MA63: What the Malaysia Agreement Actually Says, and What Is Argued Around It

The document everyone argues about is shorter than the argument. The Malaysia Agreement 1963 runs to eleven articles. It does not contain the word “autonomy”. It does not list twenty points, or eighteen. It does not say how oil royalties are to be divided, or who controls immigration, or what share of Parliament the Borneo territories should hold.

All of that is real, and all of it is somewhere else — in a committee report the agreement points to, in a Malaysian Act of Parliament that rewrote the Constitution, and in memoranda that were submitted during negotiations but never attached to the treaty at all.

Understanding MA63 means following that chain. Most disputes about it are disputes about a particular link.

What the agreement physically is

MA63 was signed in London on 9 July 1963 by five parties: the United Kingdom of Great Britain and Northern Ireland, the Federation of Malaya, North Borneo, Sarawak and Singapore. Its authentic texts are in Malay and English; the annexes are in English only, and Article 11 provides that the English text governs in the event of divergence.

The agreement was registered with the Secretariat of the United Nations by the United Kingdom on 21 September 1970, under registration number 10760, and appears in Volume 750 of the United Nations Treaty Series.

Its eleven articles do the following:

Article	What it does
1	Federates North Borneo, Sarawak and Singapore with the Federation of Malaya as the States of Sabah, Sarawak and Singapore; the federation is thereafter called Malaysia
2	Obliges the Federation of Malaya to enact the constitutional amendments in the annexed instruments, to come into force on Malaysia Day
3	Obliges the United Kingdom to submit to the Queen the orders giving effect to the annexed state constitutions
4	Obliges the United Kingdom to secure legislation relinquishing sovereignty over the three territories from Malaysia Day
5	Obliges the Federation of Malaya to legislate on immigration into Sabah and Sarawak, per the relevant annex
6	Extends the 1957 Anglo-Malayan defence agreement to the Malaysian territories
7	Provides for compensation and pension arrangements for serving public officers, and a Public Officers Agreement
8	Commits the governments of Malaya, North Borneo and Sarawak to give effect to the recommendations, assurances and undertakings in Chapter III and Annexes A and B of the Inter-Governmental Committee Report
9	Requires Annex J (common market and financial arrangements) to be made an agreement between Malaya and Singapore
10	Deals with broadcasting and television powers, per Annex K
11	Language of the agreement and its annexes

Malaysia Day was originally fixed at 31 August 1963. It moved to 16 September 1963.

For the wider story of how the merger was negotiated and contested, see the formation of Malaysia in 1963.

The chain from memorandum to Constitution

The link that carries almost all of the substance is Article 8.

The Cobbold Commission, which surveyed opinion in North Borneo and Sarawak, recommended a body to work out the constitutional detail. The Inter-Governmental Committee was established in August 1962, chaired by Lord Lansdowne, with representatives of the British, Malayan, North Borneo and Sarawak governments. Its report was signed on 27 February 1963.

It was to that committee that North Borneo submitted the memorandum known as the Twenty Points, and Sarawak its own eighteen-point memorandum. This matters more than it looks: the memoranda are inputs to the committee, not annexes to the treaty. Article 8 binds the governments to the committee’s report — Chapter III and Annexes A and B — not to the memoranda as drafted.

The chain, in order:

1. Twenty Points (North Borneo) and eighteen points (Sarawak), submitted to the Inter-Governmental Committee
2. Inter-Governmental Committee Report, 27 February 1963
3. MA63, Article 8, binding the governments to Chapter III and Annexes A and B of that report
4. The Malaysia Act 1963 (Act 26/1963), which amended the Federation of Malaya Constitution into the Federal Constitution of Malaysia with effect from 16 September 1963
5. The resulting articles of the Federal Constitution, which are the operative law today

Where the safeguards actually live

Act 26/1963 inserted a block of provisions specific to the two Borneo states. These are the texts that a Malaysian court reads.

Provision	Effect
Article 95B(1)	A supplement to the State List (List IIA) and to the Concurrent List (List IIIA) applies only to Sabah and Sarawak — covering native law and custom and native courts, ports and harbours, cadastral surveys, the Sabah Railway, and state water supplies
Article 95B(3)	The legislature of Sabah or Sarawak may impose sales taxes, deemed a State List matter
Article 95D	Article 76(4), which lets Parliament legislate for uniformity in land law and local government, does not apply to Sabah or Sarawak
Article 95E	The two states are not required to follow National Land Council or National Council for Local Government policy, and no area may be proclaimed a development area without the Yang di-Pertua Negeri’s concurrence
Article 112C and Tenth Schedule Parts IV and V	Special grants and assigned revenues, described below
Article 112D	Periodic review of those grants, with an independent assessor if the governments cannot agree
Article 161	Continued use of English, and of native languages in native courts
Article 161A(5)–(7)	State law may reserve land for natives; defines “native” for each state, including the list of races indigenous to Sarawak
Article 161B	Right of audience before the courts in the two states remains subject to state adoption
Article 161E	The entrenchment clause

The money provisions, specifically

Part V of the Tenth Schedule assigns to Sabah and Sarawak the import and excise duty on petroleum products, the export duty on timber and other forest produce, and — where the state’s own royalty falls short — export duty on minerals up to a combined ten per cent ad valorem. Sabah additionally receives 30 per cent of other customs revenue for as long as medicine and health remains a Concurrent List item borne by the state.

Article 112C(4)(b) sets a floor rather than a share: in relation to minerals including mineral oils, Parliament may not restrict state royalties so that the state receives less than ten per cent ad valorem.

Part IV sets the special grants. The figures written into the Constitution are the 1963 ones — for Sarawak, a grant of RM5,800,000 a year, plus an escalating grant for 1964 to 1968; for Sabah, an annual amount equal to two-fifths of the growth in net federal revenue derived from the state over a 1963 baseline. Article 112D then provides for these to be reviewed at intervals and varied by order of the Yang di-Pertuan Agong.

That review mechanism, rather than the original numbers, is where the live fiscal argument sits.

Article 161E: the lock on the door

Ordinary constitutional amendment requires a two-thirds majority on second and third reading in each House under Article 159(3). Article 161E adds a second key.

No amendment may be made without the concurrence of the Yang di-Pertua Negeri of Sabah or Sarawak if it affects the operation of the Constitution as regards:

• citizenship of persons born before Malaysia Day by connection with the state, and equal treatment in citizenship matters
• the constitution and jurisdiction of the High Court in Sabah and Sarawak, and the appointment, removal and suspension of its judges
• the matters on which the state legislature may legislate, the state’s executive authority in those matters, and the related financial arrangements
• religion in the state, the use of any language in the state or in Parliament, and the special treatment of natives of the state
• the state’s quota of seats in the House of Representatives, for any Parliament summoned before the end of August 1970

Article 161E(4) extends the same protection to rights and powers conferred by federal law on the state government over entry into and residence in the state — the constitutional root of Sabah’s and Sarawak’s separate immigration controls.

Why it stays contested

The disagreements are, in the main, disagreements about interpretation of texts that both sides accept exist. Described without taking a side:

The wording of Article 1(2). As inserted by Act 26/1963, Article 1(2) listed the states in three groups: the States of Malaya, the Borneo States (Sabah and Sarawak), and the State of Singapore. Act A354, in force from 27 August 1976, substituted a single alphabetical list of thirteen states. One reading treats the 1976 change as drafting tidy-up with no legal consequence, the grouping having lost its purpose after Singapore’s separation. Another treats the original grouping as evidence of a distinct constitutional status. A 2018 Prime Minister’s Office publication on MA63 described the post-1976 wording as making it appear that Sabah and Sarawak had been placed in line with the other states. Parliament returned to the question in the Constitution (Amendment) Act 2022 [Act A1642], gazetted on 10 February 2022.

Repealed provisions. Several 1963 provisions no longer stand. Article 161A(1) to (3), on the application of Article 153 to natives of the Borneo States, was repealed with effect from 10 March 1971. Articles 161C and 161D, dealing with financial aid for Muslim institutions in the Borneo States and with state legislation on religious propagation, were repealed with effect from 27 August 1976. Whether particular repeals engaged the Article 161E concurrence requirement is argued both ways.

The status of the treaty itself. One position holds that MA63 is an international agreement between parties, breach of which is a matter of state responsibility. Another holds that MA63 was fully performed on Malaysia Day, that it was implemented by Act 26/1963, and that the enforceable content today is the Federal Constitution rather than the treaty.

Parliamentary weight. Article 46 as enacted in 1963 gave a 159-seat House: 104 members from the States of Malaya, 16 from Sabah, 24 from Sarawak and 15 from Singapore. Today the House has 222 seats, with 25 from Sabah and 31 from Sarawak. Proposals to fix a minimum Borneo share of seats are a recurring feature of the negotiations; no such floor is presently written into Article 46.

Common mistakes

Calling the Twenty Points “the Twenty-Point Agreement”. It was a memorandum to a committee. What the treaty binds the parties to is the committee’s report.

Assuming MA63 governs day-to-day disputes. In practice a dispute over, say, a state sales tax or a development area proclamation is litigated on Article 95B(3) or Article 95E, not on the treaty.

Treating the Tenth Schedule figures as current. RM5,800,000 is the 1963 grant to Sarawak written into the Constitution. Article 112D exists precisely because those amounts were meant to be reviewed and varied by order.

Assuming a two-thirds majority is always enough. For the matters listed in Article 161E(2), it is not.

Where the negotiations happen

The Sabah and Sarawak Affairs Division (Bahagian Hal Ehwal Sabah dan Sarawak, BHESS) was established in the Prime Minister’s Department on 10 March 2020, growing out of a special cabinet committee formed in 2018. It acts as secretariat for the MA63 implementation council chaired by the Prime Minister and for a technical committee chaired at deputy prime ministerial level. Claims are worked through that machinery item by item rather than resolved in a single instrument.

What’s next

If you are reading MA63 to settle an argument, read in this order: the eleven articles, then Article 8, then Chapter III and Annexes A and B of the Inter-Governmental Committee Report, then the constitutional articles inserted by Act 26/1963 — checking each against the current reprint of the Federal Constitution rather than a 1963 text, because several of those provisions have since been amended or repealed.

For the political and diplomatic circumstances that produced the agreement, continue with the formation of Malaysia in 1963; for the constitutional settlement it was grafted onto, see Malaya’s independence in 1957.