Delegations from Timor-Leste and Australia signed a new maritime boundaries treaty on 6 March in New York. The treaty was the result of a conciliation process led by the Permanent Court of Arbitration (PCA) that was first initiated by Timor-Leste on 11 April 2016. According to the treaty (available here), Dili and Canberra have agreed to a maritime boundary along the median line between both countries and have set the terms for a split of the revenue from the Greater Sunrise gas fields located in the Timor Sea. The background to the negotiations is covered in detail in the Strategic Weekly Analysis.
Given that the new maritime boundary agreement is drawn along the median line between Australia and Timor-Leste, the Indonesian Government may soon start weighing up the options in regard to its own boundary with Australia. As has been assessed previously in the Strategic Weekly Analysis, that was a concern for the Australian negotiators, who wished to keep the Timor-Leste boundary consistent with that of Indonesia to ‘prevent the re-emergence of some of the uncertainties that still pertain to the Australian-Indonesian maritime boundary.’ Specifically, Indonesia has yet to ratify the 1997 Australia–Indonesia Maritime Delimitation Treaty, the last of four treaties pertaining to its maritime boundary with Australia.
The current Australian-Indonesia maritime boundary is divided into two parts. The first boundary is drawn along the Australian continental shelf and determines the ownership of resources found within the seabed while the second is drawn along the median line between Australia and Indonesia and determines the ownership of the resources found within the water column. Due to that arrangement, Australia has access to the majority of Greater Sunrise, which would otherwise belong to Indonesia if the seabed boundary were drawn according to the median line principle.
While Indonesia may be able to seek a renegotiation of the boundaries, the question remains whether it will. On one hand, since Timor-Leste has succeeded in securing a seabed boundary drawn along the median line, there could be growing discontent within Indonesia over the resulting discrepancy. Added to that is the incentive for Indonesia to seek control over the oil and gas in the Bonaparte Basin, which includes Greater Sunrise. On the other hand, however, if Indonesia were to try and renegotiate its maritime boundary with Australia, it will be a long and arduous process that could harm the Timor-Leste economy, which is set to receive seventy to eighty per cent of Greater Sunrise revenue under the new agreement with Australia.
If Indonesia does attempt to renegotiate the terms of its maritime boundary with Australia, Canberra will likely maintain its position that seabed boundaries should be drawn along the continental shelf. While there is debate surrounding Australia’s claim based upon the continental shelf, the notion that seabed boundaries should be drawn along the median line between two countries has both a stronger legal basis and is a more equitable approach.
The recent treaty between Timor-Leste and Australia could represent a small window of opportunity for Indonesia to pursue its own interests. Seeing that Australia has lost its continental shelf argument against Timor-Leste, it is difficult to see how it will win using the same argument against Indonesia, although the status of existing treaties may complicate matters for Indonesia. There is no pressure for Indonesia to renegotiate terms off the back of Timor-Leste’s win, however, and it could be some time before Indonesia decides to pursue renegotiations. Regardless, it seems inevitable that the uncertainties surrounding the Australian-Indonesian maritime boundary will eventually re-surface sometime in the future. From the perspective of Indonesia, that would preferably be before the potential oil and gas pockets in the area have been fully exploited.