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FOREWORD

The CSCAP Steering Committee meeting in Tokyo in December last was the first one to be co-chaired, with Ambassador Matsunaga, by Tan Sri Dato Dr Noordin Sopiee from Malaysia. Although most CSCAP membership issues have now been resolved, among the issues discussed in Tokyo was a preliminary consideration of the raising to full (from associate) membership of India and Europe. These moves - which have Australia's support if there is a consensus and if other conditions are met, notably in the case of India, a broadly based member committee - are likely to be taken further at the next meeting in Kuala Lumpur in June. As well, at the Tokyo meeting, the Transnational Crime Study Group, of which John McFarlane of the Australian Federal Police is a co-chair, was made into a full Working Group reflecting the value of the work already undertaken and the regional interest. Immediately prior to the CSCAP Steering Committee meeting, the North Pacific Working Group had a meeting which was notable for being the first in which China and the DPRK both participated; both contributed in substance to the discussions.

With Chinese membership, together with the arrangements for Taiwanese participation, in place, the main administrative issues concerned with the establishment and operation of the Council for Security Cooperation in the Asia Pacific (CSCAP) have now been resolved. While the Steering Committee will have an oversighting and coordinating role with respect to the Working Groups and will deal with continuing administrative and broad policy matters, perhaps the major conclusion one could draw from the Tokyo meeting is that the burden of CSCAP's work in the future will increasingly be in the Working Groups.

Co-Chair AUS-CSCAP

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THE ASIAN FINANCIAL CRISIS AND REGIONAL SECURITY

Not surprisingly, there is considerable interest among security analysts in how the Asian economic crisis will affect security in the region. Consequently, this was an item for discussion at the most recent (February 4-5) AUSCSCAP meeting. There are a number of areas of potential impact, both specific and longer term.

North Korea and Taiwan

The discussion started with the two most sensitive regional security issues: North Korea and Taiwan. On the DPRK, there has been little evidence of any change in the situation on the border resulting from the crisis. While the imbalance between the North and the South might seem to have moved generally in the North's favour, North Korea's emphasis remains on its economic weakness and on its desire for links with the US and the consequent gains it hopes to make in the economic fields. The North has made no significant moves that offset its 'wait and see' policy regarding Kim Dae-Jung except to suggest a bilateral meeting. South Korean (chaebol) interest in investment in the North however may diminish, at least for a while. Nevertheless, critical to the stability of the peninsula have been the arrangements under KEDO, and the uncertainties surrounding funding provisions for these present some concerns.

On Taiwan, the balance across the strait has not been much affected as yet since both the PRC and Taiwan have managed to avoid contagion from the crisis. Nevertheless, Taiwan has sought to gain politically from the provision of financial assistance to Southeast Asia and South Korea. The PRC, although unhappy about this, is also unhappy about Taiwan's devaluation of its currency in October 1997. Yet, neither issue has become, nor seems likely to become, a major one in the cross strait relationship.

Reductions in military expenditure

Much of the discussion centred on the effect on military security preparedness in the region. There have been substantial reductions in military budgets in the countries most affected, including South Korea, but in others under economic pressure, such as the Philippines and Japan, military expenditure is also being squeezed. Important as well are the likely cut backs in overseas purchases of military equipment. These are a result not just of the budget cuts but also of the increased cost of these purchases in the light of exchange rate changes. Views differed on how important these various impacts might be. Some saw the reductions in military spending as posing problems, arising from gaps in training and exercising as well as in procurement, of a longer-term nature. Others took the more sanguine view that for a period of one or two years such cuts, while clearly not helping improve military preparedness, could be coped with without significant longer-term effects. Generally it was accepted that the important unknown was how long the restraint on military spending was maintained.

Some particular concern has been expressed about South Korea's moves to reduce scheduled purchases of advanced equipment. More generally, reductions in arms imports were seen as a setback to modernising security systems in the Southeast Asian region, although this might be offset by the likelihood that arms exporters, particularly the US, would ease the time period for weapons payments or, in the case of Russia, enter into barter deals. While no regional arms race existed, apart perhaps from across the Taiwan Strait, the broad conclusion was that the crisis would make any such development even more distant.

Internal instability and 'scapegoating'

Reduced military budgets were seen by some as adding to the concerns about the potential for internal instability, given that unemployment, rising prices and shortages of food and energy could lead to internal disturbances. The military in some countries is still needed to limit the extent of such disturbances, particularly if they turn into ethnic, religious or racial disputes. In a number of countries, resurgence of past ethnic or racial differences could pose particular threats, overflowing borders directly through flows of refugees or having indirect political impacts. So far there has however been only small and sporadic 'scapegoating' of this nature.

Internal impacts of the crisis could affect political stability and regime legitimacy. While cross-border movements of people could potentially threaten stability, in general political instability having flow-over effects in the region was not seen as a likely major problem. Nor has there been any significant sign as yet in the region of a shift from the positive elements of economic policy which facilitated the growth that has bolstered regime legitimacy.

Broader security impacts could emerge should the impacts within the countries concerned be blamed on external sources, in particular the IMF or the US. This might be exacerbated were the reduction of regulations in South Korea, Thailand and Indonesia, now limiting foreign direct investment in the financial and industrial sectors, to provide opportunities, together with the changed exchange rate position, for foreign investors to take over companies in trouble. This may be cast in a negative light as developed countries taking advantage of the local distress, despite the essential need to restore the inward flow of foreign direct investment.

Winners and losers

The question of who has gained, who has lost and does it matter was also discussed. At the national level, there was general agreement that China and Taiwan have gained relatively to other countries but probably not relative to each other. While Singapore has also probably gained in influence, Japan has probably lost, both because of its seeming lack of leadership and responsiveness (even if not totally deserved) and its economic weakness. The US may have lost initially as a result of its slow response but that seems to have been largely overcome. Indonesia was seen as an important loser in terms of regional prestige. The same may be true of Malaysia, although Malaysia's own efforts to resolve its problems, despite its rhetoric, provide some counter to that impact. Apart from the case of Indonesia, none of these impacts was seen as particularly important in the longer term.

There has probably also been a weakening, at least for a time, of ASEAN's influence. The ability to maintain regional cohesion among members, despite the crisis, however, has been a positive factor and if this is maintained ASEAN will maintain considerable influence. Nevertheless, the weaknesses revealed in its leading member countries will probably have some longer-term impact on its political influence. In some respects, APEC may also have been weakened, particularly given its inability, reflected at Vancouver, to take action in the financial sphere and to carve out a role for itself that would enable it, while supporting the IMF approach, to assist those countries in difficulties in the short term and to improve financial capabilities, if only in the regulatory and prudential fields, in the longer term.

Professor Stuart Harris
Co-Chair AUS-CSCAP

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BRUNEI MEETING OF THE ARF ISG ON CBMS

At the Fourth ASEAN Regional Forum (ARF) meeting held in Kuala Lumpur in July 1997, Foreign Ministers of the Asia Pacific region agreed that Australia and Brunei would take over from China and the Philippines as Co-Chairs of the ARF Intersessional Support Group on Confidence Building Measures (ISG on CBMs) for the 1997-98 intersessional year. This is the core intersessional group of the ARF, providing a forum for senior diplomatic and defence officials to discuss ways of enhancing trust and confidence in the region through dialogue on security issues and the development of practical and cooperative confidence building measures.

The first meeting for the intersessional year was held in Brunei from 4-6 November 1997 under the co-chairmanship of Deputy Secretary Kim Jones of the Australian Department of Foreign Affairs and Trade and the Permanent Secretary of the Bruneian Foreign Ministry, Pehin Lim Jock Seng. Representatives from twenty of the twenty one ARF member countries attended with most delegations also including defence representatives, civilian and/or military. As is now customary for ISG meetings and as a contribution to transparency, delegates spent one morning of the meeting visiting defence establishments with half of the group visiting the Bruneian Navy and the other half the Air Force.

The Brunei meeting was characterised by a very positive atmosphere with delegations showing a constructive approach to the issues under discussion and a willingness to look at new areas of practical cooperation. Particularly pleasing was the increased appreciation of the value of defence participation in the ARF, with discussion at the ISG focusing on ways in which such participation might be further integrated and enhanced at the various levels of the ARF process.

Dialogue on Security Issues

The exchange of views between participants on a range of regional security developments is an important component of activities at all levels of the ARF (and an important confidence building measure in its own right) and the ISG on CBMs is no exception. As in previous meetings of the group, there was an extensive and frank exchange on recent developments in the regional security environment, including on issues such as the implications of the current financial crisis in East Asia and the relations between the major powers, in which the recent bilateral Summit-level meetings were welcomed. Discussion of Cambodia reflected continuing concern over events by many countries as well as strong support by the ISG for ASEAN's role in helping to restore political stability in that country. Developments on the Korean Peninsula focused on the food situation and on progress in the Four Party Talks with many countries underlining the importance of these Talks and KEDO to peace and stability on the Peninsula. A briefing by Indonesia on progress in the Informal Workshops on the South China Sea, which Indonesia hosts, contributed constructively to the exchanges on this issue.

There was considerable discussion of the development of a comprehensive treaty banning the use, production and stockpiling of anti personnel landmines. Australia also took the opportunity to brief other delegations on the Department of Foreign Affairs and Trade White Paper, 'In the National Interest' and to indicate that the Department of Defence was currently finalising a new strategic review.

Cooperative activities

As requested by Ministers at ARF 4, the meeting reviewed the implementation of previously agreed, voluntary confidence building measures and noted that solid progress had been made in areas such as publication of defence white papers, high level bilateral defence contacts, bilateral regional security dialogues and participation in the UN Conventional Arms Register. Australia proposed the creation of a set of matrices and tables setting out the level of implementation of agreed CBMs and other participants agreed to complete these in time for the Sydney meeting.

There was wide recognition of the importance of the ARF's CBMs agenda and ready agreement that this ISG should continue for the foreseeable future. A number of delegations came prepared to put ideas for new CBMs on the table. Many of the suggestions attracted considerable interest from the meeting. It was agreed that more detailed consideration of the proposed new CBMs would take place in the lead up to and at the next ISG on CBMs in Sydney in March, with a view to the ISG providing a substantial forward CBMs agenda for the endorsement of Ministers.

As well as discussing both agreed and possible new CBMs, there was, for the first time at the ARF official or 'first track' level, discussion of possible approaches by the ARF to the issue of preventive diplomacy. (There have previously been three second track ARF seminars on this subject.) Although some ARF participants remain cautious about the implications of the ARF taking on an active role in preventive diplomacy, it was agreed that discussion of preventive diplomacy should continue at the Sydney ISG meeting.

Rosemary Greaves
Director, Asia Pacific Security Section, DFAT

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SYDNEY MEETING OF THE ARF ISG ON CBMS

The second meeting of the ARF Intersessional Support Group on Confidence Building Measures (ISG on CBMs) for the 1997-98 intersessional year was held in Sydney, at the Landmark Parkroyal Hotel from 4-6 March. Co-Chaired by Deputy Secretary Kim Jones of the Australian Department of Foreign Affairs and Trade and Pehin Lim Jock Seng, Permanent Secretary of the Bruneian Foreign Ministry, the meeting was attended by over 100 diplomatic and defence officials from the 21 ARF members. The high level of attendance was a pleasing outcome, demonstrating continued regional commitment to the ARF, particularly in the context of the current budgetary pressures faced by some regional governments.

Reflecting the high level of commitment by Australia to the ARF process, the Australian Minister for Foreign Affairs hosted a dinner for delegates at the Sydney meeting. Mr Downer's after dinner speech on Australia's approach to the regional security agenda was well-received and can be found on DFAT's ARF home page (http:/www.dfat.gov.au/arf/rs_speeches.html).

In addition to close cooperation with the Bruneian Foreign Ministry, the Department of Foreign Affairs and Trade worked together with the Department of Defence in preparing for and during the meeting. As has now become traditional, the Sydney meeting included visits to defence establishments with delegates attending a briefing at Australian Maritime Headquarters and inspecting HMAS Melbourne, an Australian-built guided missile frigate. The Vice Chief of the Defence Force, Vice Admiral Chris Barrie, also hosted a dinner for delegates at HMAS Watson.

The atmosphere at the meeting was positive and constructive. While there were inevitably differences of view, delegations focused on finding common ground and looking for areas where cooperative measures could be taken forward.

Cooperative activities

As follow up to the Brunei meeting, the Sydney meeting saw the completion of a set of matrices and tables setting out the implementation of previously ARF agreed CBMs. There was ready agreement that this was a useful means of providing Ministers with information on the level of implementation of agreed CBMs and that this was an exercise worth repeating on an annual basis. The intention is that these tables and matrices will be presented to Ministers at the Fifth ARF Ministerial Meeting in July 1997.

Following further discussion of the range of proposals for new CBMs for the group to include in its future work program, the meeting agreed to consider 14 new CBM proposals in the near and medium term. Of the nine which the ISG thought could be addressed in the near term, six were defence related. All the proposals will go to the ARF Senior Officials Meeting (SOM) and Ministerial Meeting for approval and, assuming this is forthcoming, a few may be able to be implemented in the next ARF intersessional year. These include an Australian-hosted seminar for defence and foreign affairs officials on the methodology of preparing and publishing defence White Papers and other defence policy documents and a Chinese-hosted a military medicine workshop.

Training was another important area of practical cooperation considered by the meeting. Participants agreed to support US and Bruneian proposals for a regular training program in regional security issues for ARF foreign ministry and defence officials. The US has offered to host the first such program later this year.

Preventive diplomacy

As follow up to the Brunei meeting, there was further discussion of possible approaches by the ARF to the issue of preventive diplomacy. As a result of this discussion a number of proposals for ARF preventive diplomacy mechanisms will be considered in detail in the ISG on CBMs in the next intersessional year. Among these proposals is an idea put forward by the Australian Minister for Foreign Affairs, Mr Downer, for a 'good offices' role for the ARF Chair. There was also interest in the possibility of the ARF developing a set of 'principles' or 'concepts' to guide the ARF's consideration of preventive diplomacy.

Dialogue on defence and security issues

Most delegations tabled and spoke to defence policy papers, demonstrating increasing comfort levels on the question of defence transparency. Australia took opportunities to circulate copies of and brief other delegates on the Department of Defence strategic review (Australia's Strategic Policy). Trends in arms modernisation in the region were also addressed by some delegations.

There was considerable interest in the global arms control and non-proliferation agenda, with participants acknowledging that adherence to the internationally recognised non-proliferation and disarmament conventions, treaties and regimes contributed to regional peace and security. Missile Technology Control Regime members, including Australia, encouraged other ARF participants to support the non-proliferation aims of the Regime. The threat posed by illegal trafficking in small arms was also discussed. Attention was drawn to the considerable support, including from ARF members, for the Ottawa Treaty banning the use, production, transfer and stockpiling of anti-personnel land-mines with several countries noting the desirability of work being undertaken in the Conference on Disarmament, particularly in relation to transfers. The humanitarian need for continued efforts in de-mining and the removal of unexploded ordinance was also stressed.

Under the rubric of comprehensive security there were also extensive discussions for the first time in the ARF first track on a number of maritime issues, including the marine environment, law and order at sea and maritime safety. These issues will be considered further next year, including by specialist officials, to identify areas where ARF activity might be useful.

Conclusion

Overall, the two meetings held in the 1997-98 intersessional year under Bruneian and Australian co-chairmanship substantially strengthened and invigorated the ISG on CBMs, leaving it with a solid forward work program to be advanced by the incoming Co-Chairs of the Group.

Rosemary Greaves,
Director, Asia Pacific Security Section, DFAT

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ENVIRONMENTAL COOPERATION IN SOUTHEAST ASIA

Environmental issues are now firmly entrenched on the regional political agenda. 1995 was the first ASEAN Year of the Environment. The first ASEAN State of the Environment Report was released in 1997. The year 2000 has been designated the second ASEAN Year of the Environment, with the theme 'Our Heritage, Our Future' and with the goal of a 'clean and green' ASEAN by 2020. The goal is admirable but it will be difficult to attain. The Southeast Asian regional ecosystem is diverse and complex. The shared and transboundary environmental problems which beset the countries of the region include the local and regional pressures of urbanisation and energy demands, water quality and quantity, waste disposal, air pollution (including 'haze incidents'), deforestation, loss of wildlife and biodiversity (as well as loss of habitat and ecosystems) and protection and conservation of marine and coastal environment and resources.

Institutional structure and programs

In the two decades since the first regional declaration on the environment was adopted, the ASEAN countries have established an institutional structure, centred on the ASEAN Ministerial Meetings on the Environment (AMME) and the ASEAN Senior Officials on the Environment (ASOEN), to facilitate environmental cooperation. They have elaborated, through a series of declarations, resolutions and issue-specific agreements, a set of agreed norms and principles for member countries in addressing environmental degradation at a national and regional level. Sustainable development has been adopted as the guiding principle for environmental cooperation. All this has taken place against a background of international debate on environmental issues, on the one hand, and changes in the nature (and composition) of ASEAN on the other.

This institutional and normative framework has, in turn, supported a series of cooperative environmental programs, the most recent of which is the ASEAN Strategic Plan on the Environment (the successor to the three-phase ASEAN Environmental Programme). Its objectives include the establishment of long-term and harmonised goals on regional environmental quality, the enhancement of regional operational and technical cooperation on environmental degradation, and the integration of environment and development (and trade) policies.

Problems and Limitations

Environmental cooperation, at least at a declaratory level, has reflected changes in Southeast Asian regionalism. Declarations now speak of Southeast Asia as one ecosystem and emphasise the importance of eco-efficiency and environmental stewardship. They incorporate demands for a regional environmental body with sufficient political status to recommend policy guidelines and monitor environmental quality. They emphasise not only the importance of cooperation on regional issues but also the imperatives for a common ASEAN stand on global environmental issues.

Yet despite this, regional environmental cooperation has been difficult to implement and environmental problems continue to grow. The reasons offered in explanation vary. The ASEAN Secretariat points to a lack of funds as the major reason for a poor record in implementing programs under the Strategic Plan and its predecessors. Much of the funding is reliant on dialogue partners although most of the programs which have been proposed and funded have focused on information generation and exchange rather than direct remedial action.

Institutional limitations, at national and regional level, have also been identified as a barrier to effective regional cooperation despite a strengthening of professional and technical environmental expertise within the ASEAN secretariat. Problems of policy incoherence, and in particular the neutralisation of environmental policies by economic strategies, have compounded the difficulties of regional cooperation in addressing environmental degradation.

Others question whether the political nature of ASEAN - with its emphasis on personal diplomacy, discussion, consultation and consensus - predicates against successful environmental cooperation, creating a form of decision-making which may be useful for political and security concerns, but which is unwieldy in the face of the imperatives of environmental decline.

Environmental cooperation within ASEAN has always been identified as integral to natural resource sustainability and development to overcome poverty and improve quality of life. Yet the recent expansion of ASEAN membership may create further difficulties in giving successful effect to regional environmental cooperation in the light of the so-called 'two tiers' of development and the tensions between integrating environmental protection with economic development, particularly when short- and medium-term priority is given to the latter at the long-term expense of the former.

Dr Lorraine Elliott
Political Science Department, Arts Faculty, ANU

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CSCAP WORKING GROUP ON TRANSNATIONAL CRIME

At the Eighth Steering Committee of CSCAP, held in Tokyo on 18 December 1997, agreement was reached to elevate the CSCAP Study Group on Transnational Crime to full Working Group status, to be reviewed, along with the status of all the other Working Groups, after twelve months. What follows is a brief account of the history of the Group and of the reasons for its elevation to Working Group status.

Establishment of a Transnational Crime Study Group

At the Sixth Meeting of the CSCAP Steering Committee, held in Canberra on 8-10 December 1996, the following resolution was agreed:

Recognising the range and growth of transnational crime and its impact on the Asia Pacific region, the CSCAP Steering Committee agreed to establish a study group to consider the issues involved in transnational crime and their security implications in the region.

The primary objectives of any CSCAP involvement in the transnational crime issue would be:

• To gain a better understanding of and reach agreement on the major transnational crime trends affecting the region as a whole;
• To consider practical measures which might be adopted to combat transnational crime in the region;
• To encourage and assist those countries which have recently become engaged in regional security cooperation, and which are concerned about the problem of transnational crime in the region, to endorse the United Nations and other protocols dealing with transnational crime, particularly in the narcotics area, and to develop laws to assist in regional and international cooperation to counter drug trafficking, money laundering, mutual assistance, extradition, and the like.

The Steering Committee noted that CSCAP's involvement in this area is consistent with the views of Ministers expressed at the Third ASEAN Regional Forum (ARF) in Jakarta in July 1996, when the Chairman's report stated (at paragraph 18) that:

The Ministers also agreed to consider at the next ARF meeting the question of drug trafficking and related transnational issues, such as economic crimes, including money laundering, which could constitute threats to the security of the countries of the region.

In this area, CSCAP will be solely concerned with regional crime trends and will not become involved in any way in the internal affairs of member countries.

To give effect to this resolution, CSCAP Singapore agreed to facilitate a meeting of CSCAP representatives who would be interested in serving on the proposed Study Group, under Co-Chairs provided by Australia, the Philippines and Thailand.

Meetings of the Study Group

The Study Group has now met on two occasions: in Singapore on 25-26 March 1997 and in Bangkok on 10-11 October 1997. 32 participants from the following member countries were represented at one or both of the meetings: Australia (Co-chair), Canada, China, India, Indonesia, Republic of Korea, Malaysia, New Zealand, the Philippines (Co-chair), Russia, Thailand (Co-chair) and Singapore.

Initial Identification of 'Crime Types' of Regional Significance

At its first meeting in Singapore, the Study Group identified the following initial list of 'Crime Types' as being of regional significance (not necessarily in priority order):

• Arms trafficking, particularly in small arms
• Corruption, at all levels
• Counterfeiting - currency and documentation
• Crimes of violence - contract killings, arson and bombings
• Drug Production and trafficking, including amphetamines and ecstasy
• Environmental crime
• Extortion, including protection rackets
• Fraud - credit card, banking, insurance, passports, visas, documentation, telecommunications and petroleum industry fraud
• Illegal gambling
• Illegal immigration, including some aspects of the refugee issue
• Intellectual property/ copyright violations
• International corporate/white collar crime
• Maritime crime - piracy, charter party fraud, cargo deviations, Phantom ships, marine theft, marine pollution (illegal dumping, radio active waste, etc)
• Money laundering, including property and business investment by transnational organised crime groups
• Organised crime - international connections of regional organised crime groups; non-regional organised crime activities (including Nigerian OC drug traffickers and confidence tricksters), triads, gangs, etc
• Paedophile activities?
• Prostitution - illegal immigration, 'slavery', health issues, etc
• Smuggling - raw materials, antiques, artefacts, art, icons, etc; alcohol and cigarettes; radio-active/fissile materials; gold and precious stones, jewels, etc
• Technology crimes - illicit use of telephones, cyber crime, defamation on the Internet, Internet crime generally, theft over the Internet

Refinement of the List of 'Crime Types' of Regional Security Significance

At the second meeting in Bangkok, the above list was revised and the 'Crime Types' most likely to affect regional security and stability considerations were identified as the following:

• Arms trafficking, particularly of small arms
• Counterfeiting - currency and documentation
• Drug production and trafficking, including amphetamines and ecstasy
• Illegal immigration, including some aspects of refugee issues
• International corporate/white collar crime
• Money laundering, including property and business investment by transnational organised crime groups
• Smuggling of nuclear materials
• Technology crimes

Priority attention will be given to research into these areas of activity.

Terrorism as a Regional Security Issue

It was also noted that at the CSCAP Seventh Steering Committee meeting in Singapore in June 1997, the USCSCAP expressed concern that the Study Group had not made a commitment to undertaking research into terrorism as a regional security issue. The Co-chairs agreed that this topic would be considered when the Study Group had achieved a 'critical mass' of expertise and membership.

Research Papers Already Submitted

Members of the Study Group have now submitted draft papers on the following topics for consideration, and subsequent publication:

• Transnational Crime as a Regional Security Issue (Australia)
• Strategic Impact of Transnational Crime (India)
• Money Laundering Methodologies and International and Regional Counter-measures (Australia)
• Background Issues on Illegal Immigration (Canada)
• Proliferation and Smuggling of Light Weapons (India)
• Technology Crimes (Thailand)
• Multi-lateral Initiatives to Combat Transnational Crime (Australia)

It was agreed at the second meeting of the Study Group that members would be given until the end of 1997 to submit comments/criticisms to the authors of these papers and also that the authors would include specific comments on the relevance of each topic to regional security.

Additional Projects Underway

In addition to the above, the following projects have also been agreed or are underway:

• Factors Contributing to the Expansion or Containment of Transnational Crime within the Region (Singapore)
• Drug Trafficking: The New Threat to Russia from the East (Russia)
• Illicit Production and Trafficking in Narcotics and Psychotropic Substances within the Region (Philippines/Thailand to coordinate)

Recommendation of the Study Group on its Future Operation

Taking into account the nature and dimensions of the threat of transnational crime in all its manifestations, it was the unanimous view of the Study Group that this subject is of sufficient complexity and seriousness to warrant the establishment of a CSCAP Working Group on Transnational Crime as a fifth CSCAP Working Group in its own right.

Arguments Advanced in Support of the Establishment of the Working Group

1. There is considerable interest and concern at the regional and international levels for the political leadership to be better informed of, and provided with the appropriate tools to deal with the threat of transnational crime in all its manifestations. This was illustrated by reference to the proposed United Nations General Assembly Special Session on Drugs in June 1998, the recent initiatives taken by the United Nations Crime Commission in relation to Organised and White Collar Crime, the anti corruption/bribery initiatives taken by the Organisation for Economic Cooperation and Development (OECD), the organised crime and money laundering initiatives taken by the G7/P8 leaders, and the expressed interest of both the ASEAN Regional Forum (ARF)and Asia-Pacific Economic Commission (APEC) leaders in being better advised on these issues;
2. There is an increasing body of serious academic study being undertaken , not only within the legal and criminology disciplines, but also by strategic analysts, political scientists, sociologists, futurologists, and so on. This statement was illustrated with reference to publications such as Transnational Organized Crime, Low Intensity Conflict and Law Enforcement, Trends in Organized Crime, Intelligence and National Security, and others;
3. In this context, it was mentioned that membership of the CSCAP Study Group on Transnational Crime involved participation from the following disciplines: strategic analysis, political science, the law, sociology, diplomacy, the military and law enforcement;
4. Our work in this area calls for a greater commitment from CSCAP than the maintenance of a Study Group status. Our advice was that a number of member countries were holding off active involvement in the Group until it is the status of a CSCAP Working Group, which implies a longer term commitment to the assessment of transnational crime by CSCAP;
5. Picking up a point made by Co-Chair, Ambassador Nobuo Matsunaga, that CSCAP must pay more attention to economic stability factors within the region, the meeting was reminded that economic stability is strongly linked to transnational crime, particularly when the impacts of the profits of drug trafficking, money laundering, banking fraud, counterfeiting and corruption are taken into account;
6. The political leadership of almost all countries in the region needed to be better informed of the nature and extent of the transnational crime threat to the region, and the regional and global responses under development to counter the transnational crime threat. I expressed the view that CSCAP was in a unique position to contribute in this area;
7. The following areas were listed as being where CSCAP could add value to the understanding of the transnational crime threat:
   • Providing a strategic setting in which law enforcement practitioners could better understand the impact of the work they are doing;
   • Articulating the transnational crime threat and counter-measures to the political leadership of the region;
   • Developing an improved sense of regionalism through the recognition that the transnational crime threats which affect our region know no state borders;
   • What we are doing complements the more operationally-oriented exchanges undertaken in the INTERPOL and ASEANAPOL contexts;
   • It recognises transnational crime as one of the new security issues which should be integrated into the assessment of the regional security agenda;
   • It responds to the requirements of the ARF and political leadership to be better advised of the transnational crime threat.

Study Group upgraded to Working Group

The question of upgrading the Transnational Crime Study Group to Working Group status was discussed at the Eighth Steering Meeting in Tokyo on 18 December 1997. Ralph Cossa (USCSCAP) formally moved that the CSCAP Study Group on Transnational Crime should be elevated to full Working Group status. Canada seconded the proposal. This proposal was carried, subject to review after twelve months, as suggested by Indonesia.

Next Meeting

The next meeting of the Working Group will be held in Manila on 23-24 May 1998.

John McFarlane
Australian Federal Police/Australian Defence Studies Centre, ADFA

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AUSTRALIA'S BILATERAL REGIONAL SECURITY DIALOGUES

Over the last two years the Australian Government has been actively seeking to expand its range of bilateral regional security dialogues and political-military talks with Asia Pacific countries. This is consistent with the approach set out in the Foreign Affairs and Defence White Paper, In the National Interest, in which bilateral relationships are seen as the building blocks of effective regional and global strategies. The establishment of such bilateral security linkages is encouraged by the ASEAN Regional Forum (ARF) and complements multilateral dialogue on regional security developments.

Australia has a number of long standing security links with countries of the region. We have alliance relationships with the United States through ANZUS and with New Zealand through ANZUS, supported by our Closer Defence Relations program. In addition we have a formal security arrangement with Papua New Guinea through the bilateral Joint Declaration of Principles. We also have intensive security links with both Malaysia and Singapore through our participation in the Five Power Defence Arrangements (FPDA). More recently, in 1995, we signed the Australia - Indonesia Agreement on Maintaining Security.

In addition to these more formal linkages and our extensive defence relationships, particularly in South East Asia, Australia has been developing its bilateral dialogues on regional security issues. By providing mechanisms for regular exchanges of views on strategic and security issues involving both foreign and defence ministries, such dialogues contribute to the building of trust and add to transparency between countries. They also serve to strengthen and deepen our broader bilateral relationships.

The following sets out Australia's current bilateral regional security dialogues and/or political-military (pol-mil) talks with Asia Pacific countries, with the year of commencement. These dialogues all include both foreign ministry and defence/military representatives. Agreement was reached on four of these during 1997, with the Australian Foreign Minister, Mr Downer, announcing these at the time of the ARF in Kuala Lumpur in July 1997. Most are fully official or 'first track'. Those described as 'one and a half track' are held under the auspices of an academic institution but the teams from each side are comprised predominantly by officials participating in their personal capacities.

• Australia - US Pol-Mil (early eighties)
• Australia - China 'One and a Half Track' Regional Security Dialogue (1993)
• Australia - Indonesia Regional Security and Disarmament Talks (1994)
• Australia - Japan Pol-Mil (1996)
• Australia - ROK Pol-Mil (1996)
• Australia - Vietnam 'One and a Half Track' Regional Security Dialogue (1996)
• Australia - Philippines Regional Security Dialogue (1997)
• Australia - China Regional Security and Disarmament Talks (1997)
• Australia - Vietnam Regional Security Talks (will commence 1998)
• Australia - Thailand Regional Security Talks (will commence 1998; to be held in conjunction with previously established Senior Officials Talks)

With the establishment of dialogues with China, Vietnam, the Philippines and Thailand in 1997, Australia now has bilateral security linkages of one form or another with most of the countries of the East Asia/Pacific.

Rosemary Greaves
Director, Asia Pacific Security Section, DFAT

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AIIA ENVIRONMENTAL SECURITY SEMINAR

The Australian Institute of International Affairs held a one-day seminar on concepts and issues in environmental security, in Canberra on Thursday 20 November 1997. The AIIA, which is represented on the Australian Member Committee of CSCAP (AUS-CSCAP), arrived at this subject in consultation with AUS-CSCAP colleagues. AUS-CSCAP felt that a seminar on this subject, about which relatively little is known in Australia, would contribute to a greater awareness of the subject in this country and also better equip Australians to contribute to any discussions which might occur in the wider CSCAP context.

The speakers were from ANU, but for water expert, Dr Peter Gleick, Director of the Pacific Institute for Studies in Development, Environment and Security in California. Dr Lorraine Elliott began with a discussion of key concepts in environmental security, in which she elaborated the two principal approaches to the concept, the dominant approach which argues that there is an 'environmental dimension to the security problematic', and the counter view that this approach places too much emphasis on security and not enough on the environment. It is fair to say that in the ensuing discussion the dominant security approach was most evident.

Successive presenters then focused on specific issues to demonstrate the linkage between security and the environment. The first of these speakers, Alan Dupont of SDSC, provided 'practical examples of the way in which environmental degradation is contributing to conflict formation in East Asia.' This speaker chose three issues to illustrate his argument: population pressure, particularly in China, a worsening energy imbalance in East Asia, and food security, arguing that the result is the emergence of 'a new security paradigm' in which environmental factors interact with territorial, sovereignty and other jurisdictional issues in a way that transcends and challenges conventional notions of conflict formation.

Peter Gleick identified four links between water and international conflict and suggested ways of trying to reduce conflict in these four areas. He was followed by Peter Dauvergne who explored the relationship between commercial forest management and community insecurity in Southeast Asia, focusing on the Philippines, Sarawak and Indonesia. Ian Noble, after discussing the science of climate change, then entered the speculative area of the likely impact of climate (or global) change on several areas, among them, sea level rise, cyclones, agriculture and good security, and the el ni–o effect.

The discussion went on to consider environmental security's implications for Australian foreign and defence policy. Professor Stuart Harris cautioned that, in his view, there are political problems in dealing with environmental issues and 'from my point-of-view that is a better perspective to address what we do about environmental problems than defining them as environmental security problems.' He went on to sketch the outlook for Australia in this area, bilaterally, regionally and globally, and mentioned some of the mechanisms which are available to handle these issues.

The final speaker, Major Ian Finlayson, examined the implications of environmental security for the Australian Defence Force. He argued that the ADF must make provision for the new security agenda, which he sees as offering the ADF the opportunity to complement Australian foreign policy by a combination of strategic and operational level initiatives. The ADF should re-examine its core roles and capabilities and consider how it would adapt to a future in which traditional ADF roles may be superseded by non-combat roles.

For those who may wish further information, Alan Dupont is editing the seminar papers for publication by SDSC in association with the AIIA.

Lesley Jackman
Executive Director, AIIA

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AUSTRALIAN UNDERWRITING AGENCIES (AUA)

Australian Underwriting Agencies (AUA) is a wholly Australian owned insurance agency, which develops, administers, retails and wholesales insurance and service products for specialist markets. AUA is also a foundation sponsor of AUS-CSCAP.

Using the brand name 'SmartCover', AUA is a leader in the provision of insurance services to members of the Australian Defence Force (ADF) and employees of the Commonwealth, Queensland and ACT governments, and of travel insurance and associated assistance services to the Australian public. AUA has worked closely with senior Service personnel to deliver unique, beneficial and adaptive insurance throughout their clients' career and beyond into civilian life.

AUA's current Defence portfolio of one third of all Service personnel is provided with services through AUA's in-house Technology Group. This Group has been responsible for developing an interactive client, accounting and claims management system called 'Starsure', regarded as the market leader in insurance management systems in Australia. The software package wholly owned by AUA, is capable of multilingual adaptations and provides modules that allow clients to choose the most convenient method of payment for insurance premiums, investment allocations and many other payment types that are regular and predictable.

The AUA management has maintained an active interest in security developments in the Asia Pacific region for many years, and has been involved in second-track activities since the early 1990s. The Chairman of the company, Mr Barry Johnston, has been a regular participant in the Asia-Pacific Roundtable in Kuala Lumpur since 1992, and was a founding member of AUS-CSCAP. The head of Government Operations, Mr David Lamont, was formerly Deputy-Chief Minister of the ACT Government, and has been a keen promoter of Australian business in Asia. Vice Admiral RAK Walls (RAN, Retd), who was Fleet Commander and Vice Chief of the ADF (VCDF), provides strategic advice to the Chairman and the Board of Directors of AUA on corporate, national and international issues. He has been intimately involved in many aspects of cooperation between the ADF and regional defence forces, such as the Kakadu fleet concentration periods. He has been a member of AUS-CSCAP since 1995.

AUA's product base and data management systems have been built with portability in mind, which allows cooperation with business partners, government agencies and like-minded individuals in the Asian Pacific region. The AUA management believes that enhanced dialogue, closer personal relations, and strong commercial connections make important contributions to regional security.

Barry Johnston
Chairman, Australian Underwriting Agencies

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CSCAP MARITIME COOPERATION WORKING GROUP MEETING, TOKYO, 19 NOVEMBER 1997

21 participants from 13 member CSCAPS attended this meeting, as well as one participant from Taiwan and several observers from overseas missions and other institutions in Tokyo. The meeting was co-chaired by Commodore Sam Bateman from CSCAP Australia and Colonel Johannes Sarsito from CSCAP Indonesia (on behalf of Rear Admiral Sunardi). It was held at the Japan Institute of International Affairs in Tokyo on 19 November 1997. The objectives of the meeting were to:

• review progress with Working Group initiatives;
• identify possible issues with shipping and seaborne trade which offer potential for security cooperation and dialogue; and
• discuss comprehensive security concerns which arise from the growth in regional shipping traffic and the increased vulnerability of regional countries to any disruption of shipping.

Working Group Initiatives

The Co-chairs advised the meeting that the CSCAP Co-chairs had approved the publication of CSCAP Memorandum No.4, which includes the Guidelines on Regional Maritime Cooperation, provided that no member CSCAPS were opposed to this action. Advice from the representative of CSCAP China during the meeting was that CSCAP China could only agree to the document being published if a note was included to the effect that not all CSCAPs supported all of the Guidelines. This note was subsequently included and the memorandum was published in time for distribution at the CSCAP Steering Committee meeting held in Tokyo in December 1997.

There has been no success so far with obtaining funding for the annual Asia Pacific Workshops on Regional Maritime Cooperation.

Shipping and Regional Security

This meeting was the first time that the Working Group has looked in detail at regional security concerns with shipping and seaborne trade and the potential for security cooperation and dialogue. The importance of these issues arises from economic and geo-strategic factors. Except for high value cargoes carried by air, all intra-regional trade goes by sea, and many regional nations lack self-sufficiency in energy, foodstuffs, and critical raw materials. Security concerns include the vulnerability of shipping to disruption, the consequences of maritime territorial disputes, and the threats of piracy, oil spillage and marine pollution.

A particular feature of the growth in regional seaborne trade has been the increased carriage of hazardous or dangerous cargoes. Rapid economic and industrial growth drives an increasing demand for energy and complex materials (including hazardous chemicals) which can only be shipped by sea. As economic growth continues, the carriage of these cargoes will increase with a consequent higher risk of damage or pollution as a result of collision, explosion, fire, grounding or other accident involving ships carrying dangerous cargoes. The human factor has been identified as a major factor in shipping casualties.

The first group of papers at the meeting considered security aspects of shipping and seaborne trade from global, regional and national perspectives, and in the particular context of the South China Sea. The meeting was also briefed on outcomes from the 11th International Conference on SLOC Studies which had been held in Tokyo on the two days prior to the CSCAP meeting. The SLOC meeting had done much to promote mutual understanding of sealanes issues, including the scope for regional cooperation. The next international SLOC meeting will be held in Seoul in April 1999 with the following meeting in Australia towards the end of the year 2000.

Some discussion focused on the relative size of national flag shipping fleets, the growth of particular fleets, and the different perspectives that are gained depending on whether total tonnage or number of ships was used as the measure of fleet size. It was thought that, from a security perspective, the number of ships above a certain tonnage under the national flag was more significant than total tonnage as an indicator of the 'national stake' or 'national interest' in shipping.

The paper by US CSCAP described the extent of US interest in security aspects of regional shipping and seaborne trade. The first factor was the tremendous growth in the relative importance of US trade in the Asia Pacific region compared with that with Europe. The former was now twice as great as the latter. A second factor was the possible secondary effects on the US economy of any disruption to Asian economies, while a third factor was the current status of SLOC protection operations in US naval strategy. While US naval strategy was now orientated towards littoral operations and open ocean sea command was assumed, SLOC protection in coastal and sub-oceanic waters, in East Asian seas for example, was an integral part of littoral operations in the region. Naval cooperation would be the essential means of providing that protection.

Strategic Cargoes

The second group of papers covered concerns of regional countries with particular cargoes carried by sea. CSCAPs China and India presented their perspective of energy issues and the increasing carriage of oil and gas by sea, while CSCAP ROK gave a paper on 'Critical Import Dependencies in Northeast Asia'. Patterns of seaborne trade are changing rapidly with, for example, the rapid growth of trade in LNG and LPG and the possible advent of gas pipelines. It was a complex area which required new approaches and could not rely on conventional wisdoms of the security significance of shipping and seaborne trade.

China and India may both be identified as energy deficient countries. Growing energy dependence is a fact of life for both countries which underpins their fundamental interest in energy imports and the importance of investment in shipping and ports. It was clear from the Chinese and Indian papers that both countries attach great importance to the security of shipping and the safety of navigation, and were prepared to cooperate to maintain stability at sea in the region. For these reasons, China, in particular, had acceded to most international conventions dealing with the safety of shipping.

The issue of trans-Asia pipelines was raised in discussion, including consideration of their potential effect on regional security. However, the meeting was of the opinion that, even if these pipelines were built, they would have little impact on the fundamental dependence of the region on the carriage of oil and gas by sea. LNG and LPG were highly volatile cargoes but the safety record with gas carriers was high and crews were highly trained.

Environmental and Navigational Safety Issues

The papers at the meeting dealing with environmental and navigational safety issues were important aspects of the meeting. The paper by CSCAP Australia focused on issues associated with the impact of maritime transportation on the marine environment (such as operational and accidental pollution, ballast water and marine pests, the dumping of waste at sea, and marine debris) and the opportunities that exist for regional cooperation and dialogue to reduce that impact. It highlighted in particular the 'gaps' that are apparent in the ability (or preparedness) of the region to deal with some of these issues, including the level of regional participation in major IMO Conventions. The paper by CSCAP Singapore went on to consider the human factor in shipping casualties and the scope for regional cooperation in the training and education of seafarers.

The paper by CSCAP Canada addressed shipping and navigational issues in the South China Sea. In view of the density of shipping traffic in the area, the incidence of marine hazards (including natural hazards and the large numbers of poorly-lit fishing vessels), and the poor quality of hydrographic surveys in some areas, navigational safety was an important consideration in the South China Sea Workshop process. A particular problem arose because hydrographic data came from different sources without a common set of datums. However, it was difficult to resolve these issues because hydrographic data is sensitive and related to both national security and the determination of maritime claims.

The fact that search and rescue (SAR) was primarily a responsibility of regional military forces made SAR cooperation in the South China Sea a problematic issue. Training and education, including cooperative activities, were important issues. The training of the Vietnamese Coastguard by Canada could be cited as a good example of technical cooperation and capacity-building, involving assistance from a developed country.

The paper from CSCAP Indonesia made a case study of the Malacca Strait from the perspective of an archipelagic state with a need to maintain navigational safety in an enclosed sea environment. Oceanological and ecological conditions in the Strait included numerous sensitive coastal and marine areas and a relatively low ability of its waters to absorb pollutants. The efforts to maintain the safety of navigation had to be integrated with pollution prevention and control. The paper concluded that the Strait of Malacca met the definition in MARPOL 73/78 of a 'special area'. Recognition of this status would assist in achieving the high level of international cooperation required to maintain the safety of navigation and the protection of the marine environment of the Strait. Some discussion then focused on whether this recognition would lead to mandatory obligations by user states and the conceptual issue of the Malacca Strait being both a strait used for international navigation and an enclosed or semi-enclosed sea.

A paper from CSCAP New Zealand considered the transport of radioactive wastes from Europe to Japan through the Asia Pacific region. It raised concerns about the safety of waste shipments, freedom of navigation, non-notification of shipments, and liability. It concluded with a recommendation that the Maritime Cooperation Working Group should develop a short paper building on previous statements on the issue that have come out of the ASEAN Regional Forum.

This paper led into discussion of the very important issue of the impact of shipping operations on the marine environment and the prospect of tighter controls over shipping for reasons of environmental protection. While shipping is the 'major engine' of trade, it is also a major source of pollution. Further restrictions on shipping would present serious problems for the maritime states, and the meeting noted that it was important to sustain the balance of interests reflected in the 1982 UN Convention on the Law of the Sea (UNCLOS). In its consideration of these issues, the meeting had before it the paper the '"Freedom of Navigation" in the Sea Lanes of Pacific Asia' prepared by Ramses Amer and Leonard Sebastian for the ARF Track II Working Group Meeting on Preventive Diplomacy held in Singapore in September 1997. That paper had recommended a regional declaration on freedoms of navigation.

Way Ahead/Concluding Comments

The Fourth Meeting of the CSCAP Maritime Cooperation Working Group was very productive. The excellent papers at the meeting stimulated discussion on a wide range of critical issues with regional shipping and seaborne trade which have security implications and offer potential for security cooperation and dialogue. Numerous comprehensive security concerns arise from the growth in regional shipping traffic, the nature of the cargoes carried, environmental and safety concerns, and the vulnerability of regional countries to any disruption of shipping. A track two forum, such as the CSCAP Maritime Cooperation Working Group, incorporating the full scope of relevant skills and interests from different countries, is well-placed to study the potentially contentious issues that could some impact on regional security. Possible future work by the CSCAP Maritime Cooperation Working Group in the area of shipping and seaborne trade includes:

• A paper on the carriage of radioactive wastes along the lines proposed by CSCAP New Zealand. To achieve a balance of interests, CSCAPs ROK and/or Japan should be involved in the development of this paper.
• An investigation of the level of compliance in the region with key international conventions and security issues. With a comprehensive view of security, it is necessary to understand reasons for the relatively low level of accession in the region to important international conventions.
• A study of regional interpretations of navigational rights and freedoms as established under UNCLOS and customary international law.
• The development of ideas with regard to the development of a comprehensive regional maritime safety regime applying particularly in the enclosed and semi-enclosed seas where both the density of shipping traffic and the risks of marine pollution are high. This could include the development of procedures to monitor operational ship pollution (as distinct from accidental pollution arising from collisions, groundings, or other accidents causing oil spills).

The first 1998 meeting (Fifth Meeting) of the Working Group is planned to return to the theme of the management of regional seas and associated issues of security cooperation. It will probably be held in Kuala Lumpur in late May or early June immediately prior to the Asia Pacific Roundtable. To maintain the momentum on shipping and seaborne trade issues established at the Fourth Meeting, these issues will also be included, as appropriate, in the Fifth Meeting.

The proceedings of the Fourth Meeting are to be published.

The Working Group much appreciated the support of the Japan Institute of International Affairs (JIIA) in holding the meeting. The JIIA made all arrangements for the meeting in Tokyo, including accommodation, and provided the venue and administrative support during the meeting, as well as hosting a lunch for participants.

Sam Bateman
Centre for Maritime Policy
University of Wollongong

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CSCAP NORTH PACIFIC WORKING GROUP MEETING, MAKUHARI, 14-16 DECEMBER 1997

The third meeting of the CSCAP North Pacific Working Group was held on 14-16 December 1997 in Makuhari, Japan. The meeting was divided into a number of sessions, each one dealing with a specific issue.

Session one: Recent developments in the Northeast Asia/North Pacific area.

James Kelly (Pacific Forum - USCSCAP) argued that the very many incidences of improved bilateral relations, most notably reflected in the visit of President Jiang Zemin to the United States, would normally have given the region a positive report card. However, the rolling financial crisis of late 1997 is bound to have deleterious political and security effects. The underlying cause of the crisis has been globalisation, and specifically the ways businesses and governments in the Asia Pacific have managed this trend. Reduced prosperity may pose new challenges to the legitimacy of governments, will reduce funds available for Overseas Development Assistance (including from Japan, the major donor), and will put pressure on the nations sponsoring the reconstruction of North Korea's nuclear facilities under the Korean Peninsula Energy Development Organisation (KEDO). In present circumstances, US military deployments in the region are a stabilising influence, though longer term and with the advent - perhaps as a consequence of the successful outcome of the '4 Party Talks' - of a peaceful and secure settlement of the Korea dispute, some draw down of forces would be conceivable.

The analysis offered by James Cotton (Australian Defence Force Academy) noted many of the same positive developments, emphasising particularly the range of military and other CBMs which have now been introduced along the entire Russia-China-Central Asia border zone, as well as the signs of improved relations between North Korea, on the one hand, and Russia, the United States, and Japan, on the other. The former offers something of a model for others and resolves longstanding differences which were once the cause of actual conflict; the latter has the potential to complete the missing elements of the regional diplomatic web, thus building confidence.

Yet problems affecting the core group of ASEAN nations which the organisation seemed unable to manage - first the environmental crisis which arose from unchecked forest fires, then the financial instability which dealt severe blows to currencies and stock markets - raised doubts about regional institutions. Given the status of these nations within the ASEAN - Regional Forum, and the influence their modalities have had upon the operating principles of that organisation, these events have had a sobering influence.

The most significant regional problem remains the uncertain state of relations on the Korean peninsula. The 1994 'Agreed Framework' remains on track, the opening sessions of the '4 Party Talks' involving the two Koreas, the US and China, have been held, and considerable international support has been forthcoming to help overcome famine conditions in North Korea, but very great differences of outlook must be reconciled if mutual security is to be enhanced. Nevertheless, multilateral mechanisms and institutions deserve the strongest support, as their absence or failure would force the region to rely, at best, upon a concert between the major powers, an arrangement which may not prove durable.

In the discussion, the issue of globalisation was raised. The financial crisis was the consequence of failing to craft policies to deal with it. Fixed exchange rates and poor financial transparency, associated with poor governance had led to the problem. Future studies could focus upon the experiences, good and bad, of evolving systems of governance to deal with globalisation.

Traditional security thinking had so far failed to take the measure of globalisation. The concert of powers which had emerged in the region still depended on bilateral structures, including alliances. If security was to be based upon structures wider than concerts, the emerging multilateral institutions in the region - KEDO, the '4 Party Talks', and similar structures - though an encouraging start, would have to be broadened and their agenda deepened. For example, while the Tumen cooperation agenda was making some progress, additional issues required regional multilateral support, including agricultural reconstruction and industrial and transport infrastructure upgrading.

Session two: Border CBMs in Asia

Ambassador Shi Chunlai (China Centre for International Studies) expounded the principles which underlay the successful negotiation between China, on the one hand, and Russia and the three Central Asian Republic on the other, of military confidence building measures and troop reductions along their common border. These principles ensured mutual and equal security, were fulfilled on the ground of strengthened common interests, did not target third parties, and produced a result by accommodation and compromise. The actual measures having been negotiated, verification and supervision procedures were agreed which incorporated high levels of transparency. In Ambassador Shi's view, CBMs are the premise of preventive diplomacy, which cannot be successful without political will, and must pay heed to non-traditional and transnational aspects such as environmental problems, piracy, and illegal immigration. Under present conditions in Asia, bilateral dialogues will be the preferred mode of dealing with inter-state disputes, a judgement which has been vindicated by the experience of Cambodia.

The Russian perspective was provided by Victor Samoilenko (Russian Ministry of Foreign Affairs). The border CBMs were a product of the very much improved diplomatic climate in the Asia Pacific, and especially of Russia's desire to cooperate positively with Asian nations and regional institutions. Aside from two small sectors (where negotiations would shortly be concluded), Russia's Asian borders were now fully delimited. The agreements with China and the Central Asian Republic extended beyond common principles aimed at mutual transparency and reassurance, to actual force reductions, as well as to the reconfiguration of border forces for exclusively defensive purposes. There was still work to be done in the region, especially regarding the situation in Korea. Should the 4 Party Talks stall, a full international conference might be considered. Meanwhile, the suggestion to convene a Northeast Asian security dialogue should be studied with a view to further improving major power relations.

Although Mongolia was not a party to the Russia-China-Central Asia agreements, Toinkhuu Bayarmagnai (The Institute for Strategic Studies, Mongolia) noted that their outcome was supported and positively assessed by Ulaanbaatar. The positive role that Mongolia has played has been evident at least since the Sino-Soviet joint statement of 1989. Mongolia's borders with China and Russia have been delimited since 1964 and 1976 respectively; in 1996 the three states established a protocol on the point of intersection of their three borders. Bilateral agreements with Russia (in 1993) and with China (in 1997) enunciated principles similar to those which have characterised the China-Russia-Central Asia agreements.

There was a full discussion of this experience of building border CBMs. The view taken by China was that bilateral negotiations were the only appropriate means to deal with unresolved questions of sovereignty. China, thus, would discuss the South China Sea at December's ASEAN summit, but only in a 9+1 context, not in a 9+3 (including RO Korea and Japan) forum. 'Equal' security outcomes, while feasible in this case, may not be applicable to others. The China-Russia CBM and border regimes may be applicable to the Japan-Russia situation, but not to the area of North-South Korea relations.

Session three: Economic Cooperation and Institutions in Northeast Asia

Yu Hyun-Seog (Institute for Far Eastern Studies, Kyungnam University, Seoul) examined economic progress to date. Economic complementarities in Northeast Asia were leading to a growing intra-regional trade, and the advent of the Tumen River Area Development Plan had laid the foundations for more enhanced cooperation. However, political and ideological differences, disparities in levels of economic development, and historical legacies have obstructed the progress of the latter. Further progress is only likely with comprehensive state to state cooperation, with small-area multilateral projects helping to define the way forward.

Choe Han Chun (Institute for Peace and Disarmament, Pyongyang) outlined the geographical and institutional advantages of the Rajin-Sonbong free Economic and Trade Zone, established by DPR Korea in December 1991 in the Tumen area. So far, promised and actual investment in the Zone totalled $2.02 billion, and when its construction was finished by 2010 it would itself constitute an important cooperative and confidence building measure in the region.

The discussion focussed upon ways in which 'cooperation' could be analysed. It was suggested that four forms of cooperation were possible: business/enterprise to business, state to state aid, the provision of public goods (such as trading regimes), and cooperation to provide shared infrastructure. The capacities of states to facilitate any examples of such cooperation varied according to its particular form.

An informal session was devoted to a discussion of the operations of KEDO. The work of KEDO in the past year has seen the realisation of some important milestones. 18 agreements were negotiated with DPR Korea, regarding the supply of labour, entry to the site, and the provision of medical and other services. By August 9,000 tonnes of equipment had been transferred from RO Korea, and the initiation of construction has begun a work program which will see one million metric tonnes of earth being moved by August 1998. Membership has been enlarged to include the EU, which has donated ECU75million over five years to KEDO finances. So far, the work accomplished has cost $45 million. The estimate for the completed project was agreed in November to be $5.1785 billion (including contingency). The most pressing problem has been the financing of the supply of heavy fuel oil to DPR Korea. This costs $65 million per year, and even with subventions from the US, this operation has only continued by virtue of an extended credit facility provided by Japan. In 1998, the major issues for KEDO will be:

• maintaining the supply of heavy fuel oil to DPR Korea.
• burden sharing. It is still not clear what the final division of the responsibility for the expense will be, especially between Japan and RO Korea.
• dealing with DPR Korea. This will continue to require patience and diplomacy. Incidents in the last year have demonstrated that small matters even of protocol may assume major proportions.
• the delivery schedule. DPR Korea insists that 2003 should be the final delivery date, in which facilities are operational. This may be optimistic, in the light of delays to date.

In general, as DPR Korea is unhappy about any re-negotiation, it would not be feasible to vary any of the major features of the agreement. Power (conveyed by a grid connection from China) could not be substituted for fuel oil, for example.

IAEA monitoring has been a problem. The IAEA has complained that KEDO has not taken sufficient regard of safeguard obligations in its construction. In the supply agreement, however, there are provisions for IAEA monitoring of the plants, and KEDO may remove spent fuel from DPR Korea if it wishes.

Session four: Current and Prospective Cooperation and Institutions in Northeast Asia

In a very informative paper, Ralph Cossa (Pacific Forum) examined multilateral structures and national strategies for cooperation. He reviewed in some detail the accomplishments to date of the ASEAN Regional Forum, the 4 Party Talks, KEDO, CSCAP, and the Northeast Asia Cooperation Dialogue. As to national strategies, while there is a good deal of support for multilateral institutions and initiatives, these are not generally seen as a substitute for bilateral arrangements. All the regional parties, however, have seen the advantages of the former, especially as they have led to the widespread development of CBMS. Bilateral alliances involving the United States, Japan, and the RO Korea remain the main foundation for the security of these parties: an improved security climate will depend upon the negotiation of a positive bilateral relationship between Seoul and Pyongyang.

Pak Hyon Jae (Institute for Peace and Disarmament, Pyongyang) discussed the instability which had resulted from the speculative financial crisis which had enveloped the Asia Pacific. He suggested that regional cooperation might be an alternative to seeking assistance from outside institutions and powers, which was likely to lead to the domination of Asian countries by extra-regional interests. Such cooperative ventures as the Rajin-Sonbong FETZ were consistent with this strategy. As to improving conditions on the Korean peninsula, ultimately a confederal arrangement such as that suggested by DPR Korea would reconcile existing differences.

Kurata Hideya (Japan Institute of International Affairs) offered a detailed analysis of the state of relations on the Korean peninsula. The 1991-92 accords between the two states had not prevented the impasse on the status of the Military Armistice Commission, which had ceased to function by 1994. The position of DPR Korea appeared to be that it wished to negotiate military matters with the US, and a separate non-aggression pact with RO Korea; the 4 Party Talks will need to incorporate both of these two steps given the unacceptability of this approach to the other parties. The power transition in Seoul may facilitate inter-Korean rapprochement, consistent with the '10 Point program' on unification which has been DPR Korea's stated policy for some years. Other parties and multilateral mechanisms could undoubtedly contribute to Korean reconciliation.

There was a lengthy discussion on the relationship between bilateralism and multilateralism. Some participants held that the former was the foundation for security, and the latter could be at best a complement to it. Others held that bilateralism may be insufficient or defective in an era in which security had moved from 'cooperation against' potential antagonists, to notions of inclusive 'security with'â or 'cooperative security'. It could even be argued that multilateralism now makes bilateralism 'respectable'.

These remarks provided the background for a thorough review of the Korean situation. The North Korean view was to place the emphasis upon bilateral issues, and especially the relationship between the US and DPR Korea. A resolution of the Korean problem would only come with a peace agreement between the two parties, and a US withdrawal. The settlement of domestic Korean issues, on the other hand, could be left to the Korean people themselves. While this latter formula was generally acceptable to the participants, its actual content, and particularly the question of whether it provided for a role for the government of RO Korea, could still be a source of difference.

An informal session was devoted to a discussion of the likely impact of the elections in Seoul for regional relations.

Session five: Role of the ASEAN Regional Forum

Paul Evans (Co-chair of the Working Group) noted the unique geographical focus of the present Working Group, in the context of the various statements made by the chairs of successive ARF meetings. He posed the question as to whether the ARF should continue to act as a facilitator in this difficult sub-region, or whether the time was appropriate for a more ambitious role. If it was the latter - and perhaps it might take the form of suggesting that the regional powers subscribe to a statement of principles along the lines of the Treaty of Amity and Cooperation - then CSCAP could be helpful in preparing the way. Recent developments, including the successes of KEDO and the convening of the 4 Party Talks, were signs that the climate for such an effort was better than it had been in the past. In addition to endorsing these and other developments, it could be recommended to the ARF that additional forms of cooperation, including human resource and infrastructure development, and assistance programs, be encouraged. There were lessons from Southeast Asia, including the record on Greater Mekong Sub-Regional Cooperation which should be studied in the Tumen context. The exchanges initiated by the ASEAN-ISIS group could also be emulated by corresponding regional associations.

Ambassador Hasnan Habib (CSCAP Indonesia) discussed the ASEAN content of the ARF. He noted that it had taken 25 years to build ASEAN institutions, and replacing such concepts as 'the balance of power' with 'Regional Resilience' would still take some time to implement. Regular and inclusive meetings aimed at realising a cooperative security regime was the prescription. The situation in Northeast Asia would be improved by realising inclusivity in the form of admitting DPR Korea to the ARF without preconditions, and the US and RO Korea could facilitate this admission by confidence building.

Kim Sung-Han (Institute of Foreign Affairs and National Security, Seoul) offered a perspective on the ARF from the RO Korea. The ARF's intention to move beyond confidence building to 'preventive diplomacy' was laudable, especially in a climate where 'cooperative security' has replaced 'collective security'. However, the ARF has not moved much beyond debate. In Northeast Asia in particular, neither track one nor track two regional institutions have been fully realised. These are needed, and the RO Korea has made some proposals along these lines. Given recent improvements in the Korean situation discussed by other participants, the time is ripe for DPR Korea's admission to the ARF, though Seoul would expect Pyongyang to affirm its commitment to the various regimes of arms control and non-proliferation.

Once again, the bilateral-multilateral dialectic was invoked. On the one hand, there was a good case for inclusivity in regional security structures, and thus there were strong arguments for membership of the ARF on the part of Mongolia and DPR Korea. On the other, while the ARF could play an 'initiators' or 'good offices' role in Northeast Asia, the parties concerned would need to be appropriately receptive.

Session six: Implications and Prescriptions - Future of the NPWG

There were further comments on the inclusivity question. It was pointed out that the ARF was a 'forum'. It had no 'members' but only participants, and proceeded by consensus and agreement. These factors seemed to imply inclusivity.

As to issues that might be constitute the future work off the NPWG, there were a number of suggestions. The financial crisis and its security implications was clearly a topic of major interest. The progress of such Northeast Asian initiatives as the 4 Party Talks, KEDO, Tumen Cooperation, and Northeast Asian border CBMs should be reviewed, including in relation to analogous endeavours in the wider Asian region. Other vital issues that required similar regional efforts - including agricultural and transport reconstruction - should also be considered. There should also be some attempt to specify the Northeast Asian identity, to use as a focus for future cooperation. Finally, the suggestion of forming a 'Northeast Asia-ISIS' received wide support.

James Cotton
School of Politics, UNSW College
Australian Defence Force Academy

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CSCAP CSBMS WORKING GROUP MEETING, FUKUSHIMA, 30-31 OCTOBER 1997

On 30-31 October, I represented AUS-CSCAP at the seventh meeting of the International Working Group on Confidence and Security Building Measures (CSBM) held in Fukushima, Japan. Chaired by Ralph Cossa (Pacific Forum CSIS), representatives of nine CSCAP Member/Associate Member Committees attended, along with a Taiwan academic, and Japanese industry personnel from the Tokyo Electric Power Company (TEPCO), Japan Atomic Industrial Forum (JAIF) and the Power Reactor and Nuclear Fuel Development Corporation (PNC).

Purpose of the meeting

The Fukushima meeting served two purposes. First, it provided Working Group members an opportunity to inspect the operation of a TEPCO light water reactor nuclear power plant, and to see at first hand the implementation of safety and international safeguards measures. Given the varying levels of knowledge among members about civil nuclear power generation and the nuclear fuel cycle, this provided a common knowledge base for subsequent discussion. The visit and accompanying briefings also drove home Japan's energy vulnerabilities and its long-term energy security, and Japan's commitment to transparency in the peaceful use of nuclear energy.

The second purpose of the Fukushima Working Group meeting was to conduct a 'brain-storming' session to develop a list of proposals for consideration at a further Working Group meeting in Washington on 7-9 May 1998. Working Group members threw ideas on the table on what a regional nuclear framework - PACATOM - might usefully contribute to meeting regional concerns flowing from the growth of nuclear energy in the Asia Pacific.

PACATOM and regional nuclear cooperation

Working Group members saw the problem areas which a PACATOM might address as ranging from the operational safety, 'back-end' difficulties of the nuclear fuel cycle, physical protection of nuclear facilities and materials, to safeguards integrity and proliferation risks. A list of CSBMs emerged, which included technical, personnel and data exchanges, nuclear white papers and a regional information centre. On a more controversial note, proposals were put forward for regional facilities for joint reprocessing and waste storage, an agreement for the non-targeting of nuclear facilities in the event of conflict, and for cooperative monitoring of facilities. The Working Group, however, did not see its task as evaluating these proposals or even debating the pros and cons of nuclear energy. Rather, it saw its task as putting forward tentative recommendations for further examination and debate.

The Working Group was reminded of the large number of existing regional or relevant multilateral activities in the nuclear field, which include the International Atomic Energy Agency (IAEA) and its Regional Cooperative Agreement (RCA), the International Conference on Nuclear Cooperation in Asia (ICNCA), the intergovernmental nuclear safety conferences (Tokyo 1996 and Seoul 1997), the Korean Peninsula Energy Development Organisation (KEDO), the Pacific Nuclear Council (PNC), the World Association of Nuclear Operators (WANO), and the OECD's Nuclear Energy Agency (OECD-NEA), the APEC Energy Working Group, as well as the number of bilateral nuclear cooperation and safeguards agreements. It was also alerted to various other possibly competing proposals for regional nuclear cooperation, such as the ROK-backed Asian Nuclear Safety Consultation Organisation (ANSCO) and ASIATOM or PACIFICATOM, which enjoys support within Japanese academic and some industry circles.

Some members sounded a note of caution about PACATOM and other visions for regional nuclear cooperation. They noted the dangers of working at cross-purposes on matters nuclear. Some agendas prescribed an intrusive form of regional cooperation which might curb certain activities, including what many would regard as legitimate, such as development of a complete nuclear fuel cycle. At the opposite side of the spectrum, other interests saw regional cooperation as a means of gaining access to new and sensitive technologies, perhaps cheaply and without having to meet stringent controls imposed by international regimes.

A number of Working Group members urged a prudent approach toward promotion of regional nuclear cooperation and institution-building. They favoured an incremental approach which focused first on concrete and relatively non-controversial technical subjects, then moved step-by-step toward joint work on the knottier issues, including even security-related ones, as confidence levels rose. They counselled against re-inventing the wheel, pointing out the large number of cooperative activities already in place which a PACATOM or similar initiative might duplicate or complicate. These members warned against pursuing courses of action which could undermine global norms and institutions. As much as possible, they argued, any new endeavours should encourage countries in the region, as a first step, to become parties to the NPT, CTBT, safety, nuclear liability and other international arrangements which set standards and impose obligations on countries engaged in the peaceful use of nuclear energy. Adherence to these agreements would enhance confidence about the use of nuclear energy regionally and globally, and would facilitate trade and investment in the peaceful use of nuclear energy.

Agenda for next meeting

The Working Group has set itself an ambitious program for its forthcoming Washington meeting to be held 7-9 May 1998. First, the tentative agenda provides for revision of CSBM fundamentals and the nuclear problem (including a 'laymen's guide' to nuclear energy concerns) to provide a common reference point. Next, it proposes to conduct a baseline assessment of existing frameworks of cooperation, principally to create a map of what has been done as against what may need to be done. This should include an inventory of current regional or international cooperative activities which have a bearing on the Asia Pacific. CSCAP-Japan and CSCAP-China will be asked to give presentations on their respective nuclear power programs. The Working Group will look at alternative paths forward, including the status quo, the Euratom model, institutionalising PACATOM, and other processes. It may also examine the feasibility of establishing a 'Statement of Principles Relating to Nuclear Energy Research and Production in the Asia Pacific'. Finally, the group also proposes a visit to the Cooperative Monitoring Centre at Albuquerque (New Mexico).

All said and done, the real question facing the forthcoming Washington CSBM Working Group meeting could be: Is regional nuclear cooperation an area in which CSCAP, as a second track security mechanism, is able to add value to a field of endeavour in which governments and private sector bodies have already achieved, after much effort, some modest gains? Or is it one in which CSCAP risks muddying the waters?

G.L. Hunt
Counsellor, Australian Embassy, Tokyo

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