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Home affairs boss Michael Pezzullo was kept out of secret Aukus deliberations | Australian foreign policy

The head of the Department of Home Affairs, Michael Pezzullo, was kept out of the loop on the Aukus pact, as new documents show Australia’s initial investigation into nuclear-powered submarines was to be handled on a “strictly need-to-know basis”.

The announcement of Aukus – described by the Biden administration as the “biggest strategic step that Australia has taken in generations” – triggered a diplomatic rift with France, objections from China, and a mixture of support and concerns among south-east Asian nations.

Based on documents obtained under freedom of information laws, other public records and conversations with informed sources, Guardian Australia can report new details about how the “forever” partnership with the US and the UK fell into place.

The secretive talks were first driven by the Morrison government’s pursuit of nuclear-powered submarines – the first Aukus project – but evolved into a broader pledge to “significantly deepen cooperation on a range of emerging security and defence capabilities”.

When Aukus was finally announced in September, the government said the cooperation would include “cyber capabilities, artificial intelligence, quantum technologies, and additional undersea capabilities”.

A tightly held secret

Despite the emphasis on cyber and emerging technologies, the Department of Home Affairs – a key national security agency with responsibility for domestic cybersecurity – appears to have not played any significant role in landing the Aukus pact.

Pezzullo has had a high public profile this year, in part because of his controversial comments in April warning that “free nations again hear the beating drums” and were “bracing again, yet again, for the curse of war” to protect “our precious liberty”.

There was also speculation earlier this year that he might follow his former boss, Peter Dutton, into the defence department, where Pezzullo served earlier in his career.

It is not mentioned in the documents but Guardian Australia has established that Pezzullo was first briefed about Aukus on 16 September 2021.

Australia, UK and the US launch security pact Aukus, 16 September 2021.
Australia, UK and the US launch security pact Aukus, 16 September 2021. Photograph: Mick Tsikas/EPA

That was the same day the prime minister, Scott Morrison, announced the deal with his UK counterpart, Boris Johnson, and the US president, Joe Biden, in a video conference at 7am Canberra time.

The revelation Pezzullo was not part of the Aukus deliberations shows the extent to which the highly sensitive talks with the US and the UK were kept to a small group.

Within the public service, the Department of Defence played the leading role, while the Department of Foreign Affairs and Trade was also part of a small taskforce that negotiated the still-secret agreements in the US in August this year.

The prime minister’s office and several key officials in his department were also involved.

A spokesperson for the Department of Home Affairs said Aukus activities were “being led and coordinated by the Department of Defence” – but signalled it was now involved with delivery.

“The Department of Home Affairs is working with the Department of Defence to support whole-of-government efforts to deliver Aukus initiatives.”

Who, how and when?

On 25 May 2020, the chief of navy, Vice Admiral Michael Noonan, signed the terms of reference for a “nuclear submarine feasibility study taskforce”. The details were for “limited distribution” only.

While it has been previously reported Commodore Timothy Brown led this taskforce, more details about his initial assignment can now be revealed as a result of an FOI application.

The taskforce’s main purpose was to “understand the feasibility of Australia acquiring, operating and sustaining nuclear submarines in the short to medium term”, according to a heavily redacted document obtained from the defence department.

Despite the “short to medium term” focus, Morrison has since said he expects the first of the new submarines to be operating by about 2040.

The taskforce’s key principles included that it should collect and assess information “that both supports and contests the capability options presented” and operate on a “strictly need-to-know basis”.

The taskforce was also asked to incorporate “whole of government considerations, including strategic, industrial and international relations assessments and implications” – in other words, to weigh up the potential fallout.

The questions about Australia accessing nuclear-propelled submarine technology included: “Who could it be obtained from, how, and when?”

Another question was how Australia could operate and sustain nuclear submarines, and what industrial base would be required to support such an acquisition – questions that remain open.

A flowchart suggests Brown’s reporting line was to Noonan, the navy chief, but ultimately the work was conducted with the knowledge of and oversight by the defence secretary, Greg Moriarty, and the chief of the ADF, General Angus Campbell. The report was due by December 2020.

‘Australian Eyes Only’

The month after that report’s completion, the foreign minister, Marise Payne, was first briefed about the submarine-related reviews Morrison had commissioned, according to evidence to Senate estimates.

Then, on 11 February 2021, Moriarty and Campbell wrote to Vice Admiral Jonathan Mead to launch a defence capability enhancement review – in line with a direction from the then defence minister, Linda Reynolds.

The three-page letter, originally marked SECRET AUSTEO (Australian Eyes Only) but also obtained under FOI, said Australia’s strategic circumstances had deteriorated and warned that “the rapid introduction of more advanced submarines, sensors and weapons will further complicate the subsurface threat environment over the coming decades”.

“Submarines are fundamental to the nation’s maritime security. They secure Australia’s strategic advantage and underpin Australia’s credibility and influence as a modern military power.”

Moriarty and Campbell asked Mead to report back on changes in the maritime threat environment against the backdrop of “faster than envisaged” military modernisation in the Indo-Pacific – an obvious reference to China. The letter cited “intensifying” major-power competition and the undermining of confidence in the rules-based order.

“Your review is afforded the highest priority and you are to advise us as to the resources you require,” Moriarty and Campbell told Mead.

The chief defence scientist was made aware of the government’s interest in acquiring nuclear submarines on 10 March 2021 – the same month the Australian Nuclear Science and Technology Organisation was first consulted.

But the Australian Radioactive Waste Agency “was not consulted in the lead up to the announcement on 16 September 2021”, a response to a Senate question on notice reveals.

Aukus driven at political level

The Morrison government formed the view by about April 2021 that the idea of Australia receiving US help to acquire nuclear-powered submarines could advance into the American political system, sources said.

That is the same month Andrew Shearer, a foreign policy hawk now serving as the head of the Office of National Intelligence and who is an influential source of strategic advice to Morrison, met with Biden’s top Indo-Pacific adviser, Kurt Campbell.

The precise details of the 30 April meeting in Washington DC have not yet been publicly disclosed, but the talks were evidently important: Moriarty told Senate estimates he was “aware of that meeting either on the day or shortly after”.

Australian officials have drawn a distinction between the original submarine capability-driven talks and the broader idea of trumpeting a wider security partnership under the “Aukus” banner. The latter appeared to have been driven at a political level, including by Morrison.

Moriarty said he was first aware of the idea of a formal partnership in May or June, “as the prime minister was thinking about the framing”.

The new secretary of Dfat, Kathryn Campbell, was briefed on the Aukus “package” on 27 July, the day after she started in the top foreign affairs role, although a number of her officials were aware earlier.

After Morrison, Biden and Johnson sketched out the broad parameters of a deal in a meeting on the sidelines of the G7 in June, officials from the three countries gathered in Washington DC in mid-August to negotiate two key documents.

These memoranda of understanding – one related to the submarine project and the other to the broader Aukus partnership – have never been released.

The Australian negotiating team was led by Mead – the one who oversaw the earlier capability review, and who is now in charge of yet another taskforce that will spend 18 months figuring out the “optimal” pathway to deliver these submarines.

Nuclear proliferation fears anticipated

Newly released White House visitor logs for that month show Mead was among four Australian officials who dropped in to the Eisenhower Executive Office Building in Washington DC on 17 August.

The other Australian officials included Australia’s ambassador for arms control and counter-proliferation, Amanda Gorely, and the Australian embassy’s naval attache, Commodore Mathew Hudson. Also in attendance was Scott Dewar, who earlier this year was listed as the director of the Australian Geospatial-Intelligence Organisation.

Photo taken on May 2, 2018 shows French president Emmanuel Macron (2/L) and Australian PM Malcolm Turnbull (C) standing on the deck of HMAS Waller, a Collins-class submarine.
Photo taken on May 2, 2018 shows French president Emmanuel Macron (2/L) and Australian PM Malcolm Turnbull (C) standing on the deck of HMAS Waller, a Collins-class submarine. Photograph: Brendan Esposito/AFP/Getty Images

Sources familiar with the matter said the group met with Kurt Campbell, and it should not be a surprise that such meetings were held in the run-up to the Aukus announcement.

Guardian Australia has established Gorely was also a member of the interagency negotiating group, along with a small number of other Dfat officials, in a sign Canberra anticipated the implications of Aukus for nuclear proliferation could become contentious.

Australia would be the first non-nuclear weapons state to acquire nuclear-powered submarines. Indonesia and Malaysia later raised concerns Aukus could pose non-proliferation issues, and China is pressing for the International Atomic Energy Agency to launch a special committee to review the matter.

“Australia has made clear it is committed to meeting all of its nuclear non-proliferation obligations and to maintaining the strongest possible non-proliferation standards in relation to Australia’s acquisition of conventionally-armed nuclear-powered submarines,” a Dfat spokesperson said.

Payne travelled to the region last month in a bid to reassure Indonesia and Malaysia.

French pique

The diplomatic ramifications continue to reverberate, with the French government still furious with the Australian government over its handling of the scrapping of the $90bn deal for 12 conventionally powered submarines, claiming it was deliberately kept in the dark.

Letters from the Australian defence department to France’s Naval Group a week before the Aukus announcement, and also hours before, released under FOI, painted a positive picture of progress being made against technical issues with the French plans. Naval Group was informed of the cancellation the night before the announcement.

The department confirmed that defence leadership had received written advice from the section managing the then-project “regarding progress on the Attack class submarine program” – but it has not released that.

As for the new submarines, it remains the government’s “intention” to build them in Adelaide – but nothing has been locked in yet, nor the costs and delivery dates, as Mead’s taskforce continues talks with American and British counterparts. All of these are not due to be finalised until after the federal election.

“Defence is not ruling any design option out at this time, however the design that is selected must be mature at the time of build,” the Defence Department said in response to a Senate question on notice.

“This includes current and potential future UK and US designs.”

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