Financial Times [UK] Thursday, November 27, 2003

Australia Accused of Stalling Boundary Talk

By Shawn Donnan in Dili

East Timor's prime minister, Mari Alkatiri, on Wednesday accused Australia of deliberately stalling vital negotiations over the two countries' maritime boundaries in a move he said was deterring investment in the world's newest country.

Officials from Australia and East Timor met in Darwin earlier this month for preliminary talks, but Australia refused to agree to monthly negotiations so they are not due to meet again until April next year.

"These negotiations have to be planned and organised and if you are delaying it is because you have the real intention to delay," Mr Alkatiri said in an interview with the Financial Times. "If you are refusing to have a time frame it is because you are planning to delay."

East Timor is seeking to shift boundaries that Australia and Indonesia, its former ruler, agreed to in 1972. The existing lines are seen as generous to Canberra because they put many of the known oil and gas fields in the Timor Sea in Australian waters.

Mr Alkatiri, whose government assumed control from the United Nations in May last year, argues that international law calls for the 1972 boundaries to be moved to a point halfway between the two countries as their traditional 200-mile boundary claims overlap.

"Technically the question is so clear," Mr Alkatiri said. "We don't want to invent the wheel now. Our claim is to apply current international law."

The difference for East Timor and its 800,000 people would be billions in additional royalties because a southward shift in the boundaries would put big oil and gas fields into Timorese waters.

One section in dispute, the Greater Sunrise area, would result in $7bn (€5.9bn, £4.1bn) in royalties for East Timor over its life, govvernment advisers say. The current government's annual budget is just $80m while international donors have spent about $2.5bn on rebuilding East Timor since its violent split from Indonesia in 1999.

The government in Dili, which is due to begin receiving significant royalties from one oil and gas field next year, wants to use the oil revenue to help other sectors of the economy develop. "We do not want East Timor to become a petroleum-dependent country," Mr Alkatiri said.

Because of that, East Timor wants to see the talks resolved quickly and government advisers say they could be wrapped up in three to five years. The government is also worried about royalties now being drawn by Australia from disputed fields that are nearly depleted.

Australian officials say Canberra is busy with other sea boundary talks and its resources so stretched that the discussions could take decades.

They also consider "provocative" a move by Mr Alkatiri to bring back Peter Galbraith, an outspoken former UN official who helped East Timor win a 90 per cent share of royalties from an area run jointly with Australia. The American angered Australian officials by criticising Canberra publicly during negotiations.

Mr Alkatiri said he had brought back Mr Galbraith because of his experience and that the move was not meant to anger Australia. "I'm not intending to provoke Australia," he said. "What I'm looking for is a good solution to the negotiations."

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