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07CANBERRA1742 2007-12-11 02:14:00 CONFIDENTIAL//NOFORN Embassy Canberra
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O 110214Z DEC 07
					  C O N F I D E N T I A L CANBERRA 001742 




E.O. 12958: DECL: 12/11/2017

REF: STATE 164809

Classified By: POLCOUNS James F. Cole for reasons 1.4 (b),(d)

1. (C/NF) Gerry McGuire, Director for Counter-Proliferation,
Department of Foreign Affairs and Trade, told poloff December
11 Australia agreed with the U.S. judgment that Jakarta's
December 12 seminar on "PSI in the Framework of Maritime
Security" does not meet its requirements as a venue to
advance the PSI agenda with Indonesia, and should have
included more Southeast Asian participants.

2. (SBU) McGuire advised that Ted Knez, Executive Officer in
the Counter-Proliferation Section, would attend the seminar
and deliver a presentation of about 15 minutes in length,
titled "Australian Perspectives on the Proliferation Security
Initiative." (A copy of the final version of the
presentation follows below at para 4.) Knez is armed with
extensive briefing materials, put together following a GOA
interagency meeting last week, and will be prepared to
correct misperceptions about PSI.

3. (SBU) The GOA welcomes the Department's offer for Mr. Knez
to coordinate on tactics with ISN/CPI Tony Foley in advance
of the seminar.

4. (SBU) Following is the final text of Knez' prepared PSI

Begin text:

Seminar on the Proliferation Security Initiative (PSI) in the
Framework of Maritime Security "Australian Perspectives on
the Proliferation Security Initiative (PSI)" Borobudur Hotel,
Jakarta, 12 December 2007

I am very pleased to have the opportunity to address you

I thank the Department of Foreign Affairs of the Republic of
Indonesia for organising this seminar to facilitate
discussion on the Proliferation Security Initiative (PSI). In
our discussion today, I believe we can start from a single
point of agreement that the proliferation of weapons of mass
destruction is a serious threat to international security.
That threat is the very reason why the PSI exists.

Following on from Tony Foley's presentation, I would like to
talk to you about Australia's perspectives as a
PSI-supporting country and on what the PSI means to us.

Let me say at the outset that the Australian Government is
strongly interested in, and committed to, non-proliferation
and disarmament.

I would like to begin, perhaps paradoxically, by mentioning
some of those things which Australia believes the PSI is not.
Firstly, the PSI is not a substitute for maintaining and
strengthening the existing multilateral WMD treaties. In this
regard, we still have a lot of work to do. The Nuclear
Non-Proliferation Treaty (NPT), for example, while almost
universal, is under stress as a result of North Korea's
nuclear test last year, and the discovery in 2002 that Iran
had been developing a secret nuclear program and has still
not provided the International Atomic Energy Agency (IAEA)
with all the information that the Agency has requested on
this program.

Nor is the PSI a substitute for all countries having
effective export controls. It is in our own security interest
to deny proliferators the materials and technologies they
need to produce WMD. And we have an obligation, in this
regard, following the adoption of UNSCR 1540 in 2004. I
Qregard, following the adoption of UNSCR 1540 in 2004. I
should add here that the PSI does not presuppose new
multilateral structures or laws. It effectively complements
and reinforces existing ones.

The PSI does not discriminate against any country. It is not
an exclusive club. On the contrary, the PSI's strength lies
in its diversity and inclusiveness. It provides an

opportunity for countries to work together to take practical
measures against the threat of WMD proliferation. PSI
countries agree to take steps, consistent with national and
international law, either alone or with others, to impede the
transfer or transport of WMD, their delivery systems and
related material to and from states and non-state actors of
proliferation concern. There are now almost 90 PSI supporting
countries world-wide. Fourteen of those countries are right
here in the Asia-Pacific region.

The PSI is not illegal or somehow inconsistent with
international law. PSI supporters abide by their own domestic
and international legal obligations. No state is asked to do
anything it believes is contrary to the law. Indeed, PSI
activities have helped states to develop a better
understanding of where they can take action and were they

Australia will only take action that is consistent with the
United Nations Convention on the Law of the Sea and this
means, for example, that rights like that of innocent passage
through territorial seas are taken into account.

The reality is that most of our PSI work is not about
dramatic interdictions at sea - it is the every day work of
good intelligence, export controls, and law enforcement
efforts - all of which means that most of our work takes
place in port.

The PSI is also not about the forfeiture of national
sovereignty. Recognising the threats posed by proliferation,
states have chosen to work together to respond. We do this in
full recognition of our rights as sovereign states, but also
with an understanding that where issues extend beyond the
boundaries of anyone country, and an issue cannot be managed
or resolved by anyone country acting alone, then cooperation
may provide a solution. In the region, we have seen the
benefits of such cooperation in, for example, disaster relief
efforts and tackling transnational crime including drug
trafficking and illegal fishing. Likewise, concerned states
have looked for ways to
enhance their ability to counter the threat of proliferation.

That then brings me to the question of what the PSI is. For
Australia, it represents the sort of new strategic thinking
and flexibility which we had already embraced through our own
counter-terrorism and counter-proliferation efforts. PSI
fitted perfectly with our approach and the broad-based,
whole-of-government framework that we base our counter- and
non-proliferation activities on. Australia has also worked to
streamline our domestic coordination measures and approaches,
both across agencies and across jurisdictions. Agencies meet
regularly, share information and work together. We know the
Australian public - after the horrors of 9/11 and the Bali
bombings - would expect nothing less.

The PSI is practical, flexible and non-bureaucratic. There is
no formal organisation and no secretariat - it doesn't need
these. PSI gets its continuity and coordination through
regular meetings of PSI operational experts. PSI converts
political support for non-proliferation goals into an
operational capacity to respond professionally and
Qoperational capacity to respond professionally and
expeditiously to a proliferation alert. PSI participants form
partnerships of states ready to work together, as necessary,
to disrupt the illicit trade in WMD-related materials. PSI
countries train together, their defence and law enforcement
authorities share information and they perform actual
maritime and air interdictions.

In the event of a proliferation alert PSI supporters,
Australia included, assess the legal, practical and political
issues on a case by case basis, and decide what action if any
they are prepared to take in response to credible and
reliable information. Flag state consent is one example.
Under the PSI, supporting countries may be asked to authorise
an interdiction if one of their state flagged vessels is
suspected of illicitly transporting WMD. Australia has
developed national flag state consent procedures to respond
to PSI cases. But our consent is not automatic - we remain in
control of the decision-making process and, where relevant,

would take this up to the highest levels of government. We
have defined the conditions on which we would give our
consent, should we be asked for it.

In short, Australia will consider flag state consent requests
on a case-by-case basis. And that effectively is the approach
taken by PSI countries as a whole. Quite simply, we maintain
our national sovereignty when it comes to deciding our
response to PSI cases. It's a serious issue for us.
Australia like Indonesia is a coastal state, and almost 90%
of our international trade is transported by sea. We are not
interested in putting arrangements in place which would cause
unnecessary delays for the shipping industry. So it was
important for us to get the flag state consent procedures

As I mentioned at the outset, the proliferation of WMD is a
threat to international security. Unfortunately, that threat
conceals itself within one of the greatest achievements and
advantages we have in ensuring our continued development and
prosperity this century: the free flow of trade, knowledge
and people on which our global economy is based. These
freedoms can facilitate the availability of dangerous new
capabilities and opportunities to states of concern or to

The challenge for governments and regulators is to keep pace
with the phenomenal growth in world trade, which demands ever
faster customs clearances and transport, and the activities
of determined proliferators who would seek to use legitimate
trade for illicit WMD trafficking. Several measures have
been introduced to address this problem, including the US
Container Security Initiative and the more recent Secure
Freight Initiative. However, the consequences of WMD
materials slipping through despite these measures are
frightening indeed. The PSI was brilliantly conceived to
address such a possibility.

As you well know, the Asia-Pacific is strategically
important to the global economy. It has some of the world's
busiest ports, airports and trans-shipment centres and these
assets can be used by those who seek to move WMD materials
around the world.

Through outreach to our region on counter-proliferation and
PSI, Australia seeks to work with our neighbours to counter
WMD proliferation - a threat that threatens us all. We stress
that no country would be immune to the consequences of a WMD
attack, no matter how far away this occurred. The economic
and trade effects alone of such an attack would hit every
economy. Australia is prepared to assist regional countries
to improve their WMD-related export controls and expand
regional support for the PSI. With other Australian agencies
and key PSI partner countries (for example, the United States
and Japan), we have coordinated the delivery of practical
technical assistance to several important supplier and
trans-shipping countries, and have expanded our dialogue on
counter-proliferation issues.

What we have found from our discussion with regional partners
is that some countries which are otherwise willing to take
steps to stop WMD proliferation, hesitate to support the PSI
because of uncertainty about its exact nature, including what
Qbecause of uncertainty about its exact nature, including what
participation in the PSI would require of them. While
intimate knowledge of PSI modalities might be scarce in some
cases, overall we have seen a welcome desire from
interlocutors to learn more about the initiative itself. As
we strive to de-mystify the PSI and tackle the knowledge gaps
and misconceptions about the initiative and its activities,
hesitant countries will, in time, open-up to the initiative.
Our priority is to continue efforts to provide solid
information about what the initiative is and what it is not.
Participation in the PSI, including endorsement of its
Statement of Interdiction
Principles (SIP), sends a strong message to would-be
proliferators of the political commitment by countries to
taking legal, cooperative and practical action to stop the
spread of WMD.

In our experience one of the best ways for non-PSI countries

to understand the PSI is to attend a PSI exercise. We engaged
regional countries on the PSI through our PSI "Pacific
Protector 06" exercise in April last year and since the
exercise, and following further engagement on the PSI,
several of those observer countries have publicly expressed
their support for the PSI. Similarly, Japan's recent PSI
exercise Pacific Shield 07 contributed to further
understanding the PSI for those regional observer countries
that attended. On another level, Australia has adapted the
successful PSI Tabletop Exercise from Japan's ASTOP meeting
earlier this year as a discussion tool.

Australia offers to host a Tabletop Exercise in regional
countries as the basis for a multi-agency discussion of how
to respond to a real proliferation threat. The Tabletop
Exercise draws out key issues of both interest and concern,
and also demonstrates the value and importance of
inter-agency coordination and cooperation.

The PSI has been in existence for almost five years. In
fact, next year marks the PSI's fifth anniversary. It is a
tribute to supporting states that the PSI continues to
develop and evolve.

In the future, key challenges will be to continue to expand
the membership of PSI, widen its coverage in particular
regions, and enlist the direct support and related efforts of
major countries still outside the PSI.

Increased international support remains key to expanding the
PSI's operational reach, strengthening capacity, and
responding to disruption opportunities. The more countries
that participate in the PSI, the stronger the defence, and
the fewer opportunities for proliferators to exploit gaps in
the coverage of the PSI.

In conclusion, I'd like to reiterate that the multilateral
arms control and non-proliferation treaties serve us well in
defending us against the spread of WMD, as do effectively
implemented export controls. But as we seek to strengthen
those systems to prevent dangerous technologies, know-how and
WMD falling into the wrong hands, proliferation can still
prosper where treaty obligations are evaded and export
controls and their enforcement are weak, or where procurement
is forced underground. The PSI exists in an attempt to cover
these weaknesses. The PSI acts, if you like, as a safety net.

Thank you again for the opportunity to address this seminar

End text.

5. (U) Embassy regrets the delayed response to reftel, which
was not received by the action office until December 11 owing
to a server outage.