MCCBCHST - Land Lease Surrender Policy

Date: 26 July 2024

MEDIA STATEMENT

Any reduction of leasehold land size without giving due consideration on merits maybe illegal, unconstitutional, against the Federal Constitution and the National Land Code.

1. The Malaysian Consultative Council of Buddhism, Christianity, Hinduism, Sikhism and Taoism (MCCBCHST) is alarmed with a proposal made by Deputy Prime Minister Ahmad Zahid Hamidi at the Bumiputera Economic Congress which was held in early March, 2024 that on the renewal or extension of a land lease “….if the lease size exceeds 50 acres (20.23 ha) for agricultural land or 20 acres for industrial use, the proposal calls for 20 percent of the land to be handed back to the Government upon lease renewal or extension.” The Deputy Prime Minister was further quoted as saying “…the Government plans to set up a Bumiputera Land Corporation (Perbadanan Tanah Bumiputra) to preserve land ownership, as part of effort to strengthen the community by boosting its land ownership”. [See Malaysiakini March 7, 2024 article by P. Gunasegaram]
    
2. The MCCBCHST supports any measure to help the Bumiputra community but it should not be done at the expense of the non-Malays legitimate interest. The law allows the landowner of leasehold land to apply for renewal or extension of lease and the approving authority has the corresponding duty to consider it, properly and reasonably, on its merits. In Pengarah Tanah Galian Wilayah Persekutuan v. Sri Lempah Enterprise Sdn. Bhd. (Federal Court Civil Appeal No. 94 of 1978) (“Sri Lempah”), the Federal Court stated:
   
   “…… If the landowner has the right to apply for conversion, the committee has the corresponding duty to consider it properly and reasonably, on its merits”. (pgs. 30 & 31 of case). Based on this principle, any Government policy or decision that directs that where a lease size exceeds 50 acres for agricultural land or 20 acres for industrial use, then 20 percent of the land to be handed to the Government upon lease or extension is arbitrary and unlawful as the extensions or renewal sought of the lease of land had not been given due consideration as required by law, that is to consider the application “properly and reasonably on its merits”. Therefore, the blanket directive requiring taking away 20% of leasehold land upon application for extension or renewal of leasehold land without considering it on merits would be unlawful and in contravention of the National Land Code, the “Sri Lempah” case, and the Federal Constitution.
    
3. The Proposal by the Deputy Prime Minister would mean that any application for renewal or extension of lease would not be given due consideration to consider it properly, reasonably and on its merits, by the approving Land Committee but it would straightaway proceed to take away 20% of the leasehold land on its renewal or extension however meritorious it was to grant approval of the whole leasehold land applied for. The implications of this proposal (it appears this situation does not apply to Bumiputra holdings) are tremendous. If for eg. one has agricultural land of 50 acres growing oil palm then one has to give up 10 acres upon lease renewal or mere extension and also lose the yearly output because the area planted is reduced 123 Jalan Berhala, Brickfields 50470 Kuala Lumpur Email: [email protected] by 10 acres. Further, if one has industrial land for eg. with an oil palm mill, logistics centre, office premises, workers quarters etc. then one has to surrender 4 acres to the Government which will then be allocated to the Bumiputra Land Corporation. The taking over of such leasehold land is illegal as per the principle established in the “Sri Lempah” Federal Court decision:
   
   “…. that the approving authority had acted illegally in refusing to consider and approve the application and in making the application to surrender the land and to reapply for the alienation of the part to be retained by the applicant to be held on a 99 - year lease and further that the approving authority’s action was unconstitutional, being contrary to Article 13(1) of the constitution”. (Page 21 of case). [Note: Article 13(1) says: “No person shall be deprived of property save in accordance with law]
    
4. At the moment all leases for renewal or extension are usually automatically renewed on payment of premium and rarely terminated or withdrawn. This practice complies with the law and ensures applications for renewal are considered on merits and allows businesses of all kinds to have reasonable certainty that they can operate in a system which is fair, equitable and reasonable.
    
5. Since independence such a proposal to take away 20% of leasehold land on renewal or extension has not been made. No Malaysian law including the Federal Constitution and the National Land Code allows this kind of compulsory taking over of 20% acreage of leasehold land without due consideration on merits having been given by the approving authority.
    
6. At present the Malay ownership of land is already protected by the Malay Reserve land. If more land is needed to be put in the Malay reserve then it should be done without taking away land compulsorily from non-Bumiputera which they need for their survival and business.
    
7. In view of the above the MCCBCHST calls on the Government to abort proposal to take away compulsorily 20% of leasehold land where the size exceeds 50 acres for agricultural land 20 acres for Industrial land. The MCCBCHST further calls upon the Government to respect the rights of all citizens as stipulated in the Federal Constitution and the National Land Code. The Government actions should promote unity and be based on the Rule of Law and as per the principle in the Federal Court case of “Sri Lempah”, all applications for renewal or extension of leasehold land must be considered “properly and reasonably, on its merits” and not compulsorily take away 20% of leasehold land and reducing size to 80% only. Such actions may also affect foreign investor confidence negatively and disrupt businesses.