Australia draws up list of critical infrastructure

Australia made the announcement as it launched a Critical Infrastructure Centre to manage what it calls the “complex and evolving” security risks to the country’s infrastructure.

“With increased privatisation, supply chain arrangements being outsourced and offshored, and the shift in our international investment profile, Australia’s national critical infrastructure is more exposed than ever to sabotage, espionage and coercion. We need to manage these risks by adopting a coordinated and strategic framework,” attorney-general George Brandis said in a statement.

The register will “enable a consolidated view of critical infrastructure ownership in high risk sectors across the country [and] help to proactively manage the national security risks that can arise from operational and procurement strategies”, he said.

The centre will help government, owners and operators to work together to identify and manage risks, the statement said, and will support Australia’s foreign investment framework, “which will continue to assess and manage foreign investment applications on a case-by-case basis”.

“The Australian government is committed to jobs and growth and maintaining strong foreign investment while ensuring our national security,” it said.

Infrastructure expert Margaret Cole of Pinsent Masons, the law firm behind said: “To the extent that such a register increases certainty and predictability in the application of foreign investment laws it will be welcome.”

“However, apparently the register will not be public, for understandable reasons. The market will therefore have to take on trust any assertion that the register will lead to an increase in efficiency and consistency in the application of those laws. Trust in government is a scarce commodity in Australia at the moment. On the other hand, for reasons of national security alone, clarity within government as to what constitutes critical infrastructure would seem to be an important goal; it is perhaps surprising that no such listing currently exists,” Cole said.

In August 2016 Australia’s federal government blocked a planned sale of a 50.4% stake in a lease on Ausgrid, New South Wales’ (NSW) electricity grid, to one of two bidders, Chinese government-owned State Grid Corporation and Hong Kong-based Cheung Kong Infrastructure, in a deal that was expected to be worth around AU$10 billion (£6 billion).

Treasurer Scott Morrison said at the time that he told both bidders that in his “preliminary view” their proposals are “contrary to the national interest, in accordance with the required provision on the grounds of national security”.

The national security concerns were principally around the power and communications services that Ausgrid provides to business and government, Morrison said.

Australia “will continue to welcome foreign investment that is not deemed contrary to our national interest”, Morrison said.

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