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"East Timor's leadership has stated, on several occasions, that while it considers the treaty illegal and invalid (as does the United Nations), it wants the oil and gas projects to continue. In the event of East Timor gaining full sovereign rights over its seabed resources, East Timor's leaders have stated that the fiscal requirements for companies operating in the gap shall remain the same." John Land
See also: BD: TIMOR OIL - A collection of recent Reports, Position statements, Petitions, Articles and News

Green Left Weekly, Issue #437

February 21, 2001

EAST TIMOR: Scrap the Timor Gap Treaty

BY JON LAND

The Australian government is attempting to prevent East Timor from gaining full sovereign rights over vast oil and gas reserves in the Timor Sea that are expected to generate hundreds of millions of dollars in royalties over the next 20 to 25 years.

By arguing that the current terms of the Timor Gap Treaty should remain unchanged, Prime Minister John Howard's government is trying to swindle the people of East Timor out of vital revenue, thus undermining an independent East Timor's ability to rebuild its shattered infrastructure and economy.

When the treaty was signed on December 11, 1989, by Indonesian foreign minister Ali Alatas and his Australian counterpart, Labor's Gareth Evans, it was hailed as a major step forward in relations between the two countries. With the convening of the inaugural inter-ministerial council on Bali on February 9, 1991, the treaty officially came into force, allowing the Suharto dictatorship and the Bob Hawke-led Labor government to approve contracts with the petrochemical companies queuing up to develop the rich fields in the Timor Gap.

East Timorese resistance leader Xanana Gusmao passed a letter to Prime Minister Bob Hawke via an Australian parliamentary delegation visiting East Timor in February, 1991. Gusmao condemned the treaty as "a total betrayal" of the East Timorese people by Australia. A pre-condition for the establishment of the treaty (and its continuation) was the recognition by successive Australian governments of Indonesian sovereignty over East Timor.

The improvement in relations between Indonesia and Australia after the signing of the treaty coincided with a brutal wave of military repression throughout East Timor, intended to smash the resistance of the East Timorese masses. Special efforts were directed at breaking the resolve of a new generation of East Timorese student and youth activists who were developing an extensive underground network in every town and village.

On December 11, 1991, just one month after the massacre at Santa Cruz cemetery in Dili that claimed hundreds of lives, Australia signed an agreement with Indonesia to award Timor Gap contracts to exploration companies. Evans alleged that the killings were not a deliberate act of the Suharto dictatorship but simply "the product of aberrant behaviour by a sub-group" and therefore did not justify a policy change towards Indonesia or the suspension of activity in the Timor Gap.

More contracts were awarded early in 1992. The race to get access to known and potential reserves had begun in earnest, mostly in area A of the zone of co-operation. Between 1989 and 1999, gas and oil companies spent $485 million to explore and $196 million to develop deposits within area A.

The oil and gas industry, through its considerable political power and influence, played a critical role in shaping the final outcome of the treaty. For the likes of Australian-based oil and gas companies such as BHP, Woodside, Santos and Petroz, the Timor Gap exploration flurry in the 1990s was their "reward" for years of lobbying and private meetings with government ministers.

With the majority of East Timorese people opting for independence in the 1999 referendum, the prospect of changes to the treaty has raised "concerns" from these and other companies, such as the US-based Phillips and the Anglo-Dutch Shell corporation.

East Timor's leadership has stated, on several occasions, that while it considers the treaty illegal and invalid (as does the United Nations), it wants the oil and gas projects to continue. In the event of East Timor gaining full sovereign rights over its seabed resources, East Timor's leaders have stated that the fiscal requirements for companies operating in the gap shall remain the same.

The Howard government has sought to manipulate the renegotiation of the treaty, citing "maintenance of investor confidence" and the "national interest" as the reason why the terms of the treaty should not be changed.

It is rumoured that at the next round of formal talks on the future of the treaty between UN, East Timor and Australian government representatives, Australia may accept a greater share of royalties going to East Timor. The Australian government appears reluctant to budge on the issue of re-establishing the seabed boundary along the half-way line (in accordance with international laws and norms) between East Timor and Australia.

The significant oil and gas reserves in the Timor Gap were major factors behind Australia's support for Indonesia's invasion and 24 year-long occupation of East Timor. By clinging to the unjust and immoral Timor Gap Treaty, the Howard government is continuing to deny the people of East Timor the full and free expression of their right to national self-determination.


Green Left Weekly
GLW was launched in 1990 by the Democratic Socialist Party (DSP), the socialist youth group Resistance and other progressive activists to present the views excluded by the big business media. In these days of growing media concentration GLW is an independent voice committed to human and civil rights, global peace and environmental sustainability, democracy and equality.
Email: glw@greenleft.org.au Homepage: http://www.greenleft.org.au  ET News Webpage:  http://www.greenleft.org.au/current/index.htm#INTERNATIONAL

See also:

BD: TIMOR OIL - A collection of recent Reports, Position statements, Petitions, Articles and News


BACK DOOR Newsletter on East Timor  home    February news
Website: http://www.pcug.org.au/~wildwood Email: wildwood@pcug.org.au