Australia and East Timor are set to begin tough negotiations over marine boundaries this year, although Australia has refused to set a deadline. East Timor is contesting the boundaries set under a 1972 agreement between Australia and Indonesia, when East Timor was ruled by Portugal. Now, the young country wants new borders and a bigger share of the rich oil and gas fields which lie between them.

Presenter/Interviewer: Karon Snowdon Speakers: Peter Phipps, Globalism Institute, RMIT; Professor Gillian Triggs, Direector of Comparative and International Law at Melbourne University; Marie Alkatiri, Prime Minister of East Timor.

Snowdon: There's a lot at stake in the talks to settle once and for all the borders in the sea between the two countries. For East Timor, finalising maritime boundaries will also set much of its economic future.

Phipps: Currently East Timor is classified as the fourth poorest country in the world.

Peter Phipps is from the Globalism Institute at the Royal Melbourne Institute of Technology. The Institute is a signatory to a letter to Australia's Prime Minister John Howard urging a resolution before the resources are depleted and worthless to Timor. One hundred other non-government organisations worldwide also signed the letter.

Phipps: Basically we see that Australia has some policy choices to make in relation to East Timor. And that what's desirable for Australia's interests is really a stable and prosperous East Timor.

Snowdon: And so basically the letter is urging a quick resolution to the issue?

Phipps: Yeah, there are fears that the Australian government might use sort of procedural delays as a way of avoiding addressing this until after the revenue stream from the gas and the oil fields is really finished.

Snowdon: Under the Timor Sea Treaty and other agreements signed last year with Australia, East Timor's share of the earnings from the oil and gas fields of Bayu Undan in the joint development zone was increased to 90 per cent, from the previous 50/50 split.

That's worth maybe 3-billion US dollars over 17 years and is effectively the country's only income, unless it can develop other industries. (Bayu Undan falls within the jointly managed area of the Timor Gap formed during the disputes in the '70's.)

Worth a great deal more are other fields such as Greater Sunrise, the bulk of which are claimed by Australia, which is sticking to boundaries based on the continental shelf.

East Timor wants new boundaries drawn mid-way between the two countries – and it has international practice on its side. The median line is now most commonly used.

Anticipating a fight, Australia withdrew from the International Tribunal on the Law of the Sea and the International Court of Justice which might have mediated the dispute, leaving tough bilateral negotiations the only option.

And having said its been generous to increase East Timor's share of Bayu Undan when it was under no obligation to, Australia is loathe to go any further.

Because according to international law expert, Professor Gillian Triggs, a change of boundaries with little East Timor just might not be worth the effort. She says it could jepardise not only billions of resource dollars for Australia but its borders with New Zealand, Indonesia and its Antartic claims. But she adds there could be some room to compromise a little.

Triggs: It seems clear that Australia wants to reach an agreement with ET. And while I'm not privy to those negotiations, to acahive that outcome it may be that Australia will have to move a little closer to a median line.

Snowdon: So it might be that ET is given something of a concession but Australia's unlikely to go all the way and give it what it wants, the median line.

Triggs: I think the way you've stated it is a fair enough summation but there's another ingredient to this that at least couldn't be ignored. And that is that Indonesia could very well say that well look just a moment, we've got a boundary with you which is not a median line and which recognises Australia's full continental shelf claim, we want to renegotiate the boundary. Now that's pretty unusual in international law but Indonesia may feel that its entitled to renegotiation if Australia's made a concession to East Timor.

Snowdon: And there have certainly been comments to that effect by the Foreign Minister Hassan Wirajuda . It was some tiome ago but he is on the record sayin gthat he would expect a seat at the table if things were to change at all.

Triggs; Well that's correct and the consequences of that could be quite momentous.

Snowdon: Professsor Gillian Triggs, Director of the Institute of Comparative and International Law from Melbourne University.

Neither side is talking publicly today but East Timor' Prime MInister, Marie Alkatiri has had recent talks with Indonesia which a spokesperson, while declining to reveal the details says, have "gone well".

The one day confidential talks in Darwin involve only senior officials, and are to lay the guidelines for future negotiations, which could take years.

In an ABC interview earlier this week, Prime Minister Marie Alkatiri told Mark Bowling, he wants a deadline of between three and five years for the talks with Australia to be finished.

Alkatiri: I hope that Howard and Downer don't start thinking that I am hostile to Australia. I am here to defend the interests of my people as they are hgere to defend the interests of the people of Australia. I have been trying to be polite, I've been trying to be friends with all politicians in Australia but I can never give up everything just to be friends. I can give up boundaries and on the other hand I can give up resources. I cannot really give up both.