Discussions on the Statute of the Union were reopened and the
following modifications of the points set out in my C.14 [1], have
now been agreed upon:

A. The Character of the Union. The two paras have been
consolidated 'The Union Statute and appendices and common
regulations and other agreements may be registered with the United
Nations in accordance with Article 102 of the United Nations'
Charter'.

B. The Inter-Parliamentary Conference. The Indonesian Delegations
have chosen the second text.

C. The head of the Union. Paragraph 1 has been amended to read
'The Head of the Union effectuates the support of voluntary and
lasting co-operation between the partners' (a word with a slightly
different meaning to 'spirit' will be used in the Netherlands
text). Paragraph 2 no change. Paragraph 3 The Union court will
take decision in the name of the Head of the Union by majority
vote, will consist of six judges appointed for 10 years (age limit
65 years). The Members of the Court will be appointed by the
respective Governments. There shall be no question of the Head of
the Union 'affirming' the appointments but he shall administer
oath of office. (The proposed oath would be innocuous in content
and conform to the religious requirements of the nominees.)
2. The three delegations agreed in the Steering Committee this
morning to make the following press announcements 'Through
informal discussion held since the return of their Steering
Committee from Namur [2] the three delegations have agreed in
principle on the following points with regard to the Union
Statute.

A. Character of the Union Statute.

B. Position and functions of the head of the Union.

C. Duties and composition of conferences of Ministers of the Union
Partners which are to be held at regular intervals.

D. Duties and composition of the court of Arbitration of the
Union.

E. Good contact and regular co-operation between the Parliaments
of the Union Partners.'
3. The Indonesians continue to refuse to consider the Netherlands
Proposal that the Head of the Union should have the power to take
decisions on the recommendation of the Conference. Providing the
Netherlands give way on this, there are unlikely to be further
serious hitches on the Statute of the Union. The legal experts
will endeavour to complete next week a consolidated draft on the
basis of the agreements in principle already reached.

4. The Indonesian Delegation are generally satisfied with the
results. Hatta feels he can have the Statute accepted by the
Indonesian people providing the overall agreement is not delayed
too long. Sukiman is hesitant about Masjumi reactions but the
republicans consider that providing that Masjumi supporters are
approached indirectly through their Council, the difficulties can
be overcome.

5. The next major problem will be on the Economic and Financial
agreement on which the Indonesian and Dutch views still widely
diverge. Leaders of the Financial and Economic Committee made a
preliminary and superficial report to the Steering Committee today
and will discuss their problems in more detail at the next meeting
of that Committee on Tuesday 27th September. The Republicans will
now endeavour to force the pace and there may be a showdown on the
Economic issues by Wednesday of next week.