It still hurts
Still waiting: An MA63 rally at Padang Merdeka in Kuching in 2019; such scenes are repeated regularly as Sabah and Sarawak keep pressing for the agreement's (below) conditions to be met by the Federal Government. — Filepic/The Star
ON Aug 10, 1965, one day after Singapore separated from Malaysia, then Sabah chief minister Tun Fuad Stephens wrote to its prime minister, the late Lee Kuan Yew, whose English name was Harry. Here's an excerpt from that very personal missive.
'My dear Harry,
Billed as RM9.73 for the 1st month then RM13.90 thereafters.
RM12.33/month
RM8.63/month
Billed as RM103.60 for the 1st year then RM148 thereafters.
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These ordinances disrupted the federal balance and centralised control over petroleum, law enforcement, and legislative powers. Territorial Boundaries Undermined - From Continental Shelf to 3 Nautical Miles Ordinance No. 7 and subsequently the Territorial Sea Act 2012 (TSA 2012) codified the restriction of state jurisdiction to 3 nautical miles from the coast. This legal sleight of hand over maritime boundaries set the stage for the more consequential centralisation of Sabah and Sarawak's petroleum wealth. This contradicts the 1954 North Borneo and Sarawak Orders in Council, which defined their boundaries as extending to the edge of the continental shelf. The application of TSA 2012 to Sabah and Sarawak is constitutionally suspect, as Article 2(b) of the Federal Constitution requires the consent of both the state legislative assemblies and the Conference of Rulers for any alteration of state boundaries. No such consent was obtained. Beyond legal infringement, this restriction has real-world consequences for marine resource rights, indigenous fishing communities, and state planning authority over maritime development. These limitations impact the exercise of Native Customary Rights (NCR), particularly among coastal and island communities whose traditional fishing zones now fall under exclusive federal jurisdiction. Petroleum Development Act 1974 - A Centralised Grab Passed during Emergency rule, the Petroleum Development Act 1974 (PDA 1974) vested ownership and regulatory control of petroleum in Petronas, under federal authority. Section 2(1) vests ownership in Petronas. Section 2(2) grants it exclusive regulatory powers. However, land and natural resources are matters under List II (State List) of the Ninth Schedule to the Constitution. The PDA was passed without the consent or adoption of the Sabah and Sarawak legislatures and without invoking Article 76(1)(c) or 76(2). With the revocation of the Emergency in 2011, the continued enforcement of the PDA in Sabah and Sarawak is open to constitutional challenge. Sarawak, for instance, has reasserted its rights under the Oil Mining Ordinance 1958 (OMO1958) and the imposition of State Sales Tax (SST) on petroleum products — a move upheld by the Court in Petronas v Comptroller of State Sales Tax, Sarawak [2020] 6 MLJ 1. The Frozen Special Grant Reviews - A Breach of Fiscal Federalism MA63 enshrined fiscal safeguards through Articles 112C(1) and 112D(4): Article 112C(1) entitles Sabah and Sarawak to a special grant. Article 112D(4) mandates that the grant be reviewed every five years. The first and only review occurred in 1969, but its recommendations were never implemented. For decades thereafter, no reviews took place. This dereliction, enabled by Emergency-era centralisation, amounts to a prolonged breach of constitutional duty. Even recent allocations were offered outside the constitutionally mandated framework. Emergency-Era Origins of the 1969 Grant Review The first and only formal review of the special grant due to Sabah under Article 112D of the Federal Constitution took place in 1969. However, it occurred during the nationwide Emergency, when Parliament had been suspended and federal authority was centralised under the National Operations Council (NOC). This context severely compromised the legitimacy and effectiveness of the review. Although the Federal Constitution envisages that such reviews must involve meaningful consultation and mutual agreement between the Federal and State Governments, the 1969 review was carried out in a top-down manner, without the participation or approval of the Sabah State Legislative Assembly. Moreover, while the review order was gazetted, its recommendations were never implemented. This amounted to a breach of Article 112D(4), which not only requires a review every five years but also assumes that each review is a substantive and binding constitutional process—not a discretionary or symbolic exercise. The Emergency framework at the time, reinforced by Article 150(6)–(8), insulated the federal executive from judicial scrutiny and eliminated ordinary mechanisms of accountability. As a result, Sabah was left with no constitutional remedy to enforce its entitlement. The absence of subsequent reviews—until recent efforts more than 50 years later—further entrenched a fiscal imbalance that denied Sabah the revenue it was due under the Malaysia Agreement 1963. In effect, Sabah's constitutional entitlement to special grants was frozen in both legal and fiscal terms. The Emergency enabled the Federal Government to bypass its duty under Article 112D, delaying not only a fair financial settlement but also the broader principle of equal partnership in the Federation. The legacy of this inaction persists to this day, and any new review must take into account the decades of underpayment and the urgent need for restitution. Federal Laws Imposed Without Consent During and after the Emergency, federal legislation was extended to Sabah and Sarawak without compliance with Article 76 of the Federal Constitution. Examples include: Education Act 1996 Local Government Act 1976 Under Article 76: Subsection (1)(b) requires a state request for Parliament to legislate on State List matters. Subsection (2) requires state consent to impose laws for uniformity. These constitutional safeguards were bypassed, eroding state autonomy and violating the spirit of MA63. Constitutional Supremacy and Post-Emergency Legality Article 4(1) of the Federal Constitution establishes that the Constitution is the supreme law of the Federation. Emergency Ordinances, while valid during the Emergency, lost immunity from judicial review once the Proclamation was revoked in 2011. Laws whose validity relied solely on Emergency powers must now comply with constitutional procedures or risk being ultra vires. The Constitution does not permit the permanent distortion of federal-state relations through temporary emergency measures. This includes the PDA 1974, TSA 2012, and all extended legislation not passed with Article 76 consent. Restoring Federal Balance - A Reform Agenda To undo the legacy of Emergency-era centralisation and revive true federalism, the following reforms are necessary: Restore Pre-1963 Maritime Boundaries Amend TSA 2012 or enact legislation reaffirming Sabah and Sarawak's continental shelf limits. Suspend or repeal its application to Sabah and Sarawak pending a new, equitable petroleum framework. Resume Article 112D Reviews Conduct overdue reviews, compensate for lost revenue, and institutionalise a permanent review mechanism. Identify, challenge, and repeal laws extended under Emergency powers that violate MA63 or lack state consent. Fulfilling the Promise of Malaysia Day A federation held together by historical agreements must not be allowed to drift apart through decades of constitutional erosion. The Emergency may be history, but its distortions are not. Sabah and Sarawak deserve not just rhetorical recognition, but a return to constitutional truth. The path to a stronger Malaysia begins with putting right what the Emergency put wrong. 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: [email protected]
