INDONESIA AND SINGAPORE SIGN BILATERAL AGREEMENTS

C O N F I D E N T I A L SECTION 01 OF 04 JAKARTA 001566 SIPDIS SIPDIS DEPARTMENT FOR EAP/FO, EAP/MTS, PM, L (BUCHHOLTZ) DOD FOR USDP/ISA/AP (IPSEN) DOJ FOR OIA (ROBINSON/WERNER) E.O. 12958: DECL: 05/29/2017 TAGS: PREL MARR KJUS ID SUBJECT: INDONESIA AND SINGAPORE SIGN BILATERAL AGREEMENTS ON DEFENSE COOPERATION AND EXTRADITION REF: SINGAPORE 1045 Classified By: Political Officer Daniel Turnbull, for reasons 1.4 (b,d) . ¶1. (U) Summary: The bilateral Defense Cooperation Agreement (DCA) and Extradition Treaty (ET) signed by Indonesia and Singapore on April 27 achieve long-sought objectives and potentially will sustain that cooperation over the next 25 years. Strategically paired from the beginning to balance respective priorities, the two agreements were negotiated and signed as a single package. The DCA grants Singapore renewed access to sites in Indonesia for military training, following a two-year hiatus since suspension of an earlier agreement, while the ET for the first time gives Indonesia legal means to pursue fugitive Indonesian capital from the Suharto era. The next step is ratification by the Indonesian legislature (DPR) and the Singaporean parliament, but complaints from the Indonesian DPR that both treaties disadvantage Indonesia suggest the ratification process will not be easy. Provided they pass muster, the agreements would enter into force in ¶2008. End summary. DEFENSE COOPERATION AGREEMENT ¶2. (U) The DCA was signed April 27, 2007 by Singaporean MOD Teo and Indonesian MOD Sudarsono in the presence of PM Lee and President Yudhoyono. In separate ceremony on May 7, respective military chiefs signed an Implementing Agreement providing terms of use for designated training areas. The agreement formalizes a range of cooperation which is more extensive than any so far between the two countries in a defense relationship that dates back to 1974. As the official press release notes, the DCA provides "a comprehensive strategic framework for promoting bilateral defense cooperation to enhance the professionalism and interoperability of the two militaries through greater access to each other's training areas and facilities." A previous Indonesia-Singapore Military Training Area (MTA) agreement signed in 2000 had designated a joint military training area for the Singapore Armed Forces (SAF) in the Tanjung Pinang waters and a second area in the South China Sea. Indonesia had suspended cooperation under that agreement in 2003 on the grounds that Singapore had involved a third party without Indonesia's permission. ¶3. (C) According to the Indonesian Defense Department's Director General for Defense Strategy, Dadi Susanto, key issues in the negotiations included duration, movement of a major naval training area, third-country participation in training, terms and conditions for landed training areas and Indonesian legal jurisdiction: -- Duration: Because of its political sensitivity on the Indonesian side, the DCA was given an initial term of 13 years, with two six-year extensions. In contrast, the ET has an initial validity of 15 years, with two five-year extensions. The GOI thereby intends to avoid having renewals fall in or near election years. -- Access to Indonesian territorial waters: Area Bravo, located east of Batam and Bintang islands south of Singapore, previously served as Singapore's naval training grounds. Because they straddled increasingly busy international sea lanes and airline routes, Singapore agreed to accept a new Area Bravo roughly equivalent size further to the east, southwest of Natuna. Singapore is permitted to conduct firing exercises in the area four times a year, along with air support, and Indonesia has the right to observe the exercises. -- Third-country training in the Bravo area. Indonesia granted Singapore's request to invite a third country to train in the Bravo area, on an equal basis. Indonesia required notification a year in advance and stipulated that the third country also be a signatory of the United Nations Charter, the Law of the Sea, the ASEAN Treaty of Amity and Cooperation and the ASEAN Nuclear-Weapons-Free Zone. Press speculation during and after the negotiations that the intended beneficiary might be the United States or Israel JAKARTA 00001566 002 OF 004 was, according to Singapore Embassy officials in Jakarta, misleading. (Note: the TAC and SEANWFZ requirements would automatically exclude the United States.) The most likely candidates are ASEAN members, at least initially. Indonesian defense officials stress that third-country training is consistent with the principles of international law. -- Additional training areas: An army training area is to be developed at Baturaja, south of Palembang, South Sumatra. An air combat maneuvering range, called Area Alpha One, is to be located at Siabu, southwest of Pekanbaru, Riau, Sumatra, and an air firing range, known as Area Alpha Two, is to be situated in the waters between Batam Island and the Anambas Archipelago off the east coast of Malaysia. A naval target range, located at Kayu Ara Island, east of Batam and Bintang islands south of Singapore in the South China Sea, will be available for use by both signatories as well as third countries. ¶4. (U) Indonesia secured a major objective in obtaining legal jurisdiction for crimes committed by visiting military personnel outside of military duty (this will have implications with the land forces at the Palembang area, in particular). Moreover, Singapore agreed to bear 90 percent of the cost of new facilities which, after 20 years, will become Indonesian property. Indonesian and Singaporean officials also note the joint training and educational exchanges to respective command and staff colleges gives Indonesia exposure to a more advanced military, as does Indonesia's access to Singapore's modern simulation facilities. The agreement also provides for naval technical assistance and access to naval training facilities, as well as TNI access to SAF simulator training and academic courses. ¶5. (C) Singapore Embassy officials in Jakarta stress that military relations between the two countries generally have been good. In a move that may have spurred the negotiations in the first place, the SAF worked closely with the TNI in providing disaster relief after the 2004 tsunami. Singapore also provided maritime assistance after the disappearance of an Adam Air flight near Sulawesi in December 2006. ¶6. (C) At the same time, while the DCA again makes Indonesia one of Singapore's key defense partners, it is supplemented on both sides by a range of other defense arrangements. Singapore Embassy contacts point out that the SAF also trains with other forces in the region through bilateral arrangements and under the aegis of the Five-Power Defense Arrangements (FPDA),which includes Singapore, Malaysia, Australia, New Zealand and the United Kingdom. (Note: The SAF also does extensive training in the United States, Australia, France, Taiwan, Thailand and India.) According to Indonesian Defense Department contacts, Indonesia has separate bilateral agreements with the Philippines, Malaysia and India (recently concluded),while the Cooperation Framework Agreement signed in 2006 with Australia provides for a future DCA. Agreements with Vietnam, China and South Korea, they assert, are in process and Japan and Papua New Guinea have made soundings. EXTRADITION TREATY ¶7. (U) The ET with Singapore, if approved, would join similar agreements which Indonesia has with the Philippines, Malaysia, Thailand, Hong Kong, South Korea and Australia (Indonesia is in ET negotiations with China and Canada). Although an ET has been on the agenda for many years, the recently concluded negotiations reportedly began the day after the second Bali terrorist bombing in October 2005, and it was decided to proceed with the scheduled meeting, between President Yudhoyono and PM Lee, in order to demonstrate resolve. ¶8. (U) Adnan Topan Husodo of Indonesia Corruption Watch suggests the treaty contains three substantive provisions: -- a list of economic crimes agreed by both sides; -- a 15-year period of retroactivity, potentially enabling recovery of funds from the Suharto era; and -- agreement that fugitive assets should be returned to the JAKARTA 00001566 003 OF 004 original country. (Note: This is a key point, which is difficult to verify as the text of the treaty has not yet been made public.) ¶9. (U) From information released in the press thus far, it appears that economic crimes figures prominently in the list of specific offenses for which extradition is possible: murder, inflicting grievous hurt, kidnapping, bribery and other acts of corruption, forgery, stealing, embezzlement and money laundering, as well as hijacking of ships and aircraft and terrorism financing. The crimes must be punishable by imprisonment of at least 24 months. ¶10. (C) The 15-year retroactivity was one of Indonesia's main objectives, effectively opening the prospect of its application back to 1992. According to some observers, an estimated 15-20 corruption suspects are believed to have fled to Singapore, only a handful of whom have been sentenced by Indonesian courts. The treaty is also supposed to diminish Singapore's attractiveness for future fugitive capital flight. Indonesians believe Singapore had long resisted such a treaty out of concerns that it would significantly reduce the flow of such funds into the island state. At the same time, many current and former senior Indonesian civil servants travel frequently to Singapore and very likely have substantial assets there. The interests of this group lie in avoiding prosecution and many private observers in Indonesia blame the lengthy negotiations on ambivalence by both the Singapore and Indonesian bureaucracies. Reportedly one third of millionaires residing in Singapore, or 18,000 people, are Indonesians, with assets in Singapore estimated to total US$87 billion. FLAWED NEGOTIATIONS? ¶11. (U) The initial reaction from the Indonesian public has been negative. Before the ratification process has begun, the DPR members and press articles have criticized the Yudhoyono government for giving away too much in the package and have threatened to veto it. They assert that allowing Singapore to train on Indonesian territory, including the firing of weapons, violates Indonesian territorial sovereignty and is unconstitutional. Others have raised environmental concerns. Indonesian critics are similarly skeptical that Singapore will extradite fugitives or return fugitive Indonesian assets. Ignoring the government's insistence that the treaties must be treated as a package, legislators are calling for implementation of the ET first to see whether it yields tangible benefits, before allowing the DCA to go forward. ¶12. (C) The Indonesian government's strategy in selling the DCA to the Indonesian legislature (DPR) and public is to stress its continuity with previous cooperation and highlight its concrete benefits. In remarks to the press, TNI Commander (Panglima) Djoko Suyanto stressed that most of the substantive points of the treaty, including the provision for SAF training areas, were not new. In conversations with us, Susanto asserted that training areas, notably the one for land forces at Baturaja, would provide an economic stimulus to the region through infrastructure development and consumer spending by SAF personnel. ¶13. (C) Observers caution the ET could in fact have more symbolic than actual effect if Indonesia is unable to put together compelling cases or Singaporean courts determine the request is without merit. The ET conforms to the UN Convention Against Corruption (UNCAC),but Singapore has yet to ratify that convention. Indonesians see Singapore as sympathetic to ethnic Chinese Indonesians and welcome their capital, regardless of its color. Singapore Embassy officials in Jakarta, on the other hand, stress the treaty is no "magic wand." ¶14. (C) The Indonesian press also played up the sudden conclusion of the agreements as the result of Indonesian hardball tactics to force Singapore to the table by shutting off sand exports and highlighting new border issues involving Indonesian islands near Singapore. In fact, according to both Indonesian and Singapore Embassy officials in Jakarta, JAKARTA 00001566 004 OF 004 agreement was reached as the result of a marathon meeting of delegations on April 23 which resolved all outstanding issues. Singapore Embassy officials deny Singapore's hand was forced and point out negotiations often leave difficult issues to the end for precisely such a denoument. On the other hand, Indonesian officials, notably Defense Minister Sudarsono in discussions with the DPR, have as much as acknowledged that the implementation provisions are not absolutely final and could still be revised if necessary. Ironically, if the Indonesian DPR rejects the government's package as failing to preserve Indonesia's interests, any strong-arm tactics employed by Indonesia in the run-up to agreement will have backfired. HEFFERN