Congress Tells Australia to Treat East Timor Fairly

Urges Expeditious Talks on Permanent Maritime Boundary

For Immediate Release

Contact: John M. Miller, 718-596-7668; 917-690-4391
Karen Orenstein, 202-544-6071

March 9, 2004 - Members of the U.S. House of Representatives yesterday called on Australia to fairly negotiate its maritime boundary with neighboring East Timor within three to five years.

In a letter to the Prime Minister John Howard, 53 members of Congress called on Australia to "move seriously and expeditiously in negotiations with East Timor to establish a fair, permanent maritime boundary and an equitable sharing of oil and gas resources in the Timor Sea."

The letter called the outcome of maritime boundary negotiations important "to the future economic development and security of East Timor," and urged "both governments to engage in good faith negotiations to resolve their maritime boundary in accordance with international legal principles.” The letter expressed “hope [that] both governments will agree to a legal process for an impartial resolution if the boundary dispute cannot be settled by negotiation."

The letter also urged Australia to hold monthly meetings "as requested by East Timor" in order to resolve the issue within three to five years rather than the semi-annual meetings Australia insists on.

Revenue "from disputed areas on East Timor's side of the median line but outside the Joint Petroleum Development Area defined in the Timor Sea Treaty [should] be held in escrow until a permanent boundary is established," the letter said.

"The world is watching closely how Australia treats East Timor in boundary negotiations," said Karen Orenstein, Washington Coordinator of the East Timor Action Network. "Australia will lose the good will it generated in 1999 if it cheats East Timor out of the tens of billions of dollars of petroleum revenue."

The letter was initiated by Representative Barney Frank (D-MA). The text of the letter can be found below.

The next round of boundary talks are scheduled to take place in Dili, East Timor, April 19-23.

Background

Substantial oil and natural gas deposits lie under the Timor Sea between Australia and East Timor. The fate of tens of billions of dollars of revenue depend on a permanent boundary agreement.

In October 2002, East Timor enacted a Maritime Boundary Law, claiming a 200 nautical mile Exclusive Economic Zone in all directions, based on the United Nations Convention on the Law of the Sea. Where neighboring claims overlap, as is the case with East Timor and Australia, countries must negotiate a permanent maritime boundary, usually halfway between their coastlines. In March 2002, Australia gave formal notice that it was withdrawing from international legal mechanisms - the International Court of Justice and the International Tribunal for the Law of the Sea - to resolve boundary issues that cannot be settled by negotiation. East Timor's soon-to-be Prime Minister called this withdrawal an "unfriendly" act. The withdrawal prevents the new nation from bringing Australia to those forums to contest its refusal to engage in timely and cooperative boundary negotiations.

East Timor is among the poorest of the world's countries, suffering from very low levels of basic services and high unemployment. East Timor is currently struggling not to go into debt to international financial institutions, as it needs to cover a US$126 million budgetary financing gap between 2005 and 2007. Yet between 1999 and today, the Australian government has received more than US$1 billion in oil and gas revenues from petroleum fields twice as close to East Timor than to Australia that would belong to East Timor under a fair boundary settlement.

Report language accompanying the Senate Foreign Operations Appropriations bill passed by the Appropriations Committee in July 2003 stated, “The Committee is aware of negotiations between East Timor and Australia over petroleum reserves, which will be of critical importance to the future economic development and security of East Timor. The Committee urges both governments to engage in good faith negotiations to resolve their maritime boundary expeditiously in accordance with international legal principles.”

The East Timor Action Network/U.S. supports human dignity for the people of East Timor by advocating for democracy, sustainable development, social, legal and economic justice, and human rights, including women's rights.

-30-

see Prime Minister Howard's response

see also Timor Sea, Boundaries & Oil page

news release from
Barney Frank
Congressman, 4th District, Massachusetts

Washington Office:
2252 Rayburn House Office Building
Washington, D.C. 20515
(202) 225-5931

FOR IMMEDIATE RELEASE

CONTACT: Peter Kovar 202-225-9400

March 9, 2004

FRANK LEADS FIGHT FOR EAST TIMOR'S RIGHT TO RESOURCES IN TIMOR SEA

Yesterday, 53 members of the U.S. House of Representatives sent a letter to the Australian government urging it to move fairly and expeditiously in negotiations with neighboring East Timor to determine a permanent maritime boundary between the two countries.

The poorest country in Southeast Asia, East Timor could benefit from large gas reserves that lie under the sea that separates it from Australia. In 2002, East Timor's parliament passed a maritime boundaries law claiming a 200 nautical mile Exclusive Economic Zone in all directions, and the Timorese government, with the backing of the United Nations, announced that it wanted to negotiate a permanent maritime boundary with Australia.

The Australian government agreed to begin talks last November but declined to accept a timetable or an end date for resolving the issue. In their letter to the Australian prime minister, the federal lawmakers urge Australia "to move seriously and expeditiously in negotiations with East Timor to establish a fair, permanent maritime boundary and an equitable sharing of oil and gas resources in the Timor Sea."

The letter was organized by Rep. Barney Frank (D-MA) and was signed by 53 of his House colleagues, including Rep. Nancy Pelosi (D-CA), the Democratic leader; Rep. Tom Lantos (D-CA), the senior Democrat on the International Relations Committee; Rep. Chris Smith (R-NJ), a senior member of the International Relations Subcommittee on Asia and the Pacific; and other members who have been strong supporters of East Timor.

Frank added, "A fair agreement on permanent boundaries, and the ability to derive revenues from the development of offshore petroleum and other resources, is essential to East Timor's ability to rebuild its nation, alleviate mass poverty, and avoid long-term dependence on foreign aid."

A copy of the letter is enclosed.

March 5, 2004

The Honorable John Howard
Office of the Australian Prime Minister
3-5 National Circuit
Barton, ACT 2600
AUSTRALIA

Dear Prime Minister Howard:

As members of the U.S. House of Representatives who are strong supporters of East Timor, we write to urge your country to move seriously and expeditiously in negotiations with East Timor to establish a fair, permanent maritime boundary and an equitable sharing of oil and gas resources in the Timor Sea.

We recognize the critical role your country played in East Timor's fight for independence, and we know your diplomatic efforts were instrumental in prompting the dialogue between Indonesian officials and East Timorese nationalists that led to the vote for independence.

Australia's commitment to regional security, and its concern for East Timor in particular, was also evident when you indicated last June that Australian troops might remain in East Timor for years to prevent the country from "coming under unacceptable strain and perhaps collapse."

As the poorest country in Southeast Asia, East Timor's dependence on foreign aid is one factor that keeps it from consolidating its stability and economic development, which of course adds greatly to the strain the country continues to face. This is why we support the statement our colleagues on the Senate Foreign Operations Appropriations Subcommittee included in the report that accompanied this year's foreign aid bill underscoring how important the negotiations over the maritime boundary and the petroleum reserves are to the future economic development and security of East Timor.

We also join our Senate colleagues in urging both governments to engage in good faith negotiations to resolve their maritime boundary in accordance with international legal principles, and we hope both governments will agree to a legal process for an impartial resolution if the boundary dispute cannot be settled by negotiation.

We also urge you to heed Prime Minister Mari Alkatiri's call to conclude negotiations within three to five years. We were pleased that a preliminary meeting between your two governments was held in November, but we were disappointed by your government's insistence that bilateral meetings on the boundary be semi-annual and encourage you to hold them monthly, as requested by East Timor.

Finally, given the overlapping claims of the two countries, we would strongly hope that any revenue from disputed areas on East Timor's side of the median line but outside the Joint Petroleum Development Area defined in the Timor Sea Treaty be held in escrow until a permanent boundary is established.

We trust your country's commitment to the freedom and security of East Timor will include recognition of East Timor's territorial integrity and its right to a swift resolution of the maritime boundary dispute.

Barney Frank (MA); Nancy Pelosi (CA); Chris Smith (NJ); Tom Lantos (CA); Hoeard Berman (CA); Phil English (PA); Gary Ackerman (NY);  Janice Schakowsky (IL); Donald Payne (NJ); Carolyn Maloney (NY); Sherrod Brown (OH); William Delahunt (MA); Robert Wexler (FL); Maurice Hinchey (NY); Raul Grijalva (AZ); Lane Evans (IL); Tammy Baldwin (WI); Jim McGovern (MA); Dale Kildee (MI); John Olver (MA); Ed Towns (D-NY); Charles Rangel (NY); Dennis Kucinich (OH); Patrick Kennedy (RI); James Langevin (RI); Jim McDermott (WA); Rahm Emanuel (IL);  Henry Waxman (CA); Nita Lowey (NY); Julia Carson (IN); Anthony Weiner (NY), Ellen Tauscher (CA); Mike Honda (CA), Major Owens (NY),  Dennis Cardoza (CA), Madeleine Bordallo (GU), Neil Abercrombie (HI), John Lewis (GA), Pete Stark (CA), William Lipinski (IL), Barbara Lee (CA), Danny Davis (IL), Ed Pastor (AZ); Peter DeFazio (OR); Robert Andrews (NJ); Bobby L. Rush (IL); John F. Tierney (MA); Sheila Jackson-Lee (TX); Jerrold Nadler (NY); Nydia M. Velazquez (NY); Eleanor Holmes Norton (DC); Michael R. McNulty (NY); Earl Blumenauer (OR)

See http://www.etan.org/issues/tsea.htm for additional info

PRIME MINISTER
CANBERRA

2 APR 2004

Congressman Barney Frank
Congress of the United States
Washington DC 20515
UNITED STATES OF AMERICA

Dear Congressman Frank

Thank you for your letter of 8 March 2004 co-signed by other members of the United States House of Representatives regarding Australia's maritime boundary with East Timor.

I am proud of Australia's record on East Timor in recent years. Having been at the forefront of the international community's effort in support of East Timor's independence, Australia is committed to doing what we can to help East Timor continue on its road to stable, democratic governance. As we all know, East Timor's challenges are many and complex; Australia is and will continue to be a major donor in support of poverty reduction and sustainable development in East Timor. We are also very supportive of East Timor's continuing integration with the region.

Australia recognises the obligation to delimit its maritime boundaries with all its neighbours, including East Timor. The first round of formal

negotiations with East Timor will take place in April 2004 and I would like to take this opportunity to reassure you that Australia will engage in the negotiations in good faith. Australia has not, however, set an end date for the negotiations, nor - given the complexities involved - does it consider it sensible to do so.

Pending the finalisation of permanent maritime boundaries, a legal framework has been put in place by Australia and East Timor for the equitable sharing of petroleum resources in the Timor Sea. The Timor Sea Treaty establishes a Joint Petroleum Development Area (JPDA) without prejudice to competing claims to sovereign rights over the seabed. It gives East Timor 90 per cent of production from this area, which is generous compared with the 50:50 split in the former Timor Gap Treaty with Indonesia. Revenue from the JPDA, which is already flowing, will be a major contribution to creating a sound economic base and long-term stability in East Timor.

With regard to petroleum activities in areas outside the JPDA to which your letter refers, I note that Australia has exercised jurisdiction in these areas for an extensive period of time. International law does not require a State to place in escrow revenues derived from petroleum operations in an area simply because another State subsequently makes an ambit claim to sovereign rights over that area.

The issues you have raised are viewed very seriously by all who are committed to the future, of East Timor, including the Government of Australia, and I thank you and your colleagues for taking the time to bring your concerns to my attention.

Yours sincerely

/s/

(John Howard)