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Arbitration under the Timor Sea Treaty

May 3, 2013

Timor-Leste notified Australia on April 23 that it has initiated arbitration under the 2002 Timor Sea Treaty of a dispute related to the 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS).

The arbitration relates to the validity of the CMATS treaty. Timor-Leste argues that CMATS is invalid because it alleges Australia did not conduct the CMATS negotiations in 2004 in good faith by engaging in espionage.

These allegations are not new and it has been the position of successive Australian Governments not to confirm or deny such allegations.

However, Australia has always conducted itself in a professional manner in diplomatic negotiations and conducted the CMATS treaty negotiations in good faith.

Australia considers that the CMATS treaty is valid and remains in force.

Australia remains committed to the Timor Sea treaty framework, including the CMATS treaty. The treaties provide certainty for investors and deliver benefits to both countries from our shared resources including equal sharing of upstream revenue from the Greater Sunrise area.

The Australian Government is considering its response to Timor-Leste’s arbitration notification.

  1. Jeff permalink
    May 3, 2013 4:30 pm

    sorry Bob, but your words are disappointing. It’s time to extend a more generous hand than we are currently extending to East Timor. We are a rich country and can afford to be more gracious to this very poor country than we currenly have been re the undersea resources and the maritime boundary. We also need to pressure Woodside establish a liquefied natural gas plant on Timor L’Este. Our current position is not an honourable one and Woodside’s position is dishonourable,… you, as an influential Minister, have a chance to work for a better deal for the Timorese.

  2. May 6, 2013 12:08 pm

    Clare Martin in 2002 ran a campaign against floating LNG production for the Greater Sunrise gas field in the Timor Sea. She tried to argue “Why Sunrise Gas Onshore is in the National Interest”. More recently Colin Barnett, the WA premier, expressed his displeasure when Woodside announced their decision to cancel onshore processing for the Browse LNG project, in favour of FLNG espoused by Shell, their joint venture partner. In both cases, the benefits of onshore infrastructure and industrial investment creating jobs and tax revenue were sought for obvious reasons. Timor Leste is no different and desperately needs such onshore foreign direct investment which would come about through processing Sunrise gas onshore – not in the Northern Territory as Clare Martin once hoped for, but on the south coast of Timor Leste. Unfortunately for Timor Leste, the Sunrise joint venture partners have selected FLNG as the preferred development concept for the field. It is hard to fathom what outcome the Timor Leste government is striving for by questioning the validity of the CMATS treaty – my guess is they want to engage the Australian Federal government to assist a resolution of the Sunrise development impasse. See here for more background info:

  3. May 7, 2013 6:28 am

    Reblogged this on DOMINIQUE HOGAN-DORAN and commented:
    This should prove interesting. I studied International Law of the Sea with Professor Brownlie when I was a post graduate student at Oxford in the mid-1990s and this particular dispute has been broiling for a while. Will the treaty be declared invalid? Unlikely one would think, but the economic value of the income stream from the Greater Sunrise area will mean both states will fight hard.

  4. rob wesley-smith permalink
    May 8, 2013 4:12 pm

    Does ET have the skills base for onshore lng processing? If it is done onshore, it will need to be an enclave of foreigners – is that what ET wants? Woodside says ET will get $5b less if done onshore. Is that figure challenged? Why not do a middle way as McKee has espoused, primarily use the lpg on shore, and process lng on a ship, from where it can be direct shipped to markets for cash. That leaves plenty for ETese to do and develop their skills base. Wesley

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