Subject: Australia could skid on Timor oil

Australia could skid on Timor oil

July 21, 2004 5:50pm Asia Intelligence Wire

AUSTRALIA, by the medium of our Foreign Minister, Alexander Downer, is presenting a very unattractive face to the world, not least our Pacific and South-East Asian neighbours, as it negotiates with East Timor over borders between the two countries, and rights to some of the oil royalties in the disputed areas. It is not that Australia lacks a completely arguable case about the proper location of such boundaries, or that our claim would not stand up in international law. It is, rather, that the angry, dismissive and hectoring style of the Foreign Minister as he deals with East Timorese claims over the matter gives the casual outsider more than an impression of an overbearing colonial bully, the more bulldozing and impatient because he knows that there is very little that the tiny nation state can do about it. And perhaps even the more ugly, given the sycophantic tummy-tickling to which the minister is prone whenever anything arises affecting the interests of the United States. His tough-talking and spite seems reserved only for those in no position to answer back. And he is all the more unfair to imply that Australia's generosity to East Timor - and its role as a handmaiden of its independence - would in any manner entitle us to rip off the nation's best chance of some economic basis for developing the nation. The tone of his dismissals of East Timor's complaints about the fairness of the treaty, and seeming anger at their public criticism of Australia, is to suggest that they are jolly ungrateful and ought to be thankful for what they have. East Timor may well owe something to Australia, and certainly everyone wants good relations between the two countries. But nothing could be more calculated to poison the goodwill than the feeling, genuinely held, that one of the poorest countries on Earth has been consciously treated with great injustice by Australia.

Australia has a good answer, at law, to such a charge. The problem is, however, that international law regarding sea boundaries has always been stacked on the side of countries, such as Australia, with a significant continental shelf extending considerably from its shores. The layman - even the ordinary Australian layman - might assume that the basis for a sea boundary agreement was some point middle-distance between the two countries. In this sense, East Timor and its advocates have a simple case to put to the courts of international opinion, to their own population, and even to many Australians who recognise that it is on movement to economic self-sufficiency that the political independence of East Timor depends. But the boundary we claim starts at the edge of the continental shelf, hundreds of kilometres closer to East Timor and Indonesia, so that the 'mid-way' point is greatly to our advantage. That there are substantial known oil and gas deposits, and more expected, underlines the advantage we have. That Australia has negotiated joint exploitation zones, and even in parts of them, what would appear generous preponderance of the royalties to East Timor is beside the point - the position in Dili really is that all of the zone ought to belong to them. Complicating the issue is the fact that any significant adjustment to the boundaries would almost certainly spark demands (again against Australia's economic interests) with Indonesia and Papua New Guinea. It could also create problems with oil companies already operating in the area, which might not have any right to query any division of royalty spoils but could reasonably complain if they fell under a different, perhaps more unstable, legal regime. These are perhaps reasons to be firm in negotiations, though it must seem odd to outside observers that it is Australia, which claims that the law is entirely on its side, which flatly rejects either the idea of litigation in the International Court of Justice, or any sort of arbitration.

Mr Downer is right to note some degree of play-acting and ritual denunciation in East Timor's negotiators, and to insist that just as they will promote their country's interests as they see it, so will he promote Australia's. What is, however, increasingly clear is that our interests are not only in securing the maximum income from the oil fields. They also involve Australia's image, in East Timor, in Indonesia, and among other interested observers, who may well in time include that section of the Third World which specialises in blaming everything bad in their countries on the sins of colonials or Western capitalism. As it is, thanks in great part to Downer and the Government's lead role in promoting the invasion of Iraq, Australia is well placed for such whipping-boy status, and it is easy enough to imagine the script which will be developed to put us in the worst possible light over East Timor. It is that spectre which ought to invite some room for more polite negotiation, some room for concern, and a definite reduction in the bluster of our Foreign Minister.

Copyright © 2004 The Federal Capital Press of Australia Pty Limited. Source: Financial Times Information Limited.

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