MALAYSIA AND FEDERALISM

1. INTRODUCTION

1.1. On 9 June 2014, the Johor Housing and Real Property Enactment Board Bill 2014 (“the Enactment”) was passed by the Johor State Legislative Assembly albeit the controversy surrounding the Enactment which the critics alleged empowering His Highness the Sultan of Johor with the executive authority in state administration. Whether or not there is any legal basis to this allegation however, is not the scope of this article. But this controversy in the writer’s view, provides an opportune time to refresh our memory and briefly remind us the system that modern Malaysia subscribes to since achieving her independence from the British in 1957 and the position of Their Highness the Malay Rulers under the present constitutional arrangements enshrined in the Federal Constitution.

2. PARLIAMENTARY DEMOCRACY, CONSTITUTIONAL MONARCHY & FEDERALISM

2.1. Malaysia subscribes to ‘Parliamentary Democracy’ with ‘Constitutional Monarchy’ founded on the principle of ‘Federalism’. This system is premised upon certain principles based on English constitutional conventions. Parliamentary Democracy dictates that a political party with the greatest representation in Parliament will form the government. This principle of Parliamentary Democracy coupled with the principle of Constitutional Monarchy where a monarch rules in accordance within an agreed parameters, in our case, the Federal Constitution makes the Malaysia that we know what it is today. Professor Abdul Rashid Moten, in Society, Politics & Islam: An Overview aptly describes this position when he wrote, “Malaysia operates a Parliamentary system in which the government is carried on in the name of the Head of the State, Yang Di Pertuan Agong by ministers who enjoy the confidence of the majority in Parliament and are responsible to Parliament for their public acts both individually and collectively”. 

2.2 Constitutional Monarchy differs from ‘Absolute Monarchy’ as there is no absolute powers of a monarch in countries which adopts constitutional monarchy. A monarch in most constitutional monarchies possesses limited and restrictive powers which usually is limited to ceremonial duties or certain other reserved powers depending on, written or unwritten, constitutional arrangements of that particular country. In our country, His Majesty the Yang Di Pertuan Agong derives his powers as conferred by Parliament under Federal laws as provided in the Federal Constitution (see, Professor Abdul Rashid Moten, in Society, Politics & Islam: An Overview). In most cases, His Majesty acts on advice by the Prime Minister whom he is obliged to appoint from a member of Dewan Rakyat (House of Representatives) who in his judgment is likely to command the confidence of the House. 

Malaysia has nine Malay Rulers, each one of them acts as the Head of State and the Head of the Religion of Islam in their respective states whilst the Supreme Head of the Federation is His Majesty the Yang Di-Pertuan Agong who is selected amongst the nine Their Highnesses the Malay Rulers on rotation basis selected every five years by the Conference of Rulers. The four Yang Di Pertuan Negeri are in the Non Ruler States due to the political and historical evolution of those states namely, Melaka, Pulau Pinang, Sabah & Sarawak. This system is unique to Malaysia and the only one of its kind in the world.

2.3 Federalism on the other hand has its roots from Latin word ‘foedus’ which means “a formal agreement or covenant”. Federalism is not a concept unique to our country alone. Many great nations in the world including the United States, the Russian Federation, Germany, Switzerland, Belgium, India, Australia to name a few, practise Federalism, although the model may differ to accommodate local environment of each particular country. The Free Legal Dictionary defines ‘Federalism’ as “a principle of government that defines the relationship between the central government at the national level and its constituent units at regional, state, or local levels. Under this principle of government, power and authority is allocated between the national and local government units, such that each unit is delegated a sphere of power and authority only it can exercise, while other powers must be shared..… It includes the interrelationship between the states as well as between the states and the federal government”. 

In the context of Malaysia, which adopts a federal constitutional monarchy system, the Prime Minister is the Head of Government at the federal level, with His Majesty the Yang Di Pertuan Agong as the Head of State at the federal level whilst Their Highnesses the Malay Rulers of the various states are the Heads of State at the respective states level, with the Menteri Besar or the Chief Minister, as the case may be, acting as the Head of Government at the respective states level. In sum, it can be said that Federalism is a system of government in which sovereignty is shared between the federal authority and its constituent political units i.e. the state governments.

3. FEDERALISM IN MALAYSIA

3.1 Its Origin in Malaysia - The backdrop that underscores Malaysia’s federalism is intertwined with its history. This should be stated from the beginning in order to better appreciate the constitutional framework and system of government of the country. What is obvious is that the constitutional framework of the federal system of the government of Malaysia has to take into account its historical evolution. Historically, the FMS (Federated Malay States), which marked the beginning of a modem centralized administrative organisation in the Peninsula, was a device for the British to consolidate their powers. It also reduced the autonomy of the member states and made state bureaucracy subordinate to federal authority. After the Second World War, the British government decided to strengthen their role and control over the Malay states by introducing the unitary Malayan Union. This had to be abandoned because it failed to recognise and protect the rights of the Malays as the indigenous people of the country, and infringed on the sovereignty of Their Highnesses the Malay Rulers and was strongly boycotted and protested by the Malays. In lieu of this, the Federation of Malaya Agreement restored the nation, the Malays and the Malay Rulers at federal and state levels.

One of our greatest and respected jurists and a former Lord President the late Tun Suffian wrote in his classic work, “An introduction to the Constitution of Malaya” that the ‘machinery devised’ to bring the newly drafted Federal Constitution into force consisted of three component parts – a law passed in UK, an agreement between the British Monarch and our Rulers, and a series of laws passed in this country (see Chapter 4, In Service of the Law, Tun Suffian’s Legacy by Professor Salleh Buang). The law passed in the United Kingdom was known as the Federation of Malaya Independence Act, whilst the agreement signed was known as the Federation of Malaya Agreement, 1957. The laws passed in this country were a combination of federal law and state laws. The former was the Federal Constitution Ordinance 1957, whilst the latter comprised of state enactments passed to approve and give force to the Federal Constitution (see Chapter 4, In Service of the Law, Tun Suffian’s Legacy by Professor Salleh Buang). 

Whilst it cannot be denied that one of the main reasons behind the adoption of the federal system in 1957 is to protect to a certain extent the position of Their Highnesses the Malay Rulers, the adoption of the federal system also meant that Their Highnesses the Malay Rulers would have to exercise their powers in accordance with the Federal and State Constitutions, in the context of constitutional monarchy as stated earlier. This is significant as the country’s progresses and evolves into a modern democratic constitutional monarchy system. Without proper understanding the constraint and limits, there may come a time, where there will be collision between the State Ruler and the elected government. 

3.2 The Kelantan Case - The federal system established in 1957 as the federation of Malaya Constitution was meant to establish a strong federal government. In 1963, in the course of enlargement of the Federation, just before the formation and declaration of Malaysia, the very first constitutional crisis post-independence had occurred when the Government of the State of Kelantan objected to the Malaysia Act which purported to amend the Federation of Malaya Agreement 1957 in order to admit Sarawak, North Borneo and Singapore into the Federation. This case laid down the cardinal principles regarding the constitutional position of Federalism in Malaysia. As Hugh Hickling memorably put it, ‘it was left to the David of Kelantan to challenge the Goliath of the Federation’. In this case, the Kelantan government put forward five points-

• The Malaysia Act would violate the Federation of Malaya agreement by abolishing the Federation of Malaya;
• The proposed changes needed the consent of each of the constituent state including Kelantan and this has not been obtained;
• The Sultan of Kelantan should have been made a party in the Malaysia Agreement;
• Constitutional convention dictated that consultation with the Rulers of the individual states is required before substantial changes could be made to the constitution;
• The federal government had no power to legislate for Kelantan in matters that the state could legislate on its own. 

(see Johan Shamsuddin Sabaruddin, in Kelantan Challenge Charts Federalism Path published in NST on 21st July 2007) 

These points in the writer’s views were very important constitutional questions which should have been answered individually. Unfortunately, without going into each issue in specific details, Chief Justice James Thomson chose to consolidate these five issues by framing them into one question – ‘whether the Parliament or the executive government has trespassed in any way the limits placed on their powers by the Constitution’. This may have been due to the time constraints as it was reported that he had delivered his decision 30 hours before Malaysia was to be declared saying, “Never I think has a judge had to pronounce on an issue of such magnitude on so little notice and with so little time for consideration”.

Although, these 5 questions were not answered individually, the judgment was nevertheless a very important judicial pronouncement on Federalism. Chief Justice Thomson held amongst others that ‘even if Kelantan was a sovereign state in 1957, the effect of the Federation of Malaya Agreement, was that a large proportion of the power that made up that sovereignty had passed from the Kelantan government to that of the Federation’. The Court also held ‘that the Malaysia Agreement was validly signed by the Federal Government in exercise of its executive powers and the exercise of these executive powers did not require consultation with any state government or the Ruler of any State’. 

Consequently, based on these judicial pronouncements , the path of modern Federalism in Malaysia has been laid out.

3.3 The Malay Rulers in the practice of modern federalism in Constitutional Monarchy – The Federal Consitution recognised the role of their Highnesses the Malay Rulers and conferred upon them with traditional and religious powers and position. His Majesty the Yang Di Pertuan Agong is the Head of the Federation and acts as Supreme Head, Supreme Ruler or Paramount Ruler. As stated earlier, His Majesty the Yang Di Pertuan Agong, however is a Constitutional Monarch who does not have absolute powers except for powers specifically conferred by Parliament under federal laws. In most instances, His Majesty acts on advice of the Prime Minister. 

Their Highnesses the Malay Rulers also constitute part of a state government because they are the Head of State and the Head of the religion of Islam in their respective states in accordance with the Federal Constitution and their respective states constitutions. The states exist in order to maintain the position and prerogative of Their Highnesses the Malay Rulers as Head of State, and the religion of Islam is under state jurisdiction due to the traditional position and religious power of Their Highnesses the Malay Rulers as the Head of the religion of Islam. Accordingly, the Federal Constitution does not only guarantee the power and sovereignty of Their Highness the Malay Rulers as the Head of State but it also safeguards the power and prerogative of Their Highnesses the Malay Rulers as Head of the religion of Islam. The states and the Their Highnesses the Malay Rulers co-exist. Hence Their Highnesses the Malay Rulers, in protecting their status, position and power, indirectly defend the rights and autonomy of the states. Any changes or measures taken to change, which are prejudicial to the position and power of Their Highnesses the Malay Rulers can be detrimental to the states and thus to federalism as practised in Malaysia. How this in practice should be interpreted in the context of the position and status of a constitutional monarch is a subject that will continue to be debated especially in matters relates to the religion of Islam where it is jealously guarded by Their Highnesses the Malay Rulers and in matters of state administration where Their Highnesses may be required to exercise and perform their functions, which some may see as interference in executive machinery. It is submitted, any traditional prerogative or powers of a monarch must be construed in accordance with the Federal Constitution and their respective states constitutions and accepted practice of modern federalism .

3.4 Legislative Power Structure Between the Federation and State Governments - The divisions of legislative powers between the Federal Government and state governments are spelt out in the Federal Constitution to avoid disputes or conflicts between the Federal and State governments. The Federal Constitution has outlined under the Ninth Schedule, the division of these powers between the federal and state governments (Articles74,77). The Federal list for example, includes, external relations, defense, internal security, civil and criminal law, federal citizenship and naturalisation, financial, trade and industry and education whilst state list includes Islamic law, land, agricultural and forestry, local government, local services and state government machinery. This has allowed, firstly, unity in diversity and secondly, the decentralized institutional system of government. Fundamentally, this also means that some components or constituent units have some exclusive jurisdiction or competence over the other. In addition to these lists, there are also powers that are concurrent between the federal and state governments which are listed in the Federal Constitution as Concurrent List which includes public welfare, scholarships, national parks, wildlife and drainage and irrigation. 

It should also be noted that the states with Their Highnesses the Malay Rulers as the Head of State have exclusive jurisdiction over Islamic religion, land, water and mineral resources and local government whilst the states that do not have Malay Rulers (Non Ruler States) they share the same powers except on religion with the state that has Rulers. In the Non Ruler States, religion comes under His Majesty Yang Di Pertuan Agong. 

Generally, although there have been instances where the Federal and State governments have faced problems or difficulties due to the differences in the interpretation or construction of the words or phrases in the provisions in the Constitution, this division of powers in the Federal Constitution has allowed for an orderly and stable administration of the government at the Federal and state levels. For example, in order to avoid conflicts and ensure the smooth functioning of the federal system, the country has various coordination mechanisms such as The National Land Council, whose membership consist of the PM, the MB’s and CM’s, but these powers are only limited to advisory. It is up to the state to accept or reject such advice. The same goes to the National Water Resources Council and National Council for Local Government. 

Wong Chin Huat, writing in The Sun on 25th July 2007, however was of the view that the federalism system as practised in Malaysia is highly centralised. He said, “After all, in Federalism, sovereignty and power are shared between national and sub-national entities. Such vertical divisions of power between the governments at different levels provide for check-and-balance, just like the horizontal separation of power between the three branches of government: legislative, executive and judiciary. Federalism gives the federal government not only the most legislative and executive powers but also the most important sources of revenue. State governments are excluded from the revenues of income tax, export, import and excise duties, and they are also largely restricted from borrowing internationally. They have to depend on revenue from forests, lands, mines, the entertainment industry, and finally, transfer payments from the central government.” 

It may appear that notwithstanding the explicit provision of the Federal Constitution, Malaysia in practice adopts a unitary system - ‘a system of political organization in which most or all of the governing power resides in a centralized government’ (Encyclopaedia Britannica). Prior to the outcome of GE 12 and GE13, it may have appeared this way due to the fact that the same political party was in power in most states. When the same party governs the federal and state governments they naturally possess shared values and visions in political philosophy and ideology. Under the circumstances, their actions at both the Federal Government and State Governments level tended to be well coordinated and similar. Hence, their actions are seen to complement each other and thus may have appeared ‘centralised’. 

Post GE12 and GE13, this smooth cooperation and collaboration has somewhat changed with different political parties in power at the Federal level and some states and thus putting the Federal system into the real litmus test. It can be said that the coordination that once existed has become more complex and difficult, and at times unpredictable. An example of this can be seen in the case of Sg. Langat water treatment plant, the proposed water transfer between Pahang and Selangor, and even the AES. 

4. CONCLUSION

4.1 In conclusion, there is no doubt that Malaysia, de-facto and de-jure, adopts a federal system. As a young nation, however, it is to be expected, the provisions of the Federal Constitution to be subjected to differing and sometimes conflicting interpretations and have at times brought constitutional collision in respect of the powers and prerogatives of Their Highnesses the Malay Rulers, especially on the question of how a parliamentary democracy and constitutional monarchy should work and function within the context of Malaysia’s federalism. The reason for the varying interpretations may be due to lack of understanding and an agreeable concept of prerogatives under the Malaysian constitutional laws and more so at the socio/political level. Additionally, there is a lack of legal writings that comprehensively deal with the concept of royal prerogative although this is only one aspect of federalism.

The democratic principles incorporated by the Constitution were relatively new to Malaysia, which used to be a feudal society under autocratic and later colonial rule. The preservation of some traditional aspects of society was due not only to their intrinsic value, but also more importantly due to the influence and authority of the Rulers and the need for the Malays to maintain their legal and political positions as the indigenous inhabitants of the country. The incorporation of these traditional elements resulted from political compromises with other ethnic groups. This fabric of society was the basis upon which the nation was construed. In return, the non-Malays were granted full citizenship and equal political rights.

Federalism, which underpins unity in diversity, appears to provide the most appropriate system to accommodate the retention of the special position of the Malays and the sovereignty of Their Highnesses the Malay Rulers, while the geographical and demographic factors only play a subsidiary role. The reason for the enlargement of the Federation in 1963 is quite similar to those of other federations. The most important reason for the establishment of federalism in 1963 was security. Economic and administrative factors also became the contributing factors for the new member states to federate (Khairil Azmin Mukhtar, Federalism in Malaysia. A constitutional study of the federal institutions, 2002). 

What is clear is that Federalism in Malaysia has evolved. As Muhammad Yusuf Saleem wrote in his Federalism Origin and Applications, “ Federalism in Malaysia is result of an evolutionary process. The history of Federalism demonstrates the struggle between the Forces of centralisation who favoured a strong centre and the forces of decentralisation who wanted to maintain the power of sultanates and the individuality of the states. It was this struggle that shaped the federal idea in Malaysia” 

This federal structure, like a traditional marriage, has stood the test of time. Just as how the effectiveness of a marriage depends on there being a shared vision, the effectiveness of the Federal structure depends very much on shared vision at both Federal and State levels. With shared vision, you don’t even need to have coordinating mechanisms. In the absence of shared vision, the effectiveness of formal coordinating mechanisms is questionable. In fact, in extreme cases where each partner has diametrically opposite visions, it can even lead to divorce as happened between Malaysia and Singapore.