Witnessing Geopolitics: the case of the Timor Sea

Stephanie Henaro

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Witnessing Geopolitics

Stephanie Henaro

MA Geopolitics, Territory and Security

King’s College London

Witnessing Geopolitics: the case of

the Timor Sea

Abstract:

In the 1970s, discoveries of key natural resources in the Timor Sea turn that area into the centre of endless disputes that still continue today. Several agreements reached from 1971 to 2006 have approached the issue from different geopolitical scopes, reflecting the political, ideological and economic realities of the period. This essay will analyse

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the agreements concerned in their geopolitical context and the framing of the Australian foreign policy, as a means to understand the current reality of the zone.

Student Reference Number: 1049264

3986 words

Witnessing Geopolitics: the case of the Timor Sea

Introduction

As stated by Dennis Rumley, the essence of geopolitics can be understood as “the

development of strategies for the projection of national or regional power and the

portrayal of a dynamic process of special competition for power and influence

associated with the interaction among ideology , military power, economic power and

the environment” (Rumley 1999: 9). In this sense, the analytical evolution of the

geographical factor, departing from a “naive determinism” (Prescott 1972) to a

structural constraint or “context” (Rumley 1979), ensures that the presence of natural

resources straddling the boundary line will almost inevitably lead to friction between

neighbouring states (Deely 2001).

The geographical structure of interacting power units (Cohen, 1964) becomes reflected

in the State’s foreign policy and in turn manifests itself in space (Agnew 1995). The

fixed conception of space will be replaced by a fluid geopolitical dynamic process,

where it will recast itself. Hence, to understand the world, it is necessary to understand

its changing geography (Agnew 1989).

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Since the discovery of key hydrocarbon reserves in the Timor Sea in the 1970s, there

have been disputes surrounding rights to the ownership and exploitation of the resources

situated in a part of the Timor Sea known as the “Timor Gap”. This area, located outside

the territorial boundaries of the nations to the north and south of the Timor Sea, has

been the reason of numerous disagreements that initially involved Australia and

Indonesia, although a resolution was reached in the form of the Timor Gap Treaty.

However, after the independence of East Timor, the terms of the Treaty were abandoned

and negotiations culminated in the Timor Sea Treaty. This essay will draw an analysis

of the changing circumstances of the Timor Sea, which it will argue are the result of the

evolution of global geopolitical and legal contexts reflected in the framing of Australian

foreign policies. The first part will expose a brief historical background aiming to serve

as a departing point, leading to a second part focusing on the changes that occurred

during the geopolitical Cold War order, and concluding with a third part which frames

the current circumstances in a Post- Cold War order.

I- Brief History

First and foremost, it can be argued that the current formulation of the Timor Sea Treaty

has been shaped in part by historical and legal factors relating to the colonial history in

the region, namely Indonesian independence and the delimitation of maritime

boundaries between Indonesia and Australia directly preceding the end of colonial rule.

The Portuguese discovery of the Island of Timor in 1520 was contested by the Dutch

influence in the Island's west, resulting in a de facto partition of the island into two

spheres of influence from 1701 (Deeley 2001). However, it would not be until a string

of “arm-wrestling” treaties, that took place from 1859 to 1904, the international land

boundaries were delimited, leaving no agreements concerning common maritime

boundaries between the European powers.

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At the point of Indonesian Independence in 1949, as the successor state to the

Netherlands, it inherited the international boundary with Portugal (Marques Antunes

2003). The 1974 revolution in Portugal, and the subsequent civil war in Portuguese

Timor, gave the Indonesians the opportunity to add East Timor to their Republic by an

invasion in 1975. Despite condemnation from the international community, with some

exceptions such as Australia and New Zealand, East Timor was de facto incorporated

into the Indonesian territory. The former international boundary was thus relegated to

the status of a first order administrative division, separating the province of Propinsi

Nusa Tenggara Timur and the new acquired province of Propinsi Timor Timur. Still,

necessity to arrive at a maritime boundary agreement was not forthcoming (Deely

2001). Nonetheless, the repercussions of three previous maritime agreements between

Indonesia and Australia concerning the Island of Timor still impact the current maritime

treaty relating to the now independent state of East Timor. The legality of the first two,

signed in 1971 and 1972, before the Indonesian occupation is not put into question,

unlike the third, a treaty signed in 1989, again between Indonesia and Australia, but

involving the sovereign waters of East Timor.

The 1999 United Nations referendum on which the East Timorese people

expressed their will to become an independent country had the aim of

recovering and reaffirming the international boundary which existed

before its incorporation into Indonesia in 1975 (Neely 2001). Hence, the

1989 Timor Gap Treaty fell between Australia and an independent state.

Indonesia’s stake was taken over by the United Nations Transitional Administration for

East Timor (UNTAET) on behalf of East Timor, claiming that it did not represent any

kind of prejudice for further agreements between the two states (Cotton 1999).

Therefore, the current 2002 Timor Sea Treaty and the subsequent 2003 International

Unitisation Agreement for Greater Sunrise (IUA) and 2006 Treaty on Certain

Maritime Arrangements in the Timor Sea (CMATS Treaty), are better

understood as the most recent stage of a geopolitical-legal process whose roots lie in the

1960s (Marques Antunes 2003), in the post-colonial Cold War era.

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II- Maritime Boundaries and Cold War order

Indeed, it can be argued that the Australian foreign policy towards East Timor was

heavily influenced by the Cold War context, and the security fears that arose at the time

with regard to China and Japan – Australia saw control of the natural/maritime

resources as a means to curb regional threats and assert its status as a powerful player in

the region and on the global stage. Although not a major issue in earlier times,

Australia’s interest in East Timor for security and economic reasons is as old as the

Australian Federation (Cotton 2004). Rumours of Portuguese abandonment or Japanese

acquisition of the island were recurrent in national security debates during the decades

before World War II, while the first oil concession sought by an Australian business

dates from 1905 (Hastings 1999). However, it would be under the geopolitics of the

Cold War (1945-1989) the present essay will start its focus to explain the current

situation of the Timor Sea.

For parts of the Asia- Pacific region, especially after the experiences lived in Korea and

Vietnam, the Cold War was a justification for the United States to intervene in the

Developing World (Feste 1992). Increasing regional complexity associated with

decolonization and emergent nationalism, perpetuated a “security dilemma” leading to

the widespread delimitation of political geographical regions which emphasized

“otherness” (Rumley 1999). Therefore, the spread of bipolar influence resulted in a

greater degree of global geopolitical differentiation, characterizing Australia as a “trade

dependent maritime state” with clashing geostrategic interests with Japan, a country

feared deep down in the nation’s psyche, located next to an unstable Southeast Asian

“shatterbelt” (Cohen, 1964) as shown in Figure 1.

Figure 1

Geostrategic regions and geopolitical subdivisions

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Source: Rumley, Dennis 1999. The Geopolitics of Australia’s Regional Relations. London: Kluwer

Academic Publishers based on Cohen, Saul Bernard 1964.

The 1958 Convention on the Continental Shelf (CS Convention) clearly influenced by

the 1948 Truman Proclamation, entitled states to a continental shelf on a dual basis. It

defined the extension of the legal shelf as an alternative of the 200 metre isobaths and

the exploitation criterion, and also specified that the rights of coastal states over the

continental shelf did not depend upon occupation, effective or notional, or on any

express proclamation. In respect of delimitation between neighbouring states, the CS

Convention used a formula that gave prominence to equidistance between the coasts of

the states involved. Under this regime, Australia adopted the 1967 Petroleum

Submerged Lands Act establishing an “adjacent zone” going roughly up to the 500-

metre isobath on the southern side of the Timor Trough. Later in 1970, as a means to

obtain international recognition to this Act, the Australian Foreign Minister made

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reference to the resolution of the International Court of Justice (ICJ) in the North Sea

cases, and formulated what became known as the Australian theory of the two shelves:

“...The essential feature of the sea-bed beneath the Timor Sea is a huge steep cleft or declivity called the Timor Trough, extending in an east-western direction, considerably nearer to the coast of Timor than to the northern coast of Australia... The Timor Trough thus breaks the continental shelf between Australia and Timor, so that there are two distinct shelves, and not one and the same shelf, separating the two opposite coasts. The fall-back median line between the two coasts, provided for in the Convention in the absence of agreement, would not apply for there is no common area to delimit” (Australian Yearbook of International Law 1970: 145).

The first maritime agreement was signed in 1971. It listed twelve turning points

between Australia and Indonesia New Guinea and served as a reference to the 1972

Australia/Indonesia seabed boundary Treaty. The Treaty reflected the principles of the

two shelves theory, apparently used by the Australian authorities to obtain more “room

to negotiate” (Marques Antunes 2003), and resulted in the adoption of a boundary

located south of the Timor Trough, closer to the Indonesian coast – a position that might

be perceived as a “fall back”, compared to the limit stipulated in the 1967 Australian

legislation. Indeed, the 1972 boundary extends to areas that concerned the rights and

interest of the, at the time, Portuguese dominion. A “gap” was left between two

mapped points, “A16” and “A17,” equating to the spot where East Timor and Australia

face each other across of the Timor Sea, better known as the “Timor Gap” (Deely

2001).

Indeed, it is arguable that Australia´s treatment of Indonesia´s annexation of East Timor

was driven by wider strategic considerations and concerns relating to Cold War shifts in

the global balance of power, in particular, fears over the rising influence of China and

Russia in the region. By the mid-1970s, the global structure of power evolved from a

bipolar to a multi-centred and hierarchically organized structure. Australia and

Indonesia were listed into “second order” powers in a region where China and Japan

were considered as two of the “first order powers” (Rumley 1999). Therefore, the

necessity of applying explicit policies of cooperation with Indonesia in order to promote

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regional order was a high priority as a way to counterbalance the intense rivalry

between China and Japan.

The 1975 Indonesian incorporation of East Timor is still considered as the

greatest difficulty in the relationship between that country and Australia,

as it proved to have domestic as well as external repercussions

(Parliament of the Commonwealth of Australia, Joint Standing Committee on Foreign

Affairs, Defence and Trade 1993, Australia’s relations with Indonesia: 95). On the

domestic front, Prime Minister Whitlam stated Australia’s determination to support a

post colonial world order by declaring support to the Portuguese was not in the

country’s interests. This policy was soon regarded as acquiescing to Indonesian

occupation within the Labour Party and was repudiated after a bitter internal debate.

From that time until recognition of Indonesian sovereignty by the Hawke government in

1985 differences within the party were strongly pronounced (Cotton 2004). On the other

hand, in the framing of foreign policy towards Indonesia, the communist victories in the

Indochina states generated the conviction that the emerging political forces in East

Timor might seek to establish a communist aligned regime. Therefore a pragmatic and

realistic approach based on national interest was adopted. As Richard Woolcott, the

1975 Australian ambassador in Indonesia stated: “It is Indonesia’s policy to incorporate

Timor... we must adopt a policy of disengagement, allowing events to take their course”

(Woolcott 1975 in Walsh and Munster 1980: 217).

As shown in Figure 2, friendship with Indonesia was crucial for security reasons and

any wider multi-lateral strategies such as the ASEAN (Rumley 1999). This approach

would ultimately have a payoff, in the form of presenting an opportunity to negotiate

Australia’s territorial claims on key seabed resources of the Timor Sea. Nevertheless,

according to the rules of international law in 1975, as articulated in the

covenant of the League of Nations, expanded by the Kellogg-Briand Pact,

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and codified in the United Nations Charter, the Indonesian annexation of

East Timor was invalid. Therefore, the legal entitlement and

administrative authority of the territory remained with the Portuguese.

The 1972 Treaty was juridically considered as res inter alias acta

between Australia and Indonesia under international law, and thus

protecting the rights and interests of East Timor by the pacta tertiis rule

(Marques Antunes 2003). Hence, nothing prevented the Portuguese or

East Timorese authorities from advancing claims extending beyond

points A16 and A17. In fact, Article 3 provides for further negotiation

between the two parties with respect to any further delimitation in the

Timor Sea between the points mentioned. This is exactly what happened in

1989 resulting in the Timor Gap Treaty.

Figure 2

Australia’s regional geopolitical orientation

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Source: Rumley, Dennis 1999. The Geopolitics of Australia’s Regional Relations. London: Kluwer

Academic Publishers

The closing of the Timor Gap had become a high priority for Australian oil companies

who were anxious to exploit the suspected hydrocarbon resources below the seabed in

this region (Cotton 2004). Until 1985 the Australians had argued for a continuation of

the delimitations agreed in 1971 and 1972, which would have left them with control of

approximately 70% of the seabed (Deely 2001). However, the evolution of international

law along with the Indonesian perception that they had been “short-changed in the

earlier boundary agreements”, weakened Australia’s arguments based on natural

prolongation (Schofield 2008: 11). Therefore, as shown in Figure 3, a joint development

zone was adopted as a way of “bridging the different views the two nations took of their

perspective rights of the resources of the sea bed” (Bergin 1990:383-93) in the form of

the Timor Gap Treaty, which formally underlined Indonesia’s sovereignty over East

Timor. The Treaty was expressly “sovereignty neutral” and provided a temporary

expedient, valid for forty years with an option to extend for a further twenty (Marques

Antunes 2003). Three zones of cooperation were identified along with a detailed regime

for exploitation of hydrocarbons, framing a joint development maritime agreement.

Figure 3

The Timor Gap Zones of Cooperation

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Source: IBRU Boundary and Territory Briefing 2001

All the same, Portugal, who truly objected to the two-shelves theory and therefore

rejected negotiations with Australia in 1973 on the delimitation of the continental shelf,

was particularly concerned by these developments (Marques Antunes 2003). As a way

to reaffirm its position, it granted a concession to Petrotimor based on equidistance. It

denied the treaty-line and the ‘Timor Gap’ any sort of recognition based

on Article 6 of the CS Convention and made its feelings known to

Australia during negotiations over the Timor Gap Treaty. Moreover, the Europeans

initiated proceedings against the legality of the agreement before the ICJ arguing that it

violated Portugal’s rights as administering power, and also infringed upon the rights of

the East Timorese people to self determination (Cotton 2004). The Australian counter to

this claim was to assert that if there was a dispute about the status of the Agreement, it

was between Portugal and Indonesia and not with Australia.

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III- From the “Timor Gap” to the Timor Sea Treaty in a Post Col

War order

Since the demise of the USSR, “cultural wars took over ideological wars” giving birth

to the Post Cold War geopolitical period (Agnew 1998: 120). Along with this, there

arose a significant increase in the value of economic power and the relevance of

environmental questions, especially questions relating to “energy security”. Moreover,

the rise of doctrines focussed around humanitarian intervention and economic blocs,

strengthening the controlling power of the state were to be reaffirmed in the new

political reorganization of space aiming to “re-establish human above economic values”

(Rumley 1999: 30).

In terms of the “energy question”, in the Asia-Pacific region the juxtaposition between

rapid population growth and finite natural resources is likely to produce instability as a

result of the states’ inability to move away from the overriding pursuit of material

growth towards sustainable development policies (Brunett, 1992). As a response to this,

the Australian government released in 1998 the Australian Ocean Policy to establish a

‘framework for integrated and eco-system based planning and management for all of

Australia’s marine jurisdictions’1. The policy promotes “ecologically-sustainable

development of the resources of our oceans and the encouragement of internationally

competitive marine industries, while ensuring the protection of marine biological

diversity”, a situation that has a direct effect on the Timor Sea industries. Thus, the

question of “energy security” becomes increasingly important since rapid economic

growth is closely associated with rising energy demand (Rumley 1999). Based on this,

Australia’s longer-term future as an energy supplier is assured, enhancing economic and

political links with the region. These links have been notably in the case of oil and gas

throughout the different stages of the Treaties regarding the Timor Sea as Figure 5 and 6

will show.

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Figure 5

Australia’s Energy Exports

Source: ABARE 2009

Figure 6

Total Energy Supply and Exports: OECD countries and selected others 2008

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Source: International Energy Agency 2007

Furthermore, apart from a perceived enhancement of security in the broadest sense,

states can also be inclined towards regionalism as they see it as one potential means of

controlling the behaviour of other “local” states (Ravenhill 1995, 192) – in this case,

through the rise of doctrines focussed around humanitarian intervention and economic

blocs which developed in the post Cold War context. This is arguably reflected in the

creation of the ASEAN and the Australia- Indonesia Development Area Initiative

(AIDA) created in 1997 as a sub-regional agreement to develop closer economic

relations between Australia and the fourteen provinces of Eastern Indonesia. Moreover,

as stated by Hutton (1996), the increasing power of multinational corporations and

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financial institutions ensured market control beyond the power of the state. The

development of regional economic blocs associated with the growth of this new kind of

regionalism will inevitably impact upon the nature of state power (Palmer 1991). In this

sense, “regional economic development will be linked with human rights and that

criticism of human rights abuses will emanate from the region’s richer states”, such as

Japan and Australia in the Asia-Pacific Region (Rumley 1999: 30).

Indeed, the reassessment of the East Timor affair by Australia is proof of the parallel

between Australian foreign policy and the similar policy of human interventionism

pursued by the US in other countries at the time. Australia´s break with its traditional

policy to support Jakarta was undoubtedly fuelled by the impact of the regional

financial crisis on Indonesian policy capacity and the collapse of the Suharto regime

(Ball and McDonalds 2000; Way 2000). The issue of human rights was used as

leverage against financial and other assistance, such as the suspension of the

International Monetary Fund aid to Jakarta, thus forcing Indonesia to authorize

humanitarian intervention by the United Nations and led by Australia (Cotton 2004).

Following the 1999 United Nations referendum where the East Timorese

people expressed their wish to become an independent country, conflict

ensued, prompting international intervention under the UN auspices

(Schofield 2008). The 1989 Timor Gap Treaty fell between Australia and

an independent state. Therefore, Indonesia’s stake was taken over by the UN

UNTAET on behalf of East Timor as a means to safeguard ongoing resource

development activities in the Timor Sea, underlining that the arrangements did not

amount the continuation of the Timor Gap Treaty and that it was “without prejudice

to the position of the future government of an independent East Timor

with regard to the Treaty” (United Nations 2000).

As a part of the evolving circumstances of the Post Cold War period, the

Australian Government decided to engage in negotiations with East

Timor prior to its independence, as a means to maintain its status quo

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regarding the benefits of an estimate of 29 million barrels of oil, 300 million

barrels of condensate and 85 billion cubic metres of gas located in the Timor Sea, and

to maintain a “secure north front” in a economical and surveyed way,

especially in the context created after a 9/11 (Flint 2003). Thus, new

revenue shares and security measures were discussed in the following

stage of the treaty.

On the eve of the East Timorese independence in 2002, clashing perceptions regarding

the legality of the 1989 Treaty remained between Australia and East Timor (Marques

Antunes 2003: 14). Based on this, Australia announced in March of the same year its

withdrawal of Maritime Disputes from the Jurisdiction of the ICJ and the ITLOS,

leaving East Timor with no recourse to third party judicial settlement procedures (Triggs

2002). The new nation was therefore locked into an asymmetric negotiation process in

terms of development and economic needs. Hence, in order to ensure continuity in oil

and gas exploration activities, both countries agreed to the Timor Sea Treaty which

came into effect on the East Timorese Independence Day (United Nations 2002).

The Treaty established a Joint Petroleum Development Area (JPDA) coinciding with the

central part of the old Timor Gap Treaty area. However, a significant readjustment

regarding the revenue-sharing regime was made getting to a 90:10 split in East Timor’s

favour compared to the previous equal sharing terms reached with Indonesia. Along with

this, an agreement was also reached on the unitisation of the seabed oil and gas resources,

such as the Greater Sunrise complex of fields, better known as the Greater Sunrise

International Unitisation Agreement (United Nations 2002). It states that the production

“shall be distributed on the basis that 20.1% is attributed to the JPDA and 79.9 % is

attributed to Australia” (United Nations 2002). In consequence, according to these

agreements, East Timor was set to benefit from only 18.1 per cent of the proceeds from

Greater Sunrise (90 per cent share of the 20.1 per cent of the field falling within the JPDA).

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The negotiations evidently had a strong national security dimension, as the hydrocarbon

deposits in the JPDA represented a valuable resource to both countries. The protection

of such a resource, in order that it can be exploited to the benefit of Australia and East

Timor, is clearly in the national interest (Flint 2003). Australia claims the right to con-

duct patrols of both its territorial waters and its EEZ for craft that may be in breach of

national legislation. The Treaty provides, however, for surveillance patrols to be tasked

by the Designated Authority, in cooperation with the governments of both Australia and

East Timor. Operations include a surface component, an air component and also a radar

component, likely to be supplied by the RAN Patrol Boat Force Element Group (FEG),

the RAAF Maritime Patrol Group (MPG), and the Jindalee Operational Radar Network

(JORN), respectively as shown in Figure 7.

Figure 7

Security Operations Concerning the JDPA

Source: Flint, Matther 2003. The Timor Sea Joint Petroleum Development Area Oil and Gas Resources: The Defence Implications. Canberra: Sea Power Centre Australia.

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Despite the agreements, tensions between the two parties remained over boundary

delimitations and development of the resources, particularly over the destination for the

pipeline aiming to bring the resources onshore (Marques Antunes 2003), leading to a

new negotiation stage on 2006.

The 2006 Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) was

signed as a “further interim agreement that is without prejudice to the position of either

country on their maritime boundary claims” (Australian Government. DFAT 2010). It

does not provide a definitive maritime delimitation or specify the destination for the

anticipated gas pipeline. However, as shown in Figure 8, this was decided to be placed

in Darwin later on by the oil company in charge of the concession. The principal aim of

the treaty is to allow the exploitation of the Greater Sunrise gas reservoirs. In this sense,

maritime boundary claims are suspended for a period of 50 years, while Australia

continues to regulate petroleum activities outside of the JPDA and south of the 1972

Australia-Indonesia seabed boundary. However, it does provide for the equal sharing of

revenues deriving from the upstream exploitation of petroleum resources within the

‘Unit Area’ which includes the Greater Sunrise complex of fields. As a result, rather

than an 18.1 per cent share in Greater Sunrise as would have been the case under the

earlier accords, East Timor stands to gain a full 50 per cent share in the revenues

deriving from the development of those fields (Schofield 2008).

Figure 8

The JDPA under the Timor Sea Treaty

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Source: Northern Territory Government of Australia 2007

As a conclusion, one could argue that the natural resources dispute over the Timor Sea

has had a direct impact on the setting of the maritime boundary delimitation between

Australia and East Timor. The clash of national interests regarding this area, have resul-

ted in the impossibility of the closure of the “Timor Gap”. However, as Agnew (1995)

states, “ the transition from one order to another, involves a transformation of the “com-

mon sense understandings” of how international relations work and what is at stake for

particular parties as the position-practice system”. Thus, the current circumstances of

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the Timor Sea most need to be understood also as the reflection of the evolution of geo-

political, economic and international law realities.

The first attempts to delimit boundaries around the area, were framed under the belief that

sovereign claims based on the natural prolongation of a territory will ensure a larger

security reach against rival ideologies in the form of the 1971 and 1972 maritime

agreements. Then, as the global context evolved, economic benefits took priority over

sovereign claims. The creation of Zones of Cooperation between Australia and Indonesia in

the form of the Timor Gap Treaty constitutes the tacit proof. Finally, as the global context

has set “energy security” at the top of its priorities, the current Timor Sea Treaty not only

continues to leave the maritime boundary aside, but includes security issues as a way to

reflect the world we are living in now.

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