Timor-Leste has withdrawn its Australian espionage claims in the Permanent Court of Arbitration as a “confidence-building measure,” as the two countries continue to negotiate over their maritime border.
In 2013 it was revealed that the Australian government had bugged the Dili Cabinet room of the Timor-Leste government in 2006 — under the guise of Australian aid-sponsored renovations.
The Timor-Leste government claimed the espionage gave Australia an unfair advantage in negotiations over the Treaty between Australia and the Democratic Republic of Timor-Leste on Certain Maritime Arrangements in the Timor Sea, which divides future revenue from the tens of billions of US dollars worth of oil and gas that lie beneath the sea.
In a joint statement issued yesterday by the Timor-Leste and Australian governments, the two countries confirmed Timor-Leste had withdrawn from the treaty and it would cease to operate from April 10.
As the final in a series of “confidence-building measures,” Timor-Leste agreed to withdraw two arbitration cases before the Permanent Court of Arbitration in The Hague, the Netherlands: the “espionage case” and a second arbitration concerning jurisdiction of a gas pipeline from Bayu-Undan in the Timor Sea to Darwin, Australia.
The dispute over the Timor Sea — more precisely the lucrative oil fields beneath the sea — has pre-empted and then overshadowed the short and checkered history between independent Timor-Leste and Australia.
The fields are estimated to hold 318 tonnes per cubic meter of gas and 300 million barrels of condensate and liquefied petroleum gas worth about US$53 billion.
However, the agreement to terminate the treaty and “commitment to good faith talks” appear to have mended mistrust in the relationship and helped with the progress of negotiations.
Both countries are engaged in a year-long compulsory conciliation, overseen by the Permanent Court of Arbitration, and say they are working toward a final agreement on a permanent maritime boundary by September.
“The commission and the parties recognize the importance of providing stability and certainty for petroleum companies with current rights in the Timor Sea,” the joint release said.
“The parties are committed to providing a stable framework for existing petroleum operations [and] the commission intends to do its utmost to help the parties reach an agreement that is both equitable and achievable,” it said.
In order to provide a stable framework for existing petroleum operations, Australia and Timor-Leste have agreed that the 2002 Timor Sea Treaty and its regulations would remain in force in its original form until a final delimitation of maritime boundaries has come into effect.
A renegotiation of Australia’s maritime boundary with Timor-Leste, which international legal precedent would suggest will fall along a median line between the two countries, could also give rise to a claim by Indonesia to renegotiate its maritime boundaries with Australia.
The current boundary, which is different for the seabed and the water column, is significantly closer to Indonesia than it is to Australia.
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