Equity In International Defence Partnering Arrangements
 
Address by Senator The Hon. Eric Abetz
Parliamentary Secretary to the Minister for Defence
to the US-Australian Cooperation Conference
(PACIFIC 2000)
Sydney, 3 February 2000
    
(Source : Australian Defence Organisation ; issued Feb. 3, 2000)
    
 
 
The Hon. David Oliver, distinguished guests, ladies and gentlemen.

It gives me great pleasure to address the US- Australian Co-operation" Conference during the Pacific 2000 International Maritime Exhibition and to welcome all those attending, especially those who are visiting us from overseas.

I am sure that first time visitors to Sydney will agree that not only will this city, with its more than fair share of natural beauty, make a wonderful Olympic venue. It is also ideal for a maritime and naval exposition such as Pacific 2000.

I would like to thank the organisers of the Pacific 2000 International Maritime Exhibition in general and of the "US-Australian Co-operation" Conference in particular.

I was invited to address this conference some months ago and I saw this as an opportunity to discuss issues concerning US-Australian defence cooperation, especially in the area of defence industry.

Cooperation and Partnership
As I considered the theme for this conference, namely US-Australian Cooperation, and cast my eyes down the list of the presenters and the topics they will address, it struck me that whilst the concept of collaboration appears simple and basic, making it happen, in an equitable and effective manner, is a little more difficult.

When I spoke to the COMDEF '99 Conference 12 months ago, I was reminded of the complexity of the issues that defence planners needed to be across.

However, what was said then still holds good for today.

What these complex issues clearly illustrate is that the defence of one's nation can no longer be simply based on how many guns one has, or would like to have.

Rather it is based on the success a nation has in forging and maintaining sustainable strategic relationships based on equitable principles of cooperation and partnership.

Building on what our Minister for Defence, John Moore, said when he opened Pacific 2000, I would like to comment on equitable defence industry cooperation and partnership and the value to both Australia and the US in genuinely developing and maintaining such elements of our relationship.

At COMDEF '99 I posed the question, 'Should countries try and retain a totally self-sufficient indigenous defence industry capacity?' Perhaps the question should have been, 'Can countries retain a totally indigenous defence industry capacity?'

I believe that the answer to this question is no - and I believe that answer applies even to the US.

Having accepted then, as the Australian Government has, that the future for our effective defence of Australia lies - in part - on strategic partnership and cooperation, what do we need to enable this to occur in the defence industry sector?

Essential Elements
Successive Defence Ministers and delegations visiting overseas have been taking with them the same core messages regarding the essential elements for genuine defence industry cooperation, namely:

*The importance of existing defence industry cooperation between countries in general.
* The high levels of defence and technical sophistication which we share with countries such as the US.
* The value to overseas companies of teaming arrangements with Australian companies.
* And the opportunities for Australian and overseas companies to jointly develop third markets.


It is evident that Australia shares with the US the appropriate levels of technology to make cooperative activities a reality and to encourage defence industry cooperation based on true partnership and shared capability.

Successes to Date
Australian defence companies are amongst some of the most innovative and technically advanced in the world. As such, we are used to interacting as equals with overseas partners in developing sophisticated solutions for clients both in Australia and elsewhere.

In no small way the Research and Development horsepower that has gone into Australian developments has come from the Defence Science and Technology Organisation, or DSTO.

In recent years DSTO has developed an enviable relationship with industry, which has taken on some DSTO developments and moved them the next step into operational or commercial reality.

A true partnership.
Some recent examples of Australian commercial successes based on shared levels of capability are:

*the Australian company Mincom, which was recently selected by US aircraft manufacturer Boeing - against international competition - to supply software to a commercial arm of the Boeing corporation,
*Thomson Marconi Sonar - selling seismic arrays to the United States,
* Aerospace Technologies of Australia ( a member of the Boeing Group) - production of flaps for the United States' F/A-18E and F Super Hornet,
* Hawker de Havilland ( a TENIX company) - design, development and manufacture of high-tech aircraft components, and
* LADS Corporation - aerial seabed laser mapping - which recently won a contract in Norway.

You will note that much of this interaction is with the US.

Additional Examples of Australian Capability
Australia's success with the ANZAC and the Minehunters is already well known. There are, however, other achievements about which I am proud; particularly some from companies in my home State of Tasmania, which you should visit before you return home. Two examples of my State's capabilities are:

*HMAS Jervis Bay, built by Incat in Tasmania, can move 500 fully equipped troops at twice the speed of a patrol vessel and superbly illustrates our capacity to think 'outside of the box' when solving challenging logistics problems. The Jervis Bay has been a boon to our Defence planners during our operations in East Timor.

*The Fiobuoy submersible marine marker buoy and retrieval system is a commercial Tasmanian product that has been modified, with the assistance of the Defence Science and Technology Organisation, to explore its military potential. The buoy can automatically release itself from its underwater moorings and, at a predetermined time, rise to the surface to take up its marking and retrieval roles.

However, I'm not going to spend any more time in merely cataloguing our commercial successes - what I wish to point out is the capacity that Australian defence industry has to satisfy the needs of a professional and forward looking defence force such as the Australian Defence Force. And it can help do the same for your forces.

Of course much of this capacity is based on the fact that we have a highly skilled and innovative workforce and a stable and supportive Government.

Defence and Industry Strategic Policy Statement
Let me mention our Government's 1998 Defence and Industry Strategic Policy Statement.

The Statement very much reflects the shift that has occurred in our thinking about defence industry- away from a focus on capital equipment procurement, towards whole-of-life considerations and a strategic approach to acquisitions.

The Capability Development Advisory Forum
One of the many initiatives coming from the policy statement was the formation of the Capability Development Advisory Forum, or the CDAF. The CDAF is seen by our Government as an effective means of forging closer industry/Defence links, especially in the areas of technology trends and improved forward planning.

This will help to determine how best industry can participate in the development, acquisition and through life support of major new defence capabilities - in turn ensuring that Australia builds the defence industry capability that the Australian Defence Force requires.

The essential link that we can make with the CDAF and another important forum, the Defence Exporters Council or the DEC, is to have these groups determine which capabilities, and their resulting projects, have the capacity to yield potential viable international collaborative programs or activities.

I am always very mindful that international collaborative activities with the US will also heavily support our ability to develop and maintain our capacity for interoperability - an essential element if we are to operate effectively together as members of a fully integrated coalition force if required.

Dr Graham Kearns, the head of Defence's Industry and Procurement Infrastructure Division, will also address this conference, and members of his division are working with the CDAF to identify those areas with potential for genuine international cooperation that can then be furthered in cooperation with the DEC.

Can Australia 'Cut the Mustard'?
To use an Australian expression, can Australia 'cut the mustard' - or deliver the goods if you will - in international collaboration? The answer of course is yes.

Nulka is one of our collaborative success stories with the US. As an active missile decoy system it offers exceptional protection against current generation anti-ship missiles. It is an excellent example of collaborative development between two technologically compatible partners - collaboration that has the potential to realise some third party sales.

Later speakers will also discuss the potential for collaboration at the subsystem/component level, and the presentation on AMASS (ADI's Minesweeper and Support System) will provide an insight into one of the world's most effective mine countermeasure systems developed right here in Australia.

The 'Sixty Four Dollar Question'
The 'sixty four dollar question' of course is, 'How do we identify and further potential collaborative activities?'

As I'm sure you would agree, the essential steps are:
*Early identification of areas of potential for international collaboration,
* Initial consideration and development following identification,
*The appropriate international forums to raise and develop the concept further,
*The willingness of both countries to enter into a meaningful and equitable arrangement,
*And the vision to maximise the return to both parties in terms of enhanced capabilities and commercial potential.

I have already mentioned that we are attempting to identify as early as possible those areas that would lend themselves to some form of international collaborative activity through the CDAF-DEC initiative. And I remind you all that collaboration can take place at the system, sub-system and component levels.

Through the Australia/United States Ministerial (AUSMIN) Defence Acquisition Committee or ADAC, we have an ideal forum to progress collaborative activities, and I note that David Oliver will take up the ADAC cause later in the conference.

I am also pleased to announce that Australian and US Defence officials are working on a Statement of Principles for Enhanced Cooperation on Matters of Defence Equipment and Industry.

It is through this statement of principles that we hope to be able to find common solutions to common problems and to establish principles for future arrangements.

Research and development, coordination of military requirements, technology transfer, export procedures, security of information barriers to defence trade and future processes will all be covered under the statement.

However, we must always be mindful that to maximise the returns to each country the partners must be willing to maximise the benefits of any activity to both partners, not just to themselves.

The Need for Equity
In terms of the willingness of the parties to enter into meaningful and equitable arrangements, the emphasis is very much on the word 'equitable'.

On one hand we have Australia, with its current annual defence procurement budget of approximately A$2.8 billion, amongst the top 10 defence importers in the world and one of the top three importers in the region.

However, the US - the largest defence exporter in the world - imports from Australia only a fraction of the value of what it exports to Australia.

Although our figures seem to indicate that this imbalance may be improving, given the nature of defence markets we could see such gains very quickly reversed.

The point needs to be made very clearly that Australia is not a defence market just to be sold into. The countries that grasp this fact the fastest are more likely to be welcomed in all levels of bilateral commercial defence activity.

Conclusion
Successful international collaboration has the potential to save enormous resources for the countries involved and to increase markedly their capacity for interoperability.

However, there must be honesty and a commitment to making it work by both parties -- for both parties.

Collaborative activities conceived and managed purely for the benefit of one party are doomed to fail or, at very best, be only marginally successful.

Australia is well placed to enter into international collaborative agreements having highly skilled defence companies, a highly professional Defence department and a committed and supportive Government.

The importance of conferences such as this is that we have the opportunity to bring the right people together to consider the 'collaborative way ahead'.

Again welcome to the 'US-Australian Co-operation' Conference and to our wonderful Olympic city of Sydney.

Thank you
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