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Sunrise LNG in Timor-Leste: Dreams, Realities and Challenges

A Report by La’o Hamutuk
Timor-Leste Institute for Reconstruction Monitoring and Analysis

February 2008

Appendix 6. Field visit report

Link to Index and Table of Contents

In May 2006, La’o Hamutuk’s research team visited several areas under consideration as possible sites for an LNG plant. Political and security unrest had displaced many people
within Dili and to outlying areas. However, everything seemed peaceful when we visited Lautem and Viqueque districts, with no obvious signs of refugees from Dili and no shortages
of supplies. We were the only clients at every hotel and restaurant we went to.

At that time, we were informed that Com, Lore, Beaçu, Betano and Suai had been studied as possible sites for the LNG processing facility in Timor-Leste, although La’o Hamutuk was
not able to see to any of these reports. La’o Hamutuk visited Com and Lore to conduct a brief visual inspection and meet with local leaders. We also met with district officials in Los
Palos and Viqueque. We were not able to conduct our planned visit to Beaçu because the bridge was out.

In the 18 months since our visit, the political situation in Timor-Leste has changed, and further consultation should be done to assess the current mood of people in areas where the
plant may be sited. However, most of the observations discussed below, especially regarding awareness of the scale and implications of this project, lack of readiness to participate in
its economic benefits, and limitations of infrastructure and disaster management are still valid.

Com is located in a natural bay on the north coast of Timor island, which is characterized by the calmer waters of the Banda
Sea or Tasi Feto (see Figure 31). Siting the plant in Com, while providing great navigational access and a good mooring
point at an existing port, involves a longer pipeline that would have to either go around or cross Timor Island on surface or
through a tunnel through Lautem district. If Com itself were to be chosen for the site, a small but thriving community with
tourism potential and with a soon-to-be-repaired and operating port would have to be displaced. Building the plant
eastwards of Com is impeded by hills, leaving the flat lands west of Com as a possibility. In July 2006, Com and all land to
its east were designated as part of the Nino Konis Santana National Park (see Figure 14).
Figure 31. The port of Com in a natural bay on the
northeast coast of the island of Timor. A small community is
slowly developing an incipient tourist business in the region.

Lore, on the other hand, provides a mooring point on the rougher waters of the Timor Sea or Tasi Mane (see Figure 32). The
town of Lore and the beach visited during the field trip are included in the Lore Reserve, a natural protected environment
listed in the appendix schedule of UNTAET regulation 2000/19 on protected places, under point (k) [110], and as part of the
new National Park. A location on the southern coast would shorten the length of the gas pipeline and avoid the problem of
crossing the island. However, the optimal landing site for the pipeline will also depend on detailed bathymetry which has
not yet been conducted. (See Chapter 3 for a discussion of the LNG plant location requirements). Discussions with José
Teixeira’s team at the Ministry of Natural Resources [82] indicate that in mid-2006 the Government was also considering
south coast locations near Betano (Manufahi) or Suai (Cova Lima), regions that this team was not able to visit. Other
officials indicate that minimizing the pipeline length is one of the most important factors, lending weight to a more easterly
site (closer to Sunrise) such as Beaçu.

Figure 32. A location near Lore on the southeastern coast of

the island of Timor, with a rich vegetation cover and within
the Lore Reserve, a pristine and little surveyed natural
environment, one of the few virgin forests remaining in the
region.

On 16 May 2006, the team found the road from Viqueque to Beaçu on the southern coast to be
impassable due to an almost complete collapse of the road embankment (see Figure 33) of the
Motale’e bridge. The design of the bridge, built ten years ago during Indonesian times,
displayed insufficiently extended flanges, thus providing inappropriate containment for the soil
behind the bridge south support wall. Erosion of the river bend at the embankment toe
combined with inadequate drainage caused the road to collapse, which was reduced to a section
of about 1.5m in width. Small vendors congregated at the bridge waiting to catch a ride with
vans that venture through the remaining gap when the soil is dry. Local officials had informed
authorities in Dili about this several weeks earlier and were waiting for a response, since there
was no local capacity to repair the road.
This incident exemplifies both the fragile state of the Timorese civil infrastructure and the
limited local and national capacity to respond to natural disasters, industrial accidents, or
infrastructural failure.

During the trip, we observed that the rural road network is very deficient. It is also unlikely that
it will have been improved significantly by the time plant construction starts. At least at the
beginning of the works, major operations of loading and unloading will have to be carried out
from the sea or by helicopter, and thus the roads will not be necessary for the construction
phase. [82] Any benefit that might derive from an improved road network will be delayed until
the roads are necessary for the operation of the plant.

Figure 33. Collapse of the road embankment. The structural remains show a lack of
transition slab, an insufficient flange length, inappropriate drainage, and poor embankment
erosion protection at its base by the river. A temporary repair was made five months after
the bridge collapsed, slightly widening the roadway so that four-wheeled vehicles could
cross. It took another year, until October 2007, before the national government permanently
repaired the bridge.
It quickly became clear that an LNG plant along the coastal areas visited would severely disrupt
the rich and beautiful natural environment of Timor-Leste. Since most of the natural
environment has not been properly surveyed [7], the implementation of the LNG plant could
inflict some valuable but unknown losses. This suggests that prior to the selection of the site, an
in-depth environmental base line study should be carried out to find out the elements at risk to
help select the most appropriate site and establish an effective environmental management plan.

During our visit, the La’o Hamutuk team interviewed District Administrators and other officials, Chefes de Suco and Aldeia, traditional leaders, and civil society organizations. A list
of those interviewed is in the acknowledgements. Based on these discussions, we observed the following:

1. The people of Timor-Leste hold great hopes for this development opportunity. Community leaders are willing to relocate their communities if necessary for this chance to
improve their economy, even if they may lose their homes, sacred sites and agricultural land, although they expect that the Government will compensate them fairly and find
new places where they can continue their activities. There is enormous pride in Timor-Leste and in what the country can do and there is a sense of unity and readiness to work
and collaborate for the national interest.

2. On the other hand, many people are unaware of the how large this project will be, or the number of highly paid jobs and services it will involve. They anticipate that their
community will only get some unskilled jobs (cleaners, security) and a few buyers for local products. This can be dangerous, as people may not get more than they ask for. Local
businesses do not currently have the human resources or financial capacity to receive significant benefits from this project.
3. The trust in the national leadership opens the way for local people to be manipulated, and avoids responsibility at the district or community level to protect or serve the people.
For example, Viqueque district officials didn’t want to admit their frustration with Dili not responding to their requests to fix the Motale’e Bridge.
4. The social willingness and strength is counterbalanced by an enormous gap in the skills of the workforce and state of the infrastructure. At present, local people would only be
able to perform very basic jobs, such as simple construction, catering and hospitality. Women hope to benefit from this project by opening restaurants or working as cooks, and
they are ready to learn how to cook food that foreigners want. However, long-term, highly-paid international workers will expect a higher standard of food and lodging than
tourists who come for a night or two. Local businesses and workers in this sector will need extensive training and financial support to develop to the point where they can
receive significant income from this aspect of the project.
5. Every person we interviewed was eager for the LNG Plant to come to their community, even though they have little understanding of the scale and impact of the project. They
expect that it will provide some jobs for them, and that foreign workers will buy their local products. At present, few local consumers have money to buy their local products,
and farmers are looking for new markets. Improvements in local infrastructure, especially in roads that would allow local produce to be transported to urban markets, would also
be welcome. This can reduce the burden on women who usually carry their produce on foot to sell it in the districts.

6. There is a complete lack of preparedness for contingencies. A large industrial facility will pose risks to workers, adjacent communities and the natural environment. At this
moment, however, it would be impossible to handle even modest emergencies at a local level, and with great difficulty at the national level. The local community and the
country would have to rely on facility personnel to contain accidents. Should the plant fail to handle the emergency, the country would depend on foreign assistance, and the
delay caused in the process could have dire consequences for human life and the environment.

7. Public officials we met with were open about how little information they have received on oil-related issues and the LNG plant, and did not try to pretend that they knew more.
They are eager to receive information from any sources, in addition to the government. Chefes do suco and aldeia also would be grateful for basic information on oil and gas
exploration and exploitation, as well as all other aspects of such a project.

8. District and community officials have almost no information regarding the government’s development plans. Most people interviewed had not heard of the possible LNG
project, and those who had, had only heard of the topic tangentially, possessed no specific information, and had heard only about positive aspects of petroleum development.
They were unaware of the potential negative impacts of such a project, and therefore unable to reach informed opinions. Some of the local leaders said they were not asked
about development itself, but only given information about what is going to happen. The substitution of socialization for consultation has already been accepted by some local
leaders, which can lead to serious long-term consequences if projects have other effects than were explained, or if people feel excluded or alienated from projects in their
neighborhood.

9. We found a great disconnect between the information available to national authorities in the capital and to those in the districts. Information channels need to be put in place in
order to ensure participation in a development enterprise that needs to be a joint effort between the government, the developers, and local communities. For public consultation
to be meaningful, widespread and in-depth education must be provided, preferably by someone independent of the government.

10. Many local community people have accepted the conventional view of compensation for people who have to relocate, placing a high value on money spent (such as building an
expensive house) and a low value on labor and materials invested, or on land used for farming. This means that rich people may get more compensation than poor ones, and that
those who lose “only” farmland or fishing areas will get very little. In addition, conflicts could arise if the Government decides to give compensation related to traditionally
owned land. The Liurai usually has title to more land than the common people, but the land actually belongs to the entire community, so it is important to consult with the entire
population.

Continue to Appendix 7. Glossary

Go back to Appendix 5. Risk Analysis
Return to Table of Contents

The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua D. Alberto Ricardo, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
email: laohamutuk@gmail.com Web: http://www.laohamutuk.org Blog: laohamutuk.blogspot.com