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Presidential elections: Lú-Olo wins

Statement by the Spokesperson on the Presidential election in Timor-Leste

On 20 March, the people of Timor-Leste turned out in large numbers to vote in the presidential elections. On 22 March, the technical secretariat for electoral administration announced Mr. Francisco Guterres Lú-Olo the winner based on the preliminary municipal level results. The final results will be declared on 2 April.

The European Union Election Observation Mission (EOM) headed by Chief Observer Mme Izaskun Bilbao Barandica, Member of the European Parliament in its preliminary statement today, concluded that the election was well-run and peaceful, commending the electoral authorities for delivering a well-administered and inclusive process.

The European Union has a long history of accompanying electoral processes in Timor-Leste and the ongoing Election Observation Mission is a confirmation of the EU’s commitment to supporting democracy, peace and stability in the country. The observers will also follow the campaign and the voting of the upcoming legislative elections.

As a close and long-standing partner, the European Union looks forward to a continued fruitful cooperation with the next President and remains committed to the country’s democratic, economic and social development

Timor-Leste’s 2017 elections: the presidential race commences

Timor-Leste’s 2017 elections: the presidential race commences


3 MARCH 2017

Fretilin is in the box seat for the presidency vote this month, with parliamentary elections to follow in July

José Maria Vasconcelos (better known as Taur Matan Ruak) will not recontest the presidency but is likely to run for parliament.

Election year arrives again in Dili, with the presidential campaign starting today and culminating in a national vote on 20 March. While the president has a formal role in the formation of government, and holds a partial veto over legislation, executive power lies overwhelmingly with the prime minister and cabinet, making the 8 July parliamentary elections the more important of the two votes. The president’s position is nonetheless highly esteemed, and is backed by a direct popular mandate that brings much symbolic power to the incumbent to use as a “bully pulpit.”

This round of elections will test the new government formed in extraordinary circumstances in early 2015, when the former independence movement leader Xanana Gusmão handed over the prime ministership to an opposition Fretilin figure, Rui Araujo. Though best seen as a power-sharing executive rather than a formal government of national unity, this “grand coalition” between Timor-Leste’s two largest parties – the National Congress for Timorese Reconstruction, or CNRT, and Fretilin – was a remarkable development, given the bitter tensions between the parties as recently as 2012. Gusmão’s CNRT retained powerful coordinating portfolios and Fretilin took other key ministries, including foreign affairs. For his part, Gusmão moved to the Ministry of Planning and Strategic Investment, keeping control of the major infrastructure spending that underpins the government’s often-controversial development strategy.

Described by a senior CNRT minister as a transition from “belligerent democracy to consensus democracy,” this powerful combination sidelined CNRT’s former allies, Partido Democratico, the third-largest party. PD nonetheless retained its ministries beyond 2015, reducing its ability to act as an effective opposition. This left president José Maria Vasconcelos (better known by his nom de guerre, Taur Matan Ruak) as the closest thing to an effective opposition. Ruak didn’t shrink from this role, attacking the new government over accountability issues in early 2016, and vetoing the initial version of its budget. Gusmão and Ruak’s relationship appears not to have recovered from this episode.

In general, grand coalitions are good at promoting stability and reducing political conflict, but weaker on providing adequate parliamentary oversight and effective opposition. To fill this vacuum, former anti-corruption commissioner Adérito Soares formed a new political party, the People’s Liberation Party, or PLP, in late 2015. Ruak will not recontest the presidency this year, and is widely expected to enter the parliamentary race with the PLP once he is no longer president.

The parliamentary elections in July will feature around twenty-five parties and coalitions, but the presidential field looks surprisingly uncompetitive, despite the nomination of eight candidates. The main contender is Fretilin’s candidate, the former guerrilla commander and twenty-four-year veteran of the Falintil military resistance, Francisco “Lu Olo” Guterres, who is running for the third time after twice being runner-up (to Jose Ramos Horta in 2007 and Ruak in 2012). Lu Olo’s chance of success received a massive boost in January with a previously unthinkable endorsement by Xanana Gusmão. While expressed as a personal opinion rather than a formal CNRT position, Gusmão’s authority is such that the party will not formally support another candidate. Both previous presidents received Gusmão’s support.

Given the bitter rivalry between the two parties up to 2012, Gusmão’s endorsement of Lu Olo also suggests that they intend their power-sharing arrangement to continue. Meanwhile, despite considerable expectations that he might enter the fray again this year with the support of PLP, former president José Ramos-Horta withdrew from contention shortly after Gusmão’s announcement, citing the need for the next generation to take on the responsibility.

The lack of a high-profile independent alternative to Lu Olo means this may be the first presidential election since 2002 not to go to a runoff election in April. If Lu Olo is successful, it will be a first in another respect: the East Timorese people have previously chosen political independents as president.

While all signs point to a Lu Olo presidency, nothing is certain in politics, and among the remaining candidates, the next most competitive candidate appears to be the PD’s recently elected secretary-general, and education minister António da Conceição. While da Conceição will enjoy endorsement from PD and a smaller party, KHUNTO, his potential support may be somewhat diluted by a former deputy commissioner of the Anti-Corruption Commission, Jose Neves. Once a leader of the clandestine resistance movement RENETIL, he will draw on a similar pool of support to da Conceição and may divide the PD vote.

Importantly, the PLP decided this week to recommend a conscience vote by its supporters in the presidential election, and to focus its energies on the parliamentary poll. Privately, though, PLP figures expect their supporters will fall behind da Conceição or Neves. Other candidates likely to poll more than a few percent include former diplomatic resistance figure and one-time foreign minister, Frente-Mudanca’s Luis “Lugu” Guterres, who leads the fourth party in parliament; and the Socialist Party of Timor’s Antonio Maher Lopes. In the relatively improbable – but not impossible – event that the remaining candidates are able to deny Lu Olo an outright majority in the first round, PLP endorsement may prove an important factor in the runoff.

Despite being in the box seat for the presidency in 2017, the implications for Fretilin are not all positive. In a country where military resistance credentials retain great political legitimacy, Lu Olo is a powerful campaign asset for Fretilin. Assuming the presidency on 20 May will severely restrict his ability to campaign in the all-important parliamentary elections.

For CNRT, the negatives are perhaps more obvious. The party’s failure to produce an alternative prime ministerial or presidential candidate, given that Gusmão himself presently desires neither, highlights its overwhelming dependence on his charismatic leadership. Though Gusmão commands great loyalty among CNRT members, the lack of a candidate is potentially demoralising to the rank and file. The key question of whether Fretilin’s candidate will receive the support of those voters is far from resolved. PLP itself has missed an opportunity to test its support in the field, though it remains confident it can make an impact in July.

The key issues in Timor-Leste’s last election campaign, in 2012, were political stability, veterans’ issues and development policies. These are likely to be revisited this year, with the notable addition of the maritime boundary dispute with Australia, which unites CNRT and Fretilin. With clear implications for Timor-Leste’s future revenue and its development prospects, that dispute invokes issues of sovereignty, stirring strong popular nationalist sentiments that resonate with the long struggle for self-determination. For its part, PLP has already developed a strong critique of the government’s focus on “megaprojects,” and has also raised allegations of patrimonialism. Both of these issues have the potential to resonate in the electorate.

Nonetheless, the present government’s success in maintaining political stability and reducing political conflict within Timor-Leste’s small elite will undoubtedly see CNRT and Fretilin remain highly competitive. Xanana Gusmão’s popularity remains a key factor, and Fretilin’s traditional support base in the eastern districts has remained a stronghold for the historical party. The PLP will likely attempt to distinguish itself from the government by focusing on living standards for the majority rather than megaproject-led development, and also on issues of financial transparency and sustainability. The clash of these two visions of post-independence government will make the 2017 parliamentary election worth following closely, regardless of who becomes president.

Michael Leach is Professor of Politics and International Relations at Swinburne University of Technology.


What holds us together : results of survey, interactive map

What holds us together: A population-based study about resilience for peace in Timor-Leste
from Harvard University, Interpeace
Published on 31 May 2016 ­ View Original



In Timor-Leste, conflicts, divides and mistrust among citizens and authorities continue to undermine the building of a lasting peace. While attention has been given to the sources of fragility and obstacles to peace, there is a need to better understand, asses and ultimately leverage the positive assets and attributes of individuals, communities, and institutions in the country.

This report presents the findings from a nationwide survey on resilience for peace that the Harvard Humanitarian Initiative (HHI), in collaboration with the Centre for Studies for Peace and Development (CEPAD), have undertaken in the context of Interpeace’s Framework for Assessing Resilience Programme. It seeks to contribute to a better understanding of what makes Timorese able to anticipate risk, resolve conflicts collaboratively, and respond creatively to crisis – what we call resilience for peace.

The report has been authored by Phuong N. Pham and Patrick T. Vinck of HHI.

The results of the survey can also be viewed through an interactive map



1.1. Introduction

In Timor-Leste, conflicts, divides and mistrust among citizens and authorities continue to undermine the building of a lasting peace. While attention has been given to the sources of fragility and obstacles to peace, there is a need to better understand, assess and ultimately leverage the positive assets and attributes of individuals, communities, and institutions in the country. This report contributes to this understanding of what makes Timorese able to anticipate risk, resolve conflicts collaboratively, and respond creatively to crisis – what we call resilience for peace.

The report presents the results of a nationwide survey conducted in July 2015 as the quantitative component of a mixed method participatory action research designed to understand the complex linkages between resilience and peacebuilding. The research, implemented in partnership with Interpeace and the Centre of Studies for Peace and Development (CEPAD), is part of a broader program, the Frameworks for Assessing Resilience (FAR) which seeks to develop a framework to assess resilience in relation to conflict and peacebuilding.

The survey was designed to provide detailed information about the factors and capacities for resilience that exist among the Timorese population with a focus on key elements of resilience identified during the consultation phase of the project: culture, religion, leadership, law and security.2 The survey further explored general factors of resilience including key domains of social cohesion. Structured interviews were conducted with a random sample of 2,975 adult residents in all 13 districts of Timor-Leste. The sample was designed to provide results that are representative of the view of the adult population at the district level.


Time to Draw the Line, a new film


Time to Draw the Line

Year: 2016

Genre: Documentary – All

Classification: Check the classification

Director: Amanda King & Fabio Cavadini

The world fell in love with Timor-Leste when it was born as a new nation after 25 years of turmoil and war. Australia’s peace keeping force helped with its peaceful transition into nationhood. Now, over a decade later, the dark story of Australia’s relationship with this new nation must be told. TIME TO DRAW THE LINE presents the campaign for a fair go for East Timor and that nation’s desire to settle its long-running maritime boundary dispute with Australia. Interviews include those Australians who are on the side (of the line) of the East Timorese and on the right side of history. ‘Time to Draw The Line’ is essential viewing for understanding how the extraction of resources has, time after time, usurped our morals.” Damon Gameau Actor ‘Balibo’ ‘That Sugar Film’ It’s fantastic. A strong argument, but also a terrific study of a period of history too. Congratulations, it is a very significant work on this issue.

Robert Connolly, Director ‘Balibo’ ‘Barracuda’

The film will also screen with the animated documentary short, Jose’s Story – Jose Nia Istória


Promoted By Susan Connelly

Date: Mon, Feb 20, 2017 6:30 PM

Where: Event Cinemas Burwood
100 Burwood Rd, BURWOOD, New South Wales, 2134, Australia


Monday FEBRUARY 20                        6:30PM                              HOYTS WETHERILL PARK

Monday FEBRUARY 27                6:30PM                DENDY CINEMAS NEWTOWN

 There are screenings in Victoria and South Australia. Looking forward to screenings coming on in NT, WA and Tasmania.




Australia should meet East Timor halfway

Australia should meet East Timor halfway on maritime boundary
Paul Cleary

Senior writer Sydney @pgcleary

When Australian commandos landed in the colony of Portuguese Timor in 1941, they immediately noticed that the gum trees, rocks and ochre-coloured earth were strikingly similar to home.

As novelist Nevil Shute observed after the war, the commandos found that much of the Timor landscape consisted of “stony hills covered in thin forest scrub, not unlike many of the outback districts in Australia”. He added: “The men were fighting in a type of country that they understood and were accustomed to.”

There’s a very simple reason why these men, many of them recruited from the outback of Western Australia, felt right at home in Timor even though the topography was rugged rather than flat: the island is part of Australia’’s continental shelf.

This fact was first confirmed scientifically in the 1960s when Australian geologist Michael Audley-Charles spent 28 months collecting samples in Timor and then did a further three years of laboratory work, culminating in his book The Geology of Portuguese Timor. He found that many of the fossils in the rocks were the same as those found in the Carnarvon Basin in Western Australia. Since then, seismic surveys have shown that Timor is part of the Australian continental shelf.

Despite this evidence, successive Australian governments have asserted that the Australian continental shelf ends about 100km south of Timor, where water depths in the Timor Sea plunge to about 2800m, creating a long trench. As a result, they say the maritime boundary between the two countries should be influenced by the Australian continental shelf, giving Australia about two-thirds of the maritime area.

But Australia’’s dogged defence of this trench during the past 45 years seems to be unravelling as a result of East Timor’’s David-and-Goliath-style assault through the Permanent Court of Arbitration in The Hague.
This week, East Timor secured the right to proceed with compulsory conciliation over Australia’’s refusal to negotiate a maritime boundary in the Timor Sea based on the median line principle.

This week’s win also allows East Timor to terminate a 2006 treaty after it demonstrated that Australia had engaged in espionage during the negotiations. It’’s the third straight win for East Timor since it initiated this action three years ago, leaving Australia looking bloodied and bruised in legal terms.

In taking this action, tiny and poor East Timor is taking an extraordinary gamble. It could end up worse off, but so far the gamble is paying off.

How different things might have been had Australia taken the approach of Britain in the North Sea. When faced with similar geog­raphy, Britain reached an agreement with Norway in record time and the results have been spectacular. In both the North Sea and the Timor Sea, the 200-nautical-mile claims of the two sets of countries overlap, which indicates that a median line should be the outcome. And in both cases there is a trench in the seabed near the smaller party.
Norwegian negotiators were expecting the British to push for a boundary influenced by the depression, but Britain’’s opening position was the median line. Why? Britain wanted to get on with developing the North Sea resources and avoid protracted negotiations. It was successful.

In Australia, foreign affairs officials have pushed Australia’’s claim to a continental shelf since the early 1970s. Australian official Keith Brennan told the Portuguese ambassador in 1971 that there was no need to negotiate a boundary in the Timor Sea because “nature has already done this for us”. In other words, the boundary should follow the Timor Trough. Portugal didn’’t buy the argument, but Indonesia did when it signed a boundary agreement with Australia in 1972.

As recently as last August, Australia’’s then solicitor-general Justin Gleeson made this same argument in his opening presentation to the PCA when he described the “very deep” trench.

“What that demonstrates is that the physical continental shelves of Australia to the south and Timor-Leste and Indonesia to the north are entirely separate,” he told the court in The Hague.

“They are separated by the Timor Trough, and the Timor Trough is indeed deeper than the highest point on the land mass of either Timor-Leste or the Australian continent.”

Gleeson did not cite scientific evidence to back his claim that Australia and Timor are indeed “entirely separate”. In fact, the trench is more like a “crumple zone” caused by the collision between the Australian Plate and the Banda Arc to the north of Timor. Australia’’s insistence on the doctrine of continental shelf has created an unholy mess in the Timor Sea. But East Timor’’s wins don’t mean the dispute will be resolved soon.
As Foreign Minister Julie Bishop has said repeatedly, the compulsory conciliation initiated by East Timor is not legally binding. However, the Labor Party has broken ranks on this issue and it now supports a resolution based on established legal principles, and the right to seek arbitration if an agreement cannot be reached.

East Timor’’s resistance hero and former prime minister Xanana Gusmao initiated these proceedings after he learned that Australia’’s spy agency had bugged the prime minister’’s office during the 2004-05 negotiations for a treaty known as Certain Maritime Arrangements in the Timor Sea, which lifted Timor’s share of the Greater Sunrise gas and oilfield from 18 per cent to 50 per cent.

The Sunrise gas and oilfield, in which Woodside has a 33 per cent stake, was discovered back in 1974 but it is undeveloped. With more than a billion barrels of oil, the resource is valued at about $US50 billion ($66.7bn), with the government taking more than half that amount. But the result of this bold strategy could well prove to be a pyrrhic victory for a country that relies on one near-exhausted oilfield for more than 90 per cent of its revenue.

Don Rothwell, a professor at the Australian National University’’s college of law, says the five-member Conciliation Commis­sion will produce a report by September that will prove pivotal to the direction of the negotiations. He believes the likeliest outcome is that the report will underpin progress on negotiating a permanent maritime boundary.

However, he says it is possible Australia may reject the report should it prove to be favourable to East Timor’s case. “If any country could take that approach it would be Australia, given its track record in that area,” he says.

While much of the media focus has been on the horizontal median line, Rothwell agrees that the PCA’’s view on the vertical (or lateral) boundaries will decide whether East Timor has taken a wise approach in seeking compulsory conciliation at The Hague.

A strict interpretation of law would deliver to East Timor a smaller share of the Greater Sunrise field than under the CMATS treaty that it wants to abolish. It’’s a huge gamble on the part of a desperately poor nation.

But were the commission to favour shifting the eastern lateral so that East Timor would get a bigger share of Greater Sunrise, then this would raise the prospect of Indonesia exercising its right under international law to be involved in the negotiations.

This would make things even more complicated.

“It’’s one of the critical issues,” Rothwell says. “The starting point will be the existing area covered by the 2002 treaty (which gives East Timor just 18 per cent of Sunrise). Timor is very keen to expand its continental shelf entitlements to the east and west of the current boundaries. That will be the most contentious issue for the commission. If the commission does (side with East Timor), then Indonesia could pose a challenge.”

Clive Schofield
, a professor at the University of Wollongong and another leading law of the sea expert, says CMATS gives East Timor a very good deal and if East Timor attempts to go beyond 50 per cent it could draw Indonesia into the fray ­ something Australia wants to avoid.

“I think that would involve Indonesia, not just Australia,” Schofield says. “That complicates matters substantially. The fundamental reason why Australia was keen on joint arrangements was for the perceived threat that Indonesia would wish to renegotiate the existing seabed boundary from the early 70s.”

Complex disputes of permanent boundaries can drag on. Can Timor achieve more than 50 per cent of Sunrise? Schofield says: “They have a chance to do so in a negotiation, but it may take a very considerable time. Although Australia is bound to negotiate in good faith, it does not have to agree to a boundary it does not like.”

Meanwhile, East Timor’’s main source of revenue, the Bayu-Undan gas field, is nearing the end of its life, and the country could exhaust its much-vaunted petroleum fund within a decade. With its young and fast-growing population, East Timor does not have time on its side.

Paul Cleary was an adviser to the East Timor prime minister during the 2004-05 negotiations. His book on this subject is Shakedown: Australia’s Grab for Timor Oil (Allen & Unwin).

Timor Leste ‘no better off in short term’: sea treaty cancellation

via APSN

Timor Leste ‘no better off in short term’ despite sea treaty cancellation

SBS News – January 9, 2017

Kerrie Armstrong, Myles Morgan — Timor Leste will be no better off despite the cancellation of a treaty that divided resource revenues between the country and Australia, an expert says.

Deakin University southeast Asia expert, Damien Kingsbury, told SBS News the cancellation of the 2006 treaty means a pre-existing 2002 treaty is now back in force. “East Timor is no better off in the short term under the new arrangement,” he said.

“There’s no particular benefit to Australia between the two agreements. Australia will have to pay a small amount of money to East Timor in the 2002 agreement now that that’s back in force, but that’s not really significant in the grand scheme of things and it doesn’t really alter the broader financial arrangements around the division of resources.”

Timor Leste has long pushed for Australia to agree to a maritime boundary between the two countries that would comply with the international law of the sea. A halfway boundary between the two nations would mean the mineral rich fields would be under Timor Leste’s control.

The government also argued, successfully, that Australia negotiated the 2006 treaty, which allowed Australia a disproportionate share of the oil and gas revenues from the Timor Sea operations, in bad faith after allegedly bugging the Timor Leste government.

“It would appear that Australia has agreed that it was conducted in bad faith and that treaty has been cancelled,” Professor Kingsbury said.

“The current status is both governments have said they will enter into negotiations around a permanent maritime boundary between Australia and East Timor — that’s what East Timor has been arguing for. The question now is whether that is going to occur in a shorter time frame or in a longer time frame.

“I think more likely is it’s going to take quite some time, indeed Australia may not negotiate in good faith or it may not negotiate with any sense of urgency, the practical outcome being the existing arrangements in the Timor Sea remain in place.”

Timor Leste’s ambassador to Australia, Abel Guterres, told SBS News the maritime boundary was a bigger picture than resources revenue. “Timor Leste needs to know what part of the sea belongs to it in terms of its development, its long term economic issues,” he said.

“As a new state we must know what belongs to us and in terms of our fisheries, our navy corporation, how far can our navy come into the waters in the Timor Sea, and (how) far Australian navy can go there, so this is a bigger picture issue in terms of co-operation between the two countries and this is where clear jurisdiction is so important.”

Mr Guterres said it was important that both sides had agreed to come together and negotiate under international law.

“International law is neutral, that both sides can live with because neither side imposing on the other, which is very important, and both sides have agreed to negotiate under international law and that is perfect for Timor Leste,” he said. “I’m sure the end result will satisfy both sides and that is what is important for us.”

Timor Sea Campaign’s national co-ordinator, Ella Fabry, told SBS News the cancellation of the treaty was “the first step in righting the wrongs of the past”.

“For us, we’re hoping it means it will pave the way to negotiating a much fairer maritime boundary with Timor Leste,” she said.

“The simple and fairest solution for this is to draw permanent maritime boundary along the median line. That’s what would be in accordance with the international law.”

Professor Kingsbury said Timor Leste was in a difficult place financially, and needed access to the Timor Sea’s Greater Sunrise liquid natural gas (LNG) project revenue in order to shore up its economic future. But even this solution is unlikely to solve all the country’s financial woes.

“East Timor currently has about $16 billion in the bank and it’s supposed to be living off the interest from that revenue stream, however it’s also been using the capital from that account and at this rate of expenditure East Timor will be broke by the end of the 2020s, so what it hopes to do is to tap into the resources of the Greater Sunrise field,” he said.

“In the heyday of the Greater Sunrise field, when LNG prices were high, the field was thought to be worth about $45 billion in revenues, which would be divided evenly between Australia and Timor Leste.

“However LNG prices have fallen very considerably since then, so even if East Timor does get access to the field, and even somebody does choose to develop it, and even if the timing of that fits into its other more pressing financial requirements, it’s not clear that East Timor will derive enough money from that field to sustain it into the long-term future.”

Ms Fabry said a fair maritime boundary would provide “economic security and it would close the journey to independence for them”.

“They’re a fledgling nation, they’ve only just become independent 14 years ago, so for them it would mean completing that journey to independence and knowing exactly what their economy is going to look like for the next 10 years,” she said.

“I think the conciliation that came about late last year was a huge victory for Timor and it was a huge victory for fairness and good relationships in the region and a lot of the pressure that’s going to go on the Australian government will come from the Australian people who are lot more wary of them this time around.”



Review of Pilot Program

                            Report on Pilot Program of SETL   December 2016

finished house


SETL was established in 20 to provide loans to young employed East Timorese who cannot access bank loans for housing. The first loan to a young couple in Dili, both employed in nation building jobs but unable to secure a bank loan, was set up as a Pilot Program. Both borrowers and SETL kept records of the issues from and challenges of the project (ie the building process and concurrent loan repayments) with the intention to meet and discuss how things could be improved. Most of the SETL Board travelled to Dili in July 2016 and the review discussions were on-going over two weeks so that a clearer picture could be gained. Cultural and languages differences meant this process was appropriate, indeed essential.

The review showed that the SETL Pilot Program has been very successful thus far. A substantial house has been constructed in which the borrowers are living with their young family, and repayments are being made on time according to the agreement. The house is spacious, well built and, although SETL did not fund land acquisition, on a big block of land that is useful for fruit tree and vegetable cultivation.

What was learnt during this review consultation will affect future loans by SETL in Timor Leste. These include:

  • careful attention must be paid in calculating loan amounts to rising costs in an economy where almost all commodities are imported. It is not possible to predict the future of prices accurately so an allowance must be built in to project cost estimates.


  • The schedule of loan repayments needs to be scrutinised to ensure it is not too high as to become unsustainable. East Timorese are not used to loans of this size and employment is not secure, hence borrowers are anxious to repay quickly while they have income. Financial education pre-loan advancement should help borrowers understand that repayment of a housing loan is long term, that arrangements include flexibility and that obligation to repay does not have to equal overwhelming stress. This is a cultural difference in borrowing experience from taking up a personal loan under the traditional deve system where personal reputation is at stake.


  • The biggest learning for the SETL Board was about the community context of TL borrowers which differs markedly from borrowers in Australia. Living in one of the world’s poorest countries, when people have a job there is expectation that they will share with those who don’t. Traditional cultural demands include contributions to funerals, weddings, christenings but also money for health crises (of which there continue to be many in a post-conflict society) eg operations, chemotherapy (often done in Indonesia). Borrowers have high community demands on them that are a big pressure when repaying a set amount for a loan. Failure to provide help produces significant social disapproval, a factor not well understood by SETL Board before our consultation. This must be considered as significant in negotiating loan repayment amounts.


  • The financial sector in Timor Leste is underdeveloped with property rights unclear and disputes clogging up the courts, and contract enforcement regulation is weak or non-existent. The real guarantor of loan repayments is relationship, as it is understood within the TL context. SETL will therefore seek to identify through our contacts in Timor Leste an intermediate layer of people with whom a would-be borrower has a relationship to provide that relationship obligation. SETL could then remain unidentified as a “not-for-profit” organisation which does not hold the same power of obligation to repay.



  • Housing is SETL’s prime concern but due to the underdeveloped systems of Timor Leste, house building has many challenges. In the Pilot Program these were dealt with by the first borrowers by themselves, eg project management, inspection of the quality of work, materials purchasing. They did this successfully but at a very high cost to themselves. So the SETL board has decided to widen our possible loan scope because it is likely be difficult to identify potential borrowers who could undertake these extra but necessary building tasks. If an intermediate person was approached about a loan that SETL assesses as meeting a grassroots need, we may be open to funding such a venture. This will be explored further in 2017 when we seek to set up the intermediary structure.

‘Fragile’ ratings for Australia’s near neighbours

‘Fragile’ ratings for Australia’s near neighbours

By  Jackson Gothe-Snape

2 DEC 2016 – 4:01 PM  UPDATED YESTERDAY 6:44 PM

Three of the world’s most fragile countries are on Australia’s doorstep, according to a new report that implores the international community to maintain its aid commitments.

The OECD’s “States of Fragility 2016: Understanding Violence” report, released this week, identifies 56 countries or regions as being fragile based on how exposed they are to risks like economic shock, youth unemployment, disease, corruption, crime and violence.

Three of Australia’s closest neighbours – Papua New Guinea (PNG), the Solomon Islands and Timor-Leste (East Timor) – are assessed as fragile. PNG is rated as more fragile than countries that have endured recent coup attempts such as Egypt, Libya, and Burkina Faso.



The 56 countries assessed as fragile by the OECD. (OECD)

The report calls on the international community to “provide adequate, long-term? development assistance for these countries and “focus funding on the real drivers of fragility?. It also wants countries to develop “better financing strategies?.

The rise of violence in the world is also examined. The OECD estimates almost half the world?s people have been affected by some form of political violence over the last 15 years and it underscores that fact the conflict is not the leading cause of violent death. The report notes that in 2015, more people died violently in countries outside of conflict, including Brazil and India, than in Syria.

According to the report, PNG and Timor-Leste are more vulnerable to political risks, while the Solomon Islands?s most substantial vulnerability is to environmental and health risks.

Together with Indonesia, these three countries represent the largest four recipients of Australian aid. PNG was given $554.5 million in 2015-16, the Solomon Islands was granted $175.9 million and Timor-Leste received $95.3 million.

Despite ongoing conflict from West Papuans over Indonesian rule, Indonesia was not deemed fragile by the OECD.

Although the government has cut the aid budget in recent years, the cuts have not significantly affected allocations to these countries. In the 2014-15 budget, which reduced spending by $650 million, there was actually an increase in the outlay to PNG.



Maritime border dispute: Timor-Leste and Australia

The Hague revives maritime border dispute between Timor-Leste and Australia

Nyshka Chandran| @nyshkac

Tuesday, 27 Sep 2016 | 4:42 AM

A 14-year old border conflict between Timor-Leste, also known as East Timor, and Australia was revived by The Hague’s Permanent Court of Arbitration (PCA) on Monday.

Around 3,000 nautical miles separate Australia and Timor-Leste, an island in the Indonesian archipelago. Between the two countries lie the Timor Sea, home to the Joint Petroleum Development Area (JPDA) that is rich in oil and natural gas deposits. Next to the JPDA are the Sunrise and Troubadour gas fields, collectively known as Greater Sunrise, that are worth an estimated $40 billion.

These fields are at the heart of the maritime dispute that has weighed on bilateral relations and holds the potential to accelerate the nascent Timorese economy.


The Permanent Court of Arbitration


Under the 2002 Timor Sea Treaty, the Southeast Asian island receives 90 percent of revenues from the JPDA’s energy resources, with the remainder going to Australia.

However, only 20 percent of the Greater Sunrise fields lies inside the JPDA, according to the 2006 International Unitization Agreement on Sunrise (IUA), which allotted the remaining 80 percent to Australia.

Subsequently, a separate 2006 agreement [the Treaty on Certain Maritime Arrangements in the Timor Sea, or CMATS] was signed to divide revenues from the Sunrise fields 50-50. CMATs also stipulated a 50-year freeze on both countries from negotiating a permanent maritime boundary.

In 2013, the Timorese government accused Canberra of espionage to gain commercial advantage during CMAT’s negotiations, claiming that such a move invalidated the agreement.

In April this year, Timorese Prime Minister Rui Maria de Araujo initiated formal conciliation proceedings by invoking the United Nations Convention on the Law of the Sea. He aims to establish an exclusive economic zone, including a permanent boundary, one that will allow the island to gain control of the entire lucrative Greater Sunrise fields.

Australia has argued that the Hague’s international arbitration court does not have jurisdiction over the dispute as per CMATs­a response that bears striking similarities to China’s viewpoint when the same court ruled on the South China Sea dispute. In an effort to appeal to the U.S. for help earlier this year, PM Araujo also accused Australia of behaving like Beijing.

On Monday this week, the court refuted Canberra’s claims, announcing that it was indeed competent to hold a conciliation. Talks between the two countries will now continue over the next year.


Activists attend a rally outside the Australian embassy in Dili, capital of Timor-Leste, on February 23, 2016. Hundreds called on the Australian government to negotiate for the establishment of permanent maritime boundaries between Australia and Timor-Leste.


Home to a population of 1.2 million, Timor-Leste relies on oil and gas revenues from the JPDA for the majority of its state budget, and the World Bank has long warned the middle-income country to diversify its economy away from energy.

The country was a Portuguese colony until pro-independence fighters declared victory in 1975. Shortly thereafter, Indonesia claimed the region as its 27th province, paving the way for a violent conflict between the Indonesian military and separatist forces. It was only in 2002 that East Timor became a sovereign state once Jakarta relinquished control.

“Development of the Greater Sunrise gas field is the key to the economic future of Timor-Leste,” Rebecca Strating, lecturer at Melbourne’s La Trobe University, argued in a note last week.

PM Araujo is using the conciliation as part of a broader diplomacy strategy to pressure the Turnbull government, using activist-style rhetoric that positions the dispute as the final stage of Timor-Leste’s sovereignty, Strating explained.

But the island is running out of time.

It’s estimated that the Bayu-Undan oil field, one of the government’s biggest income generators located in the JPDA, will stop producing in 2022, Strating flagged. Moreover, the country’s $16 billion sovereign wealth fund­known as the Timor-Leste Petroleum Fund­could be depleted by 2025, she noted.

The fund was among the top five best performers in the 2013 Resource Governance Index, a ranking developed by the non-profit Natural Resource Governance Institute.

“Even if Timor-Leste wins the conciliation, it will mean going back to square one with Greater Sunrise negotiations. It is difficult to see how this presents a practical, long-term solution for resolving the dispute,” said Strating.

On Monday, Australian Foreign Minister Julie Bishop noted the current arrangements were hugely beneficial to the former Portuguese colony but said her government would engage in good faith during the conciliation process.

“There is an inescapable perception that Australia is denying its tiny, impoverished neighbor its sovereign birthright to determine its boundaries, control its own resources, and shape its own destiny,” Ben Saul, Challis chair of international law at the University of Sydney, wrote in an August note. “Australia should stop obstructing Timor and help it to secure its borders and its future. This week’s conciliation gives Australia a new chance to do the right thing.”

Legal experts say July’s South China Sea ruling could offer insight into the final verdict on the Timor Sea matter.

By denying China’s territorial claims, the tribunal raises the prospect that Timor-Leste might successfully initiate an arbitration against Australia, corporate law firm Gilbert + Tobin explained in a report.

Nyshka ChandranReporter, CNBC Asia-Pacific

Another win for ‘David’ Timor against ‘Goliath’ Australia

Eureka Street

  • Vol 26 No 19/Another win for ‘David’ Timor against ‘Goliath’ Australia

Another win for ‘David’ Timor against ‘Goliath’ Australia

Frank Brennan |  26 September 2016

 David Timor has once again scored a win against Goliath Australia in the international legal forum. Last time it was in the International Court of Justice which took strong exception to Australia’s raiding of the office of a lawyer involved in the preparation of Timor Leste’s case, though admittedly Australia’s one ad hoc judge did dissent on key points from the other 15 judges!

This time it was before a five-member Conciliation Commission convened under the auspices of the Permanent Court of Arbitration. Timor had asked for compulsory conciliation seeking to advance its demand that Australia come to the table and commence the negotiation of maritime boundaries. Australia raised six objections to the conciliation. All six objections were rejected unanimously by the commission.

Two of the commissioners were nominated directly by Australia. One of those commissioners was Dr Rosalie Balkin who had been a highly respected Assistant Secretary in the Australian the Attorney-General’s Department. She had been in charge of the Public International Law Branch in the Office of International Law.

Balkin’s involvement is very significant in light of the long entrenched Canberra bureaucratic mindset which has informed governments of both political persuasions on Timor issues, urging them to yield no ground when it comes to boundary negotiations.

Responding to the commission’s findings, Attorney General George Brandis and Foreign Minister Julie Bishop on Tuesday regurgitated the long repeated Canberra mantra: ‘The current treaty arrangements between Australia and Timor-Leste have been hugely beneficial to Timor-Leste and have supported the accumulation of a $16 billion sovereign wealth fund …

‘We have a strong interest in Timor-Leste’s stability and growing prosperity, and in providing a stable and transparent framework for investment in the Timor Sea.’

They have no idea just how patronising this sounds in Dili each time Australia gets defeated in the international forum. They may well be right. But it’s not their call. Timor-Leste is now an independent sovereign nation and its leaders, which include those who fought for its independence, now want to negotiate maritime boundaries. It’s time for some very plain speaking in Canberra.

Australia and Timor Leste negotiated the Timor Sea Treaty in 2002 and the CMATS Treaty (Treaty on Certain Maritime Arrangements in The Timor Sea) in 2006. The CMATS treaty was negotiated in such indecent haste that Foreign Minister Alexander Downer deliberately circumvented the usual Australian parliamentary process for scrutinising the treaty.
“Turnbull’s advisers may well continue to argue that risks in relationships can be minimised by maintaining present arrangements. This week’s ruling should give the Canberra bureaucrats every reason to pause.”
It was finalised at a time of great political instability in Timor Leste. CMATS was designed to put the negotiation of maritime boundaries on hold for 50 years, providing Timor Leste with a 50 per cent revenue share of the Greater Sunrise oil and gas field, even though most of the field fell within Australian jurisdiction under the 2002 agreement. Back in 2006, commentators including me endorsed CMATS as a fair deal given that it was supported by the Timorese leadership who were content to put boundary negotiations on the long finger in exchange for a short term financial windfall.

The expectation was that a deal for the development of Sunrise would be finalised within six years and that production would start shortly thereafter. But that never happened. No deal was struck with the joint venturers led by Woodside and Shell. With the present glut in oil and gas prices, it is highly unlikely that Sunrise will be developed in the foreseeable future. For example, Shell has shelved the Browse project off the Western Australian coast. Browse is twice the size of Sunrise, and has none of the complex jurisdictional issues.

Having learnt that Australia spied on the Timorese negotiators when CMATS was being finalised, the Timorese have been keen to invalidate the CMATS Treaty. They have other international proceedings on foot seeking a declaration of invalidity. They may succeed; they may not. Meanwhile the Timorese have received legal advice which encourages them to think that the whole of Sunrise might eventually be included within Timor’s jurisdiction, avoiding the need to deal further with the Australians. There is no certainty about this, because negotiations will need to include a place at the table for Indonesia as well as Australia and Timor-Leste.

The Timorese convinced the Labor Party before the last election that a future Labor government should commit to prompt negotiation of a maritime boundary. Labor also announced it would reverse the 2002 Australian decision to withdraw Australia from court determinations or arbitration in the event of a failure to reach agreement. The Timorese then treaded carefully and respectfully with Malcolm Turnbull during the election campaign. With new prime ministers on either side of the Timor Trough, the Timorese thought the time was ripe to seek agreement on commencing the negotiation of maritime boundaries. They could have enlisted their many Australian friends to campaign against Turnbull in the election. But they decided not to. The opted to wait.

Armed with a strong legal team from the UK led by Vaughan Lowe and Sir Michael Wood, two of the doyens of international maritime law, the Timorese then took a bold step. Lowe and Wood had advised that the UN Convention on the Law of the Sea (UNCLOS) contained provisions for compulsory conciliation in cases where the parties had agreed not to go to arbitration or to judicial settlement. They argued this was the situation with CMATS. The commission agreed. The commission decided:

Nothing in CMATS constitutes an agreement ‘to seek settlement of the dispute by a means of [the Parties’] own choice’. Nor does the commission consider that an agreement not to pursue any means of dispute settlement can reasonably be considered a dispute settlement means of the parties’ own choice. Accordingly the commission concludes that CMATS is not an agreement [pursuant to UNCLOS] that would preclude recourse to compulsory conciliation.

The Conciliation Commission will now host a year of meetings between the parties assisting them to reach agreement on maritime boundaries. The commission will then produce a report. Though the report and any observations by the commission are not legally binding, this one-year procedure should now be enough to convince the Turnbull government that there is no point in putting negotiations on hold for another 41 years or until the election of the next Labor government.
“Turnbull will need to develop a new narrative as to why Australia wouldn’t make the best of a bad lot and use the compulsory conciliation as a means to kick start a sensible negotiation of maritime boundaries. Hopefully he will drop the patronising Canberra line that we Australians know what’s best for the Timorese.”
Turnbull’s advisers may well continue to tell him that CMATS provides certainty for economic development of Greater Sunrise, while putting on hold the uncertainty of maritime boundary negotiations which might exacerbate tensions with Indonesia, given the past dealings and agreements between Indonesia and Australia. They may well continue to argue that risks in relationships can be minimised by maintaining present arrangements. This week’s ruling should give the Canberra bureaucrats every reason to pause.

There is nothing to be gained for Australia by continuing to put negotiations on hold when there is no immediate prospect of Sunrise being developed, when the Timorese are increasingly convinced (whether rightly or wrongly) that they were duped, when Australia is wanting to put out a clear message in the South China Sea that China be committed to negotiations in accordance with international law, and when Australia has to spend a year at the table engaged in conciliation under the watchful eye of five commissioners who have already taken a dim view of Australia’s legalistic approach.

More than ever, Turnbull will have to stop preaching on the South China Sea if he is not prepared to act in the Timor Sea. Australia has already told the commission that ‘it will engage in the conciliation in good faith’. So Turnbull will need to develop a new narrative as to why Australia wouldn’t make the best of a bad lot and use the compulsory conciliation as a means to kick start a sensible negotiation of maritime boundaries. Hopefully he will drop the patronising Canberra line that we Australians know what’s best for the Timorese. With their flash UK legal advisers and Norwegian commercial advisers, the Timorese will make their own decisions from here on. Thus far, David has scored two king hits in the international forum. It’s time for Goliath to take stock.
Frank Brennan SJ is professor of law at Australian Catholic University.

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