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Sabah must address constitutional setback
Published on: Sunday, June 19, 2022
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The Mamut copper mine in Ranau that was a health hazard to the villagers nearby.
THE a companying picture is deceptive of a beautiful lake but is in fact a deadly cocktail of heavy metals laden waste acidic water leftover from the Mamut Copper Mine at Ranau. 

It is a constant reminder of the slack legislation and poor understanding of the enviromental costs and effects in the 1970s that allowed the only Malaysian open pit copper mine to operate in Sabah. 

The law has since been tightened up in the 1990s with the amended Sabah Mining Ordinance which required the setting up of a rehabitation fund after the mining operation has ceased. 

But in the meantime, the Mamut Copper Mine and the Lohan Tailings Dam problem remains.

The copper mine began operation in 1975 and ceased operation in 1999. 

The open-cast mine is located some 1,500 meters above sea-level on the Southeastern slope of Mt. Kinabalu.

It covers 3,000 hectares of land around the rivers of Mamut, Bambangan and Lohan. 

Four villages lost 480 acres of land to make way for the Lohan Tailings Dam. 

About 4,000 acres of paddy land were flooded with the waste and silt in 1977. 

Today the Lohan Dam covers nearly 400 hectares, located about 15.8 km from the mine and 980 m lower in altitude. 

Many studies have been made and many proposals submitted for the rehabilitation of the mine and the Tailings Dam but todate no solution is in sight probably because of the prohibitive costs involved. 

Articles 74, 77 and the Ninth Schedule of the Federal Constitution (“FC”) are relevant to the laws on mining in Sabah. 

In this case, the FC divides the responsibility for making laws to the Federal Parliament and State Legislature according to three lists namely the Federal List, State List and Concurrent List.

Article 74(1) FC states that the Parliament may make laws as to “…any of the matters enumerated in the Federal List or the Concurrent List…”. 

Article 74(2) FC states that the state Legislature may make laws as to “…any of the matters enumerated in the State List…or the Concurrent List…”.

In the event of any ambiguity, Article 77 FC states that the state Legislature may make any laws as to “…any matter not enumerated in any of the Lists…”.

The division of responsibility is further explain in item 8(j) of the Federal List in the Ninth Schedule FC states that “…subject to item 2(c) in the State List: Development of mineral resources; mines, mining, minerals and mineral ores; oils and oilfields; purchase, sale, import and export of minerals and mineral ores; petroleum products; regulation of labour and safety in mines and oilfields…”. 

The Federal Government is responsible for all aspects of the development, purchase, sale, import and export of minerals and mineral ores. 

However, item 2(c) of the State List in the Ninth Schedule FC states that “…permits and licences for prospecting for mines; mining leases and certificates...”. 

The State Government is only responsible for issuing of permits and licences for mining. 

However, List III - Concurrent List states in item 9 that “…rehabilitation of mining land and land which has suffered soil erosion…” is the joint responsibility of the Federal and State Government.

In 2013, the State Government excised parts of the Class 1 Forest Reserves of Ulu Kalumpang and Mount Wullersdorf under Section 57 of the Land Ordinance Cap 68 and Section 16 of the Mining Ordinance No. 22 of 1960 for the Proposed Gold Mining Project over approximately 1,000 hectares of land area. 

Two rivers are potentially affected through this project – the Mantri River originating from Tawau Hills Park and the main Kalumpang River. 

There is very little news about the progress of this gold mine and so the rehabilitation cost is yet to be seen.

There is also the possibility that coal mining and other mineral mining may be allowed in Sabah in the foreseeable future. 

However, the present laws will mean that the Sabah government will only receive revenue from the issuance of the relevant licences.

At the same time, the Sabah government will be stuck with the immense rehabilitation cost for the mining land and the environmental cost of pollution after mining operations have ceased.

How did Sabah get into such a situation? 

Part of the answer is in history because the Ninth Schedule with the Federal List, State List and Concurrent List were drawn up in the Report of the Inter-Governmental Committee 1962 (“IGC”). 

At that time, Sabah still had the Companies Ordinance Cap. 26 (repealed on 1965), Income Tax Ordinance 1956 (repealed on 1968) and the Customs Ordinance of Sabah Cap. 33 (repealed on 1967). 

The IGC recommended in item 24(8) Financial Provisions that “…subject to the provisions for review made in sub-paragraph 9 below, North Borneo should receive each year a grant equal to 40pc of any increase Federal revenue derived from North Borneo and not assign to the state over the federal revenue which would have to accrued in 1963 if this financial arrangement had been in force in that year. 

The sum payable would be calculated on the basis of actual revenue received in each year…”. 

The legal suit filed by the Sabah Law Society and the Pakatan Harapan on the 40pc net revenue to Sabah is very important to address this lost revenue from failure to review. 

This is especially so because the State Government is concurrently responsible with the Federal Government for the rehabilitation cost of mines.

In any event, it is probably time for the State Government and the Federal Government to relook at the Ninth Schedule FC to determine their various responsibilities so that the problems of the Mamut Mine, the Lohan Tailings Dam, the problems from the Ulu Kalumpang and Mount Wullersdorf gold mine and other future mines will not be left with no solution but a headache to the State Government.

Roland Cheng

 

- The views expressed here are the views of the writer Roland Cheng and do not necessarily reflect those of the Daily Express.

- If you have something to share, write to us at: [email protected]





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