June 25, 1993

Article at Reuters

Timorese challenge Australia-Indonesia oil treaty

By Wilson da Silva

Australian journalist Robert Domm (left) with Timorese guerrilla leader Xanana Gusmão in 1990, before his imprisonment

SYDNEY – Exiled Timorese launched a challenge in Australia’s highest court to a 1989 oil exploration treaty for the potentially rich Timor Gap seabed between Australia and Indonesia.

Legal experts said the move could jeopardise hundreds of millions of dollars of investment.

Under the treaty, seven of the world’s biggest oil firms will spend A$500 million to drill 45 exploration wells in the area. Analysts estimate potential output at 200,000 barrels of oil a day by 1995.

USX-Marathon Group of the United States was the first to begin drilling in December, and is to be joined by The Broken Hill Pty Co Ltd, Phillips Petroleum Co, Woodside Petroleum Ltd, Petroz NL, Enterprise Oil Plc and the Royal Dutch/Shell Group.

The writ argues that Indonesia does not represent the Timorese and cannot sign a treaty on their behalf. Indonesia’s annexation of East Timor in 1976 after invading it the previous year is not recognised by the United Nations.

International treaties such as the Timor Gap agreement must be signed between sovereign states.

“We have no special objections to Australian mining interests in the Timor Sea region,” Timorese resistance official Jose Ramos Horta told a news conference in Canberra.

“(But) we believe the policies of the past 18 years pursued by Australia to appease Indonesia have produced nothing of benefit to the people of East Timor,” he said.

Legal experts said the action could potentially void the treaty and leave the Australian government open to compensating oil companies that have signed contracts to explore the region, which lies between north-western Australia and East Timor.

The United Nations, which still considers Portugal the administering power of the island, a former Portuguese colony, has called for a vote on self-determination by the Timorese.

“If it could be established that the East Timorese are entitled to self-determination, then obviously the Timor Gap treaty would be a flagrant violation of international law,” said Rafiqul Islam, law lecturer at Sydney’s Macquarie University.

“It could be argued that it is the East Timorese who have the right to enjoy those seabed resources, and not the Indonesians,” Islam told Reuters.

Eleven contracts have been awarded under the treaty, requiring the seven companies to conduct seismic surveys over 52,000 km during the next six years.

The plaintiffs are Horta and Jose Gusmão, cousin of imprisoned guerrilla leader Xanana Gusmão, and Abel Guterres, an Australian national who is an organiser for Fretilin, the leftist party toppled by Jakarta’s invasion.

The court action was backed by the Australian Democrats, a small leftist party with the balance of power in the Senate (upper house).

Australia is currently defending the treaty against Portugal in the World Court, where Lisbon is also seeking to void the treaty and demanding compensation. The U.N. court is likely to begin hearing the case in late 1994 at the earliest.

The treaty zone is split into three areas – Zone A is jointly managed by Australia and Indonesia. Once oil production begins, tax and revenue will be split between Australia, Indonesia and the oil companies.

Zone B is controlled by Australia and Zone C by Indonesia. But Zone A, which is surrounded by the existing fields of Challis, Jabiru and Skua, is where a bonanza is expected.