Thursday, 3 December 2020
Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, Australia's Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill 2020; In Committee
Over the years, I have been consistent in my strident criticisms of the decision to lease the Port of Darwin to Landbridge. How can one of our most strategic assets in northern Australia be leased to a company with ties to the Communist Party in Beijing? There have been long concerns about the decision, attributed to the surveillance and espionage capabilities presented by the port's close proximity to Australian and US defence facilities as well as concerns about the strategic purpose of China's investment in the region as part of its Maritime Silk Road. I know many Australians who have contacted me do not agree, respectfully, with the defence minister's comments on 9 September that there are no security concerns regarding the Port of Darwin. How can this not be a matter of concern? Indeed, I have to say that, after the events of this week, I envisage that there will be renewed focus on the Port of Darwin and it will become very much symbolic of our political fortitude to stand up to the bullying tactics of the CCP.
I think it's important to highlight some of the aspects of that decision on the Port of Darwin, and they remain perplexing to this day. I know that, after its win in August 2012, the CLP started exploring the privatisation of assets, including the port. There was a process. There were 33 investors, including Australian and European companies, that expressed an interest, including Landbridge. At the time, media reports indicated that Landbridge was a subsidiary of the Shandong Landbridge Group, a private company, and that its 2013 billionaire owner, Ye Cheng, was named by the Chinese government as one of the top 10 individuals caring about the development of national defence. Shandong was found to have extensive links to the CCP and the PLA. Indeed, in an interview in Beijing in 2016, Mr Ye stated:
… the Darwin Port investment fit the company's strategy to expand its shipping and energy interests and served China's foreign policy goal known as One Belt, One Road …
In February 2015, the Northern Territory assembly appointed the Port of Darwin Select Committee. That committee went through a process. The evidence from that committee also indicated that the federal government had advised the Northern Territory government that the port was better privatised than continuing in government hands. One of the key recommendations in its April 2015 report was that an Australian entity control the lease and that there be FIRB and defence consultations regarding the strategic and security risks of a potential international investor. On 14 September, FIRB contacted Landbridge indicating that the lease was outside the purview of FIRB review because of a technicality that assets owned by state, territory and local governments were exempt from FIRB scrutiny. To this day, that remains the case. The exception has been modified to some extent, but it still remains an issue, and I think that that's something that we should be looking at.
But, in any case, on 13 October Chief Minister Giles announced the 99-year lease valued at $506 million. The lease process raises some legitimate questions as to why, given the lead time to this decision, more effort wasn't made by those in key federal positions and those advising them to remove the foreign investment exemption, given the national security implications of allowing such a critical asset to be handed over to an entity with well-known ties to the CCP and the PLA. We do note that, at the time, the Abbott government was very keen to ensure that a free trade agreement was entered into with China. The Chinese President, on 17 November 2014, addressed a joint sitting and, the day after, the FTA was announced by the trade minister, Andrew Robb—$18 billion. Subsequent to that, Mr Robb left and he took on a job with Landbridge—$880,000. I will leave it there, but those questions still remain open.
In its report after the decision, the Senate Economics References Committee examined a number of issues pertinent to the decision and, in particular, made recommendations regarding that exemption. Peter Jennings, Neil James and others gave evidence. They were very, very critical of the decision. As Peter Jennings said, we would now have to have our national security interests balanced against the reality of operating out of a harbour run by a company whose website proclaims that it is contributing its best to realise the great rejuvenation of the Chinese dream.
There were different offers at the time. An ABC report of 12 March 2019 goes back and looks at some of these offers. That article reflects that, whilst Landbridge was the highest offer, the second and third offers were very close thereto. Neil James said:
If [Landbridge's] offer was the best offer, but it introduced a major element of strategic risk for the whole country, they should have had the common sense to realise they take the second best offer or the third best offer and not have any strategic risk.
I have been consistent on this issue but also on my criticisms of predatory actions by totalitarian regimes and their state owned entities on various issues—in particular, the acquisition of strategic assets. I have advocated for a major overhaul of critical infrastructure legislation, including retaking the Port of Darwin. As the minister said, there is absolutely no doubt that, were the lease of the port to be considered today, it would be subject to FIRB rules. But I also believe that because the exemption has now been modified, most likely it would be rejected by the Treasurer. However, I am disappointed that the foreign investment changes proposed by the Treasurer, which we will probably be debating shortly in this place, will not allow a retrospective consideration of the port decision. Under FIRB rules, that is not going to be possible.
Regardless of why the lease was signed, there are cogent national security imperatives as to why consideration should be given to breaking the lease. It's obvious from the Northern Territory submission on these bills that there is some contemplation of a re-acquisition. However, I did put specific questions to the Northern Territory Chief Minister, Michael Gunner, which weren't responded to. They very much went to this issue. It would have been useful to have Mr Gunner give evidence, or at least provide responses to those questions, so that we could explore the issues. The only way we are going to explore these issues is with information from the Northern Territory government. So I say to those opposite that a better course of action here would be to seek the cooperation of the Northern Territory government. They have been reluctant in relation to releasing these documents. I would urge those opposite that a better course of action, rather than getting another report here as requested, would be to urge the Northern Territory government to release those documents so that we can make a comprehensive assessment.
The minister has answered in the committee stage the very questions that are raised in this amendment. This amendment also raises technical issues, that it's not just actions in the purview of the foreign minister but also actions in the purview of other ministers, including the Treasurer, that will be required to take action. So I believe there is a technical problem with this amendment. I won't repeat my concerns about this bill, which I outlined in the second reading debate. Suffice to say that I believe this amendment will not lead to any report that would be useful. I think that it's a futile exercise, because we already know the outcome, and the outcome is that there will not be a retaking of the Port of Darwin under this legislation.
As I have said, there are other opportunities. I have been advised that there are circumstances which may provide cause for the lease to be broken, including a failure by the port operator to meet legislative requirements if the company were to become insolvent, failure to meet defence access requirements and in the event that defence powers are exercised. (Time expired)