Malaysia: The Razaleigh Rescue Mission

Tengku Razaleigh Hamzah has finally come out of his cocoon. Wearing a different hat this time around, he is now planning to lead a parliamentary caucus to press the Barisan Nasional leadership to honour the Petronas agreement.

He has insisted that Kelantan is entitled to a five per cent royalty for oil extracted off its waters, voicing out that it was about time to “re-examine the relationship between the states and the federal government”.

Tengku Razaleigh told a packed Stadium Sultan Mohamed IV that Petronas was bound by law to give the money to states where oil is found, adding Kelantan was not interested in compassionate payments.
Let us look at how he argues his case.

He reiterated that even as Kelantan is poor, it demands what is rightfully theirs.
The Kelantan government had demanded the oil royalty payment from Petronas last year, after the Federal Statistics Department revealed that Kelantan, together with Sabah and Terengganu, had contributed 62.5 per cent of the oil extracted in Malaysia. That put a spanner in the works.

The Federal government has insisted oil from the joint development area with Thailand was not from part of Kelantan’s waters and so offered RM20 million as “compassionate payment”.

But Razaleigh, the founding chairman of Petronas, disagreed with the government’s move, saying the formula for oil royalty was first agreed with Sarawak and later extended to all states.

“If Sarawak is due her five per cent royalty, no less is Kelantan, by the same principle,” thundered the Umno politician popularly known as Ku Li. He claimed that he has the blessings of the Kelantan palace to speak on the issue

Tengku Razaleigh clarified that the oil caucus he intends to lead is not just about oil. It is to re-examine the relationship between the states and the federal government.. He said the larger issue in the dispute was state rights as Malaysia was a federation of sovereign states that have assigned only certain rights to the federal government.

He wants a re-examination of the terms of the Federation Agreement signed in 1948 referring to the founding of Malaya before it gained independence from Great Britain in 1957.

He repeated his earlier argument that the Federal Government should respect the agreements made and not change them depending on who ruled the states, saying “How are we to ask investors to have confidence in us if we can’t even keep contracts between ourselves! More importantly there is a failure to understand the origin of federal powers over state resources”.

“We have forgotten that the states existed prior to the Federation. The Federation only exists because the states were willing to vest their rights in it, such as their rights in oil. Not the other way around,” he wrote in his blog.

Razaleigh highlighted that the federation itself rested on the principle of fairness to all the states, and to its citizens, wherever they may live. “When the government of the day ignores this principle, it is ignoring a basic principle holding our country together. There has been too much centralisation of power in the federal government. Powers functions and rights that belong to the states must be restored to them,” he added.

The move has a precedent in Terengganu after the 1999 general elections, when PAS won the state, prompting the federal government to convert oil royalty payments to compassionate payments managed by a federal department. Terengganu had sued for its right and Putrajaya relented only after Barisan Nasional recaptured the state.

Will Tengku Razaleigh finally come out and speak as the champion for the Kelantanese people? Let us wait and see his action plans.