Australia, Indonesia sign spy pact

Foreign Minister Julie Bishop and her Indonesian counterpart, Marty Natalegawa have signed the "joint understanding of a code of conduct" in Nusa Dua, Bali.

Foreign minister Julie Bishop with her Indonesian counterpart, Marty Natalegawa, signs a spying code of conduct witnessed by Indonesian President Susilo Bambang Yudhoyono in Nusa Dua, Bali on Thursday, Aug. 28, 2014. The Australian and Indonesian governments signed the joint code of conduct, after months of negotiations, which included a promise by Australia not to use its spy agencies to harm its neighbour. (AAP Image/Johannes Christo)

Foreign Minister Julie Bishop and her Indonesian counterpart, Marty Natalegawa, signed the "joint understanding of a code of conduct" in Nusa Dua at 1.20pm or 3.20pm AEST, on Thursday.

Indonesian President Susilo Bambang Yudhoyono witnessed the formal signing, which was greeted with applause.

The president demanded the code after learning last year of Australian efforts to spy on him in 2009.

Ahead of the signing, Dr Yudhoyono said he had a "wonderful" meeting with Prime Minister Tony Abbott in June.

With the code of conduct completed, he hoped for the close relationship with Australia to be restored.

"I wish you well with this work that you have completed, I'm hoping that co-operation can be revived again, military to military co-operation, bilateral co-operation and many others," he told the ministers.

"I am hoping, personally, that we could go back to our strong relations and effective co-operation."

More to come.