When Australia and Timor-Leste finally agreed to a permanent maritime boundary last year, it seemed like the protracted dispute over lucrative oil and natural gas reserves in the Timor Sea might finally be resolved.
But this week, Guardian Australia reported that Australia has been allegedly siphoning millions of dollars worth of oil revenue off Timor-Leste. A dysfunctional parliament never got round to ratifying the treaty, so Australia continues to profit off oil fields the treaty says belong to Timor-Leste.
These latest allegations are just the most recent chapter in a difficult relationship between Australia and one of its closest, poorest neighbours. It’s a relationship that spans decades of mistreatment, driven by foreign policy choices that have prioritised Australian oil interests above all else.
Oil diplomacy
“Oil has always been a major factor in the Timor story,” Clinton Fernandes, a professor of international politics at the University of New South Wales says. The oil and gas reserves in the Timor Sea are worth billions, and by the 1960s, Australia was already issuing exploration licenses.
After the Carnation Revolution in 1974, Portugal began freeing its colonies, including Timor-Leste, which it had controlled since the 16th century. While Timor-Leste’s future was unclear, Australian policy-makers felt Indonesian integration would better serve their oil interests.
Just nine days after Timor-Leste declared independence in late 1975, Indonesian forces began a bloody invasion, ultimately annexing the territory. Australia supported the annexation, partly out of a desire to remain close to Suharto and contain communism, but also because of oil reserves.
“Part of the reason why Australia supported Indonesia’s annexation and occupation was because of the oil and gas resources in the Timor Sea,” Bec Strating, a senior lecturer in politics at La Trobe University told Crikey.
But without Australia’s support, Indonesia might never have annexed Timor-Leste. Indonesia was undecided about Timor-Leste until a meeting between Gough Whitlam and Suharto in 1974, where knowledge of Australia’s support ultimately helped crystallise its position in favour of integration.
In 1979, Australia officially recognised Indonesia’s sovereignty over Timor-Leste, and 10 years later, signed a treaty to close the Timor Gap — the hole in the maritime boundaries between Australia and Timor. The terms of the treaty were highly favourable to Australia.
Turning a blind eye to Indonesia
But Australia’s diplomatic manoeuvring required a lot of looking the other way. While the predominantly Catholic Timor-Leste was under Indonesian control, it suffered what some academics term a genocide, including a forced famine, massacres, and regular military operations in the region.
In 1977, a report by former Australian diplomat James Dunn which pointed to widespread human rights abuses by Indonesian forces during the invasion was dismissed and downplayed by the Fraser government, even while it caused concern among other western nations, including the United States. When over 250 demonstrators were killed in the 1991 Santa Cruz Massacre, foreign minister Gareth Evans called it “an aberration, not an act of state policy”.
But soon, Indonesia was softening and in 1999, with Suharto gone, Timor-Leste voted overwhelmingly for independence in a UN-backed referendum. Violence broke out in response, and Indonesian-backed militias killed hundreds. Australian peacekeepers were called in to stabilise the situation, and in 2002, Timor-Leste became independent.
The spying scandal
John Howard calls the “liberation” of Timor-Leste one of his proudest achievements. But as Fernandes points out, an independent Timor-Leste was thoroughly inconvenient for his government’s interests.
Timor-Leste’s independence invalidated the Timor Gap Treaty signed with Indonesia. In negotiations that followed, Australia was increasingly willing to play dirty with one of the world’s poorest countries. Australia had already quietly withdrawn from the International Court of Justice’s jurisdiction on maritime boundary jurisdiction, robbing Timor-Leste of an independent arbitrator in the event of a dispute.
Then, in 2004, at the behest of foreign minister Alexander Downer, Australia installed listening devices in Timor-Leste’s cabinet offices, under the guise of an aid project.
“The spying was a direct result of the government’s desire to coerce and trick the Timorese into signing an unfair treaty,” Fernandes told Crikey.
A treaty was signed in 2006, which put negotiating a permanent boundary on hold for 50 years. When Australia’s spying was revealed in 2012, Timor-Leste went to The Hague, threatening to pull out of the agreement, which led to furious re-negotiations that culminated in the 2018 treaty.
The 2018 treaty was a good outcome for Timor-Leste. But the spying scandal that preceded it betrayed the deep cynicism of Australia’s approach. Australia is now bringing highly secretive and malicious criminal proceedings under the Intelligence Services Act against Witness K, the intelligence official who first exposed the bugging, along with his lawyer Bernard Collaery. The affair implicates high profile figures from both sides of the political aisle, and yet somehow, has been met with indifference from much of the Australian media.
The office bugging also points to just how entwined foreign policy objectives were with corporate interests. Right after leaving politics, Downer took up a consultancy job at Woodside Petroleum, a company that benefited greatly off Australian access to Timorese oil. There’s a revolving door between foreign affairs and Woodside — former DFAT secretary Ashton Calvert joined the board in 2005, and it still counts many ex-department officials among its ranks.
In the popular imagination, Australia was Timor-Leste’s liberator. But that relationship has often been anything but benevolent. Timorese NGO La’o Hamutuk estimates that Australia has taken $5 billion worth of oil money from Timor-Leste since 1999.
Meanwhile, the oil reserves Timor-Leste relies upon are fast dwindling. The streets of Dili are littered with anti-Australian graffiti, and with good reason.
“We’d rather the Timorese state didn’t exist,” Fernandes says.
“We immediately began to pick their pockets as soon as they became independent.”
The illegal and shameful bugging of the Timor-Leste cabinet should be the 1st matter to be referred to a Federal ICAC. Just saying. Just dreaming.
And the second matter to be referred to a Federal ICAC should be the failure of the regulator (within Dept PM&C) to investigate ASIS’ illegal bugging. Under whose orders was she acting?
And the third matter is the series of DFAT folks, who like Foreign Minister Downer benefitted from positions in Woodside.
And the fourth is the succession of Foreign Ministers, every one of them since Downer and including Carr and Bishop, who acted against our national defence interests by ripping off our impoverished neighbour.
And the fifth is the succession of Prime Ministers including Gillard who failed to impose any authority, morality or discipline on DFAT to sort out the treaty, the revenues and the relationship with Timor-Leste. (The only thing “furious” about the negotiations is the attitude of citizens of Australia and Timor-Leste who are outraged by Australia’s ball-tampering, under-arm bowling, time-wasting and world-class sledging.)
And the sixth (I want tickets to this show) is the succession of Attorneys-General led by Brandis and through to Porter who have sought to prosecute Witness K and Collaery for defending the rights of Timor Leste.
What’s our oil and gas doing under their sea anyway?
With you Admin. Following all that, corruption charges to be faced in court by all and sundry.
If Shill Troben stumbles into the Lodge, breath should be held waiting for his doing.., well, anything, about this litany of meretricious mendacity or vindictive prosecution.
And especially not prosecuting the original meeja organisation to report the bugging.
The Guardian thinks the permanent maritime boundary settlement allocates all of Bayu Undan as Timorese. Not so.
In the former ‘zone of co-operation’, the former arrangements allowed for Timor Leste and Australia each to tax petroleum projects, and to collect only ‘their’ proportion. After independence, that was a 90/10 split in favour of Timor Leste.
But Bayu Undan is mostly the other side of the border. It’s in the area closer to Indonesia or Australia, between which the permanent border has long been set on the ‘contintental shelf’ principle.
So there had to be a ‘unitization’ agreement about the Bayu Undan field. That treats all recovery from the field, wherever it is made, as coming proportionately from the Australian and the ‘zone of co-operation’ – now Timor Leste – parts of the field. That allocation is over-generous to Timor: more is allocated there than the proportion of the productive field that is on that side of the line, essentially for aid reasons.
The claim Timor Leste abandoned was the claim that, beyond the former ‘zone of co-operation’, the Australian parts of fields crossing the border should become Timorese. That would have meant that Australia would give up to Timor Leste field areas closer to Indonesia than to Timor Leste.
Obviously if Australia were to give up territory in these areas it is Indonesia, not Timor Leste, that would have the better claim. Hence the resolution still to be sorted.
The 90/10 split is to only a smaller part of Bayu Undan production. The loud anti-Australianism of some NGOs hugely overstates the revenue effect by ignoring the substantially larger share of the field that is wholly Australian.
Great summary Kishor. For anyone wanting to know more about Australia’s scandalous conduct re Timor-Leste read Crossing the Line, Australia’s Secret History in the Timor Sea https://www.blackincbooks.com.au/books/crossing-line
Agree with comments re need for an ICAC inquiry. Maybe a Royal Commission into how DFAT has mishandled our Timor Sea foreign policy for over 50 years.
Refernhood is confusing Bayu Undan with Greater Sunrsie. Bayu Undan is 100% in Timorese waters. Greater Sunrise is subject to a unitisation agreement.
Thanks for some detail red. I’ve long doubted the veracity of the claims on all sides. It’s unwise to trust a mining company, the LNP or a flaky micro state government.
The main problem with the article and those cited is lack of important detail. What is meant by Australia siphoning money ? The government via royalties ? Australian miners ? The Australian tax dodging subsidiaries of multinational miners ? How is the figure arrived at ? Who else is skimming cream and cooking books ?
Aussie, Aussie, Aussie – Shame, Shame, Shame,
An appalling and dangerous waste of goodwill. One day Indonesia will be much stronger than Australia and when that day comes, what moral case will we make when they take over, say Groote Eylandt, to protect the local indigenous population from our callous neglect???
The shallow arrogance of our foreign policy and bullying of our near neighbours endangers our national security and exposes Australia to risk against powerful regional players. We cannot protect our vast land and puny population with a few new shiny submarines and F-35s so we must also demonstrate we are a kind and generous land. One day in the not to distant future our way of life may be in mortal danger from Indonesia, China or some other regional player and at that time we will need to make a moral case to the world as we plead for help.
My father was a commando who fought in Timor in the second world war. (I think in the 1/2 unit). He would be so disappointed in what Australia has done and is still doing, to this poor country.
Alexander Downer’s shameful wire-tapping and now the prosecution of the un-named witness.
Australia’s shameful ‘theft’ of oil from Timor, and the continuing, present ‘ripping off’ of financial rewards. Even as the oil resources are dwindling.
SHAME ON AUSTRALIA.