Huawei Australia Finds Even Money Can't Buy It Love

It had all the hallmarks of a textbook charm offensive – but in the end not even an outpouring of local investment, a seemingly-sympathetic new government and the support of an ideologically-similar UK government were enough to reverse Australia's blacklisting of Chinese networking giant Huawei.

Australia's new Liberal government, spearheaded by Tony Abbott, had intimated before the 7 September election – which it handily won despite promises to deconstruct the popular $A37.4bn ($US35.1bn) national broadband network (NBN) – that it would follow the lead of the Huawei-friendly UK government in reconsidering the exclusion of Huawei from the project.

Such a move would have put it at odds with strategic military partner the United States, where last October increasing concerns about Huawei's alleged security issues led legislators to recommend it be excluded from strategic infrastructure investments on national security grounds.

Australia has long and deep political ties with both the UK and US, whose differing positions on Huawei suggested that a new Australian government could legitimately go either way. The decision would ultimately rest on the assessment of the Australian military as to whether the US was being overcautious about Huawei, or the UK government relatively cavalier.

Geoff Johnson, a vice president at researcher Gartner with a long pedigree in government relations and telecommunications contracts, believes the latter was more likely to be the problem.

“Gartner sees no evidence that telecommunications manufacturers around the world are immune from the attentions of their governments,” he says. “The difference between the UK and Australia is that, basically, Huawei was deploying in the BT network before they thought of security.”

“This is a classic lack of process,” Johnson adds, “and we've seen it in so many network-security projects. Eighty per cent of the time security is an afterthought: they say 'we've done the deal, now how do we secure it?', rather than 'how do we secure it from the beginning?'.”

Australia’s previous Labor government – which formally banned the company from NBN tenders in March 2012 – based the decision on unspecified security issues.

“As a strategic and significant government investment, we have a responsibility to do our utmost to protect [the NBN's integrity] and that of the information on it,” then Attorney-General Nicola Roxon said in a statement at the time.

Many believe the ban grew out of the rising tide of China-based security attacks and insinuations about connections between the Chinese government and Huawei founder Ren Zhengfei who served as an engineer in the People's Liberation Army before founding Huawei in 1987.

Despite Labor's clear position, before and after the election Huawei had enjoyed growing rhetorical support from the incoming Australian government. New trade minister Andrew Robb said Huawei was “a well-respected company” that has “a big future in Australia” and new communications minister Malcolm Turnbull questioned whether Huawei's equipment could even be used for espionage. These comments had led many to conclude that it would follow through on the promise to relax restrictions on Huawei.

Where there's a will, there's Huawei?

The comments also seemed to suggest the success of a two-year charm offensive by Huawei that had begun, even before the ban was imposed, with the creation of its first-ever board of directors outside China.

That board enlisted influential Australians including former Victorian premier John Brumby, former foreign minister of 11 years Alexander Downer, and a host of Huawei regional executives. Its chairman, John Lord, is a 36-year navy veteran, retired Rear Admiral and a member of the state of Victorian Government's Defence Council.

While the team of high-profile government leaders pressed the flesh and pressed its case at the highest levels, Huawei also worked to boost its popular profile through the sponsorship of the perhaps unfortunately-named Canberra Raiders rugby league team.

Barracking the Raiders is something of a religion in the sports-mad country's Australian Capital Territory (ACT), so there could have been few choicer targets for an injection of funds. That sponsorship was renewed for the 2014 season with Huawei promising it would work to help boost the profile of Australia’s National Rugby League in China.

Bringing the Huawei brand to Australia’s heartland was a considered move for the world’s largest telecommunications equipment maker, whose 3G and 4G mobile broadband devices are already widely used in Australia.

“If you count all the Chinese manufacturers, well north of 90% of the stuff we routinely plug into our computers is made in China,” Johnson says. “And nobody thinks twice about whether there is security on those devices.”

It was in the months before the September election – in which long-standing Liberal leader Tony Abbott was expected to run away with the prize after years of missteps by the incumbent Labor government – that Huawei turned the dial up to eleven.

In May, the reclusive Zhengfei granted his first-ever interview to media in New Zealand, where Huawei supplies several major telecommunications providers. And in August, a contingent of Huawei supply-chain purchasers descended on Sydney and Melbourne with the stated aim of building relationships that would boost the $A136m ($US128m) it spends annually on Australian-made products by over 10% this year.

The fortnight before the election saw Huawei: re-appoint the entire Australian board of directors for two more years; establish an office in Brisbane, Australia’s third-largest city and a deep repository of security and IT expertise; establish an Undergraduate Work Experience Program for three Brisbane-based students to study and learn at Huawei's Chinese innovation centres; and arrange a similar program for two students and four academics in the ACT. These complemented an earlier program, announced in July, for 11 students at the ACT's Australian National University to spend time in China.

Huawei has even played the feel-good card, donating $A5000 ($4508) to Ronald McDonald House Canberra; supplying its MediaPad tablet computers to the Sydney Children’s Hospital and affiliated paediatric healthcare providers across the Asia-Pacific region; giving $A50,000 ($45,075) to the cancer fundraiser Tour de Cure; and even sponsoring indigenous Australian rugby player Trae O’Neill to train with the Raiders.

Huawei’s case for reconsideration also got a boost with the revelations this year that the US National Security Agency was conducting wholesale online surveillance. Huawei wasted no time in arguing that there needed to be a new, global approach to how countries work with cybersecurity. This was accompanied by an increasing lobbying campaign to push the IT industry away from its US-centricity, including a move away from the US-supported Common Criteria security-testing regime also used in Australia and the UK.

For a few weeks after Australia’s election, it seemed the largesse had succeeded: comments by Robb and Turnbull, both long-serving members of the government’s highest echelon, suggested that the ban was, as promised, close to being lifted.

It was with great consternation, then, that first new attorney general George Brandis slammed the lid on that speculation with the announcement that the Huawei NBN ban would continue. This was reaffirmed by treasurer Joe Hockey, who said that “further briefings” from Australian government security agencies had provided no reason why the existing policy should be changed.

Huawei, rapidly circling its wagons, has said it is “extremely disappointed” with the continued ban, and that it will make no further public statements on the Abbott government's decision. Yet with the UK government recently reaffirming its support for Huawei and Australia's NBN up in the air as Turnbull drives its major strategic reinvention, the company is certain to be biding its time.


David Braue is an award-winning technology journalist who has covered Australia's IT industry since 1995


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David Braue

David Braue is an award-winning technology journalist who has covered Australia's IT industry since 1995. His portfolio spans business, ICT, telecommunications and other areas, with a particular focus on Australia's world-leading national broadband network (NBN).

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