Huawei linked to China deal

The former attorney-general, Mark Dreyfus, has warned the new government not to compromise national security for trade, as it pushes ahead with a review of the ban on Huawei's involvement in building the national broadband network.

The former attorney-general, Mark Dreyfus, has warned the new government not to compromise national security for trade, as it pushes ahead with a review of the ban on Huawei's involvement in building the national broadband network.

His comments came as the Chinese telco's case to pitch for work in the $30 billion-plus high-speed network was helped by the Communications Minister, Malcolm Turnbull, who described the Chinese technology company as a "very credible business".

While Mr Turnbull confirmed he would review the government ban on Huawei's involvement in the network, he has not set a timetable.

But Mr Dreyfus, who served as attorney-general for seven months this year, suggested that Huawei was being used as a bargaining chip to secure a trade deal with China.

"Mr Abbott should not sacrifice national security in the rush to sign a free trade agreement," he said.

"He should listen to the advice of the national security agencies before making any decisions about the involvement of foreign entities in critical national infrastructure." Huawei was told by the Labor government in early 2012 that it could not work on or supply high-tech equipment to the NBN based on national security grounds.

The former government was acting on advice from Australia's national security agency, ASIO.

The then prime minister, Julia Gillard, said the ban was a prudent decision.

Huawei - which maintains it has no links to the Chinese government - has argued that the ban could breach Australia's international trade obligations.

Huawei's Australian chairman, a retired rear-admiral, John Lord, described the company as "the world's leading experts in NBN", as it steps up marketing efforts ahead of the next phase of the NBN rollout. Mr Lord sits on the Huawei Australia board with a former Coalition foreign minister, Alexander Downer, and a former ALP Victorian premier, John Brumby.

Mr Lord told Fairfax Media in China that Huawei Australia was "waiting to find out, like you and everyone else" whether it would be allowed to supply NBN Co under a Coalition government.

"We've put in a lot of time since the board has been running, on both sides of politics," he said.

"We would hope the new government would have a lot more knowledge in Huawei than the past government two years ago.

"We are privately owned, we do not spy on anyone ... we would hope that these messages are getting through, eventually." In an interview with Fairfax Media's BRW this week, Mr Turnbull confirmed that he held "irregular" meetings with Huawei's senior executives, including its founder, Ren Zhengfei, and the company's deputy chairman, Guo Ping, but not since becoming Communications Minister. "Even if you accept the premise that Huawei would be an accessory to espionage - I'm not saying they will be, I'm just saying that's the premise - if you accept that, then you then have to ask yourself, does the equipment that they would propose to sell have that capacity?" Mr Turnbull said.

Neither NBN Co nor the government would buy Huawei's equipment if it was deemed risky, he added.

"That's something that I will discuss with my colleagues, in particular George Brandis, the Attorney-General, and Julie Bishop, the Foreign Minister," Turnbull said.

Mr Turnbull, Ms Bishop and Trade Minister Andrew Robb visited Huawei's headquarters in China while in opposition.

Mr Robb said during an official visit to China this week that the company had a "big future in Australia".

While globally the company's revenues in 2012 exceeded $37 billion, its Australian business contributed just a fraction of that amount - reporting a profit of $7 million from revenues of $368 million last year, according to reports filed with the corporate regulator.

In 2011 profits were just $3.6 million from revenues of $230 million. The year before that it recorded a loss of $4.8 million.

Huawei has supplied network equipment to Optus and Vodafone.

It also supplies equipment to eight of the world's nine national broadband network project, among them BT in Britain, Nucleus Connect in Singapore, New Zealand's Ultra-Fast Broadband project, Telekom Brunei, TM Malaysia and Qtel in Qatar.

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