Tuesday, March 2, 2010

Bar Council supports Kelantan’s right to oil payment

By Debra Chong

KUALA LUMPUR, March 2 — Putrajaya must openly explain the reasons for continuing to pay Sabah and Sarawak for oil produced off its coast when it has persistently denied Kelantan’s claims, the Bar Council urged today.

Its president Ragunath Kesavan said the peninsula-based lawyers’ association fully support Kelantan’s oil royalty claim, estimated to be RM1 billion last year.

“At first glance, it seems that anything beyond three nautical miles would belong to the federal government. But the vesting deeds suggest otherwise,” Ragunath told The Malaysian Insider, referring to the documents signed between each of the 13 states with the federal government in 1975.

The vesting deeds effectively hands over control from state to the federation to extract oil and gas from within the state’s land and waters.

“If truly the federal government had the power, then why the need to get the states to sign the agreements? Why the need for the vesting deeds?

“What about payment to Sabah and Sarawak?” Ragunath quizzed, pointing out that the two Borneo states had been consistently paid by the federal government for oil and gas produced in their waters since 1975, even though extraction was sited beyond the three nautical mile mark.

Ragunath also raised the possibility that there may have been “secret arrangements” between the two East Malaysian states and the federal government and called on Prime Minister Datuk Seri Najib Razak’s administration to fully disclose all details, including minutes of the meetings that lead to the signing of the agreements in 1975 and after.

Ragunath noted that the federal government had placed advertisements in several Malay-language newspapers two weekends ago explaining its stand why Kelantan had no claim to be paid oil royalty.

Instead of paying out oil royalties, the Najib administration has said it would give the PAS-ruled state, among the poorest in the country, “wang ehsan” or “compassionate money”.

An incensed Kelantan replied immediately with a point-by-point counter-argument against Putrajaya’s eight reasons, which was published last week in The Malaysian Insider.

The Kelantan state legislative assembly yesterday unanimously passed a motion to move the state government to take the federal government to court in its bid to settle a long-standing dispute over payment for oil and gas produced in its waters.

But Ragunath believes that the courts should be the last resort.

“Before going to court, take it to a public forum for the people to look at it first,” he urged the federal government.

A decade ago, the PAS-led Terengganu government had mounted a similar suit against the federal government after the latter stopped the flow of oil payments to the state.

A lawyer who had acted for Terengganu then had filed the suit at the High Court here in 2001.

The suit appears to have been abandoned by the Barisan Nasional coalition after it retook control of the state, the lawyer who asked not to be named, told The Malaysian Insider today.

“At the end of the day, if there were other arrangements made, then the federal government should comply to fulfill those obligations,” Ragunath stressed.

“This matter must be resolved. It is an important aspect of state and federal relations,” he added.


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