The Australia–France Treaty for the future submarine
14 Mar 2017|

The Parliament’s Joint Standing Committee on Treaties (pictured above at ASC in Adelaide) is holding a public hearing today to consider the Framework Agreement between the Government of Australia and the Government of the French Republic concerning Cooperation on the Future Submarine Program. (The Treaty is here.) I appeared as a witness, and my opening statement is below.

Thank you for the opportunity to appear this morning. I should say in advance that I do not claim any particular expertise in the formulation and interpretation of treaties. I do know something about submarines, the industrial arrangements for naval shipbuilding in Australia, and the nation’s experience of building and supporting the Collins class submarines. And I believe that these matters are pertinent to the Treaty in question.

Let me begin with some overarching comments about the Treaty. I think it does a valuable thing by putting in place Treaty level obligations to help Australia not only build the fleet of future submarines, but also to support them. In doing so, it should help ensure that we do not end up with a difficult to support ‘orphan’ capability should changes in the world environment alter France’s economic or strategic calculus. The difficulties we had in developing an indigenous capability to support the Swedish-designed Collins submarines—which contributed to the fleet becoming essentially moribund for a period in the late 2000s—should provide ample incentive to not repeat that experience.

The Collins program provides some excellent lessons in how not to deal with an international partner in a submarine build. There was a substantial falling out between Australia and Sweden over intellectual property issues, which went as far as to land the two parties in the Federal Court in 2001. The issue was ultimately resolved, and the Australian and Swedish Defence Ministers produced a joint communiqué in 2013 on the subject of intellectual property rights for submarine design and technology. But it was a good illustration of the pitfalls of collaboration on sensitive defence technologies. The clear clauses regarding obligations for the supply and ownership of intellectual property in the Treaty we are discussing today should go a long way to avoiding that sort of problem in the future submarine project.

But it’s worth understanding the background to the Collins IP dispute, because it’s pertinent to the Treaty we are talking about today. In 1998–99 cracking problems were discovered in the Collins’ propellers, and the Commonwealth shipped two units to the United States for analysis and advice. Propeller configuration is one of the ‘crown jewels’ of submarine design, and Kockums took court action in 2001 when another propeller was to be shipped, resulting in the unedifying spectacle of the ship carrying the article being held off the US coast while the court action was resolved. The Court found in favour of the Commonwealth, but a substantial reason for the decision was that the harm to Kockum’s position had already been done by the earlier shipments—hardly the basis for a trust-based relationship between the parties involved.

The involvement of the United States in that case is relevant to today’s discussion, because in reality we aren’t talking about a joint Australian-French submarine. We know that the weapons and combat system to be fitted to the vessels will be sourced from the US. Given the centrality of those systems to the boats’ effectiveness, the integration of American systems with those supplied or designed by France will be ‘make or break’ for Australia’s future submarine capability. In practice, this is a three way collaboration to be managed.

A critical question for the future submarine program, and especially for the extent of tri-lateral cooperation in the program, is what precisely constitutes a combat system. The suite of ‘black boxes’ that sits in the control room and takes data from sensors and other inputs is correctly termed the combat management system. The extended combat system includes the sensors, such as sonars and the periscope imaging system. In the Collins, we use an American combat management system in concert with European-sourced sensors. That has certain implications for how data is managed—it requires a one way flow in order to quarantine the American technology.

I suspect that the Americans would like us to include their sensor systems in the future submarine, in part to avoid those sorts of data management issues, and in part because it is good for business. That might avoid some of the data management issues, but it would also more deeply enmesh French and American technologies in the detailed design of the boat. Managing the interests and intellectual property rights of all three players will be necessary to successfully deliver the capability we want. The Treaty before us now is a necessary step, but it needs to be part of a three-way arrangement that protects the interests of Australia, France and the United States.

Let me end with a caution. Australia and France share many values, and we have broad shared strategic interests in maintaining what the Defence White Paper called ‘the rules based global order’. To that extent we should be able to enter into long-term industrial and technological arrangements with confidence. But we have quite different approaches to defence industry. France has a much more nationalised approach to its defence industry sector, and therefore has a strong and direct commercial interest in selling its products. The Government of France owns DCNS. We should not convince ourselves that sharing submarine technology with Australia is entirely an act of altruism towards a strategic partner. We should keep our eyes open, be aware of the economic imperative at work, and protect our interests when necessary.