Is it Royalty or Compensation.

 Daro, Malaysia:

The controversy concerning the two terms above seemed to be reluctant to go away from the public’s mind. It is not so much as to pin down the real definition of the two terms.

However, in the Malaysian context it is much more a result of the irresponsible actions of certain politicians making mountains out of molehills. Harassing the federal government seemed o be the only available tactic adopted by the Opposition [Pakatan Rakyat] to deflect the public’s views away from their increasing internal problems.

The Malaysian Petroleum Act which was put through the Malaysian Parliament in 1975 by none other than one Tengku Razaleigh, stipulated among others that coastal states are only paid a certain percentage as royalties if oil was found and extracted within three nautical miles of the shores of the said state.

Thus, only the two eastern states of Sabah and Sarawak are paid royalties as they fit the condition stipulated above. As for the states of Kelantan dan Terengganu, oil was extracted farther away from their shores. Kelantan has the weakest claim since the oil that they claim to be theirs was actually found in the shared border areas of Malaysia and Thailand.

The National Front ruling coalition is now launching a nation-wide road show to explain to the people the meaning of the Petroleum Act and the extent of the government’s responsibilities.