Timor Gap Treaty (Transitional Arrangements) Bill 2000

Second Reading Speech

Campbell, Ian, (Parliamentary Secretary to the Minister for Communications, Information Technology and the Arts, LP, Western Au, Government)

-I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows-


This Bill reflects the continuing commitment of this Government to securing legitimate title to traditional lands on behalf of the Aboriginal people of the Northern Territory.

The Aboriginal Land Rights (Northern Territory) Act 1976 provides a mechanism whereby traditional Aboriginal land in the Northern Territory, referred to in Schedule 1 of that Act, may be granted to Aboriginal Land Trusts to hold title on behalf of Aboriginal people by agreement. Since the Act came into operation in 1977 a total of 61 separate parcels of land have been scheduled under the Act. This amendment will bring the total to 64.

The effect of this Bill would be to bring within Schedule 1 to the Land Rights Act the three areas of land which are subject to the Warumungu Land Claim as it relates to the Rockhampton Downs Station. The land is situated about 100 kilometres to the north-east of Tennant Creek, near the Barkly Highway.

An agreement has been entered into between the Northern Territory Government, the Central Land Council and the claimants. In addition to settling the Warumungu Claim in relation to Rockhampton Downs, the agreement also finally disposes of the Frewena Land Claim.

As part of this agreement, the Commonwealth will exercise its powers under the Land Rights Act, with the support of the Northern Territory Government, to grant the claim areas to the traditional owners by scheduling the respective areas under the Land Rights Act.

The result of this scheduling would be that no further hearing or report by the Aboriginal Land Commissioner would be necessary in order for the Aboriginal people concerned to be able to have the full rights of enjoyment of their traditional lands in fee simple, in other words, as freehold title.

The Government has the assurance of all parties to the negotiations that representative views of all Aboriginal people concerned have been obtained and their wishes taken into account.

There are no financial implications arising from this Bill.


Madam President, the purpose of the Bill is to amend the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990 and related Acts to reflect the fact that the United Nations Transitional Administration in East Timor (UNTAET) has replaced Indonesia as Australia's partner in the regulation and administration of petroleum operations in the Timor Gap.

The reason for the change is related to the recent developments in East Timor. On 26 October 1999, Australian time, the United Nations established UNTAET as the administrative and legal authority for East Timor, following East Timor's rejection of Indonesia's offer of autonomy within the Republic. From that time, Indonesia had no sovereign rights in the area covered by the Timor Gap Treaty.

UNTAET, acting on behalf of East Timor, has agreed to assume all the rights and obligations previously exercised by Indonesia under the Timor Gap Treaty, and this was formalised through an Exchange of Notes between Australia and UNTAET on 10 February 2000. The agreement with UNTAET applies retrospectively from the date of the United Nations Security Council Resolution establishing UNTAET, therefore achieving a smooth and seamless transition between Indonesia's exit from the Timor Gap Treaty and UNTAET's entry into a treaty relationship with Australia. The agreement with UNTAET is without prejudice to the position of the future government of an independent East Timor. This Bill includes the text of the Notes exchanged between Australia and UNTAET in Dili on 10 February 2000.

The Timor Gap Treaty arrangements have worked effectively since coming into force in 1991, and have facilitated the expenditure of over US $700 million on petroleum exploration and development in Area A of the Zone of Cooperation. The first commercial production of petroleum commenced in July 1998 with the development of the Elang-Kakatua oilfield. It is currently producing at the rate of about 14,000 barrels of oil per day and will provide revenues to both Treaty States at a rate of about US $3 million per annum. There are other potential projects in the Zone of Cooperation, including the Bayu-Undan and Sunrise-Troubadour gas-condensate fields. On the basis of current knowledge, development of these fields could involve capital expenditures of about A $15 billion and they could be brought into production by the early to mid 2000's.

While it is the Government's normal practice to have legislation in place before a treaty comes into force, this was not possible in relation to the agreement with UNTAET. It was necessary that the Treaty enter into force with retrospective effect, and as soon as possible, to provide continuity and certainty in the legal arrangements for existing and future commercial operators in the Timor Gap Zone of Cooperation, as well as to provide an early flow of revenue to UNTAET. In the circumstances, it was not desirable to delay the entry into force of the new treaty to allow time for passage of the relevant legislation.

The enactment of this Bill will also contribute significantly to investor certainty in the Timor Gap. This will be achieved by amendments to the Petroleum (Australia-Indonesia Zone of Cooperation) Act 1990, where necessary, to reflect the change in Australia's treaty partner from Indonesia to the UNTAET. The Bill will validate actions of the Ministerial Council and the Joint Authority since 26 October 1999, and will also enable the continuation of a range of Australian taxation, customs, immigration, crime and quarantine laws relating to petroleum operations in the Timor Gap.

The related Acts which have been amended consequent to the changes to the principal Act are the:

Crimes at Sea Act 1979
Crimes at Sea Act 2000
Customs Act 1901
Fringe Benefits Tax Assessment Act 1986
Income Tax Assessment Act 1936
Migration Act 1958
Passenger Movement Charge Act 1978
Passenger Movement Charge Collection Act 1978
Petroleum (Submerged Lands) Act 1967
Quarantine Act 1908
Workplace Relations Act 1996

In most cases, the consequential amendments to the various Acts are relatively minor - in many instances they amend the relevant Act by using expressions such as "Timor Gap", "East Timor" and "UNTAET" in sections where "Indonesia" or the "Republic of Indonesia" previously appeared. For example, changes to the Migration Act 1958, the Passenger Movement Act 1978 and the Petroleum (Submerged Lands Act) 1967 only involve the substitution of the term "Timor Gap" in place of the term "Australia-Indonesia" in the definition of Area A of the Zone of Cooperation.

However, some of the changes to existing Acts are, of necessity, more detailed - notably those relating to taxation provisions and the application of the criminal law under the Crimes at Sea Act. With respect to taxation, it has been necessary to provide further guidance as to the meaning of the terms "resident of a Contracting State" and "competent authority" to ensure the current operation of the Treaty and the Taxation Code after 26 October 1999.

The Crimes at Sea Act 1979 contains provisions governing criminal law and law enforcement in Area A of the Zone of Cooperation, consistent with the requirements of the Treaty. These provisions apply Northern Territory criminal law to petroleum related activities and provide a framework for law enforcement co-operation between the Treaty partners.

As well as amending these provisions of the 1979 Act to reflect the change in Australia's treaty partner, this Bill also inserts equivalent provisions, as amended, in the Crimes at Sea Act 2000 (currently a Bill before Parliament). The Crimes at Sea Act 2000 will be the Commonwealth's part of a new co-operative crimes at sea scheme involving Commonwealth, State and Northern Territory legislation. The amendments to the Crimes at Sea Act 2000 will commence at the same time that the Crimes at Sea Act 2000 replaces the Crimes at Sea Act 1979.

As I noted earlier, the Treaty arrangements we have entered into with UNTAET will not change the rights and responsibilities of companies and persons working in the Timor Gap, but merely provide for a continuation of those arrangements with effect from 26 October 1999. It is therefore appropriate for the Bill to retrospectively amend the relevant legislation to 1.23 am Australian Central Standard Time on 26 October 1999, the time when the United Nations Security Council established UNTAET.

However, the Bill has been carefully framed to ensure that the impact of the amendments on the criminal law will be beneficial only. There is an express provision that prevents any retrospective criminal liability arising under the amendments. Further, immunities from prosecution provided for under the Crimes at Sea Act 1979 are explicitly preserved from retrospective abrogation.

While the changes to the treaty arrangements in this Bill will enable continuity in the arrangements under the terms of the Timor Gap treaty, they will have no direct financial impact on companies and individuals or the Government. However, it is likely that projects currently awaiting approval could, if developed, provide several tens of millions of dollars per annum to both East Timor and Australia for a period of 10 to 20 years commencing in about 2004. Investor certainty in the rules that will apply in the Timor Gap are a necessary pre-requisite for such projects. I am confident that the actions taken to date and the provisions contained in this Bill will establish a favourable climate for those investments following a period of great uncertainty.

Madam President, it is clearly in the national interest that these legislative amendments be approved as soon as possible. I commend the Bill to the Senate.

Debate (on motion by Senator Quirke ) adjourned.

Ordered that the bills be listed separately on the Notice Paper.