By Loke Hoe Yeong
It appears that another maritime dispute has escalated in Southeast Asia. And this time, it is not just over islets and rocks in the sea, as in the South China Sea. Timor-Leste and Australia are now in a tightening tussle over their maritime boundary. With an estimated $US40 billion in oil and gas reserves, the Timor Sea that lies between them is a much richer source of oil than the South China Sea is, by most accounts.
On Monday (11 April), Timor-Leste informed the Australian government that it would be taking its complaint to the United Nations (UN), under the UN’s Convention of the Law of the Sea (UNCLOS). Late last month, around 10,000 protestors demonstrated outside the Australian embassy in Dili, the capital of Timor-Leste.
But what puzzles most observers is that Australia and Timor-Leste have been good friends, for the most part. When the people in Timor-Leste – or East Timor, as it was more commonly known then – voted overwhelmingly in a referendum in 1999 to secede from Indonesia, elements of the Indonesian military moved in to quell the movement brutally. In the aftermath of the violence, Australia led a military force that sought to stabilise the situation in East Timor, and was then heavily involved in peacekeeping operations.
Subsequently in the 2000s, the nascent independent nation of Timor-Leste and Australia signed a series of three treaties, which dealt with dividing the revenue from the rich oil fields of the Timor Sea. It appeared to be a generous offer of goodwill from the Australians. For example, in one of the formulas, 90% of revenues from an area in the Timor Sea called the “joint petroleum development area” would be given to Timor-Leste.
The time of these negotiations between the two countries was when relations began to deteriorate. Now, Timor-Leste says that if the international principles behind UNCLOS were adhered to, the maritime border would run exactly half-way between the two countries, and the entire area of the rich oil fields would lie totally within the exclusive economic zone of Timor-Leste.
But why would Timor-Leste be picking a fight with its old friend?
Oil and the classic resource curse?
Timor-Leste wisely invested its oil revenues, from the early years of its independence, in a sovereign wealth fund. However, that amount is being rapidly depleted. Some estimate that the fund would be depleted very soon, by 2025. And worryingly, oil and gas have held the lion’s share of Timor-Leste’s revenue source, in what is otherwise an underdeveloped economy still largely dependent on subsistence farming.
Given this context, Timor-Leste is simply desperate to maximise its oil revenue perhaps. Even if it is granted its wish, for the UN to rule in its favour on UNCLOS and cede a greater area of the Timor Sea to its jurisdiction, this is hardly a sustainable economic solution to Timor-Leste’s economic woes. The continued, heavy reliance on these oil revenue could act as a disincentive for it to develop its economy further.
A classic dispute over post-colonial borders?
Much of the current dispute is due to the fact that a permanent maritime boundary between Timor-Leste and Australia has never been negotiated. One of the terms of the revenue-sharing agreements between the two countries postpones any discussion of their permanent maritime boundaries until the year 2057.
A seabed boundary was negotiated and settled between Australia and Indonesia in 1972, which effectively applied to the territory of Timor-Leste then, by virtue of geography. Timor-Leste was a Portuguese colony at that time.
Australia’s position is that the three revenue-sharing treaties, which lay down formulae for dividing the oil revenues from the Timor Sea, has been a very generous offer to Timor-Leste, which Timor-Leste had already accepted.
However, there is also the sense among the Timorese that those three treaties were negotiated with Australia from a position of weakness. A spying scandal also erupted in 2004, when it was alleged that Australia bugged the offices of the Timor-Leste government, during sensitive negotiations over the revenue-sharing agreements.
The origin of the problem perhaps lie in the nature of the maritime boundary negotiated between Australia and Indonesia back in 1972. For some reason that was not entirely clear, that negotiated boundary ceded a larger portion of the Timor Sea to Australia.
It could be speculated that Indonesia may have been eager to placate any Australian resistance in anticipation of its eventual annexation of East Timor.
The early 1970s was a turbulent time for East Timor. The territory’s Portuguese colonial masters eventually abandoned it in 1974, due to political upheaval back home in Portugal. Subsequently, the Indonesian military occupied the territory and the government annexed it.
Indeed, the then Australian Prime Minister Gough Whitlam then told Indonesia that he would not oppose its annexation of East Timor.
The maritime dispute between Timor-Leste and Australia then begins to look more like a classic post-colonial border disagreement, and thus sets it apart from the vastly different situation in the South China Sea.