Speeches
to The Australian Industry Group,
Sydney, 17 February
2003
The War on Terror: Implications for Business and Industry
Introduction
Ladies and gentlemen
I am very pleased to have this opportunity to speak to the Australia Industry Group about threats to Australian security and how business can manage the risks that flow from these threats.
Indeed I am very well aware that the war on terror and the new security environment have weighed heavily on business as well as society at large.
So I want today to share some thoughts with you on the nature of the security challenges that we face and how we - the government and the business community – can meet them.
The new security environment
Australia's security outlook and perspective have been dramatically sharpened by the bombing in Bali on the 12th of October.
For Australians, the Bali bombings underscore that terrorism no longer happens just to other people in other parts of the world.
It has occurred in region, and the danger it may yet occur in our country is very real.
No one is immune, and everybody feels threatened.
This is why we talk about waging a war against terrorism.
Indeed it is a war – but a war against multiple foes, without a clear frontline.
It is war that cannot be waged and won by any single country.
Nor can it be ignored –we cannot curl up in a ball and hope the enemy is simply going to disappear.
Certainly, after September 11, 2001, the international community was quick to recognise that basic values shared across frontiers, across cultures, and across faiths were under attack.
We have seen impressive levels of cooperation in fields such as law enforcement, financial and export controls, intelligence cooperation and border control, as well as a successful military coalition in Afghanistan - where Australia made a valuable contribution.
The threat of terrorism has also given further impetus to international efforts to counter the proliferation of weapons of mass destruction.
Indeed the international community faces few security challenges more serious than the acquisition and potential use of WMD by states and terrorists.
We need to ask ourselves: Would a terrorist organisation like Al-Qaida acquire WMD if it could? Absolutely - as demonstrated by the recent arrest of a group in London working with ricin, one of the world's deadliest biological toxins.
Would terrorists use WMD? Certainly - the terrorist attacks in the United States show that they would stop at nothing to inflict mass slaughter.
The most likely sources of technology and know-how for such terrorist organisations are regimes which continue to flout their obligations under international law not to develop nuclear, chemical and biological weapons.
This is why the challenge posed by Iraq and North Korea is particularly disturbing. Both countries have international obligations not to possess and acquire these horrific weapons, and have wilfully flouted those obligations.
The situation in Iraq has reached a critical point, after a decade of seeking to manage the issue by negotiation.
Hans Blix's most recent report to the Security Council is deeply troubling.
It provided further evidence that Iraq is fundamentally not cooperating with UN inspections.
Iraq is a crucial test of the international community's determination to enforce global non-proliferation norms: we now look to the Security Council to see how they will respond.
Failure to disarm Iraq – whether by its own actions or by the actions of others – will send an entirely wrong message to the world, including to North Korea.
But in both cases Australia has a responsibility to support a coordinated and concerted international response, because the proliferation of weapons of mass destruction, wherever they are, affects Australia's security.
Fighting terror with our neighbours and at home
Ladies and gentlemen,
International cooperation in the war on terror is bearing fruit.
Al-Qaida has suffered because of the arrest of nearly 3000 organisers, operatives and supporters in 98 countries since October 2001.
And the string of arrests around the region has dealt a blow to Jemah Islamiyah's operational capacity.
It is particularly gratifying that the Indonesian police, working with Australian counterparts, have arrested 20 men suspected of planning and carrying out the Bali bombings.
But we cannot afford even a self-congratulatory pause in the war on terror. Not only are many key terrorist leaders still at large, but their organisations are highly adaptable and resilient.
And with few exceptions, the countries of our region face real challenges in developing the capacity to confront, and defeat, terrorism.
So we will continue to work hard in our region – particularly in South East Asia - to strengthen intelligence, law enforcement, and counter-terrorism capabilities.
We are negotiating agreements designed to enhance counter-terrorism cooperation with the Philippines, India and Fiji to add to those we already have with Malaysia, Thailand and Indonesia.
We are providing a $10 million, four-year assistance package for Indonesia to support the development of its counter-terrorism capabilities.
We have jointly hosted with Indonesia a conference to combat terrorist financing and money laundering.
And we are active in regional groupings such as the Pacific Islands Forum, the ASEAN Regional Forum and the APEC Forum, to ensure that these bodies maintain focus on one of the most important issues of our times.
At home, following the terrorist attacks in the United States, we strengthened Australia's counter-terrorism arrangements at a cost of $1.3 billion over five years.
We have strengthened legislation to give relevant agencies the powers they need to investigate terrorism and sever its sources of finance.
We have reformed the relationship between the Commonwealth and States on counter-terrorism, to reflect the responsibility that States share in protecting Australians from terrorism.
We are working with the aviation industry to improve security at the nation's major airports and with Australian Customs to improve the capability of the Service to inspect incoming shipments to Australia.
This is as it should be. The protection of our national security is more important now than at any other time in our history.
We have to plan for a long-term campaign against international terrorism. We have to prepare for attacks on all possible targets.
This is sensible contingency planning and sound risk management – something I am sure the business community can understand readily.
Impact on business
Of course terrorism is a threat not just to our citizens, but also to our economy and our industries.
As the attacks on the World Trade Centre show, business itself is a prime target of terrorism.
Indeed terrorists would like nothing more than to bring the world's financial system to a standstill and to undermine the very prospect of global economic stability and prosperity.
Certainly the financial costs of coping with a less secure world may increase. Travel and transportation may become more expensive and slower. Some firms may become less likely to enter international markets.
The effects on industry since September 11 2001 are manifest, notably in the travel, insurance and tourism industries.
Another, less tangible, effect of terrorism is the uncertainty it brings into everyday life, an uncertainty which undermines global economic confidence.
Indeed part of the terrorist agenda is to force economies to build barriers behind which businesses avoid risk and behind which economies – including those most in need of development - stagnate.
These economic pressures, in turn, make our region more vulnerable to non-traditional security threats – not just terrorism,
but also transnational problems such as the unregulated movement of people and goods.
These pose very real threats to the sovereignty of many nations in our region.
For Governments to address these problems, maintaining the conditions for growth and stability will be just as important as law-enforcement operations.
The conditions for growth and stability – including in Australia's region – are the same the world over.
Economic openness – to exchanges in trade, technology, investment and intellectual property – is essential.
Business can rebuild trust in a global economy that has been eroded by concerns about security by doing what it does best – identifying new opportunities, adapting to changed conditions and managing risks.
No-one underestimates the difficulty of this for the Australian companies with significant holdings in the region which are affected by the threat of terrorism, and for the large expatriate Australian business community.
Working with business to meet security challenges
These are all risks business and Government must manage together.
Business and Government must also work together to ensure that our critical infrastructure, information systems and our trade are safe from terrorist attacks.
The importance of direct business input into this important issue cannot be overstated.
Indeed the business community has a vested interest in the protection of the critical infrastructure that underpins Australia's essential services – our telecommunications, transport and distribution networks, energy and utilities, banking and finance.
And because much of the nation's critical infrastructure is privately owned, government action alone cannot secure them.
Business must take responsibility for maintaining risk management and contingency plans.
It must also pass on important information to Government.
This is why the Prime Minister established the Business-Government Task Force on Critical infrastructure.
The taskforce has already noted the need to identify critical infrastructure and prioritise the most vulnerable assets for protection.
Business will also play an important role in strengthening information systems against cyber-attacks.
Unfortunately, the very information systems and networks that facilitate globalisation and commerce also leave us increasingly vulnerable to that new type of threat - the interconnected nature of our infrastructure sectors significantly magnifies the consequences of service disruptions.
Similarly we will need to secure the flow of goods and people in the region.
We are already working with APEC economies through the STAR initiativeto enhance border controls, air and maritime transport security and to protect people in transit as well cargo -again there is tremendous potential for Australian business to contribute.
Business and Government also need to go on the offensive, to choke off support – financial and otherwise - for terrorism.
We must stop the patrons and bankrollers of the trade in terror and WMD.
Several resolutions of the United Nations Security Council require states to freeze assets of persons and entities involved in terrorist acts.
The Commonwealth Government has enacted the Suppression of the Financing of Terrorism Act 2002, which makes it an offence to provide or collect funds for a terrorist act.
Business and financial institutions will need to keep a watchful eye on the nature of the business of corporate customers and report suspicious financial transactions to law enforcement authorities.
Under international law, we are also obliged not to provide equipment or material which would assist the production of nuclear, chemical or biological weapons.
Indeed Australia is a leading member of several export control regimes, such as the Australia Group and the Nuclear Suppliers' Group.
The government has no wish to impede legitimate trade and commerce, but it attaches a high priority to its non-proliferation obligations to ensure that sensitive strategic or dual-use items are not misused.
That is why our domestic legislation, the Customs Act and regulations and the Weapons of Mass Destruction Act, proscribe serious penalties for breaches.
And it is also why the Department of Defence maintains the Defence Strategic Goods List (DSGL) of prohibited or dual-use exports.
Australian exporters need to be aware of the DSGL if they are exporting potentially sensitive items or to countries of proliferation concern.
We rely very much on the cooperation of business to implement this important non-proliferation measure.
Conclusion
Ladies and gentlemen,
It is beyond question that Australia now faces a more challenging security environment shaped by forces such as global uncertainty and terrorism.
This environment calls for an integrated approach by government and business.
Together we must remain vigilant in the face of the threat of terrorism while at the same time lowering the barriers that stand in the way of greater economic integration and prosperity.
We must find ways to confront the terrorist menace without undermining the openness and dynamism that characterises our society.
We must continue to show that Australia's dynamic economy and vibrant society will not be cowered by the terrorist threat.
There will be, I am afraid, costs associated with ensuring the physical security of business operations, critical infrastructure and trade.
However, the events in New York, Washington and Bali demonstrate that the costs of not addressing terrorism far outweigh the costs required to achieve a safer, more secure economy.
The task ahead is of no small magnitude.
Industry can make a significant contribution, through the initiatives I outlined to you today.
Thank you.