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Huawei-built data centre a ‘failed investment,’ Papua New Guinea says – The Globe and Mail

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A surveillance camera is seen in front of a Huawei logo in Belgrade, Serbia on Aug. 11, 2020.

MARKO DJURICA/Reuters

A Huawei-built data centre in Papua New Guinea is a “failed investment,” that country’s government says, after a technical review found serious security vulnerabilities in what was designed to be an important piece of the country’s digital infrastructure.

Dated encryption technology and the placement of some devices in the centre meant that “data flows could be easily intercepted,” according to a review commissioned by Papua New Guinea’s National Cyber Security Centre and obtained by The Globe and Mail. The security centre receives funding from Australia’s Department of Foreign Affairs and Trade. Canberra was given a copy of the report, whose findings were first reported by the Australian Financial Review.

The report details numerous technical deficiencies in the National Data Centre, including firewall devices “with basic settings for defence”; the use of 3DES, a 1995-era encryption standard “considered openly broken since 2016”; and the installation of core switches outside firewalls, which means “remote access would not be detected.” The physical configuration of the data centre was different from the schematics for its design, and the differences made it more vulnerable to hacking.

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The data centre was financed by a US$53-million loan from the Export-Import Bank of China and designed by engineers from Huawei Technologies Co. Ltd. Its deficiencies have renewed questions about the trustworthiness of Huawei technology at a time when Ottawa and other Western capitals are mulling whether to allow equipment from the Chinese company in 5G networks.

“To some extent, we can conclude that it truly is a failed investment,” Timothy Masiu, Papua New Guinea’s Minister for Information and Communication Technology, said in a statement on Thursday. He suggested looking instead to cloud storage from companies like Amazon.comInc. and Microsoft Corp., before cautioning against geopolitical point-scoring over digital infrastructure. “Our national issues are our business, and must not be used to fit any other narrative,” he said.

Outside Papua New Guinea, however, the problems with the data centre add to concerns about the security of technology made by a company headquartered in China, where the law compels organizations and citizens to “support, assist and co-operate” with the country’s intelligence apparatus.

The United States, the U.K. and Australia have to varying degrees banned Huawei’s 5G technology.

Last year, the UK’s Huawei Cyber Security Evaluation Centre oversight board faulted Huawei more broadly for problems with “basic engineering competence and cyber security hygiene that give rise to vulnerabilities that are capable of being exploited by a range of actors.” In April, 2019, Ian Levy, the technical director of the National Cyber Security Centre in the U.K., told the BBC that “the security in Huawei is like nothing else – it’s engineering like it’s back in the year 2000 – it’s very, very shoddy.”

Huawei was also the main digital supplier to the Chinese-built African Union headquarters, where, for five years, data were transferred to servers in Shanghai, according to reports in Le Monde Afrique and The Financial Times. Officials have denied such problems existed, and Huawei has said that if any data leaked, it wasn’t from the company’s equipment.

Still, such problems point to “a relatively immature … security culture in the company,” said Christopher Parsons, a senior research associate at The Citizen Lab, which specializes in communications and security studies at the Munk School of Global Affairs and Public Policy.

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In Papua New Guinea, “some of the issues being raised are not particularly advanced problems to have identified and then remediated,” Mr. Parsons said. “The fact they weren’t is unfortunate, and speaks poorly of the security culture that Huawei has.”

Huawei did not offer an on-record response to detailed questions about the Papua New Guinea data centre from The Globe. It told the Australian Financial Review: “This project complies with appropriate industry standards and the requirements of the customer.”

Huawei has a deep foothold in Papua New Guinea. The company built 4G networks for the country, a high-speed broadband network, and a network of submarine cables to connect coastal settlements. At least one local community complained that excavators used to lay underwater cable broke reefs.

Huawei was also the contractor for a national identity project that includes an electronic identification (e-ID) system backed by a database. That database, service for which has occasionally been interrupted for days, is at the National Data Centre.

The company’s importance to Papua New Guinea means trouble with the data centre is “a very sensitive issue,” the Ministry of Information and Communication Technology said in a chat message.

In Beijing, foreign ministry spokesman Zhao Lijian said the “Chinese government always requires Chinese companies, in their overseas operations, to strictly follow international regulations.” But, he said, the Chinese government firmly opposes “some foreign media’s malicious discussions about the data centre.”

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In Papua New Guinea, security vulnerabilities have become less of a concern than disrepair. The data centre has a slow internet connection, and some of its components – including backup batteries and an e-mail server – are broken. Software licences have expired, and the report says local authorities do not have enough funds to properly maintain the centre.

As a result, it “is not currently used by a significant portion of the government of PNG,” the report found. “It is assessed that a full rebuild would need to occur to modernize the facility.”

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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