Fed govt coy on Indon people swap talks

An Indonesian government advisor says talks are under way with Canberra about a people-swap deal. Source: AAP

THE federal government hasn't ruled out a possible people-swap deal with Indonesia involving asylum seekers picked up at sea, similar to Labor's failed arrangement with Malaysia.

Prime Minister Tony Abbott declined to confirm talks were taking place, saying Australia wouldn't be engaging in negotiations with other countries through the media.

"We are, of course, talking with Indonesians, as you'd expect, about the best way of handling people who are picked up in their search and rescue zones," he told reporters in Canberra on Tuesday.

We ... honour our commitments to protect the confidences of these discussions."

Earlier in the day, Immigration Minister Scott Morrison said the federal government was not "engaged in people swaps" but also did not rule out a potential deal.

But overnight on Tuesday, Dewi Fortuna Anwar, adviser to Indonesian Vice-President Boediono, flagged discussions were underway and said Australia would bear any costs.

The proposal appears to revolve around Australia taking people in Indonesian detention centres in return for Indonesia accepting asylum seekers on boats intercepted at sea in its search and rescue zones.

This would be similar to Labor's failed people-swap deal with Malaysia, which involved asylum seeker boat arrivals being swapped for processed refugees in Malaysia. It was subsequently deemed unlawful by the High Court.

Late last week there was a 24-hour stand-off over a boat carrying more than 50 asylum seekers intercepted by Australian authorities off the coast of Java.

Indonesia declined requests for the passengers to be taken ashore and the boat remained at sea under the watch of the Australian navy before the government transferred them to Christmas Island.

The coalition government continues to argue Indonesia had an obligation to accept the asylum seekers because the boat was in its search and rescue zone and Indonesia was the closest port.

"We will not shirk our duties and our obligations when it comes to life at sea," Mr Abbott said.

"As things stand we have had a stronger naval and customs presence in much of their search and rescue zone than they have themselves."

University of Sydney international law expert Tim Stephens told AAP the 1974 Convention for the Safety of Life at Sea and the 1979 Convention on Maritime Search and Rescue say rescued passengers must be taken to safety but doesn't specify which jurisdiction should accept them.

A 2004 bilateral agreement between Australia and Indonesia on sea rescues also doesn't specify which country should accept rescued asylum seekers, he added.

Associate Professor Stephens said there was an independent umpire - a tribunal based in Hamburg Germany - which can hear such maritime disputes.

However he believed it more likely future incidents would be settled behind the scenes.

Opposition leader Bill Shorten says the government needs to come clean on any secret people swap discussions, especially as the coalition opposed Labor's Malaysia plan.

"We've got a senior adviser to the Indonesian government ... contradicting Immigration Minister Scott Morrison's version of events. What on earth is going on with the boats policy," he asked.

Australia Greens Senator Sarah Hanson-Young said the development smacked of desperation.

"This is trading in human lives," she said.

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