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A seminar on East Timor and its Maritime Dimensions; Legal and Policy Implications for Australia was held in Canberra on 14 June 2000. It was jointly hosted by the Centre for Maritime Policy, University of Wollongong, The Australian Institute of International Affairs and the International Law Association (Australian Branch).
The creation of an independent state of East Timor has far-reaching implications for Australia’s sovereign rights over the living and non-living resources of the Timor Sea and for Australia’s maritime interests in the region generally. These interests of Australia in the Timor Sea were the principal concern of the seminar.
The emergence of a new independent state of East Timor raises significant maritime and law of the sea issues for Australia, not the least of which is the status of the maritime boundary arrangements in the Timor Sea. East Timor will need to negotiate new maritime boundaries with Australia and Indonesia that could impact on the existing boundaries between those two countries. It could force Australia to forgo some of the royalty income expected under the Timor Gap Treaty. Resource management regimes in the Timor Sea agreed earlier between Australia and Indonesia now need to include the interests of a third State that will push for a fair and equitable share in the exploitation of the marine resources in the area. Present indications are that, in doing so, it will likely enjoy a fair degree of international support in its negotiations with its larger and more powerful neighbours.
Australia’s security and resource interests in the area of the Timor Sea are extensive and have expanded as a result of developments in the law of the sea and Australia’s strategic engagement with Indonesia. In recent years a satisfactory accommodation with Indonesia on the management of the Timor Sea and its resources had largely been achieved. This was a commendable achievement by Australia and Indonesia that was due largely to the good political relations that existed between these two countries through most of the 1990s. However, as papers at the seminar amply demonstrated many of these arrangements are now ‘up in the air’ with the emergence of a new littoral state to the Timor Sea,[1] and in the circumstances that led to its emergence. This uncertainty is particularly so with maritime boundaries and the marine resource management regimes in the area.
The creation of East Timor disturbs the maritime boundaries between Australia and Indonesia that were finally concluded in 1997 with the signing of the Treaty between the Government of Australia and the Government of the Republic of Indonesia establishing an Exclusive Economic Zone Boundary and Certain Seabed Boundaries. This marked the successful conclusion of a collaborative process of bilateral maritime boundary delimitation that commenced in the early 1970s and continued progressively over the next 25 years through a series of key agreements:
• two agreements on the continental shelf boundary between the two countries in the early 1970s with a break in the boundary adjacent to the (then) Portuguese territory of East Timor (the so-called Timor Gap);[2]
• the 1974 Memorandum of Understanding (MOU) that permitted Indonesian traditional fishermen access to certain waters in the vicinity of the Ashmore Islands and other small features to the north-west of Western Australia;[3]
• a provisional fisheries boundary agreement between Indonesia and the Australia in 1981 that allowed each country to conduct fisheries enforcement operations in the Timor and Arafura Seas;[4]
• the Timor Gap Treaty of 1989 that established a temporary joint development zone in the area of the Timor Gap in which oil revenues would be shared and under the administration of a joint authority;[5] and finally
• the 1997 Treaty between the Government of Australia and the Government of the Republic of Indonesia establishing an Exclusive Economic Zone Boundary and Certain Seabed Boundaries[6] (this treaty has been signed by both parties but not yet ratified).
The hard work and problems involved in negotiating the full set of maritime boundaries between Australia and Indonesia are not to be under-estimated. At all stages, the initial negotiating positions of the two countries tended to be far apart and the stakes were high. The Timor Sea was known to be relatively rich in resources, including oil and gas, and the principal boundary was potentially the second longest maritime boundary in the world after that between Russia and the United States in the North Pacific Ocean and the Bering Sea. Negotiations were further complicated by the fact that Indonesia had become seriously aggrieved by the location of the continental shelf boundaries that were negotiated in the early 1970s and were highly favourable to Australia. The successful outcome of a full set of boundaries in 1997 was a credit to the negotiators of the two countries and a good example for other countries in Asia-Pacific that still have to resolve their maritime boundaries. As Kaye observed shortly after the 1997 Treaty was concluded,
The treaty finally settles issues that have been on the negotiating table for over 25 years, and represents one of the triumphs of Australian diplomacy in recent times.
It is relevant to note that the 1997 Treaty met with some criticism. Herriman and Tsamenyi considered that the Treaty was imprecise in some aspects of the overlapping areas of exclusive economic zone and continental shelf jurisdiction[7] and Forbes also thought that aspects of these areas were confusing.[8] While these criticisms are not directly pertinent to the situation with East Timor, they do suggest some of the difficulties that now lie ahead with achieving management regimes for the Timor Sea. Desirably these regimes should be consistent between Australia and Indonesia on the one hand and between Australia and the independent state of East Timor on the other (and for that matter, between Indonesia and East Timor).
The 1997 Treaty created a complex maritime boundary system of overlapping jurisdiction on either side of the Timor Gap that may not be repeated in the Gap itself. However, the ultimate success and stability of the regime for resource development in the region largely depends on good political relations between its parties and these have been severely complicated by the emergence of an independent East Timor. This development complicates resource management arrangements not just in the Timor Gap but also in the broader area of the Timor Sea.
The main maritime implications of an independent East Timor that were on the table for consideration at the seminar were threefold. The first was the issue of maritime boundaries generally with the need for new boundaries to be delimited between East Timor and Australia, between East Timor and Indonesia, and possibly also between Australia and Indonesia should this become necessary as a result of the other bilateral negotiations. Secondly, there was a need to focus on the Timor Gap Treaty, the prospects for its continuation and the commercial implications of its continuation or adjustment. The third area of deliberation embraced the remaining law of the sea issues in the neighbourhood of East Timor, including Indonesia’s archipelagic baselines and navigation within and adjacent to the Indonesian archipelago in the vicinity.
The papers in the first session of the seminar (those by Daniel Fitzpatrick and Jim Fox who are both from the Australian National University) addressed the current status of East Timor from both a legal and political perspective. They provided some assessment of the issues requiring attention prior to eventual East Timorese independence.
Consolidated Depiction of all Australian-Indonesian Maritime Boundaries
Daniel Fitzpatrick provided a legal framework for assessing developments in East Timor since the 1999 vote and the present arrangements with the United Nations Transitional Authority on East Timor (UNTAET). He appraised the current status of East Timor in international law, its movement towards independence, and the legal issues arising as part of that process, especially succession to treaties. It was accepted by all concerned that UNTAET had the authority to enter into international agreements on behalf of East Timor, including the Memorandum of Understanding (MOU) concluded between Australia and UNTAET in February 2000 to extend the Timor Gap Treaty. Fitzpatrick did not see that matters of state succession were involved. Any arrangements entered into needed to be developed in close consultation with the East Timorese people but problems were apparent in ensuring that the East Timorese position satisfactorily reflected the community position rather than the position of a particular interest group. These questions about the capacity of current consultative processes to develop an agreed position needed to be addressed if commercial certainty was to be provided for resource exploitation in adjacent waters. Institutional arrangements and capacity were of major concern both within the East Timor community and the interim UN authority.
Professor Jim Fox provided a political framework within which to appreciate the issues requiring resolution as East Timor moves towards independence, and immediately on East Timor assuming independence. He started with a broad description of East Timor drawing attention in particular to cultural and social factors and to the fact that economic indicators suggested a higher gross domestic product (GDP) per capita in East Timor as compared with the Indonesian province of West Timor. This was at least the case prior to the infrastructure destruction that occurred in 1999. He expressed some concerns about the capabilities of UNTAET to manage problems at a local level and the role of the National Council for Timorese Resistance (CNRT). The enclave of Ocussi created a difficult security situation that had a long history back to the Dutch administration of the East Indies.
In a comment during the discussion period after the Fitzpatrick and Fox papers, Peter Galbraith, the Director of Political Affairs at UNTAET, pointed out that the Timor Gap MOU only extended until the end of the transitional period. The East Timorese people would dictate any timetable for renegotiations. While UNTAET might commence negotiations on behalf of the East Timorese, any agreement would have to be ratified by the independent state. The options were a straight-line maritime boundary (or boundaries) or the maintenance of some form of joint development. It was not conceivable that Australia could argue for a straight line maritime boundary that might have the impact of cutting East Timor’s potential revenue further. Galbraith thought that the priority for East Timor would be access to the resources rather than the maritime boundaries per se.
The second session of the seminar addressed maritime boundary issues arising from an independent East Timor and the commercial implications of adjusting the Timor Gap Treaty and the current Zone of Cooperation. Bill Campbell from the Attorney-General’s Department tracked the history of the Timor Sea maritime boundary delimitations pre-1975 up to the late 1990s with particular emphasis on the Timor Gap Treaty. He referred to the ‘innovative and contentious’ nature of the final outcome but that it was better to settle boundaries by agreement rather than through dispute settlement procedures. He agreed that the Timor Gap Treaty did not involve an issue of state succession. The MOU signed by Australia and UNTAET was a transitional arrangement that provided interim management arrangements to replace the Timor Gap Treaty, which ceased to exist under the MOU in May 2000. Campbell noted that, provided an agreement is a bilateral one and there is no impact on a third party, there are few limitations on the type of boundary arrangement that might be reached between two countries. Each delimitation is different and there is no limit on the factors that might be considered in reaching an equitable outcome. Ultimately the national interest of all parties requires continuity and stability in resource management regimes.
In the following discussion period, Professor Ivan Shearer of the University of Sydney noted that Australia had not had any real alternative but to negotiate the Timor Gap Treaty with Indonesia. It was not conceivable that the negotiations could have been conducted with any other party. Support for Portugal in the UN had largely evaporated since the mid-1980s and the International Court of Justice (ICJ) had had an opportunity to question the legitimacy of the parties to enter into the Treaty but had failed to do so. In Shearer’s view there were no grounds whatsoever for claiming, as some commentators in support of the East Timorese cause had argued, that the Treaty was ‘illegal’.
Professor Victor Prescott from the University of Melbourne provided a comprehensive analysis of the maritime boundary options open to an independent East Timor, covering those with Australia and Indonesia.[9] East Timor consists of two territories with the main one involving boundaries with Australia and Indonesia in the Timor Sea and with Indonesia in the Wetar and Ombai Straits. Maritime boundaries with Indonesia will be required in the waters adjacent to the smaller territory of Ocussi. It seemed likely that lines of equidistance would provide an equitable solution with all of these boundaries. In the Timor Sea a slight adjustment to the Eastern boundary of the Timor Gap Treaty area could be required and this would involve trilateral negotiations. The main problem for Indonesia is that the creation of East Timor disrupts Indonesia’s system of archipelagic baselines necessitating the adjustment of the baselines north of Timor. Several possibilities were identified that would allow Indonesia to retain the integrity of its archipelago and its status as an ‘archipelagic State’ under international law.
Professor Gillian Triggs, also from the University of Melbourne, focused on the commercial implications for the Timor Gap Treaty and the Zone of Cooperation, including state succession issues raised by earlier speakers. Significant investment was planned in the zone of cooperation but all the indications favour going ahead with this investment. No grounds existed for commercial uncertainty. There was political will on both sides to reach a good agreement. East Timor wants the revenue from hydrocarbon exploitation in the zone and Australia wants to help. It was unlikely that the situation would go to international arbitration. Issues of continental shelf boundary delimitation and natural prolongation were raised during the discussion of this paper but generally participants seemed of the opinion that good grounds existed for believing that the necessary commercial certainty had been established. This would allow planned projects to proceed and perhaps very little of the Timor Gap Treaty might require re-negotiation.
The last session of the seminar considered broader security and maritime issues in the areas adjacent to East Timor. Commander Robin Warner RAN (from Australian Defence Force Headquarters) addressed navigational rights and freedoms (including Indonesian archipelagic issues) and maritime regulation and enforcement in these waters. She commenced with a review of the freedom of navigation issues that emerged during UN operations off East Timor in 1999 and then moved on to the situation consequent upon the separation of East Timor from Indonesia. The major consequences were for the passage regime through Wetar Strait northeast of East Timor and its impact on Indonesia’s archipelagic sealanes recently agreed upon with the International Maritime Organisation (IMO). The result is that within a relatively confined maritime space there would exist transit passage through the international strait, archipelagic sea lanes passage within Indonesian archipelagic sealanes, and innocent passage through the remaining Indonesian archipelagic waters.
Captain James Goldrick RAN (from the RAN Seapower Centre) took a broader perspective of the strategic implications of an independent East Timor, including the possible impact of complex maritime boundary arrangements in the Timor Sea. He discussed the importance of a stable maritime regime in the area that not only encompassed agreements on boundaries and other jurisdictional arrangements but also required that countries had the capacity to enforce their jurisdiction. The geographical nature of the area dictated the need for a high level of maritime cooperation. However, East Timor would require considerable assistance in this regard for the foreseeable future. Cooperative arrangements for maritime surveillance and enforcement would be important and should be developed between the three countries. Australia had a vital interest in ensuring that weak domestic enforcement capabilities in East Timor did not create a situation whereby the new country became a transit point facilitating people smuggling and drug trafficking into Australia.
Dr Anthony Bergin (from the Australian Defence Studies Centre at the Australian Defence Force Academy) discussed the Warner and Goldrick papers and made some wider observations about the maritime dimensions of an independent East Timor. He made the point that Australia’s position will not be driven by narrow legal issues but domestic politics in both Australia and East Timor will also be important. East Timor would require national maritime policies including institutional arrangements and legislation. Here Australia had a lot to offer with technical fisheries, marine scientific research, marine safety and maritime enforcement expertise, including the experience of assisting South Pacific countries through the Pacific Patrol Boat Program which could be extended to East Timor. He also mentioned the possibility of an Arafura Sea Council, involving Australia, Indonesia, East Timor and Papua New Guinea, which would have a focus on maritime cooperation in the Timor and Arafura Seas. East Timor would also have the opportunity to participate in wider regional arrangements, including the Pacific Forum.
The seminar was an extremely useful overview of a new and complex political, economic and legal situation now confronting Australia in our northern approaches. The Australian Government faces several legal and policy options in determining how to respond to this situation. On the one hand, there may be a political inclination to take a generous attitude towards East Timor. This inclination was evident in an editorial in The Australian (coincidentally on the day following the seminar). In a reference to the royalties expected from the $2.2 billion Bayu-Undan gas project in the Timor Gap, the editorial suggested that:
As a gesture of goodwill and support an equivalent of Australia’s 50 per cent share of royalties could be paid as aid to East Timor. This might provide a significant and secure income for East Timor during its most crucial period of nation building.[10]
On the other hand, however, there are a number of economic and legal factors that must be considered. These factors were clearly apparent in some of the papers at the seminar. The resources of the Timor Sea, particularly hydrocarbons, are extremely valuable and there needs to be commercial certainty to allow their exploitation to proceed. Prolonged legal negotiations between the parties will not be helpful and time is probably on nobody’s side.
As some of the later papers at the seminar demonstrated, the broader security situation in East Timor and adjacent waters must also be considered. This will be an ongoing concern for Australia both in the context of traditional military security and broader concepts of comprehensive security, particularly as a transit route for people and commodities entering Australia illegally. East Timor should not become a security liability for Australia. It would certainly be an aid liability as it is already the second largest recipient of overseas aid from Australia after Papua New Guinea. UNTAET representatives at the seminar, however, pointed out that there were very limited resources in East Timor and suggestions made by participants, such as the establishment of a university college, marine research facilities and oceans policy arrangements, would likely be of low priority for the foreseeable future.
Another challenge for Australia is that of assistance with building the capacity in East Timor to manage its maritime affairs, including the negotiation of maritime boundary arrangements with Australia and Indonesia. There is the difficulty here for Australia, however, that while Australia has the expertise and presumably the political preparedness to assist, it is likely that an East Timorese government would be suspicious of a conflict of interest on the Australian side and seek advice elsewhere. This could be particularly the case with maritime boundaries and other law of the sea issues.
The seminar demonstrated that the Australian Government faces some difficult challenges in determining where the national interest lies in managing the maritime consequences of an independent East Timor. These challenges extend beyond the immediate direct relationship between Australia and East Timor. From Australia’s perspective, East Timor’s maritime dimensions cannot be seen purely in terms of the Timor Sea. The reality is that they extend into a whole range of social, economic, strategic and legal areas, which interact with Australia’s engagement in Southeast Asia and the Southwest Pacific.
Sam Bateman
Centre for Maritime Policy
University of Wollongong
[1] The Timor Sea meets the agreed definition of an enclosed or semi-enclosed sea. An ‘enclosed or semi-enclosed sea’ is defined by Article 122 of the 1982 UN Convention on the Law of the Sea (UNCLOS) as ‘a gulf, basin or sea surrounded by two or more States and connected to another sea or the ocean by a narrow outlet or consisting entirely or primarily of the territorial seas and exclusive economic zones of two or more coastal States.’ UNCLOS Article 123 goes on to state the need for littoral countries to cooperate in the management of the sea.
[2] Agreement between the Government of the Commonwealth of Australia and the Republic of Indonesia establishing certain Seabed Boundaries, done at Canberra 18 May 1971, entered into force 8 November 1973: 974UNTS307; Agreement between the Government of the Commonwealth of Australia and the Republic of Indonesia establishing certain Seabed Boundaries in the Area of the Timor and Arafura Seas, supplementary to the Agreements of 18 May 1971, done at Jakarta 9 October 1972, entered into force 8 November 1973: 974UNTS319.
[3] Memorandum of Understanding between the Government of Australia and the Government of the Republic of Indonesia regarding the Operations of Indonesian Traditional Fishermen in Areas of the Australian Exclusive Fishing Zone and Continental Shelf, done at Jakarta 1974, entered into force 28 February 1975. Reprinted in Australian Yearbook of International Law, 11, 1991, 268-269.
[4] Memorandum of Understanding between the Government of the Republic of Indonesia and the Government of Australia concerning the Implementation of a Provisional Fisheries Surveillance and Enforcement Arrangement, done at Jakarta 29 October 1981, unpublished.
[5] Treaty between Australia and the Republic of Indonesia on the Zone of Cooperation in an Area between the Indonesian Province of East Timor and Northern Australia, done over the Timor Gap, 11 December 1989, entered into force on 9 February 1991, AusTS, no. 9, 1991.
[6] For a review of this treaty see Stuart B. Kaye, ‘The Australia-Indonesia Maritime Boundary Treaty: A Review’, Maritime Studies 94, May/June 1997, 28-32.
[7] Max Herriman and Martin Tsamenyi, ‘The 1997 Australia-Indonesia Maritime Boundary Treaty: A Secure Legal Regime for Offshore Resource Development?’ Ocean Development and International Law, vol. 29, no. 4, 1998, 361-396.
[8] Vivian L. Forbes, ‘Lines of Allocation for Marine Resources in Australia’s Northern Waters’, The Indian Ocean Review, vol. 10, no. 1, March 1997, 8-12.
[9] A similar analysis was provided in Victor Prescott ‘The Question of East Timor’s Maritime Boundaries’ (1999-2000), vol. 7, no. 4, IBRU Boundary and Security Bulletin, 72-81.
[10] Editorial, ‘Timor Gap prize up for negotiation’, The Australian, 15 June 2000 at 14.
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