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Below are some interesting (and important) media reports/commentaries relevant to policy issues. They include an assessment of Labor’s decision to oppose the repeal of the carbon tax in the context of what looks like being a re-run of the Senate election in WA. Also, an Executive Order just issued by President Obama on Climate Change and interpreted in SEPP’s weekly report as another attempt to avoid Congress by implementing policies to restrict the use of fossil fuels through regulations. SEPP points out that the EPA has recently issued regulations that effectively prohibit the construction of new coal-fired power plants and it argues that the administration is implementing a carbon tax outside Congress through what it calls “The Social Costs of Carbon”. Whether this is so is difficult to determine from this distance, but Obama’s Executive Order indicates his active pursuit of anti-fossil fuel emissions policies.

The Australian has also given considerable coverage to criticisms by Hugh Morgan of the modelling of possible future trends in climate and resource availability by scientists who failed  to taking adequate account of likely technological advances. Morgan’s comments follow criticism of climate analysis in an ABC interview by David Murray (former chair of the Commonwealth Bank). It is a pity that such critiques by business of “the science” are confined to “formers”. A leak of the next IPCC report suggests it will be similar to Club of Rome one.

Also below is an important analysis by Andrew Bolt  of the continued increase in Australia in Islamic extremists and the apparent failure of Prime Minister Abbott to acknowledge this. Bolt’s analysis follows the tabling in Parliament last week of the annual report by ASIO saying that it had “investigated several hundred mostly Australia-based individuals who are advocates of a violent Islamist ideology." Australia is not alone in having a government unable to publicly address this issue, as illustrated by the US non-reaction to criticism of the killing of the Taliban leader with a drone attack and the absurd response by US Secretary of State Kerry to criticisms of US spying – “we may have gone too far”. Perhaps he meant we have gone too far in not protecting our intelligence agents.

Australia should make it clear to countries in our region which are calling in our Ambassadors  that we must keep tabs on the potential for attacks by extremists and whether their countries of origin are able to keep control of their activities.

Des Moore

WA poll re-run to target tax on carbon
(Article by Sid Maher and Paige Taylor published in The Australian, 4 November 2013.)

Truss urges WA poll to be held ASAP

TONY Abbott will use a likely re-run of the West Australian Senate election to pressure Bill Shorten over his refusal to allow an unconditional repeal of the carbon tax amid calls from within Labor for a shakeup of its upper house candidates.

As the Palmer United Party prepares to mount a legal challenge to the bungled WA Senate vote, which was thrown into confusion when the Australian Electoral Commission revealed it had lost 1375 ballot papers during a recount, The Australian has learned micro-parties are beginning preparations to repeat their preference deals in the event of a rerun.

With Labor also briefing its lawyers, legal experts believe there is a strong prospect the High Court, sitting as the Court of Disputed Returns, will order another election after the ballot papers were lost.

The move would throw open all six Senate seats and allow nominations to be recalled.

The AEC, which has called in retired Australian Federal Police commissioner Mick Keelty to investigate how the ballot papers were lost, declared at the weekend that the Greens' Scott Ludlam and the Australian Sports Party's Wayne Dropulich had won the final Senate spots after a recount instigated by the Greens.

The original result had seen PUP candidate Zhenya "Dio" Wang and Labor's Louise Pratt take the spots in a tight contest that swung on the distribution of 14 votes at a crucial point in the preference count.

A senior Coalition source told The Australian that the carbon tax would loom large in any rerun of the ballot.

"Any federal election at any time between now and repeal will be a further referendum on the carbon tax," the source said.

The Opposition Leader announced on Friday that Labor would oppose the repeal of the carbon tax in the Senate unless it was replaced by an emissions trading scheme.

This was expected to delay the repeal of the tax until July where the new Senate make-up is more likely to vote in favour of the repeal.

Predictions of a fresh Senate election in Western Australia sparked calls from within Labor for a revamp of its Senate ticket, which returned only one senator in the disputed result on September 7.

Alannah MacTiernan, the newly elected MP for Perth, said it was clear another poll would be held and called for Labor to start again in choosing Senate candidates.

"It will be incumbent upon Labor really to make sure we have got people that will attract support for us," she said.

"My view would be - and I would have presumed - that the spots now would be open."

Her comments were a barely veiled reference to union stalwart and Right faction powerbroker Joe Bullock, who was given the top spot on Labor's Senate ticket.

Ms MacTiernan's long efforts to diminish the influence of factional leaders cost her the chance to lead state Labor in 2008, and her disapproval of Mr Bullock's ascent to the Senate is widely known.

Consultant Glenn Druery, who engineered a series of preference deals instrumental in the election of micro-party Senate candidates on September 7, said a re-run loomed as "the biggest by-election in Australia's history".

Mr Druery, who has been out of the country, said he had already been contacted by minor parties via text message.

"I'll paraphrase them all - fantastic, another opportunity," he said.

"It's my opinion that certainly some of the minor parties are revved up about this and quite willing to jump in and have another crack."

Mr Druery's preference swaps were crucial in delivering Senate spots to at least two new senators, who received only a tiny proportion of the primary vote.

In Western Australia, Mr Dropulich was elected with only 0.23 per cent of the vote and in Victoria Ricky Muir was elected for the Australian Motoring Enthusiast Party with 0.51 per cent of the primary vote.

Mr Dropulich said yesterday he knew the matter was far from resolved but was still ready to enter the Senate. "We are probably at about half-time now and I think we are just suiting up for the rest of the game," he said.

Deputy Prime Minister Warren Truss labelled the loss of votes a "debacle" and called for any re-run of the election to happen soon. "The whole event is a huge embarrassment for the Australian electoral system and we must make sure it doesn't happen again."

Graeme Orr, a Professor at Law at the University of Queensland, said the WA Governor would most likely set the timing of any new poll based on advice from the Governor-General.

But any re-run was widely expected to be early next year, ahead of the July 1 swearing in of the new Senate.

The new ballot would be open to anyone eligible to nominate and not limited to the candidates at the last election.

Clive Palmer said he would challenge the result of the recount and ask the Court of Disputed Returns to accept the result of the first count which elected Mr Wang. However, that motion will also certainly be challenged by the Greens, who won the seat on the recount.

Mr Palmer said the bungle in which 1375 votes was lost showed that Australia was not a real democracy.

"It's absolutely crazy not to declare the poll based on the first fully counted ballots which are cast," he told Channel Nine.

"I just think it's corruption. They're probably in the back of someone's car or they've been shredded. Does anyone really believe that the AEC, an organisation of great integrity, everyone says, and great security, could be able to lose five polling booth votes. I doubt it, really."

Mr Palmer said there needed to be reform of the voting and counting process to take advantage of the most up-to-date technology and to root out any rorters.

At the WA Labor conference at the weekend, senior figures said the party had sought legal advice for a challenge to the result.

Senator Pratt, who is second on her party's ticket, said she was very concerned for the disenfranchisement of electors.

"There is plenty of analysis that shows those missing votes would have made a difference," she said.

Acting Opposition Leader Tanya Plibersek said it was "obviously very important that West Australians are confident that they've got the senators they voted for".

"Once the investigation is given an opportunity to run its course, we'll have to make a decision about how we can best be confident the voice of every West Australian has been heard."

In WA, the Liberals polled 39 per cent of the vote and had three senators elected.

Labor polled 26.6 per cent of the vote. Senator Ludlam received 9.5 per cent.

Mr Dropulich received just 0.22 per cent of the vote, but harvested preferences from other minor parties. Mr Wang polled 5 per cent. A Senate quota is 14.4 per cent.

Extract from Executive Order by US President on Preparing the United States for the Impacts of Climate Change, 1 Nov 2013

“By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to prepare the Nation for the impacts of climate change by undertaking actions to enhance climate preparedness and resilience, it is hereby ordered as follows:

Section 1. Policy. The impacts of climate change -- including an increase in prolonged periods of excessively high temperatures, more heavy downpours, an increase in wildfires, more severe droughts, permafrost thawing, ocean acidification, and sea-level rise -- are already affecting communities, natural resources, ecosystems, economies, and public health across the Nation. These impacts are often most significant for communities that already face economic or health-related challenges, and for species and habitats that are already facing other pressures. Managing these risks requires deliberate preparation, close cooperation, and coordinated planning by the Federal Government, as well as by stakeholders, to facilitate Federal, State, local, tribal, private-sector, and non profit-sector efforts to improve climate preparedness and resilience; help safeguard our economy, infrastructure, environment, and natural resources; and provide for the continuity of executive department and agency (agency) operations, services, and programs...”

ASIO Report to Parliament 2012-13
(31 October 2013.)

Attorney-General, Senator George Brandis has welcomed today’s tabling of the Australian Security Intelligence Organisation Report to Parliament for 2012-13.

“This year is the 30th anniversary of ASIO’s first unclassified Report to Parliament in 1982-1983 and provides significant insight into ASIO’s vital mission to protect Australia, its people and interests from threats both here and abroad,” Senator Brandis said.

“The report demonstrates clearly why Australia continues to need an organisation dedicated to countering individuals and groups who threaten our security.

“Terrorism, espionage and foreign interference, including through cyber means, represent serious and sustained threats to Australia’s national security. ASIO continues to makes many achievements in addressing these threats as part of its ongoing mission to protect Australian lives and interests.”

In the reporting period ASIO:

Time for a Radical Solution
(Article by Andrew Bolt published in the Herald Sun, 4 November 2013.)

ASIO report says there are great dangers from radical Islamists

ASIO's report to Parliament last week exploded some sweet lies we've been told about our immigration program.

Here's one: immigration brings only good things, like falafel.

Here's another: there's still only a "tiny, unrepresentative minority" of Muslim extremists here. A "handful".

Handful? Check the ASIO report: "This year ASIO . . . investigated several hundred mostly Australia-based individuals who are advocates of a violent Islamist ideology."

In fact, we already have 20 Muslims jailed for terrorism-related offences and ASIO fears more may come: "There has been an increase in Australians travelling overseas to participate in terrorist training or engage in foreign disputes - Syria is the primary destination.

"The concern is . . . the likelihood of radicalised Australians returning home with an increased commitment and capability to pursue violent acts on our shores."

Indeed, the Syrian civil war has already "created domestic tensions . . . partly because of deep familial ties to Lebanon that exist here", with "sporadic incidents of small-scale communal violence in Australia".

Nor is the danger just from the 80 or so Australian Muslims fighting in Syria, or others who've trained or fought in Somalia, Afghanistan, Pakistan and Yemen. There are also the ticking bombs at home, fired up by messages pumped into their homes over the internet.

"The threat of homegrown terrorism is of significant concern," says ASIO, citing the Boston Marathon bombings and the London jihadists who slaughtered a British soldier. "In Australia, there are individuals and small groups who believe an attack here is justified."

"Issues such as Australia's military deployments over the last decade, the Syrian conflict, or a belief that the ideals of Australia are in direct conflict with their extreme interpretation of Islam, fuel the radical views of this cohort."

We are thankfully past the low point when Muslim groups elected as Grand Mufti of Australia the extremist Taj el-Din al-Hilali, who hailed the September 11 attacks as "God's work against oppressors".

ASIO says more moderate leaders have helped keep down tensions, especially over Syria. But Sheik Hilali still preaches at Lakemba Mosque - our biggest - and young radical preachers now whip up potentially lethal resentments, particularly when Australian soldiers are fighting jihadists overseas, or when police arrest them at home.

When five Muslims were jailed in Sydney for a terrorist plot, 30 Muslim "community leaders" and imams signed a statement at the Lakemba Mosque, claiming "the reason for the arrests and convictions is that these young men expressed or hold opinions that contradict Australia's foreign policy towards majority Muslim countries".

Hizb ut-Tahrir, which gets some 500 people to its conferences, later damned even Anzac Day as the celebration of "a disbelieving people, of events involving wars against the legitimate Muslim authority of the time".

ASIO's report didn't cover other evidence that a significant minority of some Muslim groups have struggled to integrate. For instance, those of Lebanese descent have high rates of unemployment, welfare dependency and imprisonment, and high rates of bikie gang membership.

Add also this danger sign: Of the 18 terrorist groups banned in Australia, 17 are Islamist. Even the exception, the Stalinist PKK, is from the Middle East.

Given all that, our immigration policies have been incredibly reckless, thanks to politicians more concerned with seeming good than achieving security.

We have been bringing in more than 10,000 refugees a year from Muslim lands - especially ones in which jihadism is worst. Many have little English and few skills. Not surprisingly, just 9 per cent of Afghan adults find work here even five years after arriving. Yet just last month, the Abbott Government said it would accept another 500 refugees from Syria's war between jihadists and the Assad regime.

Few would be any better equipped to integrate than were the refugees we took in from Lebanon's civil war and who formed a community which now makes up a quarter of our Muslim population - but which has produced nearly two thirds of those charged with terrorism offences.

Then there was Labor's astonishing decision in 2008 to scrap our tough border laws in a fit of "compassion", thus luring in 50,000 boat people, mostly Muslims. Already ASIO has deemed 58 a security risk.

Yes, the Abbott Government has now slashed the refugee intake from Labor's 20,000 a year to 13,500 and has sharply slowed the boats, but Prime Minister Tony Abbott is still too coy to publicly discuss the problem ASIO has labelled.

I asked him about the difficulty we had of integrating some migrants.

Abbott's response? To avoid even any mention of the word "Muslim".

Abbott: One of the great things about Australia is that we encourage people, indeed we expect people, who come to this country to leave their ethnic animosities behind them.

Bolt: But they are failing to in some cases.

Abbott: We encouraged the English and the Irish to leave their sectarian and other animosities behind them . . .

Bolt: But they didn't have suicide bombers.

Abbott: . . . and we largely succeeded.

When I pointed out that Muslims alone had been jailed here for terrorism-related offences - 20 so far - Abbott explained why he wouldn't say more. "Yeah, but it would be a big mistake for anyone in authority in Australia to suggest that people might be citizens second and adherents of a particular faith first, because nothing could be more guaranteed to hinder the integration and ultimately the assimilation of such people."

Abbott is right to a point. Even writing this threatens to do more harm than good. It could simply license racists and make our very many law-abiding Muslims here feel threatened and insulted.

But for years journalists kept diplomatically quiet about these problems and that didn't help either.

Taliban chief's death upsets peace bid
(Article by Amanda Hodge published in The Australian, 4 November 2013)

Pakistan's Interior Minister says U.S. drone strike that killed Taliban leader was a conspiracy to sabotage peace talks with Taliban. Deborah Lutterbeck reports.

US dismisses drone strike claims
Pakistan to review ties with U.S. after ...

PAKISTAN has accused the US of sabotaging its hopes for peace following the weekend death by drone strike of Taliban leader Hakimullah Mehsud.

The killing of one of Pakistan's worst mass murderers, responsible for the deaths of thousands of civilians, soldiers and public figures, has also cast a shadow over the coalition's withdrawal efforts from neighbouring Afghanistan, with Imran Khan vowing to block NATO supplies through Khyber Pakhtunkhwa province.

A visibly angry Mr Khan, chief of the Pakistan Tehreek-e-Insaf party which won control of the KP provincial government in May elections, told supporters on the weekend that Mehsud's death had damaged peace talks and that his party would retaliate by introducing resolutions in national and provincial assemblies to block the NATO supply route, which will be critical as the coalition draws down ahead of the December 2014 withdrawal.

"The Taliban held only one condition for the peace talks and that was that drone attacks must end," said the cricketer turned politician, who has lost three senior party officials in recent months to Taliban assassins. "But just before the talks began we saw this sabotage take place."

Pakistan's federal Interior Minister Chaudhry Nisar Ali Khan also condemned the killing in a statement which accused Washington of "a conspiracy to sabotage the peace talks".

"The murder of Hakimullah is the murder of all efforts at peace," Mr Khan said. "Americans said they support our efforts at peace. Is this support?"

Islamabad had filed a formal protest with the US ambassador and would protest to all five permanent members of the UN Security Council, Mr Khan said, adding the "entire perspective of the US-Pakistan relationship" would be reviewed.

But the KP and federal government response also provoked angry admonishment from secular liberals in Pakistan, most notably the son of slain former prime minister Benazir Bhutto.

Bilawal Bhutto Zardari, son of former president Asif Ali Zardari and nominal chairman of the Pakistan People's Party, condemned the PTI party's response to the death in a series of Twitter posts.

"Kill our former PM, we offer peace talks. Kill our generals and soldiers, we offer peace talks. One of their leaders are killed, peace sabotaged," he wrote in reference to the federal government's determination to push ahead with peace talks despite his mother's 2007 assassination and continued attacks and targeted killings by the Tehrik-e-Taliban Pakistan.

US National Security Council spokeswoman Caitlin Hayden said she could not confirm reports of the demise of Mehsud - whose death was erroneously reported in 2010 - "but if true, this would be a serious loss" for the Pakistani Taliban.

But a Taliban spokesman confirmed the death, which came just eight days after Prime Minister Nawaz Sharif and Barack Obama pledged closer co-operation at a meeting in Washington, and one day after the Pakistan government confirmed that peace talks with the militants had begun.

Earlier reports suggested Mehsud had been succeeded by Khan Said, a fellow member of the South Waziristan Mehsud tribe credited with masterminding the 2012 attack on a jail near North Waziristan in which some 400 mostly Taliban-linked prisoners were freed.

However Taliban spokesman Shahidullah Shahid said last night a permanent replacement had yet to be selected and only an interim commander had been appointed, adding weight to suggestions of divisions within the schismatic organisation over who should take the helm.

Various factions within the TTP, including the murderous Swat Valley wing led by Mullah Fazlullah, are said to have named their own leaders as commander at the weekend.

"Asmatullah Shaheen Bhittani, the head of the supreme shura [the organisation's consultative body], has been appointed as temporary head of the TTP,” Shahid said.

Though he accused the government of cutting a deal with Washington to sell out the militants, he did not rule out the possibility that peace talks could still go ahead.

“Nobody in history has ever negotiated with slaves. We were waiting for a meeting, while the Pakistan army and government was sitting with the US finalising deals to sell us,” he said.

Islamabad has ratcheted up security across the country in the wake of Mehsud’s death in anticipation of retaliatory attacks.

Mehsud was on the FBI’s most-wanted list, with a $US5 million ($5.3 million) reward on his head, over his role in the 2009 attack on an eastern Afghanistan US military base in which seven CIA employees were killed - the worst single loss of life for the agency in 25 years.

He was also linked with a failed 2010 car bombing in New York’s Times Square.

Mehsud, 33, took over as head of the TTP in 2009 after the group’s leader, Baitullah Mehsud, was killed in a US drone strike.

Killing a Taliban monster
(Editorial published in The Australian, 4 November 2013)

THE killing of the leader of the Pakistani Taliban, Hakimullah Mehsud, a monstrous killer responsible, directly or indirectly, for the deaths of thousands of people, is vindication yet again of Washington's determination to press ahead with targeted drone strikes against key terrorists.

Despite the mounting clamour against the tactic by groups such as Amnesty International and Human Rights Watch, no tears should be shed for Hakimullah. Nor should any credence be lent to the absurd posturing of the Pakistani cricketer turned politician Imran Khan, who in retaliation against the so-called "martyrdom" of the terrorist leader is threatening to use his control of the administration in the northwest Khyber Pakhtunkhwa province to block the vital land route serving coalition forces in Afghanistan.

In the four years since he became leader -- following the death of Baitullah Mehsud in a drone attack -- Hakimullah showed himself a ruthless practitioner of the worst acts from the obscurantist Taliban, directing waves of suicide bombings that killed Pakistani men, women and children. He masterminded the single deadliest attack on the CIA in 25 years, killing seven agents. He plotted to explode a bomb in Times Square.

Recently, however, he responded to overtures for peace talks from new Pakistani Prime Minister Nawaz Sharif. Three negotiators were due to leave for the tribal areas as Hakimullah was killed. Mr Sharif's government is now indignantly charging Washington killed Hakimullah to forestall the talks. Another theory is that Islamabad was complicit in the drone strike, despite protestations to the contrary.

What is not in doubt is the efficacy of drone strikes. Human rights groups make expansive, mostly unsupported claims about collateral civilian damage. So, too, do politicians like Imran Khan. Yet, according to US and Pakistani official figures, since 2009 the strikes have killed 2160 terrorists and just 67 civilians. On some estimates, the Taliban has killed as many as 40,000 people. The effect of this decapitation of the Taliban leadership remains to be seen; it is a hydra-headed monster that has recovered from similar setbacks.

But the value of the drone strategy has been shown again. Washington should ignore the clamour and stick with drone strikes. Terrorists everywhere must never be left in doubt about just how vulnerable they are.

IPCC this century's 'Chicken Little'
(Article by Andrew Burrell published in The Australian, 4 November 2013.
Note: An abbreviated version of this report appeared on the front page as well)

MINING industry veteran Hugh Morgan has further inflamed the climate change debate by claiming that the world's climate scientists will be remembered in a similar vein to the "Chicken Little" theorists who published the apocalyptic tome The Limits to Growth more than 40 years ago.

The long-time climate change sceptic said the intensity of the debate on global warming made it timely to consider the impact of the 1972 book published by the Club of Rome, which sold 12 million copies and was translated into 37 languages.

The Club of Rome - a group of mostly European scientists and academics - used computer modelling to warn that the world would run out of commodities, including gold, mercury, silver, tin, zinc, petroleum, copper, lead, oil and natural gas, within 30 years.

The book captured the public's imagination by warning of the "sudden and uncontrollable collapse" of economic life.

SCIENTISTS: 'Nuclear power needed' to slow warming

Mr Morgan, the former chief executive of Western Mining Corporation, told The Australian: "The book illustrates the dangers of academics talking about things they know nothing about.

"The IPCC (Intergovernmental Panel on Climate Change) will be remembered in the same way as the Club of Rome for its 'Chicken Little' approach."

Mr Morgan's comments came as former Commonwealth Bank and Future Fund chairman David Murray suggested last week that the world's climate scientists lacked integrity, prompting an angry response from a leading body representing scientists.

Mr Murray told the ABC's Lateline program that the "climate problem" had been overstated by IPCC scientists and he would be convinced that man-made climate change was real only "when I see some evidence of integrity amongst the scientists themselves".

Host Emma Alberici pointed out that the most recent IPCC report was written by 250 authors from 39 countries and was subject to review by more than 1000 experts, but he could not be swayed.

The Australian Meteorological and Oceanographic Society said on Friday it was disturbed by Mr Murray's comments.

"The IPCC reports are an outstanding example of international science co-operation, rigour and transparency," AMOC president Blair Trewin said. "The society regards the remarks of Mr Murray as being a serious slur on the integrity of the many Australian and international authors of the IPCC report."

The backlash from scientists came as Bill Shorten announced that Labor would propose amendments to the federal government's carbon tax repeal legislation, saying he believed an emissions trading scheme was the best way to tackle climate change.

"We accept the science of climate change. Tony Abbott doesn't," the Opposition Leader said.

Mr Morgan said political leaders should reread The Limits of Growth to understand the dangers of modelling and the risk of believing "academics who think they can see the future".

He said the Club of Rome's prediction that most major commodities would run out within a few decades had been proven wrong because of the scientists' failure to consider technological innovation in the resources industry and their inability to understand how companies made decisions.

"It completely presumed there was a standstill in technology,' Mr Morgan said.

He cited the shale gas revolution in the US as an example of technological change leading to increased reserves of a key commodity. The move towards deep-sea drilling for oil had also led to new discoveries in areas previously discounted.

Mr Morgan said the Club of Rome's forecasts had "scared the hell out of everybody" and had encouraged overproduction, which kept commodity prices low for 20 years. "Everybody invested and you had a massive oversupply," he said.

Spy agencies in damage control over leaks
(Article by Geoff Kitney published in the Australian Financial Review, 4 November 2013.)

Australia’s key intelligence and security agencies are desperately trying to limit the damage from the disclosure of ­Australian foreign spying operations through leaks from the United States National Security Agency which have triggered angry responses from across the region.

Formal diplomatic protests over the claims of Australia’s electronic snooping have been lodged by the Indonesian and Malaysian governments, and a Chinese foreign ministry spokesman has called for urgent clarification of the reports. The disclosures are part of the security breaches involving former NSA contractor Edward Snowden.

Despite public silence from the ­federal government and the intelligence agencies which have adopted the normal protocol of refusing to confirm or deny claims relating to intelligence matters, intelligence sources have confirmed they are taking the issue extremely seriously and struggling to manage the fallout.

Intelligence sources have indicated to The Australian Financial Review that there is deep concern in official circles about how highly classified information about top secret intelligence ­gathering capabilities – and specific operations – was allowed by the NSA to get into unauthorised hands.

In particular, there is deep concern that a low-level, outside contractor to the NSA could have obtained the information, just as there was similar ­dismay about the access levels that Wikileaks’ source Private Bradley ­Manning was able to gain.

The claims that Australia’s ­top-secret Defence Signals Directorate targeted the internal communications systems of key regional powers are part of the damaging disclosures of US spying operations which snooped on the private phone conversations of ­German Chancellor Angela Merkel and other US allies.

A US report over the weekend disclosed the details of a joint Australian DSD and NSA operation which used the cover of then-prime minister Kevin Rudd’s visit to Bali for a climate change conference in 2007 to target the mobile phones of key Indonesian figures.

Serious questions

One of Australia’s leading defence analysts, Professor of Strategic Studies at the Australian National University, Hugh White, told the Financial Review there were serious issues relevant to Australia’s national security interests that needed to be asked about the internal operations of the NSA.

“Without reflecting on the specific allegations, I make the point that our intelligence co-operation with the United States depends on the capacity of both sides to keep each other’s secrets,” Professor White said.

“The less confidence we have in the capacity of the US agencies to maintain that secrecy the harder it will be to sustain the co-operation.”

Australian diplomats in the region are responding to the protests by angry governments by refusing to confirm or deny the leaked details of electronic intelligence operations.

Instead, they are attempting to reassure regional powers that Australia is committed to strengthening regional security and building better relationships with regional governments.

But diplomatic sources concede that the issue will damage trust between Australia and its regional partners in the short term and require ongoing, behind-the-scenes efforts to repair the damage.

They say it is impossible to calculate what the cost of this might in terms of the co-operation between Australia and its regional partners.

The backlash from regional countries came after the publication in Fairfax Media of a top-secret map leaked by Edward Snowden that showed 90 US surveillance facilities at diplomatic missions worldwide, some of them joint operations with Australia’s Defence Signals Directorate.

The diplomatic scramble now going on in the region to try to limit the fallout of the disclosures is a major headache for the Abbott government and its inexperienced national security team.

Hugely embarrassing

While intelligence community insiders say that Australia’s Asian neighbours have long been aware that Australia conducts electronic intelligence gathering operations in conjunction with the US agencies, they say the disclosure of the details of specific operations is hugely embarrassing and potentially damaging to Australia’s relations with those countries.

Following last week’s formal protest by Indonesia, the Malaysian government over the weekend summoned the heads of the US and Australian missions in Kuala Lumpur to protest over the spying allegations.

Malaysian Foreign Minister Anifah Aman said his officials summoned the mission heads to “hand over a protest note in response to the alleged spying activities carried out by the two embassies in Kuala Lumpur”.

Speaking on Friday, Mr Anifah said that such activities were not done among friends because it could be severely damaging to existing relations.

Responding to the alleged spying activities, Indonesian Foreign Minister Marty Natalegawa said they were “just not cricket” .

A Chinese foreign ministry spokesman said China was “extremely ­concerned” about the reported US-led electronic spying and Australia’s connection with it.

This came as China was already unhappy about the Abbott ­government’s decision to ban Chinese telco Huawei from participating in ­providing equipment for the national broadband network over security ­concerns.

Huawei ban is PMs decision Turnbull
(Article by Christopher Joye published in the Australian Financial Review, 4 November 2013.)

Key points

The Coalition government’s decision to reaffirm a ban on Huawei’s involvement in the national broadband network (NBN) was based on a “judgment call” by the Prime Minister, says Malcolm Turnbull.

Mr Turnbull, the Minister for Communications, made it clear on television on Sunday that any decision on the continuation of the ban on the Chinese telco supplier was not his to make.

Mr Turnbull had previously advocated, alongside cabinet ministers Andrew Robb and Julie Bishop, that the Coalition should revisit the Huawei ban. But this was ruled out by Prime Minister Tony Abbott on Thursday.

Opposition communications spokesman Jason Clare told The Australian Financial Review that Mr Turnbull was “implicitly questioning the judgment of the Prime Minister” by framing the government’s decision in this way.

Mr Turnbull hinted that with or without the ban, users of the NBN would be exposed to Huawei.

He said it was a “very important point” to understand that the NBN “is not an end to end network – it is a last mile network”.

Mr Turnbull was referring to the fact that communications routed via the NBN would use other carriers, which may in turn rely on Huawei equipment.

The Financial Review revealed on the weekend that security agencies recommended that Huawei be banned from the NBN in mid-2008, over three years before the company was informed in December 2011.

A Huawei spokesman said the revelations reaffirmed that the issues which led to the ban “are bigger than any one vendor or even any one country”.

The spokesman conceded that Huawei’s issues in Australia were partly a casualty of the struggle for international telecommunications dominance between the United States and China.

The spokesman said the company had long “advocated the development of a global framework on cyber security to address these issues collaboratively”.

“Huawei is only interested in getting on with our commercial business,” the spokesman said. “We’re a private company and we’ll leave the politics to the politicians.”

2008 threat assessment

The Financial Review’s story revealed that in a 2008 “threat assessment” the Australian Signals Directorate (ASD) advised the government to avoid selecting NBN operators that used Huawei equipment on the basis of the company’s ties to the Chinese state and the “high likelihood” it would exfiltrate sensitive information to it.

In late 2008 a classified team of representatives from the Attorney-General’s Department, ASD and the Australian Security Intelligence Organisation was sent around the world to consult Australia’s intelligence partners on Chinese telco risks and Huawei in particular.

While the triumvirate could find no smoking gun, the report was said to be very clear in its conclusion. In the words of one participant, “the risk of allowing Huawei to help build the NBN was just too serious to contemplate”.

In explaining why some countries like Britain have embraced Huawei, Mr Turnbull said the “reasons carriers buy equipment from Huawei are [that] they want diversity of suppliers and because Huawei has historically undercut the price of the Western suppliers out of Europe and the United States”.

“If you go to Vodafone or Optus they will say, ‘the equipment works and it was a lot cheaper’, no doubt”, he said. “These [economic and security issues] are the things you have got to weigh up, and it is the Prime Minister’s job to make these judgment calls.”

The animus between Telstra and the government in late 2008 opened the door to Huawei working with the newly established NBN Co.

Senior intelligence officers recall that their leaders were “hopping mad” about this prospect.

In early 2009 the head of ASIO’s counter-espionage division, who cannot be named, allegedly told an inter-agency meeting that “there is no hope in hell that Huawei will have anything to do with a national infrastructure project run by the Australian government”, according to a person who attended.

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