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 writers 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 Malaysias 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 Suffians 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 Suffians
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 countrys 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 writers 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 coexist. 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 MBs and CMs, 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 subnational 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 Malaysias 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 nonMalays 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 dont 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.