Dear Victor,
Thanks for the information. I think I do not agree with what is said about
the lateral boundaries between both States ("Of mythical proportions is the
idea that, were Australia to agree to a median line delimitation, East Timor
would gain the greater part of the oil and gas resources. In fact, the
richest of the known resources lie to the East and West of the present JPDA
and lie within Australian sovereignty under the 1971 and 1972 Seabed
Agreements with Indonesia."). These lateral boundaries will also have to be
negotiated between Australia and East Timor and a legal determination of
such lateral boundaries would seem to result in other lines than the limits
of the JPDA.
Best wishes,




Alex

_______________________________________________
Alex G. Oude Elferink
Netherlands Institute for the Law of the Sea (NILOS)
Faculty of Law
Utrecht University
Achter Sint Pieter 200
3512 HT Utrecht
The Netherlands
tel: .. 31 (0)30 2537033
fax: .. 31 (0)30 2537073
email: [log in to unmask]
_______________________________________________
-----Oorspronkelijk bericht-----
Van: John Robert Victor Prescott [mailto:[log in to unmask]]
Verzonden: vrijdag 30 april 2004 7:01
Aan:
Onderwerp:


Dear Colleagues,
The attachement was sent but I have been told it was blank. Herewith the
text again. Sincerely Victor


Professor Gillian Triggs
Director, Institute for Comparative and International Law
University of Melbourne.


On the 19 April Australia and East Timor will begin four days of
negotiations upon a permanent boundary between them in the so called "Timor
Gap". This new round of negotiations follows the conclusion by the Howard
and Alkatiri governments of two agreements in late 2002 and early 2003 for
resource exploitation of the Timor Sea. Why, so soon after these apparently
successful negotiations, are Australia and East Timor back at the
negotiating table?


An obvious answer lies in the imbalance in resource sharing arrangements.
Under the first agreement, the Timor Sea Treaty, the oil and gas resources
of the Joint Petroleum Development Area (JPDA) in the disputed area are to
be exploited jointly, with 90% of the revenue going to East Timor and 10% to
Australia. The second agreement, the International Unitisation Agreement
(IUA), regulates exploitation of the Greater Sunrise oil and gas field, 20%
of which straddles the eastern limit of the JPDA. As approximately 80% of
the Greater Sunrise deposits lie outside the JPDA in the seabed under
Australian sovereignty, 80% of the revenue is to go to Australia.
Consistently with the Timor Sea Treaty, 90% of the revenues from the 20% of
Greater Sunrise that lies within the JPDA belong to East Timor.


In addition to the revenue sharing provisions of the two agreements there
are other critical differences between them. While the Timor Sea Treaty is
legally binding, coming into force on 2 April 2004, the IUA is not yet in
force for Australia and East Timor. More to the point, the revenue dollars
to be earned from the JPDA are minor in comparison to the billions thought
likely to be gained from the huge reserves of the Greater Sunrise field. The
arithmetic exposes the problem: East Timor's 90% of the expected $3.2-3.8
billions in revenue from the JPDA is significantly less than Australia's 80%
of the expected $8.5 billions in revenue from Greater Sunrise.


It is the disparity in prospective revenues from the JPDA and Greater
Sunrise that appears to have prompted East Timor both to deny Australian
sovereignty over the continental shelf of the Timor Gap and to claim 100% of
the resources of Greater Sunrise. An important provision of both the Timor
Sea Treaty and the IUA is that the agreements are interim only, pending the
final delimitation of a boundary between the Parties. East Timor is
therefore free to insist that negotiations should commence to settle a
permanent boundary. In lead up to these negotiations, East Timor has made it
clear that it rejects the boundaries of the JPDA, claiming a far larger area
of the seabed encompassing Greater Sunrise to the East and Laminaria to the
West and challenging the validity of boundaries agreed in 1971and 2 between
Australia and Indonesia.


Complicating these legal differences are the undeniable facts that East
Timor is an impoverished nation emerging from civil war and illegal
annexation. The UN peacekeeping force is due to leave East Timor in June
2005 and civil governance and legal institutions are yet to be fully
developed. Revenues from both the Bayu-Undan and Greater Sunrise fields
would be of immense value to East Timor as it faces the problems of
independence for a population of fewer than a million almost totally
dependent upon foreign aid.


These ethical and legal issues have now combined to create a fog of myths
within which negotiations upon a permanent seabed boundary in the Timor Sea
are to begin.


One of the most persuasive, but misleading, myths lies in the apparently
rational argument that the seabed between Australia and East Timor should be
based on a median or equidistant line. State practice- a powerful indicator
of customary international law- supports East Timor's view that
overwhelmingly, opposite States sharing a continental shelf, delimit their
seabeds using a median line, albeit adjusted to take account of other
factors such as islands. By contrast, international law does not require a
median line where states do not have a continental shelf in common. As a
matter of geology, Australia is on a continental shelf; East Timor is not.
Australia has consistently maintained its sovereignty over the continental
shelf up to the Timor Trough a major geological feature 3,000 meters deep
and about 40 nautical miles from East Timor. Troughs are common in the
Pacific Basin and the Okinawa Trough between China and Japan similarly
impedes negotiations for a final boundary. So too does the Aruba Gap between
Venezuela and Columbia and the Dominican Republic. State practice in such
disputed areas has been both to ignore the geological feature and to agree
jointly to manage exploitation and share the revenues.


Of mythical proportions is the idea that, were Australia to agree to a
median line delimitation, East Timor would gain the greater part of the oil
and gas resources. In fact, the richest of the known resources lie to the
East and West of the present JPDA and lie within Australian sovereignty
under the 1971 and 1972 Seabed Agreements with Indonesia.


Another myth is that the 1972 Seabed Agreement settling the boundary between
Indonesia and Australia is invalid at international law. Not only was this
boundary negotiated in good faith but also it was entirely consistent with a
decision of the International Court of Justice just 3 years earlier in 1969.
In the North Sea Continental Shelf Cases the Court found that states have
sovereign rights over their continental shelf as the "natural prolongation
of the land territory" and that "equidistance' was not a principle of
international law. Rather, a continental shelf was to be delineated on the
basis of "equitable" principles. These ideas are echoed by the 1982 UN
Convention on the Law of the Sea which provides that delimitation of the
continental shelf is to be based on international law to achieve an
equitable solution.


It is also a myth that East Timor can claim exclusive exploitation rights to
all of Greater Sunrise without affecting Indonesia's interests. Indonesian
seabed rights are necessarily prejudiced because of the proximity of the
Greater Sunrise reserve to the 1972 Seabed Boundary. In the improbable event
that Australia were to accede to East Timor's demands by moving the eastern
and western limits of the JPDA to include Greater Sunrise and Laminaria,
full sovereignty over these resources would also undermine the 1972
boundaries. To do so requires the inclusion and consent of Indonesia;
consent that is unlikely to be forthcoming.


Yet another misleading argument is that the coordinates upon which the 1972
Seabed Boundary was agreed, and upon which the JPDA was subsequently
negotiated, are invalid. To the contrary, the equidistant lines are
consistent with international law, having been drawn to take account of
Indonesia's archipelagic status. A challenge to these lines is without legal
foundation.



It is argued that East Timor is not bound by treaties made prior to its full
statehood, whether by Portugal as the Administering Authority, by Indonesia
or by the United Nations peacekeeping authority. Like many myths this is a
half truth. International practice on decolonisation has been to adopt a
"clean slate' approach under which a new state may decide in its national
interests whether to be bound by prior treaties. The concept of a "clean
slate" does not apply to boundary treaties establishing frontiers or
maritime limits. The 1972 Seabed Boundary and the coordinates established by
it are of over 30 years standing, were agreed in good faith and adopt
recognised principles of international law.


It is also a myth that disputes over seabed boundaries should be resolved by
an international judicial tribunal. Australia amended the terms of its
acceptance of the compulsory jurisdiction of the International Court of
Justice and the International Tribunal on the Law of the Sea to exclude
disputes concerning delimitation of maritime zones. While the timing of the
amendment 8 weeks before the independence of East Timor is questionable on
ethical grounds, international law permits a state to decide for itself
whether it will submit its disputes to compulsory resolution by a court.
Australian policy is that boundaries with neighbouring states should be
negotiated rather than imposed by a court. Indeed, Australia has an enviable
record of negotiating creative boundary agreements with Papua New Guinea,
New Caledonia and Indonesia. It is also legally relevant that the 1982 UN
Convention on the Law of the Sea specifically encourages states to seek
negotiated resolutions to boundary issues. The Timor Sea Treaty and the IUA
are entirely within the spirit and letter of recognised international law in
enabling the joint development of resources that are subject to conflicting
claims.


A final myth concerns the nature of a seabed boundary. Sovereign rights over
the continental shelf do not convey territorial sovereignty; only the right
of exclusive development of seabed resources. It is possible for
neighbouring states to agree upon a different regime to govern the
superjacent waters of the Exclusive Economic Zone or territorial sea. This
has been achieved in a 1997 Treaty between Indonesia and Australia and could
well be employed in discussions with East Timor.


With the Senate's approval under the IUA Enablement Act (Cth) 2004,
Australia is now able to ratify the IUA. Prime Minister Alkatiri has by
contrast repeatedly stated that East Timor's Parliament will not do so. It
was strategically unwise of Australia to have ratified the Timor Sea Treaty
without first ensuring that the IUA was also in force. The two agreements
should have been more effectively linked. As matters stand, East Timor has
the right to a 90% share in revenues from the JPDA but can, at the same
time, block investment in the development of the Greater Sunrise deposits,
to the significant disadvantage of both states. In short, East Timor and
Australia will benefit from ratification of the IUA financially and through
the opportunities to work fruitfully together on joint resource management.


While Australia has abundant natural resources, international tribunals have
found that it is not the job of international law to "refashion nature". Nor
does equity necessarily require equality. From the point of view of East
Timor these are hard laws. It is will be for Australia and East Timor to
resolve their differences on a permanent seabed boundary both in good faith
and upon a clear understanding of the international rule of law.




JRV and DF Prescott
44,Lucas Street,
East Brighton
Victoria 3187
AUSTRALIA


Phone 61 3 9592 5156
Fax 61 3 9593 1624