The Federal Government has announced it is reviewing a 2015 decision to allow a Chinese company to have full control over an Aussie port, in what is shaping up to be the latest point of contention between Canberra and Beijing.
Tensions between Canberra and Beijing have run high for months, since Australia led the global push for an independent inquiry into the origins of COVID-19.
In 2015, the Northern Territory (NT) government struck a $506 million deal with Landbridge to lease the Port of Darwin to the company for 99 years.
Under the deal’s terms, Landbridge would be allowed 100 per cent operational control and 80 per cent ownership of Darwin Port land and facilities of two wharfs.
The port is also used as a military base by Australian and United States armed forces.
At the time, the NT government said the funds would be used to lower the state’s debts and build new infrastructure, but the deal drew instant backlash from the Maritime Union of Australia, backbencher Barnaby Joyce as well as from Labor opposition as .
Now, the Federal Government has announced it is seeking fresh security advice about the deal amid concerns that the deal will allow Beijing to keep a tight eye on Australia.
Newly minted Defence Minister Peter Dutton confirmed on Monday that the Government was reviewing the deal, following comments last week from Prime Minister Scott Morrison.
“If there is advice from the Defence Department or our security agencies that change their view about the national security implications of any piece of critical infrastructure,” Morrison said last Wednesday.
“We have legislation now which is dealing with critical infrastructure. Then you could expect me as Prime Minister to take that advice very seriously and act accordingly.”
An Australian parliamentary committee also called for the government to consider reclaiming Aussie ownership of the port if the lease was found to be against national interests.
“Given the ongoing tensions with China, it is an unacceptable national security risk to have Chinese state-owned and state-linked enterprises involved in our universities (including Confucius Institutes) and our strategic infrastructure,” the .
But defence and security experts have warned that Darwin is shaping up to be a key strategic location in the Asia-Pacific region.
“Just about every litre of fuel, every round of ammunition, every piece of military equipment used at those training ranges will be offloaded at the Port of Darwin,” said thinktank Australian Strategic Policy Institute executive director Peter Jennings.
“Darwin is emerging as a strategic location not just for Australia, but for our allies and partners. Control of the port matters even more now than in 2015.”
Furthermore, the relationship between Canberra and Beijing has changed since the deal was struck, he added.
“Xi Jinping’s China is on an aggressive course to dominate the Indo-Pacific, supplant the US as the region’s leading military power, weaken its allies and brook no dissent against Beijing’s wishes.”
Earlier this year, the Victorian government ripped up its agreement with China over the Belt and Road Initiative thanks to the new foreign relations law that allows the Federal Government to veto agreements struck with foreign countries by state, local governments, and universities.
But experts are saying that tearing up this commercial lease agreement could mean real financial consequences, unlike the Belt and Road Initiative, which was a non-binding memorandum of understanding.
“Both parties have obligations under the terms of the lease, and the initial question is simply whether those terms are being met at this stage,” Charles Darwin University business law academic John Garrick told SCMP.
“If lease terms are not being met, there are standard procedures to follow for terminating a lease based on non-performance of an essential term, for example.
“But termination is extremely unlikely through the [Foreign Investment Review Board]. More likely, termination would come from a commercially negotiated mutual agreement that the lease is not viable.”
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