[Editor’s Note: This is the third entry in our symposium on “Constitutional Implications of the Malaysian Tsunami.” The introduction to the symposium is available here.]
The Malaysian constitution does not have a preamble. The first article of the constitution simply states that “[t]he Federation shall be known, in Malay and in English, by the name Malaysia.” States of the Federation are further listed in the same article as Johore, Kedah, Kelantan, Malacca, Negeri Sembilan, Pahang, Penang, Perak, Perlis, Sabah, Sarawak, Selangor and Terengganu. These 13 states and 3 other federal territories today make up the Federation of Malaysia.
As Wong and Chin have observed, BN’s dominance at both federal and state level has meant that relations between federal and state governments are more akin to “intra- or inter-party relations”, rather than conventional federal-state intergovernmental relations. This is because the BN federal government is usually able to use intra-party control over BN state governments, which end up behaving “more like branches than partners of the federal government.” One clear manifestation of this is how the top leadership of the United Malays National Organization (UMNO), the dominant party within BN, would usually decide who were to be the chief ministers of BN-controlled state governments.
Federalism of course is a contested idea, which as Palermo and Kössler have pointed out, can be “simultaneously understood as a concept, an ideal (and an ideology), a system of government and a set of institutions and instruments”. Indeed, federalism can be used to describe a wide spectrum of political arrangements, though at its core, it can be said to entail a mix of “self-rule plus shared rule”. Thus, at the minimum, federalism involves a constitutional diffusion of power.
The GE14 results raise many constitutional questions. One of these is its implications for federal-state relations. As Harding and Chin have observed that since the 2008 general elections, when opposition parties began to control a greater number of constituent states in the federation, “[o]ffice-holders at both levels have been exploring the political, legal, administrative and fiscal consequences” of greater divergence between the federal and state governments. It is of course a possibility that federal-state relations will remain pretty much the same since Pakatan Harapan (PH) has control over a majority of states in Malaysia – Johor, Kedah, Melaka, Negeri Sembilan, Penang, Perak, and Selangor. On top of this, a PH-allied party controls Sabah. BN, in comparison, retained control only over three states – Perlis, Pahang, and Sarawak – while the Islamic Party, PAS, controls Kelantan and Terengganu. However, the impact of political diffusion, I argue, will be hard to contain. As such, GE14 will create ripples on federal constitutionalism in Malaysia. The only question is the extent to which it would happen. Here, however, I identify three areas of federal-state relations, which is likely to be affected by the results of GE14: first, the status and administration of Islam; secondly, the division of powers between the federal government and the states of Sabah and Sarawak; and thirdly, the constitutional monarchy.
Islam and Federalism
On the first, debates on Islam and Islamic law may increasingly be reconceptualized as a matter of asserting state power. At the moment, the status and role of Islam within the Federation has already been a contested and much debated one. Much ink, including mine, has been spilled on the meaning of Article 3(1) of the Malaysian constitution which stipulates that “Islam is the religion of the Federation; but other religions may be practised in peace and harmony in any part of the Federation”. Such discussion has mostly been from the perspective of its impact or otherwise on the constitutional guarantee of religious freedom in Article 11(1) as well as the muddled delineation between civil and Syariah courts jurisdictions under article 121(1A). Commentaries have however tended to focus less on the dimension of federal-state relations in the context of constitutional conflicts involving religion. This could be attributed to the historically strong cohesion between the federal and state governments. In this regard, it is particularly telling that a major contributor to political conflict concerning the status and role of Islam in the federation has arisen due to political contestations between UMNO within BN and the Islamic party, PAS, which has controlled Kelantan since 1990.
The federal-state implications of Islam as the religion of the federation may well become more evident in the new political climate. Historically, when the independence constitution was drafted, the Malay sultans had initially rejected article 3(1) declaring Islam to be the religion of the federation precisely because they felt that it would open the door for the federal government to interfere with their role and sovereignty as heads of Islam within their respective states. The Malaysian constitution clearly places Islam within the exclusive jurisdiction of the states. “Islamic law and personal and family law of persons professing the religion of Islam” are part of the State List (List II of the Ninth Schedule). These laws include “Islamic law relating to succession, testate and intestate, betrothal, marriage, divorce, dower, maintenance, adoption, legitimacy, guardianship, gifts, partitions and non-charitable trusts”. The State also has exclusive jurisdiction to make laws concerning the definition and regulation of religious trusts, Malay customs, Islamic religious revenues (e.g. zakat), regulations of mosques or any Islamic public places of worship, creation and punishment of offences by persons professing the religion of Islam against precepts of that religion (except for matters included in the Federal List) as well as the establishment, organization, and procedure of Syariah courts. Notably, the State List is clear that Syariah courts “shall have jurisdiction only over persons professing the religion of Islam” and only over matters included in the List. The State also has the power to control propagation of doctrines and beliefs among persons professing the religion of Islam”. Furthermore, article 121(1A) appears to insulate Syariah courts’ from the supervisory jurisdiction of the civil courts. Syariah courts are creatures of statute passed by the state legislatures. The only Syariah court created by federal statute is the Federal Territories Syariah Court which has jurisdiction only within the federal territories.
This federal-state dynamic has emerged, although tangentially, in several religious freedom cases which implicated the scope of the states’ legislative powers under the constitution. For instance, in the 2012 case of Fathul Bari Mat Jahya & Anor v Majlis Agama Islam Negeri Sembilan & Ors  CLJ JT(2), the Federal Court decided that the criminalization of the teaching of Islam without credentials is within state power as it is an offence against the precepts of Islam, defined widely. Thus, if political diffusion occurs across the federal-state dimension, religious freedom cases may well become another area of contention whereby the state claims greater autonomy to regulate Islamic teachings and Islamic practices within their territorial jurisdiction, possibly to the detriment of the Federal Constitution.
Indeed, this can be seen in the context of amendments proposed by PAS to the 1965 Syariah Courts (Criminal Jurisdiction) Act to raise the ceiling to the punitive powers of the state Syariah courts. Currently, federal law limits the Syariah Courts’ jurisdiction such that the maximum punishment they may impose is three years’ imprisonment, a fine not exceeding Ringgit Malaysia (RM) 5000, and/or six strokes of the cane. PAS had tabled the amendments with a view to expanding Syariah offences and there was concern that this could eventually pave the way for the implementation of hudud punishments (traditional Islamic criminal punishments). The amendment bill seeks to raise the limits of existing punishments to 30 years’ imprisonment, a maximum fine of RM 100,000, and/or 100 lashes. Again, seemingly to shore up its flailing support among the ethnic Malay/Muslim voters, UMNO had pledged to support the amendment but the bill was never debated. These amendments may well be revived and repackaged as an assertion of state rights over federal rights. While PAS, even with UMNO’s support, would not have the majority to pass the amendment in Parliament, it may nonetheless succeed if it manages to gain votes from Muslim parliamentarians from PH, especially from Amanah and PKR, by appealing to Muslim solidarity in addition to inter-state solidarity.
Sabah and Sarawak
Secondly, Sabah and Sarawak, by virtue of the specific terms of their union with the Federation of Malaya into the Federation of Malaysia, may now find more avenues to reassert autonomy over a wider range of issues that had previously been controlled by the federal government, whether directly or indirectly through their proxies. The states of Sabah and Sarawak joined the Federation of Malaysia in 1963, together with Singapore. While Singapore seceded from the federation in 1965, Sabah and Sarawak remained. Discontent has been growing in both Sabah and Sarawak due to the strong control that the BN federal government previously asserted over the two states with serious consequences for its political autonomy, immigration, and control over its resources. These, it has been argued, were seen to be contrary to the Malaysia Agreement of 1963, under which Sabah and Sarawak were to enjoy special status within the federation. Claims of internal colonialism have been levelled at the federal government.
The weakening of the BN government since 2008 has arguably led to greater assertion of state autonomy by Sabah and Sarawak. While much of the discontent and re-appropriation has to do with political control, resource control is also a major area for federal-state conflict in Malaysia. In particular, Sarawak, a gas- and timber-rich state, has been tussling with the federal government over control of its oil and gas resources. In the lead up to GE14, the BN-allied Sarawak state government announced the formation of Petros, its state-owned oil and gas company, which will assume complete mining rights over its territory. This conflicts with an existing legal arrangement under which Petronas, the national oil and gas company owned by the Malaysian (federal) government, has legal ownership and rights over oilfields nationwide and makes cash payments to federal and state governments where petroleum deposits are dug up or processed. Through Petros, Sarawak will be able to earn its own revenues directly through exploration and in downstream activities.
Interestingly, prior to GE14, neither the federal government nor Petronas protested openly with Sarawak’s plans. Consequently, amendments to the Oil Mining Ordinance 1958 and the Gas Distribution Ordinance 2016 (collectively, “the Ordinances”), allowing Petros to assume control over oil resources in Sarawak, were to take effect on 1 July 2018. However, a month after GE14, Petronas announced that it had filed an application before the Federal Court seeking a declaration that according to the Petroleum Development Act 1974 (“PDA”), Petronas is the exclusive owner of petroleum resources and the regulator for the upstream industry throughout Malaysia, including in Sarawak. How the courts deal with the suit will depend on the interpretation of the Malaysia Agreement 1963, as well as the relative legal authority of the Agreement, the PDA, and the Ordinances.
It will also require a close reading of these legal documents with the constitution. Under the Federal Constitution, the development of oils and oilfields are part of the Federal List (item 8(j) of the Federal List in the Ninth Schedule), although it is to be read subject to item 2(c) in the State List, which refers to permits and licences for prospecting for mines, mining leases and certificates. The constitutionality of the PDA had not been a seriously contested issue in the previous political climate where the federal government wielded strong control over the political landscape of the federation. However, if GE14 results in greater diffusion of political power, it is likely that state governments will seek to assert greater pressure, both politically and legally/constitutionally, to seek more control over natural resources within their states. Sabah and Sarawak will probably be the most vocal in asserting their state rights, but others, particularly those now governed by the opposition BN, may well follow suit.
Lastly, the constitutional monarchy’s relationship with the state and federal governments could also be affected by any diffusion of political power post GE14. Andrew Harding’s post in this symposium provides extensive and thoughtful reflections on the constitutional implications on the constitutional monarchy. I will here only examine issues that have federal-state implications with regards to the monarchy.
Along with the tendency for federalism to take a back-seat to intra-party politics under BN’s reign, the choice of Chief Ministers within states has also frequently been determined by the central UMNO leadership. In this regard, constitutional monarchs have, in the past, appeared to take heed to the views of political leaders in the federal government. However, with divergence of political-party control among the federal and state governments, central control over the choice of leaders within the state may well decline. One such example is in Perlis, where the Sultan of Perlis refused to appoint as Chief Minister a candidate reportedly backed by the central UMNO leadership but appointed instead the previous Chief Minister, also an UMNO candidate. Interestingly, a constitutional crisis was averted at the state level after BN state assemblymen who had opposed the Sultan’s choice for Chief Minister relented after an audience with the Sultan.
This incident highlights federalism’s double-edged sword for democratic constitutionalism in Malaysia. On one hand, this incident could serve as a harbinger of the declining power of central political parties over political choices made at the state level. This could open the door for state political parties to have more control over the selection of their political leaders at the state level. Various considerations could go into why state political parties may be better placed to make such leadership considerations, including that such a leader is more likely to have local support. Thus, diffusion of central control over appointments of Chief Ministers in the states will strengthen federalism and give constituent states greater say over their leader of choice. Indeed, given that PH comprises four parties amongst which the current Prime Minister’s party (Parti Pribumi Bersatu Malaysia) have only 12 seats at the federal level (i.e. the second smallest number within the coalition) the current central government will have less control over the choice of state Chief Ministers and control over state politics, which should strengthen federalism in Malaysia.
On the other hand, the incident however highlights how political diffusion could further strengthen the respective constitutional monarchs’ powers at the state level as there is no longer a strong federal government to counter their powers and influence. As state governments are appointed by the state constitutional monarchs, they may not always be in a strong position vis-à-vis the constitutional monarchs.
As GE14 raises the prospect and process of diffusion of political power in favour of democratic constitutionalism, federal-state relations will surely emerge as one major area of negotiation. As Harding and Chin astutely observed, albeit in slightly different context: “The test is whether the federal government can live with state governments of a different political stripe; and whether state governments can in practice operate within the constraints that the constitution imposes.” The most recent dissolution of BN in Sarawak after all four component parties announced their exit from the coalition to form a new state-based alliance will be a further test of whether there will be a true diffusion of powers on the federal-state dimension. Alternatively, if the new coalition simply aligns itself with the PH government at the federal level, we might just end up with the same old federal dominance. Pakatan Harapan will simply be the new Barisan Nasional, and that would not bode well for Malaysian constitutionalism.
Suggested citation: Jaclyn L. Neo, Malaysian Federal-State Relations Post GE14, Int’l J. Const. L. Blog, Jun. 23, 2018, at: http://www.iconnectblog.com/malaysian-federal-state-relations-post-ge14
* This post expands upon a talk I gave at the EURAC Research’s Institute of Comparative Federalisms in Bolzano, Italy on 11 May 2018. I would like to thank my hosts and participants at the talk for their helpful comments.
 Wong Chin Huat and James Chin, ‘Malaysia: Centralized Federalism in an Electoral One-Party State’ in Rekha Saxena (ed), Varieties of Federal Governance: Major Contemporary Models (Foundation Book 2012) 208.
 Francesco Palermo and Karl Kössler, Comparative Federalism: Constitutional Arrangements and Case Law (Hart Publishing, 2017).
 Enric Fossas, ‘National Plurality and Equality’ in Ferran Requejo (ed), Democracy and National Pluralism (Routledge 2001) 69.
 Daniel J. Elazar (ed), Federalism and Political Integration (Turtledove Publishing 1979) 2-3.
 Andrew Harding and James Chin, ‘Fifty Years of Malaysia: Reflections and Unanswered Questions’ in Andrew Harding and James Chin (eds), Fifty years of Malaysia: Federalism Revisited (Marshall Cavendish 2014) 16. See also Tricia Yeoh, States of Reform: Governing Selangor and Penang (Penang Institute and Genta Media, 2012).
 For more background, please see the introduction.
 For further background on federalism in Malaysia, see JC Fong, Constitutional Federalism in Malaysia (2nd ed., 2016).
 Thio Li-ann, ‘Jurisdictional Imbroglio: Civil and Religious Courts, Turf Wars and Article 121(1A) of the Federal Constitution’ in Andrew Harding and Hoong Phun Lee (eds), Constitutional Landmarks in Malaysia: The First Fifty Years 1957-2007 (Lexis Nexis 2007); Jaclyn L. Neo, ‘Competing Imperatives: Conflicts and Convergences in State and Islam in Pluralist Malaysia’ (2015) 4(1) OJLR 1.
 See however Matthew Nelson and Dian A.H. Shah, ‘Regulating Religion through Administrative Law: Religious Conversion in Malaysia Beyond Fundamental Rights’, in Jaclyn L. Neo, Arif A. Jamal and Daniel P.S. Goh (eds), Regulating Religion in Asia: Norms, Modes and Challenges (OUP, 2018, forthcoming).
 Article 3(2) guarantees that the position of the Ruler as the Head of the religion of Islam in his State in the manner and to the extent acknowledged and declared by the Constitution of that State, and all rights, privileges, prerogatives and powers enjoyed by the Ruler as the Head of the religion of Islam (subject to the state Constitution) are unaffected and unimpaired by article 3(1). Article 3(2) further provides that each Ruler shall in his capacity of Head of the religion of Islam authorise the Yang di-Pertuan Agong to represent him in any acts, observances or ceremonies which the Conference of Rulers has agreed should extend to the Federation as a whole.
 Fathul Bari Mat Jahya & Anor v Majlis Agama Islam Negeri Sembilan & Ors  CLJ JT(2).
 See further James Chin, ‘Federal-East Malaysia Relations: Primus-Inter-Pares?’ in Harding and Chin (n 7) 152; and Bridget Welsh, ‘Interview with Tan Sri Simon Sipaun’, in Harding and Chin (n 7) 50.
 Trinna Leong, ‘Sarawak gains full control over state’s oil and gas sector as Malaysia election nears’ (The Straits Times, 7 March 2018) <https://www.straitstimes.com/asia/se-asia/sarawak-gains-full-control-over-states-oil-and-gas-sector> accessed 14 June 2018.
 Sharon Ling, ‘Sarawak govt to defend state’s right following suit by Petronas’ (The Star Online, 4 June 2018) <https://www.thestar.com.my/news/nation/2018/06/04/sarawak-govt-to-defend-states-right-following-suit-by-petronas/> accessed 14 June 2018.
 ‘Umno leader Zahid in Perlis state to discuss controversy over chief minister’s post’ (The Straits Times, 22 May 2018) <https://www.straitstimes.com/asia/se-asia/umno-leader-zahid-in-perlis-state-to-discuss-controversy-over-chief-ministers-post> accessed 14 June 2018; ‘Crisis in Perlis as Menteri Besar is sacked from state Umno party just after being sworn in’ (The Straits Times, 24 May 2018) <https://www.straitstimes.com/asia/se-asia/crisis-in-perlis-as-menteri-besar-sacked-by-other-umno-state-leaders-just-after-being> accessed 14 June 2018.
 Harding and Chin (n 7) 16.
 ‘Another bombshell for BN: S’wak BN dissolved, parties form new coalition’ (Malaysiakini, 12 June 2018) <https://www.malaysiakini.com/news/429431> accessed 14 June 2018.