tag:theconversation.com,2011:/fr/topics/australian-submarines-corporation-13233/articlesAustralian Submarines Corporation – The Conversation2023-03-15T03:08:06Ztag:theconversation.com,2011:article/2017602023-03-15T03:08:06Z2023-03-15T03:08:06ZIf AUKUS is all about nuclear submarines, how can it comply with nuclear non-proliferation treaties? A law scholar explains<p>The issue of nuclear non-proliferation is back in the headlines, thanks to details <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/03/13/joint-leaders-statement-on-aukus-2">announced</a> yesterday at a US navy base of a deal involving Australia’s purchase of nuclear submarines.</p>
<p>The AUKUS plan, which may cost Australia upwards of A$300 billion over the next 30 years, involves Australia purchasing three Virginia-class nuclear-powered, conventionally armed submarines by the early 2030s. Australia will also build its own nuclear powered submarines using US nuclear technology by the 2050s. </p>
<p>Australia, the US and the UK have <a href="https://www.pm.gov.au/media/aukus-remarks">said</a> the deal complies with their <a href="https://www.un.org/disarmament/wmd/nuclear/npt/">nuclear</a> <a href="https://treaties.un.org/pages/showDetails.aspx?objid=08000002800cea40">non-proliferation</a> obligations. </p>
<p>But China has <a href="https://www.reuters.com/world/china-aukus-countries-clash-iaea-over-nuclear-submarine-plan-2022-09-16/">said</a> the AUKUS deal represents “the illegal transfer of nuclear weapon materials, making it essentially an act of nuclear proliferation.”</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1635423584741990401"}"></div></p>
<p>So what are Australia’s obligations under the existing nuclear non-proliferation regime and does this deal comply?</p>
<p>To answer this question, you need to know a bit more about two key treaties Australia has signed up to: the 1968 <a href="https://www.un.org/disarmament/wmd/nuclear/npt/">Nuclear Non-Proliferation Treaty</a> (sometimes shortened to NPT) and the 1986 <a href="https://treaties.un.org/pages/showDetails.aspx?objid=08000002800cea40">Raratonga Treaty</a>.</p>
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Read more:
<a href="https://theconversation.com/progress-in-detection-tech-could-render-submarines-useless-by-the-2050s-what-does-it-mean-for-the-aukus-pact-201187">Progress in detection tech could render submarines useless by the 2050s. What does it mean for the AUKUS pact?</a>
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<h2>What is the Nuclear Non-Proliferation Treaty?</h2>
<p>The Nuclear Non-Proliferation Treaty essentially requires nuclear weapon states who are a part of the treaty (US, UK, China, Russia and France) to not pass nuclear weapons or technology to non-nuclear weapons states. Of course, other countries do have nuclear weapons but they are not part of the treaty.</p>
<p>Crucially, the treaty only relates to the use of nuclear materials associated with nuclear <em>weapons</em>. It has a specific carve-out in it for the provision of nuclear materials for “peaceful purposes” (in <a href="https://www.un.org/disarmament/wmd/nuclear/npt/text">Article 4</a>). </p>
<p>The treaty also outlines processes to ensure the <a href="https://www.iaea.org/">International Atomic Energy Agency</a> monitors nuclear programs and nuclear materials even if used for peaceful purposes (including uranium and the technology to use it). </p>
<p>Australia has a number of <a href="https://www.iaea.org/publications/documents/infcircs/text-agreement-between-australia-and-agency-application-safeguards-connection-treaty-non-proliferation-nuclear-weapons">subsidiary arrangements</a> with the International Atomic Energy Agency that outline how these safeguard arrangements work.</p>
<p>Despite what critics may say, Australia’s nuclear-powered engines under AUKUS comply with the written rules of the treaty and these subsidiary agreements.</p>
<p>On the face of it, you might think the term “peaceful purposes” would rule out use for military submarine propulsion. But the definition focuses on using nuclear material for purposes that don’t involve the design, acquisition, testing or use of nuclear weapons. </p>
<p>All AUKUS partners have emphasised the nuclear-powered submarines Australia is to acquire will only carry conventional weapons (not nuclear weapons).</p>
<p>Australia’s <a href="https://www.iaea.org/publications/documents/infcircs/text-agreement-between-australia-and-agency-application-safeguards-connection-treaty-non-proliferation-nuclear-weapons">agreement</a> with the International Atomic Energy Agency clarifies what is covered by the treaty and the concept of peaceful purposes.</p>
<p>Article 14 of this <a href="https://www.iaea.org/publications/documents/infcircs/text-agreement-between-australia-and-agency-application-safeguards-connection-treaty-non-proliferation-nuclear-weapons">agreement</a> says “non-proscribed military purposes” are allowed.</p>
<p>Effectively, the Australian government has <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/ENNPIA/Report/section?id=committees%2Freportjnt%2F024853%2F78642">interpreted</a> this to mean nuclear materials can be used for naval nuclear vessel <em>propulsion</em>. That is a usage unrelated to nuclear weapons or explosive devices. </p>
<p><a href="https://icanw.org.au/wp-content/uploads/Troubled-Waters-nuclear-submarines-AUKUS-NPT-July-2022-final.pdf">Some have suggested</a> this argument creates a risky precedent that nuclear materials – beyond the supervision of the International Atomic Energy Agency – could be used to make weapons.</p>
<p>But Australia has <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Treaties/ENNPIA/Report/section?id=committees%2Freportjnt%2F024853%2F78642">undertaken</a> to comply with its safeguard obligations with the <a href="https://www.iaea.org/publications/documents/infcircs/text-agreement-between-australia-and-agency-application-safeguards-connection-treaty-non-proliferation-nuclear-weapons">International Atomic Energy Agency</a> for the AUKUS deal.</p>
<p>This builds on its <a href="https://www.ansto.gov.au/education/nuclear-facts#:%7E:text=ANSTO%20is%20home%20to%20Australia's,OPAL%20in%20Lucas%20Heights%2C%20Sydney.">existing practice</a> around nuclear materials held for other “peaceful purposes” (like research and medical purposes). </p>
<h2>What does the Raratonga Treaty require?</h2>
<p>Australia is also a signatory to the <a href="https://treaties.un.org/pages/showDetails.aspx?objid=08000002800cea40">Raratonga Treaty</a> (also known as the South Pacific Nuclear Free Zone Treaty).</p>
<p>This treaty is a regional agreement that supports the Nuclear Non-Proliferation Treaty.</p>
<p>Signatories to the Raratonga Treaty have effectively agreed to maintaining a nuclear weapon-free zone in the South Pacific.</p>
<p>The Raratonga Treaty entered into force in 1986. It provides that no “nuclear explosive devices” can enter the nuclear-free zone outlined in the agreement. It also includes other limitations on the distribution and acquisition of <a href="https://www.un.org/disarmament/fissile-material/#:%7E:text=Fissile%20materials%20are%20materials%20that,%2D239%20isotope%20of%20plutonium">nuclear fissile material</a> (which are materials that can be used in a nuclear bomb) unless subject to specific safeguards. </p>
<p>The Raratonga Treaty accounts for <a href="https://documents.unoda.org/wp-content/uploads/2020/08/ME-workshop-July-2020-%E2%80%93-3-Paper-Dr.-Michael-Hamel-Green.docx">differences</a> in opinion regarding Australia and New Zealand’s approach to vessels carrying nuclear weapons (New Zealand does not allow nuclear-weapons carrying vessels to visit its ports, while Australia does). </p>
<p>But more importantly for the AUKUS deal, this treaty does not strictly exclude a signatory from using nuclear propulsion. That’s as long as the engine is not <a href="https://treaties.un.org/doc/Publication/UNTS/Volume%201445/volume-1445-I-24592-English.pdf">considered</a> </p>
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<p>a nuclear weapon or other explosive device capable of releasing nuclear energy, irrespective of the purpose for which it could be used.</p>
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<p>Providing the engines meet this definition, the AUKUS deal complies with the Raratonga Treaty as well. </p>
<p>Australia will have particular obligations under this treaty to deal with the nuclear waste. </p>
<p>Defence Minister Richard Marles has <a href="https://www.watoday.com.au/politics/federal/search-for-site-to-store-high-level-radioactive-waste-from-nuclear-subs-to-begin-in-next-year-20230314-p5cryp.html">outlined</a> that waste from the vessels will be kept on Department of Defence land on Australian territory (and not disposed of at sea). </p>
<h2>In accordance with international law</h2>
<p>More detail is still to come. But the US and UK have decided the risks involved in sharing nuclear propulsion technology with Australia <a href="https://www.foreignaffairs.com/articles/united-states/2021-09-27/dont-sink-nuclear-submarine-deal">are worth it</a> to hedge against more aggressive China.</p>
<p>On the face of the announcements made so far, the deal complies with international law, despite accusations to the contrary from China and other critics. </p>
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Read more:
<a href="https://theconversation.com/view-from-the-hill-anthony-albanese-finds-scott-morrisons-aukus-clothes-a-good-fit-201640">View from The Hill: Anthony Albanese finds Scott Morrison's AUKUS clothes a good fit</a>
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<p class="fine-print"><em><span>In addition to her role as a Senior Research Fellow at the University of Queensland, Lauren Sanders works as a legal consultant with a law firm, advising Defence industry on international humanitarian law and weapons law issues. Any comments made here are in her personal capacity and do not represent the views of the Australian government or the Australian Defence Force.</span></em></p>On the face of the announcements made so far, the deal complies with international law, despite accusations to the contrary from China and other critics.Lauren Sanders, Senior Research Fellow on Law and the Future of War, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/375872015-02-16T04:13:11Z2015-02-16T04:13:11ZTender doublespeak adds risk to submarine decision<figure><img src="https://images.theconversation.com/files/72066/original/image-20150216-13206-174nnm4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The government's political play on submarines could backfire.</span> <span class="attribution"><span class="source">Image sourced from Shutterstock.com</span></span></figcaption></figure><p>Days after announcing Australia’s largest ever defence contract <a href="http://www.abc.net.au/news/2015-02-10/submarine-kevin-andrews-takes-backwards-step/6082254">will be awarded</a> via a “competitive evaluation process”, the government is still scrambling for a sensible definition of what such a process is and how it differs from a tender. No one knows, because such a thing doesn’t exist.</p>
<p>Despite having spent time working in the corporate in-house legal team for a large multinational shipbuilder, I have never heard the phrase “competitive evaluation process” as distinct from a tender.</p>
<p>I have also never, ever heard this phrase used as a legal term of art. Not as a student of contract law either at an undergraduate or a masters level. Not once in my time working in-house on defence procurement matters. Not in the five years subsequent in which I have taught international trade law. </p>
<p>The current and former colleagues I have asked also have no idea what the government is talking about. This is <a href="http://www.news.com.au/national/we-explain-whats-going-on-with-the-submarines-why-theyll-probably-be-built-in-japan/story-fncynjr2-1227216945097">consistent with what is being widely reported</a>. </p>
<p>This is not to say the term “competitive evaluation process” has never before been uttered. It clearly has. However, in context it has always referred to some sort of tender process, or occasionally what’s known as an EOI or expression of interest, usually for some future tender.</p>
<p>So why is the government so keen avoid calling the procurement process for the submarines a tender?</p>
<p>Tony Abbott proffered the answer that if we had an “open tender process”, then nothing would stop Russian President Vladimir Putin bidding for the submarine contract and demanding that Australia accept his offer. Sidestepping the political debate, as a basic legal proposition the PM’s characterisation of an open tender is simply wrong. </p>
<h2>How do ‘open tenders’ work?</h2>
<p>An open tender is perfectly compatible with a set of criteria for potential bidders. For an example, the WA Government Finance Department’s description of an Open Tender process includes <a href="http://www.finance.wa.gov.au/cms/Government_Procurement/I_am_a_Supplier/Open_Tender_Process.aspx#addressing_requirements">specific reference to the existence of “qualifying criteria”</a>. These criteria ordinarily include business experience, demonstrated previous capacity, having been a company for a certain number of years, and so on and so forth. In defence procurement it is very common for such criteria to include country of origin. </p>
<p>The Senate economics committee investigating the future of Australian shipbuilding has recommended in its draft report that all future procurement contracts for defence shipbuilding <a href="http://www.aph.gov.au/parliamentary_business/committees/senate/economics/naval_shipbuilding/%7E/media/Committees/economics_ctte/naval_shipbuilding/part1/b02.pdf">be open tenders</a>.</p>
<p>Education Minister Christopher Pyne, in an appearance on <a href="http://markbutler.alp.org.au/news/2015/02/11/transcript-of-my-interview-on-abc-891-breakfast">ABC Radio</a> argued: </p>
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<p>“The difference is that an open tender is where anybody can tender. A competitive evaluation is where a consortia come together of people who can deliver such an important, expensive and massive program as the building of submarines, and the government evaluates between them who is the best to do it. So, for example, the ASC (Australian Submarine Corporation) might go into a joint venture with an overseas builder, potentially the Germans or Swedes or whomever.”</p>
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<p>This, too, is plainly wrong as a matter of legal fact. Consortium bids, or joint ventures are extremely common in defence procurement open tenders. Indeed, SEA 1444, the procurement project for the supply of the Armidale Class Patrol Boats was <a href="http://en.wikipedia.org/wiki/Armidale-class_patrol_boat">won by a joint venture</a> between Austal Ships and DMS (Defence Maritime Services).</p>
<p>An open tender process is only one of many permutations of a tender more generally. It is always possible for the government to submit RFTs - request for tender contracts - to a number of preferred suppliers. This is very common in defence procurement, particularly with respect to very complex equipment that is not purchased off-the-shelf. Indeed, it was precisely this kind of <a href="http://www.aph.gov.au/parliamentary_business/committees/senate/economics/naval_shipbuilding/%7E/media/Committees/economics_ctte/naval_shipbuilding/part1/b02.pdf">tender process</a> that was used for the AORs - Auxiliary Oiler Replenishment ships.</p>
<p>It would be trivial for the government to add ASC to its preferred supplier list and issue them a request for tender. This would doubly ensure Vladimir Putin was unable to bid for the contract.</p>
<p>Which invites the question, why is the prime minister so determined to avoid the word tender?</p>
<h2>When tenders go wrong</h2>
<p>Here we necessarily get into speculation. However, there are aspects of a tender process that would raise potential political problems for the Abbott government.</p>
<p>Quite famously the government ran into these difficulties in the 1997 case of<a href="http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/1997/558.html?stem=0&synonyms=0&query=hughes%20aircraft"> Hughes Aircraft Systems International v Airservices Australia</a>. </p>
<p>After being invited to submit to a closed tender, Hughes Aircraft Systems International was unsuccessful in their bid. Unhappy with this, it contended that the government had not engaged in its evaluation process in the manner specified in the tender documents, among other things. Ultimately Justice Finn of the Federal Court found in favour of Hughes Aircraft. In doing so he sent something of a shot across the bow of government procurers everywhere, finding that the tender documents in fact and in law imply an obligation on behalf of the government to conduct the tender in good faith, and in accordance with the specified process.</p>
<p>If, as <a href="http://thediplomat.com/2014/11/the-australia-japan-submarine-deal-gets-complicated/">some commentators are suggesting</a>, a deal with the Japanese is already well advanced it implies that any future tender process would be merely a case of “going through the motions”. This is inconsistent with legal obligations. An astute lawyer might suggest tender documents explicitly deny an obligation for the government to give tenderers equal treatment, or that the government conduct the tender according to a specified process. While this may solve the legal problem, it would doubtless invite a great deal of political criticism. </p>
<p>Any attempt by the government to avoid the ordinary rules of good faith and probity in the tendering process would come with a substantial economic and project management risk. The ill-fated tender for the supply of a new payroll management system to Queensland Health is a case in point. </p>
<p>In the Qld Health case an initial cost estimate of <a href="http://www.businessinsider.com.au/queensland-sues-ibm-over-1b-project-2013-12">approximately A$6 million blew out to in excess of A$1.2 billion</a>. The lack of an established probity officer, whose job is to ensure that the procurements process is undertaken fairly respect to all sides, is cited as a <a href="http://www.governmentnews.com.au/2014/01/legal-lessons-from-the-queensland-health-payroll-report/">major complicating factor</a> which led to the entire process going off the rails. The impropriety includes allegations that a preferred contractor – IBM – was <a href="http://www.theaustralian.com.au/business/technology/queensland-government-to-sue-ibm-over-health-payroll-disaster/story-e6frgakx-1227140553687">fed information during the tender bidding process</a> which gave it an advantage over rivals. </p>
<p>That a lack of probity courts risk should come as no surprise. The entire rationale for having a tender process in the first place is to allow a procurer to openly and objectively assess various bids to supply a particular product. The tender process is expected to guard against any internal bias or impropriety.</p>
<p>The government is twisting itself in knots trying to avoid the use of the word tender for what would appear to be purely political purposes. This is a major risk that would concern anyone who has been involved in complicated procurement contracts.</p><img src="https://counter.theconversation.com/content/37587/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tomas Fitzgerald is a member of the WA Labor party and the NTEU.</span></em></p>Days after announcing Australia’s largest ever defence contract will be awarded via a “competitive evaluation process”, the government is still scrambling for a sensible definition of what such a process…Tomas Fitzgerald, Senior Lecturer, Law, University of Notre Dame AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/373672015-02-10T19:39:30Z2015-02-10T19:39:30ZToo much at stake for weasel words on submarines<p>It appeared to be the announcement Australian industry had been waiting for. Finally, political pressure on prime minister Tony Abbott’s leadership had forced a “fair go” for Australian shipbuilding. On Sunday, the prime minster appeared to <a href="http://www.theaustralian.com.au/national-affairs/abbott-leadership-crisis-pm-woos-mps-with-20bn-submarine-contract/story-fn59niix-1227212271695">commit to a competitive tender</a> for Australia’s future submarine.</p>
<p>Or did he? In a backflip that echoes the government’s refusal to honour its pre-election promises on the subject, it appears that we’ve been misled. The promise of a <a href="http://www.abc.net.au/news/2015-02-10/labor-accuses-pm-of-making-up-defence-term-to-win-spill-votes/6081676">“competitive evaluation process”</a> may be meaningless. There is no such term in the world of defence procurement.</p>
<p>What, then, is the reality? Perhaps this was a “captain’s call” offering nothing new. No guarantees for Australian industry; no change in policy.</p>
<p>In my <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Naval_shipbuilding/Submissions">submission</a> to the Senate’s Economics Reference Committee last year, I used defence procurement terminology to outline a proposed competitive tender process for the future submarine.</p>
<p>That process would be rigorous and transparent, in line with Australian procurement legislation. No weasel words here.</p>
<p>The government would articulate its requirements for the fleet and the four leading contenders (Japan, Germany, France and Sweden) would be asked to submit their proposals as to how the submarines would be designed, built and sustained.</p>
<p>Known as a “contested project definition study” this phase would be partly funded by the Australian government: it would ensure that the contenders’ proposals met Australia’s economic and strategic requirements.</p>
<p>Crucially, the study would also establish how the contenders plan to work with Australian industry. This is fully in line with the Economics References Committee’s <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Naval_shipbuilding">inquiry</a> into the future of Australia’s naval shipbuilding industry and the future submarine.</p>
<p>In its final report, the committee said: </p>
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<p>“Given the weight of the evidence about the strategic, military, national security and economic benefits, the committee recommends that the government require tenderers for the future submarine project to build, maintain and sustain Australia’s future submarines in Australia.”</p>
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<p>That requirement – if followed by the government – would ensure that Australian submarine and shipbuilders work in partnership with the winning contender. The design, build and sustainment phases would all be based in Australia.</p>
<p>Until now there have been four contenders: DCNS, the French manufacturers of the SMX Ocean Class; Japan and its much-debated Soryu; the German submarine builder TKMS and the Swedish manufacturer Saab Kockums.</p>
<p>Now it appears there are three, after a Japanese government source <a href="http://www.reuters.com/article/2015/02/09/us-australia-japan-defence-idUSKBN0LD0D020150209">suggested</a> that Japan would be unlikely to proactively participate in a competitive process. </p>
<p>“If we are asked that’s not a problem, but we can’t really be seen to be
going out and actively pursuing a deal,” the unnamed source told Reuters, echoing comments Japanese sources have previously made about taking part in an open tender. The question must be asked: what promises have been made to Japan by the PM or the federal government regarding the procurement process, for them to reject any prospect of actively competing?</p>
<h2>What’s needed</h2>
<p>As the Senate inquiry identified, the winning contender must demonstrate the ability and the readiness to establish a design, manufacturing and sustainment base in Australia. Given the complexity, secrecy and strategic importance of submarine technology, the tender process must ensure Australia’s sovereign capability.</p>
<p>“It is critical that Australia has full access to those technologies that underpin Australia’s Submarine Force strategic interests,” explained two former submarine Commanding Officers in their submission to the inquiry. “Otherwise the effectiveness of the new submarines will always be reliant on the relationship with the overseas parent navy and its industry base.”</p>
<p>As a nation, we need control of our defence assets and the freedom to engage in military operations without overseas approval or support. To achieve that we need the expertise, the capability and the supply chains to equip, sustain and defend ourselves.</p>
<p>For Australia’s submarine and shipbuilders, this means a tender process that prioritises their involvement from the start. The winning contender must be prepared to establish a design office at the building shipyard in Australia, share technology and engage fully with Australian industry to build capability.</p>
<p>It also requires a tender process that is both rigorous and transparent. To date, the government’s preoccupation with the Soryu has prevented adequate exploration of alternatives from Europe. It has also failed to recognise the expertise we have at home.</p>
<p>Australia’s submarine industry has learnt many lessons. As David Johnston acknowledged himself – before his “rhetorical flourish” undermined his position – the Australian Submarine Corporation has made remarkable progress in implementing change. The <a href="http://www.defence.gov.au/dmo/AboutDMO/CurrentReviews/ColesReview/">findings</a> of the Coles Review into ASC’s submarine sustainment programs have been taken seriously.</p>
<p>Today, ASC is internationally recognised as an authority in submarine design and engineering: the US submarine designer and builder Electric Boat has assessed ASC to be an authority in submarine design and manufacture by international benchmarking standards.</p>
<p>ASC has more than 300 degree-qualified engineers with know-how spanning 16 engineering disciplines. Their expertise is highly specific to submarines; ASC is the largest organisation of its kind in the southern hemisphere.</p>
<p>ASC’s expertise is beyond doubt: it is ready, willing and capable of playing a significant role in the manufacture and sustainment of Australia’s future submarine. All that’s needed now is the right design partner, identified through a contested project definition study and a competitive tender process.</p>
<p>Built into that process should be a guarantee for Australian industry and the wider community. It makes no sense for Australian taxpayers to invest in innovation that benefits another country’s economy, with little benefit at home.</p>
<p>According to the National Institute of Economic and Industry Research (NIEIR), Australia would conservatively <a href="http://economicdevelopmentboardsa.com.au/wp-content/uploads/2013/06/2014_10_22-EDB-economic-analysis-of-Australias-future-submarine-program.pdf">lose out by around A$21 billion</a> if comparing the costs of building the future submarine overseas to building it at home. </p>
<p>This is not counting the benefit to the country’s long-term wealth generating capability, through the increase in economic complexity. This is essential to retain as we face the loss of a similar complexity provided by the automotive industry and its ecosystem.</p>
<p>For months, Australia’s submarine experts have been proposing a way forward that defends both economic and national security. On Sunday, it appeared the prime minster was listening.</p>
<p>With so much to gain, let’s not allow weasel words to get in the way.</p><img src="https://counter.theconversation.com/content/37367/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Goran Roos is: Fixed-term position as Professor in Strategic Design in the Faculty of Design at Swinburne University of Technology, Melbourne Chair, Venture Capital Assessment Panel (joint South Australian Government – University of South Australia Panel), Member of the Advisory Board of the ARC Centre of Excellence for Nanoscale Biophotonics, International Reference Panel member for the CSIRO Wealth from Waste Research Cluster, Member of the Defence and Systems Institute (DASI) Advisory Board, School of Engineering, University of South Australia, Stretton Fellow appointed by the City of Playford, Stretton Centre, University of Adelaide, Adjunct Associate Professor, College of Business, Nanyang Business School, Nanyang Technological University, Singapore, Adjunct Professor, University of Technology Sydney Business School, Sydney, Adjunct Professor, Mawson Institute, University of South Australia, Adelaide, South Australia, Adjunct Professor, Entrepreneurship, Commercialisation and Innovation Centre (ECIC), University of Adelaide, Adelaide, Member of the South Australian Economic Development Board, Member of the Council of Flinders University, Member of the Board of Seeley International, Founding Member of Australian Design Integration Network (ADIN), Fellow of the Australian Academy of Technological Sciences and Engineering</span></em></p>It appeared to be the announcement Australian industry had been waiting for. Finally, political pressure on prime minister Tony Abbott’s leadership had forced a “fair go” for Australian shipbuilding. On…Goran Roos, Professor of Business and Strategic Design, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/335442014-10-31T01:03:59Z2014-10-31T01:03:59ZGovernment in a rush to make the wrong decision on submarines<p>In the last week, Defence Minister David Johnston has flagged a “capability gap” if the next fleet of submarines is designed and built in Australia.</p>
<p>“We are under such time constraints to avoid a capability gap and I cannot afford to not have submarines in the water,” he told Sky News. “This country cannot afford that.”</p>
<p>It is the first time such urgency has been prioritised; it has hit the <a href="http://www.abc.net.au/news/2014-10-27/new-submarine-fleet-wont-be-designed-in-australia-johnston/5845520">headlines</a> with dramatic effect. In this case, however, the Coalition’s stance requires scrutiny, given what is at stake.</p>
<p>By claiming that there is not enough time to design and build the next fleet of submarines in Australia, the Coalition is seeking to prioritise urgency over economic reality.</p>
<p>Australia risks providing its navy with submarines that will not do the job, put the men and women in our forces at risk and be unable to be sustained in Australia due to the lack of sovereign capability resulting from an overseas build. </p>
<p>Going down the route of single source or going down the route of multiple sources in haste risks ripping the taxpayer off.</p>
<p>Johnston has blamed the previous Labor government for delays in the planning of the submarine project, without mentioning the role of the Defence Materiel Organisation.</p>
<p>For the last five years, the DMO has been undertaking preparatory studies for the next submarine fleet but has made little progress. Notably, the DMO is a leading advocate of an overseas build.</p>
<p>According to the DMO, this option is preferable for four reasons. First, it argues there is insufficient time to design and then build a new submarine in Australia. As a result, a case exists for a “limited tender” to be offered to a sole source such as Japan.</p>
<p>Second, the DMO claims that submarine construction knowledge and experience in Australia is very low. Third, it argues that Australian industry is incapable of successfully completing even “build to print” designs such as the Air Warfare Destroyer (AWD).</p>
<p>Finally, the DMO argues – erroneously - that it will cost the Australian industry twice as much as building submarines overseas.</p>
<p>According <a href="http://www.theaustralian.com.au/national-affairs/defence/ship-expert-warns-sub-decision-crucial-to-naval-superiority/story-e6frg8yo-1227088223232">Dr John White</a> – widely regarded as a leading expert on major shipbuilding projects, including the future submarine – there is little evidence to support the DMO’s arguments.</p>
<h2>There is an alternative</h2>
<p>First, there is time to design and build the next fleet in Australia, with the support of the right overseas partner. White advocates a three-part competitive process to deliver the best operational solution at the best price, with clear milestones to avoid the cost blowouts of previous projects.</p>
<p>His detailed but very conservative timeline incorporates that process into a schedule spanning 12 years – from 2015 to operational service in 2027. This could be shrunk by at least two years with the right partner.</p>
<p>Contrary to DMO’s view, Australia does have the capability to build the next fleet of submarines. All three European contenders are willing to work collaboratively with Australian industry. The outcome would have as a side effect a large benefit for the future of Australian manufacturing and innovation and have enormous significance for economic and national security.</p>
<p>“The opportunity to embark on a continuous submarine build program in Australia with the avoidance of construction learning curves that have been evident in previous one-off or limited projects in Australia will deliver significant cost and schedule savings – that have been achieved by our allies through long-term programming,” White argues.</p>
<p>Any claim that Australian industry is incapable of a “build to print” option is also untrue. The much-cited “evidence” is the AWD – not comparable to the submarine project now under discussion. Fraught with design and integration problems, the AWD project has been assessed by the Australian National Audit Office, which did not single out incompetence or lack of a capability as a factor.</p>
<p>DMO must stop advising government on what Australian industry cannot do and start asking Australian industry what it can do!</p>
<p>To avoid cost blow-outs a project structure should be established where the shipbuilder is solely responsible (preclude DMO from meddling in the management process and technical details without incurring the responsibility for the associated cost and schedule increases) and the design office is located at the shipyard and subordinate to the shipyard. Doing this will assure sovereign capability.</p>
<p>Finally, there is the question of cost. Evidence presented to the Senate inquiry into the future of the nation’s naval shipbuilding industry has demonstrated it costs no more to build submarines in Australia - around $400,000 per tonne.</p>
<p>The response to such evidence should not be haste. Respect for due process and careful consideration of the facts is required. The correct response is a contested project definition study that weighs up proposals from all four contenders, securing the best solution for our national security and the best value for the Australian taxpayer.</p><img src="https://counter.theconversation.com/content/33544/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Goran Roos is: Fixed-term position as Professor in Strategic Design in the Faculty of Design at Swinburne University of Technology, Melbourne Chair, Venture Capital Assessment Panel (joint South Australian Government – University of South Australia Panel), Member of the Advisory Board of the ARC Centre of Excellence for Nanoscale Biophotonics, International Reference Panel member for the CSIRO Wealth from Waste Research Cluster, Member of the Defence and Systems Institute (DASI) Advisory Board, School of Engineering, University of South Australia, Stretton Fellow appointed by the City of Playford, Stretton Centre, University of Adelaide, Adjunct Associate Professor, College of Business, Nanyang Business School, Nanyang Technological University, Singapore, Adjunct Professor, University of Technology Sydney Business School, Sydney, Adjunct Professor, Mawson Institute, University of South Australia, Adelaide, South Australia, Adjunct Professor, Entrepreneurship, Commercialisation and Innovation Centre (ECIC), University of Adelaide, Adelaide, Member of the South Australian Economic Development Board, Member of the Council of Flinders University, Member of the Board of Seeley International, Founding Member of Australian Design Integration Network (ADIN), Fellow of the Australian Academy of Technological Sciences and Engineering</span></em></p>In the last week, Defence Minister David Johnston has flagged a “capability gap” if the next fleet of submarines is designed and built in Australia. “We are under such time constraints to avoid a capability…Goran Roos, Professor of Business and Strategic Design, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.