Annual Report 2007-2008

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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


Close practical engagement with the countries of South-East Asia remains an abiding priority in Australian foreign and trade policy. In promoting enhanced engagement the department focused its efforts on shared security challenges, investment opportunities, freeing up trading arrangements, countering extremism, development assistance, people-to-people links and cooperation in regional institutions.

Significant progress was made in our relationship with Indonesia. Entry into force of the Lombok Treaty provides a new framework for security cooperation. High-level visits and anniversaries added impetus to regional relationships. Seven leaders from South-East Asian countries attended the APEC Economic Leaders’ Summit in Sydney in September 2007. Marking the 50th anniversary of Malaysian independence and of diplomatic relations between Australia and Malaysia and the 35th anniversary of diplomatic relations between Australia and Vietnam provided opportunities to add fresh impetus to these relationships.

The department also sought to advance Australia’s regional and economic interests through constructive contributions to the East Asia Summit and by the conclusion of an ASEAN–Australia Comprehensive Partnership and Plan of Action. We advanced understanding and tolerance among the diverse faith groups within our region through our co-sponsorship and strong support for the fourth Regional Interfaith Dialogue in Cambodia in April 2008.

Following the announcement by the Prime Minister, Mr Rudd, on 4 June 2008 of a proposal for a possible Asia-Pacific Community, the Department, working with the Department of Prime Minister and Cabinet, commenced arrangements for regional consultations on the proposal.


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.


Louise Hand

Photo - See caption below for description
The embassy in Jakarta houses a large group of purposeful, outward-looking Australians and Indonesians working in a sleeves rolled-up way with an extensive network of partners across the archipelago.
Enlarge image :: Photo gallery

Since 2005, Louise Hand has served as Deputy Head of Mission at the Australian Embassy in Jakarta, Indonesia.

Her job is to take forward Australia’s whole-of-government approach to the wide range of issues on which we work closely with Indonesia as one of our most important regional partners. Along with the wider embassy team, Louise pursues objectives such as countering evolving terrorist threats; engaging Indonesia on climate and forests issues; helping Australian companies to pursue trade opportunities; stopping people-smuggling ventures on remote islands; preventing illegal fishing; and supporting Indonesia’s efforts to alleviate poverty in coastal villages.

A key component of her work is about developing strategy—or how to make things work—in the Indonesian environment, which demands pragmatism and flexibility. Louise points to the example of the negotiations on the Australia–Indonesia Agreement on the Framework for Security Cooperation (the Lombok Treaty), which aims to develop a deeper, more forward looking and practical structure to bilateral security cooperation.




Strengthening Australia’s relationship with Indonesia remains a high priority. The department enhanced the relationship across a number of important areas.

We advanced cooperation with Indonesia on security issues by finalising the Australia–Indonesia Agreement on the Framework for Security Cooperation (Lombok Treaty). We facilitated an exchange of diplomatic notes by Foreign Ministers Smith and Wirajuda in Perth in February 2008 to bring the Treaty into force and the successful passage of the Treaty through the Australian Parliament. We worked closely with Indonesian officials on a Plan of Action under the Treaty, detailing priority areas for future security cooperation.

Consistent with commitments under the Lombok Treaty, the department continued to strengthen bilateral cooperation on counter-terrorism at the inaugural officials’ talks held in May 2008. We exchanged views with Indonesian officials on the evolving nature of the terrorist threat, reviewed cooperation to date and set directions for future cooperation. We also renewed the bilateral Memorandum of Understanding (MOU) on Combating International Terrorism for a further three years.

The department continued to cooperate with Indonesia on measures to address illegal fishing in Australia’s northern waters, including through the development of a public information campaign. Sightings and apprehensions of illegal Indonesian fishing boats decreased in 2007–08 compared with 2006–07.

As part of a feasibility study for a possible FTA with Indonesia the department met in capitals with state and territory governments, business and community representatives, to develop priorities and encourage support for the bilateral FTA.

A large number of successful high-level visits to and from Indonesia were facilitated by the department. We supported the visit to Bali by the Prime Minister, Mr Kevin Rudd, and five Australian ministers (including Mr Smith and Mr Crean) for the UN Conference on Climate Change in December 2007, and the Prime Minister’s visit to Jakarta and Aceh in June 2008. We also supported visits to Australia by President Yudhoyono and seven of his ministers in September 2007 for the APEC Economic Leaders’ Summit and coordinated the visit by Indonesian Foreign Minister, Dr Hassan Wirajuda, in February 2008.

Indonesia is the largest bilateral recipient of Australian development assistance. The department worked closely with AusAID and other relevant agencies in the development of a new, five-year development partnership with Indonesia—the Australia–Indonesia Partnership (AIP) Country Strategy 2008–13. This $2.5 billion Strategy was announced by Prime Minister Rudd in Jakarta in June 2008. The Strategy builds on the Australian Government’s development priorities in Indonesia, and is directed towards reducing poverty and promoting regional peace, stability and prosperity. It will target assistance to the country’s poorest provinces, including Aceh, West Papua, Papua, East Nusa Tenggara (NTT) and West Nusa Tenggara (NTB).

The department also provided secretariat and logistical support for the Australia–Indonesia Institute (AII) (see sub-output 3.1.2 on page 217).


The department managed the bilateral relationship with Thailand throughout its return from military to civilian government. Prior to Thailand’s democratic elections in December 2007, we worked closely with other agencies to ensure that bilateral interaction was consistent with policy measures introduced following the coup of September 2006. Following the Thai elections, in consultation with a range of departments and agencies, the department developed policy responses to the new democratically elected government. As part of Australia’s high-level re-engagement strategy, the department’s Secretary, Mr Michael L’Estrange AO, chaired bilateral Senior Officials’ Talks with his Thai counterpart (Mr Virasakdi Futrakul) in Canberra on 23 May 2008.

We also promoted economic ties with Thailand. Following the return of civilian government, we re-engaged Thai leaders and officials to encourage the commencement of further trade and investment liberalisation negotiations under the Thailand–Australia Free Trade Agreement (TAFTA).

The department also provided secretariat and logistical support for the Australia–Thailand Institute (ATI) (see sub-output 3.1.2 on page 220).


Singapore is a major partner in the region and the department strengthened bilateral engagement in priority areas including trade, defence and security. We supported a range of visits to Singapore, including by the Minster for Trade, Mr Crean, in December 2007.

The department led a stakeholder consultation process involving key business and commercial entities, and legal and education service providers in preparation for the second ministerial review of the Singapore–Australia Free Trade Agreement (SAFTA). The consultations will inform Australia’s approach to the review and ensure it responds directly to Australian commercial interests and results in a balanced package of outcomes.


Photo - See caption below for description
Australian High Commissioner to Malaysia, Ms Penny Williams, and the then Malaysian Deputy Minister of Foreign Affairs, Dato’ Joseph Salang, launching the bilingual photographic publication, Australia–Malaysia: Celebrating 50 Years, on 23 October 2007. The publication, which showcases the strength of the two countries’ relationship, was produced by the department with the support of the Australia–Malaysia Institute.
Enlarge image :: Photo gallery

The year 2007 marked the 50th anniversary of Malaysia’s independence and the establishment of Australia–Malaysia diplomatic relations. In celebration, the department implemented a program of activities to showcase the historical significance of the bilateral relationship, particularly in the areas of defence and education.

The department facilitated the visit by the Governor-General, Major General Michael Jeffery, who represented Australia at Malaysia’s independence celebrations in Kuala Lumpur on 31 August 2007. We implemented ‘My.OZ’, an expanded cultural program of partnerships between Australian and Malaysian exhibitors, performers and writers to commemorate the anniversary.

The department supported the visit by Mr Laurie Ferguson, Parliamentary Secretary for Multicultural Affairs and Settlement Services, to Malaysia in June 2008 to participate in the Third International Conference on the Muslim World and the West: Bridging the Gap.

We supported Australian companies by providing advice, negotiating greater market access and supporting tenders and investment applications. We assisted a number of key investment initiatives in the professional and financial services, oil, gas and resource processing sectors. We continued to engage in informal consultations on the Malaysia–Australia Free Trade Agreement negotiations, although concluding the ASEAN–Australia–New Zealand FTA, which includes Malaysia, remained the priority.

The department helped strengthen border security arrangements with Malaysia through practical cooperation mechanisms in the fields of law enforcement, counter-terrorism and immigration.

The department also provided secretariat and logistical support for the Australia–Malaysia Institute (AMI) (see sub-output 3.1.2 on page 219).

The Philippines

The department supported efforts to enhance Australia’s defence and security relationship with the Philippines, including efforts towards Philippine ratification of a bilateral Status of Visiting Forces Agreement signed by both countries in May 2007. We worked with other relevant agencies to advance cooperation with the Philippines on counter-terrorism arrangements and to encourage momentum in the peace process in southern Philippines.

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Michelle Chan
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Michelle Chan

Since Cyclone Nargis hit Burma in May 2008, devastating the Irrawaddy Delta and parts of Rangoon, the Australian Government has worked with the international community to deliver humanitarian assistance to survivors and support early recovery efforts. The Australian Embassy in Rangoon has been on the frontline, advocating access for humanitarian workers, monitoring relief activities and developing options for Australia’s substantial assistance to the disaster response.

Michelle Chan commenced her assignment as Australian Ambassador to Burma in the weeks following the cyclone. Her previous experience in disaster response policy, including from work on the 2004 tsunami, has proved an asset in her current role.

Michelle notes a key priority for the Australian Government in Burma is to advocate political reform in Burma and press for an improvement in the human rights situation. With the Australian Government taking a close interest in national elections scheduled for 2010, Michelle and her team at the embassy will be carefully monitoring developments.

Michelle has developed a depth of South-East Asia experience since joining the department in 1993, with postings to Indonesia, Vietnam and Cambodia and most recently serving as head of South-East Asia (South) Branch in Canberra.

It was distressing to witness the scale of the disaster wrecked by Cyclone Nargis but rewarding to be part of the strong international response and to represent one of the leading donor governments.


The department continued to facilitate trade and investment links with the Philippines and assisted Australian companies, particularly mining companies facing regulatory and security difficulties. The department coordinated with other government departments to manage trade disagreements over the importation of several agricultural products from the Philippines. An inter-agency delegation participated in an agricultural forum in Manila in December 2007 to clarify Australia’s position on biosecurity and quarantine provisions and engage Philippines’ officials and producers.

The department led a human rights delegation to the Philippines in September 2007 which resulted in the development of a number of projects aimed at helping the Government of the Philippines deal with alleged extrajudicial killings by the Philippines security forces.

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Suzanne McCourt and Australian Ambassador to East Timor, Mr Peter Heyward, travelling by International Stabilisation Force (ISF) helicopter to the opening of East Timor’s first National Park.
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Suzanne McCourt

When Suzanne McCourt arrived as Deputy Head of Mission at the Australian Embassy in Dili, East Timor, in March 2008, the country was still coping with the aftermath of the attacks on the President and Prime Minister on 11 February 2008. East Timor was in a state of siege and under a curfew and there was a strong military and police presence on the streets.

Suzanne has since been involved in the embassy’s coordination of the large Australian effort in Dili, working closely with Australian military and police deployed in East Timor and with AusAID to ensure that Australia’s assistance efforts promote stability and economic development, both in the short and long term.

Since arriving in Dili, Suzanne has witnessed a number of positive developments. These include the peaceful surrender of the assailants of the 11 February attacks, the Prime Minister, Mr Rudd’s, opening of East Timor’s first National Park in Lautem in the country’s far east, and constructive discussions between East Timor and Australia on arrangements for the jointly managed area in the Timor Sea.


East Timor

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The Prime Minister, Mr Kevin Rudd, arriving in Dili on 14 December 2007, accompanied by Minister for Foreign Affairs, Mr Stephen Smith. East Timor’s Prime Minister Mr Xanana Gusmao and Ms Kirsty Sword Gusmao welcome the party at the airport.
Photo: Auspic
Enlarge image :: Photo gallery

The department coordinated a rapid, whole-of-government response following the attacks against East Timor’s President and Prime Minister on 11 February 2008. We helped implement aspects of the response, including urgent medical assistance to President Ramos-Horta and his evacuation to Darwin. We worked with relevant agencies on the deployment of an additional 200 troops and 70 police officers at the request of the East Timorese Government.

The department supported a range of high-level visits to East Timor, including a joint visit by the Prime Minister and the Minister for Foreign Affairs in December 2007. We facilitated the visit to Australia by East Timor’s Foreign Minister, Zacarias da Costa, in February 2008.


The department continued to develop Australia’s growing bilateral relationship with Vietnam. We organised the Joint Trade and Economic Cooperation Committee (JTECC), co-chaired by the then Minister for Trade, Mr Warren Truss, and Vietnam’s Minister of Planning and Investment, Mr Vo Hung Phuc, in Canberra in July 2007. JTECC focused on three priority sectors (mining, financial services and education) and included a business dialogue for the first time.

The department supported a series of high-level visits and events marking the 35th anniversary of the establishment of diplomatic relations, including the visit to Australia by Deputy Prime Minister and Minister for Education and Training, Professor Nguyen Thien Nhan, in February 2008.

We contributed to ongoing efforts to locate and repatriate the remains of an Australian serviceman killed in the Vietnam War.

Other bilateral relationships

The department continued to support Australian commercial interests in Brunei. We cooperated with Brunei on regional security issues, supported strengthened law enforcement initiatives and worked with other agencies to conclude a memorandum of understanding on police cooperation in May 2008.

The department developed policy options for ministers in response to the political crisis in Burma in September 2007, including the imposition of financial sanctions targeting 418 senior members of the regime, their supporters and associates.

We provided timely advice to the Government on bilateral and multilateral issues relevant to Burma, including the sanctions regime and scope for limited interaction with the Burmese regime on priority transnational issues. We supported efforts of the UN Secretary General’s Special Envoy to Burma and made representations to the regime on political reform and human rights issues, in the context of the May 2008 flawed constitutional referendum process.

The department responded quickly following Cyclone Nargis in May 2008. We coordinated closely with international partners, ASEAN and the United Nations on access to the affected areas to deliver humanitarian assistance. In close cooperation with other departments and agencies, notably AusAID, we developed Australia’s response to the disaster. We supported the Parliamentary Secretary for International Development Assistance Mr McMullan’s participation at the ASEAN–UN Pledging Conference in Rangoon on 25 May 2008.

We assisted efforts in Cambodia to bring former Khmer Rouge leaders to trial, including through financial support to the Extraordinary Chambers in the Courts of Cambodia. We worked closely with other states in monitoring and facilitating progress on the trials. The department supported Mr McMullan’s visit to Cambodia to represent Australia at the Interfaith Dialogue in April 2008.

The department continued to develop the bilateral relationship with Laos, including by supporting a guest-of-government visit by the Lao Minister for Industry and Commerce, Dr Nam Viyaketh, in May 2008.

ASEAN and regional issues

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Minister for Trade, Mr Simon Crean, at the ASEAN Economic Ministers – Closer Economic Relations consultations, in Bali on 3 May 2008.
Enlarge image :: Photo gallery

The department coordinated Australian participation in the East Asia Summit (EAS), including attendance by the then Minister for Foreign Affairs, Mr Downer, at the third Leaders’ Summit in Singapore in November 2007. Working with other agencies, we made constructive and substantive contributions to the EAS agenda including facilitating Australian involvement in the second-track study of possible enhanced economic integration (CEPEA).

The department reached agreement with ASEAN on a Plan of Action to implement an ASEAN–Australia Comprehensive Partnership, which identifies priority areas for cooperation across our political, security, economic, development and socio-cultural interests.

In May 2008, we hosted the ASEAN–Australia Forum involving senior officials from each of the ASEAN countries, which reviewed key developments in Australian relations with ASEAN and identified future priorities. The department continued to lead negotiations for Australia, along with New Zealand, towards a free trade agreement with ASEAN (see sub-output 1.1.7 on page 103).

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.

In April 2008, the department co-sponsored the fourth Regional Interfaith Dialogue, working closely with host country Cambodia. The Dialogue enabled faith leaders from around the region to share information and ideas with a view to increasing regional understanding and tolerance. The Dialogue resulted in a Declaration and specific recommendations for further action at local, national and regional levels in areas including education, conflict resolution and peace building, grassroots initiatives and the media.


Close engagement with the countries of South-East Asia will remain a priority for the department, particularly in regional security cooperation, transnational crime and market access.

The department will be looking to expand its cooperation with Indonesia, building on the successful efforts on counter-terrorism, illegal fishing and people smuggling in recent years, and the very positive state of bilateral relations. Climate change, disaster response, democracy, interfaith dialogue and people-to-people exchanges are areas where both countries are seeking to advance cooperation.

Working closely with other agencies, the department will continue to support the East Timorese Government in its efforts to build a stable and more prosperous country, with a particular focus on strengthening East Timor’s security forces.

In consultation with the Department of the Prime Minister and Cabinet, we will continue to coordinate and take forward the Australian Government’s discussions with countries in the region on prospects for progress towards an Asia-Pacific Community.

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