Cyber torpedo alerts: China, Russia hack submarine plans of bidders

Cameron Stewart, THE AUSTRALIAN
9 November 2015
Chinese and Russian spies have attempted to hack into the top ¬secret details of Australia’s future submarines, with both Beijing and Moscow believed to have mounted repeated cyber attacks in recent months.
The hacking attempts have been aimed at the submarine builders in Germany, France and Japan bidding for the $20 billion contract to build the new fleet. The bidders are holding highly sensitive information about the Royal Australian Navy’s technical requirements for its new-generation submarines.
The hacking attacks have forced the bidders to rely more heavily on hand deliveries of the most sensitive information. And they are understood to have alarmed the federal government, which has raised the issue of cyber security with each of the three foreign bidders for the submarine contract: German shipbuilder ThyssenKrupp, France’s DCNS and the Japanese government.
Manfred Klein, campaign manager Australia for Germany’s TKMS, said at the company’s submarine shipyard in the German port of Kiel: “We have about 30 to 40 (hacking) attempts per night, that’s what our IT people say.”
Mr Klein said the cyber attacks were all directed at the submarine facility in Kiel and came at a time when the shipyard had a team of 120 people finalising its design for the future Australian submarine.
“The Australian government has raised it with us, and they think it’s significant,” said TKMS Australia board member Jim Duncan, who is helping put together the German bid.
TKMS Australia chairman John White said the attempted industrial espionage was to be expected on such a sensitive and important defence project. “They’re trying to get into everyone’s communications,” Dr White said. “Espionage and breaches of security ... you just ¬assume it is happening. Everybody is in that game. It’s a space that people play in. We don’t suspect anyone, we suspect everybody.”
The Australian understands Japan and France are concerned about attempts by suspected foreign powers to hack into information relating to the subs project.
TKMS declined to say which countries were behind the attempted hackings, but all three foreign bidders privately believe China is leading the push to glean information about the submarine ¬project. Other strategic rivals, including Russia, are also suspected of recent hacking attempts and it is also possible the three bidders for the lucrative contract are seeking to spy on each other.
There is no evidence to suggest that any classified information has so far been compromised by the attempted hacks, which are thought to be from state-run intelligence agencies, commercial companies and individuals.
Cabinet minister Simon Birmingham today said any reports of security threats to Australia were “always of concern” to the government and “every possible precaution” would be taken to protect sensitive information.
“There is always a lot of foreign interest in matters such as technology that goes into submarines or the like,” Senator Birmingham said on Sky News.
“That’s why we invest a lot in the security of information, that’s why we make sure that our security services are well equipped and why we have protocols in terms of the handling of information throughout government.
“I’m sure that these matters will be looked into just as of course any other security threats are and that every possible precaution is taken to protect the sensitivity of information that is critical to Australia’s national security interests.”
The espionage comes at a time of growing strategic naval competition in the Asia-Pacific, with China ramping up its submarine building program and asserting its territorial claims on disputed islands in the South China Sea. Russia has also stepped up naval activities in the region, while other Southeast Asian nations are seeking to modernise their submarine capabilities.
As part of the competitive evaluation process for the future submarines, each of the ¬bidders has been provided with classified technical and performance requirements of the new submarines. This data forms the basis of each country’s design proposals for the submarines, with each bidder having to submit final bids to Defence by the end of the month.
A report on cyber security last month by the Australian Strategic Police Institute found Australia was falling behind regional allies in defending online attacks.
According to ASPI, Singapore, South Korea and Japan had moved ahead of Australia in cyber security capabilities in the past 12 months.
A report last month from domestic spy agency ASIO warned the “number, variety and sophistication” of cyber security threats to Australia’s interests continued to increase. “Cyber espionage is attractive to foreign powers because it has the potential to provide access to large aggregations of valuable information and it is easy for the foreign power to deny its involvement,” ASIO said.
The federal government is considering its policy response to a year-long review of the country’s cyber security strategy.
In June this year, then defence minister Kevin Andrews said cyber attacks were likely to become the most persistent trans¬national security challenge facing the country. “Offensive cyber attacks are a direct threat to the Australian Defence Force’s war-fighting ability, given the ADF’s reliance on information networks,” he said.
The most recent figures from the country’s key cyber organisation, the Australian Cyber Security Centre, said the agency responded to 1131 cyber incidents last year, a 20 per cent increase on the previous year.
The government will consider the rival submarine bids once they are lodged on November 30 and is expected to pick a winner, or reduce the shortlist to two, in the first half of next year.
The navy needs to have the first new submarine available by the mid-2020s when the first of the current Collins-class boats is due to be retired.