Foreign involvement in the critical national infrastructure : the implications for national security

Certain telecommunications networks are a critical element of the UK's infrastructure, "the loss or compromise of which would have a major, detrimental impact on the availability or integrity of essential services, leading to sever economic or social consequences" In the UK the Critical National Infrastructure (CNI) is now largely in the hands of private enterprises.

There is potentially a conflict between the commercial imperative and national security.

In 2003 BT, which is responsible for large parts of the UK's telecommunications structure, embarked on a major GBP10bn rationalisation and upgrade project (the 21st Century Network). A number of companies were selected to supply the various equipment required, one of which was Huawei, a Chinese telecommunications company.

A contract for supply of transmission and access equipment, including routers, was signed in 2005, with this being deployed across the network from January 2007.

Most of the concerns surrounding Huawei relate to its perceived links to the Chinese State.

Huawei denies direct links with the Chinese Government or military, though the Committee notes that such links are considered normal in China. Huawei has also invested in the Cyber Security Evaluation Centre (the Cell), and the Committee is concerned that a Hauwei-run Cell is responsible for providing assurance about Huawei products.

The National Security Adviser should review the effectiveness of the Cell as a matter of urgency and GCHQ must have greater oversight.

The risk to the CNI must be managed properly: alerts for foreign investment in CNI; risk assessment; ministers must be informed.