Report of the Commission of Enquiry, North Borneo and Sarawak, 1962/CHAPTER 4/Anthony Abell and David Watherston

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Section E.—Recommendation by Sir Anthony Abell and Sir David Watherston


149. We would make it clear at the outset that, on the basis of the assessment of opinion in the territories which is recorded in earlier chapters of this report, we have reached the conclusion that, on appropriate conditions, Malaysia is an attractive and workable project, and would be advantageous to all parties concern.

150. Before coming to this conclusion, we have felt it our duty to consider whether it ofiers to tlte Borlleo territories a better future than other possible solutions. such as indefinite continuation of British rule, early independence on their own, or the creation of an independent Federation of the Borneo territories by themselves. We are conviced that, provided it can be achieved with due regard to the special position of these two territories, to the racial complications, to tile physical distance from Kuala Lumpur and to their political immaturity as compared with Malaya and Singapore, the Malaysia project offers Sarawak and North Borneo better prospects of security and prosperity than any other solution in view. opponents or Malaysia have often alleged to us that the project has been devised merely to help in dealing with the Malaya-Singapore situation, and that North Borneo and Sarawak are being treated as political pawns. This view is particularly strong in some quarters in North Borneo, where traditional links of trade have been moie with Hong Kong, Japan and Australia than with Singapore or Malaya. This argument goes on to say that the Borneo territories have been comparatively free of Communist and that a link-up with Malaya and Singapore would involve them unnecessarily in struggles between communisls and anti-communist. This view seems to US to disregard the impact which a change or regime in Singapore would inevitably have on Sarawak immediately, and on North Borneo very shottly thereafier. it does not lead us to modify our opinion that, both on economic and on security grounds, a successful realisation of Malaysia would be to the advantage of the two territories.

151. We recommend that a decision ot principle on the Malaysia project should be taken as soon as possible by the British and Malayan Governments, subject to debate, and support by a majority of‘ unofiieial members, in the Sarawak and North Borneo Legislatures. Once this decision of principle has been reached, we consider that a first step should be taken within l2 months at the most, and that this step should comprise the creation of a Federation of Malaysia. For the reasons set out in the following paragraphs we recommend, however, that the full realisation of Malaysia should be achieved in two distinct phases. we recognise and endorse tiie desirability moving forward as quickly as possible but we feel that there is a definite need for a transitional period during the early part or which there would no as little change as possible and which would allow time for the complicated machinery of federation to be worked out to the best advantage both ofthe Borneo territories themselves and of the Federal Government we believe that the proposals that we put forward would go 3 long way towards reassuring tiie opponents and critics or Malaysia in the Borneo territories, and would enhance the possibilities of bringing the different races together in a constructive partnership with the other parts of Malaysia, without in any way prejudicing the final achievement of a strong and single-minded Federation. our reasons for recommending a transitional period are based on our strong conviction on the following points.

(a) We feel that Her Mayestys Government have very clear obligations towards the peoples of the two territories, both general and, in Sarawak, deriving particularly from the Cardinal Principles (Appendix C) and the reply to the Petition to Her Majesty The Queen referred to in paragraph 68, to ensure that the political institutions of the territories can be carried to a stage where the people are able to play a full part in their own Govenment.


(b) Neither in Sarawak nor in North Borneo has the stage yet been reached where unofficials have been given even semi-Ministerial responsibilities. We understand that it is the intention to introduce a “Member" system at a reasonably early date in Sarawak, but that il is not thought that this can be done quite so soon in North Borneo. We were much encouraged by thee signs of growing political conciousness and political leadership in both terriories but there has been little opportunity up to the present or gaining political experience and responsibility. we consider that the necessary steps towards the appointment of a Chief Minster and the introduction of a State Ministerial system should be taken at as early at date as practicable in boll. territories; but we hold strongly the view that, for this important advance in the Constitution of the two territories to take place at one and the same time as the appointment of a constitutional Head of State and all the changes and adjustments, both emotional and political, involved in at transfer of sovereignty and the transfer or many or the State Governments" present powers to the Federal Government in Kuala Lumpur, would seriously overtax the administration and would create a sense of general bewilderment and a feeling or insecurity.


(c) Not only is the idea or a popularly elected Govenrment still strange to large sections of the populations of the two territories, but so also is the concept or a constitutional Head of State, the native peoples in particular are accustomed to a Governor who governs. Any weakening in the next few years; either real or apparent in authority at Kuching or Jesselton would involve serious security risks. We have referred else where to the regrettable growth of racial discord Until this has been given time to subside we believe that it would be difficult for a Head of State to be selected in either territory who would commond the loyalty and respect of the great majority of all races and be capable of discharging such a deiicate and invidious task.


d) We attach overriding importance to the maintenance of efficient administration and law and order during the years immediately ahead. Any lack of stability at this time would greatly increase the difficulties of the new Federation. it is absolutely essential (and this is common ground among all members of the Commission and among an over—whelming majority or witneesses) that the services of expatriate officers shouid be retained for a period of years. We would emphasise that the departure of a substantial proporlion oftliese oflioeissooii ater Malaysia comes into being would not merely involve an acceptance of lower standards but would almost certainly mean a breakdown of normal administration. Any solution therefore which does not lead to the retention of a large propotion of expatriate officers would in our judgment be doomed to failure on this account alone. In saying this we do not mean to imply that, once Malaysia is a going concern and these officers have gained first—hand knowledge of the invigorating atmosphere in, and the remarkable progress which has been made by the Federation of Malaya since independence, many of them will not be very willing to serve for a number of years under the Government of the new Federation and to give it their whole-heated loyalty.


152. The considerations in the preceding paragraph lead us to the View that, during the transitional period which we have recommended. the general pattern should be the following:


(a) Responsibility for External Affairs, Defence and the anti-subversive aspecs of lnternal security should be transferred at once to the Federal Government.


(b) Representatives of Sarawak and North Borneo should sit in the Federal Parliamenl and should be elected by the respective legislatures from among their own unofficial members. The election of a person to the Federal Parliament should not entail the vacation of his seat in the Legislalure of his territory. It might be thought reasonable for the two territories to have smaller representations in the Federal Parliament during the transitional period than their full quota under the final arrangements. On this latter point we are in agreement with our Malayan colleagues, as we have indicated in paragraphs 155 and 166 below.


(c) The Head of State in each territory should have executive powers similar to those at present exercised by the two Governors, We recommend further that Ihe title of Governor should not be changed, particularly as it will presumably continue to be used for the Head of State after the trasitional period comes to an end


(d) The Governors should be advised as at present by Executive (or Supreme) Councils and should take Ihe chair all meetings of these Councils. Chief Ministers should be appointed as soon as practicable and a Ministerial system introduced to cover subjects in the State legislative list. Federal subjects should remain the responsibility of Officials. In particular, the chief secretary, Attorney—General, and Financial Secretary should remain as ex oflicio members of the Excecutive Councils and of the Legislatures in both lerriiories until the end of the transitional period.


(e) An elecloral system for the Legislative Council in North Borneo should be introduced as soon as possible. We consider too that there will be a need to increase unofficial number of unofficial members of the Legislatures of both territories in order to meet the additional duties that members will be called upon to undertake. Some officials will have to be retained in the legislatures until Federal subjects are handed over. We recommend that Speakers should be appointed at an early date.


(f) As soon as possible afler a decision has been taken to create a Federation of Malaysia, a Joint Committee should be appointed composed or representatives of the Federal Government and of the State Governments of Sarawak and North Borneo, with an independent Chairman to be agreed beiween the three Government The task of this Committee would be to make recommendations to the three Governments as to the timingaitd manner of the integration into the Federal system of existing laws and practices, and of those Departments in the Borneo territories which are to become Federal. A particular concern of the Committee would be the question of the special safeguards for the Bomao territories which we have recommended in paragraph l48(b) of this report should be incorporated into the Constitution of the new Federation. We recommend that, in addition to senior officials of the Governments, one or more unofficlals from each of the Borneo territories should be appointed to this Joint Conimirtee.

Under the general supervision of this Committee we recommend that there should be such Joint Working Patties as are found to be necessary to examine certain fields lin detail. We visualise that formal Working Parties will be required at least to consider the Judicial, educational, and economic fields, and the public services, and there will certainly be others. In those cases where separate Working Parties are needed for each territory, there should be equal representation of the Federal Government and of the State Government concerned.

The Joint Committee and the working Parties should give the highest priority to their task so that it can be completed and the new arrangements introduced with the least possible delay.


(g) There should be close co-operation during the trausitionial period between the Federal Government and the Governments of the Borneo territories on all matters affecting their joint interests. In view of its importance, the Federal Govemment should be closely associated from the start with rural development. We have recommended in paragraph 170 the setting-up of a Development Board.


(h) The basis of employment of the expatriate siaff during the transitional period should remain unchanged. At the end of the period. a compensation scheme should be Introduced which we recommend should be as generous as possible and should be so devised as to give these officers the maximum encouragement to stay on for a further period if required


(i) We recommend that the transitional period should be for five years from the date of the creation of the new Federation but that this period should be adjustable to a minimum or three years or a maximum of seven years. During this period the state Government should make appropriate financial contributions to the cost of services transferred to the Federal Government. The basis on which these contributions are computed would have to be va cl from time to time if, as is to he expected during this stage, the Joint Committee and Working Parties referred to in sub-paragraph (f) above recommend that a State Department could be transfered to the Federal Government. The a Department should, however, remain a State responsibility for the duration of the transitional period for the reasons set out in sub-paragraph (h) above.


153. Having described the main features or the arrarigeineitts which we recommend for the transitional period. it remains to consider oonistitutional proposals which would provide the framework within which these arrangements

could operate smoothly and could move forward progressively towards the full realisation of Malaysia. We recommend that on the creation of Malaysia, the United Kingdom should by Agreement surrender sovereignty over the two territories, which would be admitted as States of the new Federation. At this stage agreement would be reached as to the ultimate division of powers between the Federal Government and the Govemments of the two States and we have made certain recommendations on the subject in paragraph 157 below. The Federal Government would at once assume responsibility for Defends, External Affairs and Internal Security (anti-subversive aspects). By Agreement, powers and functions in respect of all other matters that are ultimately to be allocated to the Federal List or the Concurrent List would be delegated to the new States for a specified period of from three to seven years. During this transitional period the new States would by Agreement between the United Kingdom and the Federation be administered by a Governor to be appointed by His Majesty the Yang di-Pertuan Agong, on the joint nomination of His Majesty and of Her Majesty The Queen, under transitional State Constitutions. These Constitutions would allow for rapid progress towards a full Ministerial system of responsible govenment with a constitutional Head of State, and would be replaced at the end of the transitional period by permanent Constitution on the lines of those provided for Penang and Malacca.

154. Turning now to the shape of long-term arrangements after the transitional period, we consider that the aim should be to strike a balance in the common interest between two conflicting requirements on the one hand, the Federal Parliament must have sufficient powers to ensure alignment of policies in matters essential to the creation and maintenance of a real and strong Federation. On the other hand, the Borneo territories should be enabled to maintain their separate identities within the Federation, Racial and other problems in the two territories are quite different from those in Malaya, and distances are so great as to make day-to—day administration from the Federal centre impracticable and undesirable.

155 Whatever the division of formal and legal powers between Federation and State. the practical administration of Federal subjects must largely be carried out on the spot. We recommend that the Joint Committee, whose appointment we have suggested in paragraph 152(f), should oonsider the desirability or regionalising the more important of the Federal posls and services in the Borneo territories. We believe that there may be a strong case for certain Federal Departments having a regional head in Borneo with sufficient authority to deal with local problems. In this connexion a suggestion has been made to us that in due course the Federal Government should appoint a Minister for Borneo affairs with a general responsibility for Federal subjects in the two territories on the analogy of the Secretary of State for Scotland; this suggestion seems to its to merit serious consideration.

156. Many witnesses have insisted that the Borneo territories should not join just as two States of the new Federation but in some way which would give more recognition to their identities and to their comparative size. We agree that it is important that the identity and prestige of Sarawak and North Borneo should be maintained but we consider that this would be achieved by maintaining a high degree of local administration and by allocating to them a quota of seats in the Federal Parliament which takes into account their size as well as their population.

157. There are one or two matters which we feel require special mention, either because we hold divergentviews from our colleagues or because they are of special significance to the Bomeo territories and are referred to in the record of evidence.

Head of State

158. We recommend that the Head of State should be aippointed by the Head of the Federation acting in his discretion but after consultation with the Chief Minister of the State. His constitutional position should, we oonsider, be the same as that of the Governors of Penang and Malacca. In View of the strength of the opinions expressed to us in the Borneo territories, we consider it is desirable that the first Head of State after the transitional period should be a member of the indigenous races. We feel that thereafler this matter should be decided by the State Legislatures.

The Judiciary

159 The distance between Borneo and Malaya leads us to believe that it would be wise to maintain for the Borneo territories a separate High court presided over by its own Chif Justice, and we would recommend that appeals from this Court should lie to a Federal Supreme Court. It might be advaiitageous if Judges or the Malayan High Court could be made available to sit as Judges of the Borneo High Court and when required and vice Versa. We have recommended the appointment of a Working Party to examine the details of new arrangements which would be necessary including the method of appointment and removal of Judges in the Borneo territories, consequent on the new Federation. We cannot exclude the possibility that Brunei may be interested in this Working Party.

Special Position of Indigenous Races


160. As we have recorded earlier, native witnesses in both Sarawak and North Borneo asked that, in the matter of special privileges and opportunities, they should be put in a position analogous to that of the Malays in the Federation of Malaya, The Chinese, while opposing any suggestion that this privileged position should be written into the Constitution, agreed that in practice the native races should be given, at least for a period of years until they reached a more competitive level, the Favoured treament which they have in fact enjoyed under the Colonial Government.

161 We find this at difficult problem and various differing views have been expressed in our discussions of it. One of us feels that Malaysia as a whole would be better without constitutional provisions of this kind and that in so far as the Borneo territories are concerned, they are in contradiction with the policy of equal opportunity for all races, which has been the basis of British policy since the war, and that they are not in the best interests of racial harmony or of the natives themselves, who would more easily be spurred to competitive.

effort without constitutional preferences. Me belives that better opportunities rather than privileges are required by the indigenous people of the Bomeo territories.

162. The other British member considers that in the light of the existing provisions relating to Malays in Malaya, the native races in the Borneo territories could not be given less favourable trealment, and recommends therefore that they should be given analogous treatment to the Malays in Malaya provided it is understood that these provisions are not a permanent feature of the Federal Constitution.

163. If a decision is taken that the provisions in the existing Federation of Malaya Constitution in this regard should apply to the natives of Borneo, we recommend that the question should be reviewed after l0 years in the light of the progress made by the native races. We further recommend that the provisions should apply to those citizens who are regarded as natives within the meaning or the Interpretation (Definition of Native) Ordinance of North Bonieo (see Appendix D) and in the case or Sarawak those who are regarded as natives within the meaning of Section 3 of the Interpretation Ordinance, 1953 (see Appendix D). We recommend that the Ordinances in the two territories should be examined with the object of bringing them into line. it is to he noted that the provisions in the existing Federation of Malaya Constitution apply to Federal matters only unless State Legislatures decide to adopt similar provisions for State matters. We recommend that the some distinction should apply in respect of the Borneo territories.

164. We agree with our Malayan colleagues that an Advisory Board, as recommended by them in paragraph 190(h), will be required to advise on the interpretasion and administration of this complex and thorny subject.

Representation in Federal Parliament

165. We have ineittioncd in earlier Chapters the strong desire everywhere expressed that the repieseiltatioil of the Borneo territories in the Federal Parliament should take account not only of their popiilations bill also of their size and potentialities. We strongly recommend that these desires should be met.

166, We concur in the proposals made by our Malayan colleagues in para- graph l90 (g).

Allocation of Functions between Federation and State

167. While specific powers will be exercised by the Federation the residual powers will remain with the State and, suhieoi to general observations made earlier in this chapter and to the particular observations which roilow, we feel that the division or subjects between the Federal, State and Concunent Lists in theexistirtg consiitiition ofthe Federation orMaiuyii would providea reasonable basis.

(a) We particularly recommend that ill such matters as land, agriculture, forestry and local customs and usage, power should clearly rest with the State Government.


(b) Education will be a controversial question for which we have recommended appointment of a Working Party. It may prove convenient to treat primary education separately from higher education for a number of years. We feel that if Federation is to be meaningful, the final objective should be federal policy and local administration. We suggest that in the initial stage some flexibility should be maintained so that the most sensible division between Federal and State fuctions can be devised practice. In view of the strength of the evidence in favour of the continued use of English as the medium of instruction in schools, we do not recominend any change in the policy of the Governments in this respect.


(c) Similarly the overriding control of Finance should, in our view; lie with the Federation in the long term. But here again it will be necessary to proceed gradually and in the light or experience. Immediate alignment of taxation would cause extreme difficulty and rasentment, though the objectors to Federation would do well to realise that taxation in Sarawak and North Borneo would increase sharply in future years without Federation, and much more sharply if the territories were to achieve independence on their own
For the longer term we entirely concur in the proposals made by our Malayan colleagues in paragraphs 216 to 2l7. We suggest that in any final arrangement room should be left For Sarawak and North Borneo to borrow on their own credit and that sufficient revenues should be left in State hands to assure the service of such borrowings


(d) Tarrifs

Here again progress would have to be gradual in order to avoid constant disturbances, but alignment of the tariff structure throughout the Federation should be the final objective and a Joint Working Party should be set up as early as possible to study ways and means.


(e) Shipping and Navigation, Ports and Harbours

Shipping and navigation on the high seas and in tidal arid inland waters, and ports and harbours. are of great importance to the Borneo territories, particularly to Sarawak. Whilst we agree that in general these matters should remain on the Federal List we think that there is a case for distinguishing between large port and harbour works on the one hand, and jetties and smaller installations on the other, and we consider that the latter would be more appropriate to the Concurrent List. Where the dividing line should be drawn is a matter for an expert Working Party.


(f) Fisheries (Maritime and Estuarine Fishing and Fisheries, cxcluding Turtles)

We consider that fisheries are appropriate to the Concurrent List. On the one hand international complications sometimes arise which are the concern of the Federal Government; on the other hand there is the need to ensure that day—to—day administration is on a local basis and that traditional fishing grounds and local rights are fully protected, and this is properly the concern of the State Government


(g) Labour and Social Security

We think that some degree or concurrence may be appropriate is regards legislation affecting trade unions and labour disputes in the case or territories such as North Borneo and Sarawak, which are so far from the Federal centre. Similar considerations apply in the case of charities and charitable institutions, where responsibility for day-to-day administration is very much a local matter and should clearly remain so.

(h) Welfare Aborigins

We consider that the inclusion of this item in the Federal List would nor be appropriate in me case of North Borneo and Sarawak.

Public Service


168 (i) One effect of the transfer of a number of subjects to a Federal list and of the transfer of the departments dealing with those subjects from the State Governments to the Federal Government, will be that the officers of the Borneo services in those departments will come under the control of the Federal Covernment. We recommend that such officers should not be come transferable to other parts of the new Federation without their consent nor should the terms and conditions of the Federal service be applied to them, unless they opt to join that service and accept liability for transfer throughout Malaysia.
Further, the promotion prospects of officers in this category within the area of their original service should not he prejudiced.

(ii) In addition to the purely Federal services there are in the present Federation of Malaya certain joint services common to the Federation and one or more of the States. These include the senior staffs of such departments the Agricultural, Forestzy and Veterinary Departments, which will remain State Departments in the Borneo territories after Malaysia comes into being.
We recommend that officers of the Sarawak and North Borneo Gooverments in these departments who possess the nacessary qualiications should be considered, if they so desire, for admission ro the appropriate joint service provided that they accept liability for transfer throughout Malaysia.

(iii) Officers in the Federal and joint services in the Borneo territories, should, subject to the views of the Working Party whose appointment we recommend in subparagraph (vii) below, come under the jurisdiction of the approciate Federal Service Commission. We recommend, howwver, that these Federal Service Commissions should make special arrangements for the exercise of their functions in the Borneo territories. We regard it as essential that persons from the Borneo territories, including senior officers of the Federal services serving in Borneo with their first-hand knowledge of the people and of local conditions, should be associated as closely as possible with the Commission's work. It is important too that there should be close liaison between the Federal Service Commissions, and the Public Service Commission or Commissions in the Borneo territories, possibly by one or more persons being members of both Federal and State Commissions.

(iv) A public Service Commission has already been set up in Sarawak, so far without executive powers. We reoommend the early establishment of a similar Commission in North Borneo or—an alternative we prefer—that a single Commission should be established for the Borneo territories which would be given executive powers at the end of the transitional period.

(v) One matter which will require consideration at an early date will be whether or not the quota system for recruitment to certain Federal Public Services should be applied in Borneo as it is in Malaya. We cosider that this should first be referred to the Advisory Board whose appointment we have recommended in paragraph l64 of this report. We suggest that persons recruited to Federal services after Malaysia comes into being should accept liability for service anywhere in the territories comprising the new Federation.

(vi) We recommend that the Federal services in the Borneo territories should be staffed as far as possible by persons recruited in Borneo. even if this mean that, at any rate for a time, the full qualifications normally required in Malaya for candidates For each grade of the service cannot always be insisted upon. We would hope, however; that as time goes on and officers now in service retire, there will be opportunities for officers in the more senior grades, if they so desire, to be transfered to appointments elsewhere in Malaysia either on promotion or to gain wider experlence.

(vii) We recommend that a Working Party should be set up at as early a date as possible after a decision on Malaysia has been reached by the United Kingdom and Malaya Governments to consider staff matters generally and the form of liaison desirable on this subject in the relations between the Federal centre and the Borneo territories. Uniformity in salaries, conditions of service and qualffications will take time, but should be regarded as a desirable objective.

(viii) We stress once again how essential it is to encourage British officers to continue in serviced during the next period.

(ix) Some major departments are already handicapped by staff shortages. We recommend that determined efforts should be made to fill these vacancies and that if necessary the contract terms offered should be reviewed.

169. Both in Sarawak and North Borneo the Commission were able to meet delegations from the associations and unions which represent the majority of officers in the senior and Junior branches of Government service. We were very impressed and ecouraged by the responsible attitude of these delegations; although primarily interested in the future of the Government staff this did not conceal their real concern for the future welfare of the people of the Borneo territories.

170. One of the main attractions of the Malaysia proposals to the rural population of Sarawak and North Borneo is the vigorous programme of rural development in Malaya which has been given much publicity and has been seen and admired by the many people who have undertaken sponsored visits to Malaya. We are in agreement with the views of our Malayan oolleagues in this matter (paragraph 220-223), and we recommend that at Development Board should be set up in both territories as soon as possible after Malaysia is formed with representation of the Federal and State Governments. These Boards should provide a focus for the continuation of the very valuable help which is being given in many fields by the Commenwealth Governments, by the Colonial Deveiopment Corporation, through the Colombo Plan and by various international organisations.







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