137 Dispatch to Willesee

Jakarta, 2 June 1975

1175 SECRET AUSTEO

The Portuguese Timor Problem as seen from Jakarta

The decolonisation of Portuguese Timor is likely to have important ramifications for Australia's future relations with Indonesia.

The nub of the issue is that the belief shared to a greater or lesser extent by Indonesia, Australia and Portugal-that Portuguese Timor should be integrated into Indonesia-may prove inconsistent with the policy to which we are all publicly committed, namely that the territory's future should be determined by the wishes of its people. The evidence available to me at present-admittedly inadequate-suggests that a genuine act of self determination in the territory would result in eventual independence.

Indonesian Policy

Indonesians associated with the Timor issue are aware of the present lack of support for APODETI, the party which supports integration with Indonesia. To meet the situation they have three main courses of action available. First, to allow the process of decolonisation to run its course and seek to maintain close and friendly relations with an independent Portuguese Timor, should that be the result; secondly, to integrate the territory by force; or, thirdly, to seek integration through other methods.

The first option appears to have been ruled out. Integration is an Indonesian policy objective.(...1 by the end of 1975. We do not know, however, whether this timetable has been changed.) It results mainly from the fear that an independent Portuguese Timor could threaten the security and stability of Indonesia and the region. This fear has two aspects. First, because Portuguese Timor has insufficient resources to stand on its own feet, it would attract unwanted foreign interference, particularly from China and, possibly, the Soviet Union. Indonesian resolve that Timor should not upset regional stability has, if possible, been strengthened by recent developments in Indo China. Sensitivity to the possibility of a 'communist beachhead in Indonesia's belly'—as one BAKIN officer described it—has been heightened. Secondly, the Indonesian Government considers that an independent Portuguese Timor could aggravate­—by example and possibly also material assistance to separatist groups—fissiparous tendencies in Indonesia.

Whether or not these fears are justified the fact is that they exist and are held by President Soeharto and by other Indonesian leaders, particularly in the powerful military and intelligence communities. Except for the Foreign Minister, Mr Malik, and the Information Minister, Mr Mashuri, senior civilians in the government have no role in policy making on the issue.

I would not wish to suggest that Indonesian policy is immutable. If Portugal were to remain in control of Portuguese Timor for, say, five years at least and if the territory were to develop in a manner completely acceptable to Indonesia, it is possible that Indonesia might come to accept the idea of independence. At present however, I would judge the likelihood of such a change in attitude as extremely unlikely.

Integration by force-the second option mentioned above-cannot be ruled out. As you know the President and other leading Indonesians have given categorical public and private assurances that Indonesia would not invade Portuguese Timor. President Soeharto is justifiably proud of the responsible foreign policy he has built up since 1966. His speeches on foreign policy stress the need for the peaceful solution of disputes and avoidance of the use of force. He told Mr Whitlam that Indonesia, as a country which has endorsed the principles of freedom and democracy would not contemplate the invasion of the territory. The President is also fully aware of the possible damage to Australia/Indonesia relations which would result from an invasion. He will do all he can to avoid the use of force.

Nevertheless, in certain circumstances, I believe that President Soeharto would authorise that course. His most important concern is the security and stability of Indonesia. If it appeared to him that these were seriously threatened by developments in Timor I believe he would judge that the responsible course of action was to remove the threat by the most appropriate means available. It may well be force.

Bearing in mind that the Indonesian Government would consider its security threatened by an independent Portuguese Timor, I would envisage two situations in which the President might authorise the use of force.

First, if Portugal were to decide to hand over sovereignty to the independence parties (much as they have in their African colonies). Portugal's position as outlined to the Indonesians in London on 9 March and as stated publicly would seem inconsistent with this course of action.2 Developments in Portugal will be important, of course. Should the communist position in the Government there grow--or appear to the Indonesians to grow-Indonesia may conclude that the communist influence, or what it sees as that influence, will increase and, perhaps, that the early granting of independence was likely.

Secondly, if it became inevitable to the Indonesians that the decolonisation process would result in independence.lt is difficult to envisage the circumstances which might lead Indonesia to adopt this attitude. Even so the procedures forming part of this process will be crucial. For instance, two in particular would concern Indonesia. Any recognition, before an act of self-determination, that the territory was independent; and formation of a transitional government in the image of an independent government. On these points the situation should be clearer after the meeting planned to take place in Macao between the Portuguese Government and party representatives. This meeting itself may be deferred because of the present tensions between the UDT and FRETILIN.

In the first situation Indonesia's reaction would probably be sudden and swift. In the second it would probably be gradual, developed covertly in support of an alleged APODETI insurrection. In this situation the second and third options overlap.

Indonesia has adopted the third option, which seems to include two possibilities; to influence an act of self-determination in favour of integration, and to prepare for the sort of insurrection I have already mentioned. At this stage I doubt whether the Indonesians have decided which course to adopt. If the Portuguese agree to circumstances making integration virtually a foregone conclusion Indonesia would accept some act of self-determination. (An important factor for the Indonesians would be time.) If not the second possibility is likely. At present Indonesia's policies could be ad[a]pted to suit either possibility.

Aware that the non-cooperative approach and scare tactics used early this year were not very helpful to its cause Indonesia has now adopted, in the words of a Foreign Ministry official, more 'elegant' methods. Indonesian publicity will stress the benefits of integration: Indonesian economic activity and tourism in Portuguese Timor will increase. Indonesian tourists will, no doubt, include intelligence operators and para-military personnel. Efforts will be made to wean the pro-independence parties away from strong opposition to integration. Indonesia's covert activities in Portuguese Timor will be stepped up, as will the training of APODETI leaders. 'Refugees' are being prepared at Atambua to return to Portuguese Timor to play their part in persuading the people to support integration. In short Indonesia hopes to repeat the success achieved in the West Irian act of free choice, while building up the capability to adopt even more direct methods should they prove necessary.

Indonesia does not have control of Portuguese Timor, as it did of West Irian, before the act of self-determination. Manipulation of the act would thus be much harder and success less certain. The extent of apparent support for independence evident in Portuguese Timor in February and March suggests that Indonesian persuasion would need to be extensive. There is a distinct possibility that Indonesia will adopt the course of inspiring an insurrection.

[matter omitted]3

Australian Policy

Judging from the February/March press coverage, the situation in Australia will be different from that in South East Asian countries and will make it hard for the Australian Government to answer the difficult questions posed by the Timor issue. The Government wants the territory to become part of Indonesia but through some internationally acceptable process of self­-determination if this can be brought about. What would we do if it were integrated by force? What is the relative importance we attach to relations with Indonesia and to an act of self­-determination in Portuguese Timor?

Judging from the February/March press coverage, the situation in Australia will be different from that in South East Asian countries and will make it hard for the Australian Government to answer the difficult questions posed by the Timor issue. The Government wants the territory to become part of Indonesia but through some internationally acceptable process of self­—determinationif this can be brought about. What would we do if it were integrated by force? What is the relative importance we attach to relations with Indonesia and to an act of self­—determination in Portuguese Timor?

I am not suggesting that Australia give Indonesia 'carte blanche' to do what it likes in Timor. Australia's reputation as a progressive responsible regional country would be tarnished if we did. Indonesia is well aware that the Australian Government would not condone military action in Timor and that such action would adversely affect our relationship with Indonesia to some degree. Indeed I think that Australia would be obliged to condemn any outright aggression. A decision to take overt military action would be made with this knowledge, although some influential Indonesians do not share our assessment of the likely public reaction in Australia.

In public statements the Australian Government has emphasised the need for an internationally-recognised act of self-determination in Timor. True acts of self-determination are rare indeed. Certainly they have not been conducted in Portugal's other colonies. The Indonesians would find it difficult to understand if Australia and others were to insist that something which has not been applied to most other colonies in recent times-and all the other Portuguese-should now be resolutely enforced in the case of Portuguese Timor.

I do not think we should be too fussed about the manner chosen to determine the wishes of the people of Timor. Following the Prime Minister's talks with President Soeharto inTownsville the Indonesians will think that our main concern is that the way in which the future of Timor is decided should not upset the Australian people, thus putting at risk our bilateral relations.

We should continue to encourage Indonesia to go through with some process to determine the will of the people as indeed they are publicly committed to do. On this point I think we have our greatest (perhaps only) chance to influence Indonesian policy on Timor. We can continue to advise against blatant intervention which might stimulate Australian public opinion and lead the Australian Government to criticise Indonesia's actions. We might also advise the Indonesians of the importance to the future stability of the region of working out a solution to the future of Portuguese Timor which does not contain the seeds of further trouble. We should continue to impress upon the Indonesians our opposition to the use of force. But in doing so it would be important to avoid becoming the only or the main country in the region obstructing what Indonesia and its other neighbours could well see as Indonesia's legitimate national interest. There is a real danger that we could become isolated in this respect.

Another theme of our private talks with the Indonesians and the Portuguese has been to persuade the Portuguese to maintain sovereignty in Timor, at least for several more years. This, of course, is a policy objective agreed by the Prime Minister and President Soeharto. When we talk with Timorese political leaders we might continue to emphasise the importance Indonesia will play in their future, regardless of what that might be. We should avoid giving them the impression that we would support them against Indonesia.

Thus I see our policy as being, through quiet and patient diplomacy, to encourage all the parties, that is, the people of Portuguese Timor, Portugal and Indonesia to work out a peaceful solution. If it continued to appear that independence was the predominant wish of the people of Timor, we might continue our low key efforts to convince the Indonesians that they could live with an independent Portuguese Timor, provided it was friendly to Indonesia and looked mainly to Jakarta for guidance and succour. (Admittedly there is very little chance of this happening.)

In the event of the use of force by Indonesia to integrate the territory I would see Australia's interest as being to modify Australian opposition as far as possible and to minimise the impact on the long term need for a close and secure relationship with Indonesia.

One of the main themes of our Timor policy so far has been that Australia is not, and does not, seek to become, a party principal in the Timor issue. I consider our interests lie in maintaining this position and, if anything, decreasing our involvement, while keeping our private contacts with the Indonesians, Portuguese and Portuguese Timor political parties.

There are several reasons for this. First, increased involvement would augment the prospects for a confrontation between our activities and Indonesian interests. As Indonesian interference becomes more evident UDT and FRETILIN will probably see Australia more and more as a balance to Indonesia. Secondly, because integration may not be gained easily the situation in Timor may become messy (whether force is used or not).If so our presence (in whatever form) would be unlikely to assist the people of the territory or Indonesia, but it could prove embarrassing for us and make future good relations with Indonesia even more difficult than they would be in any case.

Finally, there are two specific aspects of Australian policy towards Portuguese Timor on which I should like to comment: the proposed consulate in Dili, and aid.

In retrospect it is regrettable that our consulate was closed. While it may prove inevitable I would recommend against re-opening of the Consulate at this stage. To re-open it now, would be interpreted here as support for the idea of an independent Portuguese Timor even if we were to assert that it did not. Certainly the pro-independence parties, UDT and FRETILIN, would seek to have it seen that way. They would portray our presence as a balance to Indonesia's. Consequently I recommend that we not re-open the consulate. If however it proves necessary for domestic political reasons to do so, we should give the Indonesians as much warning as possible, taking care, both in Indonesia and Timor, to avoid any misunderstandings as to our intentions. There would be advantages in presenting a decision to re-open the consulate if we could combine it with announcements of new consulates we may be opening elsewhere in the region.

We are still exploring the Indonesian attitude towards Australian aid to Portuguese Timor in more detail following the reservations expressed by the Indonesians at the Townsville meeting. Indonesia's concern is that Australian aid should not bolster in any way the arguments for independence. We should try to adopt procedures with which the Indonesians agree. Basically this means giving the aid to the Portuguese Government and avoiding, as far as possible, administrative procedures which give credence to the idea of Portuguese Timor as a separate entity. Also, of course, we should do all we can-including, if necessary, public statements-to ensure that our aid does not become a factor in the internal politics of Timor. Any Indonesian aid certainly will be, and the tendency may be for opponents of integration to use the fact of Australian aid to counter pro-integration arguments.

My comments on aid are based on the assumption that the Government is committed, domestically, to its provision. Undoubtedly an aid program will result in closer Australian involvement in the Timor issue. As mentioned above, I consider that at this stage Australian interests are best served by decreasing our involvement there.

My conclusion is that in relation to the Portuguese Timor issue, the outlook contains the seeds of real difficulties for Australia. Indonesia is bent on integration. While we would prefer that solution we may not like the way in which it now looks as though it will be achieved. If Indonesia decides to use force or crude pressure to achieve its objectives I do not think that Australian opposition would prevent this, once the President had decided that such action was in Indonesia's national interest. In these circumstances our best interests will lie in coming to terms with the realities of the situation.

R. A. WOOLCOTT - Ambassador

[NAA: A1838, 3034/10/6/9, i]