Australian + New Zealand Defence Directory 20/21

AUSTRALIAN + NEW ZEALAND DEFENCE DIRECTORY 2020/21 THE NATION BUILD www. d e f e n c e . d i r e c t o r y 26 WHAT IS SOVEREIGNTY? IT’S NOT JUST “DOING STUFF” IN AUSTRALIA S overeignty is mentioned in almost every single communication with respect to defence industry. The issue, however, is that the word sovereignty in this debate has lost its context. It is used primarily in a political sense to justify jobs and “doing stuff” in Australia. Whilst those jobs, both individually and collectively are important, this is not what sovereignty in defence is about. There are two separate concepts of sovereignty to consider. The first is sovereignty with respect to territoriality; a concept that is widely accepted to have developed from the Treaty of Westphalia in 1648 that recognised a sovereign’s right to govern within recognised borders free of outside interference. The second is sovereignty with respect to the application of military force. Nation states are born with a “cup full” of sovereignty. This sovereignty is bequeathed to states by the international community, and the state is able to utilise this sovereignty for its benefit. It can enter into trade agreements, or alliances, as it chooses, and offer up aspects of its territorial sovereignty in return. The hosting of allied military bases is an example. Nation states are born with an “empty cup” of operational sovereignty, that is, the ability to use military force as, when, where and for the period required. The only way to acquire this sovereignty is to invest. Which brings us to the why for operational sovereignty and for sovereignty in defence industry. Defence forces exist to provide governments with strategic options. The world comprises states with varying levels of power, and varying intent with respect to the utilisation of that power. Some aspects of that intent may be perceived as threatening to another state, or to the attainment of its strategic interests. The role of the defence force is, therefore, to assist the state mitigate the risks that arise from these threats through the ap- plication of force. Defence forces in modern democracies are reliant on industry. Industry provides not only the platforms and systems which the military uses, but also typically provides the means to the sustainment of those capabilities. As defence forces are structured to mitigate strategic risks, it follows that the industry capabilities of most importance are those aligned to the capabilities and the risks. This is not a novel concept. A series of Australian defence industry policies have addressed this point through succes- sive definitions of Priority Local Industry Capabilities (PLICs), Priority Industry Capabilities (PICs), and, most recently, Sovereign Industry Capability Priorities (SICPs). As military capabilities differ in their level of importance, not all industry capabilities are of equal importance. As funding is finite it therefore follows that to get maximum ‘bang for our buck’ we need to invest into those industry and military capabilities most aligned to the mitigation of strategic risk. This is where defence industry sovereignty comes back into frame. Stephen Krasner, a prominent academic in the field of sovereignty, notes that sovereignty essentially comprises two aspects; authority and control. Authority comes from properly executed contracts, and a robust judicial system. Control, however, is the problematic piece for defence industry in Australia. The fact is that most companies in the Australian defence industry, and the ones that do the vast majority of the work, are controlled from foreign locations. An Australian-based subsidiary doesn’t overcome this reality. In peacetime this doesn’t really matter. But defence forces provide the effects for which they are established in periods outside of peacetime. These effects are at increased risk when the ability to exercise any meaningful of control over the required industrial processes, activities and priorities is limited, or non-existent. We don’t need control over all capabilities. This is autarky, and we can’t afford to be autarkic. What we do need is control over those aspects of defence industry that contribute to the critical capabilities in the military force structure. We need to control the development, the manufacture, maintenance, sustainment and improvement of these capabilities at the time and in the manner that we decide is required. Not how and when some foreign entity decides for us. In reality, the number of these critically-important capabilities will be small. We can, therefore, continue to acquire platforms, systems and services from off-shore suppliers for the majority of what we do. But we need to recognise that just because something is done here does not automati- cally make it sovereign. Graeme Dunk Head of Strategy Shoal Group