The twelve months since then have seen clear evidence of the continuing threat from terrorism in the ARF region. The bombings in Bali were the most serious and destructive manifestation of this threat. The same period has seen an escalation of tension on the Korean Peninsula. Although the terrorist threat and the possibility of conflict on the Korean Peninsula are the most serious current challenges to security in the region. a number of other fault lines could give rise to inter-state friction. Regional governments must remain vigilant about these potential problems. Closer engagement and stable relations between constituent parts of the region are the keys to political and military stability in the Asia-Pacific.

The ARF has developed into a valuable forum for exchanging views on security in the Asia Pacific region. It has also developed a role in considering practical measures to address terrorism and related trans-national threats. New Zealand would like to see the ARF moving beyond discussion and confidence-building to playa more active role in the prevention and management of regional conflict As an Inter-Sessional Support Group Co-Chair with Laos, New Zealand has tried to facilitate a shift in this direction.

Current issues

ARF members recognise that the campaign against terrorism requires ongoing international and regional cooperation. New Zealand welcomes steps that ARF member countries have taken to strengthen cooperation and coordination of action against terrorism. The operating environment for terrorists has become more difficult. But, notwithstanding some successes in combating international terrorism, it is very clear that the threat remains. Cooperative regional efforts will need to be sustained to deal effectively with the threats posed by a convergence of goals between local extremist groups with domestic agendas and international groups, such as al Qaeda, that have global objectives.

The ARF has become an important mechanism for consolidating consensus on counter-terrorism policy; for enhancing bilateral and multilateral cooperation in areas such as intelligence exchanges, police cooperation and financial measures against terrorism; and for facilitating exchanges on technical assistance and capacity building. The annual Ministerial Meeting enables participants to review the actual and potential impact of terrorism in the region and to offer political guidance for responses through the ARF and member states.

The stability of Northeast Asia underpins crucially the stability of the ARF region, in particular because of the over-lapping interests of the major regional powers. Since the latter part of 2002 there has been a serious deterioration in the situation on the Korean Peninsula. New Zealand is committed to giving active diplomatic support to international efforts to persuade the DPRK to renounce nuclear weapons aspirations, and to refrain from missile development and proliferation activities which threaten security in the ARF region and beyond. New Zealand does not believe that nuclear weapons issues are a bilateral problem between DPRK and the US. DPRK compliance with NPT and IAEA safeguards obligations is a matter of much wider significance. New Zealand supports tentative moves towards US/DPRK engagement, facilitated by China, but believes that other key parties should participate as soon as possible. In bilateral diplomatic contact with the DPRK New Zealand supports the efforts of other countries to achieve a peaceful resolution of current problems.

Many Pacific Island countries are facing cumulative internal stresses, attributable to ethnic tensions, land use and land ownership issues, disparities in economic development, population pressures and failures of governance. These can lead, and have led, to instability. There are no quick fixes to the issues at the heart of the current problems in the affected Pacific Island countries. New Zealand is working with these countries, the Forum Secretariat, regional partners and multilateral agencies to strengthen Pacific Island countries' capacity to meet these challenges.

Support for peace processes in Bougainville and Solomon Islands has been a major focus of New Zealand's engagement on security in the region. After 10 years of civil war in Bougainville the peace process is entering its final stages. This has been supported and nurtured by an unarmed Peace Monitoring Group (PM G) made up of military, police and civilian observers from Australia, New Zealand and Pacific Island countries. The PMG monitors are scheduled to withdraw from Bougainville on 30 June.

There are serious problems of governance and law and order to be addressed in Solomon Islands. As part of a multi-donor effort to improve many aspects of the law and justice sector in Solomon Islands, New Zealand has deployed police officers under a mentoring project to support the Royal Solomon Islands Police in the areas of frontline and community policing. New Zealand and Australia are working with the Solomon Islands Government to find new ways of addressing the continuing deterioration in the security situation, which has damaged the economy and severely affected prospects for economic development.

The availability of small arms for illicit purposes is a significant security challenge facing many Southeast Asian and Pacific Islands countries. New Zealand sees the ARF as a useful forum for focusing attention on small arms issues in our region. New Zealand welcomes the regional seminars held in Tokyo and Bali early in 2003 to promote implementation of the UN Programme of Action in the Pacific and Asia and to facilitate exchanges of ideas and experience to curb small arms proliferation. New Zealand looks forward to the First Biennial Conference on the UN Programme of Action on Small Arms to be held in New York in July 2003 as a means of re-energising small arms initiatives.

Transnational issues have continued to pose threats to stability and security in the Asia-Pacific region. The ARF confidence-building agenda now includes a number of concrete counter-terrorism measures and points up the connections between terrorism and transnational crime, including people smuggling and trafficking, drug trafficking, money laundering, cyber-crime, and small arms proliferation. No country can combat this type of crime alone. Greater international cooperation and coordination is needed. Initiatives aimed at defeating terrorism may also be effective in combating transnational crimes. The Bali Conference on People Smuggling, Trafficking and Related Transnational Crime was an example of a regional initiative serving both objectives.

The proliferation of weapons of mass destruction and their means of delivery is an ongoing threat to our region. At last years Brunei meeting ARF Ministers recorded ongoing interest in disarmament issues, and noted that the terrorist attacks of 11 September 2001 underlined the importance of participants fulfilling their individual and collective commitments to multilateral cooperation in arms control, disarmament and non-proliferation. The international community needs to renew its efforts in disarmament and non-proliferation relating to nuclear, chemical and biological weapons. Existing international treaties controlling weapons of mass destruction (WMD) are not perfect. Much work is needed to close the loopholes. But the existing major treaties do play an essential role in preventing the spread of WMD. The Nuclear Non- Proliferation Treaty (NPT) remains the cornerstone of international nuclear weapons control. Further ratifications of the WMD treaties are needed. Strong universal verification mechanisms are required to build confidence that each country is keeping its commitments. Vigilant controls on exports of items that could be used to manufacture WMD also contribute to keeping the world safer. New Zealand welcomes the Hague Code of Conduct against Ballistic Missile Proliferation .as a first step toward limiting the proliferation of WMD delivery vehicles. Ultimately, security will best be achieved by making progress towards the total elimination of all weapons of mass destruction.

Recent moves by India and Pakistan to re-engage with each other have been encouraging. New Zealand hopes that this will build confidence for genuine dialogue to occur on the causes of tension between the two countries, notably the issue of Kashmir. We share the concern of others in the international community that the risk of an escalation of tension remains, particularly if further terrorist actions occur. New Zealand has appealed to both sides to exercise restraint, to resolve their differences peacefully, to refrain from further nuclear tests, and to become parties to the NPT and the CTBT without delay and without conditions.

New Zealand welcomed last year's signing of the Declaration on the Code of Conduct in the South China Sea by the Foreign Ministers of ASEAN and China. This Declaration, and the spirit in which it was undertaken, should help to reduce and manage potential tensions from conflicting claims. New Zealand believes conflicting territorial claims in the South China Sea should be resolved peacefully through dialogue between the claimants. New Zealand takes no position on these territorial claims but attaches great importance to maintaining freedom of navigation in these significant international shipping lanes.

Stability in Indonesia underpins regional peace and security in South-east Asia. New Zealand wants to see a stable, democratic, prosperous and united Indonesia, and strongly supports Indonesia's transition to democracy, its economic reform programme and its efforts to secure peaceful resolution of internal conflicts. New Zealand has expressed its deep disappointment that the Cessation of Hostilities Agreement (COHA) in Aceh has broken down. New Zealand's view continues to be that special autonomy for Aceh is a workable solution if both sides are committed to it. New Zealand also sees full and early implementation of special autonomy in Papua as the key to a peaceful resolution of problems in that province.

The security environment in Timor-Leste remains fragile. The task of nation building is a daunting one for this newly-independent country. The mandate for UNMISET (UN Mission in Support of East Timor) has been extended for a further 12 months until 20 May 2004. After that date any residual UN presence is likely to have a developmental rather than a security focus, although this will depend on progress made over the next 12 months. Timor-Leste's future security and stability will best be secured by its political and economic integration into the region, including through participation in regional cooperation organisations such as ASEAN and the ARF.

In Myanmar the detention of Aung San Suu Kyi (ASSK), along with other members of the National League for Democracy (NLD) on 30 May, is a severe setback to' hopes for national reconciliation. New Zealand has condemned these moves and regrets the apparent reluctance of the SPDC to engage in genuine dialogue that could lead to political reform and more democratic forms of governance. In addition, the economy and the humanitarian situation have deteriorated, creating hardship for the people of Myanmar. The possibility that the situation in Myanmar could lead to instability, and the implications of this for the country's neighbours, makes Myanmar a subject of concern for the region as a whole. New Zealand has consistently urged the military authorities to improve the human rights situation in Myanmar, to enter into a substantive political dialogue with ASSK and other opposition groups. There is an urgent need for the SPDC to release ASSK and other political prisoners and to return to a genuine dialogue, facilitated by the Special Envoy of the United Nations Secretary General.

New Zealand contributions to regional and international security

New Zealand has continued its commitment to the multilateral security process and to playing a role in the maintenance of peace and stability in the Asia Pacific region. New Zealand has been an active participant in the international campaign against terrorism through its contributions in Afghanistan to Operation Enduring Freedom (recently enhanced) and to the International Security Assistance Force. New Zealand has recently offered assistance to humanitarian and reconstruction activities in Iraq. In Timor-Leste, New Zealand continues to contribute to UNMISET as well as providing training assistance to the local defence force. New Zealand will continue to offer support to Bougainville in its transition towards an autonomous government and is giving consideration to providing expanded assistance to Solomon Islands. New Zealand commits military personnel to a total of twelve UN and other multilateral peace support and demining missions. The New Zealand government has, for the next ten years, committed significant funding for replacing and upgrading a range of the New Zealand Defence Force's equipment to ensure that it is able to continue playing an active role in preserving regional and international peace and security.