A controversial decision by former defence minister Peter Dutton to approve a billion-dollar purchase of reconnaissance drones also used by Russia and China will be "carefully" reviewed by the Albanese government, which has flagged it could eventually be scrapped.
Schiebel, the Austrian company selected for the sole-source contract, has also been accused by human rights groups of supplying its unmanned aerial vehicles (UAVs) to Myanmar in an apparent breach of EU sanctions.
Australia's military already uses the S-100 Camcopter technology, with the latest order for a Maritime Tactical Unmanned Air System to provide "intelligence, reconnaissance and targeting" on Navy's Arafura-class offshore patrol boats and Anzac-class frigates.
The unarmed Austrian helicopter drones were hand-picked by the Morrison government for Project SEA129 Phase 5, just days before the caretaker period for this year's election, and after it ditched a competitive evaluation process that included rival American and British bids.
US defence giant Raytheon has been appointed as the "system integrator" for Project SEA129 Phase 5, with Defence insisting the S-100 Camcopter system is in use internationally.
"Defence has robust processes to ensure any platforms introduced into service do not create vulnerabilities," a Defence department spokesperson told the ABC.
"In the case of the S-100, working with Raytheon Australia as the Prime System Integrator, all relevant systems would be scrutinised and approved to ensure the appropriate level of protection is in place."
Details of the Defence Department's deal with Schiebel and Raytheon are tightly held, but the total contract is believed to be valued at more than $1 billion.
In recent years the S-100 Camcopters have been purchased by China's military for use on the PLA-Navy's guided missile destroyers, and have been under licence by Russia for civilian use.
A spokesperson for Defence Industry Minister Pat Conroy told the ABC the federal government had "no plans" to immediately revisit Mr Dutton's initial decision, but had flagged the program could be cut under a broader defence review.
"This process has a long way to run, and subsequent decisions by the government will be carefully considered," they said.
"The Defence Strategic Review will examine force structure, posture and preparedness and investment priorities, to ensure Defence has the right capabilities to meet Australia's strategic needs."
Concerns over Schiebel's links to Myanmar's military
Earlier this year human rights group campaigners claimed Schiebel Corporation had exported parts and training models for S-100 Camcopter drones to Myanmar's military junta via Russia, in an apparent breach of EU sanctions against the Asian nation.
According to the Justice for Myanmar group, Schiebel items were sent to Myanmar via the company's Russian partner OAO Gorzont, which manufactures Camcopter S-100s under licence.
Federal independent MP Zoe Daniel, an outspoken critic of Myanmar's dictatorship, said the Schiebel drone deal with Australia highlighted the need for open and transparent processes for defence contracts.
"The Myanmar junta is a brutal regime that subjects the Myanmar people to abject repression, violence and in some cases torture — and is holding an Australian in jail for political reasons," she said.
"These UAVs or drones are used for surveillance and reconnaissance. It's likely they are being used against civilians to monitor their activities and to support military crackdowns on democratic activism.
"While Schiebel has justified its interactions with Myanmar, and I believe since cut ties with the Russian partner involved, this whole murky deal proves one thing — that open tenders should be the norm for defence purchases. To stick with the contract without transparency, sits uncomfortably."
Schiebel has in the past strenuously denied supplying UAV equipment to Myanmar's military in breach of international sanctions, but the company is yet to respond to questions from the ABC about its Australian contract.
A spokesperson for Raytheon Australia referred all questions about Project SEA129 Phase 5 to the Department of Defence.
