The Provisional agreements on the Statute of the Union reached by
the Steering Committee at the weekend (C.14 [1]) have not been
fully accepted by the two Indonesian Delegations. Their request to
re-open discussions has been strongly opposed by the Netherlands.

The following is a summary of the other main developments:

(1) Steering Committee.

(a) Minorities. On the recommendation of the sub-Committee
(paragraph 1 of my C.9 [2] the Steering Committee has decided to
propose to the conference that the Netherlands minority group be
heard on the following subjects.

1. Citizenship.

2. Religious belief and culture.

3. Education.

4. Position of the Netherlands language.

5. The position of the Netherlands Civil and Military officials
and pensioners after transfer of sovereignty.

Further subjects may be considered at a later stage.

(b) 'Significant interests'. A serious conflict developed on the
question of hearing representatives of 'significant interests' at
the Conference. The Netherlands have been anxious to give as wide
a hearing as possible to all 'interests' including representatives
of local separatist movements in East Indonesia and Sumatra, some
of whom have arrived in Holland without the Indonesian Delegations
being previously consulted. The Netherlands Delegation stressed
that these people have a special claim to be heard with regard to
the right of self-determination. On the other hand, the
Indonesians and particularly Anak Agung regard these separatist
movements neither as minorities nor as 'significant interests' but
as political groups whose participation in the conference would
add confusion and create political difficulties in Indonesia. On
the suggestion of the Commission, a compromise has been found
whereby all groups or individuals claiming to represent
'significant interests' will present their claims personally to a
sub-Committee of the Steering Committee and be given the
opportunity to submit written documents. The compromise may
provide a safety valve insofar as all interests will be able to
settle their point of view. At the same time the sub-Committee
will recommend which groups, if any, should participate in the
Conference and will be able to prevent any group from confusing or
delaying the main work.

(c) New Guinea. The Netherlands Delegation has agreed to the
proposals of the Indonesians that New Guinea should now be
discussed and that the Chairmen of the Delegations to the
appropriate Committee should be instructed to meet informally to
decide a procedure.

(d) Work of the Conference. To speed up the conference, it has
been decided to call on the Heads of delegations to the various
Committees to report personally and to discuss with the Steering
Committee points of agreement and disagreement. As a first step
leaders of the Financial and Economic Committee will report at the
next meeting of the Steering. Committee on 22nd September.

(2) Political Committee.

(a) Foreign Relations. Sub-Committee 3 divided this subject into 7
topics-
(i) consideration of which existing treaties shall be taken over
by the R.U.I.;

(ii) provisions looking toward a common foreign policy;

(iii) possibility of the Netherlands-Indonesian Union taking part
in foreign relations in its own name;

(iv) provisions for table consultation prior to one of the two
partners contracting a treaty with another power which affects the
interests of the other partner;

(v) possibilities of common diplomatic representation;

(vi) possibility of one partner looking after the interests of the
other;

(vii) Personnel.

A working group of three members from each delegation will
consider these topics on the understanding that items (ii) and
(iii) will be held over until decisions on the Union Statute have
been reached. It is already clear that a large measure of
agreement exists in the Sub-Committee and no major difficulties
are foreseen.

(b) Nationality and Citizenship. Informal discussions are being
held with regard to the principles underlying the classification
of Netherlands subjects at the transfer of Sovereignty.

(3) Military Affairs Committee. Three major problems have emerged
in the informal discussions-
(a) the status of Sourabaya as a naval base;

(b) the withdrawal of Netherlands troops (the Netherlands have
suggested that the withdrawal would be completed within 18 months
to two years. The Indonesians have in mind six months to one
year);

(c) the position of the Royal Netherlands Indonesian Army. (The
Republicans believe that the Federal Army should consist as far as
possible of officers and men who have accepted Indonesian
nationality and that Netherlands personnel should only be used as
advisers or for training.)
(4) Cultural Affairs Committee. It has been agreed that cultural
relations between the R.U.I. and the Netherlands should be
voluntary and should be based on principles of independence,
democracy and reciprocity. It is not expected that there will be
serious difficulties in the way of completing an agreement for
cultural co-operation.

(5) Social Affairs Committee. The Netherlands delegation has
proposed three main groups of topics-
(a) the legal Status of the present Civil Service on the transfer
of sovereignty;

(b) the regulation of relations between employers and employees
and social provisions for the latter;

(c) general activities in the social field with particular
reference to provisions for public health, welfare, housing,
labour conditions position, social associations, etc. The
Indonesian delegations are insisting that discussions be
restricted to Group (a) and that the other subjects fall within
the competence of the Sovereign R.U.I.