A review by Australia’s Defence Department has advised the federal government against overturning the controversial 99-year lease of the Port of Darwin to Chinese company Landbridge, citing a lack of national security grounds.
The review, initiated by Defence Minister Peter Dutton—amid escalating tensions between Beijing and Canberra—was tasked with investigating with whether the Chinese-owned port posed an “unacceptable national security risk” and if Australia should consider renationalising it.
The national security committee which commissioned the review has reportedly not received any formal recommendation from the Department of Defence for intervention from the government, according to The Australian newspaper on Wednesday.
The Defence Department has yet to respond to inquiries from The Epoch Times.
The revelations will likely make any plans to axe the 2015 Port of Darwin’s lease more politically challenging.
During a visit to Darwin in April this year, Australian Prime Minister Scott Morrison said the A$506 million port deal was the sole responsibility of the former Northern Territory government since it was undertaken without federal government oversight.
The PM also said he would respond as necessary “if there is advice from the Defence Department or our security agencies that change their view about the national security implications of any piece of critical infrastructure.”
Labor Defence Spokesperson Brendan O’Conner on Wednesday warned the prime minister against going against the Defence Department’s advice.
“The Port of Darwin is a critical strategic asset for Australia. Australians know this foreign privatisation deal should never have happened on Mr. Morrison’s watch—that’s just common sense,” O’Conner said.
“If the government acts unilaterally beyond Defence’s advice and intervenes on the Port of Darwin contract, the associated costs and fallout are on the prime minister’s lap.”
Meanwhile, Professor Clive Hamilton of Charles Sturt University called the results of the review of the lease “naive” and “extremely puzzling,” stating it would make way for Beijing to spy on Darwin’s defence assets.
“If the Port of Darwin is not critical infrastructure, I don’t know what is,” he told News Corp, noting that the government still had the power to abrogate the lease.
Labor Party member Luke Gosling has previously urged the government to avoid “blatant double standards” calling for the Darwin Port deal to be treated the same as the Victorian government’s two Belt and Road Initiative (BRI) agreements, which were axed earlier this year by the Morrison government—citing inconsistencies with Australia’s national interest.
“Officially, the Darwin Port sale wasn’t badged as a BRI project. But it was undoubtedly part of it from Beijing’s point of view, even if not from ours,” Gosling wrote in a commentary for the Australian Strategic Policy Institute on Sep. 15, 2020.
In response to the Port lease deal and concerns around foreign interference, the government amended the Security of Critical Infrastructure Act 2018, giving the treasurer the power to revoke any infrastructure deals that could pose a national security threat to the country.
The law, however, excludes a “corporation that operates on a commercial basis,” creating a loophole that could allow a group like the Chinese Communist Party (CCP) to instead, hijack Chinese private companies such as Landbridge to acquire key assets, Gosling added.
“A private company that owns critical infrastructure abroad is still accountable to Beijing,” he noted.
Landbridge has refuted any security risk concerns associated with its ownership of the port, warning that Australia’s focus on the company could impede Landbridge’s plan to invest $155 million into the port over the next 20 years.
Warwick Smith, businessman and former Howard-era government minister told The Australian that the port agreement “was a reasonably good return for what was a basically low-level piece of port area,” and that many Australian top officials did not see this as a “high-priority issue.”
Experts, however, argue that had the federal government recognised the significance of the port—the country’s front door to Asia—there would have been no chance for Chinese investment to step in to the investment void.