December 18, 2017

How Secure is the Australian Future Submarine Facility at Cherbourg, France?

On December 15, 2017 Defence reporter Andrew Greene at Australia’s ABC News Online, wrote:

“...Australia's $50 billion Future Submarines program has been hit by allegations of fraud, with [an Australian] Commonwealth official being investigated for misappropriating funds.

The investigation has been confirmed by senior defence officials following questioning from South Australian Senator Rex Patrick during a Senate estimates hearing in Canberra.

"Defence is conducting an investigation into some allegations in relation to financial management," [Australian] Defence Department Secretary Greg Moriarty told the committee.

"I don't want to go into further detail while there is a proper process underway," Mr Moriarty added.

It is believed the Defence Department employee under investigation was involved in the establishment of Australia's Future Submarine Office in France.

The secure facility in Cherbourg houses submarine designers, naval architects and engineers, bringing together staff from France's Naval Group (formerly DCNS), and Lockheed Martin as well as the Australian government....”


I wonder if Prime Minister Turnbull knew about the fraud issue when he openned the Australian Future Submarine program office at Cherbourg in July 2017? "Cherbourg, France, July 9, 2017 – Naval Group (formerly DCNS) and Lockheed Martin Australia today welcomed the official opening of Australia’s Future Submarine Office by Prime Minister Malcolm Turnbull, in the presence of the French Ministry For The Armed Forces, Florence Parly." (Details and photo courtesy Naval Group Australia)


The submarine industry worldwide recieves more than its fair share of corruption and bribery allegations.

As the “secure facility in Cherbourg” conducts higher than merely Top Secret work any corruption is a worry.

Poor program security already and the possibility of Chinese or Russian intelligence blackmailing or bribing corrupt officials working in such a facility is a worry.



Anonymous said...

Hi Pete

Recently, Penske Power Systems unvealed MTU 12V4000U83 submarine engine which may be used for Collins and Shortfin submarines. This engine is possible alternative for MTU 16V396SE83. According to Penske Power Systems, maximum power of 12V4000U83 is 1500kW [1].

I hope that Canberra Connection does not adversely affect on purchasing from Penske Power Systems.

Notice: diesel generator consists of diesel engine and alternator, and diesel generator is not presented in this picture. Output of generator is engine output x power facor (eg, 1500kW x 0.8 = 1200kW).


Anonymous said...

Fraud and corruption are both human traits and unless there is a change in business mindset from the top with zero tolerance, no wall is going to stop or prevent those. I worked for a US multinational and we take FCPA seriously (you do go to jail for breaking those). I also worked for a French multinational, and when FCPA came up (they were listed on US exchanges so US laws do apply), the senior and middle managers there all laughed.

Peter Coates said...

Thanks Anonymous [at 19/12/17 9:57 AM]

I'll make a copy of your 19/12/17 9:57 AM comment and move it to of 20 December 2017 - as it is also highly relevant there.



Peter Coates said...


I see that the US FCPA is the .

Certainly fraud and embezzlement are clear crimes.

But bribery of foreign officials under the US FCPA is a more difficult concept.

In some countries, eg. Saudi Arabia, the payment of "Commissions" personally to foreign officals or ministers to authorize or expedite a sale may be standard cultural and business expectation. In Saudi Arabia the non-payment of a commission may an insult barring a company from selling its weapon system.