Govt ignores Huawei security concerns

BY ALEXANDER RHEENEY
PNG PERSPECTIVE

CONFIDENTIAL EMAIL CORRESPONDENCE obtained by PNG Perspective.com shows that the Papua New Guinean ambassador to India, Tarcy Eri [right], wrote to then foreign minister Sam Abal on 12 October 2010 to warn that the PNG government should reconsider the engagement of China’s Huawei Technologies on the grounds of national security.

“While I applaud the vision of the Department [of Communication] to network all government entities for purposes of dissemination of information in an integrated way, I believe the national security applications of this project have not been thoroughly examined and thought out,” Mr Eri wrote.

“The recommendation for Huawei Technologies as the sole contractor without a third party involvement is a grave and detrimental oversight. The lack of technical expertise in Papua New Guinea, especially within the government of Papua New Guinea, makes us vulnerable and our national security and sovereignty compromised and undermined,” he wrote.

According to the New Delhi-based diplomat, Huawei Technologies had come under the radar of the Indian government.

“Having said that, I wish to bring to your attention that since January 2010, the intelligence agencies and the Ministry of Home Affairs of the government of India have put Huawei Technologies of China on their radar screens for telecommunications equipment security,” Mr Eri continued.

“The issues of telecommunication equipment security were taken over from the Department of Telecommunications by the Department of Home Affairs with the aim to secure networks and enhance national security.”

Huawei Technologies was also being investigated by a number of foreign governments including Australia, he added.

“Indeed, Huawei Technologies of China is one of the global manufacturers of telecommunications equipment together with Ericsson, Nokia-Siemens and ZTE.

“However, I am also informed that the national security agencies of the United States, United Kingdom, Australia, Indonesia and others have raised concerns about the propriety and integrity of Huawei Technologies in supplying telecommunications equipment.”

The email was copied to the then PNG Department of Foreign Affairs and Trade secretary Michael Maue and the chief secretary to government, Manasupe Zurenuoc.

The O’Neill government, since coming into office in August last year, has embraced the project despite Mr Eri’s concerns. A telecommunications advisor to the O’Neill government told PNG Perspective.com recently that it is now “work in progress”.

The Integrated Government Information System will be funded by a $US53 million loan from the Chinese government-owned Exim Bank. A service agreement with Huawei Technologies was finalised in 2010, with then Treasurer and now parliament-elected Prime Minister Peter O’Neill signing on behalf of the state.

Huawei was represented by the Chinese firm’s senior vice president Qu Wenchu [pictured]. Under the program the IT company will set up e-work permits, e-learning, e-health, online visa processing, e-passport, e-tax and e-commerce online infrastructure.

It is understood portions of the $US53 million loan have already been drawn down with ICT equipment shipped into Port Moresby and waiting installation at key government-owned telecommunication hubs at Telikom Rumana, Police Headquarters, Konedobu, the Ela Beach Telephone Exchange, the Boroko Telephone Exchange and Jacksons International Airport.

In response to questions posed by PNG Perspective.com, Department of Information and Communication acting secretary Kora Nou said they were aware of the concerns raised by Mr Eri but have addressed it.

“I am well aware of the 'concerns' raised by HC Eri as we had dealt with it when it arose. What we did then was ask Huawei and the Chinese Ambassador to PNG to look into the security issues raised by Amb Eri,” he said in an email.

The installation of Huawei Technologies-owned ICT infrastructure at state-owned telecommunication facilities in PNG will worry Australia, which banned the same company from bidding for contracts tied to its $36 billion National Broadband Network.

According to the Financial Review the deputy secretary of the Australian Attorney General’s Department, Tony Sheehan, advised Huawei Australia’s chairman John Lord of the ban late last year. Chinese cyber-attacks appear to be the main concern for Australian authorities.

A number of senior PNG bureaucrats contacted by PNG Perspective.com have expressed concern at the vulnerability of state-generated information, and the inability of PNG national security agencies to maintain the integrity of government information systems.

“We are very concerned about the Integrated Government Information System and its implications for national security but it appears the government is going ahead with it,” said a Port Moresby-based bureaucrat.

Australia’s top signals intelligence expert and Australian National University (ANU) academic, Professor Des Ball, in an interview with the The Australian last month said there was “no doubt” Huawei partnered with China’s espionage services.

Comments

[Peter Kranz]

Who's forgotten who is building the Government Information Network in PNG?

Huawei - that's who. Banned from both the US and Australia over concerns they have close connections with the Communist Government.

Surely we can trust the Chinese?

"Chinese technology giant Huawei has offered to provide unrestricted access to its software codes as it seeks to counter negative public perceptions that it poses a security risk.

The company was banned from having any involvement in building the National Broadband Network (NBN) on security grounds, and has also been the subject of a highly critical congressional report in the United States.

The chairman of the Australian arm of the company, John Lord, concedes Huawei has done a poor job of explaining its work and that needs to change.

He has suggested setting up a national cyber security centre, based on a similar concept in the United Kingdom, that would independently evaluate all overseas-made technology products.

"If Australia is to effectively mitigate risk in our communications networks, we must establish universal, transparent frameworks to provide security assurance for all vendors," Mr Lord said in a speech to the National Press Club."

Software isn't the problem, it's the hardware backdoors built into its products.

http://news.cnet.com/8301-1009_3-57482813-83/expert-huawei-routers-are-riddled-with-vulnerabilities/

Peter O'Neil - take some advice from your IT guys!

[Harry Topham]

Robin - Rather ominous. Portends a more serious GFC crisis looming if the Chinese feel they must treat their US bonds as potential toxic assets which can be offloaded through ancillary loans to other countries.

But then again, how strong is the China yuan. Google search shows at present 1 Chinese yuan = 0.154155566 Australian dollars which indicates strong disparity factors of real value.

I also note that despite world pressure the Chinese government refuses to let the real value of the yuan become evident by floating same on the world currency market.

Understandable stance if the Chinese government want to maintain their competitive trade advantage.

[Robin Lillicrapp]

Intel says that in recent times China, saddled with immense holdings of rapidly devaluing US treasury bonds, is seeking to amass gold holdings to counter potential losses, and also to prospect the establishment of their money as a more strongly backed replacement of the greenback as a world trading currency.

I guess the issuance of small business loans to PNG expat businesses is a means of collateralizing a toehold in an ever widening pool of investors swayed by cheap interest.

Not much has been said either of the largest trade agreement ever signed between China and Japan earlier this year.

It is part of a concerted push by those nations into the Asia Pacific region toward achieving economic and political dominance.

If this dominance is to be achieved at the risk of destroying the viability of PNG resources, jobs, and lifestyle, PNG'ns should think twice before taking the "cash" or committing to the leasing of their lands etc.

[Peter Kranz]

Tony - Yes you are right. But is this the Chinese form of 'boomerang aid'?

Sure we'll build bridges or help develop a mine, but just sign this contract for a loan from a Chinese Bank first - and ast very competitive rates of interest.

At the risk of being cynical, sounds a bit like the economic version of the opium wars.

[Tony Flynn]

Peter - That large developments are getting special loans from Chinese sources is normal.

I hear that small businesses are obtaining cheap loans with Chinese government encouragement: trading ventures etc.

Pretty hard for the NDB to compete.

[Peter Kranz]

Tony - I understand that most Chinese resource and development projects in PNG require the government taking out loans with Chinese banks, which are offered as part of the deal (eg, the government IT network, RamuNico etc).

Imagine the outcry if AusAID projects required PNG to sign up for loans from Australian banks. And Aussie banks are independent of government control - not so for Chinese finance.

[Tony Flynn]

Nice to have an inside line to what is happening in the resource sectors.

There may even be a way to find out what the opposition are bidding or problems they are facing.

I heard recently the overseas (PNG) Chinese are able to get cheap loans courtesy of the government banks.

Does anyone know more about this.

[Peter Kranz]

Alexander Downer is of course on the Australian Huawei board of directors.

Obviously no self-interest there.

[Peter Kranz]

I meant to add that there is a complex thread of self-interest and political influence at play here.

Join the dots. Mining - intelligence - Chinese government investment - PNG - Australia - leading politicians and magnates in both countries recieving favours.

No conspiracies here. But I think I better go and revisit old copies of The Twilight Zone.

[Peter Kranz]

It seems that Huawei has been courting the rich and influential in Australia recently. PNG should be careful that the same thing has not happened there.

From The Daily Telegraph ['Conservative Australia is suddenly in bed with reds'] - a typically provocative headline from News Ltd which it itself rather compromised over relationships with China.
______________________

Julie Bishop has a Huawei-donated iPad. Dangerous. Dangerous for her and dangerous for Australia if she becomes foreign minister.

The iPad is but one of the micro details to emerge from Bishop's visit to China as a guest of the Chinese telco. Some Liberals led by Bishop, together with vested mining interests, questioned the Gillard government accepting ASIO's advice against letting Huawei bid for NBN. But the bar has wider significance because the controversy it has sparked illuminates the most vexing issue of Australian foreign policy - our relationship with China.

This was again in sharp relief at the recent Boao Forum, on the luxury resort on Hainan Island.

West Australian mining billionaires Andrew Forrest and Gina Rinehart were there.

Forrest complained the Huawei decision was indicative of the insufficient sympathy for Beijing and that Australia's foreign policy should reflect our commercial relationship with China.

This is not the first time West Australian mining magnates have sought to stamp "Made in China" on Australia's foreign policy.

The day after President Barack Obama's long-awaited visit to Australia, one of Forrest's Boao buddies "Iron" Mike Young dismissed the visit on the front page of the Australian Financial Review.

Former Liberal senate leader Nick Minchin backed ASIO's advice. Former foreign minister Alexander Downer told the ABC that Huawei was a "victim of Sinophobia".

Liberal finance spokesman Andrew Robb, along with Bishop and Bronwyn Bishop, all criticised the government for following the security advice. All have recently been guests of Huawei in China.

Bishop and Downer really should know better. Fortunately, some Liberals do know better.

Senator George Brandis, the shadow attorney-general, was briefed by ASIO and eventually Tony Abbott overruled Robb and the two Bishops.

However it seems that the tribune of mining magnates, Julie Bishop, is not done.

After being silenced she arguably took the pro-Beijing line further. She was quoted in The Australian newspaper saying "confusion about the Labor government's attitudes towards China was increased significantly by the 2009 Defence White paper that implied China posed a direct conventional military threat to Australia".

However the Liberal's official policy is to support the 2009 Defence White Paper!

[Paul Oates]

I do recall this subject being raised at the time on PNG Attitude.

In addition, a similar question was also raised about the refurbishments to the GG's residence and a new building being constructed next to the Parliament house.

If there was any truth in the concerns it might take more than the occasional can of Mortein to take care of all the binatangs.

Thank heavens we're not into conspiracy theories. Nogat tru. Las mono kani.