Return to search

Australia weighs vetting foreign investors in critical infra

Two years after the Port of Darwin lease raised domestic and international concerns, a government paper has proposed empowering the attorney general to stop sabotage, espionage or coercion.

The Australian government may expand its power to vet foreign investors and protect critical infrastructure from the threat of sabotage, espionage or coercion by foreign actors.

A paper released by the government’s Critical Infrastructure Centre, launched in January, suggested giving the attorney general authority to “direct specific risk mitigation actions” as a last resort when there is a national security risk.

The discussion paper comes in response to concerns over foreign ownership of critical infrastructure assets. Calling foreign involvement in domestic infrastructure “essential to support Australia’s economic and social prosperity”, it nonetheless warned that foreign actors could exploit access to critical infrastructure to collect information, disrupt operation for strategic or economic gain or use its access to apply coercive power and influence policy.

“While the more extreme examples of risks are unlikely outside a significant shift in regional or global strategic relationships or imminent armed conflict,” the paper notes, “we need to account for the full range of national security risks in a way that provides flexibility to address changes in the geopolitical landscape as it evolves over time.”

Concerns in Australia have mounted since 2015, when China’s Landbridge Group was awarded a 99-year lease of the Northern Territory’s Port of Darwin. Australians questioned the wisdom of allowing such a vital strategic asset to fall into foreign hands, while the US objected over fears the Chinese could use the port for intelligence gathering. Last August, New South Wales rejected two Chinese bids for its electricity distribution network, citing national security concerns.

The Critical Infrastructure Centre will develop a register of critical infrastructure assets, tracking who owns and operates them. The centre will also identify key assets in high-risk sectors and develop risk assessments and management strategies, the paper said.

But when risks “can’t be mitigated through existing frameworks”, the paper proposed reforms similar to those made in the country’s telecommunications sector. Last November, Australia empowered the attorney general to issue directives to telecom carriers and carriage service providers in order to manage security risks.

The paper’s proposal would give the government similar powers in other sensitive sub-sectors such as electricity, water and ports.