Indon-Aust relations turn new page, but clouds loom on horizon

By Karen Michelmore, South East Asia Correspondent

JAKARTA, Dec AAP - Australia's relationship with Indonesia is full of new promise.

A new year, and a new Australian prime minister and foreign minister, offer scope for a fresh chapter in at-times tricky bilateral ties.

Indonesia's media has heralded the November 24 election of Kevin Rudd - whose Mandarin-speaking skills received wide acclaim - as a new era in Australia-Asia relations, including with Jakarta.

Much has been written about how Mr Rudd - a former diplomat whose son-in-law is ethnic Chinese - may reinvigorate Australia's role in the region after more than a decade of US policy-oriented John Howard.

Certainly, the first signs are encouraging.

Indonesian President Susilo Bambang Yudhoyono was the first world leader to call Mr Rudd to congratulate him on his win.

And Mr Rudd's first overseas visit as prime minister was to Indonesia for the UN climate change talks in Bali, where he formally handed over documents ratifying the Kyoto Protocol adding much-needed momentum to the summit.

"To Prime Minister Kevin Rudd, I say to you - welcome aboard, mate!," President Yudhoyono told delegates, sparking a hearty round of applause.

The two leaders also held warm and friendly private talks, which Dr Yudhoyono described as "a very constructive and productive dialogue".

"The relations between Australia and Indonesia is very good, strong and progressing, and we are committed to expand and strengthen these relations," Dr Yudhoyono said.

It has been a busy time too for other ministers - new Foreign Minister Stephen Smith met with his Indonesian counterpart Hassan Wirajuda, while the new Trade Minister Simon Crean also visited and pledged to continue investigating a possible free trade pact with Indonesia.

But as much as there is cause for optimism, there are some dark clouds on the horizon.

The fate of six young Australian drug traffickers on death row in Bali could severely test relations.

Mr Rudd told Dr Yudhoyono in their first meeting that he will personally appeal for clemency for the six Bali Nine members facing the firing squad if their final legal challenges fail.

Australia will have to walk a fine line when three 2002 Bali bombers facing execution eventually meet their fate, sympathising with the families of the 202 victims, while still maintaining a consistent line opposing the death penalty.

Mr Rudd and Dr Yudhoyono also had a "general discussion" on the Balibo Five case, after NSW Deputy Coroner Dorelle Pince found the five Australian-based journalists had been deliberately killed by Indonesian troops in East Timor in 1975.

And there are a plethora of other issues bubbling away - such as alleged human rights abuses in nearby Papua - which could resonate louder with Labor voters than they did with a Howard constituency.

But whatever the future holds, the groundwork done by the Howard government to cement relations with Indonesia - particularly through counter-terrorism cooperation, Australia's generous post-Tsunami aid, and in the 2006 Lombok security pact - will help ensure that relations will bounce back easier than they have in the past.

Dr Yudhoyono says there will always be problems between neighbours.

"But with a good spirit and good neighbourliness, our two countries will handle whatever problems stand in the way," he said.