Timor Leste: first step on oil/gas sovereignty

TL sovereign rights is a key 2017 political campaign against Turnbull and Bishop to concede. I post recent stories on “Spying fallout: East Timor to tear up oil and gas treaty with Australia”
http://www.theage.com.au/federal-politics/political-news/spying-fallout-east-timor-to-tear-up-oil-and-gas-treaty-with-australia-20170109-gto1aj.html
Update:26 January TL drops spy case for negotiations
http://www.theage.com.au/federal-politics/political-news/east-timor-dumps-spying-case-against-australia-for-good-faith-oil-gas-boundary-talks-20170124-gtxiva.html

I urge that Alexander Downer, then LNP Foreign Minister, has to be exposed and prosecuted for his illegal actions against TL – actions that only served LNP corporate interests.

As well David Irvine former Director of ASIS doing the bugging has to be dismissed for his role; and DFAT held to account and corporate Woodside and other oil/gas executives who drove the politics.

Most importantly, Australia has to pay $7 billion in reparations – oil revenue stolen from the TL people.

1. Timor Sea Justice Campaign Coordinator Ella Fabry:

“Australia has for years refused to negotiate a permanent maritime boundary with TImor Leste, preferring to jostle Timor into a series a temporary revenue sharing agreements that have robbed Timor Leste of billions of dollars in revenue. To have agreement to negotiate permanent boundaries is a major step forward”.

“It’s time for the Australian government to represent the views and values of the Australian people on this issue – and that means settling permanent boundaries halfway between Australia and Timor Leste, in accordance with international law.”

“Australia has not behaved in a fair and just way towards Timor over the last 15 years. This is the first step in righting the wrongs of the past. The Turnbull government now has the chance to finish the job that John Howard started in 1999 through the Interfet mission”.

“East Timor holds a special place in the hearts of the Australian people. The public will expect an outcome that ensures that restores Timor Leste’s right to their fair share of resources under international law and that promotes the future prosperity of our near neighbour.”

2. East Timor to capitalise on economic opportunities “JOAO MENDES GONCALVES: We should define first the boundaries between the two countries, so that we knew what belonged to Australia and what belonged to Timor-Leste, as far as the natural resources in the Timor Sea.

KATHERINE GREGORY: Joao Mendes Goncalves is head of the Mission Unit for the Timor-Leste-Indonesia-Australia Growth Triangle, and the former Timor-Leste minister for economy and development.

He says the new border in the Timor Sea could significantly change his country.”
Dili was pushing to renegotiate it for years, but Canberra did not give in – until now.

Timor-Leste’s ambassador to Australia, Abel Guterres:

ABEL GUTERRES: For Timor-Leste, it’s maritime border is very important in terms of completing its sovereignty over its land and sea. And number two is: Timor-Leste must know what areas, either sea or land, belongs to it and all the resources there is.
Read here http://www.abc.net.au/am/content/2016/s4601901.htm

Join now: Timor Sea Justice campaign welcomes decision http://www.timorseajustice.com/timor-sea-justice-campaign-news/timor-sea-justice-campaign-welcomes-decision-to-terminate-timor-sea-treaty-2006
Tom Clarke TSJC http://stream.aljazeera.com/story/201701180025-0025361

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3.Australia’s unscrupulous pursuit of East Timor’s oil needs to stop
Tom Clarke
Timor Leste
Australia’s dodgy oil and gas treaty with East Timor is dead. Now it’s time to negotiate fair and permanent maritime boundaries with our tiny neighbour.

This week’s joint announcement from the governments of Australia and East Timor that the 2006 Certain Maritime Arrangements in the Timor Sea (CMATS) Treaty will soon be terminated is a modest, but important first step towards resolving a long and bitter feud.

PM TL

PM TL


At least 10,000 people gathered outside the Australian embassy in Dili, the capital of East Timor, on Tuesday to protest against Australia’s stance on the oil and gas meridian line in the Timor Sea. Photo: Wayne Lovell/Timor Photography
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Terminating CMATS has the potential to clear away some of the debris that successive Australian governments have generated in their unscrupulous pursuit of Timor’s oil and allow the two nations to start afresh on the fundamental problem at the heart of the dispute; where exactly to establish permanent maritime boundaries.

However, the odds are that the Timorese still have a long and bumpy road ahead of them given Australia’s track record of stalling and derailing similar negotiations in the past. As was the case during Timor’s long struggle for independence, fair-minded voices in the Australian community will be needed to maintain pressure on the Australian government and hold it to account.

CMATS was a “temporary resource-sharing agreement” that centred on the massive Greater Sunrise gas field located a little under 150 kilometres from Timor and 450 kilometres north-west of Darwin. Greater Sunrise might generate up to $20 billion in government revenue alone.

In circumstance like this, where two countries are less than 400 nautical miles apart, international law overwhelmingly favours establishing maritime boundaries based along the median line – that is, halfway between the two coastlines. This approach would see most if not all of Greater Sunrise fall within East Timor’s exclusive economic zone.
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But until now international law has been of little consequence. That’s because just two months before East Timor’s independence in May 2002, the Australian government withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice. Pre-emptively turning its back on the independent umpire was a sure sign that the Australian government knew its outdated arguments about continental shelves was unlikely to stand up to scrutiny in any international court or independent arbitration process.

This meant that in the subsequent negotiations, the Australian government was able to jostle East Timor into a series of temporary resource sharing arrangements that all sought to short-change the fledging nation out of billions of dollars.
To Resist is to Win
Australian Foreign Minister Julie Bishop has been quick to point out the final outcome of conciliation with East Timor is not legally binding. Photo: Andrew Meares
As if the David and Goliath imbalance in the bargaining positions weren’t enough, the Australian government also used an aid project as a cover to bug the Timorese cabinet room. When exposed in 2013 the underhanded move against the impoverished nation incensed the Timorese leadership and infuriated many Australians who believe our espionage capabilities should be dedicated to national security, not chasing economic gain.
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The Australian government’s tactic of snubbing international law began to crumble last year when East Timor was able to launch a “compulsory conciliation” procedure at the United Nations. It’s a mechanism that has never been used before and exists specifically for when one country refuses to recognise the jurisdiction of the independent umpire that would normally settle disputes.

Although Foreign Minister Julie Bishop has been quick to point out that the final outcome of this conciliation is not legally binding, politically a ruling in Timor’s favour would be hard for Australia to ignore. At a time when Bishop is seeking a spot on the UN’s Human Rights Council, it would be breathtakingly hypocritical to reject the conciliation process – especially given her many pleadings for China to heed independent rulings in regards to its territorial dispute in the South China Sea.

When the proceedings opened last September in The Hague, East Timor’s lead negotiator, Xanana Gusmao, opened with reflections on why as a sovereign nation it was important for East Timor to establish permanent maritime boundaries and complete its long journey to independence.
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“We have not come to The Hague to ask for favours or special treatment. We have come to seek our rights under international law,” he told the commission. Australia’s delegation on the other hand, opened by mounting a challenge to the commission’s authority to consider the central topic of maritime boundaries.

Fortunately, this undignified attempt to wriggle out of the process was soundly rejected by the UN-constituted commission and the conciliation process now appears to be making some progress.

Although this week’s announcement essentially just boils down to a public commitment to return to the negotiating table, in the context of the past 15 years in which successive Australian governments have outright refused to even entertain the idea of establishing permanent boundaries in accordance with current international law, it’s a promising sign.

The conciliation process will now continue behind closed doors. Australians who believe that a rules based world order is in our interest and believe in a fair go, need to find their voice. We must let our government know we are watching.

This issue is not about charity, it’s about justice. East Timor is simply asking for what it is legally entitled to – no more and no less.

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

4.Steve Bracks former Victorian Premier urges settlement is in Australia’s interests
https://www.lowyinstitute.org/the-interpreter/timor-leste-oil-treaty-renegotiation-australias-interests

Lowy Institute on TL arbitrationhttps://www.lowyinstitute.org/the-interpreter/pca-ruling-australia-and-timor-leste

East Timor tears up oil and gas treaty with Australia after Hague dispute http://www.abc.net.au/news/2017-01-09/east-timor-tears-up-oil-and-gas-treaty-with/8171006

5. 9 JAN 2017 – 9:30PM
Timor Leste ‘no better off in short term’ despite sea treaty cancellation
by Damien Kinsbury
http://www.sbs.com.au/news/article/2017/01/09/timor-leste-no-better-short-term-despite-sea-treaty-cancellation
East Timorese protest against Australian government
Crikey Insider January 10, 2017
Oil slick: East Timor wins battle, but Australia could yet win resources war
Professor Damien Kingsbury

East Timor has won a significant moral victory in the Timor Sea dispute, with Australia agreeing to scrap the controversial 2006 Timor Sea treaty. However, East Timor’s hope that this now spells the beginning of the end of that dispute, much less that it will secure the country’s economic future, might be overly optimistic.

The agreement to scrap the treaty effectively confirms East Timor’s claim that Australia acted in bad faith while negotiating the 2006 Certain Maritime Arrangement in the Timor Sea (CMATS) Treaty by spying on East Timor cabinet treaty discussions in 2004. Australia initially argued that the UN’s Conciliation Commission of the Permanent Court of Arbitration (PCA) did not have jurisdiction to hear the case on the 2006 treaty, which the PCA ruled against, so scrapping the treaty represents a humiliating defeat for Australia.

In a further apparent victory for East Timor, Australia has agreed to negotiate a permanent maritime boundary between the two countries under the auspices of the PCA. East Timorese officials say finalising the maritime boundary will offer certainty to oil and gas investors.

East Timor’s claim to a permanent boundary equidistant between the two countries would put all of the Timor Sea oil reserves and, it claims, its gas reserves, under East Timorese sovereignty. The claim to the gas reserves will be dependent on where the lateral boundaries are drawn, which will also require Indonesia to agree to modify its own boundaries.
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While East Timorese officials now say that ending the 2006 treaty means the way is open for the country to secure its economic future, there is no timeframe for negotiations, and the agreement does not indicate where the new boundaries might be. The Australian government could seek a negotiated settlement that compromises the equidistant sea boundary or the allocation of resources within it.

The statement that ends the 2006 treaty simply says that the two countries “agreed to an integrated series of measures intended to facilitate the conciliation process and create conditions conducive to the achievement of an agreement on the permanent maritime boundaries in the Timor Sea”.

In part, Australia has little to lose by now giving way to East Timor’s claims, as revenues from oil in the Timor Sea will be exhausted within the next few years. The greater financial prize is the Greater Sunrise liquid natural gas (LNG) field, just under 20% of which lies within the area under agreement between Australia and East Timor.

Australia had agreed to split 50-50 the revenue from the Greater Sunrise LNG field. Initially, East Timor accepted this proposition on the condition that the LNG be processed on East Timor’s south coast. The intention was that this south coast refining facility would kick-start a petro-chemical industry in East Timor that would sustain the country after both oil and gas ran out.
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However, the Greater Sunrise development partner, Woodside Petroleum, balked at refining the LNG in East Timor. It noted the difficulty of laying a pipeline across the 3300-metre-deep Timor Trough and that East Timor did not have the material or human resources necessary to undertake refining. Given the bitterness of the subsequent dispute, the question of “sovereign risk” of the multibillion-dollar investment has also been raised.

At the peak of LNG prices in around 2013, the Greater Sunrise field was worth about US$45 billion to Australia and East Timor. However, since then world LNG prices have slumped. Woodside noted that the previous 2002 Timor Sea Treaty remained in place but did not indicate that it would accept onshore processing, and the company has previously proposed a floating processing platform option.
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The scrapping of the 50-year treaty comes as East Timor’s government increasingly recognises the country’s economic insecurity. East Timor’s sovereign wealth “Petroleum” fund has around US$16 billion. The interest from this fund was intended to provide working capital for East Timor’s government. However, the East Timorese government has been spending both the interest and about a billion dollars a year in capital from the fund. With income from Timor Sea oil diminishing, at current rates of government expenditure, East Timor will be broke by the end of the 2020s.

Accessing funds from the Greater Sunrise field could stave off such a financial collapse. This, however, assumes the Greater Sunrise field will be developed by a partner willing to agree to East Timor’s onshore processing demands, or that East Timor will relinquish its claim to onshore processing.

The scrapping of the 2006 treaty is a first step towards East Timor securing its economic future. But it will need all future breaks to go its way if it is to avoid economic collapse.

* Damien Kingsbury is professor of international politics at Deakin University
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7. Michael Leach A Line in the water
http://insidestory.org.au/a-line-in-the-water

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8. Timorese have had a win but could still lose big-time

Frank Brennan | 16 January 2017

http://www.eurekastreet.com.au/article.aspx?aeid=50519#.WH6gVndh1-U
I applaud the Timorese leaders for their persistence in scrapping CMATS. CMATS was a good deal at the time, but it had reached its use-by date once the Timorese lost interest in the development of Sunrise without the prospect of onshore development in Timor. From here the stakes are high. The Timorese may get the whole of Sunrise but then they will need to find a developer willing to incur the added cost and uncertainty of a pipeline across the Timor Trough and subsequent development in Timor. Then again, they may be left with only a 20 per cent share in any future Sunrise development rather than the 50 per cent presently on the table, and in the meantime, they will have lost the exclusive right to manage the water column inside the JPDA. For Timor, the prospective gains are astronomical; for Australia, they’re peanuts. That’s the ongoing tragedy of this long running battle between David and Goliath in the Timor Sea. The Timorese have had a win, but they could still lose, big time.

9. Sister Susan Connelly
with Catholic support seeks justice for TLhttp://catholicleader.com.au/news/josephine-sister-seeks-just-outcome-on-timor-gap

10 Timor Sea dispute http://stream.aljazeera.com/story/201701180025-0025361
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11. Background http://theconversation.com/whats-behind-timor-leste-terminating-its-maritime-treaty-with-australia-71002

Former post on TSJC 2016 http://chriswhiteonline.org/2016/02/timor-sea-justice-campaign-2016-protests-24-march/

12.But many argue oil/gas in TL is a pipe dream
http://www.abc.net.au/news/2017-01-12/east-timor-gas-pipe-dream/8176482
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13. Australia should meet East Timor halfway on maritime boundary
Paul Cleary

Senior writer Sydney @pgcleary

When Australian commandos landed in the colony of Portuguese Timor in 1941, they immediately noticed that the gum trees, rocks and ochre-coloured earth were strikingly similar to home.

As novelist Nevil Shute observed after the war, the commandos found that much of the Timor landscape consisted of “stony hills covered in thin forest scrub, not unlike many of the outback districts in Australia”. He added: “The men were fighting in a type of country that they understood and were accustomed to.”

There’s a very simple reason why these men, many of them recruited from the outback of Western Australia, felt right at home in Timor even though the topography was rugged rather than flat: the island is part of Australia’s continental shelf.

This fact was first confirmed scientifically in the 1960s when Australian geologist Michael Audley-Charles spent 28 months collecting samples in Timor and then did a further three years of laboratory work, culminating in his book The Geology of Portuguese Timor. He found that many of the fossils in the rocks were the same as those found in the Carnarvon Basin in Western Australia. Since then, seismic surveys have shown that Timor is part of the Australian continental shelf.

Despite this evidence, successive Australian governments have asserted that the Australian continental shelf ends about 100km south of Timor, where water depths in the Timor Sea plunge to about 2800m, creating a long trench. As a result, they say the maritime boundary between the two countries should be influenced by the Australian continental shelf, giving Australia about two-thirds of the maritime area.

But Australia’s dogged defence of this trench during the past 45 years seems to be unravelling as a result of East Timor’s David-and-Goliath-style assault through the Permanent Court of Arbitration in The Hague.
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This week, East Timor secured the right to proceed with compulsory conciliation over Australia’s refusal to negotiate a maritime boundary in the Timor Sea based on the median line principle.

This week’s win also allows East Timor to terminate a 2006 treaty after it demonstrated that Australia had engaged in espionage during the negotiations. It’s the third straight win for East Timor since it initiated this action three years ago, leaving Australia looking bloodied and bruised in legal terms.

In taking this action, tiny and poor East Timor is taking an extraordinary gamble. It could end up worse off, but so far the gamble is paying off.

How different things might have been had Australia taken the approach of Britain in the North Sea. When faced with similar geog­raphy, Britain reached an agreement with Norway in record time and the results have been spectacular. In both the North Sea and the Timor Sea, the 200-nautical-mile claims of the two sets of countries overlap, which indicates that a median line should be the outcome. And in both cases there is a trench in the seabed near the smaller party.
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Norwegian negotiators were expecting the British to push for a boundary influenced by the depression, but Britain’s opening position was the median line. Why? Britain wanted to get on with developing the North Sea resources and avoid protracted negotiations. It was successful.

In Australia, foreign affairs officials have pushed Australia’s claim to a continental shelf since the early 1970s. Australian official Keith Brennan told the Portuguese ambassador in 1971 that there was no need to negotiate a boundary in the Timor Sea because “nature has already done this for us”. In other words, the boundary should follow the Timor Trough. Portugal didn’t buy the argument, but Indonesia did when it signed a boundary agreement with Australia in 1972.

As recently as last August, Australia’s then solicitor-general Justin Gleeson made this same argument in his opening presentation to the PCA when he described the “very deep” trench.

“What that demonstrates is that the physical continental shelves of Australia to the south and Timor-Leste and Indonesia to the north are entirely separate,” he told the court in The Hague.

“They are separated by the Timor Trough, and the Timor Trough is indeed deeper than the highest point on the land mass of either Timor-Leste or the Australian continent.”

Gleeson did not cite scientific evidence to back his claim that Australia and Timor are indeed “entirely separate”. In fact, the trench is more like a “crumple zone” caused by the collision between the Australian Plate and the Banda Arc to the north of Timor. Australia’s insistence on the doctrine of continental shelf has created an unholy mess in the Timor Sea. But East Timor’s wins don’t mean the dispute will be resolved soon.
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As Foreign Minister Julie Bishop has said repeatedly, the compulsory conciliation initiated by East Timor is not legally binding. However, the Labor Party has broken ranks on this issue and it now supports a resolution based on established legal principles, and the right to seek arbitration if an agreement cannot be reached.

East Timor’s resistance hero and former prime minister Xanana Gusmao initiated these proceedings after he learned that Australia’s spy agency had bugged the prime minister’s office during the 2004-05 negotiations for a treaty known as Certain Maritime Arrangements in the Timor Sea, which lifted Timor’s share of the Greater Sunrise gas and oilfield from 18 per cent to 50 per cent.

The Sunrise gas and oilfield, in which Woodside has a 33 per cent stake, was discovered back in 1974 but it is undeveloped. With more than a billion barrels of oil, the resource is valued at about $US50 billion ($66.7bn), with the government taking more than half that amount. But the result of this bold strategy could well prove to be a pyrrhic victory for a country that relies on one near-exhausted oilfield for more than 90 per cent of its revenue.

Don Rothwell, a professor at the Australian National University’s college of law, says the five-member Conciliation Commis­sion will produce a report by September that will prove pivotal to the direction of the negotiations. He believes the likeliest outcome is that the report will underpin progress on negotiating a permanent maritime boundary.

However, he says it is possible Australia may reject the report should it prove to be favourable to East Timor’s case. “If any country could take that approach it would be Australia, given its track record in that area,” he says.

While much of the media focus has been on the horizontal median line, Rothwell agrees that the PCA’s view on the vertical (or lateral) boundaries will decide whether East Timor has taken a wise approach in seeking compulsory conciliation at The Hague.

A strict interpretation of law would deliver to East Timor a smaller share of the Greater Sunrise field than under the CMATS treaty that it wants to abolish. It’s a huge gamble on the part of a desperately poor nation.

But were the commission to favour shifting the eastern lateral so that East Timor would get a bigger share of Greater Sunrise, then this would raise the prospect of Indonesia exercising its right under international law to be involved in the negotiations.

This would make things even more complicated.

“It’s one of the critical issues,” Rothwell says. “The starting point will be the existing area covered by the 2002 treaty (which gives East Timor just 18 per cent of Sunrise). Timor is very keen to expand its continental shelf entitlements to the east and west of the current boundaries. That will be the most contentious issue for the commission. If the commission does (side with East Timor), then Indonesia could pose a challenge.”

Clive Schofield
, a professor at the University of Wollongong and another leading law of the sea expert, says CMATS gives East Timor a very good deal and if East Timor attempts to go beyond 50 per cent it could draw Indonesia into the fray ­ something Australia wants to avoid.

“I think that would involve Indonesia, not just Australia,” Schofield says. “That complicates matters substantially. The fundamental reason why Australia was keen on joint arrangements was for the perceived threat that Indonesia would wish to renegotiate the existing seabed boundary from the early 70s.”

Complex disputes of permanent boundaries can drag on. Can Timor achieve more than 50 per cent of Sunrise? Schofield says: “They have a chance to do so in a negotiation, but it may take a very considerable time. Although Australia is bound to negotiate in good faith, it does not have to agree to a boundary it does not like.”

Meanwhile, East Timor’s main source of revenue, the Bayu-Undan gas field, is nearing the end of its life, and the country could exhaust its much-vaunted petroleum fund within a decade. With its young and fast-growing population, East Timor does not have time on its side.

Paul Cleary was an adviser to the East Timor prime minister during the 2004-05 negotiations. His book on this subject is Shakedown: Australia’s Grab for Timor Oil (Allen & Unwin).

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