Indonesia, Australia sign new security agreement to mend ties hurt by spying allegations

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Indonesia's President Susilo Bambang Yudhoyono, right, greets Australia's Foreign Minister Julie Bishop during a meeting in Bali, Indonesia, Thursday, Aug. 28, 2014. Australia and Indonesia have reached a new agreement on how they'll use their intelligence operations in the future, even settling their disagreement on its name. The agreement their foreign ministers are scheduled to sign Thursday on the Indonesian resort island of Bali is designed to mend a rift sparked last November by accusations that Australians tapped the cellphones of the Indonesian president, his wife and eight ministers and officials in 2009. (AP Photo/Firdia Lisnawati)


Indonesia's Foreign Minister Marty Natalegawa, left, shakes hands with his Australia counterpart Julie Bishop during their bilateral meeting in Bali, Indonesia, Thursday, Aug. 28, 2014. Australia and Indonesia have reached a new agreement on how they'll use their intelligence operations in the future, even settling their disagreement on its name. The agreement their foreign ministers are scheduled to sign Thursday on the Indonesian resort island of Bali is designed to mend a rift sparked last November by accusations that Australians tapped the cellphones of the Indonesian president, his wife and eight ministers and officials in 2009.(AP Photo/Firdia Lisnawati)


BALI, Indonesia — Often-testy neighbors Indonesia and Australia signed a new security agreement on Thursday to mend a relationship badly damaged by allegations last year that Australia was listening to the telephone conversations of President Susilo Bambang Yudhoyono and his wife.

"With the signing of the code of conduct, we are back to where we have been in terms of Indonesia and Australia relations," Indonesian Foreign Minister Marty Natalegawa said after the signing on the island of Bali. He said the deal would lead to enhanced intelligence operations and the restoration of full military cooperation between the countries.

The disagreement, which at its height saw Indonesia pull its ambassador from Canberra, hurt cooperation between the countries on the movement of asylum seekers through Indonesia to Australia and efforts to tackle Islamist militancy, a concern that has grown sharper in recent months amid the passage of Australian and Indonesian jihadists to Iraq and Syria.

Yudhoyono, whose second five-year term ends Oct. 20, downgraded relations with Australia last year over the reported phone-tapping of him, his wife and eight Indonesian ministers and officials in 2009. The allegations were based on disclosures by National Security Agency leaker Edward Snowden.

Australia has never confirmed or denied the allegations, and has offered no public assurances that it won't tap phones in the future.

Analysts at the time said the spat was driven by domestic political considerations in Indonesia, where nationalist, anti-Australian rhetoric is easily whipped up. It coincided with the arrival in office of Prime Minister Tony Abbot in Australia.

Yudhoyono apparently did not want to leave office with ties with the country's most important neighbor damaged.

Australian Foreign Minister Julie Bishop said the agreement will reinforce respect for each other's sovereignty and territorial integrity, and provide a basis for enhanced intelligence cooperation.

"And we both believe that a strong intelligence partnership is vital for both countries and the most effective way to defeat those who would do harm to the people of Australia and the people of Indonesia," she said.

Indonesian Ambassador Nadjib Riphat Kesoema returned to Canberra in May as ties gradually improved.

The breakdown in relations was the most serious since 1999, when Australia led a U.N. military force into the former Indonesian province of East Timor following a bloody independence ballot.

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