The Dandelions

.. the mutual admiration and bashing society.

So, who actually owns the land in Perak & Penang?

Posted by Oscar the Grouch on December 29, 2008

So, here’s the crunch: – the benevolent Perak state government wants to award freehold land titles to those residing in settlements and new villagers. The DPM, Najib Razak, quickly responded by declaring that the Perak government is not entitled to do so, citing the need to get the approval of the National Land Council. Perak and Penang disagrees and insists that it is within their legal right to do so.

Here’s an interesting constitutional impasse, I thought to myself. I have already prepared myself, since the March 8th election results, of the eventual legal collision between the State and the Federal Government. Amply armed with statute books and plain curiosity, I decided to waste the long stretch holiday afternoon to understand the issue. Here’s what I found out: –

The Federal Constitution demarcates very clearly jurisdictional matters concerning the Federal Government and the State Government. Article 74 (1) of the Federal Constitution allows Parliament to make laws with respect to matters stated in the Federal List. The Federal List includes matters relating to international treaties & diplomatic matters, defence, internal security, administration of justice, official secrets, citizenship, finance, commerce, transport, education and health.

As for State Government, Article 74 (2) of the Federal Constitution allows the Legislature of a State to make laws with respect to matters laid out in the State List. These include matters relating to Islamic law, land tenure, registration of titles & deed, land improvement & soil conversation, rent restriction, Malay reservation, compulsory acquisition and transfer of land.

Therefore it would seem that the State Government has jurisdiction when it comes to matters relating to land. What then is this National Land Council? The National Land Council, or the NLC for short, was established pursuant to Article 91 (1) of the Federal Constitution. The duty of the NLC is set out in Article 91 (5) as follows: –

91 (5) It shall be the duty of the National Land Council to formulate from time to time in consultation with the Federal Government, the State Governments and the National Finance Council a national policy for the promotion and control of the utilization of land throughout the Federation for mining, agriculture, forestry or any other purpose, and for the administration of any laws relating thereto; and the Federal and the State Governments shall follow the policy so formulated.

The task of the NLC is to formulate policies on land matters. This is so argued by the DAP. In the press statement issued by Ngeh Khoo Ham, the MP for Beruas and a member of the Perak Senior State Exco, entitled “Legal Opinion on the Constitutionality of the Perak State Government to permit the Conversion of Leasehold Titles into Freehold Titles”, it was contented that the NLC has no legislative power.

In many ways, the DAP’s claims are correct. There appears to be no provisions in any Acts of Parliament or the Federal Constitution to support Najib’s claim that prior approval of the NLC must be obtained. It is not for the State Government to seek permission from the NLC, but rather it is the NLC who formulates policies, of which it shall be the responsibility of the State to adhere to.

Land belongs to the State, not the Federal Government. This is clearly provided on the National Land Code 1965: –

40. There is and shall be vested solely in the State Authority the entire property in –

(a) all State Land within the territories of the State;

Since land belong to the State, the State has authority and power to dispose and alienate State Land, either in perpetuity or for a term not exceeding 99 years (Sections 41, 42 and 76 of the National Land Code 1965). Therefore, as maintained by DAP, since land belongs to the State, the State Government is at liberty to issue freehold titles as it wish, without seeking prior approval of the NLC, whose job is to only formulate policies.

Alas, I find DAP’s argument half-full. Although it is true that the State Government need not get approval from the NLC, Article 91 (5) of the Federal Constitution provides clearly that the “… State Governments shall follow the policy so formulated.” This means, even though the NLC has no legislative powers, the States are mandated to follow the policies, even though it has no force of laws, unlike an Act of Parliament.

The powers of the Federal Government are far greater than that of the State. Even if the DAP argues that the NLC has no legislative powers, Article 76 (1) (b) of the Federal Constitution allows Parliament to step in and legislate on state matters for the purpose of promoting uniformity of the laws of two and more States.

Of course, when Parliament starts to legislate on state matters, the law shall not come into operation in any state until it has been adopted by a law made by the Legislature of that State and shall then be deemed to be a State law (Article 76 (3) of the Federal Constitution). However, in matters relating to land, Article 76 (4) of the Federal Constitution provides the final blow for the State Governments: –

76 (4) Parliament may, for the purpose only of ensuring uniformity of law and policy, make laws with respect to land tenure, the relations of landlord and tenant, registration of titles and deeds relating to land, transfer of land, mortgages, leases and charges in respect to land, easements and other rights and interests in land, compulsory acquisition of land, rating and valuation of land, and local government; and Clauses (1) (b) and (3) shall not apply to any law relating to any such matter.

Sadly, to me, the Pakatan State Governments are fighting an uphill battle. Though the States own the lands and are given jurisdiction on land matters, they are bound by the policies issued by the NLC. Even if the policies are ignored, ultimately Parliament can step in to arrest the matter. Of course, there may be other novel legal arguments for the Pakatan to dwell on, but that is something that needs mulling over.

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P/s. Oh yes, I like to wish my fellow Dandies and all readers a Merry Christmas and a Happy New Year 2009!

2 Responses to “So, who actually owns the land in Perak & Penang?”

  1. vinnan said

    That’s right Parliament must step in and legislate away what the Penang and Perak state government has done and apply it to all states. Do you see the political nuclear bomb heading for the Federal government if they were to try something like that. What you said is theoretically possible but politically impossible. Let’s just leave it at that.

  2. MC said

    The controversy of land conversion (DAP)
    http://dapmalaysia.org/english/2009/jan09/bul/bul3645.htm

    From the Bar Council:
    http://www.malaysianbar.org.my/legal/general_news/kl_will_have_final_word_on_land_title.html

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