Photograph Source: Biblioteca del Congreso Nacional – CC BY 3.0 CL
Clinton Fernandes is Professor of International and Political Studies at the University of New South Wales. He has published on the relationship between science, diplomacy and international law, intelligence operations in foreign policy, the political and regulatory implications of new technology and Australia’s external relations more generally. His research in the Future Operations Research Group at UNSW analyzes the operational environment, and the threats, risks and opportunities that military forces will face, in the 2030-50 timeframe.
He is the author of Peace with Justice: Noam Chomsky in Australia (2012), What Uncle Sam Wants: U.S. Foreign Policy Objectives in Australia and Beyond (2019), and his latest book, Subimperial Power: Australia in the International Arena (2022). In 2009, Fernandes acted as the historical consultant for the film Balibo based on the 1975 events surrounding the murders of the Balibo Five and Roger East.
Recently, we exchanged email communiques.
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JH: The 50th anniversary of the 1973 coup in Chile that toppled the Allende government is fast upon us. With half a century of hindsight, what essential lessons can we draw from this event — often referred to as Chile’s 9/11?
CF: It is also the 200th anniversary of the Monroe Doctrine and the 70th anniversary of the 1953 coup against the conservative Mossadegh government in Iran, then a British client state. Mossadegh tried to nationalise his country’s oil – a sign that he, like Allende in Chile, didn’t understand how the “rules-based international order” worked, namely that a country’s resources must be made available to Western corporations in the manner desired by them. In Chile, two U.S. companies, Kennecott and Anaconda, controlled the main export-based sector, which was copper. Another company, IT&T, controlled the telecommunications sector. The majority of Chileans wanted to benefit from their own resources. They wanted agrarian reform and an end to the huge economic inequalities in their society. But Chilean oligarchs relied for their own privileged position on their country’s subordination to the U.S. They urged Nixon and Kissinger to help, and took action at home to undermine Allende.
One obvious lesson is that the rules-based international order is a euphemism for an imperial system in which investor rights take precedence over state sovereignty. An empire is a formal or informal relationship in which one state controls the effective political sovereignty of others. Control can be achieved without conquering colonies or directly ruling foreign lands. It can be established through economic, social or cultural dependence, political collaboration between both countries’ elites, the threat or use of military force, coups d’état, intelligence operations, trade agreements and investment treaties.
Today the United States sits at the apex of a hierarchically structured imperial system. Its “democracy-promotion” agenda is in reality an investor-rights promotion agenda. As Thomas Carothers, formerly of the Reagan administration says (in his Critical Mission: Essays on Democracy Promotion), the United States promotes democracy when it fits in with U.S. security and economic interests. Where it clashes with other significant interests, democracy is downplayed or ignored. When the People’s Republic of China subordinates its business elites to the interests of its national sovereignty, it acts against the “rules-based international order” – one reason why it’s disliked in certain sectors.
JH: Henry Kissinger is said to have uttered the presumptuous and obnoxious lines about dealing with Chile after Allende’s election in 1970,
I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its people. The issues are much too important for the Chilean voters to be left to decide for themselves.
He seems to be equating communism with socialism. In what way is this sentiment revealed to be the driving force of American foreign policy?
CF: It shows that “security” is an elastic term. It expands to accommodate what a nation or group thinks it should have – other countries’ resources, yes, but more fundamentally, the principle that investor rights must take precedence over state sovereignty. It also shows that the real threat to this imperial foreign policy is independent economic nationalism – the unacceptable idea that the people of a country should derive the greatest benefit from their resources.
We know from the declassified record that Kissinger and Nixon’s main concern wasn’t specifically Kennecott and Anaconda, the two U.S. copper giants that dominated the Chilean economy. As the exemplary scholar Peter Kornbluh has shown, they had an imperial conception of U.S. foreign policy. They understood what they called the “Dimensions of the Problem,” namely what happens in Chile had ramifications far beyond just U.S.-Chilean relations. Kissinger and Nixon recognised that Allende’s success would “have an effect on what happens in the rest of Latin America and the developing world” and would “even affect our own conception of what our role in the world is.” His success would surely have “precedent value for other parts of the world, especially in Italy.” That’s because Italy still had an active labour movement even after four decades of CIA subversion. Chile’s experiment with social democracy would signal to Italian voters that they could – and should – revive their own independent labour tradition.
JH: More and more information is now being divulged about the role of Nixon and Kissinger in the coup plot. The CIA and DIA played decisive roles. Less is known, but is now coming to light, about Australia’s role in the coup. Can you enlighten the reader?
CF: As a result of legal action in Australia, it has been confirmed that the Australian Secret Intelligence Service (ASIS) helped the Central Intelligence Agency overthrow the democratically elected government of Salvador Allende in 1973. ASIS opened a base in Santiago in 1971 and conducted covert operations, including handling CIA-recruited Chilean assets in Santiago and filing intelligence reports to CIA headquarters in Langley, Virginia. The two agencies cooperated to destabilise the Chilean government. Both countries, however, have largely refused to declassify their records on this unique clandestine collaboration. Both countries continue to conceal the intelligence reports from the Australian spies to their CIA counterparts. And the Australian government refuses to reveal the extent of its collaboration with Chilean intelligence – a serious matter, since it might be concealing its involvement in torture, disappearance and other human rights violations in Chile. These crimes are far from trivial: in a country with a population of 10 million in 1973, there were about 4,000 cases of death or disappearance by the regime, between 150,000 and 200,000 cases of political detention, and approximately 100,000 credible cases of torture.
JH: Clinton, in your previous book, What Uncle Sam Wants, you seem to suggest that Australia is little more than a vassal state to America. (Some say, though, that with the Union Jack still taking up so much space on the Aussie flag, that the Brits own Australia.) You cite Wikileaks embassy cable posts to back your analysis. It is one of the few times I’ve seen Wikileaks used so effectively. Why hasn’t more journalism been done to connect dots about Aussie doing using Wikileaks?
CF: I don’t believe we are a vassal state. I say (page 123): “Australia is not a pawn in world affairs. The pawns are vassal states like local clients in Papua New Guinea and elsewhere. Australia joins more powerful pieces on the chessboard in opposing adversaries, maintaining dependence among the pawns, and preventing unity and cooperation among the Global South.” The Australian colonies began their existence on the winning side of a worldwide confrontation described variously as imperialism versus anti-colonialism, the West against the Third World, or the North-South conflict. The organising principle of Australian foreign policy is to stay on the winning side of this global confrontation. The United States did not impose the AUKUS pact on Australia – Australia initiated it. One of our key foreign and defence policy goals is to demonstrate our relevance to the United States as it tries to stay at the apex of world order.
It’s true that the Australian National Flag has the Union Jack in the upper left-hand quarter nearest the flagpole, as a way of acknowledging the history of British settlement in Australia. But I have no desire to disown my country or its heritage, good, bad and otherwise. I’m very much a part of it all. And an Australian republic would do nothing to change the basic framework of Australian foreign policy. As the philosopher Peter Slezak says, “those who have been most passionate about the need to sever purely symbolic ties to Britain have shown no interest in other ties which are arguably more consequential. The fact that a phone call from the US President has been sufficient to embroil Australia in military interventions around the world has not been seen as evidence of a tie deserving question.”
In the 1950s, Britain was the leading foreign investor in Australia, with 60% of the total. That was more than double the investment of the United States, with 27% of the total foreign investment. Today, US investors dominate the commanding heights of the Australian Securities Exchange. According to the Bloomberg Professional Terminal, BHP, which is widely known as the Big Australian, is 71 per cent US owned. Rio Tinto is 77 per cent US owned. Woodside Petroleum is 63 per cent US owned. Newcrest Mining is 53 per cent US owned. South32, a diversified metals and mining company, is 47 per cent US owned.
The avoidance of primary sources such as the leaked cables is not a new phenomenon. Shoup & Minter’s analysis of the Council on Foreign Relations’ War and Peace Studies Project, published as Imperial Brain Trust (https://catalogue.nla.gov.au/catalog/2172858) was a rare exception, offering insights into US planning for the postwar world. The Pentagon Papers are also ignored in an interesting way – lots of attention to the 1960s and to the gap between the reality of the Vietnam War on the ground and the government’s claims. But the early period is almost completely avoided – and that’s the most important part of those Papers because they expose the fundamental framework of imperial ambitions.
JH: In the intro to Subimperial Power, you note:
Australia is not an exploited neocolony in the US-led imperial system but a subimperial power. As such it is an active, eager participant in the US-led order.
Powerful words. At the same time, the national culture seems to have reservations about a more fully developed relationship with Americans. How does such subimperialism jibe with what ordinary Australians want? Is the average Joe here willing to die to protect Taiwan, for instance? What’s in it for Australians?
CF: Let me focus on the last part of your question because it is the most important aspect of the Australian-United States operation to destroy democracy in Chile. That’s the “why” question – why did we do it?
Previously in Chile and elsewhere in Latin America and beyond, the basic norm governing foreign investment’ had been “national treatment” based on the argument of legal scholar Carlos Calvo that “foreign investors should not expect special treatment simply because they were foreign. Instead, host states should treat them the same way as domestic investors.” The Chile coup replaced the pro-sovereignty Calvo Doctrine with the investor-rights Washington Consensus. An important feature of this system is investment treaties, whose principal or sole aim is to protect foreign investors. They contain investor-state dispute settlement (ISDS) provisions, which prevent states from regulating in the public interest if doing so interferes with certain investor rights.
Investment agreements with ISDS provisions give corporations rights that no human being possesses. Corporations are not required to go before the local courts in Australia before beginning arbitration, for example. They can directly haul the government before a private arbitration panel. Unlike courts, ISDS lack standardised rules of procedure. The parties are free to agree on the location, time, confidentiality, witness list and document production. The predictability of outcomes is much lower. No human being enjoys such rights, but corporations—in reality, the elite investors who control them—do. ISDS proceedings are private, not public. Only the final arbitral award is routinely available, and only if the parties agree.
These treaties allowed U.S. company Ethyl to file a $250 million compensation claim against Canada for banning a fuel additive on environmental grounds. Canada reversed the ban, paid Ethyl $13 million and issued a statement that the additive did not harm the environment. In 2009, a Swedish energy company called Vattenfall sued the German city of Hamburg for restricting the water usage of a coal-fired plant it had built on the banks of the Elbe River. Vattenfall demanded more than US$1.5 billion in compensation.
Many Australian elites are willing participants in this system. Australia’s long-term strategy is to work with like-minded states to replicate investment treaties so widely that they take on the status of customary international law. This, in turn, requires evidence of widespread state practice as well as the belief that such practice is required by international law. If that were to occur, it would have implications for all countries, including those that had not signed investment treaties and those who disputed Western conceptions of customary international law. They would be forced into observing these provisions just to be regarded by other countries as a responsible, law-abiding member of the international community. As yet, of course, customary international law has not been established in investment treaties. They cannot be regarded as codifying norms that would be binding even if there were no treaty. But that is the direction DFAT wants to take us in, and the ASIS–CIA operation to destroy Chilean democracy had the same objective.
JH: Can you say more on Investor Rights. For instance, Australia owns the second largest lithium supplier in the world. This just in time for the EV revolution. China would love that opportunity. But I’ve read recently that the US has just offered to “buy out” a major supplier in Perth. Could Australia get caught up on a slippery banana and fall prey to foreign predators, like Chile did?
CF: On lithium and other critical minerals: in 2013, Geoscience Australia conducted a study of ‘Critical commodities for a high-tech world’. It found that Australia was rich in antimony, beryllium, bismuth, chromium, cobalt, copper, graphite, helium, indium, lithium, manganese, molybdenum, nickel, niobium, platinum-group elements, rare-earth elements, tantalum, thorium, tin, titanium, tungsten and zirconium. We could establish a nationally owned company that exercised ownership and control of strategically important minerals. We would then be in a position to increase domestic innovation and support higher value-added sectors, such as high-technology research and development, advanced manufacturing, and energy efficiency.
Instead, Australia has established a Critical Minerals Facilitation Office, which involves creating a benign environment for private investors to carve up our critical minerals. The business press reports approvingly that ‘the Aussies come to Europe’s rare-earth rescue… When the EU goes looking for supplier countries’ for critical minerals to feed its manufacturing, ‘several sets of ears around the world prick up at this, but few as eagerly as those in Canberra’. (Alan Beattie, ‘The EU Plan to Live in a Raw Materials World’, Financial Times, 26 November 2020.)
You could say the same thing about Australia’s Defence and Foreign Affairs officials.
