Australia and Indonesia are -developing an increasingly close defence and security relationship, sharing more intelligence on -terrorist threats and working closely to ease tensions in the South China Sea. 
In Sydney yesterday ministers from both countries stressed the importance of a new "memorandum of understanding on combating international terrorism" to streamlining practical co-operation to deal with common threats.
The MOU and a renewed -defence co-operation agreement were signed at a meeting of Foreign Affairs and Defence Ministers attended by Julie Bishop and Marise Payne and their counterparts Retno Marsudi and Ryamizard Ryacudu.
Ms Marsudi said sharing of -intelligence on terrorist threats was a crucial part of the agreements. Ms Bishop said the agreements would renew the framework for co-operation between the two countries in security co-operation.
She said Australia and Indonesia were co-operating extremely closely on terrorism.
Both ministers said they were not able to discuss reports that -intelligence supplied by Australia led to the arrest of suspected -terrorists in Indonesia this week. "Suffice to say that Australia is always prepared to play its part and in this instance it would -appear that the Indonesian police have been very successful in thwarting an attempted terrorist activity," Ms Bishop said. "But the details are still being made known to us." Ms Bishop said that overall Australia and Indonesia were co-operating very closely on t countering terrorism.
"We're playing our part -globally, we're certainly playing our part regionally and bilaterally we're working very closely -together," Ms Bishop said.
In their joint communique, the two delegations warned that the situation in the South China Sea was directly related to the peace and stability of the region and that "ensuring maritime security is a critical element in maintaining peace and stability and the rule of law".
They emphasised the importance of promoting a rules-based international order, respect for international law, ensuring freedom of navigation and overflight, and unimpeded lawful commerce as well as resolving maritime disputes by peaceful means, in -accordance with principles of international law.
They expressed concern at the recent and ongoing developments in the area and called on all parties to exercise restraint, take steps to ease tensions and refrain from provocative actions that could escalate tensions.
Indonesian Defence Minister General Ryacudu warned at the post summit media conference that Papua, part of which has sought independence as "West Papua", was a province of Indonesia and must remain so."There are countries that are getting involved in the issue of Papua. For us, Papua is in the United Republic of Indonesia. There is no other solution to talk about it, that's it, that's the way it is."