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The Age

All East Timor seeks is a fair go November 3, 2004

A poor nation wants to improve its lot using natural resources. But rich Australia won't let it, writes Mari Alkatiri.

The talks in Dili last week between the governments of East Timor and Australia were aimed at finding a way to resolve our overlapping maritime boundary claims in the Timor Sea, which in turn would create the environment for the Greater Sunrise oil and gas field to be developed.

There is political will on our side to achieve a just settlement that allows development to proceed. During these exploratory sessions, we put a number of possible means of resource sharing on the table for discussion. Unfortunately, we were told categorically that none of these could be contemplated.

We were talking about East Timorese participation in the development of the disputed resources. The Australians, unfortunately, only wanted to talk about money.

The stakes are high for both nations, but it is fair to say these talks were of vital importance to a country that after 24 years of brutal occupation has no industry and most of whose people are desperately poor and live a semi-subsistence lifestyle.

Greater Sunrise is much closer to East Timor than to Australia, but we stand to gain only 18 per cent of the "upstream" royalty and tax revenue, and nothing from the "downstream" revenues, in particular the onshore processing should the gas be piped to Darwin.

Under the interim arrangements negotiated for the Bayu-Undan field, we receive a much fairer 90 per cent of the revenue from oil and gas from the field, but we get nothing from the onshore processing. A 500-kilometre pipeline and an LNG plant in Darwin are being built.

As ABC TV's Four Corners said earlier this year, Darwin is booming as a result of the thousands of jobs created by the plant's construction phase, and the Northern Territory's march towards statehood is being propelled by Timor Sea gas.

Processing the Greater Sunrise gas in Darwin would lead to an even more lopsided distribution of benefits. One Australian Government estimate put the economic benefit to the Darwin region of about 100,000 people at $22 billion.

In last week's talks, we were willing to defer our right to the delimitation of a maritime boundary - which is inextricably part of our right to self-determination - and opt for a solution that addresses Australia's concerns and delivers justice, fairness and economic development for our people.

This solution could be based on resource sharing along similar lines to the Timor Sea Treaty, rather than a permanent boundary. This was a major concession on our part, because under a permanent boundary we might treble the revenue that we are projected to earn under the interim Timor Sea Treaty.

In seeking this solution, we are not simply looking for the Australian Government to write a cheque or to hand out quasi-aid for an extended period. We want an outcome that underpins our national development.

One element of a fair settlement that should be given full consideration is to pipe the Greater Sunrise gas the much shorter distance to a processing plant on East Timor's shores. Woodside estimates the distance to East Timor at 150 kilometres, compared with 500 kilometres to Australia, and technology is no longer an impediment.

We asked the Sunrise partners to study this option in detail earlier this year. In so doing we were exercising the regulatory power that is enshrined in the Timor Sea Treaty. The Australian Government, in seeking to find a solution, is able to exercise the same power.

An East Timor pipeline and LNG plant have been on the table since the meeting between our foreign ministers on August 11 that focused on "resource sharing" to resolve the dispute. Such an outcome would mean much more than more revenue. It would mean that in resolving the Timor Sea dispute we would be finding a fair means of sharing the upstream revenue as well as the downstream benefits, including processing.

The dispute would be resolved in a way that spearheads the economic development of this new nation. The construction phase alone would help to create thousands of jobs, plus new businesses.

It is perfectly reasonable for the government of one of the world's poorest nations to seek an outcome that directly tackles its great need for economic development. Darwin already has one LNG plant to process gas from the Timor Sea, which is why one fair outcome would be to put the second LNG plant in East Timor.

I also believe it is imperative that a Timorese entity be allowed to participate in the exploration and exploitation of present and future resources.

East Timor remains willing to find a solution to our maritime boundary claims that accommodates the Australian concerns, but we cannot accept a solution that jeopardises our sovereign rights over resources.

Although we are disappointed with the outcome of last week's talks, East Timor remains willing to reach a solution to the Timor Sea dispute.

East Timor and Australia are neighbours. We cannot stop negotiating.

Mari Alkatiri is the Prime Minister of East Timor.