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Relations strained as East Timor buys Chinese navy boats

Sydney Morning Herald - June 7, 2010

Lindsay Murdoch, Darwin – Two 43-metre Chinese-made navy patrol boats mounted with 30-millimetre cannon, initially to be crewed by Chinese sailors, will be launched in East Timor this week in what observers say is a slap in the face for Australian diplomacy.

The 1960s-designed 175-tonne Shanghai class boats have arrived in East Timor at a time of strained relations between the Rudd government and the four-party coalition in Dili led by the former guerilla fighter, Xanana Gusmao.

East Timor bought the boats from a Chinese company in 2008 without first consulting Australia, which has had hundreds of troops deployed in the country since 2006.

Ian Storey, an expert on East Timor's relationship with China, told the Herald that the government in Dili had bought the boats to "demonstrate to Canberra that it has other choices when it comes to defence partners".

But Dr Storey, a fellow at the Institute of Southeast Asian Studies in Singapore, said that as he understands it the boats will be used for fishery protection duties "and in that sense, have no inherent strategic value... that is, nothing for neighbouring countries to worry about".

A statement from East Timor's Ministry of Defence and Security said the boats, which will initially be manned by Chinese crews while Timorese undergo training, will be able to travel 1000 kilometres and remain at sea without land support for a week. The Defence Minister, Julio Tomas Pinto, said the boats were an "urgent" response to combat illegal activities in East Timor's exclusive economic zone.

East Timor's navy consists of ageing and smaller Portuguese-made Albatross class boats. Its $US28 million ($34 million) purchase of the boats from Poly Technologies, a subsidiary of China Poly Group, a defence company with close ties to the Chinese military, stirred controversy in East Timor. The government made the purchase without conducting an open tender process.

It came when China was spending millions of dollars to establish an economic, diplomatic and strategic foothold in the half-island nation.

Dr Storey wrote in the Jamestown Foundation's China Brief last year that one of China's primary interests in East Timor is to gain access to the country's oil and gas reserves. "So far, however, it has made little headway," he wrote.

Australia's relationship with East Timor is at its lowest point since the country gained its independence in 2002, observers in East Timor say. In fiery speeches in rural provinces in recent weeks, Mr Gusmao has been attacking plans by Woodside Petroleum to build a floating liquefied natural gas platform above the multi-billion Greater Sunrise field in the Timor Sea. Timorese media has quoted him as saying that the Timorese must unite to stop Australia stealing their wealth as it did in 1989 when it signed an agreement with Indonesia to carve up resources in Timor.

Mr Gusmao is threatening to block the Greater Sunrise project unless the consortium pipes the gas to a plant in East Timor. Woodside estimates Australia and East Timor would share a $US32 billion profit from a floating development at the field. Tempo Semanal, a newspaper published in Dili, said relations between Canberra and Dili have sunk to a point where they can almost no longer talk with each other. The newspaper said the dispute over Greater Sunrise is one reason, pointing also to failed Australian aid programs.

"Australia needs to know that the poor relations are not just about Woodside. There is history here. The history is mostly bad," said the newspaper, which is run by the most high-profile journalist in East Timor, Jose Belo.

A spokeswoman for the Defence Department said "the sale of the boats is a bilateral matter between East Timor and China". She said: "Australia was pleased to provide English language training to 36 [East Timorese defence] personnel to prepare them for patrol boat training in China".