With Malcolm Turnbull in Japan to discuss the much-publicised Abbott-era submarine deal, RW Chinnery explains what it could mean politically.

 

There was a distinctly oceanic theme to Prime Minister Malcolm Turnbull’s exercise in applying the principles of speed dating to diplomacy last week, coming as it did on the heels of Tokyo’s decision to resume whaling and with a decision on Australia’s next generation of submarines looming in the near future.

Japan rolled out the red carpet for Mr Turnbull, who spent just a day in the country (including 90 mins of “special time” with his Japanese counterpart, Shinzo Abe). This was originally scheduled to be a three-day trip, but the decision to go ahead even without enough time to conduct any substantial business emphasises the importance of it happening at all.

Abe enjoyed a chummy relationship with his fellow conservative revanchist Tony Abbott and there were fears in Tokyo that Turnbull’s accession would see Japan lose influence in Canberra to the benefit of China. Various pronouncements by Turnbull since taking power on regional hot-button issues like the South China Sea damped such anxieties; going out of his way to make sure he spends some time in Japan this year, even a symbolic amount, should put any lingering doubts to bed.

One major change in the relationship that cannot be avoided however is Japan’s prospects of landing the A$30-50 billion (depending on who you ask) SEA1000 project to replace the Royal Australian Navy’s Collins class submarines. These are looking rather less certain than they did under Abbott. SEA1000 is a huge project that has every conventional sub building country drooling. Australia thus has a lot of negotiating power over Japan, France and Germany in all sorts of areas. Japan is the most strategically relevant of the three, so potentially has the most to offer in return.

Rumours have flown around for nearly two years that for reasons which remain unclear, Abbott had all but promised the project to the Japanese who are offering a variant of their Soryu class. This sort of captain’s pick on such a crucial strategic acquisition would be out of the question for most governments, but under the impulsive, consultation-averse Abbott, such scuttlebutt had disconcerting plausibility.

Abbott was eventually convinced to make some concessions to proper process and due diligence before his ousting in the form of the so-called “Competitive Evaluation Process.” A departure from usual procurement practice was necessary in any event, as the previous ALP government’s preoccupation with its own internal warfare effectively kept the project on hold for the duration of Labour’s time in power, costing the navy time it didn’t have.

The CEP, though swifter than a full tender process, is necessarily less thorough in its assessment of the options. Ideally, each design would be assessed solely on its technical merits and realistic assessment of through-life costs. But anyone who follows these things knows that it is impossible to insulate a project of this scale from political considerations, especially when other countries are vying to sell their wares. With the technical, industrial and commercial aspects of each bid harder to substantiate due to the truncation of normal procedure, more room is left for political considerations to come into play.

There is more motivation on each side in the context of an Australia-Japan negotiation than with the Europeans. Japan simply matters a lot more to Australia than Germany or France and Australia matters a lot more (at least militarily) to Japan than it does to the European bidders. Moreover, it is the option that would be preferred by the US who will supply the submarine’s combat system. This will be an evolution of that currently used on the Collins class which replaced the one they were built with and was the source of many of the Collin’s early teething troubles. Crucially, it is based on the system the US uses on its own Virginia class submarines. While the US may be happy to share this extremely sensitive technology with ANZUS partner Australia, it also has to be willing to share details with whoever wins SEA1000 so it can be integrated into the design.

There is an extremely strong case for the German bidder, ThyssenKrupp Marine Systems, who are the absolute hands-down past masters of technology transfer in this area. They’ve built subs for other countries both in their own yards and in customer country yards for decades to standard designs (their Type 209 is the VW Beetle of submarines) or to custom designs (like the Type 218SG for Singapore or the Type 216 ‘Endeavour’ that is being offered for SEA1000).

Their record is excellent and TKMS are not afraid to make the point in concrete, or rather, steel terms, unveiling on December 14, 2015, a submarine hull section built at Australian Marine Systems in Henderson, WA from design data created in Germany and transferred in full electronically. Japanese industry, by contrast, has not designed or built a warship for a foreign customer since before WWII. It is far from certain however the US would be as comfortable exposing its technology to the Germans (and even less the French) as it would Japan.

The Abbott Government’s fixation on “Option J” lead one to fear the crucial lesson of the Air Warfare Destroyer project (SEA4000) has been lost already: the designer’s ability to transfer technology and design data is as important as design maturity.

Against the navy’s preferences, Navantia’s F100 was chosen as the safe off-the-shelf option over the far more impressive Evolved Arleigh Burke class design offered by US firm Gibbs & Cox. The subsequent well-reported travails of the AWD program leave one imagining how the admirals must rue that decision. The troubles would surely have been just as bad with the more ambitious design but at least they would have a much better ship for their pains. If anything good is to come of the AWD experience, it should be that the defence establishment is thoroughly disabused of the notion that there is an inherent risk mitigation benefit in choosing an existing design.

For Australia, nothing can ever truly be “off the shelf.” We enjoy a unique and rather awkward strategic position. We are far enough from the action to be safe from direct attack, but as a trade-dependent nation, this means by the same stroke the most likely situation in which we would need to use military force to defend our interests involve fighting far from home. Thus, everything we buy ends up being “Australianised” to reflect the environment our forces operate in and the threats they face, which are more often than not quite different to those the baseline design was originally conceived for. That it shall be the same with SEA1000 is a certainty.

Australia has an especially unusual mission set for a conventional sub operator requiring long transits and long time on-station. This, of course, means any non-nuclear option will need to be a bespoke design or one modified to the point it is essentially new. The Soryu will require far more reworking to bring it into line with requirements of SEA1000 than the F100 frigate design did for SEA4000, and the Swiss watch-like nature of submarine design means every change carries far more risk than it would in a surface ship.

Mitigating the temptations of an illusory easy fix in the Soryu class are the hazards of tying ourselves just a little too tightly to Japan when its resurgence is still a fraught and hesitant endeavour. Like Abbott, Abe is an anomalous figure in his political culture. There is no guarantee his successor will be keen to make good on any strategic payoffs promised to Australia in the wake of a sub deal with Abe.

And what about China? Well, one thing we can be sure of is that a deal with Germany is going a raise far fewer eye-brows in Beijing than one with Japan. Buying US gear and engaging in the close strategic relationship that implies is one thing, the US is a global power. Japan, however, is China’s regional rival. Doing the same with them would send a different message, one that denies us the option of holding a strategically beneficial position of ambiguity in the event of a Sino-Japanese showdown. We will have already shown our hand. We should not kowtow to China, but neither should we drop our trousers and moon the emperor.

The choice Australia must make is not just between different submarine designs but between proven competence or possible geopolitical advantage. Before the choice of Japan or another country was the burning question, it was a question of whether to build in Australia or not. That has been settled firmly in favour of a local build. During that discussion the economic impetus to keep the work and the spending in-country clashed with the need to get the boats under-construction in good time. We have taken the hard but politically doable option with the build, now we must choose who is going to help us best in rising to the challenge we have set ourselves.

It would pay us well to keep in mind that what matters is whether these things will be available and able to do the job they were built for when the time comes. We should not presume this will be a time of our choosing.

 

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