oreign Control Watchdog CAMPAIGN AGAINST FOREIGN CONTROL OF AOTEAROA, PO BOX 2258 CHRISTCHURCH, NEW ZEALAND NUMBER 72 MARCH 1993 CONTENTS BLINDED BY BULLSHIT..............00+ RECOLONISATION FOR AOTEAROA/NZ? HEALTH CARE PRIVATISATION ..........6+ “THE AMERICAN DISEASE” - New Video Available COMALCO’S LITANY “THE GULLIVER FILE" UPDATE. - GATT/NAFTA & THE ENVIRONMENT Letters ASPEN INSTITUTE & BIG BUSINESS OKURU WATER EXPORTS - Greenies’ Trickledown, CAFCA SUBMISSION ON SOUTHPOWER . Southpower/Electsicorp/Maruia Update . ‘The Empire That Never Went Away .... ‘COURT DISMISSES PEOPLES CENTRE RAID CHARGES . OIC DECISIONS August to December 1992 decisions . Reviews “THE BIG CON” .... : “CONTROLLING INTERESTS" . THE CAR INDUSTRY - Is It Finally CKD? .. Spreading The Real Kiwi Disease ASIAN INVESTMENT - Some Facts From An Insider « Obituaries HART Stops - So Long and Thanks BRUCE McALPINE . INSTANT FEUDALISM - Just Add Peasants . THE REAL DRUG BARONS «0.2... 00000050005 PEACE, POWER & POLITICS - NZ After ANZUS Conference Membership of CAFCA is $15 per year. Enguries to the above address. The material in this issue may be reprinted provided the source is acknowledged. A copy would be appreciated. ISSN 21710896BLINDED BY BULLSHIT -Murray Horton (The "Republican invited Murray to write a cover story. This is the full version. We highly recommend the revamped “Republican” toour readers. All inguir- ies t0 Box 22 263, Otahuhu, Auckland 6). ‘There used to be apocryphal stories about American tourists who believed that they could drive to New Zealand via the Sydney Harbour Bridge (actually, not that apocryphal. I've met Yanks in my travels who believed that). This lamentable Northem Hemisphere ‘geographical ignorance must account for the belief that New Zealand is part of Australia, or at least, that our ‘economy is, “The market” (an appropriate name for collection of sheep and swine) offered that straightfaced explanation as to why New Zealand interest rates suddenly went up at the start of this year, despite the economy having less inflation than a used condom. Apparently, “foreign investors” had one of their peri- odie panic attacks regarding the Australian economy, and assuming New Zealand to be part of it, decided to get id of their Mickey Mouse Kiwi dollars as well. The end result? New Zealand homebuyers and homeown- cersendup paying more on their mortgage interest rates. A timely illustration of the costly and parasitic nature of this much vaunted foreign investment, particularly of the speculative money market variety. Foreign investment is proclaimed to be the panacea for the country's problems by both major parties, the Business Roundtable, and their ideological arselickers in the media (when the latter aren't bringing us the really vital news, such as Prince Charles” fear of being reincamated as a tampon). The need to make New Zealand “competitive” and “attractive” to foreign in- vestors is cited as the rationale for destroying the Welfare State, smashing unions, and throwing the economy wide open to any passerby fancying aquickie. Apparently it will create jobs, pay off the national debt, and, courtesy of an export-led economy, get us out of the Great Depression of the 90s. Plus give us cars, cellphones and videos. It’s the white man's cargo cult. Halleujah! Bullshit. Let's start with jobs. Unemployment regularly cited as the country’s most pressing problem. Even the media hacks pushing the current propaganda line that “things are getting better” always qualify themselves by saying that unemployment will be the Jast economic indicator to show any improvement, OK, butthat'sthe already depressed domesticeconomy. ‘What about this lifesaving foreign investment? ‘The “Listener” (21/11/92) ran a feature entitled “10 Ways 10 Beat Unemployment”. Number 1 was: “Ex- pand Exports” (and I'l eave the arguments against an export-led economy for another time). “..-Forestry is another export area that could grow. The number of trees ready to be felled should double by the beginning of the next century. For- estry Industry institute director Paul Quinn guesses these existing trees wall create another 2500 jobs. “But to get more jobs than that, Quinn says, the dustry will need new pulp and sawmills, Re- quired expenditure - about $3.5 billion. Thatis too ‘much to come solely from New Zealand investors. And because of attractive tax write-offs for for- estry investors in countries like China, Chile and Indonesia, investors are more likely to gothere than come here. If we want new plants and jobs, the government must modify depreciation schedules, he says. “The significant but capital-intensive forestry in- dustry is but a small part of the answer to finding 260,000 people jobs. At best it could obtain about five percent of them”, Forestry is a very good example of the fact that foreign investment will do SEA for employment. It is an industry that has undergone massive changes in owner- shipin the last few years, starting with Cyclone Richard, and continuing apace today. in late 1991, NZ forestry giant, Carter Holt Harvey, became American owned; and in carly 1992, the Government sold forestry rights tonearly 100,000 ha of State forests to the American company ITT Rayonier, for $366 million (they had been expected to fetch $900 million). ITT is now the largest overseas owner of New Zealand’s forests, with 8% of exotic plantations. Eventhe local industry giant, Fletcher Challenge, is no longer a New Zealand com- pany, with its foreign shareholding being at least 40% (25% is the legal definition of foreign ownership, inthe 1973 Overseas Investment Act) ‘And so where are the forestry jobs? Well, the Minister of Forestry, John Fallon (rhymes with Buffon) pro- claimed, inlate 1991. that forestry would create 350,000 jobs by 2020. (Thatsounded uncannily like the 410,000 Watchdog Page 2jobs predicted for Think Big in the early 80s by Bill Birch, Mark 1). But a 1992 study by the Forest Industries Council, the big players in the industry, conclucled! “Even the most optimistic outlook predicts crea tion of only about 12,500 new jobs by 2001 ‘These would be partially offset by jobreductions in other paris of the industry because of new technology...it urged against planting for “short term social results’ at the expense of ereating a ‘useful forest resource inthe long term..."¢°Press”, 72092), What the timber wolves are telling the Government here is simple: don’t use forestry for job creation schemes, it’s our resource for private {and overseas) profit. OK, but isn’t foreign investment going to solve “our” debt problem? Let's start by establishing whose debtit is we're being held responsible for. ‘The “Press” (25/6 92) rana very telling analysis of the total foreign debt, which stood at $62 billion as at March 31, 1992 Ge $18,000 for every man, woman, and child in the coun- uy): “The figures show the continued rise of private sector debi, comprising companies, financial insti- tutions, and producer boards... The private sector now holds 56.4% of the total debt, up from 41% in September 1989... The official Government sector now holds 32%, compared to 36% in 1989... Debt helel by SOEshas dropped sharply and now stands at 11.4% as against 22.4% 3 years ago. ‘This wasmainiy due tothe privatisation of SOF: I's very useful to realise that 56% of “our” debt is nothing whatsoever to do with the taxpayer, but results from the explosion of private debt incurred by New Zealand capitalists when Roger Douglas deregulated the overseas exchange market. When he came to office, foreign debt was $15 billion, I's also instructive to realise that foreign ownership of New Zealand companies is olficially regarded as a liabitity, not an asset. Why? Because their profits are repatriated to their overseas owners, And currently intemational liabilities exceed assets by $51 billion. ‘The liabilities are listed as being that $62 billion debt, plus $14 billion in foreign ownership of New Zea- land companies (“Press”, 17/10/92). “The rationalisation for State asset sales has always been that they are necessary, 1o clear our horrendous foreign debt. An argument I've always compared to selling the house (o pay the mortgage, or more aptly, burning it down to get the insurance. You get some money, but you lose your asset, and indeed, your home. insult is added to injury by the knowledge that, in fact, only 2 tiny percentage of the money raised by asset sales has been used to pay debt. To quote. a letter from Erwin Alber, in the “Listener” (17/10/92): “At March 31, 1991, $10 billion worth of our national assets had been sold to comporate owners. ‘These included Telecom, AirNew Zealand, forests all over the country, the Rural Bank, State Insur- ance, the Tourist Hotel Corporation, Petrocorp, Synfuels and New Zealand Liquid Fuel Invest- ment, Of the $10 billion that these assets brought in, only $780 million (7.8% of the total) wasused to retire debt”. New Zealand is undeniably attractive to foreign inves- tors at present, and they, in retum, are invested with a false patina of glamour by a largely sycophantic media. ‘The perfect iustration of this lovefest was the Heinz takeover of Wattie’s, The glamour was personified by Heinz’ chief executive, Tony O'Reilly. ‘There was a peculiarly New Zealand angle tot -only passing atten- tion was paid to the fact thatthe highest paid executive in the US flew into Hastings in the corporate jet, to consummate a marriage he had first proposed 20 years earlier (“Beanz Meanz Long Engagement2”). Nope, the media plugged the angle that Tony O'Reilly was a Jong ago but not forgotten rugby legend, ironically a Teftwinger, in the 1959 Lions (I was a Wellington primary schoolboy then, and T well remember his red hair, short shorts, and record tally of tries). In return, O'Reilly was well pleased with what Heinz bought for $567 million, saying Wattie’s will become Heinz’ means of penetrating the booming Asia/Pacific market. And he sang the praises of Rogemomics: “the New Zealand economy has benefitied from Goverment policies that have encouraged free trade and low cost operator status, over the last five years...Rogernamics has catapulted New Zea- land into a society transformed. Allowing that soumess exists out there, the Fact of the matter is, New Zealand has broken the bonds of the past. 1 really believe that enterprise is about to enter @ dramatic decade of growth in this county. “Furthermore, the principal trading competitor, Australiaisonly beginning coaddress issues which are already now passe here. f thought New Zealand, was five years ahead of Australia, but because of its particular political process it will take Australia, 10 years to go through the necessary catharsis to Watchdog Page 3defy its geographic isolation in the way New Zea- Tand has. New Zealand is there, Australia has 10 years of agony. That does not even mean caich up ~ just that in 10 years Australia will get to where New Zealand is today” ("Press”, 8/10 & 13/10/ 92). ‘Translation - Australiahas got another 10 years toavoid turing into the wasteland that we have become. In the ‘meantime, New Zealand bids goodbye to local owner- ship of the baked beans that have done so much to destroy the ozone layer in this pan of the world. Noris Heinz’ enthusiasm aone off among multinationals - for example, Glaxo, Britain’s largest company and the world’s second largest pharmaceutical company, is building @ $14 million plant in Palmerston North, because of New Zealand's “sound business environ- ment” “Press”, 9/10/92). O'Reilly is doubtless correct when he says “Rogernomics has catapulted New Zea- land into a society transformed”, although the vast majority of New Zealanders would list considerably different, and negative, examples. Which brings us to another of the myths of the ideologi- cal wankocracy -namely that the level playing field will, in itself, attract our salvation i.e. foreign invest- ment, Obviously some multinationals, such as Heinz, buy this, as does Comalco’s managing director, Kerry McDonald. in his paper, on “Manufacturing” at the October 1992 Japan/New Zealand Business Council meeting, in Christchurch, Kakapo Kerry said, of Rogemomics: “There are no guarantees about the future but ‘generally the bipartisan nature of the changes has been encouraging. While aspects of the changes are controversial and politically unpopular there is, nevertheless an understanding in the community of the necessity for the policies of change (sic). Fie nally the changes are not superficial and cos- metic, but fundamental, (0 an extent that will make them practically impossible to reverse.” ‘McDonald then articulated the Bolger/Richardson line on foreign investment: “..A common question among potential investors is about the scope of New Zealand's tax and other incentives for direct foreign investors. The Gov- ‘emment’s responseis thatthe policy focusisnoton short term fiscal or similar measures to artificially enhance New Zealand's attractiveness as an in- ‘vestment destinationbut rather onacomprehensive process of reform tomake the New Zealandeconomy genuinely more competitive, so that producers in New Zealand have a genuine competitive advan- tage which is not subject to short ferm policy variation... Unfortunately for the Tory Rogemauts, some foreign investors want the level playing field tocome complete with floodlights, Astroturf, and members’ boxes. The 1992 Forest Industries Council report (cited above) is an example, “ult found from a confidential poll of senior overseas forestry executives that New Zealand was ‘ot particularly attractive for investment. “While policy advisers/analysts may applaud New Zea- land’s low inflation rate, etc, investors require more from New Zealand” “. An explicit invitation card to foreign investors ‘was needed, including intemationally competitive depreciation rates, more competitive cost struc- tures, and Government-led efforts against other countries’ trade barriers through bilateral treaties... The package had to be able to survive changes of Goveriment and would need to be constantly compared with overseas. ““Investment in New Zealand is simply a product, ‘competing in the intemational investment market- place’. It warned against subjective “loss of sovereignty’ arguments, saying the retums to New Zealand were far greater than to the inves- tor...” (*Press”, 7/2/92) ‘The timber wolves unfavourably compared New Zea- Yand with Chile, another Pacificnation awash with trees and slavishly eager to attract foreign investors (includ- ing those very same New Zealand forest products multinationals). Apparently we need to compete onthe same terms as a Third World economy that has only recently emerged from abrutally long military dictator- ship. ‘Tohark back to the “10 Ways to Beat Unemployment” C'Listener”, 21/11/92). Number 2 is “Roll in the Tour- ists", and we find the Tourism Board public affairs ‘manager (the ubiquitous David Beatson) saying thatthe industry needs about $6 billion invested over the next five years, money that has to come from overseas. “Like the forestry industry association, Beatson points to high depreciation rates offered by other Asia/Pacific countries. “Right now it's damned hard”, Indeed the desirability or otherwise of investment Watchdog Page 4“incentives” engaged the nuling classinapublicdebate, in 1992, The Bolger/Richardson “level playing fields enough initselt” line prevailed. The most frank assess- ment (indeed an unusually frank one, from a Japanese) came from Professor Masahiki Ebashi, who spent time in NZ working for the tnstitute of Feanomic Research and the New Zealand-Japate Foundation. “Professor Ebashi said New Zealand was not attractive enough not to have to offer incentives to potential investors, “A neutral policy for invest- ‘ment would be just enough if the country had {ots ofinvestmentattractions such asabigand dynamic growing market, a cheap, affluent and flexible labour market, and abundant natural resources ButNew Zealandcouldnotclaim these..."(“Press”, 10/492). Ebashi's most telling point was not highlighted by the media, because of its enormous implications: “Japa- nese companies operatingin thiscountry...perceived the reforms of the last eight years as creating an unstable environment because of the amount of change resulting” (ibid), That is, the inherently con- servative Japanese rnultinationals are now wary of NZ, because they don’t like change for change's sake. That is something we can agree on. What sor of incentives do foreign investors want? Singapore's Ministerof Foreign Affairs, Mr Wong Kan Seng, said Singaporean investors were attracted by the tax holidays and other inducements offered in South East Asia, and that New Zealand was competing with that (“Press”, 5/12/92), ‘The splendidly named Mr Minn Wann-kee, executive director of the South Ko- rean Chamber of Commerce and Industry, was even blunter. Korean investors want investment incentives, tax holidays, and factories free from trade unions. ‘The Employment Contracts Act is not enough, “What concerns us most is the high wage level in your country” (“Press”, 4/9/92). Cheap labour, no unions, no taxes, no questions asked. And the NZ taxpayer should pay them to come here. Having just read about the physical brutality of Korean-run factoriesin several Central American countries, I say no bloody thanks. ‘The Jocal ideologues want even more fundamental concessions. Royer Kerr, the Savaronola of the Busi- ness Round Tabi, has decried “negative” public atti- tudes towards business, saying politicians “exploit the myth of corporate greed and unrestrained power to justify taxing and regulating business in the name of consumer protection”, He attacked the teaching of history and social studies in schools, saying they rein- forced “negative” attitudes to business, and that the Watchdog social studies’ icaching of anti-racism, anti-sexisra, and environmentalism sets a “politically correct ethos (which) contains a strong anti-business bias” ("Press”, 15/10/92). One wonders where the survivors of the 1980s got this “myth of corporate greed”? Not only must we get the Good News about the economy, we must only get the approved version of capitalism, It's timely to examine the actual deletrious effects of foreign control (which is the logical end product of foreign “investment"). Before looking at the more obvious ones, [' mention some others, New Zealand. hhas been virtually free of the political corruption that is endemic in so many other countries (look no further than Australia). Financial corruption is another matter, and was a major factor in fuelling Roger Kerr's “myth, of corporate greed” in the 80s. But evidence of straight out political comuption has been thin on the ground, Sir Hamish Hay, undefeated Tory Mayor of Chrisichurch, 1974-89, handed us an example on a plate, during the 1992 local body campaign. He wrote a bludging letter to a Japanese millionaire in Christchurch’s sister city, Kurashiki. “My reason for writing this letter is to ask you to consider making a donation to assist the election advertising costs of aconservative political organi- sation of which I am President -namely the Christchurch Citizens Action Association - which, isabouttocontest the local Council elections. .Our eam is strongly supportive of our sister-city rela- tionship with Kurashiki and in further developing friendshipand economic ties with Japan, especially in the tourism sector, We are urgently seeking ‘more funds toassistour campaign costs, and would deeply appreciate any donation which your Com- pany or any other organisation you may know of in Kurashiki which has links with Christchurch may tomake. We will, of course, keep this matter strictly confidential”, For good measure, his signature included his Japanese honour, Order of the Rising Sun (with Gold Rays)! Well, confidential is the last thing it became, An appalled Christchurch resident of Kurashiki gave il to the “Press”, which splashed it all over the front page (22/9/92). Sir Hamish, a silver spoon Tory of the old school, seemed genuinely astonished at the uproar, and resigned as Citizens’ President, Nor did his begging letter elicit any yen from Japan. It was comic opera stuff, but the serious question remains, what about the ‘ones we don’ tknow about? ‘The plethora of libel claims against TVNZ. arising from the 1990 “Frontline” pro- gramme alleging massive Big Business financing of Page 5the Roger Douglas-vintage Labour Government are still dragging through the courts. And Winston Peters unearthed more than one can of worms in tis quest for the truth behind the 1980s BNZ fiasco and related scandals, ‘There is the all pervasive cultural imperiatism that comes with foreign control, as inevitably as flies follow shit. ‘This has been a constant feature in New Zealand right throughout our unbroken colonial history, being firstiy English, andnow American (doubiless Japanese culture will be next, but hopefully something better than karaoke bars). A whole book could be written on this alone, and not enough work has been done in this, ficld in NZ, ‘Yo me, the classic current example is the fact that the Hawera house of the late, great Ronald Hugh Morrieson, one of our greatest writers (and among the top tier of pissheads), is threatened with removal to make way for a Kentucky Fried Chicken outlet, A local art teacher was quoted: “I could not imagine William Shakespeare's residence in England having threat hanging overitof becoming a fast foods outlet, but can easily imagine it happening here in Hawera” (“Press”, 7/12/92). Murder and chooks are given equal, idiosyncratic treatment in Morrieson’s books. Hopefully he has put a fearful curse on the place. ‘Then is the question of multinationals flexing their ‘muscle to protect their interests here. Examples of this are plentiful, and take a variety of forms. I'll give two. Harper Collins, the world’s third largest publisher, obtained High Countinjunction, tostop Tony Mitchell selling cheap books. He had already sold over I million from his Book Warchouse chain, importing American remainders, and selling them well below the prices charged by publishers for the British editions of the same books. Harper Collins were enforcing the old imperial book publishing agreement which dictated that Australians and New Zealanders should buy books from Britain, while Canadians had to buy them from the States. 1t said it was just protecting its copyright under intemational taw, but in other countries (eg Australia) the use of copyright to control marketing channels breaches free trade laws (“Press”, 9/12/92). The seconlexampleis Glaxo, the very same beneficient British multinational mentioned above for bestowing a {$14 million plant on Palmerston North because they like us so much, Glaxo, via its local lobbyists (includ- ‘ng Jim McLay) was instrumental in getting the Gov- ernment to announce anamendmenttothe 1953 Patents, Act to stop local companies replicating cheap versions of drugs patented by multinationals. Minister of Com- merce, Philip Burton, denied that the Goverment had been influenced by Gtaxo or anybody else, but his own Secretary of Commerce, John Belgrave, revealed the truth; “Part of the emphasis on patent iegistation comes from America attaching significance w it, New Zealand has not been able to ignore the American position, We are sirong compatriots in the GATT. round in agriculture, We are relying on the United Statesinagriculture. Itmakes sense that we cannot ignore the United States when it comes to patent legislation in the GATT context” (“Press”, 1/7/ 92). Specifically, patents fall into the GATT lexiconas TRIPS (Trade Related Intellectual Prop- eny Rights). The unauthorised sale of Eile Macpherson T shirts and nighties was a more recent, and comprehensible, case involving intel- lectual property. Note that, in both these examples involving some of the biggest multinationals in their respective fictds, there is ‘no mention of free trade (let alone fair trade), competi- tion, deregulation, cheaper goods, orservice tothe New Zealand public. Quite the opposite, in fact. And that exposes the central contradiction propounded by the bullshit artists who hold the increasingly shaky ideo- logical high ground. “Deregulating”, “restucturing”, reforming”, “downsizing”, etc, etc (ad nauseum) in- deed does make New Zealand attractive to foreign investors. But once here, they have no adherence 10 “market forces”. ‘Their only interest is in forcing the market to suit themselves. ‘The propagandists peddle the myth of the level playing field - the big boys are interested only in monopoly domination, increased profits, andunassailable politico-economic power. The New Right stormtroopers sing the praises of the with- ering away of the State; ironic really, because toca! and foreign Big Business effectively become the State. A corporate State, acting solely in the interests of its largest shareholders. ‘The public need not apply. ‘There is nothing unique about what is happening here, a fact that our isolation and parochial media Tead us to ignore. Itis simply part of a worldwide trend towards multinationalisation. Governments worldwide have, willingly or not, accepted this ideological bullshit about their economic satvation lying in making their countries“atiractive” to foreign investment. Obviously the multinationals and their local collaborators have & vested interest in encouraging this delusion. ‘The simultaneous and contradictory trends of deregulation and multinationalisation have twomaineffects-money and power. Deregulation means that NZ.capitalists, or the fewNZ- based multinationals, can take their money to more Watchdog Page 6profitable places overseas (although most of them crawled home, in the 80s). For multinationals, the money factor is that they can repatriate profits home ‘without restriction; pay minimal or no taxes (Comalco being the classie example of that, at least until the late 80s); and engage in all sorts of other profitable prac- tices, such as transfer pricing (i.e. declaring their profits in countries with the most favourable tax rates), oF buying and selling at mates” rates among their own, subsidiaries. Combining multinationalisation with a deregulated economy means a tangible loss of New Zealanders” sovereignty over our Own destiny a loss of ownership over our own assets; and a massive concentration of ‘wealth and resources into the hands of foreign and focal Big Business. In every sense, we lose power over virtually all aspects of our own lives. Losing power offshore means that decisions made in foreign board- rooms (viz the interest rates) can cost us money, oF lose us our jobs, Centralised multinational power brings with it decentralised proxluction (the "world car” being the most graphic example), and means that multina- tionals, such as our very own Fletcher Challenge, can ride out local (NZ) strikes by importing raw material from their foreign (Canadian) holdings. It means that nation states end up competing against each other to offer the most “attractive” conditions for foreign investors - cheaper labour, lower taxes, less regulations, less environmental restraints, no social costs, weakened unions, a gutted Welfare State. Sound like home? And some of the brainwashed in the increasingly marginalised union movement end up pparroting the slogans of the ideologues, urging workers to “compete” with each other, domestically and inter- nationally, ‘The obvious examples of foreign investment eg the Asian owned resorts and golf courses are the ones that get the tabloid attention and the racist reaction (and it’s ‘worth realising that Asian investment comes a long way behind Australian, American, British, and Euro- pean; and that of the Asian investment in high profile commercial propestics and hotels, only 35% is Japa- nese), Farmore important is the Australian takeover of several billion dollars worth of strategic financial re- ‘sources, leaving us with only one New Zealand owned bank, forexample. Thisis part of atiend away from the fields traditionally dominated by multinationals - ic. agriculture, raw materials, manufacturing -into serv- ices, which covers a mullitude of fields such as the media, banking, insurance, finance, transport, tourism, telecominunications, etc, etc ‘The wildly slanted media coverage ofthe interminable and cyeglazing GATT negotiations stresses only ane aspect - that “we” will al be better off if “our” farmers are allowed to sefl more dead animals in hitherto off limits markets. In reality, the Uruguay Round is a multinationals’ charter, fed by the US, to destroy any form of protectionism worldwide, and allow multina- tional penetration intoevery market, I've already cited theexample of Glaxo andthe drug giants pressuring NZ tochange its laws to suit them, with GATT as justifica- tion, Another hypothetical example is that die current quota system which regulates the booming fishing industry ‘would not be permitted under GATT, as it stipulates that multinationals must be given “national treatment” i treated like a local company. Foreign fishing com- panies are currently excluded from NZ's Exclusive Economic Zone, Under GATT, they will have to be admitted, on pain of enforceable intemational penl- ties, ‘The Government has anticipated this and a ‘nounced tis replacing the quotasystem withtendeting, which will benefit the multinationals. Anyone voicing, opposition to GATT is perceived as a “traitor” and ignored by the media inits facile coverage of the issue. “Us” becoming better off will in reality mean “them” having an even more open market to loot and plunder. ‘The deregulators keep right on keeping on, although they are running out of things to “liberate” (how about traffic lights?). But there’s still the odd remaining pocket ofideological sinfulness. For instance, there are moves afoot to deregulate coastal shipping, allowing foreign crewed vessels to carry NZ domestic cargo. Both the maritime unions and local shipping compa- nics have opposed it, saying it will destroy the local industry and cost 7000 jobs (“Press”, 14/10/92), while also raising the possibility of disasters caused by hu- ‘man error. ‘The Business Round ‘Table and their pet, Sir Roger Douglas, are campaigning hard for the removal of producer boards, as they impede private profit, Douglas has recently released a repon calling for the demise of the Kiwifruit Board. Apple Fields has been most vocal in its battle with various producer boards, and it pro- vided Douglas with a platform at its annual meeting, in Christchurch. Managing director, Tom Kain, intro- duced Douglas as “Apple Ficld’s man of the century” Press”, 23/12/92). It was in this speech that Douglas said: “And if the Alliance wins (the general election) {I'm jumping on the next boat to China”. I would have thought Somatia would have been @ more appropriate spiritual home. ‘The State has definitely withered away there. (Tobe fair, Douglas also said he wouldn'tbe part Watchdog Page 7of any government that let people starve, in the context of advocating a compulsory superannuation scheme). Doughas also dealt at length with the health “industry”, a major battleground of the New Rightists. As he said, with unassailable logic: “What is different in health from any other product?”. And it is in health that the new bloatacracy has become most glaringly apparent, creating armies of lavishly overpaid managers and consultants, with Big Business waiting for profitable privatisation, Health restructuring costs incurred in the Prime Minister's department were 400% over budget, in 1992 (“Press, 23/12/92), and the excess was ac- counted for by this bloatocracy. Meantime both sick- ness and death have been the result of the health “reforms” ie the bad blood scandal, and the babies who died because the Health Department wouldn'torcouldn’t spend money to wam people of the dangers of eating shellfish, So it’s official -radical Rightwing economic restructuring kills people. ‘My aim has been to deal with some of the official THE PAIN IS ALMOST OVER... cocen DOUGIS 13-88 Does THIS SEAN THE. EcoNOMY 1S ON THE, MEND 7 propaganda promoting the necessity of making New ‘Zealand “attractive” to foreign investment, and indeed Of the bene its of foreign investment in itself. What are the solutions? Well that’s a whole other story. At the very mildest level, start with the Alliance, although I bbaulk at its policy of buying back Telecom. Expropria- tion would be my preference. It goes way beyond parliamentary politics however. In fact they are part and parcel of the problem. Anditcan't be solved in one ‘country in isolation, it needs international resistance at grassroots level. But likewise, we must recapture the ‘mana of “nationalism”. ‘The current propaganda line associates itonly with atrocities like Sarajevo. Progres- sive nationalism is something to be proud of. Suffice it to say, let's make New Zealand as ugly as possible for foreign investors. We always get told that the market must take priority in all areas of life, butalso that the market is subject to periodic bouts of acute nervousness. Well let’s make the bastards so bloody nervous they shit themselves. That would be a highly satisfactory starting point, us rg No, THIS ‘MEANS Sve RUN OUT OF CHAIN...RECOLONISATION FOR AOTEAROA/NEW ZEALAND? Dennis Small ‘A full page advertisement in the newspapers (e.g. “Press”, 23/1/93) recently told us that “The world’s ‘most famous hour of current affairs” was returning on Channel 2, Yes, "60 Minutes” is back! Our television minders eagerly continue to pump out more and more, US propaganda, often packaged with NZ domestic content, ai the same time as they gut TV of any ‘meaningful political analysis and debate. Even tight- winger Lindsay Perigo, on leaving, said that TV current affairs has become sheer spectacle, He pronounced it “brain-dead”. Whether due to personal pique or not, Perigo’s comments are certainly valid. ‘To whom did the “Holmes” show tum for comment on. the resumption of Westem hostilities against Iraq? To none other, of course, than Steve Hoadley, well-known for his pro-US views, to give us the official Big Brother version of how we should see the world (TV 1, 14/1/93). Hoadley, chillingly enough, indicated that we would sce a lot more of such military policing actions in the. future to nip possible future Hitlers (not Bushes!) in the bud. ‘The Westem Imperium in its imposition of the “New World Order” is being well served by the likes of Hoadley with their moralising gloss over the reality of the resource war. ‘Their function is to justily keeping the “wretched of the earth” firmly in their place, and to legitimate bloody intervention as appropriate. At the same time, a destructive, mutually reinforcing interac- tion has arisen between Saddam Hussein examplars and those who try to control them. US - N.Z. Tradelinvestment Agreement In the 1990s cultural colonisation is accumulating in Aotearoa/NZ. It goes hand in hand with the sticky economic threads that are being woven around us. “An Agreement between the Government of New Zea~ land and the Government of the United States of America conceming a framework of principles and procedures for consultations regarding trade and in- vvestment relations” was signed on 2 October 1992, by US Trade Representative, Carla Hills for the US, and Philip Burdon for New Zealand, ‘This Agreement fits in both with the prescription for closer ties to the US, long desired by the political establishment and foreign affairs bureaucracy, and with the related trade negotiations in the GATT, CER, and the North American Free Trade Agreement (NAFTA). It signals our deepening involvement in the US-driven “free” trade programme. The framework of general principles explicitly takes account of how the Agreement should fit into the GATT, Point 3 of Anicic 6, dealing withconsultations, says that," This Article shall be without prejudice to the rights and obligations of either Party under the GATT or under any other instruments (including any instru- ments emerging from the GATT Uruguay Round) to which both Parties are, or may, during the period of effectiveness of this Agreement become contracting parties” (note that this provision can cover CER and the ‘Australian connection, and also possible future NAFTA, membership). Inthe Agreement, itis declared that the panties recog- nise “that foreign direct investment confers positive benefits on cach Party...” No recognition of any negative aspects here! In similar vein, the Agreement extolls the virtues of ‘private investment”. Agreement principles include those about “recognising the ben- efits to cach Party resulting from increased intema- tional trade and investment . . ."; “recognising the increasing importance of services . ..”; and “recognis- ing the importance of providing adequate and effective protection and enforcement of intellectual property rights...” ‘The principle referring to protection of “intellectual property rights” (patent legistation, etc.) contrasts glar- ingly with an earlier point about the alleged negative effects of“>protectionism and other measures distorting trade and investment flows” that would deprive the Parties of the “benefits” of “a more liberal and predict- able environment”. Apparently, what transnational corporations (TNCs) regard as free trade “protection and enforcement of intellectual property rights” is not something called “protectionism”! ‘The NZ Govem- ment has, indeed, openly acknowledged that itis yield- ingto US'TNC demands onintellectual property and so "TNC-engincered distortions tothe market (see “Watch- dog” 70). Governments, especially govermenis of small countries, are increasingly the agentsof globalised Watchdog Page 9(oF regionalised) capital ‘The Coming Crunch for Capitalist Competition - and how NZ will fare Supporting US Subversion of Small Countries So the US-NZ trade/investment Agrcementis facilitat- ing closer economic collaboration even as the GATT talks seem to be crumbling under the crossfire of the three great rival capitalist blocs - the US, Europe and JapanlEast Asia, - especially the strongly contesting ‘American and European blocs. The long predicted and painfully analysed crisis of capitalism is reaching a tension-ridden tripolar high point. Former NZ. diplo- mat, Bryce Harland, in his review of NZ's position in this emerging tripolar world, makes much of the fact that we are “On Our Own’ (Institute of Policy Studies, 1992). But the implicit message of Harland’s booklet is that NZ. would be better off with a big, powerful friend ie. the US. It is worth looking closely at Harland’s study in order to see how such a diplomatic determination is made, Harland has represented NZ. at the United Nations, was our first ambassador to the People’s Republic of China, and recently retired from the post of High Commissioner tothe United Kingdom. Despitethe heavily documented record of US depravity in the name of freedom, Harland subscribes to the standardised official view of the US as the defender and promoter of “market democracy”, and champion of the independence of small countries. Facts are not allowed to get in the way of this sort of diplomatic vision! if Harland canignore for the most part all the US interven tions and invasions in Latin America and elsewhere, he may comfortably ignore the lossof freedom for Aotcaroa/ NZ. Again, this fits with the official foreign affairs bureaucratic view of our place, or preferred possible place, in the world. If minds are already colonised, freedoms are both poorly perceived and appreciated. Noan Chomsky aptly observes that the key reason given for the US-led war on Iraq, namely that “aggres- sors cannot be rewarded and aggression must be re- versed by the quick resortto viotence” could be refuted intwo minutes by @ literate teenager! ("Media Controt: ‘The Spectacular Achievements of Propaganda”, Open Magazine Pamphlet Series, no.10, 1991). Even the public record (overlooking the covert one) of the US so clearly contradicts the notion that itis the guardian of small countries. This point is important to stress in Harland’s case since his outlook is representative of how perverse the official view of reality is, and conse- ‘quently how perverse the understanding of what inde- pendence can mean for Aotearoa/NZ. Harland, incidentally,doesacknowledge the US’sregu- Jar use of unilatcral military power, and its future application “as ever”, in the Caribbean.(p.78). Yet he must evidently consider such intervention as somehow demonstrating principled concern for human rights and self-determination! ‘Tripolar Threats But, Ieft unbalanced, this would be somewhat cavalier comment on a scrious effort to confront genuine con- cems, even if more or less pushing a standard solution. Tt would also be wrong to ignore some very significant points and questions, if obvious enough, raised by Harland, His shor study is useful foraffording insights into certain current problematic issues related to the central problem of NZ’s vulnerability to tripolar trade wars; and the nature of the continuing assessment by the forcign affairs establishment as to what course of action NZ. should take in these increasingly critical circumstances, (One important question which Harland posesis whether, without the Soviet threat, and so a convenient external enemy, capitalist unity can survive. Theres, of course, the real Jong term enemy still - the starving millions of the Third World. Today, this is brazenly evident in Pentagon strategic planning as registered, for instance, inthedocument “Discriminate Deterrence” (Jan, 1988) by the Presidential Commission on Long-Term Inte- grated Strategy. But, like Hoadley, Harland cannot ‘openly recognise this reality. He wams, for instance, against the danger of threatening Third World countries ‘on the matter of nuclear proliferation - such a move ‘could generate a strung negative reaction towards the ‘West (p.72). Again, he worries that thenew trilateralism, if functioning co-operatively, might well be perceived by the Third Worldas anew form of imperialism (p.81). ‘While existing neo-imperiatism is overlooked, crudely evident repression is eschewed, if only because of the negative reactions it might engender. Rising nationalisms - the spectre of Social Darwinism - and economic competition are seen as the potential intemational threats to world stability and NZ. prosper- ity. But there is no explicit acknowledgement of the connections of these threats with the underlying prob- Jem of mounting pressure on resources. As well, there is a large contradiction between the settlement of the GATT Unuguay Round hoped for by Harland and what this would actually mean for Aotearoa/NZ in terms of ‘greatly reduced sovereignty (p.87). Evident here, in- deed, is a fundamental lack of comprehension of, or rather feeling for, the meaning of independence, Watchdog Page 10Permeating all this is a mixed, ambivalent, if uncon- sciously felt, view of capitalist market forces. On the one hand, market forces supposedly help make us free. On the other, a growing crisis is perceived in the capitalist system in terms of dangerous trends to trilat- ral competition. ‘The market as great benefactor may become the market as the great destroyer. Marxist analysis is ironically being endorsed even in the imme- diate aftermath of the proclaimed capitalist triumph over eastem state socialism. Choice, Independence and Belt-tightening For Harland, independence is an asset 10 be used sparingly (p.88). His continual carping about claimed difficulties, including trade ones, caused by our anti- nuclear stand shows the bureaucratic willingness to compromise onindependence (see pages 25, 26, 40,43, 54, 56, 57,61, 88, 90,91). How can any independence bemaintained if one isin the pocketofabigpower? But a trade-off of our economic, political, social, and cul tural integrity for continued affluence is what Harland really appears to be suggesting is NZ's best option. He isal least right in stressing that there is aprice to pay for assertive independence, a hard choice to make, It can be much easier to be subservient. Yet there are illusions of choice too. Even if we were to sell our soul for supposed material gain, reality will eventually force changes to the way of life of most people. Inevitable environmental constraints will re- quire this. ‘The big question is the degree to which adjustment and adaptation will be shared equitably. Of course, however, the immediate central counter- argument to Harland’s implicit thesis is that selling out to foreign contro! would only accelerate the already brutalising effects ofthe free market, let alone rob us of our freedom, A ffluence is amyth for all those who both suffer and will suffer deprivation so that a few can live luxuriously. Harland considers, ludicrously enough, that the IMF fhas saved Third World countries from losing their independence - mainly because the US is opposed to imperialism! (9.88). What Walden Bello calls a“glo- bal economic counter-revolution”, engineered by the US-led World Bank/IMF/TNC consortium, Harland regards as benevolent salvation! (sce “Pacific World”, 10.24, August 1992, for Bello’s brilliant overview) But, then, Harland can actually say that, “No one has even begun to talk about restructuring in New Zea- fand’s case”! (p.87). One perceptive joumalist has well described NZ's experience of restructuring under “Rogemomics” (now “Ruthenomies") as “Chile with- out the guns” and our diplomats are clearly responsible for helping arrange the conditions of structural adjust- ment and facilitating foreign control, The Ministry of External Relations and Trade (MER) is even helping, promote New Zealanders’ experience in economic re- structuring on an international level (“Press”, 15/2/93). NZis working with the World Bank and other interna- tional financial institutions in this enterprise! In seeking our best choice for the future, Harland maintains that NZ could not exert much influence. unless closely associated with one or more of the great powers (p.56). He specifically criticises Aotearoa NZ's anti-nuclear stance as “unrealistic” and the result of“areluctance to accept the world as it was" (p.56). In an address delivered! as “The Menzies Lecture” and reproxtuced as an appendix to “On Our Own”, Harland asserts that Australia and NZ can have little global influence, “What happens in the rest of the world affects us much more than our actions affect it. In the Janguage of the marketplace we are price-takers rather than price-makers” (pp.104-105). The obvious impti cation to draw is that we should surrender our sover- eignty. GATT, CER, NAFTA Harland, indeed, points forward to political union with Australia. He claims that an “increasing number of New Zealanders share Menzies” hope that closer eco- nomic relations” will Tead to such liaison, He adds, “Their view could gather support if te Uruguay Round failed to relieve us from the pressure of protectionism” (@p.105-106). In his conclusion, Harland poses the central issue at stake as he secs it in the Uruguay Round - “whether the ‘emerging tripolar world will be a co-operative and constructive one, or the opposite . . .” (p.107). An isolated moa strides into extinction on the study’s cover. The symbolism for NZ is clear. While“On Our Own"is the treatise of one ex-diplomat, it signifies, as indicated above, the sort of thinking under way in Government circles and suggests the direction in which the Government is leaning, of rather lurching. The US-NZ.trade/investment Agreementis a majorsignpost. Consequently, itis vital for proponents of alternative viewpoints to examine the case being made for subordination to the US. I Harlandis somewhat reservedin the expression of his inclinations, others are much more forthright. Another recent Institute of Policy Studies publication argues in Watchdog Page 11detail for a commitment to a NAFTA-CER linkage. In astudy of the impficationsof NAFTA, Sir Frank Holmes and a MERT official, Crawford Falconer, “recommend that the possibility of a NAFTA-CER linkage of some kind should be actively explored” (“Open Regionalism? NAFTA, CER and a Pacific Basin Initiative”, 1992, p. 192). The Government launched this book at a Beehive function on 17 November last year. Prime Minister Bolger was already expressing its views a year or so before the launch, e.g. see report by Suzanne Pollard of NZPA in the “Christchurch Stat”, 5/10/91 ‘This book requires a future lengthy analysis. In the meantime, attention is drawn to the extensive and fast ‘growing literature on the issuesinvolved in NAFTA and the work of people’s movements to counter NAFTA’s threat 10 employment, labour conditions, health and food safety, the environment, and basic human rights. NAFTA is a recipe for increased inequality and injus- tice. The banner for opposition to the NAFTA agenda, and for the development of positive altematives, is hetd high in'“Trading Freedom: How Free Trade Affects our Lives, Work and Environment”, edited by John Cavanagh, John Gershman, Karen Baker and Gretchen ‘Helmke (The Institute for Food and Development Policy, ‘San Francisco, in association with the US Institute for Policy Studies, 1992). A collection of writings by activists and analysts spanning the US, Canada and Mexico, this work provides a fund of information to assist NZ campaigning. Rise of a New Internationalism Let John Cavanagh speak: “Through the international citizens’ dialogues that are already under way, we must lay out an altemative agenda wherein connections be- tween our peoples and our economies enhance basic Watchdog human rights, the long-term sustainable use of our natural resources, and the economic viability of our communities. We must challenge the promoters of free trade at each stage and we must, a the same time, offer viable altematives” (p.2) It is probable that the Clinton Administration will be considerably more receptive 1o domestic criticisms of free trade, Certainly, the US moves to limit its beef imports and bolster its dairy exporters will hurt NZ. producers (“Press”, 28/1/93). They make a mockery of the US-N.Z. trade/investment Agreement. Thus we need to respond affirmatively to Harland’ challenge of being “on our own”, We need 10 be more self-reliant, But the pressures for subservience are yet still likely to intensify. As the GATT Uruguay Round flounders, NAFTA and other regional trade pacts are coming to the fore. Aotearoa/NZ.should try tokeepon good terms with its trading partners while choosing greater self- sufficiency and a more environmentally sound eco- omic path, In their pro-NAFTA study, Holmes and Falconer state that, “In our view, it is feasible to negotiate a link between CER and NAFTA within the very near term” (p.137). The National Government is currently trying toovertum Aotearoa’s nuclear free stand in preparation for entry to NAFTA. Relinquishing this may even be ouradmission fee! Ourindependence is thus being sold ut right now in a carefully orchestrated fashion. It is time toreally mobilise resistance and defend our rights! Public debate has to be further stimulated and citizen action increased. We can link with like-minded inter- national support. The corporate free trade agenda is serving to arouse, activate, expand and maintain a worldwide people's movement for development which is egalitarian, sustainable and participatory. Page 12HEALTH CARE PRIVATISATION -Wolfgang Rosenberg, ‘The United Nations Centre on Transnational Corpora- tions has published a unique study in depth of “Transnational Corporations in World Development”, While the publication dates back to 1988, its coverage of facts and well considered comment will remain useful for many years to come, ‘An example of how useful this publication is, can be found in its description of the activity of transnational ‘corporations in the health service, ‘No doubt, ifthe Government insists on its privatisation plans (following Sir Roger Douglas’ leadership and advice), the transnational cor- porations which are already putting health care in the jig- ‘Transnational Hospital Corporations as of 3986 According (0 the UN Centre's survey, transnational corporations are, for the most part, owners of the hospitals they operate at a profit, However, there are. some of these corporations which specialise in manag- ‘ng hospitals rather than owning them. Other hospital chain operators manage some and own more of the hospitals they are connecied with, Of the 125 hospitals listed for 1986, 81% were owned, the balance managed. The following is the listof the 11 transnational hospital corporations presented in the UN Centre's on Transnational Corporation's survey. saw puzzle of profit-creating Number of Hospitals Owned or Managed Abt intemational marketing activi- » ties will look at New Zealand eae uae [ Hlospital Comporaiion 0 js ‘American Medical Intemational Leading are comporationsfrom —~pcie f the United States whose over- = seas for-profit hospitals have | Shae nity Psychi Meroe rapidly tenumbers, | otMmunity Psychic Centres ‘National Medical Enterprises _ By the end of 1986 125 for- cign hospitals had beenestab- Summit Health Lid Medical Corporation lished in 19 countries. No doubt by now these numbers Hyatt Medical Enterprises (Nu Med Inc) have grown. ‘Fotat ‘As the table shows, there ex- ised in 1986 11 hospital corporations operated transnationally, of which only one was non-American: the German Paracelsus Healthcare Corporation “These corporations operated predominantly in the Mid dle East, Westem Europe (especially the United King- dom), the Pacific area and the Americas. However, it is remarkable that in countries where according to the publication quoted here: “national health care systems are safe, affordable and efficient enough to mect the demands of the people (as ‘in Canada, West Germany, Japan, New Zealand, and the Scandinavian countries) transnational hospital cor- porations have not set up operations”, ‘The only firm for which the UN Centre gives a profit figure is Hospital Corporation of America, ‘That firm recorded profits from its international ventures of over $US9 million in 1986. The Centre publication com- ments: “If these profits are suggestive of things to come, it seems that foreign-operated hospitals and health care services are here to stay", ‘There are comments on the nature of the operations of these hospital chain: “The countries in which these hospital chains invest are ‘ones in which demand for health care is high, the competition weak and hence the potential for profit high. Watchdog Page 13“Fransnational hospital firms are also successful where local health services are inadequate. Since their charges are usually higher than those of national hospitals, they are primarily patronised by the more affluent parts of society - which in tum may decrease pressures for upgrading national health faciliti Regardless of the ownership nationality of the private {for-profit hospital section of national health sectors, the above comments conceming the suitability and conse- ‘quences of privatisation are worth studying. This is a hardhitting 25 minute video, produced by Reject Americanised Health, in Wellington. Itexam- ‘nes the horrifying facts of the privately owned, profit, driven US health system. Humana Corporation (see above) features prominently. Itisno laughing matter - people are bankrupted, maimed, suffer, are physi- cally dumped out of hospitals, and actually die ifthey haven't got private insurance, or can’t pay the bills, ‘One case details how a baby dies when its respiratoris repossessed. “THE AMERICAN DISEASE” ‘This video is aimed at showing New Zealanders the reality ofthe health model that Simon Upton and the new layers of health bureaucrats are imposing on us. It should be seen by everyone. In Christchurch, contact CAFCA, or the Canterbury Health Coalition, Box 884, ChCh (Koa Saxby, ph 3588495). Elsewhere, contact Vanguard Films, Box 3563, Wellington. COMALCO’S LITANY ‘Today’s Letter is D Deunionisation Comalco was one of the first to take full advantage of | the Employment Contracts Act. A “Time” cover story (Wages of Fear”, 14/12/92) included this: “Avits Tiwai Point aluminium plant atthe foot of the South Istand, Comalco last year abandoned union agreements and negotiated individual con- tracts with its 1150 workers, Although it did not ‘outlaw unions, the company stopped deducting, union dues from wages and discouraged on-site meetings. The effect on the Engineers’ Union was catastrophic: membership has fallen from 700 to 200. Wages have risen, morale among workers is high, and the company estimates a 30% increase in productivity. Union assistant secretary Ged O'Connell admits the union was out of touch with workers, Comalco now offers staff superannua- tion and payment of children’s schoot fees”. ‘This rosy picture of employer patematism doesn't deal with Comalco's real aim: t0 use its New Zealand. precedent to smash the unions at its much bigger and ‘more important Australian operations. “Aconcerted pushby thealuminiura groupComalco, Ltd to reform work practices is placing increased strain on the company's relations with its unions, ‘The CRA Ltd subsidiary has been moving to boost productivity at its Australian operations after win- ning significant improvements in efficiency under radical new industrial relations arrangements adopted at its aluminium smelter at Tiwai Point in New Zealand. “. .With eamings under severe pressure because of the collapse in world aluminium prices, the com pany is looking to achieve similar improvements in Jabour productivity at its Australian operations, “But these moves are likely to be hampered by a deteriorating relationship between the company and its Australian unions, particularly at its two aluminium smelters at Bell Bay in Tasmania and Boyne Island in Queensland. The main union covering workers at the smelter, the Federation of Industrial Manufacturing and Engineering Em- ployees, yesterday accused the company of delib- crately attempting to exclude unions” (“Australian Financial Review", 1/5/92). Comaico’s managing director, Kemry McDonald, de- tailed the downturn in the aluminium market, in his paper on “Manufacturing”, presented to the October 1992 Japan/New Zealand Business Council annual Watchdog Page 14meeting, in Christchurch. in the year ended June 1992: “ Exports of aluminium (lo Japan) were still the larges single item, but have fallen by $NZ252 million, since their peak in the year to June 1989, reflecting the sharp fall in word aluminium prices”. ‘The full title of MeDonald’s paper was “New Zealand's Competitiveness in Manufacturing and Resource Processing”. Not surprisingly, Comalco is gung ho about the “economic reforms” of the last 2 govern- ‘ments, and specifically the Employment Contracts Act. Some extracts: “The 1992 World Competitiveness Report (!) con- firmed the decisive improvement in New Zealand's performance. Ranked 18th in 1991, New Zealand, lifted to 15th place in 1992, ahead of Australia, Italy and Norway. ‘The ranking is assessed on 8 factors related to competitiveness...In terms of the competitiveness of government policies, New Zea- land went from 8th to Ist place, in contrast to ‘Australia’s 13th ranking... “In spite of the political unpopularity of policy changes by both Labour and National govem- ments, the policies of reform towards a more competitive economy have been consistently sus- tained for nearly a decade... “There are no guarantees about the future but ‘generally the bipartisan nature of the changes has been encouraging. While aspects of the changes are controversial and politically unpopular there is nevertheless an understanding in the community of the necessity of the policies of change. Finally, the changes are not superficial and cosmetic, but fundamental, fo an extent that will make them practically impossible to reverse. These factors suppor the view thatthisis asustainable, longterm change in New Zealand’s competitiveness”. Deregulation Kerry McDonald has said that: “Worker productivity had improved the fimm’s intemational competitiveness decisively” (“Press”, 1/12/92). Now heis dangling the carrot of big contracts for the depressed engineering industry, specificallyin Canterbury -IF Comalco closes a new supply deal with Electricorp, McDonald was ‘quoted as saying, in the same “Press” report, that constructing a fourth potline is unlikely (because Comalco decided to concentrate its major expansion in Queensland, by buying the Gladstone power station from the Staie Labor government and expanding its Boyne Island smelter, ‘To use the poctic phrase of its CEO, Nick Stump, Queensland was “the first cab off the rank”. This was covered in detail in “Watchdog” 71). But McDonald is offering a booby prize of a $300 million upgrade at Bluff IF Flectricorp gives Comalco a satisfactory deal. But what Comalco really wanisiis the ability town its own power supply. ‘The electricity supply market is being subjected to major restructuring at present, with most people being affected at the level of their local power supply authority. But at the big end of the electricity market, things are happening too, “The Wholesale Electricity Market Sway report has been prepared by an independent group headed by a former National Deputy Prime Minister, Mr Jim McLay...t was prompted by hopes that new generating companies would compete with Electricorp for the wholesale supply of electricity. “J was not sponsored by the Govemment but involved its biggest SOE, Electricorp, plus its national grid operator, Transpower. It also in- volved the Blectricity Supply Association, and big electricity users like Comalco, BHP New Zealand Sicel, Fletcher Challenge and Carter Holt Harvey. “..A new company comprising the major players could be necessary...Existing contracts with big direct users like Comalco would be leftto run their course, if necessary. “..cThe study does not define the final form of the proposed new market, but aims to create a climate in which several power generators can compete against Electricorp...”("Press”, 22/10/92). So this ideological mania for deregulation fis in rather nicely with Comaico’s all-consuming desire toown the Manapouri power station, And it can't tose, if it's allowed to keep its existing contracts as well (einto the next decade). There are obvious dangers in the big industrial users becoming the owners of the wholesale electricity market, dangers that have already been pointed out by Power for Our Future, which urges a continued Government presence. And how cant a report presented by interested parties such as Comalco possibly be described as “independ- ent”? And why should we trustanything headed by Jim MeLay? (It used to be said, in the good old days, that New Zealanders would vote for a red arsed baboon 9 Jong as it Jed the National Party. Well Jim was the one and only red arsed Tory baboon that never gotthere, He suffered from a lack of credibility, and he kept getting Watchdog Page 15his nose stuck in TV cameras. So he did what failed politicians do - become a consultant and hire yourself ut to the highest bidder) ‘The likelihood of Comalco securing Manapouri for itself came significantly closer with the Government's announcement, in December, that it was splitting ‘Transpower from Electricorp, with ownership of the national grid being divided between Electricorp and powerdistributors. The Crown will retaina controlling “Kiwishare” (rememberthat from when Prebble flogged off Telecom tothe Yanks?), One of the more observant reactions came from fona Holsted, the PSA’s industrial officer: “There doesn’t seem to be anything in the futuretostop alarge consumer like Comalco buying Lake Manapouri, generating its own electricity, and demanding significant say in how the national grid operates” (*Press”, 23/12/92) New Zealanders have every reason to fear these multi- national monopolies controlling our electricity supply marke, and, specifically, have very good reason to strenuously resist Comalco acquiring Manapouri Deniability Rio Tinto Zinc, the world’s biggest mining company, and Comaico’s ultimate parent, has decided to go onto the offensive re the environment, and deny that mining, wastes are any of its responsibility, RYZ chairman, Sir Derek Birkin, told the London Metal Exchange annual dinner: “Society as a whole, rather than present mining ‘companies and their sharcholders benefited most, from those wastes. It would be more honest, if politically embarrassing, for the costs of cleaning Up old mine wastes to be recognised as the taxes he RZ Conporatinn Pt RI AVDA ON GAIAM 94 UNI Midland Bank pic He"Civieeoot kone Watchdog they are, rather than disguised as moral commit- ments”, Hie claimed that governments, which in other areas of the economy allowed market forces free reint, are “un- duly disposed” to regulate in matters environmental, “Concem for the environment has become like motherhood. ‘Too many people unquestioningly accept any policy put forward to preserve it”, Describing the scientific basis for many environ- mental policies as “questionable”, Sir Derek con- cluded “and their possible benefits are out of all proportion to the inevitable heavy costs” (“Finan- cial Times”, 23/10/92). So there: you have it in a nutshell: We pollute, we profit. You pay. A slightly less blunt version of this was presented by Conzine Riotinto Australia, Comalco’s immediate par- ent, and itself the 6th largest mining company in the world. George Littlewood, CRA’s vice president for extemal affairs, told a Las Vegas conference of the American Mining Congress that the Rio Earth Summit hhad advanced the cause of the environment move- ‘ments campaign against mining, and that the industry had to strengthen its own intemational networks. He adopted a high ethical tone. “Itis no more ethical for this generation to pass on to succeeding generations a degraded economy than it is to pass on a degraded environment. Morality is onthe side of developmentas well ason the side of those who geruiinely care for the protec- tion of the environment (“Financial Times”, 22/10/ 92) Coming from a multinational that has ravaged indig- enous lands over several continents (eg Australia, and Bougainville, to name but two regional examples), these fine sentiments are both cynical and laughable. Murray Horton's stake in RTZ = all 12p of i Page 16GATT/NAFTA AND THE ENVIRONMENT ‘The major stumbling block in the GATT negotiations hhas been the wrangle over agricultural protectionism (import barriers/subsidies) between Europe and the United States. But the Agenda 21 process arising out of the Eanth Summit (lune 1992) has been catching up abit with these international rade talks, and with"‘free” trade in general. Lately, environmentalists have been having some effect in getting debate on the implica- tions of free trade for sustainable development. ‘What are the likely effects of this trade on the environ- ment? While the GATT may be collapsing, the North ‘American Free Trade Agreement (NAFTA) into which Aotearoa/NZ could soon gravitate has pretty much the same sort of implications for conservation and resource management, Forests To quote a study on which we shall draw a lot: “Free trade promotes economic specialisation and trade de- pendency, whichcan lead developing countries toclear forests in order to eam foreign currency for imports.” Free trade may also adversely affect the efforts of developing countries to reduce raw log expons and process timber domestically. Since countries can eam more from processing this can help slow forest cuts. But export restrictions are already open to challenge from other countries under the current GATT, National conservation programmes will also be open to attack as unfair subsidies Agriculture “Free trade agreements may have a positive environ- mental impact by curbing agricultural programmes that promote surplus production - and the resulting environ- ‘mental damage - in Europe and the U.S, But they may also eliminate environmentally beneficial subsidies, such as soil conservation programmes or wetland and habitat protection schemes. Free trade may also foster ‘more unsustainable large-scale, capital-intensive farm- ing.” (Cont'D Overleaf) GULLIVER FILE” UPDATE Wins Plaudits; Price Slashed Having updated readers about the hydraheaded RTZ/ CRA/Comalco monster, it’s appropriate that we up- date you on its foremost nemesis, Roger Moody, of the London based PARTIZANS (People Against Rio ‘Tinto Zinc and its Subsidiaries), and Mine Watch. “The Gulliver File”, Roger's 894 page encyclopae- digofmining companies (including ourmutwal fiends) was reviewed in “Watchdog” 71. 14 years in the making, itis an epic in every sense. ‘Two things need updating since the review appeared. Firstly, the prestigious English newspaper, the “Guardian”, featured it as one of the top 10 envi- ronmental books for 1992, Secondly, the price has been slashed. ‘The review described its original price as “astonishing”. And it was. 150 pounds, plus 16 pounds for post and packaging. There was a second tier - 25 quid for NGOs, But for almost everybody, a book costing nearly $NZ500is just completely out of the question. Coincidentally ornot, Roger has written tous (26/12/ 92) saying: “WE HAVE NOW DROPPED THE PRICE TO ALL AND SUNDRY TO 25 POUNDS. It should never have been two tiered in the first place, and this was largely my fault. (Paranoia about the mining industry buying the entire print run and pulping it)". So, the book is now available for around $NZ75-80. lus the extra 16 pounds for airmail post overseas it’s a big, heavy SOB of a hardback). Order from: Minewateh, 218 Liverpool Road, London N1 ILE, England. Ph.(44) 71 609 1852. Fax. (44) 7h 700 6189. Watchdog Page 17Air and Water Pollution “Programmes that provide incentives. for pollution reduction may be challenged as unfair goverment subsidies. And, by removing barriers to intemational investment, GATT and the NAFTA may create ‘regu- Iatory flight’ to countries with lax pollution regulations, or enforcement.” So countries that specialise in slack environmental regulation would be able to gain a comparative trading advantage over other countries with stricter controls, Hazardous Waste “Free trade advocates believe that hazardous waste should be imported and exported as freely as any other product. U.S. lavis that regulate hazardous waste may be “harmonised” downward to fit intemational stand- ards set by GATT and NAPTA.” Global Warming “Eve trade agreements aim to stimulate production of more fossil fuels, thereby lowering their costs and increasing their use. ‘This could undermine efforts to forestall global warming by reducing carbon dioxide emissions. GATT may also nullify the global warming treaty launched at the Earth Summit. if the treaty should employ trade sanctions in the future, these sanctions would be vulnerable to GATT challenge. ‘Also, national efforts to comply with the treaty by imposing conservation measures could all be under- mined by sweeping efforts to eliminate subsidies and harmonise standards.” ‘These are then a few major examples of how damaging free trade can be. Third World nations, like Aotearoa/ NZ, rightly fear barriers being putin their way suppos edly for “green” environmental reasons, but really for other protectionist ones. Yet global environmental deregulation according tothe GATT/NAPTA agendais, ultimately notin theirinterestsilf they are going to have the chance of conserving resources for their peoples. So Fars this country is concemed, itis hard to see how the Resource Management Act could work to protect our environment. The Act is billed as discouraging “unnecessary controls and rules” (Ministry for the Environment booklet) and in this sense fits in with the free trade agenda but, on the other hand of course, local authorities supposedly have the power to set and regu- late standards, performance measures, and soon, Un- der NAFTA or GATT these could all be open to attack as distortions to wade. Standards like food safety regulations are already being towered under CER. A govemment-backed study - “Open Regionalism? NAFTA, CER and a Pacific Basin Initiative” by Sir Frank Holmes and Crawford Falconer (institute of Policy Studies, 1992) - has only half a page on the environment (p.30) and a totally inadequate assess- ment. (Compare, for instance, John Wamock’s article, “NAFTA and the Environment” in “Briarpatch’, Dec. 1992/Jan, 1993, pp.38-40), Free trade would render void the safeguards of the Treaty of Waitangi, probably our best protection of al. If the term “sustainable development” is to mean any- thing in the years ahead, then we must be prepared to contest the corporate free trade agenda as strongly as possible, (quotes from “A Guide to Trade and the Environment” by Thomas Wathen, Environmental Grantmakers As- sociation & the Consultative Group on Biological Diversity, New York, July 1992) Letters ASPEN INSTITUTE & BIG BUSINESS 25 October 1992 Dear Editor, In the April edition of “Watchdog” (69) there was an article on big power strategies in the Asia-Pacific region (pages 18-24), which describes how business interests which expect t0 gain from free trade work together, and an article on the payment by Douglas ‘Myers(of Lion Nathan) of Labour politician Dr Michaet Cullen’s trip to the Aspen Institute of Humanistic Studies, USA (pages 30-32). Theresa link betweenthe two stories, for the Aspen Institute has long been interested in fostering Pacific Rim contacts. 1980 was the year of the formation of the Pacific Economic Cooperation Conference (PECC), mentioned in your article as a “loose grouping of current and former government officials, private sector business- men and right wing academics, observers from which Watchdog Page 18now attend APEC meetings” (APEC = Asia Pacific Economic Cooperation). That same year the Aspen Institute was joint sponsor (with the Humphrey insti- tute of Public Affairs) of a “Pacific Basin Planning Session”. Amongst those present was Mark Earle, Director of Intemational Studies at the Stanford Re- search institute. At the Sixth PECC mecting at Osaka in 1988 the US. ‘team included Mark Earle, who was then Director of the Pacific Rim Program of the Aspen Institute. Interest- ingly, the Pacific Basin Economic Council (our old nemesis, PBEC. Ed) was represented by Standing Commitice member Ron Trotter, of Fletcher Chal- lenge. Its no surprise that people who believe in, and profit from, free trade should form associations. Its similarly ‘no surprise to find that the Aspen Institute, which was sel up to foster inter-country dialogue, should take an interest in the Pacific Rim, And its to be expected that they should provide services first and foremost for those whocan afford to pay. There is little spare cash in the hands of the lefl, or environmentalists, soit is only natural that the market should demand courses which are altractive to the wealthy right, ‘Those with sufficient money are of course interested in paying to send potential national leaders like Cullen to a place of their choice, to be taught policy ideas which might benefit the benefactor. The problem is with the intellectual and moral bankruptcy of the current Labour Party. For sadly there seems to be no one to pay for Cullen to tisten to those here in New Zealand who ‘might present an opposing picture, 1 feel particularly annoyed because I am one of the locals passed over by this process, Some years ago, I ‘carried out some modelling for the Commission forthe Future, which showed how free trade could beexpected to destroy a large part of New Zealand manufacturing, and thats just what has happened, I could explain why that should be so, but can find no one to pay me for the information. Perhaps those facts would be loo embar- rrassing to the free trade pundits. “Yours sincerely, (Sga) John Robinson ‘Mantinborough OKURU WATER EXPORTS The Greenies’ Version of Trickledown 2192 ‘The Editor “Watchdog” | was both incensed and amused by your story on bulk ‘water export from South Westland (see “Watchdog” 71), incensed that industrial development in a national park could even be considered. But I wasn’t surprised. ‘That pack of pricks we call the Government will do anything for money. ‘Then I started thinking about the proposed use of the water. It would have to be for drinking water, and untreated - it wouldn't be economic if it was still to be tweated, But what about giardia? It’s already in the South Island and it’s only a matter of time before it reaches South Westland. When that happens the water will no longer be safe to drink, The only conclusion I ‘can come tois that Okuru Enterprises, whoever they are (cowboys no doubt), haven't told their foreign partners about giardia. Perhaps we ought to do the decent thing and let them know, preserve New Zealand’s good name, ete. But all this is a bit passive. Why don’t we take more positive action? I've always wanted to tramp the South. Westland forests. 15 kilometres along the pipeline would get me well into the forest very quickly. I will have been drinking lots of water from the unpolluted streams along the way, so by the time J get to Tuning, Fork Dam, nature will definitely be calling. It will give me great relief, physically as well as psychologically, to stand on top of the dam and piss info that pure, unpolluted water below. Anybody want fo come with me? Name withheld to avoid future embarrassment. So there you have it. A clarion call for indecent expo- sure and casting offensive matter, all in the name of a noble cause. The causeof keeping Aotearoa green (and, depending on the time of year, the effect might be to tum some sensitive organs blue). Flora, fauna, genita- fig, Wall seems so -natural! Our anonymous piss artist has suggested that we announcea 1:1 subsidy for Okuru Enterprises ie subscribers offer to personally do their bit to double the low into the first tanker to fll up. If enough flashers tum up (0 shake off the drips amidst Nature's grandeur, it could help the depressed South Westland economy. You could make ita social event. But instead of a pub crawl, it would be a water crawl; Watchdog Page 19and instead of a pissup, it would be a pissdown, And if it gets shipped away in one of those flag of convenience rustbuckets, imagine the mess wien it inevitably falls 10 iis on somebody else's coastline. 80,000 tonnes of honest to goodness Kiwi urine hitting the beaches. It was allegedly foreign tourists who introduced giardia to our hitherto pristine mountain waters, so Iets give it back to the bastards. As for Okunu itself, the opposition has paid off (par- tially). Dennis Marshall, Minister of Conservation, decided that the outflow pipe coutd not pass through any part of Mount Aspiring National Park. But he’s quite happy (© have it situated 500m outside the park boundary, which has been welcomed by Okurv Enter- prises (“Press”, 5/1292). So the opponents have ‘vowed to keep up the fight. ‘And the rest of you, practise pissing on things that despoil the environment. if you live in Christchurch, ‘we suggest you start with the gondola, Trickledown is, the name of the game, so get trickling, greenies! SUBMISSION ON SOUTHPOWER DRAFT ESTABLISHMENT PLAN (This was presented, in November 1992, to the special ‘committee hearing public submissions on Southpower' ‘future ownership. This process was repeated all over the country, as required by the Energy Companies Act 1992. While this was being presented, by Murray Horton, the Campaign for People's Sovereignty pick- eted outside the Christchurch City Council building. CPS made such a fuss about the public being routinely excluded from Southpower Board meetings, that representatives were invited to the December meeting, not only to attend but 10 address the Board, The 3 speakers were Ken Martin, Reg Duder, and Murray Horton. Allwere received in total silence. CPS finally broke through the news media blackout on its Southpower campaign, by getting a “Press” reporter allowed into the meeting for the first ever time, and ‘generating sympathetic coverage. Previous pressstate- ‘ments had been ignored. Murray's speech consisted of reading this CAFCA submission, directly to the Board. Teeth were heard to be ground. Southpower chairper- son, Sue Suckling, confirmed that once it becomes a company [April 1, 1993], Board meetings won't even Pretend to be open to the public). Our title is self-explanatory, and our interest in this, subjectis accosdingly obvious. We are fully aware that the Southpower Board and its majority shareholder, the Christchurch City Council, have emphatically stated that Southpower will not be sold, either to an NZ or foreign private owner. We appreciate that the situation isdifferent from that of other power boards, particularly inthe North Island, where sales to energy multination- als and share issues to the public, are about to become realities, or already have, in some cases. So, first, we congratulate the Board and local bodies for thatemphatic statement that Southpoweris not forsale. However, we don’t see much in the way of guarantees inthe Draft Establishment Plan, We have the promises of politicians, but with the greatest of respect, the NZ. public has grown ever so slightly cynical about them. ‘And with very good reason, ‘Yes, the Draft docs say that any shares offered for sale must firstbe offered toexisting shareholders, butifthey decline to buy, then the Directors can offer them to any individuals or organisations as they sce fit. This dis- turbsus. Whats to stop a future set of directors selling ‘Southpower in this manner? Southpower is, and remains, a publicly owned asset. Any share sales should only come after approval by the public, by means of a poll Onceitbecomes private energy company, Southpower will reat even further behind the veil of “commercial sensitivity”, Its Board meetings are publicly notified, yetmembers of the public (including myself) have been routinely excluded from entire mectings. And not just part ofamecting, or one whole meeting. We have been ‘excluded from all parts of all meetings. Likewise, with a special City Council mecting to discuss Southpower. ‘Meetings of the biggest power authorities, such as the ‘Auckland Electric Power Board, are open to the public, But Southpower routinely conducts all its business behind closed doors. This gives us no reason to trust the promise that future Boards will act in the public inter- est, How will we know? We have no way of observing the current Board in action. We don't buy the argument that Southpower should take over all or part of smalter South Island authorities (such asin the Timaru share swap deal). The argument Watchdog Page 20is that hy becoming a bigger business, maybe the only one in the South Island, Southpower will be better able to withstand any takeover bid by bigger power compa- nies. This disadvantages the customers ofthase smaller centres, ancl, in fact, increases the altractiveness of Southpower to a local or overseas buyer, Watties was ‘one of the big fish that dida’t stop a bigger fish making it an offer it couldn't refuse. ‘That plays into the hands of the Minister of Energy, John Luxton, who wants to restructure the electricity supply industry into one consisting of maybe 6 compet- ing suppliers. We are alarmed by Southpower’s mission statement: “To be the preferred supplier of energy and related services in New Zealand”. This empire building braggadoccio has no mandate from the Christchurch public, wino would be quite happy foritto stick toits job of supplying electricity to Christchurch and surrounds. ‘This goal could only be achieved by mergers and Lakeovers that would very quickly remove Southpower from the control of the people of Christchurch, and quite possibly, from the people of New Zealand, ‘The Draft Plan commits Southpower to cnergy effi- ciency. We don’t see any specifies. Indeed, a supply system consisting of competing companies will try 10 ‘outdo cach other in selling electricity, not by encourag- ing conservation. The private sector does not operate by saying:” Please don’t use our product”, It was this zeal to sell electricity , above all other considerations, that landed us in the Electricorp disaster of this last winter. We totally reject the view of the Maruia Society, a conservation group that should know better, that priva- tisation is the way to achieve energy efficiency. ‘We find ourselves in a strange alliance with Mr John Collinge, president of the National Party, and until he was sacked recently, chairman of the AEPB. He says, in a“Listenes” interview (14/1 1/92): “Privatisation is, great, and has worked well in many cases. But this is privatisation of a monopoly. ‘There’s been nothing else like it, Where you have a monopoly there are undue risks for the public”. He also describes the AEPB as “a licence to print money...an casy business...Everyone likes running that sortof business because the opportun- ities are so immense”, Exactly the same applies to ‘Southpower. ‘Wecentainly don’ (exempt current Southpower policies from criticism. Specifically, we are opposed to the removal of cross-subsidies, to the benefit of commer- is and to the disadvantage of domestic users. Jocal example of the corporate agenda that has landed the country inthe messit’s in now. Why should business get special treatment? Tt can write off its power bills as tax deductions. Ordinary householders can’t do thai. The increasing namber of the poor will find increased power bills an impossible burden, and yet Southpower is increasing them monthly, despite Christchurch having just endured the most vicious winter in memory. This is an abuse by a monopoly - other forms of heating are banned, or extremely expen- sive, Be that as it may, we favour retention of the existing public ownership of Southpower, with some form of accountability through ownership by elected local bod- ies. But that accountability is tenuous now, due to Southpower's obsessive secrecy, and may become non-existent when it is a private energy company. Its mission statement must include a commitment (o energy efficiency, and scale back its ambitions to scrving the people of Canterbury only. ‘Most importantly, it must emphasise public service above all, not selling clectricity for profit. There is a huge difference between supplying and selling. Elec- tricity is essential for everyone, and such a strategic asset must not be subject to the whims of ideologues temporarily occupying office, nor be hijacked by pri- vate sector profiteers. Southpower belongs to the people of Christchurch. We've already paid fort, and you have no mandate to place it beyond our control. RECOMMENDATIONS, USouthpower must remain in accountable public ‘ownership. 2/ Southpower’s mission statement must speci cally commit itself to public service, as opposed to profit making. 3/Southpower's mission statement must confine it- self to Christchurch and Canterbury. 4/The establishment plan must emphasise energy efficiency and affordability. S/Thesecrecy that currently surroundsSouthpower’s decision making must be removed. 6/The establishment plan must contain rock solid guarantees that Southpower will NEVER be sold. Southpower Update Southpower wrote to us (and to everybody else who made submissions) advising which changes had been incorporated into its final Establishment Plan, Some covered concems that we had raised eg “energy conser- Watchdog Page 21vation", and “reinforced public consultation process, befare share disposal” Statement simply confuses things: “Clarities Canter- bury Region will be primary focus of business, how: ever, deregulation will enlait operating on a national basis”. What does that mean? The January letter also stated that Southpower's owners (the Christchurch City Council, and smaller local authorities) will “take notice” of recommendations to: “Hold a meeting once. a yearto allow members of the public o discuss results| and Annual Report with Owners and Directors; and to consider mecting certain social obligations from divi-