By: Tan Sri Panglima Herman Luping
August 26, 2012: The Prime Minister, Datuk Seri Najib Tun Razak who announced early this month that a special committee to review oil royalties would be formed is described by the Chief Minister, Datuk Seri Panglima Musa Haji Aman as another good and positive sign of a caring BN government, and added that the move is a sign that the Federal government is attentive to the people's needs.
He was responding to the report that Najib was setting up a committee to study petroleum royalty payable to the three oil producing States of Sabah, Sarawak and Trengganu.
Since the signing of the Petronas oil agreement in 1976, the three States were receiving 5 per cent of the total cost of crude oil extracted.
Over the years, elected representatives and political leaders from both sides of the political divide, especially from Sabah and Sarawak have been calling for a review of the oil agreement and asked for a rise in the royalty from the current 5 per cent.
In Sarawak last Monday, the Chief Minister, Tan Sri Abdul Taib Mahmud was quoted as saying that the State government would discuss the need to review the five per cent petroleum royalty paid to Sarawak with the Federal Government and added that the State government and opposition leaders have reached a consensus on the issue.
And in Sabah last week, Sabah's Chief Minister, Musa welcomed the setting up of the special committee announced by the Prime Minister.
He said the Prime Minister was a caring leader who was always prepared to listen to the people and their needs.
He said the good relationship between the State and Federal Governments have benefited Sabah and Sabahans through large allocations which greatly helped the State to propel forward in its developmental strategies.
"Therefore, I believe this issue (oil royalty) is open for discussion and what's important is that we scrutinise the matter and reach the best decision for the mutual benefit of all concerned", he told the press men in Papar where he attended the Papar Umno Aidilfitri Open House co-hosted by Member of Parliament Datuk Rosnah Abdul Rashid Shirlin, Kawang Assemblyman Datuk Ghulam Haidar Khan and Pantai Manis Assemblyman Datuk Rahim Ismail.
In actual fact the Federal government has been very generous in its allocation of funds to the State - money taken from the Federal coffer for the past ten years or so.
Since the BN coalition took over the reign of power in the State, the Federal government has been pouring in funds for the development purposes.
The allocations were especially accelerated when Musa took over the reign of leadership in the State ten years ago.
This is what he meant when he said that the good relationship between the Federal and State governments have benefited Sabah with large allocations which helped Sabah propelled its economic endeavours.
The amount of funds allocated to Sabah are far more than the agreed amount of oil royalty of 5 per cent.
The 5 per cent in oil royalty represents roughly about RM100 million a year. I am told by one who works closely with Petronas that this RM100 million takes the company only about half an hour to earn.
Sabah, however, has been receiving from the Federal government in the billions of ringgit since Musa took over as Chief Minister.
That the Federal government is willing to discuss the matter with the State governments is indeed a sign that the Government is appreciative and responsive of the needs of the people and more especially the political consideration on the matter.
Political leaders from the Opposition have been calling for a rise in the 5 per cent oil royalty, too.
The people from all communities and from all political parties must therefore be appreciative of the Prime Minister's move on this issue.
In actual fact the matter of the oil royalty has been debated and discussed over the years ever since oil was found in our waters.
And ever since Petronas started to drill for the oil. Sabahans in general felt then that the State has been given a raw deal. This was in fact the feeling of the Usno leaders led by Tun Mustapha in 1974 when the Petroleum Bill was passed in the Federal Parliament giving the Federal government the right to prospect and own the oil resources in the Sabah waters.
The Chief Minister at the time (1975) was Tun Mustapha.
His original idea was for the State government to go on a partnership with the Federal government to prospect and drill the oil.
This was not acceptable to the Prime Minister then (Tun Razak).
Tun Mustapha then asked that the oil royalty be at least 30 per cent and refused to sign the Petronas oil agreement if it gave Sabah only 5 per cent.
He explained to us that he did not want to be cursed by future generation of Sabahans.
Indeed, before entering into negotiation with the Federal leaders on the issue, he had a meeting with the Chief Minister of Sarawak (Tun Rahman Yacob) to agree on a common stand on the matter.
A friendly golf tournament was arranged between the two Chief Ministers' team and was held at Miri.
This was in 1974.
After the golf game, leaders from both State governments then met over dinner and it was agreed that both States must request and accept only 30 per cent in oil royalty. Tun Mustapha then took some senior officers and politicians with him to visit Pahang to meet the Menteri Besar and council members there.
The question of oil royalty was again raised and agreed that States with oil find should be given at least 30 per cent in oil royalty.
At that time it was thought that the oil find in the east coast of Peninsula Malaysia was in Pahang waters.
It was in fact in Terengganu.
The Sabah and Federal leaders' spats during the reign of the Usno administration over the oil royalty issue gave rise to the birth of the Berjaya Party led by Tun Stephens. The Federal government and Peninsula BN coalition parties, led by Umno, gave the new party visible support including financial support.
Of the 48 Constituencies at that time, Berjaya won in 28 seats and the Usno in 20 seats in the 1976 election that ensued. The latter seats (20) were predominantly Muslim voters, whereas the 28 seats were predominantly Kadazandusun and Chinese voters.
Berjaya then took over the reign of power from April 1976 to 1985.
Cordial relationship between the State government and the Federal government, and between the Chief Minister (Tan Sri Harris Salleh) and the Prime Minister (Tun Dr Mahathir Mohamad) ensued.
This cordial relationship between State and Federal also brought benefits to Sabah and Sabahans and much economic and social progress was undertaken under the Berjaya administration.
I don't think the issue of the oil royalty was raised during the Berjaya administration.
However, by the midst 1980s (PBS administration under Tan Sri Joseph Pairin Kitingan) the matter concerning the oil royalty was raised. In fact, it was part of the many points or matters mentioned in the PBS manifesto.
There was no response from the Federal government or from the Prime Minister, Tun Mahathir then.
The issue was again raised by many opposition politicians from the two Borneo States in the 1990s and also from BN coalition elected representatives.
It is the consistent call made by these leaders that made the present Prime Minister to take heed of their call to review the oil royalty.
Since Najib took over the mantle of leadership in the country, his responsive attitude to the call for the betterment of the people and country has been his strong hallmark as Prime Minister.
So, as I said earlier, even though the 5 per cent oil royalty had been there unchanged since 1976, the truth of the matter was that billion of ringgit have been poured to the two Borneo States for developmental purposes.
This was especially so during the last ten years during the leadership of the current Chief Minister, Musa.
The cordial relationships between the two Borneo States and the Federal government, and more particularly between Najib, Musa and Taib should make the meeting to discuss the issue an easier and cordial discussions.
It would indeed be a win-win situation for all concerned.
It is possible to expect the two States might yet get the 30 per cent oil royalty and more, even a seat each as a director in the Petronas company from the two Borneo States. This was the terms requested by the late Usno leader, Tun Mustapha in 1975.