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MINISTRY OF FOREIGN AFFAIRS PRESS RELEASE

WATER ISSUE IS ABOUT SANCTITY OF AGREEMENTS, NOT ABOUT PRICE ALONE, SAYS SINGAPORE FOREIGN MINISTER PROF S JAYAKUMAR

Singapore Foreign Minister Prof S Jayakumar today (25 Jan 03) comprehensively rebutted Malaysian allegations on the water issue and other issues. He underscored that the issue goes well beyond the actual price of water supplied by Malaysia to Singapore.

He also refuted other allegations such as those concerning Malaysia’s vacating of the naval base facilities in Woodlands, the signing of the Special Agreement on Pedra Branca, the ASEAN+3 Secretariat proposal and the East Asian Economic Caucus (EAEC).


Documents, Correspondence and Diplomatic Notes released to set out facts

Prof Jayakumar noted that all these allegations had the common objective of painting Singapore as "insensitive", "arrogant" and "unneighbourly" in the conduct of its bilateral relations with Malaysia.

But the most strident allegations by Malaysia were on the water issue, including claims that Singapore was "selfish", "profiteering", "legalistic" and "unreasonable". The water issue was the core problem underlying the endless, vitriolic barrage of Malaysian allegations. But the water issue was critical to Singapore’s survival as a nation, and Singaporeans needed to know the facts and be able to judge for themselves. He released the exchanges of correspondences between the leaders of the two countries, as well as formal diplomatic exchanges concerning this issue.

He had to do so because "so much misinformation on the water issue has been put out by Malaysia that it now needs to be countered by conclusive evidence. These documents will clear the air for everyone." The documents, in two volumes, are now part of the official records of Parliament. The documents also include the texts of various Agreements.


The fundamental issue: Sanctity of Water Agreements and Separation Agreement

The fundamental issue was not the price of water, but how Singapore was made to pay for any revision. This cannot be done at the will or dictate of Malaysia. Said Prof Jayakumar: "The 1961 and 1962 Water Agreements are enshrined in the Separation Agreement and registered at the United Nations. They are fundamental to our very existence as an independent nation. Neither Singapore nor Malaysia can unilaterally change them. This is the root of the dispute between us."

Prof Jayakumar stated: "Let me be clear. It is not a matter of money…the significance of the water price, to both countries, is Singapore’s existence as a sovereign nation separate from Malaysia, and the sanctity of the most solemn agreements which Singapore and Malaysia have entered into."

The issue goes well beyond whether Singapore has to pay 45 sen or 60 sen or stick to 3 sen. Singapore will not be impoverished by an increase of 3 to 45 sen per 1,000 gallons if Malaysia were to charge that. Neither would Malaysia be enriched significantly.

He stressed that the two Water Agreements are no ordinary agreements. They are so vital that they were confirmed and guaranteed by both Governments in the 1965 Separation Agreement, also known as the Independence of Singapore Agreement.

"This was registered at the United Nations. Both countries have to honour the terms of the agreements and the guarantee in the Separation Agreement. Any breach of the Water Agreements must call into question the Separation Agreement and can undermine our very existence."


Diplomatic Notes sent to Malaysia

Prof Jayakumar said in early 2002, various statements made by the Malaysian Government led to Singapore conveying its serious concerns to the Malaysian Government. A diplomatic note was sent. Singapore pointed out that "pending a binding agreement on the overall package of issues, all legal obligations of the existing Water Agreements and the POA remain in force and are binding on both Governments".

In the diplomatic note, Singapore also reminded Malaysia that the Water Agreements are binding legal arrangements duly confirmed and guaranteed by the Governments of Malaysia and Singapore in the Separation Agreement, and that the Agreement was "the fundamental basis of Singapore's existence as an independent sovereign nation", and that "any variation of the Water Agreements without the consent of both Governments will be a breach of the Separation Agreement that cannot be accepted".

Singapore also pointed out that "further negotiations on new agreements pertaining to the long term supply of water to Singapore can only proceed on the basis that the agreements already concluded cannot be altered without the explicit consent of both parties. Otherwise any new agreements on water can similarly be altered without consent. This will have grave implications for bilateral relations".

On 14 March 2002, the Malaysian Government replied that its "commitment to resolving the issue of water with Singapore in the context of an agreement on the overall package of issues", and that "at no time was there a suggestion that the Government of Malaysia would depart from such a commitment." It said that any suggestion to the contrary is "misleading and constitutes a gross misinterpretation of the well known position of the Malaysia Government."

Singapore, in a diplomatic note dated 25 March 2002, took note of this commitment and assurances by the Malaysian Government and reiterated Singapore’s commitment to reach a mutually beneficial agreement on the package of outstanding issues.

Malaysian Foreign Minister Syed Hamid also reiterated in his opening statement at the First Ministerial Meeting on 1 July 2002 in Putrajaya that "Malaysia has repeatedly said that it will honour the 1961 and 1962 Water Agreements until their expiry in 2011 and 2061 respectively".


Facts on Package show Singapore was not the unreasonable party

Prof Jayakumar gave a full chronology to show that difficulties arose because Malaysia repeatedly changed its position, and shifted their goal posts each time both sides neared an agreement. Singapore had persevered, accommodating as much as possible, and never closed the door on negotiations to reach a mutually beneficial agreement.

Prof Jayakumar strongly refuted allegations that Singapore had been the unreasonable party. The package of items under negotiations covered the future supply of water to Singapore for 100 years after 2061; use of Malaysian airspace by RSAF; variations in the terms of the Points of Agreement, by giving additional 12 parcels of land at Bukit Timah for joint development; early return of CPF monies amounting to RM 3 billion to West Malaysians and, later, the Malaysian proposal to replace the Causeway with a bridge and a revision of the current water price.

Singapore was prepared to agree to the items which Malaysia wanted, including a current water price revision, in exchange for Malaysia agreeing to provide Singapore with a long-term supply of water beyond 2061, and RSAF use of Malaysian airspace. "These concessions to Malaysia would have been at a considerable cost to us. They had to be seen in the context of the overall package deal being negotiated," he said.

When negotiations on the package deal did not make much progress, Malaysia suddenly and unilaterally discontinued the package approach. Singapore was even prepared to go along with the Malaysian proposal to decouple water supply from the other items but Malaysia refused to discuss future water supply until 2059, a mere two years before the expiry of the 1962 Water Agreement. It was therefore clear that Malaysia had no intention of striking a deal on future water.


How do we go forward?

Malaysian leaders spoke about referring the water issue to international arbitration by the Permanent Court of Arbitration (PCA). Later, Foreign Minister Syed Hamid reportedly said the option of referring the water issue to PCA for arbitration did not arise. This back-tracking was despite statements by PM Mahathir and FM Syed Hamid on two different dates that it should be referred to the PCA.

To overcome the impasse, Singapore is prepared to have recourse to arbitration in accordance with the provisions of the Water Agreements. The provisions in Clauses 21 and 19 of the 1961 and 1962 Water Agreements respectively provide for the settlement of disputes arising under the Agreements. Those provisions stipulate that where disputes cannot be resolved, the matter shall be referred to arbitration "in accordance with and subject to the provisions of the arbitration law at the time of such dispute existing in the State of Johore".

Indeed, the Johor State Secretary sent letters of 14 August 2002 seeking to give Notice of price review in accordance with Clause 17 and Clause 14 of the 1961 and 1962 Water Agreements respectively to the PUB. As Singapore’s position was that Malaysia had lost its right of review, the PUB replied on 9 October 2002 that it did not accept that the Johor State Government was still entitled to serve notice to seek a review of the charge of raw water under the two water Agreements.

The question of whether there was still a right of review, as well as the quantum of the price revision, can be resolved through legal process as provided for in the two Water Agreements.

"This is like the way we are resolving Malaysia’s claim over Pedra Branca. Both sides will be bound by the decision of the arbitrators. If in fact Johor has not lost its right to revision by not exercising it in 1986/87, then the arbitrators’ award on the price revision will take effect from the date when Johor gave its Notice to PUB as provided for in the two Agreements," said Prof Jayakumar.


Loose talk of war was irresponsible and dangerous

Prof Jayakumar said he was concerned about loose talk of war. "Loose talk of war is irresponsible and dangerous. It whips up emotions that could become difficult to control. In such an atmosphere, the Malaysian air force, navy and marine police vessels have continued to make repeated intrusions into Singapore airspace and territorial waters off Pedra Branca. Such provocative actions are not only senseless but dangerous. Senseless because both sides have agreed to refer the dispute to the International Court of Justice and such actions cannot affect the decision of the ICJ…The Malaysian Government would have to bear responsibility for the consequences."

Prime Minister Mahathir had said Malaysia would respect international law on territorial disputes and avoid a confrontation with Singapore on Pedra Branca. This is also Singapore’s position.

Prof Jayakumar said it was Singapore’s intention to have good, not strained, relations with Malaysia. "There is much that both countries can gain by working together. Our common interests far exceed our bilateral differences. We must ensure a firm and level basis for conducting state-to-state relations," he said.

. . . . .



MINISTRY OF FOREIGN AFFAIRS
SINGAPORE
25 JANUARY 2003


Full text of Statement by Minister for Foreign Affairs Prof S Jayakumar in Parliament, 25 Jan 2003 is available at
http://www.mfa.gov.sg/press/speech.html