Australia's top spy has warned the Solomon Islands that a planned 4000 kilometre-long internet cable connecting the tiny Pacific nation to Sydney could be torpedoed after it signed up controversial Chinese firm Huawei to lay the cable, Fairfax Media understands.
The future of the communications cable project is now uncertain because of Australia's fears about the involvement of Huawei, the communications giant that was banned from working on the National Broadband Network on the advice of security agency ASIO.
Nick Warner, the head of the foreign intelligence agency the Australian Secret Intelligence Service, is understood to have warned Solomons Prime Minister Manasseh Sogavare of Australia's concern during a visit to capital Honiara last month to mark the end of the Australian military and police assistance mission to the country.
Fairfax Media understands that while Australia strongly supports the cable project because of the economic benefits it would bring to the struggling island nation, it has become concerned since the Solomons government abruptly abandoned previous plans to sign up a US-British firm to lay the cable and instead began pursuing an opaque deal with Huawei in mid-2016.
The switch by Honiara also prompted the Asian Development Bank – which would have provided concessional financing – to withdraw support because of the lack of transparency, it is understood.
Foreign Minister Julie Bishop said in a statement provided to Fairfax Media that the Australian government had been in discussions with the Solomons government about the project for "a number of months".
"Australia is strongly supportive of economic growth for the development and prosperity of Solomon Islands, including an undersea cable to provide the improved internet access that the business sector needs to generate jobs and growth," she said.
"The Australia High Commission has been in discussions with the Solomon Islands government about the undersea cable project and the application process for a number of months."
To land a cable in Sydney, the Solomon Islands Submarine Cable Company needs to apply for a permit under Australia's Telecommunications Act.
The act states that the Attorney-General can direct the Australian Communications and Media Authority to deny a licence to a person if it "would be prejudicial to security".
The 4000-kilometre cable aims to deliver reliable internet to the Solomons. Currently it depends largely on satellites for telecommunications.
There are growing concerns about espionage against Australia, notably by China. Recently retired Defence chief Dennis Richardson said in an outgoing speech that "it is no secret that China is very active in intelligence activities directed against us".
Fairfax Media understands that the US-British firm – which posed no national security concerns for Australia – had been granted permission to land a cable in Sydney. The firm had won a competitive tender process that was backed by the Asian Development Bank, which would have provided concessional financing for the project.
But in mid-2016 the Solomons abandoned that approach for reasons that remain unclear and began pursuing a deal with Huawei, prompting the ADB to withdraw support because it was concerned about the lack of transparency in the procurement process.
Huawei did not respond by deadline to emailed questions. The Solomons High Commission in Canberra and the office of Mr Sogavare also did not respond. The head of the Solomons government-controlled cable company also could not be reached for comment.
