Organised crime may be infiltrating Timor-Leste’s government. One minister is sounding the alarm

Two decades after Timor-Leste gained its independence, the country is a complicated and qualified success story. Poverty and deep economic problems persist, but the country boasts a thriving democracy. Its ascension to the ASEAN regional bloc will come later this month.

As this milestone approaches, however, a senior official with oversight over the national intelligence agency has gone public with explosive claims that Timorese institutions are allegedly being bought by organised crime.

His concerns come after a recent UN report that describes in vivid detail a sophisticated attempt by figures linked to triad gangs in China and Southeast Asia to allegedly establish a base of operations in the Timorese region of Oecusse-Ambeno.

If the allegations are true, they could pose the one of the greatest tests for Timor-Leste in its short history. Is its democracy robust enough to confront the challenge?

Allegations of corruption

Agio Pereira is the Timorese minister of the Presidency of the Council of Ministers. He is one of the most powerful elected officials in his country.

On September 21, Pereira published on Facebook what he called A Manifesto for the Defence of Timor-Leste. In it, he claims to have “undeniable and damning evidence” that US$45 million (A$68 million) has been brought (in some cases flown) into the country by “transnational criminal syndicates from Cambodia, Malaysia, Macau and Hong Kong”.

He says the money was allegedly used to influence regulatory bodies to grant “fraudulent licences” and set up “protected enclaves” where “illegal gambling, cyber-scam centres and human trafficking would be able to operate under state protection”.

He said the country faces a simple choice:

Will we be a sovereign nation governed by democratic laws and institutions, or will we become a criminal state owned by foreign mafia syndicates?

Pereira also listed numerous demands, including:

• the revocation of any licences that may have been granted to criminal networks
• government cooperation with international law enforcement to dismantle the networks
• an investigation of all officials who have allegedly taken any money.

Pereira did not provide any evidence in the post to back up his claims, but especially given his status and oversight of the national intelligence service, many are taking his claims seriously.

In response to the allegations, President José Ramos-Horta told me via WhatsApp:

I always said Timor-Leste does not have homegrown organised crime. […] But Timor-Leste, being still a fragile country, is very attractive to organised crime from Asia.

I have full confidence in our authorities with support from Australian Federal Police and from Indonesian police in tackling the challenges by organised crime.

Prime Minister Xanana Gusmao also took a measured response to the allegations. He told local media Pereira would be given a chance to raise the issue with the government directly.

On October 1, he was given his chance, addressing a meeting of Timor-Leste’s Counsel of Ministers. This resulted in the swift approval of a draft resolution cancelling all existing licences granted for online gambling and betting operations and prohibiting any new licenses from being issued.

But Pereira’s other key demand – an investigation into officials accused of taking money from organised crime syndicates – appears not to have been addressed.

Scammers taking root

Cyber-scammming is a booming industry in Southeast Asia, bringing in billions of dollars in revenue annually.

Illegal gambling and scam centres have proliferated in recent years in “special economic zones” in Cambodia, Laos, Myanmar and the Philippines. The organised crime groups behind them are constantly looking for new bases of operations where local officials can be persuaded to look the other way, or lack the capacity to stop them.

Although Timor-Leste is small, it’s important due to its strategic location (just a 1.5-hour flight from Darwin) and the fact Australia and its allies are increasingly competing for influence there with China. Australia cannot afford to ignore any threat to the security of a fledgling democracy on its doorstep.

Pereira’s manifesto came in the wake of an August 25 raid on a suspected scam centre in Oecusse-Ambeno, where 30 foreign nationals from Indonesia, Malaysia and China were detained. The head of the regional government, Rogerio Lobato, was given notice two days later.

Oecusse, as it’s commonly known, is a rugged coastal exclave on the western half of Timor island, surrounded by Indonesia. Once extremely isolated, Oecusse was granted autonomy in 2014 and a special economic zone was established to spur foreign investment.

The report from the UN Office on Drugs and Crime in September described how organised crime groups took advantage of the region’s loose regulatory structures late last year to allegedly establish an “Oecusse Digital Centre”. It reads:

The Special Administrative Region of Oecusse-Ambeno (RAEOA), Timor-Leste appears to have already been targeted by criminal networks through FDI [foreign direct investment].

As Timor-Leste prepares to join ASEAN in October 2025, the reported infiltration of RAEOA and its national ID system by convicted cybercriminals poses a serious security risk.

The report notes that Timor-Leste shares “stark similarities” with the development of the scam industry in Cambodia, Laos and the Philippines, which have now become notorious hubs for cyber fraud, drug trafficking and human trafficking.

In his message to me, Ramos-Horta declined to address the allegations surfaced by the UN report, saying:

I know well the work of UN agencies. They should focus more on solid research and less on allegations against individuals because this is not their mandate.

In his manifesto, Pereira appears to suggest operations like the one recently raided in Oecusse are made possible through the bribery of Timorese officials. He says directly this influence is occurring on a scale that risks state capture.

Reactions to Pereira’s allegations

It’s unclear why Pereira chose to appeal directly to the people rather than take his concerns to others in the government.

Nelson Belo, director of the civil society and security monitoring organisation Fundasaun Mahein, criticised Pereira’s choice to go public. He said as a minister, he should “lead and act within the law”.

Belo’s group had also recently warned of the risks transnational organised crime groups could pose to the country.

Abel Pires, a former government minister and former member of Timor-Leste’s Council of Defence and Security, had a different view.

He reasoned that because “the problem may involve too many people within the system”, Pereira might have had no choice but to go public.

He also called the cancellation of gambling licences a positive step, but said there must be an independent investigation into Pereira’s allegations.

On the street, the allegations have fed into frustration with official greed and incompetence, which fuelled recent student demonstrations against government waste.

That a leading minister felt he needed to go public with the accusations to have them taken seriously by his own government is telling.

The potential subversion of Timor-Leste’s institutions by organised crime is a serious threat to the country’s security. Its government – as well as Australia’s – would do well to pay heed.