Darwin Port’s Chinese owner says it will cooperate with Australian defence review

Landbridge says it is willing to participate in review of $500m lease but insists 2015 deal with Northern Territory was ‘in good faith’

The Chinese company that operates the Port of Darwin has vowed to cooperate with the Morrison government’s review into any security risks from its long-term lease – but insists it struck the deal “in good faith”.

The defence minister, Peter Dutton, confirmed on Monday that his department was reviewing the 2015 agreement between the Northern Territory’s then-Country Liberal party (CLP) government and the Landbridge Group.

The review comes after Scott Morrison said last week he would take seriously any new advice from defence and security agencies.

The federal opposition accused the Coalition government of dragging its feet, saying it was only now acting after “six years of warnings”, while the Liberal MP Andrew Wallace told Sky News the original deal was “absolute madness”.

In response to questions from Guardian Australia, the vice-president of Landbridge in Australia, Mike Hughes, said the company had “acquired the lease to Darwin Port in good faith following a transparent process in 2015”.

Hughes said the company’s involvement had been reviewed at the time by both the Foreign Investment Review Board and the Department of Defence and had been subject to a Senate inquiry.

“We are aware of reports of a new review to be conducted by the Department of Defence and are willing to participate in this review as required,” he said in a brief statement.

The company did not comment on the issue of compensation if the federal government intervened to tear up the 2015 deal, which was worth $506m.

Its holding company, Landbridge Group, is headquartered in China’s Shandong province. The group’s chair, Ye Cheng, is currently estimated to be worth $US1.5bn, according to Forbes.

The NT chief minister, Michael Gunner, who was not in power at the time of the deal, said he was “very happy for the Australian government to look at anything they want to in relation to the 2015 sale” by the CLP.

“I don’t believe the CLP, as the government of the day, have ever apologised to Territorians, or Australians, for the decision to sell the Port to foreign owners,” the Labor chief minister said on Monday.

Gunner said the NT government still had not received any formal advice that the government was looking at the matter, “but if they decide to, we are more than happy to work with them”.

Gunner had criticised the deal by the then NT chief minister, Adam Giles, at the time, but promised to honour the agreement if elected. Gunner has since shown no interest in the NT funding the unwinding of the deal.

Last year Gunner indicated that if the federal government were able to find $500m for the NT, it would be better off spending the money on creating jobs.

On Monday the federal Labor party said it had long raised concerns about the Port of Darwin, which it described as a “critical strategic asset for Australia”, being under “effective foreign ownership”.

The party’s foreign affairs spokesperson, Penny Wong, and her defence colleague, Brendan O’Connor, said the Coalition had voted last year against an amendment to the government’s foreign veto laws that would have ensured the Port of Darwin deal could be reviewed.

“Now that it is becoming a political problem, Mr Morrison is engaging in more of his usual political management – after failing to show leadership for six years,” Wong and O’Connor said.

“Australia needs leaders who will act strategically in the national interest – not someone who’s only interested in political management.”

Wong and O’Connor said the Port of Darwin was used by the defence forces of visiting allies and partners in addition to the ADF, “so we would expect that Defence is also seeking their views as part of this review”.

The original deal prompted diplomatic ripples with the US, with Barack Obama raising it during a meeting with Malcolm Turnbull in Manila in late 2015.

The US – which rotates Marines through the NT – was unhappy it was not kept in the loop, but Turnbull suggested that US officials “should invest in a subscription to the Northern Territory News because it was not a secret”.

At the time, Turnbull also said the NT government had consulted the defence department, which did not not raise any concerns.

But the legislation at the time did not require the proposal to go through Firb – an issue Morrison as treasurer reviewed, prompting amendments to the law for future deals.

During a visit to the Northern Territory last week to announce an upgrade of defence training sites, Morrison hinted the 99-year lease of the Port of Darwin could be reconsidered on security grounds.

He said he would heed any advice from the defence department or security agencies “about the national security implications of any piece of critical infrastructure”.

In an interview with Nine newspapers, published on Monday, Dutton said the Morrison-chaired national security committee of cabinet had asked the defence department to “come back with some advice, so that work is already under way”.

When asked about forced divestment, Dutton reportedly replied the government needed to wait for the advice and “we can look at options that are in our national interests after that”.

Dutton – a conservative who has been making waves since being appointed defence minister a month ago – and the government are increasingly adopting tougher rhetoric on China.

But the idea of rethinking the Port of Darwin lease has gained support from across the political divide.

In March, a committee chaired by Liberal National party backbencher George Christensen called on the Morrison government to consider bringing the Port of Darwin back under Australian control.

Christensen emailed his supporters on Sunday to declare “an incredible opportunity to have the Australian government take back the Port of Darwin and other key infrastructure from the clutches of Communist China”.

Comment has been sought from the Chinese embassy. Last week the Chinese ambassador to Australia, Cheng Jingye, cited “increasing discriminatory restrictions imposed over investment from Chinese enterprises” as an example of “negative moves by the Australian side that has poisoned the atmosphere”.


Daniel Hurst Foreign affairs and defence correspondent

The GuardianTramp

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