Indonesia Halts Intelligence Exchange With Australia

Protesters in Jakarta burned Australian flags and called for a break in diplomatic ties as tensions between the two countries escalated to their highest level in 14 years over claims the phones of Indonesia’s leaders were tapped.

President Susilo Bambang Yudhoyono has called a halt to cooperation with Australia on asylum seekers, military operations and intelligence sharing. As the dispute escalated, a person claiming to be from the Anonymous Indonesia group said it carried out a cyber attack on Australia’s central bank.

Several hundred people gathered outside the Australian embassy in Jakarta today, burning that country’s flag, police said. Indonesians were demanding an apology from Australia, said protester Donny Manurung, from a local youth group, and more rallies were planned.

Prime Minister Tony Abbott has ruled out an apology over the tapping claims, which potentially complicate his bid for a free-trade pact with Indonesia after two-way trade reached A$14.6 billion ($13.6 billion) last year. Abbott, who told voters before the Sept. 7 election his diplomatic focus was on “Jakarta, not Geneva,” is seeking Yudhoyono’s help to prevent asylum seekers reaching Australia by boat.

Abbott’s “early statement that’s downplaying as though spying on your friends and neighbors, including on the president’s wife, is normal,” made things worse, said Dewi Fortuna Anwar, deputy secretary for political affairs to Vice President Boediono and a political analyst at the Indonesian Institute of Sciences.

Swiftly, Courteously

“If he had quickly expressed regret and given assurances that it won’t happen again, it would have toned down,” Anwar said by phone. “I think the one that will be most hurt is Australia. Australia is in a position where it needs Indonesia more than Indonesia needs Australia.”

In remarks today to parliament in Canberra, Abbott said he had received a letter from Yudhoyono and would reply “swiftly, fully and courteously.” He said he would do everything he “reasonably” could to strengthen ties between the nations.

Trade Minister Gita Wirjawan warned Indonesia may suspend talks with Australia on a free-trade accord.

“We must guarantee that we are comfortable in our communications” with Australia, he said yesterday on the sidelines of a forum in Jakarta, the Jakarta Post reported. Indonesia doesn’t plan for now to halt cattle imports as the government is concerned about domestic supplies, the paper said.

‘A Friend’

Yudhoyono on Nov. 18 recalled his envoy to Jakarta and said yesterday any tapping was a breach of Indonesian law. “Now is not the Cold War era,” he told reporters. “Australia and Indonesia are not against each other, let alone in animosity. Why must there be tapping on a partner, a friend?”

The Reserve Bank of Australia said its website was subject to a denial-of-service attack late on Nov. 19. The Australian Federal Police also said its website was hacked.

Anonymous Indonesia said earlier this month on its Twitter page that it infiltrated more than 100 Australian sites in response to reports of spying by Australia. A person claiming to be a member of the hacker group today posted links to the affected websites and added: “I’m Ready For This War!”

Australia has pledged to not hack the phones of senior officials, Marciano Norman, head of Indonesia’s National Intelligence Agency, told reporters in Jakarta yesterday, adding the violations occurred in 2007 and 2009. “I was told by the Australian intelligence side that now, as well as in the future, there won’t be any” tapping.

Timor Tensions

Indonesia’s communications ministry today ordered telecommunications companies to check their security systems and look for any evidence of tapping. Companies must report back within seven days, minister Tifatul Sembiring told reporters in Jakarta.

Tensions may be further strained after Twitter posts late yesterday attributed to Mark Textor, the managing director of a consultancy that provides strategic and polling advice to Abbott’s Liberal Party, disparaged Yudhoyono and Indonesian Foreign Minister Marty Natalegawa, according to the Australian Broadcasting Corp. The posts are no longer available on his Twitter feed, where Textor has issued an apology.

Ties between the two nations soured during President Sukarno’s rule in the 1960s, and when Australian journalists were killed in the 1970s in what is now East Timor. Indonesia reacted angrily in 1999 when Australia led international military support to restore order in East Timor after it voted to become independent from Indonesia. Relations improved under Yudhoyono, who can’t stand again in elections due next year.

People Smugglers

While Abbott made a visit to Jakarta in his first international engagement as leader, his meetings with Yudhoyono failed to secure detailed agreements on how to curb the smuggling of people from war-torn nations such as Afghanistan.

His stance could see him backed into a corner that hurts the national interest, whether it’s economic ties or the asylum-seeker issue, said Stephen Stockwell, a political analyst at Griffith University in Brisbane. “Australia doesn’t want to gain an attitude in Asia of being insensitive and untrustworthy.”

Yudhoyono’s response in turn is largely resonating with the Indonesian public, said Natalie Sambhi, an analyst with the Australian Strategic Policy Institute in Canberra. “In the past he has been seen by some as a lame-duck president, and I think that some of his actions can be seen in part as an attempt to improve popular support,” she said by phone.

Indonesia Election

It’s too soon to say if the spat will affect the 2014 presidential vote, as Yudhoyono’s party has not been polling well, Sambhi said. “I’m not sure whether his attempt to garner popular support will extend necessarily to his party.”

The ABC said Nov. 18 that the mobile-phone activity of Yudhoyono was tracked for 15 days in August 2009, citing documents leaked by U.S. whistle blower Edward Snowden. The phones of his wife and senior advisers were also monitored, the ABC said.

The Sydney Morning Herald reported Oct. 31 that Australian embassies are helping intercept phone calls and data across Asia as part of a U.S.-led global spying network, citing information from Snowden and a former Australian intelligence officer.

“It would be silly to sacrifice elements of the relationship over something that, at least in outline, everyone knew was going on from many years back,” said Keith Loveard, head of risk analysis at Jakarta-based Concord Consulting.

“Petty reactions, such as penalizing Australian business in some way, would damage a relationship that has taken years to develop to its current stage.”

To contact the reporters on this story: Jason Scott in Canberra at jscott14@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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