On 30 August this year, the two countries announced that they had reached the ‘central elements’ of an agreement to end a falling out over the disputed waters — and its oil and gas resources — with details to be made public this month.
The dispute, which marked a low point in bilateral relations, appeared to have been resolved with the outline of a permanent maritime boundary and resource sharing agreement for the Greater Sunrise liquid natural gas (LNG) field, 80 per cent of which is in Australian waters. The agreement implied that part of the Greater Sunrise field would remain in Australian waters, contrary to Timor-Leste’s original position for a maritime boundary to be established at the halfway point of the Greater Sunrise field under the provisions of the UN Convention on the Law of the Sea.
The initial text of the agreement also referred to ‘the establishment of a Special Regime for Greater Sunrise [and] a pathway to the development of the resource’. Although unlikely, this could have allowed Timor-Leste’s preferred position of processing the LNG at a yet to be built facility on the country’s south coast.
The leading Greater Sunrise partner, Woodside Petroleum, rejected the south coast option, instead opting for a floating processing platform. The quickest option — likely to produce revenue for Timor-Leste in time to address its falling income stream — would be to backfill an existing oil pipeline from the Bayu-Undan oil field in the Timor Sea, which is expected to run dry by 2022.
The compromise appears to fit with the more conciliatory approach of Timor-Leste’s recently appointed Prime Minister Mari Alkatiri. Following the elections, Alkatiri allowed Xanana Gusmao, former prime minister and current Minister for Planning and Strategic Investment, to continue as lead negotiator on the Timor Sea.
Gusmao had argued for all of Greater Sunrise to be within Timor-Leste’s territorial claim and for the LNG to be processed on Timor-Leste’s south coast. So the recent compromise would not have aligned with Gusmao’s preferred position.
Given that Gusmao’s National Congress for Timorese Reconstruction party (CNRT) lost power in the July elections, his reservations would not have mattered except that CNRT’s former governing partner, the Fretilin Party, only won the election with 23 of the parliament’s 65 seats and a tiny 0.2 per cent margin over CNRT, which won 22 seats. Even in coalition with the Democratic Party (PD), the government only holds 30 of the 65 seats.
Under Timor-Leste’s constitution, the president can appoint the party with the most votes to government, even if it is short of a majority. Before the election, President Francisco ‘Lu-Olo’ Guterres — a loyal Fretilin member — was expected to favour Fretilin to lead the government if it won the most votes of any single party.
This might not have mattered if Fretilin had continued in partnership with CNRT, as was widely expected before the elections. But there appeared to be a falling out between Fretilin’s Alkatiri and CNRT’s Gusmao. This was likely over Alkatiri’s decision not to reciprocate CNRT’s support for Fretilin’s Rui Araujo as prime minister when Gusmao stepped down in February 2015, or over CNRT’s support for Guterres as president.
From these decisions, Alkatiri appeared to have returned to the centralising political style that marked his time as prime minister between 2002 and 2006. That centralising style earned Alkatiri much political animosity at the time and contributed to the troubles of 2006, which forced him to resign as prime minister.
The People’s Liberation Party (PLP), the smaller Joyous Fertility of Timorese People’s National Unity party (KHUNTO) and even Fretilin’s governing partner PD, complained about Alkatiri’s lack of inclusion during negotiations over joining the new government.
CNRT, PLP and KHUNTO — the parties in parliament that are not in the governing coalition — recently joined together as the Parliamentary Majority Alliance (AMP), the same name given to the CNRT-led governing alliance in 2007. Together, they control 35 seats.
On 19 October, the AMP voted down Fretilin’s proposed governing program in parliament and is expected to defeat a second vote on the program in November. If it does, President Guterres could appoint a new Prime Minister who is able to command a majority in the parliament. But it is more likely that the government would go into caretaker mode ahead of fresh parliamentary elections expected after January 2018.
The political instability that is currently shaking Timor-Leste could delay finalising the Timor Sea agreement, the details of which have been put off for another month. Or it could mean that the agreement will not be signed before the expected elections, which could produce a different government with a different view on the recent compromise.
If the Timor Sea agreement is not signed before a new government is elected or appointed by President Guterres, the extent of the agreement on the Timor Sea that has been reached could be back on the table for renegotiation.
Damien Kingsbury is Personal Chair and Professor of International Politics at Deakin University and Coordinator of the Australia Timor-Leste Election Observer Mission.
A version of this article was first published here in Deakin Speaking.
This article was on Deakin’s website on 23 October, and its conclusions are still not valid. Every Timorese political party agrees that Australia should respect Timor-Leste’s maritime boundary rights according to international legal principles, so any agreement which does that will be ratified and implemented by whatever constellation of parties ends up in government. But if the agreement (which has not yet been disclosed) forces Timor-Leste to surrender of its rights, it will be controversial regardless of who is in power. I hope Australia understood that during the negotiating process.
Thanks Charlie,
To be correct, there is one conclusion, not multiple, as you state. That conclusion is: ‘If the Timor Sea agreement is not signed before a new government is elected or appointed by President Guterres, the extent of the agreement on the Timor Sea that has been reached COULD [emphasis added] be back on the table for renegotiation’. That is a singular conclusion and its assertion that if there is no agreement prior to the likely elections is qualified and which remains absolutely valid.
As you will be aware, Mari Alkatiri had said during the height of Gusmao’s tirades against Australia that he would be able to find a compromise agreement on the Timor Sea dispute. Xanana Gusmao’s different – and mutually incompatible – view complies with your observation ‘that Australia should respect Timor-Leste’s maritime boundary rights according to international legal principles’ (with which, incidentally, I personally agree). That there is a general agreement on this principle in Timnor-Leste it is a normative position only; what ‘should’ be is not always, or often, the same as what ‘is’.
You are further incorrect in your inference that the agreement that has been reached complies with respecting ‘Timor-Leste’s maritime boundary rights according to international legal principles’.
In fact, it says: ‘This draft treaty delimits the maritime boundary between them in the Timor Sea and addresses the legal status of the Greater Sunrise gas field, the establishment of a Special Regime for Greater Sunrise, a pathway to the development of the resource, and the sharing of the resulting revenue.’
Let me repeat that last phrase: ‘the sharing of the resulting revenue’. If the agreement was to ‘respect Timor-Leste’s maritime boundary rights according to international legal principles’ then the whole of Greater Sunrise would, under UNCLOS, be within Timor-Leste’s territorial waters and there would be no requirement agree to a ‘pathway to the development’ or to share the ‘resulting revenue’.
If the agreement ‘forces Timor-Leste to surrender its rights’, as revenue sharing implies, it probably will, as you say, ‘be controversial regardless of who is in power’. That the agreement may or may not be controversial is irrelevant to the simple fact of the text concerning revenue sharing released by the Court of Arbitration, to which Timor-Leste was a party.
As for Australia understanding the potential for controversy ‘during the negotiation process’, I’d doubt that political controversy in Timor-Leste over this proposed agreement is robbing of the sleep anyone in Canberra. That is to say, ‘Australia’s understanding’ of controversy in Timor-Leste has been irrelevant to its actions to date and to the new agreement clearly stating that revenue from Greater Sunrise will be shared.
You might also benefit, in your commentary, from not conflating my observation on the complications of Timor-Leste’s political turmoil, and its possible impact on the signing of an agreement, with the views of the Australian government as a party to negotiations.
Cheers,
Some caution needs to be exercised in assessing the precise direction of a permanent Timor Sea maritime boundary as final details have yet to be released, however it is fair to assume from the Press Releases of the Conciliation Commission that the so-called ‘Special Regime for Greater Sunrise’ will see a permanent boundary delimited within that sector of the Timor Sea with an accompanying resource sharing regime. How the resources within the regime are allocated will clearly be critical for both sides; more so for Timor-Leste than Australia given the political significance associated with the issues as has been highlighted. However, Timor Leste will need to be extremely cautious as to how it proceeds during the final phase of the Conciliation given the issues that have been raised. Timor activated the conciliation under the 1982 UN Convention on the Law of the Sea and from all reports both Australia and Timor have engaged in the conciliation in good faith; as is required under international law. If Timor were to at this very late stage of the conciliation seek significant variations to what has been negotiated so far there is a risk that the conciliation could conclude without agreement having been reached and the conciliation being considered a failure. However, the Conciliation Commission (which is the first such Commission established under the Convention) has demonstrated great flexibility in its processes, including agreeing to requests by the parties to extend its mandate beyond the original 12 months. This may prove the key to the conciliation remaining ongoing until matters in Dili are resolved.