Transcript

How do ports sustain Australia’s economy, border security and defence preparedness?
What are the biggest strategic challenges facing Australian ports?
What role do ports play in combating organised crime and protecting Australia’s borders?
What partnership, policy or capability would most improve Australia’s port security now?

In this episode, Sharryn Parker speaks with Mike Gallacher and Mike Outram about the role of ‘ports’ as critical infrastructure and the challenges of protecting Australia’s maritime supply chains.

Transcript

(This transcript is AI-generated and may contain inaccuracies.) 

Mike Gallacher

If we can get good at managing our border, our supply chains and our resilience, we will be good at dealing with organised crime and those sorts of things.

Mike Outram

We're all island nations, whether it's Nauru, Kiribati, Fiji or Australia, New Zealand. We're all affected by the same problems. We're interconnected. Therefore, the risks coming through some of the softer targets of some of the Pacific Islands are real risks to us too.

National Security Podcast 

You're listening to the National Security Podcast, the show that brings you expert analysis, insights, and opinion on the national security challenges facing Australia and the Indo-Pacific, produced by the ANU National Security College.

Sharryn Parker

Welcome to the National Security Podcast. I'm your host, Sharryn Parker, a Senior Policy Advisor at the National Security College. I acknowledge the Ngunnawal and Ngambri people and recognise them and their continuing connection to land, waters and community as the traditional custodians of the Canberra land on which we record today. Imagine waking tomorrow to discover Australia's largest ports have stopped operating. Container terminals are offline, our medical supply chains are interrupted, and we are beholden suddenly to fuel already on shore. This cause could be a cyber attack, an extreme weather event, a systems failure, or a deliberate act of disruption. Can we imagine this as an action of a hostile actor exploiting an Australian critical vulnerability? So why does this matter? And whatever the trigger, the consequences could ripple far beyond the waterfront and ripple quickly. Because ports don't just move cargo, they move Australia's economy. They support our border security, they underpin our defence preparedness, and increasingly, we have a growing awareness that ports are on the front of the line of national resilience. So here's the question. How are we protecting and using these gateways that keep Australia running? Today we're joined by two people who understand these challenges better than most. Port Australia Chief Executive Officer, Mike Gallacher, and former Border Commander, Border Security Expert and Distinguished Advisor at the National Security College here at ANU, Michael Outram. Gentlemen, welcome.

Mike Gallacher

Yeah, good morning. Good morning you Sharryn. Good morning to Michael.

Mike Outram

Good morning.

Sharryn Parker

Gents, today we're taking our listeners behind the fences and beyond the cranes to understand why Australia's ports are an important national security frontier. And I'd like us all to consider what it takes to keep them secure and efficient in an increasingly unforgiving world. Mike Outram, can I ask you first? When Australians think about national security, they often think about defence or the intelligence agencies. So why should they also be thinking about ports?

Mike Outram

Yeah, thanks Sharryn. That's a really good question. But when you think about it, ninety plus percent of our trade in Australia by volume arise through our ports by sea. And almost everything on our shelves, in our pharmacies and our fuel tanks, comes through our ports. So the importance of it economically can't be overstated. For forty years I was in law enforcement, the last ten, as you mentioned, managing the Australian border as the Border Force Commissioner for seven of those. And what I've noticed is increasingly how geopolitics, geoeconomics, technology, and of course commerce, they collide at the port. That's the interface. And the final point I'll make is that of course defence and intelligence protect the nation. Ports sustain it. Ports are our connection to the region, connections to the world economically, but they also transmit of course risk into our economy and into our community. I'll stop there.

Sharryn Parker

Fantastic. Mike Gallacher can you provide a response to that?

Mike Gallacher

Yeah, look, Mike's right. I've enjoyed a very longstanding relationship with Michael through his role with the ABF. That point about, you know, that 99% of trade, that equates to about $650 billion a year, and it's over 1.6 billion tons of trade, both exports and imports. The challenge for us, of course, is that the majority of our ports are in regional Australia and they're very much export focused around a particular supply chain. Their ports are purpose built for that. Whereas in capital cities, invariably completely different. It's import focused. And again, quayside infrastructure, very much focused on trade, not on defence.

Sharryn Parker

Yeah. It's actually a really interesting issue with what thirty two thousand kilometres of coastline and I guess somebody like me actually sits and sees the ports in Sydney and Melbourne, et cetera, and thinks that that's exactly what they are. They don't exist in regional Australia, but that's where the majority of our exporting occurs from.

Mike Gallacher

That's where the balance of payments come from. And it really does. But the other thing that most Australians don't realise when they do look at the horizon, 99% of those ships, probably 99.9% of those ships, are owned by foreign countries, not by Australians. They're not Australian flagged. So therein lies another level of complexity in terms of the vulnerability of our supply chains based on the ownership of those ships. And this whole question of our sovereignty.

Sharryn Parker

Right. And so what then are the biggest strategic challenges facing Australian ports?

Mike Gallacher

I mean look for us, our ports are very commercial. That's what they are entrusted with the role of doing. They have built their ports, many of them are around vertical supply chains with various suppliers of small numbers of commodities but large volume out of regional areas. Those regional areas are employed overwhelmingly around that port and all of those ancillary services. I mean, we equaint out of ports, it's about nearly 700,000 jobs around the country. Not direct but indirect. And we're not trying to pick up the pie shop and the local milk service delivery because he somehow went to a port. We're talking about that direct relationship. And of course, and then when you're talking about container ports, they are having pressure put on them to get bigger, but they're being requested to get bigger as the economy grows, population grows, the quest for decarbonisation grows. It's a whole lot of problems that interface between defence needs, national security needs, and commercial needs has really become a thing in people's minds since COVID. I'm happy to explore that with you later, but COVID was the epiphany for most people. They then woke up to the fact that, hey, we're a maritime nation and we rely on the Blue Highway to keep us fed, watered, and safe.

Sharryn Parker

Mike Outram, you have probably been really aware of a number of these issues that Mike Gallacher has just raised for a number of years. How do we sell this message and continue selling it in a sensible, considered way to the Australian public?

Mike Outram

I would say firstly, even from a policy point of view, we don't look at our border, our ports or airports or supply chains as a system. We don't take a systems view and that that in of itself is challenge and the way we structure it across government is partially the reason for that. I see the ports as a transition point from the supply chains that Mike just mentioned to our domestic economy and vice versa. And it's where we exercise sovereignty over trade. And travel of course who's coming into the country and what goods are coming into the country and leaving the country and of course that's the work of the Australian Border Force, Department of Agriculture and others at the border. And of course there's millions of containers coming in a year. It's a matter of public record, and I've said it publicly that, you know, physically the ABF can only X-ray about one percent of those containers. One percent. And so, you know, you've got understand then the way we manage risk is through intelligence and data for the other ninety nine percent. But when you look at the challenges we currently face where, you know, the sort of the revenue being collected on tobacco is reduced from something like, you know, I think it's about fifteen billion to seven billion a year, is a huge revenue gap, the amount of narcotics coming in the country you can see from the wastewater analysis, clearly there's a challenge for us in terms of the visibility of what's coming through our ports, and by visibility I mean digital visibility. The other reason they're important is because they're actually not only a vector for illicit goods like tobacco and drugs and other things, but they're also a vector for things like the trans- the movement of dual use goods, sanctions evasion. There's a whole lot of other issues that ports become important in and increasingly, and you've heard Mike Burgess talk about this here in Australia and various heads of intelligence agencies in Europe, is that supply chains and ports are increasingly being exploited by other some states for statecraft purposes and of course that brings in sort of grey zone and other kinds of challenges. And the example I give here is when you think about Ukraine spending eighteen months smuggling drone parts into Russia, assembling them in Russia, hiding them in crates, putting crates on trucks driven by unsuspecting Russian truck drivers, and destroying about a third, I think it was, of the Russian strategic bomber fleet. That's one of the biggest air raids probably in the last ten years. All through the infiltration of supply chains and borders. So they're becoming strategically very important. And finally I'll make this point. In Australia we, in the ABF, again public record, we conducted an operation called Jardena. Mike would remember this. Jardena was really a search for trusted insiders at the Australian border, and we identified roughly a thousand people in a hundred companies that were of great concern. And of course the trusted insider problem is a real problem not only from a contraband point of view, but from a national security point of view. I'll stop there.

Sharryn Parker

So much to unpack there. Look, I think what you've done is actually elevate ports as critical infrastructure and make it very, very clear as to the Australian economy, its importance, but then also some of the difficulties for the intelligence agencies around this issue of not just foreign interference, you know, which we could probably talk about later, but you know how do we actually track this in the insider threat as something that that you both have to deal with on a day to day basis. You know I guess I would go then to, you know, back to the idea of ports as critical infrastructure. You know, Mike Gallacher, what are the operational realities of keeping ports functioning, noting that this is what your operational environment is like?

Mike Gallacher

Look, and it is a very expensive operational environment, because it's just not the port themselves. It are those actors that provide those critical services to ports such as towage operators, tugs, pilotage providers, lines people who tie these vessels up. Each one of those is critical for the operation of that port movement, that vessel movement. The other important thing to recognise that every port is different. I know we often say everything is different, but ports around the country are different, not only in relation to their commodities, but also in terms of how the port is configured, their environmental challenges. There's a whole lot of different things. So what we do is bring our operational experts together during the course of the year to share knowledge, to share experience and collaborate amongst themselves. I'm not a maritime expert and I most certainly give acknowledgement to those that have spent many years at sea. We bring them together to be able to share that experience from a regional, from a capital city. The other thing to realise with a capital city port, a lot of people don't know this. They're a landlord port. So in the same way that a shopping centre is owned by a major organisation, and then you have those retailers that provide the services or the goods to the community through that shopping centre. A capital city port, a container port is very similar. It's the landlord and it has the stevedores, you know, Patrick's DP World, Hutchison, etc., a VICT in Melbourne, fully automated port, a world-leading port. So we actually have to work with them to ensure that their systems are in place because of our responsibilities under critical infrastructure legislation. So it's not an easy task of just saying, well that's the port. There's all these entities that make up that environment.

Sharryn Parker

Amazing. Mike Gallacher, what does that planning for resilience actually look like? you know, you've just said you get together and talk about it. How do we move this from discovery and understanding the problem set to actually rehearsing for crisis?

Mike Gallacher

Yeah. What was really interesting, Sharryn, was COVID. COVID was interesting in a lot of ways. But what it showed was the different views with our Federalist system in relation to where how governments around the country approached locking down their states. Now, I'm not getting into the politics of it, but what it meant was, how do we then move our workforce around the country when states have built a fence and you can't bring pilots in who live in one part of the country who fly across to another part to operate for two or three weeks? FIFOs, fly in, fly outs. So that was a real challenge for us. So COVID also brought a bit of an awareness that there is no land bridge through to Asia or through to Europe that we rely on shipping. So for us, it was now a case of government. And I'm not saying they took their eye off the ball. It's just the ports were the quiet achievers. They just went about building, doing their work, and they did it very, very well. But it was only when that risk around ports, particularly the interface between international shipping operators and their s and their crews bringing COVID to the country, we pulled the drawbridges up and we made sure that Australia became a floating isolated nation so far as the world of COVID was concerned, but there was still that interface. So that has been a bit of a wake-up call. And now, of course, with Defence, particularly under former Chief of Navy Vice Admiral Hammond, Defence has really stepped up their interface with us directly through me and this office, but it's right around the country, and it's a good thing, but it's a challenge because Defence has a different view of ports and what they need compared to a commercial port where someone has spent hundreds of millions of dollars, probably billions of dollars over many years getting it ready to receive containers or to be able to ship iron ore. So it's a real interesting situation that we find ourselves in now, as you said, with over 30,000 kilometres of coastline, we just can't get a backhoe out and create a new port easily.

Sharryn Parker

Yeah. I would offer that defence is always better when it rehearses, you know, particular crises and particular issues and obviously it loves to lean forward into space that that isn't necessarily owned by Defence. You know, is there recognition by the department that that you actually have a very, very big say here, so do other private elements of our port industry?

Mike Gallacher

Yeah, look, I'm very fortunate to be the port's representative on the Australian Maritime Defence Council, which is led by the heads of each of our Defence agencies, including Michael's, former agency Border Force, and that is providing a very, I'll use the expression, a very important vessel as opposed to a vehicle, to actually have that dialogue. And what we're doing now is working closely with Defence to understand their priorities. To bring our ports people to the table so we can have that understanding of where things are going. Each of our ports have massive plans for the future in terms of investment. Defence needs to understand those to ensure that where they can travel alongside those future plans, if we ever need them, that they are there, rather than turning up with a vessel that's completely incapable of pulling up alongside because of the configuration of the port.

Sharryn Parker

Right, well Mike Outram, you know, we've just heard some of the planning that is going on, some of the engagement, the conversations that are occurring. You know, I guess the other side of that is some of the problems in the security realm. You know, what are the second and third order security implications of operational disruptions that might occur to those ports?

Mike Outram

Well I think they're economic, social and strategic, but I might just weave that into the conversation we've just had. Your viewers here will you've mentioned about the biannual conference in September and I'm chairing a panel on the defence ports relationship and one of the key issues for me is it's I think it's building on what Mike said, the Defence Strategic Plan 2026 clearly opens the aperture in terms of what national defence means to include, you know, contested logistics disruption of supply chains, fuel security and so on and so forth, from an enabling point of view for Defence. So that clearly brings ports into the purview of our national defence and planning. There isn't, we haven't had a national security plan since 2013. But I would say that visibility of not only the containers and the goods and the things that are moving across our border, but even the components inside these days is important. From a security point of view, from a compliance point of view, and from an economic point of view. And I look at the architecture we need to build for resilience, which supports defence, national defence and national security, as being really sort of fourfold. We the globe is moving towards paperless trade, so a digital border. We still we still have bits of paper manifests and those sorts of things. And I think digital trade is the future. And Mike would know that Australia's been involved in some trials with other countries in digital trade. And many countries around the world are going this way and international standards are slowly evolving. And then there's digital credentials. So we need to be able to verify the person, the people, the companies that are actually, you know, putting information and data in to that system. And then there's federated visibility. You know, government has the intelligence, industry has the data. Okay. And we need to find a federated system that allows the government to access that data with its own algorithms to protect security, protect privacy and all of those things. And today it's doable. And the old paradigm of if you squeeze hard on security at the border, you slow down the economy is broken by technology and data today if we configure the system the right way. And then finally the inspection layer, and I'll come back to that relationship between government and industry, which I think is key to resilience. It's often been said, I mentioned one percent earlier on, of containers being X-rayed. As ports automate around the country, it's feasible that you actually build your X raying architecture in the flow so containers are X rayed as they are moved around the wharf. And the government become the recipient of digital imagery. You know, why are you lifting and moving containers that may have nothing in them? So that and you in that way you could get to a hundred percent potentially. So there is a paradigm shift required here and that means the question that Mike just mentioned about who pays, and you just talked about that, also applies in the national security space. And I think there are opportunities to find different ways to allow industry to use its capital, to put it on the table and to use it for public good. But to do that you have to make it investable. And that requires co-design, genuine co-design and partnership between government and industry and a new paradigms of trust. And that's how we have to build resilience. So to your question about the second and third order consequences, I mean the first one's economic, of course, we've seen it in the Strait of Hormuz etc. The second one is social, you know, you end up with shortage of things on shelves, shortage of pharmaceuticals, forage shortages of fuel, high prices of course for everybody, cost of living crisis and all those sorts of things. And then there's the strategic one. If we if we're shown to be not to be able to defend our supply chains, our independence, our resilience, and our sovereignty, then we become a target for economic coercion. So we invite trouble in the future. So that's the way I would answer that question, Sharryn. I think there's a lot of work to be done here in the national defence and the national security space. And bringing industry and government together in a more formal way through appropriate governance, I think is the way to do that.

Mike Gallacher

Sharryn, can I just add to that because one of the areas that Michael has alluded to earlier, and that is border integrity and the whole issue of risk at the border. Organised crime, those involved in importation or indeed export, they are highly organised and they have their trusted insiders. And one of the things that we are doing is working closely with Border Force to identify people who have a law enforcement background in the supply chain, as I have a law enforcement background, to develop our trusted insiders. What we know with government, and Michael spoke about it earlier, was about co-design. Government's very good at what it does. What government doesn't really understand, and the intricacies of it, is the supply chain and the risks that come with the supply chain. And what, and under Michael's leadership at ABF, we started this process to bring industry representatives highly credentialed to provide assistance and advice and guidance to our law enforcement agencies in terms of where risks are around the country. For us, it's about identifying those people in our industry that have that skill base, that knowledge, who are willing to participate to be a bit of a guiding light for the good guys. That is absolutely critical, whether it be in terms of cyber, we have a cyber intelligence group, cybersecurity group, whether it's in that space, whether it's in the border security. The other thing that we have done over the last couple of years is, and this is within Ports Australia. We've got to stop looking at this as an Australian problem. we actually have to start looking at this in my view, as an Oceania problem. We've started to reach out to our Pacific neighbours through New Zealand, right out through the Pacific now. Many of them have joined us. It's not a membership drive. It's about building a collaborative relationship across South Pacific, across Oceania, that we can share experience, but they can come to us and say, look, we need to talk to somebody in this particular field, because many of them don't have that experience and that knowledge. But we're all island nations, whether it's Nauru, Kiribati, Fiji or Australia, New Zealand. We're all island nations. We're all affected by the same problems. We're interconnected. Therefore, the risks coming through some of the softer targets of some of the Pacific Islands are real risks to us too. So we need to ensure that we're building that relationship. Last week I took part in the Pacific Maritime Transport Alliance in Tonga, and that was a message loud and clear from the Pacific Islands. They want collaboration across the region, and there's an opportunity for Australia and New Zealand to really lead in this regard.

Sharryn Parker

Fantastic. Look, I really would like to talk about some of the cybersecurity risks and elements that that you've just both brought up. I guess before I get to that, you know, this all sounds fantastic, but we haven't really identified who should own it or who currently does own it. You know, to either of you have an offering as to who federally should own it and then who within the states should actually own it? Is it government in some way? Or does private industry lead on this?

Mike Outram

Mike, I'll I might just jump in there quickly. What's changed, Sharryn, over the last, I think, four five years, let's say, is that national security now includes economic security because the vectors of threat and we saw in the pandemic when we were economically coerced because of alleged slights against China, what can happen when other countries decide to take action, whether it's on tariffs or whether it's on trade in general. So the concept of national security has shifted. As I mentioned earlier, we haven't had a national security strategy since 2013. So it's hard to see where the centre of gravity sits. We have obviously pockets of excellence. You've got the Department of Home Affairs, responsibility for you know, the regulation of the SOCI Act, the Customs Act. You've got Department of Agriculture in relation to biosecurity. And there's dozens of agencies that have a responsibility at the border, but there is, to your question, no convening authority or centre of gravity. And to my mind it raises a question about the sort of a national security advisor function. I can imagine what's going to come in the threads now after I've said that, that people for or against that, their arguments for and against, I understand. But the way we've structured our government, I think this is primarily about our economy. The border is primarily about our economy. It's primarily about our economic security and independence. And if we can get good at managing our border, our supply chains and our resilience, we will be good at dealing with organised crime and those sorts of things. But what we've done as a country is we've filed the border away under crime. As a subject matter and an as a an investment decision and from budget purposes. And I think that significantly understates the importance of our borders and our supply chains from a strategic economic point of view.

Mike Gallacher

Yeah. I mean for us the challenge of course is that that security, port security has traditionally been about port plans. And where do you put your security cameras? Where do you where do you ensure that people can't ingress onto port land, which is now deemed to be critical infrastructure? So it's been a bit of a necessary evil that ports have had to invest in security. There's been no commercial return in it. They've had to do it, but at the same time, they're having to invest in automation, digitisation or all of new systems. So the challenge for us of course has been one of, well, if we go down the path of a simplified trade system and a maritime single window, that point you make, Sharryn, is who's going to own it? Because of the competitive pressures on ports, we feel it should be government that owns it. The reason being, and it's the same with the islands last week, they've got pressure putting on the pr pressure put onto them to say, look, we need to go down this path of digitalisation, digitisation of our ports, simplification, where is all this data going to be housed? How do we protect that data? because there's so much data coming out of our ports in terms of performance of key side infrastructure as well as trade data, everything. So we feel that government should be responsible for maintaining it and protecting it. And that's what I'm hearing from the islands as well. They're concerned that they're buying product off the shelf. Where's it going to end up? Not today. You can have all the promises in the world today. What about in five or ten years' time when the company that sold you the product's no longer there? What does it mean in terms of that security of that data? And that is a huge issue for us. And that's why the industry has kept doing what it's doing in terms of its own systems, to improve its own systems, but there's no national, there is no national model in place because right now we have all these competing interests and people in the industry are saying, well, government's got to lead on this.

Mike Outram

And I agree with Mikey, has to be government led. I mean we can't, government can't abrogate its responsibility and its risk to industry. I think that's absolutely a valid point. However, I do think that there are different ways that the system can be regulated by government and where risk can be managed. And I'll give you example. When we all travel out through an airport, a private security person x-rays our bags. It's not a government official. Of course they do that to a very strict standard that's set by the Department of Home Affairs and regulated by the Department of Home Affairs. And we all pay a passenger movement charge that funds that activity. So the precedent's already been set in many ways for how we could think differently about, to Mike's point, you know, industry having to spend a lot of money and at the moment they don't accrue any benefit economically for doing that. And some companies go in above go above and beyond and do even more. But they don't get the benefits, the benefits accrue to the entire system, if I can put it that way. And I think to differentiate between the good players and the as I've said earlier on, and trust and visibility is key for me. But always, it always has to come back to government. But in terms of the who in government leads this, I mean you've obviously got obvious departments like Defence, Home Affairs, Agriculture for those main sort of security risks at the border in our supply chains. But I don't think there's one place where you could say the one department, one particular division that can lead on all of this. It's how you put the governance across it. And in the paper I wrote through the college, that the college published back in January, Beyond the Checkpoint, I made a number of recommendations which goes to governance, which goes to the relationship with industry, the funding models and those sorts of things. But unless you have that to your I think going to the heart of your question, unless you do have a sort of a centre of gravity that drives this though, it's very hard to make progress. 

Mike Gallacher

And the other thing, following off from that point that Mike made earlier, in terms of the approach with national security around trade, whilst government needs to lead all of this, equally sitting at the table needs to be industry, because otherwise we end up in the same situation. So it can be led by government, you have the suitably qualified people at the top, but equally sitting around that table are people who are bringing expertise that government just doesn't have. We can't have a bureaucratic approach. This is the way we've always done it. It's a bit like the work we're doing with ABF. This is new thinking in terms of working collaboratively with the private sector around protecting the integrity of our border. We need to have the same approach in terms of understanding what are the challenges for industry and not just having someone sitting in Canberra saying, hey, look, we'll just pass this legislation. And then we turn around and say, well, it's not going to work for these reasons. And then the whole thing just falls to bits.

National Security Podcast 

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Sharryn Parker

Right. So I guess it then comes down to, you know, which risks are concerning you most. You've both actually highlighted the fact that that there are practical measures out there that are proving effective, but it's not the data that is being collected is not landing in any particular place. That obviously y you know, guidance for that is owned by government in some way, shape or form. That then leads us very naturally to this idea of, you know, organisationally, the these different elements that are involved, thinking about resilience and future risk just a little bit differently. And then that leads us to something that has been quite a stalwart with your organisation, Mike Gallacher. You know, can we look ahead to the Ports Australia conference that's coming up? I believe this is going to be the forty-seventh *forty-ninth* time you've actually brought Australians together to discuss issues like this.

Mike Gallacher

Not me personally, otherwise I would have been very young when I started with them. But yes, the difference is though, the challenges that now confront this country are global challenges. Whilst there are some domestic sort of finesse that needs to be tweaked, both certainly it's international, you know, and we've seen that. One of the things that we've raised on the international horizon that no one else was talking about, was the risk to our ports of lithium-ion battery fires involving a vessel? One at sea, what do you do with it when it's at sea? But what do you do with it when it's alongside? Because there's no way of putting these things out. That literally could cripple an economy, a vessel coming into a port. It was an issue that I raised last week, as I say, in Tonga. They're all totally in agreement, but we need to develop an international way of dealing with this risk. So it's but one. Cybersecurity is another. The geopolitical tectonic plates that continue to move in the Southern Hemisphere, it's different from the Northern Hemisphere. Whilst it's different, it's still in some ways the same story, different actors. So that's why we've got significant contribution from the United Kingdom and Europe coming. And the UK will have a different view from Europe. But we've also got a senior representative from the United States coming. And it's to start to flesh out where each of the nations are going in relation to their approach to these risks. Be they cyber, be they confrontation, be they COVID 2.0, it's all about understanding what others are doing, that we are not somehow down here at the bottom end of the earth away from it all. It's all around us and many of these things are coming our way. We spoke about earlier the fuels, fuels issue. We are totally reliant on imported fuel. And of course, we all saw the risks of recent times. And of course everything went back to normal in terms of people's visibility on it and it's all happy days and cool drinks as far as the community's concerned, what that shows is our vulnerability. Take that to the Pacific Islands, they're all reliant on diesel to run their hospitals, run their schools, run their life. If they can't get diesel, what happens to them then? So that's my point about saying to government we need to work collaboratively across the region. But we also need to work with organisations like yours, the ANU, other institutes of higher learning. As I've recently had a lot to do with the University of Plymouth, they've done some work on the Cyber Ship Lab, which takes away the old desktop exercise that we've all done in the past, and everyone's ticked the box from their security perspective. Yes, we ran a desktop exercise. The Cyber Ship Lab of the University of Plymouth runs a live operation. So they create this live port, live shipping, live everything based on what is occurring in your port. And then we bring the people who are responsible for the response and just watch how it all unfolds. We brought them out here in 22 down to Geelong and it was an eye-opener to see the time ticking down. You've got two minutes to make a decision. What are we going to do now? And this is all live in front of us, as if we're sitting, or standing at the helm of a vessel coming into a port, and you've got no control over the vessel because it's been hacked. What do we do? This is the way that higher learning is investing. What we need to do is to work out those institutions that are doing that worthwhile work and bring them in closer to us. As I keep saying, ports and infrastructure, whether it's ports or other areas, we don't need to be the smartest person in the room. We just need to know where to find you.

Sharryn Parker

Yeah, there's nothing like real time pressure and real time situations to really clarify what's important and to get your answers out. does Australia offer a world leading you know, capacity in this space, or are we really reaching to those other nations to determine what is world's best practice at this stage?

Mike Gallacher

Well what I'm seeing in the again in the UK experience is a greater interface between the universities and defence. Now that's probably occurring here, but we're just not being told about it. We don't need to be told about it because the more we know about it, bad people know about it too. We just need to know that it's taking place. But it's taking place at a level it's just not ticking a box. They're actually challenging the way that we do things. And I know in the UK that they're doing that now. We've got the Australian National University, of course, and the work you guys do. We've got the Maritime University in in Tasmania that works very much around skills. But this is a new frontier. This is about challenging that interface between government and industry to protect our country. It's from a commercial perspective, but then also from a defence perspective, and it's a challenge.

Mike Outram

I'd agree with everything that's just been said. I think you know, what are the hints to the future? Well, you know, we can just look at what happened with DP World when there was a cyber incident there and thirty thousand containers, I think it was, might got stranded within days. You know, what's happened with Mayask in 2018, I think it was, when they were subject to a cyber attack and virtually closed down. Land Rover Daneley, UK. So there's some of the cyber threats that we can already see. In the United States, they're PMC cranes that were used, I think in seventy percent of their wharves were found to have sort of modular transmitting devices. They're Chinese built. So there's the sort of nature of the architecture that we're building. We've got to be very careful with our critical infrastructure. Of course, events in the South Pacific over recent weeks demonstrate the sort of changing dynamics in in our region, whether it's PRC naval ships coming round Australia or we're gonna see more and more of that. of course in 2048 we have Article 25, I think, of the of the treaty, which triggers the opportunity for countries to sort of change the arrangements in Antarctica. And I think the Antarctica's gonna become more contested and that's going to affect the immediate geography and the shipping lanes around Australia. So I think that the threats are converging, they're changing. Our relationship with the United States is our main security relationship, but it's changed in the last three or four years, I would say. Our relationship with China as a trading partner is crucial, but of course we come at regional security and stability through from very different positions. If you look at, I was in Japan recently with the National Security College. They're almost at ground zero. They've got the, Russian to the north, they've got the North Korean's, you know, missiles coming over their heads. They've got, of course, their challenges with China and Taiwan and a US presence there. I mean, they really are sort of not at war, but they're sort of fighting on a number of fronts really to protect their sovereignty. And then we of course we have the UK coming out to the conference mic for the panel discussion and what's happening in Europe with Russia, grey zone and hybrid warfare tactics. And I've heard senior in public, senior British officials describing their situation as being in a sort of a Cold War, you know, situation with Russia. and so I think you know if you go there and go then go forward ten, fifteen years. You know, the rules based order as we knew it, the rules of trade, the sort of the volatility that's now coming to the world is going to increase. And therefore I would say that our systems and our resilience and architecture needs to keep pace.

Mike Gallacher

Yep. And I mean, that that's absolutely spot on. I mean, the challenges of Europe, they're totally oblivious, with all due respect. And they'll say this to me, we are not aware of the tensions in the southern part because they're focused in on their challenges. That's going to be interesting because they're ahead of us in terms of what are they doing to respond to that. But to give you an idea, one of the things that we look at is the push towards decarbonisation. Now we're we are doing what we can with decarbonisation, and we look into the IMO to give some guidance in that regard. But right now we have a port system that has independent, free-moving parts that aren't connected up to the Internet of Things. They are not connected up to electricity, they're diesel, and of course, people rear back in horror when you mention diesel. You plug them all into the Internet of Things and you plug them into an electrical provider. Is there a risk that if you were to attack electricity and to cut our undersea cables and cut off our internet and our ability to operate in that regard, what happens to our key site infrastructure? How do you get the cranes to work? So therefore the question is, of course, is the model that we currently have with diesel-powered, independent, free-moving, with people, men and women, working those cranes, how does that fit in terms of the risk paradigm around this whole quest to go down the path of decarbonisation. Which we all are proceeding that way, but it's something that we're trying to we're not trying to, we are putting forward the government when we have an opportunity to discuss it, and that is trying to find a balance between some of this. So the ideal world where we would all like to be, but the real world of where we are today and how do we deal with that.

Sharryn Parker

Right, so if you could recommend one policy capability or partnership that would most improve Australia's maritime resilience and port security right now, Mike Gallacher, what would that be?

Mike Gallacher

Any future reforms, anything that's on the table, do it collaboratively, co-design with industry. Don't do it on your own and don't think that it's co-designed unless we're actually there saying to you it's gonna work or it's not gonna work. And if it's not gonna work, don't think we're doing it to be miserable and penny pinching. We're doing it because we actually want this system to work in the national interest. Co-design is critical, and the same with cyber. We need to start looking at cybersecurity across all critical infrastructure in the same way we do with port security and make sure that we start to bring together a body responsible for critical infrastructure delivery around the country that are sharing knowledge and sharing information in the same way we do with port security.

Sharryn Parker

Mike Outram, can I ask you the same question?

Mike Outram

Yeah, of course. And I'd go back to my paper that was published, Beyond the Checkpoint, and recommendations and in there are all these excellent initiatives that are in place within the Board of Force with Defence, I'd elevate them to a sort of an on-all-hazards view, and create an expert body committee, call it what you will, but make sure that it's formalised in governance of all the people from industry who have the expertise and the seniority, so I'm talking like C suite, secretaries from relevant areas of government and departments, particularly need one of the centrals on there, and academia to help Australia design the blueprint for our border and supply chains into the future. Because if we keep it segmented, we're gonna have a problem because the border is a system of systems. And so we need to elevate that and but I'd lock it into our governance.

 

Mike Gallacher

And the other thing I'd do to add to that to Michael's proposal, I was make sure that all of those people who are on that group, it's a bit like Fight Club. They don't talk about it. They all undergo the highest level of probity because this is national security stuff. This isn't sort of blue sky thinking stuff. We need people to sit around the table and say, hey guys, we're really vulnerable on this. What can we do to fix this problem? And it has to be honest, but it has to be inside that room.

Sharryn Parker

Right. So an elevated all hazards view, held and owned by government. To help us drive it forward. 

Mike Outram

But give industry a say, give them a stake.

Mike Gallacher

They've got to be there. If they don't have they don't have part ownership of it, it's not gonna work. They're just gonna feel we're just getting lip service.

Mike Outram

It has to be investable, Sharryn. If it's not, then all of that private capital will stay where it is.

Sharryn Parker

Yeah. Gentlemen, fantastic discussion today. Thank you for joining us on the National Security College podcast.

Mike Outram

It's been a pleasure. Thank you and good to see you, Mike.

Mike Gallacher

Cheers.  Thank you.

National Security Podcast 

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