Sara Everingham A week of conciliation talks ends in East Timor dropping its spying case against Australia as part of negotiations to resolve the long-running dispute over permanent maritime boundaries in the Timor Sea.
East Timor has dropped its spying case against Australia as part of negotiations to resolve the long-running dispute over permanent maritime boundaries in the Timor Sea.
After a week of conciliation talks in Singapore, both countries announced East Timor had agreed to drop the spying case as part of the "good faith" negotiations to resolve the underlying disagreement over maritime boundaries.
In a joint statement, they also said they would aim to resolve permanent maritime boundaries by September this year.
The talks are a result of East Timor's move last year to take Australia to the United Nations for compulsory conciliation in order to resolve the boundary dispute.
"Today's announcement shows the UN-backed conciliation process under the UN Convention of the Law of the Sea is bearing fruit," Professor Michael Leach from Swinburne University said.
The espionage case related to allegations Australia's overseas spy agency, ASIS, spied on East Timor during negotiations over the 2006 CMATS (Certain Maritime Arrangements in the Timor Sea) treaty that governs the carve-up of revenue from the Greater Sunrise gas field in the Timor Sea.
East Timor alleged the espionage gave Australia an unfair advantage in the negotiations over revenue, potentially worth billions of dollars. Australia accepted decision to tear up treaty
Earlier this month, East Timor told Australia it was terminating the CMATS treaty, a decision Australia accepted. "The Timorese had been seeking to terminate the treaty through these allegations of espionage," Professor Leach said.
"Now that both parties have agreed to terminate CMATS and that the maritime boundary negotiations will continue, the Timorese no longer see the need to pursue that [the espionage] case," he said.
The CMATS treaty split revenue from the Greater Sunrise field 50/50 between Australia and East Timor, but the agreement delayed negotiations over a permanent maritime boundary for 50 years.
East Timor argues that if the maritime boundaries were decided under international law, most of Greater Sunrise would lie within its territory. Until recently, Australia had resisted resolving the dispute under international law.
Relations between the governments of Australia and East Timor have been strained as a result of the dispute and hit a low point after the spying allegations emerged in 2013.
"There's been no ministerial visits over the past couple of years and that's a sign of very poor relations between Canberra and Dili at this time," Professor Leach said.
But he said the announcement today appeared to be a sign relations were improving. "We've seen Timor come to the party today dropping two arbitrations against Australia," he said.
Ben Doherty Timor-Leste has withdrawn its Australian espionage claims in the permanent court of arbitration as a "confidence-building measure", as the two countries continue to negotiate over their maritime border. In 2013 it was revealed the Australian government had bugged the Dili cabinet room of the Timor-Leste government in 2004 under the guise of Australian aid-sponsored renovations.
The Timor-Leste government claimed the espionage gave Australia an unfair advantage in negotiations over the Certain Maritime Arrangements in the Timor Sea (Cmats) treaty, which divides future revenue from the tens of billions of dollars worth of oil and gas that lie beneath the sea.
In a joint statement issued on Tuesday by the Timor-Leste and Australian governments, the two countries confirmed Timor-Leste had withdrawn from Cmats and the treaty would cease to operate from 10 April this year.
As the final in a series of "confidence-building measures", Timor-Leste agreed to withdraw two arbitration cases before the permanent court of arbitration (PCA) in The Hague: the "espionage case" and a second arbitration concerning jurisdiction of a gas pipeline from Bayu-Undan to Darwin.
The dispute over the Timor Sea more precisely the lucrative oil fields beneath the sea has pre-empted and then overshadowed the short and chequered history between independent Timor-Leste and Australia.
The fields are estimated to hold 9tn cubic feet of gas and 300m barrels of condensate and liquefied petroleum gas worth about $53bn.
But the agreement to terminate Cmats and "commitment to good faith talks" appear to have mended mistrust in the relationship and helped with the progress of negotiations.
Both countries are engaged in a year-long compulsory conciliation, overseen by the permanent court of arbitration, and say they are working towards a final agreement on a permanent maritime boundary by September this year.
"The commission and the parties recognise the importance of providing stability and certainty for petroleum companies with current rights in the Timor Sea," the joint release said.
"The parties are committed to providing a stable framework for existing petroleum operations [and] the commission intends to do its utmost to help the parties reach an agreement that is both equitable and achievable."
In order to provide a stable framework for existing petroleum operations, Australia and Timor-Leste have agreed that the 2002 Timor Sea Treaty and its regulations would remain in force in its original form until a final delimitation of maritime boundaries has come into effect.
Father Frank Brennan, former director of the Jesuit Refugee Service in Timor-Leste, adviser to the church-constitution working group in that country and professor of law at Australian Catholic University, said the fledgling country had taken a huge gamble in its negotiations.
"From here the stakes are high," Brennan wrote. "The Timorese may get the whole of [the Greater Sunrise oil and gas field] but then they will need to find a developer willing to incur the added cost and uncertainty of a pipeline across the Timor Trough and subsequent development in Timor.
"Then again, they may be left with only a 20% share in any future Sunrise development rather than the 50% presently on the table. They could also lose lucrative exclusive fishing rights."
A negotiation of Australia's maritime boundary with Timor-Leste, which international legal precedent would suggest will fall along a median line between the two countries, could also give rise to a claim by Indonesia to renegotiate its maritime boundaries with Australia.
The current boundary, which is different for the seabed and the water column, is significantly closer to Indonesia than it is to Australia.
Josephite nun and human rights advocate Josephite Sister Susan Connelly has urged Australians to maintain pressure on the Federal Government to negotiate a fair maritime boundary with East Timor.
On January 9, Australia and East Timor agreed to begin negotiations on a permanent maritime boundary between the two countries a significant shift which could potentially end years of dispute over the lucrative oil-rich Timor Gap and end bitter mistrust between neighbours.
Canberra and Dili have agreed to ditch the controversial Certain Maritime Arrangements in the Timor Sea (CMats) treaty that divides future revenue from the Greater Sunrise oil and gas reserve, where an estimated $40 billion worth of oil and gas lies beneath the Timor Sea.
"The recent news that Australia has agreed to negotiate maritime boundaries with Timor-Leste is welcome, but there are many loose ends and unknowns," Sr Connelly, an outspoken advocate for East Timor's maritime boundary aspirations, said. "Given the history, we cannot afford to be complacent."
Dispute over how to delineate the sea boundary has marred relations since East Timor won its independence in 2002, but reached a crisis point in 2012, when Australia was revealed to have spied on East Timor's cabinet by bugging its cabinet room under the pretext of renovations.
The two countries have been taking part in a year-long compulsory conciliation, overseen by the permanent court of arbitration (PCA) in The Hague, over the maritime boundary dispute.
Steps towards conciliation have not been made public but, in an unprecedented move, the foreign affairs ministers of Australia and East Timor, along with the PCA, this month announced key developments that could break the impasse.
Terminating the CMats treaty is a significant shift in position for Australia, which had maintained the treaty was valid and should remain in force.
The treaty will cease to exist three months from East Timor's formal notification. Both countries have agreed to then negotiate a permanent boundary.
"2017 could see this issue finally move closer to a proper resolution, but it is certainly not a forgone conclusion and it is not a time to 'take our foot off the pedal'," Sr Connelly wrote on her blog, Timfo.org.
"As I see it 2017 is a year to ramp up the pressure, visit our local Members of Parliament and make sure that Canberra knows that we support a prompt and proper resolution of this issue.
"Representatives of our Government are finally, reluctantly, talking about this issue in the forum provided by the UN Conciliation. They need to know we care and we are watching."
Frank Brennan Without any media fanfare, Foreign Minister Julie Bishop published a statement on 9 January 2017 announcing that Australia and Timor Leste had agreed to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).
This news is more welcome to the Timorese government than to the Australian government. But the uncertainty created by this Timorese win might in time impact more adversely on Timor than on Australia. Only time will tell.
The starting point of any moral and prudential assessment of the announcement must be an acknowledgment that the self-determining, sovereign government of Timor Leste has achieved its objective of forcing Australia to the table to negotiate maritime boundaries in the Timor Sea.
Australia had not always been the unwilling party when it came to the negotiation of maritime boundaries. Back in 2004, Australia was keen to commence the protracted negotiations, knowing that ultimately Australia and Timor would need to be joined by Indonesia at the table to finalise boundaries delimiting the maritime jurisdiction of all three countries in the Timor Sea.
In 2004, Timor was already reaping the benefits from the Bayu Undan oil and gas deposit which was being extracted north of the median line between Australia and Timor Leste. Under the 2002 Timor Sea Treaty, Timor was entitled to 90 per cent of the upstream revenue from any deposits within the Joint Petroleum Development Area (JPDA) covering the area in dispute between Australia and Timor.
Basically, Australia has continued to claim jurisdiction over the continental shelf up to the edge of the Timor Trough, while Timor (like Portugal, its colonial master in times past) has claimed jurisdiction over the area north of a median line between Australia and Timor.
The next major deposit to come on line after Bayu Undan was Greater Sunrise which straddles the eastern lateral line between the JPDA and the area clearly within Australia's jurisdiction.
Under the 2002 Treaty, Timor would have been eligible only for 18 per cent of the upstream revenue (90 per cent of 20 per cent) because 80 per cent of the Greater Sunrise deposit lay within the Australian jurisdiction if the eastern lateral line remained in place.
It was the Timorese leaders, not the Australians, who proposed in 2004 that boundary negotiations be put on hold and that a more creative solution for the development of Greater Sunrise be found. The Timorese were confident that Sunrise could be developed promptly. The Timorese leaders were delighted when they convinced the Australians to agree to a 50-50 upstream revenue share for Sunrise. Also, the Timorese were given the exclusive right to manage the water column inside the JPDA which meant that they could issue fishing licences there.
The parties agreed to extend the delay in negotiation of a maritime boundary from 30 years to 50 years, thinking this would provide ample time for the exploitation of Sunrise and any other petro carbons discovered in the JPDA. Such a delay suited Australian officials, who were getting worried that the Indonesians might want to revisit their earlier boundary determinations which could look disadvantageous to Indonesia considering what the Timorese might manage to negotiate, given recent developments in the international law of boundary delimitations.
In January 2006, the Australian and Timorese governments signed CMATS but the violence and political disruption in Timor meant a one year delay on ratification by the Timor parliament and president. During 2006, Australia once again despatched peacekeepers to Timor at the request of the Timor government.
Despite the upheavals in Timor as well as the complexity of some of the provisions in CMATS, (including a novel proposal that some of the treaty provisions would be resurrected if mining occurred even after one of the parties had terminated the treaty), Australian Foreign Minister Alexander Downer insisted on Australian parliamentary approval of the treaty without the usual time allowed for scrutiny by the Joint Standing Committee on Treaties (JSCOT). In a very non-partisan stance, JSCOT reported:
"The CMATS Treaty contains new and important obligations and raises different issues which should have been subject to the usual process of scrutiny and review. In this instance the national interest exemption should not have been invoked before the Committee was given a reasonable opportunity to consider and report on the Treaty within the Government's timeframe."
Things started to turn sour when the joint venturers for Sunrise informed both governments in 2010 that their preferred development options were FLNG (floating liquid natural gas) or piping the gas to Darwin for processing. The Timorese were hoping that the joint venturers could be convinced to pipe the gas to Timor across the Timor Trough so that industry might be developed on the south side of Timor. The joint venturers insisted that any development plan had to provide the 'best commercial advantage consistent with good oilfield practice'. They were adamant that a pipeline to Timor with subsequent processing in Timor was a third option, and never likely to be first.
"The Timorese will need to convince the Indonesians to give less weight to their own islands when it comes to drawing the lateral line. This could take many, many years. After all, Timor and Indonesia have not yet succeeded in finalising their land borders."
Being flush with funds from Bayu Undan, the Timor Government could by this time afford very good legal advisers, including Sir Michael Wood and Vaughan Lowe from the United Kingdom. They advised that if a boundary negotiation were complete, there was every chance that the whole of Greater Sunrise would fall within Timor's jurisdiction. Timor would then be able to dismiss the joint venturers who were unwilling to contemplate development in Timor and to enlist a developer sympathetic to Timor's nationalist development goals.
The significance of the 9 January announcement is that Timor has, at least for the moment, taken a huge gamble. Timor has forfeited the right to manage the water column inside the JPDA and it has agreed to a reduced share in the upstream Sunrise revenue from 50 per cent to 18 per cent should it be developed before the finalisation of maritime boundaries. Were the eastern lateral to remain where it presently is, Timor would then be entitled to no more than 20 per cent of the upstream revenue flow.
Timor's legal advisers are arguing that the eastern lateral should be drawn more favourably for Timor so that the whole of Sunrise then falls within Timor's jurisdiction. But here is the big risk. The present eastern lateral has been used in the past by Australia, Portugal and Indonesia all claiming that a line of equidistance giving equal weight to all islands is appropriate. Before the Timorese come to negotiate the eastern lateral determining the exclusive economic zones of Australia and Timor, they will need to negotiate that first part of the eastern lateral determining the territorial seas and the contiguous zones of Timor and Indonesia. The Timorese will need to convince the Indonesians to give less weight to their own islands when it comes to drawing the lateral line. This could take many, many years. After all, Timor and Indonesia have not yet succeeded in finalising their land borders. And Indonesia has already indicated that it would prefer to finalise its maritime borders north of Timor involving only the two countries before they come to consider boundaries south of Timor which will require all three countries to be at the table.
I applaud the Timorese leaders for their persistence in scrapping CMATS. CMATS was a good deal at the time, but it had reached its use-by date once the Timorese lost interest in the development of Sunrise without the prospect of onshore development in Timor. From here the stakes are high. The Timorese may get the whole of Sunrise but then they will need to find a developer willing to incur the added cost and uncertainty of a pipeline across the Timor Trough and subsequent development in Timor. Then again, they may be left with only a 20 per cent share in any future Sunrise development rather than the 50 per cent presently on the table, and in the meantime, they will have lost the exclusive right to manage the water column inside the JPDA. For Timor, the prospective gains are astronomical; for Australia, they're peanuts. That's the ongoing tragedy of this long running battle between David and Goliath in the Timor Sea. The Timorese have had a win, but they could still lose, big time.
Paul Cleary When Australian commandos landed in the colony of Portuguese Timor in 1941, they immediately noticed that the gum trees, rocks and ochre-coloured earth were strikingly similar to home.
As novelist Nevil Shute observed after the war, the commandos found that much of the Timor landscape consisted of "stony hills covered in thin forest scrub, not unlike many of the outback districts in Australia". He added: "The men were fighting in a type of country that they understood and were accustomed to."
There's a very simple reason why these men, many of them recruited from the outback of Western Australia, felt right at home in Timor even though the topography was rugged rather than flat: the island is part of Australia's continental shelf.
This fact was first confirmed scientifically in the 1960s when Australian geologist Michael Audley-Charles spent 28 months collecting samples in Timor and then did a further three years of laboratory work, culminating in his book "The Geology of Portuguese Timor". He found that many of the fossils in the rocks were the same as those found in the Carnarvon Basin in Western Australia. Since then, seismic surveys have shown that Timor is part of the Australian continental shelf.
Despite this evidence, successive Australian governments have asserted that the Australian continental shelf ends about 100km south of Timor, where water depths in the Timor Sea plunge to about 2800m, creating a long trench. As a result, they say the maritime boundary between the two countries should be influenced by the Australian continental shelf, giving Australia about two-thirds of the maritime area.
But Australia's dogged defence of this trench during the past 45 years seems to be unravelling as a result of East Timor's David-and-Goliath-style assault through the Permanent Court of Arbitration in The Hague.
This week, East Timor secured the right to proceed with compulsory conciliation over Australia's refusal to negotiate a maritime boundary in the Timor Sea based on the median line principle.
This week's win also allows East Timor to terminate a 2006 treaty after it demonstrated that Australia had engaged in espionage during the negotiations. It's the third straight win for East Timor since it initiated this action three years ago, leaving Australia looking bloodied and bruised in legal terms.
In taking this action, tiny and poor East Timor is taking an extraordinary gamble. It could end up worse off, but so far the gamble is paying off.
How different things might have been had Australia taken the approach of Britain in the North Sea. When faced with similar geography, Britain reached an agreement with Norway in record time and the results have been spectacular. In both the North Sea and the Timor Sea, the 200-nautical-mile claims of the two sets of countries overlap, which indicates that a median line should be the outcome. And in both cases there is a trench in the seabed near the smaller party.
Norwegian negotiators were expecting the British to push for a boundary influenced by the depression, but Britain's opening position was the median line. Why? Britain wanted to get on with developing the North Sea resources and avoid protracted negotiations. It was successful.
In Australia, foreign affairs officials have pushed Australia's claim to a continental shelf since the early 1970s. Australian official Keith Brennan told the Portuguese ambassador in 1971 that there was no need to negotiate a boundary in the Timor Sea because "nature has already done this for us". In other words, the boundary should follow the Timor Trough. Portugal didn't buy the argument, but Indonesia did when it signed a boundary agreement with Australia in 1972.
As recently as last August, Australia's then solicitor-general Justin Gleeson made this same argument in his opening presentation to the PCA when he described the "very deep" trench.
"What that demonstrates is that the physical continental shelves of Australia to the south and Timor-Leste and Indonesia to the north are entirely separate," he told the court in The Hague.
"They are separated by the Timor Trough, and the Timor Trough is indeed deeper than the highest point on the land mass of either Timor-Leste or the Australian continent."
Gleeson did not cite scientific evidence to back his claim that Australia and Timor are indeed "entirely separate". In fact, the trench is more like a "crumple zone" caused by the collision between the Australian Plate and the Banda Arc to the north of Timor. Australia's insistence on the doctrine of continental shelf has created an unholy mess in the Timor Sea. But East Timor's wins don't mean the dispute will be resolved soon.
As Foreign Minister Julie Bishop has said repeatedly, the compulsory conciliation initiated by East Timor is not legally binding. However, the Labor Party has broken ranks on this issue and it now supports a resolution based on established legal principles, and the right to seek arbitration if an agreement cannot be reached.
East Timor's resistance hero and former prime minister Xanana Gusmao initiated these proceedings after he learned that Australia's spy agency had bugged the prime minister's office during the 2004-05 negotiations for a treaty known as Certain Maritime Arrangements in the Timor Sea, which lifted Timor's share of the Greater Sunrise gas and oilfield from 18 per cent to 50 per cent.
The Sunrise gas and oilfield, in which Woodside has a 33 per cent stake, was discovered back in 1974 but it is undeveloped. With more than a billion barrels of oil, the resource is valued at about $US50 billion ($66.7bn), with the government taking more than half that amount. But the result of this bold strategy could well prove to be a pyrrhic victory for a country that relies on one near-exhausted oilfield for more than 90 per cent of its revenue.
Don Rothwell, a professor at the Australian National University's college of law, says the five-member Conciliation Commission will produce a report by September that will prove pivotal to the direction of the negotiations. He believes the likeliest outcome is that the report will underpin progress on negotiating a permanent maritime boundary.
However, he says it is possible Australia may reject the report should it prove to be favourable to East Timor's case. "If any country could take that approach it would be Australia, given its track record in that area," he says.
While much of the media focus has been on the horizontal median line, Rothwell agrees that the PCA's view on the vertical (or lateral) boundaries will decide whether East Timor has taken a wise approach in seeking compulsory conciliation at The Hague.
A strict interpretation of law would deliver to East Timor a smaller share of the Greater Sunrise field than under the CMATS treaty that it wants to abolish. It's a huge gamble on the part of a desperately poor nation.
But were the commission to favour shifting the eastern lateral so that East Timor would get a bigger share of Greater Sunrise, then this would raise the prospect of Indonesia exercising its right under international law to be involved in the negotiations. This would make things even more complicated.
"It's one of the critical issues," Rothwell says. "The starting point will be the existing area covered by the 2002 treaty (which gives East Timor just 18 per cent of Sunrise). Timor is very keen to expand its continental shelf entitlements to the east and west of the current boundaries. That will be the most contentious issue for the commission. If the commission does (side with East Timor), then Indonesia could pose a challenge."
Clive Schofield, a professor at the University of Wollongong and another leading law of the sea expert, says CMATS gives East Timor a very good deal and if East Timor attempts to go beyond 50 per cent it could draw Indonesia into the fray something Australia wants to avoid.
"I think that would involve Indonesia, not just Australia," Schofield says. "That complicates matters substantially. The fundamental reason why Australia was keen on joint arrangements was for the perceived threat that Indonesia would wish to renegotiate the existing seabed boundary from the early 70s."
Complex disputes of permanent boundaries can drag on. Can Timor achieve more than 50 per cent of Sunrise? Schofield says: "They have a chance to do so in a negotiation, but it may take a very considerable time. Although Australia is bound to negotiate in good faith, it does not have to agree to a boundary it does not like."
Meanwhile, East Timor's main source of revenue, the Bayu-Undan gas field, is nearing the end of its life, and the country could exhaust its much-vaunted petroleum fund within a decade. With its young and fast-growing population, East Timor does not have time on its side.
Michael Leach Election year in Timor-Leste got off to an unexpected start with Monday's joint announcement that the government in Dili would terminate its 2006 treaty with Australia covering maritime arrangements in the Timor Sea. The decision, which Australia said it would not contest, opens the way for fresh boundary negotiations between the two countries.
Aside from provisions for sharing the proceeds of under-sea resources, the key feature of the 2006 CMATS agreement was a fifty-year moratorium on negotiations to determine the boundary between Australia and Timor-Leste. Instead, the two countries negotiated a series of revenue-sharing agreements, known as "provisional arrangements" under the UN Convention on the Law of the Sea, or UNCLOS.
Monday's announcement is especially significant because it is the first time since the restoration of East Timorese independence in 2002 that Australia has publicly committed to negotiating permanent maritime boundaries. Malcolm Turnbull and foreign minister Julie Bishop had consistently rejected calls for boundary talks and were voicing their support for CMATS as recently as late last year, so the turnaround is a significant step.
Several factors help explain the change in Australia's position. For one, the 2006 treaty had been tarnished by allegations that Australia had spied on the East Timorese negotiating team in 2004. The reported evidence of a former ASIS agent, "Witness K," provided grounds for Timor-Leste to challenge the treaty, invoking the Vienna Convention's principle that negotiations should take place in "good faith." Monday's joint announcement is, in effect, an acknowledgement that Australia wants that case to end.
Equally significantly, last April the government of Timor-Leste initiated compulsory conciliation proceedings under UNCLOS with the aim of concluding permanent maritime boundaries with Australia. Australia's opening legal gambit the claim that the CMATS treaty had already settled the border dispute was roundly dismissed by the proceeding's judges, who found that Australia's obligation to settle the boundary survived the treaty, despite the purported moratorium. Having lost this argument, Australia had little further use for CMATS. Monday's announcement demonstrates that the UN-auspiced conciliation process is working, and highlights the importance of the principles and institutions of international law in these disputes.
The third factor was the dispute between China and its neighbours in the South China Sea, which raised the regional profile of international law in boundary disputes. In that case, Australia urged China to follow the rule of law, as represented by the decision of the tribunal formed under UNCLOS. The contrast with Canberra's own behaviour its refusal to discuss a boundary in the Timor Sea and its withdrawal from the dispute-settlement provisions of UNCLOS shortly before East Timorese independence in 2002 has created something of a public relations problem for Australia.
While Australia's new commitment to negotiating a permanent maritime boundary is overdue and welcome, this doesn't mean that negotiations will be conclusive or rapid. The two sides are likely to start from very different positions on where a boundary should be settled. While Australia may find it difficult to maintain its "natural prolongation" continental-shelf argument given the increasingly strong presumption of a median-line boundary in international law, the process of negotiating frontier and lateral boundaries, and the consequent revenue arrangements, could be lengthy or deliberately drawn out.
It is also notable that the government's pledge to negotiate a boundary does not go as far as Labor's policy, which commits to internationally binding dispute resolution if bilateral negotiation fails. In other words, Canberra hasn't committed to the settlement of the dispute in accordance with international law. Nonetheless, this week's announcement is a positive step, and a clear endorsement of the UNCLOS conciliation process initiated by Timor-Leste. For its part, Timor-Leste is likely to drop the espionage case against Australia.
The key issue ahead is the division of royalties from the Timor Sea. Setting the boundary at a median point between the two countries would certainly lift Timor-Leste's revenue from existing fields in the Joint Petroleum Development Area, which stands to rise from 90 per cent to 100 per cent. But these fields are heading towards the end of their lifespans, and the larger and as-yet-undeveloped Greater Sunrise field, which straddles the eastern lateral of the Joint Petroleum Development Area, is a trickier question. CMATS divided future rents over this field on a fifty-fifty basis, but the earlier Timor Sea Treaty, which prevails until the coming negotiations are concluded, gives just 20 per cent to Timor-Leste.
Though these are merely numbers on a page while the field remains undeveloped, and would be superseded by any fresh negotiations, they highlight how critical the final revenue details will be for Timor-Leste. The future placement of the eastern lateral boundary will therefore be of prime relevance. The East Timorese government has formal legal opinions suggesting it should receive a larger share of that field when the boundary is finalised. Herein lies clear potential for disagreement between the parties.
Of potential relevance to this question is Timor-Leste's current maritime boundary negotiations with Indonesia. While these talks will start off on the north coast, it is the south coast determination that could have a wider impact not least where the lateral boundary is set within their territorial waters, which could potentially influence its extension further south in any new division between Australia and Timor-Leste. Canberra also remains concerned that a median-line boundary, favoured by international law since UNCLOS, could open up a challenge to the 1972 "continental shelf" border with Indonesia. This possibility can't be ruled out, though it is fair to say that the political risks exceed the legal exposure, as there remains a very substantial difference between a border settled and observed for forty-five years and one that was never negotiated.
Less often posed are questions over the western lateral boundary of the Joint Petroleum Development Area. Longstanding fields like Corallina, Laminaria and Buffalo lie just outside it, but potentially within the future Exclusive Economic Zone of Timor-Leste. Timor-Leste has received no royalties from these fields, which have returned rents to Australia. Will a settlement of boundaries include compensation for lost royalties? These issues could arise in negotiations, and suggest that Timor-Leste will have cards to play in terms of trading off potential claims. Though understandings exist between the two governments relating to these matters, they could come back into play in fresh negotiations.
The coming negotiations won't necessarily be conclusive; nor are they guaranteed to meet all of Timor-Leste's aspirations. But this is a significant turning point in the dispute. It may also give pause to critics of the East Timorese government's legal strategy.
Critics are less likely to resile from their critiques of the ambitious East Timorese plans for "downstream" processing of oil and gas on the country's south coast, which remain out of favour with commercial partners like Woodside Petroleum. More broadly, the East Timorese government's current approach to development, heavily focused on megaprojects and large-scale infrastructure spending, continues to attract criticism, as does the sustainability of the country's sovereign wealth fund, given currents rates of annual budget expenditure.
While these matters tend to attract attention in commentary on the boundary dispute, they are separate issues, subject to increasing debate within Timor-Leste's lively civil society itself, and are likely to feature in this year's elections.
Babs McHugh Political and energy analysts have expressed serious doubts that East Timor will ever be able to benefit from a major gas project unless it changes its policy.
East Timor and the Australian Government on Monday announced they would abandon a 10-year-old treaty on maritime borders.
The 2006 treaty was an agreement that a freeze of 50 years be put on negotiations for a permanent maritime border in the Timor Sea.
Within the area is the large and high quality Greater Sunrise gas field, which straddles Australian and East Timor waters 80/20.
East Timor insists the field be developed by bringing the gas to an onshore gas plant so it can make and ship liquefied natural gas (LNG) and other products.
Its aim is to boost economic development and create new downstream industries for the fledgling country, which only gained official independence from Indonesia in 2002.
But technical issues, the gas price, a looming LNG glut and high greenfield development costs render that option unfeasible.
Independent analyst Peter Strachan said the biggest technical stumbling block was a subsea trench called the Timor Trough, which is 3-5 kilometres deep at its deepest point.
"Imagine having to put an 80 centimetre steel pipe down and up the other side of that trough," he said.
"The project itself is in water depths from 200 to 400 metres and technically, this has never been done before.
"It's not like the relatively easy way of running a pipeline along the continental shelf that has a sandy bed, it's flat and it's about 100 metres deep."
Mr Strachan said he understood the desire by East Timor to develop its own downstream industry, but the economics did not stack up.
"It's a good goal, but the project was at the top of the list to be developed at the early part of last decade, by Woodside," he said.
"With an agreement in place, it was hoping to have the project up and running by 2011 or 2012.
"Had there not been this uncertainty about sovereignty, and the unrealistic demands by East Timor for the project to be developed there, the project would've probably been running four or five years by now."
Mr Strachan said with a low price for LNG of about $US10/mBtu and a looming glut, piping the gas to existing facilities in Darwin would make more economic sense.
"There's more than 25 million tonnes too much LNG being produced annually at the moment," he said.
"But if it went ahead, the options could include a floating LNG (FLNG) plant, to potentially backfill into the Bayu-Undan gas project, and an expansion of the one-train facility in Darwin."
Oil, gas and energy specialist with Wood Mackenzie, Saul Kavonic, agreed that tying in to the Bayu-Undan project would be the most likely way Greater Sunrise would go ahead, within the next decade at least.
"Bayu-Undan is the main gas field that supplies the Darwin LNG plant and it's also located within the same area that could be up for discussion," he said.
"It's been a longstanding legacy project and we forecast it will cease operations by early next decade, so there's scope there.
"Building a brand new project would entail much higher costs and risks, and those kind of big, greenfield developments are off the cards at the moment. Further expansion of brownfields (existing developments) are more likely."
Angela Macdonald-Smith The fresh uncertainty that has enveloped the Timor Sea petroleum province comes at a critical time for the gas venture that currently provides most of the revenue for tiny, impoverished Timor-Leste.
ConocoPhillips' successful Darwin LNG venture is on the hunt for more gas to replace the ageing Bayu-Undan gas field. Unless an alternative source of gas can be found to flow into the Darwin plant by 2022-23, production will start to decline.
Scrapping the treaty that set the revenue sharing arrangements between Australia and Timor-Leste for the nearby Sunrise gas field as confirmed by the two governments this week doesn't help with that quest to find a new feed of gas.
To explain, ditching the Sunrise deal officially known as CMATS brings to an end the moratorium between the two nations on sovereign right claims that was embedded in the treaty. Now the governments have agreed to negotiate on a permanent maritime boundary, significant questions of sovereignty hang over a number of other fields nearby.
In the centre of the picture is the Bayu-Undan gas field, which lies in the Joint Petroleum Development Area and that has fed Darwin LNG since it started production in 2006. With 90 per cent of petroleum royalties from JPDA fields flowing to Timor-Leste, the Bayu-Undan project has contributed more than $US18 billion in taxes and other payments to the Timor-Leste Petroleum Fund since 2004, Conoco estimates.
Settling a permanent maritime boundary will be a lengthy and complex process with many question marks over the outcome. But Timor-Leste is pressing for a median line to be set as the boundary, which could shift the JPDA fields into its waters, even as some sources say that the jointly administered area won't be affected.
But reopening the border discussion also raises the issue of the eastern and western lateral boundaries of the JPDA, bringing the complicating factor of Indonesia into the picture. Some experts maintain the result could be that most of the Greater Sunrise fields, which straddle the eastern edge, end up in waters governed by Indonesia, rather than Timor-Leste.
It is against this background that Conoco and its Darwin LNG partners, which include Santos, ENI and Japan's Inpex Corporation, are hunting for alternative gas supplies to Bayu-Undan, where remaining reserves are put by consultancy Wood Mackenzie at just 940 billion cubic feet of gas and 30 million barrels of liquids.
Conoco names two primary options to replace Bayu-Undan gas at Darwin LNG the Greater Poseidon fields in the Browse Basin far to the west, and the Caldita-Barossa fields to the east of Sunrise. But ventures are operated by the US company and both lie in undisputed Australian waters.
But some industry sources argue that boundary issues aside the stalled Sunrise resource should also be in the picture. Independent analyst Peter Strachan says Darwin LNG would provide a much lower risk and economical route to market for the circa 5.1 trillion cubic feet of gas in Sunrise than costly floating LNG, the option most lately favoured by the Woodside Petroleum-led Sunrise partners. It also easily beats the even less realistic option favoured by Timor-Leste of an onshore LNG plant on its southern coast.
Conoco's stakes in both Darwin LNG and Sunrise should ease the way to a deal, which could then see Sunrise gas transported in a new pipeline to the existing Bayu-Undan pipeline for transportation to Darwin.
With the border issue blown wide open it is however difficult to see movement on Sunrise for several years, while the Darwin LNG partners may find it tougher to invest to develop new gas in the region. The risks are high for Timor-Leste, whose Petroleum Fund is estimated by some to run dry within five years.
Ben Potter The Greater Sunrise gas project in the Timor Sea which has poisoned relations between Australia and tiny Timor-Leste won't produce any revenue before the late 2020s if ever, experts say.
Matt Howell, an oil and gas analyst with consultancy Wood Mackenzie, said the quality of the resource 5.1 trillion cubic feet of liquefied natural gas and 226 million barrels of condensate (light oil) points to it getting developed at some point.
But Wood Mackenzie puts the earliest production from the Woodside Energy-managed Greater Sunrise field in the late 2020s more than a decade away.
"Once you start getting out that sort of time distance, it's hard to know what is going to get developed," Mr Howell said. "There's a lot of water that needs to go under the bridge before that happens."
During more than a dozen years of negotiations over the Greater Sunrise revenue split the oil and LNG prices soared and subsequently plunged but not before hundreds of billions of dollars of giant LNG "megaprojects" elbowed their way to the front of the queue. These include Greater Gorgon, Prelude, Wheatstone and three Queensland projects.
"The whole Sunrise thing has been a huge missed opportunity for Timor-Leste," said Graeme Bethune, an analyst at energy consultancy EnergyQuest.
Foreign minister Julie Bishop said on Monday a 2006 treaty under which Australia agreed to share revenue from Greater Sunrise 50-50 rather than 82-18 under prior agreements heavily favouring Australia would be torn up and renegotiated, putting billions of dollars of revenues at risk.
This opened up the possibility of a new revenue sharing agreement heavily favouring Timor-Leste perhaps to the exclusion of Australia owing to a sharp shift in negotiating strength.
Timor-Leste claims the maritime boundary between the two nations should follow the median line and not the 1972 boundary negotiated with Indonesia which follows the edge of the Australian continental shelf and put most of the Timor Sea gas projects in Australian waters.
The Timor-Leste government discovered Australia had spied on it during negotiations for the 2006 treaty, and last year won a decision from an international conciliation commission that the treaty did not preclude future negotiations. Timor-Leste is also accusing Australia of espionage in an international tribunal, promising more embarrassment for Australia if the David-and-Goliath battle is not resolved.
Conceived more than a dozen years ago, Greater Sunrise was originally expected by the Australian government to produce more than 8 trillion cubic feet of liquefied natural gas and 295 million barrels of condensate (light crude oil).
Its value was estimated at more than $20 billion after production costs over the project's life, yielding $8.5 billion in revenues to the Australian government according to a 2003 National Interest Assessment by the Australian government. It looked like an answer to the prayers of impoverished infant state Timor-Leste.
But even without the geopolitical thicket that has engulfed the project, the economics have moved decisively against large LNG projects, making them much more difficult to get up. The Platts Japan Korea Marker benchmark LNG price soared from $US4 per million British thermal units in 2009 to more than $US18 in 2013-14. It's now just under $US10.
Woodside's head of marketing, trading and shipping, Reinhardt Matisons, declared the era of the mega-project over last week and said the company would pursue more organic and incremental growth opportunities for the next few years.
As well, Greater Sunrise faces steep technical challenges. Its gas comes with a lot of carbon dioxide, making the prospect of a carbon price daunting. Shell, the second largest partner in Greater Sunrise, assumes a $US40 a tonne carbon price for any new investment.
The field is also separated from Timor-Leste by the 3,300 metre deep Timor Trough, meaning the nearest viable pipeline land access is 450 kilometres away in Darwin a blow to Timorese hopes of a valuable onshore processing facility.
Emily Stewart It is back to the drawing board for a maritime agreement between Australia and East Timor.
At stake are oil and gas reserves worth up to $40 billion but, while both governments fight over future revenue sharing, development of the project has not even started.
Woodside Petroleum's most valuable oil and gas reserves hold up to 5 trillion cubic feet of gas and were discovered in 1974, but have been waiting to be developed ever since.
"We were the original explorers up there. So this discovery has really been in Woodside's portfolio for many years," Woodside chief executive Peter Coleman told Business PM. "We've been very patient as it's gone through a number of changes in respect to governance."
The company has teamed up in a joint venture with Conoco Phillips and Shell to extract the resources. However, with the so-called Greater Sunrise project site in open waters, the Australian and East Timorese Governments have been in dispute over revenue sharing.
A 2006 temporary treaty had agreed on a 50:50 split but, after claims of spying surfaced, East Timor took the treaty to the Hague, with uncertainty causing the developers to shelve the project in 2015.
Woodside has welcomed this week's decision to dissolve the treaty, with both governments now open to negotiating a permanent solution. "It's recognising the treaty's still in place, for us that's the most important thing, recognising we've got tenure [over the field]," Mr Coleman said.
However, the company said development will not proceed until it has certainty over the revenue sharing arrangements between the two governments. "Reality is we got to an impasse on the project just a few years ago. Who actually do we pay the rents to?" Mr Coleman commented.
"Woodside is really sitting on the bench until the Australian Government and the Timor Leste government sort out how they will proceed with the new boundaries," said Giuliano Sala Tenna, institutional equity sales at Bell Potter.
There has also been an impasse with the East Timorese over the development model, with the fledgling nation preferring to host a processing plant, and the jobs that go with building and operating it, while the energy companies have favoured a floating liquefaction plant.
Using a land-based plant in Darwin would also be an option. "Our base plan is a floating solution, the other alternatives are becoming more and more competitive over time with that floating solution," Mr Coleman said.
Fortunately for the project, oil and LNG prices have crashed in the past 3 years, which has meant competing projects have been put on hold and technology has advanced, creating a window of opportunity if energy prices recover, as Woodside now forecasts.
"It means Sunrise has an opportunity to come to the front of the queue," Mr Coleman said. "It's a very competitive project, two years ago it was lagging well behind, it would not have got to the front of the queue."
Woodside is predicting commodity prices will rally in 2019, and is calling on both governments to reach a conclusion as soon as possible so they can capitalise.
Kim Landers: Political leaders in East Timor say they're looking forward to capitalising on the new economic opportunities from oil and gas reserves in the Timor Sea.
East Timor, also known as Timor-Leste, is on track to establish a new maritime boundary in the Timor Sea, after tearing up a controversial treaty with Australia.
Katherine Gregory reports.
Katherine Gregory: It's a long-anticipated window of opportunity for Timor-Leste.
Joao Mendes Goncalves: We should define first the boundaries between the two countries, so that we knew what belonged to Australia and what belonged to Timor-Leste, as far as the natural resources in the Timor Sea.
Katherine Gregory: Joao Mendes Goncalves is head of the Mission Unit for the Timor-Leste-Indonesia-Australia Growth Triangle, and the former Timor-Leste minister for economy and development. He says the new border in the Timor Sea could significantly change his country.
Joao Mendes Goncalves: I don't think Australia will need the resources of the Timor Sea as much as Timor-Leste needs it. You see the amount of poverty that still exists in Timor-Leste; the amount of development that needs to be done.
Katherine Gregory: On Monday the Australian and Timor-Leste governments announced they would abandon a 2006 treaty, which divided $40 billion worth of resources in the Timor Sea between the two countries.
That 50-year treaty had stipulated only a temporary sea boundary, which favoured Australia. Dili was pushing to renegotiate it for years, but Canberra did not give in until now.
Timor-Leste's ambassador to Australia, Abel Guterres:
Abel Guterres: For Timor-Leste, it's maritime border is very important in terms of completing its sovereignty over its land and sea. And number two is: Timor-Leste must know what areas, either sea or land, belongs to it and all the resources there is.
Katherine Gregory: Chris Flynn, an international law and energy security expert, says these border negotiations give Timor-Leste more than fair access to oil and gas reserves.
Chris Flynn: It may end up that some of that gas can be brought onshore and processed onshore. And that would be require a whole lot investment to be made in East Timor itself. And that would be tremendously helpful to a small, developing company like East Timor.
Katherine Gregory: Mr Flynn points out that the termination of the 2006 treaty also grants East Timor more political clout in its dealings with Australia.
Chris Flynn: And that's because international law would favour a fairer resolution to this dispute for East Timor. And that's important because East Timor will no longer be restricted from suing Australia, as it was under the treaty that's just been set aside, if Australia doesn't play ball.
Katherine Gregory: Lawyer Chris Flynn ending Katherine Gregory's report.
Jonathan Pearlman, Sydney Australia and Timor Leste have agreed to walk away from a controversial deal over a lucrative A$50 billion (S$53 billion) oil and gas field, a step in resolving a long-running bitter dispute over their maritime border.
In a joint statement released yesterday, the two countries said they had agreed to negotiate a permanent maritime boundary a process being overseen by the Permanent Court of Arbitration.
Timor Leste has long pushed for a 2006 treaty to be scrapped, arguing that it unfairly divides revenue from the Greater Sunrise fields and that Australia had spied on its officials during negotiations in 2004.
The treaty, which equally divided revenue from the fields and set a maritime boundary for 50 years, will become ineffective three months after Dili's formal notification.
"The parties recognise the importance of providing stability and certainty for petroleum companies with interests in the Timor Sea and of continuing to provide a stable framework for petroleum operations and the development of resources in the Timor Sea," said the joint statement by Australia's and Timor Leste's foreign affairs ministers, Ms Julie Bishop and Mr Hernani Coelho, along with the arbitration court.
Timor Leste, formerly an Indonesian territory, is heavily dependent on future revenue from the Greater Sunrise fields to secure its economic future. The tiny country gained its independence in 2002, with the help of an Australian-led international force, but ties with Canberra have become deeply strained over the long-running border dispute.
The two nations have been conducting a one-year confidential conciliation process overseen by a five-member panel from the Permanent Court of Arbitration. The conciliation is being hosted by the court, which is based in The Hague, but meetings have been held in Singapore.
An international law expert, Professor Donald Rothwell, said the announcement marked a significant shift for Australia, which had signalled for the first time that it was willing to accept the establishment of a permanent maritime border.
He added that the conciliation talks appeared to be "moving forward" but the shape of the final boundary remained unclear. "All the signs from the conciliation are promising," he told The Straits Times.
"Australia is prepared to countenance a permanent maritime border as a result of this process. Australia has never made that concession previously."
The conciliation process, which is due to end in October, is compulsory but its findings are not binding. Most analysts believe the talks could lead to a boundary that is far more favourable to Timor Leste than the existing arrangement.
The current treaty sets the boundary according to the continental shelf but most international law experts believe the border should be marked by the midway point between the countries.
Such a change would place the Greater Sunrise fields discovered in 1974 entirely, or mostly, in Timor Leste's territory. The fields are due to be operated by Australian resources firm Woodside Petroleum, which welcomed the move to negotiate a permanent boundary.
It said: "Woodside understands the Timor Sea Treaty remains in place and we look forward to an agreement that allows for the earliest commercialisation of the Greater Sunrise fields, which promise great benefits for all parties."
In an explosive development in the dispute, Timor Leste in 2012 accused Australia of using spies from its foreign intelligence agency to bug the Cabinet office in Dili in order to gain a negotiating advantage.
Australia has not admitted to spying but it seized the passport of a former spy who allegedly informed Timor Leste's representatives about the alleged spying.
Daniel Flitton East Timor will abandon the multi-billion dollar oil and gas treaty at the centre of sensational spying claims by Australia.
The two countries issued a joint statement on Monday declaring the deal to be dead, just over four months after East Timor took the unprecedented step to demand confidential conciliation talks with Australia at The Hague.
Relations between the neighbours have been strained since it was revealed in 2013 Australian spies bugged the cabinet office of the East Timor government in Dili during negotiations for the 2006 treaty.
The extraordinary disclosure of eavesdropping was again catapulted into the headlines a few months later when ASIO raided the home and offices of East Timor's lawyer based in Australia, confiscating documents.
In a sign of how tense relations have become, no Australian minister has visited East Timor since 2013, shortly after the spying claims first became public. Australia was also subject to a special order by the International Court of Justice to cease all spying against its neighbour.
But the move to scrap the treaty still comes as a surprise, with Australia insisting as late as September last year, at the beginning of the conciliation process, that the agreement remained valid.
Australia also unsuccessfully sought to challenge the jurisdiction of the international commission at the Permanent Court of Arbitration at The Hague to hear East Timor's complaint.
In the carefully worded statement on Monday released simultaneously by Dili and Canberra, the two nations also committed "to negotiate permanent maritime boundaries", long a sticking point in the relationship.
A final decision on the maritime boundary had been put in the deep freeze for 50 years under the 2006 deal, known as a "Treaty on Certain Maritime Arrangements in the Timor Sea", or CMATS.
But East Timor now believes the bulk of the resources fall within its territory, and independence hero Xanana Gusmao has previously invoked the tiny nation's long struggle against Indonesian occupation to galvanise support against Australia.
An early treaty dating from 2002 will remain in force under the complex and overlapping arrangements to divide the spoils of undersea oil and gas resources in the Timor Sea, which have an estimated value of up to $40 billion.
East Timor has amassed about $16 billion in a petroleum fund from existing oil and gas fields governed by the 2002 treaty, but resources in those fields are fast running out.
The 2006 treaty was intended to govern yet to be developed reserves known as Greater Sunrise, thought to be the richest in the area, but the future for that field now looks likely only to be decided once the maritime boundary is determined.
Tension had also surrounded the processing arrangements for the resources and the hundreds of jobs this was likely to create whether gas would be sent by a pipeline to Darwin for refining, processed on a floating platform, or sent to a purpose-built facility on East Timor's south coast.
Swinburne University of Technology's Michael Leach said the decision to terminate CMATS opened the way for maritime boundary negotiations to follow.
But Professor Leach said it was not yet clear if Australia will move from away from its long-standing insistence that any line must be based on continental shelf towards drawing a median line a position favoured by contemporary international law.
Experts believe the decision to abandon the 2006 treaty means it is now likely East Timor will drop its separate spying case against Australia at the International Court of Justice.
East Timor's ambassador to Australia Abel Guterres hinted last year the spying case against Australia could be abandoned should the two countries negotiate a new treaty to divide rich undersea oil and gas fields.
The conciliation is expected to hold further confidential hearings through the next 12 months. The 2006 treaty will be formally terminated three months after East Timor gives official notification of its intention to abandon the deal, with Australia having agreed various zombie clauses in the treaty that would have allowed the treaty to become active again will not be invoked.
Kerrie Armstrong, Myles Morgan Timor Leste will be no better off despite the cancellation of a treaty that divided resource revenues between the country and Australia, an expert says.
Deakin University southeast Asia expert, Damien Kingsbury, told SBS News the cancellation of the 2006 treaty means a pre-existing 2002 treaty is now back in force. "East Timor is no better off in the short term under the new arrangement," he said.
"There's no particular benefit to Australia between the two agreements. Australia will have to pay a small amount of money to East Timor in the 2002 agreement now that that's back in force, but that's not really significant in the grand scheme of things and it doesn't really alter the broader financial arrangements around the division of resources."
Timor Leste has long pushed for Australia to agree to a maritime boundary between the two countries that would comply with the international law of the sea. A halfway boundary between the two nations would mean the mineral rich fields would be under Timor Leste's control.
The government also argued, successfully, that Australia negotiated the 2006 treaty, which allowed Australia a disproportionate share of the oil and gas revenues from the Timor Sea operations, in bad faith after allegedly bugging the Timor Leste government.
"It would appear that Australia has agreed that it was conducted in bad faith and that treaty has been cancelled," Professor Kingsbury said.
"The current status is both governments have said they will enter into negotiations around a permanent maritime boundary between Australia and East Timor that's what East Timor has been arguing for. The question now is whether that is going to occur in a shorter time frame or in a longer time frame.
"I think more likely is it's going to take quite some time, indeed Australia may not negotiate in good faith or it may not negotiate with any sense of urgency, the practical outcome being the existing arrangements in the Timor Sea remain in place."
Timor Leste's ambassador to Australia, Abel Guterres, told SBS News the maritime boundary was a bigger picture than resources revenue. "Timor Leste needs to know what part of the sea belongs to it in terms of its development, its long term economic issues," he said.
"As a new state we must know what belongs to us and in terms of our fisheries, our navy corporation, how far can our navy come into the waters in the Timor Sea, and (how) far Australian navy can go there, so this is a bigger picture issue in terms of co-operation between the two countries and this is where clear jurisdiction is so important."
Mr Guterres said it was important that both sides had agreed to come together and negotiate under international law.
"International law is neutral, that both sides can live with because neither side imposing on the other, which is very important, and both sides have agreed to negotiate under international law and that is perfect for Timor Leste," he said. "I'm sure the end result will satisfy both sides and that is what is important for us."
Timor Sea Campaign's national co-ordinator, Ella Fabry, told SBS News the cancellation of the treaty was "the first step in righting the wrongs of the past".
"For us, we're hoping it means it will pave the way to negotiating a much fairer maritime boundary with Timor Leste," she said.
"The simple and fairest solution for this is to draw permanent maritime boundary along the median line. That's what would be in accordance with the international law."
Professor Kingsbury said Timor Leste was in a difficult place financially, and needed access to the Timor Sea's Greater Sunrise liquid natural gas (LNG) project revenue in order to shore up its economic future. But even this solution is unlikely to solve all the country's financial woes.
"East Timor currently has about $16 billion in the bank and it's supposed to be living off the interest from that revenue stream, however it's also been using the capital from that account and at this rate of expenditure East Timor will be broke by the end of the 2020s, so what it hopes to do is to tap into the resources of the Greater Sunrise field," he said.
"In the heyday of the Greater Sunrise field, when LNG prices were high, the field was thought to be worth about $45 billion in revenues, which would be divided evenly between Australia and Timor Leste.
"However LNG prices have fallen very considerably since then, so even if East Timor does get access to the field, and even somebody does choose to develop it, and even if the timing of that fits into its other more pressing financial requirements, it's not clear that East Timor will derive enough money from that field to sustain it into the long-term future."
Ms Fabry said a fair maritime boundary would provide "economic security and it would close the journey to independence for them".
"They're a fledgling nation, they've only just become independent 14 years ago, so for them it would mean completing that journey to independence and knowing exactly what their economy is going to look like for the next 10 years," she said.
"I think the conciliation that came about late last year was a huge victory for Timor and it was a huge victory for fairness and good relationships in the region and a lot of the pressure that's going to go on the Australian government will come from the Australian people who are lot more wary of them this time around."
Paulina Quintao, Former comfort woman Ines Magalhaes Goncalves travelled to Japan late last year to give testimony at an international conference on human rights about the crimes committed against her by Japanese soldiers in Timor-Leste during World War II (1942-1945).
Mrs Goncalves' son, Leonel Barreto, who accompanied her to Japan, said she also called on the Japanese government to officially recognize the crimes committed during this time.
Former comfort women from Korea, Indonesia and the Philippines also attended the conference part of efforts to hold the Japanese government to account and formally apologize to all victims.
"At this (conference) mother said: 'I am not coming here to find something good, to take a plane to see a beautiful city, but I come here to find justice and the truth,'" he said at Dili airport after returning from Tokyo.
He also thanked the Timor-Leste Human Rights Association (HAK) and the Japanese Coalition to Timor-Leste for encouraging former comfort women to share their stories at conferences in Tokyo and Korea last year.
Barreto said former comfort women received no social assistance from the Timor-Leste government to date, although his mother had received some support from HAK and the Japanese coalition.
After being forced to become a comfort woman for Japanese soldiers Mrs Goncalves fell pregnant, but the baby died. After the war ended she married and had another four children.
She is now 85 years old and lives in Obulu suku (village) in the Atsabe administrative post in Ermera municipality.
During World War II the Japanese military occupied Timor-Leste and imposed a system of forced labor for road construction and agricultural crops, while many local women were kidnapped from their families and forced to work as sexual slaves (known as comfort women) for soldiers.
In 2000, Marta Abu Bere, another former comfort woman, also testified at the same conference in Tokyo to highlight the human rights violations that occurred in Timor-Leste and the lack of positive action to date from the Japanese government.
Meanwhile, HAK representative Marina Galucho said it was opportunity for the victims to meet with Japanese government officials and other human rights activists in South East Asia to talk about the situation facing former comfort women.
"The Japanese government should acknowledge the human rights violations that were committed by their soldiers against the women of South East Asia," she said.
With the support of the Japanese coalition, Galucho said 18 former comfort women had been registered across the country, although eight have died and survivors continue to live in vulnerable conditions.
Although the Japanese government accepted the recommendations made by former comfort women attending the conference, she said it had yet to offer any clear response to the issue.
In 2015, the Japanese government formally apologized and paid compensation to former comfort women from Korea, but it is yet to offer the same recognition to victims from other countries.
HAK is continuing to work with regional civil society networks with support from Japanese activists to advocate on behalf of victims and urge the Japanese government to accept responsibility.
However, the Secretary of State for the Socio-Economic Support of Women (SEM), Veneranda Lemos, said the Timor-Leste government must also share responsibility.
She said the government was now in the process of revising the national action plan on gender-based violence and would also integrate this issue for further advocacy.
"With the revisions that we have made to the national action plan on gender-based violence, we can now include issues like this in the program for the next five years," she said.
In its recommendations, the Committee on the Elimination of all Forms of Discrimination Against Women (CEDAW) called on the government to look at the issue and push the Japanese government to formally recognize victims.
Paulina Quintao The National Parliament has approved proposed law no. 26/III/2015 on the prevention and fight against human trafficking. Of the 64 MPs, 34 were present, with 32 voting in favor, two abstentions and none against.
Deputy President of Commission A (responsible for constitution, justice, public administration, local authorities and anti-corruption) Arao Noel de Jesus Amaral said the law would provide a legal basis to fight against human trafficking in the country.
"So far we have no law and so it is hard for the judges in court and the prosecution to take preventive action in human trafficking cases," he told parliament.
He said the law would criminalize the trafficking of people in and out of Timor for the purpose of sexual exploitation and forced labor.
He said the law contained 39 articles, including a significant one which officially categorizes those under 18 years old as a child. This means that offenders involved in the trafficking of minors will face two separate charges.
The minimum sentence for those found to be involved in human trafficking is two years, with the maximum being 10 years, although that could be increased depending on the severity of the offence.
The law was approved on October 25 and the government is now raising awareness among communities before it comes into force.
However, member of the Timor-Leste Parliamentary Women's Group (GMPTL) Josefa Alvares Pereira Soares said the law was still not complete, although it would at least partly respond to some of the issues linked to human trafficking.
"We do not want our young people to fall victim to drugs and we also do not want our sisters and children to become victims of human trafficking, therefore the two laws are very important for our country," she said.
She said the content of the law places a high value on human life and provides protection for victims without discrimination as is everyone's right in Timor.
Under the new law, the Timor-Leste government will be responsible for coordinating with embassies to return foreign victims of trafficking to their country of origin with dignity. "We must implement this law effectively," she said.
She said organized crime occurred as a result of economic conditions, which forced some people to engage in human exploitation. She hoped that Timorese people would protect each other from such crimes in the future.
Meanwhile, Justice Minister Ivo Jorge Valente said the government is planning to establish the Commission to Fight Against Human Trafficking, which will be responsible for devising a strategic plan for the implementation of the law in order to protect vulnerable groups. "It is a new law so it will take time to implement," he said. He said the commission will consist of representatives from the ministries of Justice, Foreign Affairs, Social Solidarity and Interior Ministry, and will also involve the Immigration department and civil society.
He said the main role of the commission was to raise awareness among communities about the content of the law and the different characteristics of human trafficking.
Sara Everingham East Timor's former president Jose Ramos-Horta says after spending months considering whether to run in the country's next presidential election, he has decided to sit it out and make way for new leaders.
East Timor's former president Jose Ramos-Horta says he has decided he will not contest the country's presidential election, due in March. Dr Ramos-Horta, who was East Timor's president from 2007-2012, said he has spent months considering whether to run but has decided against it.
"I have received a lot of support, appeals from across the country, political leaders, the church, led to me reflect on that but I decided not to seek another term," Dr Ramos-Horta said.
Recently East Timor's former prime minister, Xanana Gusmao, threw his support behind the Fretilin party candidate, Lu'Olo, but Dr Ramos-Horta said that was not the reason he decided not to run. "Not at all, because I never discussed with Xanana Gusmao or anyone whether they should support me or not," he said.
Dr Ramos-Horta said the powers of the president in East Timor were limited and he said he would be able to make a contribution in other ways.
He said it was time to make way for new leaders, and that he would remain available to help those elected in the presidential and parliamentary elections this year.
"I will remain available to work with the new president and to look at how I can help the new government," he said. Dr Ramos-Horta said the next five years would be crucial for East Timor.
"We will have to address serious issues to further stabilise the country, further consolidate peace, further improve our democratic institutions, eliminate corruption from the face of Timor-Leste," he said, referring to the country by its official name.
The issue of economic development is tipped to feature heavily in the country's elections this year. East Timor's economy is reliant on oil and gas revenue but the Bayu Undan gas field, which is East Timor's main source of revenue, is nearing the end of its life.
The country's petroleum fund could run out in a decade and there's concern the country's current development strategies are not doing enough to develop alternative sources of revenue.
East Timor's President, Taur Matan Ruak, is not expected to run for a second term. Instead, he is expected to run for prime minister for the new Peoples Liberation Party in elections later this year.
Dili (AFP) East Timor will hold a presidential election on March 20, an official said on Wednesday (Jan 18), and Nobel Peace laureate Jose Ramos-Horta may try to make a comeback as head of state.
It will be the third presidential vote in the tiny half-island nation since it won independence in 2002 following a brutal, 24-year occupation by neighbouring Indonesia.
"The president... issued a decree Tuesday which stated that the first round of the presidential election will be held on March 20," Mr Nelyo Isaac Sarmento, state secretary for social information, told AFP.
Dr Ramos-Horta, who lived in exile during the years of occupation and was East Timor's voice on the international stage, was a major figure in the country's politics for a decade after independence serving as both prime minister and president.
He lost his post as president in 2012 elections and vowed to step back from politics, but analysts say he is considering running in the March polls for the largely ceremonial post.
However his likely rival Francisco Guterres a former guerrilla fighter known by his nom de guerre "Lu Olo" is seen as a stronger candidate.
Up to six candidates are expected to compete in the first round in March, said Mr Sarmento, although none has officially declared their candidacy. No candidate is expected to win the required 50 per cent of the vote on March 20, meaning a run-off will likely be held on April 20.
Incumbent President Taur Matan Ruak is not expected to stand. "Ruak has said he will not stand again as president and is very widely expected to run for parliament, with the intention of becoming prime minister," said Professor Damien Kingsbury, an East Timor expert at Australia's Deakin University.
Nearly 750,000 Timorese are registered voters, Mr Sarmento said.
The presidential poll sets the stage for parliamentary elections expected in July, which are more important as they will decide who becomes prime minister.
During the Indonesian occupation of East Timor, a poor country of 1.1 million people with an oil-dependent economy, around 183,000 people died from fighting, starvation or disease.
Timor-Leste goes to the polls in 2017 with little in the way of a genuine policy debate. The political scene is dominated by former revolutionary leaders and the jostling between them. It seems likely that the two largest parties the National Congress for Timorese Reconstruction (known by its Portuguese initials, CNRT) and the Revolutionary Front for an Independent East Timor (Fretilin) will back the candidacy of Francisco "Lu Olo" Guterres in the upcoming presidential election. These two parties will probably also win a majority in the parliamentary poll due in July, allowing a broad government of national unity to remain in place. Opposition groups that highlight issues of corruption are unlikely to make much headway, producing a new parliament with a fragile opposition.
The decision of Xanana Gusmao, a former leader of the resistance against Timor-Leste's occupation by Indonesia, to step down as prime minister in February 2015 led to the formation of a government of national unity, backed both by Mr Gusmao's CNRT and Fretilin, the party of the current prime minister, Rui Maria de Arauijo. The support of smaller parties afforded the coalition government the backing of all 65 members of parliament for some time, leaving Timor-Leste bereft of a parliamentary opposition.
However, this cosy set-up has led to government clashes with the president, Jose Maria Vasconcelos, who is popularly known by his nom de guerre, Taur Matan Ruak. In February 2016 Taur Matan Ruak made a withering criticism of Mr Gusmao and what he sees as political corruption. This is significant, as Taur Matan Ruak has decided to stand down as president in 2017, running for parliament instead with the support of a new party, the People's Liberation Party (PLP), in a way that reopens the sphere of democratic competition. The perceived closeness of a small party, the Partido Democraitico (PD), to the president led in May 2016 to the PD's own expulsion from the ruling unity government. (PD ministers in the government opted to stay as independents, forestalling a reshuffle.)
This pits the supporters of the unity government against those who focus on corruption and claim that the government is wasting the country's petroleum wealth on trophy projects. The first election due in 2017 is for the presidency, which is likely to be held in March, with a run-off in April. A new president will take office on May 20th. So far, there are three candidates.
Fretilin is backing its party leader, Mr Guterres, who lost out to Taur Matan Ruak in the 2012 presidential poll. Mr Guterres has emphasised his closeness to Mr Gusmao in a way that suggests he is seeking CNRT backing. The only other declared candidates are Antoinio Maher Lopes, known by his nom de guerre Fatuk Mutin, who was put forward by a minor party, the Socialist Party of Timor, as well as Josei Antoinio de Jesus das Neves, who goes by the nom de guerre Samala Rua. He is a former deputy commissioner of the Anti-Corruption Commission and is running as an independent. Presuming that CNRT does not run a separate candidate, this leaves the field wide open for an easy win by Mr Guterres. Speculation that a former president and Fretilin founder, Josei Manuel Ramos-Horta, currently the UN Special Representative to Guinea-Bissau, might run has so far proven unfounded.
This will be followed in July by the legislative election. As CNRT and Fretilin appear to be continuing to co-operate, it is likely that these parties will win a majority in parliament. A poll conducted in November 2016 by the International Republican Institute (IRI), a pro-democracy think-tank, shows that Fretilin has the support of 44% of Timorese, while CNRT comes in at second place with the support of 19%. Only 3% of those surveyed supported the PD, and 2% the PLP, with other small amounts of backing other minor parties. Under a proportional representation system with a 3% threshold to secure a seat, Taur Matan Ruak may struggle. The opposition groups are likely to win only a handful of seats in total.
This reflects broad satisfaction with the governing coalition. In the IRI poll, 74% stated that the government was doing a good job, and reported improvements in healthcare, education and electricity supply. There is strong public support for state investment in the Oecusse special economic zone and the Tasi Mane petrochemical complex. At present, there appears to be little public opposition to the way that the government is spending petroleum wealth. Over the longer term, however, as petroleum wealth runs out, a stronger political debate may emerge in Timor-Leste. In policy terms, there seems little reason to expect the 2017 elections to produce a sharp change.
Paulina Quintao The government is still unable to calculate annual medical supply needs accurately as hospitals are not providing a daily record of stock quantities and usage.
Minister of Health Maria do Ceo Sarmento Pina da Costa acknowledged that medication supply was an ongoing issue that the ministry still needed to resolve.
She said health personnel did not record the prescriptions given to patients and therefore it was difficult to calculate medication needs clearly.
"We don't have data, so it is difficult to calculate clearly. If we over calculate then a lot of medication will be burnt and if we under calculate then medication stock runs out," she told a public audience with MPs at the National Parliament.
Other problems, she said included the lack of human resources in health facilities, particularly pharmacists, with cleaners regularly helping nurses to distribute medication to patients.
Last year the government was forced to burn four containers with 47 different medical items valued at more than $300,000 because they were past their use by date.
She said this medication was purchased between 2013 and 2014, with some also donated by the Global Agency Fund and UNICEF.
Most of the medication burnt was antibiotics, including ampixilin, which is no longer used for treating patients.
In 2015, the government established an online database system in health centers in Baucau and Dili to control the daily medication supply in the health facilities there, but it is no longer functioning in Baucau due to internet problems.
Meanwhile, President of Commission F (responsible for health, education, culture, veteran affairs and gender equality) MP Virgilio da Costa Hornai said some of the medication purchased and donated by international agencies was not based on health needs in the country.
He said it was important that health personnel register medication use in each health facility to help the government to calculate stocks properly when purchasing supplies.
"We should have a database so we can calculate the drug purchases based on our necessities," he said.
He called for an in-depth investigation into the burning of the four containers of medication and for the results to be made public.
He also called on the team from the Autonomous Drug and Medical Equipment Service (SAMES) to be more accountable and only purchase medicine that was required.
Paulina Quintao The salt brand Kapal which is produced in Indonesia and has been available in Timor-Leste for many years is intended to be used in pig feed rather than human consumption.
Minister of Commerce, Industry and Environment (MCIA) Constancio Pinto said the government had warned entrepreneurs to reduce imports to the country. However, Pinto said the government could not stop salt imports as Timor had adopted a free market economic policy.
"MCIA has already talked with the company importing the salt and they have agreed to reduce this and also coffee [imports]," he said following the signing of an MoU between supermarkets and horticulture groups at Timor Rai Klaran hall room in Aileu.
He said salt production in Timor was sufficient to distribute to local markets and more awareness was needed about the benefits of consuming locally produced salt, which was much better quality than imported products.
He said the government was making efforts to increase salt production for local markets by providing funds to producers in Kasait (Liquisa) and Atabae administrative post (Bobonaro), as well as Manatuto and Laga (Baucau).
Timor currently exports salt to Singapore and Macau. The government is now starting to invest in small industries and has been providing funds to producer groups since 2014 to help boost their production levels.
While Timor is still economically dependent on oil, the government has started investing in the tourism and agriculture sectors, especially local food production.
Meanwhile, President of Commission D (responsible for economy and development) Jacinta Abu Cau Pereira said Timorese people were not animals and called on the government to ban salt imports.
"Indonesia as producer country, they use salt just for feeding animals and in Timor we consume it, we are like animals this cannot happen, we must stop it," she said.
She also expressed disappointment that although the Minister had acknowledge that the Indonesian salt was used in animal feed that the government allowed entrepreneurs to continue importing it to Timor for human consumption.
She said that although Timor had adopted a free market system, it did not mean that all products could be imported.
She also called on the government to introduce proper policy and regulations to control imports and ensure products being accessed by communities were good quality and not harmful to people's health.
Paulina Quintao Data shows that 20% of Timorese companies producing bottled water do not meet international standards set by the World Health Organization (WHO).
20% of local companies producing potable water do not meet international standards set by the World Health Organisation. 20% of local companies producing potable water do not meet international standards set by the World Health Organisation. 20% of local companies producing potable water do not meet international standards set by the World Health Organisation.
The National Laboratory's Director for Toxicology, Water Analysis and Environmental Services, Pedro Almeida da Silva, said there are currently 70 companies producing purified water in the country, of which 80% are meeting proper standards.
He said the data was based on monthly water samples provided by companies for testing.
He said the large water bottles were often contaminated by bacteria because they weren't sterilized properly, while chemicals used to treat the water were not based on the correct dose and therefore the water tasted bitter and smelled bad.
He was also concerned that consumers still lacked knowledge about the quality of local bottled water products.
He therefore, he called on consumers to be cautious when buying bottled water as poor quality products could impact on people's health and cause diarrhea.
In a recent incident at the Ministry of Petroleum and Mineral Resources, employees questioned the quality of water products being because provided at the office after a number of staff experienced diarrhea symptoms.
A sample later tested by the laboratory team identified that there was bacteria present which caused diarrhea.
After being informed the company in question made improvements to their production process and subsequent sample tests were bacteria free. He said issues like this occurred as factory workers lacked proper knowledge.
Meanwhile, national MP Leonel Marcal said almost everyone consumed treated water as it was not safe to drink directly from the tap. He said the government had an obligation to control water products on the market and should temporarily suspend companies that failed to meet proper standards.
"We see that almost all people in the country, especially in Dili, do not consume water from a natural source, but everyone consumes water from the factory. Of course, they are using chemicals and if we don't have good controls then this will affect people's lives," he said.
He said Timor-Leste already had consumer protection laws in place and therefore encouraged anyone that purchased poor quality water to make an official complaint.
"If they (companies) break the law they should be closed, so they don't bring disease and death to others," he said. He also called on the competent bodies to process companies that sold contaminated food and water according to the law as it was crime and affected people's lives.
Thomas Ora, Dili, Timor Leste Nothing unusual happened when Aitarak - not his real name - moved from Timor-Leste to Malang in Indonesia's East Java province to study law, three years before the country's independence referendum.
Things became difficult for him when conflict broke out at home during the referendum in 1999, forcing his family to stop sending him money. Aitarak then had to work in a bar, where he began taking drugs and later contracted HIV.
"The world was crumbling upon me," Aitarak, 41, told ucanews.com, recalling the day he was diagnosed with HIV in 2000 and the sense of shame, guilt and loneliness he felt, afraid to tell about his status to his family.
For the past 17 years, Aitarak has worked with a non-profit organization in Timor-Leste, which focuses on HIV/AIDS prevention. After years of hard work, the organization recently appointed him to program manager. Through the organization, he wants the young people of Timor-Leste to stay away from drugs and casual sex that can lead to HIV/AIDS.
"I want to make sure that other people will not fall into the same pit as I did," he said. Today he advocates for young people to avoid unsafe sex and drugs, and for married couples to remain faithful.
Daniel Marcal, Executive Secretary of the National Commission of HIV/AIDS, said HIV cases in Timor-Leste began to emerge even before independence, starting with only a few cases. The number, however, has increased every year.
The commission reported last year that in the past 13 years more than 600 cases were discovered, of which 29 percent were young people aged 15-24, 59 percent were people aged 25-44 and 9 percent were people aged 45 years and older. The remaining percentages are children aged 14 years and younger.
However, these numbers are limited to data from hospitals and clinics. It is possible that the number is higher because many people do not report their HIV status. People with HIV live in almost all the 13 districts, but predominately in Dili, followed by Bobonaro, Kovalima-Suai on the border with Indonesia, Baucau, Oecusse, and Ermera, said Marcal.
"HIV in Timor-Leste is like the tip of an iceberg, which will be a huge problem later if it's not handled properly," said Marcal.
The government continues to fight the spread of HIV and every year it allocates about US $600,000 to clinics and groups dealing with treatment.
According to Marcal, the main contributing factors to the spread of HIV include poor education and a lack of understanding about the importance of healthy lifestyles.
"The easy availability of paid-for sex makes it worse," which is rampant he said adding that most sex workers in Timor-Leste are young girls coming from poor families and also from the Indonesian border district of Atambua on West Timor.
The commission will sign an agreement with the Indonesian government this year to monitor the movement of people across the broader to minimize the spread of HIV in border areas.
Bishop Virgilio do Carmo da Silva of Dili said the Catholic Church is saddened and alarmed by the large number of young people contracting HIV.
"To those with HIV, you may not lose hope, but believe in God," Bishop Da Silva said during a Mass dedicated for HIV/AIDS patients in December. "To families and communities, please embrace people with HIV and not discriminate against them."
Holy Spirit Sister Prisca dos Santos, the manager of Dili Rest Home, a house for people with HIV/AIDS, said that since its formation in 2011, the center has not only provided service for patients but also counseling for the families.
However, the nuns will only allow one person in the family to know about it; the one who will continuously monitor his or her HIV positive sibling. "Because if many people know, they will be ousted from the community," said Sister Dos Santos.
Some female patients helped by the center have been living with HIV for many years and are actively working in shops, restaurants, and are housewives, while male patients work as drivers and laborers.
Since its establishment six years ago, Dili Rest Home has helped more than 500 people, not only giving them medicines but also teaching them basic skills such as sewing, making herbal medicines and baking cakes.
The result of their labor is sold to the public and the money is given to them to pay for transport to clinics or to buy daily needs at home. "With this kind of help we try to restore their self esteem," Sister Dos Santos said.
Paulina Quintao Many young women are marrying early due to a lack of adequate information about sexual and reproductive health issues.
Secretary of State for Youth and Sport (SEJD) Leovigildo da Costa Hornai said one of the most significant obstacles faced by young women was early pregnancy.
"Families in rural and urban areas should tell their children not to get married early because it can ruin their future," he said at the opening of a march to mark International Girls Day in Jardin 5 de Maio in Dili.
"They have already formed a family; of course this impedes them from continuing their study at a high level because they must take responsibility for their own family."
He said the government and local organizations, with the support of international agencies, continued to make efforts to establish a clear policy in regards to women's participation in the national development process.
Therefore, he called for the young women to strengthen their morality, knowledge and humanity to enjoy their rights correctly. "These three foundations will guide you to become Timorese women that can respond to the global and universal principles," he said.
However, he said another obstacle faced by young women in relation to early marriage was Timor's culture of giving higher importance to men.
However, he said it depended on individual families as to whether daughters were given equal opportunities and access to education.
Meanwhile, youth representative Odelia da Luz Vargas acknowledged that many young women were unable to continue their studies as a result of early pregnancy.
"I think it is not good and we should raise awareness to increase young women's consciousness about the importance of education," she said. She therefore called on the government to improve the quality of education quality as this helped develop better leaders in the future.
According to 2014 data from the Ministry of Health, 23.2% of women under the age of 19 dropped out of school after falling pregnant.
Meanwhile, Deputy President of Rede Feto Alzira Reis said women's organizations had conducted many campaigns about the impact of early pregnancy on health and education, but they were not working effectively.
"It (early pregnancy) impedes their education because they cannot go back to school and increases the risk of abortion [and] other infectious disease in their reproductive organs," she said.
She said the lack of information from parents meant many young women abandoned their classes to do other activities outside with friends.
She therefore called on women's organizations to continue to advocate for the government to establish a policy to encourage young women to continue their studies after giving birth.
Paulina Quintao The falling price of coffee makes has saddened growers in Ermera municipality who are struggling to improve their lives and send their children to school.
The President of Ermera municipality authority, Jose Martinho do Santos Soares, said the coffee price is a perennial problem for farmers, which has not been tackled so far.
The local coffee price is set based on the international market, which is falling in price at the moment, and therefore directly impacting Timor-Leste.
"Coffee costs 30 cents per kilo and this isn't fair for the farmers, so how can they send their kids to schools and how can their family have good health?" Soares said at celebrations to mark Farmers Day in Ermera.
That is why the local government has suggested fixing a fair price so that both farmers and companies can benefit from the coffee, he said.
Farmer Francisca Ximenes also called on the government to set a fixed price for Timorese coffee (Kafe Timor) as the existing price was too low. Ripe coffee costs 35 cents per kilo, with ground coffee costing $1 per kilo.
"We want the coffee price to be increased from $1 to $2 because we have many children who need to go to school and we can't afford to pay for their school fees if the price is falling," Ximenes said.
As well as school fees, growers spend the money they earn from selling coffee on traditional ceremonies such as funerals (lia-mate) and weddings (lia-moris), as well as other daily needs.
President of the Ermera Community Leadership Association Luis dos Santos said some of the coffee trees were so old that they can only produce a little fruit.
"Some 100-year-old coffee trees don't fruit well [and] that's why the Ministry of Agriculture and Fisheries has started doing coffee reforestation in some villages," dos Santos said.
He also urged the government to standardize a coffee price that is fair for farmers.
Sarina Locke An Australian agricultural aid worker motivated to assist East Timorese people has helped farmers double crop yields and find useful time saving devices.
Australia will spend more than $200 million on overseas agricultural aid this year. The projects aim to improve crop varieties, and farming techniques, develop better feed for livestock and help them market their produce.
Aid workers like Samuel Bacon say they find the work fulfilling, because the results can be dramatic.
Mr Bacon came to East Timor to work with farming families. His journey led to doubling corn production, which started when he accidentally fried the electricity in a Timorese home in Los Palos, trying to screen a film.
"The community wanted to see it, so the next day I bought electrical gear and rewired his house," Mr Bacon said. "In a break I was talking to his wife over a cup of coffee and I asked 'what are your needs and struggles'".
The answer was air-tight storage, because almost all the corn they could grow became infested with pests. They had small drums from a previous Australian program through the Seeds of Life aid program, but it wasn't enough.
"They could produce 1.5 tonnes on their 1.5 hectares of land, the rest was eaten by rats and weevils," Mr Bacon said.
"We started to need a bigger idea for corn storage, so we looked at tanks being produced locally and how we could modify them to be air-tight, to suffocate the weevils inside."
A Chinese proverb says "give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime". Mr Bacon's motivations are in that vein. He wanted the farmers to invest in grain storage, not be given handouts. "So for the sizeable $600-$700 loan, we entered a business arrangement. And for me to assist him, I really wanted to understand his production, his input and labour costs, and how we could help him get better yields reduce his labour.
"So we started, made up a diary, and I said 'every time you walk into that field, I want you to write down what you do, how many people were working that day, the costs, buying some food for the farmers, or if you've killed a chicken or two to feed them, buying rice or corn'.'"
The result showed the biggest labour effort was in shelling the corn. With the group of 50-60 people having to shell 25 tonnes, it would take many days and required goats to feed everyone.
"It was a massive job, difficult for the women and some people were freeloading and you'd have to feed them as well. I remember seeing this as a kid at country shows where you put a corn cob in and wound the corn off. Looking on the internet, [I found] there were some available in China."
The project imported thousands of the devices. The hand winding shelling device, will shell the corn at least four times as fast, without the split thumbs.
Mr Bacon started working with the Australian program Seeds of Life, which developed new high yielding crops, and brought the Las Palos farmer into that program. The program wrapped up in 2016.
When asked what poverty meant in countries like East Timor, Mr Bacon said "it's a whole lot of pressures from a lot of different directions".
"It's farming, social, it's health. Even your inability to understand things because as a child you didn't get enough nutrition. As a modern world we need to be careful we're not dumping our modernity onto them, onto people who are often happy living a simple life.
"So we have to be careful to help them move into a future that is comfortable. They just want to be happy."
Felicity James A survey of households in Timor-Leste has found most people in the country's capital Dili fear eviction from their land in the next five years.
Land conflict and dispossession in the country are "dormant giants" and pose an increasing threat to stability, according to an Asia Foundation report.
The foundation's Timor-Leste deputy country director Todd Wassel co-authored the report to inform the debate about draft land laws currently before the country's Parliament.
"If the law were to pass, we estimate a quarter of Dili would not be protected under the new law, so they wouldn't have any legal tenure security on the land where they're currently living," Mr Wassel said.
"That's roughly about 63,000 people. The survey found that almost 60 per cent of people, despite saying that they own the land, are afraid that they'll be evicted in the next five years."
More than 1,000 households in Ainaro, Ermera and the urban area of Dili took part in the survey. "There hasn't really been any quantitative data available for the policy development process," Mr Wassel said.
Mr Wassel said the number of people without protection under the draft land laws could be even higher, because people who reported holding valid land titles could be mistaken.
He said the draft land laws catered primarily for people who moved onto their land before 1999 and people in Dili were most likely to be affected by the new regime.
"There was a lot of dispossession and landlessness that happened during the Indonesian occupation and we're seeing people focusing on Dili as their main source of livelihoods."
Ines Martins is part of the Timor-Leste Land Network and said the land laws needed to protect people forcibly relocated during the Indonesian administration.
Ms Martins said an adverse possession law, which provides the right to land or compensation from possession of land prior to 31 December 1998, specifically excluded these people.
"During that time, most of Timor Leste was evicted from their land to another land. So how can we solve this issue?"
Ms Martins said people would not be satisfied with monetary compensation, and guidelines for providing alternative land after evictions should be part of the legislation.
"People don't want to move, but politically forcing them to move? The Government has to think about this, they have to evaluate this."
The survey also found only 40 per cent of people living in Dili indicated they owned land outside the capital. "If people get dispossessed in Dili there is no place for them to go," Mr Wassel said.
"There's a common misconception that if people lose their land in Dili, they can just move back to the countryside where they're from. Most people don't have that option."
Mr Wassel said he hoped to see an increase in discussion about land rights in Timor Leste in the lead-up to the country's election in July. "I think land issues touch just about everybody in the country."
Read full report here: http://asiafoundation.org/publication/survey-access-land-tenure-security-land-conflicts-timor-leste/
Bernardo Almeida, Todd Wassel Voters in Timor-Leste will head to the polls twice this yearfor presidential elections in March and parliamentary elections in July in what will be the first such elections to be held since the UN Mission departed in 2012.
The next government will be faced with dwindling oil reserves and the urgent need to switch from a petroleum fund-based economy to one that is more diversified and sustainable. While these issues will factor heavily on the minds of Timor-Leste's citizens on election day, another issue could factor as a potentially even bigger priority: land.
Fifteen years after independence from Indonesian occupation, Timor-Leste still lacks a legal basis for determining land ownership. At the time of independence, post-colonial and post-conflict legacies resulted in a variety of challenges, including landlessness and forced displacement caused by Indonesian occupation, disputes caused by the massive land occupation that occurred after the 1999 violence, and the legitimacy (or lack thereof) of formal land titles issued during the Portuguese and Indonesian administrations.
Most Timorese in the countryside access and hold land through customary and informal systems, which have no legal recognition. Only a minority ever got access to formal land titles during the Portuguese or Indonesian administrations. This situation is further complicated by urban migration, especially to Dili, where without mechanisms to legally access land, people can only rely on informal schemes. Land occupation (sometimes peaceful, other times violent) and informal arrangements are common; even those that acquire land from formal owners do not have the legal mechanisms to securely formalize an acquisition.
In 2012, Parliament approved a draft land law to clarify the current confusion regarding land rights by establishing a set of criteria to determine initial ownership. However, after being vetoed by then-President Ramos Horta, the law has been going back and forth between the government and parliament, and is currently once again under debate. Initial versions of the draft included provisions to protect those households from eviction that do not fulfil the criteria of the law for land ownership recognition and cannot afford resettlement. But this protection has been removed in the current draft, and it is not clear how many people could face eviction.
Despite the high stakes involved, there is little reliable, consistent, and independently collected data about land. The Asia Foundation and the Van Vollenhoven Institute in Leiden University this week released a new survey that provides quantitative data regarding land-related issues in Timor-Leste. The survey, which interviewed 1,152 households in the municipalities of Ainaro, Ermera, and Dili, will assist the government and parliament in developing evidence-based land policies and legislation.
Any new legislation will have the greatest effect on the capital, Dili, where a quarter of the country's 1.2 million people live. Dili has seen a boom in urban migration, with 39 percent of new households established after 1999 (and 21% after 2008). Despite high levels of recent arrivals, 87 percent of survey respondents in Dili considered that they own the land where they live, even though almost half also say they do not have a land title. Without a land title, land rights are not recognized under the current land law, leaving approximately 101,000 people without any legal tenure security.
Despite high levels of perceived ownership, and more than half of respondents in Dili saying they have a land title, the majority of households in Dili have low perceived tenure security, with 70 percent fearing in higher or lower degrees that they will be evicted in the next five years. Such a high level of fear seems to indicate a low trust in the quality of their documents combined with recent, ongoing state dispossessions that have further flamed widespread fears of land-related instability and of social and political exclusion.
The concept of "ownership" perceived by the great majority of citizens is very different from western-like definitions of ownership, in which the owner can freely transfer and avail of the property. Despite claiming to be the owners of the land, the majority of respondents reported not being allowed to transact or rent or lease the property. Many civil society organizations following the land debate are concerned that if the land reform law passes, the disruption of the traditional social and cultural fabric that binds villages together may have a greater negative impact than the current lack of titling.
The survey found that in all the target municipalities, men have greater access to and ownership of land and housing. However, there are several cases where the land is claimed to be owned individually by men, but the house built on the land is jointly owned by the couple. Any process of land registration or titling that does not incorporate clear measures to mitigate gender discrimination will most likely reinforce these inequalities and create another structural barrier for women to own land.
Under the current draft law, the survey found that a least a quarter of the population in urban Dili (63,000) would not have any land rights recognized by law and will not be entitled to any compensation. This number could increase substantially depending on the strictness of assessing legal validity of land titles and the means of proof accepted.
The lack of any protection against evictions in the current draft law will leave these households without any social protection and may cause further marginalization due to difficulties in assessing equivalent land. Clearly, evicting a quarter of the population is not a viable solution to the land problem in Dili, and would cause new problems, including potential violence and disruption to the economy.
While new land legislation is urgently needed in Timor-Leste, it's critical that it protects the rights and security of its citizens, while also helping to provide increased confidence to businesses for increased investments.
Read full report here: http://asiafoundation.org/publication/survey-access-land-tenure-security-land-conflicts-timor-leste/
Tricia Aquino, Manila The Philippines should use its chairmanship of the Association of Southeast Asian Nations (ASEAN) this year to accelerate the membership of East Timor in the 10-member regional bloc.
This is according to M.C. Abad, Jr., the former director of the ASEAN Regional Forum, housed in the ASEAN headquarters in Jakarta, Indonesia.
Abad was one of the speakers at the Mangrove Forum on International Relations on Tuesday at the Sofitel Philippine Plaza. In the forum, the DFA's Undersecretary for Policy Enrique Manalo gave an overview of the priorities on the agenda of Manila's chairmanship of the regional bloc in 2017.
Abad noted that the Philippines had stood with East Timor in its struggle for independence from Indonesia, which East Timor finally gained in May 2002.
In fact, the Philippines' solidarity with East Timor had even caused a "ripple" in diplomatic relations with Indonesia, Abad recalled.
He was referring to the dilemma faced by the Ramos administration in 1994, when private groups and Philippine-led NGOs convened the international congress on the East Timor issue at the University of the Philippines, even though then-President Fidel V. Ramos stood solidly with the Indonesian government a close ally of the Philippines in ASEAN and imposed an official ban on the entry of foreign delegates.
The Manila conference was the first time the international community took note of East Timor's plight 24 years since it was annexed by Indonesia.
In the late 1990s, Philippine religious congregations and volunteer groups based in East Timor also helped provide sanctuary to thousands of East Timorese when Indonesian militiamen went on a rampage and started attacking them.
Then Philippine President Joseph Estrada was among the first to call on the United Nations to send peacekeepers to East Timor, to prevent the slaughter of civilians as the drive towards independence moved faster.
According to the BBC, East Timor applied to join the ASEAN in March 2011. Six years later, it remains the only country in Southeast Asia that is still not part of the ASEAN.
As "a democratic country in transition", East Timor deserves support, Abad said. The longer its membership is delayed, the more difficult it will be for the country to catch up with the rest of Southeast Asia, where some ASEAN members have in fact tried to rev up their economies to keep pace with the bloc's march to integration.
Abad added that the Philippines will earn recognition should it pave the way for East Timor's membership in the ASEAN as it chairs the organization's 50th year.
Abad also suggested that the Philippines pursue more international dialogues on the South China Sea as a way to prevent disputes from escalating into armed confrontation.
He recommended that the Philippines bring up confidence-building measures that the ASEAN had undertaken with China even in decades past. It is important to demonstrate "sincerity and intention" in dealing with the disputes over the South China Sea, he stressed.
As ASEAN looks to the future, Abad advised the organization to take note of a study that says that the greatest achievement of ASEAN has been the preservation of peace. This will dictate the direction of the member-states.
Economic and social developments in these countries can only be achieved in an environment of peace, Abad said. Therefore it is necessary to be committed to "pacific settlement of disputes".
Each member-state should also contribute to the stability of the region, as "failed or weak states" affect not just a country's citizens, but its neighbors too if it becomes a transit point for terrorists, drug traffickers, international criminal networks, or even transnational environmental hazards.
In closing, he noted that the Philippines must take care of itself. It will only be valuable to the ASEAN network if it is a contributor, rather than a burden.
"We should have a means to help ourselves and others. We should not be distracted from building our national economy in the years ahead," Abad said. "We lead (or live) for ourselves and for others."
Paulina Quintao The Timor-Leste government has established a secretariat for youth from the Community of Portuguese Language-Speaking Countries (CPLP), with the aim of strengthening the friendship between member countries.
Timor-Leste government has established a secretariat for youth from the Community of CPLP, with the aim of strengthening the friendship between member countries.
The secretariat will advocate for youth issues in member countries and around the world, as well as giving young people an opportunity to learn and develop themselves through discussions with CPLP's youth network.
President of the National Youth Council (CNJTL) Maria Dadi S. Magno said the main role of the CPLP youths was to do advocacy work to respond to the problems identified during the annual CPLP youth forum last year.
During the youth forum, member countries established the Dili Declaration, which consisted of four important issues: Portuguese-language training, unemployment, gender inequality and education.
"We have established this secretariat with the function to coordinate with other member countries to realize our dream, especially for youth development," Magno said at the launching ceremony in Farol, Dili.
Although some member countries have yet to establish a youth secretariat, including Sao Tome and Principe, Guinea Bissau, Cape Verde and Mozambique, he said as Timor-Leste initiated the plan they must start even with a small team.
He said the secretariat consists of youth representatives from the resistance movement, those living with disabilities and rural and LGBT communities.
Timor-Leste was among the South East Asian countries that took a part in the CPLP organization in 2012 and in 2014 Timor-Leste hosted a meeting of the heads of states of member countries, assuming responsibility for the presidency for a two-year term from 2014 to 2016.
Meanwhile, Secretary of State for Youth and Sport (SEJD) Leovigildo da Costa Hornai said the government was optimistic that the secretariat would work efficiently, especially in advocating for the problems faced by young people in rural areas nationally and around the world.
"We hope that they can talk based on the reality in Timor, especially doing advocacy about the problems that young people face," he said.
As the roles are unpaid, he therefore called on representatives to continue to work with a voluntary spirit, adding it was important to help each other, especially other youths who are facing problems in their lives.
Venidora Oliveira The majority of illegal fishermen in the Timor Sea detected during operations by the Maritime Police come from Indonesia.
The Commander of the Maritime Police, Superintendent Linho Saldanha said many illegal boats have been captured since they started operations.
The Commander of Maritime Police, Superintendent Linho Saldanha, said since being established Maritime Police have captured many illegal boats, including the KM Samudra Lima from Indonesia, which was seized in 2014 and later sold by the government.
"We seized the boat in Lore (in Lospalos) and at that time the government sold it and the money was added to state coffers," he said. "Almost all illegal fishing comes from the neighboring country, Indonesia," he said.
Timor-Leste lies close to the small Indonesian islands of Alor, Wetar, Kisar and Liran, where many of the communities live in poverty and are therefore willing to fish illegally in the Timor Sea.
He suspected that sometimes local groups ask Indonesian fishermen to bring fish to sell in Timor.
He said illegal fishing had become a national issue and therefore urged the government to hold a seminar so that the relevant sides could identify weaknesses in the current system and discuss ways to improve and prevent illegal fishing in the future.
However, he said there needs to be better coordination between police and the court to look at establishing a proper mechanism, especially in regards to the process of capturing and seizing illegal boats so that authorities did not blame each other.
"So everything can run smoothly according to the country's interest as sometimes there is misunderstandings that lead to mistrust".
Meanwhile, National MP Antonio Serpah said he was appreciative of the successful efforts of the Maritime Police in capturing illegal fishermen.
He also called on those efforts to be continued and strengthened as the country's maritime wealth was very important for Timor's future development.
"We have not managed the maritime wealth properly in this development process [and] therefore the security [agencies] should guarantee that people do not take it all," he said.
Paulina Quintao The Timor-Leste government has yet to build a statue honoring women who struggled for the country's independence.
The Secretary of State for the Socio-Economic Support of Women (SEM), Veneranda Lemos, said the government has plans to build the statue, but the project had not got off the ground because of a lack of funding.
"We have thought to value our heroines and we should establish the monument for them, but not now," she said after participating at celebrations to mark the 4th national women's day at the National Parliament.
She said SEM had presented its proposal to a meeting of the Council of Ministers for consideration in the 2018 budget.
According to the plan, a statue of well-known resistance fighter Maria Tapo will be constructed as a representative of the women who struggled and died for the country's independence.
The late Maria Tapo was shot by the Indonesian army on in November 3, 1975 in Tapo suku (village) in Bobonaro municipality after it was attacked by troops.
Meanwhile, the President of Timor-Leste Parliamentary Women's Group (GMPTL), Florentina Smith said the government did not yet place a high enough value on the role of women during the struggle for independence.
"Sometimes, we talk about the heroes, [both] women and men [and] we uphold the men but not women," she said.
However, as a woman, she said she was proud of the government's initiative to construct a statue to honor the heroines and that GMPTL supported the project and was ready to approve the funding when the government proposes it in the general state budget.
East Timor and Australia have agreed to a new maritime border which would give East Timor control of a $40 billion oil field. But not everyone is happy.
With the host of maritime disputes in the Pacific, it is encouraging to see efforts at reconciliation and compromise, as Australia and East Timor have announced their intention to create a new maritime border agreement in 2017. In the wake of meetings in Singapore, which the Permanent Court of Arbitration Conciliation Commission described as "productive" where both parties "reaffirmed their commitment to work in good faith," an agreement is likely to emerge in September 2017.
The area of contention concerns the maritime border between Australia and East Timor in the Timor Sea. After its independence from Indonesia in 2002 an event which was facilitated by Australian support East Timor created the Joint Petroleum Development Area with Canberra, which created a profit sharing scheme for oil and gas extraction in the Timor Sea. After independence, East Timor had no permanent maritime border with Australia, yet this very area housed significant oil and gas resources. This agreement was hastily signed by East Timor, as the nascent nation desperately needed income sources.
In 2006 Australia and East Timor signed a temporary border treaty, which saw a 50:50 revenue sharing scheme and also delayed final border arbitration for 50 years. In recent years, there has been growing discontent in East Timor over the terms of this treaty, which many Timorese see as an unfair agreement negotiated with a far stronger partner. Relations between the two countries hit a low point in 2013 after allegations emerged that Australia had bugged Timorese cabinet meetings during the 2006 negotiations.
East Timor's Prime Minister Rui Maria de Araujo summed up the island nation's feelings towards Australia in a 2015 interview, stating that "having [spying devices] as an advantage for you to negotiate something that is a matter of death and life for a small country, I think is at least morally a crime [sic]." The fact that East Timor has managed to agree on 98 percent of its borders with Indonesia its former oppressor and genocidal overlord with the remaining two percent to be finalized in 2017-2018, before reaching a deal with Australia shows how broken bilateral relations with Canberra have been.
At the heart of the longstanding dispute is the Greater Sunrise oil and gas field. Discovered by Woodside Petroleum in 1974, the field's five trillion cubic feet of gas and 225.9 million barrels of oil (valued at $40 billion) has remained stuck in political limbo and untapped. Woodside owns 33.44% of the field, with Phillips-Conoco controlling 30%, Shell 26.56% and Osaka Gas 10%. This group has sought to finally develop the field, yet East Timor's 2015 suit in the Hague scuppered those plans. Woodside is predicting a commodity price rally in 2019, and encouraged by improving bilateral ties, has called on Canberra and Dili to reach an agreement as soon as possible.
The core point of contention has been thus: Australia has argued its border extends along the continental shelf, whereas East Timor has called for the border to be halfway between the two countries, a move which would place the majority of the Greater Sunrise field within Timorese waters.
It is therefore encouraging that despite such animosity, both countries are making steady progress towards a permanent resolution in 2017. Having taken Australia to the Hague and invoking the United Nations Convention on the Law of the Sea (UNCLOS), both countries have decided to work together to enlarge East Timor's maritime territory in order to give it more access to the region's oil and gas resources. UNCLOS is a friend to small nations, yet has been challenged by countries like China, especially in the South China Sea.
Australia and East Timor's commitment to working in good faith could offer an example for productive regional dispute resolution. Australia withdrew from the UNCLOS' compulsory dispute settlement procedures in 2002, yet it has managed to cooperate with UN organs to work on a solution with East Timor. Australia's reservations about UNCLOS are mirrored by China's resistance to outside mediation. Furthermore, the power disparity between Australia and East Timor is just as stark as that between China and countries like the Philippines. Furthermore, both the Timor and South China seas are contested for their oil and gas wealth, involve gross power disparities among claimants and dominant powers skeptical of UN arbitration.
Recently, Australia agreed to East Timor's demand to scrape the 2006 treaty. In return East Timor dropped its espionage case against Australia in January; allegations which were being used to validate its efforts to abolish the treaty. East Timor is facing significant pressure to resolve the maritime dispute, as the country is quickly running out of viable oil reserves. East Timor's oil and gas income peaked in 2012, and has been declining ever since; its Kitan oil field stopped producing in 2014, and the country's last remaining field Bayu-Undan is expected to cease production between 2020-2022. This is a very troubling scenario for East Timor as oil and gas revenues account for 75% of the state budget. It is therefore in the country's interest to resolve the dispute as soon as possible.
Despite wisely investing in the development of a petroleum fund, East Timor cannot sustain itself on investment revenue alone, and is being forced to withdraw from the principal: at current rates the country will be bankrupt in a decade. Moreover, alongside international pressure from the UN, it is in Australia's best interest to ensure East Timor's stability. If East Timor becomes a failed state, Australia will undoubtedly face not only a refugee crisis, but potentially renewed Indonesian efforts to reacquire the island. Indeed, Australia led the UN intervention in the country in 1999: failing to act on the border issue, and letting East Timor fall would severely damage Australia's international image and increase regional instability.
East Timor's pending bankruptcy has led some Timorese to question the government's reliance on oil and gas, arguing that the country needs to address basic needs and diversify the economy, rather than engage in more mega-projects. This is has been echoed by both the IMF and World Bank, with the later stating that "East Timor must employ its finite resources effectively and implement key reforms to support a more diversified economy [...] a combination of marginal investment and high costs also raise important questions [about] the quality and prioritization of the infrastructure programme."
Indeed the $2 billion price tag to get Greater Sunrise off the ground dwarfs the $1.39 billion 2017 state budget. The current government also wants to build a processing plant in the country in order to create jobs. Opponents of this plan argue that the costs of such a project would outweigh the benefits, especially since existing infrastructure exists in Darwin, or could be repurposed from the Bayu-Undan floating platforms. Opponents have also criticized the government for being out of touch with the needs of ordinary citizens, focusing instead on prestige projects such as joining ASEAN.
These criticisms come as the government touts its successes and engagement with Australia ahead of upcoming presidential and parliamentary elections in 2017. The problem for those who oppose the government's trajectory is that both major parties FRETILIN and the National Congress for Timorese Reconstruction (CNRT) have been in an informal power sharing agreement since the 2012 election created a hung parliament, which has left the country without an effective opposition.
In 2016 a new party the People's Liberation Party (PLP) was founded by the popular former corruption commissioner Aderito Soares in order to fill this gap. The PLP is critical of the government's development strategy and is seeking to make corruption and basic service provision key election issues.
East Timor's current president, Taur Matan Ruak, joined the current government as an independent in 2012. As the election slated for sometime between mid March and the end of July gets closer, Ruak is expected to resign as president and run as the PLP's prime ministerial candidate. Currently there is no declared CNRT presidential candidate, so it remains unclear whether the party will field its own candidate or support FRETILIN's Francisco Guterres.
Soares and Ruak are a popular couple, and put the PLP in a good position. While support for the PLP is growing, it is unlikely to form government: capturing 20% of the vote is seen as a good result, especially for such as young party. The PLP is angling for third party status, a role currently occupied by the languishing Democratic Party. While not expected to form government, the PLP could benefit from a protest vote, and it would certainly not be the first populist upset in recent months.
Regardless of East Timor's ultimate development focus, the main threat facing the government in 2017 is its ability to present a united front in, and thereby successfully concluding negotiations with Australia. Any fragmentation will present Australia with an opportunity to play on the FRETILIN government's fears about anti-development/anti-oil critics to force more concessions out of Dili in return for a speedy resolution to the border dispute. It remains to be seen whether Greater Sunrise will see a rising East Timor or if the light of day lays bare the country's divisions.
Hands up anyone who believes that the Sunrise gas project in the waters that separate Australia from East Timor will be developed in their lifetime, a challenge that Slugcatcher extends to any children who might be reading this column?
Some optimists will have raised their arms but most people who have followed the sorry saga of Sunrise since it was discovered in 1974 suspect that it could be at least another 43 years before any gas production facility is installed on the field.
The problem with Sunrise starts with its location in disputed waters, but has been magnified by political games, complicated by a brief war, impeded by a 3000m deep submarine trench, muddled by changes of government on both sides of the border and with all those issues, compounded by a collapse in the price of oil and gas.
Oh, and while those matters are being digested there's the most important question of all: what company is going to commit shareholder's funds to a project which, in all likelihood, will be marginally profitable given the gas price and uncertainties over tax and revenue-sharing arrangements?
The more anyone with an open mind looks at Sunrise and its troubled history the more it becomes a project that will probably be sold by its current owners as soon as the latest round of government-related issues are resolved if, in fact, they are ever fully resolved.
The latest twist in the Sunrise story started last week when the governments of Australia and East Timor agreed to terminate a 2007 agreement with the ridiculous name of Certain Maritime Arrangements in the Timor Sea, or CMATS for short.
In theory, the ending of CMATS clears the way for a fresh deal governing gasfields such as Sunrise, but in reality all it does is take the clock back another five years when an earlier treaty was signed, the 2002 Timor Sea Treaty which coincided with East Timor gaining independence from Indonesia.
At this point Slugcatcher apologises for dragging his reader through the crazy world of government treaties that are supposed to last 50 years and only last for 10 and for the total lack of understanding by government officials on both sides of the Timor Sea disputes about how business works.
What's happened and this is 2017 and not 2007 or 2002 is that the Australian and East Timorese governments have decided to re-visit the most basic question of all, where exactly is the boundary between the two countries and is it possible to have a jointly administered area to manage oilfield development?
For anyone who can be bothered referring to the history of the Timor Sea boundary that is what dogged relations between Australia and Indonesia as far back as 1975 when Indonesia invaded East Timor which was then a Portuguese colony, and was reignited in East Timor's war of independence which ended in 2002 when the former colony became a country.
Throughout all of the troubles the Sunrise project sat undeveloped, partly because of the technical challenge faced by all remote oil and gas fields, but largely because of a lack of confidence in any agreements made by government, and concern that agreements could be quickly overturned by changes in government.
How wise it was for Woodside Petroleum, the company with most skin in the East Timor game, to hold back on committing to a development of Sunrise until it had the confidence that the project (a) made financial sense, (b) could be developed using known technology and (c) would not be subjected to onerous additional taxes applied on the whim of government.
Now for the most important questions of all, what's actually changed?
There are no easy answers to those questions, which is the primary reason why Slugcatcher feels that he has entered a time machine and been sent back to 1974 when he vaguely remembers writing stories for assorted news outlets about the Sunrise gas discovery.
Hopefully, it will not be another 43 years before the oil industry celebrates the start of gas production at Sunrise, though that possibility should not be ruled out given the high level of distrust between the governments involved.
David Hutt With much of the population living in poverty and oil wealth running dry, Timor-Leste's upcoming elections could be the public's most important decision since independence
"Our people need money," said then-President Xanana Gusmao the day after Timor-Leste gained independence from Indonesia in 2002. "They need to sell their products. They need to have money to send their children to school and to start improving their daily lives."
When the East Timorese head to the polls in a few months' time, in what could be the country's most important elections to date, money will be the major talking point: how to end corruption; how the country's petroleum wealth should be invested; and whether there will be enough money for future generations. The answers are far from simple.
Timor-Leste's politics have typically been a contest between the two major parties, Fretilin and the National Congress for Timorese Reconstruction (CNRT), both of which trace their origins and disputes to the country's 24-year independence struggle against Indonesian occupation. The last elections in 2012 saw a further 19 parties compete, with the Democratic Party garnering 10% of the vote to finish in third.
Last year, Southeast Asia Globe reported on the growing cooperation between Fretilin and the CNRT, a rapprochement that led pundits to speculate that the parties had reached a power-sharing agreement, meaning the country was without an effective opposition to the CNRT majority government. In this void, President Taur Matan Ruak, a former military commander who took office running as an independent, assumed the mantle as the government's chief antagonist.
A new political party, the People's Liberation Party (PLP), was also formed last year by the former corruption commissioner Aderito Soares and it is all but certain that Ruak will resign his presidency and run on the PLP's ticket for prime minister. According to Michael Leach, an associate professor at Swinburne University, Australia, the combined appeal of the "popular" Ruak and Soares means "the PLP is in a very strong position to make a mark in the 2017 elections". Both presidential and parliamentary elections are set to take place sometime between the middle of March and early July.
The PLP is expected to overtake the Democratic Party in the ballot the latter has been flailing since its leader, Fernando de Araujo, passed away in June 2015 and seize the more established party's traditional third place. It has also "already developed a strong critique of the current development focus on large 'megaprojects', and has also raised allegations of patrimonialism", said Leach. Both of these issues are expected to be important to the electorate.
However, while few expect the PLP could win a majority, it has positioned itself as a viable option for protest votes and a potential thorn in the side of the next government.
Core to the PLP's and Ruak's message is that the government has forgotten 'the people', focusing instead on issues that have no bearing on ordinary lives. As the president said in parliament in February: "The state of Timor-Leste is far too centralised. It centralises skill, power and privileges. It excessively wastes resources, allowing thousands of Timorese to become second-class citizens."
By taking a strong populist stance, the PLP is challenging what some perceive to be the consolidation of power among the traditional elite who focus on large, costly development projects and aggrandised state budgets that are leading the country to bankruptcy. By doing so, it hopes to provoke the two main parties into reassessing the direction they are taking Timor-Leste.
Perhaps a good representation of the government's alleged misdirection is its focus on joining Asean a cornerstone of the country's foreign policy since independence. Debates linger over how much this will affect economic development, and ascension to the body seems little more than symbolic for Timor-Leste, as the only Southeast Asian country yet to be admitted. However, according to Charles Scheiner, an analyst at La'o Hamutuk, a local development NGO, joining the body is not particularly "significant for people's lives in Timor-Leste".
"It would be better for the leaders to devote their energies to reducing poverty and malnutrition, and investing in education, healthcare, water, sanitation and other things which are more immediate and connected more closely with the citizens," he added.
While there may have been improvements in quality of life and development advances in Timor-Leste, there is a risk such progress could become overstated. The government quite rightly says it has reduced poverty, but an official report from 2014 stated that 489,000 people, almost half of the 1.1 million population, were living in poverty in that year only a small decrease from 509,000 in 2007.
In recent months, there has been a slew of optimistic output from the government. A press release, dated 17 November, bears the headline: "Timor-Leste's economic outlook positive as reforms begin to show results." In an email to Southeast Asia Globe, Agio Pereira, minister of state and the government's spokesperson, further extolled the country's progress and hit back at naysayers.
"The government is focused on creating conditions for sustainable economic growth and economic diversification," he wrote. "We are building essential economic infrastructure, reforming systems to encourage private sector growth, strengthening the capacity of our human resources and supporting priority sectors for development."
However, as a recent report from La'o Hamutuk opined, this is little more than pre-election posturing. "Any government entering an election cycle will spin the facts to convince voters that they are doing a good job," it reads. "We hope that Timor-Leste's decision-makers don't believe their own propaganda."
The main economic issue facing the country relates to its oil and gas reserves. Kitan, the smaller of Timor-Leste's two producing oil fields, ended production in 2014. And if government spending continues on the same trajectory, the country's sovereign wealth fund designed to save oil revenues for future generations could be empty within 12 years, according to La'o Hamutuk figures.
Damien Kingsbury, professor of international politics at Australia's Deakin University, says this has placed corruption and economic planning at the forefront of this year's election, "because the first is getting much worse and is draining the country's limited resources, and the second because the government does not have a Plan B for when the oil runs out".
Indeed, if the most pessimistic estimates of state revenues are correct, then it will fall upon the next government to make what could be the most important decisions the country has faced in its short history since independence. Taking the wrong course could spell disaster.
"Timor-Leste has consolidated its democratic processes, and the 2017 elections should further confirm that," said Kingsbury. "However, even the most entrenched democracies can be subject to change in times of crisis, which the country is likely to face when the money starts to run out."
Predictions for any election are difficult, but the commentators Southeast Asia Globe spoke to offered up a few opinions. Most agreed that Fretilin and the CNRT will compete separately but, post-election, are likely to return to their power-sharing agreement. In none of the country's three parliamentary elections has any party other than Fretilin or the CNRT won the most votes, and it is highly unlikely this trend will change. If the PLP manages to gain 20%, said Kingsbury, it would have done a good job.
As for the presidential race, there are unconfirmed rumours that the Nobel Prize-winning former president Jose Ramos-Horta will return. When Pereira was asked about this, he did not deny it but said: "Timor-Leste is fortunate to have highly qualified, capable and committed people to stand for this role." At the time of writing, the CNRT was yet to announce its candidate, but another major question which could go some way toward demonstrating how the two main parties might cooperate post-election is whether the CNRT will back Fretilin's candidate, Francisco 'Lu Olo' Guterres.
"One key question facing the second- and third-largest parties after the election may be whether to accept ministries, or to instead act as an independent parliamentary opposition," said Leach. "In general, 'grand coalition' arrangements are good at promoting stability and reducing political conflict, but weaker on providing adequate parliamentary oversight and effective opposition."
When the people of Timor-Leste go to the polls, they will have their say on whether to back political stability and the status quo, or reconsider how the country moves forward. With pressure mounting on authorities as oil funds run dry and their approach to development comes under increasing attack, the most important outcome could be that the country gets a strong, committed opposition to effectively challenge government decisions.
Steve Bracks The revelation this week that Australia will negotiate a maritime boundary with Timor-Leste represents a significant and welcome policy shift within the Australian Government.
Progress in this decades-old dispute is long overdue. Australia's commitment to negotiations is a positive step for both countries, the broader region and the international community.
Xanana Gusmao, Timor-Leste's legendary former resistance leader, president, prime minister and now chief negotiator in the Compulsory Conciliation with Australia, has repeatedly emphasised that for his young nation, finalising Timor-Leste's maritime boundaries is the final step in achieving full sovereignty.
As a small half-island state in potentially oil-rich waters, with a desperately impoverished population, it is clearly in Timor-Leste's national interest to have permanent maritime boundaries so it can have unfettered sovereignty over the resources to which it is entitled under international law.
I believe it is also clearly in Australia's national interest to negotiate a permanent maritime boundary with Timor-Leste based on the principles of international law.
It is in Australia's national interest to have a permanent maritime boundary for the benefit of our security, defence and fisheries services operating in the Timor Sea.
It is in Australia's national interest to have an economically and politically stable neighbour to our near north. A maritime boundary based on international law would provide Timor-Leste with the economic base it needs to deliver desperately needed health and education services and invest in transport and water infrastructure.
It is in Australia's national interest to have a relationship with Timor-Leste based on trust and mutual respect. It reveals much about the relationship between the two countries that not one minister from the Abbott or Turnbull governments has visited Timor-Leste, which is a little over one hour's flying time from Darwin. There is no question that Timor-Leste is a friend of Australia, however, it is understandable that many Timorese believe Australia has not always acted as a friend.
It would also be in our interest to be seen to be respecting the international rules-based order.
The Conciliation Commission will oversee a series of confidential meetings in the coming months, engaging with both parties for the 'eventual conclusion of an agreement on maritime boundaries in the Timor Sea'. I am optimistic about the UN Compulsory Conciliation process. Both parties appear to be engaging in good faith.
The decision to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) was sensible and inevitable. CMATS was tainted by allegations in 2013 that Australia had bugged the room where the Timorese delegation gathered to discuss tactics during negotiations in 2004. It was also the Treaty that applied a 50 year 'moratorium' on maritime boundary negotiations between Australia and the then fledgling nation of Timor-Leste.
In a recent article in The Interpreter, Bec Strating makes the curious argument that while CMATS was in place Australia 'could counter charges of hypocrisy by arguing that its respect for the legally binding treaty was consistent with the rules-based order'. This is a strange assertion, particularly in light of allegations about Australian spying during the negotiations, and the criticism of Australia's refusal to accept the maritime jurisdiction of the international courts.
I believe Australia's reliance on CMATS which purported to give Australia rights to resources 150km from Timor-Leste and more than 400km from Australia undermined Australia's integrity in regard to support for international law and a rules-based order. With CMATS out of the way, and Australia's active participation in the UN Law of the Sea Convention Compulsory Conciliation process, Australia is at last powerfully demonstrating a commitment to the international rules-based order.
Australia's decision to negotiate is also good news for resource companies with interests in the Timor Sea. A permanent maritime boundary will finally provide the certainty that resource companies operating in the Timor Sea have sought for decades.
However, it is understandable that many Timorese, and indeed anyone familiar with this long-running dispute, may believe it is premature to celebrate this week's announcement too enthusiastically. There is still a long way to go. As Strating points out, Australia has repeatedly emphasised the non-binding nature of the UN Law of the Sea Convention Compulsory Conciliation process. And Australia has given no indication that it has changed its position on where maritime boundaries should be drawn.
However, there is further reason for optimism, given the Australian Labor Party has committed, in 2015, not just to negotiate a maritime boundary with Timor-Leste, but if necessary, to resubmit to the maritime jurisdiction of the international courts. This was a game changer. It forced the Department of Foreign Affairs and Trade to contemplate a negotiation process and it means the ALP, with the support, I suspect of the minor parties, will hold the Turnbull Government to account.
This dispute has overshadowed an otherwise close and strong relationship. Bonds were formed during the Second World War and have grown as our nations became development partners in the years following Timor-Leste's independence.
I am hopeful that this change in policy by the Australian Government will lead to a mutually beneficial agreement.
John Martinkus East Timor's cancellation of the 2006 Treaty between Australia and the Democratic Republic of Timor-Leste on Certain Maritime Arrangements in the Timor Sea (CMATS), which centres on the oil between Australia and Timor, is not about money. It is not about the median line. It is not about whether Australia bullied the small country into making the agreement. It is about pride.
I spent a lot of time in that country in quite, let us say, straitened circumstances in the mid to late '90s. When a man has no food, no income, cannot provide for his family or protect them from marauding Indonesian forces or militia paid by them, things become pretty basic. When you can't stop your wife being raped or your kids being recruited into the militia out of hunger, you only have one thing left. That is your pride and self-respect. I watched Timorese men grapple with that. They fought, sometimes hopelessly, against the overwhelming military and logistical force they were faced with. They often died, were tortured and locked up and beaten for a few days, a few weeks, maybe months. The international community largely looked away, and throughout the '90s the deaths continued on a pretty much daily basis.
They were getting hammered, but they still fought. Eventually, and almost miraculously, the international community started to take notice. As a reporter, I finally started getting published covering the butcher's bill of the constant killing. No longer were my attempts to report the latest killings of pro-independence supporters met with the dismissive reply by editors "so what are your plucky brown fellows up to today?".
What happened next was the ultimate exercise in cynicism. The UN announced they would conduct a ballot over whether the Timorese wanted independence or to stay with Indonesia. Of course before they arrived the Indonesians took advantage of the situation by killing more Timorese. The massacres were supposedly carried out by "militia". Everyone could see that the Indonesian military was facilitating this. They provided trucks to drive the militia there, weapons, even food for those who carried out the massacres. It was no secret. It was a joke.
The massacres stopped for a while when the UN came in in mid 1999. But they started again as it became clear the Timorese would vote for independence. As the time for the ballot approached the Australian government under John Howard said everything would be fine. The Australian Federal Police contingent were unarmed and constantly attacked, as were the UN, also unarmed. Alexander Downer, in Dili, said everything would be fine because "Australians were a tough people". He didn't count on what happened next.
After the ballot and the result for independence was announced, the Indonesians went crazy. They shot at everybody, killed quite a few, started burning down the centre of Dili. Quite helpfully they had trucks on hand and evacuation flights scheduled for all the foreign media and UN workers willing to leave. Then they started to round up the locals and send them to Indonesia as refugees.
A few foreigners stayed, got shot at, rounded up like dogs. After a few days holed up in the UN compound most of us evacuated. Meanwhile, the Timorese got killed. There were bodies on the streets when we finally got back on September 20, 1999, protected by the Australian troops who finally, finally had been forced to do something and send in the peacekeeping force the UN, the Timorese and journalists had been calling for for months.
The Timorese leadership came back. Order was restored. It took months for anything like normal life to resume. There was no water, no food, no roofs on the buildings. No jobs, no infrastructure.
I went up to the mountain camp in Waimori where the East Timorese guerrilla fighters had voluntarily confined themselves to avoid conflict with the retreating Indonesian forces. They were there with many civilians who had fled there to avoid the forced deportations. There wasn't much food. Dinner was rice and some sort of meat. My friend, a Canadian journalist, ate the meat and later got really sick. I just ate the rice; I later learned the meat was monkey. I interviewed the leader, Taur Matan Ruak. He is now the President of East Timor. And he told me then that they would get what they were owed in the Timor Gap. They would get what they deserved.
By cancelling the CMATS treaty they are another step closer to doing that. If anyone deserves their oil and gas it is these guys, for the sheer awfulness of what they have endured to free their country. Australia has been cynical and opportunistic in trying to negotiate a more favourable deal for itself in the post-independence period, but take it from someone who knows these people: don't mess with them. They'll get what is rightfully theirs or they will die trying. I know. I have seen it and lived it. It is not about the money. It is about the pride. And when you have nothing else that is all important. Australia's negotiators don't understand that.
Tom Clarke Australia's dodgy oil and gas treaty with East Timor is dead. Now it's time to negotiate fair and permanent maritime boundaries with our tiny neighbour.
This week's joint announcement from the governments of Australia and East Timor that the 2006 Certain Maritime Arrangements in the Timor Sea (CMATS) Treaty will soon be terminated is a modest, but important first step towards resolving a long and bitter feud.
Terminating CMATS has the potential to clear away some of the debris that successive Australian governments have generated in their unscrupulous pursuit of Timor's oil and allow the two nations to start afresh on the fundamental problem at the heart of the dispute; where exactly to establish permanent maritime boundaries.
However, the odds are that the Timorese still have a long and bumpy road ahead of them given Australia's track record of stalling and derailing similar negotiations in the past. As was the case during Timor's long struggle for independence, fair-minded voices in the Australian community will be needed to maintain pressure on the Australian government and hold it to account.
CMATS was a "temporary resource-sharing agreement" that centred on the massive Greater Sunrise gas field located a little under 150 kilometres from Timor and 450 kilometres north-west of Darwin. Greater Sunrise might generate up to $20 billion in government revenue alone.
In circumstance like this, where two countries are less than 400 nautical miles apart, international law overwhelmingly favours establishing maritime boundaries based along the median line that is, halfway between the two coastlines. This approach would see most if not all of Greater Sunrise fall within East Timor's exclusive economic zone.
But until now international law has been of little consequence. That's because just two months before East Timor's independence in May 2002, the Australian government withdrew its recognition of the maritime boundary jurisdiction of the International Court of Justice. Pre-emptively turning its back on the independent umpire was a sure sign that the Australian government knew its outdated arguments about continental shelves was unlikely to stand up to scrutiny in any international court or independent arbitration process.
This meant that in the subsequent negotiations, the Australian government was able to jostle East Timor into a series of temporary resource sharing arrangements that all sought to short-change the fledging nation out of billions of dollars.
As if the David and Goliath imbalance in the bargaining positions weren't enough, the Australian government also used an aid project as a cover to bug the Timorese cabinet room. When exposed in 2013 the underhanded move against the impoverished nation incensed the Timorese leadership and infuriated many Australians who believe our espionage capabilities should be dedicated to national security, not chasing economic gain.
The Australian government's tactic of snubbing international law began to crumble last year when East Timor was able to launch a "compulsory conciliation" procedure at the United Nations. It's a mechanism that has never been used before and exists specifically for when one country refuses to recognise the jurisdiction of the independent umpire that would normally settle disputes.
Although Foreign Minister Julie Bishop has been quick to point out that the final outcome of this conciliation is not legally binding, politically a ruling in Timor's favour would be hard for Australia to ignore. At a time when Bishop is seeking a spot on the UN's Human Rights Council, it would be breathtakingly hypocritical to reject the conciliation process especially given her many pleadings for China to heed independent rulings in regards to its territorial dispute in the South China Sea.
When the proceedings opened last September in The Hague, East Timor's lead negotiator, Xanana Gusmao, opened with reflections on why as a sovereign nation it was important for East Timor to establish permanent maritime boundaries and complete its long journey to independence.
"We have not come to The Hague to ask for favours or special treatment. We have come to seek our rights under international law," he told the commission. Australia's delegation on the other hand, opened by mounting a challenge to the commission's authority to consider the central topic of maritime boundaries.
Fortunately, this undignified attempt to wriggle out of the process was soundly rejected by the UN-constituted commission and the conciliation process now appears to be making some progress.
Although this week's announcement essentially just boils down to a public commitment to return to the negotiating table, in the context of the past 15 years in which successive Australian governments have outright refused to even entertain the idea of establishing permanent boundaries in accordance with current international law, it's a promising sign.
The conciliation process will now continue behind closed doors. Australians who believe that a rules based world order is in our interest and believe in a fair go, need to find their voice. We must let our government know we are watching.
This issue is not about charity, it's about justice. East Timor is simply asking for what it is legally entitled to no more and no less.
Bec Strating On Monday, a joint statement from the governments of Timor-Leste and Australia announced that Timor-Leste planned to officially notify Australia that it wished to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).
The CMATS provided for its own cancellation if, after six years, the governments and venture partners could not agree on Sunrise development.
Australia was an adamant supporter of retaining the treaty. However, the carefully worded statement indicates that the Australian government 'recognises' Timor-Leste's right to initiate the termination.
CMATS was originally designed to enable the joint development of the contested Greater Sunrise gas field, estimated to be worth around $40 billion. The states negotiated a 50:50 revenue sharing arrangement, and the treaty placed a 50-year moratorium on the negotiation permanent maritime boundaries.
Timor-Leste was dissatisfied with CMATS because Australia did not agree with its plan to build an export pipeline to its south coast for processing. Australia supported the view of licensee consortium, headed by Woodside, that held the export pipeline is not the best commercial option.
Timor-Leste's government has also sought permanent maritime boundaries, arguing these are a necessary precursor to full sovereignty.
In 2015, Timor-Leste initiated United Nations Compulsory Conciliation (UNCC) proceedings under the United Nations Convention on the Law of the Sea (UNCLOS) to assist in resolving this maritime boundary dispute.
Timor-Leste initially preferred to use legal processes to invalidate the treaty because a unilateral withdrawal would have threatened the termination of the 2002 Timor Sea Treaty under Article 3 of CMATS and thrown oil revenue from the Joint Petroleum Development Area (JPDA) in doubt.
In 2013, Timor-Leste initiated proceedings against Australia to invalidate CMATS on the grounds that it was not negotiated in good faith due to Australia's alleged spying on Timor-Leste's representatives in 2004.
However, the possibility of Timor-Leste withdrawing from CMATS was raised in opening statements to the UNCC. Timor-Leste government spokesperson Agio Periera declared that '[t]he current provisional regime is near its end. CMATS is going. That is the policy of Timor-Leste. Timor-Leste's legal representative declared that if necessary Timor-Leste would exercise its right to terminate the CMATS unilaterally'.
Until recently, Australia refused to re-enter boundary negotiations, stating its preference for maintaining existing treaty arrangements.
Timor-Leste's decision to initiate the UNCC, and its threats to unilaterally withdraw from CMATS, have effectively forced Australia to back down on maritime boundaries discussions.
Without CMATS, the Australian government can no longer rely upon the treaty to prevent discussions on maritime boundaries. This could also have broader ramifications for Australia's foreign policy, in particular its position that parties to the South China Sea should respect the international 'rules-based order'.
While CMATS was in place, Australia could counter charges of hypocrisy by arguing that its respect for the legally binding treaty was consistent with the rules-based order.
While Timor-Leste has successfully forced Australia to enter negotiations on permanent boundaries, this may turn out to be a pyrrhic victory.
Timor-Leste's aim is to force Australia to negotiate a permanent boundary, but its core objective is achieving boundaries that would make its oil industrialisation ambitions viable. This requires obtaining most, if not all, of Greater Sunrise.
Australia has no obligation to reach an agreement. It has repeatedly emphasised the non-binding nature of the UNCC recommendations. Australia has also given no indication that it has changed its position on where maritime boundaries should be drawn.
Australia favours principles of 'natural prolongation', which provides it seabed territory that extends to the edge of a geomorphic continental shelf. In contrast, Timor-Leste favours a 'median' line, which is supported by post-UNCLOS jurisprudence.
But the contested line that determines Greater Sunrise ownership is the eastern lateral. Australia's claim to 80% of the field is based on the current interim line drawn according to principles of 'simple equidistance'. Timor-Leste argues that the eastern lateral should be drawn further to the east. Problematically, UNCLOS provides few substantive rules for settlement of the eastern lateral beyond the need to find an 'equitable solution'.
In recent years, revenues from the Joint Petroleum Development Area have provided approximately 90% of Timor-Leste's state budget. The Bayu-Undan oil field will stop producing in the early 2020s. Timor Leste's $16 billion sovereign wealth petroleum fund could be depleted by 2025. Without a source of revenue, Timor-Leste's economy would be at serious risk of collapse. The more time that passes, the more urgent a resolution on Greater Sunrise becomes.
Timor-Leste's dependence upon Timor Sea resources renders its vulnerable in terms of futures negotiations. Australia could potentially prolong boundary negotiations in an effort to pressure Timor-Leste to accept a less favourable outcome.
Australia's exclusion of binding compulsory dispute resolution procedures mean that Timor-Leste cannot take Australia to an international court for a ruling on the maritime boundary. Permanent maritime boundaries negotiations have failed in the past because neither state fully recognises the territorial claims of the other.
There is no precedent for what happens if the states fail to reach an agreement after the UNCC recommendations. UNCLOS suggests that if the negotiations fail, the parties 'by mutual consent' would submit to third-party arbitration to decide boundaries. However, Australia cannot be forced to accept the jurisdiction of a court or tribunal on maritime boundaries.
It is also questionable whether a tribunal could rule to extend the eastern lateral without Indonesia. Indonesia would need to be involved, at minimum, in determining the trilateral junction points. Indonesia becoming a potential third claimant is not a favourable prospect for either Timor-Leste or Australia.
Ultimately, it appears that the best chance of settling this dispute is through negotiation, which will require both sides to compromise on their boundary claims.
Damien Kingsbury East Timor has won a significant moral victory in the Timor Sea dispute, with Australia agreeing to scrap the controversial 2006 Timor Sea treaty. However, East Timor's hope that this now spells the beginning of the end of that dispute, much less that it will secure the country's economic future, might be overly optimistic.
The agreement to scrap the treaty effectively confirms East Timor's claim that Australia acted in bad faith while negotiating the 2006 Certain Maritime Arrangement in the Timor Sea (CMATS) Treaty by spying on East Timor cabinet treaty discussions in 2004. Australia initially argued that the UN's Conciliation Commission of the Permanent Court of Arbitration (PCA) did not have jurisdiction to hear the case on the 2006 treaty, which the PCA ruled against, so scrapping the treaty represents a humiliating defeat for Australia.
In a further apparent victory for East Timor, Australia has agreed to negotiate a permanent maritime boundary between the two countries under the auspices of the PCA. East Timorese officials say finalising the maritime boundary will offer certainty to oil and gas investors.
East Timor's claim to a permanent boundary equidistant between the two countries would put all of the Timor Sea oil reserves and, it claims, its gas reserves, under East Timorese sovereignty. The claim to the gas reserves will be dependent on where the lateral boundaries are drawn, which will also require Indonesia to agree to modify its own boundaries.
While East Timorese officials now say that ending the 2006 treaty means the way is open for the country to secure its economic future, there is no timeframe for negotiations, and the agreement does not indicate where the new boundaries might be. The Australian government could seek a negotiated settlement that compromises the equidistant sea boundary or the allocation of resources within it.
The statement that ends the 2006 treaty simply says that the two countries "agreed to an integrated series of measures intended to facilitate the conciliation process and create conditions conducive to the achievement of an agreement on the permanent maritime boundaries in the Timor Sea".
In part, Australia has little to lose by now giving way to East Timor's claims, as revenues from oil in the Timor Sea will be exhausted within the next few years. The greater financial prize is the Greater Sunrise liquid natural gas (LNG) field, just under 20% of which lies within the area under agreement between Australia and East Timor.
Australia had agreed to split 50-50 the revenue from the Greater Sunrise LNG field. Initially, East Timor accepted this proposition on the condition that the LNG be processed on East Timor's south coast. The intention was that this south coast refining facility would kick-start a petro-chemical industry in East Timor that would sustain the country after both oil and gas ran out.
However, the Greater Sunrise development partner, Woodside Petroleum, balked at refining the LNG in East Timor. It noted the difficulty of laying a pipeline across the 3300-metre-deep Timor Trough and that East Timor did not have the material or human resources necessary to undertake refining. Given the bitterness of the subsequent dispute, the question of "sovereign risk" of the multibillion-dollar investment has also been raised.
At the peak of LNG prices in around 2013, the Greater Sunrise field was worth about US$45 billion to Australia and East Timor. However, since then world LNG prices have slumped. Woodside noted that the previous 2002 Timor Sea Treaty remained in place but did not indicate that it would accept onshore processing, and the company has previously proposed a floating processing platform option.
The scrapping of the 50-year treaty comes as East Timor's government increasingly recognises the country's economic insecurity. East Timor's sovereign wealth "Petroleum" fund has around US$16 billion. The interest from this fund was intended to provide working capital for East Timor's government. However, the East Timorese government has been spending both the interest and about a billion dollars a year in capital from the fund. With income from Timor Sea oil diminishing, at current rates of government expenditure, East Timor will be broke by the end of the 2020s.
Accessing funds from the Greater Sunrise field could stave off such a financial collapse. This, however, assumes the Greater Sunrise field will be developed by a partner willing to agree to East Timor's onshore processing demands, or that East Timor will relinquish its claim to onshore processing.
The scrapping of the 2006 treaty is a first step towards East Timor securing its economic future. But it will need all future breaks to go its way if it is to avoid economic collapse.
Rebecca Strating The government of Timor-Leste has officially notified Australia of its wish to terminate the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS). The treaty sets out the division of revenue from the Greater Sunrise oil and gas fields, an estimated A$40 billion deposit in the Timor Sea.
The maritime border between Timor-Leste and Australia has been a source of contention over recent years. But the decision to terminate the treaty and begin negotiations anew could have serious ramifications for Timor-Leste's economic development, given its dependence on the Timor Sea resources.
The CMATS treaty was designed to enable the joint exploitation of the Greater Sunrise field. The treaty circumvented the competing border claims by placing a 50-year moratorium on negotiating maritime boundaries betweeen Australia and Timor-Leste.
The Sunrise International Unitisation Agreement, finalised in March 2003, agreed that 20.1% of Greater Sunrise was located in the Joint Petroleum Development Area (JDPA) established under the 2002 Timor Sea Treaty and 79.9% within Australia's jurisdiction.
If the maritime border was drawn halfway between Australia and Timor-Leste, the oil and gas fields would fall completely within Timor-Leste. Under CMATS, however, Timor-Leste negotiated a 50:50 revenue-sharing arrangement.
Timor-Leste has long considered this treaty invalid. In recent years, the governments of Timor-Leste and Australia have been unable to agree on how the Greater Sunrise gas should be processed.
In 2013, Timor-Leste initiated proceedings against Australia at an arbitral court (in the Permanent Court of Arbitration at The Hague) under the Timor Sea Treaty to invalidate CMATS. It did so on the grounds that Australia's alleged spying on Timor-Leste's negotiators in 2004 contravened the Treaty of Vienna requirement that treaties be negotiated in "good faith".
Timor-Leste favours an export pipeline to its south coast to enable its ambitious petroleum industrialisation plans. In contrast, Australia supported the decision of the licensee consortium, headed by Woodside, that the export pipeline was not the best commercial option.
When the CMATS treaty was negotiated, these disagreements were put aside in order to reach an agreement. However, this just delayed the seemingly irreconcilable dispute about developing the field.
Timor-Leste's government has developed a narrative that maritime boundaries are necessary for completing its sovereignty. This narrative has linked the independence movement to the sea disputes in order to bolster public support against Australia. Consequently, the moratorium on forming permanent boundaries had increasingly become a problem in relations between Australia and Timor-Leste.
In 2015, Timor-Leste's government initiated a United Nations Compulsory Conciliation under Annex V of the UN Convention on the Law of the Sea (UNCLOS) in a bid to pressure Australia into changing its policies on Greater Sunrise.
Timor-Leste's withdrawal from CMATS is not a surprise. In the opening statements of the conciliation process, Timor-Leste's representatives flagged this as a likely action.
The careful wording of the joint statement makes it clear that the Australian government "recognises" Timor-Leste's right to initiate the termination of the treaty. This does not suggest that Australia has substantially shifted its long-standing policies on the Timor Sea. However, the joint statement does indicate that the Australian government recognises that maintaining the CMATS treaty had become untenable.
Terminating CMATS reflects a continuation of Timor-Leste's high-stakes approach to Timor Sea diplomacy.
Negotiations on establishing a permanent maritime boundary will continue under the UN Compulsory Conciliation. This process is designed to help states resolve bilateral maritime disputes by providing recommendations from a panel of experts.
The Australian government has repeatedly emphasised the non-binding nature of these recommendations. While Australia has an obligation to negotiate in good faith, this does not mean it can be forced into agreeing to a maritime boundary. Negotiated boundaries still appear to be some way off.
Timor-Leste will be pushing for permanent maritime boundaries that will give Timor-Leste most, if not all, of Greater Sunrise in order to support its ambitious oil industrialisation plans.
Terminating the CMATS treaty ultimately means that the governments of Timor-Leste and Australia are back to square one in negotiations over Greater Sunrise.
There are a number of potential consequences for Timor-Leste.
First, the revenues that flowed from the Joint Petroleum Development Area under the Timor Sea Treaty have provided approximately 90% of Timor-Leste's state budget. The Bayu-Undan oil field is expected to be depleted by 2022 or 2023.
Without a source of revenue, Timor-Leste's economy would be at serious risk of collapse: the A$16 billion petroleum fund could be depleted by 2025. The risk for Timor-Leste is that Australia will prolong boundary negotiations, putting more strain on its finances. Timor-Leste's vulnerability increases as the window for resolving the dispute before oil revenues run out narrows.
Second, the Exclusive Economic Zone and continental shelf claims of Timor-Leste and Australia overlap with those of Indonesia. While the spectre of Indonesia's future involvement in the dispute is largely ignored in the media, it would be naïve to believe that Indonesia would not become a third claimant if the opportunity arose.
Hopes of a clean slate in developing the gas riches of the Timor Sea have now shifted to the international courts in The Hague.
Australia has backed down and agreed to scrap an existing 2006 revenue-sharing deal in the Timor Sea that in Dili's eyes had been hopelessly tainted by alleged Australian spying and bullying.
The 2006 treaty was signed to develop the still unexplored areas of the Greater Sunrise gas field which straddles the Timor Sea. It also agreed to freeze for 50 years the argument over East Timor's permanent sea boundaries with Australia, where Dili disputes the existing line.
East Timor wants the boundary to follow a new median line between both sides and which would bring additional gas areas under their control. Australia has always objected that a change in its boundary with East Timor could unravel its 1972 sea border with Indonesia, signed when Jakarta ruled East Timor. But it too is concerned over the share-out of $50 billion of gas revenue in the fields.
The 2006 agreement had shared the gas 50-50. As a result of that, plus a still-existing, earlier 2002 deal, more than $16 billion has already flowed into East Timor's accounts. But many East Timorese still saw our refusal to budge on a more permanent boundary as high handedness with an impoverished and supplicant neighbour, and at odds with Australia's leading role in East Timor's independence. That suspicion exploded in 2012 with allegations that Australia had bugged the East Timorese cabinet room during negotiations in 2004.
Now new boundaries will be worked out with the UN Permanent Court of Arbitration in The Hague the same body incidentally, that China has just ignored in its South China Sea disputes. Time is also now weighing on the matter: nobody has benefited from the very long delays to what is still a promising gas region. Fair boundaries, and a fair share of the gas, has to be the result.