A complex network of interconnected supply chains keep Australia fed, fuelled, and functioning. But recent changes to Australia’s energy supply chain mean they’re increasingly vulnerable to disruption.

Australia, like most advanced economies, relies on a ‘just-in-time’ supply chain system, in which goods are delivered only when they’re needed in the production process. That makes a lot sense economically, as it increases efficiency.

But supply chains don’t operate in a vacuum; they’re intricate and interconnected systems of systems. The efficient functioning of ‘just-in-time’ manufacturing supply chains depends in turn on domestic fuel supply chains that allow trains and trucks to transport goods.

These domestic fuel supply chains themselves rely on international maritime ‘just-in-time’ fuel supply chains that bring refined fuel to Australia for further distribution around the country. Even a slight disruption to this process can have cascading consequences.

Supply chain interdependencies can become very obvious in such circumstances. The slowdown in global automotive manufacturing caused by the 2011 Japanese Tohoku earthquake and tsunami involved a series of disruptions to suppliers up and down the supply chain. Many Japanese automakers believed that their suppliers were more reliable than they actually were, and several supply chain bottlenecks were exposed by the disaster. That in turn affected automakers outside of Japan, whose supply chains were susceptible to the same bottlenecks.

While Australia’s economy is more services-based than Japan’s, we can learn much from the experiences of Japanese automakers in 2011. A key lesson is that disruptions to supply chains can be both regional and global, meaning that multiple industries across linked economies can be affected.

Another lesson comes from the fact that the Japanese automotive manufacturing industry was able to recover relatively quickly thanks to explicit planning for supply chain resilience. Earthquakes are a familiar hazard, and were duly considered in Japanese supply chain planning. While Australia faces a different set of potential disruptions, planning for them is prudent.

Fuel is a fundamental input to supply chains; if the fuel stops, everything else stops. So identifying vulnerabilities in Australia’s maritime energy supply chains is critical. Due to recent refinery closures, Australia’s increasingly dependent on Asian suppliers (notably Singapore, South Korea, and Japan) for the refined fuels that keep our supply chains running. By outsourcing most of its refining, Australia has effectively ceded the ability to regulate its domestic fuel stocks to the international petroleum industry and to maritime suppliers.

Australia isn’t compliant with the suggested minimum ‘whole-of-economy’ fuel reserves set by the International Energy Agency (IEA), which mandates that member states hold 90 days’ worth of fuel reserves. By some accounts Australia has only 71 days of industry fuel stockholdings (and no public reserves), equivalent to about 23 days’ worth of consumption. However, Australia’s non-compliance is set to be addressed over the coming decade with the announcement that it will comply with IEA regulations by 2026.

But there’s a problem with that. Part of that planned compliance depends on the purchase of oil ‘tickets’, which give Australia priority when buying crude oil from another producer in the case of a disruption. What oil tickets don’t do is provide any guarantees on how that oil will get to Australia.

If the maritime energy supply chain is disrupted, the oil Australia is a priority customer for might be stuck where it was produced while Australians are running on empty. Purchasing oil tickets may make Australia technically compliant with IEA regulations, but whether it makes Australia’s energy supply chains less vulnerable will depend on the context of the disruption.

A solution could be for the federal government to pass legislation that enacts national supply vulnerability reduction measures. This legislation could mandate a number of measures, notably the establishment of mandatory fuel reserves based on type and projected needs. The reserves could be implemented by the Department of Environment and Energy using federal funds; this model is similar to the American Strategic Petroleum Reserve, funded by the US Department of Energy.

Encouraging the re-establishment of a large domestic refining capacity through a series of tax breaks for the petroleum industry is another possible solution.

A third option is to decrease demand for petroleum by moving towards renewable energy sources. Renewable energy has its limitations so Australia’s future energy supplies will likely continue to be a mix of renewable and non-renewable.

This would help alleviate some of Australia’s dependence on overseas imports—especially refined fuels—that are extremely vulnerable to disruption. The US government has had such legislation in place for some time and the Department of Homeland Security has established strategies for the identification of disruptive triggers for loss of global supply chain continuity.

Given Australia’s reliance on imported fuel and the variable storage of reserves, considering the effectiveness of implementing strategic and legislative solutions similar to those in the US makes sense.

During the Cold War, we were good allies to the Americans. Our presence in Korea and Vietnam was testament to our bona fides. But prime ministers Whitlam, Fraser, Keating and Hawke all had security policy differences with Washington and, during or after leaving office, expressed views which questioned aspects of the alliance.

Over the past two decades, it has become axiomatic for Australian governments to support, without serious qualification, the main thrusts of American security policy whether in the Asia–Pacific, the Middle East or Eastern Europe. This approach has thus far been broadly right regarding Asia, mainly wrong in the Middle East, and while shrilly bombastic on Eastern Europe, not gravely prejudicial to our interests.

More recently, while the politicians and security communities in the US and Australia continue to genuflect to ANZUS, the attitudes of the public in both countries may be less ebullient (in the American case not specifically about its alliance with Australia, but on its military undertakings generally)

If for no other reason, we need to think about the centrality of ANZUS to our foreign policy.

While the United States still sees itself as the world’s sole superpower, it increasingly questions its global role. Three overlapping American perspectives on security policy come to mind.

First, informed American opinion is unanimous that the United States’ appetite for military engagement has declined. This view is also supported by recent polling by the Pew Research Centre which points to an increase since 2010 from 46% to 57% of those believing that the US should deal with its own problems, leaving others to do the same.

A second perspective is reflected in some of President Obama’s arguments in the now famous piece in The Atlantic. These suggest he has become fatalistic about the limits on America’s power. He’s suspicious of the so-called ‘Washington playbook’ which he sees as relying excessively on militarised responses to crises. He believes that before exercising military power, the US has to be clear about its core interests and about why it’s making a military commitment.

Some argue Obama’s policies in the Middle East have in practice differed little from those of Bush, and that he’s now seeking to project the legacy he would have preferred. Others see him as a vacillator who sold out America and argue that when he goes America will revert to a more traditional view of security policy.

Neither approach however contradicts the contention that in expressing himself as he did, Obama understood that while Americans will accept military commitments based on protection of core American interests, they will be unreceptive when such commitments are based on less than concrete concepts of international order.

The third perspective is demonstrated by populist sentiments which have become increasingly evident over the past six months and which Messrs Sanders and Trump have harnessed. Both candidates have played upon fears of foreign military entanglements and international economic commitments. Trump has also stoked xenophobia.

The concern here isn’t about the degree to which Clinton has been thrown off course by Sanders or the risk of a Trump ascendancy, it’s that the currents that have swept them along are so strong that no American political aspirant can ignore them.

America is not about to enter a new isolationist phase. Neither Obama, nor Trump, nor anyone else is suggesting that it do so. But America is thinking differently. Its preparedness to act as a protector of Australia or anyone else is increasingly likely to be premised only on hard assessments of American need and risk.

There are also indications that the difference in the perspectives of the American security establishment and the American people may have a few analogies in Australia.

Australians strongly support ANZUS as evidenced by a number of Lowy polls. Both political parties know this and act accordingly. However Lowy polling three years ago also showed that dispatch of troops to support the United States in the Middle East drew only 48% support and hypothetically in Asia, even less at 37%.

A survey released earlier this month (PDF) by the United States Studies Centre and the Perth USAsia Centre suggested that Australians see United States’ regional power as on the wane. Only 22% of Australians polled believed that the United States is the most influential country in Asia, a much lower proportion than Japanese, Koreans or Indonesians. More Australians compared with any other country’s respondents selected China as the most influential country in Asia. There was also a surprisingly high Australian emphasis on the desire for improved relations with China rather than with the United States.

Another Lowy survey released earlier this week noted that respondents accorded equal importance to our relationships with China and the United States (43%). This differed from two years ago when 48% accorded most importance to the US compared with 37% for China. Moreover, perhaps partly influenced by the Trump factor, support for ANZUS was down nine points to its lowest level since 2007.

It’s drawing a long bow to suggest that these surveys show a structural decline in our support for ANZUS, and an even longer one to suggest that the Australian psyche would readily adjust to the absence of American guarantees.

Australians would probably stand up to be counted in the case of a clear and direct threat to the United States. But we might question the automaticity of “being in it” in situations in Asia or elsewhere in which we saw the dangers differently to the Americans.

Our next government needs to look again at the issues by way of a fresh White Paper authored by a multidisciplinary team capable of seeing Australia’s national interests more broadly.

ANZUS can only be thought through in the context of our foreign policy environment as a whole. It cannot be divorced from our other regional and global interests. In 1973, Gough Whitlam famously said: ‘For all its enduring importance, adherence to ANZUS does not constitute a foreign policy’.

Today this comment rings truer than ever.

 

Next Monday, April 25, is Anzac Day, the 101st anniversary of the ANZAC landing at Gallipoli. This is the first of two columns by Graeme Dobell reflecting on the commemoration.

For six decades, I’ve known Anzac Day as a fixed moment of season.

The leaves change, the chill begins, the football launches, and then it’s the day for The March.

(In many households it was capitalised like that: The March.)

The March stood for a lot of things. The medals came out and the old comrades assembled for the annual parade.

As a child in the 1950s and a teen in the 1960s, The March meant Melbourne’s St. Kilda Road, leading to the Shrine.

We clapped loudly for my father and his revered and raucous 9th Division mates, striding in step like the young soldiers they’d been. We knew that this was the magnificent 9th. They swaggered again.

The applause was different, gentler, for the slow-moving, ghosting ranks of my Grandfather’s WWI division of original Anzacs.

As the 1950s turned into the 1960s, I vaguely grasped the tensions and the divides, even the politics, which swirled beneath Anzac Day.

Over my six decade span, many of those conflicts of meaning and memory have faded.

The original Anzacs are all gone. And most of the sons and daughters of Anzacs who marched off to WWII march no more.

My father’s generation grew up knowing the Anzac legend in intimate ways. The original Anzacs stood before them as fathers and uncles—or stared down at them as pictures and medals on the mantle, amid the souvenirs of France.

In the 1920s and 1930s, many were taught the legend as a defining expression of Australia as a new nation. Others got the opposing story about a massive waste—sometimes from the lips of those original Anzacs.

That’s why the headline to this piece refers to today’s simpler Anzac Day. Compared to earlier eras, our approach is—relatively—more straightforward.

The understanding of Anzac Day is ever contested. Yet the divides across Australian society are no longer as vivid or as powerful.

Today’s Anzac Day more easily aligns personal remembrance, Australian identity and political purpose. And perhaps the politics doesn’t throb as forcefully.

Not least in this simplification is that old struggles about Australian identity are forgotten.

See this by considering what was once a hallowed term, as important in its way as Anzac: the Australian Imperial Force. My Mum’s father was in the 1st AIF, my father in the 2nd AIF.

For my father, the sense of continuity was as much about the Australian Imperial Force as the Anzac legend.

The term AIF was an identity as significant as the slouch hat. When our military was named the Australian Defence Force in the 1970s, Arthur Tange and his political masters well understood which bit of the tradition they were honouring and which bit had already died.

At its inception, the contest over the meaning and ownership of Anzac Day was the tension between Australian and Imperial.

For some, Empire and Australia were inextricably united. Others believed Australia had sacrificed her youth to unworthy Imperial ends.

Mix into this the great political and sectarian divide that cut through Australia during the conscription referendums of WWI, and throbbed for decades.

For 25 years, Catholics were discouraged from taking part in Anzac Day as a ‘non-denominational’ ceremony honouring the dead. As Jack Waterford notes, the chief Catholic military chaplain, Archbishop Daniel Mannix, saw Anzac days as ‘forbidden to Catholics,’ regarding the RSL hierarchy as ‘morally equivalent to high-grade Freemasons, which, of course, they often were.’

On its foundation in 1916, the RSL’s full title was the Returned Sailors and Soldiers Imperial League of Australia (RSSILA). Imperial meant British and Archbishop Mannix wouldn’t nod to that, nor to the officer class at the top of the RSL.

The RSL’s grip on Anzac Day meant a deeply conservative organisation wielded a great Australian talisman through much of the 20th century.

As a Protestant, my Dad was on the other side of the sectarian divide. Yet he, too, laughed loudly at the ‘The League’ when it was in jingo mode. Still, he worked devotedly for the RSL for many years and was a proud life member.

When old mates were in trouble, the RSL was a network that could be quickly mobilised. He thought The League did more good than harm.

The Imperial versus Australian struggle is absent from today’s understanding of Anzac.

The shift from a British to an Australian identity can be traced through the life of Charles Bean, the scribe who inscribed the Anzac legend into the official history of WWI, and helped create the War Memorial in Canberra.

In Ross Coulthart’s fine biography, Bean starts out as the most jingoistic of Britons, thrilled by imperial might and notions of British racial superiority and purity: ‘Despite this, what is intriguing about Charles Bean is how his personal life story tracks the origins of Australian nationalism. Over the coming decades, his own growing sense of Australian self-identity would transform so much of what he and all Australians had once so passionately believed.’

The journey from Imperial to Australian is part of the story of how the meaning of Anzac Day has been remade.

The Southeast Asian rejection of Australia joining ASEAN is simply expressed: ‘You’re not from around here. You don’t think like us. You don’t belong.’

The argument is about identity defined through geography.

The previous column in this series gave an ASEAN version of the ‘Yes’ case for Australia and New Zealand making the Association a 12-nation Community.

Now for the ‘No’ case as put by Rodolfo Severino, a Philippines diplomat who was the Secretary General of ASEAN from 1998 to 2002. His summary of the negative case:

‘ASEAN will say, “You’re not Southeast Asian.” And that’s all the criterion is, to be a member of ASEAN. You must belong to a region called Southeast Asia, which was invented by Lord Mountbatten by the way – South East Asian Command – but that’s neither here nor there. The fact is that the region exists now, conceptually, which is the most important thing.’

Severino’s long held view is that Australia has a ‘sometimes ambivalent and fluctuating relationship’ with ASEAN. He describes the elements of this variable approach as:

• Australia’s desire for economic engagement with Southeast Asia
• Southeast Asia’s strategic location between Australia and the rest of Asia
• ASEAN’s role as the hub of East Asian regionalism
• Australia’s close and unwavering relationship with the US

Severino thinks the fluctuations with ASEAN reflect the larger Australian ambivalence about its place in East Asia. He sees this expressed in Australian politics, with Labor being less equivocal than the Liberal Party in ‘the desire for identification with East Asia.’

The former ASEAN Secretary General was caustic in 2005 about the Howard Government’s initial refusal to sign the ASEAN Treaty of Amity and Cooperation because Howard viewed the TAC as non-aligned nonsense—a ‘relic of the Cold War.’

The ASEAN ultimatum—no TAC signature, no seat at the East Asia Summit—produced what Severino saw in 2005 as a humiliating Oz about-face:

‘Canberra’s initial refusal to sign the treaty—indeed, its denigration of it—had affected Southeast Asians’ perceptions of its intentions and motives. Australia continued to signal its reluctance even after it had apparently decided to accede to the TAC; [Foreign Minister] Downer was quoted as saying, ‘If the price (of participation in the East Asian summit) is signing the Treaty of Amity and Cooperation, we’ll do that’… Under either political party, Australia has long considered close association with ASEAN and with the larger East Asian region to be in its highest interests. Accession to the TAC, as well as participation in the East Asian Summit, will be a highly visible manifestation of this association. All’s well that ends well, of course, but a bit more enthusiasm and a bit less reluctance on Canberra’s part would have been even better.’

When I sat down with Rodolfo Severino last year, he returned to those themes of Australian ambivalence and reluctance and the basic idea that to be ASEAN is to be Southeast Asian.

I put to him the argument that conceptions of Asian geography are expanding. The East Asia Summit embraces the US and India as well as Australia and New Zealand. What of a slow push for Australia to have observer status in ASEAN—a half-in membership—by 2024, the 50th anniversary of Australia’s dialogue partnership with ASEAN?

‘That would be something to think about. We can’t predict the long term. But in the short term the instinctive reaction would be to reject it. For many reasons. One is – to me the more resonant one – is the tendency of Australians to tell Southeast Asians what is good for them. Maybe it needs saying, but not as a member, a permanent observer.’

Southeast Asians, he says, look at Australia as a little US, and ‘although secretly the US is welcome’ in the region it’s not politically fashionable to say so publicly.

‘Australia is regarded as a deputy sheriff of the US. The question to answer is: “Are you Asian enough?” For Severino, a ten year push for Australia to have observer status in ASEAN is too short a time to get a positive answer to that query about Asian identity: ‘I like to talk about facts, realities. So I think observer status is out of the question at this point.’

Severino says Australia has a record in Southeast Asia for practical diplomacy and contributing as a good partner, but part of the Australian psyche is still European: ‘The problem with Australia is its ambivalence. At some point when Australia feels confident enough to say, “We are in Southeast Asia and we deserve to be in ASEAN,” then that will be the time. But this has to be worked out internally, domestically.’

Forty years ago Australia decided to engage China. We should now embark on a similar path of engagement with Africa. Africa is on a growth trajectory that’s enabled it to become the world’s fastest-growing continent.

I recently returned from Zambia where ASPI teamed with South Africa’s Brenthurst Foundation to convene the second Aus–Africa Leadership Dialogue, after the first iteration in 2013.

Australia and Africa can work together across infrastructure, trade, education and broader security cooperation.

There’s been the recent opening of an Australia Africa Chamber of Commerce and the establishment of a Government Advisory Group on Australia–Africa Relations. There’ll be a ‘Doing business in Africa’ conference in Melbourne next month. We’ve got 200 Australian mining companies involved in over 700 projects in Africa.

Our relations with Africa aren’t about aid, they’re about investment, trade and people-to-people links.

Africa will have billion people by 2050. We need to change the narrative so we conceive of Africa as a rich continent, and one of opportunity.

Unfortunately Africa’s image is one of inefficiency and strife and therefore many think it’s better for Australia to focus on Asia.

Let me set out some possible areas of cooperation outside of the security domain, which will be the subject of a separate post.

In the area of health, the Ebola outbreak revealed that the World Health Organization needs a deployable, international volunteer medical corps for handling health crises.

Australia should be working with Africa to promote a voluntary multinational corps ready on short notice when the next health emergency arises. Australian companies in Africa can assist in future campaigns that focus on basic health and hygiene in the workplace and home.

Forty percent of Africa’s working age population is between 15 and 24. There’s a real need for entrepreneurship amongst youth in Africa. Several of Australia’s higher education institutions have entrepreneurship programs, but Africa has been off their radar.

Australian business can work with African researchers on how bigger companies can outsource to smaller companies to get younger people into the value chain.

Natural disasters act as a huge handicap on the development of many African countries. Australia can help in operational capacity. In Botswana, for example, the NSW Rural Fire Service has successfully trained fire fighters and established a coordinated firefighting model in bush fire prone Botswana. We have engineering companies that can assist in developing more resilient infrastructure.

In the area of road safety, Africa possesses only 2% of the world’s vehicles but contributes 16% to the global deaths. Australia could be working with African researchers and governments to understand the factors behind these figures.

In sports diplomacy we could expand our sporting scholarships and friendly matches to foster good will on the continent.

Many African countries have underfunded, but creative entertainment industries. Through our movie makers there’s opportunities to work with Africa to tell some great stories.

A memorandum of understanding was recently signed by our Foreign Ministry and a new body, the Australian Fashion Chamber, a peak body for designers, to promote our creative industries overseas. We could showcase the work of our designers in Africa and work with African designers to open doors to trade and investment.

Australian agriculture research and expertise can help improve productivity along food and agriculture chains in Africa. Australia has long confronted drought and water management issues. We know the challenges of producing crops that can withstand the elements. There’s a tremendous opportunity for Australia to export this knowledge to help build African capacity. Australia can contribute to African diets by applying our business services. Better food packaging, for example, can reduce food waste.

In the area of energy security, Australia’s pretty good at publishing our energy resources and plans; we could assist in African energy planning to ensure right long-term transparent investment framework is there. We can share how we develop energy supply chains: from power stations, transport of power to customers, through to the retailers who buy wholesale electricity and package it with transmission and distribution services for sale.

The blue economy concept is about marine economic activity as a driver of sustainable growth and development. The African Union has produced 2050 Africa’s Integrated Maritime Strategy.

Oceans will become an economic force this century, driven by new technologies that make it economically viable to tap marine resources and demographic trends fueling the search for food security and alternative sources of minerals and energy. Australia’s well placed to advance the blue economy working with Africa.

There’s plenty of opportunities for Australia to contribute to the development of the blue economy agenda (PDF) in Africa, whether it be by providing good data to better manage data-poor fisheries, helping with aquaculture systems, mapping wave-energy resources, and assisting with dredging science for port developments.

An Australian company, Carnegie Wave Energy, has just signed a memorandum of understanding with the Seychelles to investigate wave power and micro-grid opportunities.

Much of East Africa’s offshore oil and gas potential is at a depth of around 3500 meters. Australian company Woodside has experience developing gas resources at such depths (PDF). Australia and Africa should work together to take advantage of the opportunities offered by innovating in the blue economy.

The African proverb says it all: ‘if you want to go fast, go alone; if you want to go far, go together.’