Sara Everingham and staff – The United Nations has handed over full control of policing operations to the East Timorese National Police Force (PNTL) at a ceremony in Dili.

The current UN deployment – the United Nations Integrated Mission in East Timor (UNMIT) – came in 2006, after a political crisis in which dozens were killed and hundreds-of-thousands displaced.

Police Officers from more than 40 countries, including Malaysia, Bangladesh, Pakistan and the Philippines, arrived to help with police duties, restore order and conduct training.

The head of UNMIT, Finn Reske-Nielsen, says the bulk of peacekeepers will now leave over the next six weeks.

"We expect that most of our personnel will leave by the middle of December," he said. "We will still have a handful of people left here by 31 December in order to sort of formally close what would be then be almost 13 years of UN peacekeeping and political missions in this country."

Mr Reske-Nielsen says a recent evaluation by the UN and East Timor found the PNTL was ready to take back control, but still needed improvement in several areas, including discipline.

"Although the way of dealing with problems might not be up to international standards, in the Timorese context they are really ready to do their job," Nelson Belo, director of the security organisation Fundasaun Mahein, told Radio Australia's program.

East Timor's Government says it plans to keep developing its security forces with continued help from countries like Australia after the UN withdrawal.

UN hands full police powers to East Timor

Australian Associated Press - October 31, 2012

United Nations peacekeepers in East Timor have handed full responsibility for policing to Asia's youngest nation, Prime Minister Xanana Gusmao has announced.

The National Police of East Timor "are assuming full responsibility for maintaining law and order", he said in a statement on Wednesday.

In March last year the United Nations Integrated Mission in Timor-Leste (as it is formally known) handed some responsibilities to the Timorese police and has since focused on training instead of frontline duties.

The head of the UN mission, Finn Reske-Nielsen, said that under the peacekeepers' guidance the Timorese police had "made significant progress" in many areas.

The force provided security during this year's peaceful presidential and general elections.

The current UN deployment, which arrived in 2006 after a political crisis in which dozens were killed and hundreds of thousands displaced, began withdrawing in earnest this month in line with a timetable to leave by the end of the year.

The largest batch will leave in November with the last of the peacekeepers due to depart in December, Reske-Nielsen has said. At its peak, the mission had 1600 peacekeepers.

The only major violence since the arrival of the UN force was a 2008 failed assassination attempt against then-president Jose Ramos-Horta.

East Timor, an impoverished half-island nation of 1.1 million despite bountiful oil and gas reserves off its coasts, in May celebrated a decade of formal independence after a 24-year occupation by Indonesia.

UN begins withdrawal from East Timor after 6 years

Australian Associated Press - October 23, 2012

UN peacekeepers will hand over full responsibility for policing to East Timor next week as they begin withdrawing in earnest from Asia's youngest nation, a UN official says.

The final batch of peacekeepers will leave in December in line with a timetable to depart by the end of the year, said Finn Reske-Nielsen, head of the United Nations Integrated Mission in East Timor (UNMIT), on Tuesday.

"We will pull them out over the next two months. By the 15th of December there will be no UN police (peacekeepers) left in the country," he told reporters in Jakarta.

The current UN mission arrived in 2006 after a political crisis in which dozens were killed and hundreds of thousands displaced, with a mandate to restore security.

The only major violence since then was a 2008 failed assassination attempt against former president Jose Ramos-Horta, and the country this year held largely peaceful presidential polls and general elections.

The UN partially handed over responsibility for security to Timorese police in March last year and from November 1 they will be expected to operate on their own.

It would be the "end of any kind of operation of support by the UN police", Mr Reske-Nielsen said. "At the moment whenever we are asked to provide support for a police operation, we will do that. But as of November 1 that stops and we will send the police home in very short order," he said.

A first batch of 330 UNMIT personnel will withdraw this month, with the largest contingent expected to pull out in the early weeks of November, said Mr Reske-Nielsen.

At its peak, the UN mission was made up of 1600 people and it currently has about 1270. Reske-Nielsen said the UN Security Council was expected to make a decision to formally terminate the mission next month.

Health & education

East Timor health fund help needed

Australian Associated Press - October 11, 2012

Lauren Turner – Intestinal worms affect up to half of East Timor's children and former president Jose Ramos-Horta is calling on Australians to help eradicate the "scourge" within five years.

The "very debilitating" worms result in malnutrition, anaemia and stunted growth, and can lead to children dropping out of school as they become too unwell to attend classes. "It really affects seriously a child developing in every sense," Dr Ramos-Horta told a gathering in Sydney.

A program to provide anti-parasitic drugs to Timor-Leste has been set up in a bid to combat the disease – the first project of the University of Sydney's Isin-Di'ak Fund which aims to improve the health of the people of East Timor.

Addressing a corporate breakfast in the CBD hosted by the Rotary Club of Sydney, Dr Ramos-Horta said rapid improvements in health were within reach.

"With the technical support of Sydney University medical school, our minister of health and a generous contribution from the Australian Federal Government and the Australian citizens, we can in five years see these problems eliminated in Timor-Leste," the Nobel Peace Prize Laureate said. "You are contributing to eliminating this scourge."

Dr Ramos-Horta said the program was "incredibly important" and encouraging as it's "doable within a relatively short period of time".

The program also aims to help the 23,000 East Timorese infected with elephantiasis, a parasitic disease that causes limbs to swell.

"This is a very cost-effective program that could eliminate two very significant diseases that cause a great deal of suffering," said Professor Peter McMinn, Bosch chair of infectious diseases at Sydney University.

About 5000 health volunteers will be trained to administer drugs to the East Timorese which have been donated by pharmaceutical companies. They aim to reach 80 per cent of the population of 1.2 million people – everyone over the age of one, with the exception of pregnant women.

It is hoped the first vaccinations will be given in June 2013 as part of the five year program.

Plea to help Timorese students

ABC New - October 11, 2012

Former East Timor president Jose Ramos-Horta has called for help for students wanting to study in Tasmania.

The Nobel Peace Prize winner has addressed students at Hobart's Fahan School. He spoke about issues facing his country's young population and plans to improve education.

Dr Ramos-Horta says only two East Timorese currently study in the state and has called for scholarships to attract more.

"We have all together 600 Timorese students in Australia, most of them with full scholarships paid for by our own Government, many paid by AusAid and maybe Tasmania as a very rich state could receive quite a few more."

Education Minister Nick McKim has supported the call. "They have immense benefit not only economically but benefit to our community and the more international students we see here the happier I am," he said.

"The Government has announced recently some new strategies to do more to attract international students to Tasmania, I spoke to a number of agents around the world only last week."

Graft & corruption

East Timor's antigraft body visits the KPK

Jakarta Globe - October 11, 2012

Rizky Amelia – The East Timor Anti-Corruption Commission on Wednesday visited the headquarters of Indonesia's Corruption Eradication Commission in Jakarta in hopes of fostering cooperation between the two agencies, one of its commissioners said.

"As a new institution, we are still learning while at the same time working to improve corruption eradication. We should not fight alone, we should cooperate," said Jose Antonio, a deputy commissioner of the East Timor antigraft agency.

Antonio said that there was merit in learning about eliminating corruption from the antigraft agency known as the KPK because there were similarities in the types of corruption within the two countries. He added that so far, his institution was already closely following the actions of the KPK through Indonesian television broadcasts that are aired in East Timor.

The KPK has gained international acknowledgement as a successful antigraft body, with many international institutions linking the country's drive to eradicate corruption to the commission's existence.

Many Indonesian television channels are able to be watched across East Timor, with residents of the tiny country reportedly enjoying Indonesian TV programs. Most East Timorese can speak the Indonesian language, a result of more than 25 years of Indonesian occupation.

Antonio said that as a fledgling country, East Timor has continued to build up its infrastructure and that many private companies from Indonesia were taking part in its development. "Things that can [hurt] the state [both] in Indonesia and in East Timor we should eradicate together," he said.

Antonio stated that a formal cooperation should be developed between the two countries and he added that his institution, set up just two years ago, has already been able to drag a couple of ministers to justice.

"We [recruit] from various backgrounds. There are former police members, engineers, journalists [and] accountants," he said, adding that his commission had the authority to recruit its own investigators."

Foreign affairs & trade

No China influence in Timor: Ramos-Horta

Australian Associated Press - October 8, 2012

David Beniuk – East Timor's former president Jose Ramos-Horta has dismissed what he says are Australian suggestions that his country is growing closer to China.

Delivering a lecture at the University of Tasmania, Dr Ramos-Horta said East Timor had snubbed the offer of cheap loans from China, joking that the emerging superpower had more influence over Australia.

"In Africa everybody rushes in to have cheap loans with China... we are making ourselves a bit too difficult to get," he said. "So it's not what academics at the ANU (Australian National University) suggest, (that) it's growing Chinese influence."

The Nobel Laureate said the only Chinese contribution to his country had been help with the construction of three government buildings – the defence and foreign ministries and the presidential office.

"Does that make a country under the influence of China?" he asked. "How about Australia? They sell almost everything to China. ANU is not worried about that. They're worried about three buildings that China put up in Timor-Leste."

But Dr Ramos-Horta said his country had an excellent relationship with the Asian giant. "I've met Timorese in China speaking Mandarin better than Kevin Rudd," he joked.

The former foreign minister, prime minister and president, who survived an assassination attempt in 2008, said the country's "new generation" government under national hero Xanana Gusmao had no choice but to succeed.

He said improvements in education, health and the reduction of poverty were vital. "He has to deliver," Dr Ramos-Horta said.

"Our people have been waiting for far too long for simple clean water, to have a few electric bulbs at home to be able to study at night.

"Will he be able to? I believe so, as long as the cabinet is absolutely loyal to him and as long as our development partners redirect their attention, energy and resources to where it can make a difference."

Mining & energy

Timor may walk away from gas treaty with Australia

ABC News - October 15, 2012

Stephanie March – East Timor is considering walking away from its treaty with the Australian government and Woodside Petroleum over the development of oil and gas fields in the Timor Sea.

The three parties are signatories to an agreement that governs the rights each have to the resources under the Timor Sea.

Timor has been pushing for a pipeline to be built from the Greater Sunrise gas field in the Sea to a yet-to-be-built processing plant on its south coast. It believes the pipeline would create much needed jobs and infrastructure for East Timor.

But resources giant Woodside says this would not be commercially viable, wanting to build an offshore floating platform instead.

Timorese government lawyer Pierre-Richard Prosper has been in Australia lobbying government officials in Canberra to support Dili's position over a pipeline.

"This is not simply an issue between Timor and the operators," he said. "When you look at the treaty there is also another party, that is the Government of Australia, so they have a voice, and they have the opportunity to speak up and cite a preference."

Mr Prosper says East Timor is mulling leaving the treaty when it expires in February next year.

"Timor could easily find a new partner that would be willing to have a pipeline to come through," he said. "Up in the northern part of Asia there is a big country there that I am sure would be very interested in an opportunity to have some gas."

Changing boundaries?

East Timor would spark a battle for a new maritime boundary if it walks away from its treaty with Australia and Woodside Petroleum.

The boundary presently in place between East Timor and Australia only exists because of the oil and gas treaty. An international law expert at the Australian National University, Professor Donald Rothwell, says the changes may be drastic.

"There could in fact be quite a radical shift in the way in which the boundaries are aligned if a permanent boundary were settled," he said. He says the shift could also affect both countries resources and fishing rights.

"That would extend to both sea bed resource rights, living column resource rights, such as fish and also other rights to associated activities within that region which could prove to be quite valuable in terms of biodiversity for example," he said.

Professor Rothwell says the relationship between Australia and East Timor will also be at stake should Dili leave the treaty.

"When a treaty has been concluded in good faith between two countries, if one of those countries is to unilaterally break the terms of that treaty, that in my view does have a significant impact upon the ongoing relationship between two counties and will inevitably lead to a lack of confidence as to the ability of those countries to reach a new treaty arrangement," he said.

The Australian Foreign Minister and Resources Minister have declined to comment on the issues raised by East Timor.

Woodside targeted by East Timor government in tax dispute

Business Spectator - October 2, 2012

Woodside Petroleum Ltd, along with ConocoPhillips and other resource companies, is facing demands by the East Timor government to pay up to $3 billion in disputed tax payments related to activities in the Timor Sea, according to an ABC TV report.

East Timor has increasingly focused on seabed rights and has levied accusations against private energy companies of not paying a fair share of tax for the resources being extracted.

The government's dispute with Woodside relates to the siting of a gas processing plan in the south of Timor used to handle produce from the proposed Greater Sunrise field, according to ABC's Four Corners program.

Woodside has said it would prefer to build a $13 billion floating platform and processing centre at sea, insisting that building a pipeline from the Greater Sunrise to East Timor would be prohibitively expensive and technically challenging.

The Four Corners program reported that the East Timor government established an audit and investigation team to examine Woodside's books 18 months ago and has already recovered $363 million in 28 individual actions.

"Our tax department is looking at the overall oil industry and asking companies to justify their expenditure and, as of today, if they do not provide us with justification there is the potential for that going up to $3 billion," East Timor finance minister Emilia Pires said, according to The Australian Financial Review.

Taxing times in Timor

Four Corners - October 1, 2012

(Footage of US secretary of state, Hillary Clinton, arriving for a visit in Timor Leste)

Kerry O'Brien, presenter: For a country struggling to find to its feet, a friendly visit from the US Secretary of State is always welcome.

Hillary Clinton: Hello, and how are you my friend? I am so happy to be here, I can't tell you how happy I am.

But while major governments might wish East Timor well, the country's leaders claim big, foreign corporations aren't paying a fair price for Timor's gas and oil.

(Footage from Four Corners program plays)

On Australia's doorstep a classic battle of David and Goliath. And it seems true to the legend that this David will not be bullied.

Welcome to Four Corners.

The deck was stacked against East Timor for a long time, first a colonial master, Portugal; the swallowed up violently against its will by Indonesia. Ultimately it paid the price of its independence in blood, and a society ripped apart, its economy in tatters.

East Timor's one big roll of the dice, its one way out of extreme poverty was to buy a future for its people with massive seabed oil and gas reserves, which might last 20 years or more. But the government is now locked in an almighty battle with the big international companies they're in partnership with to get to their fair share of the bonanza.

Four Corners will tonight reveal some of the games big oil appears to have played. And the sophisticated arsenal developed by one of the world's poorest countries to recoup hundreds of millions of dollars in back taxes.

Two corporations that feature in the program, Woodside Petroleum and ConocoPhillips, have declined to be interviewed on camera.

The reporter is Andrew Fowler.

(Footage of Alfredo Pires boarding helicopter)

Andrew Fowler, reporter: As he prepares to board a helicopter in the East Timor capital, Dili, Alfredo Pires the country's minister for natural resources is only too aware what's expected of him. He's on his way to one of the poorest villages in East Timor.

(Footage of children performing for Alfredo Pires plays)

Children (singing): It's I it's I who builds East Timor. It's I who builds East Timor, bam, bam, bam....

Andrew Fowler: The village has been preparing for the minister's visit for days.

(Children sing)

He has great plans to develop the area.

(Footage of Alfredo Pires and Andrew Fowler on board the helicopter before take-off)

Steward: Good to see you on board our helicopter.

Andrew Fowler: As a qualified geologist, Pires could be pulling in a six figure salary anywhere in the world.

Steward: Please switch of your mobile phones and....

Andrew Fowler: Instead he's returned home, one of a new breed of highly educated Timorese determined to re-build their country.

Alfredo Pires, Minister of Petroleum and Mineral Resources: Did you hear the Russian?

Alfredo Pires: I think having grown up in Australia, under the culture of fair go and a fair crack of the whip I think that also helped a lot to make that decision and to give what we can to others.

Andrew Fowler: There's no doubt he has a big job ahead of him. And no better example of the immensity of the task than the trip we're taking in this UN helicopter.

(Footage of East Timor from the helicopter)

We're on our way to Suai, on the far south coast of Timor.

The 180 kilometre journey will take less than half an hour. By four wheel drive it's a dangerous seven hour trip. Hardly surprising that fixing the roads to this remote part of the country is one of Pires's biggest priorities.

From the air you get a hint of the problems. It's not just the lack of roads. There's precious little infrastructure, even basics like water, sanitation and electricity.

Steward: Welcome to Suai...

Andrew Fowler: East Timor is ranked as one of the poorest nations in South East Asia.

(Footage of road from car plays)

And on the south coast there's even less. The road we're travelling on will take us to the poorest of the poor. It's hard to believe, but the East Timor government has grand plans for this area.

(Footage of welcome dance for Alfredo Pires at village plays)

The plan is to lift the people out of poverty but at the same time maintain their cultural traditions.

Alfredo Pires: They have a piece of land where they grow corn about once or twice a year. Probably makes $1,300, $1,400 a year.

Andrew Fowler: That's about $4 a day per family.

Pires and his government are convinced that such subsistence farming and poverty can be banished forever. But he is acutely aware of one of the biggest problems.

Alfredo Pires: No false promises.

Andrew Fowler: No false promises. No.

Young man in village: We promise you we will do our best.

Andrew Fowler: The government is already delivering on one promise though: education.

Children: We are children and we are the future of this country.

Andrew Fowler: And learning English, the language of commerce and trade as Pires calls it, will help them get jobs in the new industry the government hopes to attract to the area.

Children: 'Cause only education can change our lives.

(Footage of Alfredo Pires talking to locals at the beach in Suai plays)

Andrew Fowler: Down on the beach, Minister Pires details his grand plans for the south coast, including a deep water port here near Suai.

Alfredo Pires (at beach): (Points out area on map)... with a draft of 20 metres.

(On Four Corners): When a supply base is ready the goods and services will have to come out there. We have a world standard facility there, I am sure we able to attract other people to come and use those services.

So the initial impact, especially if there's a supply base related to an industrial estate, then we could talking, we could talk about quite a few jobs.

(Computer images of highway plans is shown)

Andrew Fowler: There are plans too for a four lane highway, connecting the port to an oil refinery.

(Computer images of proposed gas processing plant are shown)

And further up the coast, if the government wins a standoff with Australia's Woodside Petroleum, a gas processing plant fed by a pipeline from the development of the Greater Sunrise field in the Timor Sea.

Alfredo Pires (at beach in Suai): There's a few sacred sites here, we're going to have to design it to respect that.

Andrew Fowler: For the local people it's a welcome opportunity to get paid work.

Youth (subtitled): As the youth of this area, we would like to get jobs if they open a supply base here.

(Footage of man opening oil wellhead plays)

Andrew Fowler: It's not as though the south coast hasn't had the whiff of development before. This old oil wellhead, long abandoned, can still put on a show.

(Picking up oil from the ground at the wellhead): Right here the oil is bubbling to the surface. It's rich and sticky and has a very distinctive smell. The smell of money.

(Footage of East Timor landscape plays)

This time the Timorese have a real stake in the development of the resource. But the wealth isn't here on land, it's out there in the Timor Sea.

(Map of Timor Sea is showing the Joint Petroleum Development Area maritime border.)

Deep below the ocean floor lie two massive oil and gas deposits. They're worth billions of dollars.

(Bayu Undan with pipeline to Darwin is marked on the map)

One, Bayu Undan, is already piping gas to Darwin.

(Greater Sunrise is marked on the map)

The other is known as Greater Sunrise. It's a treasure trove yet to be tapped. It's the gas from this field that East Timor believes holds the key to the country's future wealth.

Xanana Gusmao, Timor Leste Prime Minister: We are a new country, a small country, a small population and we have resources. The fundamental problem is how to manage these resources to benefit the people. This is the very crucial for the future of this nation.

Andrew Fowler: Xanana Gusmao believes the full value of the nation's resources can only be realised if the gas is piped to the south coast. It's a plan that has cross-party political support.

Former Prime Minister, Mari Alkitiri, believes the pipeline plan will benefit East Timor.

Mari Alkitiri, Secretary-General, Fretilin: It will be good if Timor Leste can be a new hub of oil and gas. And not only be a producer but be a hub. This is what we struggle for.

Andrew Fowler: So what are the benefits of it being a hub and not just taking the money?

Mari Alkitiri: It's a development of – for infrastructure, development of knowhow, development of technical skills, everything. And even, even development of the country as a whole

(Map of Timor Sea showing Greater Sunrise gas field and possible Woodside pipelines to East Timor and Darwin is shown)

Andrew Fowler: But Woodside has plans of its own. It doesn't want to build a gas pipeline from the Greater Sunrise Field to East Timor. It has examined the possibility of piping the gas all the way to Darwin.

(Computer images of proposed Woodside floating platform are shown)

But Woodside's preferred option now is to build a floating platform, where the gas can be processed at sea. The disagreement over how to exploit the Greater Sunrise Field has caused great tension between East Timor and Woodside.

Don Voelte, CEO, Woodside Petroleum 2004-11 (at press conference): By objecting to Sunrise being built, they must be objecting to promoting the quality of life and improving the livelihood of their people. And I don't get it. I just don't understand it.

(Footage of Woodside AGM plays)

Francisco Monteiro, CEO, Timor Gas and Petroleum: We were wondering you know how can an oil s company executives ever say that to a legitimate government, and particularly another foreign government, you know. That's unacceptable in any kind of judgement that one would have.

(Footage from Don Voelte's press conference plays)

Xanana Gusmao: Everybody say that for poor countries, for under-developed, give them ownership, give them capacity to run their own business. It means essentially respect to the others. If we have this kind of environment, respect, we can have a deal

Kerry O'Brien: When Woodside's CEO, Don Voelte travelled to East Timor in 2010 Prime Minister Xanana Gusmao refused to meet with him. But the company pressed on.

Don Voelte (to press, 2010): It's the beginning of next week when we deliver to the regulator the very thick and very detailed field development plan for consideration with the governments of Timor Leste and Australia.

Andrew Fowler: The plan was to be delivered to Timor's National Petroleum Authority. Woodside had agreed to provide an even handed appraisal of all options for the development of the Greater Sunrise field.

(18 May 2010: Footage of people arriving for meeting between Woodside and the Timor Leste government)

Brendan Augustin, Woodside's East Timor manager, a former department of foreign affairs officer, and Jon Ozturgut, a senior company vice-president from the Perth head office, brought the plan with them.

What happened next was extraordinary.

Gualdino da Silva, President, National Petroleum Authority: The discussions like were still in the middle of discussions. And then Mr Jon Ozturgut was like sitting next to me and then just walk off without saying anything, just like that. So that was something that was really unpleasant to see of course.

(Footage of Jon Ozturgut leaving the meeting plays)

Andrew Fowler: As Jon Ozturgut made his way out Gualdino da Silva, and his staff, was stunned.

Gualdino da Silva: Jon walk out and then followed by Brendan.

Reporter (to Jon Ozturgut): Where are you running sir?

Andrew Fowler: It's what Ozturgut left behind that was important: the incomplete development proposal. It did not include the complete details of the option to build the pipeline to East Timor.

Andrew Fowler: So what do you think they hoped to achieve by leaving the report in your room?

Gualdino da Silva: I think what they would like to achieve at that time was to ensure that – to say that we had actually accepted the field development plan.

Andrew Fowler: But da Silva's staff spotted the files, and stuffed them into the hands of the Woodside driver.

(Footage of staff member handing files to Woodside driver plays)

Ozturgut put on a brave face, but the message sent to Woodside was clear: Timor Leste was still pushing ahead with the pipeline to the south coast.

If leaving the files behind was an attempt to force the government to accept what Woodside wanted, it wasn't successful. Just across town Woodside would come up against another tough opponent.

Francisco Monteiro (showing Andrew Fowler around TimorGAP's offices): Basically the gas business unit and...

Andrew Fowler: Francisco Monteiro, the CEO of East Timor's national gas and petrol company, known as TimorGAP.

Monteiro knows a thing or two about Woodside Petroleum, and in particular the Sunrise project. It's his PhD thesis, and he temporarily put it to one side to help his country.

Francisco Monteiro (talking to staff member): Can you zoom into the Suai area and the area of Suai supply base itself.

Andrew Fowler: Monteiro's job is to develop a detailed plan of the south coast development area and make sure the pipeline gets built.

(Francisco Monteiro shows the Suai supply base area on computer)

Francisco Monteiro:... and Suai airport to be rehabilitated.

Andrew Fowler: Woodside's argument has been simple. They say there is a huge trench between the field and the Timor coast which the pipe can't cross.

(to Francisco Monteiro): There's a lot of controversy about the pipeline with Woodside arguing originally that the trench, the Timor trench was too deep to send a pipeline across.

Francisco Monteiro: Well, first of all it's not a trench, to be correct and technically.

Andrew Fowler: So what is it?

Francisco Monteiro: To us, it's a trough and maybe this is this is not a semantic kind of argument. This is really something substantial.

(Francisco Monteiro shows Andrew Fowler map of the area the pipeline would have to cross)

Francisco Monteiro: This part is 3,020s.

Andrew Fowler: Monteiro says he has the evidence to prove his point, as he pours over the maps pointing out the relative depths of the ocean and how the pipeline could avoid the steepest parts.

Francisco Monteiro (pointing out area on map): Since 2007, we carried out a number of studies, started off with a pre-feasibility studies, subsequently followed with bathometric studies, mapped out the whole seafloor there. And eventually we found out that technically it's possible. So it's feasible to lay the pipeline across that Timor trough.

(Graphic of Woodside's public presentation material plays)

Andrew Fowler: At public presentations Woodside showed a trench, like an underwater slice of the Grand Canyon; huge cliffs plunging to the depths. A pipeline seemed like an impossible engineering feat. By stretching the vertical scale it exaggerated the slope of the trough.

If it had shown the trough true to scale it would look like this (trough graphic is shown true to scale) a wide open undersea valley of mainly gentle slopes.

Alfredo Pires: It looked pretty scary. They had very steep slopes, you wouldn't want to put there. So the average person would immediately raise their hands and say 'look let's get out of here.'

I remember, it's a clear example the idea that there were slopes all the way up to 45 degrees that we would have to tackle if the pipeline was coming from Greater Sunrise to Timor Leste, which is true. But we weren't told that you can actually just deviate those 45 degrees and go by something much much less steep.

Andrew Fowler: Four Corners requested an interview with Woodside Petroleum, but the company declined. In a statement Woodside said the graph had been "sized to fit in the presentation".

(Map of Joint Petroleum Development Area is shown)

East Timor had already missed the potential benefits of having a gas pipeline come ashore.

In 2002 it signed an agreement with the giant US energy company ConocoPhillips to pipe gas from the giant Bayu Undan field to Darwin.

The creation of an LNG (Liquid Natural Gas) hub greatly boosted Darwin local economy, creating thousands of jobs.

With the gas going to Darwin, ConocoPhillips was about to reap an even richer reward. Without telling East Timor the company built a $50 million dollar helium plant. This had never been in the agreement.

It was only by chance the Government found out what ConocoPhillips was up to. At a trade fair the plant owner began boasting to an East Timorese official.

Francisco Monteiro: When they were asked where will the gas come from? Saying 'from Bayu Undan' and everyone's like 'what? We are the owners of that resources, we are the managers and administrators and managers of those resources. And how could we not informed and be asked our permissions?' And on top that should also share the revenues of these resources.

And so it's unbelievable that these things happen without our knowledge.

Andrew Fowler: The amount at stake, around $16 million, so far.

The East Timorese believe that because it was their resource they should get a cut.

Emilia Pires, Minister for Finance: If someone is making revenues off helium from the Bayu Undan gas then we should be entitled to our share. But we haven't had it; we haven't received anything so far, therefore we are investigating.

(Footage of Pierre Prosper arriving for a meeting with Alfredo Pires plays)

Andrew Fowler: Pierre Prosper is a lawyer for a highly regarded Washington DC law firm, an expert in diplomacy and international law. The East Timor government hired him to help fight their case. He understands only too well what's going on with the helium.

Pierre Prosper, Legal Adviser to East Timor government: What we're discovering is that everyone's making money. The owners of the pipeline, the operators are making the money, all the way up and down the chain. Australia is making money because they have now a taxpayer that's in their territory, the jobs that come with it.

The only entity or body that is not making money, is not receiving any benefits, is Timor. Timor is not recouping or able to recoup a single cent from that operation while everyone else is. And we look at that as a not only a significant problem, one that is just unfair, but it's really unjust from our view.

Andrew Fowler: Yet again the East Timor government had discovered it needs to keep a close watch on the activities of its new business partners.

Four Corners can reveal that the amount of money involved in disputed, unpaid taxes leaves the sum involved in the possible helium rip-off looking like loose change.

(Footage of riots in East Timor plays)

While East Timor was burning and trying to recover from years of instability, petroleum companies took the opportunity to effectively keep hundreds of millions of dollars from the East Timorese.

Charlie Scheiner is a researcher at an independent organisation which monitors government income and expenditure. He's closely investigated the oil companies and the tax they pay.

Charlie Scheiner, Researcher, L'ao Hamutuk: They are looking of course to maximise their own profit. And when Bayu Undan started significant production in 2004, and it's increased since then, the government here did not have either the capacity or the interest, it's not clear, to do detailed independent audits of ConocoPhillips tax returns.

And so ConocoPhillips did what a lot of taxpayers do, especially rich ones, they pushed the margin. And each year when they take a little bit more questionable deductions and it doesn't get challenged, they take a little more the next year and the next year.

Andrew Fowler: In a cramped upper floor Dili office, a special task force is locked away in a secure location, combing through the financial records of the oil and gas companies.

It's using sophisticated forensic accounting techniques, and some of the world's most highly qualified experts to chase the money trail. It's a massive task, digging back through thousands of financial transactions and reports.

But the East Timorese have only been able to do this level of forensic auditing since 2011. For almost a decade the companies kept their books off-shore in Australia, away from the prying eyes of East Timor's finance department, and its minister.

Emilia Pires: When I became minister all I knew is that I was not allowed or my people were not allowed to go to Australia and check the – and do auditing to the companies. Because most of the companies that are in the oil business are situated in they have their headquarters in Australia.

Andrew Fowler: So why are the books held in Australia and not here?

Emilia Pires: Because they are their headquarters were there.

Andrew Fowler: So you couldn't get access to the books?

Emilia Pires: And we couldn't go to Australia to do auditing because it's like going to somebody else's country.

Andrew Fowler: In desperation the East Timor government tried to persuade the Australian Government to help.

Emilia Pires: We had a lot of talk with the tax department in Australia, trying to do a memorandum of understanding and so that we could allow we were allowed to go there and do the auditing etc. But it didn't work out successfully. And so when it didn't work out successfully so I said OK, bring them – bring the books over to Timor Leste. And so the books – the companies were forced to bring the books to Timor Leste.

Andrew Fowler: Only in 2010 did East Timor get the right to have the books of the companies held in Dili. And it was only then that the task force began uncovering just how much money the nation calculated it's owed in unpaid taxes.

Four Corners has been told that so far 28 cases of unpaid taxes have been settled. And there are many more to come.

Emilia Pires: Well, since we start auditing and we really started auditing in beginning of 2011. So within a year and a half you know since then to now, we've recovered or collected about $362 million just in the auditing exercise.

We are at the moment, our tax department is actually looking at the overall oil industry and asking the companies to justify their expenditure. And as of today, if they do not provide us all the justification there's a potentiality of going up to $3 billion.

Andrew Fowler: $3 billion?

Emilia Pires: $3 billion.

Andrew Fowler: The task force has also uncovered some extraordinary cases of what it says is unaccountable expenditure.

Andrew Fowler: Are there any examples that you can cite at the moment of somebody who's making a tax claim but can't produce the documents?

Emilia Pires: Well, we are in the process of do some issuing some assessments on some cases, yes, that they are not able to give us the paperwork, the justification. We have been asking lots, we have been asking for a long time.

Andrew Fowler: Can you tell me about those?

Emilia Pires: I am not allowed to speak at the moment because we are in the process.

Andrew Fowler: Emilia Pires may be coy about what's happening in the future but several cases are already before the courts and in the public arena.

(Excerpt from Woodside Petroleum corporate video plays)

Voiceover: Woodside is now a global force in energy supply...

Andrew Fowler: Even before Australia's own Woodside Petroleum has sunk a gas production well it's been hit with a bill for a capital gains tax and penalties.

Voiceover:.... Woodside oil over 50 years ago...

Andrew Fowler: During a 16 month investigation auditors discovered that Woodside had sold a share in an uncommercial gas field to Italian firm, ENI, one of its joint venture partners.

According to the East Timor government, Woodside paid a capital gains tax of $24.9 million.

Woodside, which Four Corners understands is appealing the ruling, said it actually made a $26 million loss.

(End excerpt from Woodside corporate video)

(Excerpt from ConocoPhillips corporate video plays)

Voiceover: It's time...

Andrew Fowler: Over at ConocoPhillips Australasia, East Timor's tax investigators have handed the company a $6.5 million bill for a single year, challenging its tax write off for decommissioning oil drilling and production equipment.

Voiceover:... deep water, oil sands and LNG...

Andrew Fowler: The East Timor tax office wrote to ConocoPhillips explaining: "The decommissioning cost... has not yet been approved." The letter pointedly added: "Any deactivation costs... will not be deductible for tax purposes."

Voiceover: It's time, for ConocoPhillips.

(End ConocoPhillips corporate video excerpt)

Emilia Pires: For you to decommission you need to have approval from the regulatory body. And then you can deduct that money from us like so you don't have to pay tax. You cannot do it the other way around. And unfortunately the company did it, yeah, the other way around. And therefore we as a tax agency we need – we have to act.

Andrew Fowler: After subsequently paying approximately $79 million in back tax and penalties for failing to get permission for the decommissioning, ConocoPhillips and its partners are now appealing the case in court.

(To Emilia Pires): Were they taking advantage of you?

Emilia Pires: I have a feeling that in the past, yes, because I mean they knew more than we did, and they knew that we were weak.

(ConocoPhillips corporate video of Bayu Undan plays)

Andrew Fowler: In yet another case, ConocoPhillips, which heads a joint venture partnership with among others, Australia's Santos, and Tokyo Electric and Gas, has been caught out 'cost shifting'.

The company has sought permission to drill for gas in a dry field known as Phoenix, which it described in its application as lying "outside the Bayu Undan discovery area".

ConocoPhillips was given approval to drill on the condition that: "costs may only be recovered from income derived from the ultimate successful development of the Phoenix Prospect." And not from the profits of the existing Bayu Undan field.

Emilia PIRES: No revenue, no deduction. But if you get revenue, OK, fine, you know, you deduct. But they insisted they went and then they spent like 71 days in exploring that field and came out with nothing because it was a dry field. But they still deducted from the Bayu Undan from us, $32 million.

So when we went to do this auditing looking back and etc, we were 'no, no you shouldn't do that because it was very clear that you were not meant to do that. You go there at your own risk and then you charge us. You shouldn't, no, you can't do that.' And so we made an assessment on them and charged penalties.

Andrew Fowler: What do you think that that says about the company that will have an agreement with you and then break it and do exactly what the agreement says they would not do: to charge expenditure against the profits of another field? What does that say to you?

Emilia Pires: Well, again... Well, obviously they are not doing the right thing by us. But why do they do it? I cannot, I mean you should ask them because all I can tell you is that if you don't do the right thing you get caught. And they're getting caught now.

Andrew Fowler: ConocoPhillips has a reputation of doing more than most to reduce its tax bills. A large number of its political lobbying efforts in the US are related to tax. And ConocoPhillips' parent company has many subsidiaries registered in tax havens.

Andrew Fowler: Just explain to me the process by which you're making the companies explain their profits and also the charges that they are setting against those profits. What are you actually doing?

Emilia Pires: When we are doing an auditing we are asking them OK, show us the receipts. Tell us, if you say that this cost you, just as an example, $100 million then give me the receipts for $100 million. And they're struggling. They're not able to give us that, the total cost of what they said they claim that they've spent. Now that's a bit of a problem.

Andrew Fowler: Four Corners requested an interview with ConocoPhillips Australasia but the company refused.

In a statement the company said: ConocoPhillips "has paid and is up to date with all taxes assessed... but is challenging the basis on which those assessments have been made."

Australia is also a tax recipient from the companies operating in the joint production area between Timor and Australia. So Australia too stands to gain if the companies are being found to be underpaying their tax through elaborate schemes.

While Four Corners was in Dili, the Australian ambassador and a senior Australian government official sought a meeting with the finance minister.

Emilia Pires: The ambassador came to see me with another lady from the Ministry of Resources, Energy and Tourism in Australia. I think the Australian National Audit Office has done an audit in Australia. But they needed some access, some extra information from Timor Leste to verify the accuracy of some of the findings, and so they came to see me.

Andrew Fowler: What sort of information were they asking you for?

Emilia Pires: Well, I didn't understand very well, but I think it was a lot of it on the royalties. But I do audit on taxes, not royalties. But they were asking me for information for auditing on royalties, the production in the field, etc.

Andrew Fowler: Four Corners has since discovered that the Australian National Audit Office investigation is looking into the accuracy and completeness of petroleum revenue from the Timor Sea received through taxes and royalties. We've also been told that the investigation has nothing to do with companies not paying their tax.

How to manage the oil money has always been the big issue for East Timor. It feared the potentially corrupting influence of the billions of dollars flowing into the country.

In 2009 it established an anti-corruption watchdog, headed by another PhD graduate from Australia, human rights lawyer, Aderito Soares. He only took the job because he was guaranteed he would be independent.

Aderito Soares, Commissioner, Anti-Corruption Commission: We never get any call from other authorities to stop any investigation. I assure you, even not from Prime Minister or from former president or from other entities to say that 'commissioner, don't do that'. We never experienced that, and I hope that this will go as I said you know for in the future.

And I assure you that I think no, I think for public land some people kind of doubt, but we have been doing this work in the last two years and I think we're quite – I think they respect the independency of this institution.

(Footage of Alfredo Pires and Pierre Prosper in a meeting plays)

Alfredo Pires: So the airports, all the helicopters you see in the current airport...

Pierre Prosper: Well I see the government as going as far as is, it can to be corruption free and transparent. They've instituted many mechanisms that give great visibility into how they receive money and how they spend money. In fact, many of the rules are so stringent that documents, contracts and so forth are, are made available to the general public for examination. So everyone knows who's contracting with the government, who is receiving money and what they're doing with that money.

It's proud of the fact that it's independent. It's proud of the fact that it's becoming a stronger democracy, and it's trying to become an example to the world.

Andrew Fowler: Back in 2005 East Timor became just that, an example to the world. It knew that it needed money to build the country and for people to live on as well. It decided to take a bold step.

When the billions of dollars from the oil and gas bonanza began pouring in, the government of Timor Leste did a very smart thing. Unlike other countries which have frittered away their petro dollar wealth Timor Leste would be different. It set up a sovereign wealth fund and locked the money away.

The idea was East Timor would live on the income from the fund and keep the capital safe for future generations. But the trouble was there wasn't enough money in the fund to produce a big enough income. The back taxes would have helped.

Pierre Prosper: What the client in Timor has been doing is really going back and assessing all the previous years of tax returns. They were able to discover over $300 million of back taxes that had not been paid or either been improperly deducted. So our job has been to, to as you say, chase the dollars and find that money and put it back into the government coffers so that it goes to where it needs to go.

Andrew Fowler: A combination of not enough tax money, and the fund not producing enough income, forced the government to act. It raided the fund to build up East Timor's broken infrastructure and to help alleviate poverty.

Xanana Gusmao: Don't talk to me about malnutrition, don't talk to me about education, don't talk to me about the roads, don't talk to me about agriculture. I just lock the money in safe in some coffer?

Andrew Fowler: The World Bank and others argued against drawing down too much money from the sovereign wealth fund.

Emilia Pires: They don't understand. They are a multilateral institution. I mean how many of them has governed countries? I once upon a time also worked for the World Bank and I'm now in the minister of finance's hot seat and I have to look at it from my point of view and says OK, now that I'm here, what am I going to do? If I don't spend then things don't move.

If the public sector is the motor of the economy and the public sector is not functioning, is not spending, well, what do you expect? People will have no jobs on the ground. There's no economy moving and so what will happen? Crisis will happen. And this is what happened to us.

Andrew Fowler: Eventually The World Bank changed course and supported the government's use of the fund, but only after a damning report blamed much of East Timor's failure on the Bank's policy.

(To Hans Beck): How bad were those mistakes of the past?

(Four Corners): Hans Beck is the World Bank's acting country manager for East Timor.

Hans Beck, Acting Country Manager, World Bank: Well Timor Leste has made tremendous progress in the last 10 years, drawing down money from the fund and channelling that into through budgets to meet pressing development needs in education, in health, in agriculture, for example. And through that achieving in the last five years for instance, 12 per cent average growth rates, which is remarkable in this region if not the world if you like.

Andrew Fowler: But according to your own internal report they only got there at that level because they disregarded the advice that was coming from the World Bank. Poverty already at twice the rate of Indonesia rose significantly through most of the evaluation period and declined only after 2007 when the government, against the Bank's advice, increased spending using petroleum resources. And that's your own report.

Hans Beck: As I said there was a lot of... and that's an independent evaluation group report which provided a lot of valuable lessons that have been incorporated in, as I said, our own strategies, work with the government and the government's own relationship with us. So it's a helpful report, and we took it very much to heart.

Andrew Fowler: And the changed policy worked. According to the World Bank the economy is now growing strongly and the infant mortality rate has nearly halved.

If there's one lesson the Timorese have learned over the years, it's to rely on no-one but themselves. If the tax take had been higher in the first place it's arguable that East Timor may not have had to raid the sovereign wealth fund.

Emilia Pires: All the money that comes from the oil goes to this petroleum fund, which is our sovereign wealth fund

Right now we depend very much on it. It nearly finances like 90, probably 95 per cent of our budget from the oil revenues. So it is that money that's allowing the economy to move at the moment.

Andrew Fowler: The petroleum minister is only too aware of the problems facing his country.

(Footage of Alfredo Pires and Andrew Fowler walking through power station plays)

Alfredo Pires: What the engineers tell me at the moment we are...

Andrew Fowler: This power station is part of $1 billion electrification program, much of the money drawn from the sovereign wealth fund.

Alfredo Pires: Right now we've got the major capital, so Dili is running on this one. And other towns, Bacau, the northern suburbs, as we are spreading out the towers on the south coast. And this will all be linked together. So future industries, all will be enjoying energy from this plant.

Andrew Fowler: There's the potential for an added bonus. The plant runs on diesel at the moment, but it can quickly be converted to cheaper gas from the Greater Sunrise Field, if the pipeline comes ashore in East Timor.

For the people of this battered country many questions remain. Will the gas resource be piped ashore? Will the companies pay their taxes? Will there be jobs for all?

Certainly people like Victor De Araujo and his wife Maria hope the government gets it right. They and their four children live a meagre existence.

Victor supported the struggle for independence but now all he wants is work. He gets casual jobs, but nothing permanent.

Victor de Araujo (subtitled): My wish and desire is that I have a job to support my family. That's why during the Indonesian times we fought for our independence, because we didn't have work. But since independence we still haven't seen much change.

Andrew Fowler: Having won the war the East Timorese are looking for a peace dividend. Instead they have a new fight on their hands as the government tries to bring jobs and industry to some of the poorest parts of the country.

(Footage of Alfredo Pires in Suai plays)

There's no doubt collecting all the tax revenue that's due, will help provide the lifeline East Timor needs as it struggles to turn itself into a modern nation.

Pierre Prosper: Around the world, multinational companies always fight for their interests. And they fight tooth and nail, it's their job, they have shareholders, they have a board to answer to.

And in our case we're in a fight. And it's expected, we're not offended by it, it's part of the process. And we, we expect the fight to get harder, because we are talking about a lot of money. But, but what has changed here is that Timor is fighting back.

Alfredo Pires: As a young country we have come to learn very quickly. It's a tough game and what I usually tell the young Timorese who are now coming into this area is that there is no Mother Theresa's in the in the oil and gas game. So don't expect that people are going to hand things out for you. You're just going to have to smarten up and defend your rights to the best of your abilities.

Xanana Gusmao: I believe that companies will be aware that they have to pay. Under the rules, under the laws they have to pay the tax.

Kerry O'Brien: Small it may be, but East Timor is most certainly a nation of fighters.

As we've said, Woodside and ConocoPhillips declined to be interviewed on camera for the story. But you'll find their statements in response to our questions on the program website.

Next week on Four Corners, on the front line with the rebel forces in Syria. It's an extraordinary insight into a bloody civil war that shows no sign of ending.

Until then, goodnight.

Miners owe East Timor millions in unpaid taxes

ABC News - October 1, 2012

Peter Cronau and Andrew Fowler – Potentially billions of dollars of tax is being withheld from the government of East Timor by some of the world's richest oil and gas companies operating in the Timor Sea, Four Corners has revealed.

The amount owing to East Timor, or Timor Leste as it is known in the country, could be as much as US$3 billion, once interest and penalties are added to the unpaid taxes.

"As of today if they do not provide us all the justification, there's a potentiality of [it] going up to $3 billion," East Timor finance minister Emilia Pires has told.

A forensic audit of tax payments over the past 18 months has found what the government claims are multiple underpayments of tax by the resource companies. These companies include the US oil giant ConocoPhillips and Australia's own Woodside Petroleum.

"Since we started auditing – and we only started auditing in the beginning of 2011, so within a year and a half since then to now – we've recovered or collected about $362 million," Ms Pires said.

Only in 2010 did East Timor get the right to have the financial records of the oil and gas companies operating in the Timor Sea held in Dili.

It was a year later that a specialised tax task force was put together in the nation's finance ministry to begin forensic auditing investigations. It then began uncovering just how much money the nation is potentially owed in unpaid taxes.

Of the dozens of cases of tax underpayment so far discovered, 28 have been settled for a total of $362 million. But several demands for payment have been appealed by the companies involved.

Ms Pires has hired lawyer Pierre Prosper, from prestigious Washington DC law firm Arent Fox, to advise on the legal cases that have arisen.

In cases now before the Dili District Court, Mr Prosper has submitted that companies have "improperly deducted costs" from taxes due to the government.

"Around the world multinational companies always fight for their interests and they fight tooth and nail; it's their job – they have shareholders," Mr Prosper said.

"There was no enforcement because there wasn't capacity, so it was up to the companies to do the job of following the letter of the law.

"What we are saying is that we noticed some deficiencies and... the government has begun to push back, enforce and regulate.

"We expect the fight to get even harder, because we're talking about a lot of money, but what's changed here is that Timor is fighting back."

The task before the audit team is enormous, trawling back through five years of tax returns and financial documents, looking for illegitimate claims.

Ms Pires explains the type of problems they are seeing with many of the companies' tax returns.

"When we are doing an audit we are asking them, 'OK show us the receipts, tell us if you say that this cost you, just as an example $100 million, then give me the receipts for $100 million' and they're struggling," she said.

"They're not able to give us... the total cost of what they said they claim that they've spent. Now that's a bit of a problem."

Recently re-elected East Timor prime minister Xanana Gusmao agrees that the companies need to pay their dues. "I believe that companies will be aware that they have to pay, and under the rules, under the laws they have to pay the tax," Mr Gusmao said.

Several of the companies involved are appealing in the Dili District Court against the tax reassessments of the East Timorese government.

Balibo 5

Family demands justice over Balibo deaths

TVNZ - October 16, 2012

The family of a Kiwi news cameraman slain during the Indonesian invasion of East Timor is calling on the Government to seek justice.

Gary Cunningham, along with four Australian and British reporters, was allegedly killed by Indonesian troops in Balibo in 1975.

A letter obtained by ONE News shows the Government are now considering a new memorial for civilians killed in war, like Cunningham, for the new National War Memorial Park in Wellington.

Cunningham's aunt Pat McGregor said anyone who is killed or murdered in a war zone deserves to be remembered.

"No government has officially recognised the fact that the boys were murdered and it's wrong – Governments are supposed to protect people."

Cunningham's family unveiled a small plaque on Mount Victoria two years ago in memory of his pursuit for "the truth". No Government officials or ministers attended, despite invitations.

"From day one the New Zealand Government abrogated its responsibility to one of its citizens and passed the buck to the Australian government who as we all know did nothing but lie and cover up the truth," said Gary's brother Greig Cunningham.

The Australian and Indonesian Government have maintained the men known as the 'Balibo Five' died when they were caught in a cross-fire.

But in 2007 an Australian Coronial Inquiry found they had been targeted by Indonesian special forces. The Australian Federal Police have also been investigating the case for three years.

"We communicate about that with the Australians from time to time," said foreign minister Murray McCully. "But we don't want to push a process that the Australian's are operating at the moment. It's an independent process and we're happy to respect that."

McCully said he still discusses the killings with his Indonesian colleagues from "time to time".

Balibo families dispute return of loved ones

Sydney Morning Herald - October 16, 2012

Michael Bachelard, Jakarta – Shirley Shackleton is the only of the relatives of the Balibo Five who wants the men's grave dug up and their remains returned to Australia, according to the brother of another of the victims.

Paul Stewart is the brother of sound recordist Tony Stewart, who was killed with Ms Shackleton's husband Greg in the Indonesian invasion of East Timor in 1975.

"The Balibo families have discussed this at length and we don't agree with Shirley," Mr Stewart told The Age/Herald yesterday.

Another relative, Greig Cunningham, the brother of cameraman Gary, also strongly rejected the proposal, saying Ms Shackleton was just "doing her usual widow routine".

"This has been something she has perfected over the years and good luck to her, but when she crosses the line and involves our family that is not, and never will be acceptable."

Ms Shackleton travelled to Jakarta on Sunday (Oct 14) to visit the grave and told journalists she would not rest until the remains of her husband were returned to Australia. She has enlisted the support of Independent Senator Nick Xenophon as well as human rights activists in Jakarta, and held meetings with Foreign Minister Bob Carr.

But the gravestone suggests all five of the dead men are interred in the same south Jakarta grave, and Mr Cunningham said that the remains "whatever or whoever's they are should not be disturbed but left in peace".

Mr Stewart said it was "extremely disappointing" that Ms Shackleton and Senator Xenophon did not warn them that the story would appear, "so I could have warned my 84-year-old mother, who is in ill health, that there was a call to tamper with her son's remains".

He was most angry with Senator Xenophon for teaming up with Ms Shackleton to "trick the Australian media into running their piece".

Mr Stewart said his family would prefer that the "huge cost of digging up the remains" be spent on "the living East Timorese who need it".

Mr Cunningham also criticised Ms Shackleton for her proposal to DNA-test the remains saying, "we have been through some time ago and Shirley is well aware of the complexities involved".

Mr Cunningham added that it was not obvious where the remains would go if they were identified, as members of the families live in different parts of the world.

Mr Cunningham said his focus remained on bringing the men who murdered his brother to justice. This was the recommendation of a NSW Coroner in 2007. The Australian Federal Police began an investigation in 2009, but, according to Mr Cunningham there is still no progress – something he put down to political considerations.

"The lack of will on the part of successive Australian and Indonesian Governments is not something we will accept," he said.

"Though we don't doubt the AFP and their ability and willingness, it is their political masters who should be fronting us and the public to explain why they are more than happy to provide justice, counselling and memorials for the victims of the Bali bombings but are happy to bury the truth of the Balibo Five in some other unmarked grave in Canberra's archives. We want that issue to be at the forefront as we mourn Gary tomorrow."

Senator Xenophon said he understood the anger of the other relatives, but believed Ms Shackleton had a right to raise the issue. He would welcome meeting the other family members to discuss the issue.

"This has opened up the issue and, though it may be painful now, it might lead to a resolution that could help all parties," Senator Xenophon said.

Widow in call to exhume the Balibo five

Melbourne Age - October 15, 2012

Michael Bachelard, Indonesia – Shirley Shackleton refers to it as "my job" – telling journalists the story of her husband, Greg, who died at Balibo in East Timor in 1975, and seeking justice.

At 80 years of age, she is worried that, soon enough, she will no longer be able to do that job.

But she has set herself one new challenge – taking on the Indonesian government in the attempt to bring the remains of her husband home to Melbourne.

At the moment, the remains of the journalist, who was killed in Indonesia's invasion of East Timor, lie in a well-tended grave in a South Jakarta cemetery, Tanah Kusir.

They have been there since 1979, after being moved from another cemetery. On the headstone are the names of all five of the Australian newsmen who were killed – according to the New South Wales coroner in 2007 – "not in the heat of battle".

But nobody knows what exactly is left of the bodies, which were repeatedly burned. One theory holds that the five are intermingled in one box. Shirley Shackleton, who went to the grave site yesterday, refuses to believe it just because that's what she's told.

"We don't know that and I don't work on supposition," she says. "The only way to know that is to get in there and look."

It is this doggedness that has carried her throughout her 37-year campaign on behalf of her husband.

In the latest journey she has involved Senator Nick Xenophon, who accompanied her to Indonesia yesterday. He in turn has enlisted Indonesian human rights activist Andreas Harsono and lawyer Haris Azhar.

They hope also to see new Jakarta governor Joko Widodo. Senator Xenophon took Ms Shackleton last week to see Foreign Minister Bob Carr.

"We saw Bob Carr and he was extremely nice to me," Ms Shackleton said at the graveside. "I expect that he'll do what he can too, that's his job... to look after Australian citizens, dead or alive."

On her last visit to Indonesia, in 2010, Indonesian Foreign Minister Marty Natalegawa also agreed to do what he could.

Senator Xenophon believes that in the next few months it is possible the remains will be exhumed to find out what is really buried. "The science of DNA now is light years apart compared with 1975," he said.

It's not clear whether the families of the other four newsmen killed – Gary Cunningham, Brian Peters, Malcolm Rennie and Tony Stewart – are seeking the remains to be returned, but according to Senator Xenophon this should not be an obstacle to Ms Shackleton's plan.

"If the remains of the DNA can be isolated, which they should be, then we should be able to resolve this in a way that is dignified."

Ms Shackleton says that in 1975, the Australian government told her it would cost $48,000 – the price of a good house in those days – to repatriate her husband's remains.

That was never good enough for a woman who has been lied to repeatedly over the years about what happened when her husband and his colleagues were killed by Indonesian troops as they invaded East Timor.

"Some people just imagine things. I don't do that. I want to know the truth," she says.

Asked if it was not time she moved on, she was quite clear. "On to where? Leaving here, that would destroy me. That is not right. I think people who do that end up dippy... I don't think you get anywhere by pretending these things didn't happen."

Leave remains where they are: Balibo Five family

ABC News - October 15, 2012

The family of one of the five journalists killed in East Timor in 1975 is opposed to having his remains returned to Australia.

The Balibo Five, as they are known, were killed by Indonesian soldiers during the invasion of the country. Their remains lie in a single grave in the Indonesian capital, Jakarta.

Shirley Shackleton, the widow of one of the men killed, Greg Shackleton, has called on the Federal Government to exhume the bodies and have them returned to Australia. She says there are still so many unresolved questions and after 37 years, it is time for the Government to act.

However, Annie Stewart, whose brother Tony Stewart was also killed, says her family would prefer to see his remains left in Indonesia.

"Just the pain of doing it all again is something we are not interested in," she said. "We went over to East Timor in 2004 for the dedication of Balibo House and it was such a joyous occasion, like the first real funeral for our brother." "We would like to leave it there."

Concerns over returning Balibo Five remains

ABC Radio Australia - October 15, 2012

Relatives of two news reporters killed at Balibo in East Timor in 1975 say an attempt to exhume their remains will cause more trauma. The reporters, and three fellow newsmen, were killed by Indonesian troops during the invasion of East Timor. The independent Senator Nick Xenophon has backed a move to have the remains returned to Australia.

Brendan Trembath: Relatives of two news reporters killed at Balibo in East Timor in 1975 say an attempt to exhume their remains will cause more trauma. The reporters and three fellow newsmen were killed by Indonesian troops during the invasion of East Timor.

The independent Senator Nick Xenophon has backed a move to have their remains returned to Australia.

Anthony Stewart reports.

Newsreader (archival audio): Indonesian authorities have finally confirmed the deaths of the five Australian newsmen who have been missing presumed dead for some weeks in East Timor. The remains of the four bodies and personal effects have now been handed over to Australian officials in Jakarta and the Indonesians now regard the incident as closed.

Anthony Stewart: The remains of Greg Shackleton, Tony Stewart, Gary Cunningham, Brian Peters and Malcolm Rennie were all placed in a half-sized coffin and now lie in a Jakarta cemetery.

Greg Shackleton's widow Shirley supported by independent Senator Nick Xenophon was in Jakarta yesterday publicly calling for the remains to be exhumed and returned to Australia. The move has upset Tony Stewart's sister Annie, who says she wasn't consulted.

Anne Stewart: So to hear Shirley come out again – we're used to that – but for Nick to support her, Senator Nick Xenophon to support her, it's just outrageous that he would make comments like that without even talking to our family.

Anthony Stewart: Gary Cunningham's son John Milkins says he wasn't aware of the move either and that it distracts from attempts to bring the killers to justice.

John Milkins: For our family our focus is very much on bringing the perpetrators of the journalists' murder to justice, as recommended in 2007 by the coroner. We're wondering why there is still no outcome from the AFP investigation that's ongoing.

Anthony Stewart: Senator Xenophon says the situation is fraught with emotion but he wanted to support Ms Shackleton's bid.

Nick Xenophon: Shirley wants her husband's remains to be returned to Australia. She's wanted this for many, many years and her wishes are important in this, as are the wishes of all the other family members.

Anthony Stewart: He's hopeful all the families will be able to work out a resolution.

Nick Xenophon: I think it's going to take a lot of dialogue. It's been going on for many years and every family has been deeply traumatised by this. Shirley desperately wants her husband's remains brought back but obviously the best thing to do is to get a consensus.

Anthony Stewart: Ms Stewart says her family has already said goodbye to her brother.

Anne Stewart: We have all talked about it as families and we are not that interested in having it repatriated. In 2003 when the memorial service was held at Balibo East Timor, we all thought 'What a wonderful place to leave their memory'.

To do anything else, to dig it up and, you know, pose more questions, it's just not something we're interested in.

Anthony Stewart: John Milkins says all the families can agree the people who murdered the men need to be put on trial.

John Milkins: It think what you do about the remains of five people in a half-sized coffin in a different country in Jakarta which may or may not be them and will be subject to DNA testing that individuals have to agree to, is a different matter entirely.

It's part of the story, without a doubt, but I think the key focus should be on whether our politicians have the courage to pursue whatever the AFP recommendation will be.

Anthony Stewart: Senator Xenophon says he'll be taking up that cause during Senate Estimates.

Nick Xenophon: I think it's absolutely clear that the issue of justice for the families, in terms of the perpetrators being brought to account is a fundamental one and it has to be a priority. That's why I'll be asking questions in the Senate Estimates process this week and that's why I needed to go to Jakarta and meet with people to get further information about what's occurred.

Anthony Stewart: Annie Stewart says she's unsure whether her brother's killer will ever be brought to justice and perhaps the greatest memorial to the Balibo Five can be achieved in East Timor.

Anne Stewart: Mr brothers and I, my sister, we have been longtime supporters for East Timor, and as we often say in our family, we did lose a brother but we gained a whole nation who has lost 200,000 people since the invasion. Always we have been looking to support East Timor.

Anthony Stewart: The 37-year anniversary of the men's death is tomorrow.

Brendan Trembath: Anthony Stewart.

Widow wants Balibo journalist's remains brought home

ABC News - October 14, 2012

George Roberts, Indonesia – The widow of one of five journalists killed by Indonesian troops in Timor in 1975 has launched a new campaign to have her husband's remains returned to Australia.

Shirley Shackleton's husband Greg was one of the so-called Balibo Five, a group of Australian journalists killed in East Timor in 1975 by Indonesian forces.

Indonesia, however, says they were caught in crossfire. Their remains lie in a single grave in the capital Jakarta.

Mrs Shackleton has travelled to Jakarta to push for her husband and his colleagues' remains to be bought home. She says there are many unresolved questions surrounding their deaths and subsequent burial.

"Why on earth are they here? Why weren't they taken [home]?" she said. "I haven't had answers to anything."

Mrs Shackleton says after 37 years, the Government should act. "Well I suppose the Australian governments and the Indonesian governments have to get together and surely it's time for them to say let's get rid of this weeping sore, because the longer it goes on the worse it gets," she said.

Independent Senator Nick Xenophon has accompanied Mrs Shackleton to Indonesia.

"I think she deserves resolution," he said. "I would've thought the justice of her case demand that her husband is brought home."

Mrs Shackleton is meeting Australian ambassador Greg Moriaty to ask for help and she is getting advice from human rights lawyers. But taking the case through the courts could be an exhaustive process.

Neither the Australian or Indonesian foreign ministers have commented. But at 81 years old, Ms Shackleton says she is running out of time to bring her husband home.

Wife of slain Australian reporter seeks return of body

Agence France Presse - October 14, 2012

The 80-year-old widow of an Australian journalist allegedly shot by Indonesian forces in East Timor in 1975 pleaded Sunday for her husband's remains to be swiftly repatriated.

Shirley Shackleton, who has been seeking the return of the remains of her husband Greg since his killing 37 years ago, fears that unless the saga is ended soon she may not live to see his body returned.

Greg Shackleton is buried in the same grave as four other journalists – two Britons, another Australian and a New Zealander – who were killed when Indonesian troops overran the East Timorese town of Balibo in October, 1975.

His remains can not be removed from the grave at a Jakarta cemetery without the prior agreement of relatives of the other four, prompting his widow's call to the capital's governor to order the exhumation of the site.

"They only have to exhume the grave to find out if it's possible to bring my husband home. We can discuss what happens after that, once we know the condition of the remains," she told AFP from the cemetery.

"Nearly four decades have gone and it's still very hard for me to come back here. But I want my husband back in Australia, I don't think he should stay here."

An Australian inquest into the deaths of the so-called "Balibo five" accused Indonesian forces of killing the group in cold blood in an effort to stifle their reporting on abuses committed during Indonesia's brutal occupation of East Timor.

Jakarta has always maintained that they died in crossfire as Indonesian troops fought East Timorese Fretilin rebels, and refused to cooperate with an Australian war crimes investigation launched in 2010.

A 2009 film about the suspected war crime was banned by Indonesian censors, prompting debate over the nature of free speech and democracy in Indonesia, which has failed to prosecute any of its military officers over alleged war crimes and crimes against humanity in East Timor.

"I would think Indonesia wants to be rid of this whole situation," Shirley Shackleton said. "If that's the case I hope they will help me bring my husband home."

An estimated 183,000 people were killed or starved to death during Indonesia's 24-year occupation, which ended with a bloody vote for independence in 1999. (apj/sls)

Analysis & opinion

Honesty always a better policy than spin to win

The Australian - October 8, 2012

Paul Cleary – For most of its history, East Timor has been justified in blaming foreign powers for its woes. But now, with oil revenue flooding into the independent country, the government, led by resistance leader Xanana Gusmao, surely has no one to blame for the country's problems.

Sadly, East Timor has found another target to distract attention from the task of nation-building. This time, it's those big, bad multinational oil companies, and it has been encouraged in this populist pursuit by Australia's national broadcaster, the ABC.

In July, 7.30 screened a report on the country's vociferous complaints about the tax compliance of oil giant ConocoPhillips. Last week, the ABC's flagship investigative program Four Corners ran a documentary on this issue and on Woodside's refusal to build a liquefied natural gas plant on Timor's soil.

The Four Corner's report seemed like a propaganda piece for the government, its glaring omissions and inaccuracies highlighting the pitfalls of fly in, fly out journalism.

Consider these two crucial facts omitted from the report. First, East Timor, with a population of 1.1 million, earned $US3.3 billion in oil revenue last year, almost all of which came from one field, Bayu-Undan, operated by Conoco. Second, in seven years, the country has saved $US10.5bn in its petroleum fund.

For a deeply impoverished nation that desperately needs foreign capital, exposing the confidential tax affairs of your biggest foreign investor on national television is a manifestly counter-productive strategy, especially when the dispute may involve modest amounts of money. A sensible country that was really concerned about improving its lot would use the proper processes that it has in place to resolve these differences.

But not East Timor's leaders, who became masters of the spin cycle during their independence struggle, and not, it seems, Four Corners, which lapped up and distorted this left-wing conspiracy while failing to critically examine the government's own performance in improving the lot of its people.

One of the key facts in the tax dispute involves an adjustment "for a single year" of $US6.5 million. That's right, an amount worth 0.02 per cent of annual oil revenue. The government has now issued a notice worth $US79 million, which the company is appealing in court.

But there's more, of course. The government's audit has identified $362 million disputed taxes but this relates to eight years of revenue and highly complex transactions.

And there's even more, with the government claiming the total tax haul could be in the order of $US3 billion.

While omitting the oil revenue and savings numbers, the report exaggerated the significance of these figures by portraying East Timor as having been severely constrained by a savings policy foisted on it by another big, bad institution, the World Bank. "The back taxes would have helped," the report said.

The report wrongly claimed that this policy restricted the country to spending the "income from the fund" only, and not any of the revenue as it comes in. This is not the case, and in any event the more liberal savings policy was devised by the country's leaders at the time of independence.

The program showed Timorese school children speaking English – "the language of commerce and trade" – while failing to mention that such classes are limited and that the official language taught in all schools, Portuguese, has no such attributes.

As a sign of the country's development strides, the report showed a new oil-fired power station just outside the capital, Dili, which is based on second-hand Chinese generators sold to the government at inflated prices, and has resulted in cost blowouts far greater than the tax dispute with Conoco. The report omitted these crucial facts.

But it found room to include glowing comments by a government adviser about the country's record on corruption, without testing these claims. It interviewed the country's anti-corruption commissioner, Aderito de Jesus Soares, without asking him about the level of corruption in the country.

East Timor's attacks on the multinationals have some parallels with the protracted dispute with Australia over the Timor Sea oil resources early last decade. While the country was justified in challenging the Howard government's poor form in these negotiations, this dispute proved to be a huge distraction from the task of nation-building, which created the conditions for civil unrest in 2006 and another round of intervention by the Australian military.

The really important point that the ABC is missing is this: East Timor remains a fragile nation with an uncertain future. The foreign media shouldn't indulge its leaders in populist attacks on imaginary villains.

The executive producer of Four Corners, Sue Spencer, says she stands by the story entirely. However, Four Corners should put its significant resources into examining the government's own results in lifting its people out of entrenched poverty.

This might ensure that the leaders focus on the real threat to their country's future.

[Paul Cleary was an adviser to the East Timor government in 2003-05 during the creation of the country's petroleum fund and is the author of Shakedown: Australia's grab for Timor Oil.]

Filling gaps in 'Taxing Times'

La'o Hamutuk - October 4, 2012

The excellent new ABC Television Four Corners documentary Taxing Times in Timor highlights critical issues for Timor-Leste, and will open they eyes of Australians and others. The focus of the program – Timor-Leste's fight against oil companies who are ripping off this new, small, impoverished country – is important for people everywhere.

Two years ago, La'o Hamutuk researched and wrote Making the Oil Companies Pay What They Owe, which we just updated. We are writing this blog to fill some gaps in the program, especially for people who live in or want to know more about Timor-Leste.

Unfortunately, the program often reports Timorese politicians' public relations, rather than their actions or underlying facts. Nearly everyone interviewed is on the Government payroll. The few alternative voices (opposition leader Mari Alkatiri, the World Bank's Hans Beck, La'o Hamutuk's Charles Scheiner) are edited to unreservedly support Government policies, giving a partial picture of their views.

Prime Minister Xanana Gusmao appropriately focuses on the tremendous needs for education, nutrition, agriculture and rural roads. Unfortunately, the failure to adequately address these needs does not come from foreign advisors or lack of money, but from the Government's own budget and implementation policies. Timor-Leste spends much less on health and education than other developing countries. Three-fourths of our people are farmers, but only 1.4% of public spending is for agriculture. Only one- third of the money allocated for roads last year was actually used. Infrastructure mega projects – especially oil-fueled electricity and Tasi Mane oil facilities, consume the majority of public funding, with questionable returns.

The key question is not how many dollars to spend, but how to get the best value from Timor-Leste's finite, nonrenewable resource wealth. In 2011, 46% of all state expenditures went for electricity. The $1.2 billion national electricity project costs five times what it would cost to put solar panels on every house in the country. Fuel and maintenance of the power plants and national grid will cost more than this one-time investment in solar panels which require no fuel, local grids, and little maintenance. Currently, ratepayers pay less than one-quarter of the cost of generating power, so Timor-Leste's limited funds will subsidize affluent people who use the most kilowatt-hours.

Similarly, Timor-Leste's government will 'invest' 5-10 billion dollars in the Tasi Mane south coast petroleum infrastructure project with few spin- off benefits and no demonstrable net financial return. Investments in Timor-Leste's human resources – health care, sanitation, nutrition, and primary education – would generate a more certain result. Investments for economic development should prioritize agriculture and light industry, creating jobs while producing food and products to substitute for imports.

The documentary misleads viewers by ignoring the first and largest greatest theft of Timor-Leste's oil reserves – Australia's continuing 'occupation' of 40% of our oil and gas wealth by refusing to negotiate a maritime boundary. In the map at right, everything above the green line, including the blue and orange areas with all of Greater Sunrise, Bayu-Undan, Kitan and Laminaria-Corallina, would belong to Timor-Leste under current international law.

In 2006, Australia coerced Timor-Leste's negotiators into accepting a "gag rule" in the CMATS Treaty which prohibits this government from talking about maritime boundaries in any forum. Although the treaty may expire next February, the injustice of this arrangement, compounded by the arrogance of Woodside which was vividly portrayed in the documentary, is at the heart of the controversy over the Greater Sunrise pipeline.

Timor-Leste's determination to bring this gas to our shores is deeper than the dubious economic reasons examined in La'o Hamutuk's 2008 report. It is at the core of this nation's struggle for sovereignty. ConocoPhillips, Woodside, Shell and other companies drilled for oil in Timor-Leste's maritime territory during the illegal Indonesian occupation, and their current tax evasions continue this pattern of stealing from the Timorese people.

Timor-Leste's total oil and gas wealth is limited, totaling $40-$50 billion, so $3 billion in unpaid taxes is significant. But at current spending and economic growth trends, these reserves – which finance more than 95% of State activities and two-thirds of our entire economy – could be used up in about 12 years. We welcome the billions which will be recovered through more effective tax collection – but they can only delay bankruptcy by one or two years.

Four Corners persuaded a fairly new World Bank official to acknowledge that the Bank faulted itself for encouraging Timor-Leste not to spend unsustainably. This does not accurately reflect the 232-page review by the Bank's Independent Evaluation Group (9 MB), which rated the "overall outcome" of the Bank's support to Timor-Leste during 2000-2010 years as "moderately unsatisfactory." The Bank's IEG found only one sector of the Bank's work "highly satisfactory" – "assistance to Timor-Leste in securing its petroleum revenues and managing them transparently." On the other hand, the IEG concluded that the Bank was "unsatisfactory" on poverty and unemployment alleviation, youth unemployment and disaffection, legislation, private sector development and agriculture.

A seven-page response from Finance Minister Emilia Pires is appended to the IEG's report, praising the Bank's openness and methodology, while pointing out the shortage of concrete data. However, the Minister praised as a "contribution to data enhancement" a 2010 " Poverty assessment" by the Bank which "demonstrated a 9% reduction in poverty [from 50% in 2007 to 41% in 2009]... as a result of newly exercised social and expansionary fiscal policies." The Government and others cited this number repeatedly, but the Bank had invented it with a questionable statistical "imputation" which did not measure poverty.

Unfortunately, both the Government and the Bank were wrong about 2009, and the poor are still with us. The Government's as-yet-unreleased 2011 Household Income and Expenditure Survey, based on people's actual living situations, confirms that the Bank's prediction of reduced poverty in 2009 was erroneous. The sad reality is that in 2011 about 50% of Timorese families were below the poverty line, just as in 2007, which means that about 70,000 more people are in poverty.

Government spending has increased eight-fold since 2007, with total expenditures of about $4 billion. The GDP growth from this deluge of dollars – mostly flowing to foreign companies – has enriched a few people, barely touching the impoverished rural majority. We need inclusive, sustainable, equitable development.

In this democratic, sovereign nation, Timor-Leste's officials choose what advice to follow. We hope they base their decisions on objective, comprehensive, long-term, fact-based analysis, and not on self-serving agendas or unrealizable fantasies. La'o Hamutuk believes that the Four Corners team shares this goal, but unfortunately the latter part of Taxing Times in Timor does not reflect it.

Book & film reviews

Love story amid blood-soaked birth of nation

Brisbane Times - October 1, 2012

Wendy Frew – Historians often say the past is a foreign country but in East Timor it's a thread that runs through the fabric of daily life. Reminders of Indonesia's brutal 24-year occupation are everywhere: burnt- out buildings in central Dili; the absence of men of a certain age; a memorial at the city's Santa Cruz cemetery to the victims of the 1991 massacre by Indonesian soldiers.

It's no surprise then, that East Timor's first feature film, A Guerra da Beatriz (Beatriz's War), focuses on the horror of those times and how the Timorese coped with and resisted the occupation.

Due for release early next year, part of the film is set in 1983 in the village of Kraras where every male – estimated to be at least 200 men and children – was killed by Indonesian soldiers in retribution for an earlier attack by the Timorese resistance.

A Guerra da Beatriz, a co-production between a local film company, Dili Film Works, and Australian outfit FairTrade Films, has a Timorese cast, a majority of Timorese in the crew, and was shot in several stunning locations in East Timor.

It is a love story set during the occupation, about a young Timorese couple, Beatriz and Tomas. Tomas disappears after the Kraras massacre only to return years later, almost unrecognisable. The inspiration for the story came from a true 16th-century French tale about a peasant, Martin Guerre, who returned to his family after years away only to have his identity challenged.

The script was co-written by the film's lead actress, Irim Tolentino, who worked on Robert Connolly's Balibo and who has starred in many East Timor theatre and television productions.

Those involved in A Guerra da Beatriz hope the experience gained during the shoot and post-production will help kick-start a local film industry.

It's also exciting the story is told in Tetum, the native language of East Timor, says Dili Film Works co-founder and the film's co-director, Bety Reis.

"We want to continue [making films in Timor] because this is a new thing for us, to tell stories for a younger generation," says Reis who, with the rest of the production team, is now in Dili editing the film.

"We have a lot of ideas we want to produce for short films because in Timor we have a lot of stories to tell. There is a tradition of storytelling here. When we are small our grandparents always tell us stories; we don't get them from movies or books."

The creative team wanted to do something bold that would attract a lot of attention in East Timor and overseas, says the co-director Luigi Acquisto, explaining why they melded the love story with recent Timor history.

"In Timor, from the beginning of independence [from Indonesia] there has been rhetoric about reconciliation and forgiveness, but the reality for many East Timorese is that... they don't want revenge but they want justice, the same way victims of other wars want justice."

The love story – and whether Beatriz can accept the man who claims to be Tomas but may in fact have fought with the Indonesians – allows the film to explore ideas about forgiveness, reconciliation and justice, without preaching.

The whole production has been conducted almost "guerilla-style" says Acquisto, on a shoestring budget, with in-kind support from some local companies and the Timorese government, and financed in unorthodox ways, such as through a fan club, crowd-sourcing and regular film screenings in Dili.

Via their website, Acquisto and his partner at FairTrade Films, Stella Zammataro, who is also co-producer of the film, are aiming to raise $12,000 to help fund post-production work. But they could need at least another $100,000 by the time they finish.

The team encountered the usual logistical nightmares of filming in rugged and remote areas. During the two-week shoot in the village of Kraras, for example, water had to be trucked in for the cast and crew, toilets had to be built and everyone slept at the local school.

The many local extras deliver an extra layer of truth to the film, Acquisto and Zammataro say.

During some scenes involving the massacre, the extras – many of whom were widows of those killed in 1983 – were in tears or in shock because the story being told was their own, Zammataro says.

Part of the story involves a funeral. The local village women helped the crew organise the set and choose the correct flowers and candles. "They started calling to the spirits. It was very powerful; it was real grief," Acquisto says.

The role of Celestino dos Anjos, who fought with Australian troops in World War II, is played by Commander Funu Lakan, a former Falintil resistance fighter who is now serving with the Timorese Army. "He brings a real veracity to the role, especially when he is shot by the Indonesians," Acquisto says.

In the film, he is ordered to dig his own grave but refuses. "I don't do surrender well," he told the crew when they were shooting the scene.

The story resonated even with those actors who had not witnessed the Kraras massacre.

Jose da Costa, who plays the adult Tomas, survived the Santa Cruz massacre but was arrested and tortured, and later fled to Australia by boat. Others in the cast were part of a clandestine resistance movement that operated out of Indonesia.

SBS TV in Australia and the World Movie Channel have acquired the film for broadcast and the team is talking to various film festivals. After its debut in Dili next year it will tour the country, where it will be shown in schools using a digital projector.

Da Costa, a seasoned actor who had roles in Balibo and Answered by Fire (a mini-series about the lead-up to the 1999 independence referendum in East Timor), hopes this latest venture, of which he is a co-producer, will lead to more work.

"I like to express myself through acting," Da Costa says. "I have a passion for storytelling, especially stories about Timor. It's in my blood."