insider | Connect Asia



Updated 18 January 2012, 16:05 AEDT

An article from a former employee of the energy company Woodside has labelled their negotiating style "arrogant" and "adversarial", saying it's largely the company's own fault that long-running negotiations with East Timor are stalled.

For years now there's been disagreement about where to process the gas from the Greater Sunrise field off the coast of East Timor, a field which is divided up between East Timor and Australia. Dili has been pushing for a facility on its shore, while Woodside favours a floating facility, having also previously contemplated piping the gas to Darwin for processing. Woodside operates and owns 33.4 per cent of the project and has been leading negotiations over developing the Greater Sunrise field. In 2007, Mandy Whyte left her job at the New Zealand Ministry of Foreign Affairs and Trade to set up Woodside's social investment program in East Timor. She left 20 months later and now shares her views of what went wrong.

Presenter: Liam Cochrane

Mandy Whyte, author of 'Cowboys, Ogres and Donors: A Decade of CSR in Practice - NZ, Australia, Timor-Leste and Indonesia'

COCHRANE: Now in the article that was released this week, you described the relationship between the East Timorese government and Woodside as adversarial. How did it get to that stage?

WHYTE: Woodside has two attempts at looking at options for the development of the Sunrise gas and I think the first time they did it, I don't think the will was there to look at a Timor option. They pretty much dropped it before they started. When they went back again in 2007, they did put a lot more effort into it, but I think the major problem was that they failed to engage effectively from the beginning it was very much a relationship of sitting at the end of the table and informing and talking about the key points, but there was no real sense of taking people on the journey and as partners and I think that resulted in a lack of trust and lack of transparency.

COCHRANE: And indeed you describe Woodside's attitudes towards the East Timorese government in your paper, you described them considering the government as a thorn in the side to use your words as well as devious and untrustworthy. I mean those are strong terms, a very strong attitude for a company to have towards what should be a stakeholder and a partner in the project?

WHYTE: Well, I used the term 'thorn in the side' to describe a public relations approach to working with communities, so 'it is a necessary thing to do, we have to deal with the community and meet their demands and concerns'. But taking a more CSR, corporate social responsibility community development approach, then the company has to see their local partners, the host government as a partner and to develop the relationship in the spirit of partnership, not as a supplier or a negotiating role. They really need to engage effectively in very patient dialogue and in effect to empower the local partners, particularly in the developing country environment.

Now Woodside works okay in Australia, but it's not a developing country, ithere's a very set of norms and rules around engagement between companies and communities. In a developing country, there is a different environment, different processes need to be employed and Woodside did not do particularly well in Maurotania or Kenya or any other developing country Libya. They need to learn that there are ways to achieve the sorts of outcomes they're looking for.

COCHRANE: And you actually say that there are community development tools that are available or at least were available to Woodside that could have prevented this standoff. Can you give me an example of some of the practical things the company might have done to have a better relationship with the government and the community at this point?

WHYTE: Yeah, I guess the main thing is education. One of the things that companies have traditionally done is to inform. They put out document that give people bits and pieces of information. The first thing is to educate, educate, educate, consult, engage, help people to understand what is going on and a lot of people in Timor have got a very unrealistic expectation, they have a really understanding of what the development of the Sunrise Gas field will do for them, what it involves. I had people come up to me in the street can I have a job on your building the pipeline and I mean this is a deep sea pipeline that will be laid by a barge, it won't bebuilt with picks and shovels as some people had expected.

COCHRANE: So you're saying that Woodside needed to educate people more, it needed to explain the project and perhaps some of the benefits in a more realistic way. What about as far as sharing the wealth around and sort of telling people about how the wealth might be shared around?

WHYTE: Well, I guess that's what I'm saying educating people, engaging them on a process and helping them understand that this is not going to be a panacea for the economic health of Timor Leste, this is going to produce a few jobs and it's going to have some impact. But gaining, a realistic view of what the benefits of that impact is going to be and some of aren't going to be particularly positive.

COCHRANE: Can you expand on that, what things are not going to be positive that people in East Timor should know about?

WHYTE: Well first of all, there under the expectation that there will be a large number of jobs, there may or may not. Let me just go back to the tools. I said education is absolutely critical and I think the government needs, the company needs to go back and start to fully engage with the community and the government and help people really understand what they're doing and why they're doing it and how they're doing it. But they also need to look at the Timor option and one of the things they did a Perth based study of the Timor option, but they did much more comprehensive studies of the Darwin option and the floating option. If they had invited Timor Leste to participate in that process and put up their own bids, I think there would have been an opportunity to compare the Timor option and get a much more full picture of the risks and ill affects associated with it and also social assesment. It was something that was never fully done. A local organisation here did a preliminary social assessment that did demonstrate that there would be some things, but it also did bring some risks for local people as well. It in fact couldn't get the number of jobs. I think if the company had done a lot more research and then put that research out to the community, a huge amount of misinformation here in the media about the project and yet rather than coming in and saying hang on people, let's get the story straight, they've really remained silent.

COCHRANE: Why did you choose to release this paper now?

WHYTE: I actually wrote it a couple of years ago and sat on it, but I've been back in Timor for the last year and I've just watched this impasse, I've watched the same scenario play itself out. Back in 2007, I said to the company this is inevitable. The writing is really on the wall if you don't engage in a way that is more empowering and more transparent and more participatory and really build a partnership, then you're not going to get past this previous history of mistrust and a sense that the company's been misleading.

COCHRANE: And, of course, that standoff has become quite entrenched for a long time now and the Foreign Minister of East Timor said recently that he expressed some hope that negotiations might move forward under some new leadership from Woodside. He said that he's looking forward to not just one side bringing one idea and the other side bringing one idea and then bumping heads at the table, but the new ideas and new leadership might actually progress at the negotiations. Do you have any optimism that those negotiations will be furthered?

WHYTE: I guess it depends on the approach that the new CEO of Woodside wants to take, I mean if he wants to continue the same approach that was taken previously, then I think they're just going to remain at loggerheads. I mean obviously there's an interest on both sides to progress the development, I think they need to get back to the drawing board and to rethink the approach.

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