India’s energy company scandals; Greenpeace targeted in India; Tension in PNG over Bougainville; Balibo 5 appointment By Hamish McDonald.

Australia called to Hague on Timor Gap

Priya Pillai, campaigner for Greenpeace India, at a rally celebrating the government’s decision to stop a coalmining project in Madhya Pradesh.
Priya Pillai, campaigner for Greenpeace India, at a rally celebrating the government’s decision to stop a coalmining project in Madhya Pradesh.
Credit: John Cobb / GREENPEACE

With its defence department gearing up to join the Americans in the occasional defiant flyover of the new Chinese artificial islands in the South China Sea, the Australian government finds itself on the same side of the dock as the Chinese in international maritime law proceedings.

Both China and Australia are being taken to arbitration in The Hague by smaller, weaker neighbours accusing them of riding roughshod over their claims to maritime resources.

The Philippines has taken China to the Permanent Court of Arbitration to seek a ruling on resource zones around the Spratly Islands, where China has been dredging up sand islands on some reefs and harassing Filipino marines holed up in a beached ship on another reef. China has said it will not be party to the case or accept any ruling, but the court will try to construct a notional Chinese case before giving its ruling next year.

Timor-Leste delivered a diplomatic note on June 1 to Australia, formally notifying intent to proceed to arbitration by a private panel under The Hague court’s auspices, to have the 2002 treaty known as CMATS (Certain Maritime Arrangements in the Timor Sea) declared invalid because of Australia’s allegedly fraudulent conduct on subsequent negotiations flowing from it.

Just before Timor-Leste became legally independent in May 2002, after the United Nations interregnum following Indonesia’s exit in 1999, the Howard government famously withdrew Australia from the jurisdiction of international courts in setting maritime boundaries, then overawed the Timorese into accepting a compromise in the dispute about the “Timor Gap” and its resources, notably the vast Greater Sunrise gas field leased to a Woodside Petroleum consortium.

The Timorese have long been unhappy with the deal, and dug in hard on negotiations about Greater Sunrise to get the gas landed in Timor, rather than piped to Darwin or processed by a floating factory. The act of a whistleblower from the Australian Secret Intelligence Service (ASIS), notifying Timor’s lawyers that he had led a team that bugged the cabinet office in Dili in 2004, gave them grounds of bad faith to seek annulment of the CMATS treaty, which would otherwise defer boundary disputes for 50 years from signature; that is, long after Greater Sunrise was exhausted. Fortunately, a provision for arbitration in the treaty has given a loophole for such a move.

Things have got quite nasty at times. The Australian Security Intelligence Organisation, then headed by David Irvine who’d been ASIS chief at the time of the 2004 bugging operation (under Alexander Downer’s helm at DFAT), raided Canberra lawyer Bernard Collaery’s office to get the leaked ASIS material in December 2013. Timor then mounted a side-action in the International Court of Justice to get it back. Solicitor-General Justin Gleeson had the hide to tell the court Timor and its agents had encouraged the “crime” of disclosing intelligence matters to a foreign government. In May, the court ordered the material handed back. Attorney-General George Brandis swore he had not peeked at it to help Australia’s litigation.

Meanwhile, there has been lots of duchessing of Timorese leaders, with former prime minister Xanana Gusmão and his wife Kirsty Sword Gusmão given gongs in recent honours. But after a six-month suspension, Dili, under new prime minister Rui Araújo, is pushing the case again, and unlike the Chinese, the Australians have no option but to front up at The Hague.

Australia has nominated Yale legal expert Michael Reisman to the arbitration panel, and Timor the British law lord Lawrence Collins, and they between them have named Italian maritime law expert Tullio Treves to the chair. The hearings will be in camera, which will disappoint spectators wanting to see how the Timorese got screwed after being liberated. But this actually gives a pathway for the ASIS whistleblower, known as Witness K, to give evidence in confidence, should the government give him back his passport.

Should the panel rule that the CMATS treaty is invalid, then Australia will have lost control of the resources it believes it owns across the median line of the Timor Sea, and will have to negotiate from scratch. Indonesia, which was pressured into signing an invidious maritime boundary on either side of the Timor Gap in 1972, will be watching.

1 . India’s energy company scandals

As he starts his second year as India’s prime minister, Narendra Modi is having some difficulty in finding corporate role models for the business-friendly economy he has set out to create.

Modi and his Hindu-nationalist Bharatiya Janata Party won an outright majority of lower-house seats in India’s parliament last year, and was sworn in on May 26 to a collective sigh of relief that the previous Congress Party-led coalition was gone. After 10 years of mounting scandals over the allocation of mobile telephone spectrum, coalmining leases, and other licences, the monk-like Modi promised an era of discipline, probity and focus.

Helped admittedly by the fall in global oil prices, the Indian economy quickly recovered its momentum and at growth projected above 7 per cent this year is likely to outgrow the slowing Chinese economy. Modi is tackling some politically difficult reforms, including a national goods and services tax to replace the varying state sales taxes and a new land transfer regime.

But Indian big business remains very much on the nose with the public. In February, the police busted a network of industrial espionage centred on the petroleum ministry, arresting five executives in the “corporate affairs” offices of leading energy companies Reliance Industries, the Reliance Anil Dhirubhai Ambani Group, Essar Group, Cairn India and Jubilant Energy, as well as two alleged middlemen in obtaining classified information.

Somewhat embarrassingly, the two Reliance outfits and Essar are each heavily invested in Gujarat state, where Modi made his reputation as chief minister. Their controlling families, the Ambanis and the Ruias, epitomise the swashbuckling entrepreneurial spirit erupting out of Gujarat’s traditional Bania mercantile caste onto the modern sharemarket, with often controversial results.

Adding to the embarrassment has been the leak of the so-called “Essar Diaries”, which list details of corporate favours to politicians, bureaucrats and journalists in return for getting access to government budget papers, influencing decisions on oil prices and taxes, and having unfavourable stories buried.

The businessman closest to Modi, Gautam Adani, also a Bania from Gujarat, is not involved in these scandals, but after recently hiving off its ports and power arms into separate companies, his Adani group looks overextended in its various big projects, including the projected $16.5 billion coal and railway scheme in Queensland’s Galilee Basin.

The newly exposed scandals relate to events under the previous government, but these are the same groups that Modi’s government will need to tackle India’s shortage of the electricity needed to drive faster growth. This will involve coal leases, land acquisition approvals and loans from the big commercial banks, still state-owned, which are already carrying non-performing loans to Essar and other favoured capitalists. Opinion polls show Modi is still regarded as a big improvement, but a majority doubt that corruption has truly declined. The recent re-election of the anti-corruption movement Aam Aadmi (Common Man) to run Delhi’s government shows faith in Modi is somewhat provisional.

2 . Greenpeace targeted in India

What to do about India’s scandals? Part of the political response, it seems, has been to attack the civil society that has been busy exposing them through public interest litigation in the courts and investigations of projects in the field.

The latest victim has been an Australian worker for Greenpeace, Aaron Gray-Block, who was turned around on arrival in India last Saturday for meetings, despite having a valid business visa, and sent back to Kuala Lumpur. This comes as part of a crackdown by the Ministry of Home Affairs on non-government organisations under the Modi government. Some 9000 NGOs were deregistered.

Greenpeace, a fly in the ointment for companies hoping to open coal and bauxite fields in the tribal lands of the eastern states, is a particular target. Earlier this year the ministry froze Greenpeace India’s bank accounts and then suspended its licence to receive foreign funds, claiming it had violated rules in opening accounts for foreign donations.

On January 11, Greenpeace activist Priya Pillai was stopped at Delhi’s airport from boarding a flight to London, where she was to address a parliamentary committee about a contentious coal project in tribal lands of Madhya Pradesh state. She was told later her name was in a database of people not allowed to leave the country because of “anti-national” activities. Her passport was stamped “Offload”.

In March Pillai got a judge to order the lifting of the travel ban, as an infringement of constitutional rights to free speech. Justice Rajiv Shakdher said dissent about development models are “always there” but “travelling abroad and espousing views” without any criminal intent “cannot, in my opinion, put Ms Pillai in the category of an anti-national element”. The war against the foreign connections of Greenpeace continues, however.

This crackdown is clearly being pushed by the Intelligence Bureau (IB), the domestic security agency inherited from British times that comes under the home affairs ministry. It has long been fighting internal rebellions, including the Maoists taking the side of tribal dwellers resisting the encroachment of miners. Modi made former IB head Ajit Kumar Doval his national security adviser, a post normally occupied by a senior diplomat. The new approach doesn’t serve India well. 

3 . Tension in PNG over Bougainville

As predicted, John Momis has been voted back as president of the Autonomous Region of Bougainville. His new five-year term coincides with the window for a referendum on whether the island of an estimated 300,000 people stays within Papua New Guinea or becomes fully independent.

Manoeuvring will also speed up on whether the abandoned Rio Tinto copper–gold mine is reopened, and whether other gold deposits will be opened to outsiders after a long moratorium.

The island is already becoming a point of diplomatic friction between Canberra and Port Moresby. PNG Prime Minister Peter O’Neill said he was taken by surprise by last month’s budget inclusion of funding for an Australian consulate in Buka, the Bougainville provincial capital, and promptly banned all Australians from travelling to the island. Foreign Minister Julie Bishop insisted his government had been given prior notice. The travel ban has been lifted.

But expect lots of contention in the years ahead, as Momis battles the perhaps utopian idea among many of his people that independence or autonomy is possible without funding from mining taxes, and O’Neill tries to avoid being the first PNG leader to lose a province, even though the causes of separatism were in evidence long before his watch.

4 . Balibo 5 appointment

Australian ambassador Paul Grigson returned this week to Jakarta, but the bilateral atmospherics just got harder with Indonesian president Joko Widodo nominating former general Sutiyoso as the new chief of the State Intelligence Agency, known as BIN.

As a young special forces officer in October 1975, Sutiyoso took part in the covert attack on then Portuguese Timor, in which the five Australian-TV newsmen were killed at Balibo. While governor of Jakarta in 2007, Sutiyoso came to Sydney on a trade mission, oblivious of the ongoing inquest into Balibo at the time. Invited to give testimony, he fled immediately, and organised demonstrations against the Australian embassy. Then defence chief Angus Houston, recently knighted in Tony Abbott’s Order of the Bunyip, was sent to placate him. If Sutiyoso is confirmed, intelligence exchanges could get testy.

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This article was first published in the print edition of The Saturday Paper on June 13, 2015 as "Australia called to Hague on Timor Gap".

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Hamish McDonald is a Walkley Award-winning foreign correspondent.

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