It is important to identify the events and decisions that led to the Port of Darwin being leased to the Landbridge Group, a Chinese-owned company, in October 2015 for a period of 99 years.
These represent a catalogue of failures on behalf of both the Country Liberal Northern Territory Government and the Federal Liberal National Coalition Government.
The deal resulted in the Landbridge Group obtaining 100 per cent operational control of the port and 80 per cent ownership of the Darwin Port land, facilities of East Arm wharf including the marine supply base, and Fort Hill wharf.
The owner of the Landbridge Group, Ye Cheng, was named by the Chinese Government in 2013 as one of the top 10 "individuals caring about the development of national defence". The Landbridge Group was subsequently identified as having extensive connections to the Chinese Communist Party and the People's Liberation Army.
In 2016, Mr Ye was reported as saying that his firm’s investment in the Port of Darwin would further his company's strategy of expanding its shipping and energy interests and serving China's One Belt, One Road foreign policy objective.
The actions of the Northern Territory Government in selling and leasing this critical infrastructure were not opposed by the Turnbull Coalition Government. Instead, Andrew Robb, Minister for Trade and Investment in the Turnbull Government and a member of the National Security Committee, welcomed the transaction.
When the agreement was concluded between the Country Liberal Northern Territory Government and the Landbridge Group, Mr Robb said that it was a “powerful sign of the enhanced commercial relationship between Australia and China flowing from the China-Australia Free Trade Agreement” and that “Landbridge’s commitment to the growth of the Port of Darwin will be a huge spur to the development of Australia’s north”.
Andrew Robb entered into a consulting arrangement with the Landbridge Group worth $73 000 per month immediately upon leaving Parliament in 2016.
By contrast, the Northern Territory Labor Party identified the transaction as short-sighted and contrary to the Territory’s long-term interests. The Federal Labor Party noted the anxiety within the Australian Defence Force created by the lease of such critical national infrastructure and the importance of conducting a proper and thorough review to identify the implications of the deal.
However, a 2016 Senate inquiry found that the transaction was not required to be subject to a full Foreign Investment Review Board (FIRB) assessment, because only around $100M of the total $506M involved the actual sale of assets. This was below the then-FIRB threshold of $248M.
Furthermore, Australian takeover law at the time deemed that the sale of an asset owned by a state or territory government did not require the approval of the FIRB. Then-Secretary of the Department of Defence, Dennis Richardson AC, recognised this as a “systemic issue” with the Foreign Acquisitions and Takeovers Act.
Then-Defence Minister Marise Payne said that she and the leadership of the Department of Defence were only informed that a Chinese entity had been awarded a 99-year lease on the Port of Darwin “a few hours” prior to the contract being signed on 13 October 2015.
The failures of this Liberal-National Government to recognise, understand or properly interrogate the risks associated with the long-term lease of the Port of Darwin, a sensitive asset with national strategic significance, are deeply regrettable.
Neither the Northern Territory Country Liberal Government, nor the Liberal-National Federal Government identified or properly considered the strategic implications or the long-term consequences of this deal for Australia’s national security and sovereignty.
This avoidable fiasco was entirely of the making of the Liberal and National Parties. Their poor decision-making, incompetent governance and pursuit of short-term monetary gain has compromised Australia’s long-term strategic security.
It is the view of Labor members that the Morrison Government has still not adequately addressed this failure. Despite the Australian Foreign Relations (State and Territory Arrangements) Act 2020, the Government has refused to explain whether the lease of the Port of Darwin is consistent with Australia’s foreign policy. The Government must explain what action the Foreign Minister may or may not take under the Act in relation to the 99-year lease of the Port of Darwin to a Chinese company.
Ms Ged Kearney MPSenator Tim Ayres
Deputy Chair
Dr Daniel Mulino MPSenator Raff Ciccone