June 3, 2004 - The East Timor Action Network (ETAN) today urged Australia's Prime Minister John Howard to allow East Timor a fair opportunity to achieve economic independence by developing its own natural resources. The
Prime Minister is visiting Washington this week.

"While Australia welcomed East Timor into the community of independent nations two years ago, the Australian government continues to obstruct the new country's efforts to define a fair maritime boundary in the Timor Sea.
Meanwhile, Australia extracts billions of dollars worth of oil and gas from disputed undersea territory," said John M. Miller, spokesperson for ETAN. "We urge Prime Minister Howard to respect his new neighbor's sovereignty by
participating in good-faith efforts to resolve the boundary dispute quickly and legally."

In March, more than 50 members of the U.S. House of Representatives wrote to Prime Minister Howard, encouraging Australia to "to move seriously and expeditiously in negotiations with East Timor to establish a fair, permanent maritime boundary and an equitable sharing of oil and gas resources in the Timor Sea."

In his reply, Mr. Howard wrote that "Australia is committed to doing what we can to help East Timor on its road to stable, democratic governance." Nevertheless, Mr. Howard declined to "set an end date for negotiations." In
addition, he rejected the Representatives' strong suggestion that "any revenue from disputed areas on East Timor's side of the median line but outside the Joint Petroleum Development Area defined in the Timor Sea Treaty be held in escrow until a permanent boundary is established" by stating that "Australia has exercised jurisdiction in these areas for an extensive period of time."

"This claimed jurisdiction is based on an illegitimate treaty with Indonesia, illegally signed while Indonesia brutally occupied East Timor," said Miller. "The East Timorese and their friends thought that the violent withdrawal of Indonesian troops in 1999 was the end of foreign occupation of their territory. Australia should be ashamed to continue to profit from this occupation. Prime Minister John Howard betrays Australians' sense of fair play and legality when he justifies today's continuing occupation by citing Australian complicity with Indonesia's brutal invasion."

Prime Minister Howard is visiting Washington this week, and met with President Bush today to discuss Iraq and the new Australia-U.S. Free Trade Agreement, among other topics.

"We wonder if the two leaders discussed how their nations can set a good example by following the rule of law, especially in relation to smaller, weaker, less affluent nations just developing their democratic traditions," said Miller.

Background

Substantial oil and natural gas deposits lie under the Timor Sea between Australia and East Timor. The fate of tens of billions of dollars of revenue depends on a permanent boundary agreement. Where neighboring claims overlap, as is the case with East Timor and Australia, countries must negotiate a permanent maritime boundary, usually halfway between their coastlines. If both sides approach the issue in good faith, such agreements usually take 2-3 years to negotiate.

Two months before East Timor achieved independence in May 2002, Australia formally withdrew from international legal mechanisms - the International Court of Justice and the International Tribunal for the Law of the Sea - for resolving maritime boundary issues that cannot be settled by negotiation. Mari Alkatiri, East Timor's soon-to-be Prime Minister, called this withdrawal an "unfriendly" act. The withdrawal has prevented the new nation from employing third-party arbitration to encourage Australia to approach this issue in a timely and cooperative manner.

In October 2002, East Timor enacted a Maritime Boundary Law, claiming a 200 nautical mile Exclusive Economic Zone, based on the United Nations Convention on the Law of the Sea. At the same time, East Timor's Prime
Minister asked his Australian counterpart to begin negotiations. The first round of talks was held a year later, the second round in April 2004. Neither meeting made significant progress, although East Timor asked for monthly talks both times, and Australia has refused to meet more than twice per year.

East Timor is among the world's poorest countries, with low levels of basic services and high unemployment. Its government's annual budget of around US $85 million has come largely from donors during the past few years. The new nation is currently trying to avoid borrowing from international financial institutions, as it faces a projected US$30 million budget deficit between 2005 and 2007. Yet between 1999 and today, the Australian government has taken in more than US$1 billion in oil and gas revenues from petroleum fields that are twice as close to East Timor as they are to Australia, and which would belong to East Timor under a fair boundary settlement.

In the first substantive round of negotiations in late April, Australia's stonewalling did not change.

After those talks, the United Nations Secretary-General reported that "the possibilities for Timor-Leste's future political development and social progress are indissolubly linked with its economic prospects. Progress towards agreement between Australia and Timor-Leste for development of the mineral resources in the Timor Sea, in a mutually beneficial manner, through full commitment of the leadership of the countries involved, would make an essential contribution in this regard."

In March 2004, Representative Barney Frank and 52 others wrote to Mr. Howard, concluding that, "We trust your country's commitment to the freedom and security of East Timor will include recognition of East Timor's territorial integrity and its right to a swift, permanent resolution of the maritime boundary dispute." In early April, more than one thousand East Timorese demonstrated in front of the Australian Embassy in Dili, calling for Australia to end its occupation of the Timor Sea and stop stealing East Timor's oil. East Timor's leaders, including President Xanana Gusmão and Prime Minister Mari Alkatiri, made similar requests, and pointed out that this is a life and death issue for the people of East Timor.

Report language accompanying the Senate Foreign Operations Appropriations bill in July 2003 stated, "The Committee is aware of negotiations between East Timor and Australia over petroleum reserves, which will be of critical importance to the future economic development and security of East Timor. The Committee urges both governments to engage in good faith negotiations to resolve their maritime boundary expeditiously in accordance with
international legal principles."

The East Timor Action Network/U.S. supports human dignity for the people of East Timor by advocating for democracy; sustainable development; social, legal and economic justice; and human rights, including women's rights. For more info see www.etan.org.