Report of the Inquiry into  Australian Intelligence Agencies  

Chapter 3 - Recent Intelligence Lessons


Jemaah Islamiyah

Background to Jemaah Islamiyah
The Intelligence Context
The Australian Assessments

In the same way that September 11 galvanised US public and government attention to terrorism, the bombings in Bali just over a year later have had an enormous impact on the way Australia views the terrorist threat and what it means for the safety of Australians and our way of life.

The following study examines how Australia's external intelligence agencies understood Jemaah Islamiyah (JI) and its emergence as a terrorist network posing a direct threat to Australia. The focus is on Australia's foreign intelligence agencies, in particular the national assessment agencies ONA and DIO, and how they dealt with the issue in the years leading up to the attacks in Bali. Since these matters are being considered by a separate parliamentary inquiry, this study does not address in detail the text of travel advisories, the threat levels set by ASIO in the period or the response by Australia's domestic security service, except in so far as they affected the picture of JI being built by Australian agencies.

Background to Jemaah Islamiyah

Indonesia is a predominantly Islamic country - by population, the world's biggest. While Islam is important in politics and radical Islamist organisations have a long history in Indonesia, they have never come close to taking control of government, democratically or otherwise. The historical spread of the faith through the archipelago was uneven, and Islamic ideas and practices have co-existed with and were affected by traditional, particularly Javanese, belief systems and ways of living. As a result, the Islam practised by the vast majority of Indonesians has its own particular character and is, currently, essentially moderate.

Post-independence Indonesian politics have also stamped some unique marks on Islam as it is practised in the archipelago. Nationalist and Islamist strains of thinking were key influences on the development of independence politics in Indonesia, reflecting basic differences of view about the place of Islam in the post-colonial state. Symbolising the radical element of the Islamist instinct was the Darul Islam movement, which emerged with the waning of Dutch rule in the 1940s and which advocated the establishment of an Islamic state, more or less broadly drawn, governed by Islamic law. Subsequent repression of Islam as a political force under the Suharto regime further influenced Islamic thinking in Indonesia and served to radicalise a number of Muslim leaders.

It was among conservative Muslims repressed during Suharto's New Order period that many of today's radical Islamic organisations and leaders have their origins. Like other radical networks, the group which has come to be known as Jemaah Islamiyah emerged from the remnants of the Darul Islam rebellions of the 1950s. JI's political aim is to create a regional caliphate or Islamic state spanning Indonesia and neighbouring majority Muslim countries or regions. The establishment of an Islamic community (or 'jemaah Islamiyah') is seen as a preliminary step to this end. Through their involvement in the Afghanistan jihad experience in the 1980s, a number of key members of JI became aligned with the globalist anti-Western aims represented by groups like Al Qaida.

Little was known of JI, under that name, before a major security operation undertaken by Singapore security authorities in December 2001 resulted in the arrest of 13 individuals suspected of planning large-scale terrorist strikes against US and other Western interests in Singapore and of being members of an organisation called Jemaah Islamiyah. In addition to the October 2002 strikes in Bali, JI is now suspected of having plotted or carried out a number of prior terror attacks in Indonesia and the Philippines and of responsibility for the Marriott hotel bombing in Jakarta in August 2003. Following Bali, JI was officially listed by the United Nations, and proscribed by Australia, as a terrorist organisation.

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The Intelligence Context

In Jemaah Islamiyah, the Australian intelligence community faced an intelligence target which was at once hugely important to Australia and of a nature fundamentally different from the subjects traditionally covered by external intelligence agencies.

The terrorism target is inherently difficult. It requires a range of new analytical approaches and methodologies, many of which are closer to police investigation and domestic security intelligence service techniques than to the deductive, interest-based analysis customary to foreign intelligence assessment. Terrorism also poses new challenges for foreign intelligence collectors due to the covert and nebulous nature of operational terrorist cells such as those which characterise groups like Al Qaida and JI.

In any case, contemporary expectations about what intelligence can provide by way of early warning of specific terrorist events often misunderstands the nature of much foreign intelligence assessment. Intelligence seldom provides directly actionable evidence. Information received by intelligence assessors is often amenable to various analytical conclusions. Nevertheless, a great deal of effort is being put by Australia's intelligence collectors and all relevant agencies of government into capturing the kind of specific, detailed threat information which may help avert a terrorist attack. This will be an ongoing priority for the Australian intelligence community. The Inquiry has seen nothing to indicate that any of Australia's intelligence agencies had specific intelligence warning of the attack in Bali. This is consistent with the findings of the Inspector-General of Intelligence and Security's report on the Bali terrorist attack.

Australia's foreign intelligence agencies, like their counterparts elsewhere, are caught between very high public expectations of them to provide early specific information of terrorist plans, and the inherent difficulties of terrorism as an intelligence target. This tension remains.

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The Australian Assessments

Before the Bali bombings, Australia's foreign intelligence agencies underestimated in some important ways the nature of radical Islam in South East Asia and the extent to which regional extremists posed a threat to Australia. Australian assessments evolved as more information became available and as analysts understood better that the generally moderate character of Islam in Indonesia did not mean that terrorists could not thrive in the Indonesian environment. Nevertheless, to a greater or lesser degree, Australia's foreign intelligence analysts in the period before the Bali bombings underestimated the extent to which anti-Western and global jihadist ideas and Middle East militancy had penetrated radical groups in South East Asia.

The foreign intelligence community's assessment performance on JI falls into several main parts, chronologically defined: before the 11 September 2001 terrorist attacks on the US; the period between September 11 and the Bali bombings; and after October 2002.

In reporting before 2001 on Islamic extremism in Indonesia and the broader region, ONA and DIO focused primarily on what extremist groups and their activities might mean for internal security and politics in Indonesia and other South East Asian countries and, secondarily, on what they might mean for regional security. While ONA did examine possible links between Middle Eastern militants and regional extremists before September 11, it judged that the domestic focus of the Indonesian Islamic militant groups limited their usefulness to international terrorists. In DIO's case, its analysis of global terrorism as an emerging security issue generally went forward in isolation from its reporting on Islamic extremism in South East Asia.

September 11 changed Australian agencies' understanding of global terrorism in fundamental ways. ONA and DIO sharpened their focus on terrorism as a threat to the international system and as a destabilising factor in regional politics and security. Still, the full import of the attacks for the region, and of Islamic terrorism for Australia, was not evenly recognised across the foreign intelligence analysis community. In the immediate post-September period at least, Australian foreign intelligence assessments were focused on regional contributions to the global fight against terrorism. The development of indigenous terrorist organisations with ambitions and agendas beyond their local settings was not a sustained focus of the agencies at this point.

A series of arrests of terrorist suspects by Singaporean authorities in December 2001 and the uncovering of plans to attack Western targets in Singapore, including Australia's High Commission, was a tipping point for ONA's understanding of regional terrorism. ONA was quick to recognise the significance for Australia and applied vigorous analysis to the JI network
as revealed by the arrests.

From this point on, ONA's key judgments were that:

ONA's concerns firmed over time. By the second half of 2002, just before the Bali bombings and at a time when some others were less concerned, ONA was judging consistently that the danger from terrorists in South East Asia was high and persistent.

DIO assessments on the whole were slower to recognise the full significance of South East Asia's home-grown extremists and their commonalities with Middle Eastern and other militants with established terrorist track records. The Singapore arrests did prompt DIO to assign additional resources to its coverage of transnational links to terrorism in South East Asia. Nevertheless, while acknowledging that several JI leaders and some cell members remained at large, probably in the region, and that terrorist planning was by nature difficult to detect, DIO's judgment about the group's limited capability and intent led it to underestimate the threat posed to Australians by the residual JI presence in Indonesia.

Through the period September 2001 to October 2002, DIO continued to judge that:

Up until October 2002, DIO continued to take a limited view of Islamic extremism in Indonesia, analysing it mainly in terms of its impact on Indonesian stability. DIO analysts saw little in incoming intelligence reporting that was inconsistent with domestically focused extremist activities such as had characterised Indonesian communal politics for some time. While DIO's judgments evolved and strengthened over time, and began to distinguish JI from other radical groups in the region, DIO continued to underestimate the potential scale of any possible terrorist attack.

The pattern of response to regional terrorism from other parts of the foreign intelligence community followed a similar chronology. Prior to September 2001, there was a low level of consciousness generally in Australia's foreign intelligence system of terrorism as a real threat to Australia's security and to the lives of Australian citizens at home and abroad. September 11 was a turning point. In the aftermath of the attacks, Australia's foreign intelligence effort against the terrorist target was stepped up significantly. Significantly more attention and resources were given to counter-terrorism in what was now seen as the start of an extended and extensive campaign to address a new global threat. And certainly, since Bali, the regional terrorist target has been a top priority for all agencies, matched by significant new resources from government.

While this Inquiry is focused on Australia's foreign intelligence agencies, it is important contextually to note the development of ASIO's understanding of the regional terrorist threat. In the Australian system it is ASIO that carries responsibility for assessing levels of threat to Australia, including to Australian interests abroad. In general terms, ASIO's understanding of the potentially serious nature of the threat of terrorism in the region developed more quickly than was the case for the foreign intelligence assessment agencies. For some years, ASIO had been concerned about links between some individuals and groups in Australia and terrorist groups elsewhere. Almost immediately after the September 11 attacks in the United States, on 28 September, ASIO raised to 'high' the threat level for Australian interests in Indonesia. It viewed as significant Osama Bin Laden's first specific public reference to Australia in November 2001, drawing attention to the fact that Australian civilians could be targeted. On JI, ASIO responded immediately to information flowing from the Singapore arrests.

The causes for the early weaknesses in Australian foreign intelligence assessments of JI and regional terrorism were many. To judge the quality of the assessments, it is important to understand the context in which analysts were working.

At issue here was a fundamental and long standing tenet of Australia's understanding of Indonesia. For many years, at the core of Australia's assessments of its largest neighbour had been a view of Islam in Indonesia as something unique. Indonesian Islamic radicals were seen as significant for their impact within Indonesia, on the country's politics and its stability and unity; the links to Australia's security interests were important, but they were indirect.

The known history of JI provided little compelling cause for analysts to unsettle these longstanding conclusions. While radical in rhetoric and with an ideology intolerant of compromise, JI had no significant record of striking at foreigners or foreign interests in the region. At least until the Singapore arrests, outward signs suggested that the activities and agendas of regional extremist groups remained domestically focused, concentrated typically on local communal violence and low-level religious vigilantism.

Until 12 October 2002, the most notable terrorist operations in South east Asia were not major events: the attempted assassination of the Philippines Ambassador in Jakarta in August 2000, which killed three and injured 17; the Christmas Eve 2000 attacks in Indonesia, which killed 15 and injured 94; and the Metro Manila bombings, which killed 14 and injured 70, on 30 December 2000. Of these, only the failed attempt on the life of the Philippines Ambassador was aimed at a foreign target, and even then the target was regional and seemingly connected with Manila's own battle with domestic separatism and extremism.

In the absence of definitive intelligence, it is not surprising that Australian foreign intelligence analysts needed convincing that JI or any other local group represented a serious direct danger to Australia. Decades of accumulated knowledge of Indonesia and of the politics of Islam in South East Asia proved in this important case to be a drag on the evolution of Australia's understanding of the emergence of anti-Western terrorism within the region's radical, militant and extremist groups.

To the extent that Australian analysts underestimated the threat posed to Western interests by regional Islamic extremists, they were not alone. Many commentators with deep South East Asian knowledge also clearly misread the situation, focusing too much on what distinguished Islamic radicalism in Indonesia and the broader region from the terrorism bred in other regions of the world.

Indonesian observers and security authorities, and those elsewhere in the region, also took some time to recognise the nature and scale of the threat posed by regional Islamic extremists.

Viewed against this background, the failure of our foreign intelligence agencies to recognise early the threat posed by JI is understandable. Just as importantly, the alacrity with which ONA was able to question fundamental assumptions, reassess and shift a longstanding tenet of its Indonesia assessment was commendable.

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Australian intelligence agencies should have known more before December 2001 about JI as a group developing terrorist capabilities and intentions. ONA assessments on this key issue, especially from December 2001 onwards, evolved more quickly than those of DIO. The failure to appreciate the serious nature of the threat posed by JI was widespread outside Australia's intelligence agencies, and in Indonesia itself. Indeed it was fundamentally a regional intelligence failure.

The Inquiry has seen nothing to indicate that any Australian agency, including ASIO, had any specific intelligence warning of the attack in Bali. This is consistent with the findings of the Inspector-General of Intelligence and Security's report on the Bali terrorist attack.

This case study demonstrates the value of Australia's security cooperation with countries in the region, in particular with Singapore. The emergence of anti-Western Islamic terrorism in the region underlines the need to build more depth into Australian foreign intelligence agencies' understanding of Islam and the interaction of Islamic extremism with regional politics and local radicalism.

Following 12 October 2002, Australia's foreign intelligence community has responded with vigour and determination to the regional threat of terrorism. In particular, the Australian Federal Police, with the Indonesian police, has done outstanding work in helping to identify those responsible for the Bali bombings. These efforts have been supported by significant increases in resources across the intelligence community. JI's rise demonstrates the crucial importance of Australian foreign intelligence agencies being alert to shifts in the regional security environment and the emergence of new threats.


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