"We hope of course more positive steps will follow, for example in relations to Papua and Maluku," he said.
Indonesian courts have handed heavy jail sentences to a number of pro-independence activists in Papua and Maluku province for raising separatist flags, considered treason under the country's law.
Last week an appeals court in Papua increased jail sentences for 11 pro-independence activists from eight months to between three years and three-and-a-half years for raising separatist flags last year after prosecutors appealed an earlier conviction.
Retno said Hassan defended Indonesia's action against those who raised separatist flags during talks with Verhagen.
"There were questions about the issue of flag raising and Mr Hassan explained that this is not about people raising a piece of cloth but everybody knows there is a message behind it," Retno said.
Separatist rebels have been fighting a sporadic rebellion in Papua, formerly Irian Jaya, since the early 1960s.
Papua, a predominantly ethnic Melanesian province 3,700 kilometres north-east of Jakarta, is a former Dutch colony that became an Indonesian province in 1964.
Maluku saw a resurgence of the separatist South Maluku Republic in the wake Muslim-Christian violence that killed thousands of people there at the start of the decade.