BEYOND WATER SECURITY: DOWNSTREAM HYDRO HEGEMONY, UPSTREAM SOVEREIGNTY AND THE SUNGAI MUDA CONFLICT IN MALAYSIAN FEDERALISM

Abstract

This article argues that the Sungai Muda conflict reflects the complex interaction between sovereignty, riparian rights, and the governance of strategic resources within the framework of Malaysian federalism. Penang represents a compelling case of how a subnational entity lacking conventional territorial sovereignty over a river basin can nonetheless defend and legitimise its claims through negotiation, administrative efficiency, and strategic adaptation to federal structures. By leveraging institutional effectiveness through the Perbadanan Bekalan Air Pulau Pinang Sdn Bhd (PBAPP) and engaging in calibrated domestic diplomacy, Penang has justified its continued access to the waters of the Sungai Muda, despite the absence of a clearly codified and consistently applied riparian rights doctrine in Malaysia. In this respect, Penang constitutes a distinctive domestic model that warrants comparative consideration within global resource governance scholarship. Conversely, Kedah, as the upstream state exercising territorial jurisdiction over the Ulu Muda catchment, has mobilised its sovereign position to demand distributive justice, recognition of the ecological and fiscal burdens associated with maintaining the watershed, and formalised compensation from downstream beneficiaries. The dispute therefore exposes structural tensions within Malaysian federal governance, where questions of distributive equity, ecological sustainability, and shared responsibility remain insufficiently institutionalised. Drawing upon hydro-hegemony theory and normative frameworks of distributive justice, this study examines how Kedah and Penang articulate and defend competing claims within an asymmetrical federal structure. The article proposes the reform of Malaysia’s inter-state water governance architecture through more inclusive and rule-based mechanisms, including formalised compensation schemes for upstream states, the establishment of joint basin management institutions, and the integration of ecological sustainability principles into federal resource policy. In doing so, it seeks not only to advance scholarly debates on strategic resource governance in Malaysia but also to contribute to comparative discussions relevant to federations and river basins worldwide that confront analogous tensions over shared water resources.