French Manufacturer Building Indian Submarines Suffers Major Data Leak

http://www.nytimes.com/2016/08/25/business/international/france-india-submarine-leak.html

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Detailed plans for stealth submarines built by a French military manufacturer for the Indian navy have been leaked, raising concerns over the company’s digital security just months after it signed a multibillion dollar deal to build submarines for Australia.

Officials in France and India were scrambling on Wednesday to assess the damage from the leak, with both countries opening investigations. It appears to be the latest example of a company’s critical internal information falling into the wrong hands, and it comes with the Indian navy scheduled to put the first of the submarines into service later this year.

In all, 22,400 pages detailing “the entire secret combat capability” of six Scorpène-class diesel-electric submarines being built for the Indian navy were leaked to The Australian, the newspaper reported on Wednesday, without identifying its source.

The publication said the leak from the French manufacturer DCNS included technical manuals and other sensitive information, including details of the submarines’ secret stealth technology, torpedo-launching systems and its many intelligence-gathering systems.

The data was reportedly taken from France in 2011 by a former French Navy officer, and it then made its way to a company in Southeast Asia, but it was unclear how widely the leaked data had been shared.

DCNS, a naval contractor that is majority owned by the French government, is building the submarines with a local partner in a Mumbai shipyard. It has already sold some versions of the submarine to Malaysia and Chile, and Brazil is to take delivery of several more in the coming years.

“It looks like a case of hacking,” Manohar Parrikar, the Indian defense minister, told reporters outside an event in New Delhi. The report is being investigated by military officials, his ministry said in a statement, adding that the source of the leak appeared to be “from overseas and not in India.”

The impact of the lost data, and particularly whether it would affect the Indian naval fleet’s capabilities, was not immediately clear.

“It’s troubling. It is a challenge, but we don’t have to assume that the adversary has everything,” Robbin F. Laird, a military and security analyst, said.

That the plans date to 2011 meant the data would be of limited use to India’s opponents, he said. “You could have grabbed the answers to the exam for five years ago, but the exam has changed since then.”

The DCNS leak seems to be the latest example of companies falling victim to corporate espionage, both to those trying to sell the data as well as to state actors.

In 2014, the United States Justice Department indicted five members of the Chinese People’s Liberation Army and charged them with hacking into the networks of Westinghouse Electric, United States Steel and other companies.

Repercussions of the leak could extend to Australia. In April, the country’s government chose DCNS for its biggest ever defense procurement deal.

That $38 billion program will see the French company help to design and build Australia’s new Shortfin Barracuda submarines. DCNS and its French partners beat out intense competition from military manufacturers in Germany and Japan for the contract.

Christopher Pyne, the Australian defense industry minister, said the leak “has no bearing” on his country’s submarine program.

DCNS said in a statement that it was aware of the reported leak, and added that it was being “thoroughly investigated by the proper French national authorities for defense security.” The French Defense Ministry did not immediately reply to requests for comment.

The Asia-Pacific region is on track to overtake Europe as the world’s second-largest submarine market, after the United States, according to Sravan Kumar Gorantala, an analyst at Strategic Defense Intelligence. It will expand to $11 billion in value by 2025, as China takes an increasingly assertive stance over island claims in the South China Sea, as well as naval expansion by India, Australia and South Korea.