Working Paper S/AC.10/68 U.S.S. RENVILLE, 15 December 1947
OUTLINE OF DRAFT PLAN FOR THE SETTLEMENT OF THE NETHERLANDS- INDONESIAN DISPUTE
1. Short-run measures to be taken without prejudice to the rights, claims or position of either party (a) Implementation of the cease fire Both parties should agree to withdraw their troops to positions considered reasonable by the Committee in the light of the Resolutions of the Security Council on 1, 25, 26, August and 1 November. This involves a special effort on the part of the Committee to obtain an early acceptance and implementation of the Committee's plan for a speedy and effective truce. 
(b) Resumption of economic intercourse An early resumption of normal trade and commercial intercourse has been included in the Committee's plan for a truce and has been taken up separately with the Netherlands authorities. Such a resumption is an urgent task of the Committee, which might arrange for immediate discussions between technical experts appointed by the parties and representatives of the Committee.
(c) Administrative arrangements Administrative arrangements will be necessary prior to achieving an overall political settlement and as part of the implementation of the cease fire.
2. Long-run measures aimed at achieving a final settlement Little progress will be achieved if the Committee of Good Offices merely listens to the case presented by each party and tries to find compromises. The Committee should, prior to hearing formally either party, formulate its own proposals and then ask each party to detail its objections. To make this procedure the more acceptable, brief informal talks might be held with each party prior to the formulation by the Committee of its proposals. More progress will result from hearing objections to a reasonable proposal than hearing the minimum demands of each party.
B. PROPOSED BASIS OF SETTLEMENT
It may be assumed that Linggadjati, on which agreement was in fact reached, provides the best starting point in endeavouring to find a basis of settlement. Acceptance of Linggadjati as a starting point, however, has a number of disadvantages:
(1) Linggadjati leaves all major issues unsettled and open to dispute. Therefore, although it appears to narrow the area of disagreement, in fact it fails to do so.
(2) Its approach, that steps be taken to incorporate the Republic (Java, Sumatra and Madura) in a United States of Indonesia comprising the neutral territory of the Netherlands Indies, and finally to arrange a Netherlands-Indonesian Union, is too roundabout. The final arrangements would take so long to evolve that in the meantime further situations would be provoked and it is difficult to see how the rights, privileges and position of each party would in practice remain unprejudiced over the lengthy period of negotiations.
(3) The crucial point is that of sovereignty, and Linggadjati seriously clouds this issue.
(4) The Commission-General's interpretation of Linggadjati  included a statement that the arbitration clause (Article 17) of the Agreement  does not apply to envisaged institutions such as the Constituent Assembly. This is a major issue. There would no doubt be a number of other matters to which the Dutch would refuse to accept the application of Article 17.
2. A more satisfactory approach than Linggadjati would be to grant complete authority to the Republic over Java, Sumatra and Madura, with the proviso that at a later stage the Republic would be incorporated into a wider union. This would not mean the complete scrapping of Linggadjati. Many clauses would remain appropriate, particularly those applying to protection of Dutch rights in the area, but a new framework would have to be found.
3. The framework which was constructed by the United States to meet requirements of similar peoples with similar interests would seem to be particularly appropriate. This framework is the recently concluded United States - Philippines Agreement.  The Philippines model has the special appeal of granting immediate sovereignty, but by means of a protocol of preserving the rights and privileges of the metropolitan power in such important fields as economic and defence relationships. The treaty is subject to executive agreements on these matters.
4. The appropriate sections of the Protocol to the Treaty between the United States of America and the Republic of the Philippines read as follows:
'It is understood and agreed that this Treaty does not attempt to regulate the details of arrangements between the two governments for their mutual defense; for the establishment, termination or regulation of the rights and duties of the two countries, each with respect to the other, in the settlement of claims, as to the ownership or control of real or personal property, or as to the carrying out of provisions of law of either country; or for the settlement of rights or claims of citizens or corporations of either country with respect to or against the other.
It is understood and agreed that the conclusions and entrance into force of this Treaty is not exclusive of further treaties and executive agreements providing for the specific regulations of matters broadly covered herein.'
5. The general principles on which an agreement on this model might be reached could include the following:
(1) Provision for Indonesian authority over the domestic policy of Java, Sumatra and Madura, with the cooperation of the Dutch or, in fact, of other nationals, in technical and administrative work.
(2) Provision for local government, giving the Republic complete jurisdiction in the areas not containing foreign capital, and making provision for the maintenance of law and order in areas containing foreign capital and assets. This maintenance of law and order would be the responsibility of the Indonesians but exercised in association with the Dutch authorities, who would have certain rights to protect Dutch nationals, at least for an interim period.
(3) Provision for Indonesian autonomy in foreign affairs, subject to agreements made with the Dutch on matters related to foreign affairs.
(4) Indonesians to have complete jurisdiction over the granting of concessions and leasing of areas in Indonesia, subject to certain conditions protecting concessions already granted.
(5) The political agreement to be subject to an economic agreement which would protect the rights of the Netherlands over a lengthy period and which would give the Netherlands a privileged position in relation to the Indonesian economy.
(6) The political agreement to be subject to a military agreement which would protect the military interests of the Netherlands in the area.
(7) The de jure sovereignty granted immediately to the Republic to be subject to the condition that the Republic join in a Constituent Assembly with Borneo and the Great East  for the creation by democratic process of a United States of Indonesia as early as practicable.
(8) When created, the United States of Indonesia to enter into agreements with the Netherlands, which agreements could in turn be based on the model of the Philippines-United States agreement and which could include the principles agreed upon by the Netherlands and the Republic.
(9) Supervision of the agreement to be the responsibility of an international authority, for example, it could be a Three-Power authority consisting of a Netherlands Governor-General, a Republican President, and an independent Chairman appointed by the United Nations. A better proposal might be the appointment of a Committee of the United Nations, which would undertake its responsibilities working in conjunction with a representative of the Netherlands and a representative of the Republic, who would subsequently be replaced by a representative of the United States of Indonesia.
6. The advantages of this approach are:
(1) It would protect the legitimate interests of the Netherlands and at the same time permit the Republic to achieve its aspirations.
(2) It is consistent with the principles explicit and implicit in the Linggadjati Agreement.
(3) It provides a clear-cut approach to the problem and particularly to the sovereignty issue, as well as a more logical approach to the concept of federation. Accordingly, it suggests the most speedy method of achieving an overall settlement of the dispute.
(4) Such a clear-cut approach has been tested and its value proved in the Philippines, India and Burma. In all these countries not only have the aspirations of the local people been achieved but there has been an immediate change in their feelings towards the metropolitan powers, whose interests have been consolidated and strengthened. A solution of political deadlock in India was found in a few short months on the basis of an immediate grant of sovereignty, after months of wrangling over the formation of a federation prior to the granting of that sovereignty.
(5) Such an early agreement would consolidate and strengthen the position of moderate elements in the Republic and in Indonesia.
(6) It would provide for the most speedy restoration of normal economic life in general and of the estates in particular. This, together with the encouragement it would give to economic development, could be a most vital factor in the economic and political stability of the Far East.