Tony Abbott and Indonesian president Susilo Bambang Yudhoyono say ties improving after spying row

Updated

Prime Minister Tony Abbott and Indonesia's president said they were confident ties were getting back on track, as they met for the first time since a spying row erupted last year.

Mr Abbott and Susilo Bambang Yudhoyono held talks, seen as crucial for the neighbours' strategically important relationship, on the island of Batam in Indonesia.

The meeting was aimed at repairing ties that sunk to their lowest point for years in November after reports that Australian spies tried to tap the phones of Mr Yudhoyono and his inner circle.

Jakarta called the actions "mind-boggling" and recalled its ambassador from Canberra, who only returned to Australia last month, while suspending cooperation in several areas.

This included cooperation over people smuggling - another sensitive topic with Jakarta unhappy over Australia's military-led operation to stem the flow of asylum seekers, who mostly make the journey from Indonesia.

The leaders met privately for about 45 minutes at a hotel in Batam, where Mr Abbott stopped off for several hours before heading on to France for the 70th anniversary of the D-Day landings.

Following the talks, Mr Abbott conceded there had been "a couple of issues" between Jakarta and Canberra.

But he went on: "I am confident that they are well on the way to resolution, satisfactory and successful resolution.

"The boats that were coming to Australia have almost entirely ceased to come, so I believe this is an issue which will not substantially further trouble us.

"The intelligence issue is one that I believe will be resolved by the process underway between the foreign minister of Indonesia - his excellency Marty Natalegawa - and Australia's Foreign Minister Julie Bishop.

"I believe that this can successfully be resolved to the mutual benefit of our countries.

"One of the great things about this relationship is that on those rare occasions when there are problems, we talk them through. We speak candidly to each other, and that's exactly what's happened between myself and the president today."

Mr Abbott also heaped praise on Mr Yudhoyono, calling him a "senior statesman" of South-East Asia and a "great president" and "good friend".

Mr Yudhoyono described the talks as "productive and constructive".

"We agreed to settle the problems which have disrupted bilateral relations and to find new opportunities to cooperate for the interests of both Australia and Indonesia," he said.

"We both discussed efforts to safeguard and to further enhance our cooperation and also our partnership, between our two nations, our two countries, so that we may come closer to a future that is much better based upon the principles of mutual benefit and mutual respect."

He said "one of the important points of our discussion" was about the reports of Australian spying, adding that measures had already been taken to ensure it did not happen again.

"The foreign ministers have continued to discuss the issue to propose a code of conduct in the near future so that the process of improving cooperation can be implemented well," he said.

Mr Yudhoyono called for the code of conduct to be agreed on in the "near future". Jakarta proposed the code following the spying row, and has handed it to Canberra.

The new doctrine would set out protocols for conducting security and intelligence operations jointly or even against each other.

However, there was no sign from the leaders yet that the code had finally been agreed on.

The meeting on Batam comes a day after Indonesia admitted that reporters had been allowed to listen in on a phone call between Mr Yudhoyono and Mr Abbott last month aimed at improving relations, in an apparent protocol breach.

Jakarta said it was a mistake while Mr Abbott brushed off the incident.

Mr Yudhoyono is unlikely to meet Mr Abbott again during his remaining time in office, with just four months left in his term. The Prime Minister is likely to meet another Indonesian president sometime after October.

Mr Abbott will now head to France, Canada and the United States, as part of a 10-day trip.

ABC/Wires

Topics: foreign-affairs, government-and-politics, federal-government, abbott-tony, indonesia, australia

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