Fwd (GLW): EAST TIMOR: Scrap the Timor Gap Treaty

Alan Bradley alanb at SPAMelf.brisnet.org.au
Sun Feb 18 04:23:47 MST 2001

The following article appears in the current issue of Green Left Weekly

EAST TIMOR: Scrap the Timor Gap Treaty

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

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

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