Why the EPMI libel suit was settled out of court and Why Barisan Nasional MPs should be thoroughly ashamed of themselves for showing no concern whatsoever in safeguarding Malaysia’s national resource interests

Extracts of Summing Up Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Kota Melaka, Lim Kit Siang, in the Dewan Rakyat on Tuesday, l6.7.l985 on the motion on Parliamentary Select Committee on Parliamentary Democracy

Why the EPMI libel suit was settled out of court and Why Barisan Nasional MPs should be thoroughly ashamed of themselves for showing no concern whatsoever in safeguarding Malaysia’s national resource interests.

During the debate on Monday, l5.7.l985, the BN MP for Ulu Muda, Tuan Othman bin Abdul, challenged me to explain in Parliament why the ESSO libel case was settled out of court, insinuating that I had dishonourable motives or reasons which I dared not publicly disclose.

Othman bin Abdul’s salvo is the latest in a series of well-orchestrated campaign by at least five political groups or parties to try to smear me and damage my political reputation and credibility. We find that before every general elections, there would be a sustained and systematic campaign to try to destroy the political image, reputation and credibility of DAP leaders in the hope that this would lead to DAP reverses in the coming general elections. This happened before the 1982 general elections, and is how again happening, because of the fast-approaching coming general elections. But this time, this smear and ‘character assassination’ is even more high-powered, as there is not only a special fund set aside to carry the smear campaign up and down the country, as in putting up anonymous posters in the various towns, but it has also been brought to Parliament itself!

If the MP for Ulu Muda is a man a of honour and principle, he should be responsible and courageous enough to state what he thought are the dishonourable motives which led to the settlement of the ESSO libel case out-of-court; instead of acting as the front-man of the unholy alliance of at least five political groups out to smear my reputation. He should have the courage to openly question my political integrity instead of hiding behind parliamentary privilege by making insinuations to help fan the smear campaign against me outside the House.

I challenge the MP for ULU MUDA to state openly in the House what is being whispered outside as the reason for the settlement of the ESSO case out of court, i.e. I have been paid several million dollars by ESSO to agree to an out-of-court settlement. Better still, if this is what the MP for ULU Muda really believes, let him state it outside the House and I will have great pleasure to collect damages for his defamation of my character!

In any event, I am sure that if I have been paid several millions of dollars as out-of-court settlement by ESSO, the Inland Revenue Department would have promptly demanded their cut, especially as the government coffers are now so empty that they are prepared even to go against their Islamisation campaign in encouraging the people to gamble more by increasing the Empat Nombor Ekor draw from twice to thrice a week!


The unholy political syndicate out to smear my name over the ESSO case also tries to cover all eventualities. Although this is spread at a very low key, they claimed that if I had not been paid monetarily by ESSO, then the settlement out-of-court must mean that I have no basis whatsoever to make my allegations on oil production, and that I was therefore a most irresponsible person.

I have absolutely nothing to hide in the ESSO case. I had not wanted to talk about this case, but since my integrity had been challenged by the MP for Ulu Muda during the debate, I will take this opportunity to explain the circumstances that led to its out-of-court settlement.

In October 1980, ESS0 Production Malaysia Inc. (EPM) took a libel suit against me for an article in the DAP journal, the Rocket, of September 1980, concerning over-production of oil in August 1979, exceeding Petronas’ production targets; faulty metering system at the oil storage tanker, Esso Marcia; shoddy workmanship, improper work procedures and sub-standard designs and fabrications.

The main reason for my agreeing to out-of-court settlement was because my informant, who would be the star witness in the case, was fearful of his life and safety and dare not return to Malaysia to testify. He was formerly a project engineer with EPMI and was personally present on Tapis A platform in August 1979 when it was producing 58,000 barrels of crude oil a day when Petronas instructions limited production to 35,000 b/d with allowance for 5% over-production for certain contingencies. In fact, after the Rocket article, I had to go overseas in my several meetings with him.

The issues of oil over-production, faulty metering system on the Esso Mercia, shoddy workmanship, improper work procedures and sub-standard dealings and fabrications, are not matters concerning me with EPMI alone but are matters of national concern which all MPs should be interested in.

I think all Barisan National MPs must be thoroughly ashamed of themselves for showing no concern whatsoever in safeguarding Malaysia’s national resources interests, except to score cheap political points.

Although the EPMI libel suit has been settled out of court, the questions raised in the Rocket are still matters of vital national interests. MPs have a responsibility to demand from Petronas for a clear-cut explanation as to whether there was any over-production at the TApis A platform in August 1980, whether the faulty metering system at Esso Mercia, shoddy workmanship, improper work procedures and substandard designs and fabrications had caused financial losses to Petronas and Malaysia.

I am glad that after the Rocket article, Petronas was driven to upgrade controls to safeguard Malaysia’s national oil resources. At first though, Petronas officials denied that there was anything wrong. The managing director of Petronas, Rastam Hadi, in a special briefing to the Prime Minister on my Sept 24, 1980, Rocket article, said that Petronas did not have any severe objections to the integrity of the metering system on Esso Mercia.


But the Petronas’ managing director’s statement had been proved incorrect by a series of investigations commissioned by Petronas after the libel suit was filed, and the various experts reported the various possible ways whereby oil could be piped out without being recorded by the metering system.

For instance, one such investigation report commissioned by Petronas in December 1980 expressed grave dissatisfaction with the Esso Mercia metering system because it depended on so many variables and ‘can be manipulated dishonestly or not knowingly, ice, malfunction of the meters which no one can detect’.

As a result of the Rocket article and the investigations which Petronas was forced to conduct about the integrity of the Esso Mercia system, the Petronas even reached a decision to replace Esso Mercia as a storage tanker because of the unsatisfactory metering System in 1981, but because the replacement would cost Petronas from US$l2 million to US$22 million, and in view of the fact that the Trengganu Crude Oil Terminal would be completed at longest one year after such replacement, Petronas abandoned its earlier decision to replace Esso Mercia.

Petronas also owes the Malaysian people an explanation as to whether from its investigations, there was over-production of oil at Tapis A platform in violation of the Petronas limitation of 35,000 b/d.

I want to ask the Petronas to state whether it is not true that according to the Esso Mercia Production Logbook, the average daily production of Tapis A for the month of August 1979 was 64,624 bpd; and that according to the production date given by the Manager if Production Manager, Petronas to Vernon Cornell, Consultant, Petronas in a letter dated 4th May l98l, Petronas’ metered figures for Tapis A in August l979 averaged daily production of 46,705 bpd, with such high daily production figures as 78,000 bpd on August 21, 1979. Yet Rastam Hadi reported to the Prime Minister in Sept, 1986 that in August 1979, Tapis A average production was only 34,000 b/d, which was the figure maintained by EPMI, Can Petronas reconcile or explain the reasons for these conflicting figures?

Again according to the Esso Mercia Production Logbook, the stock on the tanker was 361,802 barrels; there was total production of 4,518,338 barrels, showing that the total crude available as end of August 1979 should be 4,875,l40 barrels on Esso Mercia. According to the Esso Mercia production logbook, the Stock as of 3lst August 1979 was 832,807 barrels, but as the total August 1979 liftings by nine vessels amounted to only 2,953,978 barrels, there appears to be an unaccounted 1,088,355 barrels for the month of August, which works out to 35,108 barrels per day.

Again, can Petronas explain these figures?

I do not want to go into other aspects of the shoddy workmanship, improper work procedures and sub-standard designs and fabrications all of which could only be testified by my informant as a matter of personal experience, but which put me in a difficult position because of his fear of coming to Malaysia to testify. It is for this reason that I agreed to an out-of-court settlement to withdraw, in the words of the Counsel for EPMI in Court, “all imputations of malfeasance” against EPMI.

As a result of the Rocket article, Petronas was forced to be more vigilant to safeguard Malaysia’s national resource interest, as it gave them greater leverage to put pressure on EPMI to comply with Petronas’ demands.

From any angle, I should be commended for rendering a great national service in highlighting the areas of weaknesses involving the country’s petroleum resources. Instead, I am made the subject of an irresponsible smear campaign that I had sold out to EPMI and become a millionaire many times over. It is only those who think of politics and public service in terms of what monetary and material gains they could get out of it, who would use their own standards to judge others. For instance, traitors and running dogs think that others are also prepared to be traitors and running dogs!

I challenge those from the five political groups or parties who want to character-assassinate me on the EPMI case to come out openly to make these allegations so that I could take them to court to clear my name, or they should cease their irresponsible and contemptible campaign.