Labor Government Decides Against Cancelling 99-Year Port Lease to Chinese Company

The government has accepted advice from the defence and intelligence departments that any security risk can be managed.

Entrance to the Darwin Port in the Northern Territory city of Darwin, on Aug. 28, 2023. David Gray/AFP via Getty Images

The Australian Labor government has decided to not overturn a contentious 99-year lease held by Chinese company Landbridge over the Port of Darwin.

The decision comes after a review by the Department of the Prime Minister and Cabinet, which said there were sufficient security measures to manage and protect the infrastructure.

“The review found that there is a robust regulatory system in place to manage risks to critical infrastructure, including the Port of Darwin; existing monitoring mechanisms are sufficient and will be ongoing; and as a result, it was not necessary to vary or cancel the lease,” the Department said in a statement on Oct. 20.

“The government has accepted that advice.”

Darwin Port, an important gateway and strategic resource hub for Australia, was leased to the Chinese Communist Party (CCP)-linked Landbridge in 2015 for 99 years at a price of $506 million (US$363 million), a decision made by the Northern Territory’s heavily indebted former Country Liberal government.

This picture taken on Aug. 28, 2023 shows a sign displayed at the entrance to the Darwin Port in the Northern Territory city of Darwin in Australia. David Gray/AFP via Getty Images

At the time, the lease prompted concerns in both Australia’s Defence Department and the U.S. government, with former U.S. President Barack Obama conveying his concerns directly to then-Prime Minister Malcolm Turnbull.

Years later, his Coalition successor, Prime Minister Scott Morrison launched a review of the lease in 2021, yet the Defence Department also concluded that there was a lack of national security grounds to overturn the deal.

Current Prime Minister Anthony Albanese said on Aug. 22 that he would be committed to reviewing the lease given its importance as a key piece of critical infrastructure and the company’s direct connection with the People’s Republic of China.

“At the time that happened, we opposed it. I was the shadow [infrastructure] minister at the time, and we were concerned about that, and we expressed our opposition,” he said on Aug. 22.

However, the government has now decided not to revoke the lease.

“The review considered the findings and outcomes of these previous assessments as well as considering whether risk management and mitigation arrangements are sufficient to protect Australia’s national security interests relating to the Port,” the department said.

This picture taken on Aug. 28, 2023 shows a sign displayed on a fence surrounding the Darwin Port in the Northern Territory city of Darwin in Australia. David Gray/AFP via Getty Images

Australians Can Have Confidence in Their Security: Department

The government has pledged to continue monitoring the lease and Port.

“Monitoring of security arrangements around the Port of Darwin will continue. Australians can have confidence that their safety will not be compromised while ensuring that Australia remains a competitive destination for foreign investment,” the department said.

The review was conducted by the Department of the Prime Minister and Cabinet in consultation with several key government departments and intelligence agencies.

This includes the Department of Defence, Department of Foreign Affairs and Trade, Attorney-General’s Department, Department of Home Affairs, Office of National Intelligence, and Australian Security Intelligence Organisation.

Beijing Softens its Stance Towards Australia

The latest decision comes as Beijing continues to show signs it is softening its posture towards Australia and the Labor government.

Most recently, the CCP released Australian citizen Cheng Lei after three years in prison. Further, Prime Minister Albanese is due to meet with Chinese leader Xi Jinping and will be the latest Labor government minister to enter talks with Beijing’s leadership.

Beijing began freezing diplomatic contact with the Liberal-National Coalition government following the introduction of a ban on Huawei from entering the country’s 5G network in 2018 over security and privacy concerns.

Beijing also lifted bans on Australian barley exports into the country in August after three years of trade restrictions implemented by the communist leadership, after the Morrison government called for an investigation into the origins of COVID-19 in 2020.

Those restrictions included a swathe of Australian exports into China including wine, beef, seafood, and timber, as well as the detention and imprisonment of Ms. Cheng.

The lifting of the barley export ban came amid heavy flooding in China’s grain-producing region of Heilongjiang in the northeast.