# Report of the Commission of Enquiry, North Borneo and Sarawak, 1962/CHAPTER 4/Wong Pow Nee and Ghazali Shalie

London, United Kingdom: The National Archives, Kew, pages 74–90
C.—Recommendations by Dato Wong Pow Nee and Enche M. Ghazali bin Shafie.
171. The Commission's assessment of the state of opinion in the Borneo territories about Malaysia has been recorded in Chapter III.
172. The conditions and safeguards asked for by persons in the second category referred to in paragraph 144 therein relate mainly to privileges of natives and the protection of legitimate interests of others, citizenship, assurance on religious freedom, appointment of Heads of their respective States, and their eligibility to be the supreme Head of state in Malaysia, national and official languages, immigration control, representation in Parliament, accelerated programmes in economic, particularly, rural development and in education, and assurances on State rights. Everyone in this category expressed the wish that the expatriate officers now serving in Sarawak and North Borneo should be retained until they, the Borneo people, could undertake the responsibilities or administration. This reflects their trust in the present British officials, whose advocacy or any plan for Malaysia would help to instil confidence in the future.
173. support for Malaysia was very clearly expressed in North Borneo by the United Sabah National Organisation (U.S.N.O.) and the United National Kadazan Organisation (U.N.K.O.) who command the support of the majority of the natives, including those of mixed parentage, and some of the non-natives. In Sarawak. the Party Negara (Panas), Barisan Anak Jati Sarawak (Barjasa) and the Sarawak National Party (S.N.P.) have come out very strongly in favour of Malaysia. Besides these groups, other organised non-political groups like the Barisan Pemuda of Sarawak and native and Muslim Associations both in North Borneo and Sarawak have indicated their support of the idea. Individual groups from the interior and representatives of such groups as those which passed the Kapit Resolutions all have signified their acceptance of the concept of closer association in Malaysia. A large number of delegations from organised representatives or local governments also came out in favour of Malaysia.
174. We would also wish to draw particular attention here to the Malaysia Solidarity Consultative Committee (M.S.C.C.) which had gone very thoroughly into the subject and submitted its recommendations to us. We observed that nearly every aspect of the proposal was discussed by the Committee, which unanimously declared their acceptance of and support for Malaysia, and the vital necessity for its early realisation.
175. Some comments were made during the hearings of the Commission regarding the M.S.C.C., which was said to be non-representational in character. It was suggested that their views should accordingly be disregarded. We find it difficult to accept this suggestion. Most of the participants were leaders in their own right either as leaders or political parties or as the accepted heads of their respective communities. The fact of their membership or the State Legislatures and in some cases, also of the Executive Council or the Supreme Council of the respective territories, reminded us that the Governments concerned have placed high value in respect of their judgment and ability of their influence and leadership. Their opinions, therefore, demand serious consideration.
​176. Turning to the elements which are in opposition to Malaysia, attention has already been drawn in Chapter I to the attitude of the Sarawak United People's Party (S.U.P.P) in Sarawak, the United Party, the Pasok Momogun and its splinter group, the Democratic Party, and the Liberal Party of North Borneo. Among the non-political groups, a large numbers of Chinese Chambers of Commerce, Clan Associations, Alumni Associations in both territories have come out against Malaysia. Their opposition springs mainly from the demand for independence. after the achievement of which, there was general readiness among some to consider the possibility of closer association with the Malayan and other Borneo territories.
177. The only organisation of any consequence with predominantly native support in opposition to Malaysia either in Sarawak or North Borneo is the Pasok Momogun of North Borneo, which advocated in line with the other organisations in opposition to Malaysia that independence should ﬁrst be gained before consideration of any wider federation. In this particular instance, however, we have reason to believe that its opposition springs basically from a fear of domination by the Federation of Malaya and that the party would be more receptive to the idea of Malaysia if these fears can be set at rest.
178. Many other groups and individuals, usually from the more remote areas, have also expressed their misgivings on these lines. They feel that they are being rushed into some adventure, of whose outcome they are uncertain. Fear is the dominating factor among them — fear of Malay domination, fear of Muslim subjugation because of the proposal that Islam should be the official religion of the Federation of Malaysia, fear of being swamped by people from Malaya and Singapore who would deprive them of the land and opportunities in Government and other enterprises, fear of the threat to their language and cultures and so on. These are genuine and understandable fears. Bitter memories of their experience of civil and internrcine strife, and of the unhappy relationship which they had with the former Brunei Administration have served to accentuate these fears. They are furthermore satisfied with the present colonial administration, and entertain expectations of more progress in the future.
179. In the course of the interviews with them, we found their candour most refreshing and we were deeply impressed by the trust they showed for the present colonial administration, Nevertheless, they are not categorically opposed to Malaysia; they are merely puzzled and afraid, we feel therefore that if their apprehensions for the future could be allayed by positive assurances. and their misapprehensions of the scheme removed by patient explanations and tangible demonstrations, the bulk of these people would ﬁnd it possible to withdraw their objections. We have no doubt that any lingering misgivings which they may have could be removed if the colonial administration could unequivocally commend the Malaysia proposals to them.
180. We are therefore left with the body of resistance to Malaysia which though small in number is extremely vociferous and active in character. This opposition springs either from an ideological identiﬁcation with the Communist cause, or an emotional identiﬁcation with Chinese chauvinism, or from an ardent belief in independence on their own on the basis of an ultra nationalism in the narrowest sense. Our estimation of their views whish we considered ​with great care must therefore be made within the framework of their basic attitudes.
181. The challenge posed by these different elements of opposition require different responses. We are confident that, if the response is satisfactory, the ultra-nationalists would realise that Malaysia is not contrary to their convictions and the chauvinists would reconcile themselves to the new structure. It would be an error of the gravest kind if these two strands of opposition, which require appropriate responses, were considered and treated together with the opposition of the Communist elements.
182. The Commission received evidence from a number of people, including officials of these two territories, to the effect that while a Federation of Malaysia is an excellent concept, it is premature and would be more acceptable and more successful if it were delayed for some years, the intervening period being devoted to active preparation for federation and to the development of a complete electoral and ministerial system. They advanced the arguments that the political and electoral systems in these territories are immature and that any other solution would fall short of the British Government's obligations in Sarawak as laid down in the Cardinal Principles and the reply given to the petition addressed to Her Majesty The Queen in 1959.
183. We accepted these submissions with the greatest respect for the spirit and sincerity with which they were made, but on the basis of our observations and study during our tour, we cannot find ourselves in agreement with these sentiments as it pre-supposes a lack of leadership of the necessary calibre among the people of the territories concerned.
184. We, on the other hand, were impressed with the quality of leadership shown both in Sarawak and North Borneo. In Sarawak there have already been elections and the Council Negri includes members elected by the people by a system of electoral college. Political parties are playing a vital role in the lives of most of the people. In North Borneo there has been an awakening of political consciousness in the most heartening manner since the proposals for Malaysia were enunciated. One of the most significant developments in these territories is the emergence of political leaders of high calibre with the growth of political parties. These are men of good sense and responsibility with high regards for the principles of democracy and freedom, whatever their views may be regarding Malaysia. We have no doubts that with the prospect of elections and political advancement in Malaysia, these trends will become even more intensified. Their relative inexperience in working a system of government within the framework of the Federation should not, in our view, be an insurmountable factor.
185. We are therefore convinced that the present leadership both in Sarawak and North Borneo is in a position to guide and lead their peoples not only towards responsible Government but also self-Government within Malaysia.
186. Indications have been given earlier to explain why the majority of the natives of North Borneo and Sarawak support the realisation of Malaysia as early as possible. It may be summarised here that they are motivated by the need to assure the security of the country as a whole from Communist subversion and to bring about accelerated progress in economic development, education, ​as well as better opportunities for participation in the political and commercial life of the country. We give further consideration to the question of economic development later in this Chapter. The non-natives who support the idea of Malaysia advanced the argument that, in the context of the present world situation, Malaysia offers the best possible solution to their problems. They are fearful that the Communists would find more fruitful grounds for exploitation if they remain in their present status. They are also aware from the experience of the Federation of Malaya that Malaysia would not jeopardise their legitimate interests.
187. Both natives and non-natives who support Malaysia have stressed to us that Malaysia must come about as quickly as possible since feelings were already running high between groups opposing and those supporting Malaysia. They feared the danger of racial conflict if there was unnecessary delay regarding the establishment of Malaysia.
188. We are in complete sympathy with this feeling and share their fears about the possibility of racial strife. We are also convinced that any delay would expose these territories and their people to dangerously disruptive influences both internally and from outside. We feel most strongly therefore that the transfer of sovereignty must take place within the next 12 months.
189. The view of the Commission has been recorded in Section A above that the Federation of Malaya Constitution could be taken as a basis for the purpose of the creation of Malaysia. The Federation of Malaya is the result of the formation of the Malay Protected States and the Settlements of Penang and Malacca into an independent Federation of States within the Commonwealth. The Commission's recommendations that North Borneo and Sarawak should be admitted as constituent States of the new Federation would in our view serve as a major political advancement for these territories. They will then be the constituent parts of a sovereign nation which derives its independence from the status of its constituent parts.
190. We turn now to a consideration of the constitutional provisions for the Federation of Malaysia under the following categories:
Our views are already indicated in Section A of this Chapter.
Our views are already indicated in Section A of this Chapter.
Our views are already indicated in Section A of this Chapter.
Our views are already indicated in Section A of this Chapter.
Our views are already indicated in Section A of this Chapter.
Our views are already indicated in Section A of this Chapter.
Earlier Chapters have recorded the strong desire everywhere expressed ​that the representation of the Borneo territories in the (illegible text)ment should take account not only of their populations but also (illegible text) size and potentialities. We strongly recommend that these (illegible text) should be met.
The combined population of the territories is some 17.5 per cent of the population of the present Federation of Malaya and (illegible text) 14 per cent of the combined population of Malaya and Singapore (the population of Brunei accounting for about a further 1 per cent of the latter figure). The combined area of the two territories (illegible text) approximately one and a half times the size of Malaya (to which proportion the accession to the Federation of Singapore or Brunei would make very little difference).
We do not wish to recommend any precise formula for the allocation to the Borneo territories of seats in the Federal House of Representatives. We feel that this should be left to the Election Commission the membership of which should, we recommend, be increased by addition of a representative from the Borneo territories. We hope that in fixing their quota of seats the Election Commission will take account not only of the population of the territories but also of their area, their distance from the centre, and the difficulty of internal communications.
If, as we have recommended, the general request of the Borneo people is met that the people of Malaya and Singapore should not be allowed unfettered entry into their territories lest their way of life be unduly disturbed, we recommend that only those citizens who are normally resident in their territories should be allowed to vote and stand for elections in their respective territories for the Federal as well as the State Legislatures. Conversely, we consider that citizens who are normally resident in either of the Borneo territories should likewise be prevented from voting and standing for elections in any Federal or State elections outside their respective territories.
We recommend that, in the initial stage, and until a more complete electoral system is introduced, election to the Federal House of Representatives should be by the State Legislatures from among their own unofficial members.
We recommend that the number of unofficial members of the State Legislatures should be increased, in order to meet the additional duties which members will be called upon to undertake.
We recommend that representation of the Borneo territories in the Senate should also take account of other factors than population. We feel that it would be difficult to allot more than the normal two seats for election by each State Legislature, and we therefore recommend the addition of, say, eight (four to be appointed from each territory) to the number of members appointed by His Majesty the Yang di-Pertuan Agong from persons who have achieved distinction or who are representative of racial minorities.
(h) Special Position of Indigenous Races
As recorded in earlier Chapters, native witnesses have unanimously asked that the native races of Sarawak and North Borneo should be put ​in the position analogous to the Malays in the Federation of Malaya. This demand springs from their feeling that they should be able to enjoy the concommitant privileges and opportunities which the Federal Constitution affords to the Malays, and that any treatment of them different from the Malays would be anomalous.
The great majority were emphatic that this position should be written into the Constitution. The Chinese, with equal unanimity, have opposed the suggestion that this privileged position should be written into the Constitution, though the great majority have agreed that in practice the native races should be given, at least for a period of years until they reach a more competitive level, the favoured treatment which they have in fact enjoyed under the colonial governments.
We have found this an exacting problem. We have given the matter our serious attention and we are agreed that the native races in the Borneo territories cannot be placed in a position any other than analogous to that of the Malays in the Constitution of the Federation of Malaya as both are generally regarded as the native groups in their respective countries. On this basis, it would be inconsistent and anomalous that the special position of the native races in Borneo should not likewise be written into the Constitution or once written that it should be subject to review separately from any review of the position of the Malays as a whole. This provision does not imply, of course, that the constitutional definition of a Malay in the present Malayan Constitution should apply to the native races of the Borneo territories.
We recognise that the subject would be more complicated in a new Federation than in the existing Federation of Malaya. In the new Federation it would not only be necessary to consider relations between the natives and the non-natives but also to hold a balance between the different native races in the Borneo territories, and at the same time between the native races as a whole in the Borneo territories and the Malays in Malaya.
This special position of the native races, more particularly as it relates to special treatment in the matter of permits and licences in trade and business, would need very careful handling. We recommend that an Advisory Board, including representatives of the principal races, should be appointed in each territory, to advise on its interpretation and administration.
We recommend that the provisions should apply to those citizens who are regarded as natives within the meaning of the Interpretation (Definition or Native) Ordinance of North Borneo (see Appendix D), and in the case of Sarawak those citizens who are regarded as natives within the meaning of section 3 of the Interpretation Ordinance, 1953 (see Appendix D.) We recommend for consideration that the Ordinance in the two territories should be reviewed with the object of bringing them into line for this purpose and we suggest that it might be advantageous to widen slightly the application so as to include certain other categories.
​It is noted that the provisions in the existing Federation (illegible text) Constitution apply to Federal subjects only unless State Legislature decide to adopt similar provisions for State subjects. We recommend that the same distinction should apply in respect of the Borneo territories.
Our views are already indicated in Section A of this Chapter.
191. In our present proposal the executive authority in each State shall (illegible text) the 'Head of the State appointed by His Majesty the Yang di-Pertuan Agong after (illegible text) consultation with the Chief Minister. In the exercise of his functions, except those relating to his discretionary powers, he shall act only in accordance with the advice of a Council of Ministers or Executive Council or Supreme Council, whatever the name may be, which is answerable to the State Legislature. The Head of State should be independent of any control from the Central authority, as are the present Rulers and Governors in the Federation of Malaya, with similar status and functions. There has been some suggestion that for North Borneo and Sarawak, the respective Head of each State should be elected. We think that it is sufficient if he owes his appointment indirectly to election, as is the case to-day in the Federation, where the Governor is appointed by His Majesty the Yang di-Pertuan Agong for a period of years, and the appointment may be terminable after a resolution by a two-thirds majority of the State Legislature concerned. Although we have some reservations regarding the appropriateness of the designation of Governor for the Head of the State in view of the possible confusion of his status and powers with that of the present Governor, we feel that any other designation, such as Yang di-Pertua Negeri or Yang di-Pertua Besar, may create an unfavourable impression that his position is not similar to that of the present Governor of Penang or Malacca.
192. In view of the present status of the two territories, some transitional arrangement will have to be devised for the appointment of the first Heads of these States on their admission as States within the Federation. It will not be possible to have a Chief Minister duly appointed without the existence of a Head of State. We have considered several formulae. On balance, however, the most attractive and practical arrangement to overcome the difficulty is for the first Head of State to be appointed by His Majesty the Yang di-Pertuan Agong, on the joint nomination of Her Majesty The Queen and His Majesty, for a period of not less than two years, during which the provision in the State Constitution regarding appointment to the office should not apply.
193. It has already been noted in paragraphs 22 and 122 that the native population who are in favour of Malaysia have insisted that the Head of the State should be a native, reflecting their concept of the return of the power of Government from Her Majesty's Government to themselves and their anxiety to utilise what they believe are the political powers of the office to correct the imbalance of economic power between themselves and the immigrant races. We have considered this demand carefully. It would appear to us that a realisation that the office of the Head of State carries with it only constitutional position and an assurance of other means to improve their economic position within the country would reconcile the natives to the idea that it should be possible for someone other than a native to be eligible for the office.
​194. Each State would also have a Chief Minister appointed by the Head of the State from among members of the State Legislature who commands the confidence of the House. Regarding representation in the State Legislature, while we feel that elections should be introduced as soon as possible, we are of the opinion that the present electoral college system should be maintained in Sarawak and that this system should also be introduced into North Borneo so that there would be as smooth a transition as possible from the present position to a fully-elected Legislature. We have already recommended in paragraph 190 (g) above that the number of unofficial members in the State Legislature should be increased on Malaysia to meet the additional responsibilities. Until there is a fully-elected Legislature we recommend that the State Secretary, the State Legal Adviser and the State Financial Officer should be ex officio Members of both the State Legislature and the State Executive Council, or the Supreme Council as the case may be.
195. The State would have its own Constitution and the Government would enjoy autonomy in those matters provided for in the IXth Schedule of the Federal Constitution and in such other matters as may be specially retained in the particular State concerned arising from the recommendations made in the following paragraphs. While specific powers will be exercised by the Federation, the residual powers will remain with the State.
196. We now consider the Federal, State and current legislative responsibilities on the basis of the present Constitution of the Federation of Malaya. In order to realise a strong, stable and united Federation and to meet the special circumstances of the entry of the Borneo territories to form the new Federation of Malaysia, we feel that the Central Government should exercise authority in the matters enumerated in the IXth Schedule subject to the following reservations and comments.
Our views are already indicated in Section A of this Chapter.
We recognise the importance to the Borneo erritories, particularly Sarawak, of shipping and navigation of the High Seas and in tidal and inland waters, and of ports and harbours. While we recommend that in general these matters should be in the Federal List, we feel that a case may be made for distinguishing between large port and harbour works on the one hand, and jetties and smaller installations relating to river transport on the other, which latter we consider would be more appropriate to the Concurrent List. The detailed arrangements for this may well be an appropriate subject for examination by an expert Working Party.
We are agreed that fisheries (as defined above) should be in the Federal List. We would emphasise, however, that nothing should be done to prejudice the exclusive rights enjoyed at present by the fishermen from the Borneo territories in their traditional fishing grounds.
We are agreed that education should be a Federal matter. There is need, however, for a detailed examination of the problems connected with the integration of the educational systems and policies of the two territories and of the Federation of Malaya, for which we recommend the setting of a Working Party (Education). Details of this Working Party are considered in paragraph 230 below.
197. We have already expressed the view that Sarawak and North Borneo should be admitted as States as early as possible within the next 12 months. We believe that a mere blue-print however clear and firm the decision may be to put it into effect in full at some future date would only provide the opportunity for disruptive elements, both internally and from outside, to render the scheme abortive. It will not be appropriate furthermore for the Central Government to assume responsibility for any matter concerning the territories until a transfer of sovereignty has been made.
198. We have made certain observations and recommendations regarding State, Federal and concurrent responsibilities, on the basis of the present Constitution of the Federation of Malaya. On the basis of these separate responsibilities it is essential that with the transfer of sovereignty, the legislative and executive authority in Federal matters should also be simultaneously transferred.
199. We think that such a step is vital for the purpose of creating a complete, strong and single-minded Federation. A graduated constitutional and legal transfer of powers would only provide an opportunity for protracted delays as a result either of reluctance on the part of the State Government to transfer some of its powers or of the Central Government to assume the necessary responsibilities. The door will then be left open for destructive elements to impede the creation of a strong central authority by exploiting differences among various races and creating frictions between the Central Government and the States.
200. It would be an extraordinarily cumbersome process if both the State Government and the Central Government have to refer to their respective legislatures each time that a transfer of responsibility is to be effected. In any case, the subjects which are of immediate, everyday concern to the people, such as land, adat, agriculture, forestry, local government and other services of a local character, all remain in the State list.
201. The majority of the people în Borneo have expressed their desire for Malaysia and if they are not to be frustrated and disillusioned regarding those matters on which they have placed such emphasis, for example, progressive economic development, increased attention to education, upliftment of rural standard of living, and so on, the Central Government should from the outset be made to feel responsible for these matters and should be provided with the opportunity and the means to meet these rising expectations. This is particularly împortant in the immediate years after Malaysia. Such an arrangement would also avoid the difficult problem of having to work out some provisional devices to ensure proper and adequate representation and financial contribution from these States commensurate with each transfer of power as it takes place. ​We are convinced, therefore, on the evidence of our findings and of the hopes and expectations which the Malaysia proposals have aroused that any other scheme would not meet with the wishes of the people.
202. We are of course aware of the possible dangers of a complete break-down in the machinery of administration if immediate and precipitous steps are taken to transfer the Federal functions to the Central authority simultaneously with the legal transfer of powers. It is most important that there should be a transitional period during which arrangements for the transfer of functions should be worked out carefully and gradually. We therefore strongly recommend that the Central Government having been legally and Constitutionally vested with the Federal powers simultaneously with the transfer of sovereignty, should immediately delegate to the Chief Minister of the respective States the exercise of as many executive functions as may be necessary for the maintenance of good administration. Whether by separate legislation or by using the relevant Articles in the Constitution, provision should be made to enable the respective State authorities to execute certain functions for the administration of specified Federal laws.
203. We would also most emphatically urge that there should be a general continuance of existing State laws which would become Federal laws on Federal matters after Malaysia, until repealed, amended or modified by the Central Authority, notwithstanding any conflict with the provisions of the Constitution. Thus, during the transitional period, nothing in the administration would change for purposes of ordinary business. The same laws would continue to apply and the same officials would continue to carry out the executive functions.
204. At least three subjects however must be excluded from such an arrangement namely, External Affairs, Defence and Internal Security. These are subjects of great importance in order to ensure a strong Central Government.
205. These transitional arrangements should continue for as long as it is considered necessary in order to avoid any breakdown in the administrative machinery. We recommend therefore that a Joint Working Party (Administration) for each of the States should be appointed, if possible, before the entry of those States into the Federation, comprising an equal number of officials nominated by the State Government concerned and the Central Government respectively, and a Chairman to be agreed upon by the two Governments, for the purpose of examining and making recommendations on the manner and timing of the integration into the Federal system of the laws and practices relating to those subjects included in the Federal List. This Joint Working Party for each State should not be concerned with financial, fiscal and economic subjects or with the integration of educational policies or with those matters relating to the judicial and legal departments since these merit separate attention.
206. In view of the remoteness of the Borneo territories from the Federal Centre we recommend that the Federal posts and services in these territories should be regionalised. When necessary and possible each Federal department should have a regional head in Borneo with sufficient authority to deal with local problems. We would advise that the titles of heads of departments should not be changed immediately and that suitable titles for these regional heads should be coined. It must be clear, however, that the control of the ​Federal Public Service throughout the Federation of Malaysia should remain with the appropriate Federal Service Commission which will have jurisdiction over all officers in services which become Federal services on Malaysia day. We would strongly urge that the appropriate Federal Service Commission should take steps to enable the exercise of any of its functions in the Borneo region by a Borneo officer of the Federal service or a Board composed of a representative of the Commission concerned and some Borneo officers of the service to which its jurisdiction extends. Internal control recruitment and promotion of Federal officers within the region should be carried out by such a Board.
207. We have dealt with the question of the transfer of powers and the need for the gradual transfer of functions from the State Government to the Central Government in Federal matters. The relationship between State Governments and a Central Government often give rise to various difficulties which require patient and careful adjustments. We have no reason to expect that they will be fewer or less difficult in this instance, but we are confident that on the basis of our recommendations and with a reasonable approach by all concerned these difficult ties can in time be overcome. We would like however to make one or two observations which might be helpful not only for the purpose of meeting immediate requirements but also as a long-term and permanent arrangement.
208. As a result of the transfer of powers, certain officers connected with the subjects transferred to the Federal List will be regarded as Federal officers and their posts would likewise become Federal posts. This implies that their scheme of service and the regulations governing their employment will be subject to Federal arrangements. We feel, however, that an officer so affected should not be made transferable to any other part of the Federation without his consent nor should his terms and conditions of service be affected unless he decides to opt for the terms of the general Federal service. His promotion prospects within the area of his original service should likewise not be prejudiced as a result of Malaysia.
209. Although it should, of course, be the ultimate aim that there should be uniformity in terms and conditions of service, we recognise that to subject the Federal posts in Sarawak and North Borneo to any general Federal arrangements immediately on Malaysia would present certain problems. For example, certain conditions regarding the recruitment of officers to the Federal Public Service for the existing Federation, such as the application of a quota system, may not be appropriate in the case of the Federal Public Service in Borneo. We think, therefore, that subject to any recommendation of the Advisory Board regarding the special position of the indigenous people which we recommended above (paragraph 190 (h)) and of the Joint Working Party (Administration), regarding the existing qualifications for appointment and conditions of service of officers who would become Federal officers in Borneo territories, the present practice should continue.
210. In the case of the uniformed services, we think that nothing should be done until after a suitable period to standardise their uniforms with the rest of the Federation and that in any case this should only be done if considered absolutely necessary. We regard this as particularly important in relation to the Police Force.
​211. Occasions may arise, perhaps not during the early stages but at some future date, when it would be possible for Federal officers to be transferred from one State to another either within the Borneo region or throughout Malaysia. We would like to make an observation here that in such a situation the receiving State Government should be allowed to request for confidential reports of the officers concerned before deciding whether or not to accept them. We are aware that there is a convention of consultation in the Federation of Malaya between the Federal and State Governments. This should likewise be extended to the new States of Malaysia.
212. We have not dealt with the position of the State Civil Service because this does not raise new issues. We would, however, venture to suggest that the Borneo States should not find it too difficult to co-operate with each other with regard to the sharing of employment of a State officer, e.g., Agricultural Officer. The principle we advocate is that wherever necessary such a practice may be adopted and the cost of employing such officers borne on a proportionate basis.
213. We would now like to turn our attention to the legal and judicial services, for which we feel that regional arrangements should also be applied. There should be one Supreme Court for the Federation of Malaysia with unlimited jurisdiction, appellate and original, throughout the Federation and in cases between the constituent States and between any one of the constituent States and the Central Government. There should be a High Court in the Borneo region with unlimited original jurisdiction in all matters arising in the area except those reserved for the Supreme Court. The High Court should also be a Court of Appeal. The domicile of the Supreme Court should be in the Federal capital but we think that its meeting elsewhere in the Federation whenever convenient would be well received. We also feel that it should be the aim to establish a uniform system of Magistrate Courts of different grades.
214. The legal and judicial services should come under the jurisdiction of a Commission, with the Chief Justice of Malaysia as the Chairman. We do not think that the Commission should deal with the appointment of Judges, who should be appointed in accordance with the provisions of the Constitution of the Federation. Posting to individual territories, subject to our observations in paragraph 211 above, should be made by the Chief Justice of Malaysia in the case of judicial officers and by the Federal Attorney-General in the case of legal officers.
215. Obviously we are not in a position nor are we competent to go further into the details of the arrangements which may be necessary. But we have ventured to express our views because of our awareness of the need for paying special attention to these problems. We would therefore recommend that a Joint Working Party (Judicial) be set up with representatives of the two Borneo territories on the one hand and representatives of the Central Government on the other, equal in number and a Chairman to be agreed upon by the three Governments. We cannot at the same time exclude the possibility that Brunei may be interested in this Working Party. It would be its task to examine and recommend the manner and timing of the integration of the legal and judicial services into the Federal system. We would also urge that, subject to the recommendations of the Advisory Board on the special position of the indigenous people (paragraph 190 (h)) and of this Joint Working Party, the ​existing practice regarding recruitmeut, terms and conditions of service should continue.
216. In view of our recommendation that Sarawak and North Borneo should be admitted as States in the new Federation (although with certain variations regarding their autonomy as against the other States), it follows that on financial matters the new States would be subject to the same arrangements as are applicable at present to the existing 11 States. It cannot be overemphasised that in order that the Central Government should remain strong and able to bear its responsibilities, it should be vested with the necessary powers which can be applied effectively and promptly to ensure the maintenance of a sound and stable economy. However, in view of the novel situation in which these Borneo territories would find themselves as States in Malaysia, we think that certain unequivocal assurances and safeguards must be given by the Central Government. While it is accepted that those services which are transferred to the Central Authority would cease to be financed by the State Government, although administered by it during the transitional period, there must inevitably arise a feeling that much of the revenue earned at present by the State would be retained by the central Treasury.
217. State Governments are assigned revenue proceeds as specified in Part III of the Xth Schedule of the Constitution. These sources may be inadequate to meet the expenditure of the various State services which the Borneo territories would have to maintain and which they want to improve. In view of their remoteness from the Federal capital, these territories may feel that their requirements would not be fully understood and sympathetically considered. We strongly urge therefore that a formula should be worked out whereby the new States would be assured of an annual grant such that the total revenue of the State after the addition of this grant would generally meet its total expenditure. The formula so devised should be flexible enough to take account not only of the need to maintain existing services but also of changing situations and thereby ensure provision for expansion and development in time to come. Some arrangement should also be made which could assure the Borneo territories that such of their establishment requirements as may need the concurrence or assistance of the Central Authority would be met as expeditiously as possible.
218. We would also like to consider the question of the power of the State to borrow. We think that the present arrangement existing in the Federation of Malaya is adequate. In general terms, the practice at present is that the State Governments may borrow with the approval of the Central Government. We are of the opinion that there should be some co-ordination of borrowing plans and efforts by the constituent States of the Federation. Such co-ordination will avoid competition between States in the loan markets in regard to terms and at the same time enable the Central Government to have overall responsibility so that it will not unwittingly have the responsibility of rescuing a State which may be in difficulty at a later stage with regard to repayment of its loans.
219. We have advocated in paragraph 203 that the existing State laws of North Borneo and Sarawak should be inherited by the Central Government and regarded as Federal laws during the transitional period. It should be clearly understood however that during this period existing Federal laws and practices ​relating to taxation, trade and tariffs will not apply to these States. The exercise of functions in these fields may similarly be delegated to the Chief Minister. Procedures should be worked out whereby common tariffs and changes in tax structure would be introduced by gradual stages allowing for adjustments of the various differences in order to avoid any difficulties and undesirable consequences during the transitional process.
220. We therefore recommend that a Joint Working Party (Economic) should be set up for each of the new States with the task of examining in detail and of making recommendations as soon as possible regarding the timing and manner of the integration into the Federal system of the laws and practices relating to taxation, trade, tariff and other economic and financial matters in the States concerned. We suggest that the Joint Working Party for each State should consist of three members nominated by the Central Government and three members by the State Government concerned and a Chairman to be agreed upon by both the Central and the State Governments.
221. Great expectations have been engendered among the rural populations by the publicity given to rural development in Malaya, through sponsored visits to Malaya and otherwise. By the great majority of the population, who are little concerned with the developments of world politics, Malaysia will be judged by whether or not it delivers the goods in the form of rural improvements, schools, and medical and other social services. It is essential that, from its inception, Malaysia should offer, and be seen to offer, definite advances in these fields. It will be no less important to step up rapidly training schemes for young men and women for professional, technical and administrative posts, with the objective that the standard of technical skills may be raised and a firm basis provided for accelerated economic growth.
222. We recognise that Districts, Residencies and Divisions, and the States concerned in the Borneo territories should have the power to decide in the initial level the aims and the best methods of development in accordance with local needs within the framework of the national goal. We also recognise that it should be the responsibility of the Central Authority to formulate and implement an over-all and integrated development programme in the interest of national unity, utilising such resources as are available in the most efficient way. Such a programme may sometimes be beyond the resources of a single State and may cut right across boundaries of individual States. However, we are agreed that the Central Authority should not be allowed a completely free hand in this matter, which might give rise to frictions.
223. We therefore do not envisage for the Borneo territories, at least during the early stages, centralised planning in the strictest sense of the word. We would wish to see much of the present organisational pattern in North Borneo and Sarawak continue. We would also wish to see these local plannings coordinated and collated in a Development Plan for Malaysia enjoying advice and assistance in finance as well as technical experience from the Central Authority.
224. We have stressed the need for co-ordination because we firmly believe that the co-ordination of the development programme of the States is necessary to avoid any inconsistency and competition which may lead to wasteful use of resources. Some States should not lag behind others in economic and social ​development and we urge that the Central Authority should see to it that there will be an equalising of opportunities for development in all States, particularly in North Borneo and Sarawak, and that they will be well provided with the necessary resources and technical knowledge.
225. In the field of industrial development, we are of the opinion that increased opportunities should also be given to these new territories of Malaysia and that every effort should be made to reduce any effect which the free play of economic forces may have of widening the gap between these States and the other more industrially advanced States of Malaysia. In this respect we would strongly recommend that there should be joint consultation between the Central Authority and the States concerned on industrial location to ensure that development will be well co-ordinated and distributed. Such co-ordination, we feel, is also vital in the efforts to attract foreign investments.
226. We are pleased to note in North Borneo and Sarawak that valuable help is being given in many fields by other Commonwealth Governments, by the Colonial Development Corporation and by such international organisations as the United Nations Specialised Agencies and the Colombo Plan. We also understand that there are non-Governmental bodies which are involved in providing technical assistance in these territories. We are most anxious that the flow of such assistance should not in any way be reduced by reason of the change of status of the two territories. We hope that the independent status of these States within Malaysia would facilitate a greater measure of assistance from Governmental and non-Governmental sources alike, and that the Central Government would see to it that the assistance and co-operation given would be channelled in their direction.
227. In the light of the objectives outlined above, to which we attach the greatest importance, we recommend that the Joint Working Party (Economic) should examine the subject in detail and devise appropriate measures by which they may be realised.
228. Before we conclude, we would wish to stress the importance of the contributions which British sources have made to the development of these territories and the necessity for the continuance of such financial and technical assistance. We would urge most strongly therefore that Her Majesty's Government and the Federation Government should arrive at some arrangement whereby North Borneo and Sarawak would continue to benefit from these sources. This may well be a subject which could appropriately be examined by the Working Party (Economic) referred to above.
229. We encountered strong feelings among the people of the Borneo territories that they should be given priority in education in Malaysia, primary, secondary and high level, and that the aim should be a parity of educational facilities and opportunities for them with the rest of the Federation. There was also a strong feeling that the present policy in education in each territory relating to the teaching of English and English as the medium of instruction should be retained.
230. We are agreed that education should be a Federal matter. This is particularly important in view of the progress in education which the Borneo territories expect with their entry into Malaysia. We think therefore that special ​attention must be given to the question of Federal scholarships and other educational training schemes both at home and abroad for the benefit of the people of these territories. Care should also be taken to ensure that the dialects of the indigenous people are preserved and that measures are introduced to enable the teachings of these dialects. At the same time we are anxious that due heed must be paid to the wishes of the people of these territories regarding the policies to be adopted. These many and complex problems would require close and detailed examination and we recommend therefore that a Joint Working Party (Education) should be formed for each of the territories to examine and make recommendations on the problems of integration of the educational systems and policies. Each Joint Working Party should be comprised of the representatives of the State Government and the Central Government equal in number and a Chairman to be agreed by both Governments. The problems connected with the administrative arrangements regarding recruitment, postings, terms and conditions of officers in the Educational Service should perhaps be left for the consideration of the Joint Working Party (Administration).
231. We would like to make some observations regarding the position of the present expatriate officials, including technical and professional officers in these territories after Malaysia. We have noted the high regard in which these officers are held and the unanimous expression of views that they should be encouraged to stay until they can be replaced by the local people. We are aware of the dangers that the administrative machinery and the various plans for development would suffer very considerably with the immediate departure of any substantial number of these officers. While we see no objection to the recruitment of officers from overseas to replace any vacancies which may arise out of the retirement of the present expatriate officers, we are reluctant to advocate the secondment of officers from Malaya or Singapore, unless there is a very definite request from the Governments of these territories.
232. In the course of the Commission's interviews, we have been encouraged by the responsible and reasonable attitude which expatriate members of the Public Services in Borneo have taken towards the Malaysia proposals. Their concern with any change in the terms and conditions of their service arising from the transfer of sovereignty with Malaysia is understandable and we note with satisfaction their willingness to consider serving in these territories provided satisfactory terms can be agreed upon, irrespective of the constitutional arrangements which may be devised.
233. In order to meet the concern of the present members of the Civil Serivce about their future we have attempted to provide for interim arrangement and for regionalisation. However, we recognise that we are not in a position to go further into the ways and means about terms and conditions which would retain the services of these officers. We would therefore strongly urge that Her Majesty's Government and the Federation Government should direct their attention specially to this problem, with a view to encouraging the officers to remain in service in Borneo.
234. These are characteristics of the new Federation and of its constituent States, in particular, Sarawak and North Borneo, which we recommend. Fully mindful of the responsibilities placed upon us and in the light of our experience ​both before and after independence in our own country, we are confident that Sarawak and North Borneo are now ready to assume their new responsibilities and take their places as States with the Federation of Malaysia. We are equally convinced that the political and administrative arrangements which we advocate for these territories are fair to all concerned and the most practicable in existing circumstances.