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Tuesday, 12 November 1985
Page: 2010

Senator VIGOR(9.26) —My colleague Senator Sanders has set out the real reasons why we have taken the position we have with respect to the cash bonus bidding system. I would like to extend these with a few reasons of my own in this particular area. I am disappointed with Senator Walters because of the implications she has made in this House, but I do not believe they deserve any type of qualification, answer or even attention. The reason why I personally will be supporting the cash bonus bidding proposal is that the alternatives presented to us are not really as attractive. Last time the Petroleum (Submerged Lands) (Cash Bidding) Amendment Bill was before us we put forward a bank bond system, which has now been rejected by both the Government and the industry, even though I believe that it was a better option than the cash bonus bidding system. It was that system I supported last time.

The current system of planned work programs managed by the Department of Resources and Energy has a number of obvious pitfalls and does not offer the immediate revenue raising potential to the Government which the cash bonus bidding system does. I believe that the system proposed for cash bonus bidding may have more than one reason for being introduced. We must note that it is being introduced in an area to our north, and I wish to concentrate on some of the problems of that region in the Timor Sea where the leases and the new blocks are to be introduced. I believe that we could well have as one reason for introducing it-getting our money now while we still can.

In these times when we are squeezing veterans, the poor and needy in our society, I much prefer to raise money from the large oil companies which are exploring our North West Shelf than from these hard hit groups. Let us face it, cash bonus bidding is a revenue raising procedure set up by the Government. The money raised goes into Consolidated Revenue and hopefully will allow the Government to introduce tax concessions and allow added expenditure to flow into areas of need in the Australian community. It is also possible that the Government may see the light and put some money into developing renewable energy resources instead of just developing oil fields. I believe it is quite important to support reasonable fund raising measures.

Oil companies will explore only if it is economically viable for them to do so. We are giving them access to a resource which is Australian, at this stage, and I believe that the companies should pay for it. I am quite happy that they should pay for it through a system like the cash bonus bidding system. As Senator Sanders said, we see no reason to suggest that this will stop exploration in any way, and I believe the arguments that he has put forward to support his thesis.

When the Bill before us this evening becomes law, the Timor Sea will be a test case for cash price bidding. With cash bidding the blocks will be much smaller. It is estimated that the biggest area that will be offered in the Timor Sea is only 28 blocks. This will allow more people to be involved in the process. The issue which is of greatest concern to me in relation to the Government's oil policy is oil drilling in the Timor Sea. I digress slightly to look at East Timor and the way in which the Government has treated that area, because it is related to the fact that we wish to develop oil fields within 50 to 100 kilometres off the shore of that land.

The invasion of East Timor 10 years ago is a matter of national disgrace for Australia. Both the Liberal Party of Australia and the Australian Labor Party have spent a lot of time, and made great efforts, to legitimise their past behaviour. All thought and concern for the civil rights of the East Timorese people, or their right to national self-determination, has been squashed. Australia's policy towards Indonesia has been one of appeasement, and the parallels between Munich 1938 and Australian-Indonesian relations in 1975-85 are quite alarming. Successive governments have vainly attempted to appease the Indonesians. They have said to the Indonesians: `You can have peace-you can have this piece, that piece and these pieces'. The reality is that Indonesia is expansionist and belligerent. It already has West Irian and Timor, and already it calls Papua New Guinea East Irian. I could go even further and mention Majapahit, which is the very old Indonesian belief that parts of northern Australia are already part of Indonesia. When will Indonesia be satisfied? Is it looking for some pan-Indonesian development, or maybe a Lebensraum-a breathing space-as was sought by Hitler?

The drilling in the Timor Sea and the economic advantages to Australia are a balm to our guilty conscience-yet another reason to shut up on the subject of East Timor and the dreadful violations of human rights as well as the violence and oppression of the East Timorese people. While the economic advantages of the agreements between Australia and Indonesia to drill for oil in the Timor Sea are clear, I look forward to the day when it will not be at the cost of innocent people's lives and happiness. The Department of Foreign Affairs and the Prime Minister (Mr Hawke) have been bending over backwards to assure the Indonesians that we would do anything to keep them happy. I believe that the reasons for this are clearly economic. We can see some of the reasons we want the money from the oil developments up front in the Bill before us tonight.

The recent announcement of the agreement in principle that a joint development zone in the Timor Sea is a precursor of a joint Indonesian-Australian authority to exploit the oil resources of the Timor Sea has been reported in the Australian Financial Review. Does this mean that the policy of appeasement will take on a new quality as yet unknown? I seek leave to incorporate in Hansard an article by Michael Byrnes in the Australian Financial Review of Tuesday, 29 October, entitled: `Timor-gap talks show ice has melted'.

Leave granted.

The document read as follows-

Timor-gap Talks Show Ice has Melted

The main lesson of last week's talks between the Indonesian and Australian Governments on the longstanding and delicate ``Timor gap'' border problem is simply that relations between the two countries seem to have warmed significantly beyond thawing point.

A statement issued by the Australian Foreign Affairs department immediately after the talks concluded on Friday made the point that the talks progressed in a ``friendly and constructive atmosphere''-the sort of comment normally dismissed by most observers as routine diplomacy.

In the case of the Timor gap talks, however, the Foreign Affairs statement seems to rather underplay the real significance of an atmosphere of growing constructiveness in Australia-Indonesia relations.

Australia and Indonesia are yet to reach agreement on the toughest issues in the Timor gap problem-exactly where an eventual borderline is to be drawn, the specifics of how resource exploration is to be conducted in the area at issue, the geographical details of where an interim joint resource zone is to be located.

Yet the fact that the two sides were able to reach positive agreement in principle that a joint development zone (JDZ) should be established is regarded as of more than normal significance.

Furthermore, it now seems that both sides are clost to settling informally on the establishment of a joint Australia-Indonesia authority to administer the JDZ.

An ultimate settlement of the Timor gap may never completely erase the culture gap that has contributed so greatly to frosty relations between Australia and Indonesia over the past decade.

But the fact that negotiating teams from Australia and Indonesia were last week able to reach a level of constructive understanding on a matter sensitive enough to involve the eventual drawing of a borderline between Australia and Indonesia indicates something close to a breakthrough in relations between the two governments.

Much is sometimes made of the view that mental perceptions are often of greater significance to Indonesians than the simpler reality of more obvious fact.

Rarely is the same point made of Australians.

Yet, in the overall context of Australia-Indonesia relations, it seems that the constructive atmosphere of last week's talks is regarded as of more importance than anything else by both sides.

In the worst case, the talks held the potential for one side to dig itself in on an issue.

There is no doubt that past problems between the two countries held a potential to colour negatively the tone of talks on the Timor gap issue.

But the opposite seems to have occurred. Canberra now takes the view the talks were more positive than expected.

Discussions on the Timor gap issue still have a long way to go.

Last week's talks involved a wide range of interests from both Australia and Indonesia, with the Australian side including representatives from no less than a dozen government bodies and departments (Foreign Affairs, the Northern Territory and WA Governments, as well as the Departments of Resources and Energy, Attorney-General, Prime Minister and Cabinet, Defence, Treasury, Mineral Resources, Primary Industry, Arts Heritage and the Environment and Taxation).

Still, the talks were angled mainly towards legal and jurisdictional issues. The Australian side was led by the international legal section of Foreign Affairs, which in itself says a lot about the nature of the discussion.

The next round of talks, most likely to take place early next year, will focus on some of the more concrete sticking points. The main point still to be decided is the exact location and area of the JDZ and the nature of the zone.

Other outstanding issues are widespread, involving not only whether the zone will be more to the north or to the south, but eventually whether BHP and Pertamina operate alone, whether BHP operates in the Australian ``partnership'', or even whether BHP might operate under licence from Pertamina on the Indonesian side.

However, agreement for the establishment of a JDZ in itself has taken the two sides much closer to settlement.

The possibility of a zone being split into two, along a north-south line, for example, now seems more remote. Much more likely is the eventual administration of the entire zone by a joint Australian-Indonesian authority.

Still far from any decision is the way a line will eventually be drawn to fill in the missing 250km gap in the Australia-Indonesia border.

Currently-agreed incomplete boundaries between Australia and Indonesia were set in negotiations sealed in 1971-72, when Timor was still under Portuguese rule and when Portugal held rights over the area in question.

After Indonesia's annexation of Timor in 1976, problems arose in attempts to close the gap, with Australia arguing for a simple extension of existing borders and with Indonesia arguing that that the lines should be drawn mid-way between Australia and Indonesia. In subsequent negotiations, both sides have been able to back their conflicting arguments with a reasonable weight of law and logic.

After last week's talks, Canberra's feeling seems to be that there is no need for haste on the drawing of a line and that in the meantime, a JDZ will at least get underway the exploitation of whatever resources are in the disputed zone.

It is expected that informal contact between Australian and Indonesian Governments in the period before the next round of talks is held will begin to clarify some of the tougher remaining problems.

Eventually, of course, the entire Timor gap issue will be decided by the two governments on political grounds. And it is here that the real payoff from the Australian-Indonesia thaw will hopefully be seen.

Senator VIGOR —I thank the Senate. No doubt the present Government would like East Timor to go away and Fretelin with it. There would be no impediment to Australia's throwing herself at the feet of the Indonesians, and that is one of the problems. How far can we go down this path? I was quite surprised at Mr Hawke's statements on Indonesian television which, I believe, were yet another move to appease the Indonesians.

Cash bonus bidding is a way of Australia getting revenue at this stage from the exploration in our northern oil fields before someone claims that they may be Indonesia's southern oil fields! Hence, I will support the Bill in a trial form, with a two-year sunset clause to be moved by the Democrats at the Committee stage. I believe it is important to raise in the Parliament these matters concerning East Timor. It is also important that we should have some exploration in that area which will produce reasonable development and a reasonable return to the Australian people for the resources which they are making available to the oil companies. I will support the Bill as amended.