Andrew Southcott (Boothby, Liberal Party) Share this | Link to this | Hansard source

On behalf of the Joint Standing Committee on Treaties I present the committee’s report entitled Report 85: Treaties tabled on 6, 7 and 27 February 2007.

Ordered that the report be made a parliamentary paper.

by leave—Report 85 contains the committee’s findings on five treaty actions. The committee found all the treaties reviewed were in Australia’s national interest and, where a recommendation was required, recommended that binding treaty action be taken. I will comment on all the treaties reviewed in report 85.

Under the social security agreement with the Swiss Confederation, residents of Australia and Switzerland will be able to move between the two countries safe in the knowledge that their right to benefits is recognised in both Australia and Switzerland. The agreement provides for enhanced access to certain Australian and Swiss social security benefits and greater portability of most of these benefits between countries.

The agreement with Finland on the avoidance of double taxation is a revised version of an existing treaty. The changes are designed to further aid in the elimination of obstacles to investment as a result of international double taxation. The agreement will reduce rates of withholding taxes on dividends, interest and royalties and bring into line the treatment of capital gains tax with OECD practice and integrity measures. In particular, the agreement includes rules to allow for the cross-border collection of tax debts and rules for the exchange of information on tax matters.

Australia has a strong interest in maintaining biodiversity generally and in protecting migratory bird species which visit our shores. The agreement with the Republic of Korea on the protection of migratory birds will help protect bird species which regularly migrate between Australia and the Republic of Korea. This agreement complements the two similar agreements Australia has in place with China and Japan.

Measure 4 (2006) Specially Protected Species: Fur Seals removes Antarctic fur seals from the list of specially protected species established under the Antarctic Treaty. Research has determined that these fur seals are no longer at significant risk of extinction, meaning they no longer require specially protected species status to ensure their conservation. Fur seals will continue to receive the comprehensive general protections afforded to all Antarctic seal species.

I would finally like to comment on the Treaty between Australia and Democratic Republic of Timor-Leste on Certain Maritime Arrangements in the Timor Sea, known as the CMATS treaty. The principal aim of the CMATS treaty is to allow for the exploitation of the Greater Sunrise natural gas field, located between Australia and East Timor in the Timor Sea. Upstream revenues from this resource will be shared equally between Australia and East Timor. It is estimated that this resource will yield around US$20 billion over the life of the field. The treaty also prevents both countries from asserting or pursuing their maritime boundary claims in the Timor Sea for 50 years.

Many of the submissions received by the committee in relation to the inquiry expressed strong reservations about certain aspects of the treaty. Particularly, there was concern regarding the 50-year moratorium on asserting claims to maritime boundaries. Several submissions accused Australia of contravening international laws in this respect, claiming that, if permanent maritime boundaries were concluded along the median line halfway between the coastlines of Australia and East Timor coastlines, the Greater Sunrise field would lie entirely within East Timor’s exclusive economic zone. This related to a further concern over the equal share of upstream revenues from the Greater Sunrise field. Many of the submissions received pointed out that the delimitation of maritime boundaries along the median line would result in all of the revenue from Greater Sunrise belonging to East Timor.

While the committee acknowledged these concerns, it noted that, under the United Nations Convention on the Law of the Sea, if the two countries were unable to agree to a permanent maritime boundary, they were obliged to enter into provisional arrangements of a practical nature without prejudice to the final decision. This has been achieved through the CMATS treaty. Further, the equal share of upstream revenue from Greater Sunrise is a vast improvement on the previous 18 per cent East Timor was entitled to prior to the CMATS treaty. The apportionment of Greater Sunrise under this treaty is a positive step for East Timor and the committee supports the sharing arrangement established by CMATS.

I should mention briefly the government’s use of the national interest exemption to bring the CMATS treaty into force prior to the committee reporting. The exemption is intended for use in only extreme situations, and the committee would have preferred the opportunity to review the treaty and report in a shorter than usual time frame. The committee acknowledges that the immediate development of the Greater Sunrise field will be a significant benefit to the people and economies of both Australia and East Timor and that the ratification of the CMATS treaty was required before that development could occur.

I thank the committee secretariat for their work in assisting the committee during the public hearings, in the receipt of submissions and in the preparation of the report. I thank all members of the committee. I see that the member for Swan and the member for Lyons are here. They are both very diligent and hardworking members of the committee. I commend the report to the House.

Kim Wilkie (Swan, Australian Labor Party) Share this | Link to this | Hansard source

by leave—The Joint Standing Committee on Treaties Report 85: Treaties tabled on 6, 7 and 27 February 2007 contains the review of five treaty actions. The Agreement between Australia and the Swiss Confederation on Social Security is one of Australia’s many international social security agreements. Australia already has social security agreements in place with 18 other countries. We have recently signed agreements with Korea, Japan, Germany and, most prominently, with Greece. Australia is currently negotiating eight further social security agreements. These social security agreements close the gaps in social security coverage for people who migrate between Australia and other countries, which I believe to be in the national interest of Australia. In a similar way, the Agreement with the Government of Finland for the Avoidance of Double Taxation with Respect to Taxes on Income and the Prevention of Fiscal Evasion is one of a number of such treaties Australia has with other countries, and we expect to review more such treaties in the future. The measures are sensible and should be supported.

The Agreement with the Government of the Republic of Korea on the Protection of Migratory Birds requires both Australia and the Republic of Korea to prohibit the taking, sale, purchase or exchange of birds and their eggs, with a small number of exceptions, such as for scientific research. My electorate of Swan has a very significant migratory bird habitat, particularly at the Milyu Nature Reserve, and any effort that can be made to protect those species and conserve their habitats is very valuable.

In relation to the fur seals measure, the committee was informed that the Antarctic fur seal population has grown to over 1.6 million. The committee is satisfied that the removal of fur seals from the specially protected species list will not result in any potential threat of future commercial exploitation.

Finally, I would like to make some comment on the Treaty between Australia and the Democratic Republic of Timor-Leste on Certain Maritime Arrangements in the Timor Sea, which provides a fifty-fifty income split for royalties from the Greater Sunrise oil and gas fields and prevents maritime boundary disputes from being contested for 50 years. While I agree with the committee’s conclusion that the treaty is in Australia’s national interest, I would like to emphasise my dissatisfaction with the government’s decision to invoke the national interest exemption and make comment on the overall process that has led to this treaty.

The Minister for Foreign Affairs explained that the exemption was invoked to take advantage of immediate short-term opportunity in East Timor to bring the CMATS treaty into force. However, both the minister and the Department of Foreign Affairs and Trade informed the committee that the CMATS treaty had been publicly available since its signature in January 2006. Given this early public availability, it has not been adequately explained why the treaty was not referred several months earlier for review.

The national interest exemption should not have been invoked before the committee was given a reasonable opportunity to consider and report on the treaty. The committee has previously reported within a very short time frame—for instance, in relation to the Cambodia prisoner transfer agreement, where the committee heard evidence on the evening of Tuesday, 5 December 2006 and made an interim report on the morning of Thursday, 7 December 2006 to enable work to progress immediately to bring that agreement into force. The government was aware that the opportunity to ratify the CMATS treaty with East Timor was a possibility in the days leading up to its eventuality. It should have taken this opportunity to approach the committee with a request for an early hearing and a prompt interim report on the agreement. Personally, I blame incompetence and inefficiency of the minister and the department. Not to do so would lead one to the conclusion that they were deliberately ignoring Australia’s proper treaty review process.

I also take this opportunity to comment on why we have the CMATS treaty before us today. A few years ago the Joint Standing Committee on Treaties conducted a review of the Timor Sea Treaty and the division of royalties from resource projects in the Joint Petroleum Development Area between Australia and East Timor. This included the International Unitisation Agreement, which set out the income split for resource royalties, including those from the Greater Sunrise oil and gas fields. This agreement would have seen East Timor receive 90 per cent of the royalties from 10 per cent of the Greater Sunrise field—which is in the Joint Petroleum Development Area—which equates to roughly 18 per cent overall.

East Timor, however, refused to ratify the agreement, believing that it did not reflect an equitable split of the revenue stream. East Timor believed that, had the maritime boundaries between Australia and East Timor been set using the equal distance method, 100 per cent of the Greater Sunrise fields should have been located in their territorial waters. The nonresolution of this dispute meant that joint venture partners were prevented from commencing any projects, because they wanted to have certainty over tenure and income distribution before committing billions of dollars to project development.

East Timor has only now agreed to the CMATS treaty because it will allow projects to commence and royalties to be guaranteed. However, by agreeing, the East Timorese have agreed that the maritime boundaries will not be challenged for 50 years and that royalties from other possible projects in the disputed area go to Australia. This trade-off gives East Timor 50 per cent of the Greater Sunrise royalties. Given that Australia would probably have lost the rights to all of Greater Sunrise if the International Court of Justice had been allowed to rule on the dispute, this outcome is not bad for Australia.

East Timor is undoubtedly one of the poorest and most underdeveloped nations in the world. In order to develop, East Timor desperately needs to mobilise the full capacity of its resource sector. By denying the East Timorese this, the government was effectively robbing them of their right to development. And it surely must have come as some surprise to the East Timorese that Australia, the nation that delivered them freedom, was now trying to hoodwink them out of the resource royalties that they so desperately needed to lay the foundations for their fledgling democracy.

Australians do not like a bully and they certainly do not like a bully who picks on the smallest and least able to defend themselves. But, sadly, this has been the approach of successive Australian governments in dealing with the Timorese on this issue—none more so than this government. It has tried to bully the East Timorese out of the oil and gas that so rightfully belongs to them. This government is guilty of blackmail of the highest order. Its approach to dealing with the East Timorese on this issue has been a disgrace and it runs counter to Australian values. A fair go is central to the Australian ethos. But according to this government our fair go ideal does not extend beyond our own borders, not even to one of the most poverty stricken nations on earth.

I support ratifying the Treaty on Certain Maritime Arrangements in the Timor Sea, but the income sharing provided for in this agreement should have been the starting point for negotiations, not the end point. We should never have been dragged kicking and screaming to this outcome.

I would like to thank the committee secretariat and all those who put in submissions and presented evidence on this treaty. As an aside, can I refer people to Paul Cleary’s book entitled Shakedown: Australia’s grab for Timor oil, which has recently been released and which gives a very accurate picture of what has been happening in the negotiations over the Timor Sea oil.

Ann Corcoran (Isaacs, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the House take note of the report.

In accordance with standing order 39(c), the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.