Independence hero Xanana Gusmão, 76, has reemerged as Timor-Leste’s likely next prime minister after his party secured minority government in Sunday’s general election. It looks set to pose Foreign Affairs Minister Penny Wong with her most significant regional test so far.
Australia and Timor-Leste finally reached some rapprochement after the redrawing in 2018 of the nations’ long-disputed maritime boundary in energy-rich seas, but Gusmão’s bid to have downstream processing infrastructure built on the nation’s south coast — a project known as Tasi Mane — remains unresolved.
Timor-Leste’s change of government represents a desire for change after the myriad crises of the pandemic, the 2021 floods and the concomitant economic contraction. There remains no resolution to the nation’s approaching financial cliff, with the nation’s primary income from oil and gas dwindling as its current reserves are tapped out.
Gusmão’s National Congress for Timorese Reconstruction (CNRT) won 31 of Parliament’s 65 seats with 41.6% of the vote, in a system where seats are allocated on a party-percentage basis. This is short of the 33 seats needed for an outright majority — the CNRT is stitching up a coalition with the Democratic Party (PD), which won six seats with 9% of the vote.
For the first time, Fretlin, once the nation’s leading party, saw a significant drop in its vote to 25%, down about four percentage points, under its leader Mari Alkatiri, 73, the county’s inaugural prime minister from 2002-06 after it secured independence from Indonesia.
Nobel Peace Prize laureate José Ramos-Horta, 73, won the separate presidential election last year under the CNRT banner, which helped pave the way for Gusmão’s latest victory.
Gusmão’s pet $20 billion project
The ageing Gusmão and Horta — who will need to work together under the nation’s mixed presidential–parliamentary system — are determined to build about $20 billion in oil and gas processing for Tasi Mane. This is to exploit the Greater Sunrise reserves, which Timor-Leste finally wrested control of in 2018 after taking its case to The Hague. The result was a new treaty between Australia and Timor-Leste that redrew the boundaries, handing the smaller nation 56% of the reserves.
Australian energy firm Woodside and its partners have resisted this plan for more than a decade — preferring to process the resources in Darwin. The previous government had agreed with its fossil fuel backers, but Gusmão and Horta have made it clear that if Australia won’t come to the party, they will be more than happy to invite Chinese investors.
“They [the Chinese] are very interested and they even told me they are very interested even to be the sole partners,” Horta told the ABC last year.
Senator Wong will be desperate to avoid this, having demonstrated since coming to office, with a $2 billion aid package aimed at “security”, that Australia wants to reassert its influence in Timor-Leste, Papua New Guinea and the broader Pacific — as well as prevent any port infrastructure China wants to build.
Giveth with one hand and taketh with the other
Australia, which was instrumental in helping Timor-Leste gain independence from Indonesia in 2002, effectively robbed the tiny nation of much of its oil reserves, in concert with Woodside. Australia and Woodside were helped by the illegal bugging of the Timor-Leste cabinet in 2004 when negotiations on maritime boundaries were underway. The spying was authorised by then-foreign affairs minister Alexander Downer, who later took a job as a consultant to Woodside after leaving Parliament.
As one former senior diplomat noted privately to Crikey, “[If] Timor-Leste and Australia were people, the latter would be charged with abuse.”
When a former ASIS official known as Witness K blew the whistle on this unfathomable event, both he and his lawyer Bernard Collaery, a former ACT attorney-general and long-time advisor to Timor-Leste, were arrested under the Coalition government in an ordeal that began in 2013. Their trials were conducted in secret.
There is a raft of other former Liberal Party politicians, as well as former and current senior spy chiefs and public servants, implicated in the spying, including Josh Frydenburg, David Irvine, Nick Warner and Chris Moraitis.
Witness K was given a suspended sentence in 2020, and following Labor’s election win, Attorney-General Mark Dreyfus decided to discontinue the case using his power under the Judiciary Act 1903.
Sources in Canberra told Crikey that Collaery’s exoneration by Wong and Dreyfus was not necessarily out of good faith. Rather, it was because affidavits from senior Timor-Leste politicians, including Gusmão and Horta, would have become public, at a time when Wong had begun attempting to improve relations with Australia’s regional neighbours.
It’s telling that on the nation’s Independence Day on Saturday, which was followed by a rare Sunday election, Collaery was fêted in Dili by all its senior leaders and handed an Ordem de Timor-Leste, the country’s highest honour, with much pomp and ceremony.
Options review led by Steve Bracks
Timor-Leste has long been the leader in the Pacific at playing off its larger neighbours Indonesia and Australia against China, but it also understands the dangers of drawing China too close. Other Pacific nations, such as the Solomons and Fiji, have watched and learned as China has provided useful civic infrastructure to Dili.
They have also watched an untrustworthy Australia in action, and here is the test for Wong in showing Australia can at least be trusted by our closest neighbour. Many believe that to truly resolve the greatest foreign policy scandal in Australia’s recent history, a full and public inquiry is needed.
In her biggest move to resolve the impasse over oil and gas infrastructure, Wong appointed former Victorian premier Steve Bracks — who has long worked hard for Timor-Leste and was also handed honours in Dili at the weekend — as a special envoy for oil and gas in October 2022.
Crikey understands that an evaluation of the Darwin v Timor-Leste’s south coast is now underway by Bracks, with input from both countries as well as Woodside and its partners. A new report is due by September.
“The Australian government wants to see the development of Greater Sunrise in a commercially viable way that supports the economic development of Timor-Leste and maximises the benefits to all parties, consistent with the 2018 Maritime Boundary Treaty,” Wong said at the time of Brack’s appointment.
“As special representative, Mr Bracks will represent the Australian government and consult with the government of Timor-Leste and other key stakeholders, including the Sunrise Joint Venture.”
After Bracks delivers his report, negotiations are set to begin. Senator Wong will need to make the right accommodation with Gusmão and Horta, with the China “threat” hanging over her head. It won’t be easy as the Timorese leaders have shown they can play hardball with Canberra.
It will also be a golden opportunity for Wong and her government to prove they are not, as many still suspect, in the pockets of Woodside and the fossil fuels lobby.
