Press Release: IT IS IMPORTANT TO CLARIFY WHY THE ESTOPPEL PRINCIPLE, AS DESCRIBED, DOES NOT APPLY TO SARAWAK’S SITUATION. ---

SSANZ 14th November 2024

1. No Representations or Inducements by Sarawak:

Zaid's argument that Sarawak is estopped due to its silence ignores the essential requirement that estoppel can only apply where there have been prior representations that induced reliance or caused detriment to another party. In the case of Sarawak, it has not made any representations to Malaya that could give rise to an estoppel claim. Sarawak has consistently objected to the application of the Continental Shelf Act 1966 (CSA66) to its territory, asserting that it was never bound by the provisions of the Act. These objections are documented and demonstrate that Sarawak has not represented anything to Malaya that could reasonably have induced any reliance.

2. Malaya’s Actions are the Root Cause of the Dispute:

It is critical to note that it was Malaya’s unilateral actions, not Sarawak’s silence, that altered the status quo. Malaya took steps to redefine Sarawak’s boundaries, including actions to "legitimize" and pave the way for the enactment of the Petroleum Development Act 1974 (PDA74), which directly impacts Sarawak’s territorial claims over its natural resources. These actions were taken without the consent or agreement of Sarawak, and were the result of decisions made in the context of federal consolidation following Malaysia’s formation in 1963.

Therefore, any argument based on estoppel should first acknowledge that Sarawak was the victim of these changes and did not voluntarily acquiesce to any representations that might lead to an estoppel.

3. Breach of the Malaysia Agreement 1963 (MA63):

A critical aspect of the dispute is the Malaysia Agreement 1963 (MA63), which established the terms under which Sarawak became part of Malaysia. If the MA63 is valid, it is clear that Malaya has breached the agreement by taking control over Sarawak’s oil and gas resources without Sarawak’s consent. The MA63 guaranteed Sarawak’s rights over its natural resources, including oil and gas, and any move by the federal government to alter that arrangement is a violation of the agreement. The Malaysia Agreement did not include any provision allowing Malaya to expropriate or control Sarawak’s oil and gas reserves. The federal government's actions in imposing the CSA66 and the PDA74 over Sarawak’s resources go against the very spirit and letter of the MA63, thereby breaching Sarawak's constitutional and sovereign rights.

4. Unconstitutional Laws: CSA66 and PDA74:

The imposition of the Continental Shelf Act 1966 (CSA66) and the Petroleum Development Act 1974 (PDA74) on Sarawak was unconstitutional for several reasons. Firstly, both laws were passed under a state of emergency condition, during which extraordinary powers were exercised by the federal government. The circumstances under which these laws were passed did not follow the constitutional requirements that Sarawak, as a state within the Federation, had a say in laws that directly affect its territorial rights and resources.

Sarawak was not consulted nor did it approve these laws, which significantly altered its control over its natural resources. This contravenes the requirements of both the Federal Constitution and the Constitution of Sarawak, which require state consent for laws impacting state rights and interests. The federal government’s imposition of the CSA66 and PDA74 without Sarawak’s agreement constitutes an unconstitutional act, and the resulting laws cannot be considered valid.

*5. Rebuttal to Zaid’s Claim on the Principle of *Effectivités* (Effective Control):

Zaid may also argue that Sarawak is bound by the principle of *effectivités*, a principle often used in international law to recognize territorial claims based on the exercise of effective control over a given area. Under this principle, the state that exercises actual control over a territory, through administration, legislation, or physical presence, may be considered to have de facto sovereignty over that area. However, this principle does not apply to Sarawak’s situation for several reasons: -

No Effective Consent or Agreement from Sarawak**: The principle of *effectivités* presupposes that the state in question has either implicitly or explicitly accepted the situation of control. In Sarawak's case, there has been no agreement or consent to Malaya’s imposition of laws such as the CSA66 and PDA74. The notion that Sarawak, by its silence or inaction, implicitly accepted federal control over its resources is highly problematic. In fact, Sarawak has consistently opposed the imposition of these laws, as seen in its objections to the application of the CSA66 and the lack of consent for the PDA74. Silence, particularly in the context of a coercive federal system, cannot be equated to tacit consent under international law.

Historical Context of Coercion and Unilateral Action:

The principle of *effectivités* typically applies when a state exercises continuous and overt control over a territory in a way that is recognized by other states or international bodies. However, in the case of Sarawak, the actions by Malaya to alter Sarawak’s boundaries and impose federal control over its oil and gas reserves were done under a state of emergency and without Sarawak's explicit approval. These actions were coercive and unilateral, which undermines any argument that Sarawak's control or "acceptance" of these actions was voluntary. Thus, the application of *effectivités* is inappropriate where there has been no free and informed consent from the state in question.

Violation of International Agreements and Constitutional Rights:

The principle of *effectivités* also fails in this case because it conflicts with the Malaysia Agreement 1963 (MA63), which outlines the specific terms of Sarawak’s membership in Malaysia and guarantees its rights over its natural resources. The federal government’s actions, including the imposition of the CSA66 and PDA74, directly contradict the terms of the MA63. As such, the principle of *effectivités* cannot be used to override the legal and constitutional protections afforded to Sarawak under both international law and Malaysia's federal system.

In conclusion, the principle of *effectivités* cannot be invoked to justify Malaya’s actions with respect to Sarawak’s oil and gas resources. Sarawak has never agreed to the federal government’s imposition of control over its resources, and such control was achieved through unconstitutional means, including the breach of the MA63 and the imposition of laws without Sarawak’s consent. The application of *effectivités* would not only disregard the historical and constitutional context but also violate Sarawak's sovereign rights.

6. Estoppel Does Not Apply to Sovereign Claims:

Even if one were to stretch the concept of estoppel, it must be shown that the other party (Malaya) relied on the silence or inaction of Sarawak to its detriment. However, Malaya’s actions—altering Sarawak's boundaries and pushing through the PDA74—cannot be said to have relied on Sarawak’s failure to assert its rights in a timely manner. These actions were taken in a context of federal consolidation, not as a result of any representations or reliance on Sarawak’s conduct.

7. The Historical and Legal Context:

Finally, it is essential to highlight the historical context of the dispute. When Malaysia was formed in 1963, the terms of Sarawak’s membership, including control over its oil and gas resources, were outlined in the Malaysia Agreement. The CSA66 and the subsequent PDA74, however, have been contested by Sarawak, which asserts that the federal government overstepped its authority by extending these laws to Sarawak without the necessary legal or constitutional consent. This dispute is not one of estoppel based on prior representations, but rather one of territorial and constitutional rights.

In conclusion, Sarawak’s claim to its oil and gas rights should not be dismissed based on estoppel or the principle of *effectivités*. Both principles fail to account for the lack of consent and the breach of Sarawak’s rights under the Malaysia Agreement 1963. Furthermore, the CSA66 and PDA74 are unconstitutional, and their imposition over Sarawak’s resources cannot be justified by either silence or claims of de facto control. Instead, Sarawak should be recognized as having legitimate, constitutional, and international legal rights to control its oil and gas resources, free from coercive federal actions.

Robert Pei

Sabah Sarawak Rights Australia New Zealand. 14/11/2024

Footnote: estoppel

Estoppel is an equitable doctrine, a bar that prevents one from asserting a claim or right that contradicts what one has said or done before, or what has been legally established as true. Estoppel may be used as a bar to the re-litigation of issues or as an affirmative defense.

For estoppel in contract law, promissory estoppel is often applied where there is a promise or an agreement made without consideration.

Subscribe Below: