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Datuk Sebastian Ting Dewan debate on The Oil Mining (Amendment) Ordinance Bill, 2018

1.1 Datuk Amar Tuan Speaker.

Thank you very much for giving me the opportunity to join the other Honourable members of the august House in debating the Oil Mining (Amendment) Ordinance Bill, 2018. I would like to congratulate our Sarawak Government and Deputy Chief Minister YB Datuk Amar Haji Awang Tengah for tabling a very comprehensive Bill.

2.0 THE BILL

Datuk Amar Tuan Speaker.

2.1 The original Oil Mining Ordinance was passed in 1958 and it is timely for this Bill to update the Oil Mining Ordinance to have better provisions in the law to give the power to the State the regulatory rights over its oil and gas activities in both offshore and inshore of Sarawak.

2.2 The Oil Mining Ordinance will require the oil and gas contractors, subcontractors and vendors operating in Sarawak territorial waters to obtain necessary licences and approvals from the Sarawak government or risk being deemed as illegal under the state law.

2.3 The Yang di-Pertua Negeri Sarawak Tun Pehin Sri Abdul Taib Mahmud had reiterated yesterday that the Sarawak Government would be able to manage its natural resources well, particularly oil and gas, to ensure that Sarawakians could benefit from them. The establishment of PETROS is in line with the government’s effort to manage the development of the oil and gas industry in Sarawak.

2.4 I would like to refer to Amendment of Section 3 of the Principal Ordinance where the words “ten thousand dollars” are substituted with the words “two hundred thousand ringgit”. This section refers to penalty for exploration, prospection or mining for oil and gas without receiving lawful authority, i.e. licence, to do so under the Principal Ordinance.

2.5 However, the New Section 3A is different. New Section 3A – “Restriction against building, erecting etc. of mining structures”

3A (1) says, “No person shall build, erect, maintain or decommission any mining structure on any land onshore or in the continental shelf unless authorised by the terms in any license or mining lease issued under this Ordinance or with the approval in writing of the Authority and subject to any condition or restriction imposed in that license, mining lease or approval granted by the Authority”.

3A(2) says, “Any person who fails to comply with subsection (1) shall be guilty of any offense and shall, upon conviction, be punished with a fine of not exceeding two hundred thousand ringgit or imprisonment for a term not exceeding three years or to both”.

Datuk Amar Tuan Speaker.

2.6 I look at the quantum of the fine of two hundred thousand ringgit only upon conviction. I am sure that all of us know that in the oil and gas industry, two hundred thousand ringgit is nothing compared to millions of ringgit they can pump per day. Indeed in criminal matters it takes a long time, a year, two or more, for a court to convict a person for such wrong doing. While the case is on going the person continues to pump the oil or gas, making millions of ringgit. I would therefore like to propose an amendment to section 3A(2) to “a fine of two hundred thousand ringgit for every day that the offence is continued after the serving of notice to the person”.

3.0 OIL AND GAS REVENUES

Datuk Amar Tuan Speaker.

3.1 I would like to touch on the oil and gas revenues. The oil and gas resources found within Sarawak’s Territorial Waters belong to Sarawak and Sarawakians as a whole. It is our inalienable Rights over our natural resources and therefore we must safeguard our own resources. Since the discovery of oil in Miri in 1910, we have been receiving oil royalty from SHELL annually and this continues on even after the Malaysia Day. Though the Oil Mining Ordinance 1958 was passed before the Malaysia Day, it is still a good law and only applicable in Sarawak thanks to the protection given in Section 73 of the Malaysia Agreement.

3.2 On the 4th June 2018 (just 26 days after the PRU14), Sarawakians woke to find out that PETRONAS had filed an application for leave to commence proceeding over ownership right to Sarawak’s oil and gas resources. It was originally scheduled to be heard by the Federal Court on the 12 June 2018 but subsequently postponed to 21 June 2018. On the 22 June 2018, the Federal Court delivered its judgement and dismissed the PETRONAS application for leave.

3.3 The people of Sarawak were very concerned with this PETRONAS’s suit against the Sarawak Government and were fully behind our government. Indeed they were very happy when the Federal Court refused to grant leave to PETRONAS.

3.4 Here, I would like to take this opportunity to congratulate the Sarawak Government. Congratulation to Assistant Minister for Law, State and Federal Relations and Project Monitoring YB Sharifah Hasidah for handling this matter since day 1 and the Sarawak legal team comprising State Attorney-General Datuk Talat Mahmood Abdul Rashid, State Legal Counsel Dato Sri J.C Fong and the Sarawak State Attorney-General’s Chamber for a wonderful job well done. I would like to mention here and appreciate the full support from the Advocate Association Sarawak, led by their President Mr. Ranbir Singh.

3.5 We need to remind ourselves constantly that we did not form Malaysia at the expense of our resources being taken away from us. We formed Malaysia based on the understanding that we would have political and economic cooperation to share the wealth together but the ownership of oil and gas resources must belong to the people of Sarawak. Therefore as owners, it is our Right to regulate the exploration, prospecting and mining of our resources. It would be fair statement that if our founding fathers in 1963 knew that forming Malaysia would result Sarawak losing its oil and gas ownership, they would never have agreed to sign the Malaysia Agreement.

3.6 I refer to the State Constitution Article 47 (2), it says that “Any land in the State which immediately before the commencement of this Constitution was vested in Her Majesty shall on the commencement of this Constitution vest in the State”. The commencement date of the State Constitution was when we formed Malaysia on 16 September 1963.

3.7 Therefore, immediately on 16 September 1963, all land including natural resources (oil and gas) in the seabeds and subsoils in Sarawak Continental Shelf as defined in the Sarawak (Alteration of Boundaries) Order in Council 1954 made on 24th June 1954 belong to Sarawak.

3.8 The ownership of oil and gas belongs to the Sarawak people and only through the passing of laws in the State Legislative Assembly can our State boundaries such as the Territorial Waters be changed. It is important to note that our State Legislative Assembly has never passed any law that alter our boundaries therefore legally our State still has full control over our land unchanged since 16 September 1963.

Datuk Amar Tuan Speaker.

3.9 Our people will certainly be happy to know that we will have more oil and gas revenues and are likely to ask, what do we do with the additional revenue from oil and gas? How can they benefit?

3.10 Apart from the usual improvement on public infrastructures for the rural and semi-rural community, we should consider to improve on the public transportation, clean water distribution, power distribution and health care. I would like to suggest something different like issuing a share in PETROS to each and every Sarawakian including the new born in the future. As part of transparency and accountability, every year, PETROS will report their revenues of the year to the legislative assembly and with the approval of the legislative assembly, the dividend will be paid out to all Sarawakians. Of course, the government has to come out with a formula to determine the appropriate dividend to be given each year. Sarawakians will surely be happy and look forward to receiving this yearly dividend.

3.11 We should also consider to set up a Sarawak sovereign fund or Oil Fund. We need to plan for the future that one day the oil and gas resources will come to an end. Such fund is to ensure that the future generations continue to benefit from the oil and gas revenues and at the same time, providing financial security for Sarawak in case there is an unforeseen economic challenge. The Oil Fund will also invest in stocks, bonds and real estate abroad and locally for higher return of investment and I believe that our Development Bank Of Sarawak (DBOS) should be the right government arm to handle such investment.

4.0 CLOSING

Datuk Amar Tuan Speaker.

With the above observations I fully support the Oil Mining (Amendment) Bill, 2018.

Thank you.

Dato sebastian ting, piasau yb






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