‘Indisputable sovereignty’: Philippines’ UN filing reignites Sabah dispute with Malaysia

Malaysia ‘categorically’ rejects Philippines’ UN filing to extend continental shelf from Sabah as analysts say Marcos Jnr may not push issue

The Philippines

Raissa Robles

Published: 8:00am, 4 Jul 2024

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A recent Philippine submission to the United Nations over claims to seabed territory has sparked vigorous protests from Malaysia, reviving a long-standing territorial dispute over Sabah in northern Borneo.

The historically complex dispute, which can be traced back to colonial-era agreements, has significant political and economic implications for both nations given the region’s considerable oil and gas resources.

Malaysia submitted a diplomatic note to UN Secretary General Antonio Guterres on Saturday rejecting a filing from the Philippines to the UN.

Manila had registered its entitlement to an extended continental shelf in the Western Palawan region of the South China Sea, defining the seabed areas over which it has sovereign and exclusive rights to exploit for natural resources.

Malaysia said it “categorically” rejected the Philippines’ filing on the basis that the extended continental margin in the submission “was projected from the baselines of the Malaysian state of Sabah”.

“This clearly disregards Malaysia’s indisputable sovereignty over the state of Sabah,” the diplomatic note said.

Malaysia’s protest came just as the country’s foreign minister, Mohamad Hasan, paid a courtesy call on President Ferdinand Marcos Jnr in Malacanang Palace and met his Philippine counterpart, Enrique Manalo, on Monday.

Sabah straddles an area between Malaysia and the Philippines. Graphic: SCMP

Complicated history

The controversy over the ownership of Sabah, located on the northern tip of Borneo, stems from colonial-era agreements. In 1878, the sultan of Sulu, who owned Sabah, signed a “permanent lease” agreement with the British North Borneo Company, which the sultan’s heirs to this day interpret as a lease, while Malaysia sees it as a cession. This disagreement lies at the heart of the dispute.

When Malaysia was formed in 1963, incorporating Sabah, the Philippines lodged a formal claim, arguing that Sabah rightfully belonged to the sultanate of Sulu and thus to the Philippines. Malaysia, however, maintains that the territory was legitimately ceded to it by the British. The dispute has persisted, periodically flaring up due to diplomatic notes, legal actions, and even armed incursions.

Malaysia had been paying an annual “rent” of 5,000 silver dollars to the heirs of the sultanate of Sulu due to the 1878 agreement, which stipulated that the grant of lease was “forever and until the end of time” in exchange for rent payments. Malaysia halted payments in 2013 after one of the heirs mounted an unsuccessful bid to take over Sabah.

The cessation of payments subsequently led the heirs to seek arbitration in a French court, which resulted in a US$15 billion ruling against Malaysia. The judgment included compensation from Petronas, Malaysia’s state-owned oil and gas company, for the extraction of oil and gas resources in Sabah.

However, the Paris Court of Appeal ruled in 2023 that the arbitration tribunal had no jurisdiction, effectively nullifying the award and supporting Malaysia’s stance against the claim .

The last Philippine president to actively espouse, then backtrack on, the sultanate’s claim was Ferdinand Marcos Snr. Since his ouster in 1986, Manila has not formally recognised the sultan of Sulu.

Philippine President Ferdinand Marcos (right) shaking hands with Malaysia’s Foreign Minister Mohamad Hasan at the Malacanang Palace in Manila on Monday. Photo: Handout / Presidential Communications Office / AFP

Unresolved tensions

Julkipli Wadi, dean of the University of the Philippines’ Institute of Islamic Studies, told This Week in Asia that the Malaysian government should “show transparency” over the Sabah issue and that he expected the Marcos administration to shelve the dispute as did his predecessors.

“If it is shown that the oil that Petronas has been harvesting for decades comes from the Sulu Sea, then Malaysia should be man enough to open all books and never hide under the cloak of false claim and unwarranted use of other people’s and other country’s resources,” said Wadi, who hails from Sulu.

He expressed scepticism that a “strong position” over Sabah could be expected from Marcos Jnr “beyond beautifully crafted words”.

Marcos Jnr’s predecessor, Rodrigo Duterte, also set aside the dispute even though his foreign secretary, Teodoro Locsin Jnr, posted on social media in 2020 that “Sabah belongs to the Philippines”.

Political risk analyst Ronald Llamas told This Week in Asia that the president could not afford to be the first Philippine leader to drop the Sabah claim. “He has to negotiate for something, [or] at least appear to be negotiating. And he won’t simply drop the legacy of his father on Sabah.”

Llamas said the Philippines could still settle the dispute over Sabah through negotiations. “We can talk, clarify, negotiate with Malaysia, unlike China who have not only built, but weaponised their artificial islands within our exclusive economic zone,” he said.

The government could also negotiate on behalf of the sultan’s heirs and his family, Llamas said.

It is unclear, though, with the South China Sea dispute on his plate, whether Marcos Jnr would be willing to devote time to the Sabah dispute.

In August 2022, his press secretary at the time, Trixie Cruz-Angeles, said the Sabah issue was “a private claim” by the sultan’s family and therefore “not an issue of sovereignty or of territory at the moment”.

The country’s recent UN submission, however, would categorically make Sabah a sovereignty issue.