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
2002 Bali bombings
2002 Bali bombings
Australia–East Timor spying scandal