Morrison government toughens foreign investment scrutiny to protect ‘national security’


Michelle Grattan, University of Canberra

The Morrison government will significantly strengthen its scrutiny of foreign investment to protect sensitive national security technology and information and further ring fence the nation’s critical infrastructure.

It will insert a new “national security test” on bids, in a sweeping overhaul of the foreign investment regime.

The action follows mounting public concern about Chinese investment, although the government – already under harsh criticism from China – will seek to play down suggestions it relates to any one country, and point out it has been a long time in the pipeline.

Planned new legislation will also strengthen compliance provisions to ensure foreign investors follow conditions attached to approvals.

During the pandemic, all foreign investment bids are being scrutinised to ensure unfair advantage is not taken of distressed companies.

But in normal circumstances those under certain thresholds escape examination by the Foreign Investment Review Board (FIRB), the body that makes recommendations to the treasurer.

While all bids from foreign governments are screened, most private investments under $275 million – or $1.2 billion if the country has a free trade agreement with Australia, as China and a number of other major trading partners do – are not scrutinised.

The government is concerned investments in some very sensitive sectors are escaping screening even when there are national security concerns. Of particular worry is the vulnerability of small and medium sized companies that have specialised expertise, but fall below the threshold in value.

Under the new test, foreign investors will have to notify FIRB if they propose to start or acquire an interest – generally 10% or a position of control – in a “sensitive national security business”.

This will mean all foreign investments in sensitive national security businesses will be examined.

Businesses which raise sensitive national security concerns are those involved in critical infrastructure, including telecommunications, energy, ports and water, as well as those which service defence and national security organisations.

The national security test will also involve new powers.

The treasurer will be able to “call in” an investment before, during or after an acquisition for review if it raises risks which were not picked up earlier.

The treasurer will also have a new “last resort” power enabling them to apply or vary conditions or order disposal of an investment where national security concerns emerge after approval. This last resort power would not be retrospective – it would only apply to future approvals under the revised regime.

The government will release draft legislation next month for consultations. It wants it passed this year, to apply from January 1 next year.

It is estimated the new security arrangements will affect only a very small proportion of total foreign investment.

The tougher compliance measures follow complaints that some foreign investors ignore the conditions that are attached to approved bids. Recently fingers were pointed at Alinta for not implementing conditions about information storage. The company was told to comply.

Increasingly, conditions have been applied to allow bids to pass. In 2018-19, 4149 applications were approved with conditions attached. This was 47.6% of total approvals. By value, more than 80% of investment was approved subject to conditions.

The government says the monitoring and enforcement powers of Treasury and the Australian Taxation Office need expansion because of the extensive use of conditions and “emerging risks caused by global developments and rapid advances in technology”.

It notes that apart from residential property investments, the treasurer’s enforcement powers are limited to taking civil action or seeking a criminal prosecution. This inhibits the government’s ability to respond proportionately, for example to a minor breach.

Under the changes, the government will have a wider range of tools for enforcement, including access to premises to collect information and powers to give directions to investors in order to prevent or address suspected breaches.

While most of the announced changes are about toughening the scrutiny regime, the government will at the same time streamline the approval process for investments that do not raise national interest concerns.

Aware of the need to attract passive investment as part of the post COVID recovery, it will narrow the definition of a foreign government investor to exclude certain passive investments in funds where the investors have no influence over the investment or operational decisions of the entity.,

The government is committing $54 million over four years to step up compliance and monitoring capability. Funding will go to Treasury, the ATO and “relevant agencies such as the Department of Home Affairs”.

Treasurer Josh Frydenberg said the changes were the most significant made to the foreign investment regime since it was introduced in 1975.

“The reforms will ensure that our foreign investment regime is able to respond to emerging risks and global developments,” he said.

“Through the introduction of a new national security test, stronger enforcement powers and enhanced compliance obligations, we will ensure that Australia can continue to benefit from foreign investment while safeguarding our national interest.”

The reforms were developed with the support of FIRB whose chairman David Irvine has a national security background, including as head of ASIO.

Irvine said the package “appropriately addresses increasing risks to the national interest whilst ensuring Australia remains welcoming and open to foreign investment”.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

COVID-19 increases risk to international students’ mental health. Australia urgently needs to step up



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Hannah Soong, University of South Australia

The Victorian and ACT governments in recent days released support packages for international students facing hardship due to COVID-19.

Victoria has committed A$45 million under which international students could be eligible for relief payments of up to $1,100, co-contributed by Victorian universities. The ACT has committed A$450,000 to support vulnerable people on temporary visas and international students without income due to COVID-19.

The Northern Territory, Queensland, South Australia, Tasmania and Western Australia all have varying amounts of help available for international students – whether it be one-off payments, free mental health support or help with food and shelter.

These moves by the states are in stark contrast to the federal government. International students, most of whom are on temporary visas, have been excluded from the goverment’s A$130 billion stimulus package. And Prime Minister Scott Morrison said international students unable to support themselves could return to their home countries.

Such comments can put a sizeable dent in Australia’s international education reputation. The way Australia supports international students studying here now may cement its global reputation as a country of choice to study.

Recent reports show Australia’s competitors for international students – Britain, New Zealand, Canada and Ireland – have offered support to those in hardship. This includes access to government welfare and flexibility on visas.




Read more:
90,000 foreign graduates are stuck in Australia without financial support: it’s a humanitarian and economic crisis in the making


Even before this pandemic, international students were exposed to several unique hardships. These are compounded by COVID-19.

Not only are they stranded in a foreign country unable or unsure about going home, many have no or little support from family or close friends in Australia.

It is therefore critical for Australian universities to act collectively, swiftly and decisively to provide a model of care for international students’ well-being. And it’s important for the Prime Minister to show he understands their unique vulnerabilities.

How international students are vulnerable

There is a perception that the majority of Chinese international students come from wealthy households. But a study of 652 Chinese students revealed significant differences in both demographics and backgrounds, as well as sources of funding for their studies.

While the majority (67%) had their studies funded by parents, 17% funded them through personal savings. The majority of self-financed students experienced added emotional and psychological challenges during their studies overseas.

Chinese students make up the majority (around 40%) of international students in Australia, but tens of thousands also come from other Asian countries including India, Nepal, Vietnam and Pakistan.

About half of international students, who are private renters, rely on work to pay rent. Like many, they too have lost their jobs in the COVID-19 pandemic – but they are not eligible for JobKeeper wage subsidies.

On March 30, Scott Morrison announced the National Cabinet had agreed to put in place a six-month moratorium on evictions.

This helps but is only one part of the rental issue for international students. Many international students enrolled in Australia for study, are unable to return to their homeland. Nor are they allowed to break their leases early without penalty.

The spread of this coronavirus has unfortunately also accelerated racist sentiments against Asian Australians and international students from Asia. In February, a student who had returned from visiting family in Malaysia found she had been evicted from her rental, as her landlord assumed she had travelled to China for Chinese New Year.




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The protracted uncertainty of not knowing if students can pursue or complete their studies or continue to pay their rent can significantly affect their mental health.

A recent report found due to culture, language and academic barriers international students are at a higher risk of mental ill-health than domestic students.

In 2019, the Victorian Coroners Prevention Unit found 27 international students died by suicide between 2009 and 2015 in the state. But the coroner said this was likely to be an underestimation.

After the Victorian Coroner’s finding, the state government appointed Orygen Youth Health to undertake research to formulate a model of care that looks at mental health support and services for international students.

What can Australia do?

Australia can lead the way by developing a model of care that is responsive to the needs of affected COVID-19 international students. It should be informed by policies and programs that prevent international students feeling a worsening sense of entrapment, or being boxed-in by their circumstances.

The Australian government must work closely with both international students and universities to formulate practical support designed to mitigate the drivers of mental distress. Support and assistance can be informed by our national mental health policy settings, and aim to ensure the widest possible range of proven interventions that promote well-being, and reduce mental distress and vulnerability




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‘I’m an international student in Australia. How do I tell my parents the pressure they put on me is too much?’


Financial support to ease pressure must be paralleled with culturally competent and easily accessible mental-health support. How Australia, as a society, responds and supports international students during the pandemic and its aftermath will be a defining moment for Australian international education.

In view of strengthening Australia as a trusted and reputable international education destination for current and future international students, COVID-19 provides us an opportunity to live out our depth of empathy, as an egalitarian and cosmopolitan society.The Conversation

Hannah Soong, Senior Lecturer and Socio-cultural researcher, UniSA Education Futures, University of South Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

90,000 foreign graduates are stuck in Australia without financial support: it’s a humanitarian and economic crisis in the making



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Ly Tran, Deakin University and George Tan, University of Adelaide

COVID-19 has left governments scrambling for balanced economic, social and ethical policy responses.

The Australian government’s A$130 billion JobKeeper payment – a wage subsidy to keep Australians in work – is vital for our response to the pandemic and future economic recovery.

But temporary visa holders, including international temporary graduates, have fallen through the cracks. The temporary graduate visa (subclass 485) is for international graduates of a qualification from an Australian institution. It allows them to stay in Australia for two to four years to gain work experience.




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There are nearly 90,000 temporary graduate visa holders in Australia.

International graduates on temporary visas rely solely on wage income to cover their living expenses. These visa holders mainly work in industries that have suffered majored losses, such as hospitality, and they are not entitled to the JobKeeker payment.

The Tasmanian government has just announced a $3 million support package for temporary visa holders which would include 485 visa holders.

This is a first from any state or territory government and will hopefully spur similar support from universities and other jurisdictions – including from the federal government.

It’s time for Australia to be reciprocal and take care of international graduates, who are major contributors to our economy and society, in their time of need. It’s both a humanitarian issue and a sensible economic strategy.

A major drawcard for Australia

International education is Australia’s third largest export – behind iron ore and coal – and its largest services export. It contributes almost $40 billion to the Australian economy and creates around 250,000 full time jobs.

The 485 visa was introduced in 2008 and updated in 2013, taking on recommendations from the 2011 Knight Review, which recognised post-study work rights for international students as crucial for Australia to remain competitive in the education export market.

Since then, the temporary graduate visa has become a drawcard for international students. In our 2017-19 study, 76% international students indicated access to this visa was an important factor when choosing Australia as their study destination.




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Australia’s temporary graduate visa attracts international students, but many find it hard to get work in their field


The top five citizenship countries of 485 visa holders in Australia have mirrored the top five source countries of international enrolments in Masters by coursework programs since 2013.

Many temporary graduate visa holders become skilled migrants or international students again. Of the of 30,952 visa holders who transitioned to other visas in the 2018-19 financial year, 45.3% became skilled migrants and 34.9% became international students again.

While international temporary graduates contribute to Australian tax revenues, they are not entitled to subsidised government services. This means they bring net income to the Australian economy.

Our temporary graduate visa survey and interviews show international graduates often desperately need work experience and an income to cover their living costs in Australia.

They do not want to compromise their career goals or permanent residency outcomes.

For this reason, they may be exploited and willing to accept jobs outside their field and in industries most vulnerable to job losses during a crisis.



Census data shows cleaning, sales and hospitality are among the top five jobs for international temporary graduates. And many are front-line workers serving the Australian community, especially in aged care, health care, supermarkets and the cleaning sector.

Other countries support them

Australia’s key competing destinations for international education are giving their international students, international graduates and other temporary workers access to their welfare schemes.

New Zealand is not restricting international students and graduates from accessing its wage subsidy scheme. Britain and Canada allow international students and graduates access to the Coronavirus Job Retention Subsidy and the Canada Emergency Response Benefit, respectively.

Australia’s current policy jeopardises not only these international graduates’ security but also its competitiveness as a destination for international students.

On April 3, Prime Minister Scott Morrison sent out a chilling message that international students and other temporary visa holders can return to their home countries if they were unable to support themselves.

Apart from the fact international graduates can’t return to their home countries due to border closures, many have signed rental contracts in Australia.

Others may be doing further studies.

Temporary graduates are no longer international students. As a result, they do not qualify for their former university’s hardship support funds, loans and food banks or any other resources for international students.

The international education sector and universities, which rely on the 485 visa to attract international students, have a duty of care to these visa recipients.

Universities are projected to incur significant losses for the next three years due to its loss of international students.




Read more:
Australian universities could lose $19 billion in the next 3 years. Our economy will suffer with them


There are many factors that will determine how well Australia’s international education industry recovers. These include the recovery of other major provider countries of international education such as China and India who continue to grapple with this pandemic.

But when the appetite for international education returns, Australia’s efforts to manage its international students and alumni in this period could reinstate its reputation and help its economic recovery.The Conversation

Ly Tran, Professor and ARC Future Fellow, Deakin University and George Tan, Adjunct Fellow, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why closing our borders to foreign workers could see fruit and vegetable prices spike



Dave Hunt/AAP

Michael Rose, Australian National University

One aspect of the COVID-19 crisis that has so far escaped widespread public attention in Australia is its potential impact on our food security.

We haven’t seen supermarket shortages of fruit and vegetables like toilet paper and pasta because, being perishable, they are not easily stockpiled and therefore less prone to demand-side spikes.




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When the coronavirus gets tough, the tough get stockpiling


But being perishable also makes them more susceptible to supply-side shocks, such as we’re seeing with higher prices now for the likes of broccoli due to the impact of drought and bushfires.

The major variable in whether the coronavirus crisis will hurt fruit, vegetable and nut supplies (and prices) depends on how they are picked while the nation’s border remains closed to the foreign seasonal workers on which Australian farmers depend.

Foreign muscles, Australian fruit

Rural Australia’s dependence on the muscles of tens of thousands of backpackers and workers on temporary working visas is sometime minimised by official statistics.

More than one-third of peak seasonal jobs on horticultural farms are filled by overseas workers, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

But anyone in direct contact with the industry knows most direct harvest labour in Australia is done by foreigners.

Official statistics about agricultural workers are rubbery. The Australian Bureau of Statistics, for example, can only estimate the total number of workers at between 240,000 and 408,000.

The vagueness is due to three reason. First, the data is based on a single month (in this case August 2016) and picking work is seasonal, with less workers employed in winter. Second, workers move around, so double-counting can occur. Third, overseas workers and contract workers provided by labour hire companies are not included in labour force surveys.

What immigration data tells us, however, is that in 2017-18 about 31,000 backpackers did at least 88 days of farm work to be eligible to extend their visas for a year. (There are no numbers for the number of backpackers working on farms for other reasons.)

A further 8,500 workers from Pacific Island nations and Timor-Leste worked on farms for up to six months on visas issued under Australia’s Seasonal Worker Programme. This increased to about 12,000 in 2018-19.

Domestic restrictions

The indefinite closure of Australia’s borders to non-resident foreign nationals jeopardises this supply of farm workers.

The question is whether the spike in domestic unemployment will see Australian workers (and other foreign workers) displaced from other sectors flocking to rural areas to take up those jobs.

Possible complications are travel restrictions, with states closing borders and city dwellers being told to stay away from Australia’s country towns, and the Australian government’s income assistance measures.

As migration researcher Henry Sherrell notes of the job seeker allowance being doubled to A$550 a week, “that’s a pretty decent week if you’re on picking piece rates”.




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Australia’s $130 billion JobKeeper payment: what the experts think


“In theory, Australians laid off in the many sectors now facing recession could head for the countryside and start picking fruit,” he argues in an article co-authored with Stephen Howes, an economics professor at the ANU Crawford School of Public Policy.

In practice, it is just not going to happen. The work is difficult, and farms often geographically isolated. It would take years not months to change the reality that farm work is just not in the choice set of most Australians – who, after all, live in one of the most urbanised and richest countries in the world.

An exemption for seasonal workers

Allowing backpackers and seasonal workers in Australia to extend their visas is an obvious first step. On top of any measures to encourage foreign workers to stay, the longer term may require making an exception to the ban on their entering the country.

The entry of seasonal workers from the Pacific and Timor-Leste already requires medical checks before they travel. Exempting those with seasonal work visas from our closed border policy would not be unreasonable. Canada, which runs a similar guest worker program, has already done so.



With Australian help, workers could be tested for COVID-19 before they fly. On arrival here they would be quarantined for 14 days like everyone else.

The government would need to step in and pay for suitable accommodation, catering and medical services. It would also need to ensure arrangements so workers can get home. But there are there a number of benefits to justify the cost.




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How migrant workers are critical to the future of Australia’s agricultural industry


It contributes not only to Australia’s food security but also its national interest, maintaining and deepening its bonds with its island neighbours.

If there is a silver lining to the current grim situation, it may be that it could serve to make real the rhetoric that our relationship with the Pacific (and Timor-Leste) is one defined by partnership, in which we help ourselves through helping each other.The Conversation

Michael Rose, Research fellow, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

With the US and Iran on the brink of war, the dangers of Trump’s policy of going it alone become clear


Klaus W. Larres, University of North Carolina at Chapel Hill

President Donald Trump’s policy toward Iran is in deep crisis. The president’s approach has the support neither of America’s allies nor of its strategic rivals, China and Russia. And his policy – made even more confrontational by the shooting of a high-ranking Iranian official – has boxed him into a situation where, short of dramatic reversal, Washington and Tehran are edging close to war.

By failing to forge policies in cooperation with allies, the U.S. was robbed of advice and expertise in how to tackle the problems posed by Iran. Above all, it led to the dangerous deterioration of relations between the U.S. and Iran after the U.S. became the sole country to withdraw from the Iran nuclear deal. That deal was painstakingly negotiated by the Obama administration in cooperation with five other world powers.

Instead of Trump’s harsh policy imposing maximum pressure on Iran, Iran has turned the tables and has put pressure on a freshly impeached U.S. president whose reelection is by no means assured and whose international diplomatic isolation and weakness is no secret in the region.

And once again, Trump took unilateral action early on Friday morning. The killings of Iran’s revered and powerful military commander, General Qassem Soleimani, and Iraqi militia leader Abu Mahdi al-Muhandis in a U.S. drone strike on Baghdad airport has further escalated tension in the region.

The killings immediately caused huge anti-American protests in Iran and led to the rise of global oil prices and the fall of stock markets around the world.

Iran has vowed “harsh revenge” for the assassination of Soleimani, the strategic mastermind behind Tehran’s entire ambitious Middle East policy. He also coordinated Iran’s widespread covert operations program and provided much of the strategic expertise for President Bashar Assad’s war in Syria.

President Trump holding the memorandum announcing the US withdrawal from the Iran nuclear deal, May 8, 2018, in Washington.
AP/Evan Vucci

Wishful thinking?

Since coming to office in January 2017, President Trump’s approach to resolve America’s longstanding quarrel with Iran has consisted of two stages.

The politics of maximum pressure – imposing stiff economic sanctions – combined with harsh rhetoric toward Tehran’s leaders was to be followed by a second stage of intense personal diplomacy that would culminate in the signing of a great new deal of cooperation with longtime enemy Iran.

It would turn Trump into one of America’s greatest foreign policy presidents and might even, or so he hoped, earn him a Nobel Peace Prize.

As an international relations scholar and former diplomatic and foreign policy adviser at the German embassy in Beijing, I believe this approach consisted of a lot of wishful thinking.

Iran’s Supreme Leader Ali Khamenei simply refused to engage with Washington on the conditions laid down by Trump. Those conditions included Iran halting all uranium enrichment and ceasing support for the region’s militant groups.

Tables turned

Trump’s unorthodox idea – conducting the nation’s diplomacy singlehandedly and without asking for much advice from experts in the State Department or from his allies – has been revealed as untenable.

Trump’s withdrawal from the 2015 multi-party nuclear deal with Iran was caused by his unhappiness that the deal was not meant to restrain Iran’s aggressive politics in the region. Trump also believed it would not effectively prevent Tehran’s ability to manufacture nuclear weapons in the long run.

But his policy toward Iran appears not to have contained and intimidated the country’s leaders. It has instead emboldened the country to aggressively challenge U.S. policies in the Middle East.

U.S. withdrawal from the deal was deeply resented by both Iran and the international community. And it started the rapid deterioration of relations with Tehran.

The recent siege of the U.S. embassy in Baghdad by violent protesters who were clearly directed by the Tehran regime recalled the Iranian hostage crisis 40 years ago that decisively contributed to President Jimmy Carter’s electoral defeat.

The shooting down of an expensive American drone by Iran in June as well as Tehran’s open support of the Assad regime in Syria and the Hezbollah terrorist organization in Lebanon were further indications of Iran’s challenge to the U.S.

It appears that Trump’s airstrike on the Baghdad airport was an attempt to demonstrate America’s power and to break out of a largely self-inflicted foreign policy failure.

New tack

I believe that President Trump’s diplomacy toward Iran requires urgent course corrections.

The only option left – and one not yet seriously considered by the Trump administration – is to fall back on cooperation with other great powers, not least with Washington’s many allies, such as the U.K., France and Germany, who are still anxious for American global leadership. The Trump administration has little option but to return to the Obama-era nuclear deal with Iran, though perhaps it could be somewhat modified to enable Trump to save face.

The administration could then embark on a unified Western policy to restrain both Iranian leadership ambitions in the Middle East and Tehran’s nuclear ambitions.

The killing of Soleimani and the angry reaction to his death, however, has made this almost impossible in the short run. But tempers may cool.

Despite recent joint Russian-Chinese-Iranian naval maneuvers, Moscow and Beijing are also still interested in containing Iranian ambitions. Iranian dominance in the Middle East and the resulting further tension and escalating rivalry with Saudi Arabia for regional control would hardly benefit the great powers and the stability of the region.

Whether or not the Trump administration is capable of and willing to embark on such a major change of course is unclear. But I believe it is the only way out of a crisis largely caused by Trump’s unilateral policies.

[ Insight, in your inbox each day. You can get it with The Conversation’s email newsletter. ]The Conversation

Klaus W. Larres, Richard M. Krasno Distinguished Professor; Adjunct Professor of the Curriculum in Peace, War and Defense, University of North Carolina at Chapel Hill

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Agents of foreign influence: with China it’s a blurry line between corporate and state interests


File 20190226 26162 bsb4uy.jpg?ixlib=rb 1.1
Australia’s Foreign Influence Transparency Scheme Act obliges individuals to register if they act on behalf of “foreign principals”.
Shutterstock

John Garrick, Charles Darwin University

Former federal trade minister Andrew Robb says he has quit his A$880,000-a-year consultancy job with Chinese-owned Landbridge Group because it didn’t have anything for him do.

Former Victorian premier John Brumby says he has quit as a director of Chinese tech giant Huawei in Australia because he has too much else to do.

Former federal foreign minister and ex-NSW premier Bob Carr has quit his job as director of the Australia-China Relations Institute, an organisation bankrolled by a Chinese billionaire with a history of using donations to cosy up to politicians.

It might be just a coincidence that these decisions have come just days before new foreign influence transparency laws come into effect on March 1.

The new laws are supposed to make visible the “nature, level and extent of foreign influence on Australia’s government and political process”. There is more than enough evidence that greater transparency is needed. But the extent to which the new rules will achieve this is questionable.

Money talks

Federal parliament passed the Foreign Influence Transparency Scheme Act (FITS) in December. The Act obliges individuals to register if they act on behalf of “foreign principals” – be they governments, government-related entities, political organisations or government-related individuals.

Failing to apply for (or renew) registration, providing false and misleading information or destroying records may lead to a prison term of up to six years for individuals and fines of A$88,200 for companies.

Registrable activities include:

  • parliamentary and political lobbying on behalf of a foreign principal
  • communications activities for the purpose of political or government influence
  • employment or activities of former cabinet ministers.

An example of the latter is Andrew Robb.

In February 2016 Robb resigned as federal trade minister and announced he would not recontest his seat. He left parliament in July. Three months later he had his new job, getting paid way more than the prime minister as a consultant to the Landbridge Group.




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View from The Hill: Would Landbridge be on or off the government’s register of foreign interests?


It is always instructive to note the first jobs taken by politicians after they leave parliament. Those appointments generally reflect relationships already well-groomed.

Landbridge is a privately owned Chinese company, but like many Chinese companies has strong ties to the ruling Chinese Communist Party. Its substantial interests in petrochemicals and ports includes a 99-year lease over the Darwin port, which is considered of strategic importance in China’s diplomatic dance with the United States.

Qualitative differences

China isn’t the only foreign power interested in having influence in Australia, of course. Historical ties have meant that Britain once dictated Australia’s foreign policy. Since World War II the United States has had almost as much power.

Now China, Australia’s largest trading partner, taking about 30% of our exports, looms large. But the power exercised by the Chinese regime is qualitatively different.

For all its economic liberalisation since the death of Mao Zedong in 1976, China remains a one party state, with repression worsening under Xi Jinping. On freedom of the the press, for example, China ranks 176 out of 180 countries.

Commercial, military and political influences are wrapped up together. Lines between state and private enterprises are blurred. When Chinese business interests curry favour with foreign politicians and officials, there’s a high chance that statecraft is also being advanced. “Soft power” is used extensively.

Agent of influence

This is what made the tawdry scandal involving former NSW senator Sam Dastyari so alarming.

Though a humble senator, Dastyari was a key Labor Party fundraiser and powerbroker. He later admitted that vanity and arrogance made him susceptible to the charm offensive of Huang Xiangmo – the billionaire who courted Bob Carr to head up the Australia-China Relations Institute.

Dastyari accepted financial gifts from Huang’s company, including a A$44,000 payment to settle a legal dispute, along with payments from other donors connected to the Chinese Communist Party.




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Such payments made it obvious why he defied his own party’s policy and defended China’s militant stance in the South China Sea. He was subsequently labelled a Chinese “agent of influence”.

These revelations resulted in Dastyari resigning from parliament in 2017. Earlier this month it was revealed the federal government had rejected Huang’s bid to become an Australian citizen and stripped him of his permanent residency visa.




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Why do we keep turning a blind eye to Chinese political interference?


On the basis of these examples highlighted above, there’s a strong case for making influence peddling open and transparent.

Whether the new laws can achieve that is another matter. They may curtail flagrant scenarios where those leaving public office sell their wares to the highest bidder. But to work effectively, the laws and their enforcers will need to constantly adapt and evolve as agents look for creative ways to wield influence from the shadows.The Conversation

John Garrick, Senior Lecturer, Business Law, Charles Darwin University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australia should brace for a volatile year in foreign policy in 2019


Susan Harris Rimmer, Griffith University

By the end of 2019 we should be able to assess how Australia is travelling with the grand plan laid out in the 2017 Foreign Policy White Paper. In this, an election year, I examine the status of our most important international relationships.

My verdict: decidedly shaky.

A difficult 2018

Even before the August leadership spill, 2018 was a difficult year for Australia’s foreign policy.

New prime minister Scott Morrison visited Jakarta within days of his appointment, but did not attend the Pacific Island Forum on Nauru. He also cancelled long-planned visits to Malaysia and Vietnam. He then jeopardised the Indonesian relationship with a rushed announcement about moving Australia’s embassy in Israel to Jerusalem.

Australia was increasingly criticised in various multilateral fora for its detention practices on Nauru and Manus Island, as well as its climate policies and defence of the coal industry. Morrison then had a shaky summit season.




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Relationship with China, Middle East

China put us in the “deep freeze” for most of the year, putting off visits between ministers, deferring a trip by the Department of Foreign Affairs and Trade secretary, and delaying a range of educational exchanges.

The Chinese embassy issued a safety warning to international students, a large market for international education. This was in response to then Prime Minister Malcolm Turnbull’s vow to crack down on foreign interference in Australian affairs, as well as our position on the South China Sea.

In August, the federal government banned Chinese-owned tech giant Huawei from taking part in the roll-out of 5G mobile infrastructure over national security concerns.

This was the one relationship that may have benefited in the short term from the change in prime minister.

Despite these set-backs, the need to be principled and steady, and to build a long-term relationship with China, remains a challenge.

The year ended badly. With the West Jerusalem embassy announcement in December, Morrison proved a new diplomatic adage: that you can, in fact, please no one, all of the time.




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Morrison’s decision to recognise West Jerusalem the latest bad move in a mess of his own making


In the Pacific

Some issues are slow-burn. Most Australians still do not realise the deep implications for domestic policy raised by the Trans-Pacific Partnership deal that came into effect on December 30, 2018. These implications range from changes to labour market testing, intellectual property issues and the Investor-State Dispute Settlement (ISDS) provisions that allow private corporations to bypass national courts and seek compensation from extraterritorial tribunals if they believe a change in the law or policy has harmed their investments.

But one bright spot was the so-called Pacific pivot, which Morrison announced in November, and now has to be realised.

While the white paper laid out a stepping up in engagement, long overdue, with the Pacific, it was China’s increasing influence in the region that led to a sense of urgency and scale to the Pacific pivot announcement.

The announcement includes A$2 billion of new funding for infrastructure, a billion dollars to entice Australian businesses back into the region, adding five new diplomatic missions, enhancing labour mobility opportunities and creating an “office of the Pacific” with whole-of-government oversight. Australia, Japan, New Zealand and the US promised to connect electricity to 70% of PNG’s population by 2030.

These goals must be realised in a spirit of true partnership. Australian researcher Tess Newton Cain points out that Australia often misses the right tone of respect and partnership in its announcements to the region. And without climate leadership, will the Pacific trust us?

Leadership churn

No white paper can protect Australia from the damage to our international reputation over our constant turn-over of prime ministers. Based on current polls, another one is likely in May after a federal election.

The Lowy Institute’s Michael Fullilove says that worse than being a laughing stock, now Australia can be ignored while the region moves on.

The image of German Chancellor Angela Merkel barely concealing her boredom at meeting her fifth Australian leader in five years at the G20 Summit spoke volumes.

Opposition leader Bill Shorten is not known for his foreign policy vision, but Penny Wong is a respected foreign policy thinker, and an interesting symbol for the region on diversity, multiculturalism and the rule of law.

Will she take the foreign minister role in cabinet if the ALP is elected, assuming she may have some choice? For Australia’s sake, she should; we desperate need steady interlocutors. Richard Marles is also a respected figure in the Pacific.

A Shorten government should also display bipartisanship and give Marise Payne and Julie Bishop roles as special envoys or ambassadors to shore up some degree of continuity. Former PMs Kevin Rudd, Julia Gillard and Malcolm Turnbull could all be given roles to play.

Big meetings ahead

Thailand will host ASEAN (Association of Southeast Asian Nations) and the East Asia Summit (EAS) in 2019. The 10-member association has been criticised for allowing Thailand’s military government to become chair.

APEC (Asia-Pacific Economic Cooperation) will be hosted by Chile in 2019, showing the reach of APEC across the Pacific. APEC was not able to produce a leaders’ declaration at the PNG summit and it was the scene of extraordinary tension this year. Chile will be hoping for a return to business as usual.

Japan will also host an early G20 Summit in Osaka in June, part of an enormous diplomatic year for them. In 2019, Japan is hosting the Rugby World Cup and preparing for the Tokyo Olympics in 2020. Then in April, Emperor Akihito, will abdicate, making way for his successor Crown Prince Naruhito.

Threats on horizon

The Council for Foreign Relations, an independent US think-tank, nominated its highest risks for 2019, which I have modified for Australia:

  • A highly disruptive cyber-attack on critical infrastructure and networks

  • Renewed tensions on the Korean peninsula following a collapse of denuclearisation negotiations

  • Armed conflict between Iran and the US or one of its allies

  • Armed conflict over disputed maritime areas in the South China Sea between China and one or more Southeast Asian countries (Brunei, Malaysia, Philippines, Taiwan, and Vietnam)

  • A mass casualty terrorist attack by either foreign or home-grown terrorist(s)

  • Continued violent re-imposition of government control in Syria

  • Deepening economic crisis and political instability in Venezuela leading to violent civil unrest and more refugees leaving

  • Worsening of the humanitarian crisis in Yemen, exacerbated by ongoing foreign intervention in the civil war

  • Increased violence and instability in Afghanistan resulting from the Taliban insurgency and potential government collapse.

International elections

The Indian general election is expected in April or May 2019, a test for Prime Minister Narendra Modi.

Other major elections in 2019 are due in Afghanistan, Canada, South Africa, Indonesia, Thailand and The Philippines.

Key partnerships

Alas, the UK remains focused on Brexit.

And all international diplomats are bracing themselves for the next phase of Trump’s foreign policy.

The US foreign policy think-tanks argue that with the Democrats in control of the House of Representatives, the Trump White House will be more active in foreign policy as it struggles to pursue a productive domestic agenda. This could lead Australia into some kind of rollercoaster if we are not willing to disengage from some US requests for our assistance.

In 2019, the US Ambassador to Australia will finally arrive after more than two years’ delay. Republican Washington lawyer Arthur Culvahouse might well spice things up during his posting.

He told the US senate that while China is Australia’s largest trading partner, Australia has also given China “a nation that’s already … aggressive” an “outsized” influence and opportunity to press its agenda.

Depending on the election outcomes, India is looking more like a natural ally for Australia, at least in the shared interest in strengthening ASEAN and the EAS process, and the early conclusion of the Regional Comprehensive Economic Partnership (RCEP) in which both countries are partners.

The way forward for Australia is clearer too, if the government adopts the approach laid out in Peter Varghese’s report An India Economic Strategy to 2035. The former diplomat and public servant envisages the goal by 2035 to be to:

… lift India into its top three export markets, to make it the third largest destination in Asia for Australian outward investment, and to bring it into the inner circle of Australia’s strategic partnerships and with people to people ties as close as any in Asia.

Strategy requires skill and leadership. We will need all three in 2019. We have a volatile year ahead.The Conversation

Susan Harris Rimmer, Australian Research Council Future Fellow, Griffith Law School, Griffith University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Blocking Chinese gas takeover won’t damage Australia’s foreign investment pipeline



File 20181121 161621 4s3rkd.jpg?ixlib=rb 1.1
A single foreign company having sole ownership and control over Australia’s most significant gas transmission business, says Australia’s treasurer, is not in the national interest.
Shutterstock

Simon Segal, Macquarie University

The Morrison government’s decision to block Hong Kong’s largest infrastructure company from buying one of Australia’s key infrastructure companies seems to make a complicated relationship with China even more fraught.

Rejections of foreign takeover bids are extremely rare. This is just the sixth such decision in nearly two decades.

It might be argued the blocking of the A$13 billion bid for gas pipeline operator APA Group by Cheung Kong Infrastructure (CKI) Holdings reflects increasing politicisation of Australia’s process for reviewing foreign investment.

But this is not a political shot across the bows like China’s announced anti-dumping probe into imports of Australian barley. This takeover proposal was always doubtful. News of its knock-back potentially damaging relations with China, or foreign investment more generally, are greatly exaggerated.




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Always unlikely

APA Group owns 15,000 km of natural gas pipelines and supplies about half the gas used in Australia. It owns or has interests in gas storage facilities, gas-fired power stations, and wind and solar renewable energy generators.


APA Group’s infrastructure assets.
APA

Back in September, after APA accepted the takeover offer from a CKI-led consortium, the investment research company Morningstar judged it unlikely that Australia’s Foreign Investment Review Board would approve the bid.

The board is only an advisory body. The final decision rests with the federal treasurer. Josh Frydenberg signalled his intention to block the deal in early November, giving CKI a few weeks to change its proposal, either by selling assets or finding other investment partners, enough to change his mind.

That did not happen. Frydenberg’s final decision to block the bid was based, he said, on “a single foreign company group having sole ownership and control over Australia’s most significant gas transmission business”.

He emphasised the government remained committed to welcoming foreign investment: “foreign investment helps support jobs and rising living standards.”

It’s not all about CKI

CKI is not state-controlled. It is headed by the son of Hong Kong’s richest man, Li Ka-shing, and has a history of considerable success in investing in Australia.

Nonetheless speculation about the rejection damaging the Australia-China relationship has ensued. In the words of the South China Morning Post: “As the most China-dependent developed economy, Australia potentially has a lot to lose should relations with its biggest trading partner deteriorate further.”




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Let’s put this into perspective.

First, there is broad bipartisan agreement that foreign investment is crucial to Australia’s economic prosperity.

Second, as already mentioned, this is just the sixth major public foreign investment proposal blocked since 2000. (All but one, notably, have been by Liberal treasurers.)

Third, all six rejections have been case-specific. Each bid has been considered on its merits.

This case arguably has less to with CKI being Chinese linked than with the size and significance of APA, whose transmission system includes three-quarters of the pipes in NSW and Victoria.

In 2016 CKI’s A$11 billion bid for NSW electricity distributor Ausgrid was also blocked (by then-treasurer Scott Morrison) on national security grounds.

But in 2017 CKI won approval for its A$7.4 billion bid for West Australian-focused electricity and gas distribution giant DUET. And in 2014 CKI’s acquisition of gas distributor Envestra (now Australian Gas Networks) was also cleared.

Shifting emphasis

This is not to deny that politics played a part in Frydenberg’s decision.

The seven-person FIRB board was divided (the exact votes are not known). The Treasurer’s call could have gone either way.

Forces within the Liberal Party that opposed Malcolm Turnbull’s leadership have also been deeply hostile to APA’s sale to CKI. Among the most vociferous was NSW senator Jim Molan, who warned of “hidden dragons” in the deal.

For a minority government lagging in the polls and just months away from an election, such views have assumed inflated importance.

Nonetheless the APA decision was not a surprise. Greater scrutiny is now part and parcel of the Foreign Investment Review Board process. In particular, the emphasis has firmly shifted over the past few years to scrutinising national security and taxation areas.




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The Critical Infrastructure Centre within the Department of Home Affairs, which became fully operational this year, brings together capability from across the federal government to manage national security risks from foreign involvement in Australia’s critical infrastructure. It’s particularly focused on telecommunications, electricity, gas, water and ports.

David Irvine, who has chaired the Foreign Investment Review Board since April 2017, is a former head of the Australian Security Intelligence Organisation.

This shifting emphasis does not equate to a bias against foreign investment per se. There is no evidence investors, including Chinese, are being discouraged or significantly deterred from investing in Australia.

CKI itself demonstrates, by returning to Australia despite previous rejections, that foreign investors will not give up so long as the next deal stacks up. There is already speculation CKI has moved on, and now has its eyes on Spark Infrastructure, an ASX-listed owner of energy asset.The Conversation

Simon Segal, PhD research candidate, Business, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Government needs to slow down on changes to spying and foreign interference laws


File 20180608 137315 1qkiuu4.jpg?ixlib=rb 1.1
Attorney-General Christian Porter wants the legislation passed before the “Super Saturday” byelections on July 28.
AAP/Lukas Coch

Tony Walker, La Trobe University

What’s the rush? If you believe Federal Attorney-General Christian Porter, unless two pieces of security legislation are in place in the remaining two weeks of parliament before the winter recess, the country will be in peril.

This was the line Porter was taking yesterday on the release of the Advisory Report on the National Security Legislation Amendment (Espionage and Foreign Interference) Bill.

His argument is nonsense. Labor should also be taken to task for being party to a hasty process that appears on the face of it to be expedient. Labor’s persistent concern is to avoid being wedged on security issues.

Under the proposed legislation, bodies such as Amnesty International that have been critical of Australian government policies may be vulnerable.

Porter wants two separate tranches of legislation – the Espionage and Foreign Interference Bill and a Foreign Influence Transparency Scheme Bill – to be passed before the Super Saturday byelections on July 28.




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Porter’s argument appears to be that unless the legislation passes in the concluding two weeks of the midyear session of parliament, those byelections will be conducted in a perilous atmosphere. He said:

There’s an unprecedented level of foreign intelligence activity in Australia and that means more foreign agents and more foreign power using more tradecraft and more technologies to engage in espionage and foreign interference and the attempted foreign influence of our democratic processes.

And that increase in volume is detectable even in the period of time that this piece of legislation has been under consideration by the committee.

No reasonable person would argue against the need for beefed-up legislation to deal with challenges to democratic processes such as those witnessed during the recent US election.

Russian cyber interference in the US political process is hardly in question, nor attempts by Russian agents of influence to suborn the system. The question is to what degree?

What is proposed in Australian legislation foreshadowed by Prime Minister Malcolm Turnbull late last year is a new and far-reaching suite of laws aimed at limiting foreign interference.

An initial version of the bill was poorly drafted. It represented an unreasonable threat to individual liberties and freedom of expression.

It was particularly antagonistic to journalists operating in the security space. Long jail terms for publication of unauthorised security material were incorporated.

The insertion of a public interest amendment has somewhat alleviated that risk.

Fairfax Media’s publication overnight of leaked documents dealing with alleged war crimes by members of the Special Air Service might have fallen foul of such provisions, and may still do so.

Media coverage of the draft amendments to the Espionage and Foreign Interference Bill has been relatively favourable. However, this might have less to do with the merits of the legislation than with relief the bill is less threatening to legitimate inquiry than an earlier draft.

In all, parliament’s Joint Committee on Intelligence and Security made 60 recommended amendments to the Espionage and Foreign Interference Bill.

Most of these recommendations are cosmetic, except those relating to journalistic inquiry. They include the need for security certifications to be validated before proceedings could be initiated for an espionage or secrecy offence, and a review of the legislation by the National Security Legislation Monitor after three years.

Urging quick action on the Espionage and Foreign Interference Bill, Porter argued that a second bill, the Foreign Influence Transparency Scheme Bill, was required to complement the main piece of legislation.

This refers to legislation that sought to proscribe involvement in Australian political processes not just by foreign governments and their agents, but by entities like GetUp, which has drawn part of its funding from foreign sources.

The scope of this proposed legislation – which is yet to be agreed by the JCOIS – has now been limited to foreign governments, foreign-related entities, foreign political organisation and foreign government-directed individuals.

Foreign companies would be excluded from this provision unless it could be demonstrated they were closely connected to a foreign government or political organisation.

In such cases, government-dominated companies, even those associated with friendly nations, would be required to register under the proposed law.

In efforts to guard against interference by individuals or companies who might be connected with a foreign government, the Attorney-General’s Department would be empowered to issue “transparency notices” to identify such individuals or companies.




Read more:
New foreign interference laws will compound risks to whistleblowers and journalists


An appeals process against these findings would be available through the Administrative Appeals Tribunal. Porter said:

It’s vital that our national security legislation and framework reflects the modern challenges that we face … that framework remains dangerously incomplete while these two remaining and critical bills remain unlegislated.

As interested parties digest the provisions of the proposed amendments, it’s likely more objections will be raised, such as those by Claire O’Rourke, one of Amnesty’s Australian representatives.

O’Rourke told The Guardian that under the Foreign Influence Transparency Scheme Bill charities like Amnesty that hold the Australian government to account on its human rights record could face criminal charges. She said:

This is clear government overreach and a cynical exercise by both sides of politics to shield themselves from the scrutiny of Australian society, including charities.

The ConversationThe upshot of all this? Quite simply, more time is needed to review proposed amendments.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article was originally published on The Conversation. Read the original article.