Since the Prohibition Enactment 1911 was applied in most of the states of the Malaysian Federation, by the time it was repealed in 1978, the modern Malaysian waqf system was in shambles. Not only the system itself, but also the attitudes of the ordinary Malay Muslims were negatively affected. The notion that waqfs could be an important agent of economic change and the basis of economic prosperity had become totally alien to the Malay Muslims. Muslims at all levels had come to consider that the waqfs were an ancient and decadent institution mainly for the upkeep of the cemeteries and some mosques.
At the twilight of their rule in Malaya, the British dealt a final blow to the Malay waqfs by initiating a process of massive centralization, which once started tended to continue even after the independence with its own momentum. A series of laws enacted in the fifties (Perak in 1951 and 1965; Selangor in 1952; Trengganu in 1955; Malacca in 1959; and Johor in 1978) drastically centralised the Malaysian waqf system. Among the pertinent clauses the following particularly attract attention: The Council of Islamic Religion or the Majlis Ugama Islam dan ‘Adat Melayu is the sole trustee of all waqf properties
All documents pertaining to waqf properties must be kept by the Council
The Council must take the necessary steps to transfer the ownership of all waqf properties to itself
All moneys received from specific waqf properties must be used according to the purpose for which such properties were intended
All moneys received from general waqf properties must be kept in the general fund of the Majlis or Bait al-mal (Alhabshi, 1987: 123).
Steps have been taken to ensure that the ownership of all waqf properties is transferred to the State Religious Councils but this is not a smooth process and some difficulties are being encountered. The Councils are placed directly under the Sultan of each state. In those states without sultans, the waqfs are put under the Yang Di Pertuan Agong, the King.
The actual wording of the law includes the statement; “Notwithstanding any provision to the contrary, the Majlis … shall be the sole trustee of all awqaf, whether waqf khas (family waqfs) or waqf am … (charitable waqfs)”. The expression “notwithstanding any provision” means that despite the instructions in the waqf deed, the Majlis shall be the sole trustee. Thus, in a dramatic move, the age old and universal institution of trusteeship, mutawalli, appointed by the founder is simply eliminated. This argument is clarified in Perak, where, the Control of Wakf Enactment, 1951, provides that the State Executive Council may remove any trustee, appoint a new trustee or new trustees, or appoint the Majlis to administer the trust of such waqf (Ibrahim, 1965: 287). Thus, it seems that the traditional mutawalli appointed by the founder has been replaced by the Majlis or Majlis appointed individuals.
Moreover, the property affected by such trust, waqf or nazr am shall be vested in the Majlis. The income of a family waqf, if received by the Majlis, shall be applied by it in accordance with the lawful provisions of such waqf khas (Ibrahim, 1965: 283-85).
The income of every waqf shall be paid to and form part of the General Endowment Fund or Bayt al-Mal which is administered by the Majlis. The capital property and assets of a waqf shall not generally form part of the Bayt al mal but shall be applied in pursuance of such waqfs and held as segregated funds. If over time it is no longer possible to carry out the exact provisions of any waqf, the Majlis shall manage the waqf funds as close as possible to the original purpose of the waqf or the Majlis may in such a case, with the approval of the ruler, decide that such property and assets shall be added to and form part of the Bayt al mal.
All of the above indicate clearly the excessive degree of centralization that has taken place in the Malaysian waqf system. The Majlis is declared to be the sole trustee for all the waqfs, including the family waqfs; all the waqf properties are vested with the Majlis; and separately held capital is supposed to finance the purpose of the awqaf. But how can this be done if the income is collected by the Bayt al mal? This is reminiscent of the Ottoman situation in the nineteenth century, with the Awqaf-ı Hümayun Nezareti collecting the waqf revenues and redistributing 1/4 of these funds as “aid” to the awqaf. In fact, the picture is so similar to the Ottoman application that it is as though the British Embassy in the Ottoman Empire informed the British Government in India, which then applied the same measures in British Malaya. Although, conjectural, this is a hypothesis worth examining.
Under these circumstances, the position of the mutawalli is also quite confused. It is not even clear if this millennium old institution has disappeared altogether in Malaysia. If the Majlis is declared to be the sole trustee of all the waqfs, including the family waqfs, what indeed happens to the mutawalli? Although, the Johor Waqf Enactment Act (no.5) declares that alienation of the waqf land is null and void and if any land is subjected to a waqf, the usufruct thereof shall belong to the beneficiaries.
Source: Murat Cizakca, A History of Philanthropic Foundations: The Islamic World From the Seventh Century to the Present. Republished with permission. (Islamic Market)