It will take some months to play out, but Australia is finally before an international tribunal to determine whether or not it has acted legally over the division of the Timor Sea with Timor-Leste. At stake is the territorial boundary between Australia and Timor-Leste and, therefore, control of tens of billions of dollars’ worth of oil and gas resources.
Back in 2000, while Timor-Leste was still rebuilding its devastated infrastructure and preparing itself for independence, Australia insisted on retaining the Timor Gap Treaty, which had been so infamously agreed to with Indonesia in 1989. That this treaty was part of Australia’s acquiescence to Indonesia’s brutal 1975 invasion and subsequent occupation of Timor-Leste, in which up to a third of the population died, was especially galling to Timor-Leste.
Timor-Leste did not, at that early stage, even have a government. But Australia was already pushing hard in pursuit of its own narrowly defined national interests. Those interests were territorial and commercial. As it turned out, they were also personal. The person who led Australia’s case at that time was Foreign Minister Alexander Downer.
Downer later used Australian spies to bug Timor-Leste’s cabinet office during negotiations, in contravention of Timor-Leste law. Timor-Leste claims that those actions invalidate the subsequent treaty. In his life after politics, through his consulting firm Bespoke Approach, Downer became a paid consultant to Woodside Petroleum. Woodside is Australia’s largest hydrocarbon company and stands to make billions of dollars from the arrangement.
During those negotiations, Downer told the cash-strapped Timor-Leste government that if it did not agree to retain the pre-existing border arrangements, income from the Timor Gap’s oil deposits would be frozen. Without that income, the government of Timor-Leste would collapse and its people would starve.
According to reports at the time, Downer said to then Timor-Leste Prime Minister Mari Alkatiri that this approach was ‘a lesson in politics’. Timor-Leste being effectively blackmailed, Downer signed the first part of the three part agreement on 20 May 2002—the day Timor-Leste was officially declared independent.
The treaty, however, was incomplete and, allocating Timor-Leste just 18 per cent of revenues from the oil field, led to two further agreements. These resulted in the 2006 Treaty on Certain Maritime Agreements in the Timor Sea (CMATS), which sets aside the question of a permanent boundary between the two countries for fifty years, by which time estimated reserves will be depleted.
CMATS effectively re-instituted earlier agreements, in 1971 and 1972, with Indonesia. These agreements allocated a territorial boundary along Australia’s continental shelf, placing it much closer to Indonesia than Australia. This arrangement was based on a 1958 iteration of the Convention of the Law of the Sea.
Even then, Indonesia had objected to the continental shelf defining the boundary. Foreign Minister Mochtar Kusumaatmadja said of that agreement that Indonesia had been ‘taken to the cleaners’. However, the border that had been agreed to remained.
Portugal, the colonial authority in Timor-Leste at that time, had not participated in these border discussions. There thus remained a ‘gap’ in the boundary, corresponding to the Portuguese colonial territory.
Soon after Indonesia’s invasion of Timor-Leste, Australia resumed discussions with it about closing that ‘gap’. By this time, however, the Convention on the Law of the Sea had moved on. By 1982, the already contested ‘continental shelf’ argument was replaced by the convention that maritime boundaries be drawn at a point equidistant from claimant states; the so-called ‘median line’ principle. Addressing both the existing boundary arrangement with Indonesia, as well as ‘median line’ argument, and recognising the potential for oil and gas exploitation, the two countries agreed to the Timor Gap Treaty.
This treaty allocated a smaller part of the ‘gap’ exclusively to Indonesia, a larger portion to be shared between the two countries and a significant southern portion to Australia. The treaty remained unequal in terms of the median line principle, but did not disrupt the previously agreed boundary, while also allocating some of the resources of the ‘gap’ to Indonesia.
Following the finalisation of the Treaty with Indonesia, Australian Foreign Minister Gareth Evans and Indonesian Foreign Minister Ali Alatas infamously celebrated by toasting with champagne toast while flying over the Timor Gap. However, development of the gap’s resources had only just begun when Timor-Leste voted for independence in 1999.
It was against this background, and Timor-Leste’s desperate need to begin earning revenue, that it went into negotiations with Australia. But what Timor-Leste did not know at this time was that Australia had brought the full force of its capabilities to bear in deciding the outcome of the negotiations; Alexander Downer had ordered Australian foreign intelligence officers to bug Timor-Leste’s cabinet room, to gain inside information on Timor-Leste’s negotiating strategy.
Australia was ultimately successful in restricting Timor-Leste’s claims to those associated with the previous Indonesian agreement. The region in question—the Joint Petroleum Development Area (JPDA) —remained jointly operated, with a smaller northern section allocated to Timor-Leste, a larger central area to be divided between the two states, and a large southern area allocated to Australia.
The rest of the boundary remained as agreed with Indonesia. While Australia agreed to relatively generous terms in the allocation of income from the field, this assumed that Australia had a legitimate territorial claim in the first place. But more importantly, it placed the most valuable part of the Timor Sea’s hydrocarbon fields, the Greater Sunrise gas field, largely in Australian territorial waters.
The Greater Sunrise field has been estimated to be worth between $40 and $50 billion, with its revenue to be divided between Australia and Timor-Leste. Woodside Petroleum—the company that has since secured the services of Alexander Downer—has the contract to develop the field. However, a separate dispute between Woodside and Timor-Leste about processing the liquid natural gas from the field has stopped further development to date.
Timor-Leste has insisted that the Greater Sunrise gas be processed on shore in Timor-Leste to help kick-start a petro-chemical industry. This is intended to generate employment and technological transfers to Timor-Leste. With support from Australia, Woodside has so far resisted, preferring an off-shore floating processing site. If Timor-Leste is successful in having the maritime boundary redrawn, it will have the whip hand in deciding where processing will take place. If Woodside continues to resist, Timor-Leste may seek an alternative development partner.
Since the beginning of negotiations, Timor-Leste has been deeply unhappy about the whole issue of the Timor Sea. It has continued to argue for a fairer allocation of income from the Sea’s resources and a more internationally acceptable maritime boundary. Until recently, however, given that a treaty is in place, its legal case has been weak. And then came evidence that Australia spied on Timor-Leste’s cabinet discussions. Timor-Leste argues that this spying means that the treaty negotiations were conducted in bad faith and hence invalidates CMATS.
Australia’s spying on Timor-Leste was confirmed by a former intelligence agent who ran the spying operation on Timor-Leste’s cabinet. Following revelations about Downer’s employment by Woodside, he provided evidence of Australia’s actions to Timor-Leste’s counsel, Canberra-based lawyer Bernard Colleary.
Last year, Timor-Leste took the matter to the International Court of Arbitration at The Hague, asking that CMATS be formally invalidated. In response, the Australian Attorney-General, George Brandis, ordered that Australian domestic intelligence agency ASIO raid Colleary’s office and seize the claimed evidence.
This seizure has since been challenged in the International Court of Justice, and the Australian government has since said it will return those documents that do not present it with a security risk. The problem, of course, is that what represents a ‘security risk’ to Australia could, like its ‘national interest’, be widely interpreted. This is not to mention that Australia has again secured inside knowledge of Timor-Leste’s position and thus advantaged itself in a way that constitutes bad faith.
Australia has not just acted badly in relation to Timor-Leste, it is being seen to have acted badly. The question will be, if Timor-Leste is successful in its claim, whether the court will send the two countries back to negotiations or whether it will rule on a median point maritime boundary.
If it is compelled to return to negotiations, the Timor-Leste government says the median line will be its minimum position. If the court rules on the median line, however, it will not need to negotiate. Either way, the result will push the maritime boundary very much closer to Australia and, in effect, put almost all of the Timor Sea oil and gas resources under Timor-Leste’s jurisdiction.
As a result, beyond controlling the Greater Sunrise gas field and existing oil and gas fields, there is also the question about whether, if a median line boundary is imposed, Australia would be required to repay the billions of dollars it has inappropriately received under CMATS.
And perhaps as importantly, a median line maritime boundary with Timor-Leste will be at significant odds with Australia’s maritime boundaries with Indonesia. While redrawing Australia’s sea boundary with Indonesia is a separate issue, this will also come under reconsideration. Such a redrawing of boundaries would significantly reduce Australia’s maritime reach and expand that of Indonesia, with significant resource and security implications for both countries.
Australia is therefore trying desperately to hold off Timor-Leste’s claim, and may yet resort to further pressurising tactics. Australian aid to Timor-Leste could come into question although, with access to greater oil and gas revenues, such aid would become redundant.
In pursuit of its narrowly defined national interest, Australia has all but officially alienated a small regional country that has wanted nothing more than to be a friend. As a friend, however, it has wanted to be treated as an equal. If Timor-Leste is successful in The Hague, it will be made equal to Australia under international law. There won’t, however, be much left of the official friendship.
Australia’s relationship with Timor-Leste has been an inconsistent one but, despite some partisan positioning, has considerably improved since the events within Timor-Leste in 2006. In particular, as Timor-Leste’s close neighbour and largest development aid provider, Australia looms large in Timor-Leste’s international orientation.
Because of the relative size and potential capacity to influence, Australia’s decisions can sometimes have, or be seen to have, disproportionate effect within Timor-Leste. Responses from within Timor-Leste, either directly or indirectly, can in turn sometimes be disproportionate by way sub-consciously redressing that perceived imbalance. This has, in the past, led to some difficulties in the bilateral relationship, if of a largely symbolic kind.
However, formal relations between the two countries have remained strong and there is a growing maturity in the relationship on both sides, reflected in a greater mutual appreciation of each other’s interests, perspectives and needs.
Importantly, too, because Australia was home to a significant proportion of the solidarity movement that supported independence for Timor-Leste during the period of occupation and because Timor-Leste has since been the home to arguably Australia’s strongest community to community network (‘Friendship’ network), there remains a remarkably close and often detailed relationship between many Australians and many Timorese. Moreover, since 1975 (and perhaps before), Timor-Leste has resonated deeply among a large proportion of the Australian population, arguably in a way that no other place has done. 14 years after Timor-Leste voted for independence and 11 years after it was formally achieved, Timor-Leste continues to occupy a place in the Australian public imagination much larger than its actual size or objective importance (considerably though that is) would imply.
Australia formally has a strong commitment to helping ensure stability and security in Timor-Leste, as demonstrated by Australia’s substantial aid program and its recent history of commitment to the International Stabilisation Force and in other areas.
From Timor-Leste’s perspective, it is a small and strategically vulnerable state that finds its principle security not in any specific relationship but in engaging as much as possible with the wider global community, in particular through multilateral fora. Timor-Leste does enjoy strong relations with a number of specific countries, including (not in order) Australia, New Zealand, Indonesia, Portugal, Brazil, China, the US and Japan. These relations are of varying direct importance, but each sits within a constellation of relationships that allows Timor-Leste to seek support in differing and sometimes not mutually advantageous quarters. The benefit of this strategy is that it allows Timor-Leste a degree of independence that might otherwise be compromised by excessively close relations with any one country (or strategically aligned cluster of countries). Australia should not be concerned with this strategy, but rather understand Timor-Leste’s desire for a wide range of friendships and actively support that.
More importantly, however, for Timor-Leste, is that it seeks to involve itself in multi-lateral institutions, notably the UN in the first instance, but is also making considerable efforts to become accepted into ASEAN, in which it has some supporters (including Indonesia, but not Singapore) and which will probably eventually accede to this request. Timor-Leste should continue to also be supported for its multilateral engagement, both for its longer term international engagement and such opportunities that might bring, and in particular to secure its long term security among a multitude of states rather than with particular states.
In particular, while Australia and Timor-Leste enjoy good and maturing relations, there are a number of steps that the Australian government could take in order to further enhance the depth and strength of that relationship.
1.The Australian government should give strong consideration to officially recognising, through a motion passed in Parliament, the role played and the substantial sacrifices made by the people of Timor-Leste in supporting Australian military forces in the defence of Australia in 1942. Further to this point, it should give full consideration to re-naming Australian scholarships to Timor-Leste students in recognition of the role played by the people of Timor-Leste as a continuing reminder of the historical and close relations that exists between the two countries (e.g. ‘Sparrow-Creado Scholarships’ or similar).
2. The Australian Government should negotiate in good faith and under the terms of the UN Convention on the Law of the Sea with the Government of Timor-Leste over any future discussion over the sea boundary between the two countries. While there are competing claims as to whether UNCLOS I (mid-point between shorelines) or UNCLOS III (edge of continental shelf) should apply, to the extent that there might be disagreement, Australia should submit itself and comply with the rulings of the International Court of Justice. Any such negotiation or adjudication should remain consciously quarantined from the wider bilateral relationship between the two countries.
3. The Australian government should commit to continuing the current levels and extent of its aid program to Timor-Leste. Australia’s aid program to Timor-Leste remains critical to that country’s future stability and development, and it is in Australia’s ‘enlightened self-interest’ to continue to support Timor-Leste at current levels of aid, as a good neighbour, a good international citizen and because a stable and developing Timor-Leste as a neighbour is in Australia’s regional interest. In particular, Australia should continue to cooperate closely with the government of Timor-Leste and other aid providers to ensure that aid matches Timor-Leste’s development strategy and goals, and is coordinated with other aid providers to ensure minimal overlap.
While sustainability and ‘grass roots’ participation are givens in the broader development paradigm, it is critical that these two factors be front and centre of Australia’s development assistance. Grass roots or ‘bottom up’ development is necessary to ensure that the benefits of aid programs reach the people it is intended to assist and responds appropriately to their lives needs. Sustainable development is necessary to ensure that aid that is delivered is able to continue to provide benefits to its recipients after the aid provider has departed, and does not replace and then abandon previously sustainable systems (e.g. water supply, agriculture).
4. Encourage and support Australian businesses to invest in Timor-Leste, especially in employment creation industries such as agriculture and tourism. Australia has an opportunity to invest in Timor-Leste in future growth areas, in specific areas of industry and in tourism. Australia’s aid program should assist the government of Timor-Leste with standardising and simplifying investment procedures and to offer security through consistent and equal rule of contract law to help ensure that such investments are not subject to the vagaries of bureaucratic and legal application.
5. Support and extend Timor-Leste Seasonal Workers and training programs in Australia. At the time of writing, Australia had agreed in principle to extend its guest workers program to Timor-Leste. This program has the benefit of providing labor to sectors of Australian industry (e.g. agriculture) in which there is little interest in Australia, while making available to Timor-Leste the benefit of remittances which make a direct benefit to their local communities. This project should be developed and extended to ensure that there are no areas of Australian industry, especially seasonal industry, that are left wanting for labor at peak times .
6. Encouragement and support for community to community relations between Australia and Timor-Leste, through Friendship groups, service organisations (e.g. Rotary), church groups, educational/school tours and other people to people relations. Australian community organisations with close links to Timor-Leste operate independently of government, often achieving very substantial results and helping to build close bilateral relations in a way that would be the envy of most other bilateral programs. However, from time to time their programs would benefit from the availability of government assistance, for example with conferences and community meetings. To this end, community groups should be formally recognised as contributing to the bilateral relationship and provision made for them to be able to seek AusAID or related assistance from time to time for specific and clearly defined purposes.
7. There has been discussion of a formal Australia-Indonesia defence alliance, which is unlikely for mutual domestic political reasons. However, a closer strategic arrangement could be reached in cooperation with Timor-Leste as a third partner. Despite their problematic history, Timor-Leste has been moving towards closerlinks with Indonesia, in particular through training of the Timor-Leste police (PNTL) with Indonesian police (Polri), and the development of military-to-military links with Indonesia, including proposed military training. Given the potentially problematic domestic orientation of Timor-Leste’s military (F-FDTL), Australia’s strategic interest in ensuring that Timor-Leste remains stable in the post-UN period could be enhanced by refocusing F-FDTL externally through a tripartite security agreement/treaty between Australia, Indonesia and Timor-Leste. In particular, extending officer training programs for Indonesia and Timor-Leste defence personnel would both assist their professionalisation and enhance both links and cross-cultural understandings between the defence forces of the three states.
Timor-Leste is a country born of a keen awareness of its security needs and aspirations. In the period of transition from Portuguese rule, the country and its people descended into a brief but bloody civil war, then almost immediately faced incursions from across the western border. Its people underwent 24 devastating years of occupation and resistance, emerging to confront a new security threat – that of a country largely destroyed. Timor-Leste has built since then, but again faced an internal security crisis as some of our citizens and institutions of state, still unready for full self-responsibility, took Timor-Leste back to the edge. It has since come out of that process having learned and grown.
Timor-Leste now has two security focuses:
Australia's relationship with East Timor is at risk as the deadline looms on a hotly disputed and lucrative liquid natural gas project -- with no resolution in sight.
West Australian-based Woodside Petroleum has until February 23 to reach an agreement with the government of East Timor over the site of processing LNG or else the arrangement between the two is likely to be stopped. This would then trigger the cancellation of Australia’s sea boundary agreements with East Timor.
At this late stage it's unlikely Woodside will change its long-held position and accede to East Timor's demand that the LNG be processed on East Timor’s south coast. Woodside's preferred option is a floating processing platform at the Greater Sunrise LNG field in the Timor Sea.
East Timorese newspaper Tempo Semanal published an article this week which claims that the new Timorese Government represents "an oligarchy", and criticises the new government for its size and for the fact that it contained some brothers and sisters. There was criticism of the last Timorese Government for many reasons, including corruption. However, this same government established the Anti-Corruption Commission (KAK) which has led to some former ministers being investigated and in one case found guilty.
When Timor-Leste's new Cabinet was announced, there was a flurry of critical comment within Timor-Leste, about both the size and composition of the ministry. Some critics were unhappy that an expanded ministry would cost more and potentially lead to more corruption while others railed against Timor-Leste becoming an ‘oligarchy’ rather than a democracy.
The positive aspect of this commentary is that is shows that Timor-Leste is a plural political society expressing a range of political views. It is also important to note that while some of the commentary reflected partisan political positions, much of it also reflected a genuine concern over the size and capacity of the government.
The new ministry, with 17 ministers, is not especially large by any standard and is much smaller than many of other countries. The criticism therefore reflects on the inclusion of vice-ministers and secretaries of state, who exercise quasi-ministerial functions.
In a country in which there are no public opinion surveys and in which the still developing media could not be said to reflect, much less shape, the views of most people, trying to understand why the people of Timor-Leste vote as they do was not an exact science. Such judgments that could be made were only on the basis of anecdotal evidence set against what is known about Timor-Leste’s history and some conventional theories about politics.
On Sunday evening, 15 July 2012, a congress of CNRT party members in Dili voted to go into an alliance with the Democratic Party and Frenti Mudanca to form a new alliance to make up Timor-Leste’s Fifth Constitutional Government. In response, members of Fretilin rioted, burning more than 50 cars and stoning UN police sent to quell the trouble. While it seemed as though Timor-Leste was again reverting to its violent past, this was less a return to politics by fire and more the last gasp of an out of touch political leadership on the verge of become irrelevant.
It had always been expected that, should CNRT not achieve an absolute majority in its own right, that the Democratic Party would enter an alliance with it to form a majority. With Mudanca’s two seats, CNRT only needed one more seat to form a majority and PD’s eight seats took the new alliance well over the threshold 33 seats to a compelling 40 in the 65 seat parliament.
In 2010, a senior Timorese political figure remarked in private conversation that Timor-Leste had never been better. This particular political figure was commenting on the general state of Timor-Leste since his return in 1999, after a forced 25 year absence from the country.
What is remarkable is not the political figure’s comment at that time, but that this same person now publically decries Timor-Leste’s lack of development. That is, I suppose, how politics is played.
This negative appraisal does come around a time when there has been much public negativity about Timor-Leste’s development process. Much of this negative comment is either anecdotal or reflects a snap-shot of Timor-Leste now, without reference to where it has come from.
When Timor-Leste’s Anti-Corruption Commission (CAC) was established in 2009, many people wondered whether it was just a political sop to minimise concern about perceptions of growing corruption, or whether it would be serious in trying to tackle the growing problem. If the CAC was to be serious, they wondered, would it last? In many respects, the CAC was always going to face significant challenges in a small and relatively interconnected society such as Timor-Leste. If the CAC pursued senior figures in Timor-Leste’s small and relatively closed political society then the CAC and its senior figures would earn powerful enemies, come under attack and perhaps be professionally destroyed. If the CAC did not pursue high profile corruption cases it would then be labelled as ineffective; as a ‘toothless tiger’. There was concern, too, that after the establishment of the CAC it appeared to be inactive.