Kalinga Seneviratne, Sydney – The Australian government is denying claims that it bullied the world's newest country, and one of its poorest – East Timor – to grab a large slice of a US$48 billion gas and oil deal signed between the two countries on Thursday.
The Australian Senate passed the Timor Sea Treaty (TST) late Thursday after intense debate – but not before Timorese Prime Minister Mari Alkatiri and Australian Foreign Minister Alexander Downer signed an agreement in the Timorese capital Dili earlier in the day, covering two gas and oil fields in the Timor Sea that divides the two countries.
During an acrimonious debate in the Senate, Greens leader Bob Brown accused Australian Prime Minister John Howard of "blackmailing" the Timorese prime minister by insisting that if the deal was not signed in Dili, the Australian parliament would delay the ratification of the treaty.
Brown called the agreement on developing gas and oil in the Timor Sea "blackmail of the clearest order against our poorest Timorese neighbor".
Alkatiri told the Australian Broadcasting Corp (ABC) that "a lot of pressure was done from the Australian government, which was not helpful for the whole process".
If the Timor Sea Treaty had not been ratified by this Tuesday, the contracts with the petroleum companies would have run out, depriving Australia and East Timor of revenues.
Brown was thrown out of parliament for refusing to withdraw his allegations, but they prompted Howard to make a special statement to parliament denying that he had tried to "intimidate or strongarm" East Timorese leaders over the deal.
Howard called claims of blackmail "totally false", although leaked documents published in online and print media showed contentious discussions between Canberra and Dili late last year on revenue-sharing from resources in the Timor Sea.
Downer admitted that the negotiations were tough but played down suggestions from the opposition that it has led to acrimonious relations between the two countries. "Australia is on Australia's side and East Timor is on East Timor's side. So inevitably they have been lively negotiation, bearing in mind the enormous amount of money that's at stake here," he said.
Under the Australia-East Timor agreement, the first slated project is the $18 billion Bayu-Undan field, which falls completely within a joint petroleum development area established under the Timor Sea Treaty.
Under the treaty, the two countries have agreed that East Timor would get 90 percent of the revenue and Australia 10 percent from the project, which will be spread over a period of 20 years beginning in 2004. It is estimated East Timor will earn $15 billion and Australia $2.5 billion over this period.
The contentious issue is the neighboring Greater Sunrise field, which Australia claims falls 80 percent within Australian waters. This means East Timor would be entitled to only 20 percent of the revenue from this venture.
Under the agreement signed in Dili, Australia is expected to reap $38 billion from these oil and gas fields, while East Timor will get a meager $8 billion.
The deal will also bring substantial benefits to the Northern Australian town of Darwin, where a gas pipeline will be constructed across the sea to process the gas, and export to Japan and other countries. Up to 1,500 jobs will be created during the construction phase and more than 100 ongoing jobs after that.
Ever since the Timor Sea Treaty was negotiated two years ago, the Australian government has made a big issue of how under the accord it has given away 90 percent of revenues to be raised from the development of the area.
After the signing of the Timor Sea Treaty in May, Howard said: "We must serve our own interests, but also ensure that we are fair and generous to the people of East Timor."
But many East Timorese do not see it that way. In fact, they have been calling for the renegotiation of maritime boundaries drawn up between Indonesia and Australia after the 1975 Indonesian annexation of East Timor, an act that Australia recognized.
Timorese Foreign Minister Jose Ramos Horta said in August that "Australia is getting the lion's share of the revenue without really being entitled to it, and Australia knows very well that it is not entitled to it".
He indicated then that East Timor might take the issue to the International Court of Justice (ICJ) in The Hague. But, last year, in a move that astonished the international community, Australia withdrew from the ICJ's jurisdiction on maritime boundaries – making independent arbitration impossible.
Meantime a leaked transcript of a meeting between Downer and Alkatiri in Dili in December, published on Friday by the Australian alternative news website crikey.com.au, says there was heated debate regarding the maritime boundary issue.
At one stage, it said that Downer, irritated by Alkatiri's consistent reference to renegotiating maritime boundaries, said: "To call us a big bully is a grotesque simplification of Australia. We had a cozy economic agreement with Indonesia, we bailed East Timor out with no economic benefit. Our relationship is crucially important, particularly for you, East Timor."
Later, Alkatiri said: "It is not with generosity that you gave us 90 percent. We have lost 10 percent". To that, Downer replied, "We claimed 100 percent and we lost 90 percent – I think that's a pretty good outcome for you."
"Our 100 percent claim is based on international law and the equidistance line. It was not a random decision. The present issue of generosity – I do not accept," replied Alkatiri.
Downer ended the meeting by saying: "We're very tough. We don't care if you give information to the media."
It appears that the deal on oil and gas development was signed on Thursday without any hint of renegotiating the maritime boundaries.
Some critics are now asking whether Australia's sending of troops to East Timor in 1999, to help in its quest for independence, had been done with an eye on these oil and gas deals.
Brown told ABC Radio: "'Blackmail' is a word that has been used in the parliament a thousand times, but it is never more appropriately used on this occasion."