University of Liverpool mitigates national security risk in establishing energy research centre with Chinese state-controlled company
The University of Liverpool has received an Order from the Cabinet Office setting out guidelines that it must follow in establishing a research centre with a company controlled by the Chinese state.
This development shows the continuing importance of the National Security and Investment Act 2021 (NSIA) to UK universities. The University of Manchester received the first ever Order under NSIA nearly two years ago. The Liverpool Order can be found here.
Pinggao Group Limited is an indirect subsidiary of the State Grid Corporation, which supplies electricity to over a billion Chinese people and has the status of a governmental ministry. Pinggao specialises in building switchgear for ultra-high voltage electricity transmission. The Institute, situated in Liverpool (the 'Pinggao-Liverpool European Institute of Advanced Energy Technology'), will focus on:
- Renewable energy
- Power switching technology
- Reduction of greenhouse gas emissions from the grid
- Electrical and thermal energy storage technology
The Cabinet Office found that the arrangements shared (or would share) sensitive technology with Pinggao which posed a risk to our national security, as electricity transmission is listed as a component of the sensitive 'Energy' sector in the NSIA Regulations.
The Cabinet Office, however, appeared more concerned with the 'co-location' risk of unvetted visitors accessing the University's resources than with the risk of its transferring background IP to the collaborator (perhaps because Pinggao's IP in this area is superior). The guidelines modify access to the "wider research and intellectual property that is developed and held by the University of Liverpool outside of the proposed Institute", such as by establishing an 'Insider Threat Stakeholder Group'.
Liverpool is likely to have made a voluntary notification under NSIA to the Cabinet Office, and in doing so, would have consulted the Government's helpful guidance for academia (see example 6 - a UK research organisation partners with a UK-based research centre owned by a foreign research organisation, conducting research in one of the 17 sensitive sectors). Export controls may not have been triggered because there was no transfer of listed technology abroad, the Institute being located in the United Kingdom.
The Order demonstrates the increasing awareness among university administrators of the NSIA's scope, assisted by helpful government guidance, access to the Research Collaboration Advice Team, and the Trusted Research initiative of the Centre for the Protection of National Infrastructure. Universities are doing their part to strike a balance between: (a) the benefits of unfettered scientific research collaboration with international partners; and (b) the risks that technology transfer can pose to our national security.