AGREEMENT BETWEEN AUSTRALIA AND THE REPUBLIC OF INDONESIA ON THE FRAMEWORK FOR SECURITY COOPERATION

(MATARAM, LOMBOK, 13 NOVEMBER 2006)

[2006] ATNIF 25

Documents tabled on 6 December 2006:

National Interest Analysis [2006] ATNIA 43

With attachment on consultation

Text of the proposed treaty action

Background information:

Country political brief and country fact sheet

List of other treaties with Indonesia

List of treaties of the same type with other countries

NATIONAL INTEREST ANALYSIS: CATEGORY 1 TREATY

SUMMARY PAGE

Agreement between Australia and the Republic of Indonesia on the Framework for Security Cooperation (Mataram, Lombok, 13 November 2006)

[2006] ATNIF 25

Nature and timing of the proposed treaty action

1. The proposed Treaty action is the Australia-Indonesia Agreement on the Framework for Security Cooperation.

2. In accordance with Article 10(1) of the Treaty, the Treaty shall enter into force on the date of receipt of the last notification by which the Parties notify each other that their internal requirements for entry into force have been fulfilled.

3. Indonesia is currently seeking parliamentary ratification of the Treaty. The Treaty will be considered by Commission I of the Indonesian Parliament (which covers Defence, Foreign Affairs, Communication and Information).

4. The Treaty will not terminate any existing bilateral treaties upon entry into force. In accordance with Article 2(6), the Treaty makes clear that nothing in the Agreement shall affect in any way the existing rights and obligations of either Party under international law. Reflecting the Treaty’s status as a framework agreement, the preambular paragraphs recognise the value of bilateral agreements and arrangements between the two countries since 1959 including the major bilateral instruments that have provided a strong legal framework for dealing with security issues.

Overview and national interest summary

5. Australia and Indonesia maintain a shared goal of peace, security and prosperity in the region and recognise the importance of continuing close cooperation on matters affecting their common security as well as their respective national security. The Treaty provides a strong legal framework for encouraging bilateral dialogue, exchanges and implementation of cooperative activities, and provides a firm basis for the conclusion of separate arrangements in specific areas. The Treaty also sets out a number of key principles which shall guide the Parties in their relations with each other, consistent with the UN Charter, including clear undertakings of support for each other’s sovereignty, territorial integrity and independence. The Agreement also expressly preserves the existing rights and obligations of each Party under international law. The Treaty is practically focused and provides direction to agencies involved in cooperative activities to combat terrorism and transnational crime. It strengthens commitments to cooperate on defence, law enforcement, counter-terrorism, maritime security, and on emergency management and response. The Agreement will be Australia’s first security treaty with a regional country to cover comprehensively traditional and non-traditional security threats. It should set the benchmark for others in the region and will contribute to the stability and prosperity of both countries and the broader Asia-Pacific region.

Reasons for Australia to take the proposed treaty action

Australia-Indonesia bilateral relationship

6. Australia's relationship with Indonesia is strong and broad-ranging, reflecting a shared commitment to advancing cooperation on the many bilateral and regional interests important to both countries. In the context of the Australia-Indonesia Joint Declaration on Comprehensive Partnership signed by the Prime Minister and President Yudhoyono in April 2005, both countries are committed to strengthening further bilateral relations based on respect for each other’s territorial integrity and unity and consolidating and advancing cooperation in key areas, including security, counter-terrorism and other non-traditional security threats including avian influenza, disaster management, and illegal fishing.

7. Australia and Indonesia maintain a shared goal of peace, security and prosperity in the region and recognise the importance of continuing to cooperate closely to combat terrorism and other non-traditional security threats in the region. These threats are serious and present long-term challenges that require sustained and coordinated action. Both countries also recognise the importance of regional bodies in advancing cooperation against transnational threats, including APEC, the ASEAN Regional Forum and the East Asia Summit.

8. The fight against terrorism and transnational crime is a priority for Australia and Indonesia. Both Governments have sought to develop an extensive, broad-based program of bilateral cooperation to combat terrorism and other forms of transnational crime and non-traditional security threats, especially in areas such as people smuggling, narcotics, money laundering, aviation and maritime security, and outbreaks of disease. In combating these threats, Indonesia and Australia have forged close partnerships between police and defence forces, immigration and customs officials and security and intelligence agencies, including by concluding formal arrangements (such as the 2002 Memorandum of Understanding on Terrorism; the 2002 MOU on Combating Transnational Crime and Developing Police Cooperation; and the 2006 MOU concerning Cooperation on Migration and Border Control Management).

Negotiating history

9. The Australian and Indonesian Governments have long recognised the potential value of a bilateral security agreement aimed at enhancing both countries’ capabilities in combating traditional and non-traditional security threats. During a visit to Australia in October 2003, the then Indonesian Coordinating Minister for Political and Security Affairs, HE Dr Susilo Bambang Yudhoyono, spoke publicly about the value of a bilateral security treaty in combating such threats. Following Dr Yudhoyono’s inauguration as President of the Republic of Indonesia in October 2004, the Minister for Foreign Affairs, The Hon Alexander Downer MP and the Indonesian Minister of Foreign Affairs, HE Dr N Hassan Wirajuda, held discussions about the possibility of negotiating a modern bilateral security agreement. They directed their respective ministries to commence discussions on the proposal. Australian agencies prepared an initial draft text of the Treaty in late 2004 and the Australian Embassy in Jakarta provided the Indonesian Ministry of Foreign Affairs with a general outline of possible elements to be included in the Treaty in January 2005. At the Seventh Australia-Indonesia Ministerial Forum held in Canberra on 17 and 18 March 2005, Foreign Ministers Downer and Wirajuda reaffirmed their commitment to negotiating a modern security agreement.

10. The Joint Declaration on Comprehensive Partnership between Indonesia and Australia signed in Canberra on 4 April 2005 by the Prime Minister and President Yudhoyono stated that both countries saw “value in concluding a security agreement which would provide a framework for new directions in our security relationship”. Mr Downer wrote to Dr Wirajuda in July 2005, confirming that negotiating a bilateral security Treaty would be a priority for the Government.

11. In the Joint Ministerial Statement from the Eighth Australia-Indonesia Ministerial Forum held in Bali on 29 June 2006, Ministers “reaffirmed support for the conclusion of a bilateral agreement for security cooperation by the end of 2006 which would provide a framework for the existing and future development of the security relationship”. Ministers also agreed that there would be value in the Agreement “providing a treaty-based expression of strong support for each country’s sovereignty and territorial integrity, including Indonesia’s sovereignty over Papua”.

12. Formal negotiation rounds on the text of the Treaty were held in Jakarta in August 2006 and in Canberra in September 2006.

13. The Treaty was signed by the Minister for Foreign Affairs, The Hon Alexander Downer MP, and the Indonesian Minister of Foreign Affairs, HE Dr N Hassan Wirajuda, in Lombok, Indonesia, on 13 November 2006.

Overview of the Agreement

14. The Agreement is a balanced, forward-looking instrument which provides a framework for deepening and expanding bilateral cooperation and exchanges on matters affecting the security of both countries.

15. The Agreement provides a strong legal framework for encouraging dialogue, exchanges and implementation of cooperative activities. It draws together the threads of the security relationship with Indonesia and provides a firm basis for the conclusion of separate arrangements in specific areas. Existing and future MOUs on such issues as counter-terrorism, defence cooperation and police cooperation will operate within the overarching framework of the treaty-level Agreement and be guided by the principles enunciated within.

16. The Agreement is practically focused and provides direction to agencies involved in cooperative activities to combat terrorism and transnational crime. It strengthens commitments to cooperate on defence, law enforcement, counter-terrorism, maritime security, and on emergency management and response. The Treaty also contains a clear undertaking of support for each other’s territorial integrity.

17. Overall, the Agreement will be Australia’s first security treaty with a regional country to cover comprehensively traditional and non-traditional security threats. It should set the benchmark for others in the region and will contribute to the stability and prosperity of both countries and the broader Asia-Pacific region.

Obligations

18. Article 1(1) provides that the Treaty’s main objectives are to establish a framework for deepening and expanding bilateral cooperation and exchanges, and to intensify cooperation and consultation between Australia and Indonesia on matters affecting their common security and respective national security. Article 1(2) provides that the Treaty also establishes a bilateral consultative mechanism for encouraging intensive dialogues, exchanges and implementation of cooperative activities and to strengthen institutional relationships.

19. Article 2(1) and 2(2) provide that, in their relations with one another, Indonesia and Australia shall be guided by certain fundamental principles, consistent with the Charter of the United Nations. These principles include: equality, mutual benefit, recognition of each Party’s interest in the other’s stability, security and prosperity, and mutual respect for the sovereignty, territorial integrity, national unity and political independence and non-interference in the internal affairs of one another. Article 2(3) provides a treaty-level commitment that Australia and Indonesia shall not in any manner support or participate in activities by any person or entity which constitutes a threat to the stability, sovereignty or territorial integrity of the other party. These principles are to be interpreted in a manner consistent with the Parties’ existing international obligations, including those under the United Nations Charter, and their respective domestic laws. The obligation set out in Article 2(3) would not prevent peaceful demonstrations conducted in accordance with the law, political commentary or free speech from occurring. Article 2(4) provides that the Parties undertake to settle any disputes between them by peaceful means. Article 2(5) provides that the Parties refrain from the threat or use of force against the territorial integrity or political independence of the other. Article 2(6) confirms that nothing in the Treaty shall affect in any way the existing rights and obligations of either Party under international law.

20. Article 3(1) to 3(3) covers defence cooperation, and provides that the Parties shall consult on defence policies, promote capacity building through military education, exchanges and exercises, and facilitate cooperation in mutually beneficial defence technologies and capabilities.

21. Article 3(4) to 3(7) covers law enforcement cooperation, and provides that the Parties shall strengthen police-to-police links, build law enforcement capacity, intensify joint and coordinated operations, and cooperate in preventing and combating crime related to people smuggling, money laundering, terrorist financing, corruption, illegal fishing, cybercrimes, narcotics trafficking, and arms trafficking.

22. Article 3(8) to 3(11) covers counter-terrorism cooperation and provides that the Parties shall do “everything possible individually and jointly to eradicate terrorism and extremism”, cooperate in facilitating “effective and rapid responses in the event of a terrorist attack”, and strengthen terrorism-related intelligence cooperation.

23. Article 3(12) covers intelligence cooperation and provides that the Parties shall cooperate and exchange information and intelligence on security issues in compliance with their respective national legislation.

24. Article 3(13) to 3(15) covers cooperation on maritime security and aviation safety and security, and provides that the Parties shall strengthen bilateral cooperation and capacity building activities in relation to maritime and aviation security.

25. Article 3(16) and 3(17) covers the prevention of proliferation of weapons of mass destruction and provides that the Parties, in recognition of their shared commitment not to develop, produce, acquire or use nuclear weapons or other weapons of mass destruction (WMD), shall cooperate to prevent the proliferation of WMD and shall strengthen bilateral nuclear cooperation for peaceful purposes, in accordance with international law.

26. Article 3(18) and 3(19) covers emergency cooperation and provides that the Parties shall cooperate, as appropriate and as requested, in facilitating “effective and rapid coordination of responses and relief measures in the event of natural disasters or other such emergency”, and cooperate on “capacity building for disaster preparedness and response”.

27. Article 3(20) covers cooperation in international organisations on security-related issues and provides that the Parties shall consult and cooperate on security issues in the UN, and other international and regional bodies.

28. Article 3(21) covers community understanding and people-to-people cooperation, and provides that the Parties shall endeavour to foster interaction between their respective institutions and communities with a view to improving mutual understanding of security challenges and responses to them.

29. Article 4(1) and 4(2) provides that the Parties shall protect confidential and classified information received pursuant to the Treaty, and that this obligation would continue even in the event that the Treaty is terminated.

30. Article 5 provides that intellectual property arising out of implementation of the Treaty shall be regulated under a separate arrangement.

31. Article 6(1) and 6(2) covers the implementing mechanism for the Treaty and provides that the Parties shall take any necessary steps to ensure effective implementation of the Treaty, including through the conclusion of separate arrangements on specific areas of cooperation. The Australia-Indonesia Ministerial Forum shall review and give direction to the activities under the Treaty.

32. Article 7 provides that any expenses incurred in the implementation of this Treaty will be met by the Party incurring the expense, unless otherwise mutually decided.

33. Article 8 provides that disputes arising out of the implementation of the Treaty shall be settled by mutual consultation and negotiation.

34. Article 9 provides that the Treaty may be amended in writing by mutual consent.

35. Article 10 provides that the Treaty will enter into force when both Parties have notified each other that their internal requirements for entry into force have been fulfilled and that the Agreement shall remain in force until six months after one Party gives written notice to terminate it.

Implementation

36. As the obligations imposed upon Australia by the Treaty relate to the general conduct of relations with other States, no changes to Australian legislation are required to implement the provisions of the Treaty.

Costs

37. The costs associated with Australia’s ratification of the Treaty are nil.

Regulation Impact Statement

38. The Office of Regulation Review (Productivity Commission) has been consulted and confirms that a Regulation Impact Statement is not required.

Future treaty action

39. Article 9 of the Treaty provides that the Agreement may be amended in writing by mutual consent by both Parties. Any amendment to the Treaty shall come into force on the date of later notification by either Party of the completion of its ratification procedures for the amendment.

40. Future treaty action, including any amendments to the Treaty, would be subject to Australia’s domestic treaty process, including tabling and consideration by JSCOT.

41. Article 6 of the Treaty provides for the possible conclusion of separate agreements on specific areas of cooperation pursuant to the Treaty.

Withdrawal or denunciation

42. Article 10(2) provides that the Treaty shall remain in force until one Party gives written notice of its intention to terminate it, in which case the Treaty shall terminate six months after receipt of the notice of termination.

43. Withdrawal or denunciation by Australia would be subject to Australia’s domestic treaty process, including tabling and consideration by JSCOT.

Contact details

Indonesia Political and Strategic Section

South and South-East Asia Division

Department of Foreign Affairs and Trade

Agreement between Australia and the Republic of Indonesia

on the Framework for Security Cooperation

(Mataram, Lombok, 13 November 2006)

[2006] ATNIF 25

CONSULTATION

1. The Treaty concerns Australia’s relations with Indonesia. It is therefore primarily a matter of foreign policy, and the Minister for Foreign Affairs and his Department have taken the lead in the negotiations with Indonesia which led to the Australian Government’s decision to sign the Treaty, following agreement by the Prime Minister and relevant Australian Government Ministers.

2. Notwithstanding the fact that the Treaty does not directly affect State and Territory Governments, State and Territory Governments of Australia are being consulted through the Commonwealth, States and Territories Standing Committee mechanism on aspects of the Treaty which relate to their areas of responsibility and activities, such as law enforcement and people-to-people linkages.

Political Brief on Indonesia

Political Overview

1. The Republic of Indonesia is a unitary state, headed by an executive president who is elected for a five-year term, together with a vice-president. The directly-elected president governs with the assistance of an appointed cabinet. The 678-member People’s Consultative Assembly (MPR) includes a 550-person House of Representatives (DPR) and a legislative body, the House of Regional Representatives (DPD), which consists of representatives from Indonesia’s 33 provinces. The DPD oversees legislation affecting regional issues, but cannot veto legislation.

2. The fall of the Suharto Government in May 1998, after 32 years of rule, precipitated a significant political transformation in Indonesia. Since that time, there have been major changes to governance as Indonesia has transitioned to a democratic and decentralised state. Key milestones in this transition were the 2004 presidential and parliamentary elections. The presidential elections were the first direct election of the President and Vice-President by popular vote. Susilo Bambang Yudhoyono was inaugurated as Indonesia’s sixth President on 20 October 2004 following the second round of voting in which he won 60 per cent of the vote. Direct elections at the provincial, municipal and sub-regional levels are ongoing and are deepening the democratic roots of Indonesian politics.

3. President Yudhoyono’s Administration has implemented a number of significant economic and administrative reforms (such as reducing fuel subsidies in 2005), and has a good record of arresting and convicting terrorists, strengthening civilian government control over the military, and fighting corruption. His administration has also renewed focus on the established symbols of national unity in Indonesia, especially the national philosophy (the Pancasila - which enshrines tolerance, pluralism and diversity, including religious diversity). One of President Yudhoyono’s major achievements since gaining office has been the peace agreement signed with Aceh separatists in August 2005. President Yudhoyono signed the Law on Governing Aceh on 1 August 2006 paving the way for local elections on 11 December 2006. President Yudhoyono has also renewed the government’s attention on advancing the development of the province of Papua and has stated publicly his commitment to achieving full implementation of Special Autonomy Law.

Economic Overview

4. Indonesia’s GDP grew at 5.6 per cent in 2005. The Government’s GDP growth target for 2006 is 5.6 per cent and for 2007 is 6.3 per cent. Employment generation is a major challenge for Indonesia. Foreign investor sentiment towards Indonesia has improved with the election of President Yudhoyono and his government's determination to improve economic growth and the investment climate, including by improving infrastructure, strengthening the legal and regulatory framework, enhancing governance and reducing fuel subsidies. Indonesia faces major reform and structural challenges. The Indonesian Government has released three well-targeted policy reform packages in 2006 covering infrastructure, investment and the finance sector.

Australia-Indonesia Relations

5. Australia’s bilateral relationship with Indonesia has developed considerably in recent years. Australia and Indonesia work closely on a range of important bilateral, regional and multilateral issues, including counter terrorism, people smuggling, illegal fishing, avian influenza and on emergency response and management. Bilateral cooperation reflects a number of important shared interests, our geographical proximity, extensive and long-standing people-to-people links, and is underpinned by frequent two-way high-level visits. President Yudhoyono’s visit to Australia in April 2005 was a landmark in the relationship. During the visit, President Yudhoyono and the Prime Minister signed a Joint Declaration on a Comprehensive Partnership.

6. In 2006, the bilateral relationship was strengthened further by the meeting between Prime Minister Howard and President Yudhoyono on 26 June 2006, the 8th Australia-Indonesia Ministerial Forum (AIMF) in late June, and the signature of the Australia-Indonesia Agreement on the Framework for Security Cooperation (also known as the ‘Treaty of Lombok’) on 13 November 2006. The Agreement would strengthen further existing broad-based bilateral cooperation to combat terrorism and other forms of transnational crime and non-traditional security threats, especially in areas such as people smuggling, narcotics, money laundering, aviation and maritime security, and outbreaks of disease. In 2007, Australia and Indonesia will co-host, in furtherance of the objectives of the Treaty of Lombok, a sub-regional ministerial meeting on counter-terrorism and a regional meeting on illegal fishing.

7. The trade and investment relationship is significant. Total two-way trade between Australia and Indonesia reached $10 billion in 2005-06, up from $8.6 billion the previous financial year, with Indonesia ranked as Australia’s 13th largest trading. Investment levels remain modest, though some 400 Australian firms are operating in Indonesia. Over 16,000 Indonesian students were enrolled to study in Australia in 2005. The annual Australia-Indonesia Trade Ministers’ meeting held in Canberra on 10 August 2006 reviewed implementation of the Australia-Indonesia Trade and Investment Framework (TIF) agreed in September 2005.

8. Australia is committed to providing ongoing assistance for Indonesia’s economic and social development. In 2006-07, Indonesia is Australia’s largest bilateral overseas development assistance recipient. Under the Australia-Indonesia Partnership, which includes the $1 billion committed by Australia following the Indian Ocean tsunami on 26 December 2004, Australia is providing funds to help rebuild communities in Aceh and in other disaster affected areas, and to promote economic growth across Indonesia.

Other treaties with Indonesia

There are no treaties of the same type with other countries

December 2006