A call to arms sales
This week Prime Minister Malcolm Turnbull announced the “Defence Export Strategy”, an initiative designed to make Australia one of the world’s 10 largest weapons exporters within a decade.
“A strong, exporting defence industry in Australia will provide greater certainty of investment, support high-end manufacturing jobs and support the capability of the Australian Defence Force,” he said in a joint statement with Defence Minister Marise Payne and Defence Industry Minister Christopher Pyne.
The proposal was met with horror from international charities, aid groups and the Greens, but Labor was notably quiet in the following days. The best the Opposition’s defence spokesman, Richard Marles, could do was attack the Coalition’s record of withdrawing support from the manufacturing sector. “We’ve long been strong supporters of an Australian defence industry that has, at its heart, the capacity to export,” he said.
Labor’s reluctance to make arms exports a political issue may explain why the government’s efforts to expand the domestic armaments industry have largely flown under the radar. The value of military exports permits granted by the government has increased by an average of 44 per cent every year for the past three years. Since taking on the defence industry portfolio in July 2016, Pyne has been evangelical in his efforts to sell Australian armaments around the world, speaking candidly of his desire to “send a lot more weapons overseas”.
While the “Defence Export Strategy” includes funding for a new Australian defence export advocate position, Pyne’s eagerness to become a glorified arms dealer has already given us a glimpse of what we can expect once the strategy is up and running. In September last year, Pyne quite literally issued a “call to arms”, urging Australian companies to help global weapons conglomerate Raytheon build armoured truck-mounted missile launchers for the Australian Army.
The launchers will likely be mounted on the Australian-built Hawkei and Bushmaster armoured patrol vehicles, which have already attracted buyers from Britain, the Netherlands, Poland and Japan. Presumably, global demand for Hawkeis and Bushmasters will increase once buyers can fire missiles from them.
The amount of money the government is putting behind the “Defence Export Strategy” shows how eager it is to replicate the success of the Bushmaster and Hawkei on a larger scale. One of the strategy’s main components is the $3.8 billion defence export facility, designed to help domestic defence suppliers secure and fulfil large overseas contracts by financing start-up costs businesses cannot cover themselves. The new money represents a boon to the industry, which only exported $127 million worth of armaments in 2016, according to the Stockholm International Peace Research Institute.
Despite its self-proclaimed success helping small drone manufacturers and weapons bay developers take on large orders, the Export Finance and Insurance Corporation (EFIC) is used to dealing with far smaller figures when it comes to defence funding. In the 2016-17 financial year, it approved just seven defence-related contracts worth $13.2 million.
The corporation’s vastly expanded defence budget will be underwritten by the National Interest Account (NIA), a fund giving the trade minister licence to green light any funding deemed “in the national interest”. Funding arrangements granted under the account bind the government to reimburse the EFIC if it loses money on the deal.
The NIA has traditionally been used to provide foreign aid to nations with which Australia wants closer ties, but governments have also found it useful as a source of easy cash for political advantage. In 2009, then trade minister Simon Crean approved a $200 million NIA loan to General Motors, to preserve Holden manufacturing in South Australia, as well as a $US400 million loan to Oil Search and Santos to help construct a gas plant in Papua New Guinea. Under the “Defence Export Strategy”, local arms manufacturers now have a near-guaranteed source of finance.
While Pyne has offered assurances that Australia will sell weaponry only to “appropriate countries and appropriate places”, the Turnbull government has already approved a number of highly questionable sales to parties in the ongoing Yemen civil war, and is actively seeking more.
In February 2017, Pyne spoke at the International Defence Exhibition in Abu Dhabi, one of the largest arms dealing conferences in the world. Pyne also met with Sheikh Mohammed bin Zayed Al Nahyan, the crown prince of Abu Dhabi, and Homaid Al Shemmari, the chair of the Emirates Defence Industries Company, to “further build our interaction in the field of defence industry, including enhanced Australian defence exports”.
Nations that have sold weaponry and related equipment to the UAE in the past have found their wares used in unappealing ways as the nation expands its footprint in Yemen. Norway halted arms sales to the UAE in January, while Finland is set to follow suit after footage surfaced showing the UAE was using Finnish-made armoured vehicles inside Yemen. In October 2016, the Swift, a UAE military-chartered HSV-2 logistics catamaran built by Tasmanian ferry builder Incat, was severely damaged in a rocket attack by Houthi fighters near the western port city of Mokha.
As is often the case, the extent of the Swift’s involvement in UAE military activity depends on who you ask. The UAE foreign ministry stated the ship was an unarmed civilian vessel “carrying humanitarian assistance, wounded Yemenis and passengers”. The Houthis, however, claimed the Swift was “an Emirati warship” previously used to ferry fighters from Eritrea. The United Nations has expressed doubt that the Swift was on a humanitarian mission. The Swift was originally built in 2003 for the United States Navy, which primarily used it for humanitarian relief assignments.
In any event, the attack highlighted why other countries have become increasingly wary of selling arms matériel in such a volatile region. In November, the European Union recommended an arms embargo against Saudi Arabia due to allegations of war crimes in Yemen and domestic human rights violations. In August 2017, Canadian Foreign Affairs Minister Chrystia Freeland ordered an investigation into news reports showing Canadian-made military vehicles being used in a government siege of the southern Saudi city of Awamiyah.
The prospect of a similar scandal happening here has seemingly done little to dissuade the government. In December 2016, Pyne led a delegation of Australian defence companies to Riyadh, where they met with senior members of the Saudi regime. Three months later, Fairfax reported that several Australian companies had secured contracts to supply military equipment to the Saudi government. Citing commercial-in-confidence restrictions, Pyne has refused to detail which companies had won the contracts, how much they were worth, or what the companies would be exporting.
While Pyne would not reveal which companies accompanied him on the Riyadh trip, Austal, a shipbuilding company and Australia’s largest defence exporter, confirmed it had representatives in the delegation. While it is best known recently for supplying combat and transport ships to the US Navy, including USS Gabrielle Giffords, Austal has been agitating for Saudi money for some time.
In June 2015, then chief executive Andrew Bellamy voiced his desire to capitalise on the Royal Saudi Naval Force’s plans to add more warships to its eastern fleet, saying “there’s a great opportunity for Australia to build those ships in conjunction with the Saudi Arabian government”.
Austal has been happy to sell to repressive regimes in the past. In August 2015, then prime minister Tony Abbott toured Austal’s Western Australian shipyard, where Bellamy showed off the high-speed support ships the company was building for the Royal Navy of Oman. While Oman has declared its neutrality in the Yemen conflict, the country has a dismal human rights record and routinely harasses and imprisons pro-democracy activists, critics of the country’s absolute monarch, Sultan Qaboos bin Said al Said, and homosexual men.
That cavalier attitude to selling weaponry in the Gulf may have already had frightening consequences. In 2005, the company built 10 armed patrol boats for the Yemen Ministry of Defence, which is taking part in a coalition blockade of the country’s west that has triggered a severe humanitarian crisis. United Nations leaders have warned that “millions of children, women and men risk mass hunger, disease and death” unless the blockade is lifted.
Austal did not answer questions from The Saturday Paper asking if it has confirmed that its patrol boats have not been involved in the blockade. In a statement following the government’s announcement, the company’s chief executive, David Singleton, said Austal was “delighted” with the “Defence Export Strategy”. On this, there is no reason for doubt.
This article was first published in the print edition of The Saturday Paper on Feb 3, 2018 as "A call to arms". Subscribe here.