Australia–East Timor spying scandal
In 2002, the Australian Government withdrew from the United Nations Convention on the Law of the Sea (UNCLOS) clauses which could bind Australia to a decision of the Permanent Court of Arbitration in The Hague on matters of territorial disputes. Two months later, East Timor officially gained its independence from Indonesia. In 2004, East Timor began negotiating territorial borders with Australia. In response to this, ASIS used an Australian aid project to infiltrate the Palace of Government in Dili and install listening devices in the walls of the cabinet room. This enabled ASIS to obtain top-secret information from treaty negotiators led by Prime Minister Mari Alkatiri. This provided the Australian Government with "an advantage during treaty talks". The installation of listening devices occurred 18 months after the 2002 Bali bombings, during a time of heightened ASIS activity in the Southeast Asia region. In 2006, Australia and East Timor signed the second CMats treaty. Before the revelations of ASIS's clandestine activities in East Timor, the treaty between East Timor and Australia was ridiculed. Over 50 members of the US Congress sent a letter to Prime Minister John Howard calling for a "fair" and "equitable" resolution of the border dispute, noting East Timor's poverty. Signatories included Nancy Pelosi, Rahm Emanuel and Patrick J. Kennedy. Witness K made the Australian Government's spying activities public after the Inspector-General of Intelligence and Security (IGIS) recommended he do so. David Irvine, ASIS head (2003-2009) authorised the operation. His successor Nick Warner, ASIS head (2009-2017), assisted in an advisory role. Foreign Minister Alexander Downer, who oversaw ASIS was overseas during the operation. According to the lawyer of Witness K, former ACT Attorney-General Bernard Collaery, successive Australian Governments from both major parties have actively sought to cover-up the incident. Witness K revealed the bugging operation in 2012 after learning Foreign Minister Alexander Downer had become an adviser to Woodside Petroleum, which was benefiting from the treaty. The Gillard Government, in response to a letter sent by East Timor's Prime Minister Xanana Gusmão requesting an explanation and a bilateral resolution to the dispute, authorised the installation of listening devices in Collaery's Canberra office. After the story became public in 2012, the Gillard Government inflamed tensions with East Timor by denying the alleged facts of the dispute and sending as a representative to Dili someone who was known by Gusmão to have been involved in the bugging. In 2015, Gusmão said of Prime Minister Julia Gillard's response:
The response of the Gillard Government led to East Timor's application to have the case heard in the Permanent Court of Arbitration. According to Gusmão, during a 2014 meeting in Bo'ao, China, Prime Minister Tony Abbott shrugged off East Timor's concerns over the spying scandal by telling Mr. Gusmão not to worry because "[the] Chinese are listening to us". In 2015, the bugging scandal received renewed interest after the Australian Broadcasting Corporation ran a story revealing the level of concern amongst senior intelligence officials in the Australian intelligence apparatus. Attorney-General George Brandis, under lengthy questioning by a panel of Australian senators, admitted that new national security laws could enable prosecution of Witness K and his lawyer, Collaery. Further, Australia's Solicitor General, Justin Gleeson SC, claimed in a submission to the ICJ that Witness K and Collaery could have breached parts of the Criminal Code pertaining to espionage and could be stripped of their Australia citizenship if they are dual-nationals (as, indeed, Collaery is). Foreign Minister Julie Bishop said in April 2016 that: "We stand by the existing treaties, which are fair and consistent with international law."
In August 2016, the Turnbull Government indicated it will consider any decision made by the Permanent Court of Arbitration binding. Some suggested this "softening" was linked to the territorial dispute over the South China Sea between China and neighbouring states. The East Timor government continued to press Australia for an equidistant border between the two countries. In 2016, the Australian Labor Party said a new deal could be struck between East Timor and Australia if it formed government. In September 2016, The Age newspaper in Australia published an editorial claiming East Timor's attempts to resolve this matter in international courts "is an appeal to Australians' sense of fairness".
On 26 September 2016, Labor Foreign Affairs spokesperson Senator Penny Wong said, "In light of this ruling [that the court can hear East Timor's claims], we call on the government to now settle this dispute in fair and permanent terms; it is in both our national interests to do so". To date (March 2018), the Australian Government has not officially acknowledged the spying claims. Witness K had his passport seized in 2013. As Collaery has pointed out, such security assessments are usually conducted by ASIO and not, as in the case of Witness K, by ASIS. In 2018, despite having approval from the Director-General of ASIO to apply for a passport, ASIS and the Turnbull Government denied Witness K right to obtain a passport citing national security. His lawyer maintained that this was "pure retaliation" and that Witness K remained in "effective house arrest" in Australia. Three months after the election of the Abbott Government in 2013, ASIS was authorised by Attorney-General George Brandis to raid the office of Bernard Collaery and the home of Witness K, whose passport was seized. Brandis said that he authorised the ASIO raids to protect Australia's national security. Collaery, who represented the East Timorese government in the dispute with the Australian Government over the bugging of cabinet offices during the negotiations for a petroleum and gas treaty in 2004, alleged that two agents from the Australian Security Intelligence Organisation (ASIO) raided his Canberra office and seized his electronic and paper files. The seizing of Witness K's passport prevented him from appearing as a witness in East Timor's case against Australia at the Permanent Court of Arbitration in The Hague. Collaery said Witness K's ability to travel overseas and appear before The Hague was crucial to East Timor's case. The passport of Witness K remains confiscated as at April 2020. On 4 March 2014, in response to an East Timorese request for the indication of provisional measures, the International Court of Justice (ICJ) ordered Australia not to interfere with communications between East Timor and its legal advisors in the arbitral proceedings and related matters. The case was officially removed from ICJ's case list on 12 June 2015 after Timor-Leste confirmed that Australia had handed back its property. The Timor-Leste representative stated that "[f]ollowing the return of the seized documents and data by Australia on 12 May 2015, Timor-Leste [has] successfully achieved the purpose of its Application to the Court, namely the return of Timor-Leste’s rightful property, and therefore implicit recognition by Australia that its actions were in violation of Timor-Leste’s sovereign rights". In 2013, East Timor launched a case at the Permanent Court of Arbitration in The Hague to withdraw from a gas treaty that it had signed with Australia on the grounds that ASIS had bugged the East Timorese cabinet room in Dili in 2004. In April 2016, East Timor began proceedings in the Permanent Court of Arbitration under UNCLOS over the sea border it shares with Australia. The Australian Department of Foreign Affairs and Trade released a statement condemning the move, which it said was contrary to the previous treaties it had lawfully signed and implemented. East Timor believed much of the Greater Sunrise oil field fell under its territory and that it had lost $US5 billion to Australian companies as a result of the treaty it was disputing. Hearings before the court commenced on 29 August 2016. The court dismissed Australia's claim that it did not have jurisdiction to hear the case on 26 September 2016. In early 2017, East Timor withdrew the case against Australia after the Australian Government agreed to renegotiate. In 2018, the parties signed a new agreement that was far more favourable to East Timor which is now expected to reap between 70% and 80% of total revenue.
International law ; Permanent Court of Arbitration
In 2018, the parties signed a new agreement which gave 80% of the profits to East Timor and 20% to Australia.