6 years ago
Law to put 'sovereignty' back into Australia's Naval Shipbuilding
Senator Rex Patrick
Centre Alliance will introduce a Bill into the Senate that will inject the concept of sovereignty back into Australia’s purported 'sovereign' Naval Shipbuilding program.
The Defence (Sovereign Naval Shipbuilding) Bill 2018 will amend the Defence Act 1903 to require:
- all new naval vessels (e.g. patrol boats, frigates, destroyers, submarines, supply ships, etc) to be built in Australia, except in times of defence emergency or in time of war (as defined in the Defence Act); and
- responsibility for any vessels built in Australia to be assigned (contracted) to a well-established, high performance Australian controlled shipbuilder.
The Bill will not prevent foreign shipbuilders tendering to be the prime contractor in any shipbuilding program, but they will need to sub-contract the entire build to an Australian-controlled shipbuilder that meets a minimum experience and performance threshold.
"Australia's uncertain strategic future requires a much greater measure of self-sufficiency as a pacific maritime power," Senator Rex Patrick said.
"While we can expect to work with our alliance partners for a long time to come, we need balanced and self-sustaining naval capabilities that will buttress our security in a regional environment that is likely to be more contested than it has been at any time since the Second World War.
"Australia needs to be able to exercise a much greater measure of independent maritime power in our region and to do that we need a sovereign naval shipbuilding and support sector."
Centre Alliance is fully supportive of the Federal Government’s $90 billion continuous Naval Shipbuilding program, but improvements to it are required in the interests of national security and to maximise the economic benefit of the program to Australia.
"The Bill is designed to counter what may in the future come to be seen as the treacherous approach taken by Russell Hill bureaucrats in the Future Frigate program whereby Australia’s two established and highly capable shipbuilders, ASC and Austal, have been excluded in the tender documents from having responsibility for the build," said Rex.
"Instead the Government has invited three foreign ship designers to bid for the job, offering them a taxpayer-funded shipyard in Adelaide and a $35 billion contract to establish themselves to compete with the long standing Australian companies. This approach to the project makes ASC’s future rather bleak."
It was revealed by former Senator Xenophon in June 2017 that ASC will have no part in the Future Submarine build. In August 2017, he again revealed that they were excluded from taking a lead in the Future Frigate program. It is also clear from an FOI release to Senator Patrick last month that Defence officials are planning to shift Collins submarine full cycle dockings to WA.
"All of this will leave ASC without substantive work," said Rex. "Perth-based Austal, the world’s biggest aluminium shipbuilder, will also be damaged in its overseas markets because exclusion from the Future Frigate program will be seen by potential export customers as shunned by their home Navy here in Australia."
There has been a gradual but unambiguous shift away from the use of local shipbuilders in Navy programs:
- The RAN’s French designed Durance Class supply ship was built by an Australian-controlled company. The RAN’s two replacement supply ships are now being built in Spain by a Spanish company.
- The RAN’s Swedish designed Collins Class submarines were built by an Australian-controlled company. The RAN’s new submarines will be built in Australia by a French controlled company.
- The RAN’s German designed ANZAC frigates were built in Australia by an Australian-controlled company, as were the RAN’s Spanish designed Air Warfare Destroyers. Our new frigates will be built in Australia by a European Controlled company.
- Aroura Australis, the Antarctic Division’s Icebreaker was built in Newcastle by an Australian controlled company. Australia's new icebreaker, RSV Nuyina, is being built by a Dutch company in Romania.
"It is hard to avoid the conclusion that the bureaucrats advising Government are determined to see the quiet death of a sovereign shipbuilding capability in Australia and its replacement with foreign entities operating on Australian waterfront real estate," said Rex.
"This has to stop. The new Bill will contain a provision that will mean the law applies from the date it was announced - as has been done for other Government bills. This will have effect on both the Future Submarine Program, for which no build contract has yet been signed, and the Future Frigate Program.
"While the Bill will allow overseas procurement of naval vessels in time of a defence emergency or war, it will provide an unambiguous legislative direction that Australian naval construction must take place in Australia by Australian companies with the consequent benefits for our defence industrial base and long-term strategic self-reliance."
Senator Patrick says the use of Australian companies for the build is important for a number of reasons:
- It will ensure the know-how of these programs is transferred to an Australian-controlled company, not to a daughter company of a foreign entity.
- It will ensure that foreign entities will not have veto power over any export opportunities Australian shipbuilders wish to engage in.
- It will ensure the shipbuilding workforce can be better managed. There will be no competing amongst multiple shipbuilders for a common workforce - under the current regime there will be competition amongst ASC, Austal, Civmec, Luerssen, Naval Group and BAE/Fincantieri/Navantia and, indeed, lay-offs with the ebb and flow of contracted work across multiple shipyards.
- Australia shipyards will be able to assure export customers that they have the confidence of their own Navy.
- Reduce exposure to foreign corporate risk - currently we are aiming to tie up $85 billion in work up with two foreign entities (possibly one if Fincantieri wins the Future Frigate job noting it is likely to merge with Naval Group shortly).
- Ensure that Australia retains and develops sovereign shipbuilding and support capabilities able to support a larger and more self-reliant Royal Australian Navy in a strategic environment characterised by considerable uncertainty and the need for Australia to confidently exercise independent naval power in our immediate region.
Senator Patrick will move to introduce the Bill when parliament resumes.