East Timor independence formally occurred on 20 May 2002.
East Timor was occupied by Indonesia for 24 years from 1976 to 1999, a period during which many observers consider a genocide to have taken place. It was estimated by one report that the Indonesian occupation of East Timor was responsible for 180,000 deaths in the 24-year period. The human rights violations of the Indonesian government resulted in a home-grown resistance movement pushing for independence. Several pro-independence organisations such as the centre-left Fretilin (and its armed wing Falintil) and the centre-right Timorese Democratic Union (UDT) joined forces in 1986 in the National Council of Maubere/Timorese Resistance, a coalition which grew over time and by 1998 included all East Timorese political parties. The 1991 Dili Massacre, which was recorded on video and was widely reported to have killed between 180 and 200 people, was a turning point for the independence cause. Publicity about the atrocity stimulated the emergence of an East Timor solidarity movement in Portugal, the Philippines, Australia, and other Western countries. United States support for Indonesia ended and the U.S. military pulled out of Indonesia. Following civil unrest and protests, long-time president Suharto (presidency 1967–1998) fell from power in May 1998 and was replaced by B. J. Habibie.
Although Habibie was opposed to outright independence, he allowed an East Timorese referendum on special autonomy or independence on 30 August 1999. In the lead-up to and aftermath of the referendum, in which 78.5% of voters chose independence rather than special autonomy, the 1999 East Timorese crisis occurred, with lethal violence between pro-Indonesia militias and pro-independence forces. UN peacemaking troops of the INTERFET intervened on 20 September 1999 to address the humanitarian and security crisis. The Indonesian government formally recognised the result of the referendum on 19 October 1999, after which UN peacekeeping troops of the UNTAET oversaw the transition period to independence until 2002, during which some deadly clashes continued to occur.
Australian shift in policy and letter from John Howard
Around this time Australian support for Indonesia over East Timor had been changing. Under the past Fraser and Hawke governments, there had been support for Indonesia over its rule of East Timor. Even after the Dili Massacre, when the US military pulled out in protest, Paul Keating's Government had increased military support, Keating himself was close to Suharto, and had financial dealings with Indonesian business. At this time, there was an increase in East Timor itself of more overt feelings towards independence. The Australian Government's policy was also shifting, and while in the past it was one of the few countries that recognised Indonesia's control over East Timor, the Government's view at this time changed towards the possibility of some sort of autonomy. This shift in policy was initially revealed by journalists, and then formally acknowledged by the Australian Foreign minister, Alexander Downer, on the 12th of January 1999. Australian Prime Minister John Howard, proposed by letter to the president of Indonesia that there should be a referendum for the people of East Timor, to do with their autonomy. While the letter advocated that the referendum take place over the next 10 or 20 years, Indonesian President B. J. Habibie, however, prompted by the letter, decided to have a referendum on independence immediately.
Though it was noted there had been a fair amount of diplomacy between the two leaders, who generally had good relations, It was said that Habibie was not happy with the letter, which prompted him to act. Also, from the Indonesian point of view, there was a reluctance to continue to support and invest money into East Timor, for an extended period of time, if in fact Timor would simply leave Indonesia at some point in the future.
This was unexpected by the Australian government, who expected the letter to be rejected, and even if it was considered, expected a move to autonomy to be planned and to take place years if not decades in the future. However, the fact that it signalled a change in policy by the Australian government, obviously indicated a change in support for Indonesia over its governance of Timor.