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Reported Australia-Timor oil deal 'cheats' East Timorese

ETAN Press Release - May 18, 2005

The East Timor and Indonesia Action Network (ETAN) today said that the reported agreement between Australia and Timor-Leste on the division of resources in the Timor Sea "cheats" the new nation. It urged the two governments to transparently conduct negotiations based on fundamental international legal principles.

ETAN also condemned Australia's continued pressure through media leaks and other means to force Timor-Leste to concede its oil and gas rights by making a rapid agreement on the Timor Sea.

"The pending deal cheats Timor-Leste's sovereignty and revenue," said Karen Orenstein, Washington Coordinator of ETAN. "Timor-Leste's independence will not be fully realized until its boundaries, both land and sea, are defined and accepted by its neighbors."

The Timor-Leste government has not yet approved the proposal, and the details of any agreement have yet to be released. After last week's negotiations, Australian media reported that Timor-Leste will receive some revenues from the disputed Greater Sunrise gas field in return for deferring resolution of the maritime boundary for generations.

"According to international law, Greater Sunrise belongs to Timor-Leste. It is the height of hypocrisy for the Australian government to claim it is somehow being generous while bullying Timor-Leste to give up what is rightfully theirs," added Orenstein.

"Why the rush to complete a deal?" asked Charles Scheiner, spokesperson for ETAN. "Timor-Leste will receive sufficient revenues from other oil projects for the next 15 years. Furthermore, the value of Sunrise natural gas will increase over time, and the companies involved have made a priority of other projects."

"After the negotiators reach a provisional agreement, both governments should involve their people in a thorough discussion of its merits before it is ratified," added Scheiner.

Late last month, East Timorese NGOs urged their government not to "rush in obtaining an agreement for the exploration of Greater Sunrise; it is more important that you determine [boundaries] based on international law..." They also asked "the Australian government to return to international dispute resolution processes for maritime boundaries" and to "cease exploration" and granting new licenses in disputed areas.

Background

Substantial oil and natural gas deposits lie under the Timor Sea between Australia and East Timor. How much each country will receive of the tens of billions of dollars of revenue is contingent on a permanent boundary or other agreement.

Last week, Australian foreign minister Alexander Downer announced that the latest round of talks with Timor-Leste had resulted in an agreement that would allow development to go forward on the disputed Greater Sunrise petroleum field. However, Timor-Leste's Prime Minister Mari Alkatiri vehemently denied the report, calling it "an absolute lie."

Australian media reported that Australia will pay Timor-Leste around $3.8 billion over the next 30 to 40 years; negotiations over the maritime boundary would be delayed for 60 years. Experts project government revenue from the Sunrise oil and gas at around $39 billion. Under a prior arrangement, Timor-Leste would receive only 18% of this. The rumored agreement this week would increase the Timor-Leste share to around 27%.

Since East Timor's independence referendum in 1999, the Australian government has taken in approximately $1.2 billion in revenue from oil fields much closer to East Timor than to Australia. Under current international legal principles, these fields should belong to East Timor.

Australia claims the bulk of the revenues from the largest known field, Greater Sunrise, on the basis of prior occupation stemming from illegal agreements with Indonesia, the former occupier of East Timor.

Development of Greater Sunrise has not yet started, and production and revenues won't begin flowing for at least a decade after an agreement is reached on ownership.

In October 2002, Timor-Leste enacted a Maritime Boundary Law, asserting its claim of a 200 nautical mile Exclusive Economic Zone in all directions, based on the 1982 United Nations Convention on the Law of the Sea.

Where neighboring claims overlap, as is the case with Timor-Leste and Australia, countries must agree on a boundary, usually halfway between their coastlines. The Australian government preemptively withdrew from maritime boundary jurisdiction of the International Court of Justice and the International Tribunal on the Law of the Sea two months before Timor-Leste's independence, leaving the new republic with no legal recourse if negotiations are protracted or unsuccessful, as they have been thus far.

In March, 17 senior members of both houses of the US Congress wrote Australian Prime Minister John Howard to urge "Australia to move quickly and seriously to establish a fair, permanent maritime boundary with Timor-Leste, based on the rule of law..." They wrote that an "equitable sharing of revenue is not a question of charity; rather it is a matter of self-determination, sovereignty and Timor-Leste's future."

Last year, the Senate Appropriations Committee stated that it "again encourage[d] all parties to negotiate in good faith in accordance with international legal principles."

In Australia, the Timor Sea Justice Campaign said this week, "You can't get a fair outcome from an unfair process," accusing the Australian Government of "trying to force East Timor into another shabby deal that [falls] well short of East Timor's legal entitlements..."

ETAN has supported human dignity for the people of East Timor since 1991.

ETAN advocates for human rights (including national and women's rights), democracy, sustainable development, and social, legal and economic justice.

For more information see http://www.etan.org/issues/tsea.htm
 
 

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