Private records reveal divisions among State officials on telecoms security law challenged by China

Private Government talks on telecoms security measures opposed by China ran into a “procedural hitch” in January when a change to draft law before the Oireachtas was delayed unexpectedly.

At issue was a significant legal concession to groups such as Huawei, the Chinese-owned business which fears its equipment may be banned from Irish networks.

The legislation had met a frosty response from the Chinese ambassador, He Xiangdong. But now moves were in train to remove the damaging “high-risk” tag from any target company, using instead the neutral expression “relevant” vendor. The advantage was clear: replacing negative language could help limit the business fallout.

The Department of Enterprise, Trade and Employment was displeased when communications officials said this change would be delayed. So too was IDA Ireland, the inward investment agency.

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“I agree it is disappointing but the intention to introduce the change as the Bill proceeds through the Seanad is positive,” said an email from Eileen Sharpe, a senior IDA official.

“I will speak with the client [and] with the Chinese ambassador to update them.”

[ Last-minute concession to telecoms firms after Chinese criticism of new law ]

The client was Huawei, which was campaigning against measures introduced on the advice of the National Cyber Security Centre, the Government body responsible for dealing with cyber threats. The change was made in February in the final Seanad debate, just before President Michael D Higgins enacted the law in March. The law was “commenced” this month but security measures remain subject to ministerial regulation.

Such moves come as the Biden administration takes steps to ban Huawei technology from the US for national security reasons. They are in line with European security measures, although Dublin officials clashed on whether the Irish law went beyond the scope of EU requirements.

Huawei’s objections – and those of He – have been known for months. In rare public criticism of domestic legislation last November, the ambassador attacked the Irish law and said it would “suppress” Chinese high-tech companies. The embassy’s intervention questioned Government claims that powers to ban certain groups were neither company-specific nor country-specific.

Eir, which uses Huawei kit, also opposed the law. Redacted notes of a November meeting show it warned of a potentially “serious impact” from the law and implications for “Ireland’s brand in terms of attracting trade and investment”.

But it is only now, through Freedom of Information records released to The Irish Times by the Department of Enterprise, that deep divisions within the Government administration itself have come to light.

At the centre of it is all was tension between cyber security and communications officials, who were concerned about new “security threats” from fifth-generation 5G networks, and officials charged with encouraging inward investment into the State.

“IDA expressed concerns about references to countries that do not operate a democratic model as this may be construed as referring China and, as such, may be perceived as discriminatory,” said a note of talks on January 13th between IDA and Department of Enterprise officials. At that meeting, IDA officials suggested an alternative designation to high-risk vendor.

The files show the extent of Huawei’s efforts to block the law. They embrace letters to then tánaiste Leo Varadkar and Minister of State for Communications Ossian Smyth in November and submissions the company made to the IDA of English-language translations of similar laws in Germany and the Netherlands.

Huawei told Varadkar the German legislation was “a more reasonable proposition” and that both the German the Dutch laws were “much more balanced”.

Sharpe of the IDA later forwarded the translations provided by Huawei to Department of Enterprise officials, saying they seemed to provided a “more balanced outcome”.

Varadkar’s office told Huawei he was unable to meet the company due to his heavy schedule but said it may wish to contact Minister for Environment, Climate and Communications Eamon Ryan.

[ IDA spends hundreds of millions buying and developing ‘strategic’ sites outside Dublin ]

The files refer also to a legal opinion casting doubt on the constitutionality of the measures that Huawei commissioned from Rossa Fanning SC when he was in private practice as a barrister before he became Attorney General in December.

At the January 13th meeting, IDA cited what was described as a “recent report” commissioned by Huawei “expressing strong concerns from a legal perspective” about the legislation.

In an email later that afternoon to Sharpe of the IDA, Huawei said it provided the legal opinion to the “for the purpose” of discussion and dissemination. “Upon agreement with Huawei Ireland, IDA Ireland can share the document with relevant stakeholders.” Within one hour, Sharpe forwarded the Huawei opinion by Fanning and barrister Niall Buckley in an “confidential” email to enterprise officials.

The Government has said Fanning had no role in the February move to eliminate the “high-risk” designation, adding that he gave “no advice whatsoever” in relation to draft law.

But it is clear that the legislation itself created quite a stir.