New Depths in Australia-US Relations: The Collins Class ...

Maryanne Kelton: New Depths 36assessment and modification. Moreover, the Commonwealth argued that asKockums did not have the resources to resurrect the propellers then they wereentitled to seek assistance elsewhere. As submarine technology is tightly held, theEuropean conventional submarine technology is of particular commercial andstrategic interest to the US. As Australia had shipped submarine propellers to the USfor modification in 1998 and 1999, Kockums were concerned that Defence haddeliberately passed on confidential submarine technology to the US. 194 Thecompany duly protested to the Department of Defence. They contested the claimsmade that a) the propellers did not meet the specifications, and b) they did not regardUS modifications as an improvement under the specifications. Nonetheless, Defenceremained dismissive. Although these early problems regarding authorisation weredropped, they resurfaced again in 2001.In March 2001, Kockums sought federal court assistance to withhold therelease of a propeller about to be shipped to the US for modification. Concerned thatthe propeller technology would be leaked to third parties, Gunnar Ohlund, executivevice president of Kockums submarine division, claimed their federal court action wasbased on both the protection of commercial intellectual property and a desire toprotect the interests of the Swedish Navy. Kockums had worked closely with theSwedish navy in the development of the technology. 195 Justice Wilcox of the FederalCourt found in favour of the Commonwealth, but also found that the intellectualproperty rights belonged to Kockums. 196 No doubt, by 2001 the increasing tensionbetween Kockums' new owners and the Australian government over the sale of theASC itself and then the related issue of ownership of design property, did little toameliorate relations between the groups involved. Through 2003 the issue remainedin dispute.Alliance issues, however, were clearly not the only seas to be navigated. 197Employment and economic issues were also at the forefront of the ASC sale. For thegovernment the complexity of the problem was to marry its strategic priorities (oncedecided) with the exigencies of a commercial sale and a satisfactory employmentoutcome. 198 Yet, already in circumventing HDW's participation in the sale, strategicconcerns had overridden economic interests that included maximising bothemployment opportunities and the prospects of a profitable sale. Marginalisation ofHDW, had initially relegated economic and possibly employment concerns assecondary to the alliance relationship.Persistently problematic has been the sale of the ASC. 199 By January 2002,Robert Hill, (now Defence Minister) was continuing to explore the relationship withElectric Boat. Whilst discussions ranged over their option of a 40 per cent share194 Lincoln Wright, 'Defence gave sub secrets to US, say makers: More choppy waters for troubledCollins', Canberra Times, 20 August 2000.195 'Swedish submaker seeks to keep propeller from US', Reuters Business Report, 18 February 2001.196 Department of Defence, 'Federal Court decision allows submarine propeller modifications to goahead', Media Release, Departmental 93/01, 11 April 2001.197 Sale of the ASC was also dependent upon the resolution of the set of IP, design and businessissues, see Department of Defence, The Australian Naval Shipbuilding and Repair Sector StrategicPlan, Canberra, 2002, pp. 40-41. Most significant in the ongoing maintenance and alterations inequipment and weaponry was that safety issues should remain the priority. On the subject of Kockumspossible separation from the ongoing maintenance of the submarines, Patrick Walters claims that a‘deeply troubling aspect of the pending breach with Kockums, according to some defence and industryexperts, is the risk it could pose to the long term safety of the navy’s submarine fleet’. See PatrickWalters, ‘Skirmish for the Collins Class’, The Australian, 15 November 2003, p. 27.198 Geoffrey Barker considers the 'unanswered strategic, technological, economic and employmentquestions' in 'Suboptimisation', in the Australian Financial Review, 25 July 2000, p. 42.199 Mark Thomson assesses the options for naval shipbuilding in Australia in ‘Setting a Course for NavalShipbuilding and Repair Industry’, A Presentation to the Maritime Building, Repair and MaintenanceConference, 26-27 March 2003. In each of these options the sale of the ASC assumes centrality.Paper accessed via the Australian Strategic Policy Institute.