Greens dissenting report

1.1The Defence Trade Controls Amendment Bill 2023 (the Bill) is intended by the Albanese Government, as part of a suite of AUKUS-related legislation, to align Australia’s scientific community, national security controls and military with the US (United States). This is a precondition for Australia to receive nuclear submarines under AUKUS Pillar 1 and to have greater access to US military technology under AUKUS Pillar 2.

1.2In short, the Bill is intended to make it easier to exchange scientific ideas and technology with the US and the UK (United Kingdom) while putting in place fresh barriers for these exchanges with the rest of the planet. As the House of Commons Research Library says:

A key part of the AUKUS agreement is the pledge contained in the initial leaders’ statement to deepen defence ties and enhance joint capabilities and interoperability between all three countries. This includes developing a range of advanced military capabilities that are collectively known as AUKUS pillar 2 activities.[1]

1.3Late last year the US Congress passed legislation that exempts Australia and Britain from some of the stringent export control requirements under the US’ International Traffic in Arms Regulation (ITAR) scheme, but only on the condition that both countries implement similarly stringent export control laws.[2] This Bill is intended as Australia’s response to this demand from Washington.

1.4The Bill should be rejected in full, it has been rushed through despite significant concerns from businesses and academia; it fails to address the existing very real issues with the Australian defence export regime; and it will have devastating impacts on the Australian research and technology sector if passed without radical changes.

1.5To be clear the Australian Greens join with thousands of academics and many in the nation’s advanced manufacturing and research sector to not support the recommendation in the interim report that the Defence Capability Assurance and Oversight Bill 2023 be passed.

1.6In a moment of genuine political irony this Bill, which is touted as part of Australia’s national security response to a less certain world, will in fact make Australia less safe and will stunt academic and economic growth.

Cutting Australia off from the rest of the world

1.7Dr John Bryon, Principal Policy Adviser, Queensland University of Technology described this Bill in the following manner:

This whole bill is Boolean: there's ones and zeros; there's nothing in between; it's 'who's in, who's out'. Okay, there's an attempt to create some special conditions with other countries: the Foreign Country List; the use of Five Eyes classification clearances—that kind of thing. But it's still basically about: 'Are you in the tent or outside the tent?[3]

1.8This description highlights significant issues with the Bill, Australia needs to have strong relationships with the vast majority of the scientific and research world that sits outside of the Anglosphere tent of the US, UK and Australia.

1.9At the Centre of this Bill is a new permit regime for collaboration between Australia and any foreign national or foreign entity that touches upon national security. Requiring such a stringent permit regime to engage in many types of academic research or technological development will create a significant deterrent. This is partially true when failing to adhere to this new permit regime could result in 10 years imprisonment.

1.10As Anna-Maria Arabia Chief Executive of the Australian Academy of Science highlighted during the hearing, this law will harm leading Australian researchers. The example of the President of the Australian Academy of Science, Chennupati Jagadish was provided:

[Dr Jagadish] works in the area of nanotechnology and semiconductor research. He can place 20 lasers in one stand of your hair—and why would he want to do that? Working at that scale means that he can create technology to better diagnose treatment for Alzheimer's disease, which is terrific. His fundamental research is almost always published, as far as I'm aware. That's what he intends to do all of the time. But before it's published he speaks to his colleagues, he goes to many conferences and he collaborates with 30 countries.

…

He's a fellow of 14 academies across the world. His research group is made up entirely of international students. There is not an Australian student in his workforce. He cannot get them. The implications of this bill, unamended, are that his research would cease or he would need to set up a closed area of his research laboratory where such research could be undertaken. There would be a question mark as to whether he could maintain his current students and collaborators. He would certainly not be able to access the research workforce that he's able to access today. I think that snapshot alone shows you how extensive the implications of this legislation, unamended, are. It is not a given that his fundamental research and activities are exempt.[4]

1.11This concern is also shared by businesses, as Dr Nadia Court, Director, Semiconductor Sector Service Bureau, said at the hearing:

We know that there are a large pool of workforces coming from places like India and South Korea, which are not on the foreign countries list, and other areas in south Asia. That's concerning. We have companies we've spoken to where 75 per cent of their workforce come from countries not on that foreign countries list.[5]

1.12With as much as three-quarters of the semiconductor workforce facing the risk of no longer being able to continue their work due to this Bill, there is already a chilling effect.

1.13With as much as three-quarters of the semiconductor workforce facing the risk of no longer being able to continue their work due to this Bill, there is already a chilling effect.

1.14Furthermore, because of the critical industries and areas that this impacted workforce and the academics specialise in, Australia’s national security will also be impacted, as Dr John Bryon noted:

People move very easily. We will lose people. We will not get people that we want. And some of that will be research that is directly applicable to national security.[6]

1.15This evidence, which paints a disturbing picture of a national research brain drain that weakens Australia’s national security if the Bill proceeds, has been swept aside by Labor and the Coalition in their uncritical cheerleading for AUKUS.

Regulatory burden

1.16The Department of Defence provided no clarity on the impact this Bill will have or the increase in permits and the impact this will have.

1.17Concerningly, recommendation 5 of the committee report claims that ‘the Department of Defence stated that they anticipate a net reduction in applications for permits.’

1.18Defence made no such statement. The closest Defence came to claiming this was stating there would be a ‘net reduction in regulatory burden’. This is not the same as a net reduction in permits.

1.19Defence claimed, both during the hearing and in their submission that about a third of the 3,000 export permits currently issued would no longer be required as they fall under the licence-free agreement from the UK and the US.

1.20However, when asked at a recent hearing how many additional permits would be required David Nockels, First Assistant Secretary, Defence Industry Policy Division, Department of Defence initially said, ‘dozens’[7].This evidence was jarring and directly contrary to the submissions from every other participant at the inquiry.

1.21This claim completely contradicts the concerns of academia and businesses that warned the Bill would create a regulatory and punitive burden that would stunt Australia’s technology and research sector.

1.22The claim that there would only be ‘dozens’ of additional permits is further undermined by Defence’s subsequent response to a Question on Notice seeking clarity on the number of additional permits, which did not indicate any number concerning additional permits. In refusing to either back in the extraordinary claim of Mr Nockels or add any actual detail Defence instead said:

[…] that some of the data obtained to inform the analysis of the likely workload for Defence cannot be released publicly due to the security classification of the information and the permitted legal reasons for using the data.[8]

1.23If Defence’s claim that this Bill would only lead to ‘dozens’ of additional permits being required by Australian industry and science then this cannot be consistent with Washington’s demand for stringent export control systems under AUKUS pillar 2.

1.24The National Defense Authorization Act for Fiscal Year 2024 states clearly that without the implementation of a ‘system of export controls comparable to those of the United States’, Australia would not have access to the expedited consideration and processing of defence articles and services.[9]

1.25It is unclear how a regime that would only see ‘dozens’ of additional permits would allow for this standard to be met. In truth, it can’t.

1.26The confusion and double-speak by Defence should be a warning bell for the Parliament. This leads to two unattractive conclusions: either Defence doesn’t understand the impacts of their own Bill or alternatively they do not want to disclose what they know the true impacts will be. Neither conclusion would support the passage of this Bill.

Fundamental research

1.27Numerous submissions referred to the need for a comprehensive definition of ‘Fundamental Research’ with Macquarie University proposing the following definition:

An exception for research considered Fundamental Research, where Fundamental Research is defined to mean basic and applied research in science, technology, engineering, medicine and mathematics, where the resulting information is ordinarily published and shared broadly within the scientific or medical communities, as distinguished from research whose results are restricted for proprietary reasons, medical reasons or national security reasons.[10]

1.28Notably this definition includes an objective element in the phrasing ‘ordinarily published’ as opposed to a subjective phrasing like 'intended to be published'.

1.29Kylie Wright, Assistant Secretary, Defence Industry International Policy, Department of Defence acknowledged that there are ongoing consultations around this definition, however during the hearing claimed:

The subjective element is removed because they have proposed 'is ordinarily published' is what they have proposed, so we're waiting for that and that covers all of it.[11]

1.30However, once again through further clarification on a Question on Notice, this statement from Defence during the hearing was shown to be misleading.

1.31We now know that the most recent draft definition of ‘Fundamental Research’, circulated to members of the higher education and research working group for comment on Tuesday, 27 February 2024 read:

Fundamental Research is defined to mean basic or applied research that is intended for public disclosure or shared broadly within the research community and not research whose results are restricted for national security reasons.[12]

1.32If this is the working definition that will find its way into the Bill then there must be a coherent explanation as to how this subjective intention will be established. Does a researcher simply have to propose as part of their project that at some point they want to publish it and get an exemption? Under this test, there is no requirement for the intention to be reasonable or have any other objective basis. If so then the scheme cannot satisfy the US requirements.

1.33This legislation is dangerously undercooked and has a dangerous real-world impact on Australia’s existing and future research base. It is extraordinary that even while all these issues have been shown to exist during the inquiry into the Bill both Labor and the Coalition propose to press ahead regardless.

1.34It is almost as though whenever the words ‘national security’ are uttered by a government the Parliament ceases critical thought and just starts cheering instead.

1.35This Bill as drafted is about national security. It will have an impact on our national security and the impact will be noxious.

1.36This Bill should be rejected in full.

Senator David Shoebridge

Substitute Member

Greens Senator for New South Wales

Footnotes

[1]UK Parliament, ‘AUKUS pillar 2: Advanced military capabilities’, research briefing, House of Commons Library, 8 March 2024.

[2]Defense News, Final defense policy bill advances AUKUS, Taiwan training, December 8 2024 www.defensenews.com/congress/2023/12/07/final-defense-policy-bill-advances-aukus-taiwan-training/.

[3]Dr John Bryon, Principal Policy Adviser, Queensland University of Technology, Proof Committee Hansard, 1 March 2024, page 7.

[4]Anna-Maria Arabia Chief Executive of the Australian Academy of Science, Proof Committee Hansard, 1 March 2024, page 15.

[5]Dr Nadia Court, Director, Semiconductor Sector Service Bureau, Proof Committee Hansard, 1 March 2024, page 21.

[6]Dr John Bryon, Principal Policy Adviser, Queensland University of Technology, Proof Committee Hansard, 1 March 2024, page 8.

[7]David Nockels, First Assistant Secretary, Defence Industry Policy Division, Department of Defence, Proof Committee Hansard, 1 March 2024, page 49.

[8]Department of Defence, question on notice 3, 1 March 2024 (received 6 March 2024).

[9]US Government, The National Defense Authorization Act for Fiscal Year 2024, Public Law No. 118–31, 22 December 2023, Sec. 1343.

[10]Macquarie University, Submission 7, p.3.

[11]Kylie Wright, Assistant Secretary, Defence Industry International Policy, Department of Defence, Proof Committee Hansard, 1 March 2024, page 47.

[12]Department of Defence, answer to question on notice 1, 1 March 2024 (received 5 March 2024).