| Subject: The Australian: Timor
Gap THE WEEKEND AUSTRALIAN
www.news.com.au
NOVEMBER 21-21, 1999 p27
FOCUS: Stepping into the gap
With East Timor in a mess, what will become of the natural
resources off its coast? It depends, writes BERNARD LANE, on which country you speak to.
----------------------------------------------------------------------------
‘You have to defend your position but you have to be prepared to make some
concessions too’ - Mari Alkatiri
----------------------------------------------------------------------------
Insert: map showing the Bayu-Undan gasfield located on the
East Timor side of the agreed water column boundary (median line) separating the
territorial waters of Australia and East Timor.
BRIDGE OVER TROUBLED WATERS Between Australia and the
former Indonesian province of East Timor there is no single maritime boundary. Australia
and Indonesia could not agree on a seabed boundary, which decided oil or gas rights. Hence
the “gap”. Australia said the boundary should be close to the Timor coast
because Australia’s continental shelf extends so far north. Indonesia argued the
boundary should be a median line between the two coasts.
In 1989 the two nations put off a final seabed boundary and
struck an interim deal for joint development in the gap. The gap has three zones A, B
and C. A gasfield, Bayu-Undan, is being developed in Zone A of the gap, the crucial zone
where Australia and Indonesia agreed to divide royalties 50-50. Australia and Indonesia
already had a boundary dividing the water column (which decides fishing rights). This 1981
boundary runs along the median line, coinciding with the southern boundary of Zone A.
EAST TIMOR’S political leadership may persue a better
deal in the Timor Sea, where there is hope of rich resources - as well as a treaty
symbolising the long-held assumption of Indonesia and Australia that there never would be
an independent state of East Timor.
The Timor Gap Treaty promised Australia and Indonesia half
shares in government revenue from the US$1.4 billion (A$2.19 billion) Bayu-Undan gasfield,
the best find so far in the contested area of the Timor Sea.
With Indonesia gone, what will East Timor do about the
treaty? Australia’s Foreign Minister Alexander Downer has not been alone in speaking
as if the East Timorese have already undertaken to honour the treaty.
So far most commentary has implied near-inevitable
succession by East Timor to Indonesia’s treaty rights, no real change in the treaty
beyond the technical, and a harmony of interests between Australia, East Timor and
Phillips Petroleum, the company leading development of the Bayu-Undan field.
In mid-1998 East Timor’s political grouping, the
National Council of for Timorese Resistance (CNRT), issued a statement seeking a review of
the treaty but also recognising the rights of the petroleum companies and the joint
development interests of Australia.
One CNRT signatory to the statement was Dr. Mari Alkatiri,
who has responsibility for the treaty issue. The interview he gave THE WEEKEND AUSTRALIAN
this week suggests the CNRT may be repositioning itself to seek a better deal from
Australia than Indonesia got under the treaty.
Alkatiri says it would be premature to reveal the CNRT
position. But he confirms that East Timor’s bargaining options include a bigger share
of government revenue from projects in the crucial joint development Zone A, where
Bayu-Undan lies, and a new maritime boundary with Australia that would give East Timor
control of the entire Zone A.
He says neither strategy need concern the Bayu-Undan
project. The companies could keep working under treaty-like arrangements during the two to
three year period of United Nations transitional administration. And when the UN gives way
to a sovereign East Timorese government, renegotiation of the treaty with Australia would
not affect the legal rights or taxation rates of the companies.
‘It doesn’t matter for them [the oil companies]
whether they are going to pay Australia or East Timor,” he says.
If Bayu-Undan succeeds, others may follow. Right now Zone A
has only a small oilfield in production, Elang-Kakatua. The more promising Bayu-Undan is
dwarfed by the gas fields of Australia and Indonesia. But for a ravaged East Timor, Zone A
revenues could well be significant.
Phillips Petroleum’s Darwin area manager Jim Godlove
says Bayu-Undan could give East Timor, on the existing 50-50 split, “many tens of
millions of US dollars a year”. The figure can’t be precise. Before Bayu-Undan
can realise it’s full potential, it must meet a series of challenges; the treaty
transition is just one.
The origins of the treaty lie more in geography than in
gas. In that area, Australia and Indonesia could not agree on a seabed boundary. Indonesia
favoured a median line between the Australian and East Timorese coasts. Australia said the
boundary should be north of the median line because its continental shelf reached well
towards Timor’s coast. Hence the joint development treaty, with a coffin-shaped gap
of contested territory divided into zones, and a joint administrative authority
headquartered in Jakarta. From 1991, when it came into force, the treaty had at least 40
years to run, although both nations were supposed to make regular attempts to agree on a
final seabed boundary.
In a sense, the treaty still works. Only last month
Phillips gave the go-ahead for the first stage of Bayu-Undan. Indonesians still occupy
half the positions on the joint authority. Indonesia still gets (modest) monthly revenue
payments, its half share from Elang-Kakatua. In another sense, the treaty is defunct. It
assumed Indonesia would continue to exercise sovereignty over East Timor, according to
former Commonwealth solicitor-general Gavan Griffith. QC. Yet authority over East Timor
has now passed to the UN.
For all the talk of East Timor naturally succeeding to
Indonesia’s rights, Australia acknowledges that the choice is East Timor’s. Even
so, Australia argues that self-interest should make East Timor “step into the
shoes” of Indonesia, and continue joint development with Australia. The only
renegotiation yet envisaged by Australia is technical: for example, withdrawal of
Indonesia from the joint authority and revenue regimes.
Alkatiri does not like the shoe-stepping metaphor: “It
is really impossible to do it, because for us the treaty is an illegal
one…….that’s why we simply cannot be a successor state.” In the two or
thee year transition period, the only difference my be terminology. In a matter of weeks,
the UN on behalf of East Timor and Australia, is expected, in effect, to continue the
treaty arrangements.
Alkatiri prefers to describe this as a practical
“mechanism” to allow Bayu-Undan to proceed. “It doesn’t mean that we
[have] accepted already to be a successor state of the treaty,” he says. Like
Australia, he is well aware that nothing agreed now by the UN can legally bind the future
government of East Timor. That government could seek a better deal.
Asked whether it could seek a larger share than 50 percent
of Zona A revenue, Alkatiri says: “We are considering a lot of things, but of course,
that is one of them.”
He says there should be no direct “linkage”
between any increased revenue for East Timor and a decrease in foreign aid, but adds:
“If we are getting much more revenue we will need less aid.”
Alkatiri also says East Timor would seek to resolve the
dispute underlying the treaty: the position of the final seabed boundary.
This could be very significant for control of resources in
Zone A, according to Geoffrey McKee, an oil industry consultant and adviser to the
Darwin-based East Timor International Support Centre.
Back in 1981, Australia and Indonesia agreed on a fisheries
line running through the Timor Sea. It is on the median line between the two coasts and
follow the southern boundary of Zone A (see map).
McKee has international law advice that East Timor would
have a good case to argue for a single maritime boundary through the gap, with the seabed
boundary (deciding gas and oil rights) joining the fisheries boundary at the median line.
If Australia agreed, he says, it would give East Timor total control of Zone A, and twice
the government revenue from Bayu-Undan ( a potential US$4.4 billion over 25 years, rather
than US$2.2 billion).
Asked whether he was considering such a “median
line” approach, Alkatiri says: “I have different ideas on this question, but, of
course, it will be better for East Timor if the median line [principle] is accepted.”
The median line would be a viable starting point for
negotiation, according to Ivan Shearer, Challis professor of international law at Sydney
University. Shearer says recent international practice “puts all the pressure on
favouring a common line for both seabed and water-column (fisheries) boundaries and that
would naturally start from a hypothesis that the fairest boundary is one which meets half
way, a median line.”
It is too early to say how far East Timor will push for a
better deal in the Timor Gap. CNRT is caught up with more immediate concerns and the
complexion of a future government is unclear.
Indonesia’s rights are there for taking, but there is
no guarantee a radical renegotiation would win East Timor anything better.
Victor Prescott, a political geographer at Melbourne
University, points out that the treaty and the 1981 fisheries line were part of a matrix
of innovative agreements between Australia and Indonesia, including a 1997 agreement** yet
to be ratified. If East Timor wanted to open the treaty, then Australia might insist on
quite wide-ranging negotiations. “If they [East Timor] want some sort of cash flow to
augment whatever aid flow is going on,” Prescott says, “then the easiest thing
to do is say, ‘fine let’s continue the Timor Gap Treaty’.”
The former Australian foreign minister who signed the
treaty, Gareth Evans, recalls it’s origins in the intractable dispute with Jakarta.
“The difficulty was to reach agreement about the [seabed] boundary with the
Indonesians and the army of international lawyers they had,” he says. He cannot see
why it would be easier with any other nation state.
McKee argues that East Timor’s claim for a better deal
would not just be legal but moral, especially after the destruction that followed the
independence vote. Even so, Shearer says the East Timorese would be hoping for all kinds
of support from Australia, their regional ally. “I would not expect [East Timor] to
drive too hard a bargain [over the treaty],” he says.
Like other CNRT leaders, Alkatiri stresses the importance
of good relations with Australia. And he suggests a flexible approach to treaty
negotiations. “Of course this is a political negotiation,” he says, “you
have to defend your position but you have to be prepared to make some concessions,
too.”
BERNARD LANE is The Australian’s High Court
correspondent.
** Poster’s clarification. The 1997 agreement,
mentioned above, refers to a Treaty signed in March 1997 by Indonesia and Australia. The
1997 Treaty finally settled the water column boundary in the Timor Gap, making it
coincident with the southern boundary of ‘Zone A’. It has not yet been ratified.
Australia’s Joint Standing Committee on Treaties recommended (in it’s 12th
report) that Australia ratify 1997 Treaty. The 1981 fisheries agreement - referred to by
Lane - was a ‘memorandum of understanding’ that established a Provisional
Fisheries Surveillance and Enforcement Line’ (‘PFSEL’) in the Timor Gap,
pending permanent delimitation of the maritime boundary. The 1997 Treaty achieved the
permanent delimitation foreshadowed by the PFSEL agreement.
Back to November Menu
World Leaders Contact List
Human Rights Violations in East Timor
Main Postings Menu
Note: For those who would like to fax "the
powers that be" - CallCenter V3.5.8, is a Native 32-bit Voice Telephony software
application integrated with fax and data communications... and it's free of charge!
Download from http://www.v3inc.com/ |
