Silk roads, strategy and Landbridge
19 Nov 2015|

Royal Australian Navy Boatswains Mates from HMAS Larrakia, ready for the arrival of HMAS Perth into the Port of Darwin, arriving in preparation for the commencement of Exercise TALISMAN SABRE 2015.

It’s puzzling that mixed messages appear to be the new preferred means of signaling our strategic intent. And it’s even more puzzling that the Australian government, grappling with the delivery of a new Defence White Paper, remains silent on the deal to lease Darwin harbour to a ‘private’ Chinese corporation.

One wonders what the Chinese government thought when President Obama used his 2011 visit to Australia to announce that US marines would be based in the Northern Territory. And one wonders what the US government is thinking now as it digests the decision to lease the Port of Darwin to the Landbridge Group for 99 years.

Such even-handedness may be consistent with our charming national capacity for insouciance. But it betrays an extraordinary strategic naïveté. China knows much about the strategic impact of 99-year leases, and must be finding it hard to believe its luck as it contemplates managing the principal access point for US naval assets supporting the deployment of marines to the Northern Territory, not to mention a key port supporting the RAN’s operations in northern waters.

The deal to hand over the port of Darwin to Chinese management is of enormous strategic significance. For it both plays into China’s aspirations for economic and strategic dominance of the major trade routes that connect China with the world and imposes another constraint on the US’s freedom of strategic manoeuvre and its ‘pivot’ to Asia— not to mention Australia’s freedom of strategic manoeuvre in our northern approaches.

But of even greater significance is the transfer of the management authority of a vital national strategic asset into the hands of an agency of a foreign government. This isn’t just a question of foreign ownership; it’s a question of foreign control.

Australia’s liberal approach to foreign ownership contributes to Australia’s economic strength and, by extension, to its strategic strength. Foreign ownership brings investment, and along with it, employment, technology and management improvements. The issue here is less the capacity of Australian law to protect the rights of Australian citizens and Australian governments, though the recently concluded TPP agreement raises questions about the ability of Australian governments to legislate solely in the interests of Australian citizens.

The issue is essentially one of control: how are access priorities set; how are berth and mooring allocations decided; do particular cargoes, carriers or trade destinations have priority; how are port charges levied; how are improvements treated at the end of the lease? There are myriad questions that should be dealt with before a major strategic asset is removed from Australia’s direct control.

The most important issue, however, is the management of Australia’s northern defences in the broad. Conventional wisdom suggests that any substantial threat to Australia can only emerge from or through the Indonesian archipelago. It’s for that reason that successive Australian governments have established a line of key defence assets in northern Australia, stretching from RAAF Townsville (Garbutt) through RAAF Scherger, RAAF Tindal, RAAF Darwin, RAAF Curtin and RAAF Learmonth, not to mention the ports of Townsville, Cairns and Darwin, Larrakeyah and Robertson Barracks and the exercise area at Bradshaw.

The port of Darwin is part of Australia’s critical defence infrastructure. How many of the other assets should be leased or sold for short-term financial advantage?

There are precedents in considering access to, and ownership of, areas that are essential to Australia’s defence. There are protocols governing access to the Woomera Prohibited Area (WPA), for instance, that are designed to accommodate the needs of the Defence organisation along with the exploration and mining interests of commercial third parties. National defence interests, however, remain front and centre in granting access, and it would be unthinkable for any Australian government to cede control of the WPA to any foreign party.

Whatever strategic issues the next century generates, they will be more multi-dimensional, more multi-factorial, more multi-faceted and probably more intractable than any that we have experienced previously. Fundamental change in the alignment of strategic power as China rises (and the US declines relatively), structural changes in the balance of political power in Southeast Asia, India’s steady march onto the Asian strategic stage, together with the inevitable pressures generated by global warming—all of those factors combine to recommend prudence in the way we manage our national strategic infrastructure.

The economic development of northern Australia is a strategic priority, as well as an economic priority. But such development must be undertaken with deliberation and consideration of the entire gamut of national interests, not just the immediate concerns of live cattle exporters, LNG and minerals exporters or the short-term interests of the Northern Territory government in obtaining a cash windfall.

The Silk Road of antiquity was the strategic artery through which the economic lifeblood of the Eurasian land mass flowed. The maritime Silk Road promises to do much the same in the Asian maritime domain.

Instead of embarking on a wide-eyed and open-mouthed journey on the maritime Silk Road, it behooves the Australian government to give full consideration to the nation’s long-term strategic interests. While the Defence Department appears to entertain a pretty laissez faire attitude to the matter, the government would do well to seek the strategic advice of the Office of National Assessments and the opinion of the Chief General Counsel on the applicability of Australian law to foreign government-owned entities, be they Singapore’s Temasek Holdings or the Landbridge Group.