Review of Chinese-Leased Port of Darwin Complete: Australian Defence Department

By Daniel Y. Teng
Daniel Y. Teng
Daniel Y. Teng
October 29, 2021 Updated: November 2, 2021

The Australian Defence Department has completed its assessment of the controversial Chinese-leased Port of Darwin, signalling an impending decision from the federal government on whether to scrap the deal.

Peter Tesch, deputy secretary of strategy and policy at the Department of Defence (DOD), said the review, which the national security committee ordered in May, had been handed to the government.

“We are now working with other agencies about facilitating consideration by the government of that information,” he told a Senate Estimates hearing on Oct. 27.

The review also encompassed a deal where a Chinese-backed company acquired a 50 percent share in the Port of Newcastle in March 2018, but no immediate concerns were found.

The review was ordered earlier this year following the termination of two Belt and Road Initiative (BRI) agreements signed between Victoria’s state leader Daniel Andrews and Beijing’s National Development and Reform Commission.

Foreign Minister Marise Payne, who exercised the new powers granted to her under the Foreign Relations Act, ordered the cancellation, citing a conflict with Australia’s national interest.

The newly legislated law also opened the door for other deals signed with the Chinese Communist Party (CCP)-affiliated bodies to be scrapped, including Confucius Institutes and sister-city agreements.

However, the Port of Darwin has been a significant source of concern among defence experts and political leaders.

Prime Minister Scott Morrison in late April said he would not hesitate to terminate the deal if advised to.

“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,” Morrison told reporters on April 29. “We have legislation now which is dealing with critical infrastructure.”

“You can expect me as prime minister to take that advice very seriously and act accordingly,” he added, noting that such a move would be carried out by the treasurer under amendments to the Security of Critical Infrastructure Act 2018.

In 2015, the heavily indebted Northern Territory government leased the strategically located Darwin Port to Chinese state-owned firm Landbridge for AU$506 million (US$382 million).

The move raised eyebrows from U.S. officials, with previous U.S. President Barack Obama conveying his concerns directly to then-Prime Minister Malcolm Turnbull.

In response, Morrison—who was treasurer at the time—expanded the remit of the Foreign Investment Review Board so that all Australian asset sales to foreign entities would be subject to federal approval.

In 2016, the billionaire owner of Landbridge, Ye Cheng, boasted that acquiring the Port of Darwin would assist with the expansion of Beijing’s Belt and Road Initiative (BRI).

The BRI is the CCP’s trillion-dollar global infrastructure building fund and arguably the “crown jewel” of Beijing’s geopolitical ambitions.

However, it has been accused of being a “trojan horse,” leaving developing countries heavily in debt and potentially being leveraged for military or spying purposes.