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East Timor to Seek Legal Action Against ConocoPhillips

  • Kate Lamb

JAKARTA — The tiny half-island nation of East Timor says it will seek legal action against the U.S. mining giant ConocoPhillips for unpaid mining taxes.

The East Timorese government claims that U.S. mining company ConocoPhillips owes the country “millions, possible billions” in unpaid mining taxes.

The small and impoverished nation has a $10 billion petroleum fund, which is almost entirely generated by the Bayu Undan project - operated by ConocoPhillips.

Imbued by a new mandate following the parliament election last week, political analyst Ed Rees says the decision to take legal action is symbolic of the country’s growing assertiveness.

“They have managed to pass through three election cycles without any serious violence," he said. "The U.N. peacekeeping mission is scheduled to leave in December and the Australian defense forces shortly thereafter. They are flexing their muscles so to speak. This particular issue is part of a wider feeling of self-confidence in Dili, about calling their own shots and expressing their opinions, and seeking to get the best deal they can for themselves.”

One of the world’s newest nations, East Timor was brutally occupied by Indonesia for 24 years before it was granted independence in 2002.

Apart from coffee and tourism, some 90 percent of the country’s revenue is derived from oil and gas.

The government says the best way to ensure East Timor’s future is spend the petroleum fund on developing critical infrastructure - and reduce its dependence on oil and gas.

Analyst Edward Rees says East Timor’s approach toward multinationals is part of a wider trend of resource nationalism.

“National governments in the developing world are increasingly looking to what they feel is owed from the benefits of the resources that international extractive companies are involved in operating on. Whether it is here in Indonesia, or in East Timor, Venezuala or Nigeria,” he said.

East Timor is also embroiled in a dispute with the Australian company Woodside Petroleum about the Greater Sunrise LNG project.

The Bayu Undan Project is located in the JPDA, or the Joint Petroleum Development Authority, located in the Timor Sea. East Timor owns 90 percent of revenue from the JDPA, while Australia owns the remaining 10.

No dates have been set for the court hearing.
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