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Reports emerged on Thursday that Australian officials paid the crew of a boat carrying migrants $30,000 to turn around and return to Indonesia.
Indonesia's Foreign Ministry said it was "very concerned" by the claims, which came from police in the country's East Nusa Tenggara province.
The captain and five crew members of the boat - which was reportedly carrying around 65 migrants from Sri Lanka, Bangladesh, and Myanmar — told police they were each paid $5,000 after being intercepted by an Australian navy ship following 12 days at sea.
The police chief on the remote island of Rote, where the boat was taken, said the captain told him he had been given the money by an Australian customs officer who spoke fluent Indonesian.
"I saw the money, the $5,000 was in $100 banknotes," he told the Brisbane Times. The crew had $30,000 in total, which was wrapped in six black plastic bags, he said.
The crew have been detained for human smuggling offenses.
The passengers apparently corroborated their story, writing a letter to the government in New Zealand, where the boat was headed.
The letter said the Australian officials had paid all six crew members, taken away their boat and replaced it with two smaller ones and given them a little fuel.
Passenger Nazmul Hassan told Radio New Zealand the boat was originally stopped by officials who gave them a notice saying "never try come to Australia for settlement and never use Australian waters to go to New Zealand."
Five days later, near North Australia, they ran into officials again who asked to speak to the captain, he told the radio station.
"They took him away to their customs boat. After five to six hours in a meeting, they came back again and arrested all of us. After two days there, they took us somewhere inside Australia [waters], we didn't know that place because our phones and everything were taken away," he said. "What they told the chief captain I don't know. But after he came back, he called another five captains and say that Australia wanted to donate for us to go back to Indonesia."
Foreign Ministry spokesman Arrmanatha Nasir said the Indonesian government was concerned that if such payments were happening they could encourage human trafficking.
Australia's Immigration Minister Peter Dutton said the department did not comment on operational matters. When asked by Australian news network ABC if Australian officials paid people to return asylum seekers. Foreign Minister Julie Bishop said "no."
Australia has a policy of turning back and refusing to resettle any migrants who arrives on its shores by boat.
Asylum seekers are sent to holding centres in Papua New Guinea or Nauru.
The Associated Press contributed to this report.