Two countries agree to set up ‘hotline’, but stop short of promising not to collect intelligence

Tony Abbott says Australia has made no commitment to stop spying on Indonesia as the two countries try to repair their relationship after the recent espionage allegations.

After meeting her counterpart, Dr Marty Natalegawa, in Jakarta Thursday, foreign minister Julie Bishop said Australia would "not undertake any act or use our assets and resources, including intelligence assets, in any way to harm Indonesia''.

But asked on Melbourne radio on Friday whether Australia had “agreed to stop collecting intelligence on Indonesia”, prime minister Tony Abbott said, “No, and they certainly haven’t agreed to stop collecting intelligence on Australia. But we are close friends. We are strategic partners. I certainly want Australia to be a trusted partner of Indonesia and I hope Indonesia can be a trusted partner of Australia.”

Abbott said he “hoped” the relationship was close to repaired and repeated that Australia and Indonesia had agreed to set up a “hotline” so that “when issues arise they can be dealt with quickly before they become a public drama”.

Bishop and Natalegawa agreed to work through the six-step plan proposed by Indonesian president Susilo Bambang Yudhoyono to restore full co-operation between the nations. Military, police and intelligence co-operation remain frozen until the process is complete.

"I do expect a continued co-operation from Indonesia in our anti-people-smuggling campaign because, let's face it, people smuggling is illegal in Australia, and the point I've been making as politely as I can to the Indonesians is that, as far as we are concerned, this is a sovereignty issue,'' said Abbott.

In November, documents leaked by NSA whistleblower Edward Snowden showed that Australian spying authorities had attempted to listen in to the private phone calls of the Indonesian president, Susilo Bambang Yudhoyono, and had targeted nine members of his inner circle, including his wife.

Bishop reiterated Canberra's regret, first expressed by the prime minister, Tony Abbott, over the repercussions of the phone-tapping scandal revealed by Guardian Australia and the ABC.

"We regret the hurt caused to President Yudhoyono and to the Indonesian people," Bishop said. "The Abbott government will not undertake any act or use our assets or resources, including intelligence assets, in any way to harm Indonesia."

Yudhoyono has temporarily suspended co-operation with Canberra in a number of key areas, including joint efforts to combat people smuggling of asylum seekers and all joint military exercises. The Indonesian ambassador to Australia has also been recalled. Yudhoyono wants his six-step plan to culminate in a binding "code of ethics" between Jakarta and Canberra.

Speaking after the press conference, Natalegawa said there was no "specific deadline or timeline" in place but "we have the six steps to be gone through, and we are now on step one".

He added: "There has been a change of behaviour now in the way [Bishop] stated deep regret over the events that led to our situation now. I think there's improvement or shift.

"I'm not saying whether I'm satisfied or not satisfied. I will report this [to the president]. It is a process to regain trust, to reclaim that level of comfort in co-operating with each other. This needs a process and it cannot be changed in an instant. Clearly, the meeting today is not harmful, the meeting is part of a contribution in relieving the relationship. But the roadmap remains a long way to go." Natalegawa said the Indonesian ambassador to Australia would only be returned once it served "our interests".

Bishop said she hoped any code of ethics forged between the two nations would "focus on the broad range of areas of co-operation, on the importance of this bilateral relationship, the significance of it to both countries and to [ensuring] that we can take this relationship to the next level of trust and mutual understanding."

Bishop is now in Beijing for bilateral talks.