Reference Australian suggestion American-Australian arbitration.

[1] Dr. Oesman, Indonesian representative in Australia, has made
public statement [2] saying that he considers his Government could
accept proposition, especially if third party were included. He
gives the interesting explanation that arbitration by three
parties would be understood by Indonesians, as this is common
Dutch practice. Arbitration by one is foreign to them and. by two
raises the question as to what happens if there is lack of
agreement between the two. There is some merit in suggesting a
third party. Understand from Oesman that the United Kingdom would
probably be an acceptable third party, and we assume also that the
Dutch would find United Kingdom acceptable. Perhaps it would be
possible for counter suggestion to be put forward by Dutch of a
third party, for example, the United Kingdom. To be successful
such a proposal would have to be agreed upon before Security
Council meeting, Council being merely informed of agreed means of
carrying out its previous decision.

2. India, Philippines, and others will claim a right, but clearly
the three parties ught to be members of the Security Council.

Moreover, if means of arbitration is greed matter is not for
Council to discuss.

3. Should be glad of early advice as to United Kingdom reaction to
proposal. We earned only the other day that the United States
offer [3] had been made without the knowledge of the United
Kingdom Government, and we had previously assumed the United
Kingdom Government did not desire to be associated with the offer
following upon their attitude at the Security Council. Our
proposal for American-Australian arbitration was based on that
assumption.