State owned companies must act in the national interest

In the wake of the foolish decision of Air New Zealand to operate a charter flight to ferry Australian troops on their way to the war in Iraq, Fran O'Sullivan has questioned whether a publicly listed company can be expected to uphold 'national interest' considerations.

Given the status of Air New Zealand as 'national flag carrier' the actions of the airline are more likely to reflect on New Zealand than other companies. Aviation can be a boom and bust business, but it is in New Zealand's interest to ensure we always have an airline. While I do not want to see any State Owned Enterprises (SOEs) sold, it could be said that there are stronger reasons for turning Air New Zealand into an SOE, than would be the case for many existing SOEs.

The Companies Act requires directors to act in the interests of all shareholders, not just the majority owner. In the case of Air New Zealand, some would argue that, in effect, the airline has been acting more in the interests of its minority shareholders for some time. If the Government is unable to ensure that the actions of entities that it owns do no contradict with public policy objectives, the value of public ownership is diluted.

In fact the company board have been diluting the Government's shareholding for some time, by issuing more shares to be bought up by private owners on the stock exchange. The proportion of Government ownership has dropped by 82% in October 2001 to 76% now. This is nothing but privatisation by stealth.

The current issues surrounding Air New Zealand are also relevant to more open privatisation threats. Since 2005 the National party have made noises about selling partial stakes in state assets such as Solid Energy. Under such a policy it is likely that some SOEs would be turned into companies with a similar structure to Air New Zealand. The current situation with Air New Zealand, where the Companies Act places restrictions on its ability to act in the national interest is a very good demonstration of why partial privatisation is a really dumb policy.

Of course the Nats may well have designed the policy to fail in this way, in an attempt to create a situation where they can push the case for full privatisation. Its a policy that could be compared to a Trojan horse - made of wood and full of borer.

The privatisation of taxation

Given the disgraceful way in which Air New Zealand have treated their workforce this year it was with some surprise I found myself agreeing with their description of the way airports set their charges.

"A privately owned unconstrained monopoly with the statutory right to set fees as they see fit is tantamount to the privatisation of taxation."

I would like to think this is an indictment of how privatisation of strategic state assets is contrary to the long held constitutional principle that taxes should only, and can only, be levied by Parliament, but I don't think so. Sadly, I don't think they understood the full significance of what they said.

While the fuselage of the planes may be round, it is a long bow to make any comparison with a Roundhead.

Privatisation of essential services such as electricity and water are also examples of the privatisation of taxation, whether they be in private ownership or operating as State Owned Enterprises. Why are there no calls for Contact Energy to give tax cuts?

Some would argue the Reserve Bank's so called 'independent' power to raise the Official Cash Rate has a similar function to a tax. Earlier this year, Treasury and the Reserve Bank looked at economic stabilisation (read anti-inflation) measures they could use as alternatives to raising the Official Cash Rate. Interestingly, one of the reasons they cautioned against the introduction of a variable levy on mortgages was the real constitutional issues raised. These issues were also raised with the head of Charles I in 1649. Should a mortgage levy be increased by a Reserve Bank without recourse to Parliament? What say the Finance Minister implemented the levy on advice of the Reserve Bank? But this only shows the distinction between monetary and fiscal policy is a monetarist illusion. For me, the debate over the mortgage levy showed there is no such thing as an 'independent' Reserve Bank - it is an attempting to give over control of our economy to an undemocratic institution.

But back to Air New Zealand.

Some would argue their description of the airport companies could easily apply to Air New Zealand itself may times in its history. There have been many occasions where Air New Zealand and Qantas have tried to merge, only to be told there is too much danger they could become an privately owned unconstrained monopoly (merger plans usually involve privatisation). A recent code sharing arrangement with Qantas failed after concerns were raised by the Australian Competition and Consumer Commission.

If Air New Zealand were really worried about the 'privatisation of taxation' they would be calling for the renationalisation of the airport companies. This would allow airport charges to be treated as an economic development issue concerning the operation of an essential service. This could also assist climate change policy as more fuel efficient planes could be charged less.

Air New Zealand says airlines and airports should have the ability to negotiate on a level playing field, and call in an expert to only arbitrate if they could not reach agreement. I look forward to Air New Zealand applying this same principle when they cannot reach agreement with their workers and their representatives.

The Labour-led government try and pretend they do not own Air New Zealand. But they do - and they fail to take responsibility for the disgraceful industrial tactics of their own airline. Perhaps Michael Cullen thinks this will constrain inflation. Even worse, they allow the board of Air New Zealand to issue more shares - therefore diluting the shareholding of the Government. Air New Zealand's plans to contract out airline services also amount to privatision. So its privatisation by stealth under Labour - if they did not support the actions of Air New Zealand they would have fired the company board by now.

PS: I am flying Qantas to Christchurch tomorrow. While I would normally support a New Zealand owned company I detest the way Air New Zealand have treated their workforce under the leadership of Rob Fife. While their marketing department would like me to be thinking about 'amazing journeys' all I can think of is the chilling call of 'contracting out'.

Support NZ Post workers

The Engineering Printing and Manufacturing Union (EPMU) have launched a campaign to help NZ Post workers gain a 5% pay rise this year.

"In less than a decade NZ Post has grown 500%, from a four hundred million dollar business to a two-and-a-half billion dollar company. And a lot of that is due to EPMU members at NZ Post: their loyalty and hard work has ensured the company earns good profits and has a great reputation."

As a loyal Kiwibank customer I say hear hear!

NZ Post made a profit of $130 million last year, and has made a profit every year since 1987. Yet over that same timespan pay packets have only kept up with the cost of living, and the latest offer from NZ Post is yet more of the same.

NZ Post likes to boast the company strives for "common goals and mutual gain"” and "“being a great New Zealand company and meeting our social obligations"”, so its about time NZ Post put its money where its mouth is, and offered their workers more than a Penny Black.

Click on the Take Action link and send a message to SOE Minister Trevor Mallard, NZ Post management and a message of support to NZ Post workers. Help STAMP out poor wages!

It is great to see the union movement getting into the digital age with designated websites to support their campaigns. It also provides a great avenue to educate workers about legislation relevant to their job. While the EPMU do not make mention of the State Owned Enterprises (SOE) Act 1986 on their campaign website, in my humble opinion it is highly relevant.

While the Act defines the primary objective of SOEs is to "operate as a successful business" the Act also requires NZ Post to be a "good employer" and exhibit a sense of social responsibility. At the time Richard Prebble introduced this deeply flawed piece of legislation, Ministers considered the requirement to be a "good employer" a 'quite harmless clause' that unions would agree with*. While this might not be much, this demonstrates that SOEs have greater responsibilities than 'just another private business', so the rant from the right about SOEs being run according to some purist business model should be ignored.

It is high time the Government and State Sector employers were challenged to make the "good employer" clause mean something. I would also like to see the union movement calling for such clauses to be strengthened, as this would help build solidarity right across the state sector, from NZ Post, to Solid Energy and Air New Zealand.

It is also worth mentioning that the SOE Act lacks any specific requirement for SOEs to exhibit a sense of environmental responsibility - this now looks like a glaring omission.

* Jane Kelsey, "Rolling Back the State", p 365.

PS: I realise Air New Zealand is not strictly an SOE, but it should be!

Two protest camps, Waihopai and Happy Valley

Apologies for the lack of posts of late, I have been out of town quite a bit, attending two protest camps in as many weeks. On 20th of January I travelled north to join the call of the Anti-Bases Campaign to close the Waihopai spy base, and last weekend I crossed the Southern Alps to join the occupation of the proposed open cast coal mine site at Happy Valley on the West Coast.

An 'indefinite' occupation was launched following a High Court decision last month to reject Forest and Bird's appeal against an Environment Court ruling in favour of mining. The mine threatens to destroy a completely unique tussock wetland that is a home to 13 endangered species, including the great spotted kiwi and the giant carnivorous snail powelliphanta patrickensis. Rivers will be polluted by acid mine drainage and twelve million tonnes of carbon dioxide will be released into the atmosphere.

The occupation of Happy Valley has been welcomed by Greenpeace.

Ongoing reports of the indefinite occupation can be read on the Save Happy Valley blog; "The beauty and expanse of Happy Valley is poignantly contrasted with the scarred and devastated landscape that is the Stockton open cast coal mine located not far from Happy Valley."

We travelled by van over to Westport on Friday and undertook the four hour tramp into Happy Valley the next day. It actually ended up taking us over six hours to get to our campsite as the weather was very hot and dry, making a long half-time break at a swimming hole absolutely essential. It was easily the best swimming hole I have ever been to, complete with many deep pools and waterfalls. One could get a great adrenalin rush by leaping from the tall banks of the river or the top of the waterfall into the pool below. It was completely safe, despite it being a long way down.

After a brilliant swim I was aghast to hear the brilliant swimming hole is also on Solid Energy's 'hit list' for mining once they have finished digging up Happy Valley. It is also possible the swimming hole will be polluted by the proposed Cypress Mine if the development in Happy Valley goes ahead.

Despite it being a very hot day, we had to be careful where we filled our water bottles, as some of the streams in the area are already polluted by acid runoff from the existing Stockton Open Cast mine. The water from the pristine streams tastes great.

It was really inspiring to see 75 people join our camp on the Saturday night. There was a great sense of community, even though people were tired from a long tramp saddled with heavy packs. Actions like this take a lot of commitment and sunscreen.

Solid Energy have continued to harass and attempt to intimidate protestors, even though the 'occupation' is occurring on public land. This has included attempting to deliver dodgy 'preemptive' trespass notices and continuing to film protestors against their wishes. Save Happy Valley Coalition spokesperson Frances Mountier said she believes security guards filmed the protestors as "a means to intimidate and quell any public opposition to what they (Solid Energy) are doing".

A spokesperson for Solid Energy Vicki Blyth disputes they are adopting intimidatory tactics, and claims they asked security guards to film protestors to ensure they had a record of any exchanges between the security people and protestors, "So that there can be no question about who said what to whom."

Well I happen to know personally this excuse is simply a croc of shit. If this was so, then Solid Energy would not have attempted to instigate 'exchanges' (under false pretences) with each of those taking part, by asking people if they would like to read a statement from Solid Energy and then shoving a camera in their face. But that is exactly what they attempted to do to me while I was standing on a Christchurch public footpath and had shown no interest in being on Solid Energy's land. Passively filming while security guards do they job is one thing, attempting to capture the faces of all your perceived opponents on camera is quite another.

We fell asleep listening to the calls of kiwi and other wildlife and hoped they could keep their natural home.

Categories: Environment, Mining, New Zealand, Politics, Happy Valley

Solid Energy, endangered snails and the corporate paparazzi

On Monday I joined around 25 others in a protest outside Solid Energy's Christchurch office calling on the Government and Solid Energy to halt plans to mine Happy Valley on the West Coast, a development that will destroy the habitat of an endangered giant land snail Powelliphanta ‘Augustus’. Happy Valley is also home for a large population of spotted kiwi.

I also went along to express my disgust at the intimidatory tactics of Solid Energy towards opponents of the development, tactics that have included using a security company to take uninvited video footage of a tramping group legally on Department of Conservation land.

I got to the action around 15 minutes late, and began to stand on the grass verge of the footpath and greet a few people I knew. I was barely off the footpath, and at least a good three metres away from the boundary of Solid Energy's headquarters, a boundary I had shown any no interest in crossing, and had only began to talk to a couple of people when a security guard approached.

"Would you like to read a statement from Solid Energy?"

I turned around to face the security guard, only to find another security guard standing behind him with a video camera aimed at my face. I immediately told them I had no wish to be filmed and turned my back to the guards. If Solid Energy had handed out a statement outlining their point of view and politely informing people where boundary was, this would have been a reasonable response to the action, but no, Solid Energy decided to be duplicitous and unreasonable.

Asking people to 'read' their statement was a pure pretence to capture people on film. Any foot powered member of the public who showed any interest in what was going on was subjected to the same treatment. Intimidation appeared to be the main aim of the game.

I informed the Press photographer what was happening and he took a photo as they approached someone else.

This is not the first time. Around a month ago Save Happy Valley campaigners led a tramping group of 33, included children and overseas visitors on an education trip to see the valley. Around dinner time, Gibson security burst into their campsite and filmed the group against their express wishes.

Who are they trying to be? The corporate paparazzi?

Solid Energy are attempting to push the mining development ahead with all possible speed. While Solid Energy previously accepted it required ministerial consent to move the snails by hand, the company sought to make use of what it saw as a loophole in the Wildlife Act, and move the snails with a digger, without any such consent. Thankfully the Royal Forest and Bird Protection Society successfully challenged Solid Energy's dodgy legal interpretation in the High Court. On Friday the High Court called a spade a spade, and told Solid Energy they needed consent to move the snails, no matter how they went about moving them.

This is hardly the sort of behaviour one would expect from a State Owned Enterprise, so I wondered what the State Owned Enterprise (SOE) Act would have to say about Solid Energy's antics. While the Act defines the primary objective of SOEs is to "operate as a sucessful business" the Act also requires Solid Energy to be a "good employer" and be,
"An organisation that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates and by endeavouring to accommodate or encourage these when able to do so." (Section 4(1)(c))

How on earth is attempting to take advantage of a loophole in the Wildlife Act, in order to destroy the only remaining habitat of a endangered species an action of a socially responsible SOE? A parliamentary question would be useful here - it would be very interesting to get the view of the minister on the actions of Solid Energy in regards to their responsibilities under the SOE Act.

How on earth are Solid Energy demonstrating "regard for the interests of the community" or being at all accommodating to the community by hiring bullish security guards to intimidate members of the public with video cameras?

The protest was good natured and made its point. We got a lot of toots from passing motorists, and the Christmas theme made people smile. If Solid Energy regard elves doing cartwheels on a public footpath to be a threat to their interests, then I suspect they are going to have a very paranoid Christmas.