Paul Toohey – There was never any question that it would tread softly. After all, it was called the Commission for Truth and Friendship, not the commission for truth. It was set up by the leaders of East Timor and Indonesia not merely to rake over the horrors of 1999 but most of all to find a way forward for two neighbours with a history of bad blood.

There was also never any question that the Indonesian military, police and civilian officials – that is, the Indonesian government – would be found responsible for urging and participating in atrocities in which an estimated 1400 (mostly) East Timorese were killed about the time of the independence referendum. For the commission to have concluded otherwise would have rendered the report an embarrassing lie.

Indonesian President Susilo Bambang Yudhoyono says he will abide by the commission's outcome and accept responsibility for what happened in East Timor on behalf of his nation. It has been a relatively painless thing for him to do because the violence did not occur on his watch. But that does not make his gesture meaningless.

"We convey very deep remorse at what happened in the past that has caused the loss of lives and property," Yudhoyono said in Bali this week, as East Timor's President Jose Ramos Horta and Prime Minister Xanana Gusmao stood by his side to formally receive the report. It really couldn't be put more strongly than that. Or could it?

Yudhoyono spoke in Indonesian while reporters were handed an English language translation of his remarks, from where the above quote is drawn. It was immediately suggested that Yudhoyono in fact had used a much softer word than remorse, more along the lines of regret.

The event nevertheless carried the appearance of a historic moment, with Yudhoyono officially ending nine years of denial by accepting, without equivocation, the verdict of the 10 commissioners, five of them from East Timor, five from Indonesia.

It did not matter that the whole world already knew it to be the truth. Certainly East Timorese have never doubted Indonesian involvement for a second. Those people who lost loved ones in 1999 will take little satisfaction from Yudhoyono's remarks.

But the report serves SBY well, allowing him to further strengthen his authority over the main culprit in the 1999 violence, the TNI, or army, in the run-up to next April's presidential election.

Marcus Mietzner, who has just taken up a post at the Australian National University in Canberra lecturing in Indonesian studies after 10 years in Jakarta working on military reform issues, points out that several of Yudhoyono's political opponents are named in the report as direct militia backers, most notably retired general Wiranto, who plans to run against SBY. Already, Mietzner says, Indonesians are declining to blindly vote in retired military figures as their local governors or bupatis.

"We do have now for the first time civilian governors in key provinces, where before they were positions reserved for the military," he says. "In a sense it's significant that the Indonesian side would accept such a harsh judgment. But that some of SBY's rivals are mentioned in that report would not be unwelcome to him. It damages them politically."

The report recommends that Indonesia clarifies and emphasises "the legal boundaries between civil authorities who are exerting the authority and responsibility of making policies, versus the military and police forces who are exerting operational responsibility".

Yudhoyono – also a former general – has already embarked on this course, particularly in Aceh, making it clear that his generals toe the line or face the sack.

Mietzner thinks it unlikely Yudhoyono will urge further action against the likes of Wiranto on the basis of the report. "Not moving with legal action is an ideal solution for him," he says.

Yudhoyono said in his Bali statement: "We must learn from what happened in the past to find out the facts over who has done what to whom and who must be held responsible. Only the truth will free us from those past experiences."

It does indeed seem that the truth can free people. The TNI leaders will go unpunished. The commission did not have the power to recommend charges and, despite Yudhoyono's words, Mietzner says there is little sympathy among Indonesians for what happened in East Timor. He says any further internal self-examination – beyond the bogus human rights trials that have already occurred, in which a handful of militia and mid-ranking military serve short terms – would not go down well domestically.

The commission's terms of reference, as agreed to between East Timor and Indonesia, cast its mandate in such a way that it could deliver only positive results, one being the ability to reward co-operative witnesses with amnesties from any later prosecution.

But in a clear statement of intent, the commission refused to recommend any amnesties because it found Indonesian military witnesses evasive and untruthful. The Australian understands it was the Indonesian CTF commissioners, not the East Timorese, who were most insistent on not granting amnesty to Indonesian soldiers.

That suggests one of two things: the Indonesian commissioners are enjoying their new democracy and want results or the East Timorese commissioners are meek and want no trouble.

The UN refused from the start to co-operate with the commission because its terms of reference gave it power to grant amnesty. The UN believes convicted war criminals should face the consequences. So it is interesting that Ramos Horta, who several weeks ago made a public play for the job of UN High Commissioner for Human Rights, then withdrew, revealed in Bali how out of step he was with UN thinking by endorsing the CTF findings.

"Justice is not and cannot be only prosecutorial in the sense of sending people to jail," he said. "Justice must also be restorative. We as leaders of our people must lead our nations forward."

As far as East Timor and Indonesia are concerned, the fallout over the events of 1999 ends here and now.

The report recommends no individual receive financial reparation. It suggests, vaguely, that both Indonesia and East Timor employ "collective reparations". One can imagine this would work similarly to the approach taken to Australia's Stolen Generations: no personal payouts but assistance in the form of grants to offer group comfort; counselling, if you're lucky. Maybe tea and biscuit money for survivors to sit around and discuss their grief.

It is admirable that the leaders of East Timor and Indonesia want to put it all behind them, whatever the motives may be. But it's easier for them. Gusmao led a guerilla insurgency that directly attacked and killed (he has never admitted it) patrolling Indonesian soldiers. He lost comrades. Ramos Horta travelled the world and won a Nobel Peace Prize. He lost family members to the Indonesians. Yudhoyono was a soldier, now he's a president.

It is not possible to dismiss the motivations of any of these men. But how do Ramos Horta and Gusmao explain their stance to ordinary East Timorese who lost their loved ones in 1999? It remains to be seen whether they share their leaders' geopolitical imperative.

"As a first step," the CTF report states, "the two presidents should make a joint statement inviting both nations to overcome the legacy of past violence and work together towards preventing reoccurrence of conflict and promotion of lasting friendship in the future. The commission recommends that the two presidents together acknowledge responsibility for past violence and apologise to the peoples of the two nations and especially to the victims of violence for the suffering they have endured."

It is a little unclear to whom Ramos Horta must apologise. The report found that the Indonesians "systematically co-operated with and supported the militias in ways that contributed to the perpetration of crimes". While it is certainly true that East Timorese citizens cut the throats of their own people, burned them out of their homes, raped and then ran west across the border where many still live, these ruthless automatons were doing the bidding of the TNI.

For all the report's apparent shortcomings, it has met with the approval of the toughest critic of all, Darwin's Rob Wesley-Smith, an activist who has fought tirelessly for East Timor's freedom for the best part of 35 years.

"I had zero expectations about the report but I feel it is positive, even if it is minimalist," he says. "They've laid blame squarely on the command structure of the Indonesian military. The important thing here is that an Indonesian-commissioned report blames the Indonesian government and the military. That, to me, means a lot. It is great acknowledgment from an Indonesian government."

Suharto-era critic George Aditjondro, an academic who left Indonesia for Australia in 1995 for his own safety and is now back in Indonesia, does not share the joy.

"By laying blame on the TNI, SBY is also laying the blame on Wiranto," Aditjondro says. "This is a sign to the international community not to support Wiranto's candidacy but continue support for (Yudhoyono's) candidacy. There's already an understanding that there will be nobody taken to court. There have already been Indonesian-style courts in which the Indonesians were absolved and they turned the East Timorese (militia) into scapegoats.

"I personally feel people starting from Wiranto down should be prosecuted. His immunity has allowed him to run for the coming election. He doesn't have to fear anyone. He should have been the first person taken to court as an international war criminal.

"This report shows that there has been high-level politicking between Jakarta and Dili. It is a gentleman's agreement not to pursue anybody about war crimes in Timor. It is more a symbolic event. Human rights groups do not forget about the violations. For Indonesia's sake, it would be a good thing to take those who committed atrocities to courts because it would put pressure on the TNI."

Jamie Mackie, a visiting fellow at the ANU, says the report may become a factor in the election, especially the demand, to which SBY has agreed, to at some point down the track issue a formal apology to East Timor.

"I don't think the report was been geared towards the election but it's something SBY now cannot afford to ignore," Mackie says.

"The implication of him either giving or not giving an apology to East Timor could become critical. And the human rights groups in Jakarta might continue to keep this in the forefront, partly as a way to keep the army on the back foot.

"My guess is that the report in a way makes it easier for Wiranto. Two months ago I would have said SBY has it safely made for the election. I'm a lot less sure now, not just because of Wiranto but also because of rising fuel and food prices. At a time like this I suspect SBY couldn't afford to take too many risks, therefore I suspect he's gone as far as he will go."