•  As army leaves, power shifts in Dili
•  East Timor refugees terrorized in camps
•  Australia casts an eye on Timor's oil
•  Mass murder becomes a political weapon
•  UN troops clamp down on militia
•  Asian, Western nations disagree on inquiry
•  'Dead' Gusmao Snr looking well
•  Map shows forced exodus of Timorese
•  Well hides secrets of torture chamber
•  Murdered journalist exposed scandal
•  Bodies dumped from passenger liner
•  Habibie lifts martial law, handover soon
•  Many police desert to independence side
•  Activist says Wiranto behind killings
•  Falantil leaders disappear in West Timor
•  Militia leader picked to head secret group
•  Military will fight, warn guerrillas
•  Bullies melt away after soldiers hit streets

•  Group pushes to speed up election

•  Police shoot man in Irian Jaya unrest

•  Military leaders to escape punishment
•  60,000 troops to secure MPR session
•  Australia the bogeyman
•  Indonesia ends controversial law
•  West Timor capital ready to explode
•  Anger grows over Timor 'humiliation'
•  Blair government under fire for plane sales
•  'Too early' to plan trials for atrocities

•  Army pullout shows Indonesia fault lines

•  Economic recovery hangs in balance
•  Bank scandal audit backfires on Indonesia
•  Flap threatens bilateral investment

Riots end, forces wary of more unrest

Jakarta -- The streets of Indonesia's capital were quiet on Saturday after days of bloody anti-military riots in which at least six people were reported to have been killed, but security forces were wary of more unrest.

Two people died late on Friday night just as the riots were petering out, after the government bowed to the protesters and announced it had suspended a new security law that had sparked the trouble, local newspapers said.

The latest deaths would bring to at least six the number of people killed in the riots, which erupted on Thursday. One of the dead was a policeman, run down by a car, apparently on purpose. At least 100 people were injured in the violence.

Thousands of students took to the streets when the outgoing parliament passed a new security law that the students said would give the military even more power to crush dissent.

The parliament, dominated by the ruling Golkar party, is accused by the law's opponents of bending to the military's will. They say the generals want to bolster their powers.

The government, in a rare capitulation, on Friday said it would suspend implementation of the law after it became clear that local residents had joined the students in their protests.

Riot police on Saturday patrolled central Jakarta where the streets were littered with the debris of tear gas canisters, plastic bullets, petrol bombs, burnt-out cars and rocks.

The two days of rioting were the worst since last November when more than a dozen students were killed when security forces broke up mass anti-government protests near parliament house.

With dozens of casualties on both sides, and several fatalities, tensions remained high, and security forces remained in position in key locations around the city. Three protesters had been shot dead, apparently by live sniper fire, by the time the government backed down. Later, two others were killed, the Kompas daily reported on Saturday.

The newspaper quoted witnesses as saying a convoy of 10 troop carriers, escorted by motorcycles, had suddenly approached the gate of a hospital late on Friday night, and fired shots randomly, killing the two and wounding dozens.

One of the dead included a University of Indonesia student, the newspaper said. The other had not been identified, it added.

A crowd of students and residents were sitting at the time outside the hospital, where many injured were being treated. The hospital is near Atma Jaya University, the epicentre of the riots in Jakarta's central business district.

The Jakarta Post said in an editorial on Saturday that President B.J. Habibie should leave the fate of the new security law to the new president, to be elected by the top legislative body, the People's Consultative Assembly, in November.

"Now is the time for the president to show his wisdom and save his people, and himself," the newspaper said.

10,000 join bloody protests at parliament

Sydney Morning Herald - September 24, 1999

Craig Skehan and Ningrum Widyastuty, Jakarta -- Police used tear gas and beat protesters in the streets of Jakarta as pro- democracy groups claimed the way had been cleared for Indonesia to be ruled by a military junta in the wake of Parliament's passage of new security laws yesterday.

Masked youths hurled rocks at police, and security forces responded with volleys of tear-gas canisters. Youths armed with wooden clubs and iron bars roamed the streets.

A crowd of up to 10,000 gathered outside the national Parliament and police fired rubber bullets as students set up barricades and lit fires. Several cars caught in massive traffic jams were were set alight by rampaging protesters.

One bloodied student was seen being bashed by three helmeted officers armed with clubs as he lay face down on a road, apparently unconscious.

Demonstrators called on Parliament to refuse to accept the security bill, but it was passed with a substantial majority.

The non-government Centre for Reform Action said in a statement Indonesia was in danger of falling under military rule through sweeping powers available under a state of emergency. "This act is obviously only to fulfil military aspirations -- not the hopes of the people for reform," said a group spokesman. While the situation in strife-torn East Timor is dominating international coverage of Indonesia, domestically the introduction of the tough security laws and the Bank Bali financial scandal loom larger.

Protests against the security laws have been far larger than those against the foreign intervention in East Timor.

President B.J. Habibie is facing growing opposition amid claims his Government is involved in efforts to protect senior politicians and officials in the alleged diversion of $US70 million for vote-buying.

It has been alleged senior advisers to Dr Habibie and officials of the ruling Golkar Party siphoned the funds from Bank Bali so parliamentarians could be bought in November parliamentary elections for the presidency.

Those whose names were dropped from the report of a parliamentary committee inquiry into the scandal include a senior adviser to Dr Habibie, Mr Ahmad Baramuli. This followed a directive to auditors PricewaterhouseCoopers to release only an edited summary, omitting key names.

The auditor's investigation was sought by the International Monetary Fund, which has suspended disbursements under a $US43 billion rescue package for Indonesia because of the Bank Bali scandal.

Meanwhile, attempts to halt a further deterioration in Australia's relations with Indonesia were set back yesterday by reports that the Prime Minister, Mr Howard, had sought to make Australia the regional security "deputy" to the United States.

The Indonesian media seized on a magazine interview with Mr Howard amid claims by local politicians and commentators that Australia has been arrogant over its leadership of the multi- national force in East Timor.

Australia's Ambassador to Jakarta, Mr John McCarthy, faced a barrage of questions from Indonesian journalists after delivering a luncheon address in which he stressed Australia wanted to be a friendly and co-operative neighbour to Indonesia.

Thousands of students rampage

Vaudine England, Jakarta -- At least three people were killed and more than 50 others injured in another bloody clash between security forces and at least 10,000 Indonesian demonstrators yesterday protesting against a new law giving the armed forces sweeping emergency powers.

Riot police and soldiers continued to fire shots and tear-gas canisters last night in a bid to stop demonstrations which degenerated into violence hours after the country's lawmakers enacted the controversial security bill.

At least three people were killed and their bodies were brought to the Mintohardjo Navy hospital, while dozens of injured demonstrators were treated at various hospitals in the capital city, hospital officials said.

A total of 53 people were injured, the SCTV network reported. At least four were rushed to hospital with bullet wounds, while other bloodstained protesters were taken to a makeshift clinic at nearby Atma Jaya University.

Thousands of university students rampaged in more than half a dozen Indonesian cities in the biggest anti-government protest since President Bacharuddin Habibie rose to power in May last year after his predecessor, authoritarian former president Suharto, was forced to step down.

Witnesses said as many as 50 people, nearly all of them protesters, were injured in the clashes when police fired tear- gas and plastic bullets at the crowds. The students fought back with rocks and Molotov cocktails.

Police fired rubber bullets and beat students with clubs in two Jakarta protests, injuring dozens of demonstrators.

About 6,000 students and their supporters, many carrying sticks, clashed with police outside Parliament, starting early in the afternoon and going into the evening.

National lawmakers had passed the military security bill just hours earlier, triggering fresh violence. The law gives authority to the President to declare a state of emergency in a province, if this is requested by the provincial legislature and governor.

Its opponents argue the law gives the military and the Government even more power to crush dissent just as the country is shifting towards an era of democracy after decades of autocratic rule.

The students were prepared for a fight. They carried bamboo sticks, metal bars and rocks as blue-jacketed marshals directed formations of young men into face-to-face confrontations with the police.

On a signal from numerous intelligence officers on the outskirts, riot police moved into position and began firing gas and pepper foam. Behind them, water-cannon trucks arrived, edging forward against a stubborn mass of students.

Members of the public, gathering outside homes and offices, openly jeered the riot police. The protesters responded with jeers and fighting songs.

A police car drew up behind one row of troops and unloaded 12 wooden cases of fresh ammunition as night fell. Most of the live shooting appeared to be in the air, with many people affected by the tear-gas.
 

East Timor

As army leaves, power shifts in Dili

Doug Struck, Dili -- As a large contingent of Indonesian troops marched to the port to withdraw from East Timor today, the international peacekeeping force here tightened its control of this capital city.

Helicopters swooped low and soldiers of the Australian-led force went door to door, routing out pro-Indonesian militias. The peacekeepers' show of force emboldened East Timorese residents, as youths reclaimed the streets shouting "Viva independence!"

Waving flags and holding long-banned photos of independence leaders, the youths reveled in the moment that had been denied by the rampage of violence that erupted after the East Timorese voted overwhelmingly to secede from Indonesia last month.

At a news conference, Indonesia's local military commander promised to give full control of East Timor next week to Maj. Gen. Peter Cosgrove, the Australian commander of the international force that landed here Monday.

But the roar of one Blackhawk helicopter after another skimming low over the rooftops nearly drowned out Gen. Kiki Syahnakri's words and was evidence that control of the city was being taken rather than given.

On the streets below the Indonesian army barracks where Syahnakri spoke, 1,000 Australian-led troops moved through the city center. In full combat gear, they stormed the buildings that remain standing and seized suspected militiamen at gunpoint.

The helicopters hovered with their side doors open and machine guns manned, and armored personnel carriers rumbled into intersections. By day's end, the multinational force had moved out from the few areas it has controlled here in the capital since Monday and secured a major part of the city that had remained lawless after nightfall.

"Our purpose was to start to indicate to the [refugees] in the hills that the environment is safe to return to Dili," said Australian Lt. Col. Nick Welch, the commander of the operation. "Our message to the militia is, 'You think you control the area, but in reality, it is in our control.' "

In fact, the impressive show of force was partly for intimidation purposes. The only parts of East Timor where the multinational force has taken control are Dili and a beachhead 70 miles to the east in Baukau. Large portions of the countryside remain vulnerable to violence by the retreating militias and humiliated Indonesian troops.

Tens of thousands of refugees remain in hiding in the hills, unsure it is safe to come out. But today's events had the appearance of historic symbolism.

Syahnakri said about 4,500 Indonesian troops -- from a high of 21,000 -- will remain in East Timor, and that number will be reduced "gradually" before the Indonesian parliament votes on ratification of the referendum results in November. But Cosgrove pointedly said he expects them to have little visibility and no role beyond guarding their own barracks and headquarters.

Today's news conference almost seemed designed to add to the military embarrassment. Cosgrove sat stone-faced as Syahnakri tried to field questions from Western reporters, even as the multinational military operation proceeded around the building.

Syahnakri acknowledged that despite the declaration of martial law after the vote in East Timor, the violence had continued and "I recognize that I cannot fully control all the situation."

Under questioning, he also admitted that the apparent involvement of Indonesian soldiers in an attack on two journalists this week "was really embarrassing to us." The journalists were uninjured, although their driver was blinded in one eye with a rifle butt and an interpreter is missing. In a separate incident Tuesday, a Dutch journalist was killed, and militia snipers are suspected in the slaying.

Many militiamen are reported to be heading toward western Timor, where some observers fear they will establish a guerrilla base to continue opposition to an independent East Timor.

The multinational force has not rushed to the border, although Col. Mark Kelly, the force's chief of staff, insisted that destination is "part of our ongoing plan."

At 5pm, the departing Indonesian troops marched in a smart column to the port, and boarded a brightly lighted liner. Australian troops quickly seized the post they had vacated and found pro- militia graffiti and evidence of looting -- one cabinet had a large blue-and-white UNICEF emblem on it.

Moments after the soldiers departed, a squadron of buzzing motorcycles and bicycles burst onto the street, their riders carrying independence banners and shouting slogans of liberation. A truck teetering with other youths followed, a joyous send-off to the Indonesians.

"This is our day! Today is the day for our independence!" shouted one young man over the tumult. The jubilation even brought smiles to the usually stolid Australian soldiers posted nearby.

"We're away from our families to help their families, but we're glad to do this when you see how happy these people are," said one soldier. "This is the first time in a long time they have been able to go up and down these streets and celebrate like that. I just hope it lasts."

East Timor refugees terrorized in camps

Keith B. Richburg, Kupang -- They fled here in abject retreat, packed onto trucks scrawled with the names of their militia gangs and bringing with them their assault rifles, machetes and dreams of revenge.

But as East Timor's militias have settled here, across the border in western Timor -- now riding around the streets of Kupang in open-backed trucks and wearing their characteristic black T- shirts -- they have brought their reign of terror and intimidation, this time against tens of thousands of displaced East Timorese living in sprawling refugee camps as virtual hostages, according to relief workers, human rights monitors and others.

There are now more than 200,000 East Timorese scattered throughout as many as three dozen camps -- some of them in churches, government buildings and a stadium and some along the road with people living in tents and under tarps. Relief agencies say many, if not most, of those camps are controlled by the pro-Indonesian militias, who deny access to most Westerners. There have been repeated reports of militia members entering camps at night and taking away suspected supporters of independence for East Timor. Young men are also being forced to join the militias.

This is thought to be a regrouping, a swelling of the ranks, for a possible incursion into East Timor, where an Australian-led multinational peacekeeping force is gradually wresting control of the capital, Dili, from the armed gangs and departing Indonesian soldiers.

"Right now our job is to protect the refugees, but, like it or not, there will be war," said a 26-year-old militia member named Binto, who spoke at a camp located at a provincial sports stadium here. "We will return to East Timor, but we have to fight for it."

And relief agencies say they are alarmed that the Indonesian government has announced plans to begin relocating the refugees farther away from East Timor -- part of what aid groups here fear could be a forced removal of people as a prelude to the eventual partitioning of East Timor.

"They've got between 150,000 and 200,000 people hostage here," a foreign relief worker said. "They're not refugees; they're hostages."

"What's happening here is horrible," he said, speaking on condition of anonymity. "They're burning houses on this side of the border. We hear reports of pregnant women being killed and their bellies split open. Boats leave with 'X' number of people and arrive with less." He added: "The militia and military -- you can't make a difference anymore -- are in control of this city. And the government can't do anything."

Khin Sandi Lwin, senior program coordinator for the UN Children's Fund (UNICEF) in Jakarta, just returned from a trip to the refugee camps at Atambua, near the border between East Timor and western Timor, and she said she saw militia members brandishing their automatic weapons inside the camps she visited. "This is a very strong militia-controlled area," she said. She was able to go into the camps only because she is Burmese; Westerners, and particularly "white faces," are generally not allowed.

She estimated that 127,000 refugees are living in the district around Atambua. Asked how many are there voluntarily, and how many are being held against their will, she said, "With the militia all around, we wouldn't want to ask them."

The New York-based Human Rights Watch also said in a statement: "Militias in West Timor are terrorizing the East Timorese, infiltrating the camps, and systematically attempting to identify and retaliate against independence supporters. They have also assaulted, 'disappeared,' and killed those attempting to aid and shelter refugees."

On August 30, nearly four-fifths of East Timorese defied militia intimidation and voted overwhelmingly to separate from Indonesia and become an independent state in a UN-backed referendum. But the anti-independence militias retaliated with a vengeance, engaging in murder and destruction that provoked intense international pressure on Indonesia to accept foreign peacekeepers in East Timor.

As they embarked on their rampage, the militias were seen herding thousands of East Timorese toward the border. Relief workers said they fear that many -- particularly young men, anyone associated with the United Nations or working for foreigners, or anyone suspected of being an independence supporter -- may have been executed along the way.

The International Committee of the Red Cross, for example, had about 70 East Timorese staff members in Dili. When militiamen raided the Red Cross compound, the expatriate staffers were loaded onto a truck and eventually taken to the airport to leave. About 2,000 refugees, and some staff members at the compound, were last seen being marched along the beach. Today, Red Cross officials said only 11 of their local staff members have arrived in western Timor; the others are missing.

Not all of the refugees here are considered "hostages." Some are the relocated families of military personnel, others the families of the militias. They are kept in military camps, like the Noelbaki camp about nine miles from here, where most of the men wear military uniforms.

The militia campaign of terror has extended beyond western Timor, and is said to reach as far away as Bali, and even Jakarta, where suspected independence supporters have received death threats and are being hunted down. Some East Timorese university students, and Red Cross staff members, have been moved several times because of death threats, with some being relocated to Darwin, in northern Australia.

"There's militia in Jakarta, there's militia in Surabaya," said an aid worker here. "They know who they're looking for. They have names." "The carefully-planned campaign of violence and terror carried out by the Indonesian security forces and their militia surrogates in East Timor and in west Timor over the past several weeks has spread throughout Indonesia," said the Atlanta-based Carter Center, which sent monitors to observe the East Timor referendum and still has observers scattered around the archipelago.

"Armed militias [continue] to harass and terrorize refugees from East Timor who have taken refuge in Bali and several cities on the island of Java, including the Indonesian capital of Jakarta," the center said in a report.

No one seems certain of the motive for holding tens of thousands of people hostage. But some relief groups and human rights officials have suggested the militias may have been trying to empty East Timor of its pro-independence population as a prelude to demanding that the western half of the territory be allowed to remain a part of Indonesia. The western half, with its coffee plantations, is the most economically viable part of otherwise poor East Timor, and many prominent Indonesians are said to have business links there.

An aerial survey of the western side of East Timor done Thursday by the United Nations found "very few people living there," according to David Wimhurst, a UN spokesman in Darwin.

The government has announced plans to relocate as many as 100,000 East Timor refugees away from the border areas and into semi-permanent settlements elsewhere in East Timor, as well as on neighboring islands.

[Special correspondent Atika Shubert in Kupang contributed to this report.]

UN tightens grip on devastated Timor

Philippe Naughton, Dili -- UN forces tightened their grip on Dili on Saturday and began venturing into East Timor's interior to secure routes for desperately needed aid.

The ravaged capital was calmer, with people walking freely in the streets. Indonesian troops were steadily withdrawing and more refugees were returning to Dili from the hills where they fled to escape a murderous rampage by military-backed pro-Jakarta militias after East Timor's August 30 vote for independence.

UN armoured personnel carriers stalked the capital and Blackhawk helicopters swept overhead, looking to flush out bands of militiamen sworn to subvert East Timor's independence.

"There is a clear sense of improving security in the area and as we continue in our expansion operations we then look forward to extending that sense of security throughout the area," said Colonel Mark Kelly, chief of staff of the UN force.

But the humanitarian situation was desperate and aid agencies said it was imperative to begin food deliveries to the interior, where hundreds of thousands of Timorese are sheltering.

A helicopter reconnaissance mission by the UN Mission in East Timor (UNAMET) found widespread devastation.

"When we flew over the eastern part of the territory and saw the extent of the damage from the air, it was very clear there were very few people left in the towns," said David Wimhurst, spokesman for UNAMET, which organised the referendum in which East Timor voted overwhelmingly to break from Indonesia.

Wimhurst said 75 percent of buildings in the towns of Dilor and Los Palos were destroyed. Louro was "almost totally destroyed" and Manatuto was also devastated.

The United Nations was due on Saturday to launch its first humanitarian assessment mission to the eastern town of Baucau, passing through Manatuto.

The mission aimed to find warehouses in Baucau and organise regular flights of aid. The UN convoy was escorted by armoured personnel carriers and Australian Blackhawk helicopters.

More Indonesian troops leave

All but a few thousand Indonesian soldiers have quit East Timor, handing control of the explosive security situation in the territory to the multinational UN force. Those who remain have a reputation as among the more professional and relatively neutral of the Indonesian forces.

On Friday, Indonesia withdrew four battalions, or almost 3,000 troops, from East Timor -- a big step out of the former Portuguese colony it invaded almost 24 years ago. An Indonesian presence of 4,500 troops will remain for up to a month, Indonesia's local military commander has said.

Indonesian soldiers, their pride wounded at having to surrender East Timor to foreign forces, torched their own barracks and other buildings as they left Dili on Friday.

Kelly said troops from several more nations were arriving in Dili to augment the UN force. He said some Filipino troops arrived on Friday and were preparing to deploy.

French doctors and troops were due to arrive on Saturday, along with a New Zealand helicopter squadron, and the Canadian and Thai contingents were expected to arrive soon.

Kelly brushed off suggestions of a rift in the UN force -- Thailand, which holds the deputy command, is reported to be uneasy about aggressive behaviour of Australian troops and hopes to employ a more "softly softly" approach. "There are no differences," Kelly said.

Concerns about refugees

Despite improvements in East Timor, the United Nations said it was concerned about the fate of refugees in West Timor and elsewhere in the Indonesian archipelago, amid widespread reports of intimidation and forced deportation.

"It's imperative that the United Nations and other agencies have full access to this region to organise the return to East Timor of the people," UNAMET's Wimhurst said. East Timor's population of about 800,000 people was scattered by the bloodshed, many into the hills behind Dili or into the neighbouring province of West Timor.

There are an estimated 400,000 to 500,000 displaced people in East Timor and over 150,000 refugees in West Timor.

"The UNHCR (UN refugee agency) has had discussions in Jakarta with the authorities there and they have agreed to allow international humanitarian agencies into West Timor," Wimhurst said. But aid agencies have faced threats and attacks in West Timor, often by members of the militias.

Australia casts an eye on Timor's oil

Kalinga Seneviratne -- Australia has taken the high moral ground in organising the rescue of the East Timorese people, perhaps 25 years too late.

While the Western media, and some of the Asian media as well, have hailed Australia's leadership role in organising the peacekeeping force for East Timor in such a short time, they have conveniently ignored some pertinent questions.

Why has Australia moved in such haste to organise an "invading" (in Indonesian eyes) force into East Timor at this stage, when for the last quarter of a century it has been the strongest supporter of the Suharto regime's annexation of the former Portuguese colony?

In answer to this question, it will be interesting to note that the untapped deep sea-bed oil wealth on the Timor Gap, which will come under the territorial integrity of an independent East Timor, would have played a big role in Canberra's decision to mount a rescue act.

On December 11, 1989, on board a Royal Australian Air Force VIP 707 plane flying over the Timor Sea at an altitude of 10,000 metres, the Timor Gap Treaty (TGT) was signed by the foreign ministers of Australia and Indonesia. Under the treaty, the two countries are to jointly explore for oil and mineral resources in the Timor Gap sea-bed and share any revenue from it equally.

When Portugal, as the UN-recognised colonial administrator of East Timor, challenged it in the World Court (ICJ) in the Hague, Australia defended the action. Portugal argued that the TGT was illegal because the UN has never recognised Indonesia's annexation of East Timor.

In June 1995, the ICJ ruled that it could not make a decision on the legality of Indonesia's annexation of East Timor, because Indonesia does not recognise the authority of the ICJ.

Following the ICJ verdict, Australia claimed victory over Portugal and then Foreign Minister Gareth Evans stated publicly that Australia will have access to Timor Sea oil, without bother from Portugal.

As recently as April this year, Mr Evans, in a submission to a Senate Foreign Affairs committee inquiry into East Timor, argued that the TGT was not a blow to the interests and aspirations of the East Timorese for independence. He also reiterated that the TGT did not attract criticism from the international community. "There were no General Assembly or Security Council Resolutions calling on Australia not to ratify the treaty, or indeed even criticising the treaty," he pointed out.

According to figures presented to the Senate hearing, revenue from the TGT is currently US$5 million a year and is not expected to exceed US$100 million. But, industry sources seem to think otherwise.

Australia's giant multinational oil and mining company, BHP, is a major stake holder in the Timor Gap oil exploration.

BHP, along with US-based Phillips Petroleum Company are developing a natural gas field off the East Timor coast. The northern Australian port city of Darwin will become the processing centre for this gas exploration.

In August last year, with the possibility of independence for East Timor in the offing, BHP's Jakarta representative, Mr Peter Cockroft, made a secret visit to the notorious Cipinang Prison for an hour-long meeting with the jailed resistance leader, Mr Xanana Gusmao. He is believed to have been assured by Mr Gusmao that BHP's petroleum assets off the East Timor coast would be safe under a post-independence government. The East Timorese resistance movement has never accepted the legality of the TGT.

The Indonesian government threatened to expel Mr Cockroft when it found out about the meeting. At the annual general meeting of BHP shareholders a month later, Mr Jerry Ellis, the CEO of BHP, said confidently that there will be no threat to BHP's oil interests in the Timor Gap under an independent East Timor.

Having a stake in the Timor Gap oil resources will be crucial for the Australian economy in years to come, as its off-shore oil fields in the Bass Straits near Tasmania are due to dry up in a few years time.

Without doubt, economic factors have motivated Australia's foreign policy towards Indonesia and the East Timor issue in recent years.

It's not only the signing of TGT, Australia also developed close military and economic cooperation with the Suharto regime to fight off attempts by Malaysia's Prime Minister, Dr Mahathir Mohamad, to keep Australia out of East Asian affairs.

Australia saw President Suharto as a close ally in its efforts to lock into the fast growing markets north of the continent. Thus, successive Australian governments in the 1980s and the 1990s gave priority to developing close economic, political and military links with the Suharto regime.

In November 1994, close on the heels of the "Dili massacre" where the Indonesian army killed unarmed demonstrators, a conference on Indonesia in Canberra was told by then Foreign Minister Evans, that human rights issues should not be allowed to dominate Australia's relationship with Indonesia.

"It is clear that in the economic sphere, we already have a substantial foundation on which to build still further. Our commercial linkages are growing rapidly -- two-way trade grew to A$3 billion last year, almost treble that of five years ago," Mr Evans said.

In December 1995, Australia signed a defence pact with Indonesia, which angered human rights activists at home, because the government kept the public and parliament in the dark about the negotiations for the landmark defence pact.

The pact was the first defence accord signed by Indonesia, which committed both countries to consulting each other -- if either or both of them is threatened; to consider joint responses; as well as promote security cooperation in the region.

Ironically, this month, as Australia prepared to send peacekeepers to East Timor, Indonesia revoked the pact in the face of anti-Australian nationalistic uproar in the country.

In recent years, Australia has also refused to grant political asylum to East Timorese refugees, so as not to upset the Indonesian government.

In May 1995, on the eve of the then Indonesian Research and Technology Minister B.J. Habibie's visit to Australia to sign a technological cooperation agreement, 18 East Timorese boat people arrived on the shores of Darwin. They were the first to arrive by boat since the 1975 invasion.

While Dr Habibie signed agreements for cooperation in developing high-tech industries from aerospace, radar and solar engineering to construction, cars and coastal management, the Australian government did not know whether to declare the boat people Indonesians, East Timorese or Portuguese.

In a mockery of international diplomacy, four months later, the Australian government advised the Refugee Review Tribunal (RRT) that the boat people should be handed over to Portugal because it still claimed sovereignty over East Timor.

It was only a few months earlier that Canberra was celebrating a victory over Lisbon at the World Court, after arguing that Indonesia is the legal ruler of East Timor. This has been, of course, Australia's official position since 1975.

When this decision was also supposed to apply to 1,300 other East Timorese "tourists" who were awaiting a decision from the RRT after applying for political asylum, Australia's Catholic church threatened to break the law by harbouring them in its church premises, in a bid to block deportation.

The East Timorese, who have arrived on tourist visas and applied for political asylum, have fought legal battles in Australia for years, in an attempt to get refugee status. A network of East Timorese exiles, churches and human rights activists across the continent have supported their cases and a few have been successful.

In spite of the government's support for the Suharto regime's stand on East Timor, Australia has been a sanctuary for many East Timorese independence activists since 1975. The East Timorese resistance leader and Nobel peace laureate Jose Ramos- Horta has been living in Australia for the most part of the last 20 years. Mr Ramos-Horta, however, is also a strong critic of Australia's policy towards Indonesia during the Suharto era. Immediately after the Indonesian president's resignation last year, he chided Australia for putting military links ahead of support for democracy and human rights in Indonesia.

"Australia's record has been one of playing golf with Suharto, with Habibie, with the military, providing military training to Indonesians in this country, joint military exercises, signing a joint security treaty between the democratic country Australia and a dictatorship." he told an Amnesty International gathering in Sydney. "It's an extraordinary display of hypocrisy," Mr Ramos-Horta pointed out.

Hypocrisy or not, if Australia's peacekeeping operations are successful, an independent East Timorese government, in which Mr Ramos-Horta is expected to play a leading role, will have a lot of hard bargaining to do with Australia.

Australia is believed not to be too happy with the drawing up of the maritime boundaries under TGT. A year after the Treaty was signed, Mr Evans was reported to have told a TGT Forum in Darwin that "subject to the Treaty, Australia continues to claim sovereign rights over the seabed resources of the entire Treaty area".

A small, vulnerable East Timor beholden to Australia for rescuing it, may find it extremely difficult to resist pressure from Australia for extracting a new Treaty which would be more favourable to Australian economic interests in the region.

In this context, the investments Canberra has put into peacekeeping operations may well turn out to be a small price to pay. Only time will tell.

[The writer was the Australian and South Pacific correspondent for Inter Press Service news agency from 1991 to 1997. He contributed this article to The Straits Times.]

Mass murder becomes a political weapon

Louise Williams, Darwin -- Several days before he was killed in East Timor, the Dutch journalist Sander Thoenes was discussing his concerns over the political manipulations behind the public face of the Indonesian Government and military, and the violence and death that power struggle would wreak.

His own life ended tragically on the outskirts of Dili, his killers -- who mutilated his body -- dressed in Indonesian military uniforms.

His death was part of the bigger picture he had been talking about: the use of terror and intimidation, and the provocation of violence to promote the political interests of the Indonesian military and the maintenance of the status quo.

What killing Sander -- one of the most qualified and insightful members of the Jakarta foreign press corps -- achieved was to frighten other journalists seeking the truth about the Indonesian military and the militia's role in East Timor during the past weeks.

But the murder was just one part of a continuing fear campaign to demonstrate that, despite the democratic face of the post- Suharto Indonesian Government, the authoritarian forces of the military still hold the real political power -- and have no intention of letting it go. What East Timor represents to the Indonesian military is an unacceptable international humiliation.

To that end, public opinion in Indonesia is being manipulated to criticise Australia's role in the peacekeeping force and sow fear among Australians in Indonesia.

It is not surprising that snipers this week fired, mysteriously, into the Australian embassy, despite the presence of Indonesian military guards; that demonstrators tore down the Australian flag inside the consulate in Medan and raised the Indonesian flag; that mobs burnt Australian flags in Jakarta; and that Australian businesses were the targets of death threats.

But the demonstrators are not ordinary Indonesians, but "rent-a-crowd" members of right-wing groups with links to the Indonesian military.

Indonesian politicians routinely talk about "provocateurs" stoking violence for political ends, playing one religion off against another,one culture against another along the numerous fracture lines that run through Indonesian society.

It is important to remember that in May last year the massive riots that devastated Jakarta were provoked by one faction within the Indonesian military seeking to discredit the military commander-in-chief and promote the ambitions of their own commander. At least 1300 Indonesians died.

"The political and military elite is so accustomed to power that thousands of lives are not too much to achieve their ends," said one Asian diplomat recently. It is important to point out that there is little that is genuine about this "rising wave of anti-Australian sentiment".

Ordinary Indonesians, themselves struggling under the weight of the worst economic crisis since World War II, are not afforded the luxury of misplaced national pride and have had little interest in the Timor issue.

It is perhaps even more important to point out that within Indonesia this week there were far larger, and more passionate, demonstrations by Indonesians against their own armed forces and political elite.

Thousands protested outside the Indonesian Parliament building over new legislation that would further enhance the powers of the security apparatus.

That legislation mocks the "democratic" victory of tens of thousands of student demonstrators who last year forced President Suharto to step down, raising hopes of an end to military abuses and the evolution of an accountable, democratic political system in Indonesia.

And the East Timor carnage is a tragic warning to other regions that the Indonesian military will continue to act with impunity.

For Australia, the power struggle in Jakarta is crucial for our own efforts to reshape our tattered foreign policy to reflect the realities East Timor has exposed. It appears that the Indonesian military is not able to be effectively checked.

But it would be foolish to discount the strength of the democratic movement in Indonesia and the deep resentment of the armed forces among the people of other regions who have suffered so much.

UN troops clamp down on militia

Dili -- Multinational troops clamped down on East Timor's militia with a raid and a high-profile arrest Friday and issued warnings against Indonesian soldiers wreaking havoc as they retreat.

The soldiers have burned their barracks behind them and let out volleys of automatic gunfire in defiant parting gestures as they are shipped out of the territory.

The chief of the multinational force Major General Peter Cosgrove admitted Friday his troops were having difficulties with the Indonesian military. "It's hard to say there is a uniform relationship," he said, after some of them opened fire near British Gurkhas Thursday.

A UN official in Dili told reporters there were fears the military has given the nod to the troublemakers in a bid to discredit the International Force in East Timor (Interfet) before it can expand to full strength.

"We think they want things to turn real bad for a while after they have washed their hands of security so they can say they were needed to take care of East Timor," he said.

Reconnaisance flights Friday found more towns almost completely levelled by the departing soldiers and pro-Jakarta militias responsible for a wave of violence after East Timorese voted on August 30 to break with Indonesia.

"There were very few signs of people in the major towns," said World Vision aid worker Sanjay Sojwal. "In Dili, they have left the shells at least," he said. "It's quite evident that it's very systematic."

Indonesia said the military will on Monday hand over the security of East Timor to Interfet, which is now at about half its planned strength of 7,500.

Cosgrove issued a public warning to Indonesia's top soldier here, Major General Kiki Syahnakri, saying he expected that after the handover his forces would ensure "weapons are not available for any pilfering elements."

The army has been accused of arming and organising the militia who are opposed to independence from Indonesia, which has ruled the territory since 1975.

Cosgrove directly accused Indonesian soldiers of working with the brutal gangs, saying Syahnakri agreed in talks there had been "interaction".

As he spoke, the peacekeepers mounted a heavily armed raid on burned-out buildings on Dili's harbourfront and a sweep of surrounding streets, arresting four pro-Jakarta militiamen.

The Australian-led forces have arrested several dozen militia suspects and confiscated hundreds of weapons during street searches. Their biggest catch is Caitano da Silva, an alleged platoon commander in the brutal Aitarak (Thorn) militia arrested Friday.

Ground forces spokesman Major Chip Henriss-Anderssen said the arrest sent a clear message to the militias: "You cannot run, you cannot hide. Justice is here." Frustration mounted Friday among aid workers struggling to get supplies to the militias' victims, up to 190,000 civilians who scattered into the mountains and jungles to escape the violence.

They warned the threat of attack from the marauding gangs, as well as pilfering by Indonesian troops, had seriously compromised relief efforts.

World Food Program (WFP) spokeswoman Abby Spring said a cargo of aid sent to Dare, in the hills outside Dili where up to 37,000 refugees are sheltering, was intercepted by Indonesian soldiers and half of it stolen.

The UN has some 6,000 tonnes of rice in its Dili warehouse, enough to feed 500,000 people for a month. But so far only the aid convoy to Dare has left the capital.

Australian Defence Force chief Chris Barrie said Friday after inspecting conditions he was concerned about just how international forces would safely get humanitarian aid out of Dili.

"That's a concern to me and I know it's a concern to General Cosgrove," he said, adding it could be weeks before aid moved out of Dili by road.

Cosgrove has said he will speed up the deployment of his force following threats the anti-independence militia could mount an attack and amid increasing aggression in Dili from Indonesian troops.

A company of Filipino rangers arrived Friday to swell the numbers of the force which is now encamped at three places in the devastated territory.

The White House has warned that any attacks against peacekeepers in East Timor would be an "extraordinary miscalculation". The Pentagon said Friday US Defense Secretary William Cohen is to visit Jakarta next as part of an Asian tour.

More details of atrocities committed by the army-backed militia emerged in an Amnesty International report which said 35 East Timorese refugees were killed and their bodies dumped from a ship carrying them to West Timor.

UN Human Rights Commissioner Mary Robinson called Thursday for an international inquiry into the Timor terror and accused Indonesian security forces of complicity in the militia rampage.

Asian, Western nations disagree on inquiry

Stephanie Nebehay, Geneva -- Asian and Western states failed to agree yesterday on whether to launch a UN inquiry into killings in East Timor, and a UN Commission on Human Rights special session on the issue was due to resume on Monday.

East Timorese resistance leader Jose Ramos-Horta, comparing his people's fate to that of Jews during the Holocaust, had earlier called for a UN inquiry into war crimes.

In a sign of potential compromise the European Union, which has called for an international inquiry, emerged late yesterday from negotiations with Asian nations including Indonesia, and announced that its resolution had been revised. The new EU draft, to be debated on Monday, has been modified to include Asian experts on an international panel.

It calls on UN Secretary-General Kofi Annan to establish "an international inquiry with adequate representation of Asian experts in order to, in co-operation with the Indonesian national commission on human rights and thematic [UN] rapporteurs [investigators] gather and compile systematically information on possible violations of human rights".

Finland's envoy Pekka Huhtaniemi, whose country holds the EU presidency, told the Commission: "It is evident that many colleagues now feel they need some time to reflect on this new version and also in the cases of at least some, they need instructions either from their capital or from New York where their senior authorities are at the moment.

"So it would probably be wise to have a pause in the process and to come back on Monday with new vigour in order to try to find a consensual outcome," he added.

The United States backed the EU resolution for an investigation, but Latin American and African delegations took the floor at the Geneva forum to speak out against it. Indonesia had called on Asian, African and South American states yesterday to block Western attempts to launch the inquiry.

Portugal, the former colonial power, called for the two-day special session, the fourth in the commission's 53-year history. On Thursday, Japan, China, India and Pakistan signalled in speeches they would try to block any UN inquiry.

Similar commissions led to the establishment of UN war crimes tribunals for former Yugoslavia and Rwanda. Indonesia passed up an opportunity to discuss East Timor in the UN General Assembly on Thursday.

'Dead' Gusmao Snr looking well

Michael Zielenziger, Dili -- His eyes are rheumy and his legs are weak, but for a man in his 80s, Manuel Francisco Gusmao looks fairly healthy -- considering the father of resistance leader Xanana Gusmao was reported on September 7 to have been killed by pro-Jakarta militia.

At least three times, marauding militiamen entered a Catholic convent on the outskirts of Dili specifically to look for Manuel and his wife, Antonia Henriques Gusmao, the nuns who protected them disclosed on Thursday.

But here he was, gently welcoming a few visitors. "I'm very happy now, because we can feel the Timorese people are safe with the arrival of UN peacekeepers," Mr Gusmao said.

As for the premature reports of his and his wife's demise, Mr Gusmao smiled modestly. "No, we're not dead. We are here, and the sisters took good care of us," he said.

"That they're still alive is really a miracle," said Sister Marlene, one of those who hid the couple in the sacristy of the convent chapel. Sister Marlene brought the elderly Gusmaos to the convent in a sports utility vehicle the morning after a militia unit went to burn down their home.

At times, she said, the nuns diverted soldiers from the hallway that led to the Gusmaos' room off the chapel by pretending to mop the floor, then admonishing the searchers not to tramp their dusty boots on the wet tiles. It worked.

"A few days after the shootings and burnings started, we heard a report on CNN that the Gusmaos were dead," she said. "We laughed, but really quietly."

Map shows forced exodus of Timorese

Sydney -- A map smuggled out of West Timor purports to outline Indonesian plans to disperse 100,000 East Timorese across the archipelago, Australian Broadcasting Corporation radio said Friday.

The plan to depopulate the province was brought from Atambua by freelance Irish journalist Sam McQuellin. Militias regrouping at Atambua, near the border, were being armed with automatic weapons, he said.

McQuellin said a man working in a government office at Atambua gave him the map showing where East Timorese would be forced to settle.

"This document actually maps out a relocation plan for 40,000 refugee families in West Timor -- which represents 100,000 people -- into islands close to West Timor," McQuellin told ABC radio. "It details the amount of refugees, the locations from which they will be taken and where they will be taken."

The ABC said it had a copy of the map, labelled "potential candidate sites for resettlement", with figures for the number of families that could still be relocated to more than 20 locations in West Timor and another 13 locations on islands in east Nusa Tenggara, west of Timor Island.

"Some informed foreign observers in Atambua fear that Indonesia has absolutely no intention of allowing back any of the refugees," McQuellin said. "Of the 200,000 that are there now, many will be either relocated or executed by Indonesian soldiers and militia.

"They also think Indonesia will partition East Timor, they've entirely cleared out the western part of East Timor and will use that as a claim for pro-integration."

He suspected the Indonesian military was arming militias near the border to take on the United Nations force. "They seem to be withdrawing across the border from East Timor, they've formed a coalition and are regrouping to go back into East Timor and take on the UN," McQuellin said.

"What I noticed different from Kupang [to the west] was many of them now have automatic weapons, which I think have been supplied by the Indonesian army."

Well hides secrets of torture chamber

Nature has taken over the garden of Manuel Carrascalao's house in Dili. Tall weeds grow between paving stones and flies buzz in the air. As you approach the well at the back of the garden, the soft hum of millions of maggots becomes audible.

Inside the well, clearly visible under the moving mass of white maggots, is the decapitated body of a woman, her torso rising up and legs bent to one side. The stench of decomposing flesh is overwhelming.

There may be many more bodies under that of the woman; the well is usually 20 metres deep and her body lies only half a metre from the surface. But, at first glance, it is impossible to tell.

It was in April that Mr Carrascalao's house first became the focus of militia violence. The leading pro-independence figure had been sheltering some 200 refugees in his house and grounds.

On April 17, Aitarak militia led by Eurico Guterres attacked, shooting and threatening refugees and the Carrascalao family with machetes. The official death toll from that day is 13, including Mr Carrascalao's 18-year-old son. But the unofficial toll may be as high as 60.

Since the attack, the house has been deserted. Papers, photographs, clothing and the personal effects of the family that fled litter the floor among smashed glass and broken furniture.

A few weeks ago the house became the centre of activity -- not as a family home where visitors were entertained and children played -- but for something far more sinister.

Three meat hooks hanging from the walls of one of the outhouses suggest that this house had become a place of torture and murder.

"People were hanged from meat hooks, with cloth around their necks. They were killed here," said Domingos Xavier, who appeared in the garden with some young boys. He had arrived to make sure we had seen the body.

Mr Domingos said Aitarak militia and Indonesian soldiers were responsible for the killings. He did not say why the people had died, but he believed it must have been because they supported independence.

He said they were killed in the outhouses and then dumped in the well. "There are many bodies there on top of each other. It is impossible to say how many. They have been here two weeks," he said, his hand over his nose to lessen the smell.

Two doors down, at the Hotel Tropical, is the headquarters of Aitarak itself. The stench of decomposing flesh lingers here too, along with the smell of rubbish and food collecting behind the hotel rooms.

Australian troops came here yesterday and removed weapons. An empty box of Russian ammunition lies in the courtyard among discarded blue pro-autonomy baseball caps. "Aitarak has been gone for a week," said Mr Domingos, who led us through the mass of rooms and courtyards.

Among the empty cans of baby milk and beer bottles, photographs lay on the floor. One of them shows a group of young men tending graves in the Indonesian heroes' cemetery, where soldiers killed during their tour of duty in East Timor are buried.

There have been many reports over the past few weeks of mass killings in East Timor during the reign of violence and terror by the militias and Indonesian armed forces.

Although there is anecdotal evidence to suggest many people were targeted and killed, there is, as yet, no hard factual evidence to prove systematic slaughter.

At police headquarters in Dili, there is nothing to suggest the mass of bodies stored in detention cells which Australian aid worker Isa Bradbridge and his wife reported two weeks ago.

Now deserted, apart from seven officers, and destroyed by the soldiers who patrol out in front, there is no sign of blood and no sign of a clean-up.

According to police chief Lieutenant-Colonel Sitompul, the reports are false. He gave a tour of the headquarters to prove it. "See for yourself. There are no bodies here," he said. He showed two empty coffins in a large hall.

"Four boxes were prepared for personnel and two were used, maybe the witnesses mistook this," he said. But the house of Mr Carrascalao is one place where there is evidence that killing and possibly organised torture has occurred.

By late afternoon yesterday Interfet peacekeeping troops had pulled eight bodies from the well.

Murdered journalist exposed scandal

Jakarta -- Journalist Sander Thoenes, found dead in East Timor yesterday, recently exposed a US$250-million scandal at a company controlled by the brother of Lt-General Prabowo Subianto, the former commander of Indonesia's elite special forces or Kopassus.

The Dutch-born journalist, the first reporter killed in a wave of violence in the Indonesian-ruled territory, had covered developments in the country since 1997 after a reporting stint in the former Soviet Union. Witnesses said men wearing military uniforms chased and killed a foreign journalist on Tuesday near dusk in the suburb of Becora, about 3 km from the centre of Dili.

Mr Thoenes, 30, was riding pillion on a motorbike taxi when he and driver Florindo da Conceicao Araujo were attacked. The driver survived, but Mr Thoenes' body was found in a garden yesterday. He had been shot in the torso and his face was mutilated.

Canadian journalist Paul Dillon said: "At 5am, a resident went out to look for something to eat and found a body of a man whom we now know is a colleague. It brings home the danger here... It's very shocking."

He said the body appeared to have been dragged to its resting place. "His pen is lying on the ground, a couple of metres away. His notepad was there as well," Mr Dillon said.

Indonesian army commander for Dili Geerhan Lentora said the Becora area was like the "wild West. We don't know who did this. In this kind of area, many things can happen".

The taxi driver told reporters in Dili that he had taken the journalist from Hotel Turismo to Becora, a known militia hotspot about 4.30pm.

He said they came under fire from six gunmen wearing Indonesian army uniforms, but added that they could have been pro-Jakarta militia, wearing clothes discarded by retreating Indonesian soldiers.

"My motorcycle fell on the ground and dragged both of us for about 100 metres. The journalist fell on the road. They kept shooting and I ran into the jungle."

Maj-General Peter Cosgrove, commander of Interfet, the United Nations-sanctioned force trying to restore order in East Timor, said yesterday that suggestions that the Indonesian military may have been involved would be investigated.

"This style of violence is of course a difficult one to stop immediately because of the disguised nature of it, the random nature of it, the selective nature of it," he said. Indonesian military spokesman Colonel Panggih Sundoro was quoted as denying any military involvement.

In a separate incident on Tuesday, a British reporter and a United States photographer were ambushed on the outskirts of Dili. Veteran Sunday Times reporter Jon Swain and US photographer Chip Hires fled into the bush, hid in a village and phoned their office in London, which sent a message to Interfet in Dili. A rescue operation was mounted and the men were reported to be safe.

Bodies dumped from passenger liner

Bernard Lagan -- Suspected supporters of East Timor's independence were executed on ships taking refugees from the territory and their bodies dumped in the sea, according to witness accounts collected by an Australian election observer who has just returned from Kupang, West Timor.

Ms Katharine Kennedy, of Melbourne, who was an accredited observer to the United Nations-supervised ballot in East Timor, fled to West Timor to escape violence after the result was announced on September 4. While in West Timor, she noted the following accounts from witnesses:

On September 13, about 15 young Timorese men were stabbed and thrown overboard from an Indonesian passenger liner, the Pelni Awu, en route from Kupang to Denpasar in Bali. The witness believed the killers were members of the Indonesian Army.

On September 8 at the Dili wharf, Aitarak militias separated men from a refugee group and told them to remove their shirts. The militias then shot 10 dead before an Indonesian Army member intervened.

On September 6 four alleged members of the National Council of Timorese Resistance [CNRT] were shot and thrown over the side of an Indonesian naval vessel carrying forcibly deported refugees to Kupang.

Ms Kennedy's accounts are backed in general terms by the Carter Centre, which has an East Timor Observer Mission in Darwin. A report released by the centre yesterday said Indonesian police and militias were seen to murder a refugee being shipped from Kupang to Bali on September 13.

In West Timor and in other parts of Indonesia, including Denpasar, Surabaya, Solo and Yogyakarta, Indonesian military police, helped by local authorities and militia, ordered churches, hotels and boarding houses to report the presence of refugees from East Timor.

Ms Kennedy said the militias and the Indonesian Army had prepared lists of independence activists, students and church workers who were among those deported to West Timor.

"Heavily armed men wearing Aitarak and Besi Merah Putih militia T-shirts have been roaming the city of Kupang and terrorising refugees and searching for individuals named on hit lists they carry," she said.

Habibie lifts martial law, handover soon

Jakarta -- Indonesia on Thursday lifted martial law in East Timor and said it expected to hand over control of security in the territory to the UN-approved force there on Friday or Saturday.

"The president today issued one presidential decree ... which revokes presidential decree number 107 of 1999 on the emergency commission in East Timor, considering the improving conditions in East Timor," said Justice Minister Muladi.

Martial law was imposed on East Timor on September 7 as pro- Jakarta militias, with the backing of sections of the Indonesian army, terrorised the population.

The decree said the decision was in line with the agreement between the Indonesian government and the United Nations under which responsibility for security is to be handed over to the multinational forces there.

"In relation to this, the defence minister will immediately order Major General Kiki Syahnakri ... to hold a handover," Muladi said. Syahnakri is the head of the Martial Law Command in East Timor. Muladi said he expected the handover to take place "on Friday or Saturday."

Another decree from President B.J. Habibie appeared designed to head off moves to set up an international tribunal under the auspices of the UN Human Rights Commissin to probe the violence in East Timor.

Habibie formalised the government's support for a fact-finding team of the National Commission on Human Rights to investigate the carnage unleashed by the August 30 vote for independence.

"A leader of the the National Commission on Human Rights will go to Geneva soon to explain that the handling of the investigation of the violence in East Timor can be by the commission," Muladi said. He said he hoped the mission would be allowed to investigate the violence and that an international tribunal would not have to be set up.

The UN Human Rights Commission was to open a rare session Thursday to discuss the violence in East Timor, marking only the fourth time in a decade that a special meeting of the commission has been convened.

After all previous three special sessions, in 1992 and 1993 on Yugoslavia, and in 1994 on the genocide in Rwanda, the Commission named a special envoy to investigate massacres.

UN Human Rights Commissioner Mary Robinson said earlier that an extraordinary meeting was justified by the continued violation of the right of the East Timorese to self-determination, the mass exodus from the territory and the arbitrary murders of civilians.

Muladi also said Habibie had issued an official instruction to take measures to "restore the life of the people in East Timor," for which several ministers would be responsible.

Many police desert to independence side

At Least 100 members of the Indonesian armed forces (TNI) in East Timor have deserted and joined the pro-independence Falintil guerrilla movement, in a further indication of discord within TNI ranks.

Yesterday, men in police uniforms were openly walking around the village of Dare where tens of thousands of refugees live under the discreet protection of Falintil after fleeing the military- backed campaign of violence which followed last month's vote for independence. "I am a policeman of Indonesia but I want independence for East Timor," said Agustinho Gomes da Silva, a former East Timorese sergeant in the Indonesian police. "I left the police to co-operate with Falintil for the security of our nation."

Next to him stood several other uniformed men, including one in the dress of Brimob, the Indonesian special riot police. According to Sergeant Gomes da Costa, there are 100 deserters in the Dare area alone, including members of both the police and military, and 25 of them have brought guns with them. "Many of my friends also try to come here but the situation is very difficult," he said. "Ninety per cent of East Timorese in the armed forces want independence."

Large numbers of police and soldiers stationed in the territory are ethnic Timorese. Almost none of them hold high rank, and there has long been tension between them and their Indonesian commanders. TNI generals have claimed that the recent violence in the territory has been perpetrated largely by local recruits, in what is seen as an attempt to portray East Timor as a fractious territory incapable of independent self rule.

But the deserters in Dare suggest the opposite -- that many East Timorese are risking their lives to desert the force responsible for the persecution and displacement of their people. Sergeant da Costa said: "I want to be a policeman in a new independent nation."

Activist says Wiranto behind killings

Singapore -- An American journalist and activist deported from Indonesia said Monday he was convinced armed forces chief General Wiranto was behind the militia killings in East Timor.

Allan Nairn was in Dili for about two weeks before Indonesian authorities detained him for violating visa regulations by entering the country as a tourist.

He said here Monday that during his detention at the military headquarters in East Timor, he saw pro-Jakarta Aitarak militiamen living and working out of there.

"While I was being held there and questioned there, you could see that the whole back-half of the base was full of uniformed Aitarak militia, with their black tee-shirts and red and white headbands," added the 43-year-old journalist, who is also an activist on East Timor affairs.

He said one of the officers who questioned him told him the militiamen "live here, they work out of here."

"You can see them going out on their motorbikes and their trucks, fully armed to do their attacks on Dili," said Nairn, adding it was the same situation in the police headquarters in Dili where he was also held.

Asked whether he was convinced Wiranto was behind the militia actions, Nairn said: "Yes, definitely. "Organisationally in the Indonesian military, the only person that both the army and police report to is General Wiranto."

But Wiranto, speaking in a parliamentary hearing Monday in Jakarta, catagorically denied he was behind violence in East Timor. "It doesn't make sense and it has never even crossed my mind. There's convincing evidence that TNI [the Indonesian military] wish to do good in East Timor," he said, adding the military had mediated peace pacts between involving rival groups in the territory.

"How bad and sinful I would be as a religious person if I had done that, and that's impossible." Wiranto said deep-rooted hatred between the rival groups made it hard for the military to reconcile them.

UN Secretary General Kofi Annan Sunday accused the Indonesian army of cooperating with East Timor militias in committing atrocities against the territory's people.

Nairn said he saw militiamen inside a plane in which he was flown from East Timor to West Timor last Wednesday, wearing black T- shirts and carrying pistols, knives and swords.

"I actually recognised by face some of them from the streets of Dili as being among the street-level militia leaders. But it turns out all these men were police intelligence and they were being rotated back ... after having fulfilled their assignments in Dili."

Nairn also said he saw a police intelligence document referring to a specific operation which had moved out a total of 323,564 people from East Timor.

Falantil leaders disappear in West Timor

Lauren Martin -- East Timorese resistance leaders had "disappeared" from militia-guarded refugee camps across the border, and the mainly women and children who remained were at risk of becoming hostages to other vigilantes, a Senate committee heard in Canberra yesterday.

Two top Falantil leaders had been hunted down in the camps and "could well be eliminated", according to Dr Harold Crouch, a senior fellow at the Australian National University and an Indonesian military expert.

Dr Crouch knew the "very senior" Falantil men only by their noms de guerre but said they included the leader who took command from Xanana Gusmao.

The news came amid warnings from Mr Bob Lowry, a former lieutenant-colonel and former assistant military attachi at the Australian Embassy in Jakarta, that the refugees could be made pawns by the military or by mavericks operating with military consent. Mr Lowry touched on rumours that General Prabowo Subianto -- former president Soeharto's son-in-law who was dismissed from the military after his troops were found to have kidnapped and tortured dissidents in Java -- was seen in Kupang, West Timor, in recent days. "If that is true, one would have to ask what he is doing there," Mr Lowry, a visiting fellow the Australian Defence Studies Centre at the Australian Defence Force Academy, told the Senate committee.

He said General Prabowo's presence certainly would have been sanctioned by the head of the Indonesian Army, General Wiranto. "So [the military's] attitude to him and what he might be doing is fairly obvious from that," Mr Lowry said.

"We would just hope our fears don't come to fruition in that regard. There may also be other retired members of the army who still have an ideological commitment, or even ordinary citizens or people from the civil administration, who want to seek vengeance for what has happened" in the East Timor vote for independence, he said.

Mr Lowry also questioned the continuing high-profile role of militia leader Eurico Guterres in the West Timor refugee camps.

"One has to ask what else he was doing there," Mr Lowry said. "Who he was making connections with, what plans he was making, what his future intentions are. One hopes he's not planning to keep these people hostage on that side of the border for any period of time."

Mr Lowry said the UN troops could quickly secure the centre and east part of East Timor. "The question is how quickly they will be able to get a grip of the western sector.

"As long as the border is controlled on the Indonesian side, and as long as there are no third parties who are allowed to supply money and equipment and training to the militia, then I think it will be resolved within several months. "If that doesn't happen, then of course it could drag on for quite a while."

Militia leader picked to head secret group

Anne-Marie Evans -- Eurico Guterres, leader of the Aitarak anti- independence militia, was made the head of a clandestine military-funded organisation earlier this year and supplied with guns and money, a source said yesterday.

Mr Guterres had been made a member of the Gada Paksi soon after it was created in 1994 by former president Suharto's son-in-law, Prabowo Subianto, under the direction of the army's Kopassus special forces.

The organisation's goal was to infiltrate the youth of East Timor, said the source, formerly a senior leader of anti- independence forces in East Timor.

Former Indonesian general Subianto provided a budget of 500 million rupiah to start the organisation, the source said. The organisation helped young people set up small businesses at the same time as providing military and intelligence training in Jakarta.

In January this year, regional military commander General Adam Daimari -- like Mr Guterres a target of United Nations human rights investigators -- met Mr Guterres, made him leader of the Gada Paksi and offered him 50 million rupiah to re-organise the group, the source said.

"That's when he got excited about all this power. From then on his members were given revolvers and ordered by Daimari to take over security in Dili," added the source.

There were about 800 members of Aitarak, the source said, of which a large majority were also Gada Paksi members. About 200 had close links to Mr Guterres, and some were also members of the Kopassus special forces, the source said.

He said Mr Guterres' parents had been pro-independence Fretilin activists. The source, who claims to know Mr Guterres personally, said the Aitarak militia leader's parents were killed for their Fretilin sympathies in 1976.

Mr Guterres, who the source said was married to the niece of East Timorese bishop Basilio do Nascimento and a father of three young children, was brought up by an Indonesian Government employee, "Eugenio", in Viqueque, East Timor. At the age of 20 he was running a secret gambling organisation in Dili. Mr Guterres had always been aware of how his parents died, but rejected their beliefs, the source said.

Military will fight, warn guerrillas

Jill Jolliffe, Darwin -- East Timorese independence guerrilla commanders warn that Indonesian forces are preparing to resist United Nations troops.

Speaking from the Los Palos district, the deputy chief of the Falintil army, Mr Lere Anan Timor, said Indonesian soldiers were threatening to "kill the international troops, using the [pro- Jakarta] militia".

He said Falintil, although well armed, would fight only if asked to by the international force, InterFET, because it was determined to honor the peace agreement signed in New York last May.

"Our people voted 78 per cent in favor of independence, and we have kept our word to maintain the peace," he said. "We will only fight if needed."

Mr Lere said Indonesian troops in his region were withdrawing from rural areas to towns, but continued to kill independence supporters and force people to go to Indonesian West Timor.

"The United Nations force is very welcome," he said. "The majority of our people have fled to the mountains and are dying of hunger and of ongoing massacres. The death toll is high and rising."

He said the Indonesian army had used heavy artillery south of Los Palos last Thursday, but with no casualties. "They are firing mortars and bazookas. The aim seems to be just to terrorise the population."

A spokesman for Mr Virgilio dos Anjos, the veteran guerrilla leader known as Ular, who commands the fourth military region, said he also believed there would be resistance to the international force.

The spokesman, Mr Meno Paixao, said: "It won't be frontal, but by means of snipers bullets, using the militias -- but they don't have the power to resist themselves, and the TNI will be behind them," he said.

Mr Paixao said known independence supporters were being shot and food shortages were acute. "In my zone there have been around 300 deaths from starvation, principally children, since referendum day [30 August]," he said.

Bullies melt away after soldiers hit streets

Lindsay Murdoch, Dili -- The thugs of Dili's streets disappeared quickly. When the first Australian soldiers arrived in full combat dress, their rifles at the ready, the militiamen pretended they were the very refugees they had terrorised for weeks.

Some of the killers, rapists and looters walked in small groups along debris-strewn streets waving at the Australians who began arriving shortly after dawn yesterday in huge cargo planes from Townsville and Darwin in what is likely to be Australia's most significant military operation since World War II.

But the militias no longer carried the rifles given them by the Indonesian armed forces or brandished their machetes, knives or home-made pistols.

A couple of the thugs were confronted by heavily armed New Zealand soldiers on Dili's docks but handed over their pistols without argument.

"They are basically cowards," said an Irish journalist, Robert Carroll, who has spent the past nine days hiding out in Dili and the surrounding mountains. "They ran away when real soldiers arrived." The militia last night emptied their rifles into the air as they had done every night since the United Nations announced that the East Timorese had rejected Indonesia's brutal rule and voted to become the world's newest independent state.

They set alight or trashed the few buildings still habitablein the town from which 70,000 people have fled. But as hundreds of foreign troops arrived, tense and ready for action, the bullies disappeared and the fires were burning themselves out.

Major Chip Henriss-Anderssen, of Townsville's 3rd Brigade, said at Dili wharf that genuine refugees appeared to be frightened and remained in small groups.

"But after a while they came up, one or two at a time, and shook our hands," he said. "The little kids were saying, hey mister! Perhaps after a while we will be able to teach them to say g'day."

The scene at Dili's airport was surreal. Shortly after dawn crack Special Air Service troops based in Perth were among the first Australians to arrive in giant Hercules transports.

They ran across the dusty tarmac, securing the perimeter. But waiting and watching were a few dozen Indonesian soldiers, representatives of a humiliated, embittered and convulsively violent force that is leaving East Timor in disgrace.

Indonesia has never suffered so great a humiliation -- the world's fourth most populous nation rejected by people who had suffered 24 years of repression, most of whom are now homeless and still living in terror.

The few dozen Indonesian soldiers who remained to watch wave after wave of troops arriving did not seem too fussed. Asked about the destruction and looting, one said: "This incident happened before we arrived." He declined further comment.

Major-General Peter Cosgrove, the Australian commander of the multinational peacekeeping force, described the reception his soldiers received as "benign". "We have had a cordial reception from the TNI [Indonesian armed forces]."

Nobody mentioned that it was the TNI which through its proxy militias had destroyed most of what Indonesia claimed was its 27th province and stood by and watched mass killings and other atrocities.

General Cosgrove was not underestimating the risks as more than 1,000 of his troops sat under the few trees at the airport with shade. "It is still from my point of view a very risky environment beyond the sight of the nearest Australian soldier."

Our group of 40 journalists was ordered not to leave the airport after we arrived in a crammed Hercules from Darwin.

The first soldiers who went into the now wrecked departure lounge found it smeared with excrement. Red and white banners, the colours of Indonesia's flag, still hang outside the VIP lounge, one of the few buildings in Dili not destroyed.

Tonight we will be escorted under armed guard to the Turismo, the waterfront hotel from where many of us had fled in fear of our lives.

The hotel is trashed but we will set up a makeshift camp in the mosquito-infested garden where only a couple of weeks ago Australia's former deputy prime minister, Mr Tim Fischer, and an Australian delegation of ballot observers sat and drank beer and talked confidently of the birth of a new nation.

There is some good news, though. The UN compound where we spent six long and scared days before being evacuated has not been burnt and much of the UN's equipment is untouched.

But a UN official who has been staying at the fortified Australian consulate, not far from the airport, said: "It's a pretty horrific picture overall. There are thousands of people dying up in the hills without food or water. They need urgent help. There is nothing left in the town for people to return to."

Robert Carroll, the Irish journalist, said he had seen young children with bloated stomachs and families with nothing to eat but small portions of rice. "People have been told the peacekeepers are coming but they don't believe anything any more," he said.
 

Presidential succession

Group pushes to speed up election

Vaudine England, Jakarta -- Moves to accelerate the constitutional process of finding a new Indonesian president are well under way, promoted by a group of opposition political parties.

Dubbed the "Team Kecil" or "small team", it is led by constitutional law expert Yusril Ihza. The group includes representatives from the anti-Habibie faction of the ruling Golkar party, the National Development Party, National Awakening Party, Justice Party, Star and Crescent Party and the National Mandate Party.

These figures, together with a representative of Megawati Sukarnoputri's Indonesian Democratic Party of Struggle met at the house of Muslim leader Abdurrahman Wahid last Sunday in a bid to speed things up. The goal is to shorten the present hiatus in national leadership caused by the weakness of President Bacharuddin Habibie and his armed forces chief, General Wiranto, in the face of corruption scandals and the East Timor crisis.

The motive for most of those involved is to bring Mr Habibie's term of office to an end as soon as possible and to demolish any chance he might think he still has of re-election.

Details under discussion by the team focus on bringing the actual presidential vote forward on the agenda of the forthcoming general session of the Peoples' Consultative Assembly.

The Suharto-era schedule for the assembly would see Mr Habibie give his accountability speech, which the assembly would then take time to assess, before formulation of new State Guidelines for the next five years, leading to a presidential poll at the end.

This schedule would leave Mr Habibie in office until at least mid-November. Some team members also are interested in providing the possibility for a faster assembly decision on the status of East Timor.

The idea would be to get rid of that problem as fast as possible by accepting the result of the pro-independence August 30 ballot and ending Indonesia's shame at having foreign troops on what is considered in Jakarta as legally still being Indonesian territory. It remains unclear whether an actual vote on the presidency will be necessary.
 

Aceh/West Papua

Police shoot man in Irian Jaya unrest

Jakarta -- Angry mobs paralyzed downtown Manokwari in Indonesia's remote Irian Java province on Saturday, a day after police shot dead one man and wounded two others during an outbreak of violence.

Thousands of people gathered inside and outside the local district parliament building in Manokwari, where the body of John Wamafma was laid. The mob completely blocked the town's main streets with stones, wood, oildrums or tree trunks, the Antara news agency said.

Wamafma was shot dead as police attempted to disperse a mob that went on the rampage in Manokwari on Friday, laying waste to several government offices and private houses, the agency said. Two other men, including a highschool student, were in critical condition at the the state hospital there after they were shot by the police.

The rampage was sparked by an earlier fight between several people with policemen at Manokwari harbour. The arrest of four of the civilians by the police, who also manhandled them, sparked anger among the population.

The mob burned three police homes and ransacked the local parliament, the state RRI radio station and the office of the public service administration agency, Antara said.

The Indonesian military has taken over from the police who have been withdrawn to their headquarters to prevent further violence, Antara said.

The mob at the local parliament has also demanded that the town's police chief be replaced within 24 hours for failure to assure security in town. The local military police are currently investigating the shooting, Antara said.
 

News & issues

Military leaders to escape punishment

Geoffrey Barker -- Few, if any, Indonesian military chiefs and their militia proxies are likely to be tried, convicted and jailed for atrocities committed in East Timor before and since the August 30 independence ballot.

The most they are likely to suffer is the international embarrassment of being identified and having the evidence of their crimes published by an ad hoc tribunal that will be set up within days by the UN Human Rights Commission in Geneva.

Despite the orgy of murder, torture, rape, forced deportations and property destruction planned and presided over by some of Indonesia's top generals, Australian academic and legal experts agree that Indonesia is unlikely to hand over any senior leaders to an international tribunal, regardless of the evidence.

Dr Harold Crouch, of the Australian National University, said this week he would not be optimistic that any incoming Indonesian government would allow senior soldiers to be put on trial.

"They will be back in Indonesia, and the political reality is that the military is still a very important force," he said. Associate Professor Hugh Smith of the Australian Defence Force Academy said many senior Indonesian military figures would be anxious about their positions but it would be too much to expect the Indonesian Government to hand over military personnel for trial.

He said the Indonesian military might try to cleanse itself by picking a few scapegoats and dealing with them through Indonesian channels. "Justice then might be partly done and that's probably better than nothing," he said.

Calls for an international inquiry into Indonesian military- militia atrocities in East Timor have been led by the UN Commissioner for Human Rights, Ms Mary Robinson, who has reported to the UN Security Council that there was "overwhelming evidence that East Timor has seen a deliberate, vicious and systematic campaign of gross violation of human rights".

A major effort to collect evidence in Australia is being co- ordinated by the Australian Section of the International Commission of Jurists.

The NSW Director of Public Prosecutions, Mr Nick Cowdery QC, is head of a committee of several hundred volunteer Australian lawyers who are about to start interviewing East Timorese refugees in NSW, Victoria and Western Australia.

Mr Cowdery said yesterday he was not optimistic that Indonesia would voluntarily surrender people identified by the evidence. "My aim is to have the international community take action to demonstrate that people cannot act with impunity," he said.

"Whether anybody is actually punished is beside the point. Administrations have to be shown that if they engage in this sort of conduct they will be held accountable in the court of public opinion.

"It would be better if guilty people were tried, convicted and punished but it is almost as important that there be public international disclosure of the facts." Mr Cowdery said it was ridiculous to expect any Indonesian commission of inquiry to deal with the East Timor atrocities.

He said training of the volunteer lawyers in evidence-taking would start tomorrow, with interviews with refugees to starts within a fortnight.

Many refugees in Australia were able to give evidence of Indonesian military involvement in the atrocities but it was too early to say how far up the chain of military command it would be possible to pin responsibility, he said.

Dr Crouch said the violence in East Timor was part of the military's considered East Timor policy directed by the Defence Minister and Army Chief, General Wiranto.

60,000 troops to secure MPR session

Jakarta -- City authorities will deploy as many as 605 companies or about 60,000 security officers to safeguard the upcoming General Session of the People's Consultative Assembly (MPR), Governor Sutiyoso said on Friday.

"The joint security forces will consist of officers from the city police, the military (TNI), the People's Security (Kamra) and the City Public Order Office," Sutiyoso said after chairing a meeting of the city collective leadership at City Hall.

City police deputy chief Maj. Sutanto said the security officers would not be supplied with live bullets, but that they would be equipped with tear gas and rubber bullets.

The number of troops to be deployed this year is down on last year's deployment, when 78,000 security officers were spread throughout the city to safeguard the Special Session of the MPR.

Governor Sutiyoso called on Jakarta residents to help the city administration create a conducive and secure situation for the MPR General Session. "We suffered a great loss during last year's mass unrest. We should not experience such unrest anymore," he said.

At least 123 buildings and 70 vehicles were damaged in incidents of mass looting and burning in the city, following the closing session of the MPR Special Session on Nov. 14, 1998.

Sutiyoso regretted the protesters' violent actions during a mass demonstration on Thursday, in which the city's green areas, lighting system, and other facilities were vandalized.

Jakarta Military Commander Maj. Gen. Djadja Suparman called on city residents to refrain from joining any mass demonstrations during the MPR General Session, which is slated for November this year.

"Let the political elites in the MPR solve the political problems. The general public should not get involved," Djadja said. He also called on the people to accept and support the outcome of the November presidential election.

The 700 new MPR members will take their oaths of office when the MPR General Assembly is opened next Friday. They will reconvene in November to elect a president and a vice president and endorse the State Policy Guidelines.

Djadja called on the provocateurs, who have allegedly orchestrated recent demonstrations in the city, to refrain from influencing people to join the protests.

The two-star general said the people had suffered a prolonged economic crisis and should concentrate on helping create a smooth General Session. Djadja said people from outside the city were involved in Thursday's rally.

"They were not students. They appeared to be thin but militant people." He said the protesters' foremost and ultimate target was to occupy the MPR/House of Representatives (DPR) building. "The rally to protest the endorsement of the state security bill was only their intermediate target," he said.

Australia the bogeyman

Craig Skehan, Peter Cole-Adams and Mark Metherell -- Indonesia turned up the heat on Australia yesterday with accusations of torture by Interfet forces in East Timor and bans on wheat imports as it tried to deflect attention from worsening civil unrest.

Two days of rioting in Jakarta has left at least four people dead -- including a policeman -- in the biggest domestic upheaval since the downfall of President Soeharto.

Up to 10,000 demonstrators, many of them students, protested against new laws that would give police and the military wide powers to restrict people's movements, to detain and interrogate, stop assemblies and control the media and telecommunications.

A Jakarta-based political analyst, Wimar Witoelar, said the military was desperate to keep domestic attention focused on criticism of foreign intervention in East Timor and away from problems in other parts of the country.

"Many Indonesians are talking about hurt feelings over the way Australia has handled its role on East Timor," he said. "But then they are starting to think more about the other side and the tens of thousands of people the military has killed."

Most Indonesian newspapers reported claims yesterday by the militia leader Filomeno Antonio Britto that eight militiamen had been tortured by peacekeepers in East Timor.

Britto alleged that one member of the Mahadomi militia had died after being doused with petrol and set alight inDili by foreign troops.

The claims came as the Australian head of the peacekeepers, Major-General Cosgrove, directly accused Indonesian soldiers of links with the anti-independence militias responsible for mass killings and destruction.

Indonesia, meanwhile, said that although it would hand over control of East Timor to the force, it planned to keep 4,500 Indonesian troops in the territory.

An editorial in the Republica newspaper referred to Major- General Cosgrove, as "Major-General Cockroach" and said there were growing tensions between Indonesians and foreign soldiers.

One of the paper's commentators said Mr Howard stood for the same anti-Asian racism as the One Nation leader, Ms Pauline Hanson.

At the same time, one of Indonesia's biggest flour millers confirmed that it had slashed by 50 per cent its wheat imports from Australia, following claims by another influential wheat trader that all purchases from Australia would stop.

The director of Bogasari Flour Mill, Mr Fransiscus Welirang, said the 50 per cent cut was a "logical consequence" of the uncertain relations between the two countries.

Mr Bustinil Arifin, head of the private wheat importer PT Sriboga Raturay, said all importers had stopped buying wheat from Australia because of the political tension.

As well, the Indonesian Chamber of Commerce and Industry urged its members to switch their export markets to countries other than Australia.

Meanwhile, Mr Howard said he would consider national service if there was a military need for it, but he did not believe this was the case at present. The Government would look at views in favour of national service during its defence review.

"Nobody should think I have a deep-seated philosophical objection to it," he said on Brisbane radio. "It's just that I don't believe at the present time that there is a defence need for it."

Indonesia ends controversial law

Slobodan Lekic, Jakarta -- The Indonesian government on Friday suspended a new law giving the armed forces expanded emergency powers, a day after its passage sparked one of the most serious protests to hit the capital since former President Suharto was forced from power.

The policy reversal was seen as a blow to the powerful army commander, Gen. Wiranto, who sponsored the bill. It also will further erode the prestige of President B.J. Habibie, who is running for re-election after succeeding Suharto in May 1998.

Habibie's chances have been dimmed by dissatisfaction with his handling of the referendum on East Timor independence and by a bank scandal involving his closest associates. "Half of the people do not understand the contents of the bill," complained Maj. Gen. Sudrajat, the spokesman who made the announcement on behalf of the Cabinet. "Because of that, the government has decided to suspend the security law." The statement did not immediately quell running battles in Jakarta between student-led protesters and riot police backed by marines.

Hospital and police officials said three demonstrators and one officer were killed in two days of rioting. More than 100 people were injured and police said 39 protesters were arrested.

During much of Friday, demonstrators blocked the capital's main thoroughfare, Sudirman Avenue, pelting police with stones and gasoline bombs. They tore out traffic signs and decorative pillars to create makeshift barricades.

Police responded with plastic bullets and tear gas, but the demonstrators quickly regrouped after each police charge.

Indonesia's stock exchange and currency market closed early because of the violence. The national currency, the rupiah, continued to slide on fears of political instability and ended six percent lower than last week. Shops and malls throughout the city also closed early.

Opposition leaders quickly joined the students in rejecting the new law. Megawati Sukarnoputri, the front-runner to become Indonesia's next president, and Matori Abdul Djalil, leader of the National Awakening Party, demanded that the law not be applied until the new parliament convenes next week and officially revokes it.

"The nation is again shedding tears over the victims among the flower of its youth because of the action by the security apparatus," they said in a joint statement. "The students' peaceful protests were met with violence." At Jakarta's Atma Jaya Catholic University, the scene of a massive police raid just before dawn Friday, students taunted a cordon of officers resting under shade trees opposite the campus.

"Be afraid, be afraid," yelled a student who gave his name as Andes. "We now have weapons -- sharp ones too."

West Timor capital ready to explode

Sarah Crichton, Kupang, the capital of West Timor, may soon explode into riots because of mounting tension between local residents and arrogant militias from East Timor, says a returning aid worker. Mr Jamie Isbister, international programs manager for the National Council of Churches in Australia, who has recently returned from West Timor, said yesterday the violence of East Timor could spill into Kupang, where resentment is growing against abusive behaviour by armed militia groups.

Kupang was the scene of social unrest last November when Christian and Muslim gangs clashed, sparking an exodus of local residents.

"The militia -- Aitarak and Besi Merah Puti -- have been built up by the Indonesian military to believe they are beyond the law and their actions, in line with that, have continued since they crossed the border from East Timor," he said. Armed thugs wander around Kupang, drive stolen United Nations vehicles or ride on the back of Indonesian military trucks.

"They don't pay for their hotel rooms," Mr Isbister said. "They walk off without paying from restaurants -- all feeding tension in the city.

"Local police have made some attempts to try to disarm them, but there is building resentment and a very real danger that West Timorese youths will attack the militia, and we'll see open conflict between locals andthe well-armed militias." The refugees' security was "critical" in West Timor, where aid organisations and agencies are prevented from helping or gaining access to refugee camps. There have been violent attacks on humanitarian agency workers. "We have seen the intimidation transported across the border. People are very afraid," Mr Isbister said.

West Timor is one of the poorest provinces in Indonesia, and Mr Isbister stressed that the local community, with few resources, had so far reacted hospitably to the influx of more than 160,000 people from East Timor.

But militia in the refugee camps were able to prevent food and aid getting to refugees believed to be pro-independence.

"Between 1,000 and 2,000 people are thought to be underground in Kupang, hidden by locals or church groups, and hoping to be slowly smuggled out of Timor," Mr Isbister said.

But their journey was highly risky because militia at the sea port or airport were using photographs to identify independence supporters on their lists, he said.

Because of the militia action, local churches were one of the few groups who could gain access to the refugee camps and were now playing a pivotal role in providing basic humanitarian relief, he said.

AFP reports: Thousands of East Timorese pushed to West Timor by Indonesian Army-backed militias could be "transmigrated" to other parts of Indonesia within weeks, making it "nearly impossible for them to return home", Human Rights Watch has warned.

The Indonesian Government says inadequate facilities make resettlement to Irian Jaya, the Moluccas, and other islands the only option, the group said.

Anger grows over Timor 'humiliation'

Keith B. Richburg, Jakarta -- In the port town of Balikpapan, on Borneo island, an Australian diplomat was dispatched to help rescue Australian mine workers besieged by people demonstrating against foreigners. He spent most of his time hiding from angry crowds, running down back stairwells and being trundled into a getaway van.

In Banyuwangi, in East Java, more than 100,000 Muslims signed up for a jihad against foreign peacekeeping troops if they try to invade Indonesia, and their leader predicted that Australian soldiers would go home in body bags from the peacekeeping venture in East Timor.

In the western Timor town of Atambua, a flamboyant militia leader, Eurico Guterres, pledged to attack the Australian-led peacekeeping force "because they are white people." He warned: "We East Timorese are thirsty for the blood of white people."

As the UN-sponsored intervention force prepares to land on the shore of Dili, East Timor's seaside capital, to end a rampage of killing and destruction by armed militia gangs and their military backers, Indonesians are coming to grips with what many in the political elite are calling a national humiliation, and which some are envisioning as a possible call to arms.

Few here talk about the atrocities committed by Indonesians in East Timor after residents voted overwhelmingly for independence on August 30 -- the killings of priests and nuns, the razing of the capital, the mass deportations.

Instead, many are focusing on what they see as the Western world's unfair pummeling of Indonesia, including the suspension of military ties, the threats to cut off aid, and now the indignity of foreign troops landing in East Timor, which Indonesians call "the 27th province."

Those feelings of anger and humiliation are producing a sometimes nasty, xenophobic outburst of nationalistic pride in the world's fourth-largest country, with the largest Muslim population in the world, and many leaders are warning that the overwrought emotions could spiral out of control.

The backlash began as anti-Australian, but is becoming anti- Western, and more broadly anti-white, tapping into deep-seated feelings of resentment reaching back to the period when Indonesia was a colony. And with the peacekeeping troops due to arrive in East Timor on Monday, those feelings could lead to violence.

"People are no longer really focusing on what happened in East Timor, but on how Indonesia has been insulted," said Dewi Fortuna Anwar, a political scientist who serves as foreign policy adviser to President B.J. Habibie.

"There's always been a suspicion of white people in general, which is understandable because of the long experience in colonialism. The feeling is always there. Indonesia has always been very touchy about being pushed around by outside countries."

So far, Miss Anwar said, most of the anger had been directed against Australia and its prime minister, John Howard, whom she accused of "trying to prove his manhood and saying some very ugly things" about Indonesia, and thus "waking up this dangerous nationalism." She said that the United States, through President Bill Clinton and Secretary of State Madeleine Albright, had been "more moderate" and had shown more sensitivity, and that US relations with Indonesia should not suffer.

"The US has a very important role to play in supporting the democratic process here," Miss Anwar said. "Indonesia cannot be left alone wallowing around in narrow nationalism. If it goes down, the region goes down."

Abdurrahman Wahid, who heads Indonesia's largest Muslim organization, Nadhlatul Ulama, also put much of the blame on Mr. Howard and Australians, who he said are helping whip up the nationalist frenzy.

"There are calls in Australia to invade Indonesia," said Mr. Wahid, who also heads the National Awakening Party, which finished in the top four in recent parliamentary elections, making Mr. Wahid a long-shot candidate for president. "They are crazy. Put it in writing -- they are crazy."

There are strong emotions on both sides, with anti-Indonesian passions whipped up among Australians as reports accumulate of the massacres in East Timor, which is less than 800 kilometers from Australia's northern coast. Australian dockworkers have refused to unload Indonesian goods from ships, and unions have boycotted the Indonesian Embassy and consulates, meaning trash is not collected and water is cut off. Some Indonesian facilities in Australia were vandalized.

The small but organized crowds that attacked Australian consulates and trade offices and the embassy in Jakarta said they were retaliating for the vandalism against their missions in Australia.

Much of the outrage seems orchestrated, or at least tolerated, by authorities. In Balikpapan, a port town where many Australian mining and mineral companies have offices, the demonstrations were held by a well-known government youth organization that has long been accused of being a violent intimidation force.

During the almost daily demonstrations in Jakarta, riot police stood by when students attacked the fence of the Australian Embassy, but when anti-government students marched to protest military brutality in East Timor, the police charged in with tear gas and rubber bullets.

What is unclear is how this rising anti-Western sentiment affects Mr. Habibie, whose term ends in two months and who is planning to seek a new mandate when the People's Consultative Assembly convenes in October to choose a president.

Blair government under fire for plane sales

London -- The government of Prime Minister Tony Blair came under a hail of criticism Sunday over the imminent delivery of British military planes to Indonesia despite a European Union embargo resulting from the East Timor crisis.

Three Hawk ground attack aircraft at the centre of the upset, bound for Indonesia, were grounded in Thailand, officially because one of the three transit pilots was ill.

The government said was powerless to stop delivery of the Hawks to Indonesia, because the contract was signed before the European Union (EU) decreed an arms embargo last week.

The Conservative opposition used the occasion to attack the New Labour cabinet for not living up to its promises of "ethical diplomacy."

But "delivery was taken by the Indonesians before the embargo, indeed before the current crisis" in East Timor, the Labour junior defense minister John Spellar said in a televised interview on Sky News. "Obviously in the spirit of the embargo we would prefer that they did not go to Indonesia," he said.

Spellar noted that the three Hawk jets currently are in Thailand and that Britain was no longer was responsible for the aircraft. "Delivery has already been taken by the Indonesian government and they are in Thailand, which is a sovereign independent country, and they are owned by another sovereign independent country," he explained.

The EU issued the arms embargo against Indonesia on September 13 in response to murderous attacks by militias backed by Jakarta's forces against East Timorese who had voted overwhelmingly on August 30 for independence.

Spellar noted that the original contract had been signed by the previous Conservative government. The Conservative shadow defence spokesman, Iain Duncan Smith, said the episode showed that "the government is driven by hypocrisy at its core. It says one thing and does another."

Menzies Campbell, the Liberal Democrat foreign affairs and defence spokesman, said "The Indonesians have broken the conditions upon which these aircraft were to be supplied. There is no legal or moral obligation for Britain to continue to fulfil the contract."

He said the British government was responsible for the confusion, leaving "itself open to accusations of complicity in the genocide in East Timor, both by arming the Indonesian generals and its refusal to revoke the licences for the Hawks."

The affair was revealed by The Sunday Times newspaper which said the planes were grounded in Thailand following an intervention by Foreign Secretary Robin Cook, and not due to the ill health of one of the pilots.

A total of nine Hawks were granted export licenses by the former government. They are among a batch of 16 ordered in 1996, the key component of an estimated 300-million-pound (480-million-dollar) arms deal. There has been concern that Indonesia has flown some of the Hawks already delivered over East Timor despite assurances that it would not.

'Too early' to plan trials for atrocities

Vaudine England, Jakarta -- International calls for the prosecution of Indonesians for war crimes in East Timor are sure to meet stiff opposition in Jakarta, and even some human rights monitors in the capital suggest now is not the time to pile on yet more pressure.

UN High Commissioner for Refugees Sadako Ogata, UN Commissioner for Human Rights Mary Robinson, US Secretary of State Madeleine Albright and the Australian Government all say evidence against perpetrators of the brutality in East Timor must be collected.

"The awful abuses committed in East Timor have shocked the world -- and rightly so, since it would be hard to conceive of a more blatant assault on the rights of hundreds of thousands of innocent civilians," Mrs Robinson told the UN Security Council last week. "There must be accountability for the grave violations committed in East Timor," she said.

East Timor's Bishop Carlos Belo also believes justice must be done, if future efforts at reconciliation are to succeed. "We must forgive, but we must also bring about justice," the co- winner of the 1996 Nobel Peace Prize said. "There must be trials."

But Indonesians are struggling with the idea that their country can be accused of such crimes, let alone be held accountable to foreigners for them.

The immediate reaction is defensive, so the issue becomes not one of human rights, but yet another example of how foreigners are keen to dabble in the domestic affairs of a sovereign nation.

"My fear is that this nationalist backlash we are seeing now will only be intensified with such pressure on war crimes and prosecution," said a senior Western source in Jakarta.

The danger this and other sources see is that Indonesia could be forced into a shell of resentful xenophobia by such moves from the global community. That would jeopardise diplomatic and financial contacts, Indonesia's hoped-for democratisation and its economic recovery.

"It is not a black-and-white situation," said Dewi Fortuna Anwar, foreign policy adviser to President Bacharuddin Habibie. "The crimes against humanity are not one-sided. It would be better to ... put the past behind us."

Armed forces chief of territorial affairs Lieutenant-General Bambang Yudhoyono said yesterday: "There is a conspiracy, an international movement ... to corner Indonesia by taking up the issue. We must position ourselves firmly that we have the facts, that it is not so easy to regard it as war crimes or crimes against humanity."

Among the arguments proffered for postponing or avoiding war- crimes prosecutions is the idea that the last thing a future East Timor needs is bad or confrontational relations with Jakarta. Indonesians say their own soldiers have been victims with many killed or maimed by East Timorese fighters.

A 42-strong team of UN human-rights experts is collecting evidence necessary to support possible future trials. It is focusing on ties between anti-independence militias and the Indonesian armed forces. Top of the list of suspects is Major- General Zacky Anwar Makarim.

Other names mentioned include General Adam Daimari, whose regional command includes East Timor, Colonel Tono Suratman, formerly commander of the army in East Timor, and the militia leaders Joao Tavares, Cancio Carvalho and Eurico Guterres.
 

Arms/Armed forces

Army pullout shows Indonesia fault lines

Seth Mydans, Jakarta -- When international peacekeepers land in East Timor in the days ahead, they will witness the departure of a defeated Indonesian army at the lowest ebb in its history -- humbled, hesitant, embittered and convulsively violent.

After failing, or refusing, to bring order to the disputed territory despite intense international pressure, the Indonesians have apparently been spurred by the imminent arrival of foreign troops to clamp down at last, bringing some order to the capital, Dili. They even swept streets clean of some of the debris left by looters.

For most of this year, and most intensely in the past two weeks, these units have encouraged and worked with the brutal local militias responsible for laying waste to the capital and killing hundreds -- possibly thousands -- of people.

These are the actions of an army that has run out of control, carrying out threats that few people had taken seriously -- to ravage the land it invaded 24 years ago, to relinquish it, after a vote for independence, only as a smoking and bloody ruin.

The inability of military commanders in Jakarta to rein in their troops, together with what amounts to a call for help from abroad, have dealt them a double humiliation.

The euphemism offered by the military chief, Gen. Wiranto, for this debacle is "psychological factors." It is a phrase that reveals as much as it hides about the armed forces today.

What the general meant when he used the phrase during a brief visit to East Timor with senior UN envoys was that his men on the ground were so emotionally committed to keeping East Timor as part of Indonesia that they were beyond the reach of his orders.

But "psychological factors" run much more deeply through the armed forces as they go from being an unquestioned power in the Indonesia of former President Suharto to an uncomfortable search for their place in a newly open and democratic environment. In post-Suharto Indonesia, military men find themselves subjected to public criticism and even the possibility of investigations and trials -- inconceivable before unrest forced Suharto from office last year.

This once-swaggering army, Suharto's arm of repression, is now divided and self-doubting. The moderates at the top who seek to professionalize and modernize the army face resistance from some hard-line subordinates who fear losing their power and privileges and insist that a harsh military hand is still needed to hold together the vast, scattered island nation of Indonesia.

The experience in East Timor this year -- from President B.J. Habibie's surprising announcement in January that he would let East Timor become independent if its inhabitants voted that way to the last two weeks of violence -- has exacerbated divisions in the military and exposed new risks to Indonesia's uncertain transition toward democracy.

Discontent among some officers has apparently reached the point of insubordination. Wiranto's hesitancy about clamping down illustrates the tenuousness of his command, several analysts said. Now his invitation to foreign troops to enter sovereign soil can only fuel resentment.

"We are waiting to see what develops," said James Fox, an expert on Indonesia at the Australian National University. "How far have we pushed this and how far has Mary Robinson spooked them?"

Mary Robinson, the UN high commissioner for human rights, visited Jakarta last week and drew an agreement from Habibie for an investigation of military abuses in East Timor that she said may lead to war-crimes trials.

"This is really scary for them," Fox said. "Mary Robinson has raised a specter that for the first time ever -- ever -- the Indonesian military might be accountable for its deeds."

Paradoxically, the military today is both more and less divided than it was under Suharto, who led the country for 32 years. Suharto, a former general himself, made it his business to foster rivalries at the top in order to keep the military from posing any unified challenge to him.

In this way, he was its real leader, and his departure -- and replacement as president by his politically weak vice president, Habibie -- left the armed forces "without a brain," as one diplomat put it.

"With a strong leader, Indonesia's institutions looked stronger than they were," the diplomat said. "Now we are seeing how weak the institutions really are. Even the military is without coherence and order."

Wiranto has acted to consolidate the top of the officer corps and has removed his main rival, Gen. Prabowo Subianto, Suharto's son- in-law. But opponents are still numerous.

As East Timor demonstrates, Wiranto has been unable to replicate the fear and unquestioning obedience commanded by Suharto, allowing local commanders more autonomous control.

Indonesia invaded East Timor, a territory approximately the size of Connecticut, with 800,000 inhabitants, in 1975. One year earlier, Portugal withdrew as East Timor's colonial power.

Indonesia's military has effectively ruled East Timor ever since the invasion, fighting a counterinsurgency that has cost the lives of some 200,000 people.

When Habibie made his sudden offer of independence in January, the military began mobilizing irregular militias to try to skew the vote through terror. When that failed, the militias, with the open backing of local military units, set out on an apparent campaign to leave behind a blasted and barren land, killing, burning and forcing hundreds of thousands to flee.

The army blames two battalions that include many native East Timorese troops for the problems and has transferred them from the territory. But there are reports, given credence by local residents, that about 6,000 East Timorese troops have joined the militias.

The conflict in East Timor only complicates the military's difficult attempt to retreat from its aggressive political role, known as "dual function," in which it formed virtually a parallel government throughout all levels of administration.

The military has decreed that if officers wish to hold administrative positions they must resign their commissions. And it has agreed to a 50 percent reduction, to 38 seats, in its parliamentary bloc.

But at the same time, it is pushing through a new national security law that gives it more latitude than ever before to declare a state of emergency and military rule.

And in several areas of unrest -- notably East Timor, Aceh and Ambon -- it has behaved over the last year with all the brutality and sense of impunity of the Suharto past. This rule of terror that has characterized the military's style may have some short-term effect but is already obsolete, a senior ambassador said. The success of the outside world in forcing Indonesia to accept a peacekeeping force in East Timor is a case in point.

"The army has been using tactics lately that are 15 or 20 years out of date," the ambassador said. "It will have to learn that these tactics are unsuitable for an era of globalization when you've got a free press and the world is watching."
 

Economy & investment

Economic recovery hangs in balance

Washington -- Events in East Timor and the Bank Bali scandal threaten to derail Indonesia's fragile economic recovery but it has not yet been knocked completely off track, the World Bank said Thursday.

"The sudden upsurge in violence in East Timor and the disturbing implications of the Bank Bali affair have shaken market confidence," the Bank said in a quarterly review of East Asia.

"These developments have interrupted, and may even derail, an otherwise steady march toward economic stabilisation," the report said.

But Jean-Michel Severino, the World Bank's vice-president for East Asia and the Pacific, said the gains had not yet been reversed, noting that the Indonesian economy had attained two quarters of positive economic growth this year "despite the political events."

The growth this year could partly be ascribed to the fact that the economy had fallen so far it had to bottom out at some time, but "what impresses us quite a lot is that this [growth] has taken place despite the political events," Severino said.

The economy had shown great resilience and capacity to rebound and "a lot of investors, both domestic and international, are waiting to jump and come back as soon as the political situation stabilises," Severino said. Investors remember the "tremendous" growth record of previous years and "are ready to try again."

In its World Economic Outlook report released on Wednesday the IMF forecast the Indonesian economy would shrink 0.8 percent this year and return to positive growth of 2.6 percent next year, after shrinking 13.7 percent in 1998.

But Severino said that "what is absolutely key right now" for the economic turnaround to continue "is a good clean electoral process" in presidential elections in November.

International Monetary Fund managing director Michel Camdessus said earlier Thursday that a resumption of IMF aid to Indonesia depended on developments in East Timor and resolution of the Bank Bali scandal.

Camdessus said he hoped that with the arrival of a multinational peacekeeping force in East Timor that a "more acceptable situation will progressively be established."

But he said it would not make sense for the IMF to resume aid until bilateral donors did so, as IMF aid only worked as part of a concerted effort.

Camdessus also said there would be no resumption of IMF funds until the scandal surrounding Bank Bali is resolved. "We have asked for the investigations to be speeded up and the results of the investigation to be published" before funds can resume, Camdessus said.

The scandal centers on the payment of an 80-million-dollar commission by the bank to a company owned by a ruling Golkar party executive. The bank paid the commission to recover money owed by three banks which had been closed down.

Bank scandal audit backfires on Indonesia

Andrew Marshall, Jakarta -- Indonesia's decision to allow an independent auditor to probe a damaging banking scandal has backfired spectacularly -- instead of placating foreign donors and investors it has highlighted the myriad risks they face.

The full report by PricewaterhouseCoopers has been deemed by the authorities as too sensitive to publish, despite demands for transparency from the International Monetary Fund and World Bank.

But a 36-page summary, a copy of which was obtained by Reuters, contains enough damning information to keep foreign investors very wary of Indonesia, while falling well short of the comprehensive and transparent probe donors demanded.

"This won't please anyone," said the head of sales at a Jakarta brokerage. "They haven't been allowed enough scope to please the IMF. But for Indonesia the audit is very damaging."

The scandal centres on the payment of 546 billion rupiah ($68 million) by Bank Bali to a firm run by a leading figure in President B.J. Habibie's ruling Golkar party to help recover loans from the Indonesian Bank Restructuring Agency (IBRA).

Indonesia's opposition says some of the commission paid by Bank Bali to recover its money went into Habibie's re-election campaign coffers. Habibie has denied wrongdoing. But there is clear evidence of high-level involvement.

Audit won't placate Indonesia's donors

The World Bank and IMF have said loans to Indonesia are on hold until it resolves the Bank Bali scandal.

The government agreed to the independent audit after intense pressure from donors. But the IMF and World Bank have not been given copies of the full PwC report, and the auditor's summary makes clear it was denied sufficient access for its probe.

"PwC has not been afforded adequate time and sufficient access to information, and has been delayed from conducting an investigation which meets international standards and which ensures complete transparency and accountability," it said.

Analysts said the evasions and obstruction encountered by PwC bode ill for Indonesia's ability and commitment to investigate the scandal to the satisfaction of multilateral donors.

New government no panacea

The loan suspension by the IMF and World Bank is a signal they are not prepared to work with the current government and are waiting for the next one, analysts said. Habibie is widely expected to be ousted at November's presidential election.

While the battered economy can survive a suspension of a few months, a longer-term halt would have a drastic impact both on the economy and Indonesia's fragile transition to democracy.

Most analysts say there is too much at stake for multilateral institutions to risk throwing Indonesia and the region into fresh instability. But they may well be faced with a dilemma. The audit details irregularities at the central bank and IBRA. The central bank says the audit's findings are unfair and its conclusions "very speculative." The bank also complained it was not given the chance to respond to the findings before the report was published. But analysts say some individuals, if not the institutions, need to be purged.

Even if Indonesia changes government, there is no guarantee its economic institutions will be cleaned up. Unless Bank Indonesia and IBRA are reformed, donors may face the dilemma of risking sovereign default and economic collapse by continuing to withhold loans, or losing credibility by resuming lending to a country with institutions still considered suspect.

"I would say there's a need for a wholesale clearout not just of the government but also of some people in these instititions," the brokerage head of sales said. "If not, what's going to change?"

IBRA'S integrity under threat

IBRA's integrity is crucial for Indonesia. The agency runs the bank recapitalisation process, a cornerstone of recovery.

But its power and importance extend far beyond this. It has taken over around $30 billion in bad loans from troubled banks and has seized $10 billion of equity from bank owners. As it pursues debt workout deals, its equity portfolio will expand.

IBRA's influence and special powers make it a central player in resolving Indonesia's multi-billion-dollar corporate debt deadlock. And to fund the huge costs of bank recapitalisation, it must sell its vast assets over coming years.

Foreign investors will be the main buyers. But if investors feel IBRA lacks transparency, or that inside information and fat bribes are needed for them to do deals, many will stay away. Analysts believe most top IBRA officials are genuinely commited to battling corruption and patching up the economy.

But the audit notes irregularities in the actions of some IBRA officials, as well as political meddling in IBRA. It also highlights a dispute between top officials, which led to a refusal to hire staff for some divisions and concerns about the impact of this on IBRA's performance. For investors, the document is a very uncomfortable read.

Flap threatens bilateral investment

Grainne McCarthy, Jakarta -- The drastic deterioration in relations between Indonesia and Australia over East Timor threatens to damage trade and investment between the two countries, business executives say.

Members of the large Australian community in Jakarta say the outrage in Australia over Indonesia's handling of sustained violence in the half-island will lead to lost trade and investment for both countries.

"What has taken more than 30 years to build has been almost destroyed over the past [two weeks]," says Sabam Siagian, head of the Indonesia-Australia Business Council, a private trade association.

The IABC, in a statement published in Jakarta newspapers Saturday, said, "Escalation of anti-Australian sentiments in Indonesia could be very damaging to Australian business in the nation and could place future foreign investment projects in the country in jeopardy."

Any Australians "who were considering investment in Indonesia, now won't consider it for some time," says Wilfred Schultz, an Australian citizen and technical adviser in Jakarta with accounting firm Grant Thornton LLP.

Relations between the neighbors and former close allies have plummeted since East Timor voted convincingly for independence last month. In the weeks surrounding the vote, anti-independence militias have beaten and killed people, and looted and destroyed property.

Burning of Indonesian flag provokes anger

Many Indonesians resent Australia's criticism of Indonesia's handling of the crisis, and of what Indonesians perceive as excessive zeal to send troops to East Timor.

Anthony Lewis, an Australian citizen and a senior partner at Arthur Andersen in Jakarta, says tactics used in Australia to demonstrate anger at Indonesia -- such as burning the Indonesian flag -- are perceived as a direct insult by many Indonesians, who have scant experience with democratic political expression.

"We're pretty certain the people demonstrating in Australia have got no idea what it's like to be in a country where law and order is fragile," Lewis says. Indonesians are venting their outrage in scattered demonstrations around the country.

A scuffle with local protesters in the port town of Balikpapan in Kalimantan led Australian resource companies Broken Hill Proprietary Co. (BHP) and Rio Tinto Ltd. (RTP) to start pulling staff and dependents out last week.

Two Australian citizens in Balikpapan were threatened by a crowd and forced to surrender their passports to Indonesian immigration authorities. They have since received their passports.

Noke Kiroyan, president of Rio Tinto Indonesia, says the protesters wanted Australian companies to "publicly apologize for the flag burnings and for what they see as Australian interference in Indonesia's internal affairs."

Kiroyan doesn't rule out extracting more of its staff, depending on what happens after Australian troops enter East Timor Monday as peacekeepers.

Trade was picking up

A blockade last week of Indonesia-bound cargo at Australian ports already has hurt trade between the neighbors. Maritime Union of Australia had refused since September 10 to work on cargoes bound to or from Indonesia, affecting shipments of wheat, paper pulp and other items.

According to news reports, the union ended the ban Saturday, but said they won't hesitate to impose it again if Indonesia fails to uphold its commitment to the UN to cooperate with peacekeeping forces.

It's too early to tell what lasting damage the cargo ban has done, but businessmen say it is worrying that the ban came amid signs that exports from Australia to Indonesia were picking up.

After a slump last year, Australia's exports to Indonesia jumped 21% in the three months ended June 30, from the same period a year ago.

Saul Eslake, chief economist for Australia and New Zealand Bank, based in Melbourne, says East Timor faullout could hurt Australian grain and live cattle exports to Indonesia. Other major Australian exports to Indonesia include cotton and manufacturing equipment, particularly for the mining industry.

Widjaja Sugarda, a former Indonesian consul general to Sydney, says Australian trade with Indonesia wasn't affected after the 1991 massacre at the Santa Cruz cemetery in East Timor, in which Indonesian security forces killed as many as 200 people, causing outrage in Australia. "Now with 4,500 [Australian] troops going in, trade will be affected," he says.