Darwin: not such a safe haven

If there is one thing that the new administration of Malcolm Turnbull can be confident about, it’s that dealing with China is not going to get any easier. Despite our new prime minister taking a decidedly more nuanced view of our most important trade partner than his predecessor did, getting the bilateral relationship right remains a key foreign policy challenge.

Just how difficult this can be has been highlighted by the increasingly controversial deal with Landbridge to lease the Port of Darwin for 99 years. As the Australian Strategic Policy Institute’s Geoff Wade revealed in a noteworthy scoop, Landbridge is a Chinese state-owned enterprise with ties to the People’s Liberation Army.

Given Darwin’s pivotal role in the security policies of both Australia and even more importantly, perhaps, the US, having their notional enemy in charge of one the region’s more important strategic assets is surprising, to put it mildly. That it has happened at all sheds an unflattering light on the policymaking process in Australia.

One question to ask is why the Northern Territory government was allowed to negotiate such an important deal with apparently little consultation or oversight form their federal counterparts. The role played by the Foreign Investment Review Board (FIRB) seems equally unclear. The Landbridge Group claims it consulted “extensively” with the FIRB and the Department of Defence before the bid – a view supported by NT Chief Minister Adam Giles.

And yet the federal government looks to have been caught off-guard and apparently oblivious to the possible implications for national security. Defence has been obligingly reluctant to add to the government’s problems by offering no public commentary on the deal, but according to Laura Tingle in the AFR there is said to be “considerable alarm about the deal behind closed doors”.

There are apparently similar amounts of anxiety and incredulity in Washington. Remarkably enough, the US seems to have had no warning that such a deal was in the offing. It was not broached at the recent AUSMIN talks in the US. Given that one of the primary justifications for the alliance relationship with the US is the value of shared intelligence and close co-operation, this seems a remarkable turn of events.

One assumes that both Foreign Minster Julie Bishop and newly installed Defence Minister Marise Payne actually knew about the deal and chose not to mention it. Given the lengths to which Australia normally goes to shore up the alliance and to ensure the US of our “utter reliability” – as Tony Abbott put it – this is also a remarkable development, and one that comes not long after Australia’s decision to join China’s Asian Infrastructure Investment Bank – despite US requests not to do so.

Is this a manifestation of some significant change of direction in Australian foreign and domestic policy? It seems unlikely, especially as Treasurer Scott Morrison is furiously back-tracking and belatedly claiming that the government is:

… acutely aware of the sensitivities regarding foreign investment in strategic national assets and critical infrastructure.

Even if this turns out to be more cock-up than conspiracy, it’s still not a good look for the policymaking process in Australia. Not only is it apparently difficult to co-ordinate the actions of the disparate parts of Australia’s notoriously dysfunctional federal system, but it betrays an alarming lack of awareness about the way relations between the state and “private enterprise” can sometimes operate in China.

It is striking and revealing that it took the analysis of an independent thinktank to draw attention to the nature of state capitalism and the possible implications that flow from China’s very different ideas about security policy.

Thinking about security has an altogether more “comprehensive” and inclusive dimension in China. State-owned enterprises can and do play a role within the foreign, economic and even strategic policies of the Chinese state.

There are two questions the Australia government has to deal with in the light of this apparent failure to co-ordinate domestic, foreign, economic and security policies.

First, the idea of a “whole-of-government” approach is often invoked, but this episode suggests it’s a work-in-progress at best. Thinking about ways to actually make this happen is clearly still needed. Addressing the shortcomings of the federal system ought to be part of the discussion.

Second, is the challenge of deciding how to respond to China’s rise any closer to resolution? There is a separate debate to be had about the nature and extent of Australia’s strategic response to this question, but whatever the government decides, enacting policy in a consistent way ought to be a priority. Otherwise the government may end up alienating and irritating friend and foe alike.