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FRAN KELLY: Foreign Minister Stephen Smith leaves this morning for talks with senior Government officials in Jakarta, but he joins us now. Stephen Smith, good morning.

STEPHEN SMITH: Good morning, Fran.

FRAN KELLY: Now you'll be meeting your Indonesian counterparts to talk about a number of things, including the proposal for a regional processing centre. Exactly what do you want from Indonesia?

STEPHEN SMITH: It's a planned visit to Indonesia, it's my sixth visit to Indonesia as Foreign Minister, my first as Minister for Foreign Affairs and Trade. So I'll be meeting with Marty Natalegawa, my counterpart in Foreign Affairs, and Mari Pangestu, my counterpart in Trade. I'll have a conversation with Marty Natalegawa about our approach and proposal for a regional processing centre. Australia and Indonesia of course, co-chair the Bali Process, which is the regional institution of over 40 countries and over a dozen institutions, which tries to deal with people smuggling, human trafficking issues. And under the Bali Process, our officials have been looking at trying to get a better regional framework for some time, but this is the first time that any country has formally proposed a regional processing centre. So I'll go through that with Marty Natalegawa...

FRAN KELLY: The early signs aren't that positive, are they? Isn't Indonesia indicating it's not keen on the idea of an East Timor processing centre?

STEPHEN SMITH: Well no, that's not right. I've spoken to Marty Natalegawa, we gave Indonesian officials the courtesy of letting them know that the Prime Minister would be making her speech last week. I spoke to Marty Natalegawa on the day of the speech and we agreed that we'd have a conversation as part of my planned visit to Jakarta, but I'll go through the proposal with him.

Our officials have been in East Timor for the last couple of days, they've now left, but they've had very good conversations with East Timorese officials.

FRAN KELLY: How good, how encouraging, given that the vote in the Parliament this week was not encouraging? Are you getting any different sort of noises, from these talks with the officials?

STEPHEN SMITH: The East Timorese Government position has not changed, which is that they are in conversation, in discussion with Australia. Yes, there was a resolution in their Parliament, but I've urged people not to over-interpret that, or read too much into it.

East Timorese Ministers don't sit in the Parliament, it's a reflection of those Members of the Parliament who were there at the time. The East Timorese Government's position is that they are having a conversation with Australia. In the course of the second half of this week, I'll probably have a conversation with my East Timorese counterpart, Zacarias da Costa, about the progress of those talks.

FRAN KELLY: Will you also have a conversation with Nauru, because the President of Nauru has indicated that they want a conversation too, they're keen, they're even prepared to sign up, it seems, to the UN Refugee Convention, in order to be a part of this kind of solution?

STEPHEN SMITH: Well our focus is very squarely on East Timor, and...

FRAN KELLY: Why though, why not consider Nauru, given there's a detention centre already there?

STEPHEN SMITH: Our focus is on East Timor firstly. Secondly, I've said – Immigration Minister Chris Evans has said – if other countries in the region indicate an interest, that'll be a matter for them. And we welcome the fact that Nauru has indicated it's proposing to ratify the Refugee Convention. We encourage any country who's not a signatory to the Convention to sign up, so we welcome that.

But our focus is on our discussions with East Timor, about the notion of a regional processing centre, which we...

FRAN KELLY: I understand that's where your focus has been, and that's what the Prime Minister's kicked this off with, but why, in your view, would East Timor be a better solution than Nauru? I guess particularly given that Nauru already has some kind of Australian-built detention centre there?

STEPHEN SMITH: Well, we are focusing on East Timor, and...

FRAN KELLY: Why though?

STEPHEN SMITH: Well because we believe that is the appropriate place for us to have a conversation.

Nauru was used by the Howard Government, and I choose my words carefully, used by the Howard Government. They're still not a signatory to the Refugee Convention. If they sign up, that's a good thing, but we are in conversation with East Timor about a regional processing centre, because we believe a regional processing centre would reduce the incentive for secondary movement, would reduce the incentives for people to get on boats and risk their lives on the high seas, but also lead to better assessments throughout the region, better standardised assessments through the region. It's a big project...

FRAN KELLY: But why would East Timor be a better location for that than Nauru, that's all I'm wondering. Why, in the Australian Government’s view, is East Timor a better solution than Nauru?

STEPHEN SMITH: Nauru is not currently a signatory to the Refugee Convention, that's the first point. Secondly, we've made it clear to them...

FRAN KELLY: If they sign up?

STEPHEN SMITH: Well, Nauru's indicated an intention to do that, let's wait and see. And we welcome the fact it's indicated that intention. But there is some fundamental policy fabric here that we need to have. Firstly, we believe very importantly it's got to have the support, the endorsement, the agreement of the United Nations High Commissioner for Refugees. The Howard Government's Pacific Solution, in particular Nauru, did not have that support, on the contrary it was roundly criticised by the UNHCR because Nauru was not, and is not, a signatory to the Convention.

But secondly, we need to also ensure that not only is there regional support, either formally through the Bali Process, or generally throughout the region, we've also got to get support from those settlement and resettlement countries who have traditionally taken refugees from our region. New Zealand is one of those, the United States, Canada, the European countries.

So this is an extensive conversation, which is why it's not going to be solved in one day, or one week, or in one meeting with officials.

FRAN KELLY: Okay, Minister, we'd best move on, there's only two minutes to the news. The Australian newspaper has reported today that Indonesian authorities are concerned that someone they describe as a senior al-Qaeda figure from Afghanistan has ended up in detention in Indonesia, in amongst a group of asylum seekers intercepted before they could embark on a boat trip to Australia. Do you know anything of this?

STEPHEN SMITH: I can't and won't comment on the particular individual case, but suffice to say we work very closely with Indonesia on counter-terrorism matters. And anyone who claims asylum to come to Australia has to, if their refugee application is successful, has to pass the most stringent health, quarantine and security assessments done by ASIO. So it's no surprise to us that Indonesia is working very assiduously in this area. We've got good cooperation with them, and they're very conscious of it.

FRAN KELLY: And very briefly Minister, to Fiji, where the Acting High Commissioner for Australia, Sarah Roberts, flies home today after being expelled. Now Prime Minister Frank Bainimarama says because of interference from Australia, he's considering cancelling elections in 2014.

STEPHEN SMITH: Well, it's just a ruse by the Commodore. He promised his Pacific Island Forum leaders an election in the first quarter of 2009. That's come and gone. It would be no surprise if he didn't effect elections by 2014, but we want elections before then. We want to continue our efforts of dialogue with Fiji, through the Pacific Islands Forum, to get them back to a path for democracy. And the suggestions, the allegations, the rhetoric about Australian or New Zealand interference, are frankly just nonsense, it's just an excuse by Commodore Bainimarama.

But we will persist, we won't give up. It is hard to have a one-way dialogue, but we're not going to give up.

FRAN KELLY: Alright, Stephen Smith, we've got to go, the news is upon us, but I guess you're following your namesake in his test debut against Pakistan, Steven Smith the bowler?

STEPHEN SMITH: I met him in India, he gave me his New South Wales jumper, and I told Simon Katich, the West Australian captain of the New South Wales team that when he made, when Steven Smith made his test debut, I'd wear his jumper, which I did.

FRAN KELLY: Good on you. Stephen Smith, thanks for joining us, it's eight o'clock.

STEPHEN SMITH: Thanks, Fran.

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