Address to the 2026 Shangri-La Dialogue: Plenary Session Three

Thank you to the IISS for convening this Dialogue, and for the opportunity to speak on cooperative maritime security in the Indo-Pacific. This is the fifth Shangri-La Dialogue I have attended as Australia’s Defence Minister — and in that time the conversations have grown more urgent. The questions are harder. And the stakes have grown considerably higher.

When I addressed this forum for the first time in 2022, I spoke about a world in which the rules-based international order was under stress, and in which a military build-up of historic proportions was reshaping the strategic landscape. I argued then that Australia’s approach to the world — to China, to our region, to our alliances — would be anchored in a resolve to safeguard our national interest and support regional security based on rules. And this approach would be sober, consistent, without drama.

Since then our Government has released the 2023 Defence Strategic Review, the 2024 National Defence Strategy, and in April this year the 2026 National Defence Strategy. There has been a consistency in each of these documents. There has been a sober avoidance of hyperbole. There has been a steady trend in observing a deteriorating strategic environment and increasingly acute strategic contest. And each of these documents has concluded that Australia faces its most complex and threatening strategic landscape since the end of the Second World War. 

And within our region, the area where the strategic environment is most complex, where the strategic contest is greatest, is the maritime domain. 

The seabed has become a major field of contest.

Over the past eighteen months, we have witnessed a series of attacks against subsea critical infrastructure at a scale and frequency that is historically unprecedented. This is not speculation. This is a documented pattern of behaviour. And we must reckon with it honestly.

In November 2024, a vessel severed two fibre optic cables in the Baltic Sea — between Germany and Finland, and between Sweden and Lithuania. Weeks later, Finnish coastguards seized a tanker, the Eagle S, that had dragged its anchor for nearly a hundred kilometres across the floor of the Gulf of Finland, severing a power connector between Finland and Estonia and damaging four separate telecommunications lines. 

Earlier this year, the Baltic was in a state of heightened alert again after yet another subsea cable was cut — this time a fibre-optic line connecting Helsinki and Tallinn, detected on the last day of 2025. Finland’s President Stubb spoke of national mobilisation. NATO launched a dedicated operation, Baltic Sentry, to monitor and protect critical seabed infrastructure.

It is striking that several cables have been severed across the Baltic and the Taiwan Strait since November 2024. Now, maybe these were accidents. But even if they were, it highlights the vulnerability of this crucial part of the globe’s infrastructure. If they were intentional, we are left to wonder: are countries testing our response times, testing our attribution thresholds and testing our political will to respond?

In the Indo-Pacific, Taiwan has now reported five separate cases of seabed cable damage in 2025 — compared with three in 2024 and three in 2023. In January 2025, a cargo vessel was found near a severed international cable northeast of Taipei. In February, a Togolese-flagged vessel severed the cable connecting Taiwan’s main island to the Penghu Islands. 

Now all of this matters to Australia because we are among the most exposed nations in the world to this threat.

Around ninety-nine percent of Australia’s internet traffic flows through just fifteen subsea cables. Consider that number for a moment. Fifteen cables — fifteen physical assets on the ocean floor — carry essentially the entirety of our international digital connectivity. Our financial systems, our health systems, our communications, our intelligence partnerships, our ability to operate as a modern economy and a functioning state: all of it is critically dependent on infrastructure that is exposed, that cannot move and — as we have now seen demonstrated in the Baltic — can be cut with an anchor in the middle of the night.

Australia is not alone in this exposure. Pacific Island nations are, in many cases, served by a single cable. Maritime Southeast Asia — the commercial and digital heartland of one of the world’s most dynamic economic regions — is threaded through with this infrastructure. The relatively recent proliferation of subsea cables across the Indo-Pacific has been one of the great enablers of the region’s economic rise, connecting communities to cloud services, to global markets, to the digital economy. These cables are, in the most literal sense, the arteries of modern civilisation. 

And we have been slow — collectively slow — to recognise them as the strategic targets they have become.

Contests on the surface of the sea are also reshaping the maritime domain.

Last year, the twin drivers of Iran’s strategy of proxy warfare and the ongoing Yemeni civil war saw militia attacks on strategic chokepoints in the Red Sea, disrupting the principal maritime corridor connecting Europe, the Middle East, and the Indo-Pacific. The costs were enormous — rerouting of shipping, higher insurance premiums, extended transit times — a global economic hit delivered through the control of a geographic bottleneck. 

This year, the costs have escalated even further as the conflict with Iran has seen an effective closure of the Strait of Hormuz.

In the South China Sea, the region continues to contend with extensive militarisation, the construction of artificial islands, and increasingly assertive naval and coastguard operations.  Almost ten years have passed since an Arbitral Tribunal, constituted under UNCLOS, made a unanimous, clear, and binding ruling in the South China Sea arbitration between the Philippines and China. Australia has consistently joined international calls for compliance with this decision, and for disputes to be resolved peacefully in accordance with international law.

And the shadow fleet problem — vessels operating in the grey zone between commercial shipping and instruments of state coercion — extends well beyond the vulnerability of subsea cables. These same networks of unregistered, flag-of-convenience vessels are vectors for sanctions evasion, for the transport of energy that sustains Russia’s war in Europe, for illegal fishing, for human and drug trafficking. 

According to Australia’s own fisheries agency, a third of the total fish catch in Southeast Asia and the Pacific is illegal. The fisheries of this region support the livelihoods of nearly two hundred million people. Their systematic plunder is not just an environmental problem. It is a security problem. And it is being conducted substantially through the same opaque maritime methods of operation that enable grey zone coercion.

What Australia concludes from all of this, is that it is now abundantly clear that the post-Cold War era is over, and with it the optimistic assumption that political convergence and economic interdependence offsets the need for robust government spending on defence and security. States that do not invest in credible defence capability will be more exposed to coercion and face greater constraints on their sovereignty. 

And so for Australia’s part, the Australian Defence Force is now undergoing a hard power transformation which enables our country to deter force projection against the continent. We are also increasing our military capability to work with our partners in South East Asia, the North East Indian Ocean and the Pacific to prevent conflict and preserve our region’s security and prosperity.

For this reason, Australia has made a deliberate judgement to increase the weight of our defence posture in the maritime domain. More than forty percent of our defence budget under the 2026 NDS is now directed to maritime capabilities. We are engaging in a generational recapitalisation of the Royal Australian Navy — nuclear-powered submarines under AUKUS, three Hobart class air warfare destroyers, six Hunter class frigates, eleven new general purpose frigates, and six large optionally crewed surface vessels.

We are also investing heavily in the enabling capabilities that maritime defence in the grey zone requires: satellite-based surveillance, autonomous undersea systems, enhanced maritime domain awareness, and the data and AI capabilities that allow us to track and attribute behaviour that is designed to evade attribution.

For a three-ocean nation, this is a strategic necessity. Ninety-eight percent of Australia’s traded goods passes through Australian ports. Ninety percent of our fuel is imported. Our economic sovereignty, in the most basic sense, is a maritime proposition. 

And the free and open passage of goods, energy, and data across the seas is not just Australia’s economic lifeblood — it is the economic lifeblood of this entire region.

And it is precisely for this reason that neither Australia – nor indeed any country – can meet this strategic moment by acting alone. For this is a collective challenge, and it demands a collective response.

The Indo-Pacific needs a step change in regional maritime domain awareness to meet the threat of grey zone sabotage to critical maritime infrastructure. The technology exists: satellite-based monitoring, AI-enabled vessel tracking, blockchain certification systems that make commercial maritime activity transparent and traceable. These are not aspirational tools. They are available today. What is required is the political will to share information, to pool surveillance assets, and to establish the regional fusion centres that would allow us to connect the dots before the next cable is cut, rather than after.

NATO’s Baltic Sentry operation offers a model — not for the Indo-Pacific to mirror, but from which to learn. Closer to home, the Malacca Straits Patrol between Malaysia, Singapore, Indonesia, and Thailand is an example of regional states acting together, in a framework consistent with ASEAN centrality, to address a shared maritime security challenge. What that model achieved on piracy, we can also achieve on grey zone infrastructure threats.

We must close the legal and institutional gaps that make attribution and accountability so difficult. The doctrine of plausible deniability works precisely because our legal frameworks have not kept pace with the tactics. So we need stronger national legislation mandating vessel registration and monitoring regardless of the flag state. We need enhanced enforcement of port state measures. 

We need financial and criminal penalties that are a genuine deterrent. And we need regional mechanisms — building on UNCLOS, the Port State Measures Agreement, and the work of Regional Fisheries Management Organisations — that support accountability at scale.

Critically, we need the engagement of the great powers on this challenge.

Using military might or coercion to force change undermines any viable international order, be that in land borders in Europe, maritime boundaries in Asia or elsewhere. And also in the subsea domain, which is exposed to a new vector of coercion that undermines the security of sovereign states.

I value and appreciate the hours of dialogue I have had with my Chinese counterparts. The stabilisation of the Australia-China relationship over the past four years has been genuinely important, and both China and Australia have worked hard to maintain it. China is our largest trading partner. China’s economic success is connected to that of our region. Australia wants a stable and productive relationship with China, and we believe that is achievable.

And China has a real opportunity. A commitment to transparency around its maritime operations would be a meaningful contribution to the regional stability upon which China’s own prosperity depends. And a commitment to international law as the basis for managing and resolving maritime disputes would do the same.

Because in truth, our region’s stability is under pressure. Existing patterns of grey zone activity are not consistent with a peaceful and stable regional order. 

In recent years, scepticism about the international rules-based order has grown louder. 

In my 2024 speech here, I noted that commentators had framed the strategic competition of our era in different ways — East versus West, North versus South, democracy versus autocracy — and that those frames tended to obscure more than clarify. 

At the centre of the competition is a more fundamental proposition: whether the international system will be governed by rules, applied universally, or by power, applied selectively.

That question matters most for the states that are not great powers. When the rules apply, smaller states have agency. When the rules yield to power, sovereignty becomes — as others have put it — the purview of the powerful. And no state in this room, whatever its size, is well served by that outcome.

The international rules-based order is imperfect. It was built by imperfect actors. It has been applied inconsistently. And it has sometimes been invoked by powerful states to protect their own prerogatives. Southeast Asia understands this better than most. 

But we are much better off with it than without it, and it has been to our region’s great benefit that the United States has chosen to invest in that order based on an enlightened conception of its own self-interest. The task before us — all of us, including the great powers — is the renovation of that order, not its dismemberment.

In the maritime domain, that renovation is urgent. The seabed is becoming a battlefield. The shadow fleet is becoming a weapon. The chokepoints through which our region’s prosperity flows are under a pressure they have not experienced in the modern era.

Australia is investing to meet that challenge. We are investing in our own capabilities, in our alliances, in our partnerships across the region. We are committed to the region’s security architecture and dialogue, so exemplified by the gathering this weekend. Because we understand that security in our region is indivisible — that what threatens our neighbours ultimately threatens each of us, and that what we can build together we cannot build alone.

The sea connects our great region. What we must all decide is whether that connection will be governed by the laws we have built together, or contested by the tactics of those who prefer the alternatives.

Australia’s answer is clear. Rules are essential. And operating by them is the pathway to regional peace, security and prosperity.

Thank you.

ENDS