Shad. — Picture by Jack Ooi

By Adib Zalkapli - The Malaysian Insider

KUALA LUMPUR, March 20 — National oil firm Petronas could be unlawful as its founding law was approved before it signed agreements with all the states, law professor Datuk Dr Shad Saleem Faruqi said today.

He also explained that according to the constitution land belongs to the states, which complicates the provision in the agreement surrendering control of petroleum found onshore under the Petroleum Development Act 1974.

“I think there are some aspects of the Petronas Act that is unconstitutional,” Shad told a forum on oil rights.

Under the agreements signed in the mid-1970s all state governments were promised cash payment or royalty of five per cent for petroleum extracted onshore or offshore in return for surrendering their control ofminister and the son-in-law of another former prime minister,” he said, referring to banker Datuk Seri Nazir Razak, entrepreneur Datuk Mokhzani Mahathir and Umno Youth chief Khairy Jamaluddin respectively.

Earlier in the evening, Anwar had described how in the 1990s Malaysia was second in the region only to Singapore in economic competitiveness but could now no longer be compared to such leadings lights as our southern neighbour and other Asian giants like South Korea and Taiwan.

“Instead we are comparing ourselves to Indonesia, Vietnam and the Philippines and even then we are losing to them in terms of growth and foreign direct investment,” he claimed.

He added that the country has lost its attractiveness as an investment destination with experts explaining that Malaysia is no longer on “the radar” due to