Hard-Wired for Corruption -The arms trade and Australia’s lax monitoring regimes
Chris Douglas concludes that from an anti-bribery/corruption risk perspective, Naval Group should not have been put on the shortlist for the Future Submarines program, let alone selected to partner with Australia to build the submarines. The ‘contract of the century’ was mired in unacceptable risk from the outset due to Defence’s poor risk-management processes and non-existent specific anti-bribery/corruption measures. A formal inquiry is needed both to examine how this deeply flawed decision was reached and to help prevent the situation recurring in future major defence procurement projects.
‘In the arms business, it’s always a time of war’, wrote Roeber. Without war, there is no revenue, no profit, no growth. Countries with established arms manufacturing industries therefore have a perpetual economic driver towards conflict and warfare.
To give just one example, there is no visibility around what or how much weaponry Australia has exported to Saudi Arabia or the United Arab Emirates during the years of the Yemen war.
https://undueinfluence.substack.com/p/hard-wired-for-corruption?utm_source=substack&utm_medium=email Michelle Fahy 1 Aug 22, The international arms trade, worth around US$200 billion a year, represents less than 1 per cent of world trade yet is said to account for about 40 per cent of its corruption. While estimates vary, there is little dispute amongst long-term arms industry researchers that it is the most corrupt industry on the planet. Indeed, it is said to be hard-wired for corruption.
The World Peace Foundation (WPF), housed at Tufts University in America, produces extensive research on the global arms trade, including a compendium of corrupt arms deals. It says that ‘Corruption within the industry is often treated in terms of isolated incidents, when it is, in fact, representative of the business model for the industry’.
This finding is supported by research for Transparency International’s (TI) Government Defence Integrity (GDI) index, which assesses the quality of controls for managing corruption risk in defence and security institutions. The GDI shows that 86 per cent of global arms exports between 2016 and 2020 originated from countries at moderate to very high risk of corruption in their defence sectors, while 49 per cent of global arms imports went to countries at high to critical risk of defence corruption. Australia is rated as a moderate corruption risk in the GDI, with two key areas of concern being the lack of transparency in defence procurement and weak anti-corruption safeguards on military operations.
The legal trade in arms has long been known for its susceptibility to corruption. This is due to the high value and complexity of arms deals, the close association between the arms industry and political power, and the secrecy claimed necessary for national security, all of which shield arms-related activities from scrutiny. As arms industry expert Joe Roeber pointed out, ‘Defence goods are complex and each contract contains a mix of special requirements. Comparison is remarkably difficult and effective monitoring by public watchdogs is all but impossible. An unknowable price can be manipulated to accommodate any amount of covert payments’. Further, there are very few major arms deals on offer globally each year—usually less than 10 in the range of tens of billions each meaning competition is intense—while only a small number of people make the decision on what to buy…
‘In the arms business, it’s always a time of war’, wrote Roeber. Without war, there is no revenue, no profit, no growth. Countries with established arms manufacturing industries therefore have a perpetual economic driver towards conflict and warfare.
For example, in the month leading up to Russia’s invasion of Ukraine, and just days after a horrific attack in Yemen by the Saudi-led coalition using a Raytheon missile that killed 90 people and injured 200, Raytheon’s CEO told investors that global tensions represented ‘opportunities for international sales’, and that he expected to ‘see some benefit’ from ‘the tensions in Eastern Europe [and] in the South China Sea’. Meanwhile, Just Security has noted that the ‘well-documented risks of corruption in the arms industry and the potential for profiteering from an arms race in the Ukraine war’ are risk factors embedded in the massive flow of lethal weaponry from the West into Ukraine…
Blanket secrecy
All countries justify secrecy around arms-related activity with claims of protecting ‘national security’. The Australian government, for example, imposes a high level of secrecy over its arms procurement, sustainment and export deals, with politicians and the Department of Defence resisting demands for greater transparency…
Australia also relies on ‘commercial-in-confidence’ justifications to protect arms industry interests. This, in combination with national security claims, has led to almost blanket secrecy around Australia’s arms exports. To give just one example, there is no visibility around what or how much weaponry Australia has exported to Saudi Arabia or the United Arab Emirates during the years of the Yemen war. The government has only released information about the number of export permits it has approved or declined (by March 2021 Australian approvals to these two nations topped 100). However, permit numbers are not useful, as not all permit approvals translate into actual exports, and permits can cover numerous types of equipment, small or large quantities, extend for varying time periods, and even cover multiple destinations.
This is significant because the decades-long UK Campaign Against the Arms Trade has amassed a ‘mountain of evidence of corruption in arms sales to Saudi’ showing that bribery is central to the Saudi government’s approach to arms deals. Andrew Feinstein, author of the exhaustively researched 600-page book The Shadow World: Inside the Global Arms Trade, told ABC radio in 2018 that he had never seen a Saudi arms deal that didn’t involve ‘massive amounts’ of corruption, and that the percentage of a Saudi contract paid in bribes could be up to ‘about 35 per cent of the contract price’. The United Arab Emirates is also known for its secrecy, corruption, and money laundering links.
Australia’s decreasing commitment to anti-corruption measures
Australia’s extraordinary current spending on military capability—$270 billion in a decade, on top of the usual defence budget—means the domestic arms industry is awash with cash. At the same time, the public’s limited ability to scrutinise this spending has been eroded further by a defence minister, Peter Dutton, who has restricted Defence’s engagement with the media. The combination of record sums of money and little scrutiny provides fertile ground for corruption.
Australia’s performance on anti-corruption measures has nose-dived in recent years:
- It recorded its worst ever score on a global anti-corruption index in 2022, dropping four points (from 77 to 73) and falling to 18th place. Australia has now dropped 12 points in a decade, from a high of 7th (85 points) in 2012.
- Its membership status at the Open Government Partnership risks being put under review because it has ‘acted contrary to the OGP process’ and failed to submit its latest national action plan.
- Its negligible attempts to investigate and prosecute cases of foreign bribery have been criticised by the Working Group for the OECD’s Anti-Bribery Convention (it expressed concern over ‘the continued low level of foreign bribery enforcement… given the size of Australia’s economy and the high-risk regions and sectors in which its companies operate’ and ‘its long-standing challenges in attributing wrongdoing to corporate entities’).
- It has been named an ‘international laggard’ in expanding anti-money-laundering laws in line with recommendations by the G7’s Financial Action Task Force, one of only three countries, alongside Haiti and Madagascar, to have failed to do so. Australia now risks being put on a grey list of countries that don’t meet international money-laundering standards. (Australia has been resisting anti-money-laundering regulation for fifteen years.)
- A dedicated federal anti-corruption body still has not been established…
Red flags
‘The biggest corruption risk in an arms deal is a company’s decision to pay bribes to secure the deal’, says Sam Perlo-Freeman, former Program Manager for Global Arms and Corruption, World Peace Foundation, Tufts University. Decisions to pay significant bribes are made at a company’s highest levels, and while no amount of technical anti-corruption measures will eliminate high-level corrupt behaviour, strong whistleblower protection mechanisms can increase the probability of exposure. Other anti-corruption measures are also important, particularly at lower levels where zealous company employees might be tempted to cut corners to advance their careers. However, such technical measures do not tackle the underlying political and economic drivers of high-level corruption in the arms industry, where winning large deals is necessary for corporate survival and price is not the primary concern. As Joe Roeber noted incisively, bribery in this context ‘is not just a simple add-on to the procurement process, but distorts the decisions. What would the equilibrium level of trade be without the stimulus of corruption?’ …
No evidence has emerged of…extensive corrupt practices in Australia, but there are regular red flags of possible arms industry corruption. Chris Douglas, a 31-year veteran of financial crime investigation for the Australian Federal Police, who now runs his own consultancy, is an Australian expert in anti-bribery and corruption measures. He says that such compliance programs are a necessary component of good corporate and public governance—essential for preventing corruption in the defence industry. Although he has lodged numerous Freedom of Information requests (FOIs) with the Defence Department about anti-bribery/corruption measures on major procurements, he says, ‘I have not detected an ABC [anti-bribery/corruption] program being used in any of the major defence projects I have examined’.
Douglas says that the Department of Defence ‘has not caught up with modern corporate management practices’ and has no understanding of how to use anti-bribery/corruption risk-based assessments to manage the significant risks posed by bribery and corruption in its projects, particularly major ones. As he puts it: ‘That any department would not undertake an ABC risk assessment when such large sums of money are involved, in an industry that is rated high for corrupt behaviour, speaks volumes about a poor culture within that department’.
Repeated cost blowouts and delays are just two of the red flags for corruption that are regularly found in Australian defence procurement and sustainment projects. The cost of these to the public is substantial.
While there are numerous examples of red flag projects, here are just three.
Naval Group—submarine contract
This contract was abandoned with the arrival of AUKUS, but the original deal with Naval Group requires a public inquiry to examine the full extent of the process by which the internationally lucrative ‘contract of the century’ was awarded. The need for an inquiry has been amplified given the shock shredding of Defence’s largest ever contract, a decision which made international news and may yet cost Australia billions.
Continue readingAustralia’s price tag for nuclear submarines could soar by $billions
AFR Andrew Tillett, Political correspondentJul 20, 2022
New US government reports warn that Australia could be saddled with billions of dollars of higher costs to build the most up-to-date nuclear submarines, and have cast fresh doubts on America’s defence industry being able to contribute to a speedy acquisition of boats.
Defence Minister Richard Marles wants to announce a preferred design and acquisition pathway in the first quarter of next year, but the Congressional Research Service said the US Navy’s Virginia class submarine program was suffering from construction delays and a maintenance backlog, curtailing the availability of boats already in service…………………………….. (subscribers only)
more https://www.afr.com/politics/federal/australia-s-price-tag-for-nuclear-submarines-could-soar-by-billions-20220719-p5b2p7
Uranium is losing the new energy market battle.
Uranium is losing the new energy market battle. Uranium is being bypassed
in the rush to embrace renewable wind and solar energy sources, leaving
nuclear power floundering well short of its once anticipated potential.
Mining Journal 14th July 2022
Kerry Schott: why new coal or nuclear plants are a dumb idea
Mark Ludlow AFR, 7 June 22, ”…………………………………………It seems whenever there is an energy crunch or crisis, supporters of a nuclear industry say it would be the solution to Australia’s energy woes? Do you think nuclear will ever be an option in Australia?
My view of it, at the moment, is it’s a price thing. The last plant the English built cost an enormous amount of money. It’s much more expensive than coal.
It’s the cost of building the plant and dealing with the waste. Once up and running it’s not too bad, but the capital costs and the operating cost of dealing with the radioactive waste is a problem.
If you’re in the UK or France you have a population of 50 million. We don’t have that many people.
And the small-size modular plants they talk about are not being built because they are expensive.
Having gas as a standby is far cheaper. And nuclear, like coal, has to run all the time.
You still have the problem that it’s producing radioactive waste and not being dispatched.
Any other solutions to smooth out the bumps in the transition to a low-emissions economy?
The other thing we need is more transmission. To get prices down you need more zero-cost power, which is the wind and the sun. So, you need more of that in and need more transition.
Yes, there is a cost of transmission, but it’s bringing in many gigawatts of renewable energy at zero cost. So net-net, it’s a benefit.
The danger of building too much transmission is very slim because it takes ages to build it for starters. If anything, we’re lagging in the race rather than getting ahead of it…………………………… https://www.afr.com/companies/energy/kerry-schott-why-new-coal-or-nuclear-plants-are-a-dumb-idea-20220607-p5arru
Unions NSW opposes nuclear powered submarines and the AUKUS treaty.
Paul Keating ,Branch Secretary, Maritime Union of Australia, Sydney Branch, 26 Apr 22,
Unions NSW declares its total opposition to the reckless announcement by Scott Morrison that Australia would be developing nuclear-powered submarines as part of a military alliance with the US and UK.
At a time when Morrison should have been pursuing vaccination supplies and providing maximum support to our health system and millions of people in lockdown, he has been pursuing secret military deals. The deal will continue to escalate unnecessary conflict with China. Workers have already been impacted with seafarers stranded on coal ships and some trades shut down.
Extraordinary sums of money have been wasted with the previous submarine contract scrapped only five years after it was signed. That contract was worth $90 billion – nuclear submarines will cost much more.
Only six countries in the world have nuclear submarines, and they all have nuclear power stations. Advocates for nuclear power and nuclear weapons have been emboldened. The submarines will use highly enriched uranium ideal for nuclear weapons.
The Australian government has repeatedly tried to set up nuclear waste dumps on First Nations land. This will intensify that pressure.
The billions wasted on submarines should be spent on:
Building an Australian strategic shipping fleet in Adelaide that could operate in cabotage and international trades;
· Building renewable energy and offshore wind turbines to ensure we prevent global heating from exceeding 1.5°C;
· Raising Jobseeker payments to well above poverty levels;
· Pay increases for health workers and investments in our health systems;
· Pay increases for teachers and investments in public schools to make them covid-safe;
· Investing in firefighting capacity and ensuring we are ready for the next bushfire season.
Workers have no interest in war with China or any other country. Every effort should be made to pursue peaceful relations.
Unions NSW stands in solidarity with workers in all countries in opposing war and wasteful environmentally harmful military spending.
We pledge our opposition to oppose the development of nuclear submarines in Australia, and the development of any other nuclear industry.
Will Australia’s nuclear submarines end up being built overseas?
ABC, 7.30 / By Angelique Donnellan, 18 Apr 22, In 1938, wharfies at Port Kembla, south of Sydney refused to load smelted iron ore bound for military production in Japan for its war against China.
Key points:
Independent Senator Rex Patrick is concerned Australia’s nuclear submarines may end up being built overseas
Defence expert Clive Williams believes it would be cheaper to build the subs in the US or the UK
Port Kembla in NSW is being considered as a base for the nuclear submarines
Some locals, including Alexander Brown from Wollongong Against War and Nukes, says the peaceful legacy is reason for the town not to become a defence base for Australia’s new nuclear submarines.
“We’re a city of peace, and we’re a city of renewable and sustainable employment. We don’t want to turn into a defence industry town,” he told 7.30.
“If nuclear submarines are based here in Port Kembla, we’re looking at accident risks for us, for sea life, for the ecosystem that we all depend upon.”
Port Kembla is being considered as a potential $10 billion east coast nuclear submarine base location, along with Newcastle and Brisbane.
Debra Murphy from Illawarra Regional Development Australia said the town should embrace the opportunity.
Along with the base proposal, the historic AUKUS deal to deliver eight nuclear-powered submarines remains a work in progress during its initial 18-month consultation period…………
Defence Minister Peter Dutton wouldn’t be drawn on when the new nuclear submarines would be built and go into service, or the amount of construction work that would happen in Australia.
Under the previous French submarine deal, there was a public pledge to spend 60 per cent of the contract value in Australia………..
Concerns subs may be built overseas
South Australian Independent Senator and former submariner Rex Patrick said the language around a local build was too vague.
Every day, it looks more and more likely that this submarine will be built overseas,” Mr Patrick told 7.30.
“The government keeps squeezing on the schedule and that means that they have to reduce risk wherever they possibly can.
“The Australian Strategic Policy Institute has predicted that this project will cost about $170 billion. An overseas build is the exporting of $170 billion of taxpayers’ money and thousands of Australian jobs to foreign shipyards.”……………………..
Expert says subs should be built overseas
Defence researcher Clive Williams from Australian National University said considering the complexity of a nuclear submarine, taxpayers would get better value for money if the boats were constructed in the US or UK.
“I think building at Osborne in South Australia is fraught with danger and could well be another defence procurement disaster. I’m sure that it’ll wind up in cost overruns, changes to design, fiddling around with it, and so on,” he told 7.30.
“I think a much safer bet is to go with an overseas purchase.”………………………………
The government is pursuing the nuclear option after cancelling a contract last September with the French to build 12 diesel-electric submarines, a move that is likely to cost up to $5.5 billion in compensation to the companies involved, including Naval Group.
Mr Dutton said negotiations were ongoing and the settlement would be made public when finalised. https://www.abc.net.au/news/2022-04-19/australia-aukus-nuclear-submarines-building/100982778
No – it turns out that the nuclear submarines not likely to be built in Australia – Morrison
I am in awe. The man is a marketing genius. He managed to make sure that the submarine development plan for Adelaide was shut down – by promising an even better nuclear submarine development in Adelaide. Now that wondeful new job-making enterprise vanishes into the ether. But – no worries – he”ll be able to convince us that an attack on Australia by China is imminent, -so natioal security tops employment. So no doubt Australians will rejoice and re-elect the champion marketer.
PM won’t commit to build nuclear subs locally Joseph Brookes,, https://www.innovationaus.com/pm-wont-commit-to-build-nuclear-subs-locally/ 6 April 2022 Prime Minister Scott Morrison will not commit to building Australia’s nuclear powered submarines locally, saying any industry development considerations will be trumped by the need to acquire the capability as soon as possible.
The refusal, made Wednesday as the AUKUS arrangement was expanded to other technologies, follows Defence Minister Peter Dutton also flagging Australia would need to “get the balance right” between supporting local industry and securing capabilities in response to rising foreign threats.
The AUKUS arrangement was announced in September and the “intent” to build new nuclear powered submarines in Australia was a welcome direction for the local defence industry because the new plan also meant the previous submarine program was being scrapped.
A taskforce is continuing to assess options for acquiring the new submarines, including which vessel type and where they will be built.
In February, Defence Minister Peter Dutton had to address concerns about local industry missing out after a high-ranking Defence official told an industry conference the department is “maturing beyond ascribing a percentage” of local industry involvement and was unlikely to set a minimum like previous major ship builds.
A few weeks later the minister suggested a decision on submarine type would be revealed before the election after the taskforce made significant progress earlier this year.
But he was promptly contradicted by Prime Minister Scott Morrison who said a decision was not anticipated before the election because of the processes that would be required stretching into a caretaker period.
On Wednesday, during an announcement about the expansion of the AUKUS arrangement to hypersonic technologies and electronic warfare, the Prime Minister backed away from any commitment to local industry.
He was asked if he could guarantee if the new submarines, beyond the nuclear reactor, would be built in Australia.
“We’re working through all of those issues at present what, and that is certainly our intention to maximise all of that [local manufacturing]. Of course it is,” he told reporters.
“But it’s also the paramount goal is to ensure we get that capability as soon as we can, and it’s in the best form that it can be working with our partners.”
Weapons corporations infiltrate our schools and charities, promoting war-mongering to our youth
REPUTATION LAUNDERING,
https://declassifiedaus.org/2022/03/31/reputation-laundering/ DeclassifiedAUS2 The weapons companies spruiking the ‘benefits and opportunities’ of the wars in Ukraine and Yemen and tensions in the South China Sea are infiltrating our schools., MICHELLE FAHY, 31 MARCH 2022
A Lockheed Martin missile blows up a school bus in Yemen, while in Australia the company gains kudos by sponsoring the National Youth Science Forum.
BAE Systems supports the education of kids in Australia, while being complicit in the killing of thousands of children in Yemen.
Lockheed Martin, the world’s largest weapons-maker, is raking in billions from ongoing wars like the four-week Russian invasion of Ukraine, and the eight-year long Saudi-led war in Yemen.
A Lockheed Martin laser-guided bomb blew up a bus full of Yemeni school children in 2018, killing 40 children and injuring dozens more.
Meanwhile, in Australia, Lockheed Martin was busy cultivating kudos with kids as major sponsor of the National Youth Science Forum, a registered charity originally set up by Rotary.
Then there’s US missile-making giant Raytheon which now has a significant new manufacturing facility in Australia. It has continued to supply the Saudi-led coalition with weapons for the Yemen war, despite extensive evidence pointing to war crimes arising from its missiles being used to target and kill civilians.
In January 2022, a Raytheon missile killed at least 80 people and injured over 200 in a so-called precision strike in Sa’adah in Yemen.
Within days of this horrific incident, Raytheon’s CEO was telling investors that rising tensions represented “opportunities for international sales” and he fully expected to “see some benefit” from “the tensions in Eastern Europe [and] the South China Sea”.
There’s no mention in Australia’s media of the big profits Raytheon is making from the Yemen war, which has now entered its eighth year, killed or injured at least 19,000 civilians, and possibly many more, and also caused the deaths of tens of thousands of children through starvation, due to disruption of food supplies and militarily-enforced trade blockade.
Instead, we’ve seen pictures of Aussie school kids having fun with the Australian snowboarding Paralympian who Raytheon Australia hired to front the launch of its Maths Alive! educational exhibition.
And we also heard about Raytheon’s sponsorship of Soldier On and the Invictus Games, despite the irony of a weapons company using its support of injured military personnel as a public relations exercise.
There’s a name for this cynical behaviour by corporations: ‘reputation laundering’.
Weapons companies are now ‘Innovators’
The world’s weapons producers have also taken to promoting themselves as ‘innovators’ in the areas of science, technology, engineering and maths, called STEM.
This enables them to target children and young people as future employees (see, for example, BAE Systems Australia, Boeing Defence Australia, and Saab Australia), often with the willing partnership of respected institutions. Many Australian universities now have MOUs, joint ventures, strategic partnerships, or other forms of collaboration with the weapons industry.
This enthusiastic support of STEM serves a double purpose: reputation laundering, and a socially acceptable way to promote the weapons industry as a future employer directly to children and their parents.
Promoting STEM education is essential to creating a well-trained workforce for key industries of the future, particularly those that can tackle the existential risks associated with climate change. The concern with the weapons industry’s activities in this domain is the way it is using STEM to target children as young as primary school age for weapons-making careers, often with the support of government.
The spin and glamour being associated with Australia’s increased militarism is a concern on several levels, particularly as the marketing omits pertinent information: weapons and warfare aren’t mentioned.
Nor is there information about how children might use their STEM skills to enhance the ‘lethality’ of their employer’s products.
Nor about a future in which the need for human involvement in the ‘kill chain’ is eliminated by creating autonomous robots to make life and death decisions instead. (This is not science fiction, these research and development programs are already happening.)
Working for companies involved with nuclear weapons isn’t discussed, either.
Instead, a world of euphemism has been created: ‘advanced technology systems, products and services’, ‘high end technology company’, ‘leading systems integrator’, ‘security and aerospace company’, ‘defence technology and innovation company’.
It is also likely to be weapons company marketing material if the phrase ‘solving complex problems’ appears, especially if accompanied by claims of ‘making the world safer.
None of these euphemisms conjures up realistic images of the bloody and brutal destruction the world is witnessing in the world’s latest war in Ukraine.
The ways global weapons giants have cultivated relationships with organisations of good purpose in Australia is highlighted in the following examples.
Lockheed Martin and the National Youth Science Forum
The National Youth Science Forum was created by Rotary, which remains involved. The Forum, now a not-for-profit organisation overseen by a board, has numerous programs, the flagship program being for Year 12 students interested in a career in science.
“The ban treaty embodies the collective moral revulsion of the international community,” according to the Director of the Centre for Nuclear Non-Proliferation and Disarmament at the Australian National University, Professor Ramesh Thakur.
Lockheed Martin and the Gallipoli Sponsorship Fund
In 2020, Lockheed Martin Australia became the first corporate sponsor of the Gallipoli Scholarship Fund and provides $120,000 to fund 12 Lockheed Martin Australia bursaries for the educational benefit of descendants of Australian military veterans.
Lockheed Martin is providing these Australian educational bursaries through to the end of 2023, with an opportunity to extend.
Referring to Lockheed Martin as a “defence technology and innovation company”, the Gallipoli Sponsorship Fund’s website also does not disclose Lockheed’s status as the world’s dominant weapons-maker nor its position as a major nuclear weapons producer.
BAE Systems and The Smith Family
This example illustrates that public pressure can and does make a difference.
The UK’s largest weapons-maker, BAE Systems, has been working inside Saudi Arabia supporting the Saudi-led coalition’s role in Yemen since the start of the war.
A BAE maintenance employee was quoted in 2019 saying, “If we weren’t there, in 7 to 14 days there wouldn’t be a jet in the sky.” BAE Systems has sold nearly £18 billion worth of weaponry to the Saudis since the war in Yemen started in 2014.
Yet in Australia, BAE Systems started a $100,000 partnership with The Smith Family in August 2020, sponsoring a STEM education program for under-privileged children.
BAE’s role helping the Saudis prolong one of the world’s worst humanitarian crises in Yemen was pointed out numerous times to The Smith Family, a children’s charity, after news broke of its BAE sponsorship.
The Smith Family initially resisted but after increasing pressure and activism from peace organisations and many complaints from the public, The Smith Family soon dropped its controversial ‘partnership’ with BAE Systems Australia, mere months after it had started.
Morally indefensible positions
Benign-sounding sponsorships of Australian school children such as these might appear less self-serving if weapons companies behaved consistently and stopped supplying weapons to those nations known to be serial abusers of human rights.
Saying they are merely doing the bidding of their governments in supplying the Saudis, and other abusive and repressive regimes, as these companies have, is not a morally defensible position.
It is particularly not defensible in the face of evidence of ongoing war crimes being committed using their weaponry.
MICHELLE FAHY is an independent writer and researcher, specialising in the examination of connections between the weapons industry and government, and has written in various independent publications. She is on twitter @FahyMichelle, and on Substack at UndueInfluence.substack.com An earlier version of this article was published in Michael West Media in November 2020.
Directors net $3.7 million in selling off their Paladin Energy uranium shares, then uranium stocks plummet
Paladin directors narrowly avoid nuclear sell-off https://www.afr.com/rear-window/paladin-directors-narrowly-avoid-nuclear-sell-off-20220308-p5a2u3Joe AstonColumnist, Uranium miner Paladin Energy advised the Australian Securities Exchange on Monday that chairman Cliff Lawrenson and non-executive director Peter Watson had, between them, sold 4.5 million, or 55 per cent, of their shares in the company between February 28 and March 3, netting proceeds of $3.7 million.
Lawrenson’s broker secured an average out price of 84¢ while Watson had to settle for 81¢.
It was certainly an auspicious moment for the pair. That very evening, of March 3, Russian forces seized the Zaporizhzhia nuclear power plant in Ukraine, but not before their shelling set it on fire, and uranium stocks dutifully plummeted across global markets.
On March 4, 154 million Paladin shares changed hands, crunching the share price down 15 per cent to 74¢. At one point in intraday trading, they were down 26 per cent.
Timing is everything, the old truism goes, and you can safely say about Lawrenson and Watson that their timing is the opposite of radioactive.
Lawrenson still has 2.1 million Paladin shares to his name while Watson has 1.6 million.
Australian companies’ uranium shares plummet
ASX uranium shares plummet amid Ukraine power station attack. Motley Fool, A fire at Europe’s largest nuclear power station has uranium investors on edge… Mitchell Lawler 6 Mar 22, ASX-listed uranium shares are tumbling on Friday following reports of a fire at Ukraine’s largest nuclear power station ……..
The S&P/ASX 200 Index (ASX: XJO) is suffering a red session on Friday amid an intensification of the situation in Ukraine. However, ASX uranium shares are showing up as some of the hardest-hit companies of all on the Australian share market.
At present, many uranium producers and explorers are trading 10% to 20% lower. This follows reports that one of Ukraine’s nuclear power stations — the largest in Europe — is on fire as a consequence of Russian attacks.
………. with years of unattractive prices for the commodity, investments in creating new a new supply had been dampened.
However, with expectations of nuclear energy becoming a piece in the green transition puzzle, investors were willing to take a punt on ASX uranium shares.
That was until the latest development in the Ukraine-Russia conflict.
Companies copping the brunt of bad news
Currently, ASX uranium shares are being sold off hard. Here’s how some of these companies are tracking:
- Boss Energy Ltd (ASX: BOE) down 13.7%
- Paladin Energy Ltd (ASX: PDN) down 12.2%
- Deep Yellow Limited (ASX: DYL) down 14.9%
- Peninsula Energy Ltd (ASX: PEN) down 14%
Nuclear submarine plan does not mean more jobs for Australians. In fact it’s already caused 1,100 job losses
Now, we find out that the new $100 billion AUKUS subs deal is unlikely to have any local content mandate and may deliver absolutely nothing to the South Australian economy and workers.
more than 1,100 South Australian workers had lost their jobs because of the government’s decision to scrap the French agreement.
Doubts over local industry involvement in nuclear subs program, Joseph Brookes, Innovation Aus, Senior Reporter, 4 February 2022 Unions have called on the Prime Minister to commit to a minimum level of local industry involvement in the upcoming nuclear submarine program after a senior Defence official reportedly said there would be no mandated minimum level.
A high-ranking Defence official this week told an industry conference the department is “maturing beyond ascribing a percentage” of local industry involvement and was unlikely to set a minimum like previous major ship builds, according to The Australian.
In response to subsequent concerns from local industry, Defence minister Peter Dutton said Australia would “get the balance right” between supporting local industry and securing capabilities in response to rising foreign conflicts involving China………
The minister did not commit to a minimum level of local industry participation in submarine contracts.
In response to the earlier report that Defence’s Capability and Sustainment Group chief counsel Fran Rush had said the government was more focused more on securing capability than building local industry, unions called for Prime Minister Scott Morrison to fulfil a commitment to build at least eight nuclear powered submarines in Adelaide.
“Scott Morrison promised South Australia that it would receive billions in investment and thousands of jobs from the AUKUS submarine contract, making up for the significant losses caused by his tearing up of the French Naval Group contract, under which many South Australians were already employed,” SA Unions Secretary Dale Beasley said.
Now, we find out that the new $100 billion AUKUS subs deal is unlikely to have any local content mandate and may deliver absolutely nothing to the South Australian economy and workers.
“First Scott Morrison betrayed the French, now he’s betraying South Australians, by ripping away promised jobs and investment.”
The union said more than 1,100 South Australian workers had lost their jobs because of the government’s decision to scrap the French agreement.
Nearly 150 officials, including private contractors, are part of a government-led taskforce currently exploring options for acquiring submarines.
Do you know more? Contact James Riley via Email. https://www.innovationaus.com/doubts-over-local-industry-involvement-in-nuclear-subs-program/
Ranger uranium mine rehabilitation costs could blow out to $2.2 billion, Energy Resources tells ASX
Ranger uranium mine rehabilitation costs could blow out to $2.2 billion, Energy Resources tells ASX, https://www.abc.net.au/news/rural/2022-02-02/ranger-uranium-mine-cleanup-cost-blowout-to-2-2-billion/100798666ABC Rural / By Daniel Fitzgerald The rehabilitation of a decommissioned uranium mine in Kakadu National Park could cost up to $1.2 billion more than expected and take two years longer than initially planned.
Key points:
- Rehabilitation of Ranger uranium mine to cost between $1.6 billion and $2.2 billion
- Timeline of clean-up pushed out by two years
- Gundjeihmi Aboriginal Corporation concerned ERA won’t be able to fund extra costs
Energy Resources of Australia (ERA) — a subsidiary of mining giant Rio Tinto — shut down production at its Ranger uranium mine, 250 kilometres east of Darwin, in January last year and has since been working to return the mine site to its original state.
The rehabilitation was originally estimated at $973 million, but in a statement to the ASX on Wednesday, ERA revised costs to be approximately between $1.6 and $2.2 billion.
The company also said clean-up works could continue until the end of 2028, more than two years longer than planned.
The Gundjeihmi Aboriginal Corporation, which represents Mirarr traditional owners, had been seeking clarity on the expected cost blowouts from ERA.
“We knew it would cost more, but a doubling — to probably the biggest rehabilitation exercise in the history of Australian mining — took us by surprise,” chief executive Justin O’Brien said.
“It’s not good news, but at least we now have a much greater picture of the true cost.”
ERA’s statement outlined a number of reasons for the revised cost, including engineering issues, emerging technical risks and additional water treatment costs.
“It is a complex operation and it is in a very sensitive, world-heritage-listed national park, upstream of Aboriginal communities and the Arafura Sea,” Mr O’Brien said.
Federal changes needed to extend time frame
ERA’s current lease stipulates the company must complete the rehabilitation and be off the mine site by 2026, a condition legislated by the Atomic Energy Act 1953.
With the rehabilitation time frame now stretching into 2028, ERA said it “has been engaging with government and key stakeholders to amend the Atomic Energy Act 1953 and extend the expiry date of ERA’s tenure on the Ranger Project Area”.
Mr O’Brien said a two-year extension to the rehabilitation was “pretty ambitious”.
“If you’re going to amend the legislation in Canberra you don’t just do it for two years, you give them lots of space to do this,” he said.
“If they [ERA] relinquish within another 26 years, then fine.”
Can ERA afford the cost blowout?
In light of the cost revision, ERA said it was “currently reviewing all available funding options to ensure that the increased forecast cost of the rehabilitation of the Ranger Project Area will be adequately funded”.
As of December 31, 2021 the company had $699 million in cash funding and $535 million held by the Commonwealth government as part of the Ranger Rehabilitation Trust Fund.
ERA’s parent company, Rio Tinto said in a statement to the ASX, “it is committed to working with [ERA] to ensure the rehabilitation of the Ranger Project Area is successfully achieved to a standard that will establish an environment similar to the adjacent Kakadu National Park”.
Australian taxpayers up for $170Billion, for American nuclear submarines. No problem?
Australia’s Aukus nuclear submarines could cost as much as $171bn, report finds
Australian Strategic Policy Institute report calls project ‘most complex endeavour Australia has embarked upon’ Guardian, Tory Shepherd, Tue 14 Dec 2021
Australia’s eight planned nuclear submarines will cost $70bn at an “absolute minimum” and it’s “highly likely” to be more than that, defence analysts say.
With inflation, the cost could be as high as $171bn, according to a new report from the Australian Strategic Policy Institute.
The thinktank’s report contained a series of estimates ranging from low to high and conceded that estimating the final cost of the project is necessarily an “extremely assumption-rich activity”…………
The prime minister, Scott Morrison, has said the planned nuclear-powered submarines, part of the Aukus deal with the United States and the United Kingdom, would likely cost more than the scrapped plan for conventional submarines, which would have cost $90bn……..
Australia will partner with either the US or the UK to buy their boat designs, and a nuclear-powered submarine taskforce is working through the details
“We haven’t determined the specific vessel that we will be building, but that will be done through the rather significant and comprehensive program assessment that will be done with our partners over the next 12 to 18 months,” Morrison said in September.
“Now, that will also inform the costs that relate to this, and they are yet to be determined.”
The authors of the Aspi report, Implementing Australia’s Nuclear Submarine Program, wrote that while the Aukus deal has seemed to move fast, the enterprise would still be “a massive undertaking and probably the largest and most complex endeavour Australia has embarked upon”.
“The challenges, costs and risks will be enormous. It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability…….
The Aspi report co-author Dr Marcus Hellyer told Guardian Australia the government needed to work out its priorities and would need to balance capability needs, scheduling and the Australian industry content. He emphasised that picking which submarine to build was “secondary” to picking a strategic partner.
The US is building submarines at a rate 10 times higher than the UK, he said……….
The report canvasses other issues that will need to be resolved.
There are likely to be legislative changes needed to allow nuclear reactors in Australia. The government should consider appointing an internal nuclear regulator, an inspector general of nuclear safety, and how it will responsibly dispose of radioactive waste once the reactors that power the submarines reach the end of their useful lives…….. https://www.theguardian.com/world/2021/dec/14/australias-aukus-nuclear-submarines-estimated-to-cost-at-least-70bn
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Australia has been warned, even from the militaristic Australian Strategic Policy Institute, on the problems and astronomic costs of the nuclear submarines
The price tag will be eyewatering, with an eight-boat programme costing Aus$116 billion (US$83 billion) “at an absolute minimum”, almost a tenth of annual gross domestic product.
“It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability.”
Australia warned bid for nuclear subs carries ‘enormous’ risks https://www.france24.com/en/live-news/20211213-australia-warned-bid-for-nuclear-subs-carries-enormous-risks 13/12/2021 Australia’s bid to develop a fleet of nuclear-powered submarines will cost more than US$80 billion and take decades in the “most complex” project the country has ever embarked on, a study released Monday warned.
The report from the Australian Strategic Policy Institute — an influential Canberra-based think tank — said ownership of the high-tech subs built with US or British know-how would offer a major advantage in deterring aggression from China or elsewhere. [Really?]
But it will also be a fiendishly difficult task requiring a step-change in Australia’s military and industrial capabilities.
It is “probably the largest and most complex endeavour Australia has embarked upon. The challenges, costs and risks will be enormous,” the think tank warned.
“It’s likely to be at least two decades and tens of billions of dollars in sunk costs before Australia has a useful nuclear-powered military capability.”
The project, announced last month, will make Australia the only non-nuclear weapons power to own nuclear-run submarines, which are capable of travelling quickly over long distances carrying long-range missiles and state-of-the-art underwater drones.
Canberra plans to equip them with conventional rather than nuclear weapons. It has yet to decide whether it will buy US or British technology, what class, size and capabilities the subs will have, where they will be built or how radioactive material will be handled.
Even under an optimistic schedule, the first submarines are unlikely to be operational before 2040, according to the report’s authors, who include former Australian defence department officials and an expert on nuclear physics.
The price tag will be eyewatering, with an eight-boat programme costing Aus$116 billion (US$83 billion) “at an absolute minimum”, almost a tenth of annual gross domestic product.
Among a litany of tasks ahead, the navy will have to triple the number of submariners it recruits, refurbish docks, and develop extensive nuclear safeguards.
On the diplomatic front, Australia will need to reassure neighbours and the International Atomic Energy Agency that the subs do not present a nuclear proliferation risk.
“Regardless of the Australian government’s declared intentions,” the report said, “once Australia possesses (weapons-grade enriched uranium), the breakout time to develop and construct nuclear weapons would be less than a year if a simple nuclear-weapon design were pursued.”
The submarine plan has already caused diplomatic headaches for Canberra, with nearest neighbour Indonesia expressing concern, and the decision to ditch a contract to buy French non-nuclear submarines causing fury in Paris.
Debunking the false claims that nuclear power is affordable for Australia
Nuclear Power’s Economic Crisis, Jim Green, 9 Dec 21
A new report by Friends of the Earth Australia comprehensively debunks claims that nuclear power is cheap or affordable in the Australian context.
The 32-page report, ‘Nuclear Power’s Economic Crisis and its Implications for Australia’, details catastrophic cost overruns with nuclear power construction projects ‒ including ‘small modular reactors’ (SMR) ‒ over the past decade.
Dr. Jim Green, author of the report and national nuclear campaigner with Friends of the Earth Australia, said: “Nuclear lobbyists base their claims about ‘cheap’ nuclear power on implausible cost estimates for reactor types that have not even been built. Our report aims to ground the nuclear debate in detailed, factual information about reactor construction projects.
“Every reactor project in the U.S. and Western Europe over the past decade has been a disaster. Costs for every one of those projects has ballooned by more than $10 billion. They are all behind schedule, by as much as 13 years.
“SMR projects have also been disastrous: expensive and over-budget, slow and behind schedule. There are disturbing connections between SMRs and nuclear weapons proliferation, and between SMRs and fossil fuel mining. The only operating SMR anywhere in the world is used by Russia to power fossil fuel mining in the Arctic.
“The nuclear ‘renaissance’ of the 2000s has collapsed into corporate carnage including the bankruptcy of American nuclear giant Westinghouse and near-bankruptcy of its parent company Toshiba. In France, Areva was saved with an $8 billion bailout and the other major utility, EDF, is saddled with $66 billion in debts. Nuclear corruption and criminality are evident in many countries operating nuclear power plants.
“The persistence of nuclear support can be attributed to three factors: ignorance, commercial interests, and the ‘culture wars’.
Those are the likely explanations for the Minerals Council of Australia’s ongoing disinformation campaign regarding nuclear power. Member companies such as BHP and Rio Tinto should stop the MCA’s nuclear disinformation campaign or resign their membership from the MCA.”
“Research by CSIRO and the Australian Energy Market Operator conclusively demonstrates that nuclear power is far more expensive than renewables coupled with storage. It’s time for nuclear lobbyists to stop dissembling and to face the facts: Australia’s future is renewable, not radioactive.” Dr. Green said.
The report notes that in 2020, a record 256 gigawatts (GW) of renewable capacity were added to the world’s power grids compared to a net gain of 0.4 GW of nuclear capacity. This year will be another record-setting year for renewables with 290 GW installed so far, and nuclear power has flatlined yet again with the small number of reactor start-ups matched by permanent reactor closures.
The report, ‘Nuclear Power’s Economic Crisis and its Implications for Australia’, is online at https://nuclear.foe.org.au/economics/
Antinuclear 