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Industry awaiting release of sovereign industrial capabilities policy

Minister for Defence Industry, the Honourable Christopher Pyne MP (centre right) at the announcement of the Naval Shipbuilding Plan in the presence of Acting Chief of the Defence Force, Vice Admiral Ray Griggs, AO, CSC, RAN (left), Minister for Defence, Senator the Honourable Marise Payne, and the Prime Minister of Australia, the Honourable Malcolm Turnbull.

The Naval Shipbuilding Plan was released in May, but industry is still waiting for the sovereign industrial capabilities policy. (Defence)

Development of a new ‘sovereign industrial capabilities’ policy, covering those military capabilities that are considered to be so important that they must be developed or supported by Australian industry, remains a work in progress.

That is despite the Defence Industry Policy Statement that was released with the 2016 Defence White Paper having stated that a transition from the existing Priority and Strategic Industry Capability policy would have taken place by now.

The current policy will be replaced by a Sovereign Industrial Capability Assessment Framework to improve the identification and management of the sovereign industrial capabilities that develop and support Australian Defence Force (ADF) capabilities, the industry policy document stated.

Possible examples of sovereign industrial capabilities include the industry capabilities underpinning the Nulka active missile decoy, for which BAE Systems Australia is the prime contractor, and CEA Technologies’ radar technology.

The federal government is expected to release the Defence Industrial Capability Plan (DICP) at some point this year, promising to provide strategic direction to grow and upskill Australian industry.

The DICP, which is intended to outline the government’s long-term roadmap for industry, will include the Sovereign Industrial Capability Assessment Framework, and will list the sovereign industrial capabilities and provide details of a system for managing them.

At the time of the release of the Defence White Paper in February 2016, the transition to the new policy had been scheduled for the second quarter of this year.

According to Kate Louis, First Assistant Secretary, Defence Industry Policy Division, Defence has sent out a survey that about 1,400 companies have responded to as it has worked to assess the current state of the defence industry.

“What we are trying to do with building a new Sovereign Industrial Capability Assessment Framework is…part of our new Defence Industry Capability Plan, which we are looking at building over the course of this year,” Louis told the Senate Foreign Affairs, Defence and Trade Legislation Committee on May 30.

As part of this effort, Australia has turned to other countries for inspiration.

“We have looked at the UK, the US, Canada and similar [like-minded countries] in trying to build our own industry base,” Louis said. “There are differences, obviously, in scale and size from those.

“We have looked at a lot of lessons learnt that we had out of the Priority Industry Capabilities. Trying to exactly identify those things that must be done in this country in order to be able to guarantee sovereignty is something that we are working very hard on.

“We are doing a lot of consultation, as I have said, thanks to industry who have participated. We are getting a lot of data from the states and territories as well, and also internally from Defence with the capability managers, looking forward in terms of what they are going to need in terms of opportunities for the Integrated Investment Program for both building and sustaining the capability as we go forward.”

In the context of discussion of sovereign industrial capabilities, the Naval Shipbuilding Plan stated that the sustainment of the Future Submarine fleet must be undertaken by a sovereign Australian company due to the classified nature of the technology and systems involved, for example.