Litigation by the Chinese lessee of Darwin Port is an attempt at stymying the Australian government’s stated aim of returning the facility to Australian control. The case started at the World Bank is no mere attempt at protecting a commercial interest.
China’s objective is to use all its levers, whether the fear of economic and diplomatic coercion or delays in an international institution, to make the Australian government feel that its choices are constrained.
The lessee, Landbridge Group, has lodged the first ever case against Australia with the World Bank’s International Centre for Settlement of Investor Disputes, claiming forced termination would breach the China-Australia free-trade agreement.
This is merely part of a pattern of resistance by China to losing control of Darwin Port. The case follows repeated statements of support by Chinese government representatives for its lease over the commercial facility in Darwin Harbour. China has threatened economic consequences if the government reasserts Australian control.
The case comes just months after the Supreme Court of Panama annulled contracts for a Hong Kong company to operate key ports in that country. China responded by slowing inspections of Panamanian-flagged ships and escalating tensions with the US and Latin American nations over control of the Panama Canal.
Meanwhile, China has just this month prohibited US tech-giant Meta acquiring AI company Manus, which was established in China and is now based in Singapore. China’s opposition to the acquisition saw it effectively holding Manus’s Chinese founders hostage.
There’s one rule for when China has security concerns over critical and digital infrastructure and another when the rest of the world does.
But if Beijing can control even China-linked companies that aren’t in China, that’s more evidence that Chinese entities such as Landbridge can’t be seen as normal private sector companies. And it justifies the bipartisan Australian position that control of Darwin Port, assessed as critical infrastructure, is a national security matter. After all, Chinese companies and individuals are obliged to help China’s intelligence, security and military organs, including under national security and intelligence laws.
China has openly told the world through its Belt and Road Initiative that it considers global infrastructure as vital to achieving national resilience and international dominance. The initiative, whose name was at first translated as ‘One Belt, One Road’, clearly serves as a foreign policy tool to reduce its own dependence on the world and increase the world’s reliance on it.
Repeated studies have detailed the scale of China’s global port network, which is dual-use by design for both economic reward and crisis contingency and includes some 110 ports in 67 countries. Darwin Port plays a key role in China’s global maritime strategy, with control of the only major port in northern Australia providing maritime access to and from Asia as well as proximity to Australian and US forces.
Landbridge Group was further involved in Beijing’s state agenda when, in May 2016, it acquired Panama’s largest port, Margarita Island, with the People’s Daily reporting, ‘The company plans to build a modern and efficient deep-water port, which will play an active role in coordinated development between the harbors along the One Belt, One Road path.’ A year later, Panama President Juan Carlos Varela said his country would withdraw diplomatic recognition of Taiwan.
Landbridge advertised the Darwin Port’s role in China’s foreign-infrastructure effort, saying in 2016, ‘Landbridge’s three ports – Landbridge Port in Asia, Darwin Port in Oceania, and Margarita Port in the Americas – are interconnected to form an important fulcrum of maritime cooperation for the Belt and Road Initiative.’
A Landbridge-controlled Darwin Port is also intended to facilitate further Chinese engagement with northern Australia. In 2015, the year when Landbridge won the lease, China’s ambassador to Australia, Ma Zhaoxu, presented to Northern Territory Chief Minister Adam Giles a copy of the China–Northern Territory Planning Cooperation Report formulated by the government’s China Development Bank. Darwin Port and Landbridge company Westside also signed a cooperation framework agreement with state-owned Hubei Port Group in December 2023. In the following year, Darwin Port signed ‘a friendly non-binding MOU in order to establish a closer relationship’ with Shenzhen Port.
Darwin Port has also tied with Australia’s largest rail freight operator, Aurizon, which aims to offer rail connections from Darwin to Australian state capitals. Aurizon officials accompanied the Landbridge delegation to China when the agreement between Darwin and Shenzhen Port was signed.
China wants both to keep control of Darwin Port for its own sake and to avoid losses in Australia and Panama initiating a global domino effect in which more foreign infrastructure were taken from it. So the World Bank case should be understood as meaning that negotiation with Landbridge to return Darwin Port would lead only to a dead end.
The ball is therefore in the Australian government’s court to unilaterally terminate the lease and regain control.
Infrastructure that is assessed as critical cannot be held by companies under the control or influence of strategic adversaries. Removing Landbridge from Darwin Port is the easy part. Finding a trusted alternative is more complex. Australia should look to the Panama solution and work with international security partners to give the public confidence in those with their hands, eyes and ears on the port.
