Your cablegram 316 of 20th August. [1]

1. The Government notes that, in regard to its acceptance of
initial responsibility for Borneo and territories to the East
thereof, it is the intention of the United Kingdom Government to
make available, as soon as possible, British and Dutch Forces to
relieve Australian Forces in territories other than Papua and the
Australian Mandated Territories for which we will remain
responsible throughout.

2. Further consideration has been given to the division of
responsibility within the Southwest Pacific Area between the
United Kingdom and Commonwealth Governments in the light of
discussions between Australian service representatives and the
South East Asia Command Mission. The following arrangements, which
have been agreed upon by the Service representatives, are
concurred in by the Commonwealth Government:-

(a) South East Asia Command to take over responsibility for the
Netherlands East Indies in three phases, except as stated below:

Phase 1: Australia will initially be responsible for Borneo and
the Islands to the East thereof. South East Asia Command will be
responsible for the re-occupation of Java, Bali and Lombok.

The assumption of initial responsibility by Australia does not
connote action to occupy in Phases 1 and 2, all of the Islands
within its sphere. In fact, there will be a gap consisting of
Celebes (except Pinrang), Halmaheras (except Morotai), Dutch New
Guinea and the Lesser Sundas, excluding Timor, in which neither
South East Asia Command nor the Australian Command have sufficient
resources to accept local surrenders initially. These areas can
only be covered in the first instance by the general surrender at
Singapore of Field Marshal Terauchi [2] or by local surrender of
subordinate controlling headquarters in these occupied
territories. In areas where Australian responsibility involves the
acceptance of the surrender of Japanese Forces and the re-
occupation of territories, this will be undertaken in stages.

Phase 2: South East Asia Command will take over up to the line
Balabac Straits, Southeast to include South East Asia Command, the
Halmaheras group, exclusive of Morotai, then Southwestward through
the Manipa Strait West of Ceram and Amboina, continuing Southwest
through the Ombai Strait North of Timor.

The target date for the completion of Phase 2 is the end of
October, 1945.

Phase 3: South East Asia Command will become responsible for the
whole of the Netherlands East Indies (including Dutch New Guinea)
less the Island of Timor, the future responsibility of which will
be the subject of later negotiation between the respective
Governments.

(b) The progressive assumption of responsibility by South East
Asia Command will be determined by the resources available. The
detailed phasing is a matter of planning between the staffs of
Australian Command and South East Asia Command. In principle,
South East Asia Command accepts that it will use every endeavour
to take over the area as rapidly as possible.

(c) Subject to detailed adjustment as may be required, the Command
of Dutch Forces which may hereafter come into the theatre, should,
in general, rest with South East Asia Command; Dutch Forces now
under Australian Command will so remain until the area in which
they are employed is handed over to South East Asia Command, again
subject to detailed adjustment as necessary.

(d) Such responsibility as is accepted during the military phase
for Civil Affairs administration will pass simultaneously with
Command in any area. In the organisation of economic measures in
South East Asia Area, military responsibility for the restoration
of economic life has been defined as being restricted to action
necessary to prevent disease and unrest, during the initial period
of military administration.

3. The Government invites attention to the following:

(a) Timor.

Arrangements are being made for acceptance of surrender of
Japanese Forces in Portuguese and Dutch Timor by Australian
Forces. This is referred to in the Government's cablegram No. 356
of 28th August, 1945. [3]

(b) Borneo.

The general intention is not to extend the present area of
responsibility in Borneo, except for special reasons such as the
relief of prisoners of war. The Government desires that the relief
of Australian troops in this area should be completed by the end
of October, in view of the Programme which it has laid down for
the demobilisation of the Services. It is also desired that
responsibility for Civil Affairs be taken over by British and
Dutch authorities with the least avoidable delay, and not later
than the end of October.

(c) Dutch New Guinea.

Australia has a special interest in Hollandia and Biak as Air
Force staging areas and we are prepared to maintain initial
control in Dutch New Guinea, although it will, for all practical
purposes, be confined to these staging areas. This is on the
understanding that the Dutch will remain responsible for Civil
Affairs administration, that the acceptance of the surrender of
Japanese troops in Dutch New Guinea will have a low priority and
that the general occupation of the territory will be left until
British or Dutch troops are available.

(d) Celebes and Halmaheras.

Although, in Phase 1, it is proposed that Australia should accept
initial responsibility for the Celebes and the Halmaheras,
without, however, taking occupying action in these areas, the
Government agrees with the recommendation of its Service Advisers
that, as the Headquarters, 2nd Japanese Army, are at Pimang in the
Celebes, Australian troops should accept the surrender of this
Headquarters and that, for this purpose, a limited force be placed
in Pinrang.

Some Allied prisoners of war are believed to be in the Macassar
area, and only a minor operation would be necessary for the
recovery of these prisoners. If practicable, Australian Forces
will assist in this operation.

Morotai, in the Halmaheras group, will remain within the area of
Australian responsibility until the completion of Phase 2, as a
large Australian staging base is located on this Island.

(e) Nauru and Ocean Islands.

As advised in cablegram 246 [4], the Government will make
available an Australian Force to accept the surrender of the
Japanese forces at Nauru and Ocean Islands, and to reoccupy these
Islands.

(f) Civil Affairs Administration.

The general principle adopted by the Government in regard to Civil
Affairs is that, except in Papua and Australian Mandated
Territories, Australia shall refrain from any extension of its
present responsibilities for civil affairs in re-occupied
territories. Such responsibility as is accepted initially during
the military phase will pass to the South East Asia Command
simultaneously with the relief of the Australian Command in the
respective areas. We look to Governments having sovereign rights
in these areas to take over full responsibility for them after the
initial period.

On the basis that, during the initial period of military
administration, military responsibility for the restoration of
economic life in the re-occupied territories is broadly restricted
to action necessary to prevent disease and unrest, the Government
will accept responsibility for civil affairs administration to
this limited extent.

It is understood that it is the intention that civil governments
shall assume responsibility for economic restoration as soon as it
is possible, and that close co-operation is being maintained
between Military and Civil Authorities with that end in view.

(g) Responsibility of Australian Command on Completion of Phase 3.

On completion of Phase 3, the date of which is indefinite, the
responsibility of the Australian Command will be limited to Papua
and the Australian Mandated Territories. As indicated in paragraph
2 (a), the future responsibility of Timor will be the subject of
later negotiations.

4. It is noted that consideration is being given to the
Commonwealth Government's proposals for participation of
Australian Forces in the occupation of Japan. The Government
assumes that in your consideration of this matter, an examination
will also be made of the aspect of the provision of maintenance
requirements. The Australian forces in the South West Pacific Area
have so far relied to a large extent on the United States Forces
for assistance in meeting maintenance requirements such as the
provision of shipping, base installations, repair facilities,
common technical supplies and stores and fuel and lubricants. The
Government looks to a continuance of this arrangement. It is also
advised that the shipping requirements stated in paragraph 5 of
our cablegram No. 240 of 17th August [5] do not include provision
for the Australian Force for Japan. Details will be furnished when
strength of forces is known definitely.