Foreign Relations of the United States, 1949, The Far East and Australasia, Volume VII, Part 1

501.BC Indonesia/8–2349: Airgram

The Secretary of State to the Embassy in the Netherlands

secret

Washington, August 23, 1949.

A–303. Ushic A–l. Para 3, Hicus 2.¹ Looking toward the opening of the Round Table Conference the Department desires to confirm the soundness of your approach to the tasks ahead and to set forth views upon issues of the Conference. First, it is believed advisable to summarize for general purposes within the Department and Government certain elementary propositions, long familiar to you and others who have been striving toward settlement of the Indonesian dispute, describing United States interests in a settlement of the problem. These factors lead to an enumeration of a second group of principles, namely, those basic considerations guiding plans for and participation in UNCFI’s efforts to aid the parties in accomplishing the Conference’s objectives.

A. In the light of the preliminary agreement reached within the last three months and of the major steps taken by the parties toward final settlement of the dispute, most of the substantive issues of the conference are of primary concern to the parties alone, with UNCFI and individual members thereof asserting ideas actively only when assistance is necessary or desired. Yet the U.S. is vitally interested in the outcome of the controversy and in the settlement reached at The Hague. And this concern carries a corollary interest in certain phases of the conference’s deliberations.

This country’s immediate interest rests upon long participation in UN efforts to settle the dispute. Various Security Council resolutions delineating UN interests and responsibilities with respect to the controversy are still in effect. The dispute still exists, even though both parties have complied with a substantial portion of the obligatory elements of the January 28 resolution. Under that resolution and according to the express intentions of the Netherlands and the Republic the UN may continue to exercise an active role in the situation, particularly with respect to observation or supervision of elections even after the formal transfer of sovereignty. Moreover, the item is still before the General Assembly and it is unlikely that the item will be dropped from the Assembly’s agenda prior to a substantial settlement of the dispute.

Of critical importance is our concern over the stability of Southeast Asia and the development of friendly, peace-loving and economically sound governments in that area. It is of equal importance, in the context of United States world policy, that the adjustment in Indonesia be accomplished in a fashion which will not vitiate the Netherlands’ position as a leading democratic nation.

Unless an amicable settlement, allowing room for the peaceful adjustment of nationalist aspirations, is accomplished by the parties, Southeast Asia and Indonesia will be more susceptible to Communist expansion. This hazard would constitute a major source of trouble for the U.S. and the free world.

Various Members of the U.N. will be asked to participate in and contribute substantially to a program for the economic rehabilitation and development of Indonesia after the establishment of the new federal government. It may be anticipated that this country will be requested to supply public and private capital for economic purposes. Since all plans for economic rehabilitation and development necessarily presuppose a sound political structure in the new nation, all other nations contemplating participation in future Indonesian economic development must be concerned with the political stability of the new nation.

B. For all of the foregoing reasons certain of the specific terms of transfer and of Indonesia’s proposed governmental structure are of more than general interest. As parts of what is believed to be a sound basis for a just settlement through the U.N., the following are cardinal elements of U.S. policy:

1. Although UNCFI should not be concerned with procedural details of the RTC, it is essential from the standpoint of a just solution that the conference be conducted in a fashion which will give reasonable voice to the views of the Republic and the other elements of the Indonesian group, particularly with respect to the structure and powers of the new Indonesian state. Similarly, appropriate weight upon issues of transfer and the formation of the Union must be accorded the views of the Netherlands.

2. The primary result of the Conference should be the establishment of a genuinely independent Indonesian state. After the transfer of sovereignty, this state should be able, both constitutionally and practically, to exercise all the powers of a member of the international community, i.e., primarily: self-government, independent foreign relations, and membership in international organizations such as the U.N.

3. Since the adoption of the Linggadjati agreement both the Republic and the Netherlands have frequently committed themselves to the principle that a Netherlands–Indonesia Union be formed; and UNCFI’s proposals for settlement have encompassed such a relationship. Hence, in fulfilling mutual commitments the new state and the Netherlands should, as a part of the forthcoming settlement, enter into a bona fide Union. As with other settlement problems, the precise form and scope of powers of the Union are matters for decision between the parties. Presumably, as under previous plans, the Union will reach its decisions upon consultation, requiring the affirmative vote of both Indonesia and the Netherlands. The parties to the Union should consider the obligations imposed by the U.N. Charter when they formulate the projected defense relationship under which both the new nation and the Union may carry on consultation and make cooperative arrangements for Indonesian defense with other powers.

4. The structure of the permanent federal government and the delineation, form of government and size of member states should be determined in some measure, at least, by the Indonesian people rather than by self-appointed representatives. Under commitments previously made by both the Netherlands and Republic representatives and according to the terms of the January 28 Security Council resolution, the elections to determine membership of the constituent assembly should be subject to some form of observation or supervision by UNCFI or a successor U.N. body.

5. The new nation should adopt as one of its underlying tenets the principle of fair treatment to the Netherlands and other interests in Indonesia. Such an undertaking will be a natural consequence of assurances of Indonesian leaders during U.N. negotiations that the new state will be responsible and cooperative when independent. Although no effort should be made to impose a western legal or economic structure upon the new nation, a guarantee of fair treatment should be formulated if Indonesian hopes for substantial economic assistance from sources outside Indonesia are to be realized. Such a principle would, of course, be consistent with prevailing conceptions of international law and justice and might be evidenced, in particular, by the following applications, which would give more specific meaning to general declarations previously made by Republican and Federalist representatives:

(a) Steps should be taken toward establishing protection of individual freedom and civil rights of all individuals in Indonesia, whether nationals or aliens, in accordance with guiding principles of international law, the U.N. Charter, and the concepts of the Declaration of Human Eights and the proposed Covenant on Human Rights;

(b) Existing property and contract rights and franchises should be recognized; and an obligation to refrain from confiscation of private property without fair compensation should be accepted in advance;

(c) Aliens of all nations as well as of the Netherlands should be accorded equal rights in participating in trade with Indonesia and in business activity and industrial development in the new nation. Although the new nation will, of course, enjoy freedom to adopt provisions designed to prevent foreign monopoly and exploitation, it may be observed that if full assistance through public and private investment from other nations is sought, some guarantee that there will be no serious discrimination against foreign interests will be necessary.

Beyond these essential principles, the concern of the U.S. with respect to the work of the RTC is to aid in seeing that nothing holds up the rapid completion of the negotiations, drafting, and disposition of all major issues preliminary to the transfer of sovereignty.

If efforts are made by the conference’s representatives to include the principles enumerated above, the U.S. should not urge any details for the settlement. Should the parties encounter difficulty, however, in solving any particular problems, UNCFI should stand ready to aid in presenting solutions. For example, UNCFI and its members may be prepared to suggest possible means of working out settlement of boundary lines, solution of various problems incidental to the transfer of debts and assets to the new nation, and the control of armed forces during the initial period of sovereignty prior to the formation of a cohesive federal security system.

In accordance with the recommendations of the parties in the June 22 memo of agreement and the tenor of the January 28 resolution, it will be desirable that a U.N. Organ observe the implementation of the agreement for transfer of sovereignty. This may be done, as the Netherlands and the Republic have suggested, through UNCFI, or through a successor U.N. body. The participation of this Organ will be carried out with a view to the Security Council’s dropping the case from its consideration when the settlement has been accomplished with substantial fidelityto the foregoing principles.²

Acheson

1. Telegram 686, August 9, 5 p. m., from The Hague, not printed. Mr. Cochran summarized his policy of letting the parties concerned work out agreement as far as possible between themselves, with assistance only when required. (501.BC Indonesia/8–949)
2. For a summary account of The Hague conference held between August 23 and November 2, see Department of State Bulletin, December 12, 1949, pp. 958–969; for UN doc. S/1417, November 10, 1949, see SC, 4th yr., Spec. Suppl. No. 6, pp. 1 ff.