Canberra under extreme threat of overreacting over foreign influence

There was a time when Malcolm Turnbull was seen to be an agent of foreign influence. He was ­opposition spokesman for communications in 2012 and had ­become close to senior executives of the Chinese telecommunications colossus Huawei.

He had visited Huawei’s headquarters in the southern Chinese city of Shenzen (as had Coalition foreign affairs spokeswoman Julie Bishop and its legal affairs spokesman, George Brandis).

The Gillard Labor government controversially banned ­Huawei from participating in tenders for the NBN, citing ­unspecified security concerns.

The private Chinese company was founded by a former People’s Liberation Army engineer, Ren Zhengfei, while its chairwoman, Sun Yafang, had worked for Chinese state security. The Gillard government arranged for Turnbull and Bishop to receive a confidential briefing from ASIO on the reasons for the ban.

However, Turnbull did not ­accept Labor’s decision, promising to review the ban when the Coalition gained government. He highlighted that the British government had allowed Huawei to participate in its broadband rollout, which spoke to the Chinese company’s bona fides.

“Having said that, we have not been privy to the security intelligence advice that the government has had,” he said. While this appeared to give him scope to ­reverse his position, the fact that he had already received the secret security briefing left open the ­interpretation that he was a political leader ready to change government policy to favour a Chinese business contrary to ­national security advice he had secretly received — an offence no less than those of the vilified Sam Dastyari.

When Turnbull was called out by The Australian’s associate ­editor, Cameron Stewart, who ­revealed the existence of the ­secret briefing, Turnbull cavilled that an ASIO briefing given to the opposition was not the same as that given to the government.

Following the Coalition’s 2013 victory, it was prime minister Tony Abbott who ruled that the Huawei ban would remain.

Besides illuminating a measure of hypocrisy in the present indignation over Chinese influence, the story shows the minefield that awaits once the exercise of undisclosed foreign influence is criminalised.

In a multicultural nation where two-thirds of the population has a non-Australian heritage, foreign influence is everywhere.

Foreign companies have more than $3 trillion invested in Australia, or more than the combined assets of the big four banks. Foreign trade involves transactions worth $760 billion every year, or about half of the GDP.

Foreign influence comes in waves — British, American, Japanese and now Chinese. Since 2000, China has risen from taking just 5 per cent of Australia’s ­exports to now buying a third. The Foreign Investment Review Board reports that China has ­become the biggest source of foreign investment proposals.

Over the past decade, the number of China-born residents in Australia has soared almost 150 per cent to 510,000, while 1.2 million respondents to the latest census said they had Chinese ancestry. Malcolm Turnbull will continue to be mobbed at Liberal fundraising events by Chinese donors wanting selfies with the Prime Minister, as he was in the lead-up to last year’s election, but they will all be Australian citizens.

The proposed foreign influence transparency scheme casts a cloud over all dealings between foreigners, their representatives and the government. Whether it is competition policy, foreign ­investment, regulatory reform or anything that requires a ministerial decision, advocates will have to be registered, spelling out the nature of the activity they are covering. Unregistered foreign influence becomes a crime.

The new law covers both ­direct lobbying and any kind of “communications activity”, which presumably extends to ­social media. There are limited exemptions — diplomats, news media and lawyers have some protections. However, a lawyer who felt a regulation was unfairly prejudicing their client would have to register as a foreign agent to make representations.

It is much more draconian than the lobbyists code introduced in 2013. Someone seeking to see a minister without registering as a lobbyist could be barred from future meetings. Someone seeking a meeting without registering as an agent of foreign influence could be imprisoned for seven years.

The government argues the measure is based on the long-­established US Foreign Agents Registration Act. The effect of that legislation is that no one makes representations to a congressman without a phalanx of compliance lawyers in tow. The US is a vast economy in which foreigners have relatively little influence compared with Australia. The chilling effect on contacts ­between business and government will be greater here.

Ministers, already too ­detached from the reality of business, will become increasingly isolated. One lawyer notes that the various arms of government frequently issue consultation documents when they are considering policy or legal changes. The explanatory memorandum for the new law makes clear that anyone making a submission for a foreign entity would be committing a criminal offence if they ­failed to register. It would be easier for them not to bother.

The law is sweeping and may catch many unsuspecting people such as the developer looking for a planning change to build an ­office block, the ethnic community group pushing for Australian acknowledgment of problems in their country of origin, or an ­associate of a foreign business ­retweeting a call for a policy change. Australian directors of foreign companies will need to be careful. It captures what have until now been completely normal inter­actions, generating no demonstrable harm. Whatever the government says, the Chinese sense that they are the target.

The new legislation was introduced to parliament without any prior consultation with ethnic communities, the legal fraternity or business, but responded to concerns of the security agencies.

The new foreign agent registration law accompanied a suite of other security legislation, ­including the new offence of ­“unlawful foreign interference” and updating the treason and espionage sections of the criminal code. In justifying the new laws, Turnbull referred to the “extreme threat” that Australia faced, the “disturbing reports about Chinese influence” and the “credible reports that Russia sought to ­actively undermine the United States election”. It was, he said, about preserving the “Australian way of life”.

From the 1980s through to the global financial crisis, the world prospered from the lowering of barriers to trade, investment and travel as globalisation lifted hundreds of millions of ­people from poverty. Within the Asia-Pacific region, Australia was a leader in lowering the barriers to commerce. The decade since ­that financial crisis has brought not so much a backlash as a slow chiselling away of those gains. The new foreign agent law takes out ­another chunk.