The Coalition government’s first months in office have been a crash course in regional politics, with somewhat more emphasis on the "crash". Foreign Minister Julie Bishop has now put in place the first of what is expected to be six steps to repair Australia's damaged relationship with Indonesia, while relations with East Timor are being battered by clumsy handling of that country's claim for arbitration over the Timor Sea.
Bishop's visit to Jakarta and her softer approach to Australia's culpability over spying on Indonesia, including its President, was exactly what was needed to keep this critically important relationship on track. Unfortunately, it was needed more than three weeks ago, when such an approach could have averted the subsequent fallout.
Had Bishop gone to Jakarta with exactly her current approach when the spying scandal first broke -- but before President Susilo Bambang Yudhoyono was involved -- the issue would have been neutralised. Instead, Prime Minister Tony Abbott weighed in via Parliament, making a bad situation worse.
That lesson about pre-emptive diplomacy has now been learned. But Indonesia will have to take the lead and shape a re-established relationship.
With East Timor, the government -- and its predecessor -- have known for years that Australia would face a legal challenge over the forced carve-up of the Timor Sea. The East Timorese government has long signalled that its claims against Australia included allegations of Australian spying in order to gain an unfair advantage.
With the first hearing on the matter in the International Court of Arbitration known well in advance, it is deeply puzzling why Attorney-General George Brandis would wait until almost the eve of the hearing before ordering raids on the office of East Timor's lawyer, Bernard Collaery, and the home of a former Australian Secret Intelligence Service officer.
Brandis claims the raids were not intended to try to thwart East Timor’s case, but were rather focused on preventing the release of classified information. But given the timing, that is not how it looks.
In any case, most of the relevant material was already in The Hague and will be available to the court. The raids and cancelling of the passport of the former ASIS officer are a minor glitch for East Timor’s case, but will be counted against Australia’s argument before the court.
So, too, being counted against Australia will be former foreign minister Alexander Downer’s support for Woodside Petroleum -- the major player in proposed Timor Sea gas extraction -- and the economic benefit it stands to receive as a consequence of the Timor Sea carve-up. That Downer has since been put on Woodside’s payroll looks, at best, like a conflict of interest.
At stake in the hearing is the legality of Australia’s CMATs agreement with East Timor which, if it is found to be invalid, will also invalidate two previous treaties which are "read together" with CMATS. Up for grabs, again, will be the issue of a permanent sea border between the two countries, and control over more than $40 billion worth of gas and oil.
Should this claim be successful, not only will the sea border with East Timor be up for grabs, the previously related sea border with Indonesia will then become out of synch. One border will reflect a median point between two countries, the other the edge of a continental shelf.
Of major concern to Australia is that it could now lose territorial reach and control over a good proportion of the Timor Sea's resources. Of at least equal concern is the flow-on effect this could have for the border with Indonesia.
A dispute between Australia and tiny East Timor over their sea border is troubling. A subsequent territorial dispute with Indonesia would make the recent spying row pale into insignificance.
The current breakdown in diplomatic relations between Australia and Indonesia is close to -- or is -- the worst the relationship has been. There has been nothing of such damage to the relationship since Australia’s intervention in East Timor in 1999, when Australia sent in troops with the permission of the Indonesian government to address a problem resulting from the Indonesian government being at odds with its own military.
Military co-operation, support for Australia’s asylum seeker program and intelligence sharing has now been suspended by Indonesia, and there is not even a fig-leaf of support in Indonesia for Australia. The current spying issue is more damaging than the East Timor intervention, with President Susilo Bambang Yudhoyono feeling personally betrayed by a country he considered a friend.
The suspension of key bilateral activities has ended Indonesia’s reluctant support for Australia’s asylum seeker policy. It can be safely assumed that Indonesia will not be accepting back any boats for the foreseeable future.
But Indonesia’s response is unlikely to end there. Without an adequate response by Prime Minister Tony Abbott, there is likely to be the suspension of further activity between the two countries. Areas that are likely to be affected include trade arrangements and Indonesia’s support for Australia in regional forums such as the Association of Southeast Asian Nations, including the strategic ASEAN Regional Forum (ARF).
An element of the current controversy reflects political point-scoring in Indonesia as actors jockey for position ahead of next year’s elections. However, there is also a very real sense of anger and dismay over the spying allegations. Many senior Indonesian figures have never entirely trusted Australia, and this issue has only confirmed their mistrust.
From Australia’s perspective, there has long been a quiet but very real concern that Indonesia’s next president, to be elected in September 2014, will be not nearly as well-disposed towards Australia. It was widely hoped that the strong relationship with Indonesia that existed until recently could be maintained in order to ensure that Australia goes into those uncharted bilateral waters in the best possible shape.
That option has now all but disappeared. Even if this affair can be settled down, there will remain a lingering sense of mistrust from Indonesia.
Australia’s best option at the moment is twofold. Abbott needs to fulsomely apologise to Yudhoyono privately. Yudhoyono might or might not choose to make public some or all of that apology, but that would ultimately be his call to make.
Abbott also needs say publicly that Australia apologises for the hurt and mistrust that has been caused by the allegations of spying, without formally confirming that such spying has or has not taken place. He also needs to say that Australia’s regional intelligence activities will be reviewed with the intent of ensuring that no further offence will be caused to Indonesia. Again, this will not require going into details.
This is what should have happened when the spying scandal first broke two weeks ago. Had this been said then, the current issue would have been nipped in the bud and the fallout would not now exist.
The question for the Australian government now is not whether it acts, but how quickly and precisely how to phrase the public component of the apology to Indonesia. Not to do so risks not just immediate difficulties, but could derail the relationship with Indonesia into the longer-term future.
Australia’s relationship with Indonesia is at one of its historic low points, despite claims to the contrary by Prime Minister Tony Abbott. What is unusual about this most recent contretemps with Indonesia, with which Australia has previously had several difficulties, is that, unlike in the past, the current problems are entirely a consequence of Australian policy.
Australia’s alleged spying on Indonesia is both bipartisan and largely necessary. But Foreign Minister Julie Bishop has not yet moved to allay concerns in Jakarta by saying Australia’s intelligence program will be reviewed and offensive activity ceased (even if it will not).
However, the Australian government’s handling of the asylum seeker issue has been purely a matter of domestic political choice. It is an "own goal" that was part of the planning for the game.
That policy is all but in tatters, following Indonesia refusing to readmit 63 asylum seekers bound for Australia. According to Indonesian authorities, this is the third such refusal to accept back asylum seekers; Immigration Minister Scott Morrison has finally acknowledged it was at least the second such rebuff, not having acknowledged previous problems in his less-than-frank weekly briefings on the asylum seeker issue.
Indonesia’s point-blank refusal to accept the asylum seekers on this more public occasion has raised real doubts about whether the government’s policy on turning back asylum seekers can work. If the government cannot turn back boats, as it said it would in opposition, it may now be forced to accept the same, much criticised policy as adopted by the former Labor government.
Indonesia’s Co-ordinating Minister for Legal Political and Security Affairs, Djoko Suyanto, is expected to soon formalise Indonesia’s permanent refusal to accept asylum seekers from Australian rescue vessels, other than in emergency situations. This would appear to end the government’s plan to return asylum seekers "when safe to do so". Indicating Indonesia’s growing frustration with Australia, on Friday, Djoko said:
"The Indonesian government never agreed to such wishes or policies of Australia. This has been conveyed since the time of Kevin Rudd, and there is no change of policy regarding asylum seekers wanting to go to Australia under the current Abbott government."
Following Djoko’s statement, the Australian government backed down on its push to have Indonesia accept the asylum seekers.
Indonesian Defense Minister Purnomo Yusgiantoro added to Indonesia’s public dismay over Australian asylum seeker policy by confirming that Indonesia had never agreed to asylum seekers being returned to Indonesia and that Australia should "send the asylum seekers to their detention centers in Nauru and Papua New Guinea and not to Indonesia".
Anger in Indonesia over Australia’s attempt to return the asylum seekers has further damaged relations already seriously strained over allegations of Australian spying in Indonesia. Indonesia’s presidential spokesman Teuku Faizasyah has again reconfirmed that spying on Indonesia is "unacceptable".
In response, he said that Indonesia "will take steps that cannot be disclosed to the public". Indonesian Foreign Minister Marty Natalegawa has already identified co-operation on people smuggling and terrorism as areas that will be "reviewed".
The government’s closely controlled media management strategy also appears to be coming unstuck over these two issues, with Indonesian authorities either contradicting or providing alternative accounts of matters that the Australian government is only reluctantly revealing.
The issue of Australia spying on Indonesia is far from resolved, and the asylum seeker issue is now front and centre. No doubt, where Indonesia is concerned, the government must be hoping that bilateral policy issues don’t come in threes.
With much of the recent discussion about countries spying on each other, the only startling thing is that anyone would bother to feign surprise. Indonesia and Australia have long spied on each other, and they have both known about it.
The main distinctions between Australia and Indonesia’s intelligence activities are their methods and who they share information with. Australia tends to use electronic information gathering and separate analysis in Jakarta and Canberra; Indonesia’s spying tends to rely more on human intelligence.
Australia’s spying on Indonesia began in the 1950s, as Australia and Indonesia increasingly found themselves in competing Cold War camps. Australia also had a tangential role in assisting the US in supporting the failed 1957-58 PRRI-Permesta rebellion.
Australia’s spying on Indonesia increased as the two countries initially took opposing views on the future of West Papua and as the Indonesian Communist Party became more influential. Following Indonesia's military coup of 1965-66, Australia’s interests shifted to more economic concerns, but intelligence gathering continued.
In 1999, a high-ranking Indonesia general, Abdullah Mahmud Hendropriyono, openly claimed that Australia had spies in East Timor around the time of the ballot for independence. Although it was denied at the time, Australia did have a small number of intelligence officers there, assessing the status of electoral process.
One of the more obvious findings was that Hendropriyono was a key figure in the establishment of the military-led militias, which murdered around 3000 people and laid waste to the country following the vote. Australia has since continued to spy on Indonesia, in Jakarta and Bali, as well as on activities of its more extreme Islamist organisations.
Similarly, Indonesia has long spied on Australia, although its intelligence service’s primary function, like its military, has always been focused internally. Indonesian spying on Australia was very active during the Suharto era, targeting Indonesia-focused Australian activists.
Indonesian students, in particular, have long been required to be present at and report on "anti-Indonesian" activities, such as human rights meetings and activities in support of West Papua and, in the past, Aceh and East Timor.
However, as many of Indonesia’s informants in Australia are not professionally trained, they have regularly misinterpreted events or have reported what they think their consular masters want to hear as opposed to what has actually happened. As a result, a number of Australian activists have been identified as holding different or stronger views than they do.
Indonesia has also long tapped Australian telephones, usually those connected with events within Indonesia, but it does not have an NSA-type wholesale sweep.
Individuals interested or involved in Indonesia, especially in an area that might be in some way controversial, can reasonably expect that, if not under constant surveillance, they have been and will probably continue to be spied on by Indonesian agents acting in Australia.
This is what intelligence agencies do. It was ever thus for the world’s second-oldest profession.