Debate of the Distribution of Gas Bill, 2016 by YB Dato’ Sebastian Ting

suppadmin | November 21, 2016

1. ADDRESS

1.1 Datuk Amar Speaker,

Thank you very much for giving me the opportunity to join the other Honourable members of the august House in debating the Distribution of Gas Bill, 2016 that was presented earlier on by Honourable Minister of Public Utilities, YB Dato Sri Dr. Stephen Rundi Anak Utom. I would like congratulate the Sarawak Government and the Honourable Minister for taking the initiative to table this Bill.

2. THE BILL

2.1 The Bill seeks to repeal the Sarawak Gas Supply Services (Operating Company) Ordinance (Cape 19) to regulate the distribution of gas in Sarawak and for matters relating thereto.

2.2 It is indeed very happy that this Bill is presented and subsequently upon passing will become law regulating the distribution of gas in Sarawak., pursuant to the Borneo States (Legislative Powers) order 1963 made by the Yang Di-Pertuan Agong under Article 95c of the Federal Constitution.

2.3 We take pride to note that the Sarawak Government has the power to make laws on both electricity and the distribution of gas in Sarawak as this is in accordance with the constitutional arrangements set out and recommended by the Inter-Governmental Committee (IGC) Report, 11(c) of Annex A whereby the electricity and distribution of gas have never been delegated to Federal Government by our Legislative Assembly.

2.4 Datuk Amar Speaker.

I would like to take this opportunity to congratulate our Sarawak Government for being alert and the foresight to insert the exclusion clause in the Gas Supply ( Amendment) Bill 2016 which was subsequently passed as Gas Supply Act 1993 (as amended June 2016) to regulate the supply of gas in the Federation. The new clause is this and I qoute;

Clause 2: New clause 4A

The Bill ( Gas Supply (Amendment) Bill 2016) is amended by inserting after clause 4 the following clause:

“New section 1A”

4A (1) The principal Act is amended by inserting after section 1 the following section:

“Application for State of Sarawak”

1A. Notwithstanding subsection 1(2), this Act shall apply to the State of Sarawak, upon prior approval of the Yang di-Pertua Negeri Sarawak, on the date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different provisions of this Act.”

We must always be alert whenever a new Bill is proposed and tabled for debate in Parliament. In this way, we can continuously be able to Safeguard Sarawak’s interest.

2.5 As for our present Bill, It is indeed timely to repeal the Sarawak Gas Supply Services Ordinance which was passed in 1995 as the primary purpose for that Ordinance appeared to be for the creation of a Sarawak Gas Distribution Sdn Bhd , a Sarawak Government controlled company to distribute gas by pipelines to consumers in Miri only, because Miri then was the only town where there was gas.

2.6 Now things are different and we are happy. Presently Bintulu produces the most gas in Sarawak and indeed a substantial amount of Liquefied Natural Gas (LNG) is exported overseas to major countries like Japan and Korea. MLNG is reported to have made billions of Ringgit profit each year. Even as the present price of oil is still a challenge, gas price has not been affected at all.

2.7 It is proper, correct and prudent that the Sarawak Government has decided to pass a new law to better regulate the business of gas distribution in Sarawak and to provide a framework for the expansion of gas supply industry which in turn helps to encourage rapid industrial development of Sarawak. This augers well for the future for Sarawak and all the people of Sarawak as a whole. Sarawak cannot be poor as we are rich in resources and we must take adequate control over our own depleting resources, especially in oil and gas. The passing of this Bill is the first step.

2.8 Datuk Amar Speaker.

I would like to congratulate our Chief Minister for his untiring efforts to continue the ongoing discussions and negotiations with our YAB Dato’ Sri Mohd Najib Bin Tun Razak Prime Minister of Malaysia on the devolution of powers. Diplomacy here is certainly better and yields many positive results as witnessed over the past two and half years since Chief Minister took office on 28th February 2014.

2.9 The passing of this Bill is seen as a step closer to achieving the Phase 2 of the Devolution of Powers as succinctly outlined by Chief Minister in his winding speech in the last DUN session June 2016. This will greatly benefit Sarawak and our people at large.

The discussions and negotiations will continue with the Federal Government on the Devolution of Powers until we obtain all what are rightly due to us as contained in those four documents, The Cobbold Commission Report, The Inter-Governmental Committee Report, Malaysia Agreement 63 and Malaysia Act 1963(Chapter 35).

SUPP believes in our Chief Minister and strongly supports our Chief Minister in his ongoing discussions and negotiations with our Prime Minister on the Devolution of Powers.

3. Datuk Amar Speaker . I would like to highlight some of the clauses of the Bill together with my observations.

3 CLAUSES and OBSERVATIONS

3.1 Clauses 3 relates to the appointment of Director of Gas Distribution and to be assisted by such number of officers who are to be appointed by the Minister. It is most likely that the officers will come from the present civil service. The Bill does not provide for the establishment of a Board of Management. Perhaps this can be considered so that those who are considered “experts with years of experience ” in this field can be appointed to share their experiences with the ultimate aim of managing our gas distribution and resources in the best possible way.

3.2 Clause 7 identifies the activities pertaining to the distribution of gas for which a licence must be obtained. From the reading of this clause , it is indeed very wide. For instance, It covers not only the Gas produced in Sarawak and Sarawak waters but includes the importation of any for regasfication, processing, treatment, separation, utilisation or distribution in Sarawak. This will mean that all gas that comes into Sarawak will now require a licence to do so, failing which an offence will be committed.

3.3 Clause 7

(b) talks about regasfication of gas,

(d) talks about transportation of gas

(e) building, managing or maintaining gas pipeline or other apparatus or mechanism for the distribution of gas

( f) supply of gas and

(g) retail of gas.

The above list seems to cover all aspects of the complete chain in the distribution of gas and licences are therefore required.

3.4 With the passing of this Bill, would Petronas, Sarawak Shell Bhd and MLNG be required to apply for and obtain various licenses as long as their activities are in Sarawak?

This should be rightly so as the Bill intends to regulate the complete chain in the distribution of gas in Sarawak.

3.5 In addition, land matters have always remained with our Sarawak Government as enshrined and agreed upon and contained in the Cobbold Commission Report, The Inter-Governmental Committee Report, Malaysia Agreement 1963 and Malaysia Act 1963 (Chapter 35).

3. 6 Clause 7 states

“No person shall distribute gas in Sarawak or carry out the following activities without a licence….”

I note that there is no defintion of “Person” under Interpretation Clause 2 and there is a reference of body corporate under clause 22 which covers offences committed by a body corporate. Though The Interpretation Ordinance 2005 defines “Person” to include body corporate it would be so much better to incorporate or include that definition in our present Bill.

3.7 Clause 12 refers to tariffs.

Tariffs are payments and I believe there will be different tariffs to be levied on different categories of licences. As a caring government we need to ensure that ordinary people, the end users, would not be unduly burdened with extra charges or costs. On the contrary, our Government should ensure that the charges or prices are kept to the minimum.. There is a need in making sure that the licensee in retail business must abide by the terms and conditions set out by the Sarawak Government upon issuance of the licence with the view of controlling and monitoring the prices to be charged. There may be a need to continue to place gas as a price controlled item as it is now.

3.8 As have stared above, Miri and Bintulu produce a lot of gas and more Sarawakians throughout Sarawak should enjoy the use of our own gas at a relatively low price. Adequate supply must be provided for all Sarawakians.

This will certainly help to lower the cost of living for our fellow Sarawakians especially after the increased of cooking oil, liquefied petroleum gas (LPG) and other prices. We look after our people first.

3.9 Clause 20 refers to Offences and penalties.

The offence upon conviction is stiff, that is a fine of not exceeding two hundred thousand ringgit or imprisonment for a term not exceeding five years or to both and to a further fine not exceeding one thousand ringgit for everyday or part of a day during which the offense continues after conviction.

Because of the heavy penalty, it will be good that every person who intends to apply for a licence be given prior notice of this. This is a public relation exercise.

Datuk Amar Speaker .

With the above observations i fully support this Distribution of Gas Bill, 2016.

With the passing of this Bill, this will benefit Miri people and it is hoped that more people in Miri will actively be involked in oil and gas business .

Thank you.