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Indonesia-Australia Renew Intelligence Ties as Relations Thaw

Aug. 28 (Bloomberg) -- Indonesia and Australia agreed to step up intelligence sharing in a sign that the neighbors’ relationship, which turned frosty last year due to a spying scandal, is thawing.

“Both countries will increase its intelligence cooperation going forward,” Indonesian Foreign Minister Marty Natalegawa said at a press conference in Bali today where he signed an agreement with his Australian counterpart Julie Bishop on a code of conduct for intelligence gathering and sharing. “With the code of conduct, relations between Indonesia and Australia will recover.”

Australian Prime Minister Tony Abbott is seeking to normalize ties with Indonesia after refusing to apologize in the wake of media reports that his nation tapped the phone of President Susilo Bambang Yudhoyono, who leaves office in October. The revelations, which Abbott hasn’t denied, led Indonesia to sever defense and people-smuggling agreements and threaten trade. The spat also triggered popular protests in Jakarta, where an Australian flag was burned.

“Yudhoyono doesn’t want a damaged relationship with Australia as one of his legacies, which is one of the reasons why this repair work is happening now,” said Ross Taylor, president of the Perth-based Indonesia Institute, which promotes bilateral relations. “The other, more important reason is that these two nations really do need each other in terms of regional security and terrorism intelligence.”

Phone Tracking

Yudhoyono’s mobile-phone activity was tracked for 15 days in August 2009, the Australian Broadcasting Corp. reported on Nov. 18, citing documents leaked by former U.S. intelligence contractor Edward Snowden. Indonesia and Malaysia have been key targets for Australian and U.S. intelligence operations since the 1970s, facilitated in part by Singapore, the Sydney Morning Herald reported Nov. 25, citing the documents.

After the reports, Indonesia said it would review its dependence on cattle imports from Australia. Indonesia also recalled its ambassador to Australia, Nadjib Riphat Kesoema -- he returned in May.

“Despite some recent challenges in our relationships -- and there can be between neighbors, even strategic partners as close as Australia and Indonesia -- we have proven that our two countries can keep working together,” Bishop said today.

Rifts, Repairs

The two nations have a history of rifts and repair. Ties soured during President Sukarno’s rule in the 1960s, and after 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 before last year’s spying claims. He will be replaced in October by President-elect Joko Widodo, who comes to power as concern mounts that Islamic State is attracting militants from both countries to fight in Iraq and Syria who may eventually return to carry out attacks in their home countries.

As many as 200 Indonesians and at least 30 Malaysians have traveled to Syria to fight with the Islamic State, according to a report released this month by New York-based Soufan Group, which provides strategic analysis to governments. Bishop said yesterday that Australian authorities knew of as many as 60 nationals fighting with terrorists in Syria and Iraq.

“Indonesia realizes it actually needs Australia’s intelligence-gathering expertise,” Taylor said. “A lot of the reasoning behind today’s pact will be try to negate the threat of Islamic State on their home turf.”

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Andrew Davis, Tony Jordan

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