Australia’s maritime arrangements with Timor-Leste
Australia's maritime arrangements with Timor-Leste
On 6 March 2018, Australia's then Minister for Foreign Affairs, the Hon Julie Bishop MP, and Timor-Leste's Minister in the Office of the Prime Minister for the Delimitation of Borders and the Agent in the Conciliation, His Excellency Mr Hermenegildo Pereira, signed the Treaty Between Australia and the Democratic Republic of Timor-Leste Establishing Their Maritime Boundaries in the Timor Sea [PDF 592 KB]. The treaty was signed in New York at the United Nations Headquarters in the presence of the United Nations Secretary-General and the Chair of the Conciliation Commission.
The Maritime Boundary Treaty is an historic agreement for Australia and Timor-Leste: we have settled a long-running dispute, delimited our maritime boundaries, and laid the foundation for a new chapter in our relationship with one of our closest neighbours.
The treaty will benefit both countries. We recognise its significance for Timor-Leste. Australia was committed to finding an outcome that would best support Timor-Leste's future.
The agreement is a landmark for the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and international law. The conciliation that led to our treaty, under UNCLOS' dispute resolution procedures, was the first of its kind. As two democratic nations and close neighbours, Australia and Timor-Leste have highlighted the value of international law, and particularly UNCLOS, in the international rules-based system. Our joint success through the conciliation sets a positive example for the region and the international community. It highlights Australia commitment to international law as we have set out in the Australian Government 2017 Foreign Policy White Paper.
Supporting the international rules-based order and UNCLOS
The treaty is a testament to the way in which international law, in particular the UN Convention on the Law of the Sea, reinforces stability and allows countries to resolve disputes peacefully without coercion. It is an example of the rules-based order in action.
UNCLOS has underpinned stability and security in our region and around the world. In turn, this has allowed for the growth of trade and sustainable development.
With the world's third largest maritime Exclusive Economic Zone, Australia knows how important these rules and norms are. That is why we have steadfastly supported the dispute settlement processes in UNCLOS–regardless of the outcome.
Bilateral relations with Timor-Leste
The maritime boundary treaty marks a new chapter in our bilateral relationship. It will revitalise our friendship and cooperation in the years ahead.
As Australia's Foreign Policy White Paper highlights, a strong and prosperous Timor-Leste is of fundamental important to Australia. We look forward to partnering with Timor-Leste to develop the Greater Sunrise gas field, with benefits for both countries.
We are Timor-Leste's leading economic partner [$96.1 million in total ODA in 2017-18]. We will continue to support Timor-Leste's objective of economic diversification and private sector growth through our development cooperation and labour mobility schemes.
We will continue to support Timor-Leste's armed forces and national police. We cooperate on regional security issues, including maritime challenges, border security and transnational crime. Australia supports Timor-Leste's ambition to join ASEAN, to facilitate its closer economic engagement with Southeast Asia.
The benefits of the maritime boundary treaty
The Treaty establishes permanent maritime boundaries between Australia and Timor-Leste in the Timor Sea and a stable legal framework for resource development. This will provide certainty and stability for businesses and investors.
The Treaty provides for both countries to develop the Greater Sunrise gas fields together and share in the benefits. This recognises both Australia and Timor-Leste have legitimate sovereign rights as coastal states under UNCLOS.
The Treaty will support Timor-Leste's economic development by providing new opportunities for income and commercial and industrial development. Seventy or eighty per cent of revenue from Greater Sunrise will flow to Timor-Leste, depending on how the resource is developed.
The treaty upholds Australia's commitment to international rules and reinforces peaceful dispute resolution norms, especially through the UNCLOS.
Development of Greater Sunrise
The Conciliation Commission has worked extensively with the parties to broker a way forward on Greater Sunrise. While we have not been able to agree on a way to develop Greater Sunrise, we have made good progress in the conciliation towards this goal. We look forward to building on the Commission's efforts and analysis and we will continue to discuss the how to develop Greater Sunrise bilaterally. The Conciliation Commission's analysis of the alternative concepts for developing Greater Sunrise is contained in its press release of 6 March 2018.
Australia wants Greater Sunrise to be developed in a commercially sound way that maximises the return for the parties, and therefore contributes to Timor-Leste's economic development priorities. Provided these conditions are met, Australia is genuinely neutral as to whether Greater Sunrise gas is processed in Timor-Leste or Australia.
Existing Oil and Gas projects
Oil and gas fields currently shared between Australia and Timor-Leste in the Joint Petroleum Development Area will transition to Timor-Leste's exclusive jurisdiction. The Treaty provides that the security of title and any other rights held by the titleholders previously under the Timor Sea Treaty and the International Unitisation Agreement will be preserved through ensuring conditions and terms equivalent.
In the case of Bayu-Undan and Kitan fields, Australia and Timor-Leste have agreed that the companies which hold the production sharing contracts will be subject to the same fiscal and regulatory regimes although under Timor-Leste's jurisdiction not joint Australian and Timorese jurisdiction as is the case under existing treaty arrangements. This is outlined in an Exchange of Correspondence.