Sabah, Sarawak only entitled to 10% oil royalty under constitution, says activist

An activist from Sabah says Putrajaya will not agree to Sarawak or Sabah's request for a 20% oil royalty as the limit set by the Federal Constitution is only 10%.

Zainnal Ajamain, during the launch of his book "The Queen's Obligation" in Kuching yesterday, said according to Schedule 10, Part V, Item 3 of the constitution, mineral-producing states can only claim up to 10% of minerals extracted from their territories.

Both Sarawak and Sabah have demanded that royalty to their oil be increased by 15% from the current 5%.

Zainnal however said the two Borneo states could still get more than what they had been receiving over the last 52 years "if they know their rights well".

The economist-turned-political-activist said under the Federal Constitution, Sabah and Sarawak could demand a 30% dividend from the export duty of the crude oil extracted from their respective state.

"If we (Sarawak and Sabah) understand our rights and if we insist on 10%, the federal government is obliged to pay not only 10% in lieu of royalty but also 30% in dividend.
"Just imagine how much each state could get from that 10% as well as the dividend if Petronas’s export duty is, say, about RM10 billion."

The Sarawak legislative assembly in May 2014 unanimously voted on a resolution demanding that Putrajaya raise the oil royalty for the state to 20%.

It was a landmark vote as it was the first time support for a motion had cut through the political divide.