An Interview with John Bruni, Director of SAGE International

First, can you please tell us more about SAGE International, its mission and focus?

SAGE International is a geopolitical consultancy and online think tank. We have disclosed and undisclosed associates working in Europe, Africa and North America with skills specifically focused on border security, maritime security and terrorism. Our focus has, and continues to be on issues surrounding counterterrorism, the Middle East and North Africa (MENA) region, and various other international flashpoints. However, we are gradually moving into the realm of pubic diplomacy in the Australian context, with the hope that we may help influence broad policy outcomes.

From 25-26 March, SAGE International, in cooperation with the Hargraves Institute and RUSI Australia, hosted the external pageFuture Submarine Summitcall_made. Just what is the Future Submarine Project and why is it so controversial?

The Future Submarine Project, officially known as SEA 1000, is a major Australian capital equipment project for the Royal Australian Navy (RAN). Its basic purpose is to replace the RAN’s aging fleet of six Collins class submarines with a new system. SEA 1000 was initially proposed in 2007, at the end of the Howard Coalition government. In 2009, the Rudd Labor government, through its Defence White Paper, announced that the Collins class fleet would be replaced with twelve new boats, which would effectively double the size of Australia’s submarine fleet. During the subsequent turmoil of the Rudd-Gillard-Rudd governments, little was added to the SEA 1000 proposal, which remained vague and subject to media criticism. In 2014, the Abbott Coalition Government took up the submarine replacement issue and toyed with the idea of a government-to-government arrangement between Australia and Japan, a nation of growing strategic importance to Canberra. The idea at the time was that some, if not all the new boats would be built in Japan, despite the danger it posed to Australia’s submarine construction industry, which the Collins project helped create in the early 1990s.

At present, there are a number of controversies still surrounding the Future Submarine Project.

1. Naturally, there is the problem of costs. To replace the six Collins class submarines with twelve new boats and then sustain the latter over an estimated 50-year period will cost somewhere in the vicinity of AUD40-50 billion. That would make the Future Submarine Project the most expensive Australian defence program since the country’s federation in 1901, and certainly one of the biggest government projects ever undertaken.

2. The media hype surrounding the Collins fleet’s development problems created the lingering impression, at least to some, that Australia is incapable of building complex, modern-day submarines.

3. Then there was the political turmoil triggered by the speculation that Prime Minister Abbott had signed a ‘sweetheart deal’ with the Japanese government of Shinzo Abe to purchase twelve Sōryū class submarines directly from Japan, and thereby ignore previous government commitments to build the boats in Australia. (The rumoured deal would seemingly have been part of an Australia-Japan Free Trade Agreement [FTA], also known as the Japan-Australia Economic Partnership Agreement [JAEPA], which came into force on January 15, 2015.) The possibility of such a deal put Australian defence industry leaders on their guard, particularly since it would have meant the end of any significant onshore submarine work in Australia and rolled back thousands of external pagejobs associated with sub constructioncall_made, deep maintenance, and the general support of the industry. In response to industry concerns, the Abbott government then made vague promises of possibly supplying some 500 submarine-related jobs in Osborne, Adelaide, where the Collins fleet was first assembled. This uncertain promise, however, was tantamount to electoral poison in South Australia – i.e., trying to retain a complex manufacturing capability in an area deliberately skewed in favor of farming, mining and tourism seemed doomed to failure if Prime Minister Abbott, without establishing a legitimate domestic consensus on the project and opening it up to fair tender, had promised the submarine project to the Japanese. Besides that, the promised 500 jobs, which would have involved some form of ‘light maintenance’, probably wouldn’t have stayed in South Australia because logic dictated that they needed to go to Fremantle, Western Australia, where the submarine fleet is currently based.

4. Finally, and controversially, in February 2015 the Abbott Government announced that it would conduct a "competitive evaluation process" between competing Japanese, French, and German submarine designs, with a winning design to be announced before 2016. What’s significant here is that Sweden did not make the Abbott government’s ‘final cut’ for the competition, even though the existing Collins system is based on a modified Swedish Västergötland, or Type 471 submarine. For the sake of continuity, some argue, it would have made sense to consider ‘evolving’ the current Collins design on a new Swedish model.

What was the aim of the Future Submarine Summit, who participated, and what were the key issues discussed?

The aim of the summit was to bring together stakeholders in this acquisition programme and hold an open debate on the pros and cons for retaining sub construction in Australia, and to clarify the nature of the “competitive evaluation process” announced last February.

The participants included 1) Australian federal and state politicians involved with the Future Submarine Project controversy, including Minister for Defence Kevin Andrews (standing in for Prime Minister Abbott); the Federal Leader of the Opposition, Bill Shorten; and South Australian (State) Minister for Defence Industries, Martin Hamilton-Smith; 2) international experts in submarine operation and construction, including two Japanese vice admirals, both of whom are close to the Abe government, and representatives of SAAB/Kockums (Sweden) and TKMS (Germany); 3) personnel from the Royal Australian Navy, (serving and retired), including Rear Admiral Greg Sammut, the current Director General [of] Submarine Capability, and the Acting Chief Executive Officer of the Defence Materiel Organisation (DMO), Harry Dunstall; 4) key submarine parts suppliers and distributors from Australia’s defence industry; and 5) national and international media, including specialists in defence policy.

The issues that were discussed at Sub Summit 2015 included a sober assessment of the Collins class submarine’s performance in the Royal Australian Navy and dispelling its undeserved ‘dud sub’ reputation. Indeed, upending the latter myth is critically important if the RAN wants to acquire a next-generation submarine and if Australian industry wants to be the primary builder of the new system.

Also discussed was industry’s preference for an ‘onshore build’ of the new submarine, provided it meets the operational parameters set by the RAN and the DMO. From a political perspective, Minister for Defence Andrews tried to reassure the South Australian defence industry, (South Australia is home to 25% of the country’s defence industrial base) that whatever design is ultimately chosen through the competitive evaluation process, some 500 jobs would be retained in South Australia, though what those jobs would amount to and why these jobs should remain in the area remained unclear. Federal Leader of the Opposition Bill Shorten then called for political bipartisanship to give ‘political stability’ to this massive defence acquisition programme. By doing so, he sent a strong signal to any Liberal successor to Prime Minister Abbott (who, in spite of a recent lift in polls is still looking fatally wounded) that he would be prepared to cooperate with an Abbott successor.

Most submarine experts at the summit argued that Sweden should be brought into the competitive evaluation process and that it was a mistake for Prime Minister Abbott to exclude a Swedish design. But arguably, the most surprising news came from the two Japanese Vice Admirals who, for the very first time, clearly outlined the operational characteristics of the Sōryū class submarine and how it could fit RAN requirements. In an almost perfect ‘one-two punch’, Admiral Kobayashi first gave a detailed assessment of the Sōryū boats and even made some comparisons with their Collins class counterparts. Admiral Koda then delivered the coup de grâce by saying to the largely industry-based audience that if Australia wanted to build most or all 12 boats based on the Sōryū design, then that would be possible. This last statement sent shockwaves through the audience because up until that moment, the prospect of adopting a Japanese design was seemingly off the table for two reasons – 1) Japan has never exported submarines or allowed the licenced production of such a major platform in another country before, and 2) the enduring rumour of a ‘sweetheart deal’ between Prime Ministers Abbott and Abe, which seemingly disregarded the desire for an ‘Australian build’ and the Australian public’s concerns about lost jobs.

Essentially, Admiral Koda, who is known to be one of Prime Minister Abe’s key defence advisors, blew the ‘sweetheart deal’ out of the water and restored Japan’s competitiveness with Germany and France, which prior to his announcement had been considered the front-runners for the submarine contract. When pressed on the putative ‘sweetheart deal’, Admiral Koda said he was unaware of any such arrangement, which sent a strong signal that Tokyo was sensitive to Australian concerns over lost jobs, the loss of onshore advanced complex manufacturing capabilities, and the prospect of lost ‘operational sovereignty’. In the end, this turn of events 1) confirmed Tokyo’s desire for closer strategic ties with Canberra, and 2) puts increased pressure on Prime Minister Abbott to declare himself in favour of building Australia’s next-generation submarine at home.

For additional information please see:
external pageSage International Homepagecall_made
external pageThe Future Submarine Summitcall_made
Analyses from SAGE International
external pageMore about John Brunicall_made