Australia–East Timor spying scandal
The Australia–East Timor spying scandal began in 2004 when the Australian Secret Intelligence Service (ASIS) planted 200 covert listening devices in the Timor-Leste Cabinet Office at Dili, to obtain information in order to ensure Australian interests held the upper hand in negotiations with Timor-Leste over the rich oil and gas fields in the Timor Gap. Even though the Timor-Leste government was unaware of the espionage operation undertaken by Australia, negotiations were hostile. The first Prime Minister of Timor-Leste, Mari Alkatiri, bluntly accused the Howard Government of plundering the oil and gas in the Timor Sea, stating:
"Timor-Leste loses $1 million a day due to Australia's unlawful exploitation of resources in the disputed area. Timor-Leste cannot be deprived of its rights or territory because of a crime."
Australian Foreign Minister Alexander Downer ironically responded:
"I think they've made a very big mistake thinking that the best way to handle this negotiation is trying to shame Australia, is mounting abuse on our country...accusing us of being bullying and rich and so on, when you consider all we're done for East Timor."[not in citation given]
Witness K, a former senior ASIS intelligence officer who led the bugging operation, revealed in 2012 the Australian Government had accessed top-secret Cabinet discussions in Dili and exploited this during negotiations of the Timor Sea Treaty. The treaty was superseded by the signing of the Treaty on Certain Maritime Arrangements in the Timor Sea (CMATS) which restricted further sea claims by Timor-Leste until 2057. Lead negotiator for Timor-Leste, Peter Galbraith, laid-out the motives behind the espionage by ASIS:
"What would be the most valuable thing for Australia to learn is what our bottom line is, what we were prepared to settle for. There's another thing that gives you an advantage, you know what the instructions the prime minister has given to the lead negotiator. And finally, if you're able to eavesdrop you'll know about the divisions within the East Timor delegation and there certainly were divisions, different advice being given, so you might be able to lean on one way or another in the course of the negotiations."[not in citation given]
The espionage revealation led to Timor-Leste rejecting the treaty on the Timor Sea, and referring the matter to The Hague. In March 2014, the International Court of Justice (ICJ) ordered Australia to stop spying on East Timor. The Permanent Court of Arbitration in the Hague considered claims by Timor-Leste over the territory until early 2017, when East Timor dropped the case after the Australian Government agreed to renegotiate. In 2018, the parties signed a new agreement which split the profits 80% East Timor, 20% Australia.
The identity of Witness K must be kept secret under the provisions of the Intelligence Services Act and any person in breach of this could face prosecution.
In June 2018 the Commonwealth Director of Public Prosecutions filed criminal charges against Witness K and his lawyer Bernard Collaery. A directions hearing was set down for 25 July 2018 in the ACT Magistrates Court. 
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 Witness K revealed ASIS's clandestine activities, the treaty between Timor-Leste 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.
Reaction to the allegation
The Gillard Government, in response to a letter send by East Timor's Prime Minister Xanana Gusmao 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 Gusmao to have been involved in the bugging. In 2015, Guamao said of Prime Minister Julia Gillard's response:
"It meant that the Prime Minister of a modern democracy on Timor-Leste's doorstep [Australia] did not know what her intelligence service was doing."
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 Gusmao, Prime Minister Tony Abbott sought to assuage East Timor's concerns over the spying scandal by assuring X that "the Chinese are listening to [Australia]". 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. Foreign Minister Julie Bishop banned Witness K from using his or her passport. As Collaery has pointed out, such security assessments are usually conducted by ASIO and not, as in the case of Witness K, by ASIS. 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."
The Turnbull Government has recently (August 2016) indicated it will consider any decision made by the Permanent Court of Arbitration binding. Some[who?] suggest this "softening" is linked to the territorial dispute over the South China Sea between China and neighbouring states. The Timor-Leste government has continued to press Australia for an equidistant border between the two countries. The Australian Labor Party in 2016 suggested a new deal could be struck between Timor-Leste 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." An articles in the Global Times in China on 6 September 2016 said:
[Australia] should not involve itself in the South China Sea arbitration while challenged by the maritime boundary disputes itself...The Australian government should not do what it would not like the international community to do to itself.
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.
"Just as we fought so hard and suffered so much for our independence, Timor-Leste will not rest until we have our sovereign rights over both land and sea," Gusmao, 26 September 2016.
Despite having approval from the Director-General of ASIO to apply for a passport, ASIS and the Turnbull Government deny Witness K right to obtain a passport citing national security. His lawyer maintains that this is "pure retaliation" and that Witness K remains in "effective house arrest" in Australia in violation of the law.
The Australian lawyer Bernard Collaery, who was representing the East Timorese government in a dispute against the Australian Government over the bugging of cabinet offices during the negotiations for a petroleum and gas treaty in 2004, alleged in 2013 that two agents from the Australian Security Intelligence Organisation (ASIO) had raided his Canberra office and seized his electronic and paper files. Three months after the election of the Abbott Government in 2013, ASIS was authorised to raid the office of Collaery and the home of Witness K, whose passport was seized. Australia's Attorney-General George Brandis has since asserted that he had authorised the ASIO raids to protect Australia's national security. The passport of Witness K was still being held as of March 2018. Collaery said of Witness K's ability to travel overseas and appear before the Hague:
"For the East Timorese, it will be crucial that Witness K's passport is returned so he can travel to The Hague to testify in the case."
Witness K has since been allowed to give video evidence in the Hague trial given his inability to travel outside Australia.
International Court of Justice
On 3 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 to-do list on 12 June 2015 after Timor-Leste confirmed that Australia had handed back the goods: "the Agent of Timor-Leste explained 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”.
Permanent Court of Arbitration
In 2013, East Timor launched a case at the Permanent Court of Arbitration in The Hague to pull out of a gas treaty that it had signed with Australia as it accuses the latter of having ASIS bug 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 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 believes much of the Greater Sunrise oil field falls under its territory and that it has lost $US5 billion to Australian companies as a result of the treaty it now disputes. Hearings before the court commence on 29 August 2016. The court dismissed Australia's claim that it did not have jurisdiction to hear the case on 26 September 2016.
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