The Morrison government has asked Australia’s Defense Department to review China’s Landbridge’s 99-year lease of the Australian port of Darwin and consider whether to force Landbridge to give up its lease, The Sydney Morning Herald reported on Feb. 2. The deal has been troubling federal government national security sources since it was signed six years ago.
Reports say Australian defense officials are examining whether companies owned by Chinese billionaire Ye Cheng should be forced on national security grounds to give up its ownership of the port.
Opponents within the federal government and national security experts have continued to question the agreement since it was signed in 2015.
Defense Minister Peter Dutton confirmed that the Cabinet Committee on National Security has tasked the Defense Department with “making a number of recommendations, so that is already underway.
Asked if those options included forced divestment, Mr. Dutton said the government would need to wait for the Defense Department to provide recommendations “after which we can consider options that are in our national interest.”
Mr. Dutton’s comments come after Prime Minister Scott Morrison hinted last week that his government would act on ownership of the port if he received a recommendation from the Defense Department or national security agencies.
Mr. Morrison said, “If I received any advice from the Ministry of Defence or intelligence agencies that there was a national security risk there, you would expect the government to take action on that, and that would be correct. “
Michael Shoebridge, director of the defense program at the Australian Strategic Policy Institute (ASPI), said he supported forcing Landbridge to divest, but that the company should consider doing so itself.
“I wonder,” he said, “whether it’s in the company’s business interest to continue to operate this port for 99 years in the strategic environment that they’re in.”
“I think it’s obvious that if one were to consider the lease of the Port of Darwin today, the result would not be to lease it to a Chinese company for 99 years.
“So, with that realization, how do you undo that damage and, more importantly, how do you develop the Port of Darwin into an increasingly important naval and defense facility in the darker strategic environment that we and our partners and allies find ourselves in?”
Mr. Shoebridge said the alternative to forced divestment was to develop the port around the part owned by the Arashi Bridge Group and “treat that part of Darwin Port like the sand in an oyster.”
A Chinese-owned operator controlling the best part of Darwin Port seems to be a strategic target,” Shoebridge said. “
In 2015, the government of Australia’s Northern Territory (NT) signed a lease agreement worth A$506 million with China’s Lanqiao Group. The agreement gave the Chinese company full control over port operations and 80 percent ownership of land and equipment, including the marine supply base, at Darwin’s East Arm Port.
The federal government has subsequently tightened foreign investment rules, requiring that leases and sales of critical infrastructure be subject to review by the Foreign Investment Review Board.
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