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NATIONS were making diverse claim to the breadth of their territorial sea and the control of their natural resources with Britain involved in the discussion.

To protect North Borneo while waiting for a convention, the North Borneo (Alteration of Boundaries) Order in Council 1954 was passed with the relevant provision reading:

“2. The boundaries of the Colony of North Borneo are hereby extended to include the area of the continental shelf being the seabed and its subsoil which lies beneath the high seas contiguous to the territorial waters of North Borneo.”

Those differences were discussed by the United Nations in 1956 resulting in 1958 in four conventions : (1) on the Territorial Sea and the Contiguous Zone, (2) on the High Seas, (3) on Fishing and Conservation of the Living Resources of the High Seas and (4) on the Continental Shelf.

Those conventions which Britain signed in 1958 define the terms used by the said Order in Council, viz:

(1) “continental shelf” to mean “the seabed and subsoil of the submarine areas adjacent to the coast but outside the areas of the territorial sea, to a depth of 200 meters, or beyond that limit, to where the depth of the superjacent waters admits of the exploitation of natural resources”;

(2) “territorial sea” to mean “the belt of sea adjacent to its coast”;

(3) “contiguous zone” to mean “the zone of the high seas contiguous to its territorial sea” where it may not extend beyond twelve miles from the baseline which the breadth of the territorial sea is measured; and

(4) “high seas” to mean all parts of the sea that are not included in the territorial sea or in the internal waters of a state..

The Sabah Land Ordinance was consequentially amended when its s 4 defines “land” to include the continental shelf and the contiguous zone. In 1960, North Borneo enacted its Petroleum Ordinance 1960 (Ordinance No.21 of 1960) with rules made thereunder to govern the related activities.

There was pressure on the British Government to let go of their colonies after the 14 December 1960 General Assembly resolution which condemned colonialism, in these words: “Declaration on the Granting of Independence to Colonial Countries and Peoples.

1. The subjection of peoples to alien subjugation, domination and exploitation constitutes a denial of fundamental human rights, is contrary to the Charter of the United Nations and is an impediment to the promotion of world peace and co-operation

After a failed attempt in 1958 to discuss the idea of a close association of North Borneo, Sarawak and Brunei, the idea of the Malaysia Federation was mooted by Tunku Abdul Rahman (“Tunku”) in 1961 but was opposed in a joint statement where Donald Stephens from North Borneo was one of the signatories.

The federation was formed on 16 September 1963, with Brunei declining to join, following the Cobbold Commission report, the establishment of the Inter-Governmental Committee (“IGC”) and the favourable fact-finding mission of the United Nations.

Stephens, as the leader of Upko, a Kadazan based party, became the Chief Minister of Sabah in 1963 while Tun Mustapha, head of Usno, a Malay-based party, became the head of state, there was constant simmering between the two and with Tunku siding Mustapha. This resulted in Stephen resigning as the chief minister in 1964 and was made a federal minister where he continued to raise the “20 points” issue. 

Upko was left out of the state government after the 1967 state election. When made a federal minister, Stephens was unrelenting in pursuing the rights of Sabah and called for renegotiations for Sabah’s participation in Malaysia which led to his stepping down as the federal minister. He then announced the disbanding of Upko on 9 December 1967 earning the praise of Tunku. He left for Australia to become Malaysia High Commissioner from 1968 to 1973.

North Borneo became independent in 1963, its sea territory could be described and illustrated by graph A:

Thereafter, Malaysia enacted various laws applicable initially only to Malaya for the purpose of the exploitation of the continental shelf and for petroleum mining.

One is the Continental Shelf Act 1966 (Act 57). This Act makes provisions for the exploration and exploitation of the continental shelf adjacent to the States of Malaya. It provides for application to be made under the Petroleum Mining Act 1966 for the said exploration and exploitation.

It defines continental shelf as illustrated in the said graph. It probably was not made applicable to Sabah because the area of the continental shelf belongs to Sabah.

It was amended in 1969 by the Emergency (Essential Powers) Ordinance No.10,1969) to apply to the whole of Malaysia with the proviso that in its application to Sabah and Sarawak it shall have effect only with respect to the exploration, prospecting or mining for petroleum in off-shore land.

It was revised by the Continental Shelf Act 1966 (Act 83) and modified by the Continental Shelf (Amendment) Act 2009 (Act A1351), resulting in the following definitions:

“continental shelf” means the sea-bed and subsoil of the submarine areas that extend beyond the territorial sea

(a) throughout the natural prolongation of the land territory of Malaysia to the outer edge of the continental margin as determined in accordance with section 2B; or

(b) to a distance of two hundred nautical miles from the baselines from which the breadth of the territorial sea is measured in accordance with the Baselines of Maritime Zones Act 2006 (Act 660) where the outer edge of the continental margin does not extend up to that distance, but shall not affect the territory of the States or the limits of the territorial waters of the States and the rights and powers of the State Authorities there.”

“natural resources” means—(a) the mineral and other natural non-living resources of the sea-bed and subsoil; and (b) living organisms belonging to sedentary species, that is to say, organisms which, at the harvestable stage, either are immobile on or under the sea-bed or are unable to move except in constant physical contact with the seabed or the subsoil.

“petroleum” includes any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation.

All rights to the exploration of the continental shelf and the exploitation of its natural resources are vested in Malaysia and exercisable by the Federal Government (s.3(1). The Agong can make regulations governing the seabed and subsoil of the submarine areas within the limits of the territorial waters of the States (s.6(2))

Next came the Petroleum Mining Act 1966 (Act 58 and Act 95) which was also initially for the States of Malaya. Provisions are made for exploration licence and petroleum agreement regarding exploration, prospecting and mining for petroleum. It was also amended in 1969 to apply to the whole of Malaysia by the said emergency ordinance.

Provisions were made for the revocation of all state law relating to petroleum mining and for the Federal Government to take over the benefit and burden of any agreements already entered by the Sabah Government.

Then came the Petroleum Development Act 1974 and the formation of Petronas which was endowed with the entire ownership in, and the exclusive, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia.

One final relevant legislation is the Territorial Sea Act 2012. This Act was passed because the Emergency (Essential Powers) Ordinance, No. 7 1969 ceased to have effect and after Malaysia had ratified UNCLOS 1982 in 1996. It sets the breadth of the territorial sea of Malaysia for all purposes to be 12 nautical miles. However, for the purposes of the Continental Shelf Act 1966 [Act 83], the Petroleum Mining Act 1966 [Act 95], the National Land code [Act 56/65] and any written law relating to land in force in Sabah and Sarawak, territorial sea shall mean such part of the sea adjacent to the coast thereof not exceeding 3 nautical miles measured from the low-water line. This mean shrinking Sabah territorial sea from 12 nautical miles to 3 nautical miles as was done in 1969 by Emergency Ordinance No. 7. UNCLOS 1982 sets:

(1) the breadth of the territorial sea to a maximum 12 nautical miles measured from determined baselines (Article 3);

(2) a maximum 24 nautical miles contiguous zone from the baselines from which the territorial sea is measured (Article 33); and

(3) a maximum breadth of 200 nautical miles exclusive economic zone from the baselines from which the territorial sea is measured (Article 57).

Thus, North Borneo and after it became Sabah is entitled, if not for the various legislations referred earlier, to the territorial sea, its contiguous zone, the continental shelf and to the 200 nautical miles exclusive economic zone under UNCLOS 1982, as illustrated by the following graph:

Graph showing what Sabah is entitled to under UNCLOS 1982

By those amendments, even in respect of the 3 mile off-shore land which Sabah is left with, you have to apply to a Petroleum Authority for the exploration, prospecting or mining for petroleum or for a petroleum agreement. Even that 3 mile off-shore land is gone as Petronas National Berhad or Petronas is endowed with it by the Petroleum Development Act 1974, s.2.(1):

The entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning and obtaining petroleum whether onshore or offshore of Malaysia shall be vested in a corporation to be incorporated under the Companies Act 1065 or under the law relating to incorporation of companies. 

The following graphs show the said entire ownership of Sabah by Petronas as enacted by the Petroleum Development Act 1974.

This article is not a legal discourse but a presentation of the legislative history with graphic illustrations to make for an easier understanding of Sabah territorial water, contiguous zone, continental shelf and exclusive economic zone

 Disclaimer: This article is for public information only and any other infernece is expressly negatived.

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