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MEDIA SUMMARY

COMPULSORY CONCILATION BETWEEN TIMOR-LESTE

AND AUSTRALIA

Comprehensive selection of Media releases and media articles

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INDEX OF MEDIA RELEASES AND ARTICLES

Media release from the Permanent Court of Arbitration, announcing it has jurisdiction to proceed

with compulsory conciliation, 26 September 2016

https://pca-cpa.org/wp-content/uploads/sites/175/2016/09/Press-Release-No.-4-EN.pdf

Pg.9

Media release from Ms Julie Bishop, Minister for Foreign Affairs and Mr George Brandis, Attorney-

General from the Australian Government, responding to the Conciliation Commission announcing it

has jurisdiction to proceed with compulsory conciliation, 26 September 2016

http://foreignminister.gov.au/releases/Pages/2016/jb_mr_160926.aspx?w=tb1CaGpkPX%2FlS0K%2

Bg9ZKEg%3D%3D

Pg.10

Media release from Minister of State, Agio Pereira from the Timorese Government, responding to the

Conciliation Commission announcing it has jurisdiction to proceed with compulsory conciliation, 26

September 2016

http://timor-leste.gov.tl/?p=16237&lang=en

Pg.11

Australia loses attempt to knock out East Timor's maritime boundary complaint

The Age article describes how Australia has lost in its claim that the Conciliation Commission has no

jurisdiction to hear a dispute between Australia and East Timor over undersea oil and gas resources.

Timor believes the dispute to be a matter of sovereignty. Australia says Timor should abide by the

existing treaties. The dispute has become a rare example of a foreign policy difference between the

major parties in Australia, with Labor announcing in 2015 it would negotiate with East Timor.

Comments from La Trobe University’s Bec Strating who said the conciliation was unlikely to change

Australia's approach, and East Timor was ‘running out of time’ to fix its economy. Comments also

from Swinburne University’s Michael Leach who said conciliation would still be important

politically, even though it will not be binding legally.

http://www.theage.com.au/federal-politics/political-news/australia-loses-attempt-to-knock-out-east-

timors-maritime-boundary-complaint-20160926-grooik.html

Daniel Flitton, The Age / SMH, 26 September 2016

Pg.12

Global court agrees to take up Timor, Australia sea border row

AFP article explains that an international arbitration court has agreed to pursue a legal maritime

boundary dispute between Australia and East Timor. East Timor had raised the dispute with the PCA,

but Australia had challenged its jurisdiction. Foreign Affairs Minister Julie Bishop said Australia

"accepts the commission's decision and will continue to engage in good faith,” although lawyers

noted that the process was not binding. The PCA recently ruled against China in the South China Sea

dispute. The article provides a history of East Timor and current Timor Sea treaties.

http://www.abc.net.au/news/2016-09-27/court-of-arbitration-takes-up-australia-timor-sea-border-

row/7879286

ABC News/AFP, 26 September 2016

Pg. 14


http://foreignminister.gov.au/releases/Pages/2016/jb_mr_160926.aspx?w=tb1CaGpkPX%2FlS0K%2Bg9ZKEg%3D%3D


http://timor-leste.gov.tl/?p=16237&lang=en

http://www.theage.com.au/federal-politics/political-news/australia-loses-attempt-to-knock-out-east-timors-maritime-boundary-complaint-20160926-grooik.html


http://www.abc.net.au/news/2016-09-27/court-of-arbitration-takes-up-australia-timor-sea-border-row/7879286


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Court to hear Australia, East Timor border row

The ABC’s Beverley O'Connor interviews Swinburne University's Professor Michael Leach about

Australia's failure to stop an international investigation into a disputed maritime boundary with East

Timor.

http://www.abc.net.au/news/2016-09-27/court-to-hear-australia,-east-timor-border-row/7879304

ABC video, 26 September 2016

Pg.15

Timor-Leste secures win in claiming oil and gas reserves in Timor Sea

The ABC’s Peter Lloyd says that Timor-Leste has had a diplomatic win its efforts to claim a greater

share of the oil and gas reserves in the Timor Sea.

http://www.abc.net.au/am/content/2016/s4546066.htm

Peter Lloyd, ABC Radio, 27 September 2016

Pg.15

East Timor's plea for talks goes unanswered after Australia loses bid to stymie border talks

ABC Radio Program about the Australian Government’s lack of response to the decision by an

international tribunal to reject its claims that it has no jurisdiction to hear East Timor’s case for a

maritime boundary in the Timor Sea. Instead, two senior Ministers have issued a statement defending

the existing treaties. It is still not clear whether Australia will abide by the court finding.

http://www.abc.net.au/news/2016-09-27/e-timor's-plea-for-talks-goes-unanswered-

after/7881484?section=business

Peter Lloyd, ABC Radio, The World Today, 26 September, 2016

Pg. 16

Australia receives 'drubbing' by UN commission over East Timor maritime borders

The ABC’s Peter Lloyd says that Australia has lost the first leg of its legal fight with East Timor over

the maritime border between them. Australia tried to stop Timor using a United Nations tribunal in

the case, but the tribunal overruled Australia's protests and has ordered it to participate. Interview

with Chris Flynn from Gilbert and Tobin law firm.

http://www.abc.net.au/news/2016-09-26/australia-receives-'drubbing'-by-un-commission/7879188

Peter Lloyd, ABC Radio, PM Program, 26 September 2016

Pg.16

Australia loses bid to reject compulsory conciliation with Timor-Leste

SBS Radio story claims that Australia's refusal to negotiate a permanent maritime border with East

Timor has strained relations between the two countries. Australia opposed East Timor’s request for

compulsory negotiations but the UN Conciliation Commission overruled Australia’s protest.

Comments from Minister of State, Agio Pereira, Labor's foreign affairs spokeswoman, Penny Wong,

Foreign Minister, Julie Bishop, Attorney-General, George Brandis, Deakin University Professor,

Damien Kingsbury and Swinburne University Professor, Michael Leach.

http://www.sbs.com.au/news/article/2016/09/27/australia-loses-bid-reject-compulsory-conciliation-

timor-leste

Phillippa Carisbrooke, SBS, 27 September 2016

Pg. 19

East Timor Sea conciliation to proceed

AAP story outlines that a United Nations conciliation commission has ruled that it has jurisdiction to

hear a maritime boundary dispute between East Timor and Australia, rejecting Australia’s objections.

The Australian government says it accepts the commission's ruling and will continue to engage in

good faith as the conciliation process continues. The commission says the conciliation process will

take place behind closed doors over the next year.

http://www.sbs.com.au/news/article/2016/09/26/east-timor-sea-conciliation-proceed

SBS/AAP, 27 September 2016

Pg. 20



http://www.abc.net.au/news/2016-09-27/e-timor's-plea-for-talks-goes-unanswered-after/7881484?section=business



http://www.sbs.com.au/news/article/2016/09/27/australia-loses-bid-reject-compulsory-conciliation-timor-leste



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Another win for 'David' Timor against 'Goliath’ Australia

Opinion piece from Father Frank Brennan comparing the maritime boundary dispute between East

Timor and Australia to a David and Goliath battle, as the Conciliation Commission rejects all six of

Australia’s objections to the conciliation. The author notes the significance of former Assistant

Secretary General in the Australian Attorney-General's Department Dr Rosalie Balkin’s involvement,

given the engrained views of the Australian bureaucracy on this matter. The article gives a history of

the Timor Sea treaties, referencing Foreign Minister Alexander Downer’s deliberate circumventing

of the usual parliamentary process to pass CMATS. East Timor is arguing the treaty is invalid given

Australia spied on Timor during negotiations. The Labor Party has since changed its policy on the

issue and has pledged to negotiate with East Timor. The Commission has 12 months to hear the case.

The article argues there is ‘nothing to be gained for Australia’ by continuing to put negotiations on

hold when there is no immediate prospect of Sunrise being developed. Article also refers to the

hypocrisy of Australia’s comments regarding the South china Sea.

http://eurekastreet.com.au/article.aspx?aeid=49973#.V-ryczsp-Rs

Frank Brennan, 27 September 2016

Pg. 22

PCA to mediate Australia-East Timor sea border dispute

Article from a legal publication about the dispute between East Timor and Australia that says

Australia has lost its attempt to stop East Timor’s case case from being heard, after the Permanent

Court of Arbitration announced it had competency to proceed with the matter. In its decision, the

Commission said that “it is competent with respect to the compulsory conciliation” set out in East

Timor’s request. In 12 months, the Commission will report any agreements reached and, failing

agreement, its conclusions on all questions of fact or law relevant to the matter including

recommendations which may be appropriate for an amicable settlement. The report will be coursed

through the UN Secretary-General.

http://www.australasianlawyer.com.au/news/pca-to-mediate-australiaeast-timor-sea-border-dispute-

224126.aspx

Sol Dolor, Australiasian Lawyer, 28 September 2016

Pg. 25


AAP story that says a United Nations conciliation commission has ruled that it has jurisdiction to

hear a maritime boundary dispute between East Timor and Australia, rejecting objections from

Australia. The Commission says the conciliation process will take place behind closed doors over the

next year. Comments from Timorese Minister of State, Agio Pereira, Chief Negotiator Xanana

Gusmãu, Australian Foreign Minister Julie Bishop and Attorney General George Brandis.

http://www.heraldsun.com.au/news/breaking-news/hague-to-arbitrate-in-timoraust-dispute/news-

story/b0c4534e1418203ab451d5a204772613

Lloyd Jones, Australian Associated Press (AAP), 27 September 2016

Pg. 26

A good day in The Hague: Australia’s tactics in the Timor Sea oil dispute have been shameful

Opinion piece that talks about the history of the dispute between Timor-leste and Australia, starting

from the historic role of the Australian Government who helped Timor restore its independence, but

also had an interest in the resource rich Timor Sea. Author argues negotiations with Timor-Leste

after independence were conducted in a “bullying” and “hectoring” manner and that Australia has

behaved “despicably” towards Timor-Leste over maritime boundaries.

https://www.themonthly.com.au/blog/mungo-maccallum/2016/04/2016/1475556551/good-day-hague

Mungo MacCallum, The Monthly, Tuesday, 4th October 2016

Pg. 27


http://www.australasianlawyer.com.au/news/pca-to-mediate-australiaeast-timor-sea-border-dispute-224126.aspx


http://www.heraldsun.com.au/news/breaking-news/hague-to-arbitrate-in-timoraust-dispute/news-story/b0c4534e1418203ab451d5a204772613



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Australia fails in attempt to block Timor-Leste maritime boundary case

The Guardian article states that Timor-Leste will have its case against Australia over a disputed

maritime boundary heard by the Permanent Court of Arbitration in The Hague after the court rejected

Australia’s claim that the court had no jurisdiction. The article provides a history of the dispute

including the current treaties and how they came about, including the allegations of spying during

CMATS negotiations.

https://www.theguardian.com/world/2016/sep/26/australia-fails-in-attempt-to-block-timor-leste-

maritime-boundary-case?CMP=soc_568

The Guardian, 26 September 2016

Pg. 28

Court Rules Australia Must Talk with East Timor Over Oil Fields

Wall Street Journal article outlines that Australia will be forced into a conciliation process with East

Timor over a disputed maritime boundary, after an international arbitration court rejected Australia’s

claim the court had no jurisdiction. Australian Foreign Minister Julie Bishop said Australia will fight

to uphold the current revenue sharing treaty between the two nations. She said the recommendations

from the conciliation process aren’t binding. Under a 2006 maritime treaty, Australia and East Timor

agreed to equally share revenue from the Greater Sunrise field. Development of the field has been

delayed in part by East Timor’s insistence that gas be piped and processed onshore. East Timor is

arguing for the boundary to be fixed halfway between the two countries, placing the Greater Sunrise

field in Timorese waters. Australia is arguing the arbitration court has no jurisdiction in the matter as

Australia and East Timor had already signed a treaty ruling out dispute settlement procedures.

http://www.wsj.com/articles/court-rules-australia-must-talk-with-east-timor-over-oil-fields-

1474946041

Rebecca Thurlow, Wall Street Journal, 26 September 2016

Pg. 30

Global court takes up Timor-Leste, Australia sea border row

The Straits Times says an international arbitration court has agreed to take up a maritime border

dispute between Australia and Timor-Leste which cuts across oil and gas fields in the Timor Sea. The

Permanent Court of Arbitration held that it was “competent to continue with the arbitration process"

initiated by Timor-Leste in April. Timor-Leste urged the panel to help end the dispute, saying

negotiations have so far failed. Australia argued it had no jurisdiction in the dispute as Australia and

Timor had already signed a treaty ruling out recourse to the court. A five-member conciliation

commission ruled the dispute should be settled under the UN Convention of the Law of the Sea,

rather than the CMATS treaty.

http://www.straitstimes.com/asia/australianz/global-court-takes-up-timor-leste-australia-sea-border-

row

The Straits Times / AFP, 26 September 2016

Pg. 31

Hague to arbitrate Australia, East Timor boundary

Reuters says the Permanent Court of Arbitration in The Hague will oversee a compulsory arbitration

between East Timor and Australia on their maritime boundary, rejecting Australia's objections. East

Timor asked for the process, which could decide on which side of the border lies a large oil and gas

field over which the two countries have a revenue- sharing agreement. East Timor said Australian

espionage during treaty negotiations rendered the agreement flawed. Australia has resisted

negotiating a permanent border until 2056 at the earliest. The PCA said the conciliation process will

take place behind closed doors over the next year.

http://www.skynews.com.au/news/top-stories/2016/09/26/hague-to-arbitrate-aust--timor-boundary-

aust-dispu.html

Sky News / Reuters, 26 September 2016

Pg. 32

https://www.theguardian.com/world/2016/sep/26/australia-fails-in-attempt-to-block-timor-leste-maritime-boundary-case?CMP=soc_568


http://www.wsj.com/articles/court-rules-australia-must-talk-with-east-timor-over-oil-fields-1474946041


http://www.straitstimes.com/asia/australianz/global-court-takes-up-timor-leste-australia-sea-border-row


http://www.skynews.com.au/news/top-stories/2016/09/26/hague-to-arbitrate-aust--timor-boundary-aust-dispu.html


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The Hague revives maritime border dispute between Timor-Leste and Australia

CNBC story says that a 14-year old maritime border conflict between Timor-Leste and Australia has

been revived by The Hague's Permanent Court of Arbitration. The article describes the current

treaties and how they work, including the revenue ratios. Comments from La Trobe University

Lecturer Rebecca Strating stating that: "It is difficult to see how this [process] presents a practical,

long-term solution for resolving the dispute.” University of Sydney’s Ben Saul Challis says:

"Australia should stop obstructing Timor and help it to secure its borders and its future.”

Legal experts say July's South China Sea ruling could offer insight into the final verdict on the Timor

Sea matter.

http://www.cnbc.com/2016/09/27/the-hague-revives-maritime-border-dispute-between-timor-leste-

and-australia.html

Nyshka Chandran, CNBC, 27 September 2016

Pg. 33

Hague court to arbitrate in East Timor-Australia maritime border dispute

AFP says that the tribunal that ruled China’s claims to the South China Sea to be invalid, is taking up

a maritime boundary dispute in the Timor Sea. The PCA Commission will take up the case between

East Timor and Australia, with talks to continue over the next year. The tribunal said the meetings

will be “largely in a confidential setting.” Comments from Aaron Matta, senior researcher at the

Hague Institute for Global Justice think-tank: “The commission will be creating a positive

relationship between the two sides to try and bring them together to the table.”

http://www.scmp.com/news/asia/southeast-asia/article/2022669/hague-court-arbitrate-east-timor-

australia-maritime-border

South China Morning Post / AFP / Reuters, 26 September 2016

Pg. 36


The Japan Times writes that the Permanent Court of Arbitration in The Hague will oversee a

compulsory conciliation between East Timor and Australia on their maritime boundary dispute,

rejecting Australian objections to the process. East Timor initiated the process, which could decide

on which side of the border lies a large oil and gas field over which the two countries have a revenue-

sharing agreement. East Timor said Australian espionage during treaty negotiations rendered recent

agreements flawed. Australia has resisted negotiating a permanent border until 2056 at the earliest.

Article includes comments from Timorese Minister of State, Agio Pereira and Australian Foreign

Minister Julie Bishop.

http://www.japantimes.co.jp/news/2016/09/27/asia-pacific/crime-legal-asia-pacific/hague-court-

arbitrate-east-timor-australia-maritime-border-dispute/#.V-rMe_krLIU

Japan Times / Reuters, 27 September 2016

Pg. 38

Timor-Leste founders talk nation-building

Article from the Brown Daily Herald covers talks by Prime Minister Dr Rui Maria de Araujo and

Minister Xanana Gusmãu at the Watson Institute for International and Public Affairs at Brown

University during their recent US visit. Article provides a history of Timor-Leste, focusing on its

journey from conflict to peace, and struggle for economic sustainability. The author references the

maritime boundary dispute with Australia and the compulsory conciliation process, including the

decision for proceedings to continue despite Australia’s objection.

http://www.browndailyherald.com/2016/09/28/timor-leste-founders-talk-nation-building/

Rachel Gold, Brown Daily Herald, 28 September 2016

Pg. 39

http://www.cnbc.com/2016/09/27/the-hague-revives-maritime-border-dispute-between-timor-leste-and-australia.html


http://www.scmp.com/news/asia/southeast-asia/article/2022669/hague-court-arbitrate-east-timor-australia-maritime-border


http://www.japantimes.co.jp/news/2016/09/27/asia-pacific/crime-legal-asia-pacific/hague-court-arbitrate-east-timor-australia-maritime-border-dispute/#.V-rMe_krLIU



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East Timor Takes Maritime Dispute With Australia to UN Court

Voice of America article writes that The International Court of Arbitration in the Netherlands is set to

hear a dispute between East Timor and Australia over the sharing of oil and mineral wealth in the

Timor Sea. East Timor has accused Australia of being a bully. Both sides will now enter into a

negotiation process that will take place behind closed doors over the next 12 months. Comments

from former East Timorese President Jose Ramos Horta.

http://www.voanews.com/a/east-timor-takes-maritime-dispute-with-australia-in-un-

court/3528236.html

Phil Mercer, VOA News, 28 September 2016

Pg. 41

International court dismisses Australian challenge over Timor Sea border dispute

World Socialist Website article writes that The Permanent Court of Arbitration in The Hague issued a

ruling upholding its authority to consider a case brought by East Timor over the disputed maritime

border in the Timor Sea, dismissing an Australian government challenge. Author argues the decision

marks another exposure of Canberra’s contempt for international law and its hypocrisy over the

resolution of maritime disputes. Australia sought to have the case thrown out on the grounds that the

PCA was not legally authorised to hear it. The 33-page ruling issued by the court dismissed this

claim, rejecting all the arguments advanced by the government’s legal team.

https://www.wsws.org/en/articles/2016/09/28/timo-s28.html

Patrick Kelly, World Socialist Website, 28 September 2016

Pg. 42

Wordpress Blogpost

Blog states that The Permanent Court of Arbitration has thrown out the Turnbull government’s

argument it did not have jurisdiction to hear a dispute about disputed maritime boundary between

Timor-Leste and Australia. The five-member Commission said it was competent with respect to the

compulsory conciliation over the maritime boundary. Comments from Timorese Minister of State,

Agio Pereira and Australian Foreign Minister Julie Bishop.

https://markskulley.wordpress.com

Mark Skulley, 26 September 2016

Pg. 44

Green light. Commission proceeds Blogpost

Blog states that the Conciliation Commission issued its decision on Competence, announcing that

“the Commission held that it was competent to continue with the conciliation process.” Comments

from Minister of State, Agio Pereira and Australian Foreign Minister, Julie Bishop.

http://timfo.org/new-blog-avenue/2016/9/26/green-light-commission-proceeds

Timor Sea Forum, 26 September 2016

Pg. 45

Court ruling, Australia and East Timor discuss maritime boundary

Reuters article suggests Australia and East Timor are aiming for an agreement over the disputed

maritime boundary in resource-rich waters between their countries. A court said on Thursday that a

deal could be reached by next September. Comments from Commission Chair Peter Taksoe-Jensen:

“Both sides are to be commended for being willing to move beyond past differences and work hard to

create conditions conducive to achieving an agreement.”

http://www.reuters.com/article/us-australia-timor-arbitration-idUSKCN12D0T9?il=0

Anthony Deutsch and Tom Heneghan, Reuters, 13 October, 2016

Pg. 47

http://www.voanews.com/a/east-timor-takes-maritime-dispute-with-australia-in-un-court/3528236.html



https://markskulley.wordpress.com/



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Timor Sea dispute: Timor-Leste is running out of time

In an article in The Interpreter, author Bec Strating questions the Conciliation Commission’s ability

to help resolve the dispute between East Timor and Australia given Australia’s exclusion of binding

compulsory dispute resolution procedures. Unlike the decision of courts or tribunals, the UNCC

report will not be binding on either party. In the short-term, the author argues the Timorese

government might find it difficult to keep the UNCC on the Australian media agenda. In the dispute,

Australia favours the geomorphic approach or continental shelf theory in establishing maritime

boundaries. In contrast, Timor-Leste favours a ‘median’ line, which is supported by post-UNCLOS

jurisprudence. Timor is also pushing for a pipeline to Timor. The question is whether either side will

compromise. Author suggests that Timor-Leste is running out of time and Australia knows it. Timor-

Leste’s bargaining vulnerabilities means it is likely that Australia will prolong boundary negotiations

for as long as possible.

https://www.lowyinterpreter.org/the-interpreter/timor-sea-dispute-timor-leste-running-out-time

Bec Strating, The Interpreter, 11 October 2016

Pg. 48

http://www.policyforum.net/time-running-timor-leste/


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PERMANENT COURT OF ARBITRATION MEDIA RELEASE [PCA]

Timor Sea Conciliation


Press release from the PCA

26 September 2016

On 19 September 2016, the Conciliation Commission issued its Decision on Competence in the compulsory

conciliation initiated between the Democratic Republic of Timor-Leste (“Timor-Leste”) and the

Commonwealth of Australia (“Australia”) under Annex V of the United Nations Convention on the Law of

the Sea (the “Convention”). In its Decision, the Commission held that it was competent to continue with the

conciliation process.

These compulsory conciliation proceedings concern the maritime boundary between Timor-Leste and

Australia and were initiated by Timor-Leste by way of a Notice addressed to Australia pursuant to Article 298

and Annex V of the Convention. The conciliation is being conducted under the auspices of the Permanent

Court of Arbitration (the “PCA”).

Australia’s Objections to Competence and Timor-Leste’s Response Pursuant to the Convention, a compulsory conciliation may be initiated where a party has exercised its right to

exclude disputes relating to sea boundary delimitation from compulsory arbitration and judicial settlement.

Australia exercised this right by way of a declaration made on 22 March 2002. When a dispute falling within

such a declaration arises, a compulsory conciliation may be initiated at the request of one of the parties to the

dispute. The conclusions and recommendations of the Conciliation Commission, however, are not binding on

the parties.

From the outset of these proceedings, Australia had indicated its intention to contest the competence of the

Commission and did so on 27 June 2016, immediately following the constitution of the Commission. Annex

V to the Convention provides that “[a] disagreement as to whether a conciliation commission acting under this

section has competence shall be decided by the commission.” From 29 to 31 August 2016, the Commission

convened a Hearing on Competence at the Peace Palace, the headquarters of the PCA in The Hague, the

Netherlands. In its Decision of 19 September 2016, the Commission considered and decided on the objections

raised by Australia.

In its objections, Australia argued that compulsory conciliation was precluded by the Treaty on Certain

Maritime Arrangements in the Timor Sea (“CMATS”), which includes an article providing for a

“moratorium” on dispute settlement procedures. Australia also argued that Timor-Leste had not met the

preconditions in the Convention to submit a dispute to compulsory conciliation. In response, Timor-Leste

argued that the Commission should consider its competence by reference to the Convention and should only

consider other treaties to the extent provided for in the Convention. Timor-Leste considered that CMATS was

not an agreement that would preclude compulsory conciliation under the Convention and, in any event, that

CMATS is null and void. Timor-Leste also argued that it had met the preconditions to submit a dispute to

compulsory conciliation.


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OFFICIAL GOVERNMENT PRESS RELEASES

Australian Government:


http://foreignminister.gov.au/releases/Pages/2016/jb_mr_160926.aspx?w=tb1CaGpkPX%2FlS0K%2Bg9ZKE

g%3D%3D

Joint media release:

The Hon Julie Bishop, Minister for Foreign Affairs

Senator the Hon George Brandis QC, Attorney-General

26 September 2016

The current treaty arrangements between Australia and Timor-Leste have been hugely beneficial to Timor-

Leste and have supported the accumulation of a $16 billion sovereign wealth fund.

Revenues from the Joint Petroleum Development Area are split 90 percent to Timor-Leste and 10 percent to

Australia. Despite these beneficial treaty arrangements, on 11 April 2016, Timor-Leste requested a

Conciliation Commission under the UN Convention on the Law of the Sea (UNCLOS) to conciliate

differences between Australia and Timor-Leste on maritime boundaries in the Timor Sea.

The Conciliation Commission announced on 26 September that it has jurisdiction to proceed with the

conciliation.

Australia accepts the Commission’s decision and will continue to engage in good faith as we move to the next

phase of the conciliation process. This approach is consistent with our support for the rules-based

international order.

Australia abides by the pre-existing and legally-binding 2002 Timor Sea Treaty and 2006 Treaty on Certain

Maritime Arrangements in the Timor Sea (CMATS). We seek to uphold these treaty arrangements which are

consistent with international law and were negotiated in good faith.

We have a strong interest in Timor-Leste’s stability and growing prosperity, and in providing a stable and

transparent framework for investment in the Timor Sea. We are committed to working together to strengthen

our relationship and overcome our differences in the Timor Sea.

The role of the Conciliation Commission is to assist the parties reach a settlement. In accordance with the

provisions of UNCLOS, the Commission will produce a report which, unlike an arbitration decision, is not

legally binding.



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Timor-Leste Government:


http://timor-leste.gov.tl/wp-content/uploads/2016/09/Timor-Leste-welcomes-Conciliation-Commission-s-

landmark-decision-to-proceed.pdf

Media release:

H.E Minister of State, Agio Pereira

H.E Chief Negotiator, H.E. Kay Rala Xanana Gusmão

26 September 2016

Timor-Leste welcomes Conciliation Commission’s landmark decision to proceed The Government of Timor-

Leste welcomes the decision of the Conciliation Commission that the Commission has competence to

continue with the conciliation proceedings.

The decision follows a three-day hearing held in The Hague to hear the objections to its competence advanced

by the Commonwealth of Australia.

A Press Release issued by the Permanent Court of Arbitration on the 26th of September on behalf of the

Commission announced the unanimous decision regarding the challenge to its competence.

The Commission will now continue to exercise its function as described in Annex V of the United Nations

Convention on the Law of the Sea, which is to “hear the parties, examine their claims and objections, and

make proposals to the parties with a view to reaching an amicable settlement.”

Spokesperson for the Government and Agent for the case, Minister of State Agio Pereira noted “Timor-Leste

welcomes this decision. This process is an opportunity to set a good example in our region and we will engage

with respect for the commission and its recommendations, ever conscious of the importance of maintaining

the best possible relationship with our close neighbour Australia.”

Chief Negotiator, H.E. Kay Rala Xanana Gusmão thanked the Commissioners for their expertise and noted:

“Just as we fought so hard and suffered so much for our independence, Timor-Leste will not rest until we have

our sovereign rights over both land and sea.”

http://timor-leste.gov.tl/wp-content/uploads/2016/09/Timor-Leste-welcomes-Conciliation-Commission-s-landmark-decision-to-proceed.pdf

http://timor-leste.gov.tl/wp-content/uploads/2016/09/Timor-Leste-welcomes-Conciliation-Commission-s-landmark-decision-to-proceed.pdf

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AUSTRALIAN MEDIA

Australia loses attempt to knock out East Timor's maritime boundary complaint

http://www.theage.com.au/federal-politics/political-news/australia-loses-attempt-to-knock-out-east-timors-

maritime-boundary-complaint-20160926-grooik.html

Daniel Flitton, The Age / SMH, 26 September 2016

Australia has lost in its claim that an international commission has no jurisdiction to hear a complaint by East

Timor in the bitter dispute over undersea oil and gas riches.

Prime Minister Malcolm Turnbull earlier this year knocked back a call for fresh negotiations on the maritime

boundary in the Timor Sea, but the decision released on Monday from the Permanent Court of Arbitration at

The Hague opens the way for talks between the two countries.

In a statement on Monday, the commission at The Hague ruled it had the jurisdiction to hold a "conciliation"

under a never-before invoked article of the international law of the sea.

The decision was handed down on September 19, but kept under wraps until this week.

East Timor wants a greater slice of revenues and now argues the resources fall within its territory, triggering

the conciliation claim.

Independence hero Xanana Gusmao welcomed the decision, linking the dispute with East Timor's long

struggle against Indonesian occupation.

"Just as we fought so hard and suffered so much for our independence, Timor-Leste will not rest until we have

our sovereign rights over both land and sea," Mr Gusmao said in a statement.

But Australia challenged the legal basis of the commission to hear the case during at times tense closed-door

proceedings last month, insisting East Timor should respect the existing treaty - which has delivered $16

billion in revenue to the fledgling nation.

Foreign Minister Julie Bishop was also quick to note the conciliation process invoked by East Timor is not

binding. Australia has already withdrawn from the compulsory arbitration rules for drawing up maritime

boundaries under international law.

The commission rejected Australia's argument that the existing treaty, which includes a 50-year moratorium

on maritime boundary negotiations, meant there were no grounds for conciliation.

East Timor argued the exiting treaty - known as Certain Maritime Arrangements in the Timor Sea - was "null

and void".

The dispute has become a rare example of a foreign policy difference between the major parties in Australia,

with Labor pledging at the last election to return to the negotiating table with East Timor.

Bec Strating from La Trobe University warned last week ahead of the conciliation was unlikely to change

Australia's approach, and East Timor was "running out of time" to fix a rapidly declining economy.

East Timor specialist Michael Leach from Swinburne University of Technology said conciliation would still

be important politically, even though it will not be binding legally.

Professor Leach said the decision suggests Australia's obligation under international law to negotiate a

maritime boundary in good faith has survived the treaties with East Timor.



13

But Professor Leach said Australia could circumvent the legal process altogether by agreeing to border

negotiations - "and settle this irritant in the relationship for good."

The conciliation was invoked in April, and is now expected to run for the next year, at least.

Fairfax Media has sought comment from the Australian government.

14

Global court agrees to take up Timor, Australia sea border row


ABC News / AFP, 26 September 2016

An international arbitration court has agreed to take up a decade-long border dispute between Australia and

East Timor over territory in the Timor Sea that contains large oil and gas deposits worth an estimated $40

billion.

The Permanent Court of Arbitration (PCA) "held that it was competent to continue with the conciliation

process" initiated by East Timor against Australia in April, the court based in The Hague said.

East Timor last month urged the body — the world's oldest arbitration tribunal — to help end the dispute that

has soured relations between the two countries, saying negotiations had so far failed.

Australia in return had argued the PCA had no jurisdiction in the battle as the Government had already signed

a treaty with East Timor ruling out any recourse to the court. East Timor welcomed the PCA's decision.

"Just as we fought so hard and suffered so much for our independence, Timor-Leste will not rest until we have

our sovereign rights over both land and sea," the country's independence resistance hero and former prime

minister Xanana Gusmao said.

Foreign Affairs Minister Julie Bishop said Australia "accepts the commission's decision and will continue to

engage in good faith as we move to the next phase of the conciliation process".

"We are committed to working together to strengthen our relationship and overcome our differences in the

Timor Sea," she added.

The Australian Government's lawyers had also sought to argue that it had initiated talks with East Timor

through an exchange of letters in 2003 to try to solve the dispute.

But the panel said the exchange of letters between Australia and East Timor "did not constitute an

agreement… because the exchange was not… legally binding".

And the PCA's five-member conciliation commission ruled the dispute should be settled under the UN

Convention of the Law of the Sea, rather than the 2006 treaty — called Certain Maritime Arrangements in the

Timor Sea (CMATS) — which covers the vast Greater Sunrise gas field lying between the two nations.

East Timor has also called for CMATS to be torn up after accusing Australia of spying to gain commercial

advantage during the 2004 negotiations.

East Timor however officially dropped its spying case against the Government before the UN's International

Court of Justice in June 2015 after Australia returned sensitive documents.

Talks to take place in 'confidential setting'

The PCA has not shied away from stepping into complex diplomatic battles.

Earlier this year it sparked fury in Beijing by ruling in a case brought by the Philippines that China's claims to

a vast swathe of the resource-rich South China Sea were invalid.

The PCA, set up in 1899, is dedicated to resolving international disputes through arbitration, mediation and

other means, by referring to international and bilateral treaties.


15

East Timor, which only gained its independence from Indonesian occupation in 2002, is an impoverished

nation heavily dependent on oil and gas exports.

Talks between Timor and Australia will now continue over the next year, the tribunal based in The Hague

said, but it stressed the meetings will be "largely in a confidential setting".

The commission will be involved "in a process for creating a positive relationship between the two sides to try

and bring them together to the table," Aaron Matta, a senior researcher at The Hague Institute for Global

Justice think-tank, said

A history of treaties in the Timor Sea

In 1989 Australia and Indonesia signed the Timor Gap Treaty when East Timor was still under

Indonesian occupation.

East Timor was left with no permanent maritime border and Indonesia and Australia got to share the

wealth in what was known as the Timor Gap.

In 2002 East Timor gained independence and the Timor Sea Treaty was signed, but no permanent

maritime border was negotiated.

East Timor has long argued the border should sit halfway between it and Australia, placing most of

the Greater Sunrise oil and gas field in their territory.

In 2004 East Timor started negotiating with Australia again about the border.

In 2006 the CMATS treaty was signed, but no permanent border was set, and instead it ruled that

revenue from the Greater Sunrise oil and gas field would be split evenly between the two countries.

Further ABC coverage:

Video interview with Professor Michael Leach: Court to hear Australia, East Timor border row


26 September 2016

Beverley O'Connor speaks to Swinburne University's Professor Michael Leach about Australia's failure to

stop an international investigation into a disputed maritime boundary with Timor-Leste (video).

ABC Radio: Timor-Leste secures win in claiming oil and gas reserves in Timor Sea


Peter Lloyd, 27 September 2016

Timor-Leste has chalked up a symbolic and diplomatic win in its long running campaign to claim a greater

share of the vast oil and gas reserves that lie in the Timor Sea. Dili wants a permanent, equidistant maritime

boundary that would mean Australia surrenders territory, and billions of dollars in untapped mineral wealth.

The Australian government last night lost its last ditch bid to avoid compulsory conciliation to negotiate a

border.

Featured: Agio Pereira, East Timor Minister of State; Penny Wong, Foreign affairs spokeswoman



16

East Timor's plea for talks goes unanswered after Australia loses bid to stymie border talks

http://www.abc.net.au/news/2016-09-27/e-timor's-plea-for-talks-goes-unanswered-

after/7881484?section=business

Peter Lloyd, ABC Radio 'The World Today', 26 September 2016

Today's challenge to the Australian Government by the government of East Timor's to start negotiations for a

permanent maritime border has so far gone unanswered.

Instead two senior Ministers have issued a statement defending the existing treaties.

Australia's attempts to block the Timorese government from taking its maritime boundary ambitions to an

international tribunal has failed.

And it is still not clear whether Australia will abide by the court finding, as Peter Lloyd reports.

Featured:

Agio Pereira, Acting Prime Minister Timor-Leste

Michael Leach, Swinburne University

Frank Brennan, Jesuit Priest & lawyer

ABC Radio: Australia receives 'drubbing' by UN commission over East Timor maritime borders


Peter Lloyd, ABC 'PM' Program, 26 September 2016

Australia has lost the first leg of its legal fight with East Timor (Timor-Leste) over the maritime border

between the two countries. Australia went to international arbitration to stop Timor using a United Nations

tribunal in the case. A United Nation's Conciliation Commission overruled Australia's protests and has

ordered it to participate. International law expert Chris Flynn says the 'remarkable decision' is a

'comprehensive rebuttal' of Australia's primary arguments against reconciliation.

Transcript:

MARK COLVIN: Australia has lost the first leg of its legal fight with East Timor, Timor-Leste, over the

maritime border between the two countries.

Australia went to international arbitration to stop Timor using a United Nations tribunal in the case.

No permanent boundary exists at present.

Instead there are revenue-sharing contracts that Timor says unfairly leave a large slice of billions of dollars in

oil and gas deposits in Australian hands.

Those now appear to be null and void after a United Nation's Conciliation Commission tonight overruled

Australia's protests and ordered it to participate.

Chris Flynn is a partner at Gilbert and Tobin law firm, and an expert in the international law of the sea. He

spoke to Peter Lloyd.




17

CHRIS FLYNN: Well, look, I think it's quite a remarkable decision and it is really a comprehensive rebuttal

of the primary points Australia has made trying to get out of the conciliation and retain the status quo.

PETER LLOYD: What was the Australian argument? What were they putting to the tribunal?

CHRIS FLYNN: Well, the Australian argument was that because of a treaty that East Timor and Australia

entered into called CMATS, Certain Maritime Arrangements in the Timor Sea so CMATS is the acronym,

because of that treaty and a provision under it which basically said that East Timor and Australia couldn't

effectively sue each other under international law.

PETER LLOYD: Is the tribunal saying that the moratorium on talks for 50 years isn't in itself a process and in

fact the tribunal is the process?

CHRIS FLYNN: Correct, that is part of it but I think what's really interesting is potentially there is a

paragraph in there which I think will provide East Timor with a lot of hope that there actually might be

potentially if this conciliations fails, a much stronger position it can take against Australia even though

CMATS says it can't.

The court has said that it might be able to do that. I think that's a really important, really important point

coming out of this.

PETER LLOYD: So basically it's saying that even if all this fell apart, the Timorese have a legal avenue in

places that the Australians didn't think they did?

CHRIS FLYNN: Quite and that, that, that is one reading of that paragraph and I think it's quite a clear reading

of it.

PETER LLOYD: Is this spelling out territory that the Australians didn't expect, that the tribunal sees itself

playing a role as the dispute mechanism?

CHRIS FLYNN: Yeah, well that's exactly right. Those paragraphs indicate actually what the conciliation

process, the commission might be able to assist in is determining the ground on which the conciliation takes

place and that ground will be the principles that the parties should be arguing about and it's the very principles

that are really in dispute here between Australia and East Timor.

Australia makes its claims under a much older set of laws and East Timor says, well, UNCLOS (UN

Convention on the Law of the Sea) is the treaty that should determine the dispute.

That position is consistent with what the Permanent Court of Arbitration in The Hague said in the

China/Philippines dispute.

Now that's why it says Australia will be forced to have a conciliation based on the principles under the law of

the sea which would apply a much fairer and equitable resolution for East Timor.

PETER LLOYD: And potentially much sooner than 12 months hence?

CHRIS FLYNN: Well, correct and potentially much, much sooner, that's right.

PETER LLOYD: How is this going to be received in Canberra today?

CHRIS FLYNN: I understand that the Australian delegation went into these proceedings very, very

confidently and I think this, as I said, is a bit of a drubbing for Australia.

So I think Australia will be very, very disappointed but I note that the Foreign Minister said that Australia will

comply with the decision of the court and in many ways, Peter, I mean what can Australia do?

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We can't on one hand be saying to China that it needs to respect international law and the decisions of this

very court in respect of its disputes with the Philippines and more broadly in the South China Sea and then not

comply with this one against a country like East Timor. So I think Canberra will find that it's caught between

a rock and a hard place.

PETER LLOYD: So what are Canberra's options now?

CHRIS FLYNN: Well, I think they need to go into conciliation and they need to make a good fist of it from

their perspective but the reality is I think that you'll find, as I've sort of indicated, that the weight of the law

and precedent will be against them.

It should mean the equidistance principle.

MARK COLVIN: Chris Flynn from Gilbert and Tobin law firm talking to Peter Lloyd.

19

SBS World News Radio: Australia loses bid to reject compulsory conciliation with Timor-Leste

Australia has lost its fight against compulsory conciliation to resolve its lengthy maritime border dispute with

Timor-Leste.


Phillippa Carisbrooke, SBS, 27 September 2016

At stake are oil and gas fields estimated to be worth tens of billions of dollars. Australia's refusal to negotiate

a permanent maritime border with Timor-Leste has strained relations.

The fledgling country's request for compulsory negotiations with its neighbour to decide the boundaries of

large oil and gas fields was opposed by the Australian government last month.

But the United Nation's Conciliation Commission in The Hague overruled Australia's protest last night,

ordering it to take part.

The decision has been welcomed by Timor-Leste's Minister of State, Agio Pereira, in an interview with the

ABC.

"It's good for both Australia and Timor-Leste, that's very good. Because you have to resolve these issues. You

cannot go on forever arguing with each other in a polarised way."

Foreign Minister Julie Bishop and Attorney-General George Brandis have issued a statement saying Australia

accepts the Commission's decision and will continue to engage in good faith in the conciliation process.

The Opposition wants a quick resolution.

Labor's foreign affairs spokeswoman, Penny Wong, says a permanent agreement is long overdue.

"This is an opportunity for us to resolve it. To settle these maritime boundaries in fair and permanent terms.

And we would urge the government to take this opportunity with both hands."

Under current treaty arrangements, revenue from the Joint Petroleum Development Area in the Timor Sea is

split. 90 per cent goes to Timor-Leste and 10 per cent to Australia.

If the maritime boundary were to be drawn half-way between the two countries, the rich oil and gas fields

would fall entirely in East Timorese waters.

An expert on Timor-Leste at Deakin University, Professor Damien Kingsbury, says the federal government

may fear being asked to pay back royalties.

"There is also concern that it could open up the possibility of Indonesia also asking for its boundaries to be

redrawn in line with the international law of the sea."

The Commission's report will not be legally binding.

A Timor-Leste specialist at Melbourne's Swinburne University of Technology, Professor Michael Leach, says

Australia's response will be watched internationally.

"Australia has taken quite a strong position on China in the South China Sea, urging them to respect

international law, which obviously raises the issue of consistency in relation to this dispute."

The conciliation process will take place behind closed doors over the next year.


20

Further coverage from SBS:


Australia says it accepts a UN conciliation commission ruling that it can hear a maritime boundary dispute

over the Timor Sea.


SBS / AAP, 27 September 2016

A United Nations conciliation commission has ruled that it has jurisdiction to hear a maritime boundary

dispute between East Timor and Australia, rejecting objections from Canberra.

But the Australian government says it accepts the commission's ruling and will continue to engage in good

faith as the conciliation process continues.

East Timor sought the compulsory conciliation to decide the boundaries of a large oil and gas field over which

the two countries have a revenue-sharing agreement, arguing that alleged Australian spying on its officials

rendered the 2006 agreement flawed.

After hearings in The Hague last month, the conciliation commission ruled on Monday that it had the

jurisdiction to hear the case, despite objections from Australia which has refused to negotiate a permanent

boundary.

The commission says the conciliation process will take place behind closed doors over the next year.

In a statement on Monday, Foreign Minister Julie Bishop and Attorney-General George Brandis said Australia

accepted the commission's decision "and will continue to engage in good faith as we move to the next phase

of the conciliation process".

"This approach is consistent with our support for the rules-based international order."

The ministers said Australia abided by the 2002 Timor Sea Treaty and 2006 Treaty on Certain Maritime

Arrangements in the Timor Sea (CMATS) signed by both countries.

"We seek to uphold these treaty arrangements which are consistent with international law and were negotiated

in good faith."

The ministers noted that the commission's role was to assist the parties to reach a settlement and it would

produce a report "which, unlike an arbitration decision, is not legally binding".

East Timor's Minister of State Agio Pereira on Monday welcomed the commission's decision to continue with

the conciliation to reach "an amicable settlement".

"This process is an opportunity to set a good example in our region and we will engage with respect for the

commission and its recommendations, ever conscious of the importance of maintaining the best possible

relationship with our close neighbour Australia," he said in a statement.

Former East Timorese president Xanana Gusmao, the chief negotiator before the commission, thanked the

commissioners for their ruling.

"Just as we fought so hard and suffered so much for our independence, Timor-Leste (East Timor) will not rest

until we have our sovereign rights over both land and sea."


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Ms Bishop and Mr Brandis said the current treaty arrangements had been "hugely beneficial" to East Timor in

helping it accumulate $16 billion in a sovereign wealth fund.

"We are committed to working together to strengthen our relationship and overcome our differences in the

Timor Sea," they said.

Arguing Australia's case in The Hague last month, Department of Foreign Affairs and Trade deputy secretary

Gary Quinlan said Australia did not accept East Timor's claims that allegations of Australian espionage made

the CMATS treaty invalid.

Video included: http://www.sbs.com.au/news/article/2016/09/26/east-timor-sea-conciliation-proceed


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Another win for 'David' Timor against 'Goliath’ Australia


Frank Brennan, 26 September 2016

David Timor has once again scored a win against Goliath Australia in the international legal forum. Last time

it was in the International Court of Justice which took strong exception to Australia's raiding of the office of a

lawyer involved in the preparation of Timor-Leste's case, though admittedly Australia's one ad hoc judge did

dissent on key points from the other 15 judges!

This time it was before a five-member Conciliation Commission convened under the auspices of the

Permanent Court of Arbitration. Timor had asked for compulsory conciliation seeking to advance its demand

that Australia come to the table and commence the negotiation of maritime boundaries. Australia raised six

objections to the conciliation. All six objections were rejected unanimously by the commission.

Two of the commissioners were nominated directly by Australia. One of those commissioners was Dr Rosalie

Balkin who had been a highly respected Assistant Secretary in the Australian the Attorney-General's

Department. She had been in charge of the Public International Law Branch in the Office of International

Law.

Balkin's involvement is very significant in light of the long entrenched Canberra bureaucratic mindset which

has informed governments of both political persuasions on Timor issues, urging them to yield no ground when

it comes to boundary negotiations.

Responding to the commission's findings, Attorney General George Brandis and Foreign Minister Julie

Bishop on Tuesday regurgitated the long repeated Canberra mantra: 'The current treaty arrangements between

Australia and Timor-Leste have been hugely beneficial to Timor-Leste and have supported the accumulation

of a $16 billion sovereign wealth fund ...

'We have a strong interest in Timor-Leste's stability and growing prosperity, and in providing a stable and

transparent framework for investment in the Timor Sea.'

They have no idea just how patronising this sounds in Dili each time Australia gets defeated in the

international forum. They may well be right. But it's not their call. Timor-Leste is now an independent

sovereign nation and its leaders, which include those who fought for its independence, now want to negotiate

maritime boundaries. It's time for some very plain speaking in Canberra.

Australia and Timor-Leste negotiated the Timor Sea Treaty in 2002 and the CMATS Treaty (Treaty on

Certain Maritime Arrangements in The Timor Sea) in 2006. The CMATS treaty was negotiated in such

indecent haste that Foreign Minister Alexander Downer deliberately circumvented the usual Australian

parliamentary process for scrutinising the treaty.

"Turnbull's advisers may well continue to argue that risks in relationships can be minimised by maintaining

present arrangements. This week's ruling should give the Canberra bureaucrats every reason to pause."

It was finalised at a time of great political instability in Timor Leste. CMATS was designed to put the

negotiation of maritime boundaries on hold for 50 years, providing Timor Leste with a 50 per cent revenue

share of the Greater Sunrise oil and gas field, even though most of the field fell within Australian jurisdiction

under the 2002 agreement. Back in 2006, commentators including me endorsed CMATS as a fair deal given

that it was supported by the Timorese leadership who were content to put boundary negotiations on the long

finger in exchange for a short term financial windfall.

The expectation was that a deal for the development of Sunrise would be finalised within six years and that

production would start shortly thereafter. But that never happened. No deal was struck with the joint venturers


23

led by Woodside and Shell. With the present glut in oil and gas prices, it is highly unlikely that Sunrise will be

developed in the foreseeable future. For example, Shell has shelved the Browse project off the Western

Australian coast. Browse is twice the size of Sunrise, and has none of the complex jurisdictional issues.

Having learnt that Australia spied on the Timorese negotiators when CMATS was being finalised, the

Timorese have been keen to invalidate the CMATS Treaty. They have other international proceedings on foot

seeking a declaration of invalidity. They may succeed; they may not. Meanwhile the Timorese have received

legal advice which encourages them to think that the whole of Sunrise might eventually be included within

Timor's jurisdiction, avoiding the need to deal further with the Australians. There is no certainty about this,

because negotiations will need to include a place at the table for Indonesia as well as Australia and Timor-

Leste.

The Timorese convinced the Labor Party before the last election that a future Labor government should

commit to prompt negotiation of a maritime boundary. Labor also announced it would reverse the 2002

Australian decision to withdraw Australia from court determinations or arbitration in the event of a failure to

reach agreement. The Timorese then treaded carefully and respectfully with Malcolm Turnbull during the

election campaign. With new prime ministers on either side of the Timor Trough, the Timorese thought the

time was ripe to seek agreement on commencing the negotiation of maritime boundaries. They could have

enlisted their many Australian friends to campaign against Turnbull in the election. But they decided not to.

The opted to wait.

Armed with a strong legal team from the UK led by Vaughan Lowe and Sir Michael Wood, two of the doyens

of international maritime law, the Timorese then took a bold step. Lowe and Wood had advised that the UN

Convention on the Law of the Sea (UNCLOS) contained provisions for compulsory conciliation in cases

where the parties had agreed not to go to arbitration or to judicial settlement. They argued this was the

situation with CMATS. The commission agreed. The commission decided:

Nothing in CMATS constitutes an agreement 'to seek settlement of the dispute by a means of [the Parties']

own choice'. Nor does the commission consider that an agreement not to pursue any means of dispute

settlement can reasonably be considered a dispute settlement means of the parties' own choice. Accordingly

the commission concludes that CMATS is not an agreement [pursuant to UNCLOS] that would preclude

recourse to compulsory conciliation.

The Conciliation Commission will now host a year of meetings between the parties assisting them to reach

agreement on maritime boundaries. The commission will then produce a report. Though the report and any

observations by the commission are not legally binding, this one-year procedure should now be enough to

convince the Turnbull government that there is no point in putting negotiations on hold for another 41 years or

until the election of the next Labor government.

"Turnbull will need to develop a new narrative as to why Australia wouldn't make the best of a bad lot and use

the compulsory conciliation as a means to kick start a sensible negotiation of maritime boundaries. Hopefully

he will drop the patronising Canberra line that we Australians know what's best for the Timorese."

Turnbull's advisers may well continue to tell him that CMATS provides certainty for economic development

of Greater Sunrise, while putting on hold the uncertainty of maritime boundary negotiations which might

exacerbate tensions with Indonesia, given the past dealings and agreements between Indonesia and Australia.

They may well continue to argue that risks in relationships can be minimised by maintaining present

arrangements. This week's ruling should give the Canberra bureaucrats every reason to pause.

There is nothing to be gained for Australia by continuing to put negotiations on hold when there is no

immediate prospect of Sunrise being developed, when the Timorese are increasingly convinced (whether

rightly or wrongly) that they were duped, when Australia is wanting to put out a clear message in the South

China Sea that China be committed to negotiations in accordance with international law, and when Australia

has to spend a year at the table engaged in conciliation under the watchful eye of five commissioners who

have already taken a dim view of Australia's legalistic approach.

24

More than ever, Turnbull will have to stop preaching on the South China Sea if he is not prepared to act in the

Timor Sea. Australia has already told the commission that 'it will engage in the conciliation in good faith'. So

Turnbull will need to develop a new narrative as to why Australia wouldn't make the best of a bad lot and use

the compulsory conciliation as a means to kick start a sensible negotiation of maritime boundaries. Hopefully

he will drop the patronising Canberra line that we Australians know what's best for the Timorese. With their

flash UK legal advisers and Norwegian commercial advisers, the Timorese will make their own decisions

from here on. Thus far, David has scored two king hits in the international forum. It's time for Goliath to take

stock.

25

PCA to mediate Australia-East Timor sea border dispute

http://www.australasianlawyer.com.au/news/pca-to-mediate-australiaeast-timor-sea-border-dispute-

224126.aspx

Sol Dolor, Australiasian Lawyer, 28 September 2016

Australia has lost its attempt to quash Timor-Leste’s maritime boundary complaint after the Permanent Court

of Arbitration (PCA) announced it was competent to handle the conciliation and that the matter will proceed.

In a decision made on Monday, 19 September but published only this week, the ad hoc Commission under the

1982 United Nations Convention on the Law of the Sea (UNCLOS) said that it is “competent with respect to

the compulsory conciliation” set out in Timor-Leste’s request.

“There are no issues of admissibility or comity that preclude the Commission from continuing these

proceedings,” the decision read.

Last month, Timor-Leste urged the commission to mediate the dispute claiming bilateral negotiations have

been futile.

Australia maintained that the Commission had no jurisdiction because it had signed a treaty with its

neighbour’s government barring any court recourse. It also refuses to negotiate a permanent border until 2056

at the earliest.

The arbitration could decide which territory covers large oil and gas deposits estimated to be worth $40b.


our sovereign rights over both land and sea,” Xanana Gusmao, the country’s former prime minister, said in a

statement after the PCA’s decision.

Australia “accepts the commission's decision and will continue to engage in good faith as we move to the next

phase of the conciliation process,” Foreign Affairs Minister Julie Bishop said.

“We are committed to working together to strengthen our relationship and overcome our differences in the

Timor Sea,” she added.

In 12 months, the Commission will report any agreements reach and, failing agreement, its conclusions on all

questions of fact or law relevant to the matter in dispute including recommendations which may be

appropriate for an amicable settlement.

The report will be coursed through the UN Secretary-General and transmitted to the parties in dispute.



26


http://www.heraldsun.com.au/news/breaking-news/hague-to-arbitrate-in-timoraust-dispute/news-

story/b0c4534e1418203ab451d5a204772613

Lloyd Jones, Australian Associated Press (AAP), 27 September 2016

A United Nations conciliation commission has ruled that it has jurisdiction to hear a maritime boundary

dispute between East Timor and Australia, rejecting objections from Canberra.

But the Australian government says it accepts the commission's ruling and will continue to engage in good

faith as the conciliation process continues.

East Timor sought the compulsory conciliation to decide the boundaries of a large oil and gas field over which

the two countries have a revenue-sharing agreement, arguing that alleged Australian spying on its officials

rendered the 2006 agreement flawed.

After hearings in The Hague last month, the conciliation commission ruled on Monday that it had the

jurisdiction to hear the case, despite objections from Australia which has refused to negotiate a permanent

boundary.

The commission says the conciliation process will take place behind closed doors over the next year.

In a statement on Monday, Foreign Minister Julie Bishop and Attorney-General George Brandis said Australia

accepted the commission's decision "and will continue to engage in good faith as we move to the next phase

of the conciliation process".

"This approach is consistent with our support for the rules-based international order."

The ministers said Australia abided by the 2002 Timor Sea Treaty and 2006 Treaty on Certain Maritime

Arrangements in the Timor Sea (CMATS) signed by both countries. "We seek to uphold these treaty

arrangements which are consistent with international law and were negotiated in good faith." The ministers

noted that the commission's role was to assist the parties to reach a settlement and it would produce a report

"which, unlike an arbitration decision, is not legally binding".

East Timor's Minister of State Agio Pereira on Monday welcomed the commission's decision to continue with

the conciliation to reach "an amicable settlement". "This process is an opportunity to set a good example in

our region and we will engage with respect for the commission and its recommendations, ever conscious of

the importance of maintaining the best possible relationship with our close neighbour Australia," he said in a

statement.

Former East Timorese president Xanana Gusmao, the chief negotiator before the commission, thanked the

commissioners for their ruling. "Just as we fought so hard and suffered so much for our independence, Timor-

Leste (East Timor) will not rest until we have our sovereign rights over both land and sea."

Ms Bishop and Mr Brandis said the current treaty arrangements had been "hugely beneficial" to East Timor in

helping it accumulate $16 billion in a sovereign wealth fund. "We are committed to working together to

strengthen our relationship and overcome our differences in the Timor Sea," they said.

Arguing Australia's case in The Hague last month, Department of Foreign Affairs and Trade deputy secretary

Gary Quinlan said Australia did not accept East Timor's claims that allegations of Australian espionage made

the CMATS treaty invalid.



27

A good day in The Hague: Australia’s tactics in the Timor Sea oil dispute have been shameful


Mungo MacCallum, The Monthly, Tuesday, 4th October 2016

It may sound unpatriotic, but I could not help cheering when the Permanent Court of Arbitration in The Hague

brought down its decision last week against Australia.

After more than 12 festering years, this finally brings to a head a shameful and shameless exhibition of

browbeating and exploiting our newest and poorest neighbour, Timor-Leste.

John Howard claimed much of the credit for defending the independence of the nation, and so he should; but

his motives were not entirely altruistic.

At the time of the Indonesian invasion in 1975, the Australian ambassador in Jakarta, Richard Woolcott, noted

that an important consideration for Canberra should be the oil-rich seabed beneath the Timor Sea; it was in

Australia’s interests to control as much of it as possible, and the Indonesians would drive a far harder bargain

than would the impoverished Timorese.

Nearly 30 years later, Howard made his call, and immediately after the declaration of Timorese independence

in 2002, Australia’s foreign minister, Alexander Downer, was on the doorstep demanding negotiations. The

newly-formed nation was desperate for support and finance, which gave Downer his chance.

He behaved like an archetypal private-school bully, hectoring, threatening and, it later transpired, spying to

achieve a manifestly unfair division: the boundary line was pushed a long way north to give Australia a share

of what became the Sunrise fields. The Timorese didn’t like it, but they had no choice; and they had no choice

again when, five years later, Downer insisted that the treaty he had enforced should be extended until 2057 –

by which time the oil would all have been sold.

But Downer’s perfidy was revealed when one of the spooks who had been involved in bugging the Timorese

talks turned whistleblower. The government did all it could to shut him down; his lawyer’s offices were raided

by ASIO and his passport confiscated indefinitely. But the scandal turned international opinion, which was

already on the side of the impoverished Timor-Leste, further against Australia.

And when Timor went to The Hague to ask that the treaty be renegotiated with more equitable boundaries,

Australia was forced to agree. The lawyers fought hard, claiming that the treaty was signed and sealed, and

that therefore there was nothing to negotiate. But the court disagreed and ordered conciliation.

Julie Bishop, the current foreign minister, having scarcely drawn breath after inveighing about the sanctity of

the rule of international law over the South China Sea dispute, had no real choice, so conciliation –

negotiation – there will be. It may or may not be effective; but it has already exposed a clear injustice and the

standover tactics of the Howard government in its naked pursuit of spoil.

To take advantage of any vulnerable victim is despicable; but to deliberately try to beggar an ally and a friend

while purporting to offer support is unforgivable. Even Alexander Downer would have to admit that it is just

not cricket. And that is why I, along with most of the civilised world, am cheering.


28

INTERNATIONAL MEDIA

Australia fails in attempt to block Timor-Leste maritime boundary case

Australia forced to take part in conciliation at the Hague over maritime border in relation to area that

contains an estimated $40bn worth of oil and gas

https://www.theguardian.com/world/2016/sep/26/australia-fails-in-attempt-to-block-timor-leste-maritime-

boundary-case?CMP=soc_568

The Guardian, 26 September 2016

Timor-Leste will have its case against Australia over a disputed maritime boundary heard by the permanent

court of arbitration in The Hague after the court rejected Australia’s claim that the court had no jurisdiction.

Timor-Leste asked for the process which could decide on which side of the border lies a large oil and gas field

over which the two countries have a revenue-sharing agreement.

Australia has resisted negotiating a permanent border until 2056 at the earliest. The conciliation process will

now take place behind closed doors over the next year, the court said.

Xanana Gusmao, the former Timor-Leste president, welcomed the decision.


our sovereign rights over both land and sea,” Gusmao said in a statement.

Labor frontbencher Penny Wong also welcomed the ruling and said the dispute had gone on too long.

“Labor committed in February this year to reaching a binding international resolution with Timor-Leste, either

through bilateral negotiation or international arbitration,” Wong said.

“In light of this ruling, we call on the government to now settle this dispute in fair and permanent terms; it is

in both our national interests to do so.”

The long-running dispute centres upon the maritime boundary between Timor-Leste and Australia, most

pointedly over control of the area where an estimated $40bn worth of oil and gas lies beneath the sea.

Timor-Leste argues the maritime boundary between it and Australia should be a median line equidistant

between the two countries, putting the vast majority of the exploitable area in its territory. This position is

supported by international law, the UN convention on the law of the sea, which Australia signed and ratified

in 1994.

But Australia says a 2006 temporary revenue sharing agreement (known as CMATS) that divides the revenues

– significantly in Timor-Leste’s favour, it argues – is valid, and should be honoured.

Timor-Leste argues that treaty should be scrapped because, six years after it was signed, it was revealed

Australia had bugged the Timor-Leste government’s cabinet room, with listening devices implanted by

Australian Security Intelligence Service agents pretending to be aid workers renovating the office.

Australia’s forced appearance at the permanent court of arbitration in The Hague is the first time any country

has been brought for “compulsory conciliation”. Timor-Leste says the action was necessary because of

Australia’s consistent refusal to negotiate on a permanent maritime boundary.

The dispute over the Timor Sea – more specifically the wealth that lies under it – has pre-empted and then

shadowed all of the short and chequered history between the independent Timor-Leste and Australia.



29

In 1975, as Portugal moved towards decolonisation, the resistance movement Fretilin declared Timor-Leste

independent. Nine days later, the newly free nation was invaded by Indonesia’s military in breach of

international law, and to widespread international condemnation.

In 1979 Australia became the only western nation to offer de jure recognition of Indonesia’s forced

annexation, so the two countries could begin negotiations over the Timor Sea’s resources.

The Timor Gap treaty was signed – the then foreign ministers Gareth Evans and Ali Alatas famously clinking

champagne glasses in a plane above the Timor Sea – between Australia and Indonesia in 1989. That treaty did

not establish a maritime boundary but provided for shared exploitation of petroleum resources in the part of

the seabed claimed jointly by both countries.

Australia was Timor-Leste’s saviour in 1999, leading the Interfet force which restored order in the country

after the vote for independence and retribution by pro-Indonesia militias.

But in 2002, just two months before Timor-Leste became independent, Australia secretly withdrew from the

maritime boundary dispute resolution procedures of the UN convention on the law of the sea, and the

equivalent jurisdiction of the international court of justice, so that it could not be compelled into legally

binding international arbitration. (Parliament was only told after the withdrawal had occurred.)

Timor-Leste’s first treaty – the Timor Sea treaty – signed in 2002, gave a 90-10 split, in Timor-Leste’s favour,

of revenues from a joint development zone in the Timor Sea.

The second, CMATS treaty – certain maritime arrangements in the Timor Sea – was signed in 2006, with both

sides agreeing to impose a 50-year moratorium on negotiating a permanent maritime border. CMATS gives

Timor-Leste 90% of the current oil revenues from the joint petroleum development area, and Australia 10%,

but a further treaty (Sunrise IUA) gives Timor-Leste only limited claim over future exploitation of the larger

Greater Sunrise field.

It was during the negotiations over CMATS that Australia bugged Timor-Leste’s cabinet room. Australia has

not admitted to the espionage, though it did raid the Canberra offices of Timor-Leste’s lawyer Bernard

Collaery, and seized the passport of the intelligence agent who blew the whistle on the spying operation.

Timor-Leste say the spying voids the treaty, which, it argues, was not negotiated in good faith.

30

Court Rules Australia Must Talk with East Timor Over Oil Fields

An international court rejects Australia’s claim it has no jurisdiction in a dispute with East Timor


Rebecca Thurlow, Wall Street Journal, 26 September 2016

SYDNEY—Australia will be forced into a conciliation process with East Timor over a disputed maritime

boundary determining access to potentially lucrative oil-and-gas fields, after an international arbitration court

rejected Australia’s claim the court had no jurisdiction.

East Timor asked the Permanent Court of Arbitration in The Hague to intervene in the long-running dispute as

it seeks to redraw a sea border between the two nations. If successful, East Timor could win a larger share of

oil-and-gas resources worth up to tens of billions of dollars.

In its decision, the court found it was “competent to continue with the conciliation process.” The court said it

would convene a series of confidential meetings between the parties over the course of the next year.

Australian foreign minister Julie Bishop said Canberra will fight to uphold a decade-old revenue sharing treaty

between the two nations. She said the recommendations from the conciliation process, unlike arbitration,

aren’t binding.

“We seek to uphold these treaty arrangements, which are consistent with international law and were

negotiated in good faith,” Ms. Bishop said. However, Australia accepts the commission’s decision to

intervene, and the country will engage in the conciliation process, she added.

Under a 2006 maritime treaty, Australia and East Timor agreed to equally split billions of dollars in royalties

from the Greater Sunrise field, which holds more than 5 trillion cubic feet of gas and condensate. The field is

to be jointly developed by partners including Australia’s Woodside Petroleum Ltd., ConocoPhillips of the

U.S., Royal Dutch Shell PLC and Japan’s Osaka Gas Co. Ltd.

However, the field’s development has been delayed by a number of disputes, including over East Timor’s

insistence that gas be piped and processed onshore to create a petroleum industry and employment in the

country, officially known as the Democratic Republic of Timor-Leste. The venture partners have said they

prefer to process the gas more cheaply using a vessel floating at sea.

East Timor’s other major concern is that almost 80% of the area designated for development of oil-and-gas

fields lies within Australian waters, while the rest is jointly administered by the two nations. The field is 93

miles south of East Timor and more than 280 miles off Australia’s northern coastline.

In hearings that began in The Hague arbitration court in late August, East Timor is arguing for the boundary to

be fixed halfway between the two countries, placing the Greater Sunrise field in Timorese waters.

Australia in turn argued that the arbitration court had no jurisdiction in the matter as Canberra had already

signed a treaty with Dili ruling out dispute settlement procedures.

The 2006 treaty put on hold for 50 years the right of both countries to discuss maritime boundaries or claim

territorial jurisdiction.

The existing boundary between the two countries was agreed with Indonesia in the 1971 and runs significantly

to the north of the median line between the two countries. East Timor gained independence from Indonesia in

2002.


31

Global court takes up Timor Leste, Australia sea border row


The Straits Times / AFP, 26 September 2016

THE HAGUE (AFP) - An international arbitration court agreed on Monday (Sept 26) to take up a decade-long

dispute over a maritime border between Australia and Timor-Leste which cuts through lucrative oil and gas

fields in the Timor Sea.

The Permanent Court of Arbitration "held that it was competent to continue with the arbitration process"

initiated by Timor-Leste against Canberra in April, the court based in The Hague said in a statement.

Timor-Leste last month urged the panel – the world’s oldest arbitration tribunal – to help end the dispute that

has soured relations between the two countries, saying negotiations have so far failed.

Australia in return argued it had no jurisdiction in the battle as Canberra had already signed a treaty with Dili

ruling out recourse to the court.

Dili on Monday welcomed the tribunal’s decision.


our sovereign rights over both land and sea,” the country’s independence resistance hero and former prime

minister Xanana Gusmao said in a statement.

Canberra’s lawyers had argued it had also initiated talks with Dili through an exchange of letters in 2003 to try

to solve the dispute.

But a five-member PCA conciliation commission ruled the dispute should be settled under the UN Convention

of the Law of the Sea, rather than the treaty, called Certain Maritime Arrangements in the Timor Sea

(CMATS) and signed in 2006, which covers the vast Greater Sunrise gas field lying between the two nations.

The tribunal said the exchange of letters between Canberra and Dili “did not constitute an agreement...

because the exchange was not... legally binding.”

Timor-Leste, which only gained its independence from Indonesian occupation in 2002, is an impoverished

nation heavily dependent on oil and gas exports.

Talks between the two countries will now continue over the next year, the tribunal based in The Hague said,

but it stressed the meetings will be “largely in a confidential setting.”


32

Hague to arbitrate Aust, East Timor boundary

http://www.skynews.com.au/news/top-stories/2016/09/26/hague-to-arbitrate-aust--timor-boundary-aust-

dispu.html

Sky News / Reuters, 26 September 2016

The Permanent Court of Arbitration in The Hague will oversee a compulsory arbitration between East Timor

and Australia on their maritime boundary, rejecting Australia's objections.

East Timor asked for the process which could decide on which side of the border lies a large oil and gas field

over which the two countries have a revenue- sharing agreement. The island nation said Australian espionage

on its diplomats rendered recent agreements between them flawed.

Australia has resisted negotiating a permanent border until 2056 at the earliest.

The conciliation process will take place behind closed doors over the next year, the court said.



33

The Hague revives maritime border dispute between Timor-Leste and Australia

http://www.cnbc.com/2016/09/27/the-hague-revives-maritime-border-dispute-between-timor-leste-and-

australia.html

Nyshka Chandran, CNBC, 27 September 2016

A 14-year old border conflict between Timor-Leste, also known as East Timor, and Australia was revived by

The Hague's Permanent Court of Arbitration (PCA) on Monday.

Around 3,000 nautical miles separate Australia and Timor-Leste, an island in the Indonesian archipelago.

Between the two countries lie the Timor Sea, home to the Joint Petroleum Development Area (JPDA) that is

rich in oil and natural gas deposits. Next to the JPDA are the Sunrise and Troubadour gas fields, collectively

known as Greater Sunrise, that are worth an estimated $40 billion.

These fields are at the heart of the maritime dispute that has weighed on bilateral relations and holds the

potential to accelerate the nascent Timorese economy.

Image: The Permanent Court of Arbitration

Background

Under the 2002 Timor Sea Treaty, the Southeast Asian island receives 90 percent of revenues from the

JPDA's energy resources, with the remainder going to Australia.

However, only 20 percent of the Greater Sunrise fields lies inside the JPDA, according to the 2006

International Unitization Agreement on Sunrise (IUA), which allotted the remaining 80 percent to Australia.

Subsequently, a separate 2006 agreement [the Treaty on Certain Maritime Arrangements in the Timor Sea, or

CMATS] was signed to divide revenues from the Sunrise fields 50-50. CMATs also stipulated a 50-year

freeze on both countries from negotiating a permanent maritime boundary.

In 2013, the Timorese government accused Canberra of espionage to gain commercial advantage during

CMAT's negotiations, claiming that such a move invalidated the agreement.

In April this year, Timorese Prime Minister Rui Maria de Araujo initiated formal conciliation proceedings by

invoking the United Nations Convention on the Law of the Sea. He aims to establish an exclusive economic



34

zone, including a permanent boundary, one that will allow the island to gain control of the entire lucrative

Greater Sunrise fields.

Australia has argued that The Hague's international arbitration court does not have jurisdiction over the

dispute as per CMATs—a response that bears striking similarities to China's viewpoint when the same court

ruled on the South China Sea dispute. In an effort to appeal to the U.S. for help earlier this year, PM Araujo

also accused Australia of behaving like Beijing.

On Monday this week, the court refuted Canberra's claims, announcing that it was indeed competent to hold a

conciliation. Talks between the two countries will now continue over the next year.

[Photo: Activists attend a rally outside the Australian embassy in Dili, capital of Timor-Leste, on

February 23, 2016. Hundreds called on the Australian government to negotiate for the establishment

of permanent maritime boundaries between Australia and Timor-Leste.]

Implications

Home to a population of 1.2 million, Timor-Leste relies on oil and gas revenues from the JPDA for the

majority of its state budget, and the World Bank has long warned the middle-income country to diversify its

economy away from energy.

The country was a Portuguese colony until pro-independence fighters declared victory in 1975. Shortly

thereafter, Indonesia claimed the region as its 27th province, paving the way for a violent conflict between the

Indonesian military and separatist forces. It was only in 2002 that East Timor became a sovereign state once

Jakarta relinquished control.

"Development of the Greater Sunrise gas field is the key to the economic future of Timor-Leste," Rebecca

Strating, lecturer at Melbourne's La Trobe University, argued in a note last week.

PM Araujo is using the conciliation as part of a broader diplomacy strategy to pressure the Turnbull

government, using activist-style rhetoric that positions the dispute as the final stage of Timor-Leste's

sovereignty, Strating explained.

But the island is running out of time.

It's estimated that the Bayu-Undan oil field, one of the government's biggest income generators located in the

JPDA, will stop producing in 2022, Strating flagged. Moreover, the country's $16 billion sovereign wealth

fund—known as the Timor-Leste Petroleum Fund—could be depleted by 2025, she noted.

The fund was among the top five best performers in the 2013 Resource Governance Index, a ranking

developed by the non-profit Natural Resource Governance Institute.

"Even if Timor-Leste wins the conciliation, it will mean going back to square one with Greater Sunrise

negotiations. It is difficult to see how this presents a practical, long-term solution for resolving the dispute,"

said Strating.

On Monday, Australian Foreign Minister Julie Bishop noted the current arrangements were hugely beneficial

to the former Portuguese colony but said her government would engage in good faith during the conciliation

process.

"There is an inescapable perception that Australia is denying its tiny, impoverished neighbor its sovereign

birthright to determine its boundaries, control its own resources, and shape its own destiny," Ben Saul, Challis

chair of international law at the University of Sydney, wrote in an August note. "Australia should stop

obstructing Timor and help it to secure its borders and its future. This week's conciliation gives Australia a

new chance to do the right thing."

35

Legal experts say July's South China Sea ruling could offer insight into the final verdict on the Timor Sea

matter.

By denying China's territorial claims, the tribunal raises the prospect that Timor-Leste might successfully

initiate an arbitration against Australia, corporate law firm Gilbert + Tobin explained in a report.

36


Australia had previously argued that the Permanent Court of Arbitration (PCA) based in The Hague - the

world’s oldest international tribunal - had no jurisdiction in the row

http://www.scmp.com/news/asia/southeast-asia/article/2022669/hague-court-arbitrate-east-timor-australia-

maritime-border

South China Morning Post / AFP / Reuters, 26 September 2016

The tribunal that ruled China’s extensive claims to the South China Sea were invalid is taking up another

regional sea border row.

In a blow to Australia, the world’s oldest international court has agreed to take up a case pitting tiny East

Timor against its giant neighbour stepping into a decade-long dispute over a maritime border which cuts

through lucrative oil and gas fields.

The Permanent Court of Arbitration (PCA) “held that it was competent to continue with the conciliation

process” initiated by East Timor against Australia in April, the court based in The Hague said.

East Timor last month urged the panel - the world’s oldest arbitration tribunal - to help end the dispute that

has soured relations between the two countries, saying negotiations have so far failed.

The boundary dispute between East Timor and Australia centres on a demand from East Timor that the border

of the oil field between the two countries be redrawn.

Australia in return argued it had no jurisdiction in the battle as Canberra had already signed a treaty with Dili

ruling out recourse to the court.

The PCA has not shied away from stepping into complex diplomatic battles.

Earlier this year it sparked fury in Beijing by ruling in a case brought by the Philippines that China’s claims to

a vast swathe of the resource-rich South China Sea were invalid. It was a major setback for Beijing, which has

ignored the decision.

Australian Foreign Affairs Minister Julie Bishop was chided in February by China for saying the Philippines

had the right to take China to the same international arbitration over their conflicting South China Sea claims.

East Timor, which only gained its independence from Indonesian occupation in 2002 and is an impoverished

nation heavily dependent on oil and gas exports, welcomed Monday’s decision by the tribunal.


our sovereign rights over both land and sea,” the country’s independence resistance hero and former prime

minister Xanana Gusmao said in a statement.

Bishop said Canberra “accepts the commission’s decision and will continue to engage in good faith as we

move to the next phase of the conciliation process.”


Timor Sea,” she added.

Canberra’s lawyers had argued it had also initiated talks with Dili through an exchange of letters in 2003 to try

to solve the dispute.

The tribunal said the exchange of letters between Canberra and Dili “did not constitute an agreement...

because the exchange was not... legally binding.”



37

And the PCA’s five-member Conciliation Commission ruled the dispute should be settled under the UN

Convention of the Law of the Sea, rather than the 2006 treaty - called Certain Maritime Arrangements in the

Timor Sea (CMATS) - which covers the vast Greater Sunrise gas field lying between the two nations.

That treaty set out a 50-50 split of proceeds from the vast maritime energy fields between Australia and East

Timor estimated at some A$40 billion (US$36 billion).

East Timor has also called for CMATS to be torn up after accusing Australia of spying to gain commercial

advantage during the 2004 negotiations.

Dili however officially dropped its spying case against Canberra before the UN’s International Court of

Justice in June 2015 after Australia returned sensitive documents.

Talks between Timor and Australia will now continue over the next year, the tribunal based in The Hague

said, but it stressed the meetings will be “largely in a confidential setting.”

The commission will be involved “in a process for creating a positive relationship between the two sides to try

and bring them together to the table,” said Aaron Matta, senior researcher at the Hague Institute for Global

Justice think-tank.

This article appeared in the South China Morning Post print edition as:

East Timor to take Canberra to court

38


http://www.japantimes.co.jp/news/2016/09/27/asia-pacific/crime-legal-asia-pacific/hague-court-arbitrate-east-

timor-australia-maritime-border-dispute/#.V-rMe_krLIU

Japan Times / Reuters, 27 September 2016

AMSTERDAM/SYDNEY – The Permanent Court of Arbitration in The Hague has said it will oversee a

compulsory conciliation between East Timor and Australia on their maritime boundary, rejecting Australian

objections.

East Timor asked for the process that could decide on which side of the border lies a large oil and gas field

over which the two countries have a revenue-sharing agreement. The small island nation said Australian

espionage on its diplomats rendered recent agreements between them flawed.

The decision will exacerbate a rare diplomatic rift between Australia and its neighbor 610 kilometer (380

miles) to the north, which it supported during a claim for independence from Indonesia in the late 1990s.

Australia has resisted negotiating a permanent border until 2056 at the earliest.

Australia and East Timor will now engage in a conciliation process that will take place behind closed doors

over the next year, the court ruled late on Monday.

The Australian foreign minister and attorney general said in a statement existing treaties between the countries

had been “hugely beneficial” to East Timor but that “Australia accepts the commission’s decision and will

continue to engage in good faith.”


Timor Sea,” the statement said. It also said the report to be produced by the commission would not be legally

binding.

East Timor Minister of State Agio Pereira welcomed the decision.

“This process is an opportunity to set a good example in our region and we will engage with respect for the

commission and its recommendations, ever conscious of the importance of maintaining the best possible

relationship with our close neighbor Australia,” Pereira said in a statement.



39

Timor-Leste founders talk nation-building

Former president, current prime minister share experiences shaping 14-year-old democracy


Rachel Gold, Brown Daily Herald, 28 September 2016

Rui Maria de Araújo, prime minister of the sixth constitutional government of Timor-Leste, speaks in the Joukowsky Forum during a

discussion examining the birth and development of the tiny island nation.

In the 1990s, Brown’s campus was a hotbed of activism on behalf of Timor-Leste, the Southeast Asian island

then occupied by — and subject to human rights violations committed by — Indonesia. Over 15 years later,

the leaders of what is now the Democratic Republic of Timor-Leste arrived in Providence to reflect on the

transition from a political movement to a sovereign nation.

In a roundtable hosted by the Watson Institute for International and Public Affairs titled “Back to Brown:

Reconnecting with Timor-Leste,” Edward Steinfeld, director of the institute, and Robert Blair, assistant

professor of political science and international and public affairs, were joined in dialogue by Timor-Leste’s

Prime Minister Rui Maria de Araújo and founding father Xanana Gusmão.

Perhaps more than anyone else, Gusmão’s life is intertwined with that of his young nation. Gusmão organized

the resistance movement against the Indonesians, working from his jail cell after being sentenced to life in

prison in 1993. When the country was born in 2002, he was elected its first president. Gusmão was later

elected prime minister and is now minister of planning and strategic investment, as well as international

emissary for his country, development and democracy.

It is this spirit of internationalism that brought the envoy from Timor-Leste to Providence. “There has always

been a special connection between Rhode Island and Timor-Leste,” Araújo said. “It is embodied by professors

and students here at Brown who fought and fought to put Timor-Leste on the national consciousness of the

(United States) during the years when we were under occupation.”

During the peak of the tiny island’s resistance — which displaced about one third of Timor-Leste’s population

— Timorese leaders were aware of the expressions of concern surfacing around the world, Araújo said. This

solidarity movement took hold in Rhode Island, where then-U.S. Sen. Claiborne Pell, D-RI, and then-U.S.

Rep. Jack Reed, D-RI, advocated for the United States to lend its muscle to the restoration of Timor-Leste’s

independence.

“Early this year, when I finally had a chance to thank … Reed in person, he told me the story of how he first

heard about Timor-Leste’s struggle when a group of students and professors from Brown came to see him at

his little district office in Cranston,” he said. “So let me at last say, as the prime minister of free Timor-Leste,

thank you, Brown University.”


40

The nation — which was declared independent after a 1999 referendum, placed under a U.N. transitional

government that year and officially established as a constitutional government in May 2002 — is nearing its

15th birthday. But given the rapid growth of the country’s budget and the success of its democracy, Timor-

Leste shows that “the age of a country doesn’t have anything to do with wisdom that country can pass on to

us,” Steinfeld said.

Today, the nation faces a myriad of challenges, including “crippling uncertainty for the economy,” which is

extremely dependent on oil reserves in the surrounding waters; a lack of critical infrastructure, largely due to

the slash-and-burn wrought by the Indonesians before relinquishing control and a conflict with Australia over

maritime borders, which will be mediated by The Hague in the upcoming year, according to a decision

announced this week. But as evidenced by The Hague intervention, international systems have been and must

remain invested in the nation, Araújo said.

Many in the post-Cold War world questioned the relevance of international institutions, Araújo said, offering

the words of former U.N. Secretary General Kofi Annan as a rebuke to these doubts: “Never before has the

world united with such firm resolve to help one small nation re-establish itself,” Araújo said.

Yet scholars are hesitant to label the Timor-Leste intervention a complete success. There have been only a few

other instances where the United Nations has “exercised such a heavy hand,” Blair said, noting that the United

Nations failed to adapt to indigenous institutions — particularly when it came to traditional systems of

adjudication — and that the U.N. peacekeeping mission did not end until 2012.

Under a certain light, the U.N. forces could be seen as an extension of the legacy of occupation, Gusmão said.

“Yes, it was the first time that (the United Nations) played this kind of role in a nation,” he said. “In the

beginning we were making noise — ‘are you coming to colonize us?’ There was a group of (East) Timorese

(citizens) who said, ‘We kick out the Portuguese, (who occupied the nation for over 200 years,) we kick out

the Indonesians, and now we are going to be colonized by (the United Nations).’”

But the nation’s first president — whose serious reflections turn animated when he speaks to the future,

becoming especially fiery when he exhorts young people to action — is a believer in the necessity of

internationalism and the potential for peace.

“When South Sudan, now the youngest state in the world, got independence, we sent a mission to participate

in celebrations,” Gusmão said. Once South Sudan started to see violence, Gusmão himself visited the country

to offer counsel. “When (Timor-Leste) came in 2006 to a crisis, we did everything to avoid it. They didn’t.

Now it is a mess with one million refugees.”

Throughout a day of discourse — which included a lunch discussion among the visitors, University faculty

members, graduate students and undergraduates — the ideals of diplomacy, peace and international

institutions poured forth.

“These are the values (that) animate my young country,” Araújo said. “I am here speaking for not just a young

country, but a young democracy that wants to move from being a post-conflict state to being a successful

state; a country that wants self-sufficiency, not charity; a country that believes in the rule of law.”

“Your actions bear all of our hopes and aspirations for what development can deliver and what justice can

deliver,” Steinfeld said.

Speaking to students as he left the room, Gusmão said: “The world’s future is in your hands and in your

brains.”

41

East Timor Takes Maritime Dispute With Australia to UN Court


Phil Mercer, VOA News, 28 September 2016

SYDNEY —

East Timor has accused Australia of being a bully as the International Court of Arbitration in the Netherlands

prepares to hear a decade-long dispute over the sharing of oil and mineral wealth in the Timor Sea.

East Timor — also known as Timor-Leste — wants the International Court of Arbitration in The Hague to

decide which country owns a large undersea oil and gas field. The East Timorese government believes

Australia is receiving more than it is entitled to under an international convention.

The court has said it will oversee a compulsory conciliation between the two countries on their disputed

maritime boundary, rejecting objections from Australia.

The judicial process could decide on which side of the maritime border lies a large oil and gas field over

which the two nations have a revenue-sharing agreement.

Both sides will now enter into a negotiation process that will take place behind closed doors over the next 12

months.

Jose Ramos Horta, the former East Timorese president, says his country is standing up to a bully.

“Throughout the Pacific region, Southeast Asia, people [are] looking at Timor-Leste with admiration. Wow,

they have the courage, the guts to stand up to this bullying regional power [and] taking immense risk,” he

said.

Australian officials have said that existing bilateral treaties between the Asia-Pacific neighbors had been

"hugely beneficial,” but that Canberra would accept the court’s decision.

The case has strained relations that have previously been close after Australia supported East Timor’s

successful campaign for independence from Indonesia in the late 1990s. The young nation is beset by serious

economic problems, with annual per capita income estimated at around $5,600.

In July, the U.N. Permanent Court of Arbitration ruled against Chinese claims to rights in the South China

Sea, supporting a case brought by the Philippines. In that case, Beijing refused to participate and has said it

does not recognize the ruling.


42

International court dismisses Australian challenge over Timor Sea border dispute


Patrick Kelly, World Socialist Website, 28 September 2016

Dismissing an Australian government challenge, the Permanent Court of Arbitration in The Hague issued a

ruling Monday upholding its authority to consider a case brought by East Timor over the disputed maritime

border in the Timor Sea.

The judgment is a significant blow to the Australian government. It marks another exposure of Canberra’s

contempt for international law and its rank hypocrisy over the resolution of maritime disputes. Earlier this

year, the government joined Washington in backing a dubious Permanent Court of Arbitration (PCA) finding

against China over territorial disputes in the South China Sea. The US-backed case, brought by the former

Philippine administration, was aimed at bolstering the Obama administration’s aggressive drive to maintain its

military hegemony in the Asia Pacific.

While Canberra has demanded that China abide by the arbitration ruling, in 2002 Australia declared that it

would not recognise any arbitrated case involving its own disputed maritime border with East Timor. This

unilateral withdrawal from a key aspect of the United Nations Convention on the Law of the Sea (UNCLOS)

was aimed at preventing any legal scrutiny of the Australian government’s thuggery and intimidation of East

Timor during negotiations over the division of multi-billion dollar oil and gas fields in the Timor Sea.

Unable to pursue compulsory arbitration, the East Timorese government has used a never-before invoked

clause of UNCLOS, allowing for compulsory conciliation. This involves The Hague court considering the

rival sea boundary claims and issuing non-binding recommendations that are supposed to be the basis of a

negotiated settlement.

Even this limited legal mechanism is regarded as a threat by the Australian government. It sought to have the

case thrown out on the grounds that the PCA was not legally authorised to hear it.

The 33-page ruling issued by the court on Monday dismissed this claim, sharply rejecting all the arguments

advanced by the government’s legal team.

These arguments centred on the supposed sanctity of the 2006 Treaty on Certain Maritime Arrangements in

the Timor Sea (CMATS), specifically, one of the treaty’s clauses that stated the maritime boundary between

Australia and East Timor would be left unresolved for 50 years. Australian government lawyers declared that

the East Timorese were “violating treaty commitments,” adding that their challenge to the court was

“motivated by a serious regard for principle … at a time when the rules-based order globally is under serious

challenge, it is vital that countries stand by their treaty commitments.”

These statements brazenly flew in the face of Australian imperialism’s record in Timor. In 1975 the then

Labor government encouraged the Indonesian military regime’s invasion of the former Portuguese colony.

Subsequent Labor and Liberal-National governments collaborated with Jakarta in carving up the lucrative

energy reserves in the Timor Sea. In 1999, Canberra made a tactical shift, endorsing East Timorese

independence and launching a military intervention into the territory in order to defend its predatory economic

and geostrategic interests. Subsequent negotiations with the Timorese government featured Australian threats

to crash the Timorese economy by sabotaging new oil and gas production, and countless dirty tricks, including

the planting of surveillance devices in Timorese government offices by Australian intelligence agents posing

as aid workers.

The PCA’s Conciliation Commission, chaired by former Dutch diplomat and UN jurist Peter Taksøe-Jensen,

gave short shrift to every aspect of the Australian challenge to its competence to hear the case.


43

Under international law, a maritime border case cannot be brought to The Hague if two states have agreed

upon another means of settling the dispute and that this agreement excludes other procedures. Australian

government lawyers claimed that an exchange of letters in 2003 between John Howard and Mari Alkatiri, then

Australian and East Timorese prime ministers, constituted a legal agreement to determine a maritime

boundary through negotiation. The PCA dismissed this, explaining that the letters did not constitute a legally

binding agreement and therefore had no bearing.

Australia’s lawyers also maintained that the CMATS treaty bolstered the 2003 correspondence, with the 50-

year exclusion of settling on maritime borders supposedly blocking any potential involvement of The Hague.

The PCA also rejected this argument. It noted that “what CMATS is not—and what Article 281 [of UNCLOS]

requires—is an agreement ‘to seek settlement of the dispute by a peaceful means of [the Parties’] own choice.’

CMATS is an agreement not to seek settlement of the Parties’ dispute over maritime boundaries for the

duration of the moratorium.”

The court stated that the conciliation process had to be completed within 12 months.

Xanana Gusmão, the former Timorese president and prime minister who headed the country’s legal delegation

in The Hague, issued a statement after Monday’s judgment. “Just as we fought so hard and suffered so much

for our independence, Timor-Leste will not rest until we have our sovereign rights over both land and sea,” he

said.

In reality, the Timorese case before the PCA is a desperate manoeuvre aimed at placing some pressure on the

Australian government and the American-Australian oil companies that have the rights to the Timor Sea’s

energy reserves. Dili has the right to abrogate the CMATS treaty, but does not want to alarm transnational

corporate investors by doing so unilaterally.

Timorese lawyers in The Hague told the court that government ministers recently travelled to oil and gas

company headquarters in Australia and the US, seeking input on a potential post-CMATS treaty that “meets

the investors’ requirements.”

The Timorese government sought to curry favour with the Australian government by dropping a legal case it

initiated over Canberra’s bugging operation during the CMATS negotiations. The case triggered provocative

police and intelligence raids in 2013 targeting an Australian lawyer representing East Timor, Bernard

Collaery, and a retired Australian Secret Intelligence Service (ASIS) officer who blew the whistle on the

bugging operation.

The Timorese ruling elite is desperate to secure additional investment in the Timor Sea—both to further line

its own pockets, and to stave off the threat of outright state collapse. Currently 95 percent of government

revenue is derived from royalties generated by the Bayu-Undan oil and gas project, which is forecast to run

dry in less than a decade. The country’s sovereign wealth fund is currently worth $16 billion, but the global

plunge in oil and gas prices has resulted in government spending exceeding limits aimed at ensuring the

fund’s ongoing growth.

https://www.wsws.org/en/articles/2014/03/06/timo-m06.html

44

Wordpress Blogpost

https://markskulley.wordpress.com

Mark Skulley, 26 September 2016

The Permanent Court of Arbitration has thrown out the Turnbull government’s argument it did not have

jurisdiction to hear a dispute about disputed maritime boundary between Timor-Leste and Australia.

In a decision published on Monday the five-member Commission said it was competent with respect to the

compulsory conciliation over the maritime boundary.

“There are no issues of admissibility or comity that preclude the Commission from continuing these

proceedings,” the decision.

Under the ruling, the 12-month period for the compulsory conciliation will run from the date of the arbitration

which was dated September 19.

The conciliation will not be binding on the parties, but the Turnbull government will come under increased

international scrutiny during the process, which is conducted under the UN

Convention on the Law of the Sea (UNCLOS).

The Timor-Leste government welcomed the decision, which followed a three-day hearing held in The Hague.

Timor’s Minister of State Agio Pereira – who is also their agent in the proceedings – said: “This process is an

opportunity to set a good example in our region and we will engage with respect for the commission and its

recommendations, ever conscious of the importance of maintaining the best possible relationship with our

close neighbour Australia.”

Chief Negotiator and former Prime Minster, Xanana Gusmão thanked the Commissioners for their expertise

and noted “Just as we fought so hard and suffered so much for our independence, Timor-Leste will not rest

until we have our sovereign rights over both land and sea.”

Before the decision, Foreign Affairs Minister Julie Bishop and Attorney-General George Brandis said that

Australia would abide by the Commission’s finding on jurisdiction but noted the final report was not binding.

Link to further information on the proceedings:

http://www.pcacases.com/web/view/132

Link to today’s decision:

http://www.pcacases.com/web/sendAttach/1921

https://markskulley.wordpress.com/

http://www.pcacases.com/web/view/132

http://www.pcacases.com/web/sendAttach/1921

45

Green light. Commission proceeds. (Blogpost)


Timor Sea Forum, 26 September 2016

The Conciliation Commission issued its Decision on Competence on the 19th of September and it was made

public today. The Permanent Court of Arbitration put out a Press Release announcing that "In its Decision, the

Commission held that it was competent to continue with the conciliation process.”

This means the challenges of Australia to the Commission’s existence have been overcome and the

proceedings concerning the establishment of a maritime boundary between Australia and East Timor will

continue.

The Government of Timor-Leste responded with a media release saying:

Now one question for me is "how will the Australian Government respond?"

In their challenges Australia made it clear that they do not want to be a part of this process. Julie Bishop

herself was tweeting to remind everyone that the outcome was not binding. The Decision of the Commission

has something to say about the engagement of the parties:

So if Australia is committed to engage in 'good faith' does that mean that they will take on board the

suggestion of the Commission in paragraph 108 and participate with an acceptance of the process, willingness

to seek agreement and with an intention to give serious consideration to the recommendations of the

commission?

We have not yet seen the official response from the Australian Government, but if it involves reiteration of the

'non-binding outcome of the process' it would not be a sign of 'good faith' and would fly in the face of

Australia's loud endorsement of the United Nations Convention on the Law of the Sea as the dispute

resolution solution for the South China Sea. After all this Conciliation Commission is set up under UNCLOS

to help solve disputes and [Decision Paragraph 42] "provides for compulsory conciliation where a State elects

to exclude sea boundary delimitation from arbitral or judicial settlement.” This is the exclusion Australia

made in a targeted way two months prior to the independence of Timor-Leste.

It's no wonder that Senator Penny Wong has jumped in to say:


46

Let's get on with it. I'm for that.

But doesn't the proceedings mean we all have to wait 12 months for the report of the Commission due on the

19th of September 2017? No.

UNCLOS Annex V notes that the Commission’s report "shall record any agreements reached and, failing

agreement, its conclusions on all questions of fact or law relevant to the matter in dispute and such

recommendations as the commission may deem appropriate for an amicable settlement.”

So agreements can be made in the process and will be encouraged.

I think in the coming weeks and months we need to make it clear to the Australian Government that we want

them to stop avoiding this issue and get on with it. There are activities coming around the country to help you

do that. One of the best ways in the 'old school' method of going to talk to your local federal member to ask

them about their position on a maritime border in the Timor Sea.

Let's get on with it.

47

After court ruling, Australia and East Timor discuss maritime boundary


Anthony Deutsch and Tom Heneghan, Reuters, 13 October, 2016

Australia and East Timor aim for an agreement over the disputed maritime boundary in resource-rich

waters between their countries, a court said on Thursday, signalling a deal could be reached by next

September.

Confidential meetings between the two countries have been "very productive" and would continue

next year, the Permanent Court of Arbitration in The Hague said in a statement.

The court ordered compulsory arbitration in the case last month after East Timor requested the

process against objections from Australia, which negotiated a revenue sharing agreement that gave it

until 2056 to settle the boundary issue.

Australia played a critical role in East Timor's independence from Indonesia in 2002 and shortly after

that negotiated the revenue sharing deal for the large Greater Sunrise oil and gas field. East Timor

calls the deal unfair.

"All agreed we should aim to reach agreement within the timeframe of the conciliation process," the

court said, referring to the compulsory arbitration. That process has a deadline of Sept. 19, 2017.

"I was very pleased to see a sincere willingness on both sides to come together in a spirit of

cooperation," said Peter Taksoe-Jensen, who headed the arbitration talks.

"Both sides are to be commended for being willing to move beyond past differences and work hard

to create conditions conducive to achieving an agreement."

East Timor appealed to the court for the arbitration that could determine the border through the

Greater Sunrise oil and gas field. It has said that Australian espionage on its diplomats rendered

recent agreements on it flawed.

East Timor says the boundary should fall halfway between it and Australia, which had argued that

defining the border that way could prompt Indonesia to also seek to shift its sea border and gain

ownership of disputed oil fields.

Greater Sunrise contains an estimated 5.1 trillion cubic feet of gas and 226 million barrels of

condensate, although the border dispute and low gas prices mean its development is on hold.


48

Timor Sea dispute: Timor-Leste is running out of time


Bec Strating, Lowy Interpreter, 11 October 2016

Earlier this year, Timor-Leste initiated United Nations Compulsory Conciliation (UNCC)

proceedings under the United Nations Convention on the Law of the Sea (UNCLOS) to assist in

resolving its maritime boundary dispute with Australia. While Australia disputed the jurisdiction of

the UNCC, the Conciliation Commission issued a decision last month that it was competent to

continue with conciliation proceedings.

This decision was met with commentary that presented this as a win for ‘David’ (Timor-Leste)

against ‘Goliath’ (Australia).

However, it's not clear that the Conciliation process will help resolve the Timor Sea dispute, as it

does not circumvent Timor-Leste’s key problem: Australia’s exclusion of binding compulsory

dispute resolution procedures. Looking ahead, it is important to consider the contribution that the

UNCC might make to possible avenues for dispute resolution.

The UN Conciliation Commission

Many reports in the Australian media tended to conflate the UNCC with the now relatively famous

Permanent Court of Arbitration (PCA) (see here, here and here). With the agreement of both parties,

the PCA acts as a Registry in the UNCC. However, the UNCC itself is not a court or an arbitral

tribunal, a distinction which matters for its prospective role in dispute resolution.

Article 287 of UNCLOS specifies the courts or tribunals that can settle disputes through a binding

decision: the International Tribunal for the Law of the Sea (ITLOS); the International Court of

Justice (ICJ); or an arbitral tribunal or special arbitral tribunal constituted under UNCLOS. In 2002,

Australia excluded compulsory procedures entailing binding decisions in relation to maritime zones,

which is permitted under UNCLOS. Consequently, the international courts and tribunals listed in

Article 287 do not have jurisdiction to hear seabed boundary delimitation disputes involving

Australia.

The UNCC was established under UNCLOS to assist states to reach an amicable settlement of

relevant disputes. A Commission of five conciliators will produce a report (due in September 2017)

for Australia and Timor-Leste to assist bilateral negotiations. Under UNCLOS, states are obliged to

participate in compulsory dispute resolution procedures if parties have failed to reach agreement

through peaceful means (for example, bilateral negotiations).

Unlike the decision of courts or tribunals, the UNCC report will not be binding on either party.

Future meetings of the UNCC will be conducted confidentially and most likely not at The Hague. In

the short-term, the Timorese government might find it difficult to keep the UNCC on the Australian

media agenda.


http://eurekastreet.com.au/article.aspx?aeid=49973

http://eurekastreet.com.au/article.aspx?aeid=49973


https://www.theguardian.com/world/2016/sep/26/australia-fails-in-attempt-to-block-timor-leste-maritime-boundary-case

https://pcacases.com/web/sendAttach/1813

https://pca-cpa.org/en/news/pca-press-release-conciliation-between-the-democratic-republic-of-timor-leste-and-the-commonwealth-of-australia-2/

49

Under UNCLOS, there is an obligation for Australia to negotiate with Timor-Leste in ‘good faith’ on

maritime boundaries. The UNCC proceedings will compel the Australian government to reverse its

current refusal to discuss boundaries with Timor-Leste. However, while Australia has an obligation

to negotiate and pursue those negotiations as far as possible, it does not have an obligation to reach

an agreement based on the report.

Pathways to dispute resolution

As the Timor Sea conciliation process is unprecedented, it is difficult to precisely anticipate how it

will function. However, we know that the fundamental purpose of UNCC is to conciliate, not

arbitrate. It must assist state parties to find a pathway through maritime disputes in order to achieve a

negotiated settlement. Arguably, then, the UNCC is obliged to find a ‘middle-ground solution’ that

will best support dispute resolution, making it likely that the report will aim to get both states to

compromise.

Inevitably, the dispute will return back to the realm of bilateral diplomacy. The question is whether

either state is likely to compromise in the next round of negotiations.

Australia and Timor-Leste are engaged in a dispute that entails different perspectives on points of

maritime law. Since 2012, Timorese governments have reinvigorated demands for permanent

maritime boundaries. Its public diplomacy campaign has co-opted civil society narratives that

boundaries are fundamental for ‘full sovereignty’. If permanent boundaries are the goal of the

Timorese government, then presumably it would be willing to compromise its territorial claims in

order to reach a boundary settlement with Australia.

On the maritime boundary between Australia and Timor-Leste, Australia favours principles of

‘natural prolongation’, which provides it seabed territory that extends to the edge of a geomorphic

continental shelf (to the Timor Trough, see map). In contrast, Timor-Leste favours a ‘median’ line,

which is supported by post-UNCLOS jurisprudence.

Source: DFAT

http://www.austlii.edu.au/au/journals/UQLawJl/2005/7.html

http://www.austlii.edu.au/au/journals/UQLawJl/2005/7.html

https://theconversation.com/whats-behind-timor-lestes-approach-to-solving-the-timor-sea-dispute-57883

50

Hypothetically, the conciliation might recommend that the states take the median line as the basis for

its negotiation. In this case, the UNCC report could advance public pressure on Australia,

contributing to Timor-Leste’s public diplomacy campaign.

But, crucially, the negotiation process would not end there.

Timor-Leste’s shift towards permanent maritime boundaries has been motivated by the pursuit of the

lucrative Greater Sunrise gas field, in order to build an export pipeline to support the onshore

processing plans that are already underway. The Treaty of Certain Maritime Arrangements in the

Timor Sea (CMATS), signed and ratified by Australia and Timor-Leste, was designed to oversee the

joint development of the disputed Sunrise field. Timor-Leste now considers this treaty invalid. The

contested line that determines Sunrise ownership is the eastern lateral (see map).

Australia justifies its claim to roughly 80% of the field on the basis of ‘simple equidistance’. In

contrast, Timor-Leste’s Sunrise ownership claim is based on a belief that the eastern lateral should be

drawn further to the east.

Problematically, UNCLOS provides few substantive rules in seabed boundary delimitation beyond

an agreement that provides an ‘equitable solution’.

If the report recommends that Sunrise be split 50:50, the real question is whether the Timorese

government would be willing to compromise half the field. It runs the risk of domestic political

backlash if it gives up half of what has been presented as a sovereign entitlement. Its ambitious

economic plans are even less viable if it only attains half of Sunrise.

The problem with the Timorese government’s foreign policy strategy is that Timor-Leste is running

out of time, and Australia knows it. The Bayu-Undan oil field will stop producing in 2022 and the

$16 billion sovereign wealth fund could be depleted by 2025. From 2010 to 2015, the revenues that

flowed from the Joint Petroleum Development Area furnished approximately 90% of Timor-Leste’s

state budget, and 70% of total GDP.

Timor-Leste’s bargaining vulnerabilities means it is likely that Australia will prolong boundary

negotiations for as long as possible. There is no precedent for what happens if negotiations fail again.

Article 298 of UNCLOS suggests that if the negotiations do not result in an agreement, the parties

‘by mutual consent’ would submit to the ICJ, ITLOS or a tribunal. But the key here is ‘mutual

consent’: that sovereign states cannot be brought before an international court without its consent is a

key principle of international law.

Ultimately, the UNCC does not circumvent Australia’s exclusion. Even if Australia did consent, a

court could arguably not rule without the involvement of Indonesia. A resolution could take years.

In terms of functional sovereignty, Timor-Leste risks becoming a failed state if a development

agreement is not reached soon.

http://www.eastasiaforum.org/2016/06/04/unravelling-timor-lestes-greater-sunrise-strategy/#more-50794



http://interfaxenergy.com/gasdaily/article/21748/un-hearing-puts-spotlight-on-timor-sea

http://interfaxenergy.com/gasdaily/article/21748/un-hearing-puts-spotlight-on-timor-sea

http://dfat.gov.au/geo/timor-leste/pages/timor-leste-country-brief.aspx

http://www.lowyinterpreter.org/post/2014/11/25/Australia-East-Timor-and-the-Timor-Gap.aspx

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