East Timor launches spying case in the Hague

A landmark case has begun in the Hague, looking into a multi-billion dollar oil agreement between Australia and East Timor. The case has sparked allegations of spying, office raids, broken promises and unfair advantages.

(SBS)

It's all behind closed doors in the Hague, Canberra's legal team is preparing for a case that's now about spies, international politics and a fight over billions of dollars in royalties.

Overnight, Timor's prime minister demanded to know why Australia was no longer a close friend.

"I think reviewing that decision would be a good thing for the Australian government to do but it is not enough for Attorney-General Brandis to say it is a national security matter," Greens leader Christine Milne says.

The case in the Hague centres around a 2006 agreement between the two governments.

Watch: Interview with Deakin University professor Damien Kingsbury

The treaty ensured equal profits from a shared oil field in the East Timor Sea.

The gas piped to mainland Australia, a pipeline that's transformed Darwin economically.

But it hasn't had the same affect in Dili.

"The certainty that has to be established is the boundary issue," East Timor's Ambassador to Australia, Abel Guterres says.

"So investors can go into the area know where exactly where the boundries are, which jurdistrictions are of other side."

These latest allegations of spying have surfaced at a time when Australia is trying to repair its fractured diplomatic ties with Indonesia.

Now the sensitive and supposedly secret work of our intelligence agencies is being discussed on the world stage.