The goal is to restrict the use of telecommunications equipment and systems provided by vendors residing in non-democratic nations such as China that might be subject to government instructions to participate in espionage or intellectual property theft.
After decades of promoting peace through economic cooperation with non-democratic countries, this change of direction is partly due to an exponential increase in what a nation’s security services can achieve globally by harnessing telecommunications and technology.
On Jan 28, 2019 it was announced that two indictments were returned by US courts alleging a total of 23 crimes were committed by Chinese telecommunications giant Huawei, its affiliates and its CFO Meng Wanzhou. Meng was recently detained in Canada pending an extradition request by the United States.
The charges include wire fraud, conspiracy, violating the International Emergency Economic Powers Act and stealing trade secrets from German-owned telecommunications company T-Mobile. Meng is accused of misleading US banks about business deals in Iran and is now before a Canadian court. Huawei and Meng deny any wrongdoing.
The actions against Huawei by US authorities appear to be part of the Trump administration’s strategy to tackle the trade imbalance with China and the forced intellectual property transfer regime for companies doing business or manufacturing in China. They also target industrial policy supporting homegrown competitors that is unfair to non-Chinese competitors.
Australia has an economic and security interest in the outcome of the current trade dispute between the United States and China. As China remains Australia’s largest bilateral trading partner, China’s market, trade and intellectual property practices will directly affect Australian companies. Australia is also an active participant in developing the Five Eyes’ security strategy.
Australia was one of the first nations to implement a ban on the use of Chinese telecommunications equipment in a strategic telecommunications network when it banned Huawei from bidding for tenders for the state-backed National Broadband Network in 2012.
In 2018, Australia was again one of the first nations to restrict telecommunications vendors ‘likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law’ from participating in the coming 5G rollout.
The ban on Chinese companies from participating in 5G rollouts has now occurred in Australia and New Zealand. In the United States, President Donald Trump may order a ban on Chinese telecommunication vendors participating in 5G rollouts as well, and at the same time his administration is applying pressure on the United Kingdom, Japan and parts of Europe to follow this path. Despite these moves, recent announcements by the United Kingdom, New Zealand and Germany have thrown doubt on the extent of any bans and the effectiveness of US pressure.
There have been no publicly reported instances where Huawei has been involved in a security breach during its 15 years in Australia. Huawei Australia Chairman John Lord stridently denies that it would take any action in breach of Australian law.
But the wording of Chinese government security legislation that specifies the obligations of Chinese companies does not appear to provide any exceptions for companies or subsidiaries operating outside of the country. The very nature of telecommunications networks necessitates that operational support and maintenance actions originate from the vendor’s central facilities, and in Huawei’s case the facilities are in China.
Huawei is an active member of the Australian business community and has developed ties to universities, community groups, sports and the arts. Huawei equipment and systems are now utilised by three of the four major telecommunications companies in the country and by Australian companies across most industries.
By all measures, Huawei’s Australian subsidiary has made a positive contribution to telecommunications and technology locally, but what is happening now is occurring on the global stage.
Actions motivated by national security are an inherent aspect of global relations, making adequate security assurances essential for free and open trade involving equipment and systems designed and manufactured in one nation and used in another. This includes being able to measure and monitor equipment and software activity to ensure that tampering or illegal operations can be prevented and detected.
Unfortunately, telecommunications security assurance is a relatively new field and an effective capability is not yet available, meaning that telecommunications — and technology in general — is central to current international security concerns.
It is disappointing that over the past decade successive Australian governments have not invested in the development of a telecommunications security assurance capability. The local Huawei subsidiary offered to work with the government to develop a telecommunications security assurance facility similar to that operating in the United Kingdom, but this offer was not taken up.
The Royal Melbourne Institute of Technology has requested government support for a pilot program to develop telecommunications security assurance capability. But despite the growing economic and security implications, the Australian government claims that the development of this capability is the responsibility of the telecommunications industry.
By Mark Gregory, an Associate Professor in Telecommunications and Network Engineering at RMIT University and is the Managing Editor of the Journal for Telecommunications and the Digital Economy.
This article has been republished from East Asia Forum under a Creative Commons License.