Nothing Found

When the US Joint Chiefs of Staff chairman Mark Milley announced, ‘We’re at war with Covid-19, we’re at war with terrorists, and we’re at war with drug cartels’, he articulated a fear shared by many who watch illicit non-state actors. Transnational organised crime and terrorist groups have a crucial thing in common: their business models are built around exploiting governance dysfunction and vulnerabilities. It’s inevitable that they’d seek to capitalise on the strain the Covid-19 pandemic is placing on state institutions and a potential emerging security gap.

In Asia, the United Nations Office on Drugs and Crime is struggling to bring the region’s law enforcement agencies together to share information and intelligence and to plan and conduct joint operations. Face-to-face meetings of intelligence officials have been indefinitely postponed, public security ministers and senior officials are in lockdown, and frontline law enforcement, border and customs officials are being tasked with the impossible. The pandemic is exposing fatal flaws in the capacity and response of the public security sector.

Transnational organised crime syndicates and terrorist groups are also having to rethink and adapt in response to the challenges and opportunities posed by the pandemic. From a cyber and crime–terror nexus lens, two dynamics are evident: there’s likely to be greater convergence between organised crime syndicates and terrorist groups, and that will lead to greater access to and activities in the cyber domain by both criminal and terrorist organisations.

The recent upsurge in cyberattacks against organisations and individuals is significant. That activity is expected to increase as perpetrators use the Covid-19 crisis to carry out attacks themed around the virus by distributing malware packages. Interpol has issued a warning to organisations at the forefront of the global response to the outbreak that have also become targets of ransomware attacks.

Cybercriminals are likely to exploit an increasing number of attack vectors as employers institute telework arrangements and allow remote access to their organisations’ systems and networks. Interpol warns that frontline hospitals, medical centres and public institutions are being targeted by cybercriminals.

Terrorist organisations will also try to take this opportunity to further their objectives. The latest issue of the Islamic State’s al-Naba newsletter says that the security ‘distraction’ of countries trying to control and respond to the spread of Covid-19 leaves an opening for jihadists to exploit. The US Department of Homeland Security has warned that ‘extremist groups are encouraging one another to spread the virus … to targeted groups through bodily fluids and personal interactions’.

Agencies tasked with combating these threats must recognise the crime–terror nexus as a key dynamic. Organised crime and terrorist groups often operate along a continuum of degrees of convergence that are agnostic to the groups’ differing objectives. Terrorists’ pursuit of ideological, political or religious aims can be synchronistic with transnational organised crime’s pursuit of profit and other material benefits. Essentially, the commonality is the facilitation of goods and services. But it can also lead to hybrid organisations such as Abu Sayyaf in the Southern Philippines and the FARC in Colombia.

For non-state actors who naturally operate in the shadows of states, the cyber domain offers refuge.

Both organised crime and terrorist groups are recruiting from new demographics. Terrorist organisations, as they increase in popularity, diversify their human capital needs and acquire members with advanced training and expertise, enabling these groups to operate in new areas.

The cyber domain—to which social media is the gateway—has significant appeal as a battlefield to the millennial jihadist. This makes terrorist groups more agile and more adaptive and therefore harder to disrupt. In the past, groups such as al-Qaeda and IS used the internet mainly to recruit young jihadists and promote their beliefs.

Terrorist groups now tend to have in-house cyber expertise and can branch out into actual cyber terrorism. And, importantly, groups that don’t have the capabilities can gain access to these services through client–patron relationships with organised crime syndicates.

As countries continue to close their borders (and keep them closed) due to Covid-19 and the movement of goods and people becomes increasingly restricted, transnational organised crime and terrorist groups will likely increase their reliance on commercially based relationships and hybrid tactics. They will look for new zones of exploitation, and that will include the cyber domain.

The crime–terror lens offers insights into both the services and the access to capabilities that organised crime provides to terrorists. This includes the services cybercriminals provide to facilitate illicit activities by terrorist groups in the cyber domain—which is distinct from cyberterrorism.

The crime–terror nexus has changed the way in which these cybercriminals operate. They use methods that increase the effectiveness of terrorist operations and logistics. For example, operational capabilities of terrorist organisations are enhanced through transnational organised crime syndicates acting as facilitators and providers of services. In the cyber domain, it can include cyber criminals providing hacking capabilities or supplying malware packages to disrupt targeted states, facilitate operations or launder and move funds. Organised crime networks have also used information and communications technology to facilitate various forms of traditionally offline activities, such as trafficking of people and ordnance of interest to terrorist groups.

As governments, international organisations, civil society, and the public and private sectors scramble to respond to the pandemic, there’s a risk that their usual policies and practices to curb organised crime will be weakened or become outdated. This has significant implications for the fight against both organised crime and terrorism. One key to success lies in understanding the nexus between the two.

The cyber domain presents new opportunities for convergence. Policing the digital world will therefore become increasingly important and increasingly difficult. The Covid-19 pandemic demands new mediums and modes of engagement. Illicit non-state actors operating in grey zones are potentially well placed to take advantage of the pandemic and turn risk into revenue.

Australia has so far managed the Covid-19 pandemic as well as anywhere else on the planet, except perhaps our near neighbour New Zealand or the vibrant techno-democracy of Taiwan.

That’s lucky, because if our federal, state and territory governments and our population had not cooperated on the drastic social-distancing measures put in place in the past few weeks, the horrific scenes we’ve seen in New York would be happening right now in Sydney, Melbourne, Adelaide, Perth and Brisbane.

In that alternative universe that we were just a few days and decisions away from, we wouldn’t be hearing restive Australians asking what all the fuss is about. We’d all be angry and energised about the lack of protective equipment and ventilators in our overwhelmed hospitals and we’d all be asking why our governments and our companies couldn’t supply us with what we urgently needed.

That alternative future we have so far narrowly avoided has a close connection to our $40 billion per annum defence organisation, because the Department of Defence and the Australian Defence Force have some eerily similar needs for rapid development and production of technology.

So, defence is also the organisation that we should be able to turn to for rapid development and production of systems—whether ventilators or other equipment—in future crises, military or otherwise. That’s the advantage organisations with big budgets and high technology needs have, if orchestrated and organised properly.

It’s not news to anyone involved in defence policy and capability that the rapid change in civil technology is also affecting the balance of advantage between the world’s militaries. For Australia and our allies, there’s a lot of bad news here about Chinese, Russian, Iranian and even North Korean militaries’ and intelligence services’ rapid development and adoption of technologies. Terrorist organisations like Islamic State (no, they’re not dead, not even resting) are also skilled at rapidly making and fielding very dangerous systems—improvised explosive devices, armed drones and even cyber systems.

Depressingly, our defence organisation, like numerous Western militaries, is struggling to cope with the pace of change. Instead, it has doubled down on its long lead time approach to developing and acquiring military equipment, which is why we see the bulk of the government’s $200 billion integrated investment program for defence going into ships, submarines and big armoured vehicles that are taking years—decades, in the case of the ships and future submarines—to design, build and get into service.

Even if these lumbering capability programs are still useful when they eventually turn up, they won’t succeed alone. The big manned subs will need to work with legions of small unmanned, disposable systems that can inform and protect them against enemy ‘kill webs’ of manned and unmanned systems. The same is true for the air force’s joint strike fighters, the navy’s future frigates and the army’s big armoured vehicles.

So, our defence organisation will need to do two things. Operationally, Defence and the ADF need to be able to respond to technological and tactical surprises, like when an adversary unexpectedly fields a new and highly destructive weapon such as a directed energy gun, or uses a biotech weapon that ‘out-stealths’ the most advanced system in Australia’s or America’s arsenal. And, to do so, they must be able to out-innovate adversaries. That’s done by developing and fielding new weapons and protective systems very fast, whether they are countermeasures that protect against the adversary’s weapons or even more powerful or effective weapons that overturn the adversary’s advantage.

The ADF has done this before as a one-off, crisis-driven exercise. That story is told in Brendan Nicholson’s history of the Bushmaster protected mobility vehicle and the counter-IED systems used with it during Australia’s part in the Afghanistan war. So, it’s possible.

But Defence needs to get beyond one-off, ad hoc solutions for this abiding technological problem. That can only be done by creating a focal point in Defence that has this as its primary task.

A seed for this approach is Defence Minister Linda Reynold’s announcement that Chief Defence Scientist Tanya Monro is heading up a new Defence-led rapid response group. Its task is to ‘help increase domestic stocks of invasive ventilators, as part of Australia’s response to the Covid-19 outbreak’. It will do this by coordinating ‘the activities between public and private stakeholders, … harnessing Defence Science and Technology’s capabilities and facilities, and utilising existing expertise in specialist research engineering and technology development’.

There’s a deep irony here, though: the government is creating this group because Defence has the latent capacity to do this urgent work well by using its own scientific and engineering expertise, and by taking advantage of partners it already has in academia and industry. But it has no standing arrangement or dedicated section that takes advantage of these latent strengths and applies them to meet the ADF’s own already obvious and urgent military needs.

The new group will undoubtedly do fantastic work. The obvious question, however, is why such a group wasn’t already part of Defence’s permanent structure. If it had been, not only would the ADF be able to keep up with and outpace potential adversaries’ capability development, but Defence would also not need to stand up an ad hoc group in a time of crisis. We would be weeks ahead on the ventilator challenge by now.

May Monro succeed beyond her and Reynolds’s wildest expectations. And may this lead to Defence doing what the future military operational environment, and our current pandemic, require: creating and operating a permanent, well-resourced rapid response group. That will mean that in future times of military conflict, or grave national crisis like we have now, Australia will be able to rapidly develop, manufacture and operate machines and systems we need urgently in numbers. This is only going to be more necessary in our turbulent future.

Covid-19 is a crisis of globalisation, propagated by around 800,000 international flights carrying over 100 million people across borders every week, along with the cruise liners carrying half a million or so tourists in any week of the year.

The planes have now vanished from the skies and the cruise ships from the oceans, with their passengers disappearing like a swarm of bees back into their hive. International travel will be the last industry to re-emerge after the viral wave has subsided.

The crisis has also brought fresh questioning about the value of international trade and investment. For decades consumers across the world have lapped up the goods manufactured in China with unrivalled efficiency and at an unbeatable cost. Over a 20-year period, from the late 1980s to the global financial crisis in 2007–08, the blossoming of China along with many other emerging nations sent trade volumes soaring from 35% of global GDP to 60%.

It’s as if politicians have suddenly awakened from a long slumber to discover that supply lines—the arteries of globalisation—have transformed into chains of dependence.

As Prime Minister Scott Morrison explained earlier this month, ‘To be an open trading nation—that has been a core part, a core part of our prosperity over the centuries. But equally, we need to look carefully at our domestic economic sovereignty as well.’

He later clarified that this meant ensuring that Australia had profitable, competitive and successful domestic industries with the capability to deliver critical supplies. He indicated it also meant ‘diversifying our trade base’.

The government’s National Covid-19 Coordination Commission, established to guide its response to the crisis, has taken on the task of planning a manufacturing revival. ‘It needs to be modern, efficient, high-tech and focused on the things we need’, the commission’s chair, former Fortescue chief executive Nev Power said, adding that a lot of Australia’s manufacturing was ‘very old fashioned’ and in need of investment.

Power has asked former Dow Chemical chief executive Andrew Liveris to help craft the policy. Liveris told the Australian Financial Review, ‘Australia drank the free trade juice and decided that offshoring was OK. Well that era has gone. We’ve got to now realise we’ve got to really look at on-shoring key capabilities.’

There’s a parliamentary inquiry underway considering whether Australia is too reliant on China and too dependent on foreign investment. The political momentum is probably unstoppable, but a new report from a colleague at the United States Studies Centre suggests that turning back the clock on globalisation will leave us all the poorer.

The study by USSC trade program director Stephen Kirchner explores what steps Australia should take to close the gap between Australian and American living standards and productivity. Australia has persistently lagged the United States by 15% to 20%.

There was a period in the 1990s (often attributed to the economic reforms of the Labor governments of Bob Hawke and Paul Keating) when the gap narrowed, which greatly reduced levels of industrial protection while opening Australia’s economy to global capital markets with the floating of the Australian dollar.

Those reforms exposed Australian businesses to global competition and made it possible for them to expand internationally. Without the protection of high tariff walls, the business sector had to become more productive if it was to compete.

Australian businesses proved adept at deploying developments in information technology and telecommunications in ways that boosted productivity. This was also a function of the new openness of the economy to global influence.

Kirchner says the lack of significant economic reform since the early 2000s and the growing burden of regulation in Australia relative to the US have caused the gap to widen again. He argues that it can be closed only by further exposing the Australian economy to the global economy.

The Swiss KOF Economic Institute compiles an index measuring the global connection of nations taking in such variables as ease of cross-border flows of goods, services, investment, migration and capital. Australia is middle-ranking overall, but on the economic sub-index it ranks second last, with only the US below it among the 59 nations that are tracked.

As the country with the highest productivity in the world, the US doesn’t suffer from its relative insularity; however, improvements in Australia depend upon its ability to draw in the latest innovation, business practice and expertise from around the world.

Rankings on the KOF Globalisation Index have an established cross-country relationship with living standards. Kirchner estimates that a 1 percentage point improvement on the index would lift Australia’s productivity by 0.3%.

If Australia matched the global exposure of Germany or the UK, which rank 23rd and 24th on the index, its productivity would be 5 percentage points higher, closing around a third of the gap with the US.

The study also observes that for every percentage point gain in US productivity, Australia’s productivity gains 0.95 percentage points. While we largely track the US, we never catch up.

He notes that Australia’s high migration levels, at least until the Covid-19 crisis, have contributed to productivity. More than half the increase in Australian graduates since 2013 hold degrees from overseas universities or are non-citizen holders of Australian degrees. That addition to Australia’s human capital has come without any investment from Australian taxpayers.

Kirchner argues that government policy should aim to place the economy at the frontier of globalisation if Australia is to catch up with the US. ‘Increased foreign direct investment, freer digital commerce and increased immigration offer significant and under-appreciated productivity benefits that require few changes in legislative or policy frameworks to capture.’

In the midst of the Covid-19 pandemic, public policy is heading in precisely the opposite direction. Having accepted a dramatic fall in economic activity and living standards as a necessary price for combating the virus, it may be that politicians are prepared for further sacrifices in the cause of economic sovereignty.

The history of coronaviruses is littered with environmental degradation, superstition, rampant illegal trading in wildlife, and complacency.

Earlier this century, a global panic was triggered by one such virus, SARS, and there were what look in hindsight like half-hearted attempts to develop a vaccine. Some formulations worked in animal tests but were shelved when they failed to produce the right antibodies in people. That research faded away when the world mistakenly believed the SARS threat had passed.

The new coronavirus, SARS-CoV-2, which causes Covid-19, has shown the modern medical world to be worryingly on the back foot, while foolish old-world superstitions persist about the medicinal power of wild animal parts from the most endangered and most trafficked species. This illegal industry is backed by serious and organised crime.

Animal-borne infectious diseases such as those caused by coronaviruses are an increasing threat to global health and security. More than 60% of 335 new diseases that emerged between 1960 and 2004 were zoonotic. Increasingly, these diseases are linked to habitat destruction and ecosystem disruption, which come from urbanisation, deforestation, logging, mining and rapidly increasing human populations.

The global illegal trade in wild animal products helps fuel epidemics, often in countries in which ‘wet’ markets operate. There, live animals and fish, often called ‘bushmeat’, are bought and sold. Interpol and the non-governmental organisation TRAFFIC say this trade has long been linked to gun and drug crime and illegal deforestation and mining.

Weak international laws make it difficult for NGOs like TRAFFIC to track and prosecute the criminal gangs behind the wildlife trade. Although the wet markets in China, including the one in Wuhan, were officially shut down in the initial stages of the outbreak, many have since reopened.

China also instituted a ban on the sale of wild animals for human consumption, which remains in place. But wildlife experts believe the trade has gone deeper underground and animals are now being kept in even worse conditions. That allows viruses to cross to new species. In Gabon, traders are said to be keeping pangolins hidden, though they are still selling them.

Unless the international wildlife trade is stopped, new coronaviruses will pose a threat to human communities. Many nations don’t even have laws making the importation of banned wildlife and products illegal. Where legislation does exist, penalties can be inconsistent.

Coronaviruses are known to be widespread in bats, and in March 2019 China was identified by virologists from Wuhan as a country at particular risk of a SARS- or MERS-type epidemic.

SARS is believed to have crossed from bats to people via civets, while MERS made the transition via camels. A recent paper in the journal Current Biology confirmed that pangolins are the most likely intermediate species in the transmission of SARS-CoV-2 from bats to humans.

Our new world of zoonotic diseases requires much more than vaccines. Governments are increasingly reluctant to police environmental and wildlife laws. Those that allow environmental protections to be overridden or ignored include Australia, Brazil and China.

Weak environmental protection laws in Western countries reflect how little global leaders think or care about the cause-and-effect linkages between environmental stress and the health of human populations. The costs of not caring have not yet sunk in.

Without control of both the illegal wildlife trade and more general environmental destruction, development of antivirals and vaccines will fall short. Over time, we should expect new global zoonotic diseases far worse that Covid-19 to emerge. Taking environmental and animal crimes seriously will give better insight into how these viruses spread into human populations.

The Coalition for Epidemic and Preparedness Innovation is a global alliance that finances and coordinates the development of vaccines against emerging infectious diseases. A coalition of scientists that includes researchers from the University of Queensland and the CSIRO are working on producing a vaccine against Covid-19 vaccine; pre-clinical trials have started for two potential candidate.

But vaccine development is slow and fraught with issues of safety and the difficulties of mass production and distribution. It’s not known yet whether the vaccines being trialled will produce effective antibodies in people. The world will need to keep managing Covid-19 without a vaccine for many months to come.

The Covid-19 crisis is demonstrating that protecting nature and wildlife is not a luxury but a necessity if we are to save lives, livelihoods and economies. Added challenges come from the fact that wild animals are now increasingly ‘farmed’ alongside poultry and pigs.

Future epidemics will include varieties of influenza, which can spread to humans from chickens and pigs, as happened with H1N1 and H5N1. Farming practices need serious scrutiny at the global level.

We have only just entered this new era of viruses and our current medical technologies are woefully inadequate to treat us in this new world. Many experts still operate in silos and there’s been far too little international cooperation among specialists such as epidemiologists and virologists.

Hopefully, the scale of the destruction wrought by this latest coronavirus will force the changes the world needs.

Covid-19 has shone a spotlight on accountabilities and practices in the international cruise ship industry. Until now, the developed world has been in love with the industry, which has been growing at 15% per year, offering a range of experiences from small luxury vessels cruising the Antarctic to floating parties in tropical climes. But the pandemic has shown that cruise shipping is essentially an unregulated industry that has thrived in an environment lacking rules. Will Covid-19 change that?

More than 100 cruise ships with thousands of crew on board are currently sitting off the coast of the United States. Most ships of this size are potential hotspots for Covid-19—they house large numbers of people in close confines, with little ability for social isolation. The US Navy is grappling with the same problem with the aircraft carrier USS Theodore Roosevelt in Guam, but, unlike the military, the cruise ship industry isn’t an instrument of state and companies have been resisting government pleas for them to leave and return to their home ports.

One of the reasons nations struggle with managing ships in their waters is the practice of using ‘flags of convenience’. Under longstanding maritime law, all ships must be registered to a nation-state. Flying a flag of convenience is a practice that enables a ship to be owned and operated by a company in one nation but registered in another. Often, these ships are registered in a country that doesn’t have the means to support them in remote corners of the world and that offers cheap registration with minimal regulation of safety and employment conditions.

The practice of using flags of convenience began during the Prohibition era when the US banned the transport of alcohol for human consumption and shipping companies looked for alternative business options. That period extended from 1920 until 1933 and led to many shipping companies registering their vessels in Panama in an attempt to bypass the legislation.

Flags of convenience became more widely used following World War II with the expansion of the maritime trade. By offering registration as a commodity, several small nations saw opportunity in providing low registration fees, relaxed regulation, an easy registration process, and reduced standards surrounding inspection, employment and other conditions. These nations include well-groomed tax havens like Bermuda and states like Liberia, Sierra Leone and the Marshall Islands. Many of these countries have little to no ability to control the behaviour of the ships’ owners or captains.

In cargo ships and oil tankers, the practice facilitated the hiring of crew from international labour pools without the need to adhere to labour laws in home countries, such as paying the minimum wage, or to respond to seamen’s unions. Of the 100,000 British sailors registered in the 1960s, only around 27,000 remained employed by the mid-1990s. At that time, there were around 1.3 million seafarers drawn from places with cheaper labour costs such as the Philippines, Indonesia, South Asia, Russia and Ukraine.

In addition, merchant shipping has required fewer and fewer crew over time—a 100,000-ton bulk carrier today may have only 15 crew members on board. Self-isolating 15 individuals on a ship up to 450 metres long isn’t a problem compared with trying to quarantine the huge numbers of people travelling and working on cruise ships.

It was the ever-expanding cruise ship industry that garnered the most advantage from flags of convenience, primarily to minimise labour costs. A ship carrying 4,000 or 5,000 passengers needs hundreds of crew to feed, service and pamper what amounts to the population of a small city.

The cruise industry operates on fine margins. On average, the revenue per passenger on a typical cruise is US$1,791 and expenses are around US$1,564, a margin of 12%. Without passengers, few of the expenses can be offset, so there’s no motivation to sail the ship halfway around the world to a home port without passengers.

As we’ve seen during the Covid-19 crisis, if a port won’t allow the crew ashore, and the owners won’t pay for them to return home, the ship and crew are stranded at sea like some 21st century Flying Dutchman. Many of the crew are under contracts that provide for travel home only two or three times a year. They are now in lockdown on board these ships, with no obvious way home. What effect will that have on their mental and physical health?

The pandemic has raised serious questions about the practice of using flags of convenience. Should we continue to allow the cruise industry to operate in the shadows without rigorous regulation and oversight? Or is it time to end the practice and return to requiring ships to be registered in the nation-state of the company that owns them?