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Malaysia's expansion of its maritime jurisdiction and the World Oil Crisis, 1973–80

Published online by Cambridge University Press:  05 September 2022

Lam Choong Wah
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Abstract

In this article, I argue that Malaysia joined the South China Sea dispute during the 1970s as a reaction to the World Oil Crisis instead of asserting historical claims as in the cases of Vietnam and China. Malaysia expanded its maritime jurisdiction to include several highly disputed maritime features at the height of the oil crisis. The crisis was initiated by an oil embargo imposed by the Arab states, which imposed domestic inflationary pressures on Malaysia's economy. These two factors, external and domestic, resulted in Malaysia's bolstering of its offshore hydrocarbon exploration and exploitation culminating in the expansion of its maritime jurisdiction. In particular, Malaysia expanded its maritime jurisdiction in 1976 and 1979, which coincidentally corresponded with the aftermath of major oil price hikes that occurred in October 1975 and December 1978. Compared to China, Vietnam, and the Philippines, all of whom issued their maritime claims on the South China Sea based on historical or new discoveries, Malaysia's expansion was a mere reaction towards the oil crisis rather than a deliberate move.

Type
Research Article
Information
Journal of Southeast Asian Studies , Volume 53 , Issue 1-2 , June 2022 , pp. 309 - 338
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Copyright
Copyright © The National University of Singapore, 2022

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Footnotes

I would like to thank Fan Hongwei, Wang Zhaohui, Ngoei Wen-qing and Tony See Sin Heng, all of whom gave me extremely helpful advice. I am also very grateful to the two anonymous reviewers who read my manuscript so carefully and gave many useful comments. All errors are my own.

References

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9 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 2, 46, 8 Nov. 1976, p. 4837.

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15 In fact, PETRONAS has contributed a whopping RM1.2 trillion since 1976 to the federal and state governments in the form of tax collection and oil royalties. ‘PETRONAS has contributed RM1.2 trillion for national development since 1976’, The Star, 20 Feb. 2021, https://www.thestar.com.my/business/business-news/2021/02/20/petronas-contributes-rm12-trillion-since-1976-to-national-development (last accessed 1 Aug. 2021).

16 Valencia, Malaysia and the Law of the Sea, p. 12.

17 Ibid., p. 87.

18 Mahathir Mohamad, A doctor in the House: The memoirs of Tun Dr. Mahahir Mohamad (Petaling Jaya: MPH, 2018), p. 317.

19 See Charles Issawi, ‘The 1973 Oil Crisis and after’, Journal of Post Keynesian Economics 1, 2 (1978–79): 3–26. The 1973 Oil Crisis is defined as a series of oil price hikes engineered by OPEC to counter the West's pro-Israel position. The crisis peaked in 1979 and then oil prices started declining in 1980 due to an internal divide within OPEC and the rapid rise of non-OPEC members’ oil production.

20 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 3, 28, 28 Nov. 1973, pp. 3286–87. (In Malay, my translation).

21 Ibid., p. 3310.

22 POM, ‘Parliamentary debates of House of Representatives. Third Parliament, fourth session’, 4, 9, 26 Apr. 1974, p. 1051.

23 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 3, 32, 4 Dec. 1973, pp. 3788–89. (In Malay, my translation).

24 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, second session’, 2, 9, 28 Mar. 1980, p. 1118.

25 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 2, 45, 24 Jan. 1973, pp. 5642–43.

26 Ministry of Finance, Economic report 1973/74 (Kuala Lumpur: Director General of Printing, 1973), p. 48.

27 Ministry of Finance, Economic report 1974/75 (Kuala Lumpur: Director General of Printing, 1974) p. 27.

28 Ibid., p. 64.

29 Ministry of Finance, Economic report 1976/77 (Kuala Lumpur: Director General of Printing, 1976), p. 40.

30 Ibid., p. 92.

31 Ministry of Finance, Economic report 1977/78 (Kuala Lumpur: Director General of Printing, 1977), p. 52.

32 Ibid., p. 112.

33 ‘PETRONAS digs in its heels’, Far Eastern Economic Review (FEER), 8 July 1977, p. 37.

34 Ministry of Finance, Economic report 1978/79 (Kuala Lumpur: Director General of Printing, 1978), pp. 65–6.

35 Ibid., p. 122.

36 Ministry of Finance, Economic report 1979/80 (Kuala Lumpur: Director General of Printing, 1979), p. 96.

37 Ministry of Finance, Economic report 1980/81 (Kuala Lumpur: Director General of Printing, 1980), p. 93.

38 Ministry of Finance, Economic report 1979/80, pp. 96, 123.

39 Ministry of Finance, Economic report 1980/81, p. 94.

40 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, fourth session’, 4, 16, 19 July 1974, pp. 1941–42.

41 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, fourth session’, 4, 20, 25 July 1974, p. 2470.

42 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, first session’, 1, 62, 12 Nov. 1975, p. 6978.

43 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 2, 31, 28 July 1976, p. 3486.

44 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, third session’, 3, 8, 3 Mar. 1977, p. 897.

45 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 55, 3 Apr. 1979, p. 5838.

46 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 56, 11 June 1979, p. 5987.

47 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 80, 22 Oct. 1979, p. 8649.

48 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 57, 12 June 1979, pp. 6107–10.

49 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, second session’, 2, 16, 10 June 1980, p. 2174.

50 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 71, 8 Oct. 1979, p. 7856.

51 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, third session’, 3, 38, 2 Nov. 1981, p. 4799.

52 The Malaysian Plan is a five-year development plan; the Second Malaysia Plan spanned 1971–75, and the Third Malaysia Plan, 1976–80.

53 ‘Malaysia: No time for socialism’, FEER, 30 July 1976, pp. 95–101.

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55 ‘Malaysia boosts public spending’, FEER, 11 Nov. 1977, p. 44.

56 ‘Savouring the sweet smell of oil’, FEER, 13 Apr. 1979, pp. 36–9.

57 POM, ‘Parliamentary debates of House of Representatives, Second Parliament, third session’, 3, 5, 21 June 1966, p. 1107. The bill stipulated that ‘“continental shelf” means the sea-bed and subsoil of submarine areas adjacent to the coast of Malaysia but beyond the limits of the territorial waters of the States, the surface of which lies at a depth no greater than two hundred metres below the surface of the sea, or, where the depth of the superadjacent waters admits of the exploitation of the natural resources of the said areas, at any greater depth’. The Act was amended then to cover the continental shelfs of Sarawak and Sabah.

58 POM, ‘Parliamentary debates of House of Representatives, Second Parliament, third session’, 3, 5, 21 June 1966, p. 1108.

59 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 4, 19, 24 July 1974, pp. 2361–62.

60 ‘Malaysian oil: Snags remain’, FEER, 24 Dec. 1976, pp. 90–92.

61 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, third session’, 3, 14, 12 July 1977, p. 1570.

62 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 3, 13, 8 May 1973, p. 1511.

63 ‘Malaysia strikes a late deal on Bintulu’, FEER, 14 Apr. 1978, pp. 44–5.

64 POM, ‘Parliamentary debates of House of Representatives, Second Parliament, fourth session’, 4, 48, 1 Mar. 1968, p. 7043.

65 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, fourth session’, 4, 8, 25 Apr. 1974, p. 935.

66 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 2, 45, 24 Jan. 1973, pp. 5640–41.

67 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, fourth session’, 4, 9, 26 Apr. 1974, p. 1052.

68 ‘Singapore refinery downturn’, FEER, 18 July 1975, p. 36.

69 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 4, 19, 24 July 1974, p. 2357.

70 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 2, 15, 10 Aug. 1972, p. 2008.

71 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 2, 40, 17 Jan. 1973, p. 5084.

72 ‘Malaysia's oil corporation’, FEER, 9 Aug. 1974, p. 53.

73 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, third session’, 4, 19, 24 July 1974, p. 2358–60.

74 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 31, 2, 28 July 1976, pp. 3414–15.

75 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 2, 52, 16 Nov. 1976, p. 5418.

76 Ministry of Finance, Economic report 1977/78, pp. 113–14.

77 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 2, 38, 27 Oct. 1976, pp. 4174–76.

78 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 67, 26 June 1979, pp. 7306–08.

79 Ministry of Finance, Economic report 1977/78, pp. 114–15.

80 United Nations, Chapter XXI of the Law of the Sea, United Nations Treaty Collection, https://treaties.un.org/pages/ShowMTDSGDetails.aspx?src=UNTSONLINE&tabid=1&mtdsg_no=XXI-1&chapter=21&lang=en#top (accessed 1 Aug. 2021). The Geneva Conventions on the Law of the Sea consist of the Convention on the Territorial Sea and Contiguous Zone, Convention on the High Seas, Convention on Fishing and Conservation of the Living Resources of the High Seas and Convention on the Continental Shelf. Subsequently, Malaysia signed an Optional Protocol of Signature Concerning the Compulsory Settlement of Disputes in May 1961.

81 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 2, 14, 9 Aug. 1972, p. 1883. United Malays National Organization (UMNO) was the largest ruling party from 1957 to 2018.

82 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, first session’, 1, 41, 7 July 1975, p. 4577.

83 Before 1976, China only made a proclamation, on 4 Sept. 1958, that the breadth of its territorial sea was to be 22.2 km (12 nmi) and this provision applies to all its territories, including the Nansha Islands (Spratly Islands). Meanwhile, the Philippines laid down its continental shelf claims through issuing Presidential Proclamation no. 370 on 20 Mar. 1968, and Manila only officially proclaimed the Kalayaan Island Group (part of the Spratlys) as its territory under Presidential Decree no. 1596 of 11 June 1978. Neither China nor the Philippines issued any maps pertaining to their claims at the time.

84 National Archive of Malaysia, Butir-butir Keputusan Jumaah Menteri yang belum disahkan: Perkara yang berbangkit Peta Baru Malaysia yang menunjukkan Sempadan Perairan Negara dan Pelantaran Benua, dtd 13/4/1977 [Unverified Cabinet decision details: Matter related to Malaysia's New Map displaying national waters and continental shelf], SR(900) 443–24, vol. III.

85 ‘Malaysia plans to stretch sea zone to 320 km’, Business Times, 23 July 1977.

86 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, first session’, 1, 69, 28 June 1979, pp. 7534–6.

87 The disputes of sovereignty over Batu Putih and Sipadan were settled before the International Court of Justice. Batu Putih and Sipadan were awarded to Singapore and Malaysia, respectively, in 2008 and 2001. Malaysia's claim on Layang-Layang Island and its adjacent reefs are still contested by China, Taiwan, Vietnam and the Philippines. In 2016, an arbitration delivered by the Permanent Court of Arbitration rendered all islands constituting the Spratly Island group to the status of ‘rocks’. But Malaysia stated that it is not bound by the arbitration as well as that its rights and interests shall not be affected by this decision.

88 Abdul Hamid Shaharuddin, ‘National Ocean Policy: New opportunities for Malaysian ocean development’, Marine Policy 25, 6 (2001): 427–36.

89 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, second session’, 2, 15, 9 June 1980, pp. 1997–8.

90 POM, ‘Parliamentary debates of House of Representatives, Fifth Parliament, second session’, 2, 10, 31 Mar. 1980, p. 1241.

91 POM, ‘Parliamentary debates of House of Representatives, Fourth Parliament, second session’, 2, 34, 2 Aug. 1976, p. 3819.

92 Royal Malaysian Navy (RMN), Membelah ombak: Sejarah Tentera Laut Diraja Malaysia 1934–1989 (Kuala Lumpur: RMN, 1991), pp. 132–4.

93 POM, ‘Parliamentary debates of House of Representatives, Third Parliament, second session’, 1, 109, 10 Dec. 1979, p. 11812.

94 ‘Naval base in Kuantan’, Straits Times, 2 July 1981.

95 ‘Starting the decade with a bang’, FEER, 10 Jan. 1980, p. 30.

96 Lam Choong Wah, Are we protected? Malaysian defence uncovered (Kuala Lumpur: REFSA, 2015), p. 9.

97 ‘Perched on a claim’, FEER, 29 Sept. 1983, p. 40.

98 See Royal Malaysian Navy, Gugusan Semarang Peninjau: Guardian of the frontier (Kuala Lumpur: Royal Malaysian Navy Sea Power Centre, 2018) for details of the military occupation.