Canberra, 26 August 1974

SECRET AUSTEO

Defence Significance of Portuguese Timor

I refer to your paper on the defence significance of Portuguese Timor (sent to us with your memorandum of 15 August¹) as revised by the amendments you sent us on 21 August.

2. We have a major disagreement with the paper because it seems to us to consider the defence significance of Portuguese Timor in isolation from the defence significance of Indonesia. The paper leaves out of account, or does not give sufficient weight to, the following important considerations:-
   
   1. The importance to Australia's defence of maintaining good relations with Indonesia. We appreciate that, in paragraph 32 of the revised version of your paper, there is some recognition of this consideration but there is no attempt to weigh the significance for Australia's defence of the advantages of pursuing a deliberate policy of denying Portuguese Timor to the Indonesians (which is a major implicit recommendation of your paper) against the significance for our defence of the damage to our relations with Indonesia which, in our view, the pursuit of that policy would entail. Although they are mentioned in paragraph 8, the paper does not consider the security interests of Indonesia and the effects which developments in Portuguese Timor might have on those interests or might be perceived by the Indonesians to have on them. But these effects will have important repercussions for Australia's strategic interests. We attach the more importance to this consideration because, as will appear below, we are unconvinced by your arguments that Australia 'has a clear defence interest in opposing the political or military domination of Portuguese Timor by ... Indonesia'. The paper seeks to preserve the narrow option of Australian defence access to Portuguese Timor without taking account of the argument that the preservation of that option would be counter-productive in the sense that it could provoke Indonesia.
   2. The obstacles in the way of Australian access to bases or facilities in Portuguese Timor in the context of an emerging threat to Australia from Indonesia. Point (c) of the conclusions in paragraph 34 of your paper refers to this access as possibly enhancing our position in the context of the threat mentioned. Paragraphs 19 to 22 of the paper are also relevant. We doubt whether access would be possible. Portuguese Timor will continue to be associated in some way with Portugal or it will be independent or it will be associated with Indonesia. It would seem that the argument in paragraph 24 of your paper precludes Australian access to Portuguese Timor in the event of a continuing association between the territory and Portugal and in the event of an emerging threat to Australia from Indonesia. Likewise that argument, it seems to us, would preclude Australian access to the territory if it became independent, because in the event of an emerging threat to Australia from Indonesia, it would surely be in the interests of an independent Portuguese Timor to maintain a strict neutrality between Australia and Indonesia if not a pro-Indonesian neutrality. The question of Australian access to the territory would not arise in the third case, that of an association of Portuguese Timor and Indonesia. The only likely situations in which an independent or Portuguese-protected Portuguese Timor would be likely to encourage Australian access to bases or facilities in Portuguese Timor would be in circumstances in which (a) Portuguese Timor alone was threatened or (b) the territory and Australia were both threatened. (c) There can be little difference between the strategic importance to Australia of Portuguese Timor and the importance to us of Indonesian Timor and the other small islands of the eastern Indonesian archipelago. Indeed the last sentence of paragraph 14 of the paper specifically recognises this lack of difference. If, as we argue in (b) above, Australian access to Portuguese Timor in the context of an emerging threat to Australia from Indonesia is not a practical possibility, why should we have a clear defence interest in opposing the political or military domination of Portuguese Timor by Indonesia any more than we have a clear defence interest in opposing Indonesian domination of any other of the Indonesian islands close to Australia? (cf the first sentence of para 19 of the paper). A related point emerges in para 18(b) of the paper in which it is stated that in circumstances of a threat by a major power Australian and allied access to Portuguese Timor would afford an Australian ally substantial strategic advantage in the deterrence of a conventional threat. The only ally it would be realistic to consider in this context would be the United States and we doubt whether it is realistic to see a role for the United States in the circumstances envisaged in para 18(b).
   3. The danger that an independent Portuguese Timor would pose to the stability of the region and to Indonesia. Paragraph 34(d) of your paper states that 'the exclusion of major powers ... from Portuguese Timor ... would be best served by its development through self-determination as an independent state'. Paragraph 26 of the paper states that 'as an independent state Portuguese Timor ... would be inherently weak and thus sensitive to external pressures, especially from Indonesia'. Our concern is that a weak independent Portuguese Timor would be unstable and a continuing temptation to outside intervention and not only from Indonesia. There is a serious danger that outside intervention would be directed at Indonesia and might therefore endanger Australian strategic interests. There would be a grave risk of competition between Indonesia and other outside influences to which the Indonesians would be specifically sensitive in view of their common border with Portuguese Timor.
3. It will be apparent that, as we accept the foregoing considerations, we disagree with much of the paper from paragraph 12 onwards and with its conclusions. There are, however, major points in the paper with which we agree; in essence, they are summed up in paragraph 16 and in the sentence in paragraph 14 which states: 'An important objective of our defence policy should be to ensure that no country additional to Indonesia attains a position where it could readily exert pressure on these important sea lines of communications or to our off-shore resources'. We also agree with the references to PNG in the paper.
4. We understand that it is not your intention to submit a paper on this subject to the Defence Committee before the Prime Minister's next visit to Indonesia. We are preparing a paper for the Prime Minister which will make recommendations about how he should approach the subject of Timor in his discussions. We have been informed by the Indonesians that this matter will be raised. We understand that you are agreeable to contributing to this paper. Because it may not be possible for our two Departments to reach an agreed position on this subject in time for its inclusion in the brief, it will probably be necessary to identify separately in it the views of the two Departments.

K.H.ROGERS

First Assistant Secretary

Defence Division

[NAA: Al838, 696/5, iii]

• 1 Document 21.