Dili draws a line in the sand over sea boundaries – Nikkei Asian Review


East Timor Prime Minister Rui Araujo during a March 2015 interview with the Nikkei Asian Review at government headquarters in Dili (Photo: Simon Roughneen)

East Timor Prime Minister Rui Araujo during a March 2015 interview with the Nikkei Asian Review at government headquarters in Dili (Photo: Simon Roughneen)

SINGAPORE — Rodrigo Duterte’s clear win in the Philippines’ presidential election will likely mean a new round of diplomacy over territorial disputes with Beijing in the South China Sea, with the president-elect saying that he will take a softer line than outgoing President Benigno Aquino. Meanwhile, U.S. president Barack Obama has just ended an arms embargo against Vietnam, which is also at loggerheads with China over the South China Sea.

But there is another, lesser known maritime dispute in Southeast Asia, and although the claimants are fewer and the strategic stakes much lower, it is an issue that could determine the long-term economic viability of one of the world’s youngest, smallest and poorest democracies.

East Timor, also called the Democratic Republic of Timor-Leste, wants to delineate maritime boundaries in the Timor Sea with its neighbors Indonesia and Australia in a way that Dili believes could be worth up to $40 billion in oil and gas revenues.

Frustrated at perceived stonewalling by Australia, the Timorese government initiated “compulsory conciliation” on April 11 under the United Nations Convention on the Law of the Sea — a move that could lead to the establishment of a commission to report on the boundary issue to the U.N. Secretary General. That document could in turn be used as a basis for any future boundary negotiations.

The dispute is becoming increasingly heated on both sides. In March, around 1,000 Timorese protested outside the Australian embassy in Dili at Canberra’s perceived intransigence.”The government and the people now consider that the establishment of permanent maritime boundaries is a national priority,” Timorese Prime Minister Rui de Araujo told a conference on the issue in Dili on May 19.

Australia’s Department of Foreign Affairs and Trade told the Nikkei Asian Review that “the Australian Government is disappointed that Timor-Leste has decided to initiate compulsory conciliation over maritime boundaries. Australia has repeatedly made clear to Timor-Leste our preference for a full and frank discussion of all issues in the bilateral relationship.”

Citing a past agreement between the two countries to shelve the boundary issue, DFAT added that “both countries agreed to a moratorium on boundary negotiations to allow joint development of the resources. We also agreed not to pursue any proceedings relating to maritime boundaries — this includes compulsory conciliation.”

A 2006 treaty shelved the boundary issue for 50 years and gave East Timor a 50% share in the Greater Sunrise gas field, which sits in the disuputed zone, up from the 18% it would have received without the treaty. But East Timor maintains that the deal has been voided by revelations that Australian spies eavesdropped on Timorese negotiators during the negotiations in the mid-2000s.

Dili claims that the espionage scandal means that Australia broke international law, but Australian Prime Minister Malcolm Turnbull contends that the current agreements were negotiated in “good faith” and were “consistent with international law.”

The Timorese prime minister’s office has not responded to questions from NAR about the compulsory conciliation proceedings, but in his May 19 speech, attended by Judge Vladimir Golitsyn, the president of the International Tribunal for the Law of the Sea, Araujo said that “we have taken this step, the first country to ever do so, because we were left with no choice.”

Median line

East Timor has been frustrated for years over disagreements on how to extract and process gas from the Greater Sunrise field, discovered by the Australian energy company Woodside in 1974.

East Timor’s Gross Domestic Product was just over $1.4 billion in 2014, while the country has put around $16 billion in a state fund derived from other petroleum resources. But East Timor depends on oil and gas for around 90% of government revenues, and with existing reserves likely to run out in less than a decade, Dili is desperate to see Greater Sunrise come onstream quickly.

If the maritime boundary in the Timor Sea was drawn along the median line between the two countries, as is usually the case, the Greater Sunrise field would be within East Timor’s territorial limits — although this in turn could depend on the finalization of another set of discussions on maritime boundaries with Indonesia, and after that, a potential redrawing of the Australia-Indonesia border.

Indonesian President Joko Widodo visited Dili in January, when both countries said they hoped to finalize their boundaries bilaterally, in contrast to the increasingly acrimonious dispute between Canberra and Dili. The two countries have forged good relations in recent years despite Indonesia’s brutal 1975-99 occupation of East Timor, which resulted in up to a quarter of a million Timorese deaths.

Former East Timor Prime Minister Jose Ramos Horta, who was joint winner of the 1996 Nobel Peace Prize, said that although he would have preferred to maintain bilateral negotiations with Australia, it was clear that Timorese frustrations were growing.

“This whole issue arose as a result of two events: refusal on the part of Australia to consider the development of Greater Sunrise gas field with a pipeline to be built to Timor-Leste’s south coast, a much cheaper and shorter route than [the alternative of] a pipeline to Darwin; and the discovery of the bugging by Australian secret services, using Australian aid money, of Timor-Leste’s main government conference room,” Ramos Horta told the NAR.

Ramos Horta, who as foreign minister signed the 2006 treaty with Australia, was referring to Dili’s proposal to link the untapped Timor Sea gas field to a processing plant to be built on the southern coast of East Timor.

That idea has been criticized by some energy experts, who contend that East Timor does not have the infrastructure or skilled staff to run such a plant — and would do better to spend its gas revenues on infrastructure, education and health needs. Dili says that bringing the gas to East Timor could result in a major boost for the country’s energy-reliant economy.

The companies contracted to work on Greater Sunrise have stated their preference for a floating liquified natural gas plant in the Timor Sea, or a pipeline to Darwin. Those contracts are separate to the boundary dispute and revenue sharing agreements, though Woodside said it would shelve operations in the field until the issues of sovereignty and gas processing plant location are both settled.

Although Australia’s opposition Labor Party has spoken in favor of settling the boundary with Timor-Leste, Canberra’s angry reaction at having a key aspect of its relations with a small, impoverished neighbor possibly assessed by an international commission is unsurprising.

“The Australian government has consistently expressed its view that it prefers to settle maritime boundaries by negotiation rather than by third party dispute settlement such as arbitration or conciliation,” said Donald Rothwell, professor of international law at Australian National University.

But East Timor disputes the validity of negotiations undertaken during the early years of Timorese independence from Indonesia after 2002. “When we were a new nation, we were young and inexperienced, we did not know our rights under international law,” said Minister of Planning and Strategic Investment Xanana Gusmao, a former prime minister and president. Gusmao was the leader of Timorese resistance to Indonesian occupation, which lasted a quarter century to 1999.

Speaking after meeting U.N. Secretary General Ban Ki-Moon in April, Gusmao alleged that “Australia took advantage of our vulnerability and we signed agreements not about our maritime boundaries but agreements on how to share resources in the Timor Sea — resources that under international law belong to Timor-Leste.”

Australia sees those negotiations differently, saying that three previous treaties drawn up to allow natural resource exploitation in the Timor Sea remain valid.

“Australia stands by the existing treaties, which are fair and consistent with international law,” the Australian foreign ministry noted. “These arrangements offer the best way to unlock the economic benefits of resource development for both countries and have enabled Timor-Leste to accumulate a petroleum fund worth more than $16 billion.”

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