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Foreign Affairs, Defence and Trade References Committee
Potential Australian Defence Force use of unmanned platforms

LA FRANCHI, Mr Peter, Head, Strategy and Commercial, LFRG Pty Ltd

MASON, Mr Bradley, Secretary, Australian Certified UAV Operators Inc.

Committee met at 10:21

CHAIR ( Senator Gallacher ): I declare open this public hearing of the Senate Foreign Affairs, Defence and Trade References Committee. This public meeting is in relation to the committee's inquiry into the ADF use of unmanned platforms. Copies of the committee's terms of reference are available from the secretariat. I welcome everyone in the room today. This is a public hearing and a Hansard transcript of the proceedings is being made. Before the committee starts taking evidence I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee and such action may be treated by the Senate as contempt. It is also a contempt to give false or misleading evidence to a committee.

I would like to emphasise that, while the committee prefers all evidence to be given in public, under the Senate's resolutions witnesses have the right to request to be heard in private session. If you would like to give any of your evidence in camera, please do not hesitate to let the committee know. If a witness objects to answering a question, the witness shall state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. As noted previously, such a request may be made at any other time. Do you have any comments to make on the capacity in which you are appearing today?

Mr Mason : I am the secretary of the Australian certified UAV operators association.

Mr La Franchi : I am the head of strategy and commercial with LFRG and am also the Australian delegate of UVS International, the global unmanned systems industry association.

CHAIR: Would you like to make an opening statement before we proceed to questions?

Mr Mason : Thank you for the opportunity to speak here today. We are the primary authors of the submission provided to you on 5 February. We apologise that our president, Mr Joe Urli, could not be available today. Unfortunately he is up-country at the moment on assignment.

ACUO regard the Senate committee inquiry as a valuable opportunity for Defence and industry to come together. We strongly urge the development of a whole of federal government approach to the unmanned aircraft systems sector in a broad and comprehensive manner. We believe a national unmanned aircraft systems industrial strategy is the logical way to progress this.

In our submission we pointed out that domestic sourcing is a reality in many NATO member countries and is increasingly the case in Asia. This clear trend is contributing to increased competition in the UAS sector globally. We flag two recent examples here today. Firstly, in March the European Commission commenced the roll out of an integrated industry, science and regulatory strategy for unmanned aircraft systems as a European Union investment priority. Secondly, across the Tasman, the New Zealand government’s Callaghan Innovation fund is now investing in unmanned aircraft systems as an industrial priority for that country. These initiatives seek to bolster the strengths of the respective European and New Zealand domestic UAS industrial bases and improve their competitive posture internationally.

Despite growing pressures from such competitor initiatives, Australia’s UAS industry is currently well placed in global terms. Our sector has proven it can be competitive and penetrate portions of the world market. The US Navy and Special Operations Command use Australian designed and manufactured Aerosonde mark 4.7 systems in operational roles with deliveries on an ongoing basis. The Royal Thai Air Force Academy uses Australian designed and manufactured Cyber Technology CyberEye II V2 systems as training assets. The United States Air Force’s Eglin range uses Australian designed and manufactured Silvertone Flamingo systems as flying testbeds for experimental sensors. New generation engines from the Australian Stock Exchange listed Orbital are being adopted by Boeing Insitu for its future production ScanEagle systems. Melbourne based Sentient Vision Systems has successfully entered the United States military UAS market with its Kestrel movement detection software.

These success stories will expand as significant numbers of start-ups continue to emerge from Australian industry and academia with the new business models and new technologies. These new entities are exploring both the civil and defence marketplaces together. The importance of start-ups to the Australian UAS industrial base mirrors global trends in both the civil and military market segments. The United States based AeroVironment was just 25 years ago a microbusiness in a low-cost industrial park north of Los Angeles. Today the ADF is a part of its global customer base. The Norwegian based Prox Dynamics, from whom Defence is now acquiring the Black Hornet UAS, did not exist five years ago and is still only a small business. Few in 1990 would accept that a California based microbusiness called Leading Systems would give rise to one of the worlds’ major manufacturers of air-to-ground strike aircraft. Today we know that firm as General Atomics, home of the Reaper.

Many of Australia’s emerging UAS sector businesses are start-ups. These should be seen as a source of national competitive advantage. These new companies, coupled with existing Australian UAS sector capability, provide a robust foundation upon which an even more capable national industrial base can be created. A well-articulated and well-planned national strategy is the means by which to achieve this. Defence can be a direct beneficiary of such an initiative. We contend that through such a strategy Defence’s tactical UAS requirements could be met in relatively short order and on a cost-effective basis with world-class solutions. We wish to be clear here as to where we cap our claims. We do not contend that Australia’s UAS industry is capable of solely fulfilling large and complex UAS projects of the scale of Defence’s planned purchase of the Northrop Grumman Triton, but our existing and emerging capabilities are relevant to projects of such order. In Triton we see opportunity for Australian industry to make real contributions in its own terms. This is why we urge Defence to seek far more from Northrop Grumman as the Triton acquisition nears.

In summary, we contend that Australia has significant opportunities available to it as the national and global UAS markets continue to evolve. We are starting from a significant level of industrial capability. We now need to consolidate this to achieve more efficient application of resources and attain wider market reach in the face of increasing global competition. A national strategy is critical to this. Defence has an important role to play in this process because it is, and always will be, an integral element of the Australian economy. This concludes our opening statement.

CHAIR: I have just looked at your website and you were formed with seven or eight operators. How many operators are there in Australia now?

Mr Mason : Two hundred and seventeen, I think, at last count.

CHAIR: So there are 217 certified UAV operators.

Mr Mason : As we understated it at the moment—yes.

CHAIR: That has grown. When you started it was quite small, wasn't it?

Mr Mason : When we started in 2009, there were only eight certified operators in Australia.

CHAIR: So from 2009 to today—

Mr Mason : We have now over 200 operators, and there seems to be no end to the growing list of applications that still—

CHAIR: Are they small enterprises or medium enterprises?

Mr Mason : Around 60 per cent of the UAV holders are small businesses—small to microbusinesses. They are a significant sector of the industry.

CHAIR: And they would be doing agriculture, mining—

Mr Mason : Right across the board—everything from your cheap real estate photography right through to 3-D surveying and mapping, and agricultural applications in multispectral and hyperspectral imaging. It seems that every day there are new applications and activities that can be undertaken with a UAV. We are adding to the list all the time.

CHAIR: Are the platforms they use expensive?

Mr Mason : They vary quite considerably—everything from the consumer products, like the DJI Phantoms, which everybody knows about, right through to multimillion-dollar systems. It is not unusual to spend a couple of million dollars on a sophisticated mature system, but you need not spend that amount of money. There are a lot of more cost-effective systems on the market. Today we are finding that, more and more, the price is coming down considerably.

Senator McEWEN: Where are the majority of those systems manufactured that your members operate or use?

Mr Mason : A large number of them are manufactured offshore and have agents in Australia, but we have a considerable industrial base here manufacturing all types of systems: fixed wing, conventional rotary and the multirotor systems, the Aerosonde Mark 4.7—

Senator McEWEN: Regarding the offshore ones, are there any particular countries that are leading in this?

Mr Mason : Israel has always been a big leader, as well as the US systems. Where else, Peter?

Mr La Franchi : In the market place, the vast bulk of systems are stemming, on the consumer side, on the lower cost side, out of China. DJI is the world's largest manufacturer of unmanned systems in total and it is turning out tens of thousands of units every month. The next large market segment in terms of market base is in Europe, where there are tens of dozens of companies producing small commercial grade, multirotor systems. Germany is a particular stronghold; France is a particular stronghold; England and Italy are emerging as strongholds. The United States has a lot of start-ups pursuing smaller commercial systems. Again, ostensibly they are multirotor types. In the US market the start-ups are basically pursuing both the military and the civil markets in tandem.

Senator McEWEN: You mentioned in your opening statement that the EU has made the industry an investment priority. Mr La Franchi, you talked about the number of countries in that region that are investing in this technology. Are they investing in the technology in Europe because of NATO and the military use of these systems?

Mr La Franchi : The European Commission strategy began life purely focused on the civil side. There is a corresponding European Defence Agency strategy. Those two approaches were merged together over the past two years, culminating in October last year when the European Commission unveiled its joint civil and military strategy. In parallel to developing new systems for military requirements they want to use that same technological pool to pursue opportunities for European civil industry. 'Dual track' is the terminology that they use. That European strategy was formally adopted by the European Commission in what is called the Riga Declaration, made on 6 March this year, which marked the starting point. As well as looking at the underpinning industrial requirements for both military and civil development, it is looking at the European scientific base in the broad connecting unmanned systems as an industrial priority to the European Horizon 2020 science and technology strategy and then connecting that to the requirements for the overhaul of the regulatory environment, both civil and military. So two objectives are being achieved with one common program.

Senator McEWEN: What about the New Zealand case—is that civilian and military as well?

Mr La Franchi : The main focus for the New Zealand program is on the civil side. New Zealand has been quite interesting; the Callaghan approach is to pick very tight niches. Their main investment focus is the development of a command-and-control air traffic control system for commercial unmanned systems. The basic problem we have with civil unmanned systems at the moment is that you go out there and anybody, provided they are certified, can go and fly and control. But the moment you start operating in wider air space with other aircraft, you need a level of surety and control. New Zealand is basically looking at whether you can create one common system that controls any type of civil unmanned system and be integrated as an element of broader air traffic control systems, rather than being something that is just controlled by the operator.

Senator McEWEN: Is New Zealand anticipating using the technology in Pacific island nations that it has a lot of contact with economic-wise?

Mr La Franchi : New Zealand has got a number of small manufacturers. In fact, New Zealand has achieved sales of complete unmanned aircraft systems to the Australian Defence Science and Technology Organisation. The engagement of New Zealand with the wider Pacific community has not really begun. I know that there are companies that are supplying systems through New Zealand into places like Fiji, so it is acting as an export hub and a support hub. In terms of actual manufacturing, New Zealand companies really tend to be chasing the US market and the Australian market at the moment.

Senator McEWEN: Your suggestion in your submission to develop the unmanned aircraft industry strategy—where are you prosecuting that case? Are you raising it with government and-or with Defence, and how are you going in that?

Mr Mason : It is a multi-pronged approach. We are starting with the inquiry here, but we hope to engage with Defence more cooperatively in the future.

Mr La Franchi : The initial version of this paper in fact began life as a submission to the Defence white paper process, so we know a shorter version of the document is being considered inside Defence. The informal feedback we have had from Defence is that it was very well received, and that there are people inside the Defence unmanned systems community who were very glad to see that industry had really stepped up to the plate.

Senator McEWEN: I take it your membership is all private organisations or individuals, not government?

Mr Mason : Correct. At this stage they are all private businesses.

Senator McEWEN: With regard to your comments about Triton: where you say you are looking for a revised approach, you caution against second-pass approval of the announced project until Australian industry can engage constructively and meaningfully in this important project. That sounds a bit wistful; that we have missed out there. Is that what you are implying, and how are you going in prosecuting that case with government?

Mr La Franchi : Could I put a bit of background here. Australia was actually a formal industrial partner and strategic partner in the development of the US Navy Broad Area Maritime Surveillance system project, for which the Northrop Grumman Triton was ultimately selected. I attended the industry briefing at Patuxent River for that project meeting many years ago, and it was very clear that it was almost a mirror of the opportunities available on the Joint Strike Fighter program. Due to budget pressures Australia then formally pulled out of its membership of the BAMS program, and the opportunities for that deep engagement vanished. Northrop Grumman, to give it credit—

Senator FAWCETT: Sorry—was it 2009 when that happened? Is that correct?

Mr La Franchi : No, I think that was slightly earlier. The briefing at Patuxent River would have been in 2005-2006.

Senator FAWCETT: No, when we withdrew. Was that 2009?

Mr La Franchi : Yes, around 2009. I am sorry.

CHAIR: Just so that we are perfectly clear: we withdrew from an unmanned platforms joint venture to continue with the joint strike fighter venture?

Mr La Franchi : No. We were a formal member of an industrial development program run by the United States Navy which mirrored the industrial strategy taken by the joint strike fighter project.

Mr Mason : Which we then stepped out of.

Mr La Franchi : Northrop Grumman, to give them credit, are engaging with Australian industry; they are out there trying to build various opportunities. But given the value of this project and the significance of this platform in broad defence capability terms we believe Australian industry should have a lot more opportunity available to it. We may be wistful in wishing for the opportunity that has existed in the past and was then closed to Australian industry on the scale that we would have hoped for, but we believe there are a lot of opportunities out there that can be progressed afresh and we think there are innovative ways of achieving that. That is why we suggested, for example, the notion of a commercially rated and certified pod to be carried under the Global Hawk wing to allow it to be used for other functions. I of course mean the Triton version of the Global Hawk.

Senator McEWEN: Do you think the recommendations in the Creating One Defence review to roll DMO and DSTO into a new sustainability and capability group will have any positive and/or negative impact on the development of this industry?

Mr La Franchi : There is opportunity in the recommendations made by the First Principles review and the subsequent government adoption of that to in fact support our industry, provided that the revised entity reaches out and engages with industry broadly. DMO has been very busy for obvious reasons. We have had a fairly significant war to focus upon, and industry engagement has suffered as a result of that across the board at a broad level. The unmanned systems industry has to some extent been held at arms' length. Where there have been priority military requirements to support war-fighting operations those sections of our industry have done well; they have been able to reach in and establish good relations. But I think the cost of the enduring operations, the internal focus of DMO and the problems that the First Principles review identified have basically left an awful lot more of the industry existing in an unknown state compared to what DMO could do. Will the final result overcome that? I am an optimist. Our industry is optimistic. We are very passionate about where our industry is going. For the moment, we believe this change will in fact be a positive and we look forward to Defence's to engagement with us.

Senator BACK: I want to focus on the civil applications and opportunities. You mention in your executive summary 'stepped up engagement with Defence in the development of coherent national regulatory regimes for both civil and military' and you say that the ADF cannot attain the level of proficiency it seeks without wider regulatory restructuring and reform. Given Australia's huge landmass and the remoteness of our resources, including potential resources, what is your group doing to try and harness those lobbyists, those resource companies, to harness what must be a tremendous opportunity for us in the civil space? I am talking about geology and mining exploration but also the surveillance of our offshore gas fields. Shell Prelude, when it is out there, will be worth close to $100 billion. Gorgon is worth $80 billion. Wheatstone is worth $40 billion and there are others to come. Where are you focusing your attention and where would you want this committee to focus its attention in that space?

Mr Mason : I do not believe we have a specific target there. I think we see a multitude of opportunities there for Defence to utilise these assets across a number of beneficial activities—the whole remote sectors of the country that can be mapped and surveyed and the digital data that can be reaped from that. We have members working in all the states in city, country and remote localities doing all those sorts of activities. The Triton in particular lends itself more to larger scale activities—atmospheric monitoring—

Senator BACK: Natural disasters.

Mr Mason : Natural disasters. Bushfires are a perfect example. We see it as being absolutely perfect for that sort of role.

Senator BACK: The widest possible group of applications are the areas that are likely to excite the largest amount of investment. We are focusing here on defence, but we have science technology as well. Where is CSIRO in this space?

Mr Mason : They are critical to it. They are a large research organisation. They have been working with unmanned assets now for some time. They have some brilliant people working on that. We have worked with them in the past. They are essential to that whole program.

Mr La Franchi : Senator Back, in the mining sector in Western Australia and northern Australia there is a very interesting trend emerging in the new CASA certificated operators . Large mining and engineering sector services firms are in fact developing in-house unmanned systems capabilities to do things like broad area mining surveys. In those huge pits up in the north, instead of having teams of a dozen or so surveyors using traditional means day in day out, they are flying a single unmanned system over the top using photogrammetry and 3D point clouds to work out the bulk of ore that is being shifted—down to the level of per minute of operations. You mentioned the offshore LNG platforms. There is a very interesting movement afoot. These same large engineering services firms and mining firms and also non-traditional service provider firms are looking at whether unmanned systems can be used to do pipeline monitoring over vast distances and what kind of contribution they can make to broad area distribution grids, that large-scale industrial infrastructure that characterises mining. I am aware of proposals that have been made by several of the more capable unmanned systems houses in Australia—Aerosonde and Insitu—to offer surveillance services as an additional layer of security for those offshore platforms. They have also been in discussions with the offshore fisheries industry about what is available there.

You will of course be aware that the Department of Defence funded the north-west coast trial of both the variant of the Predator B model aircraft and a virtual Global Hawk to explore what might be done in those areas as well, and very useful guidance came out of that. Is there a viable commercial industry on the civil side looking after such infrastructure? The amount of money being invested by the large engineering firms would strongly suggest that such opportunities do exist. That trend is paralleled globally. We see it in the United States. In Alaska there are a number of players now providing unmanned systems to monitor trans-Alaska oil and gas pipelines.

Senator BACK: We are not communicating this to the wider community of Australians and that is why they are not yet excited by what is going on and what the potential is. Is that an unfair criticism?

Mr Mason : No, I do not think so. The general public are becoming more knowledgeable about this sort of stuff. Certainly business is well aware of what is happening now with unmanned vehicles and some of the potential benefits that can be had from it. It has taken some time to get there. There are still some players who do not want to accept it. But generally business is now certainly seeing that unmanned vehicles can provide a lot of benefits to them, mostly cost-effective benefits, cost savings.

Senator FAWCETT: Before I go to my substantive questions I have a question for you about UAVs and public perceptions. A lot of the submissions have talked about public perceptions in terms of drones and attacks but also about privacy issues, and therefore military use of drones is at threat because of the lack of public support. I am interested in your association's view on the extent of regulation, or lack thereof, of unmanned aerial systems of under two kilograms. Do you think CASA or the government should be restricting their import or increasing the regulation of them? We are seeing an increase in the number of near misses with emergency helicopters, RPT aircraft, as well as intrusions of privacy and other things from the non-commercial sector, including a number of people offering services using those non-commercial drones. Do you have any comments on that?

Mr Mason : Overall we believe that the regulatory side is being well managed by CASA. We would certainly like to see better outcomes on the enforcement side, but we also have to understand that CASA are rather limited with the resources they have and what they can tangibly do in terms of enforcement. We have asked that CASA and the industry review those enforcement systems and procedures because mostly they are predicated on the manned aircraft sector and having access through normal aviation infrastructure. Of course, with the unmanned sector, particularly on the small side, we do not need any of that infrastructure so we do not use it. For CASA to catch some of these illegal and unauthorised operations is a headache in its own right because they just do not have the resources for that. What we have said is that CASA needs to be working more closely with state and federal police—probably more so with councils because they have the boots on the ground to be able to effectively enforce this sort of thing.

In answer to your question, we believe the regulatory side is currently acceptable. We are working with CASA at the moment on several working groups to fill in some of the holes. The rest of it I think comes down to education and informing the public to make them aware of what the regulations are. A lot of the people out there who are using these sorts of things—particularly the DJI phantoms, the small stuff—do not come from an aviation background so they have no aviation knowledge whatsoever. CASA says, 'Don't operate in controlled airspace,' but these people do not even understand what that means. So we need to educate and inform the public about where it is safe to fly and where it is not safe to fly and what you legally can and cannot do with it—the dos and don'ts. We are getting there, but that message needs to be out there wider and clearer. We are working with CASA at the moment to do that, and we accept that CASA are doing the best job they can with the resources they have.

CHAIR: Are you saying that, when you purchase these items, the information about where you can and cannot use them and what the limitations are is not on the box they come in?

Mr Mason : Yes, that is correct. That was the case up until recently. CASA have since come to an agreement with DJI, Parrot and a couple of the other main manufacturers to put a CASA flyer into the box the product comes in. So every new product that comes into the country now comes with a copy of the regulations on what you can and cannot do. Prior to that, we had nothing. So it was really up to the industry and CASA to educate and inform. In the past, as you have seen, we have had a lot of incidents. They are serious. We are very concerned about that. We have been pressing CASA to act more on that but, with the limited resources they have, there is only so much they can do. We feel that it comes back to the enforcement side. CASA needs to look at the enforcement structure. It is working for the manned sector but not for the unmanned sector. CASA needs to make the appropriate changes.

CHAIR: I take your point about enforcement: how can you enforce rules that no-one knows anything about?

Mr Mason : It comes back to education and information. We need to get it out there more widely. CASA needs to be spreading the word. The industry needs to be spreading the word much more widely and clearly about what is acceptable and what is not acceptable.

Senator FAWCETT: If you want to operate a tinnie with an outboard you need a licence. If you are a recreational shooter you need a licence. If you want to ride a motorbike, as a learner you cannot ride one of more than 250 cc in engine capacity. Should we be looking at approaches other than enforcement to make sure that recreational users have limited capacity by design in terms of either height or range from the control point? Should we be constraining the imports for the unlicensed sector? Should we have some form of licensing for even recreational use?

Mr Mason : Our association has been pushing CASA for a form of licensing of all UAV operators regardless of use—recreational, commercial or otherwise. We have been pushing CASA to formally adopt a licensing system for that. We are currently awaiting the notice of final rule-making from CASA which came out after the proposed rule-making in June last year. That basically suggested that they wanted to deregulate the sub-two kilogram sector because it was too hard for them. Again, they do not have the resources to manage it. It was like, 'Why put in place regulations that we cannot even manage and enforce?' We took the opposite tack and said: 'No, that isn't acceptable. The industry expects that all operators of these systems should be licensed, even the recreational operators.' We fully accept that there is a recreational sector which is purely for sport, recreation and fun. But what we cannot accept is that people can buy DJI phantoms and flip them up to thousands of feet over their houses and in controlled airspace. As you said, that puts helicopters, aircraft and the flying public at risk. We think that that is not on. We think it is too big a risk to allow it to continue like that. That is why we have been pushing CASA to bring in a formal licensing system across the board.

Mr La Franchi : Senator Fawcett, you mentioned the issue of privacy as an extension of this same issue. The operators association has been working on developing its own code of conduct across the board for best practices, best professional standards that can be applied, and privacy is seen as an absolutely essential element of that. There may be some requirements to overhaul aspects of legislation. There has been ongoing work by the parliament in general on that matter, including the brief inquiry that was held last year. Other states have been assessing the issue and the federal Attorney-General has been assessing the issue. We accept that the industry has an obligation to ensure that the average member of the public can accept some level of privacy in the spaces where you or I would normally assume to see that in our lives. That is going to take a substantial amount of work involving not just the operators association. Again, that requires an awful lot of education effort. It is way beyond just CASA; it is going to have to be a very broad based government approach.

The other aspect you flagged was in terms of the controls on the number of systems being brought into the Australian marketplace. We have no visibility on the total number of systems being brought into Australia. We have been exploring the concept that perhaps it is necessary for customers to start monitoring the number of imports. We realise it might be a burden to start to drill down into this. But at the moment there are no data sets available that would explain just how many of these systems—in particular, consumer grade systems—are in Australia at the moment.

Senator FAWCETT: In your view is it feasible to mandate from a whole-of-government perspective that somebody who wants to import a recreational system has to include in it a GPS circuit so that it knows where it is and its altitude and will constrain that system from operating above a given level and within particular zones—for example, controlled zones around primary airports?

Mr La Franchi : That capability is already available in the marketplace from DJI. They implemented it a couple of years—

Senator FAWCETT: Yes, but should we mandate it?

Mr La Franchi : I do not believe the industry would object to there being a standing requirement that such restrictive capacity be in place. If the parliament chooses to act and to seek to enforce such a requirement, it would simply be putting into a legislative framework the push that is already coming from the industry itself. The industry understands. When you talk to DJI directly, they understand that there is an issue and they need to address it. If you look at the incident with the DJI Phantom that flew onto the lawns of the White House, they instantly issued a software update which now prevents those systems from being able to fly in immediate proximity to the White House. There are similar zonings available for airports in Australia. There are some technical limitations at the moment. You can fly these systems without the GPS operational, which means the blockout system is prevented from working, but if the parliament did choose a legislative option on this it would simply be enshrining what the industry knows that it needs to put in place.

Senator FAWCETT: Could I take you to the substantive content of the inquiry, specifically recommendations 11 and 8. In recommendation 8 you are essentially calling for Defence to establish a domestic sourcing regime for group I and group II tactical UAS. Have you done any work at this stage with either the capability development group or the users to understand why they have gone for, in the first instance, offshore solutions and whether there are Australian solutions that you believe and they accept would actually meet their needs—or could in a reasonable timeframe?

Mr La Franchi : The capability development group has gone the direction that it has basically to meet urgent operational requirements. JP129 phase 2, which led ultimately to the Shadow acquisition, was underway well prior to the operations we have seen over the past 15 years. We all know the history of what happened with that program. The other acquisitions that have occurred have been driven by war-fighting requirements, and we see no problems with that. We are happy across the board for Defence, where it has a very clear operational need, to buy the best of all possible equipment that it can and to do it when it needs to do it—particularly given that there is no formal set of relationships, arrangements, structures or industry strategy in place at the moment. What we are saying is that, after 15 years of activity, now is the time to take that next step. Have we started to progress that discussion with Defence itself? Our submission for the white paper process was our opening point. We have had some discussions with various user communities; we are both from Brisbane, and the Army's operational unmanned systems groups are up there. We have had some informal discussions with them to help us to better understand where they are at and where they choose to go.

Senator FAWCETT: Okay. The second question is around recommendation 11. You lament in your submission the fact that Australia pulled out the BAMS program in 2009 and that that cut off the opportunities to potentially get into some of the enabling global supply chain issues. Where do you see the niche opportunities remain? Are we talking about manufacture to print for what is going on, or are you talking about development in specific areas? Where are the opportunities that you would like the government to prosecute?

Mr La Franchi : The clear opportunities that exist now are in terms of software systems related to imagery intelligence, in terms of sensor payloads and in terms of finding derivatives that might flow across to the commercial marketplace. We cited the example of the underwing pod. I mentioned that earlier. NASA has two concept technology configuration Global Hawks which are coming near the end of their lives. They will need some sort of replacement and NASA is now scouting globally. If we have a product that could actually be fitted under the wing of not just a Global Hawk but another high-altitude, long-endurance class of system, then it might be something we can take into the broader world market as a product range.

The other one I would flag is the notion of using such a pod as the basis for an atmospheric telecommunications node. In the circumstances where, say, another cyclone takes out Darwin, the lack of communications infrastructure is an enduring lesson from all these sorts of natural disasters around the world. If we were able to put a complete mobile phone relay tower into the sky above Darwin within a matter of short hours, the easing of pressure on communications systems would be immense. So we are looking for niche opportunities. In the context of Australia and Australian industry they are very large; in world terms they are small, but we think that these are the sorts of things that are worth progressing now.

As we said in the opening statement, we do not claim that Australian industry is solely capable of going out and delivering on a complete complex project like that. But in these niche areas, sensors, software and finding dual-use civil military applications and ways of linking that with an acquisition of this sort, we think there is a lot that can be done there.

Senator FAWCETT: Going to the issue of the pod, are you aware of the Adelaide-based company called Airspeed?

Mr La Franchi : Indeed we are.

Senator FAWCETT: I take it that you are talking with them about the pod concept?

Mr La Franchi : In terms of the broad research that was done for this aspect of the paper we are, basically, being aware of what they have been doing in the industry. There is also Air Affairs at Nowra that has been doing a similar type of work.

CHAIR: Thank you very much, Mr Mason and Mr La Franchi, for those remarks and answers. We now welcome the Northern Territory government to the table.