Eleanor Hall: More reports have emerged of decimated fish stocks off the coast of Indonesia near the recent oil spill in the Timor Sea. At least half a million litres of oil from the Montara oil field spilled into the Timor Sea over 10 weeks from August this year.

Hundreds of fishermen and seaweed farmers say this has cost them their only source of income and they say they are preparing a compensation claim against both the Australian Government and the Thai operators of the oil rig.

While the Australian Government maintains there is no evidence of damage to Indonesia's marine areas, Jakarta has now set up a team to investigate, as Stephanie March reports.

Stephanie March: Reports of dead fish floating in waters off Kupang in Indonesia's east started to emerge in September. Environmental researcher David Jones spent the past six weeks taking water samples and speaking to fishermen in the area.

David Jones: They found dead fish in the area and as they started fishing they discovered that their fish catch was off by like 70 per cent or more so every time they went fishing, they were unable to produce any economic benefit and in fact they lost money every trip so they eventually they had to stop fishing.

Stephanie March: Bob La Macchia manages one of the largest trawling operations in the area. He is one dozens of operators seeking compensation for lost income he says has been caused by the spill. He says the claim from his company alone reaches into the millions.

Bob La Macchia: More than a million. I'm looking at two to three million. I mean it's got to be at least seven years, at least seven before we start seeing any product off these grounds.

Stephanie March: The Australian Maritime Safety Authority says it has been conducting daily fly-over assessments of the area since the leak started in August. It maintains the type and amount of oil observed in Indonesian waters poses no significant threat to the marine environment. But David Jones says the dispersant used by Australian authorities pushed the oil from the surface down onto the reef.

David Jones: Some of these guys, they fish and sometimes they dive down at night and they use a small spear gun and they shoot a few fish. So they have actually, you know, it's only 15 metres deep so they could see it on the reef even if it wasn't on the surface.

Stephanie March: The Indonesia Government has now set up a team to calculate the losses incurred from the oil spill. Chairman of the West Timor Care Foundation Ferdi Tanoni is coordinating the compensation claim on behalf of the Kupang fishermen. He says the Australian Government has a moral obligation to help the fishermen of West Timor.

Ferdi Tanoni: I can recall back in the Second World War thousands and thousands of West Timorese and East Timorese got killed just to help with the Australian Army.

Stephanie March: Australia's Department of Foreign Affairs and Trade said in a statement it will act consistently with international law but that it is not aware of any basis for a compensation claim.

An Australian Government inquiry into the disaster will hand down its findings in April. But Kupang-based environment researcher David Jones says that may be too late for the Indonesian fishermen.

David Jones: They fish until like Christmas time and the first part of January and then they have to make enough money to survive through the wet season and this year they are not going to have any way to survive because their boats are only designed for fishing in that area.

Eleanor Hall: That's environment researcher David Jones in that report by Stephanie March.