Vulnerabilities must be addressed through sovereign solutions

In some ways, Australia was fortunate it was a virus, not an adversary, that revealed the vulnerability of global supply chains and emphasised the need for our own sovereign capabilities. In the throes of the pandemic, the immediate interests of Australia’s supplier nations quickly overrode any contractual obligations, directly threatening our interests. While this was seen publicly through restricted access to ventilators and personal protective equipment, defence supply chains were similarly affected.

This crisis of supply occurred without the added difficulty of an aggressor mounting military operations to cut or disrupt our very long supply lines.

It is now clear that in any national security crisis, we must depend principally on our own resources. This experience provides a clear notion of sovereign capability as one that exists for the defence of Australia and for Australian interests, as its first priority, and without reference to, or approval from, any foreign entity.

What that looks like from a corporate perspective, is that:
● management and executive control are held by Australians;
● control of finances and profit-and-loss accountability is entirely within the local entity;
● the local entity has intellectual property control; and
● there are no obligations to support any parent entity’s defence offsets outside Australia, with transparent controls to ensure this is so.

These four key elements underpin national resilience by ensuring the capabilities we depend on are independent of foreign influence. They are the same conditions applied to sovereign capability by other advanced nations, including via Foreign Ownership, Control or Influence (FOCI) policies in the US. Importantly, they do not exclude foreign investment in, or ownership of, sovereign capability, nor do they prevent the use of foreign technology or foreign nationals working in Australia to support key capabilities.

These principles are applicable to every aspect of sovereign defence capability,…