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Govt should review Huawei contracts after damning US report - Greens

UPDATE Oct 9: Our government should seriously consider the "damning findings" of the US House of Representatives' Intelligence Committee report into Chinese telecommunications giant Huawei, the Greens say.

Huawei is one of several component suppliers for the $1.35 billion Ultrafast Broadband (UFB) rollout and the $300 million Rural Broadband Initiative (RBI), contacts it landed in the wake of enthusiastic backing from Prime Minister John Key.

After a year-long investigation, the committee – led by Republican Congressman Mike Rogers – recommends the US government, and companies, not use Huawei gear, citing spy concerns.

It has also recommended US firms be blocked from mergers or acquisitions involving Huawei, or a second Chinese telecommunications gear maker, ZTE.

RAW DATA: The Intelligence Committee's report (PDF) 
LATEST: Huawei, Adams hit back

The US government has already taken a hard line. In 2008 it blocked Huawei's $US2.2 billion bid (with Bain Capital) to by US company 3Com, and earlier this year it pressured Symantec to drop a multi-billion partnership with Huawei by threatening to block access to lucrative federal contracts).

The new report ramps up the rhetoric, labeling Huawei and ZTE a "national security threat".

It says Huawei might be be guilty of bribery and corruption, discriminatory behaviour and copyright infringement (involving the patents of US company Cisco) and recommends that US network providers and system developers be “strongly encouraged to seek other vendors for their projects”.

The committee claims, according to a New York Times report, that it "obtained internal documents from former employees of Huawei that show it supplies services to a 'cyberwarfare' unit in the People’s Liberation Army". Links with a signals intelligence unit are alleged.

The report in itself does not bar Huawei from doing business in the US. But it makes it like Congress' Committee on Foreign Investment will put any proposed Huawei deals under the microscope, diminishing the likelihood that US phone companies, or corporates buying network gear or services, will want try to engage the Chinese company, according to the Wall Street Journal.

Congressman Rogers told the Wall Street Journal the report's findings were "alarming". He would forward a copy to the FBI, where he used to serve as a special agent.

Some, New Zealand It security insider Selwyn Pellett, see legitimate security concerns over Huawei and close ties with the Chinese government and military.

But in the US media, a number of commentators have noted a trend toward gratuitous China bashing, and trade protectionism, in the run-up to the November elections.

Appearing before the committee, officials from Huawei and ZTE said alleged back doors were actually software flaws and not intentional vulnerabilities. The companies have vigorously denied all spying accusations, and say they should be judged by their track record in the international market.

But in its report, the committee says Huawei did not fully co-operate with its investigation.

At one point it notes:

Huawei admits that the Chinese Communist Party maintains a Party Committee within the company, but it failed to explain what that Committee does on behalf of the Party or which individuals compose the Committee.

Here, the Greens are suspicious.

“The [NZ] government should review using Huawei on broadband rollout in order to protect our economy, information and intellectual property from cyber-attack,” ICT spokesperson Gareth Hughes says.

“Despite the Australian government and the US House of Representatives both taking steps to minimise the risk of Huawei operating in their countries, our government is doing nothing to ensure the integrity of our telecommunications infrastructure.

“The New Zealand taxpayer shouldn't be giving Huawei hundreds of millions of dollars to make it easier for Beijing to potentially spy on us.

“The government was irresponsible to dismiss legitimate concerns about Huawei in March, when Australia blocked the company from being involved in their fibre rollout.

“It’s unlikely that John Key and his spy agencies would know something both the US and Australia governments don't and it is now prudent to review our relationship with Huawei in light of this new information.”

Huawei electronics, management services and fibre is being used by Ultrafast Fibre (which won areas including Hamilton, Tauranga, Wanganui, New Plymouth in the UFB rollout), and Enable, holds the UFB contract for Christchurch.

Chorus is using some Huawei gear as part of the Rural Broadband Initiative contract it won in a joint bid with Vodafone (like 2degrees, Vodafone also uses Huawei gear on its own network).

ICT Minister Amy Adams has previously said the government is monitoring the situation, but has no security concerns about any of the equipment suppliers involved in the rural or urban fibre rollouts.

Early iin the UFB, Labour criticised Huawei from a different tack, asking if the Chinese company had compromised Crown Fibre Holdings by offering contract work to board member Murray Milner.

A spokesman for Huawei NZ said he was waiting on a global statement from the company, which was expected around 3pm today [UPDATE: It was released early. Read it here.]

ICT Minister Amy Adams could not immediately be reached for comment.


Don't buy Huawei gear - key US congressman warns business, govt

Oct 7: Huawei has been labelled a corporate and national security threat by a key US lawmaker and former FBI agent.

The US Congress' House Permanent Select Committee on Intelligence has been investigating the Chinese smartphone and telecommunications gear maker for the past year.

It will release a report on Monday (Tuesday NZ time).

Tonight US time, US network CBS will screen a 60 Minutes interview with the committee's chairman, Michigan Republican congressman Mike Rogers, a former special agent with the Federal Bureau of Investigation - a government agency that has visited at least one potential Huawei customer, CBS claims.

CBS today previewed snippets of the interview on its website and things are looking bad for the Chinese company.

"If I were an American company today...and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America," Mr Rogers said in an interview with CBS' Steve Kroft.

According to CBS, the committee believes allowing Huawei to build and maintain large swaths of America's telecommunications infrastructure opens a door for the Chinese government to spy on the U.S. government and engage in industrial espionage.

At hearings before the committee in Washington DC, Huawei officials have denied spying, and denied government control (NZ technology industry veteran Selwyn Pellett has detailed for NBR his encounters with Huawei in Beijing, which indicated the company works closely with the government and military).

Huawei NZ has also rejected claims around security issues and pointed to the company's commercial track record and repeat businesss.

The New Zealand government says it is monitoring events, but has no concerns about any company involved with the Ultrafast Broadband (UFB) rollout, for which Huawei is one of several component and fibre suppliers.

In the US in 2008, Huawei was blocked by Congress in its bid to buy US networking company 3Com (in a $US2.2 billion joint bid with US company Bain Capital. 3Com was later sold to HP for a lower price; cynics saw protectionism at work).

And earlier this year, security software maker Symantec dissolved a multi-billion alliance with Huawei, under what the New York Times called US government pressure.

In March, the Australian government blocked Huawei from bidding on its National Broadband Network, citing security concerns, and opened an investigation into a proposed Perth-to-Singapore Huawei cable.

NZ govt happy to boost Huawei
While a number of US and Australian politicians have taken an aggressive stance toward Huawei, here the National-led government has boosted the company.

This year, NZTE helped broker a deal for Rakon to supply components to Huawei.

In 2010, then ICT Minister Steven Joyce led a trade mission to China (including 2degrees, one of Huawei's largest NZ customers) which included a visit to Huawei.

And in July 2010, fresh from meeting Huawei executives at the Shanghai World Expo, Prime Minister John Key told Q&A’s Guyon Espiner that the Chinese telco giant should be a leading contender to supply gear to companies building New Zealand’s $1.35 billion Ultrafast Broadband (UFB) fibre network.

"At the end of the day from New Zealand's perspective I mean we're looking for value for money," Mr Key said. "So let's take ultrafast broadband. They've got a lot of expertise in that area, Huawei is a big player, they're bigger round the world, they've got a huge partnership in the United Kingdom, for instance."

ckeall@nbr.co.nz

More by Chris Keall

Comments and questions
49

Lets face it ... THERE IS NO SUCH THINGS AS A SECURE NETWORK.

weather it is Hauwei or Acatel Lucent or Cisco they can all be compromised.

As for privacy concerns i think our home grown Endace has done more damage to the right to privacy.

This is just anti-China rhetoric from the US

Agreed but if they are right then the NZ Govt has just set us up by appointing Huawei to roll out the new Broadband throughout the country.

Australia have already turned Huawei away with their rollout.

Its all a scam for US commercial interests. Most major powers already select what they want to review in the way of communications. If you think the Chinese are a special threat you really are in la-la land. They ALL listen in.

Agreed. American spooks or Chinese spooks? Hard to tell them apart these days.

No network is 'secure', but we are utterly naive if we don't think China - home of most of the world's biggest cyber-attacks on US infrastructure (and even NZ parliament) is not putting a backdoor in through its coms gear. It is intelligence 101.

The Israelis pioneered this back in the early 90s with PROMIS which was stolen by the CIA as INSLAW. The CIA is a part-owner of Facebook for precisely the same information gathering reasons.

The real issue is what happens if the US and China ever come to blows and we all get caught in the crossfire with our daks down because our communications infrastructure was compromised by ingenues so focused on the dollar and the noble ideal of 'the free market' that they utterly forgot about realpolitik.

China is not a democracy. It is not a free market. It is massive, it is running out of liebensraum. Do the math...

Key and National are in a permanent pose of having their"daks" down.So why is this anything new.Its when the person behind Key etc say" have you met Dorothy" that's when things get rough.

Wrong mate - you really do need to understand alittle more of the techy side of things. We are ALREADY spied on - by the NZ and US governments.

I'll never forget PROMIS and the related events, Danny Casolaro was just another victim of the Octopus.

I think neither china or the US really give a damn about NZ.. we're too small to matter

I think neither china or the US really give a damn about NZ.. we're too small to matter

That's just great,Key this is another fine mess you have got us into.Wonder, if the GCSB and police use these phones and network.Is there anyone in government who signs this off accountable?Not that we have much to spy on,so the yanks let us read about it in the NBR.how it could be a security breach.Chinese boss is ex Red Army general, HALLO?
Even Maxwell Smart would have spotted this one.

Probably Key & co have done more damage recently to the NZ economy and international reputation than Huawai or Dotcom.
Time for a change?
liberte

If you agree Mike's point, does it mean CIA or FBI are spying the world through the wide application of CISCO products?

Surely this is simply a trade war and there is very little reason for New Zealand to refuse Huawei on this base. Better business case and economically viable solution should be the main reason to choose the right provider. Blindly following others can only be used by others.

My first question would be why does a largish international company want to do bizness with 'us'? And for a low price? But then what do we have worth knowing?

to make money. Why wouldn't they want to do business with us - money is money, large or small.

NZ can be used to advantage to trial equipment. If it falls apart then no one will notice but if it is a success then they can trumpet about it.

USA - if you do not do our bidding, we assassinate and kill you.

USA - our satellites spy on you and you do not complain, otherwise we cut you off.

USA - you will sell your products and services to us in return for our US$, printed by the trillions out of thin air.

The simpletons who think that Huawei are a security threat probably also think that Google invented Google Earth and Google Earth as a fun-tool for citizens.

I seem to remember some months ago - or maybe last year, an article almost exact.ly like this, about Huawei, OZ and USA. The comments were almost the same, too.
Weird

It's about time our naive (-or? )PM stopped making disastrous decisions about this country's future, and that w reclaimed this right for ourselves. The man is even more a liability than Helen Clark was - and that's saying something.

New Zealand is being well and truly sold out to the predatory Chinese. Inexplicably, even the major award In the Wearable Arts show this year was quite inappropriately given to a Chinese entry. Why? It simply didn't measure up compared to some stunning, far superior entries - and the audience recognised this.

The politicisation of all aspects of life in this country is ruining it for New Zealanders. No wonder so many are leaving.

Please leave.

To France maybe so that the French can show you what a pathetic cultural retard the average NZer is? Rainbow Warrior.

To Australia where the average NZer is seen as a country bumpkin to be exploited. Air NZ/Ansett.

To the US where the average American thinks New Zealanders are free loaders. Nuclear free.

And these are your allies? Your youth died in wars started by them and defended them!

It's just the Republicans protecting self-interest for US companies, nothing surprising there. Remember the WMDs? That had more substance than these claims against Huawei.

My only comment.......prove it!
Easy. Get the answer to that, otherwise its all just postering by everyone.

The fact is that Huawei and ZTE are a risk as far as the US authorities are concerned. That means many businesses will not invest in a place where Huawei and ZTE are such as New Zealand.

Don't buy their products or use the services of those who do. If you do, then don't moan when rip offs of your intellectual property get mass produced in China.

U mean like your NZ companies in the old days rip-off overseas IP to build NZ's own pathetic radios, TVs etc?

That's how your iconic Fisher & Paykel got its start - ripping off American IP to build washing machines!

Careful. Huawei might be installing their infrastructure to spy on how our farmers drive fence posts into their paddocks.

I think amidst they hype and chest beating as various political parties try to score points on this, several very impoirtant considerations are being missed.

1) Is security the real motivation here? The UK govt has given both ZTE & Huawei a clean bill of health after a fairly comprehensive review. Huawei have been known to copy Cisco designs and undercut Cisco by a massive margin. This whole affair reeks of Lobbying and given the corruption in Washington I wouldnt be surprised if this was the case

2) Assuming Huawei and ZTE were able to spy, shouldnt the media be educating the public on the joys of encrypting sensitive information so that if it was to be intercepted by a foriegn government they'd have to spend hours if not days decrypting it before it was useful?

I havent seenthe full US congress report but wold love to know what they are basing their reccomendations on

some corrections:
1. The taxpayer is not paying any money for Huawei equipment. They are only subsidising the passive layer 1 build.
2. Neither CFH or the government selects the active equipment. This is done by the individual companies involve, which is why there are three separate UFB suppliers
3. Huawei, like many switch companies, are selling gear cheap because the real money these days is in professional services. The more hardware you get in the world the more professional services you can make.
4. You should probably distinguish between subscriber-aware electronics (which actually has to have the ability to intercept individual user's traffic by NZ law) and non-subscriber-aware equipment like DWDM - even if someone intercepted the latter they could not transport it back to china without major filtering first.

Never mind telecommunications equipment, Huawei could make great money selling tinfoil hats to half the commentards in this article. Sorry, I mean "anti-CIA-brain-control-protectionwear"...

The government should not review the contract with Huawei - they should END the contract with Huawei

is this the same US of A that wants Kim Dotcom brought to Justice for running a business that affects politicians funding from the movie industry. is it still true that half of US congress still do not own a passport and probably can not find NZ on a map of the world?

who cares, what secrets does NZ have worth knowing. Any resistence we had to a foreign power are limited, we would struggle to match Fiji.
Our isolation is our biggest defence.

Huawei has offered India their source code for security review. Maybe if we are so paranoid about security, we should probably encrypt all network data traffic.

So Huawei has a Communist Party committee in it. Heaven forfend !!! Like Auckland Uni has an ACT Party committee in it (ACT on campus), and of course most large NZ companies have a Labour Party commi ... sorry, Union organisers committee in them. Sometimes with representatives on the Board !!

Just fear mongering for political effect by Republicans assisted by the local Greens?? We already have many American companies (Apple, Microsoft, Cisco, Google, Facebook, etc) and satellites watching us so what is new. Those that need to keep secrets are the only ones that should be concerned, and have appropriate security in place.

Sadly the Greens and some in the media just want another headline.

If the Russell Norman and the 'Greens' are suddenly so interested in 'National security' why were they so pleased and enthusiastic when those fruit-loops attached the Waihopai satellite base ?.
The greens slag the US off at every opportunity so why the sudden approval of US propaganda ?

If I had a choice of being spied on by Huawei, the GCSB, the SIS, or the plods, I would choose Huawei, the only one likely to do a competent job.

If there was a Sino-American conflict surely the Chinese military could retard the effectiveness of US aligned countries that use Huawei or ZTE equipment by simply switching them off? That alone could have a massive impact on civil and or military readiness and hamper airports, ports, utlities and the simply communications required to run a country.

Start resisting by stopping your borrowings.

Can you do that?

Thought so.

ouch - not sure where you are from Dragon but in NZ we are allowed to voice our opinions. It would appear that I struck a nerve though. Now I am really scared.

So, if The Greens and all their conspiract theorist comrades really believe this tripe then they should immediately surrender their landlines and mobiles - cos, guess what, ALL networks in this country have some Huawei elements. So will Mr Norman really surrender his mobile ? Really ?

And who is most likely to declare war?

Definitely not China who has never attacked any other country.

And which country used chemical warfare like agent orange and napalm on civilians? Tried WMD equivalent on other countries?

Well apart from Tibet, Vietnam, India and the USSR, never attacked any country no...

Thought that was what one of you cultural cringers would come out with!

Tibet - was always part of China and the 'wars' with Vietnam, India and Russia were small time border skirmishes blown up of all proportion by the Western media.

Contrast that with what the US has done in Korea, Vietnam, Iraq, Guatemala, Chile, Philipines etc.

And think about the indiscriminate use of Napalm, Agent Orange, Cluster Bombs, Carpet Bombings by B-52s, Drone attacks etc - on CIVILIANS! Not the US, of course, right?

Ah, got called out didn't we. I guess 10,000 Chinese dead when you agressively attacked Vietnam for not showing enough deference was small...

250,000 dead "volunteers" in Korea was small too huh?

2-3000 dead when attacking India - that was small as well? Backing the Khmer Rouge who murdered 1.5 million of their own people - small?

And I guess all those Tibetans killed were all members of the military and not civilian.

The many millions starved to death during the "great leap forward", they weren't civilians either huh?

Yawn - nothing like the 60m Jews killed by the Europeans, is there?

Grumpy Kiwi, you are proving Dragon's point for him!

The fact that this has been triggered by today's Green press release should tell you everything. The Greens are not really concerned about NZ. They are only concerned about their own Marxist ideology becoming dominant here and elsewhere. Xenophobia is a convenient way to achieve this.

Mmmm. Great logic here, folks. To recap, the Greens are Yankee hating communists because they urge NZ to follow the American example and exclude a Chinese company from big national contracts.

Come again?

Oooh, right. The Greens don't care about NZ, because they think foreign interests should be limited in the extent to which they own our land, business, revenues and - yes - private information.

Nope, I still don't get it.

One more time. The Greens follow the teaching of Mao Tse Xenephon, because they say something critical about China.

Uhuh. Right. Sure. Yuss.

So far I never heard about any news saying Huawei or ZTE sold network spying the information.

But I do heard the news that US is spying their own people secretly.

So, it is nothing to do with the equipment, it all about the action taken.