KUALA LUMPUR: Former Petronas chairman Tengku Razaleigh Hamzah wants Petronas to do the right thing and honour its agreements with state governments.
He thinks that Petronas has made a serious mistake by paying out wang ehsan or "compassionante grants" instead of cash payments or oil royalties.
"[That's] because there is no provision in the law or in the agreements for Petronas to pay out compassionate grants. Some people say this could be illegal payment. I am not a lawyer to determine this," said Razaleigh.
He also said the payments were made to the wrong party instead of the parties named under Section 4 of the Petroleum Development Act 1974.
"Under the Act, the cash payments must be made to the state government concerned and not to any other party if payment is to be made. This is a problem that must be corrected," said Razaleigh, who also called for the establishment of a National Petroleum Advisory Council as provided for under the Petroleum Development Act.
According to Razaleigh, the council, comprising senior national leaders, would advise the premier.
"I hope the council would be formed to advise the prime minister and also to monitor Petronas' development under its new stewardship," he added.
"I am not talking about politics at all. I am suggesting that they do the right thing. There is a law, there is an agreement signed by Petronas with each state government, follow it. Implement according to what is written. That is all.
"I am talking about Petronas. The Federal Government has no part in it. The issue of royalties is between states government and Petronas," said Razaleigh in a press conference this afternoon.
Asked if Petronas was caught in the issue due to politics, the Barisan Nasional MP for Gua Musang said: "In my opinion, I don't think it should have followed the directions of the politicians. They must do [things] in accordance with the law. Even if they find that the direction is ill advised, then they should advise the politicians accordingly so that they will not be forced to do things that are contrary to the provisions of the law and the agreement."
Razaleigh said he was sad and ashamed that people had forgotten the late Tun Abdul Razak who always thought of the poor and less-wealthy states.
"It was he who told me in no uncertain terms to ensure the poorest states in the East Coast, Sabah and Sarawak would benefit from the oil wealth.
"I didn't forsee that there would be difficulties faced by the state governments of Kelantan and Terengganu when oil was found. Now the two states face all kinds of problems when in fact it was designed to help them if oil was found," he said, hoping the issue would be straightened out, the payment of wang ehsan stopped and that royalties be directed to the states entitled to receive them.
He hoped the newly appointed Petronas CEO, Shamsul Azhar Abbas, would carry out his duties as required by law and as it was envisioned by Abdul Razak 34 years ago.
Razaleigh applauded the Terengganu state government for refusing payment even in the form of oil royalties until the accounts are straightened out. Terengganu's oil royalties were converted into wang ehsan when PAS took over the state government in 2000. The money was channelled to the state via various agencies which resulted in many allegations of abuse.
"I think the state government of Terengganu has made the right decision so that they will not be responsible for things they cannot account for. And I think the people responsible should be looked at and the proper authorities must investigate," he said.
On the wang ehsan to be given to Kelantan, he said the Kelantanese are very ashamed.
"They offer to give RM20 million. Cigarette companies gives RM50 million to RM100 million to sponsor sports events," he added.
Razaleigh also clarified that he spoke about oil royalties at an event in Kota Bharu last Thursday on the condition that it was organised by NGOs, people with different political affliations were invited and that he was to be the only speaker because he had knowledge of the setting up of Petronas and the drawing up of the Petroleum Act.
"I was there to explain and I was happy to get the opportunity to explain to as many people as possible so that there won't be much doubt or further confusion regarding this question of oil royalty payments to the state government of Kelantan," said the Kelantan prince.
On calls for him to step down as the Gua Musang MP, Razaleigh said: "I only worry if I step down from MP-ship, Umno may not be able to win back that seat.
"Who is more concerned about Umno? Me or those who asked me to step down? I don't want Umno to lose that seat.
"As it is, Umno may not have enough seats in Parliament. Umno or Barisan Nasional in the Peninsula depends very much on the support of MPs from Sabah and Sarawak. Without them we have no Federal Government to talk of.
"Now you ask me to step down. One seat less and maybe some others may follow. I hope that would not happen."
He said by speaking out he was merely doing the right thing.
"Can't I speak the truth? You want me to keep speaking lies?
"I like the government to do the right thing. We have an agreement you know. We have the law," he added.
Source - the Edge
"Mengikut Perjanjian itu, tiap-tiap Negeri akan menerima 5% daripada nilai petroliam yang dijumpai dan diperolehi dalam kawasan perairan atau di luar perairan Negeri tersebut yang dijual oleh PETRONAS atau ejensi-ejensi atau kontrektor-kontrektornya".- Tun Abdul Razak, Dewan Rakyat (12hb. November, 1975)