Annual Report 2006-2007

Annual Report home |

Table of Contents |

Userguide |

Download versions

1. Overviews2. Performance3. Corporate4. Appendixes5. Financials6. Glossaries and Compliance Index

Your location: Performance > Outcome 1 > Output 1.1 > 1.1.2 South-East Asia

OUTPUT 1.1: Protection and advocacy of Australia's international interests through the provision of policy advice to ministers and overseas diplomatic activity

1.1.2 South-East Asia

On this page: Overview :: Indonesia :: Thailand :: Singapore :: Malaysia :: The Philippines :: East Timor :: Vietnam :: ASEAN and regional issues :: Outlook


The department’s active engagement, both bilaterally and through regional mechanisms, helped strengthen Australia’s security and economic interests and key bilateral relationships with countries in the South-East Asian region.

The department successfully negotiated the Australia–Indonesia Agreement on the Framework for Security Cooperation to deepen and expand bilateral cooperation with an important regional partner on matters affecting our common security interests.

The department pursued extensive bilateral and regional cooperation with South-East Asian countries on counter-terrorism and other security and transnational issues of direct relevance to Australian interests. A significant highlight of counter-terrorism cooperation was the Sub-Regional Ministerial Meeting on Counter-Terrorism, which Australia co-hosted with Indonesia in March 2007.

In close cooperation with other government agencies, we worked to ensure Australia was at the forefront of the international response to help restore and maintain security in East Timor after the unrest in April–May 2006. This included an Australia-led international stabilisation force to help the UN Police restore and maintain security in East Timor.

The department sought to protect Australian interests in Thailand by coordinating the Government’s response to the 19 September 2006 military coup, including by advocating an early return to democracy.

We sought to protect Australia’s regional strategic and economic interests by influencing the evolution of East Asian regional architecture, including by contributing to a concrete program of activity for the East Asia Summit. We also supported the Third Regional Interfaith Dialogue and a range of faith-based exchange visits with countries in the region.

The department continued to advocate Australia’s bilateral commercial interests, as well as Australia’s position on regional and international trade and economic issues, through high-level dialogue with key regional trading partners. This included supporting ministerial participation in the Joint Trade Committee meeting with Malaysia and the Australia–Indonesia Trade Ministers’ Meeting in Jakarta, as well as continued efforts to build on existing bilateral free trade agreements (FTAs) with Singapore and Thailand.


The department enhanced bilateral cooperation with Indonesia across a number of shared security, political and trade interests.

The department successfully negotiated the Australia–Indonesia Agreement on the Framework for Security Cooperation, signed by Mr Downer and his Indonesian counterpart, Dr Hassan Wirajuda, on 13 November 2006. The agreement reflects a confident and maturing bilateral relationship. It aims to deepen and expand bilateral cooperation on matters affecting our common security. It provides a strong legal framework for encouraging intensive dialogue, exchanges and implementation of cooperative activities on such issues as counter-terrorism, maritime and aviation security, emergency management and response, defence and police cooperation and combating the proliferation of weapons of mass destruction.

Photo - See caption below for description
Minister for Foreign Affairs, Mr Alexander Downer, (left) and Minister of Foreign Affairs of Indonesia, Dr Hassan Wirajuda, signing the Australia–Indonesia Agreement on the Framework for Security Cooperation in Lombok, Indonesia on 13 November 2006.
Photo: Rasto, Indonesian Department of Foreign Affairs
Enlarge image :: Photo gallery

We continued to strengthen our already extensive bilateral cooperation with Indonesia on counter-terrorism. Australia and Indonesia co-hosted a Sub-Regional Ministerial Meeting on Counter-Terrorism in Jakarta in March 2007, which highlighted several areas for further cooperation. We provided continuing support, including presenters, course facilitation and funding, to the Jakarta Centre for Law Enforcement Cooperation (JCLEC). JCLEC has now trained more than 2000 law enforcement officers from across the region, including more than 700 in 2006–07. Our joint efforts with Indonesia have seen marked results, with Indonesian police capturing key members of the Jema’ah Islamiyah terrorist network in June 2007.

The department helped implement measures to combat illegal fishing in Australia’s northern waters, and implemented joint measures with Indonesia to tackle the problem at its source. These included a public information campaign and co-hosting a regional meeting of fisheries ministers in May 2007, which endorsed a regional plan of action to promote responsible fishing practices and combat illegal fishing.

The department continued to take forward implementation of the bilateral Trade and Investment Framework (TIF) agreed in 2005. It convened the TIF Policy Dialogue and the TIF Experts Group to explore opportunities to strengthen the commercial relationship, including the recommendation that the Governments of Australia and Indonesia consider pursuing a bilateral FTA. We continued to advance Australia’s market access interests, strongly advocating the need for improved conditions for meat and horticultural products and ensuring the interests of Australian exporters were represented in processes to reform Indonesia’s tariff system. Our representations secured a continuation of our trade in wheat flour and the lifting of restrictions on most offal products.

As in the past, the experience of shared tragedy brought Australia and Indonesia closer together. The Garuda plane crash in Yogyakarta in March 2007 resulted in tragic losses and necessitated a close and cooperative response with the Indonesian authorities.

We facilitated visits by a large number of Australian ministers and officials to Indonesia, including two visits by Mr Downer and a visit by Mr Truss to attend the Seventh Australia–Indonesia Trade Ministers’ Meeting and lead a high-level business mission. We supported visits to Indonesia by the Minister for Health and Ageing, Tony Abbott, the Attorney-General, Philip Ruddock, the Minister for Immigration and Citizenship, Kevin Andrews, the Minister for Environment and Water Resources, Malcolm Turnbull, the Minister for Agriculture, Fisheries and Forestry, Peter McGauran, and the Minister for Fisheries, Forestry and Conservation, Eric Abetz. This diverse political contact demonstrated the depth and range of our shared interests with Indonesia.


The department coordinated the Government’s response to the 19 September 2006 military coup in Thailand, including registering with coup leaders and the interim government the importance of an early return to democracy. Australia has significant interests in Thailand, spanning trade and investment, law enforcement, counter-terrorism, education, defence, migration and tourism. Since the military coup, the department has worked closely with other agencies to ensure that bilateral interaction with the interim government and Thai security forces is appropriate.

The department’s efforts to advance the Thailand–Australia Free Trade Agreement’s (TAFTA) forward agenda, covering commitments by both parties to commence negotiations on services, investment, government procurement, competition and business mobility, were affected by the coup and the caretaker conventions in place before the coup. We continued to support Australian businesses to capitalise on TAFTA, with approximately 300 companies registering as exporters to Thailand and 6000 individual TAFTA certificates of origin being issued in 2006–07. This represents continued strong interest by Australian businesses in the opportunities provided by TAFTA.


Singapore is a major defence and trade partner in ASEAN, and the department continued to support close dialogue with the Singapore Government on bilateral and regional security and economic policy settings and approaches. The Secretary led discussions in October 2006 with his counterpart, providing for a productive exchange of views on key bilateral, regional and international issues. The department supported a range of visits to Singapore to further our bilateral cooperation on counter-terrorism and move towards effective implementation of measures to control the illegal spread of Man-Portable Air Defence Systems (MANPADS).

The department continued preparations throughout the year for the next ministerial review of the Singapore–Australia Free Trade Agreement, leading an interdepartmental process to encourage Singapore to respond to Australia’s key interests. The department’s priority remains ensuring that a second review results in a balanced package of outcomes with commercially meaningful results for Australian business.

The department also provided briefing and logistical assistance to help ensure the success of key high-level visits, such as those by the Governor-General to Singapore in September 2006, and by former Singapore Prime Minister and now Minister Mentor Lee Kuan Yew to Australia in March–April 2007.


The department’s activities capitalised on the closer level of political engagement with Malaysia over recent years. We helped facilitate the Prime Minister’s official visit to Malaysia in November–December 2006. We provided submissions to an Australian Parliamentary Inquiry into relations with Malaysia which, in its report in March 2007, concluded that the level of interaction between Australia and Malaysia underpinned a sound bilateral relationship. The department organised the Secretary’s discussions with his Malaysian counterpart in October 2006, with the talks underlining the closer level of political dialogue.

The department organised the 13th Joint Trade Committee meeting with Malaysia in Adelaide in August 2006 with a view to furthering our bilateral and regional trade interests. The then Minister for Trade, Mr Vaile, and his Malaysian counterpart, Rafidah Aziz, reviewed progress in the Malaysia–Australia Free Trade Agreement (MAFTA) negotiations. Mr Vaile pressed Malaysia on Australia’s halal meat export interests and advocated Australian views on regional economic integration.

The department provided secretariat support for the Australia–Malaysia Institute (see output 3.1 on page 220).

The Philippines

The department increased its programs and visits, particularly in counter-terrorism and security cooperation, defence and development assistance. This focus was reflected in the visit to Australia in May 2007 by Philippine President Gloria Arroyo, when agreements relating to the Status of Visiting Forces and bilateral development assistance for 2007–11 were signed. The department played a significant role in developing and implementing the program announced by Mr Downer during President Arroyo’s visit to provide further practical assistance to Philippine institutions dealing with human rights matters.

The department continued to support Australian commercial interests in the Philippines. Close coordination with other relevant agencies was required to ensure agriculture-related irritants in the relationship were managed effectively.

East Timor

The department worked closely with the Department of Defence and the Australian Federal Police to ensure Australia was at the forefront of the international response to help restore and maintain security in East Timor after the unrest of April–May 2006. Following a request for assistance by the East Timorese Government, the United Nations agreed that Australia should lead an international stabilisation force to support United Nations Police. While our primary focus is helping to maintain security, we also worked towards achieving our other goals of supporting good governance and sustainable economic development.

The department coordinated Australian parliamentary and government delegations to observe the presidential and parliamentary elections in East Timor in April–May and June 2007 respectively (see box below).

The department also concluded two landmark agreements on arrangements in the Timor Sea in February 2007 (see sub-output 1.1.9 for more information).

East Timor's presidential elections

Photo - See caption below for description
Ambassador Ms Margaret Twomey (left) observing the vote in East Timor’s presidential elections at a polling centre at Tasi Tolu on 9 April 2007.
Enlarge image :: Photo gallery

East Timor held presidential elections—the first organised by the East Timorese themselves—in April and May 2007. Despite the challenging security environment and difficult access to some regions, the elections took place peacefully and reflected the will of the people. The success of the elections was a welcome sign for East Timor’s young democracy.

The department (including through Australia’s embassy in East Timor) coordinated and supported official Australian observer delegations at both rounds of the presidential elections, on 9 April and 9 May. The delegation to the first round was led by Mr David Tollner MP, and included Senator Claire Moore and officials from the department and the Australian Electoral Commission. The delegation observed polling and counting in Dili and the district of Liquica, and reported that the voting and counting processes it observed were in line with international standards for democratic elections. The delegation was impressed with the professional work of electoral officials at polling centres it observed.

The delegation to the second round comprised officials from the department and the Australian Electoral Commission, and again observed polling and counting in Dili and Liquica. The delegation reported that the voting and counting processes it observed were conducted in a professional manner and that it saw no evidence of interference, violence, intimidation or fear.

The department also arranged for a delegation of officials representing the department, Australian Electoral Commission and AusAID to visit East Timor to observe the 30 June parliamentary elections.


The department’s close cooperation with Vietnam as host of APEC in 2006 made a positive contribution to the bilateral relationship. The department supported visits by the Prime Minister to Vietnam for APEC and a bilateral program, and by Mr Downer and Mr Truss for the APEC meetings in November 2006. This was in addition to support for APEC-related visits by the Treasurer, Mr Costello, and the Minister for Small Business and Tourism, Ms Bailey. High-level visits to Australia during this period included that by the Vice President of Vietnam, Madame Hoa.

The department supported the fifth bilateral human rights dialogue with Vietnam, leading a delegation to the talks in Hanoi. The department also supported the process to locate and later repatriate the remains of two Australian servicemen killed in the Vietnam War.

TABLE 6. Australia's trade in goods and services with South and South-East Asia
Goods and services (a)
East Timor (b)
Total South-East Asia

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
(b) Goods data only. Services data is not published by the ABS for East Timor.
Source: DFAT STARS database and ABS Catalogue 5368.0.

The department continued its dialogue and cooperation with Brunei on counter-terrorism, and facilitated officials’-level visits in both directions for this purpose. The department also continued to lobby the Brunei Government in support of a number of Australian companies considering investments there.

Australia’s relationship with Cambodia was enhanced by the visit to Australia of Prime Minister Hun Sen in October 2006. The department supported the visit, which saw the signature of a prisoner transfer agreement and a bilateral MOU on investment cooperation. We strongly supported international efforts to establish a tribunal in Cambodia to try those suspected of atrocities during the Pol Pot era. We assisted Cambodia’s development of its counter-terrorism capacity. Support for the democratic process in Cambodia continued through our participation in an international observer mission for the commune elections in May 2007.

The department continued to develop Australia’s relations with Laos in the areas of human rights, combating transnational crime and pandemic preparedness, and by leading the Australian delegation to the inaugural bilateral human rights dialogue. We cooperated closely with Australian business interests on investment in the mining sector.

Australia’s relations with Burma continued to be limited by the lack of democratic reform and human rights observance in that country. The department made regular representations to regime leaders calling for democratic reform, genuine national reconciliation and respect for human rights. We strongly protested against the death in detention of political prisoner Thet Win Aung and the extension of the detention of Aung San Suu Kyi. Australian delegations used their participation in UN bodies and other international forums to urge reform in Burma. Consistent with our regional security interests, the department worked closely with other departments and agencies in support of focused humanitarian assistance to the people of Burma and to ensure interaction with the regime remained limited to our key national priorities such as transnational crime and public health, including HIV/AIDS and avian influenza.

ASEAN and regional issues

The department continued to influence evolving East Asian regional architecture by encouraging, and contributing to, a concrete program of activity for the East Asia Summit (EAS). We provided support to visits by the Prime Minister and ministers to the EAS and related meetings in the region. At the EAS Leaders’ Summit in the Philippines in January 2007, Prime Minister Howard and representatives from the 15 other EAS member countries agreed on a forward work program, including in Australia’s priority area of regional financial integration and cooperation. The department continued to lead negotiations on behalf of Australia, with New Zealand, towards an FTA with ASEAN (see output 1.1.7).

In recognition of the important role that religious and civil society leaders can play in facilitating regional security and increasing understanding, the department managed Australia’s involvement in the Third Regional Interfaith Dialogue, which took place in New Zealand in May 2007. The dialogue, co-sponsored by Australia (as well as Indonesia, the Philippines and New Zealand), produced an action plan focused on promoting understanding, and the important role that the education system and media can play in this regard. The department also supported the establishment of a joint Australia–European Union youth interfaith forum focusing on the region to be held in the second half of 2007.

FIGURE 9. Australia’s trade in goods and services WITH ASEAN(a)

Figure 9: Australia's Trade in Goods and Services with ASEAN

(a) Goods data on a recorded trade basis, services data on a balance of payments basis.
Source: DFAT STARS database and ABS Catalogue 5368.0.


The department will advance Australia’s political, strategic and economic objectives in South-East Asia, focusing in particular on counter-terrorism, combating transnational crime and market access issues.

We expect practical cooperation with Indonesia to expand further in priority areas, particularly in countering terrorism, efforts to combat illegal fishing and people smuggling, implementation of the TIF Expert Groups’ recommendations, and measures to address climate change and deforestation. As in the past, differences of approach may arise on some issues and effective management of these differences will be important.

The department will strongly advocate a return to democracy in Thailand, and will look for opportunities to further strengthen bilateral links with a new post-coup government.

We will offer support and encouragement to East Timor for the development of a stable and secure environment in which to develop good governance and a sustainable economy, including by engaging closely with the new government.

The department will pressure Burma’s regime to address political reforms and the needs of its community, and will support the work of the international community to improve the situation of Burma and its people.

The department will take opportunities to advance Australia’s commercial interests in South-East Asian countries, including by pressing for further enhancements to existing FTAs.

Return to top of page