Page 9 - Australian Defence Magazine October 2021

Advertorial “Building Australian Sovereign Capability”
Jon ‘Irish’ Hawkins Omni Executive CEO
There has been much discussion about the need for sovereign industrial capability (SIC) in Australia’s defence industry. And for good reason.
As Australia is confronted by increasingly uncertain and tense geostrategic realities, particularly in our immediate region, it is abundantly clear that we must
be able to protect our national interests by our own means. Recent global events – the Covid-19 pandemic in particular – have shown the fragility of global supply chains and highlighted
we cannot rely on others to provide for us, especially when it concerns our defence and security interests.
The end-goal for genuine SIC
in Australia is an ecosystem in which Australian owned and operated small, medium and prime defence contractors exist both independent from, and alongside, foreign primes to service and secure our nation and our defence forces. However, by what means this end-goal is practically achieved, what the path to achieving greater self- sufficiency in our defence
industrial complex looks like, and what makes capabilities truly ‘sovereign’ remains unclear.
In recent times I’ve heard numerous attempts to define sovereign capability from industry and government alike. There’s never a consistent response,
the interpretations are confused, lacking a clear direction. For me, three core standards must be met for capabilities to be considered truly ‘sovereign’– ownership, operations, and capability or ‘OOC’. By this I mean that development of industrial defence capabilities must be Australian- owned as a prerequisite – and they must be truly Australian owned, and free from external influence. Organisations should also be headquartered entirely in Australia.
Put simply, an organisation that is owned and domiciled overseas, where its only nexus to Australia is an ABN, is not an organisation able of offering a true sovereign capability.
With defence spending increasing beyond 2% of GDP over the next decade, it is vital that expenditure is applied equitably across the whole defence industry eco- system. And with the amount of funding government is committing to Australia’s national defence – upwards of $270 billion – there is more than enough opportunity for Australian SMEs – who meet the OOC criteria – to play in the same space as the international primes.
Make no mistake, improving Australian sovereign defence capability is not about replacing foreign primes – this would be wholly unrealistic. Primes have the technical and manufacturing expertise, and industrial scale
that local SMEs cannot yet deliver. And for the most part foreign primes work alongside local contractors and are making significant contributions to Australian industry.
However, the current Government approach of awarding defence contracts on a case-by-case basis systematically relegates Australian SMEs to largely tangential roles on domestic programs – forcing local companies to essentially play
the understudy for larger, more established international players as a matter of course. This creates an artificial ceiling for SMEs and inhibits local industry’s ability to grow and therefore offer genuine sovereign capability solutions to Government.
The advantages of developing an industry that can stand on its own feet are numerous and well publicised. To realise these benefits and achieve the levels of SIC in Australia desired by Government, Government must incentivise and reward onshore providers.
Now is the time to take meaningful action to build a truly sovereign defence industry that safeguards our national security, supports our ADF, and builds a sustainable and self-sufficient domestic defence industry.
Jon Hawkins is the Chief Executive Officer of Omni Executive and a 25-year veteran of the Australian Defence Force.
www.omniexe.com