Subject: AU: Frank Brennan: Maritime boundary claims down to shelf life

The Australian

Frank Brennan: Maritime boundary claims down to shelf life

03sep04

ON September 20, Australian and Timorese officials will meet in Canberra for their second round of negotiations about maritime boundaries in the resource-rich Timor Sea. In July, Mark Latham said: "If we come into government, I think we will have to start again because there's been a lot of bad blood across the negotiating table."

A month later, Jose Ramos-Horta came to Canberra and held a joint press conference of foreign ministers with Alexander Downer, who announced: "It's doable by the end of the year. And it would be good if we could do that, if we can have a Christmas present for everybody."

The politicians need to sign off on the agreement that will allow the Greater Sunrise natural gas project to proceed. This can happen only if the East Timorese parliament ratifies the agreement. The joint venturers, led by Woodside, have said that they cannot proceed with the project if the agreement is not finalised by the end of the year.

Under the agreement, Australia will receive 82 per cent of the annual government share from the project and East Timor will receive 18 per cent. Downer has cabinet approval to offer some additional payments to East Timor. The East Timorese parliamentarians have been unwilling to ratify the agreement until now because they are concerned about Australia's continuing exploitation of other oil and gas fields (such as Corallina and Laminaria) that are claimed by both countries. They have also questioned the fairness of a deal that returns only 18per cent of the revenue from a project that is located twice as close to East Timor than it is to Australia.

While the politicians make their decision by Christmas, government officials, painstakingly, have to negotiate maritime boundaries in the Timor Gap, which is the gap left in 1972 by Australia and Indonesia when they set boundaries for their respective continental shelves.

The gap is the seabed opposite East Timor, which was under the jurisdiction of Portugal before 1976.

Australia and Portugal never reached agreement about a boundary. From 1953 to 1976, consistent and opposed positions had been adopted by the governments of Australia and Portugal. Mining companies had conducted exploration activities consistent with the licences they were granted by either government. Throughout, Portugal was consistent, insisting that it had control of the resources on its side of the median line between Australia and Timor. Australia was consistent, insisting that it had control of the resources on the continental shelf up to the Timor Trough.

By 1989, Australia and Indonesia were unable to reach agreement on a seabed boundary in the Timor Gap, even though Indonesia's national interest would have been well served by a maritime boundary finalisation that recognised Indonesia's sovereignty over East Timor and its adjacent seabed. Back in 1972, Indonesia had conceded Australia the entire continental shelf under waters less than 200m in depth. But international law moved on. By 1989, Indonesia would have been more likely to succeed in a claim for continental shelf up to a median line drawn midway between Australia and Indonesia.

Given these complexities, Australia and Indonesia decided to leave boundary agreements well alone and to finalise a treaty providing a sharing in the government revenues from mining projects in the Timor Gap.

Australia still claims its entire continental shelf under waters less than 200m in depth. East Timor repeats the claims made by Portugal for a half share in the continental shelf between Australia and East Timor.

Just as Australia could not convince Indonesia in 1989, it has even less chance of convincing East Timor and the international community in 2004.

It is this development in international law that colours Australia's 2002 decision to withdraw maritime boundary delimitation from the compulsory jurisdiction of the International Court of Justice. In November 2000, UN officials had been warned by Australian officials that opting out of the compulsory jurisdiction of the ICJ was "Australia's get-out-of-jail card".

The option had already been put to the Howard cabinet and no minister had objected. The UN officials were warned: "The more ambitious East Timor's claim, the easier it would be for the Government to pursue this approach in terms of living down domestic controversy."

The negotiation of equitable maritime boundaries in the Timor Gap is likely to take years, involving not only Australia and East Timor but also Indonesia. These boundary negotiations over sovereignty should not be rushed or clouded by a federal election or by the politicians needing to strike a fair financial deal allowing the Greater Sunrise project to proceed by Christmas. The challenge is to find a solution that is equitable in its consideration of the border issues and supportive of the development of Greater Sunrise.

Frank Brennan, a Jesuit priest, is author of The Timor Sea's Oil and Gas: What's Fair? (Australian Catholic Social Justice Council), which former Australian ambassador to Indonesia Richard Woolcott launches today.


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