a functioning Appeals Board. Without a dedicated and accessible statutory tribunal, most developers are left with no realistic avenue to challenge unlawful or unreasonable planning demands.

What the Appeals Board Could Fix or Curb

If properly constituted and empowered, the Board could play a pivotal role in restoring legality, accountability, and consistency across Sabah’s planning system, resolving many of the recurring issues developers face. Any person aggrieved by a refusal, condition, direction, or decision relating to planning permission may appeal to the Appeals Board. 

Below are key issues that the Appeals Board could address — or should be enabled to address through targeted reform.

1. Unlawful Conditions Before and After Approval

Conditions requiring developers to build roads unrelated to their site, pay arbitrary sewerage contributions, or alter approved drainage after the fact are not only unreasonable — they are often unlawful. These matters fall squarely within the scope of planning permissions and are directly challengeable before the Board.

A functioning Appeals Board could invalidate such conditions, reinforcing the principle that all planning requirements must be clearly authorised by law.

2. Abuse of the Occupation Certificate (OC) Process

The OC stage is increasingly used as leverage — with new demands imposed long after Development Plan (DP) approval. These often have no basis in law and contradict the approved plans. Although the OC itself is governed under building by-laws, when it is used to bypass or override prior approvals, this should fall within the Board’s review.

Legislative clarification may be needed to confirm that planning-related conditions imposed at the OC stage are appealable — especially where they amount to a de facto variation of the DP.

3. Conflicting Directions from Different Agencies

Unclear jurisdiction between departments — such as local councils, the Public Works Department (PWD), or the Civil Aviation Authority (CAAM) — often leaves developers stuck between conflicting directives.

The Board could provide legal clarity on whether a particular agency has the power to impose certain conditions, preventing duplication, delay, and regulatory overreach.

4. Imposition of Standards Without Legal Mandate

Planning conditions are sometimes imposed based on departmental practices — not law. For example, blanket requirements for Urban Stormwater Management (MASMA) compliance or Traffic Impact Assessments (TIA) are often treated as mandatory, even where no enabling provision exists.

The Board could review these conditions and reaffirm that only requirements anchored in legislation or gazetted planning instruments may be enforced.

5. Arbitrary Naming or Language Requirements

Some local authorities insist that project names be in Bahasa Malaysia, or require approval from Dewan Bahasa dan Pustaka. These are not requirements under Cap. 141. When tied to planning approvals, such policies exceed legal authority. The Appeals Board could strike down these practices where they have no statutory basis.

6. Delays from Referrals to Non-Statutory Bodies

Development plans are frequently referred to departments with no formal role under the Ordinance — such as the Health or Landscape Departments — causing unnecessary delays.

The Board could call out these practices and reinforce that only relevant, legally recognised bodies should be involved in plan approvals.

7. Social Impact Studies Without Legal Framework

Developers are sometimes required to carry out social surveys or community studies without any clear legal basis. These studies, while potentially valuable in some contexts, cannot be imposed as conditions unless specifically authorised by law. The Board could set clear limits to prevent the imposition of extra-legal requirements.

Not Just a Board — A Safeguard

These issues are not isolated. They are part of a broader breakdown in the integrity of the planning process — one where conditions are treated as tools of negotiation rather than matters of law.

An operational and properly empowered Appeals Board would not just resolve individual grievances. It would restore structure and legality to a system that has for too long operated without oversight.

It has been more than 20 years since the law provided for an Appeals Board. Not constituting it after all this time is not just an oversight — it is an abdication of duty. It’s time to end the silence and give Sabah the institutional recourse it has long been denied.

Planning Must Serve the Public

Once a development plan is approved, it must be honoured. A system that undermines its own decisions is a system that cannot be trusted. Digitising the process, enforcing transparency, and upholding legality are not just administrative upgrades — they are safeguards against abuse.

Because let’s be honest - when conditions are imposed without legal basis, when approvals are routinely revisited and renegotiated, when millions are demanded and then quietly reduced with no change in facts, the issue is no longer one of inefficiency. It raises serious questions about integrity and governance.

What we are seeing is not just bad planning. It is planning distorted by hidden incentives, fuelled by discretionary power with no oversight. It is a system where those who push back are punished, and those who play along are rewarded. And in such a system, the public always loses.

Sabah does not lack laws. It lacks enforcement. It lacks institutions willing to stand between discretion and abuse. It lacks a planning culture that sees development as a shared public good, not a private transaction.

Until the state confronts this reality head-on — by operationalising the Appeals Board under Sections 53–58, upholding the integrity of approved development decisions, and ensuring that all conditions or changes are grounded in clear legal authority — abuse of process will continue to hide behind the language of 'conditions' and 'compliance'.

Sabah has the land. It has the investors. It has the need. But no amount of geography or goodwill can overcome a system that quietly rewards obstruction and trades certainty for discretion.

And when approvals can be undone, costs rewritten, and conditions invented, Sabah becomes a warning label for investors — not an invitation.

If Sabah is to move forward, planning conditions must stop being bargaining chips — and start being law.

The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: Forum@dailyexpress.com.my