MPs Push Australian Govt. Over Contract Extension with Chinese Owned Data Centre

June 3, 2021 Updated: June 3, 2021

Australian Independent MP Andrew Wilkie on June 2 called on the Department of Defence to explain why it extended its contract with a foreign-owned data storage company to house sensitive government and strategic data for another five years, despite initial intentions to end the lease arrangement by September 2020.

Amid increasing geostrategic competition in the Indo-Pacific, fueled by an increasingly expansionist and aggressive Beijing and onshore cyberattacks in recent months, Wilkie called for the immediate termination of all Australian government contracts with foreign-owned data storage firms.

This includes Global Switch, the Chinese-owned firm based in Sydney that houses sensitive government data, including for Australia’s domestic spy agency, ASIO.

“This is wrong on so many levels,” Wilkie told the House of Representatives, adding: “It is obviously wrong from a national security point of view.”

Wilkie said that if you walked down the street and asked 100 people at random, “I reckon 100 out of 100 Australians would say, ‘Of course [sensitive data] shouldn’t be in the possession of a foreign-owned company!'”

The Tasmanian MP noted that he wasn’t singling China out but said foreign ownership, involvement, and influence in Australia needed to be reformed “root and branch” and urged the government to “get our sensitive defence data out of the Global Switch company” as “quickly as it humanly can.”

“In this day and age, data is every bit as important as the land on which we walk and our resources. It is part of our very being and our nation,” he said.

South Australian MP Rebekha Sharkie echoed this sentiment, lamenting the sale of “every single thing of value in this nation” to foreigners. “Our data is worth gold. Our data is everything. That is our national security. That is our sovereignty,” she said.

Queensland MP Bob Katter, who seconded Wilkie’s motion, decried the government’s decision to extend the lease, pointing to given Global Switch is a Chinese-owned company.

“You seriously couldn’t make this up!” Katter said. “Australia’s most strategic security asset is that information system. And it’s in the hands of people that put on their national television, over there in China, pictures of Australian soldiers cutting the throats of babies.”

“They advocated, five weeks ago, that Australia should be bombed,” he said, referring to an editorial by Chinese Communist Party mouthpiece, Global Times. “And you’ve given them all of the control of your information system.”

Andrew Hastie
Andrew Hastie, Liberal MP, spoke at the Australian Parliament in May 2018. (Commonwealth of Australia)

Responding to the motion, Assistant Defence Minister Andrew Hastie assured House members that the Australian government had full control of the Global Switch data centre, with fortress-like physical and cybersecurity protections that represent “the highest level of security assurance.”

Hastie told Wilkie and Katter that if he had “been a decision-maker many years ago,” the Global Switch lease arrangement “never would have happened.”

But now that he was assistant defence minister, Hastie said, “My eagle eye will be on this problem going forward.”

Global Switch was an Australian-owned company that was bought by Elegant Jubilee Limited in 2016. Its controlling shareholder is Jiangsu Shagang Group Co., Ltd (“Shagang”). In November 2020, it was announced that Elegant Jubilee Limited would become a wholly-owned indirect subsidiary of Jiangsu Shagang Co., Ltd.

Damon Reid Global Switch APAC group director told The Epoch Times in a statement that the company provides world-class reliability, security, and flexibility to the many governments and leading organisations that it partners with to house their mission-critical IT infrastructure

“Global Switch has no access to any customer data, we simply build and operate high-quality real estate with the right power, cooling and physical security, so that our customers are able to focus on their core IT requirements,” Reid said.

“We believe multiple, highly credentialed data centre operators, including market-leading international data centre operators, are needed to enhance competition and innovation as well as diversify risk in the Australian market.”

Prime Minister Scott Morrison, when he was treasurer, gave the government the deadline of September 2020 to migrate their data from Global Switch to an Australian-owned company.

However, in October 2020, the government signed a $53.5 million lease extension with Global Switch until 2025, with the government indicating that it was “impractical to migrate” all of its data by the deadline.

Epoch Times Photo
Aircraft from the Nimitz Carrier Strike Force and a B-52 Bomber from Barksdale Air Force base conduct integrated joint air operations in support of a free and open Indo-Pacific on July 4, 2020. (U.S. Navy photo by Lt. Cmdr. Joseph Stephens)

But Morrison told Parliament in February (pdf) that the government had already moved its most sensitive data out of Global Switch to a purpose-built facility in May 2020. Other sensitive data migrated prior to the expiration of the original lease in September 2020.

Less sensitive and unclassified data was still in the process of being migrated to an alternative data centre through a “rigorous risk-based approach,” Morrison said, which Hastie reiterated on June 2.

However, Wilkie told The Epoch Times that he wasn’t satisfied with the assistant defence minister’s response. “Leaving our data there, for now, is wrong in principle. It’s an affront to our sovereignty, and it’s denying work for Australian companies,” he said.

Hastie noted the critical importance of Australian data security amid geostrategic tensions and said the Department of Defence was well underway planning a data strategy to guide data management and improve data literacy, which he said was crucial to becoming more “mission focussed.”

“The strategic headwinds are blowing hard, and we are straddling vast change in the Indo-Pacific region where we’re seeing the greatest geostrategic competition between nation-states, we’re seeing militaries modernise, and we’re seeing the use of grey-zone tactics to coerce states below the threshold of conventional warfare,” Hastie said.

“Cyberwarfare and espionage are grey-zone activities used by nation-states to undermine their competitors’ sovereignty and also to break apart habits of cooperation in the Indo-Pacific region.

“Cyber is a new battlefield, and, whether we like it or not, we are all joined in an online contest to preserve our personal security but also our digital sovereignty as a country,” he said.

Follow Caden on Twitter: @cadenpearson