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Historical Background

1972 - Australia and Indonesia signed a seabed boundary treaty, establishing a seabed boundary much closer to Indonesia than to Australia. Since Portugal (the colonial ruler of East Timor at that time) refused to participate in the discussions, the boundary was incomplete, resulting in the "Timor Gap".

1975 - With Portuguese departure imminent, and amidst increasing Indonesian covert destabilization, , East Timor declared its independence on the 28th of November. Less than two weeks later, Indonesia invaded East Timor, killing 50,000 people in the next six months and 200,000 during the subsequent 24-year occupation.

1989 - Australia and Indonesia agreed on the Timor Gap Treaty, which divided revenue from the seabed resources in the "Gap," giving Australia a disproportionate share in return for Australia's recognition of Indonesia's illegal annexation of East Timor. The Treaty defined a Zone of Cooperation (ZOC). The Central ZOC Area A, which contained most of the oil and gas resources, would be shared equally between Australia and Indonesia. When Indonesia was forced to withdraw from East Timor in 1999, Australia and Indonesia acknowledged the invalidity of the Timor Gap Treaty, which had been premised on an illegal occupation.

1997 - Australia and Indonesia signed a treaty on the water column boundary in the Timor Sea based on median line principles. This Treaty was never ratified and has not entered into force.

1999 - Following a U.N. administered referendum in which 78% of East Timor's people voted for independence from Indonesia, the Indonesian military violently withdraws from East Timor, displacing 2/3 of the population and destroying ¾ of the buildings and infrastructure. Australia leads a multinational military force to help East Timor recover from the destruction and complete its transition to independence 2-1/2 years later.

1999 - The Laminaria-Corallina oil field, just outside the JPDA and much closer to East Timor than to Australia, begins production. To date, this field has produced nearly AUD$2 billion in government revenues, all of which has gone to Australia.

2000 - During the UN Transitional Administration (UNTAET), action was taken to preserve the oil companies' contracts and continue development, so that East Timor would receive some oil revenues quickly. The first UNTAET-Australia agreement, in 2000, continued the terms of the 1989 Timor Gap Treaty. The 50-50 division of Zone of Cooperation Area A was renamed the Joint Petroleum Development Area (JPDA).

2001 - The following year, UNTAET and Australia renegotiated the agreement to divide petroleum production in the JPDA, 90% for East Timor and 10% for Australia, signing the Timor Sea Arrangement in July 2001.

Timor Sea Dispute

March 2002 - two months before East Timor's independence, Australia withdrew from the maritime boundary jurisdiction of the two international arbitration bodies used to settle such disputes, the International Court of Justice (ICJ) and the International Tribunal on the Law of the Sea (ITLOS).

20 May 2002 - On the first day of East Timor's independence, Australia and East Timor signed the Timor Sea Treaty. This treaty gives East Timor 90% of revenues from inside the JPDA, leaving other disputed territories for future discussion. Australia continues to develop and profit from larger petroleum areas outside the JPDA, which are closer to East Timor than to Australia but claimed by both countries. The Timor Sea Treaty would allow for the production of the Bayu Undan area (within the JPDA) to begin, with 90% of the government share of revenue going to the newly independent East Timor.

October 2002 - East Timor enacts a Maritime Boundaries Law, claiming a 200 nautical mile Exclusive Economic Zone in all directions from its coastline, based on United Nations Convention on the Law of the Sea (UNCLOS) principles. (This claim includes all of the major petroleum fields listed on the 'resources in dispute' page of this website.)

December 2002 - East Timor's parliament ratifies the Timor Sea Treaty, as both nations promised when they signed it. Australia delays ratification to pressure East Timor into signing the Sunrise Unitisation Agreement the following March.

March 2003 - Australia and East Timor signed the Greater Sunrise Unitisation Agreement. This is an interim arrangement between East Timor and Australia to put in place a legal regime necessary for the Sunrise project to begin before maritime boundaries are finalised. The Unitisation Agreement currently allocates almost 82% of revenues from the Greater Sunrise field to Australia, and just over 18% to East Timor, despite the fact that the field is twice as close to East Timor as it is to Australia. Australia refused to ratify the Timor Sea Treaty (signed one year before) until the agreement was signed, which would have delayed production of the Bayu Undan field and East Timor's access to the urgently needed government revenue from this field.

November 2003 - A year after East Timor asked Australia to begin negotiations on a permanent boundary, the first round of talks is held in Darwin, Australia. East Timor sends a full team of negotiators, ready to begin substantive negotiations. Australia sends team of three, describing the talks as 'talks about talks'. East Timor asks for monthly talks leading to permanent maritime boundaries, as talks were often held monthly (at Australia's request) or more often to conclude the Timor Sea Treaty and Greater Sunrise Unitisation Agreement. Australia says it only has enough resources for two rounds of talks per year.

[2002 to 2004 - Australia offers new areas in contested waters to oil companies, signing contracts (Sept. 2002, April 2003, Feb. 2004) with some. East Timor has protested. Australia justifies continuing to "exercise exclusive sovereign rights" because it has done so "for an extended period of time".

Feb. 2004 - Bayu-Undan begins production.

March 2004 - the Australian government introduced the Greater Sunrise Unitisation Agreement Implementation Bill, into both Houses of Parliament. This Bill will implement the Unitisation Agreement. As the Bill stands, Australia would gain almost AUD 8 billion in future government revenue over East Timor which has little revenue independent of foreign aid.

April 2004 - first substantive round of talks held in Dili, East Timor. The talks are marked by a demonstrations   by over a thousand East Timorese outside the Australian embassy. At his opening address to the talks, East Timorese Prime Minister Mari Alkatiri slams Australian's policies on the Timor Sea. Among other things he offers aid to Australia to fund a negotiating team to meet monthly, as requested by East Timor. No progress is made at the talks - Australia insists on a continental shelf boundary, and refuses to negotiate about areas to the east and west of the JPDA, despite the fact that these areas are claimed by both nations and therefore under dispute.

August 2004 - Foreign Ministers Alexander Downer and Jose Ramos Horta meet, and an apparent breakthrough is made. A framework is agreed by which East Timor will put demands for a permanent maritime boundary on hold in return for resource sharing agreements to reflect their entitlement under international law.

September 2004 - Another round of talks between the two nations takes place in Canberra, on the fifth anniversary of the arrival of the Australian led InterFET mission in Dili in 1999. Outside the talks, a national convergence of Australian activists points out that Australia has betrayed the spirit of InterFET, stealing more in disputed revenues than it has given development assistance during the past five years. Inside, little substantive progress is made - Australia regards the talks as a brainstorming session - the sides are still far apart. Talks continue in Darwin in the first week of October, just before Australia's election.

November 2004 - Talks resume in Dili, East Timor, and soon break down. Far from coming up with a 'creative solution' Australia places a non-negotiable offer on the table. The offer consists of: a boundary along the Timor trough (based on the so-called continental shelf argument); revenue sharing to remain as it is currently - Australia to take 10% of the JPDA and   complete control over areas east and west of the JPDA but closer to Timor than to Australia (where Buffalo, Corallina, Laminaria and Greater Sunrise are located); East Timor to receive $3 billion in compensation; no compensation for future discoveries in the contested area which would now fall under Australian sovereignty; no other controls for Timor in these disputed areas, including employment, environmental controls, control over downstream benefits. In purely financial terms, based only on taxation revenue from currently discovered fields, this arrangement would leave Timor some USD 5 billion short of its entitlement under international law. The offer falls even further short when considered in terms of sovereignty and self-determination, the way in which many Timorese couch this debate. The Australian delegation demanded that this offer remain confidential - within one hour of talks breaking down, DFAT was briefing journalists with a version of events totally at odds with what actually took place in the meeting.

January 2005 - With a speedy resolution to the dispute looking unlikely, Woodside Petroleum shelves its involvement in the Greater Sunrise project. Shortly after the Australian Government agrees to continue talks with East Timor. The next round is currently scheduled for mid March.

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