When I was young and naive, I thought that it didn't make sense for any state to try to coerce its parts into staying within that state. In other words, I supported any independence movement around. Bosnia? Sure. Kosovo? Of course. East Timor? Taiwan? Tibet? Chechnya? Abkhazia? Niger Delta? Palestine? Texas? Sure to all of them. Even if a single individual wanted to declare his land a separate country (and was willing to deal with the problems inherent in that), I was ok with it.
I've now seen how difficult such an ideal is in practice. Indonesia, as a state, could well fall apart if too many groups go the way of East Timor. Papua and Aceh both have independence movements. If they succeed, how soon before all that's left of Indonesia is just Java? Unlikely, perhaps, but I better understand now than before the worries of the Indonesian government.
That said, I think the human rights report is correct. The government needs to take measures to work with the separatists, particularly those who are willing to accept autonomy or to put autonomy to a vote. It would be far more successful than attempting to just suppress the sentiment, as it tried in East Timor.