DEBATES in the Sarawak state assembly today were dominated by the legal conflict between the federally legislated Petroleum Development Act 1974 and the state’s Oil Mining Ordinance over the ownership to oil and gas in the state, as the 60-year-old ordinance was tabled for amendment today.

The debate became a little testy when Kota Sentosa assemblyman Chong Chieng Jen pointed to Section 2(1) of the PDA on ownership.

The section states that the “entire ownership in, and the exclusive rights, powers, liberties and privileges of exploring, exploiting, winning, and obtaining petroleum whether onshore or offshore of Malaysia shall be vested in a corporation to be incorporated under the Companies Act 1965 or under the law relating to incorporation of companies”.

Chong, a lawyer by training, told fellow lawmakers that the key word in the law was “exclusive rights”.

The state Pakatan Harapan chief, who declared he supported the amendment to the OMO Bill, said however the amendment was tantamount to passing a “syok sendiri (indulgent) piece of legislation”.

“At the end of the day, if the federal law is not consistent with the state law, the federal law will prevail.”

It sparked a flurry from both PH assemblymen and Gabungan Parti Sarawak backbenchers who disagreed with his legal view.

Irene Chang, the PH assemblyman for Bukit Assek, said it was incautious to push through a state bill inconsistent with federal acts without getting a court declaration that the federal acts have no application in Sarawak.

State Assistant Minister for Education, Science and Technological Research Annuar Rapaee asked Chong if he would bring the PDA to Parliament to be repealed or amended to exclude the law from Sarawak, since PH has a two-third majority in the house.

Abdul Karim Hamzah, the minister of tourism, arts, culture, youth and sports said there was no conflict.

Karim, also a lawyer, took the line of the Deputy Chief Minister Awang Tengah Ali Hassan, who tabled the bill, that the ordinance was never repealed by any laws and the PDA, like all laws proclaimed during the emergency in 1969, was no longer valid.

Awang Tengah said when Parliament passed the Continental Shelf Act 1966 and the Petroleum Mining Act 1966 to regulate mining of petroleum in the continental shelf that these acts were initially not extended to Sarawak.

He said those two acts were only “made applicable” to Sarawak after the 1969 Proclamation of Emergency, when in the exercise of emergency powers under Article 150 of the federal constitution.

The Yang di-Pertuan Agong, who promulgated the Emergency (Essential Powers) Ordinance No 10, had extended the two laws to Sarawak and Sabah.

Awang Tengah said, however, the OMO was never repealed by the emergency ordinance which ceased to have effect in 2012, as Article 150(7) of the federal constitution provided that all laws passed during the emergency should cease to have effect six months after the proclamation of emergency was annulled by Parliament.

The emergency was annulled by both houses of Parliament at the end of 2011.

“Therefore, as from 2012, the OMO remains the only law that regulates the exploration, prospecting and mining of petroleum on land in Sarawak, both onshore and offshore.”

Awang Tengah stated categorically that even under section 8 of the PDA, national oil company Petronas was not exempted from complying with OMO or the Land Code “when Petronas or its contractors undertake exploration, prospecting, and mining of petroleum in Sarawak”.

“The state government never waived the obligations of Petronas and its contractors from complying with our state laws when undertaking the upstream activities both onshore and offshore of Sarawak.”

He said Petronas therefore must abide by Sarawak state laws when operating in Sarawak, particularly the OMO and the Land Code.

The bill was eventually passed.

The state government has given Petronas and all oil companies involved in prospecting and mining of oil and gas to the end of 2019 to obtain the necessary licences and leases. – July 10, 2018.