Working Paper S/AC.10/68 U.S.S. RENVILLE, 15 December 1947

RESTRICTED

OUTLINE OF DRAFT PLAN FOR THE SETTLEMENT OF THE NETHERLANDS-
INDONESIAN DISPUTE

A. PROCEDURE

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. [2]

(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 [3]
included a statement that the arbitration clause (Article 17) of
the Agreement [4] 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. [5] 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 [6] 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.