Jakarta – Australia and East Timor signed a multi-billion dollar agreement Thursday on dividing royalties from oil and gas reserves in the Timor Sea despite an unsavoury row between key political leaders.
The two countries signed the Timor Gap agreement in East Timor's capital of Dili, granting the world's newest state billions of dollars in royalties as it heads towards self-government, officials said.
The agreement, worth some four to five billion dollars to East Timor over the next two decades, represents a major boost for the finances of the impoverished new state, currently under UN administration, ahead of elections next month.
East Timor will receive 90 percent of royalties generated from the commercial exploitation of oil and natural gas reserves in the Timor Sea, with Australia settling for the 10 percent balance. The treaty ensures East Timor will not remain exclusively dependent on foreign aid after the elections on August 30.
While Australian Foreign Minister Alexander Downer toasted the signing of the treaty with a bottle of Australian champagne, the deal's conclusion had earlier lifted the lid on tense undercurrents that arose during the protracted 12-month negotiations.
East Timor's interim Economic Minister, Mari Alkatiri, accused the Australian Northern Territory's chief minister Denis Burke of attempting to subvert the accord by inviting politicians from Timor's embryonic parliament, the National Council, to attend rival talks.
Alkatiri had threatened to boycott the event if Burke attended, casting a pall over preparations for the signing ceremony. "He needs to apologise for that before coming here and meeting again authorities in this country," he told ABC Radio.
Burke scoffed at the suggestion that he had "interfered in the internal affairs of East Timor." "And I wonder if Dr Alkatiri also considers we interfered in their internal affairs when we provided safe haven in Darwin for 3,000 refugees two years ago," he told ABC. "Now's not a time to be spiteful." However both Alkatiri and Burke attended the ceremony, with Alkatiri making a speech after signing the accord, said Barbara Reis, spokeswoman for the UN transitional administration.
Fellow cabinet member for the Timor Sea, the United Nations' Peter Galbraith, also signed on East Timor's behalf, with Downer and Industry Minister Nick Minchin signing for Australia.
Australian Prime Minister John Howard refused to be drawn into the dispute between Burke and Alkatiri. "East Timor will be a struggling, poor country, it will need revenue, it will need a lot of help and this arrangement is a good and generous arrangement for them," Howard said.
Australia's Labor opposition leader Kim Beazley was unsympathetic to Burke. "Denis Burke interferes in everything and he achieves nothing," Beazley told the Australian Associated Press in Perth.
The Timor Gap treaty between Australia and East Timor was renegotiated after the territory voted to break away from Indonesia in 1999 sparking violence by pro-Jakarta militias which caused hundreds of thousands to flee. A previous agreement between Canberra and Jakarta signed in 1989 divided royalties between the two countries equally, but was nullified by the former Portuguese colony's secession from Indonesia.
Galbraith said Australia would still fare better than East Timor from the agreement, despite settling for 40 percent less than entitled to under the original treaty. Citing a Northern Territory treasury study, Galbraith told AFP that Australia stood to inherit some 25 billion dollars in downstream benefits over the next two decades.
[The July 6 Sydney Morning Herald also reported that National Council member, Angela Freitas, burst through the VIP seats at the front of the hall and denounced the agreement as illegal. "Right now as you are signing this agreement, the Minister of Economic Affairs is not elected by the East Timorese people," she shouted before being surrounded by security guards and escorted out - James Balwoski.]