This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Contact Officer & Copyright Details
Timor Gap Treaty (Transitional Arrangements) Bill 2000
Date Introduced: 17 February 2000
House: House of
Portfolio: Industry, Science and Resources
Commencement: Sections 1 and 2 will commence on Royal Assent. The
remainder, except for amendments to the proposed Crimes at Sea
Act 2000, will be taken to have commenced at the 'transition
time'.(1) The amendments to the proposed Crimes at
Sea Act 2000 will commence immediately prior to the
Commencement of Schedule 1 of that Act.(2)
To amend the
Petroleum (Australia-Indonesia Zone of Cooperation) Act
1990 retrospectively to reflect the fact that on 26 October
1999 the United Nations Transitional Administration in East Timor
replaced Indonesia as Australia's partner in the Timor Gap Treaty.
The Bill also makes consequential amendments to 10 other Acts and
the proposed Crimes at Sea Act 2000.(3)
The Petroleum (Australia-Indonesia Zone of
Cooperation) Act 1990 gave legal effect to the 'Treaty between
Australia and the Republic of Indonesia on the Zone of Cooperation
in an Area between the Indonesian Province of East Timor and
Northern Australia' 1989 (the 'Timor Gap Treaty').(4)
The treaty reflected a long standing interest of the Commonwealth
Government in securing rights to petroleum exploration and
exploitation over the continental shelf under international
The rights of nations to explore and exploit
natural resources on the continental shelf are defined generally in
the United Nations Convention on the Law of the Sea
Under UNCLOS, the 'continental shelf' of a
coastal State is defined as the 'seabed and subsoil of the
submarine areas that extend beyond its territorial sea...to the
outer edge of the continental margin'.(6) It extends at
least to 200 nautical miles(7) from the 'territorial
baseline'(8) and it may follow the continental margin up
to a limit of 350 nautical miles from the 'territorial baseline' or
up to 100 nautical miles from the 2,500 metre
isobath.(9) The limit of the 'continental shelf' may
also be determined by agreement between two State Parties to UNCLOS
with 'opposite or adjacent coasts'.(10)
Under UNCLOS, a coastal State may exercise
sovereign rights over its 'continental shelf' 'for the purpose of
exploring it and exploiting its [non-living] natural
resources'.(11) These rights are inherent, in
the sense that they do not depend on any occupation or
proclamation(12) and they are exclusive, in the
sense that no other State may explore or exploit the natural
resources without the consent of the relevant coastal
State.(13) In a situation where an agreement is pending
(discussed above), adjacent coastal States are required 'in a
spirit of understanding and cooperation' to make 'every effort to
enter into provisional arrangements of a practical nature and,
during this transitional period, not to jeopardize or hamper the
reaching of the final agreement'.(14) Such arrangements
are 'without prejudice to the final delimitation' of the
Petroleum Exploration and the
Claims to the Continental
Initially, Australia's interest in the
'continental shelf' was to protect pearl shell fisheries off
Western Australia and Queensland. The interest resulted in
Australia's first formal claims to the 'continental shelf' made by
proclamation in 1953.(16) However, interest soon turned
to petroleum exploration and exploitation. A larger claim to the
'continental shelf' was made in the Petroleum Submerged Lands
Act 1967 pursuant to the United Nations Convention on the
Continental Shelf(17) and the North Sea
Continental Shelf Case.(18) The next focus of
attention was on establishing the boundary of the 'continental
shelf' between Indonesia and Australia and it eventually resulted
in the 'International Sea-bed Agreement'.(19) The next
focus of attention was on exploring the Timor Trough and sealing a
'gap' left in the agreed boundary of the 'continental shelf' by the
'International Sea-bed Agreement'.(20) It
eventually resulted in the 'Timor Gap
Treaty'.(21) Attention subsequently turned to the
boundary of the 'continental shelf' beyond the westernmost point
settled in the 'International Sea-bed Agreement'. This resulted in
a treaty that will establish certain seabed boundaries and an
exclusive economic zone boundary(22) between Indonesia
and Australia (for present purposes the 'Exclusive Economic Zone
The 'Timor Gap Treaty'
The 'International Sea-bed Agreement'
essentially contained a compromise between competing claims of
Indonesia and Australia. During negotiations, there was uncertainty
as to whether the boundary line should follow a notional line
midway between Australia and East Timor or whether it should follow
the physical features of the Timor Trough with the result that it
might draw closer to East Timor.(24) A largely
arbitrary line was drawn.
In 'sealing the gap' the 'Timor Gap Treaty'
provided a more complicated compromise. The Treaty established a
Zone of Cooperation comprising three areas:
- Area A: the area of joint control and development between
Indonesia and Australia;
- Area B: the area where Australia would make certain
notifications and profit sharing arrangements with Indonesia;
- Area C: the area where Indonesia would make certain
notifications and profit sharing arrangements with Australia.
These areas are illustrated in the map
Figure 1: The Timor Gap Zone of
The Timor Gap Treaty is a temporary arrangement
and is declared to be without prejudice to the final position of
either government with respect to the conclusion of a 'final
agreement on the delimitation of the continental
shelf'.(26) It is expressed to span 40 years and there
is an option for an additional 20 years (subject to the conclusion
of a final delimitation agreement).(27) The profit
sharing arrangements are as follows:
Area A is subject to a joint development regime
regulated by a ministerial council and a joint authority. Australia
is to regulate the exploration and use of the resources in Area B,
with Indonesia receiving approximately 16 per cent of the resource
rent tax. Similarly, Indonesia will control Area C, and Australia
will receive about 10 per cent of all taxes and royalties accrued
from the user companies.(28)
Area A is perhaps the most significant area
within the Zone of Cooperation. It stretches across an area which
encompasses all of the various proposed maritime boundaries between
East Timor and Australia. It is not closely regulated by the Treaty
but is subject to flexible arrangements to be negotiated by
Indonesia and Australia as the need arises. It also contains a
geological formation which is known to contain significant oil
As indicated, the 'Timor Gap Treaty' was given
legal effect in Australia by the Petroleum (Australia-Indonesia
Zone of Cooperation) Act 1990. This Act formally recognised
the existence and powers of the Ministerial Council and the Joint
Authority. It also gave domestic legal effect to the 'Taxation
Code',(30) an annex to the Treaty regulating the
coordination of Australian and Indonesian taxation
Objections to the Timor Gap
There is a long standing history of objections
to the Timor Gap Treaty.
Portuguese Challenge to the Timor Gap
On 22 February 1991, Portugal instituted
proceedings in the International Court of Justice challenging the
Agreement on the basis that Australia had failed to 'respect the
duties and powers of [Portugal as] the administering Power [of East
Timor]' and 'the right of the people of East Timor to
self-determination'.(32) The majority of the court
dismissed the action on the basis that in order to invalidate the
agreement it was necessary to consider the validity of the
Indonesian annexation of East Timor. This could not be done because
Indonesia was not a party to the case and jurisdiction cannot be
exercised over a State without its consent.(33) By
contrast, the minority judges were prepared to consider the
validity of the agreement solely on the basis of Australia's
conduct in negotiating with Indonesia and without passing judgement
on validity of the Indonesian annexation of East
Timor.(34) One of these judges was clearly prepared to
entertain the Portuguese claim.(35)
Portuguese Objection to the Exclusive Economic Zone
On 28 August 1997 the Portuguese Embassy issued
a note verbale to the Department of Foreign Affairs and
Trade regarding the 'Exclusive Economic Zone
Treaty'.(36) The note expressed Portugal's 'most
vehement protest' against the Treaty on the basis that its creation
of an exclusive economic zone boundary was an 'aggravating
circumstance' on top of the assertion of sovereignty over the
'continental shelf' in the Timor Gap Treaty.(37)
Exploration in the Timor Gap
To date, the focus of attention in the Timor Sea
has been on a project in the Elang Kakatua oil fields, which
commenced production in June 1999, and a project in the Undan Bayu
reservoir, which is expected to commence production in November
2002. Elang Kakatua is a relatively small oil field, apparently
containing some 20 million barrels of oil, but Undan Bayu is
expected to be much larger containing up to 400 million barrels of
light crude and LPG.(38) The stakeholders in Undan Bayu
are various companies registered in the United
Britain(41) and Indonesia.(42) The United
States companies are the major stakeholders and the Indonesian
company has a minor share.(43) Undan Bayu is located
within 'Area A' but falls on the East Timorese side of the notional
Figure 2: Timor Sea Field
Independence of East Timor
As the reader will be aware, on 30 August 1999,
pursuant to the 5 May 1999 Agreements between the United Nations
Secretary General and the Governments of Indonesia and
Portugal,(45) the people of East Timor voted on the
issue of autonomy from Indonesia. In these agreements the
Governments of Indonesia and Portugal undertook that, should a vote
for independence be carried, they would 'agree on arrangements on a
peaceful and orderly transfer of authority in East Timor
to the United Nations'.(46) The Secretary-General would
then, 'subject to the appropriate legislative mandate', initiate
the procedure to promote the process of transition of East Timor
towards formal independence.(47) These undertakings were
reaffirmed during a tripartite meeting among the Secretary-General
and the Foreign Affairs Ministers of Indonesia and Portugal on 28
Involvement of United Nations
On 15 September 1999, the United Nations
Security Council passed a resolution (Resolution 1264) inviting the
Secretary-General to plan and prepare for a UN transitional
administration in East Timor.(49) The Secretary-General
issued a report on 4 October 1999 recommending the establishment of
a transitional administration in East Timor.(50) The
Security Council decided on 25 October 1999 (Resolution 1272) to
establish the United Nations Transitional Administration in East
Resolution 1272 gave UNTAET 'overall
responsibility for the administration of East Timor' and empowered
it to exercise 'all legislative and executive authority, including
the administration of justice'.(52) It was authorised to
take 'all necessary measures to fulfil its mandate'(53)
which were expressed to extend to:
- the provision of security and the maintenance of law and order
throughout East Timor
- the establishment of an 'effective administration'
- assistance in the development of civil and social services
- ensuring the 'coordination and delivery of humanitarian
assistance, rehabilitation and development assistance'
- supporting 'capacity-building for self-government', and
- assisting in the 'establishment of conditions for sustainable
The resolution established UNTAET for an initial
period of 16 months until 31 January 2001.(55)
It also provided for the appointment of a
Transitional Administrator who would be 'responsible for all
aspects of the United Nations work in East Timor' and would have
the power to 'enact new laws and regulations and to amend, suspend
or repeal existing ones'.(56) Sergio Vieira De Mello was
appointed and commenced on 17 November 1999.
Agreement with UNTAET regarding the
Timor Gap Treaty
Exchange of Notes
On 10 February 2000, following a period of
consultation in Dili regarding the Timor Gap Treaty,(57)
a memorandum of understanding was signed by the Transitional
Administrator and the Australian Consul in East Timor (the
'Exchange of Notes').(58) The agreement effectively
substituted references to Indonesia with references to UNTAET and
continued the terms of the Timor Gap Treaty during the life of
UNTAET (ie at least until 31 January 2001). In agreeing to continue
the Treaty the United Nations expressly stated that it did not
'thereby recognise the validity of the integration of East Timor
into Indonesia'. The agreement was expressed to be 'without
prejudice to the position of the future government of an
independent East Timor with regard to the Treaty'.
The text of UNTAET's note to Australia indicates
that the authority for the Exchange of Notes is based partly on
Resolution 1272 and partly on the Secretary-General's Report. In
his report of 4 October 1999 the Secretary-General expressed the
intention that the United Nations would 'conclude such
international agreements as necessary with States and international
organisations as may be necessary for the carrying out of the
functions of UNTAET in East Timor'.(59) The corollary is
that UNTAET is empowered to take 'all necessary measures to fulfil
its mandate', one aspect of which is the 'establishment of
conditions for sustainable development' in East Timor. As
indicated, the Transitional Administrator is responsible for 'all
aspects of the United Nations work in East Timor'. Therefore, on
the assumption that the continuation of the Timor Gap Treaty will
'benefit the people of East Timor',(60) the Exchange of
Notes may be considered to fall within the powers and
responsibilities of the Transitional Administrator.
Validity of Actions during the Transitional
Effectively, there is a gap in the legal
foundations underlying the Timor Gap Treaty in the period between
the transfer of responsibility to UNTAET(61) and the
Exchange of Notes.(62) This is because the transfer of
responsibility effectively ensured that Indonesia ceased to be a
party to the Timor Gap Treaty. Any actions by the Ministerial
Council or the Joint Authority during this period would therefore
have been invalid (this issue is addressed in the discussion of
Clause 5 below under the heading 'Main
Agreement over Bayu Undan
On 23 February 2000, an agreement was signed by
the Transitional Administrator and the Minister for Industry,
Science and Resources regarding a Bayu Undan Gas Recycling
Development Plan.(63) The plan is estimated to involve
investment of $A2.29 billion.(64)
The East Timorese View of the Timor Gap
While there may be other
concerns,(65) the primary issue raised by the National
Council for Timorese Resistance (CNRT) in respect of the Timor Gap
Treaty has been the capacity for East Timor to share in the profits
of petroleum extraction. Press releases surrounding the Exchange of
Notes suggest that the CNRT supports the continuation of the terms
of the Timor Gap Treaty and will honour the existing contracts
under the Treaty.
However, prior to the Exchange of Notes, there
were indications that the East Timorese resistance would attempt to
renegotiate the terms of the Treaty(66) and perhaps even
review the terms of agreements concluded under the
Treaty.(67) For example, in November 1999, Mari
Alkatiri, a spokesman for the CNRT, declared: 'we are not going to
be a successor to an illegal treaty'.(68) Specifically,
he suggested that East Timor may seek to finalise a boundary
agreement with Australia that would give East Timor complete
control over Area A.(69) Even as late as February 2000
Jose Ramos Horta reiterated these concerns. He stated: 'we honour
the terms of the [Timor Gap Treaty] temporarily until independence
and then we will have to look into ways to adjust the treaty to
East Timor's interest'.(70) Xanana Gusmao has indicated
that he would not be seeking any review of the Treaty, but in
equivocal terms: 'In principle, we will respect the terms of the
agreement even though only an independent East Timor can be...the
Crimes at Sea
One aspect of the growing interest in the
'continental shelf' in the 1960s was the position of the
Commonwealth vis-à-vis the States. While international law
recognised sovereignty and sovereign rights,(72) and
certain powers over offshore waters, there was uncertainty as to
how the powers could be exercised in Australia, as the issue of
sovereignty had not been resolved as between the Commonwealth and
The issue was tested(74) in the
Seas and Submerged Lands Act 1973(75) and the
Petroleum (Submerged Lands) Act 1973.(76) The
assertions in the former Act were upheld for the purposes of
domestic law in the Seas and Submerged Lands
Case.(77) This case effectively confirmed
Commonwealth sovereignty over the 'continental shelf' and raised
some doubts as to the validity of State legislative powers beyond
the 'territorial sea'.(78) The Commonwealth's claim
vis-à-vis the States was formalised in amendments to the
Seas and Submerged Lands Act 1973 and the Petroleum
(Submerged Lands) Act 1973.(79)
Crimes at Sea Act 1979
One consequence of the Seas and Submerged
Lands Case was the establishment of an Offshore
Constitutional Settlement between the Commonwealth and the
States. The first legislative outcome from this agreement was the
Crimes at Sea Act 1979 which attempted to repair a number
of defects in Australia's maritime criminal jurisdiction. This Act
applied State criminal law to Australian ships, Australian citizens
and foreign ships in respect of crimes at sea. It was amended,
following the signing of the 'Timor Gap Treaty', to deal with
criminal offences within 'Area A' of the Zone of Cooperation. The
criminal jurisdiction of the Northern Territory was applied to
offences connected with petroleum exploration or exploitation
committed in 'Area A' by persons other than those over which
Indonesia had sole personal jurisdiction.(80) A more
detailed background to the Crimes at Sea Act 1979 is
contained in Bills Digest No. 79 of 1999-2000.(81)
Crimes at Sea Bill 1999
A decade of experience with the Crimes at
Sea Act 1979 suggested that the legislative regime was flawed
in a number of respects.(82) It was the target of a
report by the Australian Law Reform Commission nearly a decade
ago.(83) Since then there has been steady work to reform
the regime which resulted in the introduction of the Crimes at Sea
Bill 1999 in September 1999 which is intended to eventually replace
the Crimes at Sea Act 1979.
Part 4 of the Crimes at Sea Bill 1999 seeks to
apply the substantive criminal law of the Northern Territory to
'Area A' in respect of criminal acts on oil rigs, etc. that are
connected with petroleum exploration and extraction. These
provisions do not apply to acts committed by permanent residents or
nationals of Indonesia who are not also Australian nationals. Nor
do they apply if the acts have already been dealt with under
Indonesian law. Prosecution under these provisions requires the
consent of the Attorney-General although arrests, charges,
extradition and remands in custody or on bail may proceed, pending
this consent. Arrangements exist for the flexible application of
procedural laws depending on the jurisdiction in which the
proceedings are taken. Part 4 of the Crimes at Sea Bill 1999 is
discussed in Bills Digest No. 79 under the heading 'The Regime
within "Area A"'.(84)
Clause 5 deals with actions by
the Joint Authority and the Ministerial Council. It effectively
validates actions during the period between the 'transition time'
and the Exchange of Notes.
Clause 6 deals with
retrospective criminal liability. A number of amendments in the
Bill will have the effect of criminalising certain acts committed
within Area A.(85) When the Bill is enacted and given
Royal Assent, these amendments will be taken to have commenced at
the 'transition time'.(86) To avoid the potential for
'retrospective criminal liability' between the 'transition time'
and the date of Royal Assent, Clause 6 ensures
that criminal liability only arises from the date of Royal
Clause 7 deals with immunity
from prosecution. Under section 9A of the Crimes at Sea Act
1979(87) the criminal laws of the Northern
Territory apply to acts within 'Area A', except where the acts are
committed by permanent residents or nationals of Indonesia who are
not also Australian nationals (section 9A(2)). The Northern
Territory laws also do not apply if the acts have already been
dealt with under Indonesian law (section 9A(3)). Clause
7 ensures that those 'immunities' survive the transfer of
responsibility to UNTAET.
Amendments to the Petroleum
(Australia-Indonesia Zone of Cooperation) Act 1990
Schedule 1 amends the
Petroleum (Australia-Indonesia Zone of Cooperation) Act
1990 to reflect the Notes exchanged between Australia and
UNTAET. Items 1 and 2 effectively
update the title of the Act to the Petroleum (Timor Gap Zone of
Cooperation) Act 1990.
Item 3 amends the definition of
'Treaty' (section 5(1)) to take account of the Exchange of Notes.
Rather than being amended specifically, the treaty is to be
'read with' the Notes.
Item 4 tailors certain tax
provisions in respect of their application to East Timor. It amends
section 13 which implements provisions of the Treaty and the
Taxation Code(88) affecting Australian laws relating to
fringe benefits, income tax or sales tax on imported goods. These
amendments formally recognise the existence of
UNTAET,(89) the Transitional
Administrator(90) and East Timorese
residents(91) for these purposes during the period that
East Timor is administered by UNTAET. Following that period, the
amendments provide for these definitional issues to be resolved by
Item 5 renumbers the existing
Schedule as Schedule 1.
Item 6 inserts a new Schedule 2
- 'Australia's Note to UNTAET' (Part 1); and
- 'UNTAET's Note to Australia' (Part 2).
Substituting 'East Timor' for
'Indonesia' in other Legislation
Various items in Schedule 2
amend other Commonwealth Acts to reflect the formal recognition of
East Timor as an independent territory and to take account of the
changes to the Petroleum (Australia-Indonesia Zone of
Cooperation) Act 1990.
Items 1, 24-25
and 26-42 amend Commonwealth Acts which contain
references to 'Area A of the Zone of Cooperation'(92)
and/or the 'Timor Gap Treaty'.(93) The amendments update
references in the definitions sections of these Acts to reflect the
amended title of the Petroleum (Australia-Indonesia Zone of
Cooperation) Act 1990.
Items 18 and
21 amend the proposed Crimes at Sea Act
2000 to address the same issue.
Items 2, 19
and 27 amend the Crimes at Sea Act 1979,
proposed Crimes at Sea Act 2000 and Customs Act
1901. These amendments update references in the definitions
sections of these Acts to reflect the formal recognition of East
Timor as an independent territory.
Items 3 - 16 amend the
Crimes at Sea Act 1979. These amendments omit the
definition of 'Indonesia' and essentially substitute 'East Timor'
for 'Indonesia' in the provisions dealing with criminal laws
applicable in Area A of the Zone of Cooperation and the transit
through Australia of persons accused of offences against laws in
force in East Timor.
The Regime within 'Area A'
Other items in Schedule 2 have
a more substantive operation. They deal with the criminal laws
relating to petroleum exploration and extraction applicable within
Crimes at Sea Act 1979
Item 17 amends the Crimes
at Sea Act 1979. This amendment preserves the operation of
section 9A (which, as discussed above, deals with the application
of the criminal laws of the Northern Territory within 'Area A') in
relation to acts committed prior to the 'transition time'. Thus,
for acts done before the 'transition time', nationals and permanent
residents of Indonesia are subject to the same liabilities and
immunities as currently exist. Item 17 is to be
distinguished from Clause 7. Whereas item
17 deals with immunity for acts before the
transition time, Clause 7 deals with immunity for
acts committed between the transition time and the commencement of
amendments to the Crimes at Sea Act 1979.
Proposed Crimes at Sea Act 2000
Item 23 inserts a new
Part 3A into the proposed Crimes at Sea Act
2000. It seeks to establish a complete regime for cooperation
between Australia and East Timor in relation to the enforcement of
criminal law within 'Area A' (in relation to acts committed after
the commencement of the Crimes at Sea Act 2000). The
regime deals with:
- the application of the criminal laws of the Northern Territory
within 'Area A';
- the transit through Australia of persons accused under East
Timorese law; and
- the establishment by regulation of cooperative arrangements
between Australian and East Timorese law enforcement agencies.
The regime is essentially a duplicate of the
regime proposed between Australia and Indonesia in Part 4 of the
Crimes at Sea Bill 1999 (discussed above). (Part 4 was omitted from
the Crimes at Sea Bill 1999 in the House of
There appear to be a number of concerns arising
from the UNTAET mandate, the Exchange of Notes, the Bayu Undan
Agreement and the terms of the Bill. Ultimately, these concerns may
present no objection to the validity of the agreement or the
legislation in international law or domestic law. However, there is
at least a suggestion that the arrangements might ultimately be
challenged by an independent East Timor.
This should not come as any surprise. The Timor
Gap Treaty was never intended to be a final resolution of the
'continental shelf' boundary and profit sharing arrangements
between Australia and Indonesia. It was a temporary compromise
concluded 'without prejudice' to the ultimate resolution of the
maritime boundary dispute and, in all likelihood, 'without
prejudice' to the final profit sharing arrangements.(95)
It is possible, even under the original arrangements, that
the final delimitation agreement could have resulted in the
redrawing of the 'continental shelf' boundary to incorporate
various oil fields, including Bayu Undan, within the area under
Ultimately, this will be an issue to be resolved
by the Commonwealth Government and the government of an independent
East Timor. Its resolution may not affect the viability of the
joint venture projects approved under the present arrangements.
However, it may have an impact upon the future validity of the
arrangements that will be extended by this Bill.
- 1.23 am 26 October 1999 which corresponds to the time in New
York when the United Nations Security Council adopted a resolution
transferring responsibility for East Timor to the United Nations
Transitional Administration in East Timor: S/RES/1272 (1999) at
- That is, on a day to be fixed by Proclamation or within 12
months and a day: Crimes at Sea Bill 1999, Bills Digest No.
79, 1999-2000 at http://www.aph.gov.au/library/pubs/bd/1999-2000/2000BD079.htm
- Senate Tabling Office, Bills List, 23 February 2000, p
- Petroleum (Australia-Indonesia Zone of Cooperation) Act
- 10 December 1982, UN Doc A/Conf 62/122; 21 ILM 1261 (1982). The
convention came into force on 16 November 1994.
- Ibid, Article 76(1).
- A nautical mile is equal to 1,852 metres: Schedule 1.(1) of the
Seas and Submerged Lands Act 1973 and see Australian
Surveying and Land Information Group, 'Maritime Boundaries', at
- Article 3.
- Article 76(5). The 2,500 metre isobath is a line connecting the
depth of 2,500 metres. For a historical account of these
definitions see D. O'Connell, The International Law of the Sea
Vol. I, Clarendon Press, Oxford, 1984, pp 495-496.
- Article 83.
- Article 77(1).
- Article 77(3).
- Article 77(3).
- Article 83(3).
- Article 83(3).
- Commonwealth of Australia Gazette, 11 September 1953.
- Convention on the Continental Shelf, 29 April 1958,
U.N.T.S. No. 7302, vol. 499, pp. 312-321. The Convention came into
force on 10 September 1964.
- I.C.J Rep., 1969, 1. This case confirmed a shift in the
treatment of the 'continental shelf' in international law.
Originally, the limit of the 'continental shelf' was determined
under international law with reference to a fixed depth below the
surface of the sea. This case used the notion of 'natural
prolongation' to reflect the fact that the limit of the
'continental shelf' could be measured with reference to the
geological features of the seabed: see generally D. O'Connell,
The International Law of the Sea Vol. I, Clarendon Press,
Oxford, 1984, Chapter 13.
- Petroleum (Submerged Lands) Act 1967-73, s 156A.
- Two key components of the 'International Sea-bed Agreement'
were agreements regarding the boundaries surrounding East Timor in
1971 (Agreement between Australia and Indonesia establishing
certain sea-bed boundaries signed at Canberra on 18th May, 1971)
and 1973 (Agreement between Australia and Indonesia establishing
certain sea-bed boundaries in the area of the Timor and Arafura
Seas signed at Jakarta on 9th October, 1972). When these agreements
were negotiated, East Timor was still a Portuguese colony, which
'resulted in a gap in the Australia-Indonesia seabed boundary south
of East Timor': Senate Foreign Affairs, Defence and Trade
References Committee, East Timor: Interim Report, September 1999, p
21. The 'Timor Gap Treaty' ostensibly 'sealed the gap' in the
- Apparently, '[f]our rounds of 'technical' talks on how to solve
the problem of the 'Timor Gap' ended in October 1981 without
success'. The question subsequently became acute again with the
discovery in 1983 of the Jabiru oil field (in the Bonaparte Basin,
off north-western Australia), which led to speculation about the
existence of oil in a Jurassic rock structure known as Kelp in the
Timor Gap: Edgar Gold (Ed.), Maritime Affairs: A World
Handbook, 2nd Edition, Longman, Essex, 1991, p 358.
- This boundary was addressed by a 'memorandum of understanding'
between Australia and Indonesia in 1981 that established a
'Provisional Fisheries Surveillance and Enforcement Line'.
- 'Treaty between the Government of Australia and The Government
of the Republic of Indonesia establishing an exclusive economic
zone boundary and certain seabed boundaries' 1997, Division for
Ocean Affairs and the Law of the Sea, Office of Legal Affairs,
Law of the Sea Bulletin, No. 35, New York, 1997, p 107.
See also Oceans and the Law of the Sea: Law of the Sea, Report
of the Secretary-General, Fifty-second session, UN Doc.
A/52/487, 20 October 1997
[03/03/00] and the National Interests Analysis by the Department of
Foreign Affairs and Trade at http://www.austlii.edu.au/au/other/dfat/nia/1997/1997018n.html
[03/03/00]. The Treaty has not yet been ratified.
- While there is a fairly shallow, uniform continental shelf
boundary between Indonesia and Australia East of East Timor, the
physical features are less clear, from the point of view of UNCLOS,
closer to East Timor: 'there is no longer a shallow, continuous,
uniform continental margin between the two countries, instead there
is a broad shallow shelf adjacent to Australia and it is separated
from the narrow shelf adjacent to Timor by the Timor Trough which
has a maximum depth of just over 3000 metres': Victor Prescott,
Australia's Maritime Boundaries, Canberra Studies in World
Affairs, Vol. 16, Australian National University, Canberra, 1985, p
- Map courtesy Australian Surveying and Land Information Group,
Department of Industry, Science and Resources, Canberra, Australia.
Crown Copyright © www.auslig.gov.au.
- Timor Gap Treaty, Preamble.
- Timor Gap Treaty, Article 33(2).
- Gold, op cit, 358.
- 'Treaty between Australia and the Republic of Indonesia on the
Zone of Cooperation in an Area between the Indonesian Province of
East Timor and Northern Australia - Annex D' 1989, Petroleum
(Australia-Indonesia Zone of Cooperation) Act 1990, Schedule.
- Section 13.
- Case Concerning East Timor (Portugal v. Australia), 30
June 1995, paras 23-37 (see the summary at
- Ibid. The authority for the principle that jurisdiction cannot
be exercised over a State without its consent is Monetary Gold
Removed from Rome in 1943, I.C.J. Reports 1954, p 32. A
separate majority judgement focused on the issue of standing:
Portugal, an administering power, had not established itself as the
'coastal state' for the purposes of UNCLOS vis-à-vis East
Timor by prosecuting a dispute with Indonesia before the ICJ.
Accordingly, it did not have standing to raise the issue with
Australia: Ibid, Separate Opinion of Judge Oda.
- Ibid, Dissenting Opinions of Judges Weeramantry and
- 'The rights of self-determination and permanent sovereignty
over natural resources are rights...belonging to the people of East
Timor, and therefore generate a corresponding duty upon all States,
including the Respondent, to recognize and respect those rights.
The act of being party to a treaty recognizing that East Timor,
(admittedly a non-self governing territory and recognized as such
by the United Nations), has been incorporated in another State,
which treaty deals with a valuable non-renewable resource of the
people of East Timor for an initial period of forty years, without
reference to them or their authorized representative, raises
substantial doubts regarding the compatibility of these acts with
the rights of the people of East Timor and the obligations of
Australia. The Court could have proceeded to determine whether a
course of action had been made out against Australia on such
actions, without the need for any adjudication concerning
Indonesia': ibid, Dissenting Opinion of Judge Weeramantry.
- A/52/323-S/1997/691, annex, reproduced in Law of the Sea
Bulletin, No. 35, op cit, p 97.
- The Agreement was described as 'one violation more to the
status of East Timor as a Non-Self-Governing Territory...and to the
rights of the people of East Timor as well as to the status of the
administering Power of the Territory': Ibid, p 98.
- Senator The Hon. Nick Minchin, 'World Scale Petroleum Project
for Timor Sea', Media Release, 28/02/00 at http://www.isr.gov.au/media/2000/february/cmr85%2D00.doc
- Phillips Petroleum Co and Kerr-McGee Corp.
- Petroz NL and Santos Ltd.
- British-Borneo Oil and Gas Plc.
- Inpex Sahul Ltd.
- Apparently, Petroz has an 8.25 percent stake in the project,
while Phillips Petroleum Co has the majority 50.29 percent stake.
Other stakeholders in Bayu Undan are Santos Ltd 11.83 percent,
Indonesian Inpex Sahul Ltd 11.71 percent, Oryx 11.2 percent and
British-Borneo Oil & Gas Plc 6.72 percent: http://etan.org/et99b/september/5-11/9petroz.htm
[03/03/00]. See also 'Bay-Undan Gas Recycle Project Development
Plan Approved by Timor Gap Joint Authority', Business
- Map reproduced from Senator The Hon. Nick Minchin, Media
Release, op cit, with permission from the Department of
Industry, Science and Resources.
- One of these agreements was the Agreement between the
Republic of Indonesia and the Portuguese Republic on the question
of East Timor http://www.prica.org/news/Timtim/agreement-5may99.htm
- Ibid, Article 6.
- Ibid, Article 6.
- Report of the Secretary General, op cit, para 25.
- S/RES/1264 (1999), para 11: http://www.un.org/Docs/scfres/1999/99sc1264.htm
- Report of the Secretary General, op cit.
- S/RES/1272 (1999), op cit.
- S/RES/1272 (1999), op cit, para 1.
- Ibid, para 4.
- Ibid, para 2.
- Ibid, para 17.
- Ibid, para 6.
- 'Dili conference on Timor Gap oil', Agence France Presse
Newswire, Sunday January 16, 2000: http://etan.org/et2000a/january/15-21/16dili.htm
- UNTAET, 'Australia and UN mission in East Timor sign agreement
on oil exploration in Timor Gap', Media Release, 11
February 2000: http://www.un.org/peace/etimor/news/News11.html
- Report of the Secretary General, op cit, para 35.
- This point is explicit in UNTAET's Note to Australia.
- 1.23 am Australian Central Standard Time on 26 October 1999:
see endnote 1 above.
- 5.55 pm Australian Central Standard Time on 10 February 2000.
- UNTAET, 'Australia, UN mission in East Timor sign $1.4 billion
gas exploration accord', Media Release, 23 February 2000:
- Senator The Hon. Nick Minchin, 'World Scale Petroleum Project
for Timor Sea', Media Release, 28/02/00 at http://www.isr.gov.au/media/2000/february/cmr85%2D00.doc
[03/03/00]. See also descriptions of the project specifications at
- Other concerns conceivably would include East Timorese
representation on the Ministerial Council and Joint Authority: see
The Hon. Laurie Brereton, MP, 'Timor Gap Oil', Media
Release, Wednesday, 13 Jan 1999.
- 'East Timor: Renegotiating the Timor Gap Treaty', Reuters
- Andrew Nette, 'Leaders Keep Eye on Timor Gap Revenue', IPS
Newswire, Friday, 12 March 1999 http://etan.org/et99/march/8-14/11leader.htm
[03/03/00] cf an undertaking to the contrary by Jose Ramos Horta
reported in 'East Timor: Renegotiating the Timor Gap Treaty',
Reuters Newswire, 07/02/00.
- Karen Polglaze, 'Timor Gap Treaty in doubt', The Canberra
Times, 30/11/99, p 2.
- Bernard Lane, 'Stepping into the Gap', The Australian,
20/11/99, p 27.
- 'East Timor: Timorese to push for pay rise in Gap treaty',
Reuters Newswire, 04/02/00.
- Paul Cleary, 'Timor Gap oil treaty will stand unaltered:
Gusmao', Australian Financial Review (1st
Edition), 15/10/99. See also Richard Sproull, 'Gusmao's nod
keeps Timor Gap gas deal cooking', The Australian,
- At the time, international law recognised Australian
sovereignty over 'internal waters' and 'territorial seas'
(Convention on the Territorial Sea and the Contiguous
Zone, 29 April 1958, U.N.T.S. No. 7477, vol. 516, pp. 205-225.
The Convention came into force on 10 September 1964) and sovereign
rights over the 'continental shelf' (Convention on the
Continental Shelf, 29 April 1958, U.N.T.S. No. 7302, vol. 499,
pp. 312-321. The Convention came into force on 10 September 1964).
- D. O'Connell, 'The Australian Maritime Domain', Australian
Law Journal, Vol. 44, 1970, pp 192-208.
- In fact, the issue was first tested in 1970 with the
Territorial Sea and Continental Shelf Bill 1970, but the Bill never
proceeded. The Seas and Submerged Lands Bill 1973 followed a report
by the Senate Select Committee on Offshore Petroleum Resources that
recommended the issue be resolved by Commonwealth legislation.
- The Seas and Submerged Lands Act 1973 asserted for the
Commonwealth territorial sovereignty over the 'territorial
sea' and sovereign rights over the 'continental shelf'.
These terms reflected the terminology in the United Nations
Convention on the Territorial Sea and the Contiguous Zone and
United Nations Convention on the Continental Shelf.
- The Petroleum (Submerged Lands) Act 1973 specifically
extended Commonwealth control over offshore petroleum exploration
and extraction by extending the limits of the 'adjacent areas'
(generally, areas of sea adjacent to each State between 3 nm and
the limit of the 'continental shelf') under the Petroleum
(Submerged Lands) Act 1967-68.
- New South Wales v The Commonwealth (1975) 135 CLR 337.
- The 'territorial sea' covers waters within 12 nautical miles of
the 'territorial baseline': UNCLOS, Article 3.
- In 1980 the Commonwealth and the States enacted a regime for
joint management arrangements over petroleum exploration and
extraction: Petroleum (Submerged Lands) Amendment Act
1980. This involved the establishment of joint authorities and
the extension of civil jurisdiction of State Supreme Courts in
respect of petroleum exploration and extraction.
- That is, nationals or permanent residents of Indonesia who were
not also nationals of Australia: Petroleum (Australia-Indonesia
Zone of Cooperation) Act 1990, s 9A(2).
- The flaws related to the drafting of the Crimes at Sea Act
1979 and the fact that the complementary State legislation
potentially exceeded State legislative power. These issues are
discussed in Bills Digest No. 79.
- Law Reform Commission of Australia, Criminal Admiralty
Jurisdiction and Prize, Report No. 48, 1990.
- For example acts by Indonesian nationals or residents relating
to petroleum exploration or exploitation (Crimes at Sea Act
1979, s 9A) or a direct journey between Indonesia and a
resource installation within 'Area A' (Customs Act 1901, s
- That is, 1.23 am 26 October 1999: see endnote 1 above.
- This clause is the predecessor to Part 4 of the Crimes at Sea
- Petroleum (Australia-Indonesia Zone of Cooperation) Act
1990, Schedule, Annex D.
- As the body politic in East Timor: proposed paragraph
- As the 'competent authority' for the purposes of the Taxation
Code: proposed paragraph 13(2)(a)(ii).
- As 'residents of a Contracting State': proposed
- Fringe Benefits Tax Assessment Act 1986, Income
Tax Assessment Act 1936, Migration Act 1958,
Passenger Movement Charge Act 1978, Passenger Movement
Charge Collection Act 1978, Petroleum (Submerged Lands)
Act 1967, Quarantine Act 1908, Workplace
Relations Act 1996.
- Passenger Movement Charge Collection Act 1978.
- See House of Representatives, Debates, 6 December 1999, p 12888
[03/03/00]. See proposed amendments at
- See the preamble to the Timor Gap Treaty in Petroleum
(Australia-Indonesia Zone of Cooperation) Act 1990, Schedule
which cites Article 83 which is discussed above under the heading
7 March 2000
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