Mike Kelly (Eden-Monaro, Australian Labor Party, Shadow Assistant Minister for Defence Industry and Support) Share this | Hansard source

It's a great privilege to be able to speak on behalf of the Security of Critical Infrastructure Bill 2018 and the Parliamentary Joint Committee on Intelligence and Security. I'd particularly like to acknowledge the leadership of that committee by the chair, who has been doing an excellent job on that committee. But I have reflected before that this is a committee that I think embodies and exemplifies the best of bipartisanship in this building. It's made up of people with tremendously relevant experience from three of us who are all ex-Army. There's the Green faction and there's an ex-Attorney-General and an ex-policeman, and we've got a current shadow foreign affairs minister who is also in Finance and brings the dollars and cents side to the table. Senator Bushby makes great contributions. It's been a very positive experience for me in a building that's often portrayed as being one of great contest and partisanship. So this bill is a representation of that process working well—a process that's been underway for a few years to address our critical infrastructure needs and, as the member for Canning has spoken about, the threat that we face in terms of the heightened and industrial-scale cyberattacks in particular that we're seeing developed by governments such as that of Vladimir Putin, who has become quite a significant threat to the world at the present time.

The latest incident involving the nerve agent attack on a former Russian citizen on the soil of the United Kingdom illustrates the depths to which they will go. Of course, there are the revelations about the influence in the US election and the French election attempts there as well. This is a real and present threat not only to the sorts of cyberattacks we've had in terms of industrial espionage in the past—where we've had regular and daily attacks in that respect—but now we're seeing this evolve into the potential of a state, like Vladimir Putin's, adopting the Sun Tzu principle that the acme of success is to win without fighting; bring down all of your adversary's infrastructure without even having to fire a shot in some cases.

So we do have to have robust systems of protection. This legislation is a good start, of course, but it is legislation. We will need to follow through with a lot of practical measures to ensure that we can secure our infrastructure. I do applaud the government's establishment of the regional cybersecurity centres. I think that's going to be important for outreach to business. They're going to be a back door and a vulnerability as we go through this if we can't ensure that we're all secure in our networks. That is going to be absolutely critical.

The assets that this legislation deals with has been enumerated by previous speakers. It is now running parallel with a process that was put in place earlier in relation to the telecommunications sector security reforms, which began in September last year. One thing we reflected on in the committee was that we do have these parallel infrastructure aspects. And as we move through and review how this system is working we'll need to determine whether or not there is not a benefit perhaps, in a unilateral approach, rather than this bifurcated approach. There are differences in the types of infrastructure we're talking about. However, the experiences of both will definitely be very relevant. And there is an issue associated with the telecommunications aspect, which is that a lot of it will depend on the industry self-regulating, or self-providing, for the security measures that we know we need and that they have talked about.

The progress from this legislation is great, and it has reflected things that have been revealed as failures of the FIRB process—the Foreign Investment Review Board. There have been specific incidents that have given great cause for concern, not just internally but amongst our allies, like the United States. The port of Darwin has been a salient issue, and it did reveal some of those concerns. Also, the sale of Ausgrid in New South Wales highlighted the deficiencies in that FIRB process and the need for this measure to fill that gap.

What was most concerning about that was that the purchase of Ausgrid, potentially by a Chinese investor, was not done in consultation with Defence. Defence found out about this through media reports. What we had was a situation where critical Defence infrastructure would have been subject to this transaction. It's essential for Defence to be involved in that process. Hopefully, we will address that through this legislation in the future.

Another example was Global Switch, where we had the situation of potential Chinese investors acquiring a data centre complex which hosted a lot of very sensitive material—and not just our sensitive material. That also will be something to monitor closely in terms of the effectiveness of this legislation.

The member for Canning referred to another issue that is critical. It was subject to quite a bit of discussion within the committee, and there was interest in perhaps being a bit more robust in our recommendations about it but we tempered them. It comes back to this issue of energy security, particularly in relation to our transport fuels. I know the member for Wakefield has also commented on this in the past. We have this situation where, as the member highlighted, we have this strategic vulnerability created by the fact that our strategic resources of oil and transport fuels come across our sea lanes. There is some disaggregation of the sources of supply of the crude oil; however, we know that the sources of crude oil are concentrating more and more in the Middle East as dwindling oil resources in the world create that dynamic.

We know the vulnerabilities of political circumstances and conflict in the Middle East. We've seen oil used as a political weapon in the past by bad faith actors in the Middle East in relation to the crisis in 1973 and, again, in 1979, or simply by wars. That is a concern. Also, I know from my time in Strategy Group in Defence, monitoring influences from the Middle East in our region, that the petrodollar investment in radical madrasahs and in funding terrorist movements was of great concern to me. One of the things we need to do to ensure that our own security, our strategy vulnerability, is minimised in the future is to be more aggressive in pursuing alternative fuels for our country. The Pentagon is driving very hard in this direction, creating the Great Green Fleet in their ambition to move to biodiesel and other biofuels. We have really been left behind in a lot of this and we need to take this issue more seriously and be more urgent about it. It also conflates with our battles against the health effects of these fuels and the climate change issue.

We know that emissions in this country from vehicles are around 17 per cent of carbon emissions. On some reports, the toxicity of these emissions kills about 3,000 Australians a year. Overseas, we've seen that being amplified even more by greater population concentrations. In Scotland they've set themselves the goal of getting off oil fuels by 2032, and they'll ban diesel and petrol cars. Sweden set up an independent commission for the establishment of their independence from oil by 2025 and are well down that track, noting, in their circumstances, that they were concerned about their strategic vulnerability to Russia. The UK have now set themselves a goal of getting off petrol and diesel by 2040, noting, in their own analysis, that those fuels kill about 40,000 British citizens per annum; that's the estimate in the UK. France have set the same goal, 2040. Norway have set it at 2025; the Netherlands, 2030; Germany, 2030; and India, 2030. In India, it's interesting that the estimate of deaths per annum caused by these toxic fumes is 1.2 million. In China, where similarly they're now moving down this road to ban petrol and diesel, the deaths are estimated at 1.6 million per annum. Across Europe the estimation is 70,000 per year. From a simple health perspective and the estimated cost to the systems here in Australia, that could be upwards of a few billion dollars, maybe as much as $6 billion. So it's in our economic and health interests to get off fossil fuel as quickly as possible.

There are alternatives out there. When I was Minister for Defence Materiel I took some Defence logisticians with me to visit a site down at Nowra, a company called Algae.Tec. They had developed a technology that I had first seen in Israel, where they were strapping a facility to the Ashkelon coal-fired power station. It was a pond based system where they were, effectively, sucking in the carbon emissions from the coal-fired power station and rapidly growing this algae—which really is hungry for carbon—and turning it into a biodiesel fuel, which is a straight drop in fuel. There is no blending or conversion required.

The problem with the pond system was that it required a great space. It was hungry for space. But the beauty of what Algae.Tec in Nowra were doing was that they had taken that technology and refined it and turned it into a containerised process. This could eliminate 100 per cent of the emissions from the Bayswater power station with, approximately, a 10-hectare site facility and produce millions of litres of this biodiesel fuel. You can imagine what this could do for regional Australia's economy, for our energy security, for plugging into existing distribution systems and for ensuring our complete independence in relation to biodiesel fuels.

Obviously, we need a mix of technologies to achieve the goal of getting off this stuff, and I've been excited about the reporting of proton developments, in terms of battery storage, which will take lithium storage to a whole new level and eliminate the need for lithium batteries. These proton batteries will be incredibly efficient. They will be revolutionary applied to storage for housing and the motor vehicle space. There's a lot going on in that space. The world is getting more aggressive and determined to achieve an outcome that will ensure we have dealt with the range of issues I referred to.

From a national security point of view, I would urge the government—I would urge the Department of Home Affairs, who were a little bit dismissive of this in their response to the evidence in the committee process—that this is an urgent matter for our nation: for our security, for regional security, for undermining terrorism financing and in terms of our strategy vulnerability. I would urge perhaps replicating what the Swedes have done, and setting up a commission to establish our independence from oil as soon as possible, and setting a target date for that.

When we're talking about vulnerabilities of energy systems, there's no question in my mind that the privatisation process that a lot of people were concerned about has created vulnerabilities as well. I have mentioned the circumstances of the Ausgrid privatisation process and potential sale. It's worth noting that we've heard a lot of talk about Snowy 2.0, which I fully support and which will move us towards energy security and be a vital asset. It's worth noting that when Ben Chifley launched the Snowy Hydro Scheme, he did so under the defence power. Energy security in this nation is vital going forward.

What we're seeing revealed is that the privatisation process has created great vulnerabilities in terms of the effective maintenance of the system and in terms of its security. Unfortunately, this seems to have played out also in major bushfires in this nation, like the fires in Victoria in 2009 and the fires in the Blue Mountains in 2013. Now it appears that the fire we've just experienced down at Tathra was caused by power line failure; the situation down there seems to be pointing clearly in that direction, and that was the RFS preliminary assessment. We need to drill down on that incident because there are concerns and issues that have been raised in relation to this latest incident about the question of maintenance of those power lines. We had a regime previously where we talked about asset maintenance, and now we hear language of asset management. In this pure profit-driven approach to it, we're seeing situations of a lot of this infrastructure being left to go to its last legs before something is done about addressing that and maintaining the system to the standards it needs.

So I would urge the regulatory regimes that are being placed in the privatisation process which has occurred to ensure that we are maintaining these power lines and this infrastructure at the levels at which they must be maintained, and doing more, hopefully through this process of the critical infrastructure bill, to assess the need to provide systems integrity as well in terms of vulnerability to future cyberattack.

I salute the work of the committee on this process for the critical infrastructure bill. We have a lot more work in front of us and a lot more challenges in front of us. Life in this space is all about measures and countermeasures, so we have to continually revise and review what we're doing and how things operate together, and to work together in a bipartisan way for the benefit of our nation.

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