Amanda Hodge, Jakarta – Australia and East Timor will face off in The Hague on Monday in their territorial dispute over maritime boundaries in the Timor Sea – the first nations to use a last-chance international conciliation process under the UN Law of the Sea.
East Timor government adviser and former Victorian premier Steve Bracks yesterday claimed Foreign Minister Julie Bishop had made a key concession.
Former Timorese president Xanana Gusmao will lead his country's delegation, which will argue the two countries should agree to maritime borders, and the Timor Sea treaties are unfair and contravene international law because the Australia allegedly spied on the Timorese cabinet during negotiations. The UN Convention on the Law of the Sea dictates all negotiations must be made in good faith.
Under current arrangements between the two neighbours, oil and gas revenues from the Timor Sea's Greater Sunrise gas field are split evenly, while 90 per cent of revenues from the Joint Petroleum Development Area go to East Timor.
Australia's position is that Timor's push for maritime boundaries and compulsory conciliation contravenes existing Timor treaties negotiated in good faith, including a 2007 treaty under which both sides agreed to defer the question of maritime borders for 50 years in exchange for granting Timor 50 per cent of the royalties from the still-undeveloped Greater Sunrise field.
It argues reopening the Timor Sea treaties would not only undermine investment certainty and delay revenue flows to both countries but result in fewer royalties for Timor, which has accrued a Petroleum Fund worth $16 billion – more than eight times its annual GDP.
Dili argues its maritime border with Australia should be drawn along the median line between the two nations, the method by which Australia has settled its borders with all other nations – Vanuatu, New Caledonia, PNG, French Antarctica and New Zealand – except Indonesia.
A median-point boundary would see a far greater percentage of resources fall into Timor's exclusive economic zone.
In Indonesia's case, Canberra successfully argued in 1972 the boundary should be drawn along Australia's continental shelf. But Portugal – then still the colonial power in Timor – disputed that, thus creating the Timor Gap in the border over which the current territorial dispute now simmers.
In 2002, as Canberra and East Timor began negotiating maritime treaties, Australia withdrew itself from the UNCLOS maritime dispute settlement jurisdiction, thus avoiding the sort of binding ruling from the UN Permanent Court of Arbitration that China most recently refused to recognise in its South China Sea dispute with The Philippines.
That move, two months before Timor's declaration of independence, deprived the new, impoverished nation of international arbitration to negotiate its maritime boundaries.
Mr Bishop insisted yesterday that Australia's position on the Timor Gap was fully consistent with its position on The Philippines arbitration case.
"In both situations we emphasise the importance of the rule of law and the willingness to resolve disputes peacefully," she said, adding Australia considered the "decision of the upcoming compulsory conciliation binding on both sides".
Mr Bracks described Ms Bishop's statement as a "breakthrough for Timor", after Australia had to be "dragged kicking and screaming" to the international forum. "This is the first time the Australian government has said it will abide by the UNCLOS decision," he said. "This is a sensible way to resolve this dispute."