It is wrong! I am unhappy and saddened by the arbitrarily decision bu our Government. The continue lack of respect to agreement made shows the government of BN would do anything to remain in power.

This shows the schism created by Mahathir runs deep. This is one example his continuous lack of respect for the rule of law during his time lead his successor to forget to govern wisely. Ever since Carcosa was return to Malaysia, lead by Anwar Ibrahim at that point of time, agreement made seems to be broken at whim. They broke agreement when it suits them and funny, when Pak Lah decide to stay on, the old man cries foul, and invoke for all to hear the gentlemen understanding made by both of them whereas Pak Lah would resign soon after to make way for Najib. Yes agreement made and broken when it suits them.

That is why the opposition would never rule, for even though they win the next election BN would by all means cling to power by declaring a state of Emergency! I am sorry, to me the leaders of BN would always move the goalpost when it suits them, This is sad! This is Islamic ala UMNO and PAS! I hope my readers would think and ponder for a while and take a moment pause!

Ku Li: Oil royalty tussle has wider implications

KUALA LUMPUR, Nov 29 — Founding Petronas chairman Tengku Razaleigh Hamzah has insisted the federal government should not interfere with the national oil firm's duty to give 5 per cent oil royalty to oil-producing states.

The Umno veteran said the Najib administration's refusal to pay the fee to Kelantan has cast serious doubt on the Putrajaya's "respect for the sanctity of contracts and the rule of law" and has implications beyond just that state.

Tengku Razaleigh says the federal government is not respecting its basic obligation to pay oil royalty. — File pic

"Let's not talk about attracting FDI and increasing domestic investment to take our economy to a higher level when we do not respect our basic obligations," the Kelantan prince wrote in his weblog this morning.

This is the second such criticism that the government has reneged on its agreements, the first being for its 20-year-long refusal to allow Communist Party of Malaya chief Chin Peng from returning home under the Hatyai peace accord signed on Dec 2, 1989. The 85-year-old has sued to return home but the courts have ruled against him while the government said it can't forgive him for his war against the state that killed thousands.

The DAP has criticised the ruling Barisan Nasional for the Chin Peng snub, while its Pakatan Rakyat ally, PAS which has ruled Kelantan since 1990, has asked the Gua Musang MP to head a caucus to press for Kelantan to get the oil royalty for oil and gas extracted off its shores. Tengku Razaleigh has yet to decide but his party leaders have cautioned him against doing so.

Prime Minister Datuk Seri Najib Razak has said Putrajaya will only offer "compassionate payment" through the Federal Office as the north-eastern state is not eligible for oil royalty because the fossil fuel is extracted beyond the three nautical mile state limits. It had changed the oil royalty to a similar payment for Terengganu when the state fell to the opposition in the 1999 general election.

However, both Sabah and Sarawak get oil royalty as guaranteed under the Petroleum Development Act 1974 which Tengku Razaleigh had drafted.

"I helped craft and negotiate the Petroleum Development Act. As chairman of Petronas, I signed separate and identical agreements in respect of these payments with each of the mentris besar of the states.

"I must insist that Petronas is bound by them and that the federal government should not interfere in their fulfilment," said the politician popularly known as Ku Li.

Najib has said Putrajaya will only offer ‘compassionate payment’.

He noted that the government's response "violates the letter and the intent of a solemn agreement signed between each state government and Petronas under the Petroleum Development Act which is written in plain language that even schoolchildren can understand.

"The constitutional rights of the people of Kelantan are denied. However this has implications far beyond Kelantan," he said.

Tengku Razaleigh said Putrajaya's refusal negates an agreement signed between the Kelantan government and Petronas and "by implication, it negates identical agreements signed by Petronas with every other state and deprives the people of their constitutional rights".

"The government's refusal to recognise a straightforward contractual obligation on Petronas's part puts a question mark over the status of oil payments due to the other oil-producing states," he said.

"The states' rights to 5 per cent of profit derived from the extraction of any petroleum resources is based on a quid pro quo according to which the states vested entirely and in perpetuity all their rights and claims to petroleum resources to Petronas.

"In return for this Petronas is legally bound to pay the states the 5 per cent directly," he added.

The former Semangat 46 chief said the state oil firm's recalcitrance to pay under the law will make the states particularly Sabah and Sarawak "now wonder if the corresponding Vesting Deed by which they vested all their rights in their petroleum resources to Petronas remains in force" as the government's response was to replace Petronas's legal obligations under the Petroleum Development Act with an arbitrary "compassionate payment" from Putrajaya.

Oil and gas is extracted in the waters off Kelantan, Terengganu, Sabah and Sarawak. The discovery of fossil fuels off the Malay peninsula in the 1970s helped fuel economic growth but critics say the government is spending the petro-ringgit rather than salting it away.

The four states are also among the poorest in the country but Petronas has used its cash pile to build its iconic Petronas Twin Towers headquarters and the Putrajaya administrative capital apart from contributing some 40 per cent of the annual operating expenditure under the Budget.

The oil and gas fields off Kelantan waters are in a jointly-disputed area and is being developed together with Thailand.

razaleigh.com

Tengku Razaleigh’s official weblog

honouring our agreements

with 2 comments

The Government has now responded to Kelantan’s claim to a portion of the profits derived from petroleum resources extracted offshore by PETRONAS.

Its response violates the letter and the intent of a solemn agreement signed between each State Government and PETRONAS under the Petroleum Development Act.

That agreement is made out in language simple enough for a schoolboy to understand, in both Bahasa Malaysia and English.

The Constitutional rights of the people of Kelantan are denied. However this has implications far beyond Kelantan:

1) It negates an agreement signed between the Kelantan Government and PETRONAS. By implication, it negates identical agreements signed by PETRONAS with every other state and deprives the people of their constitutional rights.

2) The Government’s refusal to recognize a straightforward contractual obligation on PETRONAS’s part puts a question mark over the status of oil payments due to the other oil-producing states. The States’ rights to 5% of profit derived from the extraction of any petroleum resources is based on a quid pro quo according to which the States vested entirely and in perpetuity all their rights and claims to petroleum resources to PETRONAS. In return for this PETRONAS is legally bound to pay the states the 5% directly

3) If PETRONAS no longer recognises its legal obligation to pay the States what is due to them under the Petroleum Development Act, the States, and in particular Sabah and Sarawak, will now wonder if the corresponding Vesting Deed by which they vested all their rights in their petroleum resources to PETRONAS remains in force.

4) The Government’s response substitutes for PETRONAS’s legal obligations under the Petroleum Development Act an arbitrary “compassionate payment” from the Federal Government. This casts serious doubt on the Malaysian Government’s respect for the sanctity of contracts and the rule of law. Let’s not talk about spurring investment to take our economy to a higher level if we fail to understand the importance of abiding by contractual obligations.

I helped craft and negotiate the Petroleum Development Act. As Chairman of Petronas, I signed separate and identical agreements in respect of these payments with each of the Mentris Besar of the States. I must insist that PETRONAS is bound by them and that the Federal government should not interfere in their fulfillment.

Tengku Razaleigh Hamzah

Member of Parliament, Gua Musang

–

I will discuss my response to the proposed parliamentary caucus on this issue in my next posting.

I last wrote on the issue of Kelantan’s right to oil payments in my letter to the Mentri Besar of Kelantan in July this year. PETRONAS was formed to unite the country under a single and simple formula for sharing the bounty of our petroleum resources. Any unraveling of this formula could have serious consequences for our Federation.