Australia and Indonesia share many interests, including upholding international law and norms, particularly on questions of sovereignty. With China’s ongoing assertions in Indonesian waters, new diplomatic space has opened to consider boosting ties to encompass a Special Strategic Partnership. 

Today, Australia’s most powerful and important neighbour is Indonesia. Southeast Asia’s largest country is on the cusp of becoming a political and economic powerhouse, and successfully hosted last year’s G20 summit in Bali. Indonesia is also a country of imperative geostrategic importance for a secure and resilient Australia. In 1994, then-Australian Prime Minister Paul Keating famously remarked that “Australian territory can in effect be directly threatened with military force only from or through Indonesia and Papua New Guinea.”

Fast forward 29 years, Australia is trying to navigate an increasingly multipolar order in the Indo-Pacific with the rapid rise of regional giants like China, India, and Indonesia. This is a far cry from the stable US-led regional and post-war order Canberra has been accustomed to. Even though the US remains Australia’s most important and reliable security ally, the rapidly changing geopolitical environment in the region gives Canberra further impetus to broaden and deepen its strategic engagement with its neighbours. At the same time, both Indonesia and Australia are deeply concerned by the growing power of China and the increasingly volatile geostrategic environment in Southeast Asia. Both of the neighbours have a shared commitment and interest in a rules-based maritime order in the South China Sea (SCS).

In the face of China’s increasingly aggressive behaviour in Indonesia’s resource-rich North Natuna Sea Exclusive Economic Zone (EEZ) in recent years, Jakarta has deepened its defence ties with the US and its regional partners. Despite Indonesia’s traditional non-alignment, in August Indonesia and the US published a joint press release denouncing China’s unlawful nine-dash line claims in the SCS. In 2016, the Permanent Court of Arbitration (PCA) made a ruling that deemed Beijing’s nine-dash claims in the SCS as having no legal basis under the United Nations Convention on the Law of the Sea (UNCLOS). Thus, the two neighbours’ shared interest in a rules-based maritime order in the Indo-Pacific could be the catalyst for a new strategic partnership agreement between Indonesia and Australia.

Indonesia’s security dilemma in the North Natuna Sea

Indonesia is increasingly alarmed by China’s growing assertiveness in the North Natuna Sea. China claims that Indonesia’s North Natuna Sea EEZ slightly overlaps its widely disputed nine-dash line. The Indonesian navy has subsequently struggled to curb a growing number of Chinese incursions into its waters. These incursions gained international attention in 2021 when a major standoff between the Indonesian and Chinese navies occurred near Jakarta’s gas field in the EEZ. The standoff was exacerbated by China’s unprecedented demand for Indonesia to stop drilling for oil and gas in the region. Earlier this year, an Indonesian warship was dispatched to the North Natuna Sea to monitor China’s Haijing 3901 coastguard ship (the world’s largest coastguard vessel) which was active in the maritime space.

In response, Indonesia has continued to militarise the Natuna archipelago. Nonetheless, at present, Indonesia remains ill-equipped to defend the EEZ. Last year, the then-Commander of the TNI, General Andika Perkasa, made the admission that Indonesia’s ability to patrol its Natuna EEZ can last only days. Perkasa also called on Indonesia to deepen its ties with Quad countries, including Australia, to deter Chinese incursions. As part of Indonesia’s 25-year defence modernisation plan, Washington has helped Jakarta to improve its ageing regional air and naval capabilities. In August, Indonesia and the US signed a MoU for the supply of 24 cutting-edge 15EX fighter jets to Indonesia. The US hopes that its arms sales have a positive impact on Indonesia’s efforts to restrict and deter an increasing number of Chinese fishing and naval vessels from entering its EEZ. Australian Defence Force (ADF) personnel are currently taking part in the largest-ever annual US-Indonesia – Super Garuda Shield military exercises in Indonesia. China has subsequently criticised the drills by accusing “Washington of building an Indo-Pacific alliance similar to NATO to limit China’s growing geostrategic influence in the region.”

The complicated Australia-Indonesia strategic relationship

Australia and Indonesia have had a rocky relationship over the past six decades. In the 1960s, the two countries fought on opposing sides during the Indonesia-Malaysia Confrontation in Borneo. In the war, Australian Special Forces carried out secret ambush operations into Indonesian positions in Borneo. However, the bilateral relationship was able to recover from this setback and reached its zenith in 1995 when the two neighbours signed a landmark security deal. The agreement was Indonesia’s first bilateral security agreement with any country. Ironically before the agreement was signed, Keating convinced then-Indonesian president Suharto that it was the right time for the two neighbours to enter into a security deal because of the growing power of an unpredictable China. Suharto was also wary of China’s potential territorial ambition in the region. However, the agreement was torn up by Indonesia in 1999 after the Australian-led multinational intervention in East Timor.

Nonetheless, the two countries signed a new Security pact in 2006, known as the Lombok Treaty. In 2018, Jakarta and Canberra elevated their strategic ties to a comprehensive strategic partnership, though, in 2021, Indonesia responded angrily to the announcement of the AUKUS security pact deal. However, the Albanese Government has restored mutual trust in its bilateral relationship with Indonesia, and the two neighbours have recently promised to elevate their existing defence cooperation.

A new special strategic partner

With relations soaring, the time is right for Australia to elevate its bilateral ties with Indonesia to a special strategic partnership. At present, Japan remains Canberra’s only special strategic partner in Asia outside of the United States. The new agreement should include unwavering support for freedom of navigation and unhindered trade in the Indo-Pacific, and reinforce the need for peaceful resolution of maritime regional disputes in accordance with UNCLOS. It should also emphasise ASEAN’s centrality and the importance of an ASEAN-led institutional architecture for regional peace and prosperity in the Indo-Pacific.

The deal should ensure Australian and Indonesian militaries both have reciprocal access to their respective military training areas. This will subsequently increase shared military training and military operations. The training might be particularly beneficial for Indonesian defence personnel stationed in and around the Natuna islands. The new deal could expand and embed existing military education and foreign academy exchange programs between both defence forces. Overall, the new changes will strengthen the capacity building, combat readiness, and military postures of both countries. It will also greatly boost cultural exchange, which in turn might deepen the relationship between the two defence forces.

Finally, the agreement might address the issue of illegal Indonesian fishing vessels sailing and fishing in Australian waters. For decades, Australia has been burning Indonesian fishing vessels found inside its EEZ. In 2021, the Indonesian Government suspended joint maritime patrols with the Australian Border Force and demanded an explanation for the impounding of three Indonesian boats fishing illegally in Australian waters. In the new deal, an Australia-Indonesia hotline could be established to prevent illegal vessels from sailing into both Australian and Indonesian waters from either country’s territory. Ultimately, the new Australia-Indonesia special strategic partnership will bring the two neighbours closer together. This is vitally important for both nations as Southeast Asia becomes increasingly militarised and unstable.

Ridvan Kilic is a Master of International Relations student at La Trobe University. His research interests include the Australia-Indonesia bilateral relationship, Indonesian foreign, defence, and trade policy, and domestic affairs, ASEAN, the Quad, and the Indonesian diaspora community. Ridvan’s primary focus is Indonesia, Australia, ASEAN regionalism, and the Indo-Pacific.

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