Australia and East Timor on Tuesday signed a historic treaty drawing their maritime boundary, ending years of bitter wrangling over billions of dollars of oil and gas riches lying beneath the Timor Sea and opening a new chapter in relations.
The agreement was doubly historic because it also marked the successful conclusion of the first-ever negotiations to settle maritime differences under the UN Convention on the Law of the Sea — a process that UN Secretary-General Antonio Guterres urged other nations to use to peacefully resolve such disagreements.
Before a crowd of cameras, diplomats and officials, two copies of the treaty were signed by Australian Minister for Foreign Affairs Julie Bishop and Timorese Minister for Delimitation of Borders Hermenegildo Augusto Cabral Pereira.
The chairman of the independent Conciliation Commission that led negotiations, Danish Ambassador to India Peter Taksoe-Jensen, then signed as a witness.
“It is a landmark event for our two nations, but also for international law,” Bishop said. “Both our governments have deemed this to be a just and equitable outcome.”
Pereira agreed.
“Today is indeed a momentous day that will be recorded in East Timor’s history and be remembered and celebrated... With the signing of this treaty today, we write a new chapter in the friendship between our two countries,” he said.
For East Timor, a half-island nation of 1.5 million people who are among the poorest in the world, the treaty is crucial to economic development and employment opportunities.
Pereira said 65 percent of the population, mostly young people, are looking for jobs.
Bishop told reporters that under the treaty East Timor would get the biggest share of revenue from exploiting the oil and gas.
It is to be split either 80-20 if gas is piped to Australia for processing or 70-30 if it is piped to East Timor, she said.
“We are talking billions of dollars over the life of such a resource project,” Bishop said.
Pereira said companies have told East Timor that it is feasible to build a pipeline to the nation.
“We believe seriously that a successful pipeline to the south coast of Timor would be a game changer and have a transformational impact on the socioeconomic status of the country,” he said.
The dispute has dominated and soured relations since 2002, when East Timor emerged as a fledgling nation independent of Indonesia.
The terms of the deal negotiated under the Conciliation Commission in The Hague, Netherlands, through the Permanent Court of Arbitration are expected to be made public shortly, Australian diplomats said.
East Timor achieving its ambition of a border midway between the two nations could encourage Indonesia to renegotiate its own much longer maritime boundary with Australia, agreed in 1971 under outdated international law.
The Indonesian border with Australia extends east and west of the new East Timor-Australia boundary and the vast expanse Indonesia allowed Australia is a source of increasing irritation for the Indonesian government.
Bishop told reporters that she had kept Indonesian officials informed of the negotiations with East Timor on the maritime boundary.
East Timor’s oil revenues, which finance more than 90 percent of government spending, are rapidly dwindling due to the exhaustion of existing fields in its territory.
The nation’s US$16 billion sovereign wealth fund could be empty within 10 years because the government’s annual withdrawals are exceeding its investment returns, according to La’o Hamutuk, a Timorese research institute.
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