The Australian Submarine Decision: A Look Back

By Pierre Tram

Paris – It is all about governance – or the lack thereof – might be one way to summarise Nuked: The Submarine Fiasco that Sank Australia’s Sovereignty (Melbourne University Publishing), a book which takes a critical look at Canberra’s cancellation of a multi-billion dollar deal for French attack boats.

The author, former Australian Broadcasting Corporation reporter Andrew Fowler, presented the recently published Nuked Sept. 24 to the Paris branch of the National Union of Journalists (NUJ). French media and reporters of the Association des Journalistes de Defense press club attended as guests.

The “fiasco” refers to Australia, then led by prime minister Scott Morrison, announcing September 16, 2021 the axing of a deal with a French shipbuilder, Naval Group, to build 12 diesel-electric submarines for the Australian navy.

Morrison switched to the U.K. and U.S. as partners to deliver nuclear-powered submarines in  the wider AUKUS project, dumping France and reversing a pick of diesel propulsion.

Nuked sets out an account of the political reasons for that policy switch, which the author said sought to tie Australia closer to America and develop nuclear power at home.

The significance of international submarine deals for Paris could be seen with the Netherlands signing Sept. 30 a contract reported to be worth €5.65 billion ($6.25 billion) with Naval Group (NG), with the French company to build four Orka class boats, replacing the four-strong Walrus fleet.

NG said in a Sept. 30 statement on the signature of the delivery agreement the “expeditionary” boats would strengthen “strategic capabilities” of the Royal Netherlands Navy. This was widely taken to mean fitting out the ocean-going Orka for the U.S.-built Tomahawk cruise missile, giving the Netherlands for the first time a long-range submarine capability to strike land-based targets, as well as torpedoes to hit ships.

NG pitched its Barracuda diesel-electric boat against rival German and Swedish bids, respectively ThyssenKrupp Marine Systems and Saab Kockums. The Netherlands authorities rejected an appeal lodged by TKMS, which contested the pick of NG.

The French shipbuilder signed Sept. 10 an industrial cooperation agreement, pledging to inject close to a reported €1 billion in transferring advanced submarine technology and expertise to companies in the Netherlands over 20 years.

“This contract will allow the Netherlands to deploy ocean-going submarines of world class standard, strengthening the armed forces of the Netherlands as well as the European capabilities in Nato,” the French armed forces ministry said in an Oct. 2 statement.

Australian Party Politics

Back in Australia, there was a “failure of due process” on cancelling the planned French submarines and opting to work with the U.K. and U.S., Fowler said.

“I was appalled, not so much by the process of military acquisitions, which is usually a pretty murky, dirty, and dangerous world, but because what we experienced in Australia was an example of what we call ‘executive overreach,’” he said.

The underlying issue was the lack of public and parliamentary debate on a critical decision, namely dropping a major arms deal, in which France had beaten rival German and Japanese offers “by a country mile,” he said.

“Executive government decides to do something with public money and hides it from parliament, the process, and does what it wants to do for its own political purpose,” he said. That switch to AUKUS meant Australia took on spending of A$368 billion in an “unaccountable venture,” he said. Australian officials later told an inquiry they did not know why there was a requirement for a nuclear boat and how it would be financed, he said.

There was Australian party politics at play, he said, with the conservative Liberal Party, then in power, keen to strengthen ties with the U.S., which sought “containment” of China.

A pursuit of closer links with the U.S. served as a differentiator – or “wedge” – in national security policy for Morrison, looking to distinguish the Liberal Party from the opposition Labor Party, he said. Labour was anti-nuclear and took a more independent approach – similar to France.

The present center-left Labor administration has continued to pursue the AUKUS project. Australia is due to hold a federal election in 2025.

Australia-America

The other key factor which pointed up difference between the two parties was Liberal Party support of nuclear power, seen as a big break in Australian policy, he said.

Morrison’s pursuit of deeper Australian-American cooperation pointed up a move from “cohabitation” to “interchangeability,” with a view of “seamless joining” of forces, he said. Australian procurement of American atomic-powered boats offered two desired outcomes in one fell swoop, with France discarded by the wayside.

That tightening of ties made Australia dependent on U.S. policy, he said, at a time when tension had increased between Washington and Beijing.

The cancellation of an ocean-going fleet of conventional Shortfin Barracuda boats showed a big policy difference between France and Australia, he said, with Paris seeing the submarine  as a strategic partnership, while Canberra saw it as a commercial deal.

An irony was the planned Australian Shortfin was a conversion of the French nuclear-powered Barracuda boat to diesel power, he said. That begged the question, if Australia wanted nuclear boats, why not go with France, which some said built the best nuclear submarines, powered by low enriched uranium?

That was because it was not just about nuclear submarines, he said, but supporting the U.S. in containing China. That could be seen as raising the risk for Australia, he added.

“Don’t Mess Around”

Australia retained a British consultant, David Gould, in the competition for the initial submarine deal, he said. Gould pointed up the strength of the French bid – “Don’t mess around, France has got it,” Fowler said.

There was the German bid, which offered free access to the intellectual property, he said, while the French were very careful with control of advanced technology, which included “a secret propeller and very quiet boats.”

French technology was only available “on licence,” requiring Australia to work closely with French industry, he said. That was in contrast to the German offer, which offered full access to the IP.
“Has it occurred to you that the French IP is really worth a lot of money,” Gould told the Australians, he said. “It’s a closely guarded secret and they are sharing it with you…and the German IP isn’t worth a pinch of salt. That’s why they’re giving it to you.”

With the Liberal Party in power, Morrison took up the prime minister’s post in 2018, while his predecessor, centrist Malcolm Turnbull, was removed, or “rolled,” from the top job.

Morrison was a hard rightwing, Christian Evangelical, Fowler said, and a close friend of Mike Pompeo, also a Christian Evangelical. Morrison took a hard line with the French, he said, and it was around that time the Australian press gave hostile coverage against the French-led Barracuda project.

“They were running a campaign against the French,” he said. The Australian media reported the project was late and over budget, when a few months and the amount of money were insignificant in view of the scale of the program.

Such was the hostile climate, the Naval Group executive chairman, Pierre Eric Pommellet, flew 24 hours to Australia, stayed two weeks in Covid quarantine, and sought to meet Morrison, he said. That meeting did not happen, and Pommellet returned empty handed.

The NG chief executive offered 60 pct of spending in Australia on the boats, even though that was not in the contract, he said.

“It wasn’t enough,” he said.

Some eight months after that failed flight, the Australian office of national intelligence started secret talks with the U.S. state department and Pentagon on acquiring nuclear boats, he said. The Australians and Americans kept French officials in the dark on those critical discussions. It was only a matter of time before the Canberra ax fell, and it duly fell on Sept. 16, 2021.

Geostrategic Region

France sees the Indo-Pacific as a strategic region, with some 1.7 million French nationals living in overseas departments, territories, and other nations in that vast area.

The Indo‑Pacific accounts for more than a third of French trade in goods outside the European Union, and that has grown by 49 percent in 10 years, the foreign ministry said on its 2021-2022 strategy for the region.

The French services have deployed 8,300 personnel as pre-positioned forces.

The perceived importance of the region can be seen in the annual Pégase exercise flown by the French air force to the Indo-Pacific. The service completed in August its 2024 exercise.  French aircrews flew with the Royal Air Force in the Griffin Strike exercise to Australia for the first time, as part of the Pégase mission. The French service flew three Rafale fighter jets, two A330 Phénix multirole tanker transports, and two A400M Atlas military transports, while the RAF flew six Eurofighter Typhoons, one A330 MRTT and one A400M Atlas.

The British and French aircrews flew some 15,000 km to Darwin air base, taking four days and two stop overs, and took part in the Australian Pitch Black 2024 exercise along with other allied nations.
French aircrews also flew with German and Spanish pilots in another part of the Pégase exercise.

These three allies are partners in the future combat air system (FCAS) project, which comprises a new generation fighter, remote carrier drones, and a combat cloud communications network.

China Ever Present

The perceived importance of China can be seen by how often that nation is on the front page.
On the military front, there was an unusual Sept. 25 test firing of an intercontinental ballistic missile, with dummy warhead, into international waters. Australia, New Zealand, and Japan said China had failed to give advance notice of that launch, which caused grave concern.

On the same day, Reuters news agency ran its exclusive story that a Russian company, IEMZ Kupol, a subsidiary of Russian state-owned arms company Almaz-Antey, was developing and building a long-range attack drone in China, with local help. That weapon was due to be used in Ukraine.

The French stock market closed Sept. 26 sharply higher, with the CAC-40 index up 2.3 percent. That unusual gain was reportedly in response to China’s measures to inject life into its fading economy, prompting equity traders to snap up stocks in French luxury brands.

On the political front, the BBC reported Sept. 26 Donald Trump, the Republican candidate in the presidential election, had referred to China 40 times in five rallies in the presidential debate last month. Trump mentioned China 27 times in a town hall meeting in Michigan in the previous week, the broadcaster said.

Those references tended to highlight “tension” between the U.S. and China, with the latter seen as a “kind of economic predator,” the report said.