Pacific Media Centre Newsdesk

Fifteen months after the treaty pledged to usher in a “new chapter” in the relationship between Australia and neighbouring Timor-Leste, the document remains unratified and the country loses millions of dollars a month from a Timor Sea field belonging to the Timorese.

Reporting in the latest edition of Eureka Street, freelance writer Sophie Raynor, who has been living in Dili for two years, has condemned Australia for “another [action] in a long line of Australia’s failure to do the right thing by Timor-Leste”.

Then Foreign Minister Julie Bishop signed the treaty in March last year and tabled it in the Australian Federal Parliament, saying it was “her hope” that it would be ratified by the end of the year.

READ MORE: Ramos-Horta expects Australia to pay back ‘millions’ in oil revenue

Although it remains unratified, Australia continues to draw millions of dollars a month from a 10 per cent share in a field found to belong entirely to Timor-Leste.

The Timor-Leste Governance Project estimates that field could have generated A$60 million over the preceding 12 months.

Australia will provide $95.7 million in foreign aid to Timor-Leste between 2018 and 2019.

“Technically, we don’t owe that $60 million to Timor-Leste. There’s no legal right in the treaty for either country to claim compensation for lost revenue from the Timor Sea,” writes Raynor.

‘Beatific big brother’
“But Australia’s role in Timor-Leste’s historic and hard-won independence 20 years ago this August burnished our reputation as a beatific big brother — a reputation until now unmarred, despite decades of those fractious Timor Sea negotiations, allegations of our spying and serious accusations of collusion.

“For years, we’ve positioned ourselves as an international champion of moral righteousness, of sovereignty and of self-determination, and as Timor-Leste’s liberator.

“But we can’t have it both ways. Taking unearned Timor Sea wealth is another in a long line of Australia’s failure to do the right thing by Timor-Leste.”

Former Prime Minister John Howard called the Australian-led liberation of Timor-Leste one of our most noble acts of foreign policy this century — the peacekeeping part; not the preceding 30 years of heavy-handed economic encroachment in the Timor Sea.

“Our delay in ratifying the boundary treaty and our refusal to commit to repaying that unearned money is squarely at odds with how we think of ourselves in this story,” writes Raynor

“And it’s unconscionably in breach of our moral duty to do the right thing by a neighbour.”

‘Siphoning’ millions
In April, The Guardian published an exclusive stating Australia was accused of “siphoning” millions in Timor-Leste oil revenue from the Timor Sea; an amount the newspaper said was more than Canberra had given Timor-Leste in foreign aid.

“Australia remains Timor-Leste’s largest, most financially generous and most important aid and development partner, and many Australian-funded projects provide significant and much-needed support and opportunities to Timor-Leste,” writes Raynor.

“But it’s laughable to say we’re concerned with Timor-Leste’s prosperity if we’re committed to scraping from its vaults more money than we give in foreign aid; to say we’re for its stability when we’re eroding a fragile economy’s ability to reinvest its resource wealth into education, health and agriculture; to champion regional security when we’re risking a generation of economic refugees with few job prospects at home and an in-fighting government.

“We’re more concerned with excuses than with fronting up and admitting to ripping off Timor-Leste — again.”

Eureka Street is a publication of the Australian Jesuits and is a vibrant online journal of analysis, commentary and reflection on current issues in the worlds of politics, religion and culture.

Article by AsiaPacificReport.nz

ANALYSIS: By Tom Clarke

Timor-Leste and Australia has signed a maritime boundary agreement at the UN headquarters in New York today, putting their long-running border dispute to rest.

Although the finer details of the treaty remained under wraps, all reports suggest that the Timorese will secure their permanent maritime boundaries and a fairer share of government revenues from the Greater Sunrise gas field.

Such an outcome will be testament to the determination of the Timorese people and their governments to stand firm in the face of a neighbouring bully and claim their sovereign rights.

This debate has never been about charity, it has always been about justice and what the Timorese are legally entitled to.

Successive Australian governments, wanting to keep the riches of the Timor Sea to themselves, have deliberately and persistently frustrated Timor-Leste’s attempts to establish permanent boundaries.

Even though all of the oil and gas fields contested over the years are located closer to Timor than to Australia, the federal government has doggedly tried to short-change the Timorese at every opportunity.

After Australia had unilaterally tapped the Laminaria Corallina fields – without the Timorese receiving a single cent, it jostled Timor into a temporary resource-sharing agreement, the Timor Sea Treaty, that allowed it to take a slice of the revenue from the Bayu-Undan fields, which were the fledgling nation’s most important source of revenue.

Miserly Australian proposal
Australia then set its sights on the massive Greater Sunrise gas field. Its initial proposal was to allow Timor a miserly 18 percent of the government revenue.

The prevailing legal consensus is that if permanent maritime boundaries were established in keeping with current international law, then most, if not all, of the field would be located within East Timor’s exclusive economic zone.

But international law was of little relevance to Australia. Just two months before Timor-Leste became independent in 2002, the Australian government withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice.

Put simply, the Australian government turned its back on the independent umpire signalling that it had no intention of playing by the rules.

So despite Timor-Leste wanting to establish permanent maritime boundaries, in 2006 the Australian government managed to walk away with another “temporary” agreement.

This one, CMATS, would postpone for 50 years discussions about sovereignty – ie. which nation actually owns the area – and would see the government revenue from Greater Sunrise split 50/50.

Exactly how Australia managed to get such a deal was exposed in 2013 when a senior intelligence officer revealed that an AusAid project was used as a cover to bug the Timorese cabinet room during the negotiations.

Timorese upset
The Timorese government was understandably upset and triggered a conflict resolution mechanism set out in the Timor Sea Treaty, to prompt mediation in The Hague.

But just days before the meeting was to take place, an ASIO raid was ordered on the Canberra offices of Timor’s legal team and the passport of “Witness K” was seized preventing him from travelling to The Hague to present evidence.

This allowed Timor to take legal action against Australia and in a provisional judgement, the International Court of Justice slammed the heavy-handed actions and issued an unprecedented order for the Australian government to stop interfering with Timor’s communications.

With the upper hand in what would have been a long and embarrassing legal battle for Australia, Timor-Leste finally had some bargaining power. But in an extraordinary act of good faith, Timor traded that away – it withdrew its case in return for Australia agreeing to return to the negotiating table to discuss permanent boundaries.

But true to form, Australia soon reverted to its belligerent tactics and the talks were on a road to nowhere.

Eventually in 2016 with nowhere else to turn, the Timorese launched a “compulsory conciliation” procedure at the UN. This is a mechanism that had never been used before and exists specifically for when one country refuses to recognise the jurisdiction of the independent umpire that would normally settle such disputes.

The Australian government’s long held stonewalling tactics began to crumble after its undignified attempt to wriggle out of the process was soundly rejected by the UN-constituted commission.

The new treaty
The resulting treaty will set a permanent boundary along the median line halfway between the two coastlines. This is great news, but the exact placement of the all-important lateral, or side, boundaries which will determine the scope of Timor’s exclusive economic zone, is still unknown.

Recent media reports claim the treaty will give a much larger share of the government revenue from the Greater Sunrise field to Timor: 80 percent if the gas is piped 450 km to Darwin for processing where Australia will reap the downstream economic benefits of jobs and related activities, or 70 percent if the gas is piped 150 km to East Timor.

Even if the new treaty turns out to be less than ideal in regards to the size of Timor’s sovereign territory, it gets the job done in that it delivers what the Timorese have always wanted – permanent maritime boundaries – and it appears that the revenue share reflects the likely outcome had the maritime boundaries been set in keeping with contemporary international law.

It seems that it has also managed to do so without Australia having to concede territory it had not already conceded to Indonesia in 1972. So the politicians on both sides of the Timor Sea have saved face.

Whatever devils might be in the detail, there is little doubt that this new treaty will be a far better deal for East Timor.

This is a big win for the Timorese and also a reminder of the importance of the UN’s peaceful arbitration processes.

It is also a win for the Australian citizens who stood up in solidarity with the Timorese people to demand that the federal government do the right thing. It’s been a long time coming.

Tom Clarke is a spokesperson for the Timor Sea Justice Campaign.

• More Timor-Leste stories

Article by AsiaPacificReport.nz

ANALYSIS: By Frank Brennan

Without any media fanfare, Australian Foreign Minister Julie Bishop published a statement on 9 January 2017 announcing that Australia and Timor-Leste had agreed to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).

This news is more welcome to the Timorese government than to the Australian government. But the uncertainty created by this Timorese win might in time impact more adversely on Timor than on Australia. Only time will tell.

The starting point of any moral and prudential assessment of the announcement must be an acknowledgment that the self-determining, sovereign government of Timor-Leste has achieved its objective of forcing Australia to the table to negotiate maritime boundaries in the Timor Sea.

Australia had not always been the unwilling party when it came to the negotiation of maritime boundaries. Back in 2004, Australia was keen to commence the protracted negotiations, knowing that ultimately Australia and Timor would need to be joined by Indonesia at the table to finalise boundaries delimiting the maritime jurisdiction of all three countries in the Timor Sea.

In 2004, Timor was already reaping the benefits from the Bayu Undan oil and gas deposit which was being extracted north of the median line between Australia and Timor Leste. Under the 2002 Timor Sea Treaty, Timor was entitled to 90 percent of the upstream revenue from any deposits within the Joint Petroleum Development Area (JPDA) covering the area in dispute between Australia and Timor.

Basically, Australia has continued to claim jurisdiction over the continental shelf up to the edge of the Timor Trough, while Timor (like Portugal, its colonial master in times past) has claimed jurisdiction over the area north of a median line between Australia and Timor.

The next major deposit to come on line after Bayu Undan was Greater Sunrise which straddles the eastern lateral line between the JPDA and the area clearly within Australia’s jurisdiction.

Under the 2002 Treaty, Timor would have been eligible only for 18 percent of the upstream revenue (90 percent of 20 percent) because 80 percent of the Greater Sunrise deposit lay within the Australian jurisdiction if the eastern lateral line remained in place.

‘Australia has, at least for the moment, taken a huge gamble’
It was the Timorese leaders, not the Australians, who proposed in 2004 that boundary negotiations be put on hold and that a more creative solution for the development of Greater Sunrise be found.

The Timorese were confident that Sunrise could be developed promptly. The Timorese leaders were delighted when they convinced the Australians to agree to a 50-50 upstream revenue share for Sunrise. Also, the Timorese were given the exclusive right to manage the water column inside the JPDA which meant that they could issue fishing licences there.

The parties agreed to extend the delay in negotiation of a maritime boundary from 30 years to 50 years, thinking this would provide ample time for the exploitation of Sunrise and any other petro carbons discovered in the JPDA.

Such a delay suited Australian officials, who were getting worried that the Indonesians might want to revisit their earlier boundary determinations which could look disadvantageous to Indonesia considering what the Timorese might manage to negotiate, given recent developments in the international law of boundary delimitations.

In January 2006, the Australian and Timorese governments signed CMATS but the violence and political disruption in Timor meant a one year delay on ratification by the Timor parliament and president. During 2006, Australia once again despatched peacekeepers to Timor at the request of the Timor government.

Despite the upheavals in Timor as well as the complexity of some of the provisions in CMATS, (including a novel proposal that some of the treaty provisions would be resurrected if mining occurred even after one of the parties had terminated the treaty), Australian Foreign Minister Alexander Downer insisted on Australian parliamentary approval of the treaty without the usual time allowed for scrutiny by the Joint Standing Committee on Treaties (JSCOT). In a very non-partisan stance, JSCOT reported:

“The CMATS Treaty contains new and important obligations and raises different issues which should have been subject to the usual process of scrutiny and review. In this instance the national interest exemption should not have been invoked before the Committee was given a reasonable opportunity to consider and report on the Treaty within the government’s timeframe.”

Things turned sour
Things started to turn sour when the joint venturers for Sunrise informed both governments in 2010 that their preferred development options were FLNG (floating liquid natural gas) or piping the gas to Darwin for processing. The Timorese were hoping that the joint venturers could be convinced to pipe the gas to Timor across the Timor Trough so that industry might be developed on the south side of Timor.

The joint venturers insisted that any development plan had to provide the “best commercial advantage consistent with good oilfield practice”. They were adamant that a pipeline to Timor with subsequent processing in Timor was a third option, and never likely to be first.

“The Timorese will need to convince the Indonesians to give less weight to their own islands when it comes to drawing the lateral line. This could take many, many years. After all, Timor and Indonesia have not yet succeeded in finalising their land borders.”

Being flush with funds from Bayu Undan, the Timor government could by this time afford very good legal advisers, including Sir Michael Wood and Vaughan Lowe from the United Kingdom. They advised that if a boundary negotiation were complete, there was every chance that the whole of Greater Sunrise would fall within Timor’s jurisdiction.

Timor would then be able to dismiss the joint venturers who were unwilling to contemplate development in Timor and to enlist a developer sympathetic to Timor’s nationalist development goals.

The significance of the January 9 announcement is that Timor has, at least for the moment, taken a huge gamble. Timor has forfeited the right to manage the water column inside the JPDA and it has agreed to a reduced share in the upstream Sunrise revenue from 50 percent to 18 percent should it be developed before the finalisation of maritime boundaries.

Were the eastern lateral to remain where it presently is, Timor would then be entitled to no more than 20 percent of the upstream revenue flow.

The big risk
Timor’s legal advisers are arguing that the eastern lateral should be drawn more favourably for Timor so that the whole of Sunrise then falls within Timor’s jurisdiction. But here is the big risk. The present eastern lateral has been used in the past by Australia, Portugal and Indonesia — all claiming that a line of equidistance giving equal weight to all islands is appropriate.

Before the Timorese come to negotiate the eastern lateral determining the exclusive economic zones of Australia and Timor, they will need to negotiate that first part of the eastern lateral determining the territorial seas and the contiguous zones of Timor and Indonesia.

The Timorese will need to convince the Indonesians to give less weight to their own islands when it comes to drawing the lateral line. This could take many, many years. After all, Timor and Indonesia have not yet succeeded in finalising their land borders.

And Indonesia has already indicated that it would prefer to finalise its maritime borders north of Timor involving only the two countries before they come to consider boundaries south of Timor which will require all three countries to be at the table.

I applaud the Timorese leaders for their persistence in scrapping CMATS. CMATS was a good deal at the time, but it had reached its use-by date once the Timorese lost interest in the development of Sunrise without the prospect of onshore development in Timor.

From here the stakes are high. The Timorese may get the whole of Sunrise but then they will need to find a developer willing to incur the added cost and uncertainty of a pipeline across the Timor Trough and subsequent development in Timor.

Then again, they may be left with only a 20 percent share in any future Sunrise development rather than the 50 per cent presently on the table, and in the meantime, they will have lost the exclusive right to manage the water column inside the JPDA.

For Timor, the prospective gains are astronomical; for Australia, they’re peanuts. That’s the ongoing tragedy of this long running battle between David and Goliath in the Timor Sea. The Timorese have had a win, but they could still lose, big time.

Frank Brennan is a Jesuit priest and professor of law at Australian Catholic University. This article was first published by Eureka Street.