Oil Forum in Kota Bharu

By Tengku Razaleigh,

At 9pm tonight, I will be addressing the people of Kelantan at the Stadium Sultan Muhamad Ke IV, on the oil royalties that are their sovereign right.

I have written on this issue before.

http://razaleigh.com/2009/11/28/oil-payments/

http://razaleigh.com/2009/07/31/letter-to-mb-of-kelantan-on-oil-royalties/

Here are the Vesting Deeds I referred to:-

The larger issue is State rights. Malaysia is a Federation of sovereign states. The Federal government has no rights over any petroleum resources except where these have been assigned to the Federal Government by the respective state governments. The novel mechanism we created for this assignment was Petronas.

The states vested all their rights in their petroleum resources in perpetuity to this entity incorporated under the Companies Act. In return Petronas bound itself to pay the respective state 5% of the profit oil from any oil found on or offshore of the state. I signed those undertakings with the Menteri Besar of each of the states.

Petronas is all about the Federation of Malaysia. It was formed to strengthen and protect the Federation. In founding it we intended to strike a balance which ensured that while respecting the sovereign rights of the individual states over their oil resources, all the citizens of the country, no matter what state they lived in, had some part in the bounty of oil.

Sarawak and Sabah shared their oil bounty in the spirit of strengthening the Federation. The arrangement struck with those states was extended to all the other states on the principle of kesaksamaan, or fairness.

By ignoring both the letter and the spirit of those agreements, the Federal government sets aside the very purpose of Petronas. More importantly there is a failure to understand the origin of Federal powers over state resources. We have forgotten that the states existed prior to the Federation. The Federation only exists because the states were willing to vest their rights in it, such as their rights in oil.
Not the other way around. The Federation itself rests on the principle of fairness to all the states, and to all our citizens, wherever they live. When the government of the day ignores this principle, it is ignoring a basic principle holding our country together.

There has been too much centralization of power in the federal government. Powers functions and rights that belong to the states must be restored to them.