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Wednesday, 24 March 2004
Page: 21765


Senator O'BRIEN (10:27 AM) —The Greater Sunrise Unitisation Agreement Implementation Bill 2004 and the Customs Tariff Amendment (Greater Sunrise) Bill 2004 give effect to the international unitisation agreement between Australia and the Democratic Republic of Timor Leste for the development of the Greater Sunrise petroleum resources. This agreement was signed by Australia and Timor Leste in Dili on 6 March 2003. The interests of both Australia and Timor Leste will be best served by the Greater Sunrise petroleum resources being developed as soon as possible. In particular, the development of these resources will generate for East Timor revenue desperately needed to rebuild an independent and sustainable future.

Labor warmly welcomes Timor Leste into the community of nations and welcomes the progress achieved by the people and government of Timor Leste in working to build a viable, self-sustaining, independent and sovereign state. The status of Timor Leste as an independent nation amongst all others is a tribute to the resolve of its people. But the resolve of a people is not enough for a country such as Timor Leste to take its place amongst the prosperous nations of the planet. That nation continues to face significant economic and social challenges in its nation building, including the re-establishment of essential social services, revitalising the economy, generating employment and achieving food self-sufficiency.

The development of the petroleum resources of Timor Leste and the funding that will flow from this is vital to that country's economic and social development. The passage of these bills is just a small step for Australia to take in enabling that development to occur. However, more important for Timor Leste than the passage of these bills is the conclusion of a permanent maritime boundary. This government has shown a desire to ram these bills through both houses of parliament in just one day; yet it appears in no hurry whatsoever to meet with representatives of the Democratic Republic of Timor Leste to negotiate a permanent maritime boundary.

Worse than this, its actions with respect to these bills are completely at odds with the concept of negotiating in good faith. There can be no doubt that this was all about bullying the government of Timor Leste and pressuring them in the lead-up to maritime boundary negotiations. Unlike the bullyboy tactics of the Howard government and those particularly of the foreign minister, Labor in government will negotiate in good faith with Timor Leste and in full accordance with international law and it will do all things reasonably practicable to achieve a negotiated settlement within three to five years. I call on this government to match that commitment. The shadow minister, Mr Fitzgibbon, tells me that this government has told East Timor:

... it does not have the resources to meet on a monthly basis on this issue as requested by Timor Leste.

Thanks to the economic reforms—which were shirked, might I say, by the current Prime Minister when he was Treasurer but implemented by Labor after 1983—Australia is one of the wealthiest nations in the world. For the Howard government to say that Australia does not have the resources is an affront to the people of Timor Leste, one of the poorest countries in the world.

Such a statement by the Howard government to Timor Leste can mean only one of two things—either it is a diplomatic smokescreen or it is a portent of the state of the Commonwealth budget after the Howard government, lacking an agenda and looking very tired, has attempted to buy itself back into office. Labor considers that Australia should generously assist the people of Timor Leste—the people who assisted our troops so greatly and at great cost to themselves during the dark days of the Second World War—as they work towards an independent future. We should be comprehensively engaged in supporting sustainable development in that country, and the settlement of a permanent maritime boundary is a critical component of this. The dragging out of negotiations on this issue by this government is shameful behaviour in the international community.

This government can, and I guess in all likelihood will, drag out negotiations on what is the single most important issue for Timor Leste—the permanent maritime boundary—yet it condemned the Labor Party for delaying these bills by just one week after providing less than 24 hours to review these bills when it had a whole year to draft them. This government claimed that referral to the Senate Economics Legislation Committee could delay the bills for a year. Is this government already preparing itself to lose control of the legislative agenda, which under the quaint practices of the Westminster system is in the sole control of the government of the day? If the minister had answered Labor's questions relating to the customs tariff amendment bill when the bills were first introduced, the bills may not have been delayed at all. Woodside's move to immediately address Labor's concern on Australian industry participation puts Minister Macfarlane's lack of knowledge on this matter into sharp focus. Now that Woodside has provided the written assurances that should have been provided to Australian industry and Australian workers by this government, Labor is pleased to give passage to these bills.

Petroleum projects wholly in Australian waters must undertake a process of consultation with Australian industry to maximise Australian industry participation and to qualify for the duty-free entry of goods not able to be sourced competitively within Australia. This process is known as the enhanced policy by-law scheme, item 71 of the fourth schedule of the Customs Tariff Act. In its current form as drafted by the Howard government, the Customs Tariff Amendment (Greater Sunrise) Bill 2004 means that in the case of Greater Sunrise there will be no requirement for these consultative processes to occur. Unlike the anti-Australian business stance of the Howard government, Labor's view is that these processes should occur with respect to the Greater Sunrise area, and Woodside has now committed to undertake them. This government should have been looking after the interests of Australian industry and Australian workers, yet it was nowhere to be seen on this issue. The Senate committee process has been important and useful in allowing time for this issue to be addressed and resolved and allowing time to more fully review the bills to ensure that they are entirely consistent with what has been already agreed between Australia and Timor Leste and that they will not prejudice Timor Leste's right in the Timor Sea in any way.

As I said before, when these bills were originally introduced into the Senate, Labor had less than 24 hours to undertake this review, while the government had sat on them for a year. The all-party committee has concluded that in all respects these bills are entirely consistent with the Timor Sea Treaty and the international unitisation agreement as they were signed by both the Australian government and the Democratic Republic of Timor Leste in Dili on 20 May 2002 and 6 March 2003 respectively. For that reason—that the bills simply implement what has already been agreed between the two countries—Labor is happy now to give the bills passage. Labor is not happy about the things that have not been agreed, however, and calls on this government to do the right thing and to negotiate in good faith and in a timely manner with Timor Leste to establish a permanent maritime boundary that is just and fair and that reflects the joint aspirations of both countries. The Labor Party is not alone in its deep concern about this issue. This is one of the main concerns raised in evidence to the inquiry.

It is also important to Labor that the passage of these bills in no way prejudices Timor Leste's right in the Timor Sea or the maritime boundary negotiations. I note that article 2(b) of the Timor Sea Treaty states:

Nothing contained in this Treaty and no acts taking place while this Treaty is in force shall be interpreted as prejudicing or affecting Australia's or East Timor's position on or rights relating to a seabed delimitation or their respective seabed entitlements.

I also note, however, the concerns expressed by the Prime Minister of Timor Leste, Dr Mari Alkatiri, that the Howard government's statements and actions are inconsistent with the spirit and the letter of the international unitisation agreement.

While Labor shares these concerns and calls again on the Howard government to act in good faith on these issues, we are satisfied that these bills do not, in themselves, prejudice in any way Timor Leste's rights in the Timor Sea or the negotiations to establish a permanent maritime boundary. The concerns expressed by Dr Alkatiri lie not within these bills but on the shoulders of this government.

The other major area of concern raised in evidence to the inquiry relates to whether any revenue generated from the Greater Sunrise resource should be held in trust or escrow until such time as the maritime boundary dispute between Australia and Timor Leste is settled. According to the Timor Sea Justice Campaign this would remove any incentive for Australia to delay a settlement on the maritime boundary and would remove the possibility of Australia being unjustly enriched at the expense of East Timor. Under a Labor government this will be totally unnecessary because we will negotiate in good faith with the people of Timor Leste and we will do all that we can to settle the maritime boundary issue expeditiously. In any case, the Attorney-General's Department said that there is no need for a trust or escrow account because the unitisation agreement itself specifies the allocation of the proceeds between the two countries.

The Senate committee noted that there is provision in the unitisation agreement for either country to request a review of the production sharing formula and for the formula to be altered by agreement between Australia and Timor Leste. The passage of these bills will provide the developers of the Greater Sunrise field with the regulatory certainty that is so important to attracting investment capital and product markets to underpin development, for which there is intense global competition. Timely development of Greater Sunrise will deliver investment, exports, jobs and revenue to both countries. Timely agreement on a permanent maritime boundary will provide many more opportunities for economic development for both countries, but particularly for Timor Leste in its enormous challenge to rebuild an independent sovereign state and provide for the economic and social welfare of its people.

Labor, as I said, has deep reservations about the conduct of the Howard government over the course of this entire affair—the bullying of the East Timorese and the contemptuous approach the government has taken in the Senate in relation to these bills. As far as I am aware, however, no representative of the Democratic Republic of Timor Leste has asked that these bills not be passed. We also note that Timor Leste must legislate for similar measures for these matters to take effect. In these circumstances, we do not intend to obstruct passage of this legislation. Ultimately, we believe, it will fall to Labor to address the damage to Australia's relationship with Timor Leste that this episode has caused and we will embrace that responsibility when it is presented to us by the Australian people, hopefully later this year.