The Malaysia Agreement 1963 – The Treaty’s Legal Standing, Breaches and Consequences

https://www.dailyexpress.com.my/read/5773/legal-standing-of-ma63-the-breaches-and-consequences/

The Malaysia Agreement 1963 (MA63) is a landmark treaty that not only shaped the modern geopolitical structure of Malaysia but also conferred unique rights and autonomy to the states of Sabah and Sarawak. As an agreement between sovereign states—namely the United Kingdom, Malaya, Sabah (then North Borneo), Sarawak, and Singapore—MA63 is classified as an international treaty, enshrining constitutional safeguards for the autonomy and development of East Malaysia within the broader Malaysian federation.

While much of the agreement has been incorporated into Malaysia’s legal framework, questions surrounding its implementation and breaches remain points of contention. This piece explores the legal standing of MA63 as a treaty, the obligations it imposes, what happens if it is breached, and who can take action in the event of such breaches, including whether it is possible to hold the UK accountable.

MA63 as an International Treaty and its Legal Status

MA63 is first and foremost an international treaty. Under international law, treaties are agreements between sovereign states that carry legal obligations. MA63 fits this definition, having been signed by five sovereign entities at the time of Malaysia’s formation in 1963. Although Singapore left the federation in 1965, the remaining parties—Malaya, Sabah, and Sarawak—continued under the terms of the agreement.

Legally, MA63 remains valid as an international treaty under customary international law. However, the Vienna Convention on the Law of Treaties—which sets out rules for the operation of treaties—does not apply to Malaysia as it is not a signatory. Despite this, MA63’s legal force continues to operate through domestic Malaysian law due to its incorporation into the Malaysian Federal Constitution and various statutory instruments.

It is crucial to note that MA63's legal status is firmly grounded in its incorporation into Malaysia’s constitutional framework. This ensures that while external entities like the United Kingdom played a role in facilitating the agreement, the sovereignty and autonomy of Sabah and Sarawak were preserved through constitutional guarantees. The presence of British representatives as signatories does not diminish the sovereignty of Sabah and Sarawak; instead, it reflects the colonial administrative realities of the time.

Does Singapore's Exit Void MA63?

Singapore's departure from Malaysia in 1965 has sparked debates about whether this exit affects the overall validity of MA63. However, there is a general consensus that MA63 remains valid despite Singapore’s exit because it has been incorporated into domestic law through key legal instruments, such as the Malaysia Act 1963 passed by the British Parliament and the Federal Constitution (Amendment) Act 1963. These acts ensured that the provisions of MA63, particularly those concerning Sabah and Sarawak, became part of Malaysia’s constitutional framework.

Singapore's exit from Malaysia in 1965 does not void the Malaysia Agreement 1963. The departure of one party from a multilateral treaty does not automatically render the entire treaty void unless the treaty explicitly states that the participation of all original signatories is required for its continued operation. In the case of MA63, there is no such clause.

The separation of Singapore was a mutually agreed-upon decision between Singapore and Malaysia, formalised through the Malaysia (Singapore Amendment) Act 1965, which amended the Federal Constitution to remove all references to Singapore as part of Malaysia. While Singapore’s exit marked a significant change in the federation’s structure, the core provisions of MA63 relating to Sabah and Sarawak remained intact and enforceable, ensuring that their rights and autonomy, as outlined in MA63, persisted. Both states continued to be parties to the agreement, and their rights and autonomy, as outlined in MA63, persisted.

Incorporation of MA63 into Malaysian Law

MA63 was domesticated through key legal instruments, ensuring that its provisions are enforceable within Malaysia’s legal system. The most important of these instruments is the Malaysia Act 1963, passed by the British Parliament, and the Federal Constitution (Amendment) Act 1963. These legal acts translated MA63’s core provisions into the Malaysian legal order.

For example, Sabah and Sarawak were granted significant protections and privileges under the Federal Constitution, including fiscal rights and control over immigration. Article 161 of the Constitution protects the rights of Sabah and Sarawak, and provisions such as Articles 112C and 112D address financial entitlements, including Sabah’s claim to 40% of the net revenue collected by the Federal Government from the state.

The incorporation of these rights into the Federal Constitution further refutes the idea that Sabah and Sarawak were annexed or lacked meaningful participation in the formation of the Malaysian federation. While the process of decolonisation was complex, the constitutional safeguards provided by MA63 ensured that both states had substantial autonomy, with protections codified into the highest legal document of the land.

Special Provisions for Sabah and Sarawak

Some of the most important provisions of MA63 concern autonomy, resource control, and fiscal rights for Sabah and Sarawak. These provisions are designed to safeguard the distinct interests of the two states within the Malaysian federation.

1. Immigration Autonomy

One of the key areas of autonomy for Sabah and Sarawak is immigration. Under Part VII of the Immigration Act 1959/63 and Article 161E(4) of the Federal Constitution, both states control immigration into their territories. This autonomy remains in full effect today, allowing Sabah and Sarawak to regulate entry from other parts of Malaysia.

2. Fiscal Rights: The 40% Entitlement

One of the most debated provisions of MA63 is the 40% net revenue entitlement for Sabah. Codified under Articles 112C and 112D of the Federal Constitution, Sabah is entitled to receive 40% of the net revenue derived from the state by the Federal Government. However, there have been long-standing disputes about whether this entitlement has been paid in full, leading to political and legal calls for its enforcement.

3. Resource Control

MA63 grants Sabah and Sarawak significant autonomy over their natural resources, particularly oil and gas. However, the Petroleum Development Act 1974 (PDA) transferred ownership of these resources to Petronas, the national oil company. While this Act has been viewed as overriding some of the autonomy promised under MA63, Sabah and Sarawak have both sought to regain greater control over their resources, including pushing for higher royalties on oil and gas revenue.

Recent developments, such as the return of electricity regulatory powers to Sabah, have been part of ongoing negotiations to address concerns over autonomy and resource control.

Breaches of MA63 and Legal Implications

As an international treaty incorporated into Malaysian law, a breach of MA63 can have significant legal and political consequences. The agreement’s domestication means that breaches could be interpreted as violations of both international law and domestic constitutional provisions.

Who Can Sue Whom for Breaches of MA63?

1. State Governments vs Federal Government

The state governments of Sabah and Sarawak, as direct parties to MA63, can take legal action against the Federal Government if they believe their rights under the agreement have been violated. For example, Sabah might pursue a claim over the failure to fully honour the 40% revenue entitlement or breaches in resource control and immigration autonomy. Legal proceedings would take place within the Malaysian judicial system, with recourse to domestic courts such as the Federal Court, which has jurisdiction over constitutional disputes.

2. State Attorneys-General

The State Attorneys-General of Sabah and Sarawak have the authority to file constitutional challenges on behalf of their respective states in cases of MA63 breaches. This may include cases involving fiscal entitlements, resource control, or the violation of autonomy provisions.

3. Individual Citizens or Groups

In certain cases, individual citizens or groups affected by breaches of MA63 may also bring legal actions. For instance, indigenous groups or communities impacted by land rights violations could seek judicial review in the courts. However, such cases would generally focus on constitutional protections that have been incorporated into Malaysian law.

4. Federal Government

The Federal Government may also engage in political or legal measures to resolve disputes arising from MA63 breaches. This is often done through negotiation rather than litigation, with political platforms like the Malaysia Treaty Implementation Action Council (MTPMA63) providing a forum for discussions.

Can the UK Be Sued for Breaches of MA63?

As one of the original signatories to MA63, the UK’s role in the agreement was primarily as a facilitator during Malaysia's formation. However, once MA63 was incorporated into Malaysian law, the UK’s obligations largely ended. Suing the UK for breaches of MA63 is legally challenging for several reasons:

• Under International Law - While MA63 is an international treaty, the UK's direct role ceased after the treaty was domesticated into Malaysian law. Any attempt to hold the UK accountable would require Malaysia and the UK to agree to the jurisdiction of an international court, such as the International Court of Justice (ICJ). Without mutual consent, such a case is unlikely to proceed.
• In Domestic Courts - Malaysian courts are unlikely to entertain a case against the UK, as the key obligations under MA63 are now governed by Malaysian law, making the Federal Government responsible for its implementation. Similarly, UK courts would likely dismiss any claim based on jurisdictional grounds.
• Diplomatic Channels - While legal action against the UK is improbable, Sabah or Sarawak could raise the issue through diplomatic channels or international forums, such as the United Nations. However, such actions would likely result in diplomatic pressure rather than legally enforceable outcomes.

Where Can Breaches of MA63 Be Addressed?

1. Domestic Courts - The Federal Court and other domestic courts are the primary venues for addressing breaches of MA63. Constitutional challenges can be filed by state governments, seeking judicial interpretation of key provisions such as fiscal entitlements, immigration rights, and resource control.
2. International Bodies - While international recourse is limited, actions could theoretically be brought in forums such as the United Nations or the International Court of Justice, although this would require mutual consent. International pressure through diplomatic channels could also be a viable strategy.
3. Political Platforms - Ongoing negotiations between the Federal Government and East Malaysian states have proven to be an effective, though incomplete, method of resolving disputes. The establishment of the Malaysia Treaty Implementation Action Council (MTPMA63) and other forums have facilitated discussions, although litigation remains an option if political negotiations fail.

Political and Constitutional Ramifications

Breaches of MA63 have significant political implications. Both Sabah and Sarawak have long expressed dissatisfaction with what they perceive as the erosion of their rights under the agreement. Demands for constitutional reform to restore the equal partnership status of Sabah and Sarawak within Malaysia have grown louder, and there is increasing pressure for the Federal Government to fully honour all provisions of MA63.

In recent years, the Federal Government has initiated negotiations to settle MA63-related claims. Notably, Sabah and Sarawak have regained control over certain administrative functions, such as electricity regulation and deep-sea fishing licensing. However, these efforts have not resolved all outstanding issues, particularly regarding revenue entitlements and resource control.

Conclusion

The Malaysia Agreement 1963 is both an international treaty and a fundamental component of Malaysia’s constitutional structure. Its incorporation into domestic law means that breaches of MA63 are primarily addressed through Malaysia’s legal system, with limited recourse to international bodies. Legal and political disputes over fiscal rights, resource control, and immigration autonomy remain central to the agreement’s implementation. Whether through judicial avenues or political negotiations, resolving the outstanding issues of MA63 will continue to shape the future of the Malaysian federation.