Ku Li says federal government is acting like a ‘Godfather’

By Neville Spykerman

KUALA LUMPUR, Feb 25 — Tengku Razaleigh Hamzah(picture) says the federal government is behaving like a “Godfather” in refusing to pay oil royalties to Kelantan, in remarks suggesting the Kelantan prince and veteran Umno man is bent on continuing to speak out for his home state against the Najib administration.

He also pointed out in an interview with The Malaysian Insider that oil disputes had sparked the Iranian Islamic revolution in 1979 and warned the federal government against denying the wishes of the public by depriving states of oil royalties.

“Ayatollah Khomeini was 91, when he led the uprising against the Shah over 30 years ago,” said the Gua Musang MP, who added the revolution was not only because the Iranian monarch Mohammad Reza Pahlavi was a dictator but because he was misusing the country’s oil revenue.

The 72-year-old Kelantan prince, who is better known as Ku Li, was quick to dismiss any suggestions that he wanted to lead any kind of revolution in Malaysia.

But he continues to persist in his attacks against the federal government, and this has clearly caused some tension with his Umno colleagues.

Today, Tan Sri Muhyiddin Yassin questioned Tengku Razaleigh’s loyalty to Umno and accused the Kelantan prince of trying to confuse the public over the oil royalty dispute.

He also defended the federal government’s refusal to pay oil royalties claimed by Kelantan, saying that it was in “accordance with law.”

In yesterday’s interview, Tengku Razaleigh said he was moving to establish a bi-partisan Federation Caucus in Parliament to examine ‘unhappy’ federal-state relations, including the dispute over oil royalties.

The federal government and the PAS-ruled Kelantan government are locked in a dispute over whether the state is entitled to five per cent royalty for oil extracted off its waters.

The Umno veteran has broken ranks with his party to weigh-in on the side of the state government by insisting Kelantan was entitled to the payments according to the Petroleum Development Act .

Tengku Razaleigh said the Federation of Malaya Agreement was signed in 1948 while Malaysia was formed in 1963, and a review was overdue.

“The Federal Government is behaving like a Godfather even though their power comes from the 13 states,” he said in likening Putrajaya’s heavy-handedness to that of the head of a criminal organization.

He added it was not only the opposition Pakatan Rakyat (PR) led states that were unhappy with the Federal Government but also mentris besar of some Barisan Nasional (BN) states.

Despite his campaign against the federal government, Tengku Razaleigh said that Umno had nothing to fear because he is, and remains, a life member of the party.

“I am not a scheming fellow unlike some,” he said, adding a caucus was only a discussion group and a conduit for new ideas which is common in modern democracies.

He said the caucus would not be a voting bloc to oppose the government.

Honouring Our Agreements

by Tengku Razaleigh Hamzah

The Government has now responded to Kelantan’s claim to a portion of the profits derived from petroleum resources extracted offshore by PETRONAS.

Its response violates the letter and the intent of a solemn agreement signed between each State Government and PETRONAS under the Petroleum Development Act.

That agreement is made out in language simple enough for a schoolboy to understand, in both Bahasa Malaysia and English.

The Constitutional rights of the people of Kelantan are denied. However this has implications far beyond Kelantan:

1) It negates an agreement signed between the Kelantan Government and PETRONAS. By implication, it negates identical agreements signed by PETRONAS with every other state and deprives the people of their constitutional rights.

2) The Government’s refusal to recognize a straightforward contractual obligation on PETRONAS’s part puts a question mark over the status of oil payments due to the other oil-producing states. The States’ rights to 5% of profit derived from the extraction of any petroleum resources is based on a quid pro quo according to which the States vested entirely and in perpetuity all their rights and claims to petroleum resources to PETRONAS. In return for this PETRONAS is legally bound to pay the states the 5% directly

3) If PETRONAS no longer recognises its legal obligation to pay the States what is due to them under the Petroleum Development Act, the States, and in particular Sabah and Sarawak, will now wonder if the corresponding Vesting Deed by which they vested all their rights in their petroleum resources to PETRONAS remains in force.

4) The Government’s response substitutes for PETRONAS’s legal obligations under the Petroleum Development Act an arbitrary “compassionate payment” from the Federal Government. This casts serious doubt on the Malaysian Government’s respect for the sanctity of contracts and the rule of law. Let’s not talk about spurring investment to take our economy to a higher level if we fail to understand the importance of abiding by contractual obligations.

I helped craft and negotiate the Petroleum Development Act. As Chairman of Petronas, I signed separate and identical agreements in respect of these payments with each of the Mentris Besar of the States. I must insist that PETRONAS is bound by them and that the Federal government should not interfere in their fulfillment.

Tengku Razaleigh Hamzah

Member of Parliament, Gua Musang

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I will discuss my response to the proposed parliamentary caucus on this issue in my next posting.

I last wrote on the issue of Kelantan’s right to oil payments in my letter to the Mentri Besar of Kelantan in July this year. PETRONAS was formed to unite the country under a single and simple formula for sharing the bounty of our petroleum resources. Any unraveling of this formula could have serious consequences for our Federation.