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Wednesday, 8 March 2000
Page: 14226

Mr CAMERON THOMPSON (10:09 AM) —This agreement on the Timor Gap Treaty shows some of the benefits of the actions that the Australian government and the Australian Defence Force have been involved in in recent times. We have, in the words of one columnist I have read, basically given birth to or assisted as midwives in the birth of a new country—East Timor. Its future will be an interesting prospect for the people who live there. It will also be a big burden for all the countries associated with the new nation of East Timor because, in part, it will be our responsibility to ensure the success of the nation that has been born as a result of all these activities.

In doing so, I think it is important that we set about trying to ensure the financial and economic future of East Timor. In passing, I am disappointed in the opposition spokesman, the member for Kingsord-Smith, Mr Brereton. We heard 8½ minutes from him on this issue. East Timor is going to be a very important part of our region. It has been all the way through. He can scoff. But the fact is that East Timor will share an important treaty with us on the exploration of oil and gas in this region. This will provide jobs and it will provide much of the economic base on which East Timor will rely. The future of our relationships with East Timor and with Indonesia will depend very much on the success of this treaty.

A significant thing will be whether or not the provisions of the treaty that has been in place with Indonesia for some time will remain in full. The result of this changed treaty was referred to by John Loizou in the Northern Territory News on 12 February 2000. He said:

The Northern Territory News has learned that it is also likely to mean the eventual relocation of the zone of co-operation's administrator, the Timor Gap Authority, from Darwin to Dili.

I think that is a significant event because it does show the change in the power relationship. An independent nation like East Timor will have the opportunity to take a much more effective role in the administration of this zone of cooperation than it ever could as a province of Indonesia. I think that is an interesting prospect. That will mean a transfer of power to the new East Timor nation, a transfer of jobs and a greater economic stability than could ever have happened under the previous relationship with Indonesia. It is important that we recognise the value of that.

Historically, I would like to refer to a speech made by the Foreign Minister, Alexander Downer, at the National Press Club on 1 December 1999. Firstly, he said:

Australia's policy on East Timor is clearly in line with our national interests.

Prior to the creation of INTERFET and the actions that followed that, he said:

And in considering in our national interest in this matter, one point I've often made is that East Timor stood in the way of establishing a genuine long-term productive relationship between Australia and Indonesia.

That is the problem of East Timor that he is referring to there. He went on:

In effect, the presence of East Timor on our bilateral agenda—

between Australia and Indonesia, that is—

made relations with Indonesia very one sided. For example, between June 1975 and November 1999, there have been 12 official visits by Australian Prime Ministers to Indonesia—indeed, by every Prime Minister from Whitlam to Howard. In that same period, the Indonesian President has not visited Australia once.

That is an indication of how one sided that relationship was as a result of this impediment in the relationship over East Timor. He went on to say:

President Soeharto did not visit because he knew there would be massive demonstrations on the subject of East Timor. The very fact that he felt unable to come here shows there was a very big problem in the bilateral relationship, one that made the relationship very unbalanced. From that lopsided situation we are now able to move on to resolve past tensions, and for both sides to have a more balanced and stable relationship.

That is a very important point to consider in this process. Juxtaposed to those comments from the Foreign Minister, I move to an article on 19 February this year in the Weekend Australian. There was a discussion of the impending visit of the new President of Indonesia, Abdurrahman Wahid, to Australia and whether that will be in March or in May. In all that time, 12 years, there has been no visit by any Indonesian president. Now, in this very short time frame, we have the prospect that we will see the new president in Australia. That change in our relationship is a welcome development.

The foreign affairs spokesman on the other side mentioned some debate about whether or not Indonesia would now want further discussions about the seabed boundary between Australia and Indonesia. That is referred to in the same article in the Weekend Australian:

Meanwhile, the Indonesian Government said yesterday it wanted to hold talks on its sea boundaries with Australia after the separation of East Timor from Indonesia. ... Mines and Energy Minister ... had said the sea boundaries should be redefined to take into account the exploration of oil and gas under the Timor Gap treaty, which has been transferred to the UN.

That is right: they may very well want to have talks along those lines. But the fact is that at the moment there is a very effective agreement that is working, providing for three zones in that boundary. It must be one of the few places in the world where a boundary actually has a series of lines in it. It looks more like a venetian blind than a boundary. It provides for zone A, the area of cooperation between Australia and now the new state of East Timor under its United Nations administration; zone B, the area which Australia basically administers but in which 10 per cent of tax collected goes to the East Timorese authorities; and zone C, which is basically administered by the East Timorese and in which 10 per cent of the revenue flows the other way, back to Australia.

The fact that we have been able to settle so quickly on this treaty coming into place, with basically the same old treaty with Indonesia able to be transferred straight over and administered in a new relationship between Australia and East Timor, shows the underlying strength of the relationship between Australia and Indonesia. A lot of work has gone into that over the years, and the fact that that has not become a huge source of irritation in this dispute is significant and shows that there is a maturity of the relationship. While the Indonesians will no doubt want now to have a series of discussions on the subject, the fact that there has not been an immediate blow-up on the subject is healthy and shows that our relationship is healthy.

I would like to discuss some of the benefits of this agreement coming into place. We should look first at the announcement itself. The foreign affairs spokesman on the other side referred to the agreement that was signed between Australia and the United Nations administration. I would like to read into the record a part of that exchange of notes between the United Nations Transitional Administration in East Timor and the Australian government. The UNTAET note states:

UNTAET therefore has the honour to advise the Australian mission in East Timor that all rights and obligations under the Timor Gap treaty previously administered by Indonesia are assumed by UNTAET, acting on behalf of East Timor until the date of independence of East Timor. UNTAET, acting on behalf of East Timor and Australia, may enter into subsidiary arrangements or agreements relating to the continued operation of the terms of the treaty. In agreeing to continue the arrangements under the terms of the treaty, the United Nations does not thereby recognise the validity of the integration of East Timor into Indonesia. If the understanding of Australia is in accordance with the foregoing advice, UNTAET has the honour to propose that this note and Australia's confirmatory note in reply shall constitute an agreement between UNTAET, acting on behalf of East Timor and Australia, which shall be applied as of 25 October 1999.

A short part of Australia's reply says:

The Australian mission has the honour to advise that the foregoing proposal is acceptable to the government of Australia and to agree that the UNTAET note and this reply shall constitute an agreement between the government of Australia and UNTAET which shall be applied as of 25 October 1999.

That is the guts of the two notes that went backwards and forwards and sealed in concrete the agreement between Australia and East Timor under the United Nations. Of course, once East Timor gains its full independence they may well want to come back and have further discussions on the shape of that agreement as well. But of the fact that it is a solid agreement there can be no doubt because it has resulted in a flurry of activity up there.

The fact that we have been so quickly able to establish this agreement on solid ground has resulted in a couple of developments, the first one being a joint announcement—and I have a copy of the press release here from Senator Nick Minchin—by the UNTAET administrator and Senator Minchin in which they announced the unlocking of a very significant petroleum development in the Bayu-Undan field as well as in the whole of the zone of cooperation in the Timor Sea region. That agreement, which is being led by Phillips Petroleum, involved a capital expenditure of $US1,400 million and the recovery of up to 400 million barrels of condensate and liquified petroleum gas. The first phase provides for a foundation for the second stage of development that will deliver gas to Darwin for use in Australian markets or for export as liquified natural gas.

That shows—if you are purely interested in this whole exercise from a greedy Australian perspective, a purely parochial viewpoint from our perspective—that the benefits that will flow on to Darwin from having a solid agreement on the zone of cooperation are manyfold. It is very good to see that occur. I am sure that the member for the Northern Territory will be welcoming that, and it is something that we should all welcome for sure. But, in addition to that particular project to which I refer, further developments have followed in relation to the Sunrise gas resource, involving a deal between Woodside Petroleum and Shell Australia. There was discussion of that on 7 March in the Australian where it was reported:

Woodside Petroleum and Shell Australia are on the verge of staging a $5 billion natural gas coup after securing a conditional promise to buy 110 petajoules of gas a year from the Sunrise field in the Timor Sea.

This Sunrise field does extend into the area that, as I said, looks like a venetian blind and that involves joint arrangements between Australia and the new United Nations administration in East Timor and will result in benefits as a consequence.

To underline that, the agreement involves Canada's Methanex Corp and they have signed a letter of intent to build a methanol plant near Darwin, fed by gas from Sunrise, on condition enough customers can be signed for development to proceed, gas reserves are confirmed and government approvals granted. The partners are focusing on proving-up the recoverable reserves in Sunrise, and this is always a bit of a difficult process but it is under way. It is estimated currently that there are 9.16 trillion cubic feet of gas and 321 million barrels of condensate in the Sunrise area, which extends into the zone of cooperation with East Timor. That is another massive development that can flow from this good news. So in its efforts to help resolve the problem, the question of East Timor, I think the government of Australia has done a great service not only to the people of East Timor but also to the people of Australia, because we will be facilitating great developments, particularly in the Northern Territory, based on the strength of the resources there in the zone of cooperation.

I do not want to continue further because I think the major ramifications of this have been covered in what I have said. Fundamentally, if we take a wider world view rather than the parochial one that I have been focused on in the last five minutes, the question to ask is with respect to the future of East Timor itself and making that nation financially viable so that it can provide for the people who live there. As I said, there will be benefits to East Timor as a result of the zone of cooperation agreement. I am pleased to welcome this legislation and to endorse it.