Jakarta – Former Indonesian president BJ Habibie expressed his ire at former United Nations secretary general Kofi Annan on Monday with regard to the independence of East Timor (now Timor Leste) from Indonesia.

"This is the fault of Kofi Annan. I did not know. He was the one who announced the results (of the vote). He was the one who gave a press conference (on the vote's results). And so that was how things began to roll," he said at a nostalgic meeting with press figures in connection with the 10th anniversary of the The Habibie Center here.

He said the fact was that he had earlier stated that the Indonesian government would replace the military (TNI) personnel there by the ones who were neutral, namely those who once served the UN to guard the vote.

But before he and then armed forces commander general Wiranto stationed the replacements the UN secretary general had announced to the world that the vote was won by the pro-independence group although the vote had not yet finished, and this caused rioting.

In reply to a question from Saur Hutabarat, Habibie admitted he was well aware that his decision to allow the vote in East Timor carried the risk of losing East Timor which Indonesia had to bear.

That is why, he said, he as the President had prepared two speeches he would deliver if the people of East Timor wished or if they rejected to be part of Indonesia.

Habibie also admitted that if the people of East Timor chose not to become part of the Unitary State of Indonesia, Indonesia could not do anything but accept them as friends.

"Timor Leste has never been part of the Indonesian proclamation of independence as the proclamation only covers the Dutch Indies," he said in the company of his wife, Mrs Ainun Habibie.

Regarding the riots that occurred after the vote in East Timor and his ire at then UN secretary general Kofi Annan, Habibie said he would not recollect them. "What is the use of talking about it now. What is the benefit for us," he said.

While quoting a saying that the past is the farthest as no one could meet it again Habibie called for all the people to look forward.

The meeting was attended by the chairman of the Habibie Center, Muladi, who is a former minister of justice, Malik Fadjar, the former minister of education and press figures including Asro Kamal Rokan from Antara, Muh Assegaf, Ikhwanul Kiram, Atmakusumah, and others.

Comment by Damien Kingsbury

It is utterly extraordinary that Indonesia generally and Habibie in particular, in this instance, still seek to continue to rewrite history.

The announcement of the outcome of the 'Popular Consultation' on 4 September 1999, by Iam Martn in Dili and Kofi Anan in New York – after the counting of the vote was completed, not before – was intended to forestall the violence that was well and truly already underway.

Indeed, there had been growing violence and destruction since the beginning of the year, reaching a near-peak just before the ballot, and resuming immediately afterwards.

As I saw firsthand, the TNI and their militias did not wait for the announcement to kill people or burn, although from that moment on they did implement the carefully planned and orchestrated scorched-earth policy the plans for which had been leaked prior to the ballot. There were, of course, no 'neutral' TNI personnel in Timor-Leste at any time, and the intention to send new troops was not a part of any effort to control the murder and sestuction of which the TNI were transparently a part.

Habibie asked: "What is the use of talking about it now. What is the benefit for us", – the benefit for the people of Timor-Leste is that they might eventually achieve some small measure of justice for this cumulative gross crime against humanity; the benefit for the people of Indonesia is that they might take one more critical step on the path away from their long-standing culture of impunity.

East Timor may use its struggle as tourist lure

Reuters - November 1, 2009

Dili, East Timor – East Timor's struggle against Indonesian occupation may soon become a money maker. The government is considering plans to promote major sites of the 25-year fight for independence as part of a tourism campaign.

East Timor, a former Portuguese colony, was invaded in 1975 by Indonesia, but a secessionist movement soon emerged, led by Xanana Gusmao, who is now the country's prime minister, and Josi Ramos-Horta, its president.

Mr. Gusmao spent much of the occupation either in jail or on the run, often hiding with guerrilla fighters in East Timor's mountainous terrain; Mr. Ramos-Horta lived in exile, campaigning for independence.

An estimated 180,000 people died during the occupation, including 1,000 the UN said were killed during a 1999 vote for independence.

But tourists regard East Timor's turbulent past as an attraction, a Japanese tour guide, Noriko Inaba, said as she escorted a Japanese tour group to Dili's Santa Cruz cemetery. More than 200 East Timorese were killed there in 1991, when Indonesian troops fired on mourners, an event known as the Dili massacre.

"It's an historical place because of the tragedy," she said. "This is one of the things we came to see here."

The cemetery's caretaker, Joao da Costa, said tourists often visited the site and took photos. "If more people came from overseas, maybe we could develop faster," he said.

East Timor's tourism minister, Gil da Costa Alves, said the government wanted tourism to contribute more to economic growth in a country that is one of the poorest in Asia and dependent on oil and natural gas revenues for the bulk of state finances.

While there are serious obstacles, including poor infrastructure and a shortage of hotel rooms, he sees an opportunity to promote the historic sites, beaches and wildlife.

"We have this opportunity for historical tourism, for people who are interested in those sites that are part of our history," he said.

"Even the cave where Xanana was in hiding – this is a place we can promote, and other places around the country where our leaders were hiding up in the hills."

About 19,000 people visited East Timor last year, up from about 12,000 in 2006, when tourists stayed away because of political strife. Mr. Alves said he hopes that East Timor can attract as many as 200,000 tourists a year within five years.

However, Loro Horta, an East Timor analyst based at Singapore's Nanyang Technological University, was skeptical.

"The entire country has less than 700 rooms. Right now it's already difficult to get rooms in Dili," said Mr. Horta, who is also the son of the president. "So 200,000 a year – that's something like 700 a day. How exactly are they flying there and where are they going to stay?"

Mr. Horta said more affordable flights to Dili, a bigger airport and a more reliable power supply were also needed before East Timor could compete with Bali in Indonesia as a tourist destination. "I really hope I'm wrong, but we will be lucky if we can get 50,000 a year by 2014," he said.

Mr. Alves said a new infrastructure plan – including a $600 million redevelopment of the airport, the construction of boutique hotels and the improvement of basic infrastructure like roads – would increase tourism.

He said a broader tourism campaign would be aimed at the Australian and Japanese markets and would involve advertising and competitions like a recently opened fishing tournament and the Tour de Timor bicycle race, which took place earlier this year.

Last year, the government opened the Nino Konis Santana National Park in an effort to protect many of its animal and plant species while providing a new attraction for tourists. "Our strategy is to focus on the things that make East Timor different to surrounding destinations," Mr. Alves said.

Balibo 5 killings

Release of Balibo papers blocked

Canberra Times - November 23, 2009

Philip Dorling – The Defence Department has blocked the release of 34-year-old intelligence papers that would shed new light on the deaths of the Balibo Five journalists and potentially embarrass former prime minister Gough Whitlam.

Defence Minister John Faulkner's department has withheld from public release the contents of Defence intelligence reports on the events surrounding Indonesia's 1975 invasion of the former Portuguese colony of East Timor.

In mid-2007, Australian Defence Force Academy senior lecturer Clinton Fernandes applied under the Archives Act for access to reports on East Timor prepared by the Office of Current Intelligence within the Joint Intelligence Organisation, the forerunner to today's Defence Intelligence Organisation.

Dr Fernandes served as historical adviser to producer Robert Connolly's movie Balibo, which deals with the murder by Indonesian troops of five Australian-based newsmen at Balibo in East Timor in October 1975. The Indonesian Government still maintains that the journalists were accidentally killed in crossfire.

After more than two years' delay, the Defence Department released to the National Archives hundreds of pages of material, including Office of Current Intelligence situation reports formerly classified Top Secret Australian Eyes Only. However, almost all of the contents have been blacked out on the publicly released copies. In justifying the decision to withhold almost all of the content, the National Archives cited advice from Defence that the information "continues to be sensitive".

It is known that the Office of Current Intelligence's 1975 reports on East Timor drew heavily on the interception of Indonesian military communications that revealed Indonesian forces were operating covertly in the Portuguese colony before the full-scale invasion.

A former military intelligence officer, Dr Fernandes said he was "surprised" by the decision to withhold the information given "the lengthy passage of time, the independence of East Timor, democratic political change in Indonesia, and great changes in the technology of intelligence collection".

"It really is long overdue for the Australian people to get the truth about what our government knew about the invasion of a small, defenseless neighbour about whether our diplomats and politicians, most notably Gough Whitlam, turned a blind eye to what was about to happen," he said.

Long-time East Timor campaigner and widow of journalist Greg Shackleton who was killed at Balibo, Shirley Shackleton, also expressed surprise at the decision.

"Senator Faulkner ought to show his commitment to openness and accountability, rather than allow his officials to keep the cone of silence over the truth about Balibo." However, Professor Alan Dupont, of Sydney University's Centre for International Security Studies, expressed the view that the intelligence reports should not be released, at least not for another 20 or 30 years, if ever.

Professor Dupont served as an analyst on the Office of Current Intelligence's South-East Asia desk in 1975 and wrote or contributed to many of the suppressed reports. "This material would only inflame relations [between Australia and Indonesia]," he said.

Meanwhile, Indonesian censors have formed a special team to decide whether to allow Balibo to be shown at the Jakarta International Film Festival. The film's release in Australia earlier this year came just weeks before the Australian Federal Police announced they had opened a war-crimes investigation into the killings.

Justice & reconciliation

Families seek closure in Timor massacre

Associated Press - November 12, 2009

Guido Goulart, Dili – Families in East Timor appealed Thursday to their own government and Indonesian authorities to help recover the bodies of dozens of loved ones still missing 18 years after being gunned down in a cemetery during Jakarta's two-decade rule.

The appeal came as thousands of people gathered for a service at the Santa Cruz graveyard in downtown Dili, Timor's capital, where Indonesian troops opened fire on pro-independence demonstrators on Nov. 12, 1991, killing hundreds.

Mothers, fathers, sisters and brothers clutched photos of dead relatives on Thursday, holding flowers and candles as they set out from the Motael Catholic church singing Hymns, saying prayers and weeping.

"My son is still missing," said 71-year-old Maria Lourenca, whose boy Antonio was a junior high school student at the time. "I want justice for his death. He was too young. The Indonesian soldiers who shot him should be punished."

Dramatic footage of the shooting and the wounded was captured by Western journalists and smuggled out of East Timor.

Some of the gunmen were clearly captured on video, but no one has ever been prosecuted for the killings. Dozens of victims remain missing nearly a decade after the end of a 24-year Indonesian occupation that wiped out a third of Timor's population.

The failure to find victims of past crimes highlights East Timor's ongoing struggle to come to terms with its violent history that includes more than 250 years as a Portuguese colony before it became an Indonesian province. Some of roughly 174,000 people who died during Jakarta's rule were buried in mass graves that have never been discovered or exhumed.

Mourner Terezinha da Silva Ximenes, 65, asked for help to locate the bodies of 65 missing victims, including her son.

"I beg our leaders... to approach Indonesian authorities to show us the graves of my son and his other comrades so that we can give them a humane burial in accordance with our beliefs, our religion and our Timorese culture."

President Jose Ramos-Horta and Prime Minister Xanana Gusmao, icons of the country's independence movement who attended Thursday's service, have rejected calls to put on trial more than 300 suspects, most of whom are believed to be at large in Indonesia.

Court hearings would open old wounds and may undermine the sensitive relationship with Indonesia for the tiny nation of 1.2 million that only gained independence seven years ago.

East Timor recently released an alleged militia leader accused in a 2003 UN indictment of murdering women, children and priests at a church in the town of Suai. Gusmao ordered Maternus Bere's handover, in what rights groups say was an illegal act that violated the constitution.

The decision was made during intense negotiations with Indonesia, which insisted Bere be let go. He was brought to the Indonesian Embassy on Aug. 30 during celebrations marking the 10th anniversary of East Timor's independence vote.

Bere, whose trial had been under preparation by prosecutors, was freed without consulting judges or a court hearing, highlighting the weakness of East Timor's infant legal system. The case is being investigated by the Supreme Court.

How an alleged war criminal in East Timor escaped justice

Melbourne Age - November 5, 2009

Lindsay Murdoch – Maternus Bere, a Timorese-born Indonesian citizen accused of crimes against humanity, was ushered secretly across the border from East Timor into Indonesia last weekend, ending weeks of behind-the-scenes intrigue in Dili.

The story of how Indonesia came to threaten diplomatic ties with its tiny half-island neighbour to save Bere is not known outside the circle of East Timor's political elite.

It began 10 years ago, in Father Hilario Madeira's church in the East Timorese town of Suai. I was fortunate to meet Father Hilario back then, when I was covering the United Nations vote that led to East Timor's independence.

Father Hilario had invited people who feared for their lives amid a wave of pro-Indonesian militia violence to take shelter in his church, where it was thought the sanctity of a place of worship would protect them.

But scores of pro-Indonesian militia stormed the church on September 6 1999, rushing first towards Father Hilario's private quarters, hacking, stabbing and shooting many people in their path.

One witness told how a grenade was thrown into Father Hilario's room, after which the room was racked by automatic gunfire.

Father Hilario and two other priests were among the first of more than 200 people to die in the worst of many massacres in East Timor in the days immediately after Timorese voted to breakaway from Indonesia.

Maternus Bere led that militia attack, according to charges laid against him by the UN's Serious Crimes Unit in 2003.

For a decade he lived in Indonesian West Timor, out of the reach of East Timor's judicial system, where he became a provincial government administrator.

But in August this year he crossed the border and returned to Suai to attend his father's funeral, even venturing back into Father Hilario's former church to pray.

Not surprisingly, he was recognised and set-upon by angry locals. Police intervened to save him and sent him to a jail in Dili to face the UN charges.

Xanana Gusmao, East Timor's prime minister, revealed how Bere came to be set free during a vote of no-confidence against his government in parliament.

In the days before the 10th anniversary of the vote for independence, the Indonesian Government privately pressured East Timor's President Jose Ramos Horta to release Bere, who had been the commander of one of the most brutal militia in East Timor in 1999.

The issue came to a head as dignitaries, including Australia's Governor-General Quentin Bryce, were gathering for the anniversary ceremony on the steps of East Timor's new presidential palace on Dili's waterfront on August 30.

East Timor's Foreign Minister Zacarias da Costa was at Dili airport to greet Indonesia's Foreign Minister Hassan Wirayuda, who had flown in for the ceremony. But da Costa telephoned Gusmao to tell him that Wirayuda would only attend the ceremony if there was a resolution to the Bere case.

In parliament, Gusmao quoted Wirayuda as saying that "our refusal to co-operate in such a sensitive matter for Indonesia might force the Indonesian state to review their diplomatic policy towards Timor-Leste (East Timor)."

Gusmao called a hasty meeting in the palace's waiting room. A senior judge told him he could not release Bere under East Timor's laws.

When Gusmao, a former guerrilla fighter, insisted that a way be found to resolve the stand-off, the judge told him "prime minister, the time of the guerrilla (war) is over."

Eventually, the judge suggested a compromise: Gusmao could transfer a prisoner from one place to another.

"Being thankful for the idea and knowing that otherwise we could not move on with this case, I ordered the Minister for Justice to have Maternus Bere transferred from Becora prison to the Indonesian Embassy," Gusmao told parliament.

But Gusmao was still not confident his order would be carried out, such was the opposition to the move at the highest levels of government. He told the minister: "If you do not do it, I will go there and get him (Bere) myself."

Wirayuda arrived at the ceremony 45 minutes after it had begun, apparently satisfied that Bere was then safely inside the Indonesian Embassy.

Wirayuda was just in time to hear Ramos Horta declare that Timorese must "bury the past" and not pursue the killers of hundreds of Timorese, most of whom live in Indonesia.

There would be no international tribunal to prosecute those accused of crimes in East Timor, Mr Ramos Horta declared on that sweltering hot morning.

When news of Bere's release leaked the next day, UN officials in Dili, Western diplomats, politicians and non-government organisations expressed outrage.

The Catholic church also condemned Bere's release, with influential bishop, Basilio do Nascimento, declaring: "We have to forgive but before we forgive there must be justice."

I often think of Father Hilario – a wonderful and kind man – and the barbarity that engulfed his place of worship.

[Lindsay Murdoch is a senior writer based in Darwin for The Age and Sydney Morning Herald. He frequently travels overseas on assignment.]

Independence & transition

10 years after independence, East Timor still rebuilding

Online NewsHour - November 12, 2009

[Special correspondent Kira Kay examines East Timor's ongoing effort to rebuild itself, 10 years after winning independence from Indonesia. The report is part of the Pulitzer Center on Crisis Reporting's Fragile States project, a partnership with the Bureau of International Reporting.]

Kira Kay, special correspondent – There are very few people in East Timor who didn't lose a loved one in their two-decade fight for independence. So, this ceremony, reburying the bones of the war dead at the national martyrs cemetery, was filled with grief. But it was also a day of pride, the 10-year anniversary of Timor's success in that push for independence from Indonesia, the neighboring country that had violently swallowed it whole in the 1970s, after Portugal abandoned its longtime colony.

Flanked by dignitaries from around the world stood Xanana Gusmao. Once a resistance fighter, he is now East Timor's prime minister, and Jose Ramos-Horta, who lived for years in exile lobbying for freedom for his country. Today, he is the president.

Jose Ramos-Horta: I have enjoyed it thoroughly to be reattached culturally, physically to part of my body and spirit, in spite of the difficulties we encounter in these last 10 years.

Kira Kay: Difficulties of the past 10 years, because Ramos-Horta, Gusmao and their Timorese citizens have had to build their new country from the ground up. More than 100,000 people had died during the 24-year occupation. And when Indonesian troops finally withdrew in a spasm of violence, East Timor was left in ruins. Even today, its fragility remains obvious. Half its people live below the poverty line. Burned buildings remain on many corners. Unemployment runs as high as 40 percent. But overcoming adversity is not new to Timorese like Eduardo Belo Soares, a former guerrilla fighter now making the transition to ordinary citizen.

Eduardo Belo Soares: For me, myself, I have obligations. And I believe that everyone has obligations to fill independence of this country.

Kira Kay: For Belo, that obligation meant starting a business and creating jobs. So, he took a small grant given to him by the United Nations, and made an investment.

Eduardo Belo Soares: My carpentry started from this wood lathe.

Kira Kay: This is the very first thing you bought?

Eduardo Belo Soares: Yes, this is the very first thing I had.

Scarce resources

Kira Kay: In a place that has so little, even tables and chairs are important. Over 6,000 of Belo's desks are now in Timor's schools and government offices. And Belo now employs more than 600 Timorese. But even an army of Belos is not enough to build a nation. From the beginning, that job has also fallen to the international community, backed today by 1,600 United Nations police and 800 peacekeeping troops from Australia and New Zealand. Although East Timor is only the size of Connecticut, with a population of one million, the international community's job here has been one of its biggest ever undertaken.

Edward Rees, senior adviser, Peace Dividend Trust: This has been, to some extent, a – a laboratory for the international community, and continues to be.

Kira Kay: Edward Rees first came to East Timor in 2000 with the UN Mission. Today, he runs an international development group here.

Edward Rees: This was probably the first place where the international community played a direct and – and highly intrusive and controlling role in the Ministry of Finance and the business of tax collection and revenue generation and – and natural resources management. And this was the first place the United Nations played a role in the creation of a national defense force.

Kira Kay: While the UN provided crucial emergency services to those displaced from the fighting and oversaw successful elections, it had never before tried to build the institutions needed to run a country, and was given very little time to do it.

Jose Ramos-Horta: The United Nations was here for two years. In two years, with the best of intentions, all the resources they could have mustered – and they did have a lot of resources, financial and human resources – they could not have built up a modern functioning state within two years.

Edward Rees: I think, given the time that they had, they made expedited decisions in order to get things done to keep to the schedule that New York had given them. And they were the wrong decisions for the long-term stability of the country.

Kira Kay: Rees and other international analysts point to the mismanaged building of a professional military and police force, and a failure to properly integrate former guerrilla fighters, leaving them marginalized and disgruntled.

Just as the UN was in its final stages of drawdown in 2006, political infighting tore apart these fragile institutions. Violence cascaded into the streets. Dozens were killed and thousands again displaced. East Timor called for help. The international community sent new peacekeeping troops and scaled the UN back up.

'Nation-building takes time'

UN officials admit lessons were learned, that nation-building takes time. Today, there is more focus on shoring up the police and military. Under the watchful eye of Australian peacekeepers, Timor's army and police recently squared off in a friendly shooting competition. Just three years ago, they were killing each other.

Police Commander Longinus Montero is hopeful a corner has been turned.

Kira Kay: Why are exercises like this important for your forces?

Longinus Montero: This is one of the proof that they can show everybody that we are working as a part of the state institutions, we're working side by side, we're sharing our ideas. We have to leave all the past gone away. It's what East Timor needs, because our people is suffering too much.

Kira Kay: It's uncertain if this camaraderie will hold. According to an International Crisis Group report, the Timorese government has resisted further reforms, such as instituting civilian control and defining the specific tasks of the army and police. Edward Rees says the UN is still struggling to figure out its role.

Edward Rees: The United Nations police, which are the largest link in the chain, are also the weakest link in the chain. Police officers are not institution-builders. Their job is to train people how to be police officers. Their job is not to teach people how to run a police service, particularly when it comes to the civilian oversight and management of, you know, legislative issues, personnel issues, logistics issues, financial issues, budgeting, planning.

Kira Kay: The UN may be having better luck building East Timor's political institutions, including a 65-member parliament. Just a courtyard away from the impressive main chamber, a UN program is teaching staff everything from drafting legislation to scheduling a minister's daybook.

Tony Sisule, specialist, United Nations Development Program: So, you will help with the speeches, yes?

Kira Kay: UN staffer Tony Sisule came from Kenya to help.

Tony Sisule: I'm working with my colleague Jonas. He's fresh from university. And that's probably the best you're going to get, a fresh graduate. He doesn't have work experience. I bring 10 years or so of work experience from many other countries. So, we basically try to transfer this experience to the young Timorese who are coming up. Two, three years down the road, I think they should be able to handle a lot of the functions on their own.

Kira Kay: Today, the capital, Dili, is becoming a bit of a boomtown. Building construction is everywhere. There's a new slogan here: "Goodbye conflict, hello development." A well- attended exposition promises a comfort never before imagined. Much of this is because the country got lucky. It struck oil in the Timor Sea. Just after the crisis of 2006 hit, oil revenues began to flow, a boon for the struggling government. Much of this is because the country got lucky. It struck oil in the Timor sea. Just after the crisis of 2006 hit, oil revenues began to flow, a boon for the struggling government.

Charles Scheiner, La'o Hamutuk: Their chosen way of dealing with problems is handing out dollars.

Immediate fixes too shortsighted

Kira Kay: Charles Scheiner was an independence activist who now works for a well-respected local watchdog group. He says East Timor has a habit of using its oil wealth to literally pay off disgruntled members of society, from dismissed army soldiers to displaced people.

Charles Scheiner: You know, so it sort of resolved the problems the instant problems. But it created a pattern where people say we don't get services from the government unless we make trouble. If we make trouble, we get money. If we just sit quietly and are good citizens and wait for the government to provide education or health care or roads or water, it's not going to happen. I think we're – right now, things are pretty peaceful, and we're lucky, maybe, but I think that the elements of further conflict are still there.

Jose Ramos-Horta: Peace has to be paid for. Peace has to be bought, whether in Timor or anywhere in the world. And when we say it has to be paid for, it's not in the sense you buy people, in the sense you have to invest in creating infrastructures that create jobs. You have to hand out, when necessary, cash for the poorest.

Kira Kay: And this is East Timor's big gamble. With a petroleum fund now worth more than $5 billion, the government is spending more of the money on short-term problems, rather than saving it for the future. Besides the cash handouts, the government is spending millions importing a basic food staple, rice, in effect, buying some calm and some time for the country's more long-term development goals.

Edward Rees: I think, if you are me, that's the wrong policy. I think, if you're Timorese, it's the right policy. And I think that they have made a calculated decision that we need to distance the community from the last event as far as possible. And, so, spending the money today in order to ensure that nothing happens in the next five, 10 years, as I'm sure that's the way they're thinking, strikes me as being sensible.

Kira Kay: It's a fragile political equation, one that might still unravel under societal pressures, chief among them, what to do with all the young unemployed people, a demographic that has become violent in the past, and another: East Timor has not pursued war crimes tribunals against Indonesia, calculating that it needs to keep the peace with its much larger neighbor.

Jose Ramos-Horta: Let's put the past behind. There will be no international tribunal.

Kira Kay: But local activists warn that having no international judicial process keeps East Timor vulnerable to renewed violence, the process of healing from the trauma of occupation incomplete. As the flag was raised at East Timor's commemorations of its bold first steps 10 years ago, many open questions remain for its future. At stake is not just peace and prosperity for one of the world's newest nations, but also the role of the international community, as it continues to grapple with the task of nation- building.

Graft & corruption

East Timor should form anti-graft commission: president

Agence France Presse - November 27, 2009

Dili – East Timor should form its anti-corruption commission soon to support the economy and maintain people's trust in the half- island nation, President Jose Ramos-Horta said Saturday.

The Nobel laureate said at a military event that fighting graft was an important step and part of a national interest. "There has been an initiative from the government to form an anti-corruption commission," Ramos-Horta said.

"We have to fight against illegal action in order to maintain trust from our economic agents and the public," he said. "But it's urgent for the government to quickly nominate the high commissioners for the anti-corruption commission. Trust is very expensive and fragile," he said.

East Timor has been rocked by several corruption scandals this year. A report in July by the nation's Ombudsman alleged that deputy prime minister Jose Luis Guterres had abused his power by securing a United Nations job for his wife in which she was overpaid by thousands of dollars.

In August, opposition Fretilin party lawmakers called for Justice Minister Lucia Lobato and Finance Minister Emilia Pires to be sacked after ombudsman reported alleged abuse of power by the pair over government projects.

East Timor won formal independence in 2002, three years after a UN-backed referendum that saw an overwhelming vote to break away from Indonesia's 24-year occupation of the country. Despite massive natural gas deposits, East Timor's largely rural population is among the world's poorest.

East Timor finance worries

The Australian - November 3, 2009

Mark Dodd – An audit of East Timor's public finances by Darwin- based accounting firm Deloitte Touche Tohmatsu has uncovered $189 million worth of discrepancies, raising serious concerns of financial mismanagement by the Gusmao government.

The international accounting firm gave a "qualified" sign-off to its August 31 report, which found massive underspends by government ministries and two unreconciled amounts totalling $73.2m and $116.7m respectively.

The findings involve missing tax receipts, inadequate working documents and records, inadequate records of salaries and government payments including pensions.

The report is an embarrassment to the UN and to Australia which has set "improving public financial management" as an aid priority to Dili.

Environment/natural disasters

East Timor signals compensation claim over leaking oil rig

Radio Australia - November 6, 2009

East Timor says it will seek compensation from Australia if its waters or shores are polluted by a leaking oil rig.

The West Atlas Rig spewed gas and oil into the Timor Sea for 10 weeks, producing a massive ocean slick before it was finally plugged. East Timor's president says there are concerns the slick may enter domestic waters... and says if that happens he'll also call on the rig's Thai owners to pay for damages.

Presenter: Stephanie March

Speakers: Jose Ramos Horta, East Timorese president; James Watson, biologist, Queensland University; Professor Donald Rothwell, Australian National University

March: The West Atlas oil platform is just 250 kilometres from East Timor's coastline. For two months, the rig spewed 400 barrels of oil a day into the Timor Sea. The leak was finally stopped this week, but a fire on the rig has made further repairs difficult. The oil slick is now less than 100 nautical miles off the East Timorese coastline. President Jose Ramos Horta says he's deeply concerned.

Horta: (Translation) About the problem in the Timor Sea, I think that it has been going on now for more than two months in the Australian zone of the Timor Sea for which the Australian Government has full responsibility for the problem together with the Thai oil company.

March: The president says he wants to know if the slick has entered East Timor's maritime area as quickly as possible, and says if it has, he'll be looking for foreign compensation.

Horta: (translation) I think the government of East Timor should speak to the environment groups in East Timor and in Australia to find out those who have responsibility and if there is any compensation to pay to East Timor if there is a negative impact upon the environment.

March: Reports from neighbouring Indonesia suggest huge numbers of fish have died because of the spill. Queensland University biologist, James Watson, was sent by the Australian Government to investigate the initial effects of the spill in Australian waters. He says he wouldn't be surprised if the oil has reached East Timor.

Watson: This oil spill happened over when some fish were spawning so you would probably expect that some fish populations will decline in the short term at least. There will also therefore be carry on effects into other parts of the eco system so there will be a shortening in numbers of things like birds, sea snakes, turtles as well because there's less food in the environment.

March: Australian National University law Professor Donald Rothwell says Australia could legally be held responsible if the slick does pollute East Timor's waters.

Rothwell: These were actions that occurred within the Australian Continental Shelf, these were activities over which the Australian Government had oversight, ultimately the Australian Government would bear responsibility in international law for any environmental damage that occurs to East Timor as a result of these incidents.

March: The Australian Government says it will hold discussions with East Timor over any concerns it has about the spill. A spokeswoman from the Department of Foreign Affairs and Trade says the government will act consistently with international law in relation to the incident. A federal inquiry into the leak is due to be finished in April next year.

Health & education

Poor sanitation killing kids in East Timor: WaterAid

ABC News - November 18, 2009

David Coady – An international charity focussed on safe water and sanitation says children are dying needlessly in East Timor due to poor toilet facilities.

WaterAid Australia estimates more than 1000 children die from diarrhoea in East Timor each year and poor sanitation is a reason for this.

Its chief executive, Adam Laidlaw, says diarrhoea rates can be cut by more than a third when there is better hygiene.

"Over 2.5 billion people around the world... don't have a safe place to go to the toilet, and one of the outcomes of that, particularly in countries like Timor Leste, is that we have a significant number of child deaths each year due to diarrhoea."

He says the Australian Government needs to do more to improve sanitation. "We reckon that Australia's fair share for water and sanitation financing would be around about $350 million per year," he said. "And currently the spend is around $165 million a year."

Economy & investment

Argument over pipeline clouds Timor gas deal

Melbourne Age - November 26, 2009

Daniel Flitton – East Timor has warned it will abandon a multibillion-dollar deal with Australia to exploit natural gas fields in the Timor Sea unless a pipeline is built to deliver the bounty directly to the impoverished nation.

Francisco da Costa Monteiro, special adviser to East Timor's secretary of state for natural resources, flew into Canberra yesterday for talks with federal Resources Minister Martin Ferguson in an attempt to break the impasse.

East Timor wants gas from the Greater Sunrise project to be piped about 200 kilometres to East Timor's southern coastline, with a plant to be built for processing. A consortium led by resources company Woodside will develop the project.

But Woodside has ruled the proposal too expensive, preferring to examine plans for a floating plant above the field or piping the gas some 500 kilometres to Darwin. The value of the Sunrise gas field is estimated at more than $50 billion.

Woodside senior vice-president Jon Ozturgut this week told investors a decision on where to process the gas would be announced by the end of the year.

But Mr Da Costa said the Government in Dili would not accept sending the gas abroad and accused Woodside of ignoring the interests of the Timorese people.

"For us, the best outcome is development of Greater Sunrise on the shores of Timor Leste that can underpin the overall economic and social development of the country," he told The Age.

Mr Da Costa said establishing the project was expected to cost $8 billion to $10 billion and that investment would drive the development of other services in the country of 1 million.

"That's the reason why we see that for Australia this is one drop in a big ocean, but for Timor Leste this is almost the single biggest [project] and you can imagine how much attention we put into this," he said.

A spokesman for Mr Ferguson issued a statement saying the destination of the pipeline was a commercial matter to be determined by the project partners.

But Mr Da Costa said that under the terms of various treaties dividing the oil and gas fields between Australia and East Timor, the two governments should be left alone to decide how to develop the fields.

He said East Timor was willing to leave the resources in the ground for future generations rather than rushing into a deal. Resources companies from China and Malaysia have recently been invited to examine the Greater Sunrise field.

"They should start to realise that Timor today is very different from Timor in 2002 and 1999 or before," Mr Da Costa said. He pointed out that East Timor's substantial national savings from other resource projects came to a total of more than $5 billion.

"If it's [Great Sunrise] to be developed, then it's to be developed to Timor Leste," he said. "If it's not coming to Timor Leste, then we will not approve anything."