KUCHING, Nov 22 — Sarawak Premier Tan Sri Abang Johari Openg today tabled a Bill at the Sarawak State Assembly to establish a state sovereign wealth fund that seeks to maximise returns from the state’s surplus capital reserves through investment.

He said the wealth fund will be placed under the management and custodianship of a body corporate established under this Bill to be called the Sarawak Sovereign Wealth Future Fund Board.

"The tabling of this Bill is the Gabungan Parti Sarawak (GPS) government’s fulfillment of its election promise in the 12th State Legislative Assembly and to prove that the GPS government takes its promises and its manifesto seriously,” Abang Johari said.

He said Norway’s sovereign wealth fund, the Norway Oil Fund known as Norway Government Pension Fund Global (with a fund size of US$1.25 trillion or RM5.7 trillion), is used as a benchmark to set up the state wealth fund.

"The same model is also adopted by US Alaska Permanent Fund Corporation (with a fund size of US$70.6 billion).

"Incidentally, these jurisdictions also have their prime sources of revenue from oil and gas, just like Sarawak,” he said.

The premier assured that the fund will be managed in a professional and transparent manner by members of the Board of Guardians, comprising experts and professionals in the field of finance and investment.

He said the ownership of all monies in the fund and all investments and income and returns from investment, is vested in the state, said adding that the board will only be the custodians of the monies in the fund.

"The law will require a high degree of integrity, accountability, transparency and professionalism from the board and all those in charge with the custody and management of the fund,” he said.

He said the Bill, therefore, incorporates features of good governance and international best practices in the management and investment of money in the fund as enshrined in the Santiago Principles.

"In addition, it is imperative that the fund and the people managing the fund be independent of any political interference.

"Therefore, a person will not be eligible to be appointed as a guardian if he is, at the time of his appointment, a member of a political party or a Member of Parliament or the Legislature or local authority of any State in Malaysia,” he said.

He said the composition of the Board of Guardians and the establishment of committees such as the risk committee, the remuneration committee, the internal audit committee, the investment committee, and the shariah advisory committee, will be modelled based on the Malaysian Code on Corporate Governance.

"An independent investment advisory panel will also be established to advise on the management and administration of the fund,” he said.

Abang Johari said over the years the state has enjoyed commodity-based revenue, particularly from oil and gas.

"This revenue source, however, is depletable and if the revenue is not managed and invested wisely, future generations will be deprived of the same economic benefits.

"Hence, it is critical to convert these non-renewable assets into financial assets so as to preserve and grow the state’s current wealth.

"Ultimately, this will create an endowment to generate sustainable sources of income for future generations,” Abang Johari said.

He said the sovereign wealth fund will sustain the financial fiscal position of the state via revenue diversification and creation of reserves replacing oil and gas revenue in years to come.

The state assembly later approved the Bill.