As the nation continues to be absorbed by news and events related to the ongoing Covid-19 pandemic, what has escaped much notice is how our new months-old national government finally forged an agreement with the Sarawak government on the vexed and much-ballyhooed issue of the nation's oil and gas (O&G) resources, last week.
This agreement has been long in coming; absorbing the energies of three prime ministers and two Sarawak chief ministers. None will be more cheered by the concord than the industry as a whole.
The agreement comes after over half a decade of sometimes heated exchanges between both state and federal governments – first over the quantum of royalties Sarawak rightly should be getting, then over ownership of the said resources themselves, the constitutionality (or otherwise) of Petroliam Nasional Berhad or Petronas' role over those resources and, finally, the decision by Sarawak Chief Minister Datuk Patinggi Abang Johari Abang Openg to impose a state sales tax (SST) on O&G products derived from the state.
It was apparently that last fiscal move by the state which led to the new agreement. Petronas held out over payment of the tax for over a year until the state government decided to take the corporation to court over non-payment.
A new understanding was immediately forged when the High Court in Kuching decided last week that the SST is binding on Petronas.
That the agreement was announced right after the court decision came out indicated that both the Sarawak government and Petronas had actually already hammered out a deal in anticipation that the court would rule in favour of the state.
And Petronas, being wholly owned by the federal government, would clearly have had the blessings of Prime Minister Tan Sri Muhyiddin Yassin in sealing this new deal.
As with any compromise deals, both parties (the federal government/Petronas and the Sarawak government) came away with something to show.
The Sarawak government won Petronas' concession about paying the SST, a by no means small concession given that the national oil corporation could very well have gone the whole hog and tied the legal tax case and the related constitutional question over its regulatory role and ownership of all the nation's hydrocarbon resources interminably in protracted court proceedings.
In return, Petronas won the state's nod that the corporation's constitutional position over national O&G resources is on sound legal footing. The best that can be said about this new agreement is that it put a somewhat facile argument over resource-ownership behind us.
The state government itself signed its O&G rights over to Petronas in the early 1970's and it was churlish to turn around and question anew where those rights ought to reside after over 40 years. But an important and worthy lesson must come out of this wrenching episode.
What has stuck (and may remain so, despite this latest deal) is a commonly-held popular perception in Sarawak over the decades that the state has been hard done by with the original state agreement which led to Petronas' incorporation in 1974.
It is this troubling perception that both the current state government and Petronas must work tirelessly to banish. There is some rather vague and generalised language contained in the latest agreement for both Petronas and the state to work towards fulfilling the latter's aspirations for greater and more meaningful involvement in the O&G sector.
It will be a mistake for Petronas to continue to pay mere lip service to such aspirations by those in Sarawak. It will also need to do a much better job of educating Sarawakians about what it has actually already done towards furthering these local aspirations as well as the challenges which may stand in the way of better fulfilling them.
Clearly, a serious thorn pressing against what otherwise has always been a good overall federal-state relationship has now been removed. It cannot be coincidental that this comes after the Gabungan Parti Sarawak ruling Sarawak coalition decided to pitch in and form the current federal administration.
* The writer views developments in the nation, region and wider world from his vantage point in Kuching, Sarawak