57 War Cabinet Submission by Curtin
Agendum 98/1945 CANBERRA, 16 March 1945
CIVIL ADMINISTRATION AND JURISDICTION IN NETHERLANDS INDIES
Agreement between Commander-in-Chief, Southwest Pacific Area and Lieutenant-Governor-General of Netherlands Indies
Attached hereto is a copy of an agreement  between the Commander-in-Chief, Southwest Pacific Area and the Lieutenant- Governor-General of the Netherlands Indies, which sets forth the principles which will apply to the relations between Dr. van Mook's Government, General MacArthur and the members of the Allied Services under his command in the Netherlands Indies.
The agreement was forwarded to the Prime Minister by General MacArthur, who was informed that it would be submitted to War Cabinet and that any observations would be conveyed to him.
Provisions of Agreement 2. The principles of the agreement are contained in a preamble and sixteen clauses containing detailed provisions.
3. It will be noted the preamble states that the principles are designed to provide a practical solution of immediate problems and to facilitate as far as possible the work of the Commander-in- Chief and thereby the common purpose of the Allied Governments, to expel the Japanese from the Netherlands Indies and gain final victory over Japan. These arrangements in no way affect the sovereignty of the Netherlands Government.
4. The principles provide for:-
(a) the de facto authority of the Commander-in-Chief, Southwest Pacific Area, to take all necessary military measures in combat areas (Clause 1);
(b) the resumption by the Netherlands Government as rapidly as practicable even in combat areas of full responsibility for the civil administration of re-occupied Netherlands territory; and for assistance by the Netherlands authorities in such areas or elsewhere to the Commander-in-Chief in the prosecution of the war, e.g., in the matter of facilities, supplies, labour etc. (Clauses 2-5, 12);
(c) the jurisdiction of the Netherlands Government or the Allied military authorities over various classes of civil and service personnel in the Netherlands Indies (Clauses 6-10);
(d) exemption from Netherlands Indies taxation of members of Allied forces, and selected civilian employees and officials of Allied Governments and immunity of the latter from Netherlands jurisdiction (Clauses 11 and 13);
(e) future consultation if necessary on jurisdictional questions;
separate agreements on matters not covered by the present instrument, as necessary; and modification or suspension of the agreement by arrangement, if circumstances urgently require it (Clauses 14-16).
General MacArthur's Letter 5. In his letter  General MacArthur said 'In view of the fact that a number of the Australian Forces, who have already played a conspicuous and distinguished part in the campaign for the liberation of New Guinea, are serving in Netherlands territory, and that even more may do so in the future, Dr. van Mook and I feel that this agreement is one in which you will be interested.
Accordingly, I enclose a copy.
I feel confident that you will find that the interests of those Australian forces entrusted to my command have been adequately protected. I have already issued instructions that the Netherlands Indies Government is to be kept advised of the civilians and others who come within the terms of the paragraphs of the agreement which provide exemption from taxation and local jurisdiction. Such advice will include the names of all Australians concerned who are serving under my command.' Defence Committee's Views 6. The Service aspects of the Agreement were considered by the Defence Committee which considered that there was no objection to it from the point of view of the provisions made relating to the members of the Australian Forces as part of the Allied Forces under the command of the Commander-in-Chief, Southwest Pacific Area.
Reference to Treasurer and the Attorney-General and Minister for External Affairs 7. The Agreement was also submitted to the Treasurer and the Attorney-General and Minister for External Affairs. The latter has no comments to make on the terms of the Agreement. The Treasurer has commented as follows:-
'There appear to be two aspects in which the Treasury has a particular interest, namely, whether the Commonwealth will be involved in cost of any facilities, labour, supplies, etc., made available by Netherlands Indies authorities, and whether the unconditional immunity from Netherlands Indies taxation provided for the Australian civilians concerned, would warrant a reciprocal treatment to Netherlands Indies civilians serving in Australia in connection with the prosecution of the war.
On the first point it would appear that the financial arrangements concluded between the Commonwealth and the Netherlands East Indies Government and confirmed by War Cabinet in Minute No. 3964 , set out our liability in respect of facilities, labour and supplies provided to Australian troops in the re-occupation of the Netherlands Indies.
With regard to taxation, it is considered that the present provisions of the Commonwealth income tax law afford reciprocal exemption corresponding to that provided in the agreement concluded between representatives of the United States and Netherlands East Indies Governments.' Submission to War Cabinet 8. The Agreement between the Commander-in-Chief, Southwest Pacific Area, and the Lieutenant-Governor-General of the Netherlands Indies on Civil Administration and jurisdiction in the Netherlands Indies, together with the observations in paragraphs 6 and 7, is submitted for consideration by War Cabinet. 
JOHN CURTIN Minister for Defence