Pearls and Irritations

Defence approved three new export permits to Israel in October 2023, and none in November, December or January (to 29/1), according to figures Defence released following a Freedom of Information (FOI) request I lodged on 29 January.

In a Senate estimates hearing on February 14, the Defence Department revealed it had approved two new export permits to Israel since the Hamas attacks of October 7. Asked for clarification about the timing, Defence’s deputy secretary of Strategy, Policy, and Industry, Mr Hugh Jeffrey, said, ‘Two export permits have been granted since the time of the last estimates’. The previous estimates hearing had been on 25 October 2023.

The Senate Estimates and FOI evidence together show that Defence approved one export permit to Israel prior to October 7 and two in the period October 25–31.

Mr Jeffrey refused to say what items the two new permits covered. Instead he said they ‘would have been agreed on the basis that they did not prejudice Australian national interests under the criterion of the legislation’.

Possible implications

Israel has been using its F-35 fighter jets in its bombardment of Gaza. Australia is one of a number of countries that manufacture and export parts and components into Lockheed Martin’s F-35 fighter jet global supply chain. Given this, there are several reasons why the above information may be significant:

• The head of the F-35 joint program office, Lieutenant General Michael Schmidt, a US Air Force officer, said a year ago that the F-35 program was established with a ‘just in time’ supply chain, where parts arrive just before they’re needed and very little inventory is stockpiled. [Emphasis added.] Lt-Gen Schmidt described that situation as ‘too risky’.
• In mid-December, a US Congressional hearing on the F-35 program revealed that the F-35 joint program office had been moving ‘at a breakneck speed to support…Israel…by increasing spare part supply rates’. [Emphasis added.]
• More than 70 Australian companies are involved in the global supply chain for the F-35. Several of the companies are the sole global source of the parts they produce. Without them, new F-35 jets cannot be built and those parts in existing jets cannot be replaced. The US recently authorised the transfer to Israel of 25 more F-35s.

The F-35 global supply chain is vulnerable to disruption, which is why Australia could be under pressure to continue meeting supply contracts.

In his testimony to the December 12 Congressional hearing, Lieutenant General Schmidt also made clear the role of the F-35 joint program office in closely supporting Israel:

I had the opportunity to talk with [Israel’s] Chief of Staff just yesterday… [Israel is] very satisfied with [the] performance [the] sustainment enterprise is giving them. We could learn a lot from them in terms of the quickness with which they’re turning airplanes, [plus] all of the things we’re learning ourselves with moving parts around the world in support of a conflict. [Emphasis added.]

This information from the US highlights the importance to the F-35 supply chain of the steady and reliable delivery (‘just in time’) of Australian parts and components, particularly those from sole source suppliers.

The evidence above and its timing make it possible that Defence’s two export permit approvals for Israel in late October may have been related to the US-led rush to organise increased supply of F-35 spare parts for Israel.