Northern Territory MP Luke Gosling has called on the Commonwealth government to conduct an in-depth review of the Chinese acquisition of the Port of Darwin, with the ultimate goal of reconsidering the deal.
Since former US president Barrack Obama announced a reinvigorated US presence in the Indo-Pacific as part of the Pacific Pivot in 2013, Darwin has emerged as one of the key focal points for both US strategic planners and the Australian Defence Force, as the nation responds to an increasingly assertive China and rapidly evolving economic, political and strategic environment.
Located in close proximity to the strategic sea lines of communication (SLOC) of Malacca, Sunda and Lombok, Darwin is also Australia’s gateway to the Indo-Pacific, serving as a launching point for Australia’s economic and strategic engagement with the region.
While the broader economic potential of Darwin is heavily under-utilised, the strategic potential of the city is equally under-utilised, particularly given the rise of Indo-Pacific Asia and China – something increasingly recognised by the US as it seeks to re-position itself in the region.
As the regional dynamics have changed, successive Australian governments have sought to re-position key Australian military assets throughout the northern approaches to the landmass.
However, it wasn’t until the 2016 Defence White Paper that this tactical and strategic reorientation was set in stone, with the white paper identifying the need for Australia to shift beyond the narrow sea-air gap with the aforementioned facilities serving as key staging points for Australia’s engagement in the region.
"Australia’s strategic outlook to 2035 also includes a number of challenges which we need to prepare for. While there is no more than a remote prospect of a military attack by another country on Australian territory in the foreseeable future, our strategic planning is not limited to defending our borders," the white paper identified.
"Our planning recognises the regional and global nature of Australia’s strategic interests and the different sets of challenges created by the behaviours of countries and non-state actors such as terrorists."
On the back of these factors, there is a growing consensus among Australia’s strategic policy apparatus that the north of the continent is going to play an increasingly important role in the nation’s future force posture and geo-strategic, economic and political engagement with the Indo-Pacific.
However, in recent years, the "lease" of the Port of Darwin to the Chinese-backed Landbridge has drawn an ever-increasing amount of public and media attention and criticism about the impact of the deal upon Australia's economic and strategic security.
In particular, Northern Territory-based opposition MP Luke Gosling has called for the government to review and reconsider the acquisition through the prism of the new Foreign Relations legislation and empowered Foreign Investment Review Board (FIRB).
Gosling sets the scene, explaining, "The Australian government says its new foreign relations bill is about one thing: ensuring foreign policy consistency by reviewing state and territory deals that could undercut Canberra.
"Fair enough. Foreign policy is a federal — and constitutionally enshrined — responsibility. State and territory governments have been increasingly active in international engagements in recent decades. That’s a perfectly normal feature of globalisation that’s here to stay.
"But there’s good reason to keep foreign policy powers concentrated in federal hands. Thanks to its expertise, real-time reporting from the overseas diplomatic network and intelligence collection and assessments from all sources, the federal government will always be the best informed about the world and the custodian of Australia’s strategic policy."
There are some differences between jurisdictions
For Gosling, the very nature and difference of larger states like NSW, Victoria and even Queensland beget a sense of complexity, expertise and that helps them navigate the world of foreign direct investment and negotiating with foreign powers more effectively and efficiently, however they're not without their flaws.
Gosling explains, "A state like Queensland or New South Wales cannot be expected to have anywhere near the same situational awareness when making commercial deals with foreign powers. And in a dangerous world, hostile actors will seek to divide us. So, let’s not help them.
"If this bill helps reverse the hollowing out of our capacity to prosecute Australia’s national interests, I’m all in. That would need to include a serious discussion about the chronic cuts to our frontline diplomatic network and aid program. But what concerns me is the clear political slant in this bill."
Turning his attention to the now well-publicised commitment of Victorian Premier Daniel Andrews to seek funding from Beijing's Belt and Road Initiative (BRI) and the potentially disastrous national security implications such a deal could have, Gosling draws some clear comparisons between that and the deal for Port of Darwin.
"From the get-go, the government framed Victoria’s 2018 memorandum of understanding with China on the Belt and Road Initiative as the main problem that needed fixing. To be clear, the federal Labor leader, Anthony Albanese, has said that we would not have signed up to the BRI.
"It’s curious, though, that the government is waving the Victorian deal like a red rag while ignoring other BRI-related deals that are in plain sight. Like the lease of the Port of Darwin. To avoid blatant double standards, Darwin should be in the same conversation as Victoria."
This is particularly relevant as many state and territory jurisdictions are struggling to juggle the national security and economic ramifications associated with increasing levels of foreign direct investment, particularly from China.
While much has been made of Premier Andrews' plan to sign Victoria up to Beijing's BRI, NSW is not to be outdone as it has been revealed that a Chinese owned company responsible for shipping Australian medical supplies back to China during the height of COVID-19 is close to securing tenders to construct pumped hydroelectricity generation facilities in the north of the state.
It has been revealed by Clare Armstrong of The Daily Telegraph that the Beijing-linked Goldwind Australia is expected to be selected to build WaterNSW's Glennies Creek and Glenbawn Dam hydroelectricity projects in the NSW Hunter region at a time when Australian companies like AGL and Meridian dropped out of the race due to concerns about the commercial viability of the programs.
Despite growing public and media calls for a closer review and consideration of the Port of Darwin deal, it appears at this stage, despite many similarly-sized infrastructure acquisition and/or partnership programs being similarly scrutinised, Darwin won't, much to the chagrin of Gosling.
"‘No, it shouldn’t!’ the government is now saying. The foreign minister has explicitly denied that Darwin Port would be reviewed as part of this bill. Marise Payne has claimed that this is because the 99-year lease of the port by the NT government was to a privately owned Chinese company, Landbridge Group, not a government entity. The bill excludes ‘a corporation that operates on a commercial basis’," Gosling says.
"Yet it doesn’t take a degree in Sinology to understand that Western and Chinese private companies differ in important ways. In the Chinese system, outbound investors must register deals for approval with three government bodies, including the trade ministry. A private company that owns critical infrastructure abroad is still accountable to Beijing.
"This is confirmed by private companies’ mandatory reporting requirements under China’s national intelligence law. Just last year, a Foreign Investment Review Board source suggested that the Chinese law had effectively ‘done away with the distinction between private and state-owned companies’."
Critically, Gosling draws an interesting and a concerning parallel between the Darwin deal and Beijing's broader BRI initiative, stating, "Even if the government dismisses any questions around the lease of a critical infrastructure asset like Darwin Port to a foreign power, be it China or Canada, there’s a bigger issue. You won’t hear the government say this openly for obvious reasons — it oversaw the sale — but the 2015 lease of Darwin Port was part of the Belt and Road Initiative.
"Officially, the Darwin Port sale wasn’t badged as a BRI project. But it was undoubtedly part of it from Beijing’s point of view, even if not from ours. For more than a decade, China has been buying up critical infrastructure such as ports around the world. But this strategic buy-up was given an authoritative policy rationale when Chinese President Xi Jinping launched his flagship Belt and Road Initiative in 2013.
"That’s when China’s ports buy-up officially became part of the seagoing aspect of the BRI, dubbed the Maritime Silk Road. Confusingly, the ‘road’ part of the initiative is actually maritime. Through this BRI-propelled strategy, Chinese private or state-owned companies quickly acquired significant or controlling stakes in more than 76 ports in 35 countries, including Darwin and Melbourne."
Australia’s position and responsibilities in the Indo-Pacific region will depend on the nation’s ability to sustain itself economically, strategically and politically.
Despite the nation’s virtually unrivalled wealth of natural resources, agricultural and industrial potential, there is a lack of a cohesive national security strategy integrating the development of individual yet complementary public policy strategies to support a more robust Australian role in the region.
Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability, serves as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia.
However, as events continue to unfold throughout the region and China continues to throw its economic, political and strategic weight around, can Australia afford to remain a secondary power or does it need to embrace a larger, more independent role in an era of increasing great power competition?
Further complicating the nation’s calculations is the declining diversity of the national economy, the ever-present challenge of climate change impacting droughts, bushfires and floods, Australia’s energy security and the infrastructure needed to ensure national resilience.
Air Vice-Marshal (Ret’d) John Blackburn, AO, encapsulates the need for robust conversation with the Australian public perfectly, telling Defence Connect, "We need to have a serious conversation with the Australian public about the challenges we face as a nation – that includes climate change, it includes the fact that 90 per cent of our energy supplies are imported from overseas and our industry base is declining.
"This should be a key focus point for the government, but when you look at the government’s own national security site, it is focused on counter-terrorism, countering violent extremism and de-radicalisation and the vulnerability of transport infrastructure to such actors. This is far too narrow a focus for a nation like Australia."