Background Information

The Timor Sea is rich in petroleum resources, but Australia is claiming most of the Timor Sea as Australian territory, and hence the royalties from the sale of this oil and gas. The present boundary was negotiated between Australia and Indonesia in 1972, and is based on the continental shelf. It gives Australia about 75% of the seabed between the two countries. However, a gap in the boundary, known as the Timor Gap, was left because Portugal, the colonial rulers in East Timor refused to negotiate, insisting on a border mid-way between the two countries. A further boundary agreement for revenue sharing in the disputed gap section opposite East Timor was agreed between Australia and Indonesia in 1989.

The UN Convention on the Law of the Sea, developed in 1982, recommended that where countries are less than 400 nautical miles apart, the boundary be drawn equidistant between the two countries. This Convention has been reinforced by prevailing international law.

In May 2002, East Timor and Australia signed the Interim Timor Sea Treaty which gives East Timor 90% of the revenues within a small area of the Timor Sea previously called the Timor Gap, but now known as the Joint Petroleum Development Area (JPDA). However it is clear that were the border to run mid-way between the two countries, and the lateral boundaries be drawn perpendicular according to international law, East Timor's actual entitlements are much larger than just the small area of the JPDA. The extra territory to which East Timor is entitled would include significantly more resources, including a greater share of the massive Greater Sunrise gas field.

Gas and oil from active projects in the Timor Sea is to be piped to Darwin for processing. The Northern Territory Government predicts that the pipeline will generate 8,790 jobs and provide a $11 billion boost to the economy. Both Australian and East Timorese trade unionists are keen to guarantee that East Timor also benefits from its fair share of downstream development. Given that the fields yet to go into production are in areas that are likely to be recognised by International Law as East Timorese waters, it makes sense that the East Timorese people should also benefit from the downstream processing of their oil and gas. The ACTU wants to see more emphasis on employment of East Timorese workers on the rigs and platforms in the Timor Sea.

According to ACTU President, Sharan Burrow, "We currently have a situation in which East Timorese workers are filling only a small portion of the jobs. This is a real wasted opportunity and any future resource sharing agreements should include more substantial and tangible provisions for training."

Australia has withdrawn from the jurisdiction of the International Court for maritime boundary issues, so East Timor suspects that Australia is attempting to draw out border negotiations for years until the oil and gas resources are depleted.

We believe that during this dispute, Australia should negotiate in good faith, return to the International Court.

"Australia, Timor-Leste and Indonesia need to reach an agreement on the basis of international law in order to achieve an equitable solution - seeking not charity but justice - just a fair go for all three parties." (Fr Frank Brennan SJ, The Timor Sea's Oil and Gas: What's Fair).

After six rounds of talks, Australia is now pressuring East Timor to settle for a deal that would suspend permanent boundary negotiations for at least 50 years, in exchange for a 50/50 split of the Greater Sunrise gas field profits.

"From the beginning the Australian Government has approached this entire issue with bullying tactics. It's now trying to force East Timor's hand over very important details of the current proposal," said Tom Clarke, coordinator of the Timor Sea Justice Campaign.

Despite claims by the Australian government and media that an agreement has been reached, the people of East Timor and Prime Minister Alkatiri have serious concerns suspending permanent maritime boundary negotiations. However, while the Timorese wish to define their boundaries according to international law, the immediate funds from petroleum development are crucial to the country's welfare.

"For us, a 20-year negotiation is not an option. Timor-Leste loses $1 million a day due to Australia's unlawful exploitation of resources in the disputed area." (Timor-Leste Prime Minister, Mari Alkatiri 29 April 2005)

In an impoverished country just three years old, East Timor's right to control its own natural resources is critical to the health and development of the nation. Union Aid Abroad supports the Timor Sea Justice Campaign in demanding that Australia:

· Stop unilaterally exploiting contested gas and oil resources in the Timor Sea.

· Place disputed revenues taken by the Australian Government into a trust fund to be distributed accordingly once a permanent agreement has been reached.

· Immediately negotiate in good faith a permanent maritime boundary in accordance with current International Law.

· Re-recognize the authority of the International Court of Justice and the International Tribunal on the Law of the Sea to settle the dispute by independent arbitration if necessary.

For more information on this campaign please see www.timorseajustice.org

© Union Aid Abroad - APHEDA 2003.

Last Modified: Wednesday, 16-Nov-2005 16:05:27 EST
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