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Wednesday, 8 March 2000
Page: 14236

Mr RUDD (10:55 AM) —I rise in support of the Timor Gap Treaty (Transitional Arrangements) Bill 2000. The purpose of the bill is to amend the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and related acts to reflect the fact that the United Nations Transitional Administration in East Timor, UNTAET, has replaced Indonesia as Australia's partner in the regulation and administration of petroleum operations in the Timor Gap.

In a press release dated 10 February this year, Foreign Minister Downer and Industry Minister Minchin indicated that, in talks in Jakarta in early February, Indonesian government representatives had agreed that, following the separation of East Timor from Indonesia, the area covered by the treaty was now outside Indonesia's jurisdiction and the treaty ceased to be in force as between Australia and Indonesia when Indonesian authority over East Timor was transferred to the United Nations. UNTAET, acting on behalf of East Timor, has agreed to assume all the rights and obligations previously exercised by Indonesia under the Timor Gap Treaty. This was formalised through an exchange of notes between Australia and UNTAET on 10 February 2000. This interim agreement is without prejudice to the position of the future government of the independent East Timor. Long-term arrangements over the Timor Gap, between the new independent government of the new state of East Timor and the Commonwealth of Australia, have yet to be determined. Those changes, when they do occur, will be reflected in subsequent amendments to this legislation.

The bill before us is consistent with Labor's approach to the future of the Timor Gap which was enunciated by the shadow foreign minister, Mr Brereton, in September 1998 and elaborated subsequently in statements of January 1999. Enactment of this legislation is critical in terms of the long-term economic viability of East Timor.

So far, it is estimated that over $US700 million has been spent on petroleum exploration and development in area A of the Timor Gap zone of cooperation since the treaty entered into force in 1991. The first commercial oil production commenced in July 1998, and both Australia and East Timor are presently being remunerated at a rate of approximately $US3 million per annum as a consequence of that development. It is expected, or at least it is hoped, that there will be commercial development soon of the Bayu-Undan and Sunrise-Troubador gas condensate fields. If this occurs, the investment will be considerable; and it is estimated that, subject to the magnitude of that investment, several tens of millions of dollars per annum to both East Timor and Australia will flow as a consequence of that regime for a period of up to 10 to 20 years, starting as early as the year 2004.

This brings me to the related question of East Timor's long-term economic development requirements and Australia's role in that regard. I would argue that there are principles which should govern this nation's future aid relationship with the emerging independent state of East Timor. The first is a simple one, but one which we will need to remind ourselves of in the years ahead, in this parliament and as a country. It is simply this: let us not forget East Timor as it slides from national and international attention, as it ceases to be newsworthy in the international news media, as it drops from the attention span of voting publics across the world; we must never forget East Timor. There are two reasons why we should not do so. One, of course, is a universal moral obligation which we have, given our historical engagement in East Timor, both in World War II and most recently. The second is what John Stuart Mill would describe as enlightened self-interest. East Timor lies within the immediate sphere of strategic interest of the Commonwealth of Australia, and it is in this nation's interest to ensure that there is a smooth and proper path of economic development in that newly independent state so close to our northern borders. That is the first principle.

If there is a second principle which should govern our future aid relationship with East Timor, it is this: we should learn from our experience with Papua New Guinea; we should not repeat the mistakes which both sides of politics in this country, when they have been the government of this country, have made in our national aid relationship with Papua New Guinea. I believe there is a bipartisan view across this parliament that there have been huge errors in our aid relationship with Papua New Guinea since 1975-76. A large part of those errors lay in the extent to which we have dedicated historically large resources to the delivery of budgetary aid for the government of PNG. We must intelligently and in a focused way research, understand and learn from the lessons of that aid relationship experience. We must not repeat the mistake with the new emerging government of the independent state of East Timor of delivering quantities, let alone large quantities, of direct budgetary assistance.

Before talking about the parameters which should govern our overall financial commitment to the future aid and economic development requirements of East Timor, we should focus on what, in fact, such a program of economic development should be. I draw the attention of honourable members to a very useful paper recently drafted and presented on this topic by Colin Barlow at the Australian National University and simply entitled, Development of East Timor. It is worth the attention of honourable members and the House in terms of some of the observations which Mr Barlow makes.

I believe that, when we construct our future aid program for East Timor, we should focus on three simple principles. The first is human capacity building. The record of the Portuguese in this period over nearly five centuries was a poor one indeed.

Mr Hollis —Appalling.

Mr RUDD —It was an appalling one, as my colleague rightly reminds me. Let us not have some view that there was some previous halcyon period in the political and economic evolution of East Timor—there was none. In fact, we can find extraordinary parallels between the absence of the development of the civil society of East Timor during the period of the Portuguese occupation and that which also occurred in Macau. If you looked at the different states, for example, of political evolution in Hong Kong versus Macau, you can see quite a different culture at work in the sophistication and the maturation of the local civil society in those entities by the time they returned to Chinese rule most recently. The Portuguese colonial record in East Timor exhibits all the hallmarks and much worse than we saw in their occupation of Macau. In the period since 1975, the record in terms of human capacity building during Indonesia's occupation was not much better.

Of course, most recently what we have seen is the wanton destruction of the physical infrastructure necessary to provide such basic things as education and training opportunities to this new and exceptionally young nation state—both in age of the nation state and age of the population of that nation state, that we see in East Timor. Australia's aid effort should therefore have as one of its first focuses, human capacity building through rebuilding and constructing afresh major institutions, major programs of education and skills formation, within that society. I am pleased to note that AusAID, so far, has indicated that that is also one of its priorities.

A second governing principle as far as our future aid relationship with East Timor is concerned should be the rebuilding and the construction afresh of the physical infrastructure of that economy. Again, we have seen graphically through the television news the wanton destruction across East Timor in the period following the independence ballot in early September last year. The requirement for the physical construction of roads, electricity infrastructure, water infrastructure and basic sanitation, all the things we take for granted in the operation of a modern nation state, let alone a developing nation state, lie as large challenges for this emerging new society. They become the building blocks for subsequent economic development.

The operation of market forces in an economy so impoverished as East Timor is unlikely to generate this sort of basic economic infrastructure. If we reflect on the economic developments of this country—particularly in the 19th century, the laying out of the rail infrastructure, the establishment of the electricity grid and the establishment of the water reticulation systems of the country—we see that they were not in the main provided by private operators operating within competitive markets. By and large they were laid down by the state. They are the basic tools and building blocks through which subsequent economic development, hopefully based on a properly operating and competitive market economy, subsequently occurs.

The third focus should be institution building. This is probably the most difficult of all. It relates to comments I have just made about the extraordinary period of Portuguese colonial occupation. There was no emerging civil society in this Portuguese colony. In the period of Indonesia's occupation, civil society consisted of how best to organise a revolutionary or independence movement in order to replace the Indonesian occupation.

The challenge facing the new and emerging government of East Timor is to construct, almost afresh, the civil society of that country. I am optimistic that the role of the Catholic Church in East Timor will be one of leadership in doing that. But the construction of a normal political exchange between competitive political parties in a normal electoral process—something which we have taken for granted in this country for the last 150 years—is something which is not taken for granted in East Timor. The assumptions which underpin our political process in this country are not alive in East Timor. Therefore, the challenge we face of how specifically to assist and construct indigenous organisations which can implant the basic principles of a normally functioning civil and political society must remain the third focus of what we seek to do in that country.

I repeat, as I said at the outset, that we must avoid like the plague the delivery of unqualified budgetary aid to the emerging government of East Timor. Our aid must be delivered with a clear orientation towards the three focuses to which I have just referred.

Related to the economic development requirements of East Timor is, of course, the associated development requirements of West Timor, which is still part of Indonesia and part of NTT province. I visited West Timor last November and it was an extraordinary experience. Already I have presented a report on that visit to the House of Representatives. The problem faced by the government of NTT province is simply this: subsequent to the independence of East Timor, NTT province became Indonesia's poorest province. The resource base of that provincial administration is appallingly thin. They have a small population, somewhere between two to three million, to which has been added, since the events of September last year, an additional 200,000-plus refugees from East Timor. Some of those have returned, but a large number still remain there.

Practical needs such as the provision of health services, housing services and expanded economic infrastructure are being felt keenly by the administration of that province. In my discussions with the provincial governor in Kupang in November, it was plain that, given the limited financial resources available to what is a very small provincial administration within what is already a stretched national fiscal environment, this administration was facing real challenges in meeting the new needs and the new dislocations caused by the influx of people from the east.

I am also pleased to note that AusAID, in its involvement in the delivery of our historical aid program to NTT province, plans to continue and I hope expand that aid delivery program. Not only is that necessary, given the large influx of refugees into West Timor; it is also desirable given the benefit which such a continued program would give to our overall bilateral relationship with Jakarta. If you are looking at the world from Jakarta's perspective, it is worth while to take note of the fact that when they in Jakarta see a large delivery of aid programs into East Timor to build the new nation state, which is entirely appropriate, they often ask where is the parallel international interest in the remaining 206 million people of the Indonesian republic, many of whom exist in dire poverty—and West Timor, NTT province, is the most impoverished part of that republic.

On the question of the refugees themselves in West Timor, I spent some time last November visiting a large number of the camps. The conditions in those camps then were appalling. Since the commencement of the wet season, they are trebly appalling. In the report that I presented to the parliament last November, I warned of the likelihood of large-scale mortality among children, in particular. Regrettably, that prediction has proven in large part to be correct. When I visited Jakarta again three to four weeks ago and asked for a briefing from the international aid agencies in Jakarta about the state now in the refugee camps, the picture which emerged was still a disturbing one. We have had between November and March some hundreds of deaths in camps, 80 per cent of those deaths being children under the age of five. The principal cause of death in those camps was malnutrition.

There are multiple causes as to why this is occurring. It is not that the international aid agencies have been derelict in delivering large quantities of food aid, in particular, to the authorities in Kupang and seeking to distribute them. The problem at heart has still been the attitude of local TNI supported and part supported militia commanders who have prevented the effective distribution of that food aid into the camps where the food is most needed. This is an appalling tragedy when you see it happen—the food delivered to local distribution points but not getting to kids who need it 200 metres up the road. It is therefore important, as I said before about the diminution of international interest and attention in East Timor, that simultaneously we do not forget West Timor and the 100,000 plus refugees who, as we sit in this chamber today, languish in camps. Part of the reason lies in the need to impose proper authority from Jakarta on the military commanders in West Timor to ensure that militia commanders are removed from what remaining political control they have over some of the camps there. Part of it lies in ensuring that a continued quantity and quality of aid delivery occurs. I repeat, and I will say it throughout this year, that we must not forget them because the fact that they exist in those camps is a direct consequence of the foreign policy actions of this government and the reaction to those actions by the Indonesian government in the events of last September.

Finally, it is important to reflect on where all this stands in our overall relationship with the new government of Indonesia. It is important, in delivering aid programs of this nature and in our deliberations on the Timor Gap Treaty, that we are mindful of how that relationship now develops. A couple of weeks ago in Jakarta I spoke at a conference hosted by the University of Indonesia on rebuilding the bilateral relationship between Australia and that country. Foreign Minister Shihab also spoke at that conference and delivered a positive and encouraging address.

The conclusion I drew from that conference was that, in terms of rebuilding our relationship, the central problem is not so much Timor itself. If you look at the recent policy pronouncements coming out of Jakarta—the beginning of the normalisation of the role of the military in Indonesian politics and, subsequently, President Wahid's reconciliation visit to Dili—you can see that the wise policies pursued by President Wahid are pointed in the direction of normalising the role of the military, asserting normal civilian control of the administration of that country, which means that there is associated with that a recognition that the Timor matter is now dealt with. Let us hope that that process of civilianisation of the military continues.

Regrettably—and this comment is somewhat partisan; I do not often make partisan comments in foreign policy debates—the clear perception emerging across Indonesian political elites on all sides of politics is that the single central impediment to the normalisation of the Indonesian relationship with Australia is their perception of our Prime Minister, Mr Howard. The Indonesian government, under President Wahid, knows this country well and knows it better than any other administration which has preceded it. President Wahid has personally visited here many times. He has many friends in this country and has two members of his staff who have lived and worked here for something like a decade between them. Therefore, what passes for domestic debate in this country is known well beyond our borders. It is read and studied carefully within the councils of government in Jakarta.

They know the full texture and depth of the Prime Minister's statement last year through the Bulletin magazine—the so-called Howard doctrine—and asked themselves this question: what does this signify in terms of Australia's future intentions vis-a-vis Indonesia? They read, and have read carefully, the statements made during the last several years by the Prime Minister on the question of Hansonism and his Voltairean defence of Pauline Hanson's particular views on interracial harmony. They are also aware of the Prime Minister's contribution to the immigration debate of the late 1980s. All these form a picture in the minds of the new government of Indonesia that this Prime Minister is not serious about Asia or, in fact, has a sceptical view of it.

I make these remarks with a degree of seriousness. I do not make them flippantly and I do not make them as some sort of polemic in an overall foreign policy debate, but they are core to our desire to build a future relationship, a new relationship, with Indonesia.