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Huawei Staff Left in Tears Following GCSB Decision, Boss Says


The GCSB's decision to exclude Huawei from rolling out 5G in New Zealand was political "fear mongering", the Chinese company's New Zealand boss says.

Speaking at the China New Zealand summit in Auckland on Monday morning Huawei New Zealand deputy chief executive Andrew Bowater spoke frankly about the impact of the Government Communications Security Bureau's (GCSB) decision to block Huawei from rolling out 5G mobile networking technology in New Zealand due to non-specified concerns about national security.

He said the decision damaged the company's brand and left many of its 150 New Zealand staff in tears.

Huawei New Zealand deputy managing director Andrew Bowater says its supplied technology to the Government in the past with no issues.

"We were blind sided by what happened. We think this could have been handled a lot better," Bowater said.

"Our name and brand has been damaged and put through the paces."

Huawei is a Chinese cooperative started in 1987 in Shenzen, China. It operates in 178 countries, has 32 commercial 5G contracts signed globally and employs 180,000 staff.

It's had an office in New Zealand since 2005.

In November the GCSB blocked it from providing Spark with 5G technology, for a project it was rolling out on Auckland's waterfront and CBD for the America's Cup in July 2020.

Huawei had revenue of $108 billion last year.

Bowater said he only found out about the GCSB's decision moments before Spark announced it to the New Zealand stock market.

He said Huawei had been put under a great deal of scrutiny by the UK's equivalent of the GCSB and it found there was nothing to suggest that its technology would lead to a data security breach.

"We've opened up everything we do and if there was a smoking gun there they would have found it and they didn't.

"We would argue that a blanket ban on one company is going to do very little to prevent New Zealand from attacks."

He said there had been "a lot of friction not much facts" in the Huawei 5G conversation.

"It's really important we don't let politics trump common sense."

GCSB director general Andrew Hampton said when telcos were selecting vendors, such as Spark selecting Huawei, they were subject to compliance with the Telecommunications Interception Capability and Security Act (TICSA).

The GCSB was responsible for administering the network security provisions of TICSA. 

"We assess proposals from network operators to identify potential significant risk.  This process uses a framework which is agnostic of supplier and the country of origin for the equipment proposed to be used," Hampton said.

"GCSB uses information, including classified intelligence, from a wide range of sources in making our assessment of network security risk.

"While we have access to information from Five Eyes partners, and other sources, the decisions we make are independent, in accordance with New Zealand law, and based on our own assessment."

5G introduced significant changes to the traditional network model, he said.

In a 5G network, some of the sensitive functions were distributed out to the network "edge". In the 5G context a reference to the "core" of a network may now include equipment at the edge of the network providing sensitive core functions. 

"This makes it much more difficult to isolate sensitive parts of the network."

The GCSB decision was followed by a series of China-related events which suggested that the relationship between New Zealand and its largest trading partner had deteriorated as a direct result of Huawei's setback.

Australia and the United States have both banned Huawei from providing technology for their 5G projects and it has been suggested that New Zealand, as part of the Five Eyes club, was expected to follow suit.

Prime Minister Jacinda Ardern in the past has stressed that the New Zealand Government was not discriminating against Huawei.

Ardern opened Monday's China summit as the key note speaker and not long after Bowater accused the Government of making what he said appeared to be a geo-political decision.

"There has never been any evidence presented against us in any market around the world," Bowater said.

"We've continued to open ourselves up and we've told government and regulators that we're willing to continue to do that."

Bowater said he had asked to speak with ministers, including the GCSB Minister Andrew Little, about the decision but his request had not been accepted.

"We're confident that we could mitigate any risks that were potentially raised."

The GCSB left it open for Spark to mitigate risks it identified and the ball is now in Spark's court as to whether it forges ahead with Huawei as a partner or selects another technology provider.

Hampton said the UK Huawei Cyber Security Evaluation Centre Oversight Board's 2019 annual report indicated significant technical issues in Huawei's engineering processes.

"The report restates comments from earlier documents that the oversight board can provide only limited assurance that the long term security risks can be managed in the Huawei equipment currently deployed in the UK," Hampton said.

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