The Darwin Port lease: setting the record straight
24 Nov 2015|

Criticisms of the Northern Territory Government’s decision to lease sections of Darwin Port to Landbridge, a Chinese company, have come from two main sources—US commentators who see an opportunity to drive a wedge between Australia and China, and from Australian sources overstating the security risks. All authors have in common some misunderstanding of the full circumstances of the lease and fear of a threat from China, and the US critics are aware of the difficulty Australia faces with maintaining a balance between our strategic alliance with the US and our trading relationship with China.

Over the past six years, we have seen a process of action and reaction in the region with Chinese actions being matched by a US response—and vice versa. Increased US military activity in the region is viewed by China as part of the plan to ‘contain’ China and maintain US hegemony in the region. Inevitably China has to respond, leading to a classic ‘security dilemma’. Unfortunately there are ‘hawks’ in both Washington and Beijing who are only too happy to fuel this dilemma.

As part of the ‘pivot’, Washington has been boosting relations with its regional friends and allies. Australia, as a loyal partner of the US, has been a particular target of Washington’s. Any sign of our wavering towards China, as our major trading partner, is seen as a major problem in Washington. US pressure is evident in suggestions that Australia join the US freedom of navigation operations challenging Chinese claims in the South China Sea, and recently, criticisms of the lease of Darwin port facilities to Landbridge.

Richard Armitage, a former US Deputy Secretary of State, has said he was ‘stunned’ that Australia ‘blind-sided’ the US on the deal—apparently by not consulting Washington as part of the decision-making process. Even President Obama has expressed concern that Australia hadn’t consulted the US. Those suggestions are patronising and an affront to our national sovereignty.

Australian criticisms of the lease should have been ‘put to bed’ by responses from both the Secretary of the Australian Department of Defence and China experts. Dennis Richardson pointed out that the deal was exhaustively examined both by the Defence Department and ASIO, and it was ‘amateur hour’ to suggest there was an espionage risk. China expert, Linda Jakobson, has observed it isn’t unusual for a Chinese company to have a militia unit and for principals of Chinese companies to have links with the Communist party—two issues used by Australian commentators to criticise the deal.

Despite these responses, Neil James has still made an extraordinary xenophobic attack on the lease, claiming it to be a grand strategic failure. However, any failure is not, as argued by Neil, to view China as a potentially belligerent ‘peer-strategic competitor to our long-term alliance partner’. Rather the challenge is to help build strategic trust between the two competitors and, as suggested by Lyle Goldstein of the USN War College in his recent book, Meeting China Halfway, to replace the current ‘escalation spiral’ between them with a ‘cooperation spiral’.

Australian critics have mainly not appreciated what the lease involves, the composition of the port of Darwin, or the nature of port operations more generally. The lease covers the principal parts of the port involved with international commercial shipping. It doesn’t include major parts of the port, such as the coastal shipping and fishing facilities around Frances Bay, the Darwin naval base, or Stokes Hill wharf. As well as being a major tourist venue, the latter wharf is still used by Australian Customs Vessels, RAN vessels and visiting warships.

Important checks and balances will be in place with the lease. Australia can take back control of the port at any time of crisis. The Northern Territory Government will be able to ensure that the port operates safely and in accordance with environmental legislation. The port facilities operated by Landbridge will also be subject to the requirements of the International Ship and Port Facility Security (ISPS) Code, and compliance in this regard will be monitored by inspectors appointed by the Australian Maritime Safety Authority.

The Darwin port lease has led to calls for closer security scrutiny of overseas investment in critical infrastructure. That may be necessary, but every element of infrastructure is different—ports are not the same as power and telecommunications networks. Ports are part of a globalised supply chain subject to many vulnerabilities, but foreign control of some part of a port isn’t one of them—in fact, it’s a global norm. Allan Behm has noted that the ‘issue is essentially one of control’, but the questions he mentions are all ones of the normal commercial operation of a modern and efficient international port.

In the final analysis, the port leasing deal is a good one for the Northern Territory. It will ensure the development of port facilities in Darwin, particularly the East Arm wharf area, into the major international port desperately needed by both the Territory and adjacent parts of Western Australia.