JAKARTA (Reuters) - Indonesia expects ties with Australia to remain on ice for at least six months given the time it will take to negotiate a code of conduct to govern intelligence gathering in the wake of reports Canberra spied on top Indonesians.
Jakarta has been further angered by recent territorial incursions by Australia's navy in forcing boats carrying asylum seekers from the Middle East and South Asia back to Indonesia.
A document from a January 13 meeting organised by Indonesia's Coordinating Ministry for Political, Legal and Security Affairs noted that Jakarta did not expect full diplomatic links to be restored until October.
President Susilo Bambang Yudhoyono announced in November he was freezing military and intelligence cooperation with Canberra, including over the thorny issue of asylum seekers who use Indonesia as a departure point to try to reach Australia by boat.
Yudhoyono demanded a code of conduct be drawn up to cover intelligence matters. Indonesia also recalled its ambassador to Canberra.
The ministry document, a summary of the January meeting and seen by Reuters, is the first clear indication of how long it will take to revive ties. That could worry the business community, even though there has been little sign of fallout on trade and investment so far. Two-way trade was worth $13 billion last year.
"It has been two months since our ambassador was withdrawn and still there are no signs (of ties improving)," said ministry spokesman Agus Barnas.
The timeframe was an "estimate" based on the current political climate, Barnas said, although October is also when a new Indonesian president will take office following elections Yudhoyono cannot contest because he will have served a maximum two terms.
The January meeting was attended by representatives from the Foreign Ministry, the military, the national intelligence service, immigration department, the police and other agencies, according to the document.
Yudhoyono has shown rare public anger over media reports Australian intelligence agencies monitored his phone, and those of his wife and inner circle. Those reports quoted documents leaked by former U.S. National Security Agency contractor Edward Snowden.
Australian Prime Minister Tony Abbott has expressed regret for any embarrassment the reports caused Yudhoyono. His government has declined to comment directly on the reports.
In response to questions from Reuters, Australian Foreign Minister Julie Bishop reiterated that Canberra had agreed to work on the code of conduct.
"Cooperation is continuing in most areas as we continue to work with the Indonesian government to put the bilateral relationship on an even stronger and more substantial footing for the future," Bishop said in a statement.
NEW SPYING ALLEGATIONS
But possibly complicating ties further, The New York Times said over the weekend that the Australian Signals Directorate spy agency had been monitoring an unnamed U.S. law firm representing Indonesia in trade disputes with Washington.
The Times, quoting an additional document from Snowden, said the Australian agency notified the U.S. National Security Agency (NSA) and offered to share information it had obtained.
Indonesia's presidential spokesman for international affairs, Teuku Faizasyah, called the report another "perplexing revelation" of spying on Indonesia.
"It is the responsibility of countries engaged in this complicity to clean up the mess, to salvage their bilateral relations with Indonesia," he said on Sunday.
Asked about the Times report, Abbott told reporters in Australia that Canberra did not use any intelligence it gathered "to the detriment of other countries".
The rift is the most serious between the two countries since 1999, when Australia sent troops into East Timor to restore peace and subdue Jakarta-backed militias after Indonesia's military pulled out of the former colony.
Business leaders fear a prolonged chill could hit economic ties, especially if government meetings that might open the way for business agreements are derailed, said Kris Sulisto, president of the Indonesia Australia Business Council.
"The important thing I hope is that there will not be any restrictions on the business community," he said.
BREACHES INADVERTENT, AUSTRALIA SAYS
Besides the spying reports, Australia's tough new approach in dealing with asylum seeker boats is becoming a major irritant in ties with Jakarta.
The Indonesian document listed five days when Jakarta suspects the Australian navy violated its territorial waters when pushing boats back: December 12, 22 and 25, along with January 1 and 6.
Australia has apologised for a number of "inadvertent" breaches of Indonesia's 12-nautical mile territorial zone. But it has refused to give further details, citing the "operational security" of its secretive, naval-led effort to turn back would-be refugees.
Bishop said the Australian Customs and Border Protection Service and the military were reviewing the circumstances of the incursions to ensure they did not happen again.
Abbott came to power last September partly because of his tough stance on asylum seekers, an issue that has polarised Australian politics for more than a decade.
A map purportedly made by the Australian navy to help asylum seekers on one boat reach Indonesia shows just how close its naval vessels have been getting to its neighbour's waters, even when not straying into Indonesian territory.
Asylum seekers who were on the boat gave Reuters the map, which they say was left behind by navy personnel on December 19 after they had towed the vessel back toward Indonesia.
The map shows where the asylum seeker boat was left and gives directions on how to reach the Indonesian island of Rote, approximately 13 nautical miles to the northwest. The time stamp on the map shows it was printed on December 18.
Bishop did not comment on the map in her statement, but a former Australian Navy officer with experience in turning back asylum seeker boats told Reuters it was common for the navy to give such maps to the occupants.
(Additional reporting by Andjarsari Paramaditha and Kanupriya Kapoor in Jakarta and Matt Siegel in Sydney. Editing by Dean Yates)