Subject: AAP: Aust Government faces new pressure over Timor Gap

December 8, 2000, Friday Aust Government faces new pressure over Timor Gap

CANBERRA, Dec 7 AAP - The federal government is facing renewed pressure to renegotiate the Timor Gap treaty in a manner which gave East Timor up to 90 per cent of oilfield revenues.

A bipartisan report of the Senate Foreign Affairs Defence and Trade References Committee said it was incumbent on Australia to be generous to the new nation of East Timor.

"The revenues from oil and gas royalties would inevitably become the cornerstone of its future economic and social development," the report said.

The government is currently renegotiating the treaty with East Timor.

That was signed in 1989, creating a regime for joint administration and 50-50 sharing of oil and gas revenues from what is known as the zone of cooperation.

That is the offshore area between Australia and Timor not covered by a 1972 seabed agreement between Australia and Indonesia.

But current international law generally defines the sea boundary between as the median line. Should that prevail in the current negotiations, most of the productive oilfields would fall within East Timorese territory.

The government is apparently conscious that Indonesia could well expect the same deal, potentially handing it some rich oilfields now in Australian waters.

The report says a 90-10 ratio of revenue sharing, as now claimed by East Timor, would not be unreasonable.

It says Australia did much to regain its reputation with East Timor from last year's Interfet operation.

"By acting honourably and taking account of current international law, the Australian government might not only earn the goodwill of East Timor but also of other interested parties as well as providing East Timor with an economic basis on which it might be able to reduce its dependency on foreign aid," the report says.

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