Speech to the University of Canberra National Security College Lecture Series
30 August 2013
Michael Pezzullo
Chief Executive Officer, Australian Customs and Border Protection Service
New thinking about borders
E&OE
Today I would like to challenge your thinking about the very idea of 'the border' and as a consequence engender a meaningful debate about the contemporary and future states of the customs and border protection function. My aim is to encourage us all to think more deeply about that function and, for you at the University, to reflect on what it all might mean in terms of your thinking and writing about national security affairs.
We are of course in the midst of a Federal election campaign, I intend to say nothing about contemporary policy issues and do not intend to comment on the respective policies of the Government or the Opposition. In any event, my presentation today will be deliberately theoretical and at one level rather abstract. I trust, nonetheless, that you will get something out of these ruminations.
Managing the integrity of the border is essential to the protection and prosperity of the community and the economy. The border is a strategic national asset, and a very valuable one which should be actively managed and developed as such. How borders are managed can foster or impede lawful trade and travel. Border control points, systems and processes sit astride supply chains and travel pathways. The very design of these points, systems and processes can add to economic competitiveness and productivity, by fostering rapid movement and border entry or exit. Or they can detract from competitiveness and productivity by impeding movement, entry and exit, and diminishing the efficiency of our national infrastructure.
Fostering legitimate trade and travel, while remaining vigilant for national security, law enforcement and community protection purposes, while also using border controls as an extension of economic revenue and industry policy, are not contradictory policy objectives. They are intrinsically integrated and connected functions of state. It is my contention today that insufficient informed public discussion and debate about the customs and border protection function is taking place within academies and think tanks, certainly as compared with like public agencies such as the armed forces and police services. For my part, I would very much like to see a circumstance where there is increased serious academic and policy discussion in Australia about the customs and border protection function, and hopefully these remarks today will assist in that process.
Today, it is my belief that in order to properly think about borders, we need to take a step back and reflect about how we think about national security. Please indulge me and allow me to start there. Today, national security is not solely concerned with states, and their relationships. We have seen over the past several decades the rise of what some term 'non-traditional' national security challenges, many of which are inter-related and cross-cutting. These are not solely the province of relations between states. Rather they involve varying combinations of state and non-state actors. We have already seen the growing influence of non-state actors which are able to access capabilities (including weapons) which were once usually the preserve of states. Globalisation and the information revolution are affording these non-state groups the tools to form powerful cross-border networks. These are contesting the authority of states by acquiring advanced technology and weapons (including through global black markets), forming networks and communicating with one another across the globe, and arranging financial transactions in the shadows of the global financial system.
In the face of this radically transformed environment, which essentially emerged after the Cold War, thinking about policy responses to the new strategic landscape has had to change and evolve. The scope of national security strategy has been broadened, and more tools of national power have been brought to bear on the new array of threats and risks. Our responses to these challenges have had to become more wide-ranging and integrated because their causes, modalities and consequences are multi-dimensional and inter-connected.
One of the main consequences that we are dealing with has been that the dividing wall between 'external security' and 'domestic security' has broken down in many ways. State failure in one place can affect states on the other side of the globe, through people smuggling and irregular or illegal migration, the activities of large transnational criminal networks which operate from these ungoverned places, or by way of terrorist attacks which are planned and mounted from such places. Similarly supply chains and airline routes traverse many states, creating multiple points of vulnerability and access for criminals and terrorists.
National security practice itself is becoming increasingly borderless, or rather transgovernmental, at least amongst like-minded states. We see this in the increased level of cross-border collaboration in areas such as customs and border protection, law enforcement and policing, immigration controls, aviation, transport and maritime security, cyber security and financial transactions monitoring. As well as across a range of strategic pathologies – such as terrorism, proliferation, cyber intrusions, people smuggling and drug trafficking, to name five major areas in relation to which transgovernmental collaboration is becoming the norm. Transgovernmental networks of government agencies are increasingly exchanging information and collaborating, either in joint mission-specific task forces, or by way of more enduring arrangements. Networked threats require such networked responses. Through these approaches, the reach of the state is actually being extended to deal with diffused threats and risks.
We can see the inter-connected and cross-border character of national security at work in the area of global trade, and border and transport security. We rely on the daily operation of sea cargo, air cargo and international postal systems for our economic, commercial and indeed private prosperity. These have also become attack vectors for terrorist groups which seek to penetrate the global supply chain, for the purposes of striking our cities, population and infrastructure. Any approach to counter-terrorism which limits itself to reactive criminal investigations against these groups, and which does not also seek to secure the global supply chain through the creation of collaborative, transgovernmental defensive layers of transport and border security is likely to fail.
There is a greater range of national security stakeholders today - not all of whom are government agencies. The state remains the vital centre, but it does not possess a monopoly - either on the use of force or the mitigation of the risk of violence, or other adverse security outcomes. A greater range of actors than ever before are affecting and, in some cases, undermining the state's ability to protect the rights, property, liberty and welfare of its citizens.
National security professionals especially need to be very clear in their thinking about these deep strategic currents, and in particular the nature of the global order. Without a coherent way of organising our view of the global order, our responses to national security issues are likely to be fragmented and merely tactical. If a coherent view of the global order is crucial to our understanding of national security, is there a construct which might make sense? In my view a normative and empirical construct which helps us to think about the global order is the idea of modernity. Modernity is characterised by the maximization of opportunities for citizens and civil society. It has to be protected from its enemies by like-minded societies which are willing to pay the price of doing so. This is because modernity is the antithesis of authoritarian models of social and political organisation, and indeed threatens them with the promise of civil society and the expansion of freedom for citizens.
Modernity creates a transparent, rules-based order within and across societies. It entails open societies and markets, freedom of speech in public discourse, transparency and accountability in public and corporate institutions, the protection of universal human rights, the promotion of democratic practices, the integrity of legal and regulatory frameworks (including independent judiciaries and regulatory authorities) and adherence to the rule of law, to uphold liberties and rights. Modernity also creates, and relies upon, global interdependence, and adherence to rules-based behaviour at the international level – from the resolution of trade disputes and territorial boundaries disputes, to the aversion of war and the making of peace. Australia has long subscribed to the view that a functioning, rules-based global order is a vital prerequisite for creating a secure, stable and predictable environment in which states, companies and citizens can interact, to mutual advantage.
An example of the benefits of modernity is the creation of well-ordered global commons which enable the movement and transfer of people, information, goods and money. These global commons are critically dependent on the operation of agreed rule sets and international norms. The principal global commons of interest to us today are the maritime, air, space and cyber domains. These form the 'connective tissue' of the global order which enables the operation of global supply chains, trade and energy flows, travel, telecommunications, and financial transfers.
In the maritime domain, the global commons consist of sea lanes, straits, canals and sea ports, and the international agreements and arrangements which enable sea-based trade to occur. In the air domain, it is the global network of airports, air traffic management systems and over-flight regimes, and the international agreements and arrangements which enable planes to carry passengers, air cargo and postal items around the world. In space, it is the satellite systems which deliver communications, imagery, metrological, navigational and positioning services to a multitude of users, and the international agreements and arrangements for governing such matters as orbital slots and communications frequencies. In cyberspace, the global commons are to be found in physical form in terms of submarine telecommunication cables and their landing points, data centres, satellites and other information and communications technology infrastructure, as well as of course the virtual commons themselves.
It is my contention today that such global order does not spring into existence as a natural phenomena, and nor is its continued existence pre-ordained and immutable. Such an order has to be formed and sustained through human agency and practice. It requires the establishment of a set of rules and norms for managing human affairs across borders, and widespread adherence to those rules and norms. It also requires mechanisms for managing those rules and norms, and a means for ensuring compliance and, where necessary, enforcement. Without the means of compliance and enforcement, the foundations of the global order would crumble because when rules are not enforced they are no longer relevant, and the order they prescribe becomes problematic. Moreover, a rules-based order is critically dependent on there being a shared perception that the rules will be enforced and that compliance is required.
Now where do borders fit into this worldview? Borders are legal delineations of dominion, where state dominion begins and ends. In the world that I have just described, rather than being seen exclusively as a barrier, we should perhaps see the border as a space where sovereign political units control the flow of people and goods in to and out of their dominion. At regulated ports of entry and exit, cross-border flows of people and goods take place. At these control points, sovereign political units are able to determine who and what has the right, or gift, of entry or exit, and under what conditions. The control of cross-border movement is one of the foundational national functions, which is exercised and managed for a variety of purposes, including the levying of duties and taxes, the checking of travel identity and intention, and the interdiction of illegal, regulated or prohibited goods.
Now having dealt with my topic at a theoretical level, allow me to come to the level of applied theory and see how all of this applies to the Australian border. We know the way we currently do business and operate at the border will not be enough to protect the border in the future. The increasing volume of cargo and traveller movement, the complexity of supply chains and travel routes, the threat of very sophisticated criminal activities, combined with internal challenges within the Australian Customs and Border Protection Service related to culture, integrity and corruption, all contribute to the clear need for a comprehensive programme of reform for the Service that I lead. Incremental changes and tinkering at the edges just will not cut it – we need to undertake a complete transformation and all-consuming reform of the way in which we operate and the way in which we do business.
Last month, we launched the Australian Customs and Border Protection Service Blueprint for Reform 2013-2018. The five year blueprint described in that document provides the roadmap for a root-and-branch transformation programme, which will encompass all of the Service and will focus on three major tracks of interconnected change:
1) Our people and operating model: building a professional Service that is adaptive to change, with its core being the establishment of a new disciplined, uniformed law enforcement workforce, to be known as the Border Force;
2) Secondly we will deal with modernisation of business systems and the acquisition of sophisticated intelligence capabilities;
3) Thirdly, Integrity: the establishment and sustainment of a culture within the Service which is hardened against corruption.
Now it is my contention that the Service does a good job today, but I believe that we can do better. Indeed, we must do better given the challenges ahead and the world I just described. The realities that we are already facing at the border mean that we must continue to take the initiative in developing new systems and tools, as well as the skills and professional competencies of our officers.
I will not, in this lecture, provide an overview of the entire Blueprint for Reform, which you can find online at www.customs.gov.au. The Blueprint had its genesis as an internal corporate response to the problem of certain workforce, culture and integrity issues within the Service, which regrettably included the arrest last year and earlier this year of a number of officers in relation to serious criminal charges. Also regrettably, further action will need to be taken against other officers, as a consequence of on-going investigations, the details of which I cannot discuss today.
Notwithstanding this point of origin, it is my belief that we need to approach the issues outlined in the Blueprint in a strategic manner and at a national level.
And that's because, as I said earlier, it is my contention the border should be seen as a strategic national asset and the Blueprint for Reform reflects this. Our goals relate very directly to the nation's security, its prosperity, productivity and competitiveness. And these issues are clearly ones for the entire nation to consider. And hence my earlier call for the serious academic and policy discussion about the customs and border protection function in this country.
The future outlook for managing Australia's border is challenging. In the near future – before 2020 – our border systems will need to cope with an unprecedented increase in air cargo volumes as well as very significant increases in containerised sea cargo, parcels and other forms of international mail, and of course the number of international travellers. Sooner than that, by 2017 alone, we are facing a 227 per cent increase in air cargo, a 14 per cent increase in containerised sea cargo and a 24 per cent increase in international traveller numbers. Added to this, the complexity of supply chains and travel routes has made our task so much more complex. The use of the internet for trade and personal consumption is also changing our environment in a very profound way. These factors taken alone would create the need for close, effective cooperation across national borders to secure these supply chains in the global economy. Additionally however, our adversaries, those who are trying to breach the border, circumvent our systems, and who on occasion seek direct insider support for their activities, are quick to adapt, and are prepared to use infiltration and corruption as a strategy.
So as we seek to improve and tighten our border controls and capabilities, we face the reality that criminal enterprises will continue to seek new ways to move people and goods across the Australian border. Globalisation has converged with the power of the internet for instance. This means there will be more illicit transactions that knock out the middle man, and bypass traditional organised crime structures. Today, consumers are already able to purchase illicit goods from anywhere in the world, and have them delivered to their door. And organised crime activities are not just limited to illicit drug markets. Criminals are involved in a range of activities across the border environment, which include revenue evasion, tobacco smuggling, money laundering, people smuggling, firearms trafficking, and trade in performance and image-enhancing drugs. The tactics of our adversaries are as much a part of the border environment as the increasing volumes of cargo and travellers; and we cannot be blind to this reality.
So against this backdrop, allow me to sketch out some of the key features of our Blueprint as they relate to the model of the border which I outlined in the first half of this presentation. The Blueprint itself is predicated on new thinking about borders. It takes the view, as I said earlier, that the border is a space, rather than a barrier, and is made up of multiple supply chains. There are also multiple actors in that space, the vast majority of which evidence, experience and intelligence tell us are willingly compliant traders and travellers who just want to go about their business in as fast and efficient a way as possible. So the Blueprint sets out a vision where traders will increasingly experience a more navigable border clearance process, whereby the impediment effect of border checks is increasingly reduced for the vast majority of traders based on their willingness to comply and on enhanced border intelligence processes. We want to make doing business easier and we want to cut border red tape whenever and wherever we can. We will work with industry to develop schemes whereby trusted and compliant traders, who can demonstrate strong commercial security and supply chain integrity processes and systems, will be offered expedited border clearance. Similarly, our aim is for travellers to increasingly experience a fast, seamless process, using self-service and automated technologies and processes, with the majority of travellers moving rapidly through next generation virtual gates in the airports of the future.
Equally, however the Blueprint recognises that the border is not like a taxation system, or a system which can be regulated by a public agency standing afar. It is a live operating system, which consists of the physical space of the border. Live operating environments, whether we are talking about the battlefield, urban crime zones, or physical ports of entry, need first class command and control systems. For that reason, under Reform, we will create a Strategic Border Command. The Command will have the national authority and tools to coordinate the flexible deployment of Customs and Border Protection resources against risks to the border (with one exception in the offshore maritime domain, where maritime border protection will continue to be delivered by the joint command arrangements we have put in place over several decades with Defence department and the Australian Defence Force).
The Strategic Border Command will have access to advanced real-time intelligence, communications and surveillance systems to monitor and manage the border on an integrated, real-time 24/7 basis. The Command will direct the work of Customs and Border Protection regional border commands, which will be formed on state and territory lines. In addition to introducing relevant command and control structures, we will also enhance the skills and capabilities of our uniformed workforce. We will strengthen capability and leadership skills through enhanced recruitment processes, active career management, and structured professional development, such as you would expect to find in a disciplined, uniformed service. Staff engagement and consultation with other stakeholders will be crucial to this endeavour, and we are heavily engaged in this process at the moment.
Sophisticated intelligence systems and capabilities will also be crucial to this future state. We are building a new National Border Targeting Centre to better identify high-risk international travellers and cargo through increased data integration and improved analysis capability. The Centre's initial focus will be on improving the Service's internal targeting processes and capabilities, and designing a multi-agency operating model for coordinating border intelligence. The Centre will deliver a significant capability boost and will build the foundation that we need to create a leading edge intelligence-led targeting system. A second phase of this activity will establish a dedicated facility to hold multiple agencies under the one roof. This will enable joint planning of border operations, supported by improved cross-agency data integration and data sharing.
Through the National Border Targeting Centre we will work closely with border management, intelligence, law enforcement and regulatory agencies with border interests around the world. We will also work especially collaboratively with regional partners who already have similar targeting centres in the United States, Canada, the United Kingdom and New Zealand. We are doing this because enhanced cooperation and collaboration between customs and border agencies is essential to both facilitating legitimate trade and travel and mitigating the threats to our borders that I outlined earlier. These four partners, The United States, United Kingdom, Canada and New Zealand, are our most trusted international partners in terms of defence, intelligence and security collaboration. And indeed last month, Australia attended the inaugural Five Country Ministerial Meeting in the United States, the first time that Ministers responsible for homeland security from Australia, Canada, New Zealand, United States and the United Kingdom have collectively met. The meeting focused on issues of shared concern, such as border security, immigration and customs issues, law enforcement and crime, infrastructure protection, and cyber security.
Australia is also engaged with what is known as the Border Five, created some years ago by the Customs administrations of Australia, Canada, New Zealand, the United Kingdom, and the United States to discuss and partner on customs issues of interest and priority. Through the Border Five we are working to strengthen border controls, share best practice through joint initiatives and information sharing, and leverage partnerships to increase efficiency. Current activities include the development of a strategic roadmap to guide the group's future activities in five key areas: intelligence, integrity, risk management and performance measures, technology, and trade facilitation. As the current Chair of the Border Five, the Australian Customs and Border Protection Service will play a key role in driving the work of the group over the next 12 months.
Another concrete example of our international collaboration in customs and border protection was the signing last year by Australia and the United States of a Joint Statement Regarding the Development of a Framework for Cooperative International Targeting and Assessment. To implement this agreement we have posted an officer to work with US Customs and Border Protection on the development of a cooperative targeting framework that will enable delivery against the commitments under the Joint Statement. In particular, we are seeking closer links with the US International Targeting Centre and the US Customs and Border Protection's National Targeting Centres for Passengers and Cargo.
In a similar vein, our relationship with New Zealand is a whole-of-government diplomatic priority and one of Australia's closest and most comprehensive bilateral relationships. The Service has a long-standing, mutual strategic partnership with our key counterpart agency, the New Zealand Customs Service. Our bilateral work program delivers on the customs related elements of our respective Governments commitments under the Australia-New Zealand Closer Economic Relations Trade Agreement. Our long-term goal under that agreement is the creation of a trans-Tasman Single Economic Market – in effect which would involve a seamless border. Such a concept requires mutual understanding of, and an integrated approach to border risk. We are working with our New Zealand counterparts to exchange and protect sensitive information and intelligence relative to this mutual goal. We already share a deep level of understanding, maturity and trust and a high level of compatibility in the way we approach and mange border risk. These ties with New Zealand will only get closer in the coming years.
Well friends we have been talking about the challenges of the border of the future for some time. Well it is my contention, that future has arrived. Customs and Border Protection will be transformed into a disciplined uniformed service which is assisted by an advanced intelligence and risk assessment platform, well-placed to protect our country and support our industry while fostering legitimate trade and travel. Legitimate traders and travellers will be our partners as we work together to secure both our economic prosperity and our national security. Similarly central to this work will be the collaboration and partnerships with domestic and international law enforcement partners and border agencies.
I'll finish where I started, these are not matters just for the Australian Customs and Border Protection Service – they are, in my contention, matters for the nation as a whole. As I have outlined today the modern border is a strategic national asset, and a crucial function of state which directly impacts on a sovereign state's security and its economy. Given the global economy, the international nature of trade and travel and of criminal organisations, sovereign states can no longer work in isolation to defend their borders. The new way of thinking about border control is one of collaboration, and sovereign states working together to defend their borders.
Today I hope I have challenged your thinking on the role and responsibilities of the modern Service I lead and given you an understanding of the challenging environment we operate in. I hope too that I have stimulated a few of you to think about this vital national function in very different terms.
