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Issue focus: Australia

Table of contents:

Part 1

• Analyzing Australian Assistance to East Timor
• Australian Military Assistance to East Timor
• Who and What is La'o Hamutuk

Part 2

• Chronology of Oil and Gas in the Timor Sea

Part 3

• East Timor Puts U.S. Soldiers Above the Law
• UNDP letter and La'o Hamutuk Response
• Disorder in East Timor: The International Community Must Accept Responsibility
• Editorial: Democracy Requires Information
• In Brief...

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Analyzing Australian Assistance to East Timor

Australia has, with Japan and Portugal, been one of the largest donors to East Timor since 1999. The Australian government's bilateral development aid to East Timor is channeled through Australia's donor agency: AusAID.

However, Australia also provides aid to East Timor through other channels:

• Some departments of the Australian National Government directly fund certain projects in East Timor (such as the Australian Defense Department's provision of advisers, trainers and resources to the East Timor Defense Force (FDTL)). This is not considered "aid" and is discussed in a separate article on page 6.
• The Australian Government says it contributed just over US$1 billion to the InterFET multinational peacekeeping force and the UN PKF. (This amount probably includes wages and equipment maintenance costs which would have been paid even if the Australian forces had not gone to East Timor.) A tiny portion of peacekeeping work has gone to development rather than security.
• Many Australian state and local governments, universities, NGOs, solidarity groups, communities and other civil society organizations also contribute to or manage projects in East Timor.

This report focuses on AusAID.

AusAID: Background

Australia has had a government agency to administer its international aid since 1974. In 1989, when it first worked in East Timor, the agency was called AIDAB. In 1995 the name was changed to AusAID, the Australian Agency for International Development.

An Australian who worked on an AusAID project in East Timor from 1996-1999, Lansell Taudevin, wrote that during the Indonesian occupation, AusAID projects "reflected Jakarta's preferences, not East Timor's requests." He noted one example: when Bishop Belo called for education and reconciliation programs but AusAID followed Jakarta's recommendations for water supply, agriculture and veterinary assistance programs instead. Taudevin says that AusAID was pressured by the Australian Embassy in Jakarta to provide East Timor reports that were sympathetic to Indonesia. However, Taudevin noted that AusAID's presence was much appreciated by the East Timorese as a source of contact with the outside world and that its aid amounted to more than AUD$20 million (around US$14 million) between 1992 and 1997. Also, AusAID might have been expelled from East Timor if it had not made concessions to the Indonesian Government.

AusAID contributed US$20 million to humanitarian/emergency projects in East Timor from September 1999 to June 2000. Nearly half of this went to repatriate refugees and to the UNHCR-coordinated emergency shelter program; some also provided humanitarian support for people displaced within East Timor before the referendum. AusAID's total assistance to East Timor from July 1999 to June 2000, including money for UN and TFET trust funds but not including assistance to East Timorese evacuated to Australia, was US$43 million.

Aims

AusAID plans to provide US$80 million in aid to East Timor from July 2000 to June 2004. This includes approximately $20 million from July 2002 to June 2003, which, proportional to East Timor's population, is more than $20 per person. For AusAID, this is high per capita, compared with $30 million for all China and $70 million for all Indonesia during the same period. However, Australia gives Papua New Guinea (which was governed by Australia until it became independent in 1975) more than twice as much aid per capita as East Timor receives, although the high aid to PNG is considered a problem by many in Australia.

Australia's foreign aid from July 2001 to June 2002 amounted to nearly US$900 million worldwide. This represented 0.25% of Australia's Gross Domestic Product (GDP). Australian aid as a percentage of GDP has steadily declined since 1983, when it was 0.47%. It is well below both the UN's suggested target of 0.7% and the average for donor countries, 0.4%. Unlike many other donors, Australia did not promise to increase its worldwide aid at the international Financing for Development Conference last March.

AusAID's stated goal is to "advance Australia's national interest by assisting developing countries to reduce poverty and achieve sustainable development." Certainly the political and economic development of East Timor is important to Australia. Being geographically close to Australia, an unstable political situation in East Timor could create refugee problems for Australia and regional diplomatic tensions like those which occurred in 1975 and 1999. A healthy economy in East Timor would, on the other hand, create import-export opportunities for Australian businesses, particularly if the economy were open to Australian investment. Moreover, the aid money often goes directly to Australian suppliers or contractors, increasing their profits and promoting their skills and products in foreign markets.

The Australian government says it has spent about $1 billion on InterFET and UN PKF in East Timor since September 1999, so the relatively small amount AusAID spends here could be viewed as an inexpensive way to avert conflict and save future military costs.

Australian assistance to East Timor could also be intended to create good will to strengthen Australia's hand in negotiations over Timor Gap oil and gas. Australian Prime Minister John Howard often recalls Australia's "generosity" to East Timor when he speaks about negotiations with East Timor over Timor Gap oil. The Australian government's structure includes both AusAID and oil negotiations within the Department of Foreign Affairs and Trade. AusAID's US$80 million in aid for East Timor over four years is a small investment for a big return: the Australian government hopes to pocket tens of billions of dollars from oil and gas from East Timor's Exclusive Economic Zone as defined by East Timor's law and UN Law of the Sea principles. Up to now, Australia has refused to discuss the maritime boundary. Furthermore, Australia withdrew from International Court of Justice and other legal processes for resolving boundary disputes last March, leaving East Timor with no way to achieve its legal rights.

The Laminaria/Corallina oil field in the Timor Sea, in an area which belongs to East Timor under international legal principles, has been producing oil since 1999 for Woodside Australian Energy and its partners. Over the last three years, the Australian government received approximately US$1 billion in revenues from this project, about ten times what Australia has given East Timor in non-military aid. East Timor has received nothing from Laminaria/Corallina.

Priorities

During UNTAET times, AusAID's stated priorities were to increase East Timor's capacity in good governance, education, health, water supply, sanitation and rural development. AusAID projects between 1999 (including the UNAMET referendum period) and June 2002 supported the sectors shown in the graph below.

In May 2002 Australia committed US$12.5 million more over the next three years to the Transitional Support Program, a new mechanism managed by the World Bank to help fund East Timor's government budget.

The majority of AusAID projects are tendered out, mostly to big companies, and AusAID itself is not involved in direct management of the programs. This has the effect of making it more difficult for AusAID to provide project details to the public, and also puts decisions about sub-contracting in the hands of Australian (and some international) companies, rather than the Australian government.

Australia's support for high-visibility projects like the Parliament building, Exposition center, and Independence Day celebrations can be seen as a way to curry good will among East Timorese, making them less eager to confront Australia on Timor Sea and other issues. AusAID agrees that it wants to build a positive relationship with East Timor, but denies ulterior motives behind its priorities. The agency says that its priority areas were developed in consultation with UNTAET, East Timorese leaders and other donors.

AusAID's priorities may soon change. A team from Canberra visited East Timor in October to review AusAID's program. A `New Country Strategy' is being prepared to identify future funding priorities.

Effectiveness of AusAID projects

Some implementers' comments (groups contracted by AusAID are unlikely to criticize AusAID publicly):

• Bia Hula's Aleixo Da Cruz felt AusAID showed more trust in local NGOs than did European donors, who favored international NGOs. Hadomi Timor Oan (HTO), beginning an AusAID water and sanitation project in Viqueque, received a check from AusAID for the full amount of the project up front rather than in stages. HTO's manager, Antonio Amaral, saw this as a sign of trust. He also praised AusAID's relative speed in processing projects, though his latest proposal to AusAID took 3 months to get a response. These local NGO managers and the Manager of AusAID's Community Water Supply and Sanitation Program, Alan Smith, praised AusAID's flexibility _ its willingness to adjust programs to match changing or unforeseen conditions _ and its level of consultation and monitoring.
• Catholic Relief Services (CRS), a US-based NGO working on AusAID's 2001 peace-building project, was also encouraged by AusAID's flexibility. For example, when CRS' peace-building team recommended to AusAID, after consultation at the community level, that conflict mediation guidebooks be developed with the input of local leaders instead of at the onset of the program as originally planned, AusAID agreed. AusAID also supported CRS' involvement of local NGOs in peace building.
• The Head of Water Supply and Sanitation (WSS) for East Timor's government, João Jeronimo, felt meetings to discuss an AusAID water supply project were sometimes repetitive, especially since the project physically had only just started, but he appreciated the level of consultation. He also noted that all AusAID-sponsored advisers with WSS spoke some Tetum or Indonesian.
• ODB orphanage opened in Bebonuk, West Dili, in December 1999. Its coordinator thought Australian PKF assistance was more helpful than AusAID. AusAID was sent an ETCAS proposal and checked the orphanage in June 2002, he explained, but had not replied and had been difficult to contact by hand phone. When he tried to visit the Australian Embassy, he was turned away by armed Australian soldiers.

Governance includes CAPET (see chart below), the Parliament building, and consultants and training for East Timor's government. Humanitarian includes support for refugees, internally displaced people, emergency food and shelter. Other includes the Independence Day Celebrations, economic development, and capacity-building and NGO support programs that support multiple sectors.	TFET is the Trust Fund for East Timor, managed by the World Bank and Asian Development Bank. It spends funds on projects in most sectors, including 16% on health and 18% on education. The TFET managers stress private sector development over government services, and the fund has been criticized for the ineffectiveness or inappropriateness of its projects. (See LH Bulletin Vol. 3 No. 1 on the Pilot Agricultural Service Centers; LH Bulletin Vol. 3 No. 7 on the Community Empowerment Program, for example.) AusAID's prioritizing of TFET can be seen as support for this "small government" agenda, and of its lack of confidence in East Timor's government to spend the money as AusAID would wish.

After visiting a few AusAID projects in the field, La'o Hamutuk learned:

• An AusAID (ETCAS) sponsored computer training center in Mota Ulun near Bazartete still has all three computers operational after 6 months. AusAID inspected the site before giving the grant and returned to check how the money had been spent.
• The Chefe de Suco of Bazartete was unimpressed with CEP's water supply project in his area but was impressed with a separate water supply project run by AusAID.
• Ryder Cheshire Foundation in Tibar, an Australian run center for disabled and malnourished East Timorese, received a water pump system under AusAID's ETCAS scheme in December 2001. When it broke down recently, AusAID gave a verbal commitment within 24 hours to finance US$1700 worth of repairs. It is now supplying patients' and staff houses and provides a water collecting point for neighbors.
• The Community Water Supply and Sanitation Program began in December 2001 but physical projects (with the exception of CARE-implemented projects in three aldeias) only began in Covalima and Viqueque districts in October 2002. The project has, however, produced voluminous amounts of data, reports and meetings. This includes a data base of village resources that will be valuable for future projects, not just for the AusAID one. This level of planning and coordination can be viewed by some as very thorough _ by others as wasteful of resources, particularly given that the program has five full-time international advisers.
• AusAID sponsorship of AVI (Australian Volunteers International) and APHEDA assistance to the NGO forum had produced valuable training in languages, management, proposal writing, conflict resolution, district liaison officer and other subjects. NGO forum, according to one of its workers, could have also learned directly from AusAID feedback on its proposals but this feedback was often not provided.
• One worker in Dili Hospital said AusAID had provided valuable training in specialist areas like anesthetics though much more training was required before Timorese could carry out these activities themselves.
• One East Timorese customs official said AusAID assistance to the Border Service was "perfect," and that intensive two-week training sessions were very effective. However, he felt that the Border Service received guidance from too many different countries, each with their own customs procedures and structures.
• While AusAID has excellent lists of performance indicators for measuring the success of some programs (like its National Health Promotion assistance), some AusAID programs lack clear indicators for capacity building. An AusAID aide-memoire on 3 May 2002 sensibly noted a need `to review the capacity development and assessment components … of the Community Water Supply and Sanitation Project' (CWSSP), and similar comments were made in an AusAID review of the same program in July 2002. Interviewed by La'o Hamutuk in October 2002, CWSSP program leader Alan Smith noted that he still didn't have a formal way to measure whether the program was increasing East Timorese capacity to handle water and sanitation problems. This shortcoming in the original plan is fortunately now (in November, six months after AusAID identified the problem) being addressed with AusAID's provision of (yet another) adviser to help draft performance indicators and strategies for achieving them.

Recommendations

Based on our investigation, La'o Hamutuk proposes the following changes in AusAID procedures. Many of our concerns about tied aid, measurement of capacity building, accessibility to public and budget transparency apply to most donor agencies, not only AusAID.

1. Australia owes a tremendous historical debt to the people of East Timor, due to its complicity in and profiteering from Indonesia's illegal invasion and occupation. Now that East Timor is independent, Australia continues to "occupy" oil and gas fields which should be helping East Timor develop its economy. Canberra needs to re-think its relationship with its smaller neighbor to the north _ to one of partnership rather than exploitation. Australia should significantly increase its aid to East Timor, ensure that the aid money benefits East Timorese people rather than Australian companies and aid workers, and respect international law to allow East Timor its rightful share of Timor Sea oil and gas.

2. AusAID should allow non-Australian contractors to implement some of its programs. AusAID overseas service contracts require that the contractor "have headquarters and associated facilities in Australia or New Zealand" and that "the majority of the team proposed in the tender be Australian or New Zealand citizens or permanent residents who have qualifications recognized in Australia or New Zealand." This policy is designed to give work opportunities to Australian businesses and NGOs as well as to ensure contractors have appropriate technical skills and are answerable to Australian law. It also ensures that a lot of AusAID money returns to Australia (since Australians will spend most of their wages there) and that Australian companies have opportunities to sell goods and services to the project. Many AusAID projects have been sub-contracted to non-Australian (including East Timorese) NGOs and businesses. Some projects like ETCAS are managed directly by AusAID and therefore require no contractor.

Unfortunately the above policy can lead to extra levels of administration. For example, AusAID wanted the U.S. NGO Catholic Relief Services (CRS) to implement its 2001 peace-building program. But since CRS is not Australian, AusAID contracted to Caritas Australia which sub-contracted to CRS to support programs run by village-based organizations (in the case of the Edmund Rice Foundation in Railako, Ermera, the local organization was actually an Australian NGO).

3. AusAID needs to be more accessible and provide more information for East Timorese. AusAID reports regularly to the Australian Government and has an informative English language web site but could do more to inform East Timorese about what it is doing in their country. While AusAID's level of consultation at village level before and during projects has generally been applauded, much information about AusAID projects is difficult for East Timorese to access. Information points like NGO Forum, Xanana Reading Room and local NGOs rarely receive AusAID pamphlets or booklets about East Timor in any language, especially local ones. To partly remedy this problem, AusAID says it has plans to set up a translation unit so more of its information is available in local languages.

Approaching AusAID directly is also difficult. Most East Timorese do not know where AusAID's office is, and when they find it (on the second floor of the Australian Embassy, with no AusAID sign out in front of the embassy) they have to endure a daunting security process which includes armed Australian PKF soldiers, a metal detector, an ID-check, a log book, a `visitor' sticker and a revolving `bird cage' gate. In the reception room, they may, as La'o Hamutuk experienced, be met by friendly East Timorese AusAID staff _ whose knowledge and authority seems to be limited to AusAID's ETCAS project. When we asked for written information about all AusAID's main programs during our first meeting, neither of these staff could provide more than blank ETCAS proposal forms.

AusAID in East Timor has special reasons to be more accessible to the public. In Indonesia, AusAID's office is also in the Australian embassy. However, unlike in Indonesia, AusAID projects in East Timor serve a significant proportion of the population through provision of employment, infrastructure development and individual and institutional capacity building. Also, AusAID projects like ETCAS are structured so that East Timorese can work directly with AusAID, with no intermediate contractor, so these will require more open access for East Timorese to AusAID personnel. Finally, East Timor is a new country and the limited government resources and policies are seen by the international community as an opportunity to increase community input into community development. For these reasons, AusAID in East Timor should move its office from the Australian embassy (just as it was separated from the Australian Mission in 2001), or at least provide more signposting and a simpler entry process. It also needs to provide program updates in Tetum.

4. AusAID needs to be more transparent on budget details. AusAID refuses to release details of project contracts, including price information, seeing them as "commercial in confidence" for AusAID and the contractor. La'o Hamutuk approached three groups contracted by AusAID, and they would only tell us the overall cost of activities. If international organizations demand that East Timorese be open to community input about project details and transparent about spending, donors like AusAID need to set a good example.

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Australian Military Assistance to East Timor

Australian-led InterFET troops made a significant contribution towards restoring peace and security in East Timor after Indonesian security forces and their militias ravaged the territory in September 1999, although much of the destruction could have been averted if Australia and other countries acted more quickly.

Australian military personnel are currently working in UN missions in the Middle East (Israel, Palestine and Egypt), Mozambique, Ethiopia, Eritrea and East Timor and in other multinational missions in the former Yugoslavia, Bougainville (Papua New Guinea), Solomon Islands and Sierra Leone. Australia also provides military assistance to Papua New Guinea, Malaysia, the Philippines, East Timor and other countries.

During Indonesia's illegal occupation of East Timor, Australia provided military aid to the Indonesian military (TNI); up to 1999 the public amount was US$40 million/year, in addition to cooperation included in other budgets. After the 1999 East Timor crisis, Australia stopped military aid, although several TNI officers are now studying at the Australian Defense College in Canberra, and there are Australian officers at TNI's military training center in Bandung. Since the 12 October 2002 bombing in Bali, Australian and Indonesian police have cooperated closely.

During the military/militia violence before the 1999 referendum, Australian intelligence learned a great deal about Indonesian military and militia plans and operations. They refused to share much of their information with United Nations or East Timorese officials, who could have used it to better prepare and perhaps to prevent some of the devastation. Even today, Australia still keeps the information from investigators and prosecutors who are seeking to hold the perpetrators of serious crimes in 1999 accountable.

Australian contingent of UNTAET / UNMISET

As of December 2002, 1030 Australian UN PKF personnel are serving in East Timor. They are part of UNMISET and under the UNMISET PKF commander Major General Tan Huck Gim from Singapore. Most Australian UN PKF serve as part of AUSBATT in Bobonaro District, on the Indonesian border.

The Australian UN PKF contingent is generally well-regarded by the East Timorese community for its friendliness, particularly with children, and its professionalism. But some people ask why Australians carry weapons even when far from their assigned duties. Australian PKF officers explain that UNMISET is a Chapter 7 (i.e. high alert) Peace Enforcement Mission, so all PKF have a right to bear arms. Most national contingents choose not to exercise this right while off duty, but the Australian Government has ordered its soldiers to carry weapons even when not on duty. However, according to the PKF Deputy Force Commander, the UNMISET Status of Mission Agreement signed on 20 May 2002 requires that all soldiers bearing arms be in uniform, with only a few narrow exceptions.

At least one senior UN PKF officer feels that the Australians were arrogant; they led the 1999 military intervention in East Timor under InterFET and "they've never really moved away from that attitude." In September 2002, Australia deployed containers, sandbags, armored personnel carriers, and armed PKF soldiers in front of their embassy in Dili; they also closed the embassy on 16 September and evacuated their personnel. President Xanana Gusmão said he was "very ashamed with the attitude of the Australian embassy over their concern of the terrorist threat, even though East Timor's security has been under UN PKF. And I am also upset over the action taken by the Australian Government." However, the Australian government assured La'o Hamutuk that proper consultation was made.

In addition to their security role, some Australian PKF soldiers in East Timor have rebuilt buildings and done other humanitarian work. This work helps the UN Mission and the East Timorese people, although the use of soldiers for non-military activities creates confusion about the role of the military in a democratic society. In Australia, this work is used to build public support for the military, and to encourage young people with humanitarian ideals to sign up for the Australian Defense Forces.

Australian Defense Force Cooperation Program

The UNMISET mission, including Australian PKF and civilian personnel, is scheduled to leave East Timor in June 2004. At that point Falintil-FDTL, the Defense Force of Timor Leste, will assume responsibility for national defense. However Australia will continue to work together with the FDTL in strengthening defense of East Timor.

One program which will continue after June 2004 is the Defense Force Cooperation Program. This is run by the Australian Defense Forces, independent of the UN. The program consists of the Australian Training Support Team, Australian advisers in East Timor's Office of Defense Force Development (ODFD), Junior Leadership Training for FDTL officers, and other assistance. According to the Program's Australian coordinator, Lieutenant Colonel Marcus Rodda, the Australian military aims to form a strong relationship with the East Timorese military and to assist them in developing an armed forces institution.

The program was first discussed at a Defense Donors' Conference for Falintil _ FDTL in mid-2000. Two Australian advisers began working with the ODFD in November 2000, and in February 2001, 21 Australian trainers formed the Training Support Team at FDTL's training facility in Metinaro. An Australian army magazine quotes one Australian trainer as saying language was a problem. Nevertheless, Australian trainers are giving courses in tactics and techniques for modern warfare, medicine, and communications for FDTL's battalions in both Metinaro and Lospalos.

Australian advisers in the ODFD perform financial management, needs assessment, strategic planning and communications. They do not collect intelligence. In addition to the Australians, there are also advisers from the US, England, New Zealand, Malaysia, Portugal and Thailand working in the ODFD under East Timorese Secretary of State for Defense Roque Rodrigues. La'o Hamutuk will explore this office more fully in an upcoming Bulletin.

Australian funding for the Defense Force Cooperation Program is around US$4.9 million per year. Less than half of this goes to personnel costs, with the rest for equipment like infantry webbing, water bottles, sleeping bags, computers and radio equipment. In addition, Australia provided US$3.6 million in 2001 to build the FDTL Training Center in Metinaro. During the UNTAET period, Australian lent automatic weapons and ammunition to FDTL for use during trainings. After independence, Australia helped FDTL purchase about 1,000 small arms.

The Australian Training Support Team includes Battalion advisers who provide training in command, planning, discipline, military procedure and other areas as requested. The Team has specialists to attend to Australian logistics and medical needs, but who also provide training for East Timorese soldiers in these areas. Communications experts will help establish a high-frequency communications system and set up a local area computer network to help FDTL headquarters staff exchange information among their computers.

Other assistance includes English language training for FDTL personnel, including preparing three to go to Canberra in 2003 for military training. The English program has been run by Australians since it began in 2000, but the U.S. plans to provide English language lab equipment in February 2003.

The Junior Leadership Program will involve leadership training for 30 FDTL members in Queensland, Australia. FDTL will then conduct, together with six Australian officers, a similar course in East Timor. It is planned that future leadership courses will be run without Australian involvement.

During the FDTL Donors' Conference in August 2002, participants discussed the possibility of FDTL using the Australian PKF barracks in Maliana after PKF withdraws. However, an Australian military officer said that neither the FDTL nor the East Timor government has asked Australia about the future of this base. The conference also discussed building new FDTL barracks in Baucau because the barracks currently used in Los Palos is considered sub-standard and not centrally located. However neither Australia nor other donors offered money for the Baucau barracks, and it is not yet decided if either project will go ahead.

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Who is La’o Hamutuk?

What is La'o Hamutuk?

La’o Hamutuk, The East Timor Institute for Reconstruction Monitoring and Analysis
P.O. Box 340, Dili, East Timor
Mobile: +61(408)811373; Land phone: +670(390)325-013
Email: laohamutuk@easttimor.minihub.org 
Web: http://www.etan.org/lh

International contact: +1-510-643-4507, lh@etan.org