Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for Northern Australia and Indigenous Affairs) Share this | Hansard source

Firstly, I thank the member for Calare for his insightful presentation. I am not sure that I agree with all of it, but I do think he raised some very relevant and pertinent issues that we ought to be thinking about in this place. You may know, Mr Deputy Speaker Secker, that I have been close to East Timor for many years. It is true to say that, whilst the outcome of the arrangements to do with Sunrise and the area to the north is important and will provide significant revenues to East Timor over the next 20 years—anticipated to be at least $10 billion—it may well have been more had greater weight been given to the arguments which were represented by the East Timorese in their negotiations with the Commonwealth. This legislation establishes a framework for Australia to meet its obligations under the agreement between Australia and the Democratic Republic of Timor-Leste relating to the unitisation of the Greater Sunrise petroleum source when the Offshore Petroleum Act 2006 comes into force.

I think it is worth spending some time looking at some of the issues here. So that we can understand what this unitisation process means: where a petroleum resource, whether it is comprised of one or more pools, straddles borders, production rights or boundaries between administrative systems, sound resource management often requires the resource to be developed as a single unit. This is what we now know here in the context of this legislation as the unitisation of a petroleum resource. In the absence of unitisation, production from one part of a resource could be to the detriment of the resource as a whole or to those with an interest in the resource on the other side of the boundary.

The member for Calare commented on the agreement reached in 2003 between Australia and Timor-Leste about arrangements to govern unitisation of the Greater Sunrise petroleum resource. This resource straddles the border of the Joint Petroleum Development Area, which is the area of a shared jurisdiction between Australia and Timor-Leste, established by the Timor Sea Treaty and in an area of sole Australian jurisdiction located within the Northern Territory offshore area.

In 2004, Labor supported the unitisation implementation legislation as it did put in place arrangements necessitated by the unitisation agreement reached between Australia and the government of Timor-Leste. At the time, however—and it is in the context of the contribution from the member for Calare—we did raise concerns over the Australian government’s handling of negotiations with Timor-Leste over the various treaties and agreements regarding petroleum resources in the Timor Sea. We have raised concerns in this parliament over the legislation necessary to meet Australia’s obligations under these treaties and agreements.

On 12 January 2006, Australia and East Timor signed the Treaty on Certain Maritime Arrangements in the Timor Sea; the CMATS treaty, which was again referred to by the member for Calare. The CMATS treaty includes setting aside Timor Sea maritime boundary claims for 50 years—commented on extensively by the member for Calare—enforcing the Greater Sunrise international unitisation agreement, the IUA, and increasing East Timor’s share of Greater Sunrise revenues from 18 per cent under the IUA to 50 per cent. On 23 February 2007, Australia and East Timor conducted a formal exchange of notes in Dili, formally notifying each other that the domestic processes for the entry into force of the treaty were complete. The CMATS treaty and the IUA are therefore now legally binding on both Australia and Timor-Leste.

I note that the member for Calare went over the extensive debate which exists in the public domain about the issue of the maritime boundary between Australia and Timor-Leste. I must say that I personally have some sympathy for the position he put, because it is clear on any reading of this agreement and of the treaties that have been entered into that Australia does very well out of these arrangements. It could be argued—certainly by some it is—that that has been to the detriment of the people of Timor-Leste. It is no doubt true that, in the context of the economic situation that prevails in Timor-Leste, it was in the interests of the government of Timor-Leste to sign an agreement at some point because of their need for revenues for what is a very poor community.

I note that observations have been made by the member for Calare about the leadership of the government of Timor-Leste in those negotiations. I have no doubt in my mind at all about the very vigorous way in which the government of Timor-Leste argued their case with the Commonwealth—and with the support of advocates from the United Nations and elsewhere. They very forcefully put the case that the boundary issue needed to be settled in a timely fashion to give greater recognition to their claims over the revenues that would arise out of the development of the Greater Sunrise field and of the area in dispute at the time should the boundary be recognised in the form that they requested it.

We now know that, as a result of this treaty, the boundary issue cannot be addressed for at least another 50 years. In that sense, the horse has bolted. But there are other issues which are again in debate, including how this gas facility at Greater Sunrise will be developed. For example, will there be a floating platform facility and, as has been proposed by the Northern Territory government, a pipeline to Darwin to develop a facility on the mainland or, as has been argued by the government of Timor-Leste—and properly so from their perspective—a pipeline to Timor rather than to Darwin?

That is an issue which is yet to be resolved. But it is clear that, despite the arguments that have been put by some advocates in this country, consultants and experts in the field have found that it is possible to build a pipeline to Timor. The question of course is whether or not that will happen. Ultimately, it will be a commercial decision made by the joint venture partners in that field. But we should not run away from the fact that it is still a live debate. Nor should we run away from the fact that ultimately a decision could be made for a pipeline to go to a production facility in Timor-Leste rather than to Australia.

As an advocate for Northern Australia, of course I would argue that the pipeline should go to the city of Darwin. We know from figures produced as a result of a case put to the Commonwealth by the Northern Territory government that there is an argument that, if Sunrise gas is not piped to Darwin, the nation could forgo value-adding development and gas market competition opportunities worth at least $1 billion per annum. The estimated additional annual national economic benefits of the integrated pipeline option to Darwin over and above the floating liquid natural gas, FLNG, option include over $250 million in household consumption, $35 million in real investment and between $700 million and $900 million per annum during the construction phase, $715 million in net exports, employment of an additional 4,400 persons and $110 million in government revenues. It would provide an increase of 46 per cent to the GSP of the Northern Territory and for the whole of Australia an increase of $4 billion in GDP. It would provide an increase in real investment to the Northern Territory economy of $82 million and overseas exports from the Northern Territory of over $3.3 billion. It would provide a permanent employment boost of 5,156 in the Northern Territory and almost double that figure for Australia generally.

There is no doubt that there is a very strong case for piping this gas to Darwin for production. The question of course is whether or not that will take place. There will be a strong position put by the government of Timor-Leste, whichever government it might be subsequent to the presidential elections in April and then the general elections which will take place in June or July in Timor-Leste. No doubt they will be properly advocating, as they should, that the development facilities should be built in Timor-Leste.

But we need to also cogitate for a moment that, given the debate about climate change, if we were to develop the facility in the way in which it is being proposed by the Northern Territory government, we would save at least 7.3 million tonnes of CO equivalent per annum compared with the option of a floating liquid natural gas development. When we are contemplating how this Sunrise field might ultimately be developed, I think my colleague the member for Batman, who was previously responsible for this area of policy in the Labor Party, will attest to the enormous potential that exists right across the north of Australia, in the seas to the north and north-west of Australia, for the development of natural gas and the ultimate contribution that that development could make not only to our economy but also to the war we seem to be waging on the issue of climate change.

I was told last week that we are talking huge figures—billons of dollars—in terms of potential development of natural gas resources off the coast of Western Australia. If you add the Sunrise field into that mix and the other potential off the coast of the Northern Territory, in particular, you can see the value of this to the Australian economy. But we should not lose sight of the fact that we have partners in this exercise: the government of Timor-Leste. We should therefore be ensuring that, whatever outcomes exist, there is a flow-on economic benefit to that community.

I note the comments made by the member for Calare about the governance arrangements in Timor-Leste. He also expressed his frustrations about the government type. But let us be very clear about this: Australia was a partner of the United Nations in the proposals which led to the current governing structures in Timor-Leste. We have seen issues of great moment in the Timor-Leste community and indeed in the international community, such as the decisions by the United Nations to extend its presence there for another 12 months. There is no doubt there is a lot of civil disruption and concern being expressed by people—for example, the recalcitrant army officer who recently raided a defence facility and stole weapons is of major concern to many people involved in the political process in Timor-Leste. They are going through a very difficult period.

Whatever consideration the Australian government might be giving in relation to the Sunrise field—and I am aware of the very important role that the Australian defence forces have been playing since 1999—we should ensure, as far as possible, that there is fairness in the treatment of all political parties in Timor-Leste, through whatever influence we might be able to bring to bear on those forces within the country, including through the United Nations.

It is very important for this region that, once the presidential election takes place, it is an open and fair contest between those people who put their names forward and that we get an outcome which is seen as fair and reasonable and then, later, when the general election takes place, that we get a similar outcome. There is a plethora of political parties who are entering the contest in Timor-Leste and that is of great moment for us here. Observing the development of democratic institutions in a place like Timor-Leste, which has suffered so much over so many years, including the loss of hundreds of thousands of lives, we should pray that that democratic process finds a happy solution in the form of a properly elected and respected government after the election of a new president.

My contribution to this debate is almost at an end, but I do want to reinforce the view that this process is not a ‘winner takes all’ exercise. We should be ensuring that, whatever dealings we have with Timor-Leste, they are seen as open and fair. An argument has been put most eloquently by the member for Calare that the outcome in relation to this arrangement over Sunrise has not been appropriately open and fair, particularly as a result of this government’s unwillingness to address the seabed boundary issue.

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