La'o Hamutuk Annual Report for 2011

In La’o Hamutuk’s vision, the people of Timor-Leste, women and men, of current and future generations, will live in peace and contentment. They will control a transparent, just and sustainable development process which respects all people’s cultures and rights. All citizens will benefit from Timor-Leste’s resources, and will accept the responsibility for protecting them.

Established in 2000, La’o Hamutuk is a Timor-Leste non-governmental organization which monitors, analyzes and reports on development processes in this country, including policies carried on by international institutions engaged in Timor-Leste and by our own Government. La’o Hamutuk facilitates communication between people in Timor-Leste and decision makers, as well as establishing links with communities in other countries to explore alternative development models. We believe that the full participation of all communities in the country’s development decision-making can help ensure that the people of Timor-Leste will benefit the most from their resources, and provide enough space for them to control and take a role in development process, as well as assuming the responsibility of protecting their natural resource wealth.

Since 2007, Government spending has grown very rapidly as the country began to receive large petroleum revenues. More than 90% of the state budget comes from oil money, and spending far exceeds the maximum Estimated Sustainable Income (ESI) set out in the Petroleum Fund Law.

Unfortunately, from 2009 to 2011, about one-third of this spending went to the national electricity project, neglecting human resources and non-oil sectors like agriculture (nearly 80% of the population are farm families) The Prime Minister’s Strategic Development Plan unveiled in mid-2011 promises to continue this path. This controversial, shortsighted policy stimulated lively debates in Parliament and civil society, and La’o Hamutuk provided facts, analysis and advocacy to encourage better-considered, equitable and sustainable financial policies.

By 2011, it was clear that Timor-Leste’s dependence on exporting nonrenewable petroleum wealth has brought the “resource curse,” as rapidly-escalating, wasteful spending and failure to develop the local productive economy produce inflation, unemployment, and neglect of non-oil sectors.

In addition to these economic problems, the lack of investment in productive sectors and human resources, conflicts over land, impunity prevailing over rule of law, and weaknesses in governance and transparency remain serious challenges. Therefore, La’o Hamutuk has taken on an important role in fact-based analysis and research, to help and encourage the Government and other institutions to make decisions that prioritize the rights and benefits for all people of Timor-Leste.

Program activities

As a research institute, we offer independent and reliable information for Government, Parliament, civil society, community groups, journalists, academics, consultants, diplomats, international agencies and others. We have become a public resource center, providing information on issues and Government policies, and use the following activities to disseminate our findings:

Radio Program

La’o Hamutuk has had a weekly, Tetum-language program on Radio Timor-Leste (RTL) for years, but RTL suspended outside programming in 2010 to organize and evaluate their broadcasting. In October 2011, La’o Hamutuk and Radio Timor-Leste signed a new cooperation contract to broadcast our programs to reach the districts, and we hope to produce a half-hour Radio Igualidade program every week. During the last months of 2011, we produced and aired three new programs:

In addition, Viqueque community radio broadcast several of our recorded programs on climate change, international tribunal, ASEAN strengths and weaknesses, and the draft civil code.

Articles in media

La’o Hamutuk wrote many articles in daily and weekly newspapers, mostly during the debates on the 2012 State Budget. We also facilitated and appeared on a worldwide broadcast on BBC World television and were cited twice by The Economist. In addition, we were interviewed, cited or quoted more than 60 times in local and international media, including oil industry trade publications, some of which are listed in Appendix 2.

Public meetings, presentations, testimony and trainings

During 2011, we organized four public meetings in Dili and three public meetings in Liquiçá, Bobonaro and Suai districts. Juvinal Dias (All people named in this report are La’o Hamutuk staff researchers unless otherwise identified) gave a presentation about Timor-Leste’s general situation to East Timor and Indonesia Action Network (ETAN) activists in New York, and Guteriano Neves gave a presentation to the international graduate students at Seoul National University. We also presented to many groups and organizations in Timor-Leste. These and other presentations and events are listed in Appendix 3.

Several organizations, recognizing La’o Hamutuk’s capacity and objectivity, asked La’o Hamutuk to provide training on issues related to the State Budget. We gave three-days of training to Fundasaun Mahein and NGOs from Dili and the districts, and another to the Parliamentary Research Center. We also trained NGOs and community-based organizations in Liquiçá, organized by the Portuguese Instituto Marquѐs de Valle Flõr.

La’o Hamutuk is often invited to present to Parliamentary Committees, and we wrote and published many submissions, letters, reports, statements, comments and analyses, and gave oral testimony to legislatures and other policy-makers, as listed in Appendix 4.

Website, blog and email lists

Many of our web pages serve as “briefing books,” with background information, analysis from La’o Hamutuk and others, and links to related documents in several languages. The following are some of the key topics (these are in English; many are also in Tetum) which we expanded during 2011:

La’o Hamutuk wrote many letters and submissions (appendix 4), which are also on our website, as are many of the presentations we gave at public events and trainings (appendix 3).

Our site is accessed by people around the globe, as shown on the map at right. Each large dot represents more than 1,000 users, with smaller dots representing 100 readers. During 2011, website usage increased by 14% to more than 9,500 average accesses/day. Data traffic went up 29%, averaging more than 1,000 megabytes/day. Readership peaked when we posted the 2012 budget documents and our analysis, averaging 14,000 accesses per weekday in October. Online journals, media and blogs often repost our information, so our readership is actually much larger.

We started a bilingual blog http://laohamutuk.blogspot.com in 2010 to highlight upcoming events and new information. During 2011, we posted 67 entries and people viewed 13,700 pages on the blog. Appendix 5 lists key postings.

La’o Hamutuk maintains an email list with around 130 subscribers. In addition, we circulate our materials to other lists (especially ETAN’s 2600-subscriber “east-timor” list) and information sharing networks.

Natural Resources (Petroleum Dependency)

More than 90% of Timor-Leste’s state revenues come from converting oil and gas wealth into dollars. With oil revenues four times as large as the non-oil economy, Timor-Leste is the second most petroleum-dependent country in the world (after South Sudan), yet our oil and gas resources will only last a few decades. Averaged out over the next two generations, the total likely oil income of Timor-Leste is less than two dollars per citizen per day – half of what Government will spend during 2012. As a result, the country is afflicted with the “resource curse” which damns nearly every other impoverished, petroleum-dependent country.

La’o Hamutuk monitors oil and gas activities in the Timor Sea, as well as potential onshore developments. This includes macroeconomic policy, revenues, transparency, utilization of funds, policy decisions, agreements, effective regulation and their impacts on the country.

La’o Hamutuk has long been the leading organization in Timor-Leste providing information and alternatives for decision-makers, advisors and civil society about threats and possible solutions, especially the environmental, social, political and economic dangers of petroleum dependency.

In 2010, La’o Hamutuk hosted the regional conference of OilWatch Southeast Asia, and we continued to engage with international activists and researchers, supporting each other. Juvinal Dias represented La’o Hamutuk and Timor-Leste at the global OilWatch Assembly in Ecuador in July 2011, further developing our regional alliances. This network helps us to better understand global issues on environment and oil industry and its consequences for the people.

Greater Sunrise oil and gas field

Timor-Leste’s Government continues to disagree with the Sunrise Joint Venture companies as to how to develop and liquefy natural gas from the Greater Sunrise oil and gas field in the Timor Sea. Project operator Woodside Australian Energy continues to prefer a mid-sea floating LNG plant, which they say is more profitable, while Timor-Leste’s Government advocates for an undersea gas pipeline to a future onshore plant in Beaçu, Viqueque district.

During 2011, public debates between the Government of Timor-Leste, Australia and NGOs on the Sunrise issue were often misinformed or not based on facts. Therefore, we continue to update our web page with information and analysis from different perspectives, in an effort to correct frequent misreporting in the local and international media. We are increasingly used by local, international and industry press as the most current and authoritative source.

We meet regularly with company and government representatives to encourage them to be more forthcoming and less ideological, and to promote efforts to maximize the benefits to Timor-Leste’s people, while reducing the environmental and socio-cultural risks.

Former Woodside representative in Timor-Leste Amanda Whyte approached us to publish her article Cowboys, Ogres and Donors: A Decade of Corporate Social Responsibility in Practice. The article sharply criticizes Woodside’s “ogres at the helm” and “sycophantic senior staff” for taking a Public Relations approach, “not making even tokenistic efforts” to develop Timor-Leste. The ex-insider’s thoughts stimulated media coverage and may have helped change the company’s approach, and the Woodside CEO who came in a few months later relates better to Timor-Leste officials, although their bottom-line positions haven’t changed.

The 2007 CMATS treaty which enables Sunrise revenue-sharing can be cancelled by either Timor-Leste or Australia in February 2013, so if the parties do not agree on a development plan before then the project could be delayed for years, and time is not on Timor-Leste’s side.

Tasi Mane south coast petroleum infrastructure project

The Government’s proposed Strategic Development Plan (see below) centers on the petroleum industry along the south coast of Timor-Leste, including a supply base in Suai for offshore petroleum operations, an oil refinery in Betano, an LNG plant in Beaçu, a 150-km highway connecting the three, and several ports, airports and new towns. During 2010 and 2011, the Government spent more than $30 million to prepare for this project, and the 2012 budget allocates $163 million, but the total project cost will be billions of dollars. Although Timor-Leste’s state funds are paying for most of the studies and construction, the new TimorGAP national oil company (see below) will manage construction, operation and eventual revenue collection. The project hinges on an LNG plant for Sunrise gas being built in Beaçu, an option the oil companies continue to reject.

La’o Hamutuk questions the wisdom and viability of prolonging the country’s dependence on the oil and gas sector, and we analyzed information from various sources and spoke with a range of people. We have posted this, with many documents and media reports on a new page on our website.

La’o Hamutuk is trying to ascertain whether the benefits from this project for the people of Timor-Leste justify its costs, and how it will affect the socio-economic and cultural life of local communities. In September, after local people in Betano raised an outcry over plans to take community land for a power station and petroleum industrial area, we visited to talk with them and hear what they are being told (see below).

We also raised questions about the tender for a company to do an Environmental Impact Assessment of the project’s eleven components, since the timeframe was too short, the assessor was not given enough information, and the process did not involve the National Environmental Directorate. After the EIA contract was awarded to the Australian engineering company WorleyParsons (which also provides logistical support for the Bayu-Undan offshore oil and gas wells), we encouraged them to do a conscientious job.

Our work on Tasi Mane has increased societal debate and Parliamentary awareness regarding specific concerns around this project and also about the dangers of continuing dependency on the petroleum sector. Unfortunately, one result of Timor-Leste’s fascination with petroleum is that this sector draws in the most visionary and articulate people, while those responsible for developing agriculture, light industry, ecotourism, food processing and other sustainable paths do not get millions of public dollars to hire foreign companies to prepare flashy presentations, feasibility studies and preliminary designs.

National electricity project

La’o Hamutuk has monitored this project since it surfaced in 2008, including the “Heavy Oil” power plant construction in Hera and Betano, and more than 700 Km of high-voltage transmission lines. This is Timor-Leste’s first and most expensive mega-project, costing more than a billion dollars, including $447 million during 2011. We continue to educate and deliver information to the public about misguided project concepts, sloppy implementation, environmental risks, mismanagement and lack of transparency.

In our submission to Parliament on the 2012 State Budget we wrote: “Unhappily, the electricity sector is still problematic, even though it is the Government’s first priority. A lot of money has been spent, but the quality of construction work on the power stations and transmission lines is below expectations, and daily power cuts afflict EDTL customers.” Although the Hera power station started intermittent operation a few weeks later (using more expensive diesel fuel instead of cheap and dirty heavy oil), outages are still common and few provisions have been made to operate, maintain, or fuel these systems in future years.

Although the Government made little information available, La’o Hamutuk published information from non-public sources, including the monthly Progress Reports by the Italian company hired to supervise the construction. These portray an escalating debacle of sloppiness, lack of forethought, , incompetence and callous disregard of the environment and public and worker safety. We also translated and published the external performance audit of the national electricity agency EDTL, which reveals much about Puri Akraya Engineering (PAE), the new-born company which the Government hired for $406 million in September 2010 to rescue the power plant construction, including the fact that 69% of PAE’s shares were owned by Dooks Group Holdings Limited of the British Virgin Islands, a notorious tax haven.

In August, the Ministry of Finance launched a “procurement portal” with information about contracts signed between 2007 and mid-2011. Eight of the eleven largest contracts, totaling $821 million, were for electricity construction, fuel or management. Mistakes escalated as the Government’s self-imposed deadline of beginning operation on 28 November neared, with an emergency port being built in a prime scuba diving area, only to lie unused after contractors dumped a 270-ton generator on the side of road between the port and the Hera plant site, where it lay for several months. Hera started operation on the assigned date, although its output continues to be intermittent. At the Betano plant site, on the south coast, community residents protested land confiscation (see below), and we provided information.

Basic environment law

In late January 2011, Timor-Leste’s Secretary of State for Environment circulated a Portuguese-language draft of a Basic Environmental Law for limited public consultation. La’o Hamutuk translated the draft law into English and published it. At our request, the consultation period was extended to the end of February.

With technical help from volunteer experts, La’o Hamutuk submitted 48 pages of analysis and recommendations and a section-by-section commentary on the draft law. We also criticized the Environmental Impact Assessment Decree-Law which had just been enacted without any public consultation or transparency. Our submission raised fundamental principles as well as specific details, and convinced the National Environment Directorate (DNMA) that the draft Law was not ready for passage. DNMA officials appreciated our submission, which was the only substantive input they got from civil society.

Climate change and alternate energy

La’o Hamutuk works on climate change based on the principle of climate justice, in which the major countries that produce large amounts of emissions have the greatest responsibility to reduce their emissions, rather than placing the burden on developing countries.

During 2011, La’o Hamutuk participated in an Initial National Communication discussion group, continuing to make recommendations and suggestions to the government for sustainable development policy on economics and environment.

We monitored alternative energy processes in Timor-Leste, although the Secretary of State for Energy Policy declined to share the draft Alternative Energy law for public comment. He also failed to keep his commitment to speak at our February public meeting on the topic.

TimorGAP national oil company

Timor-Leste has been discussing drafts of legislation to create a state-owned oil company since 2007, and La’o Hamutuk has accompanied this process from the beginning. In November 2010, La’o Hamutuk participated in consultations and wrote a submission regarding the proposed decree-law to create a national oil company in Timor-Leste. Some of our suggestions were incorporated but many were not, and in May the Council of Ministers approved the Decree-Law to create the TimorGAP national oil company. La’o Hamutuk translated and circulated the legislation, and wrote a letter to President Jose Ramos-Horta urging him not to promulgate it.

The President took our concerns seriously and we met with his legal advisors, who asked us to write a detailed submission. Unfortunately, the President approved the law in July. The Government moved quickly to establish TimorGAP, appointing its chairman and board, renting office space in the luxurious Timor Plaza shopping mall, and signing contracts with Malaysian companies for helicopter services and to manage construction of the Suai Supply Base, which will become the property of TimorGAP. TimorGAP is managing the entire Tasi Mane project (see above), which will receive $163 million from the 2012 State Budget.

Economics and Trade

Petroleum Fund and transparency

Timor-Leste’s Petroleum Fund contains nearly ten billion dollars, and has served our country well since 2005. However, the Government began revising the Petroleum Fund Law in 2010, receiving parliamentary approval for the revisions in August 2011. La’o Hamutuk participated in many workshops and discussions with the Ministry of Finance and others, and wrote a submission to the Ministry of Finance in late 2010 which we also distributed to Parliament. With very little debate and no significant amendments, Parliament approved the revisions in August and they went into effect in late September.

We continued to engage with the Extractive Industries Transparency Initiative (EITI) process from outside the Multi-stakeholder Working Group, highlighting the late release of the 2009 report and helping the global EITI secretariat better understand the situation here. As the report for 2010 is still unpublished, we continue to urge compliance with the current spirit of EITI, and not only Timor-Leste’s praiseworthy past record. We participated in several meetings of the Core Group on Transparency (CGT) and continue to cooperate with CGT members.

In August 2011, Timor-Leste hosted a regional EITI conference, and La’o Hamutuk distributed thoughts to participants on transparency and related issues. We explained that the just-passed revision to the Petroleum Fund Law “weakens essential articles which safeguard our petroleum resources, allowing half the fund to be invested in financial markets (increasing the risk of losing money), using the Fund as collateral for borrowing and weakening the sustainable spending rule. It undercuts the roles of the Investment Advisory Board and the Banking and Payments Authority, concentrating power in the Minister of Finance.” Many journalists and international agencies appreciated the reality we brought to this otherwise self-congratulatory celebration.

At the same conference, the Government announced the launching of its “Transparency Portal” which is supposed to make current information on budget execution and procurement available on the internet. La’o Hamutuk supports the portal and often uses its data, although we are disappointed that the procurement section of the portal has not been updated since it was launched, leaving out all contracts tendered or awarded after mid-2011. Nevertheless, we downloaded information on the 287 contracts above $250,000 awarded in the preceding two years and posted it as a more usable Excel spreadsheet.

We participated in quarterly press conferences held by the Banking and Payments Authority (BPA, which has been transformed into the Central Bank of Timor-Leste) on the Petroleum Fund, often raising substantive questions. When we noticed inconsistent, incomplete or incorrect information on Petroleum revenues from local or international agencies or journalists, we privately asked for explanation or corrections, which they provided. Our website remains the principal global resource on Timor-Leste’s Petroleum Fund.

State Budget

As in previous years, La’o Hamutuk is still the primary information repository for the 2011 and 2012 State Budgets for civil society, journalists, international agencies, and many Government officials. The debate on the 2011 state budget began in 2010 but continued in 2011, and we continued to web-post budget documents and analyses, and prepared graphics and articles for Timor Post and Tempo Semanál. When President José Ramos-Horta asked the Court of Appeals for advice before he promulgated the budget, we wrote a letter asking him to veto it, pointing out that even if it is Constitutional, it would be bad policy. The legal issues involved were widely misunderstood, so we wrote a newspaper article explaining them. In the end, the Court found the budget Constitutional and the President promulgated it – a 41% increase over 2010.

La’o Hamutuk’s expertise in understanding and explaining the complex state budget is well respected. The NGO Fundasaun Mahein asked us to train their researchers, and we gave three half-days of training in March and April for about ten Timorese NGOs in Dili and the districts on how to understand and find information in the budget documents. The Asia Foundation contracted La’o Hamutuk to provide advanced budget training for the Parliamentary Research Center, which we did at the end of June and will do again in future years.

In September 2011, Government delivered the proposed 2012 State Budget documents to Parliament and the Ministry of Finance promptly posted them on its website. We appreciated Government efforts to publish the documents online quickly, improving transparency to make them more accessible than in recent years. We understood that it was motivated partly because Ministry officials wanted to pre-empt La’o Hamutuk’s website as the ”go-to” place for information on the state budget.

When the National Procurement Commission indicated its intent to award a $100 million contract to import prefabricated houses from China for poor rural communities, La’o Hamutuk asked why the contract amount was more than double the budgeted expenditure, for fewer houses, with a 170% increase in the price of each house. We considered this approach “a lost opportunity to use public money to support local employment and small businesses, and to use local materials,” and wondered about its sustainability. Although we raised similar issues in our testimony on the 2012 state budget, the project continues apace.

Parliamentary committees held hearings on the proposed 2012 Budget during October, and we testified in person and wrote a submission. We also wrote articles in local papers highlighting important issues in the budget, including borrowing, the resource curse, agriculture plans and the Timor-Leste Investment Company. Members of Parliament asked us for individual briefings.

Parliament also invited us to participate in their review of the Opinion of the Court of Appeals on Timor-Leste General State Accounts for 2010, and we mentioned a few concerns overlooked by the Court, including imprudently rapid budget growth and spending more than the Estimated Sustainable Income (ESI) from the Petroleum Fund.

Many of La’o Hamutuk’s concerns were raised during Parliamentary debates, and/or included in the report from the Budget Committee. Although Parliament rejected the Government’s misguided proposal to fund the Timor-Leste Investment Company, it still passed a record $1.7 billion budget (28% more than 2011), spending more than double the ESI from the Petroleum Fund. We urged the President of the Republic to think carefully before promulgating the 2012 Budget, but he did so just before Christmas.

Timor-Leste Investment Company (TLIC)

In September the Government enacted legislation to create a Timor-Leste Investment Company (TLIC), to “promote the development of investment opportunities and national wealth growth, leading important strategic projects with significant commercial impact” by “attract[ing] foreign direct investment by providing commercial incentives.” Later that month, $200 million in start-up capital for TLIC was included in the proposed 2012 state budget, an amount equal to three months of the nation’s GDP.

La’o Hamutuk sees TLIC as a misguided attempt to subsidize development for the elite – shopping malls, hotels, luxury imports, office towers, and international travel. We urged that the money – equal to the combined budgets for health, education and police – be used to benefit more people. We also observed that TLIC was created without public or Parliamentary participation or oversight, did not have any structure, regulations, leadership, staff, accountability or transparency.

Therefore, we wrote newspaper articles and submissions, as well as lobbying individual MPs, to urge Parliament not to hand over $200 million to an entity “with administrative, financial and asset management autonomy” which would undermine genuine private sector development.

In the floor debate, some members of the governing coalition dissented from the Prime Minister’s wishes, and Parliament voted 30-26 to remove all funding for TLIC from the 2012 State Budget. La’o Hamutuk was first to raise this issue, and we consider it a victory.

Borrowing

In October 2009, Parliament passed a Budget and Financial Management Law to enable Timor-Leste to borrow from foreign governments and institutions. The 2011 State Budget did not include borrowing, but laws and negotiations paved the way to start borrowing in 2012. In June and August 2011, the Council of Ministers and Parliament passed laws on foreign loans, opening the door for Timor-Leste to become a debtor for the first time in its history.

In September, La’o Hamutuk and the USA-based solidarity group East Timor and Indonesia Action Network (ETAN) coordinated a statement from more than 100 organizations urging debt-free Timor-Leste not to borrow. They concluded: “Timor-Leste began life in 2002 without owing money to anyone. For the sake of an equitable, prosperous, and environmentally sound future for today’s and tomorrow’s children Timor-Leste should remain debt-free. We urge Timor-Leste’s leaders and international institutions to use other ways to finance the country’s much-needed development.”

When Government proposed to borrow to finance the 2012 State Budget, we lobbied Parliament, media and the public, writing “Ten years from now, as we are repaying our debt, our population will be larger, and our shrinking oil revenues will be stretched thin. Tomorrow’s children will have less education and health care because today’s leaders will have spent the money which would have paid for it on questionable mega-projects. This is another aspect of the resource curse, which we can still avoid. As you encourage sustainable development of our non-oil economy, please don’t burden it with repayment costs for nonproductive loans.” Although Parliament approved the request to take out $160 million in loans in 2012 (of which $42 million will be spent that year), our suggestions sparked debate among civil society, Government, community and Parliament.

La’o Hamutuk continues to follow the borrowing process closely, engaging with lenders and publishing information and documents on our website and in local media. We gave a presentation on the topic to more than 300 incoming students at the Institute of Business, and include it in all our trainings, articles and presentations on Timor-Leste’s economy and state budget.

Strategic Development Plan

After two-years in preparation, the Government unveiled the 20-year National Strategic Development Plan (SDP or PEDN) in July 2011, and directed Parliament to approve it before the Development Partners Meeting (TLDPM) the following week.

According to the Government, “The plan aims to develop core infrastructure, human resources and to encourage the growth of the private sector in strategic industry sectors – a broad based agriculture sector, a thriving tourism industry and downstream industries in the oil and gas sector. [...] The social capital section focuses on the nation’s social capital and on building a healthy and educated society …. The infrastructure section will ensure that the nation has the core and productive infrastructure needed to build a sustainable, growing and connected nation. And the economic development part sets out a plan to achieve a prosperous, modern economy and create jobs for the people.”

Many MPs had no time to read the plan, so La’o Hamutuk distributed our 13-page preliminary thoughts to them, and our ideas informed the Parliamentary debate. Our main points were:

We expanded on these in newspaper articles and submissions to Parliament, as well as in a paper we distributed to the Development Partners’ Meeting just after Parliament approved the SDP.

In November, the Ministry of Economy and Development and UNDP invited La’o Hamutuk to provide comments on a draft country paper in preparation for the 2012 “Rio+20” global conference on sustainable development. We also presented at their workshop, pointing out that Timor-Leste’s current development model is neither green nor sustainable and should be radically changed: “Timor-Leste’s economic development must be based on sustainable sources of revenue. This implies a shift from oil-export-dependency to diversification of revenue sources, job creation, and development of the productive private sector. Timor-Leste’s people should be at the center of the development process, as they are our most important resource. Special attention should be given to the vulnerable and poor, as they suffer the most from inflation; the lack of health, water and sanitation services; inadequate education; insecurity of land tenure; lack of local industrial and agricultural development; unemployment and environmental degradation.”

UNDP 2011 National Human Development Report

In 2008, UNDP commissioned La’o Hamutuk to write a background paper for their third National Human Development Report for Timor-Leste, and we continued to engage with its authors. When a draft version of the report and the Government’s 880 comments were leaked to an Australian newspaper in January 2011, we unsuccessfully tried to persuade UNDP to release the draft. The report was revised again and launched by UNDP and the President in early May, and UNDP invited La’o Hamutuk to speak on a panel at the launch.

We supported the report’s goal of encouraging more attention to Timor-Leste’s non-oil economy, but pointed out some unfortunate compromises and outdated information in the report, as well as the unsustainability of current budget policies and the impossibility of achieving long term double-digit GDP growth. Although the Minister for Economy and Development was scheduled to speak, the Government boycotted the launch, which was attended by heads of most state institutions and international agencies. The next day, the Government issued a press release attacking the report and La’o Hamutuk’s “active involvement.” We followed up with private conversations with UNDP and the Government. Although UNDP soon took the report off its website and never published it in Tetum, it can still be downloaded from ours.

International assistance

Timor-Leste’s Minister of Finance has become a global leader in the Aid Effectiveness movement, heading the “g7+” group of fragile states. Over the years, La’o Hamutuk has identified many of the problems this movement is trying to address, and we continue to work for their resolution. During 2011, La’o Hamutuk facilitated and participated in civil society consultations, gave oral and written comments on draft background papers, and responded to the Ministry of Finance’s request to create a web page on the OECD consultation.

We were the only civil society organization to provide written input to the Timor-Leste and Development Partners meeting in Dili in July, encouraging participants to understand our country’s post-conflict, post-colonial, petroleum-dependent context, the impact of impunity, the consequences of external borrowing, fragility stemming from the “resource curse,” and the limitations of security (i.e. police and military) and statebuilding parameters for donor priorities. We urged longer-term planning, at least as far as 2024 when that the oil will be used up, the post-1999 baby-boomers will reach maturity and debt repayment grace periods will have ended.

In November, The Asia Foundation invited LH staffer Guteriano Neves to South Korea, where he participated in Busan civil society and governmental High Level Conferences on Aid Effectiveness, as well as a month-long fellowship in Asia Foundation Korea where he researched South Korea’s economic experiences.

When the U.S. government awarded the contract for MCC Threshold Program Anti-Corruption programming to DynCorp (which had absorbed Casals and Associates), we helped journalists and others understand the corrupt, militaristic record of this company. In November, MCC released its new scorecard for Timor-Leste, showing declining scores. However, a World Bank error caused Timor-Leste to be compared with Low-Income Countries (instead of with Low-Middle Income Countries as in the previous two years), so La’o Hamutuk recalculated the scorecard (verifying our results with U.S. officials) to show actual trends, which are not encouraging.

We are often visited by academics, journalists, delegations or staff from aid agencies and governments looking for a civil society perspective. We encourage greater transparency and prioritization of social justice, human resources, and grassroots people’s needs. Both the ADB and World Bank sought us out to discuss their upcoming strategic plans, and we had many private and public meetings with them to improve and better understand each other’s perspectives and information. We engaged with Washington-based IMF staff on Timor-Leste throughout the year. IMF economists made their annual visit to Timor-Leste in November, and the Minister for Finance tried to remove La’o Hamutuk from their meeting schedule, but they met with us several times.

We also met with (among others) diplomats and representatives of aid agencies from Japan, the U.S., Canada, Germany, UNDP, OECD, Norway, Australia, Sweden, Japan and several international NGOs and companies considering or proposing projects here.

ASEAN

For years, Timor-Leste’s Government has prioritized Timor-Leste joining the Association of South East Asia Nations (ASEAN), but La’o Hamutuk is concerned that this may not be good for everyone in our country. We feel that Timor-Leste should consider the impact of the ASEAN Free Trade Agreement on our local economy and on poor farmers who still live from subsistence agriculture. In July 2011, LH staffer Maximus Tahu was invited by UNDP to Singapore to participate in the Regional Policy Dialogue on Inequality and the Obstacles to Human Development Challenges in South East Asia. He also met with academics and others, deepening our knowledge and contacts.

Agriculture

Food sovereignty

After consulting with farmers in Ermera, Bobonaro, Manufahi and Oecusse in 2010, La’o Hamutuk launched our report entitled “Valuing Farmers’ Words and Wisdom” in 2011. This report was well-received by the public and by international institutions like the World Bank and GIZ, who realized that their programs could have been more effective during the past decade if they had listened more to farmers. We printed the report in English and Tetum and posted it to our website.

Because many communities have limited information about the development process, La’o Hamutuk feels that the media are crucial to disseminating information about sustainable agriculture. Therefore, in 2011, we organized a basic training for journalists about food sovereignty systems, with Ego Lemos from PERMATIL (Timor-Leste Permaculture).

La’o Hamutuk continued to monitor and research seeds imported by Timor-Leste’s Agriculture Ministry and the Australian aid program Seeds of Life. We organized a public meeting to discuss the impact of imported seeds on local seeds and the farmers’ livelihoods, but were frustrated by bureaucratic hurdles in obtaining the draft seeds law developed by Seeds of Life.

We work closely with local and international networks like HASATIL and regional La Via Campesina to improve our knowledge and advocacy at the international level.

Land rights

In 2007, the Ministry of Justice signed an agreement with USAID through its Ita Nia Rai project to develop three laws to regulate private and community rights on land and property – the Land Law, Expropriation Law and Real Estate Fund Law. La’o Hamutuk has followed this issue ever since, advocating for everyone’s right to access land, especially for women and vulnerable groups.

During 2011, La’o Hamutuk continued to analyze the impact of these laws on communities, since they will make it more difficult for local people to access land. We found that the proposed expropriation law would give the state authority to take poor people’s land to benefit private business interests, violating poor people’s rights, and we asked Parliament not to pass this law without adequate public consultation.

Therefore we organized a public meeting in Dili on the impact of the land laws on community land. La’o Hamutuk also organized community discussions on the land laws in Ermera (with KSI) in May, Oecusse in July and in Bazartete (Liquiçá District, with UNMIT support) in October.

The Betano (Manufahi district) community had agreed that the Government could take four hectares for the heavy oil power plant, but when the Tinolina company began work, it cleared a much larger area. The community protested that there had not been a participative consultation and that compensation was unfair. La’o Hamutuk and Rede ba Rai (Land Network) held a press conference to ask the Government for better consultation before the Government or a company takes land, with a formal agreement and just compensation to protect community livelihoods. Two weeks later, La’o Hamutuk joined government officials and 300 local citizens at a community meeting in Betano.

For more than a decade, 143 families have lived in a Dili compound which had been used by the Indonesian police (Brimob) during the occupation. Before these people were evicted in January 2011, La’o Hamutuk and Rede ba Rai worked with them to hold discussions and lobby the Minister for Justice, the Land and Property Department (DNTP), the Ministry of Social Solidarity and UNMIT Human Rights Unit to try to resolve the problem. Since being forced out, many former Brimob residents live in Aitarak-Laran in unhealthy conditions, without a home or place to sleep, no access to water or sanitation, but they have not received help from the Government or any international agency. Rede ba Rai worked with Oxfam to provide short-term assistance during 2011 only.

We also participated in Parliamentary hearings and lobbied Members, as well as writing two submissions (Tetum) to Parliament on the Land Law and Expropriation Law. When the Government tried to shortcut the deliberative Parliamentary process by approving a decree-law for “undisputed cases,” we met with community residents and published their and our concerns. Together with Rede ba Rai (Land Network), we urged that this go through a Parliamentary process to protect most people’s welfare. In addition, our research in Manatuto, Oecusse and Liquiçá districts found that data collected by the Ita Nia Rai project is not reliable enough to use for distributing land titles.

La’o Hamutuk plays a key role in the Rede ba Rai coalition, bringing issues about land and legal processes to Government and Parliamentary levels, developing advocacy strategies and communication channels between local communities and decision-makers. La’o Hamutuk’s Inês Martins is often the spokesperson for Rede ba Rai, and both our organization and the coalition are increasingly valued by local communities, NGOs and members of Parliament.

Governance and democracy

Justice for past crimes

Impunity continues to prevail more than a decade after Indonesian forces stopped committing crimes against humanity during their illegal occupation of Timor-Leste from 1975 to 1999, with no effective justice processes for nearly all of these crimes. Therefore, La’o Hamutuk continues to engage with UN and other agencies to encourage judicial accountability for perpetrators of the crimes through an international tribunal established by the UN Security Council.

As an active member of the National Alliance for an International Tribunal (ANTI), La’o Hamutuk worked with other ANTI members to keep this unfulfilled commitment in the minds of UN officials and diplomats around the world. The UN Security Council discussed their mission in Timor-Leste twice, and La’o Hamutuk facilitated and wrote letters to them prior to the February and November 2011 meetings. We also wrote to and met with relevant embassies here, lobbying them to support justice in the Security Council. In addition, we met several times with the head of the UN Mission here and other UNMIT officials (including from Geneva and New York) to encourage increased attention to these crimes, including how to support accountability after UNMIT ends in 2012.

In February, our justice team attended a training organized by JSMP and Amnesty International on “International Mechanisms for Advocacy” for justice.

The “dirty war” of Argentina’s military dictatorship against its people occurred just after Indonesia invaded Timor-Leste, but it has taken almost until now to secure some measure of justice. La’o Hamutuk, with activist support from ANTI and other NGOs and financial support from Klibur Solidariedade, invited Argentinian human rights activist Patricia Isasa to Timor-Leste to share her experience as a kidnap/torture/rape victim whose 30-year struggle eventually put her perpetrators in prison. Before her visit, we showed a Tetum-subtitled documentary about her case at campuses around Dili and broadcast it on national television. When Patricia arrived in October, La’o Hamutuk organized public and private meetings with community people, NGOs, activists and victims in Dili, Suai, Maliana and Liquiçá. We facilitated meetings with political leaders, ambassadors, UN staff, the Bishop of Dili Diocese, university students and human rights activists. President José Ramos-Horta and UNMIT chief Ameerah Haq hosted Patricia for private dinners at their homes. On her way to and from Timor-Leste, Patricia met with human rights and justice activists in Jakarta and Bali, helping to strengthen ties between Indonesian and Timor-Leste organizations. A more detailed report is available from La’o Hamutuk.

In 2011, we worked with other civil society groups, university students and associations of victims’ families to commemorate anniversaries including the 1983 Kraras massacre, the 1991 Santa Cruz massacre and 1999 Referendum. These events remind our leaders and the international community that the struggle for justice is unfinished, and they should create an international tribunal to try high-level perpetrators who remain free, many holding top positions in Indonesia.

When militia member Valentim Lavio was tried in Dili for crimes he committed in Liquiçá in 1999, we attended the trial and met with victims’ relatives to encourage them to continue the struggle for justice. We also raised the issue of justice in every meeting with UNMIT leaders and participated actively in the UN Human Rights Council’s first Universal Periodic Review (UPR) of Timor-Leste.

Moreover, La’o Hamutuk continues to cooperate with international human rights organizations and networks which focus on justice and accountability, including ETAN/US and the Australian Coalition for Justice for East Timor (ACJET) , to disseminate and advocate people’s voices for justice among international community. In August, Juvinal Dias and Charles Scheiner met with officials from Human Rights Watch, Amnesty International and the UN in New York to discuss justice and human rights issues in Timor-Leste.

Corruption

In February, La’o Hamutuk was invited to present to the Strategic Planning session of the new Anti-Corruption Commission.[29] We discussed the risks of corruption and the resource curse in oil-export-dependent countries, and urged CAC to form a division to analyze pending legislation for its safeguards, resistance, risks and loopholes in relation to corruption. Throughout the year, we met with anti-corruption researchers, consultants and advisors passing through this country.

In 2011, Parliament considered a law drafted by the Prosecutor-General to make Timor-Leste law consistent with the UN Convention Against Corruption, as well as to strengthen anti-corruption mechanisms. We believe that the law is inadequate and fails to consider the special situation in rentier economies like ours. We wrote a submission (Tetum) and testified at a hearing of Parliament Committee C on this draft law, and continue to engage with this process.

Several simultaneous legislative initiatives, including the TimorGAP National Oil Company Decree law, the National Development Agency, the National Petroleum Authority and the Infrastructure Fund, have little or no protection against corruption, and we continued to urge stronger provisions for transparency, reporting, oversight and checks and balances in this legislation.

United Nations

La’o Hamutuk is increasingly asked by UNMIT officials to share our perspectives. We find them more accessible than previous UN leaders here and often meet with high-level UN officials. When the head of the UN Department of Peacekeeping Operations visited Timor-Leste, UNMIT chief Ameerah Haq invited Charles Scheiner to sit across from him at a banquet she hosted, providing an opportunity for a frank exchange of views on impunity with high-level officials.

We met with a mission visiting from UN headquarters to plan UN support of the 2012 elections, and continued to encourage the Security Council and UN officials here to give higher priority to justice and sustainable economic development, rather than only police and military.

In August 2011, Juvinal Dias and Charles Scheiner met with the Director of the Asia and the Pacific Division in the UN Department of Political Affairs in New York, and we organized meeting for him with civil society and activists groups during his visit to Dili a few weeks later.

Also, we met several times with delegations from the Office of the UN High Commissioner for Human Rights (OHCHR) and UN Headquarters from to discuss issues related to UNMIT’s withdrawal in 2012. When the OHCHR mission visited, we wrote recommendations about the post-UNMIT UN Human Rights presence in Timor-Leste.

In November, we met with the OHCHR’s Special Rapporteur on extreme poverty and human rights during her visit to Dili, sharing perspectives on Timor-Leste’s economy and agriculture. She incorporated many of our ideas in her preliminary observations and recommendations, in preparation for her report to the Human Rights Council in 2012.

To share information, strengthen advocacy and reinforce local and global civil society movements, La’o Hamutuk often joins with other organizations in coalitions or networks on issues related to our concerns. During 2011, we worked with the following:

Timor-Leste coalitions

Core Group on Transparency

The Core Group on (budget) Transparency (CGT) formed in 2005 to monitor the RDTL state budget and advocate for transparency and accountability, especially regarding oil and gas revenues. CGT includes about 10 local NGOs, and also works with worldwide organizations and networks. La’o Hamutuk was an active member, providing research and coordination for CGT and broader civil society. In May 2011, after months of discussion, we withdraw from CGT after it decided to apply for money from Timor-Leste’s Government. As we told CGT members, this violated CGT’s integrity and would make it impossible to impartially monitor Government activities. However, we continue to work together with members on transparency and related issues.

Rede ba Rai (Land Rights Network)

Rede ba Rai includes more than 20 local and international NGOs, unions and community groups across Timor‐Leste. It supports grassroots people to set the agenda on land issues through popular education, monitoring evictions and legal processes, mobilizing people, action-research and by lobbying Government, Parliament, international institutions and donors. La’o Hamutuk plays a leading role in strategy, analysis, advocacy and public relations.

National Alliance for an International Tribunal (ANTI)

La’o Hamutuk is one of the most active members of this coalition of Timor-Leste human rights NGOs who push to end impunity for crimes committed during the 24-year Indonesian occupation. We worked closely with ANTI on Patricia Isasa’s visit, as well as on several joint letters, statements and actions during 2011.

HASATIL (Sustainable Agriculture Network)

HASATIL includes 38 local organizations: NGOs, community groups and the agriculture faculty of the National University of Timor‐Leste, working to strengthen sustainable agriculture.

International coalitions

Much of La’o Hamutuk’s research and advocacy also relies on informal partners in other countries. These are the coalitions we relate to more formally:

Climate Justice Now! Network

La’o Hamutuk has participated in the Climate Justice Now! Network since it started in Bali in 2007, joining meetings in Bangkok and Copenhagen. The CJN Network coordinates civil society groups fighting for just adaptation and mitigation on climate change, including NGOs, popular organizations, indigenous people, farmers, fishers, and people living on small islands. We draw on its members to inform our work on these issues.

International solidarity and human rights organizations

La’o Hamutuk works closely with the U.S.-based East Timor and Indonesia Action Network (ETAN), the Australian Coalition for Justice in East Timor, TAPOL (U.K.), Focus on the Global South, Amnesty International, the Centre on Housing Rights and Evictions (Cambodia), and many other organizations and coalitions which support justice and equitable development for Timor-Leste. We try to help them make their work more effective and responsive to the people of this country.

OilWatch

OilWatch was started in Ecuador and is based in Nigeria, and includes organizations in tropical forest countries that resist oil industry activities and the resulting underdevelopment, environmental damage and social degradation. La’o Hamutuk joined OilWatch in 2002. In 2010, La’o Hamutuk hosted a regional OilWatch conference with participants from Burma, Indonesia, Thailand and the Philippines, and we continue to be active with this regional and global network. In July 2011, Juvinal Dias participated in the OilWatch International conference in Quito, Ecuador.

Publish What You Pay (PWYP)

Publish What You Pay (PWYP) is a global civil society campaign for transparency in oil, gas and mining revenues. It has 300 coalition members from 50 countries, who call for laws requiring companies and governments to disclose payments and revenues from exploiting mineral resources. PWYP wants companies to report all types of payments, to every level of government and in every country where the companies operate, and Governments to report all revenues from resources extraction, broken down by company and type of revenues. La’o Hamutuk is a member of PWYP, and we met several times with PWYP representatives. We also collaborate with related international organizations, including Transparency International and Jubilee Australia.

During the reporting period, our staff included Juvinal Dias, Mariano Ferreira, Inês Martins, Charles Scheiner, Maximus Tahu, Odete Moniz, José Pereira, and three staff who joined La’o Hamutuk in August: Alexandra Arnassalon, Celestino Gusmão and Guteriano Neves, as well as three security people and one cleaner. Toward the end of 2011, José Pereira and Maximus Tahu left La’o Hamutuk. We continue to look for qualified Timorese women to work with us. Appendix 6 has brief biographies of our staff and Advisory Board.

During the year, La’o Hamutuk staffers broadened their experiences by participating in international conferences and meetings in Cambodia, Singapore, Ecuador and New York.

We moved into our new office in Bebora in May, after more than two years of searching and construction. We inaugurated the office and celebrated our 11^th anniversary with a big party. The new office gives us a better work environment, space for more staff and interns, a conference room, and a much more user-friendly library and resource center. Trocaíre gave us special funding to buy high-quality, Timorese-made bamboo furniture, making our office a showplace for “buy local” advocacy.

After extensive preparation, we contracted Abel dos Santos and Bu Wilson to conduct an external evaluation of La’o Hamutuk, the first in seven years. Bu and Abel conducted more than 70 interviews in June and presented their report in July. The report begins

The evaluators recommended that La’o Hamutuk develop a more Timorese public identity, temper criticism with praise, suggest policy alternatives, and review our approaches to building staff capacity, communicating our findings and organizing local communities. Their detailed report is available in our office.

In July, we held our third annual meeting with our donors, describing our work and discussing preliminary results from the external evaluation.

In December, La’o Hamutuk evaluated our work during the last three years and developed our Strategic Plan for 2012-2014, with discussions on La’o Hamutuk activities and major issues regarding Timor-Leste’s future, with participation from Board members, donors and friends.

We published our audited financial and annual report for 2010, as well as our six-month report for 2011. These go more smoothly every year, as we continue to refine our financial management.

Although the preceding pages describe many results of our work, this section lists a few of the important concrete outcomes. Additional impacts are in the external evaluators’ report.

Based on our external evaluation and three-year strategic plan, we do not anticipate major changes in our priorities or direction during the coming year, so most of the activities and issues discussed above will continue. However, we do plan some specific measures to strengthen our effectiveness, including:

During 2012, some new events and developments will enhance or modify the foci of our work on issues, including:

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