Asia's newest nation has been officially listed by the UN as the poorest country in the region. But many see East Timor's economic future as being dependent on the deal it strikes with Australia over oil and gas reserves in the East Timor Sea. East Timorese leaders have indicated they will sign a final agreement on Independence Day next Monday, but there is concern among civil groups and some MPs, that the deal has been pushed through too quickly and secretly.

Transcript:

Fitzgerald: East Timor's senior Foreign Minister Jose Ramos Horta says his country won't try to wriggle out of the interim deal it made with Australia last year on the valuable Timor Sea oil and gas reserves.

Ramos-Horta: "There is one principle, one rule in relations between states, you negotiate an agreement in good faith, we reached a deal July last year that was beneficial to East Timor. It is now incumbent upon the two sides to formalise this agreement into a treaty soon after independence, we should not allow ourselves to be distracted by then breaching this sacred rule of international relations, then [if] on day One of our independence we immediately reneg on an interim arrangement that we have reached with Australia, it would not be to the benefit of East Timor credibility with other countries and with potential investors."

Fitzgerald: And as far as Australia's Minister of Foreign Affairs, Alexander Downer is concerned, a new treaty to cover the Timor Gap, will be signed next Monday.

Downer: "I can say with every confidence that we'll be able to sign the treaty on 20th May on the first day of the new, independent East Timor, and there is a good understanding now on how we can move forward to include any outstanding issues."

Fitzgerald: Although Mr Downer is confident the signing will be one of the new East Timorese Government's first major undertakings there is discontent inside East Timor on the way the deal is being negotiated and over what it contains.

A group of opposition parties have called on East Timor's Chief Minister Mari Alkatari, who heads the majority Fretilin Party, to front the parliament and explain what is contained in the interim Timor Sea Arrangement signed in July last year.

Democratic Party MP Eusebio Guterres says 26 MP's don't want the deal to be signed on Monday. He says they represent a handful of dissenting Fretilin Party members and the following parties.

Guterres: "Democratic Party. Second one is PSD – Socialist Democratic Party and the third one is KOTA, fourth one is UDT, and fifth one is PPT and PDC."

Fitzgerald: The main bone of contention is over the demarkation of sea borders between East Timor and Australia, which affects who actually owns oil and gas reserves in the Timor Sea.

Mr Guterres says a decision to stick to an old Indonesian Australian agreement on sea borders, means East Timor could be robbed of control over valuable resources.

Guterres: "Boundaries have been decided by simply following negotiations with treaties signed by Indonesia and Australia."

Fitzgerald: MP's and civil groups are also unhappy that all processing of the oil and gas will be done in Darwin instead of East Timor, which they fear will rob East Timor of urgently needed employment opportunities. Chief Minister Mari Alkarai has told the MP's he won't disclose the contents of the treaty to be signed Monday, until after the signing.

He's also refused to discuss the details with a group of East Timorese civil groups who fronted him with their concerns about the deal.

Co-ordinator of the development group, Lao Hamutuk, Adrianao do Nascimiento, is criticial about the secrecy surrounding the deal, he says Mari Alkatari has kept East Timorese in the dark about the details.

Do Nasciemento: "We tried many times to approach them to get an explanation of the procss, but they said it was secret. Certain people can get the information."

Fitzgerald: Mr do Nascimento says if sea borders were re-negotiated East Timor would be in a stronger bargaining position on oil and gas exploration.

Do Nasciemento: "Talking about the Timor Gap, we have to talk about the border and secondly the status of the Timor Gap there. So the problem we are discussing here in East Timor is who is the owner of the Timor Gap."

Fitzgerald: Andrew McNaughton of the Australian East Timor Association believes if sea boundaries are not negotiated between East Timor and Australia, East Timor may receive only 40 per cent of its entitlements from exploration of oil and gas in the Timor Sea.

He says independent studies show if East Timor contested its sea boundary with Australia it is likely it would be deemed to have ownership over larger and richer oil fields than are to be covered in the Timor gap Treaty.

McNaughton: "The estimation that the Timorese would receive only about 40% of their potential entitlements if they sign the agreement, the MOU that is currently on the table, is arrived at by adding up all the key resources that they would be entitled to were they to claim their full maritime boundaries, which would include all of or most of greater Sunrise Fields, and all of Corralima field."

Fitzgerald: The current interim Timor Sea agreement does not rule out a final deliniation of the sea boundaries but Mr McNaughton says recent Australian attempts to put itself outside the jurisdiction of an international court on the issue is creating suspicion in East Timor.

Mcnaughton: "Australia has recently withdrawn or attempted to withdraw from the jurisidiction of the International Court over the determination of maritime boundaries. However, short of going to the International Court there is still a process of negotiations in which at least some moral weight would have to be accorded to the international norms.

I mean it's not clear if Australia can simply back out and adopt a totally intransigent position and say we're not going to take any account of international norms. I think there should be moral pressure if not legal pressure to take account of the international norms."