Karen Polglaze, Canberra – Australian ratification of the Timor Gap Treaty could increase the risk of political instability in East Timor, a parliamentary committee was told today.

Consultant to resources company Oceanic/PetroTimor John Imle said the treaty was a classic example of an uneven deal between unequal partners. The stability of East Timor, which was in Australia's interest, was heavily dependent on the early creation of jobs, Dr Imle said.

Former members of pro-Indonesia militia groups needed something to do, and quickly. "The present plan of development is a classic example of an uneven deal reached by uneven counterparties," he said. "In my experience, this will eventually increase the political risk. The most urgent problem for East Timor at the moment is its lack of jobs."

Dr Imle, an expert in the development of gas projects in emerging nations, said ratification should be slowed down so East Timor could seek independent advice and hold public hearings. One important factor in job creation would be where the resource came onshore.

Darwin was pushing for a pipeline to its shore, but the operators could load the liquefied natural gas directly onto boats from the platforms at sea. If the LNG were to be piped, it would be cheaper to take it to East Timor, Dr Imle said.

Fear of political instability, not technical difficulties, was the real reason for rejecting East Timor, but that had lessened with independence, he said.

"East Timor has been and is still being rushed, to close the door once more by ratifying the treaty and a development plan that takes the gas not to their shores but to Darwin," he said.

The treaty divides royalties from oil and gas resources in part of the Timor Sea 90:10 in East Timor's favour without drawing maritime boundaries.

Because the two nations are so close, their exclusive economic zones overlap, so boundaries have to be negotiated – but not necessarily before ratification. Where the line is drawn could significantly affect East Timor's future as it has few other discovered natural resources and is otherwise little developed.

PetroTimor is seeking up to $2 billion compensation from the federal government, the Joint Petroleum Development Authority and Phillips Petroleum for the loss of Timor Sea concession rights it acquired in 1974 under Portuguese colonial rule.