Subject: IPS: E Timor Calls Canberra Unfair on Oil & Gas Revenues

Also: Australian Government Set To Legislate For Timor Agreement

AUSTRALIA: EAST TIMOR CALLS CANBERRA UNFAIR ON OIL/GAS REVENUES

March 24, 2004 5:56pm

By Bob Burton

CANBERRA, Mar. 24 (IPS/GIN) -- East Timor's government, Australian political leaders and community groups are condemning the Australian government for what has been described as an attempt to 'rob' billions of dollars of revenues from oil and gas projects in the sea between the two countries.

The legislation being proposed by the Australian government on dividing potential proceeds from resources is unfair toward East Timor because the sea boundaries between the neighbors remain unsettled, charges the spokesman for the Timor Sea Justice Campaign, Dan Nicholson.

"In the absence of good faith negotiations or international arbitration on sea boundaries with the East Timorese government, the bill will lead to billions of dollars of revenue that should belong to East Timor being appropriated by Australia," he told the Senate economics legislation committee Monday evening.

Two weeks ago, the Australian government rushed legislation through the lower house to ratify an agreement with East Timor over the proposed Greater Sunrise oil and gas project.

Australian Greens leader, Sen. Bob Brown, described the draft legislation as a "travesty". He said: "The loss in royalties for East Timor may be $5.6 billion over the coming decades: a robbery of the region's poorest country by its richest neighbour."

"Just as Australia is honoring the agreement it reached with East Timor by putting in place the necessary legislation, I call on the government of East Timor to expedite its own treaty implementation process," the minister for industry, tourism and resources, Ian Macfarlane, told parliament.

The legislation, named the Greater Sunrise Unitization Agreement Implementation Bill 2004, was backed by the lower house. The Senate, however, insisted that the issue be investigated.

Signed by both countries in March 2003, the agreement divides the revenues with 82 percent of the projected $7 billion for the Australian government and only 18 percent for East Timor -- even though the oil and gas are far closer to the shores of East Timor than they are to Australia.

The project proponents are a consortium of companies including Woodside, ConocoPhillips, Shell and Osaka Gas.

At the time the government of East Timor, referred to as Timor Leste, agreed to ratify the Greater Sunrise agreement in order to ensure it would gain immediate access to desperately needed revenues from the existing but smaller Bayu Undan field covered under the separate Timor Sea Treaty.

Ahead of this week's hearing, the prime minister of Timor Leste, Mari Alkatiri, issued a media statement warning that Australian government statements about the agreement contradicted the accord and could "undermine its prospects for approval".

"If maritime boundaries were negotiated in accordance with international law, all of this field would likely be attributed to East Timor," he said.

At the same time, Dili fears that if the Australian government stalled the negotiations for years, it would then still receive billions of dollars in income from the project until such time as a sea boundary was finalized - to East Timor's detriment.

Nicholson submitted that there was already evidence that Australia is not negotiating in good faith.

"The Australian government can stall and delay the boundary negotiations with East Timor for years until the Greater Sunrise field is depleted. We have already seen the Australian government stall on these negotiations," he said.

"Usually if negotiations between two countries are proving fruitless, they could go to arbitration. However, two months before East Timor's independence Australia withdrew from the jurisdiction of the International Court of Justice and the International Tribunal on the Law of the Sea," Nicholson added.

Alkatiri also expressed anger at Australia's rejection of the proposal that the two countries meet monthly to promptly finalise the international boundaries. Instead, the Australian government has said it has enough resources to meet just every six months.

John Hartwell from the Australian Department of Industry, Science and Resources told the Senate committee that he could not give an estimate of when negotiations might be completed, but downplayed suggestions that reaching a conclusion within five years is feasible.

While insisting that "Australia negotiates in good faith", Hartwell claimed that holding monthly meetings to resolve a sea boundary would be unrealistic.

Asked what the Australian rationale for six-monthly meetings is, Hartwell searched for an explanation: "The rationale is, is, umm, ah it is in the nature of these discussions that very serious propositions are put by both sides during each round of negotiations and particularly on questions of both I suppose law, geomorphology, geography. a whole range of issues."

"To have a negotiation one month and then to expect all of those issues raised in one round of negotiations be given adequate consideration by respective governments I just don't think is realistic," Hartwell added.

Nicholson proposed that to reassure the government of East Timor, Australia's Senate should amend the legislation to set the funds aside in a special account to be allocated only after the sea boundary is resolved.

"All Australian government revenue from Greater Sunrise should be placed into trust, and that when permanent maritime boundaries are finalized the trust funds automatically be distributed according to the entitlement of each country," Nicholson said.

Opposition to the deal has also spread to the U.S. Congress. Democratic congressman Barney Frank, and 53 colleagues earlier in March wrote to Prime Minister John Howard and endorsed the need to urgently establish a permanent maritime boundary between Australia and East Timor.

They suggested "any revenue from disputed areas be held in escrow until a permanent boundary is established".

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Thursday March 25, 10:47 AM

Australian Government Set To Legislate For Timor Agreement

CANBERRA, March 25 Asia Pulse - The Australian government is set to stand by its move to legislate for an agreement paving the way for oil and gas field development in the Timor Sea.

This is despite a report that the East Timor government was having second thoughts.

Australia and East Timor last year signed an agreement to develop and commercialise oil and gas resources in the Sunrise and Troubadour fields, collectively known as Greater Sunrise.

Both governments are required to ratify the agreement by legislation, which is before the Senate today.

The Australian Financial Review reported today the East Timor government had indicated it was unlikely to seek ratification from its own parliament and instead planned to extend its sea boundaries to encompass the field.

Greens leader Bob Brown said today the passing of the bill should be held off until the East Timor government's position was clarified.

But Special Minister of State Eric Abetz said the government's position had not changed.

"The government's position is that in order to give certainty we would agree to implement this legislation," Senator Abetz said.

"That is our position and nothing has changed in relation to that."

ASIA PULSE


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