Global firms are partnering with Australian based entities in a bid to position themselves for lucrative AUKUS submarine contracts, despite law changes needed to progress, Australian Defence Magazine reports.
Fluor Corporation, a multinational engineering and construction firm headquartered in Texas has entered into a joint venture with Australia’s largest ASX engineering provider Worley to deliver AUKUS Pillar One programs.
Gillian Cagney, Worley’s President for Australia & New Zealand said the partnership would leverage Fluor’s nuclear propulsion expertise with its own 50-year history in delivering energy and mining projects.
“Worley Fluor globally has about a thousand engineers who have nuclear capability,” said Cagney.
“We have that experience and capability that we will be supporting the joint venture to bring to bear and making sure we’re bringing the best in class globally.
“We’re bringing that experience and really leveraging the expertise that sits within Fluor to make sure that we bring the appropriate standards.”
Acknowledging a lack of regulatory framework for the AUKUS Pillar One program, Cagney said the joint venture remained focused on building government relations to better understand what may be coming down the pipeline.
“One of the things as Worley Fluor Australia we are able to do is in multiple sectors globally is to ramp up to meet our customers needs so it’s no different,” Cagney said.
“It’s all about getting alignments and understanding as early as possible.”
Greg Meyer, a submarine warfare and nuclear operations expert said there was confidence within the newly established company to meet program needs, despite not yet populating its workforce ahead of government advice.
“This undertaking is a huge hill to climb because it’s expensive, it’s technically challenging, and as we know, it’s got resource limitations,” Meyer said.
“I think the Australian government is being very deliberate in their approach to this.
“They’ve been very cautious, understandably so, because they recognise all these challenges but they don’t have a lot of people in place that obviously have dealt with them because they don’t have a nuclear capability today.
“So they’re going to need some help and guidance from some companies that can provide that and and I think they’re getting closer to coming out with what I would say is a more detailed strategy.”
Also prompted by taking “calculated risks”, technology services firm UBH Group became Australia’s first private company to receive the ISO 19443 certification in October 2024 in anticipation of the requirement for second party independent auditing against safety standards and governance of the program.
“It was all premised on what the new regulator would actually be required to do and the bill for that only passed through Australia’s Senate on the 24th of October,” said UBH CEO Jeff Batten.
“The next step is that a license must be issued to a license holder, and it’s not until that point will there actually be some, I’ll say, tangible flow down of requirements to the supply chain.
“What that reinforces is that there is no demand signal right now as we’re making those educated bets, if you will, on preparing us for what those requirements are.”
The only other organisation in Australia and the Southern Hemisphere to receive ISO 19443 certification is the Australian Nuclear Science and Technology Organisation.
Developed in co-operation with the International Atomic Energy Agency, the ISO 19443 standard is considered the global benchmark in ensuring nuclear safety culture is embedded in organisations that supply products and services to the nuclear industry.
The Australian Government has signalled it would implement “the highest nuclear safety standards”, though a dedicated AUKUS program safety regulator is yet to be established.
The result has been a decision making tug of war to determine how and where to direct resources burdened by companies.
“Even though there’s not these immediate, clear demand singles right now we’ve certainly positioned our own company so that we can make investments in anticipation of future revenues,” Batten said.
“I do think it’s very unlikely that changes will be made under AUKUS Pillar One because of how strategic and how important these capabilities are, and indeed, we’ve heard the Deputy Prime Minister reinforce that, as have both the UK and US Ambassadors.”
A sentiment also echoed by Meyers, who said there was also a need to keep the public better informed about the AUKUS program.
“I think the government has a challenge in front of them that they need to make sure that the public is well educated and knows about what’s going on,” Meyer said.
“To do maintenance on a nuclear propulsion plant, there’s a lot of training involved and the skill set is very focused, but on the other hand it’s not something that’s incapable of being done by Australians because there’s already a pretty highly skilled workforce in various parts of Australia.
“And the difference between the mechanic working on a diesel engine or a turbine on a submarine is that a lot of the things are the same and they don’t all have to be nuclear engineers because what they really need to understand is the interface that the propulsion plant has with the nuclear reactor plant.”
“It’s about taking the current skill set that exists in Australia and elevating it.”
Snapshot of Australia’s AUKUS regulatory reform
March 2024 saw the passage of two amendment Acts comprising the Defence Trade Controls Amendment Act 2024 (Cth) (DTC Amendment Act) and the Defence Amendment (Safeguarding Australia’s Military Secrets) Act 2024 (Cth) (SAMS Act).
On 12 August 2024, an amended AUKUS Agreement was tabled before the Australian Parliament which, among other things:
Permits any AUKUS party to terminate the submarine project with one year’s notice; and requires Australia to indemnify the UK and US against any liability arising out, related to, or resulting from nuclear risks connected with the design, manufacture, assembly, transfer, or utilisation of any material or equipment including the naval nuclear propulsion plants or parts except to the extent that the UK or the US have received indemnity from a third party.
In October 2024, the Australian Parliament passed two additional pieces of AUKUS legislation, the Australian Naval Nuclear Power Safety Act 2024 (Cth) (ANNPS Act) which is a new principal Act, and the Australian Naval Nuclear Power Safety (Transitional Provisions) Act 2024 (Cth).
