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Indonesia relationship back on track: PM

The Prime Minister has visited Indonesia for the first time since the bilateral relationship went sour over spying allegations.

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Tony Abbott has declared in the presence of the Indonesian President the end of the boats issue as a problem between the two countries, saying his hardline policy meant “it would not substantially further trouble us”.

President Susilo Bambang Yudhoyono made no mention of boats, nor of feelings in his government that Operation Sovereign Borders is simply pushing the problem back to Indonesia, where 10,000 asylum seekers are now stuck with no route out of the country.

Mending fences: Prime Minister Tony Abbott meets Indonesian President Susilo Bambang Yudhoyono at a resort on Batam Island on Wednesday.

Mending fences: Prime Minister Tony Abbott meets Indonesian President Susilo Bambang Yudhoyono at a resort on Batam Island on Wednesday. Photo: Pool

The two leaders spoke warmly of each other at their first meeting since the spying revelations in November derailed the bilateral relationship, prompting the president to write of his disappointment in his memoirs, released in January.

But after the men met for 40 minutes on the island of Batam on Wednesday, Dr Yudhoyono downplayed the issue, saying it was something that “almost distracted our good relations,” and “almost became a challenge”. He was confident that the relationship could emerge stronger from the spying code of conduct that is being negotiated by the two countries’ foreign ministers, he said.

Mr Abbott admitted after the meeting that there had been a “couple of issues” between the two countries, but people smuggling, which has been an irritant for years, was “well on the way to resolution”.

"Both governments should not phone-tapp each other": Foreign Minister Marty Natalegawa greets Tony Abbott.

"Both governments should not phone-tap each other": Foreign Minister Marty Natalegawa greets Tony Abbott. Photo: Michael Bachelard

On spying, Mr Abbott has offered to resolve the issue by stepping up intelligence sharing, saying the challenges ahead – including jihadists returning from the civil war in Syria – would affect both countries.

“One of the great things about this relationship is that, on those rare occasions when there are problems, we talk them through, we speak candidly to each other, and that’s what happened between myself and Bapak President today,” he said.

Foreign Minister Marty Natalegawa, who has often been the one to deliver Indonesia’s tough messages to Australia, was also conciliatory after the meeting, which he attended.

He refused to comment on Mr Abbott’s assertion that the boats issue was no longer in play. He predicted that there “shouldn’t be any difficulties for Australia to come on board” Indonesia’s “simple draft” of a spying code of conduct, saying: “The principle is actually very easy and simple – both governments should not phone-tap each other.”

He said the resolution of a code of conduct was “not directly linked” to tensions over boats, but that “addressing one issue will help the other as well”.

As he arrived on the resort island for the snap meeting, Mr Abbott made it clear there would be no resolution announced, saying he was merely there to “pay my respects [to Dr Yudhoyono] and build on the relationship”.

The meeting was the first between the two leaders since October last year. The following month, revelations that Australia tapped the phones of Dr Yudhoyono, his wife and inner circle in 2007, stopped fresh talks over people smuggling and soured the relationship, prompting Indonesia to withdraw its ambassador from Canberra and to suspend cooperation on people smuggling, military and intelligence matters.

Australia has used the breakdown in the relationship as an opportunity to push boats back to Indonesia.

Indonesia has made it clear that, to normalise the relationship, the two governments need to go through a six-point process and sign and implement a “code of conduct” governing surveillance, with each step laid out by Dr Yudhoyono late last year.

Dr Natalegawa and Australian Foreign Affairs Minister Julie Bishop, have been negotiating that protocol and, as a sign of good faith, the Indonesian ambassador, Nadjib Riphat Kesoema, returned to Canberra in May.

Dr Yudhoyono wants an agreement by August at the latest, and Mr Abbott suggested it might be ready for the 2+2 dialogue between defence and foreign ministers in coming weeks.

Dr Natalegawa reiterated that he doesn't “normally work based on deadlines or timelines”, but said it should be completed “the sooner the better”.

Labor frontbencher Tony Burke welcomed the talks between the leaders, but said the opposition had hoped the code of conduct would be signed on Wednesday's visit.

The code was ''the signal we need to see'', he said.

''That will really set a mark in terms of some of the issue that came up at the end of last year,'' Mr Burke told Sky News on Thursday.

''You want it done and sorted as quick as possible. The code of conduct was a signal that Indonesia gave as something that was important to be able to get things back on track.''

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