[note: accompanying map is available at http://www.etan.org/etanpdf/pdf3//timor_map_12B.pdf]

THE OFFSHORE JURISDICTION OF TIMOR LESTE IN THE TIMOR SEA

Summary Opinion

March 2003

Prepared by:

Jeffrey Smith of LINDSAY KENNEY Barristers & Solicitors Vancouver, Canada T +1 604 687 132 F +1 604 687 2304

Introduction

Timor Leste, known also as East Timor and Timor Loro Sa’e, became the world’s newest State in May 2002. It achieved its independence with an undefined maritime jurisdiction and is now in the fortunate position of not being bound by any pre-existing offshore boundaries. The importance of this for energy development in the ocean area to the south of Timor cannot be understated, given significant reserves of oil, gas and condensates in the continental shelf. Timor Leste’s maritime jurisdiction, both north and south of its territorial land areas, remains to be defined. The new State’s jurisdiction is capable of certain determination with the application of criteria found in several decisions of the International Court of Justice, arbitration awards, State practice and developments in customary international law. The recent decisions in the Eritrea/Yemen and Qatar/Bahrain cases support the delimitation of Timor Leste’s maritime boundaries in areas outside of the restrictive Timor Gap Treaty Zone of Cooperation, now the Joint Petroleum Development Area of the pending Timor Sea Treaty. (1)

This paper discusses Timor Leste’s maritime jurisdiction in the Timor Sea. From reasons of brevity, it does not address the new State's jurisdiction in the Ombai and Wetar Straits to the north.

Present boundaries in the Timor Sea

There is presently only one formal maritime boundary in the Timor Sea. It is the continental shelf boundary established by treaty between Australia and Indonesia in 1972. (2) A gap was left in the boundary, between its delimited points A16 and A17, because Australia could not obtain the agreement of Portugal to complete the seabed delimitation. The position of Portugal was pragmatic it would wait to conclude a seabed boundary until further development of the law of the sea. Portugal did not agree that the doctrine of natural prolongation applied to determine the boundary position along the south slope of the Timor Trough, as had Indonesia, notwithstanding Australia’s reliance on the doctrine following its application in the 1969 North Sea Continental Shelf cases. In 1989, after a decade of negotiations, the closing lines and area of the Timor Gap Treaty Zone of Cooperation were agreed upon by Australia and Indonesia. It must be recalled that the Timor Gap Treaty is expressly not a maritime boundary treaty. Nevertheless, the “lateral” (i.e. east and west) closing lines of the Zone of Cooperation were based on lines of simple equidistance extending seaward from the coastline of Timor and small Indonesian islands to the east. A second boundary treaty in the Timor Sea was concluded in 1997 between Australia and Indonesia has not been subsequently ratified. (3) The 1997 Treaty was intended, in part, to delimit a water column boundary between the two states across the entire Timor Sea. The resulting boundary followed an equidistance line generally from east to west, some 140 nautical miles from Timor and the north coast of Australia. Apart from the 1997 Treaty not having been ratified, Timor Leste would not be bound to succeed to it for other reasons, although the delimitation effected by it is supportable and reasonable under the current law of the sea. The 1997 so-called “EEZ” delimitation stands in obvious contrast to the more restrictive continental shelf boundary defined by the 1972 Treaty.

There are obvious flaws in the locations of the 1972 continental shelf boundary and the closing lines that define the Zone of Cooperation, now the Joint Petroleum Development Area of the Timor Sea Treaty. Those flaws are not supportable under international law as it now applies. The 1972 boundary encroaches spatially on Timor Leste’s continental shelf entitlement. That an independent Timor Leste has an entitlement to an exclusive economic zone (EEZ) larger than the Timor Gap and the present Zone of Cooperation (4) is evident from geography, decisions of the International Court of Justice and the past conduct of Australia and Indonesia in the Timor Sea. First, the Timor Gap, defined as the undelimited area between points A16 and A17 of the 1972 Treaty is demonstrably too narrow. (5) It constrains Timor Leste's coastal projection to the south, whether such projection extends directly south or, more obviously on the basis of local geography, in a more general southeast direction.

Second, the 1972 Treaty has a diminished basis in international law. There is no precedent for it in state practice or any recent ICJ and arbitral authorities. The application of seabed geomorphology as a delimitation criterion is manifestly wrong and, without it, the 1972 continental shelf boundary would have been drawn further to the south. This was implicitly recognized in the 1997 Treaty between Indonesia and Australia for an unadjusted median "water column" boundary. Timor Leste's full maritime jurisdiction does not so much depend on recognizing that the 1972 Treaty boundary should be properly disregarded or at least shifted south as it does on the enlargement of the overall area at issue. Third, the 1972 Treaty expressly acknowledges that the interior boundary segments A15-A16 (in the east) and A17-A18 (in the west) would subject to adjustment or roll-back possibly on the request of Portugal. This opening up of the Timor Gap would have a clear result in the west. In the east it would be of little significance. Here, however, developments in the law of the sea, including state practice and recent decisions of the International Court of Justice and the Permanent Court of Arbitration reveal that Timor Leste’s ocean area is encroached upon by the restrictive lateral closing line of the Zone of Cooperation. The lateral closing line is simply an unadjusted median line that accords full effect to the disparate Indonesian islands east of Timor. This is manifestly contrary to the treatment of islands in the law of the sea, where small offlying islands or island groups are invariably accorded reduced weight or coastal projection into the offshore.

It must also be recalled in considering the lateral closing lines which define the Zone of Cooperation that the Timor Gap Treaty was, if not illegal, a discredited treaty instrument and its supersession by delimitation has been expressly recognized by Australia. Moreover, it exacerbates the obvious encroachment of the 1972 continental shelf boundary by repeated application of simplified and unadjusted geographic features. Delimitation in the Timor Sea

There are several interrelated factors that support Timor Leste's EEZ extending to a median line with Australia and over areas wider than the former Zone of Cooperation and the pending Joint Petroleum Development Area. These factors are supported by state practice and through decisions of the ICJ. The first, extension of an EEZ to the median line between Timor Leste and Australia, is straightforward especially given decisions of the ICJ (6) and also as a matter of state practice in the Timor Sea. (7)

Second, a widening of the Timor Gap from east to west can be done by adjustment of the boundary segments between points A15 and A16, and points A17 and A18, on the 1972 Treaty boundary, a matter provided for at Article 3 of the Treaty. This adjustment a widening of the Timor Gap - is particularly relevant to the drawing of a western EEZ "lateral" line which, with regard to generalized equidistance between the coast of Timor Leste and Indonesia, will seaward extend from terminus of the land boundary at the Masin River through point A18 on the 1972 continental shelf boundary to terminate just east of point Z40 on the 1997 Treaty line. As noted, above an Article 3 adjustment done in the east is less marked, largely because the 1972 Treaty gave full effect or weight in setting point A15 on full geographic application of the Leti Islands.

Accordingly, the median line and western lateral boundaries of Timor Leste’s EEZ are relatively simple to define. It should be expected that they will conform to generally equidistant courses and not require adjustment to account for geographic or other features.

Those factors that will determine the orientation of the eastern "lateral" line of an EEZ to extending seaward from the Wetar Channel include: (1) the geographic effect or weight to be given to the Leti Islands; (2) the opposing coastlines of Timor Leste and Indonesia across the Wetar Channel; (3) the encroachment of maritime areas generated by Indonesia's baselines on the offshore jurisdiction of Timor Leste; and (4) the application of the equitable delimitation method of proportionality to illustrate the non-encroachment of Timor Leste's EEZ into Indonesian and Australian waters.

In the area south of the Wetar Channel a lateral EEZ boundary will be drawn to continue seaward from the boundary between opposing coastlines in the Wetar Strait to the north of Timor. The lateral boundary, as it follows a course seaward out of the Strait, will pass through a mid-channel point at 8 20' south, 127 28' west, midway between the opposing coastlines of Jaco Islet and Leti Island. (8) The course of the lateral boundary further seaward will be contingent on the four factors above. The ICJ decisions suggest that small, disparate islands must be given diminished effect in their weight on delimitation. This is the case with the Leti Islands to the east. Their size and limited coastal presence /pdf3must necessarily be a factor in delimitation. By giving only half or reduce/d effect to the geographic presence of these islands an equitable result is achieved by adjusting the lateral boundary further east. (9) This minimizes the encroachment of the islands into a constantly radiating and uniform coastal façade generated by Timor Leste southeast of the Wetar Channel.

Without such an adjustment, the lateral boundary drawn as a perpendicular (and essentially parallel to the western lateral boundary) would pass through or a few miles to the east of Point A15 on the 1972 Treaty boundary. (10) A basic equidistance line that does not account for the limited geographic presence of the Leti Islands would follow an azimuth of between 155 to 160. This encroaches on Timor Leste’s more pronounced coastal reach.

The two most recent delimitation decisions support the equitable requirement for reduced effect to be given to the Leti Islands. The Eritrea/Yemen decision confirms that small groups of islands can be discounted (that is, be accorded reduced weighting or effect) in the drawing of a median line. (11) It is now well recognized that "mid-sea islands", if accorded full effect, can have a disproportionate result in delimitation. This is readily evident in delimitations between opposing coasts. In the present situation, even if it can somehow be characterized as one of mixed oppositeness and adjacency, it should be straightforward to apply to the islands in question the principle of reduced effect or weight.

It is the degree of reduced weight to be given to the Leti Islands (and therefore the baseline drawn across their southern periphery) that is possibly controversial. Although the ICJ decisions support half effect reduced weighting, this would result in a marked shift of the present Zone of Cooperation/Joint Petroleum Development Area closing line. A more acceptable result might be to accord three-quarter effect to the islands. This would result in a lateral boundary following a course generally close to a true opposing boundary between the east part of Timor and the Leti Islands. The coincidence of these boundaries is a further test of their equitableness. No state’s maritime area is unduly encroached upon; an overriding concern in every maritime delimitation.

The justification for such an eastward shift of the lateral boundary can also be taken from the International Court of Justice's most recent decision in Qatar/Bahrain. (12) The Court fixed a single equidistant maritime boundary which extended almost perpendicularly seaward from the interior embayment area between the two states. The Court was careful to assess whether any equitable criteria required an adjustment of the provisional median line. None merited any application.

Further certainty can be achieved by the application of the equitable delimitation method of proportionality. This doctrine suggests that no encroachment on the respective states’ maritime areas results from an opposite line or three-quarter effect delimitation, as the ratios of coastlines involved to maritime areas delimited are generally equivalent.

The law of the sea Next steps

The criterion for maritime boundary delimitation, and therefore the determination of offshore jurisdiction is overwhelmingly distance based. At play is the geography of the coastlines at issue. Maritime states are entitled to claim EEZs up to 200 nautical miles from their shores. Conceptually and legally, the EEZ extent of a state is defined by different criteria than is the continental shelf. For this reason, because of the obvious advantages in establishing a proper maritime jurisdiction, it would be highly advisable for Timor Leste to claim the EEZ it has in national legislation. This EEZ, on the basis of state practice and the caselaw, should be larger than Area A defined by the former Timor Gap Treaty and now the same Joint Petroleum Development Area under the pending Timor Sea Treaty. In asserting the claim, Indonesia and Australia would have to recognize its merits and the settled law in support of it. The preferred result would be a negotiated delimitation, desirable under the 1982 Law of the Sea Convention and a result to be achieved by conciliation or the good offices of a fourth state.

Notes

(1) Treaty on the Zone of Cooperation in an Area between the Indonesian Province of East Timor and Northern Australia, 11 December 1989, (1990) 29 ILM 469 (in force 9 February 1991) (the Timor Gap Treaty).

(2) Agreement between the Government of the Commonwealth of Australia and the Government of the Republic of Indonesia establishing certain seabed boundaries in the area of the Timor and the Arafura Seas supplementary to the agreement of 18 May 1971, Aus. T.S. 1973, No. 32 (9 October 1972) (the 1972 Treaty).

(3) Treaty between the Government of Australia and the government of the Republic of Indonesia establishing an Exclusive Economic Zone Boundary and Certain Seabed Boundaries, (1997) 36 ILM 1053 (not yet in force) (the 1997 Treaty). The median line followed by this treaty is the course of the Provisional Fisheries Surveillance and Enforcement Line agreed upon between Australia and Indonesia in 1981.

(4) Or the Joint Petroleum Development Area that is defined by the nominal successor to the Timor Gap Treaty, the July 5, 2001 Arrangement on the Timor Sea.

(5) The south coast of Timor Leste generates a maritime projection into the Timor Sea somewhat perpendicular to the geographic orientation of the Island of Timor. This projection, derived from the extrema of a simplified national coastline has a simplified width of 158 to 162 nautical miles, including the territorial sea east of Jaco Isle in the centre of the Wetar Channel. This projection is oriented southeast along an azimuth of about 155. If the profile of the south coast is considered differently a direct projection south from the two extrema of Timor Leste’s land area, in the mid-point of the Wetar Channel and the Masin River, will result in a narrower width to the coastal front of about 142-144 nautical miles. In contrast to these coastal projections the Timor Gap defined by points A16 and A17 of the 1972 Treaty is only 130 nautical miles wide.

(6) The leading decisions now being Greenland/Jan Mayen, (1993) ICJ Rep. 8, Qatar/Bahrain, 40 ILM 743 and Eritrea/Yemen (2001), 40 ILM 750 (Permanent Court of Arbitration).

(7) It is not possible for Timor Leste and Australia to each realize the maximum extent of their jurisdictional claims to 200 nautical mile EEZs (or a continental shelves) in the Timor Sea. Absent the options of maintaining the status quo under the July 5, 2001 Arrangement on the Timor Sea or some other settlement a delimitation of the area must result. This has influenced all attempts to settle jurisdictional claims in the Timor Sea since 1972, and as recently as the negotiations for the 1997 Treaty. It is likely that the geographic basis for the boundary defined in the 1997 Treaty will be recognized allowing adoption of the basepoints detailed in that treaty to be used in a formal median line delimitation. There is no encroachment that occurs from the adoption of the 1997 median line as a provisional mid-sea boundary between the EEZs of Timor Leste and Australia.

(8) See the attached chart. The commencement point is merely the continuation of an opposing delimitation extending through the Wetar Strait as it progress seaward into the Timor Sea. [chart is available at http://www.etan.org/etanpdf/pdf3//timor_map_12B.pdf]

(9) A half effect was given, among other decisions, to small offshore islands in the Gulf of Maine case, supra note at paragraph 222 and in the Tunisia/Libya decision, (1982) ICJ Rep. 18 at paragraph 128. The reduced and half effect weighting of islands is common in bilateral treaty practice, something recognized by the ICJ in Tunisia/Libya.

(10) This result is consistent with the operative provisions of the 1972 Treaty, which set point A16 as the eastern terminal point of the Timor Gap with allowance for it to be adjusted to account for any continental shelf boundaries proposed by Portugal.

(11) Supra note 6 at paragraph 117.

(12) Supra note 6.

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