The situation has moved into a decisive phase. It will as usual present us with serious difficulties. While some of the ideas in cables to our mission in New York may be largely for the historical record we need to grasp the nettle, whether we like it or not, that talks between the parties and Portugal are not going to take place and that to continue to maintain that such talks offer the 'best hope of bringing an end to the conflict' and restoring an 'orderly process of decolonisation' are unrealistic.
I think it is certain that the Indonesians will now grasp the opportunity to put enough pressure on Fretilin to defeat it and to proceed with the integration of East Timor, albeit with some lip service thereafter to ascertaining the wishes of the people and possibly including the rump of a reconstituted Fretilin in any local representative institution which might be established.
There seems to have been longstanding reluctance in some quarters in Canberra to accept the fact of Indonesian determination to integrate Portuguese Timor. As you know it has been decided Indonesian policy for some time, as I emphasised at the Heads of Missions meeting in July. Indonesia was prepared—or could have been persuaded—to bring this about in an acceptable manner but the way in which the situation has evolved, both in Portugal and in Dili, has rendered this impossible. Although we have always opposed it and sought to avoid it we have to accept that the issue will now be settled initially by force. One could argue as General Moerdani and others have done that, given the inevitable outcome for East Timor, this will mean less lives will be lost than if the slow war of attrition against Fretilin, accompanied by political activities such as talks about talks or even talks themselves, continued.
There is one point which I must make to you of which Alan Renouf should also be aware. This concerns what Andrew Peacock said during his 'private' visit to Bali in September.1 I did write to Alan personally about this on 30 September but not so explicitly. He told Harry Tjan and Lim Bian Kie, who went to Bali to brief him, that he favoured the early integration of East Timor into Indonesia. He said that he would 'not criticise' Indonesia's actions to bring this about (including presumably the use of force) provided Indonesia had the support of other ASEAN countries. He would criticise the then Whitlam Government for 'inaction' but not Indonesia. Both Tjan and Lim Bian Kie have told us this separately and while they may not have it completely correct and while the circumstances in which Mr Peacock said it have changed, there is no doubt in their minds—and they will have passed this up the line—that what Mr Peacock said then represented his considered view on Timor. I leave it to your judgement how to handle this but you may need to drop the Minister a hint at some stage about what Tjan and Lim Bian Kie believe he said to them.
I notice the media is full of criticism of the Australian Government over its failure to mediate in Timor. I do not often agree with Lenin but I do agree with his comment that 'mediators are rarely if ever successful'. Given Indonesia's well known policy, which it would, I believe, have pursued whatever Australia had done, short of intervening on Fretilin's side, there really was no scope for us to mediate. As I have consistently maintained, albeit occasionally in terms which may on occasions have offended some in Canberra, there has never been much prospect of political talks in Australia, of Australian mediation, of effective United Nations action, or of Portugal reasserting and maintaining its authority in Timor. There has to me always been an inevitability about the outcome of the Timor situation.
In essence we look like being confronted with a basic choice between Indonesia and Fretilin. Although principles of self-determination, the use of force, the peaceful settlement of disputes, are all involved, it comes back to that choice. As a political realist with racing connections I imagine that Mr Peacock will not be interested in putting his (Australia's) money on a 50 to 1 outsider in a two horse race, even if he does not like the actions of the favourites' handlers or the lack of rules for the race.
Looking beyond Timor I think we should try and widen the present focus of our relations with Indonesia. For example, if the present Government is confirmed in office on the 13 December then I think we would need to be careful that the proposed early visit by Mr Peacock—or a later visit by Mr Fraser—is not presented mainly in the context of Timor.
[NAA: A10463, 801/13/11/1, xvi]