North Borneo Dispute Explained

Ever since the inclusion of Sabah and Sarawak with the Malay peninsula to form present day Malaysia in 1963, several suggestions have been used over the years by Filipino politicians to claim that Sabah should be part of modern-day Philippines.

An off and on issue for more than 60 years, a recent Twitter spat involving Philippine Foreign Secretary Teodoro Locsin Jr and Malaysian Foreign Minister Hishammuddin Hussein resurfaced the controversy between the two countries.

The Philippine Foreign Secretary tweeted in response to a U.S. Embassy in Philippines tweet that referred to Sabah as Sabah, Malaysia. 

The Malaysian Foreign Minister then hit back.

On top of the ongoing and seemingly never-ending dispute, the nation’s second largest state also faces persistent security challenges, such as attacks from Philippine-based militant groups like Abu Sayyaf. 

So, what’s the story behind this longtime dispute?

The sultanate that ruled Sabah’s east areas signed an agreement in 1878 that handled the territory over to the North Borneo Chartered Company (NBCC), a British colonial company that was tasked to exploit the resources in the land.

They make-or-break keyword in the agreement is the term “pajakan”, which then was translated by Spanish linguists in 1878 and by American anthropologists H. Otley Beyer and Harold Conklin in 1946 as lease. The British however, used the interpretation of historian Najeeb Mitry Saleeby in 1908 and William George Maxwell and William Summer Gibson in 1924, which translated “pajak” as grant and cede.

The Philippines has long claimed that this agreement constituted a lease, rather than a full cession, of the territory to the NBCC; Malaysia considers this a non-issue as Putrajaya maintains that the formation of the Federation of Malaysia in 1963 was an act of self-determination by Sabah residents.

Natural resources and national security

Sabah and Sarawak generate about 60% of Malaysia’s oil, although, media reports say that they may only see 5% of the revenue under agreements signed in 1975 with Petronas. Former prime minister Mahathir Mohammad promised to raise the number in the Pakatan Harapan coalition’s manifesto last year while Wan Zulkiflee Wan Ariffin, Petronas’ chief executive said that talks were in the happening to work out an acceptable arrangement between parties.

Will it come to a conclusion?

The Trilateral Cooperation Arrangement signed by Philippines, Malaysia and Indonesia in 2016 saw their navies working together to clamp down on Islamic militants in the Sulu Sea. In order to ensure its success, former prime minister, Najib Razak and Philippine President Rodrigo Duterte agreed to set aside the dispute and analysts suggest the success of the arrangement could provide a path forward to finally put the dispute to rest