Malaysia Agreement 1963 (MA63): Sabah's Constitutional Safeguards Explained
What is the Malaysia Agreement 1963?
The Malaysia Agreement 1963 (MA63) is the treaty that established Sabah's entry into the Federation of Malaysia. It was signed in London on 9 July 1963 by the United Kingdom, the Federation of Malaya, North Borneo (Sabah), Sarawak and Singapore. North Borneo's signatories included Datu Mustapha bin Datu Harun and Donald Stephens (UN Treaty Series, vol. 750, checked 7 October 2026). It laid out the constitutional and political terms under which these territories would unite to form Malaysia.
MA63 annexed the new state constitutions and the changes to the Federal Constitution needed for Malaysia. In Article VIII, the governments of Malaya, North Borneo and Sarawak also undertook to carry out the assurances and recommendations of the Inter-Governmental Committee (IGC) report of 27 February 1963 where these were not already written into the Constitution (UN Treaty Series, checked 7 October 2026). Many of those safeguards trace back to the 20 Points, a memorandum Sabah leaders drew up in 1962 to protect the state's autonomy and identity inside the new federation.
The agreement came at a time of decolonisation. After Malaya's independence in 1957, Britain still controlled North Borneo (Sabah), Sarawak and Brunei. For Sabah's leaders, among them Donald Stephens (later Tun Fuad Stephens), the aim was to secure guarantees that Sabah would keep control over key matters inside the larger federation.
MA63 remains one of the most politically sensitive documents in Sabah. Whether the federal government has honoured its commitments is a recurring theme in Sabah politics, raised by government and opposition parties alike.
What are the 20 Points that protect Sabah?
The 20 Points were a memorandum of minimum demands drawn up at a meeting of political leaders convened by Donald Stephens in August 1962 (Borneo Post, checked 7 October 2026). Sarawak drew up a similar 18-Point memorandum (ISIS Malaysia, checked 7 October 2026). The Points were put to the Inter-Governmental Committee, chaired by Lord Lansdowne with Tun Abdul Razak as deputy, which worked out the constitutional arrangements.
The Points covered matters including religion, language, immigration, Borneonisation of the public service, citizenship, finance, education, constitutional safeguards, representation in Parliament, and land, forests and local government. The table quotes several of them as reported by the Daily Express (Daily Express, checked 7 October 2026).
| Point | What the 20 Points asked for | Position today |
|---|---|---|
| Point 1: Religion | No State religion in North Borneo; the Malayan provisions on Islam should not apply to North Borneo | Sabah's constitution was amended in 1973 to make Islam the state religion |
| Point 2: Language | English to be the official language of North Borneo for all purposes, State or Federal, without limitation of time | Sabah can use English as an official language |
| Point 6: Immigration | North Borneo to have unfettered control over the movement of persons, other than federal employees, from other parts of Malaysia | Sabah still controls entry and residence of non-Sabahans |
| Point 8: Borneonisation | Borneonisation of the public services should proceed as quickly as possible | Sabah politicians have long disputed whether it was carried out |
| Point 16: Constitutional safeguards | No amendment, modification or withdrawal of the special safeguards without the positive concurrence of the State government | Changes need a two-thirds majority in both houses of Parliament and the consent of Sabah's Yang di-Pertua Negeri |
| Point 20: Land | The Constitution's provisions on the National Land Council should not apply in North Borneo | Not assessed on this page |
Sources for the "Position today" column: the 1973 amendment on religion (Malay Mail, checked 7 October 2026); English, immigration and the rules for changing the safeguards (Malaysian Bar, checked 7 October 2026); Borneonisation (Daily Express, checked 7 October 2026).
How did Sabah negotiate its entry into Malaysia?
The idea of a "Malaysia" taking in Malaya, Singapore, North Borneo and Sarawak was proposed in the early 1960s. North Borneo had been run by the British North Borneo Chartered Company under a Royal Charter granted on 1 November 1881, and became a British Crown Colony on 15 July 1946 (Borneo Post, checked 7 October 2026). It had no prior constitutional relationship with Malaya.
In 1962 the British and Malayan governments set up the Cobbold Commission to gauge opinion in North Borneo and Sarawak (New Straits Times, checked 7 October 2026). Its report, completed in June 1962, found that about one third of people fully supported Malaysia, one third were in favour provided safeguards were included, and the remaining third was divided between those who wanted independence first and those who rejected the merger. In September 1962 the North Borneo and Sarawak legislative councils agreed to Malaysia on condition that state rights were safeguarded (Borneo Post, checked 7 October 2026).
North Borneo and Sarawak leaders were represented on the Inter-Governmental Committee, which turned the safeguards into detailed constitutional proposals (ISIS Malaysia, checked 7 October 2026). Its report was signed on 27 February 1963, and the Malaysia Agreement itself was signed in London on 9 July 1963.
These negotiations took place during the Cold War, and alongside objections to Malaysia from the Philippines and Indonesia. See our page on the Philippines Sabah claim.
What happened on Malaysia Day — 16 September 1963?
Malaysia Day, 16 September 1963, is the date the Federation of Malaysia came into being, when North Borneo, Sarawak and Singapore joined the Federation of Malaya (Borneo Post, checked 7 October 2026).
On that day the new State Constitution of Sabah and the amended Federal Constitution took effect, and North Borneo became the State of Sabah.
Singapore, which joined on the same day, separated from Malaysia on 9 August 1965 (The Star, checked 7 October 2026). That left Sabah and Sarawak as the only states outside the Peninsula.
Malaysia Day remains an important date in Sabah's calendar.
Has Malaysia honoured the MA63 agreement?
This is one of the most contentious questions in Sabah politics, and the answer depends on who is asked. Some safeguards are clearly in force today; others are disputed or before the courts.
Safeguards still in the Constitution include Sabah's control over the entry and residence of non-Sabahans, a separate High Court in Sabah and Sarawak, Native Courts, the use of English, and special grants and revenue sources that other states do not have (Malaysian Bar, checked 7 October 2026). On religion, Point 1 asked for no state religion, but Sabah's own constitution was amended in 1973 to make Islam the state religion (Malay Mail, checked 7 October 2026).
The most contentious issue is revenue. Under Article 112D and the Tenth Schedule of the Constitution, Sabah is entitled to a special grant of 40% of the growth in net federal revenue collected from Sabah, reviewed from time to time. Sabah received the formula for 1964 to 1968. The Sabah Special Grant (First Review) Order 1970 replaced it with fixed annual sums for 1969 to 1973, reaching RM26.7 million. The second review, due in 1974, never took place, and RM26.7 million a year stayed the figure for decades. A new order from 1 January 2022 (the Second Review Order) set RM125.6 million for 2022, rising to RM142.6 million for 2026 (High Court grounds of judgment, elaw.my, checked 7 October 2026). On 17 October 2025 the Kota Kinabalu High Court ordered the federal and Sabah governments to hold the missing review. The Court of Appeal stayed that order on 6 April 2026, and the federal appeal is fixed for 29 October 2026. This 40% grant is separate from oil royalty, which is a 5% cash payment agreed with Petronas under the Petroleum Development Act 1974, the same rate Sarawak receives. The full timeline is on our MA63 rights page.
In 2021 Parliament amended Article 1(2) of the Constitution to list Sabah and Sarawak as the Borneo States. The Dewan Rakyat passed the bill on 14 December 2021 with 199 votes and none against (FMT, checked 7 October 2026), and the Dewan Negara approved it on 22 December 2021 (Malay Mail, checked 7 October 2026). In September 2022 the then minister for Sabah and Sarawak affairs, Maximus Ongkili, said 15 issues monitored by the special council on MA63 were still unresolved, including state authority over health, labour, gas and electricity regulation, and additional parliamentary seats (FMT, checked 7 October 2026).
Borneonisation, the commitment to fill the public service in Sabah with local people, is another point Sabah politicians have long said was not carried out as promised (Daily Express, checked 7 October 2026).
Irregular migration from outside Malaysia is a separate but related grievance. The Royal Commission of Inquiry on immigrants in Sabah, set up in 2012, released its report on 3 December 2014 (Malay Mail, checked 7 October 2026). See our page on Project IC.
Why does MA63 still matter politically today?
MA63 matters because it is the legal foundation of Sabah's place in Malaysia. Many Sabahans see it as the terms on which Sabah agreed to join, and judge the federal government by whether those terms are kept.
Parties across Sabah politics refer to MA63. Some use disputed points as evidence that the federal government has fallen short; others point to recent settlements and amendments as progress. Demands for a larger revenue share or more state powers are usually framed in terms of MA63 rights.
MA63 also shapes how many Sabahans see their history: as a territory that negotiated terms for joining Malaysia. This is one reason Malaysia Day (16 September) carries particular weight in Sabah alongside Merdeka Day (31 August).
Sabah's position is shared with Sarawak, which joined on the same terms under MA63 with its own 18 Points. No state in the Peninsula has an equivalent arrangement.