Allegations that Australia’s intelligence agency has been engaging in economic espionage in Indonesia and offering to share that information with its American counterparts is “mind-boggling,” Indonesia’s Foreign Minister Marty Natalegawa told reporters in Jakarta.
By
Kate Lamb in Jakarta

17 Feb 2014 - 6:54 PM  UPDATED 17 Feb 2014 - 9:05 PM

Published in the New York Times over the weekend, documents leaked by whistleblower Edward Snowden reveal the Australian intelligence body spied on an American law firm representing Indonesia in a trade dispute with the United States in 2013.

The law firm was advising Indonesia in relation to trade disputes with the US over the export of shrimp and clove cigarettes. In the latter case the World Trade Organization ruled the United States had violated international trade laws.

New pressure on Australia-Indonesia ties

According to the classified document, Australian intelligence agents covertly monitored talks between Indonesian officials and the law firm, and offered to share the information obtained with America’s National Security Agency (NSA).

Foreign Minister Natalegawa admitted on Monday that he was perplexed by the claims, the latest in a string of damming revelations about the extent of Australia’s espionage activities in the region.

“I find that a bit mind-boggling and a bit difficult how I can connect or reconcile discussion about shrimps and how it impacts on Australia’s security,” Natalegawa told reporters at a joint press conference with US Secretary of State John Kerry, who is on a two-day visit to Jakarta.

The Australian agency the Defense Signals Directorate, now the Australian Signals Directorate, reportedly told NSA officials in Canberra that it was continually monitoring the talks and could provide “highly useful intelligence for interested US customers.”

Australia and the NSA reportedly run a sizeable intelligence facility in Alice Springs, and Australia is also part of the “five eyes” group, an intelligence sharing alliance between the US, Australia, Canada, the United Kingdom and New Zealand.

US 'committed' to reform of intelligence operations

When questioned about the report in Jakarta on Monday, Kerry reiterated the Obama administration’s commitment to reform US intelligence operations.

“We take this issue very seriously, which is why President Obama laid down a series of concrete and substantial reforms,” said Kerry.

President Obama vowed this January that America will no longer spy on the leaders of its allies and close friends after publically expressing concern about surveillance posing a significant risk to civil liberties and privacy rights.

Abbott refuses to be drawn on the claims

But Australia’s Prime Minister Tony Abbott has refused to comment on the claims, stressing that Australia does not “collect intelligence for commercial purposes.”

“We use it for the benefit of our friends. We use it to uphold our values,” said Abbott of Australia’s intelligence gathering activities. “We use it to protect our citizens and the citizens of other countries, and we certainly don’t use it for commercial purposes.”

Despite Abbott’s protestations, the latest revelations are likely to put pressure on bilateral relations between Australia and Indonesia, which have been strained since late last year.

Bilateral ties 'unlikely to improve over next six months'

Indonesian President Susilo Bambang Yudhoyono suspended military and intelligence cooperation with Canberra last November after it was revealed that Australia’s spy agency wire-tapped his phone, and the phones of numerous others within his inner circle.

Jakarta has been angered further by the territorial incursions that have occurred as a result of Australia’s boat turn-back policy, which is part of the Abbott government’s effort to deal with the politically charged issue of asylum seeker arrivals.

President Yudhoyono also recalled the ambassador to Australia and stipulated that a code of conduct must be drawn up before relations could be fully restored.

In a story quoting a leaked document from the Indonesian government that was published by Reuters on Monday, bilateral relations are unlikely to improve in the next six months.

The report details a meeting between representatives from Indonesia’s Coordinating Ministry for Political, Legal and Security Affairs; the Foreign Ministry, military, police and several other agencies.

That report refers to intergovernmental discussions that occurred before the latest claims of economic espionage emerged.

At Monday’s press conference Natalegawa said the two countries should be "looking out for each other, not turning against one another".
 
"We should be listening to one another, not listening in," he said.