JULIE BISHOP: Minister two-plus-two meeting of the foreign affairs and defence ministers. We have had a very warm and constructive meeting today. Australia and Indonesia are close neighbours, we are natural partners, we have shared in common interests across a broad and diverse range of areas. We have noted the warm rapport that was established between Prime Minister Turnbull and President Widodo on our Prime Minister's recent visit to Jakarta and we have agreed that the relationship is in very good shape. Indeed, since August there have been 15 ministerial meetings between our two countries. Indeed, Ibu Retno and I have met on about six occasions and texted many more times over the last few months.

Today's meeting coincides with another meeting in Jakarta. Two Australian ministers are meeting two Indonesian counterparts in Jakarta, and likewise in Sydney, as Attorney-General Brandis and Minister for Justice Keenan are meeting their counterparts in Jakarta while we meet here in Sydney. I think that highlights the depth of the relationship, the fact that national security is a priority for both our countries and we discussed many aspects relating to our shared interest in the area of national security and defence and I'll ask Senator Payne to talk about the defence matters shortly.

A focus of our discussions today was enhancing our economic ties, the trade and investment potential between our two countries. Indonesia is our 12th largest trading partner. There is room for us as two G20 economies to do a great deal more together.

We did focus on national security including counter-terrorism, de-radicalisation, and intelligence sharing. We work together internationally, regionally and bilaterally.

There was a particular focus on co-operation in the Pacific and also in the Indian Ocean because we are two nations that straddle both the Indian and Pacific Oceans. We also spoke about the growing people-to-people links through tourism, through academia, but particularly through student exchange. There are at least 17,000- possibly close to 18,000 Indonesian students currently enrolled in Australian educational institutions under the Government's signature New Colombo Plan where we send Australian students to study in our region. In its first three years Indonesia has proven to be the most favoured destination of Australian students and by the end of next year some 2,000 young Australians will have lived and studied and undertaken internships and practicums in Indonesia, making it the most popular destination for our New Colombo Plan students.

So all in all it was a very positive meeting. I look forward to meeting my dear friend and counterpart Minister Retno Marsudi in Indonesia as we co-host the Bali Process ministerial meeting in March next year and in the meantime I'll ask my friend and colleague Minister Payne to make some comments about the defence discussions.

MARISE PAYNE: Thank you very much Minister Bishop and to our Indonesian colleagues, Minister Ryamizard and Minister Marsudi, it's fabulous to have you both here in Sydney for the third Australia-Indonesia 2+2 Foreign and Defence Ministers Meeting today. It was also my great pleasure to meet with Minister Ryamizard in a Defence Minister's meeting earlier this morning as well. As Minister Bishop said these dialogues follow what was an extremely positive visit by Prime Minister Turnbull to Jakarta just last month.

Ladies and gentlemen, as close neighbours Australia and Indonesia will always be of significant strategic importance to each other. For us maintaining a secure and stable region is an absolute strategic priority.

This is a defence relationship which has been built over many decades. It has been an effective way for to us learn from each other, to work co-operatively and most importantly to also build our people-to-people links.

In fact if you speak to Minister Ryamizard, you will know that he has taken the opportunity on this particular visit to meet informally with two former colleagues, senior Australian leaders in our defence forces over many years. Both General Sanderson and General Peter Leahy have had the chance to catch up with Minister Ryamizard during his visit here and that is I think a real reinforcement of the depth, the strength and the longevity of those many of those people-to-people links. In fact they go back to Minister Ryamizard's engagement in Cambodia of many years standing.

Today ladies and gentlemen, we reviewed our defence co-operation. We reviewed it in the area of counter-terrorism, of maritime security, of humanitarian assistance and disaster relief and in capability development. That goes to illustrate the depth and breadth of our relationship. In fact this year our defence organisations have also enjoyed a very productive relationship across a broad range of engagement areas so there have been exercises, there have been the visits that Minister Bishop referred to, exchanges, training and the strength of our continuing education engagement. Just in November this year, we conducted the Chief of the Defence Force High Level Committee Meeting in Jakarta, and the Senior Officials Level Defence Strategic Dialogue, both very important achievements preceding this particular meeting today.

We have our peace keeping centres conducting our second biennial peacekeeping exercise, GARUDA KOOKABURRA, in Indonesia which is to prepare participants for future deployments to complex and multidimensional peace operations. Across all three of our services in both of our militaries we have continued an extensive engagement and we discussed further opportunities for that as well. We have a long standing history of responding together to natural disasters, of providing humanitarian assistance- and this is a particular interest of Minister Ryamizard if I may say.

So to support future co-operation in that area we will also undertake a new humanitarian systems and disaster relief exercise next year. Importantly, the Australia-Indonesia Defence Co-operation Agreement is due for review in 2017 and in order to prepare for that well, Minister Ryamizard and I have today agreed that we will review and renew our defence co-operation agreement and that initiative will begin in 2016 and in doing so we've made a very strong recommitment to maintaining a productive and comprehensive defence relationship. In fact Minister Ryamizard began his remarks this morning by saying there is an Indonesian maxim which goes something along the lines of- and I'll do this in English no Bahasa, I think, ‘You can choose a friend, but being neighbours is a destiny’. And we are definitely making the most of this very productive destiny that we have together, the shared destiny of being neighbours and today's meeting has gone a great deal of distance to reinforce that.

JULIE BISHOP: Thank you Marise. Ibu Retno followed by Bapak Ryamizard.

RETNO MARSUDI: Well, thank you very much Minister Bishop and Minister Payne, colleagues. I start this morning's meeting along the line of what Minister Payne mentioned, is that we can't choose our neighbour. What we have is two options, whether we want to spare no effort to develop co-operation as many as possible, or we stay on the differences. I think we committed to pick up or to choose the first option. We try to do our best to develop as many co-operations as possible. This meeting is conducted in a very good atmosphere. The bilateral relation between Indonesia and Australia is in a very good shape especially after the visit of Prime Minister Turnbull to Jakarta. So, I would like to convey our highest appreciation for Australia, for Australian Government and people, for hosting this very important meeting. As my colleague Julie Bishop mentioned, this meeting was conducted in a very productive, transparent and amicable manner and we concluded with many issues that can be followed up.

As for issues, there are three issues as mentioned also by Minister Bishop, the bilateral issue and then the regular and the international issue. As for the bilateral issue, there is some important issue that we would like to focus. First is on our commitment to strengthen the economic co-operation. We discuss about the trade investment, tourism co-operation that we can be promoted in the future. For Indonesia, Australia is one of the important partners when it comes to trade, investment and tourism.

The second point on the bilateral is our strong commitment to invest on the people to people contact. Then, education co-operation becomes very important in our bilateral relation. More than 17,000 Indonesian students study in Australia and you also your initiative to have the new Colombo plan, which we appreciated very much. And on top of that, still on the people-to-people contact, we also decided to have the Indonesia-Australia dialogue on the first half of 2016.

The third issue on the bilateral context is on the maritime co-operation. A lot has been done between our two countries and the recent development among others is the signing of the joint communique to combat IUU fishing in October 2015 and also the Sister Port between Indonesia Port Corporation and the Port of Townsville.

The fourth point is on the counter-terrorism. We applauded co-operation that we have with Australia to start with our co-operation in the context of [indistinct]. I would like to share with you that [indistinct] already train more than 18,000 police from 70 countries and it is conducted with co-operation among others with Australia. So there is four points we discuss mainly on the bilateral issue. As far as the regular and international issue, as Minister Bishop mentioned, we discuss about Pacific, we discuss also about our co-operation in other issues including of course the counter-terrorism issue. And as for Indonesia, we mention about the need for us to continue our co-operation on the maritime issue in the context of East Asia Summit, as well as on the IORA. We just take over the chairmanship of Australia in IORA and we will continue our co-operation in IORA. I thank you very much.

RYAMIZARD RYACUDU: [Translated] Thank you to the Foreign Affairs Minister and the Defence Minister from Australia. I won't speak for too long, because it's already been conveyed quite a lot now, so clearly what I would like to say is that I'm grateful to the Foreign Affairs Minister and the Defence Minister that have welcomed us and we discuss, we had a warm dialogue and it was very friendly and in this friendship it's very important, and because the defence co-operation we've had for 50 years, and it's not a short amount of time. Fifty years is a long time and we've had a lot of results from that, however many thousands of our soldiers have studied here, or practiced, had exercises or training. So this is a sign that the relationship between the two countries is actually very good, so the political issues, we do have ups and downs, but that's no problem. That's normal, the important thing is that we continue the friendship, because the friendship is founded by strong hearts.

So this relationship we have, if it's just what we see, then this friendship will continue to go forward. I would like to also ask to our friends from the media if you could also take a part in disseminating this information as well, because when we are friendly, the region will be safe and secure and if we are secure, we will feel that and earlier with the Defence Minister Payne we talked about a number of things about threat. So in Indonesia we don't consider there to be a threat in the region, both to the north, so to the Asian countries to the north and also to the South too with Australia, we don't consider there to be threats.

So the threats that we have are the real threats. What are they? Terrorism, the threats of natural disasters, disease and also drug smuggling and also on top of that as well, refugees... So that's not a threat, but it's a bit of a hassle and so we spoke about this. So the issue of threats, so we have talked about co-operation on how we're going to be combatting terrorism and then today we talk about activities of being able to find a solution for that and also, we also spoke about natural disaster threats, about maritime security, we also spoke about doing it together. So there's no problems and then to extend, continue on the defence relationship, which will- the expiry date is in 2017, but we have made plans that the co-operation going forward will be even greater than what it has been.

So this is what we spoke about and then finally, there were disruptive issues, so Indonesia has never disrupted or caused disruptions in other countries. It hasn't intervened in the issues of the affairs of other countries and Indonesia also doesn't want to be disrupted or have other people involved in its affairs. There are countries that are getting involved in the issue of Papua. For us, Papua is in the United Republic of Indonesia. The United Republic of Indonesia extends from Sabang to Papua. There is no other solution to talk about it, that's it, that's the way it is. So this is so that everyone will know that that doesn't need to be spoken about, so I think that you can understand that.

JULIE BISHOP: Thank you, Ministers.

COMPERE: The first question is from The Australian, Brendan Nicholson.

JOURNALIST: Thank you very much, Brendan Nicholson from The Australian newspaper. Ministers, on the eve of these talks, police in Indonesia rounded up a number of alleged terrorists. They reportedly were acting on information that was passed on to them by the Australian authorities. Can you please tell us where that information came from, what it covered, and what - to what extent it was valuable and any information you can give us about what was planned in terms of attacks, and just more generally how important to Indonesia is a flow of intelligence information from Australia and its allies in dealing with terrorism?

RETNO MARSUDI: [Indistinct] okay well thank you, Mr Nicholson, for the question. Firstly on that issue, on that news, yesterday, last night, I had a communication, I had a discussion with my colleague, the chairman of the counter-terrorism agency about the news and in fact that this news has to be further examined first because so far we didn't receive any proof of that issue, so we will work further to prove whether that news is correct or not.

On the intelligence, sharing information, this is one of the most important issue that we have to do under the context of the counter-terrorism co-operation so that's why today within Australia and Indonesia we signed the MOU on countering terrorism and one of the scope of co-operation clearly mention about the intelligence information sharing.

JULIE BISHOP: Thank you, Ibu Retno. As the Foreign Minister indicated today Australia and Indonesia signed a Memorandum of Understanding on Countering International Terrorism and that will renew the overarching framework between our two countries on our counter-terrorism partnership. The particular matter to which you refer is obviously very new news and so we won't go into the details of what is clearly a security and intelligence matter, suffice to say that Australia is always prepared to play its part and in this instance it would appear that the Indonesian police have been very successful in thwarting an attempted terrorist activity, but the details are still being made known to us.

Overall Australia and Indonesia are co-operating extremely closely on the whole issue of countering terrorism and we're playing our part globally, we're certainly playing our part regionally and bilaterally we're working very closely together. That's evidenced by the fact that our two counterpart ministers - the Attorney-General and the Minister for Justice are holding meetings with their Indonesian counterparts today on the issues of utmost national security importance. So on the same day in both our countries, Ministers are focussing on the issue of counter-terrorism and we will continue to co-operate in sharing information, sharing intelligence, for the safety and security of our respective people and the region.

COMPERE: Haeril Halim from the Jakarta Post.

JOURNALIST: Thank you for the opportunity, I'm Haeril from the Jakarta Post, and my question is related to boat people and I ask Mr Turnbull that isn't up here to consider the [indistinct] push back policy which concerns Indonesia in many cases, and then what concrete plans that both Indonesia and Australia have achieved on the issue on today's meeting on the boat people issue and also apart from the intelligence sharing on terrorism, counter-terrorism effort and what else, are there plans that have been made during today's meeting?

JULIE BISHOP: There have been a number of matters agreed upon today including the Memorandum of Understanding on Counter-Terrorism, the Defence Co-operation Agreement as Minister Payne referred, the co-operation in working in the Pacific, a focus on our economic and trade co-operation, the Comprehensive Economic Partnership Agreement. We also spoke about the Australia-Indonesia Dialogue which will be held again in the first quarter of 2016. There have been a range of areas of renewed enthusiasm and co-operation across the board. In relation to the matter of people smuggling we had a very frank and honest discussion with each other as we do always do. Australia's focus is on saving lives, and as a result of our policies there have been no deaths at sea through the people smuggling trade between Australia and Indonesia since December 2013.

We renewed our commitment to work through the Bali Process. Australia and Indonesia are co-hosts, we will be co-hosting the ministerial meeting in March 2016. People smuggling is a regional problem, it requires regional solutions and Australia and Indonesia bring our experiences, our level of co-operation to that meeting to ensure that we can achieve results that dismantle the criminal networks that prey on vulnerable people, and to ensure that there are no more lives lost at sea through this criminal trade.

RETNO MARSUDI: Just add a few. First is that we in Indonesia emphasise on the importance of the shared responsibility on that issue, so against this backdrop that as the Minister Bishop mentioned that next year we will co-host again the Bali Process on March 2016 and in fact the invitation is already signed by both of us to be [indistinct] to our counterpart. On top of that we agreed also to address the root causes, and Indonesia just hosted the Jakarta meeting to address the root causes which Australia was also present, so we will continue to co-operate on addressing also the root causes. Thank you.

COMPERE: David Wroe, The Age and the Sydney Morning Herald.

JOURNALIST: Hi Ministers, David Wroe from The Age and the Sydney Morning Herald newspapers. As neighbours who didn't choose each other, we of course have some very common interests in the region, notably the maintenance of a rules based order. Particularly as countries that either in Australia's case don't have a claim in the South China Sea or in Indonesia's who's claims aren't currently the subject of any of the particular tensions, do you feel that there is more that we can do together co-operatively to discourage China's assertiveness in those strategic waters, and I'm just going to tack on part B, I'm sorry, and that's just on the West Papua issue that has been raised. Was that actually discussed during the talks, and is Indonesia concerned that Australia is wading into an issue of Indonesian sovereignty?

JULIE BISHOP: I might tackle this to start and then I'll hand over to my friends from Indonesia. Australia and Indonesia already work very closely together on regional issues including tensions in the South China Sea, through the East Asia Summit particularly but also through the ASEAN Regional Forum and we - as far as I have observed, we both agree on the importance of a rules-based international order, respect for international law, ensuring freedom of navigation and overflight. As a country that does not have a territorial claim in the South China Sea, Australia nevertheless has a very deep interest because about two-thirds of our trade transits the South China Sea, so regional peace and stability is very important to Australia.

We will continue to call for negotiated outcomes for disputed territorial claims. We note that the Philippines arbitration matter has concluded, in that the evidence has been concluded and there will be a decision from that arbitration later, perhaps in the first half of 2016, and we certainly await the outcome of that arbitration because it touches on many contentious issues. In the meantime Australia continues to urge, as does Indonesia for calm, for negotiated outcomes and for peaceful resolution of disputes according to the rules based international order.

MARISE PAYNE: And if I may Julie, also regionally and in relation to relevant defence fora, both Minister Ryamizard and I participated in early November in the ASEAN Defence Ministers' Plus meeting in Kuala Lumpur where a number of participants spoke in relation to matters concerning the South China Sea and the application of international law and global norms. I think today's meeting has been a good opportunity to reinforce the importance of using a body like the ADMM-Plus to continue to make that statement, that message very strong. Both Minister Ryamizard and I have agreed that that is in fact a very important aspect of what we talked about today.

JULIE BISHOP: Just on the issue of Papua, yes that was part of our discussions, we had a general discussion about regional issues, about Pacific issues and Australia restated, as we have done on many occasions publicly and privately, our unconditional support and respect for Indonesia's sovereignty in this regard.

RETNO MARSUDI: Well thank you very much. I would like to start with the issue on the South China Sea. As clearly mentioned time to time from my President, from the President of the Republic of Indonesia that peace and stability is very important and it must prevail in the region including in the South China Sea. So that's why Indonesia always encourages every country to contribute to the maintaining of peace and stability. As Australia, Indonesia is also - doesn't have any claim in the territory whatsoever. We don't have any [indistinct] claim in the South China Sea and Indonesia continues to work together with ASEAN to - and China - to fully and effectively implement the declaration of conduct and the early conclusion of code of conduct.

There is one positive step that was taken during the senior official meeting in [indistinct] in August between ASEAN and China which both of us agreed to start discussing about [indistinct] and structure of the code of conduct. International law has to be respected, and Indonesia always also encouraged that every country should refrain from any activities that might risk tension in South China Sea. On Papua we appreciate very much the position, the very bold and strong position of Australia to unconditionally respect the territorial integrity of Indonesia.

RYAMIZARD RYACUDU: [Translated] So in terms of the South China Sea, so as the Foreign Affairs Minister from Indonesia said, Indonesia's attitude is clear and we don't have any issues there in the South China Sea. It's based on the constitution of- the Indonesian Constitution, it's declared that in fact Indonesia takes a part in bringing about peace in the world. And our politics- our foreign politics is a free and active policy, and taking part in bringing about world peace. And what the Defence Ministry does, it is based on the points that - based on what the Foreign Ministry does. So for example with the South China Sea, we need to … let's not just - let's not have anything happen, let's not just have those things proceeding to happen. I see that there hasn't been any follow-up on that. So if there's no follow-up on this and we just continue to have this dead end, if we don't have communication, this will be dangerous.

So that is why if we continue to have this dead end then it could- finally it might explode and something bad could happen. So that's why I'm trying to - with this free and active policy, with my meeting in China in April, that's why we need to open up that dead end of communication. And so in the beginning I spoke directly with China and they agreed with that, maybe from other people on one hand they can't receive that, and I said you know, for others to accept that you need to be open. And so we had the ADMM-Plus in China and the General there, he was the second person from the Chinese military, the second top in the Chinese military and he said that the South China Sea is our shared backyard.

So that means that all the places, it's all our shared backyard, so that's why we need to take advantage of that, we need to guard it, of our shared backyard. And so from there I saw that okay, things were starting to get through, not completely but it's already started to so we need to increase getting through there and having this openness there. Why? Because if we negotiate in finding a solution, so from a situation which was a dead end, there was no communication to a situation now where we're getting through, that's different, it will be better once we're getting through. Because if everything is just a dead end it will be deadlocked.

But once we get through and we're having communication- it might be difficult but we already have that communication, so it's this communication that is confronting us now. So- which is before us so this is what we've said and China is also already begun to take patrols with Thailand with Indonesia and Japan and America will also do patrols there. And there is no issue this has become open. This is what we are doing as a country which would like to have peace in accordance with law. I think that is all for the South China Sea.

COMPERE: Vishnu Derigrata(*) from [inaudible] Daily.

JOURNALIST: Hi, my name's Vishnu from [inaudible]. I would like to ask to Minister Bishop. There's a great concern about what happened in the South China Sea waters especially related with incidents provocation and unilateral move, includes China's move to build the new islands and yesterday China angry with the United States that they deployed a B-52 and a couple of days ago Australia also deployed an Orion AP-3C surveillance ship. [Indistinct] there's a concern that all of that might also affect and even jeopardise the progress that have been made especially through diplomats between ASEAN and China. I would like to hear your views about that. Thank you.

JULIE BISHOP: Australia's position is clear. We are focussed on upholding the rules-based international order including in the South China Sea. We urge all parties to negotiate differences peacefully and in accordance with international law. We also strongly uphold the right of freedom of navigation and freedom of overflight in accordance with international law so Australia will continue to transit the South China Sea or fly over the South China Sea in accordance with international law as we've done in the past. I believe that as the Indonesian Defence Minister said there needs to be consultation, there needs to be communication and that all disputes should be settled peacefully. That's Australia's interest. It's in the interests of all nations in our region for the South China Sea and the seas more broadly in our region to be safe, secure and the environment to be stable.

That's in China's interests, it's in Indonesia's interests, it's in Australia's interests and we are pleased to work with the ASEAN countries as they seek to implement a code of conduct with China and we hope that the United States and China will continue to communicate on these issues and of course the Defence Minister mentioned the joints exercises, Australia has joint exercises with China, with the United States, with others, I don't know whether the Defence Minister wants to add anything to that but that's our focus. Working closely with countries in our region to ensure that there's stability, security and the international order is maintained.

MARISE PAYNE: No, I think I responded on the South China Sea earlier and can only reinforce the Foreign Minister's remarks. Okay all good.

JULIE BISHOP: Thank you.

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