Do Downer and Brumby support Huawei in Iran?

THE world's second largest telecommunications company is looking closely at Australia

Huawei Technologies has an aggressive plan to become the No 1 provider of telecommunications services, Down Under and across the globe, in less than five years. Unfortunately, in the recent past, this Asian giant has played a key role in helping the Iranian government, the world’s most dangerous state sponsor of terror, to monitor, track, and kill those who oppose it. The Australian government should consider forcing Huawei and other Asian companies to make a choice: trade with Iran or trade with Australia, but they cannot do both.

Huawei is a Chinese multinational corporation that is soon expected to surpass Sweden’s Ericsson as the largest telecommunications infrastructure supplier in the world.Founded two decades ago by Ren Zhengfei, a former People’s Liberation Army soldier, with just $4000 in seed capital, the company has annual revenues of $32 billion and more than 110,000 employees. Huawei’s products and services are deployed in most of the largest telecom markets, and the company recently ranked 352 on Fortune magazine’s global 500 list.

Huawei has been in Australia since 2004 and employs 800 staff members locally. In Australia alone, it has reported revenue of $171 million, and in 2010 it increased its sales by 35 per cent. It has also announced that it hopes to establish a research and development centre in Australia in an effort to get more market share from Labor’s $35.9bn National Broadband Network, a national wholesale-only, open-access, high-speed broadband network.

John Lord, John Brumby, and Alexander Downer were appointed directors of Huawei Australia to boost their ability to secure the domestic market for the company. As prominent members of Australia’s political elite, these three specifically have been asked to lobby Canberra in an effort to “overcome prejudice about the company”. Sadly, some of that prejudice flows from the company’s business practices in places such as Iran.

Until late last year, Huawei dominated Iran’s telecommunications business and garnered vast revenue from doing so. Unfortunately, there are also reports that it has assisted the Iranian regime in tracking, silencing and killing Iranian opposition figures. In 2009, when Iranians took to the streets to protest against President Mahmoud Ahmadinejad’s election, Huawei reportedly installed tracking equipment for all of Iran’s telecommunications providers that allowed the intelligence services to locate people through their mobile phones, thus enabling the regime to pursue, jail and kill oppositionists.

Of course, this type of technology exists in many countries, and it is widely known that law enforcement professionals in the West, including Australia and the US, use mobile phones to track criminals and other illicit actors.

But repressive regimes such as Iran use this type of technology not only to go after criminals but also to quash their political opposition. The US State Department is investigating Huawei, stating that it “shares the concern of potential export of technology to Iran that is used specifically to disrupt, monitor or suppress communication”.

For Huawei, doing business in Iran has had a definite downside, costing it at least some of its access to the US market. In October 2010, the US administration, citing “national security concerns”, blocked Huawei from building a wireless network for US emergency workers, including police officers and firefighters. Huawei also was barred from acquiring three US companies and forced to divest its shares in a cloud computing company called 3Leaf.

As a result, in December Huawei decided to scale down its operations in Iran. Bowing to US pressure, the company chose to “restrict its business development by no longer seeking new customers and limiting its business activities with existing customers”. In other words, it chose the US market over Iran.

Other Chinese companies will face the same decision in the months to come. In 2009, the People’s Republic emerged as Iran’s top economic partner, with trade totalling about $21.2bn annually. Chinese companies supply Iran with 13 per cent of its imports, about $7.9bn a year. In addition, more than 100 Chinese state companies operate in Iran, where they invest heavily in the energy sector.

Australian government officials should follow the US model and force Asian companies doing business in Australia and Iran to choose between the two markets. As the international community struggles to find the most effective way to stop Iran from obtaining a nuclear bomb, “all options are on the table”, including a military strike. Many international policy officials are advocating robust economic warfare to force the mullahs to change their behaviour and to stop their march to nuclearisation.

Australian lawmakers should make it clear to Asian companies doing business with Iran that they are serious about sanctions against those who support the Islamic Republic and, by extension, its pursuit of weapons of mass destruction. Exerting economic pressure on Iran’s commercial partners is one of the few tools at the West’s disposal, short of the military option, and should be used to avert the unthinkable.