Plunder! launch . .

, " "

10

Number 68

October 1991

Contents

GAD and other Free Trade Threats ..

Page 2

Obituary: Father John Curnow 7

Oornatco is after Manapourt . , . . . . . . . . . . . . . . . . . . . . . . 10

comalco

Manapouri, by Geoff Bertram .... "....... 11

The Save Manapourt 1 New Zealand tried Sonja Davies was

explamed .

Agent Orange the USAF and

of the cover up .

Overseas Investment Commission: April to July 1991 deci-

sions . . . . . . . 44

PeaceLink " lets double the number of subscribers 60

Dennis Small

Free trade can so often for this.

The current

Round is a cover

Corporations with global driving behind the trade negotiations

conducted in the forums of the Agreement of Tariffs and Trade. They want

loose rules on trade to reduce the of governments, consumers, and workers. They

oppose efforts at democratic control and work to undermine high standards of public protection.

To quote an editorial from "Multinational Monitor"; "With their seemingly benign call for trade liberalisation, multinational corporations are seeking to appropriate national sovereignty and promote deregulation on an international scale" (May 1990, p6).

In recent years, the term "GA'IT' in Aotearoa has almost been synonymous with "Mike Moore". Mike has now supposedly disowned Rogernomics but the very embodiment of its successor· Ruthenomics (or Ruthlessnomics) . is touring Europe and North America this September to tout for foreign investment. Richardson boasted of "very tangible pay-offs that we are pursuing" (The Press, 10 September 1991). The pay-offs MIl indeed be made to those Transnational Corporations (TNCs) eager to exploit the Employment Contracts Act. Now that National has satisfied so much of the demands of foreign

capital, more of our assets can sold

AU this fits the US sponsored IMF Bank GAIT pattern of transnationalisation.

TIle US corporate agenda would mean the freedom for TNes to do

virtually what they like. Mike and have never told us about the corporate agenda

for GATI'. Instead, we hear mostly about how our farmers would benefit enormously from free access to agricultural especially in Europe. But the loss of control over our economy is the ultimate price to pay off foreign creditors. Even our farmers,

or many of them, would be out the end as corporatisation and foreign

ownership reaches into the agribusiness rules.

There are many big business groups pushing the GAIT agenda. A key example is the Multilateral Trade Negotiations (MIN) Coalition. Chaired by the former US Trade Representative, William Brock, who is now in private business, the group includes American Express, General IBM, General Electric, and Procter and Gamble. Such we groupings more or less determine the actual proposals which the Bush Administration presents.

Some examples of what free trade would mean under a corporate-led GATT regime indicate the dangers lurking for NZ the shifting shoals of the world economy. Several relate directly to NZ.

·3-

EXAMPLES OF MUL'I1NATIOl'::L0,L PRESSURE RELEVANT TO GATT

1. NZ has been placed on a "watch list" by the US as a country deemed to have unsatisfactory pharmaceutical law protecting patents. A Ministry of External Relations and Trade spokesperson said in May this year that it was the first time NZ had been placed on the "watch list". The rights being challenged by the US permit NZ to override company patents and import generic products; and also to import medicines form the cheapest international branch of a multinational. Neither procedure has yet been used, Apparently, NZ meets the current GATf standards for intellectual property but all this is under review at present.

Glaxo recently put up the prices of certain drugs very steeply, Even the Government objected !

Earlier in 1990, when the Health Department set out to buy brand named drugs from places where they were being sold cheaper, the Australian branches of the drug multinationals acted to protect the pricing system of their NZ counterparts. Wholesalers were warned not to resupply to NZ. The Health Department got caught up in the intellectual property wrangles being waged at the GATT talks in Geneva. The US is keen to protect the copyrights of its multinationals. The US was the most "forthright" country in telling the Health Department to back off OUf Government buckled under pressure. During the importing wrangle, NZ

was threatened with access to certain medicines cut off.

2. The Consumers' Institute claimed that changes to NZ's food regulations have been made to satisfy the demands of a large American multinational, not [Q benefit or safeguard consumers, Specific exemptions from our food regulations have been given by the Government to the world's largest cereal company, Kelloggs, The Health Department changed standards for additives in breakfast cereals in April, Kelloggs long lobbied for our food standards to be slackened.

It seems that a push for harmonisation is affecting NZ through Closer Economic Relations (CER) with Australia. Our food regulations are apparently in urgent need of an overhaul and large Australian manufacturers are putting the pressure on for us to align these regulations with Australia's own looser standards. Kelloggs closed its NZ factory over five years ago and began importing its products from Australia.

3. In July 1988, after strong lobbying from the US Pharmaceutical Manufacturers' Association, the Reagan Administration imposed trade sanctions against Brazil for its failure to provide patent protection to US pharmaceutical firms. The US lifted the sanctions in June 1990, after Brazil pledged to adopt strong patent protection legislation. In April 1990, the US Trade Representative identified 23 countries with whom it planned to negotiate over intellectual property standards. The "Special 301" section of the 1988 Trade Act requires the US Trade

Representative to unfair trade protection.

on which it determines are engaging in

not offering strong enough intellectual property

4.

India was placed on a

insurance to

on the grounds that it has not opened up its

5.

The Indonesian Rattan is a very helps check the EEC have been

ULU~'A' the export of raw logs and rattan in 1985. product but getting scarcer. The raw log ban world's tropical timber. However, the US and the Indonesian government to overturn the ban. They

6.

In Japan, South consumption were cigarette markets to

heartening declines in the rate of cigarette halted when US pressure forced open their

TRANSN A TI ON AL_S.QLJJ'I1 Ql':!S .'1

Figures from the United international trade is statistics:

on Transnational Corporations show that between and within Tb[Cs. Some revealing

80 - 90% of US and Japan's trade is of free trade. What exchange of goods on markets. In fact, concentrates and accumulates. Holt Harvey and manufactured exports

trade between TNCs, 30·· 40% of US, UK firms is, of course, far from the ideal from external restrictions, rather than

is supposedly meant to unravel distorted distorted markets, TNe power Challenge, Brierley Investments, Carter of the country's export earnings from

On the world scene, in

naturally want:

so oppose tariffs, import controls, health safeguards

cheaper controls on

so oppose environmental restrictions, restrictions on local content,

ability to move country; so want other

and profits from country to restrictions on financial and

protection where it suits their interest; eg strong patent legislation.

But even the advocates of market solutions to all problems can acknowledge that so called "free trade" is in conflict with "social, political and cultural concerns and more recently, environmental ones", ("Finance and Development", IMF /World Bank, June 1991, pI5).

How would the free market solution under GATT affect NZ? Look at some policy options that would be knocked out of our grasp:

Protection of employment by import controls, high tariffs - out.

Control of credit and money supply - very difficult due to rules on financial services.

Increased local processing; eg by bans on raw log exports "discriminatory practice" - out.

Protection of native forests' eg by bans on exports· out.

Increased local content

- verj difficult due to rules on media.

Ban on tobacco advertising· out, due to freedom for advertisers.

Food and other health regulations; eg Kelloggs, standardised by TNe dominated Codex Alimentarius, a United Nations agency.

Frigates - no local content

Pharmaceuticals: Indian solution (if Drug TNCs won't make licence available or produce locally at a reasonable cost, then local manufacturer can) - out.

MORE DfFFICUL T AREAS

Agriculture - "Supply Management" (price/income smoothing) not allowed (eg Dairy farmers); but will help exports at expense of farmers in EC and other countries. Will make it very difficult for Third World countries to become self sufficient.

Intellectual Property Rights - Some advantage to NZ in protections due to our highly developed agriculture, and high level of research, but for Third World means new seed varieties etc will be so expensive that TNCs will dominate agriculture.

Textiles - threatens industrialised world's textile industry, may help to build up Third World industry.

If we break any rules, we are subject to trade retaliation.

FAIR TRADE, NOT FREE TRADE SHOULD BE OUR APPROACH!

Core principles are:

controls on working conditions right to protect local employment

right to protect health and environment

right to manage supply of goods and services.

Even world government by TNCs IS problematic. GATT may lapse. What seems more probable than free trade through GATT is the rise of trading blocs with their own free trade zones. Certainly, this is the more immediate threat. The far right Heritage Foundation is now proposing that the US should offer NZ a free trade agreement as a step towards mending the rift over ANZUS. NZ and Australia should be invited to Join the proposed North American Free Trade Area (NAFT A) that would be created after negotiations between Canada. Mexico and the US, has said the Foundation's policy analyst (The Press, 22/7/91). Similarly, Fiji's Minister for Trade and Commerce has proposed a free trade bloc comprising Fiji, Australia and NZ (The Press, 9/9/91) Meantime, the NZ Government is involved in the Asia-Pacific Economic cooperation Initiative which is intended to promote free trade throughout this region.

We have much indeed to watch out for and positively counter I!

Footnote: Amid the current furore over the Government's Kiwicard and allegations about its tD card intentions, it is sobering to trace the origins of the Big Brother system being foisted on NZ. The lead headline on "The Press" on 2 August 1989 read "LD. Plans Pushed in Tax Rethink". The report then went on to say, "A personal identification number system is proposed for NZ in an International Monetary Fund report on the Inland Revenue Department released yesterday". Research by the Christchurch publication, "Chetword" has turned up this enlightening piece of information. "Chetword" notes that in May 1988 "Bits and Bytes" had reported that the Department of Social Welfare had already held talks with an overseas supplier of plastic cards. Obviously, plans have been afoot for some considerable time! Free trade means the loss of our freedoms in the most personal sense.

(For "Chetword'?s Kiwicard paper, apply to Box 5101, Papanui, Christchurch)

o BrI1JARY

- Murray Horton Manila

Father John Curnow died of a attack in July, aged 71. He was, of course, a CAFCA member and "Watchdog" subscriber. We extend our condolences to family, colleagues, and his innumerable friends in Christchurch, throughout the country, and all around the world. But ours was only one of a huge number of groups, both national and international, that John enriched with his presence,

He was a driving force in the progressive wing of the Catholic Church, hIS most prorrunent position being executive secretary of the Commission for Evangelisation. Justice and Development, He was a leading figure in the Christchurch-based CCJD Despite his manifold talents, his charisma and his towering intellect, he never sought to ascend into the Church hierarchy himself. For example. he was a good personal friend of one cardinal but he never tried to exploit that, and indeed remained a simple priest all his life. His deliberate choice was to remain at the grassroots. to stay among the people, to be at one with the poor m both NZ and abroad,

As a high profile progressive priest he earned the undying enmity of the reactionaries In the Catholic Church, and was attacked in the "Tablet." The attacks were always synchronised with conservative politicians, and usually concentrated on his ceaseless solidarity work for the Philippines. The charges usually included tired old libels that he

was channelling the money to Filipino Communists.

John was involved in a whole of Ploughshares, the Christchurch violent witness against the against our involvement in affiliate, CDH, now America Day picket of the

progressive groups. He was one of the founders of Catholic clergy and laity that has borne nonat Harewood, against NZ military spending, and Ploughshares has worked closely with our recently it joined the July 4 Independence from

John was involved in all the Through his Church connections, he networked with the Maori nationalist movement. He fought the good fight against apartheid, as did so many other progressive It was good to see him at the 10th anniversary party of the Springbok Tour. He ensured that Church people were regularly exposed to

progressive leaders, eg he was in getting both Owen Wilkes and David

Robie to address a high-powered conference of religious. Both were inspired

by the occasion.

He was never afraid to associate with radicals. When the PYM reunion was held in

Christchurch in 1989, he attended played a full part the open forum that analysed

the youth movement of the 70s. Easter he attended the world premiere of

"Rebels in Retrospect", the documentary shot at that reunion.

But John's internationalism, getting home from the specifically, that was his the shocking exploitation of the Filipino obituary for People."

beyond homeland. He personified

on every In fact he died just after

It was Asia in general, and the Philippines came here in 1971 and saw for himself on the island of Negros, I will quote from John Curnow, A Friend of the Filipino

"A tireless solidarity John became involved in Pilippine matters through his many ecumenical involvements. As Executive Secretary of the New Zealand Catholic Commission for Evangelisation, Justice and Development, he became associated with NASSA, Task Force Detainees and a host of other Christian grassroots initiatives.

He was a founder of ACFOD (Asian Cultural Forum for Development) and the Asia Workers Links through which he established long-lasting friendships with Philippine development NGOs, people's organisations and workers' movements ..

FI. John's involvement Philippine issues led to his participation in the Resource Centre for Philippine Concerns (RCPC), a communication and

networking centre for support groups in Conference on He was a founding also on the Planning Ecumenical vU'HJ.'.d in 1983,

He pioneered in building Philippine He helped plan the Asian Regional Philippines held in Tokyo in 1979. Advisory Board in 1981. He was Committee of the International Philippines held in Stony Point, New York

organise in and served as a Philippines

Philippine cause was to culminate in the on the Philippines, which he helped conference was the first of its kind national solidarity conferences on the

Network of Aotearoa. Current John as his friend, inspiration and mentor John committee until his death.

Essentially, he founded coordinator, Keith Locke, continued to work with the

Before I first came to the expertise and knowledge variety - he was instrumental ABC's 1990 Touching the delegates.

I went to see John, for his unparalleled Nor was his support merely of the moral funding for one of my trips here; and for the , which included Filipinos among the international

I am not a Catholic, among our circle got, and we had a singularly delighted make a Catholic out

to get a time

O'Connor). But John gave as good as he never missed a chance to have me on, and was that I was marrying a Filipino. "Ah, Murray, we'll very sad that he and Becky will now never meet).

It was appropriate that I should in Manila, on the first day of my current sojourn, when I was told of his death. And the weather was appropriate, too; 80% of the city was under water in a monsoonal flood.

Being here meant that [ had the unique privilege of being the only New Zealander among the 100 people who attended a memorial mass in his honour. Those attending represented a wide range of groups, and the major sectors of Filipino society - peasants. workers, religious, the poor. Very, very many were John's personal friends, and spoke of him in absolutely glowing terms. Tears flowed freely. I was invited to speak, and concluded with the following "J abo, I will miss your wisdom, your sense of humour, and your much valued friendship. It is my ultimate mark of respect for you that your death has achieved the previously unthinkable it has got me into a church. And you were the principal reason that I can stand here in the Philippines and say that I am proud to be a New Zealander."

The last time I saw John alive was when be came to my house for lunch, at the end of June. Ever the man of practical humility, he brought the food soup made from

tomatoes he had grown garden where he lived. He was going away 10

the Marshalls and wouldn't until I was en route for Manila. Maybe we both

sensed that this would be our meeting. We talked at great length of the Philippines,

the country we both love, and which such a marked influence on both our lives.

It was the best possible to conclude our friendship.

I finish with two quotes. From the Philippine Solidarity obituary, "He died with his boots on." And from the Manila memorial mass, "May we stand together to pursue the dreams of Fr. John in bringing about the society where true freedom, democracy and love prevail."

Cafca will be involved the of Action" to express solidarity with all sectors of Nev" Zealand society who have suffered at the hands of the rampant, relentless and misguided policies of the present We hope you'll find an a~propr~ate. way to be part of this nationwide gesture of "no confidence" in free market right W1l1g Ideology,

Mass direct action by the public is our only remaining defence against a government which fails to act on the pleas of hardship from its voters. Listen to your local orgamsers for details of the activities you can be involved in. Your presence is needed.

is on

Away from the attentions determined lobbying job on

New public it is doing a steady and

government to secure the Manapouri Power Station.

The ground has been prepared a move because of governments goal to bring

a more competitive situation power supply which will mean in practical terms

that power suppliers must compete with each other.

Not a lot of attention has on power pricing and the proposed dividing up

of the hydrogenerating assets for separately, Instead the decoy of shares sales to the

public is being placed temptingly under om noses,

The "Save Manapouri 1991 " begun, This time it is focusing on the whole issue of the

nation's power with particular to the hydrogeneration from the Manapoun

Power Station, environmental implications and power pricing, Public meetings have been

held in many New Zealand Christine Henderson and Peter Kammler addressed

concerned special interest groups the public early in September here in Christchurch

A set a papers have been for the campaign by Peter Karnmler and Mollv

Melhuish which make essential reading, to gain an awareness of the economics and energy issues involved. You can obtain these papers by phoning Bob Clark at the

national office of the "Save 1991" campaign on 844-369,

The campaign have a

of

to which your involvement is critical.

~.rl=,IlNDER" LAUNCH

Just a few months Campaign began, here at Cafca we launched

"Plunder" on the New public, Very timely it seems now as the chief subject of

this book by Roger Moody is the mining company Rio Tinto Zinc. This corporation with its links to Comalco is considered to be one of the most powerful and arrogant in the global mining industry,

We invited Geoff at Victoria University as well as working on

book. Geoff is a senior lecturer in Economics activities for many years supply policy since the 1970s.

What follows is his book launch address. We have plenty of copies left of Plunder and

hope that you will buy a copy at special price of $20 to Cafca readers.

Notes for the launching of

, Christchurch, 11 July 1991.

University of Wellington

l. Comalco: Good Citizen or t'redator?

Roger Moody's book, whose publication we are celebrating today, is the fruit of an enormous personal investigative effort into the worldwide activities of one of the great multinational corporations, RTZ, the parent company of Comalco NZ Ltd. It is not, and does not purport to be, an economic enquiry. As Al Gedicks points out in his foreword, the main inspiration for the work comes from the struggles of indigenous people to protect their interests against the mining activities of RTZ. The book is "a guerrilla handbook for doing battle with large. multinational mining corporations". and a recurrent theme. Gedicks remarks, is the "neocolonial rnindset of RTZ's top executives" and "the arrogance of corporate power". Seen from the perspective of ordinary human values, RTZ and ItS subsidiaries emerge as anti-social predators. Moody's book is written from the VIewpoint of the prey

Books of this kind are invaluable in maintaining and advancing public understanding of modem capitalism for two main reasons. they provide a counterweight to the huge mass of corporate propaganda with which public and politicians are continually bombarded, and they keep alive a research agenda which might otherwise become buried, involving timeless issues of power, control, corporate behaviour. individual and community rights, and the role of the state.

Predators do have an important role the ethically outrageous behaviour equally by its clear role as an

order.

reader of the book is struck not just by

corporation managerial staff in particular cases, bur

of creative destruction - Schurnpeter's famous phrase to

describe the process by which capitalism advances as a productive system.

I find it helpful to think of large

as fitting along along a spectrum of "personalities",

from the pure predator to the good citizen. The predator imposes its own priorities, treats local people as the enemy in a resources Waf, prefers to bulldoze opposition rather than compromise or negotiate, and gives ground only when directly confronted by superior force. This hardnosed management style is much admired in some quarters as the epitorny of profit-maximising. competitive behaviour It has certainly served to enrich the shareholders and managers of a large number of the world's leading companies, and it had a vital historical role in achieving high rates of capital accumulation in the early stages of the industrial revolution.

Good citizenship, in contrast, is cultivated as a virtue by companies which view their own long-term profitability as inseparable from the social, political, cultural and economic health of their host community. Such companies see benefits from entering into partnership with local communities, and from negotiating mutually-acceptable compromise arrangements to regulate and

" 12 "

are

without having to

state such

own

The

historical adventures as the means of production from

Insofar as it is false, then under capitalism a democratic state must be locked in perpetual battle with the corporate sector

Both personality types are to be found the world's capitalist enterprises,

objective reason that some firms are dependent upon the widely-defined

the good their host

community while others are not.

economists'

the issue is whether the wider

consequences of a firm's activities are "internal" or "external" to the firm's own calculations about where its advantage lies.

There is always a problem recognition, because capitalists (like any animal species) adopt all sorts of protective coloration, reasons familiar to any watcher of David Attenborough's TV

shows. Predators are virtually unanimous in declaring themselves to be

citizens, and spend

huge sums on public-relations campaigns to portray themselves as such. Good citizens, meanwhile, snarl and wave their claws about in an attempt to impress the stock market and the financial columnists, A good rule of thumb is to judge them 011 their record rather than their advertising.

Two quotations from recent comments on record which that company

Murray Horton of

of the is from

Moody's book:

"Cornalco's history country is one of deceit and ann-twisting at threats to our environment 011 an unprecedented dubious electricity at give-away prices"

The second quotation is a

1991" campaign C'Environmen tal

paper issued by the recently- established Be Faced", Wellington,

Manapouri 1, p.3)·

The record

subsequently with lake UA""U'~'_ or even concern. The smelter's viability did not produced. addition .. the minimise damage to

both in the original Manapouri debate and did not indicate a responsible environmental ethic, actively promoted lake-raising even though the

on the extra electricity that been

a Ministerial request

a period of critical shortage

cross-section

the New

can be made, and can command agreement among a wide image advantages lie,

it afford to have a image.

its stronghold supply contracts

New Zealand, one might feel, has operated within the letter of the

The fact that statements such as

problem" If one assumes that one must conclude that provided that in the process it and tax write-offs. Cornalco

- 13 -

while cheerfully flouting its creative tax accounting,

Government's name, were perfectly legal,

good citizen, and they leave a bad taste

days' cash-flow devoted to the kakapo,

and strong

and

and abroad to blacken

the actions of a conspicuous is not easily cleared up by TV advertising and a few

though the latter (The "power of good" TV

campaign, alas, I am forced to classify as a case of pollution of the media environment)

2. The Record in New Zealand: Some Numbers.

As an economist reading Moody's account I am unworried by the partisan stance he adopts; first because this book is no more partisan than the typical Comalco briefing document, and second because he focusses clearly and effectively on one particular set of negative impacts of RTZ on local communities where it operates.

To put his material in context, it may nevertheless be worth trying to fill in one or two parts of the wider balance sheet of the Comalco operation in New Zealand. The first point to note is that a smelter operation is in several ways quite different from a mine. Mining activity involves massive destructive Impacts on local environments, and high-stakes contests for control over natural resources, often covering wide areas. As a mining operator, RTZ therefore finds itself in confrontation with displaced or disadvantaged local peoples in many pans of the world, as the book demonstrates.

But as a smelter operator in New Zealand, RTZ in the shape of Coma1co has a completely different relationship with irs immediate host community. To the city of Invercargill the Bluff smelter is a major local asset, bringing jobs and spending to an isolated region of the national economy. Few people in Southland doubt that the has brought substantial economic gains to the region. The defence of Cornalco's interests by the current MPs from that pan of the country has the same ring of conviction as the tenacity of J Hanan, then MP for Invercargill, in acting as the company's chief New Zealand promoter in the early 19605.

The negative side of Cornalco's record in New Zealand does not lie in immediate local environmental damage, which has been minor by international mining standards, nor in an antagonistic stance towards the local community. The negative impacts of Cornalco have been borne by New Zealand as a whole, while most of the positive impacts have been concentrated in a single city. The various electricity contracts were negotiated with the Government; the construction of Manapouri was financed by taxpayers and electricity consumers in general; and the continuing supply of electricity at half the price paid by other users constritutes an ongoing subsidy in the sense that the smelter pays less than the national opportunity cost of electricity from the grid. The "dubious share deals" mentioned by Horton included several with national political figures; the

Save Manapouri campaign which

company opposed was a national campaign; and the current

manouevres to gain control of the Manapouri station represent a bid for a national asset

- 14 ~

For

it true that

at

as a

the Manapouri

for

the Could

not stepped in (in 1963) to build for calculating the electricity price

not have been pitched a bit more towards giving the Government a the resource rents from South Island electricity? Could Inland Revenue have obtained more tax revenues in the first couple of decades by more thorough investi company's affairs? Did the third potline really have to use such obsolescent energy-wasting technology?

Questions such as these call for some hard numbers, and here I come to what always been for me the real paradox of Cornalco's record in Zealand. The company's promotional materia! has always insisted both that the project was beneficial to New Zealand and that the smelter was only marginally profitable. Both these claims are essentially quantitative, but despite publishing a series of purported results of quantitative cost-benefit studies, the company has left these results

unsubstantiated, and therefore

because of its insistence on hiding the basic numbers

behind a screen of "commercial confidentiality" This secretiveness has left it vulnerable to the charge that it must have something to hide. Add to that the intensity of irs lobbying effort [0 maintain the various special favours it has wrung out of previous Governments, and the impression quickly spreads that the g in defence of very high profits to justify its

willingness to

opinion.

I have recently put together a

the relevant numbers,

are reproduced In the is set out in a lengthy

critical comments from ) The

tables

to

working paper

aim this

smelter, the Manapouri ,.,,","/00·'basis for a private

the two combined.

generated by the Tiwai Point provides the view of thea

assessment the two projects from the

and the smelter In order to move on to a full

of the New it will be

information, but for the moment I have deferred that while histories.

promoters ~ cost-benefit assessment from necessary to add quite a I finish work on establishing

(Perhaps I I not made from the company to the exchange; I have not used a

concrete

of my

are four

taxes, which transferring some surplus

not placed a 10% shadow-price premium on foreign

model the grid to the value

Manapouri the the same taxes as

Comalco, I have u tax figure. The are potentially

significant matters which I to with the next draft tax comment is intriguing.

considering that the company tax rate for the Japanese was originally set well below the rate for

- 15 -

Cornalco, and I shall follow it up. The discussion, but is not relevant to my

issue requires more technical flows have been.)

Real Cash Flow Streams for Smeller Owners and Government 1960- 1990 :

1988 Dollars

$m 300 200

100

1 00 200

300

400 1960

1975

1980

1965

19"70

Figure 2

Cumulative Real Cash-Flows for Smelter Owners, Government. and Both Combined: Millions of 1988 Dollars

$m i .500

500

- 1 . a a 0

- 1 ,5 00

- 2, 000 1960

1970

1975

1965

1980

1985

Smelter consortium

..

New Zealand Government

1985

1990

-0- Smeller

·6- Government

-- Combined

900.0 800.0 700.0

600.0 500.0 400.0 300.0 200.0 100.0

o . 0 -+-'+"""1""'~,,"+,,""+'--"""'+

II Surplus Imports Tax

Labour Electricity Local supplies

1970

1975

1980

1985

1990

There are a lot of comments one could make about these figures, but in the context of this book launch it seems worthwhile confining ourselves LO three profitability, tax effort, and the electricity price. Figures 1 and 2 show my provisional estimates of the cash-flow streams of the

smelter and the Manapoun constant 1988 If correct those figures

indicate a real internal rate return for the (that taxpayer) of just over 6% with

a 23~year payback period for Manapouri took until 1987 to get into the

real terms). This is rather less tnan the 10% demonstrated to Government officials in 1986: all

black, in the sense of having real rate of return which ~V'UU.A,-"'U ,"weu",,) I can say at the moment

The

four to

figures indicate for the

about a rate of return

for the first two potlines. and by the preliminary unadjusted from the door but is not very 1990.

cash-flow figures is roughly 11 dramatically above the risk-adjusted cost

to

over the

If, therefore, one could go back to 1960 and have a

with

executives who signed up

the original deal to develop Manapouri for aluminium smelting, one would have to ask them

whether an internal rate of return 8(10 on the total the gains to the

company's worldwide interests, be enough to Warrant the project proceeding. The fact

that it's not easy to give a quick answer to this perhaps indicates why the company was able in 1962 to present a credible threat of withdrawal, precipitating Government to over the cost

of Manapouri, By then accepting a rate return on the power Government boosted the

company's return above 10% real, at which level even 1980 Treasury would have accepted

the smelter as a reasonable bet on a

basis.

-17

Nbw what smelter proposal rather marginal much to do with matters

energy resources,

specific regional

me

IS

to

development gains when large are from industrial centres, and the external benefits from diversification of the industrial productive base of the economy. The private reasons for Investing In smelters are closely bound up with the strategic calculations of large multinationals, for whom H IS vital to hold a portfolio of producing in different countries, in order to present a strong bargaining to individual national governments (and also to permit transfer pricing and similar means of shifting profit and tax liability around me these circumstances, simple internal-rate-of-return calculations based on direct cash-flows tell only a part of the story. From the parent company's point of view Cornalco NZ Ltd has paid its way while providing vital leverage in negotiations with state and federal authorities in Australia, and no doubt elsewhere in the world.

A glance at the tax payments in Table 1 and Figure 3 makes it obvious why the company found it expedient to keep the figures condifential until the late 19805, and then to begin releasing them in press statements. It seems likely that the politicians and officials who in the 19605 negotiated the original agreements with Cornalco were not fully aware of the extent to which depreciation allowances on the smelter investment would exrnpt the consortium from paying direct taxes during the 1970s; indeed, Muldoon's raising of the electricity price 10 1977 was probably motivated partly

by the remarkably low tax contribution Following a brief period when taxes began

to bite about 1980, the third potline brought another period of freedom from tax until

1987. To obtain further tax wri a fourth potline became necessary, this new

investment is still in the wind. has at last become one of New Zealand's more

significant taxpayers. mean that the company is on the welcome Comalco's entry into the our guard.

can and saving the kakapo, may

to becoming domesticated at last I am sure that we would all good citizens. But I think that it is a bit early yet [0 drop

Of course, even as a taxpayer, terms current and the smelter is now a very

satisfactory asset to possess. same applies to the Manapouri power New Zealand

taxpayers and electricity consumers the thirty-year cost of installing the station for

Cornalco's benefit, and Electricorp now a clear $100 per year cash under the

existing contracts. 'This is not the time to fought, and half-won, in the 1

against the contracts themselves that battle was

a new era, which all sunk costs have been

recovered and the contracts represent an increasingly-attractive asset for New Zealanders, and an

increasingly-irksome burden for removes the legal edifice

behind which the company to of

foreign direct investment around over the of advantage moves from the

company to the host government, this is one important reason why contracts have dates!

it is not at

contracts ten

contracts

are now a powerful bargaining

in the

of

The internal rate of return over the

life of a project, when viewed in retrospect, is of historical

interest but does not provide us with of what to do now. In economics, byegones are byegones, and profit-maximisers (whether government or private) are presumed to calculate their present actions on the basis of the opportunities and constraints they now face. The situation with the Manapouri power station and the Tiwai Point smelter is fundamentally different now from that which prevailed in 1960, because the investments have now been undertaken and are sunk costs. The same applies to the past levels of tax payments and electricity payments by the smelter. The same also applies to the issue of surplus energy, for while Manapouri may have seemed a surplus asset in 1960 from the point of view of the national electricity system, it is certainly not a surplus asset today.

What we have today is a power station which turns out 4,000 gigawatt-hours of electricity annually at negligible operating cost, and a smelter producing 250,000 tonnes of aluminium per year. The

l\.VO dominant constraints are the state the world aluminium market and

legal contracts under

which Cornalco puchases electricity from the

predicted, and nothing we will it

at special prices. The market can't be

The contracts are another matter.

A glance at

that

the 1

the smelter was

around $200 million

a on average while paying about $100 million year for its electricity and (once depreciation write-off's on the thid potline ran out) about half that in company tax. If the price of electricity had

been, , the South Island 10% (which would be my guess of a fair

level-playing-field price for electricity at a 100% factor today) then the profitability of the

smelter would have been probably its owners cut back their electricity

use from a very inefficient 17,000 per tonne of aluminium to something closer to the

13,000 k Wh/tonne found in overseas. Would the smelter have shut down if forced

to

fun opportunity cost

would be no, because it still

shareholders' equity would obviously finn, where the strategic multinational profitability, answer seems But confronted with company was to take initial expectation that Government would

In terms of first-year economic theory, the answer

variable costs; rate return on

dropped quite a In terms of advanced theory of [he

of

greater weight than immediate

that the had been

the

of the company

to no,

closedown, and be prepared to go all the in the full

The crumbling of the Labour Government in

- 19 -

1986-87 was fascinating to 1977 is equally

a study. The

- though the stakes were lowerthen,

.,,_," \

Muldoon in Muldoon

only

the power

to one-half the going wholesale rate.

Now as the existing contracts head towards expiry over the next fifteen years, both New Zealand and the company should be planning on moving into an environment where the electricity price for the smelter reflects the energy situation of 2000 rather than of 1960. Once the Cook Strait cable is expanded, if the smelter were to close down then Electricorp's present burning of natural gas at Huntly and New Plymouth would fall dramatically, because it would be cheaper to bnng Manapouri power up through the grid to supply national demand. What this implies is that the smelter is already running on Maui gas at the margin, and in the near future will be entirely gas-powered. The inherited legal contracts (buttressed by the scandalously cheap gas supply contracts awarded to Electricorp a year or two ago) presently constrain New Zealand from acting in an economically optimal way by charging the smelter the true cost of supplying its electricity; bur this constraint will not last forever

That IS why Comalco IS now noisily maneouvring to buy the Manapouri station. If new contracts with Electricorp are not negotiated shortly, providing security of supply to the smelter at a price that IS mutually acceptable (with Electricorp constrained to set its price at the long-run marginal cost of supply), then the smelter does indeed face uncertainties that will loom over its investment plans. If Comalco controls a 4,000 GWh power station, then the uncertainty disappears, although the cost Issue remains essentially the same, because any owners of Manapouri will always have the choice between supplying the smelter. or selling the power for its market value. Why accept half the price available on the open market for electricity?

There are only two ways for Cornalco to lock in half-price electricity for the next half century. One IS to buy the power station at half its value and integrate it into the smelter consortium, so that the electricity price IS merely an intra-company transfer price, and not an arms-length market transaction. (This. of course, would not prevent the consortium from shutting down the smelter and selling the electricity for a profit. if it pays to do so. The sale of the station would not eliminate uncertainty - it would just transfer the burden of uncertainty from the smelter onto the Invercargill labour force.)

The other winning strategy for Cornalco would be to trap the New Zealand Government into another long-term supply contract written by the company's lawyers and full of small print which adds up to a replay of the history of the last thirty years.

I think New Zealanders should be opposed to either of these options. There is no reason to sell Manapouri to any bidder not willing and able to pay the full discounted present social value of the station as part of the national electricity system; that means that any price below $3 billion has to be viewed with suspicion (Electricorp, incidentally, has apparently offered Manapouri to Comalco at between $2 and 2.5 billion). And there is 110 reason whatever to get into another detailed lawyers'

· 20 -

delight

a contract based upon the worldwide expertise of the aluminium industry In

out-manoeuvring national governments,

The new electricity contract that should be on offer to Cornalco is a very simple one: twenty-year security of supply on a rolling basis (so that at each point in time the company has at least a nineteen-year guaranteed supply in hand to enable investments to be undertaken with adequate time for gestation and write-off), at a price which grants a 10% discount on the wholesale price in the open market, to reflect the high load factor of the smelter. If the smelter can't survive at that electricity price in the long run, then either it should close down or its owners (and the Invercargill community) should publicly provide good reasons for the New Zealand Government continuing to subsidise its profits. Any justified subsidy should be approved by Parliament, and the amount of subsidy paid should be reported to Parliament each year.

Quite apart from the undesirability of selling Manapouri to Comalco on the cheap, or on the quiet. or both, there seem to me to be compelling reasons for not selling it at all. It is one of the very few large-scale industrial activities located in a National Park, and it is the jewel in the crown of the national electricity system. Energy policy and the energy economy are in a state of flux, and Manapouri is a key strategic asset in the Electricorp portfolio. There are strong reasons for keeping Electricorp as a single entity and for retaining its existing integration of generation and transmission activities. The real problem we need to face in the electricity sector is the difficulty of persuading Electricorp to behave as a good citizen. Since we are all, indirectly, shareholders in Electricorp we should be in with a chance on that unless the dogmatic lobbyists for privatisation (including the Corporation's own top management) succeed in removing the corporation from our ultimate control.

Thank you.

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· 24 -

Table EA:2
~alengar-vear Electricitv Price EsIimate~
(cents per kWh)

Calendar First Second Third
years Agreement Agreement Agreement"
1971 0.16 0.55
1972 0.1'6 0.55
1973 0.16 0.55
1974 0.16 0.55
1975 0.16 0.56
1976 0.18 0.94
1977 0.29 1.26
1978 0.65 1.40
1979 0.91 2.04
1980 1.02 2.35
1981 1.11 2.53
1982 1.24 2.35 2.81
1983 1.26 2.58 2.89
1984 1.30 2.84 2.97
1985 1.54 2.98 3.48
------------------------ ---------------------- --------------------
Lower Upper Lower Upper Lower Upper
1986 1.61 1.69 3.00 3;14 3.64 3.64
1987 1.61 1.82 3.00 3.40 3.64 3.64
1988 1.61 1.94 3.00 3.61 3.64 3.64
1989 1.61 2.00 3.00 3.73 3.64 3.64
1990 1.61 3.00 3.64 3.64 ~ ...

- 25 -

POWER FOR OUR FUTURE

-,

THE SAVE lVIANAPOURI 1991 CAMPAIGN Briefly Explained

*' Our goal is to encourage the Government and Opposition to recognise that the generation of hydro-electricity in New Zealand is a unique national asset.

>I< This resource has been paid for by the people of New Zealand. In lives disrupted. in land inundated. and in rivers destroyed. It belongs to us. and IS essential to our future

"It is an economic monopoly which should be kept intact in public ownership. and never split up or sold.

*' The present system IS integrated to rrururruse the cost of production. and the cost of electricity to the user. A Hydro system in public ownership allows us to use our electricity resources

w is e lv

*' No private company must gain control of the lake level of Manapouri. with the right to squeeze out the last drop of electricity.

*' A sale would lead Electricorp to make more use of fossil fuels to produce power. plus more carbon dioxide.

"The cost of electricitv from existinz hvdro stations is on a slidine

~ . ~

scale. We believe the profits from this should go to the people

*' We believe Energy Efficiency must be promoted to conserve our resources.

* If Cornalco or some other consortium is allowed to purchase all or part of the system (e.g. Manapouri), it could end up selling us back our own electricity. If this happens. we will end up being merely onlookers in our own countrv.

· 26 .

POWER FOR OUR FUT1JRE

12 September 1991

Dear Member of Parliament

I am writing to you to ask you to actively support the Power for Our Future movement's oppositron to the plans announced by the Minister of Energy. the Hon. John Luxton, to privatise the electricity industry.

You will be aware that the plan runs counter to a remit passed by a heavy majority at the National Party Conference, and to statements that it is totally at odds with the National Party manifesto

Our organisation is apolitical and our only vested interest IS In the heritage of our country

Our members are so deeply concerned about what might happen as the result of this kind of privatisation that our efforts are being funded by private contribution.

The generation of hydro-electricity in New Zealand is a unique national asset. It has been paid for by the people of New Zealand in lives disrupted, in land inundated, and rivers destroyed. It is an economic monopoly which must be kept intact in public ownership.

We ask you to help us achieve this goal. We want the Government to govern, and not be held hostage to big business.

Our contention is that New Zealand's electricity system does not need fixing. It isn't broken.

Power for Our Future wants to see Electricorp retained as a single SOE. with a statement of corporate intent that better reflects the needs of our country than the needs of the Corporation.

NATIONAL OfFICE AND NETWORK CENTRE

1A MACDONALD CRESCENT, WELLINGTON, NEW ZEALAND TELEPHONE (04) 844-369 FACSIMILE (04) 844·928

PLEASE SEND FINANCIAL CONTRIBUTIONS AND OTHER COMMUNICATIONS TO P.O. BOX i 1051, WELLINGTON

- 27 -

A progressive tariff structure could be introduced under which consumers would benefit from the large amount of electricity which is generated.

The Impact on Pensioners:

Power for Our Future analysts have been looking at the figures for people who might get $1400 from a government electricity share handout. and what might happen when the electricity prices go up.

A 20% price rise for a person with an annual power bill of $600 means he or she would have to pay an extra $135 (inc. GST) $1400 invested at 9% would yield $126. With 24% taxed off the interest. that would leave $96, or an overall loss of $39

The government's plan would especially hurt people aged between 60 and 70.

Take a person with $4000 invested and on GRI. The allocation of $1400 to them. invested at 9%, would yield $126. But the Government clawback would leave them with only $9 to cover the higher charges for their electricity

The consensus of opinion is against the government's plans:

The government proposal to gift electricity company shares to the public is devious and dishonest. - Wellington Capital Power Chairperson and city councillor Russell Armitage. (Evening Post 10/9/91)

Fears have been expressed that changes to the electricity supply industry, including a share give-away. could be highly inflationary. - Morning Report 11/9/91.

It would almost certainly have an inflationary effect, with many people expected to cash in their shares and go on a spending spree. - Steven Gale. senior economist NZ Institute of Economic Research (Morning Report - 11/9/91)

- 28 -

The Minister's view on shareholders having a say in the running of boards is nonsense. The Minister is either naive or misleading. David Russell. Consumer's Institute. (Evening Post 10/9/91)

Environmentalists, Unions, suppliers and big electrical users said

it might prove a disaster. - James Gardiner. Energy Reporter (The Dominion 11/9/91)

The government is risking doing the economy more harm than

good. (The Group) supported the aim - to increase efficiency

but doubted enough thought had been given to the process. - John Scott. Chairperson. Major Electricity Users' Group. (The Dominion 10/9/91)

Forcing Power Companies. formed from Power Boards. to give away most of their shares would be a Treasury-inspired disaster Peter Malone, MED Taskforce Chairperson. (The Dominion 10/9/91)

. the giveaway of shares is a fast move to privatisation, and if we pri vatise and we don't actually have regulation. and Mr Luxton has said he doesn't want regulation. then what we actually risk will be price hikes. because you have got privatisation of monopoly without regulation. - Sue Suckling. Chairperson. Southpower. (Radio NZ 9/9/91)

The increase in domestic power of, say 20%. would result immediately in a half-percent addition to the inflation rate. - Sue Piper. Chairperson. PSA (Morning Report 1 i 19/91)

The independent expert on electricity pricing we spoke to .. says it's fair to say households could be on the way to a 50% plus increase in electricity. while industry could face a 25 % hike in real terms. - Peter Verschaffelt. Radio NZ Business Editor (11/9/91)

A gift we'll all pay for. If the consumers are the real owners, it would have been polite to ask them first. . The Dominion (Editorial iI/9/9l)

The present legislation is not strong enough to provide protection of the Lakes (Te Anau. Monowai and Manapouri) under private ownership. - Awarua M.P., Jeff Grant (Southland Times 3/9191)

This montage of oprruon. put together at very short notice, reflects the general views that are being expressed. The time constraint means it is important for you to have the information.

This matter is of the most vital irnportants to all New Zealanders. attach a copy of our latest News Release. which gives outlines an alternative direction of policy which could be followed.

Power for Our Future has developed a trilogy of expert papers on Profit from Hydro Systems. Energy Efficiency in New Zealand and Electricity Pricing. If you would like copies of these papers. of if there's further help I can give you. please don't hesitate to come back to me or get in touch with our National Office in Wellington.

I hope you will give this matter your serious consideration

Yours sincerely

Christine Henderson "Lintley "

No 4 R.D.

Lumsden. Southland

Phone or Fax: (03) 248-7605

POWER FOR OUR FUTURE is the research and educational wing of the Save Manapouri 1991 Campaign. It aims to bring together people who are willing and able to build a sound energy and economic future for New Zealand based on cost-effective energy efficiency. It says this will benefit the national economy, the environment, and

employment prospects.

POWER FOR OUR FUTURE

NEWS RELEASE

II September 1991

Immediate Release

New Zealand's electricity system does not need fixing broken." says the Power for Our Future Campaign.

it isn't

"We have a much better proposal than the upheaval of the Government's plan to turn the electrical supply authori ties and Electricorp into separate competing units." says Campaign spokesperson Peter Kammler

The supply authorities could be turned into companies. as proposed by the Government. but if the ownership remained as it IS now, that would best serve the consumers that the authorities serve.

OJ A system of performance standards. with performance comparison between the supply authorities. would provide commercial focus," Mr Kamrnler says. "This could be enhanced by allocating 25 % of the ownership to the local authorities in the area served. "

The Power for Our Future movement wants Electricorp retained as a single SOE, with a statement of corporate intent that better reflects the needs of the country rather than the needs of the Corporation.

Mr Karnrnler says such a change would allow the introduction of a progressive tariff structure under which consumers would benefit from the large amount of electricity which is generated today at very low cost.

!MORE ...

NATIONAL OFFICE AND NETWORK CENTRE

7A MACDONALD CRESCENT, WELLINGTON. NEW ZEALAND TELEPHONE (04) 844·369 FACSIMILE (04) 844·928

PLEASE SEND fiNANCIAL CONTRIBUTIONS AND OTHER COMMUNICATIONS TO P.O~ BOX 11051, WELLINGTON

- 31 -

"But it would charge high prices for additional electricity that's used." he says. "That would cover the high cost of fuel that's used to generate the extra power, and the even higher cost of building new power stations."

Mr Karnrnler says such a prrctng system would help energy businesses to focus on consumers in the industrial and commercial sectors as well as householders, and provide the greatest benefits for both the environment and the economy.

"The market power of today's electricity industry makes it impossible even now for energy efficiency to come into the equation." says Mr Karnrnler.

"The new pricing rules which are part of the Government's proposed energy reform package would prejudice efficiency even more. and make alternative fuels such as solar energy and natural gas even less attractive than they are now"

ENDS.

FOR MORE INFORMATION

Phone of fax: Peter Karnmler

(089) 436-5616

or contact: Bob Clark

(04) 767-987

POWER FOR OUR FUTURE is the research and educational wing of the Save Manapouri 1991 Campaign. It aims to bring together people who are willing and able to build a sound energy and economic future for New Zealand based on cost-effective energy efficiency, It says this will benefit the national economy, the en vironment, and

employment prospects,

- 32 .

PUBLIC AWARENESS ACTION GROUPS

Step 1 Form a goup of about seven ofr eight people. 'This will be your Personal Public Awareness Action Group (pPAAgroup).

Step 2 Choose someone to be the Co-ordinator for your group.

This person will be the contact person for your PP AAgroup.

Step 3 Make a list of the names, addresses and phone contacts, for the people in your group.

co-ordinator:

PERSON NAME ADDRESS PHONE
1
2
3
4
5
6
7
8 Note: Each person should be placed on a roster for your group, for example.

Week One

Person 1:

Person 2:

Person 3:

Person 4:

Person 5:

Person 6:

Person 7:

Letter to Local MP Letter to Mayor Letter to Editor Ring local talkback

Phones Local MP at Weekend

Letter to Local Electricity Supply chairperson Phones/writes to Regional Council chairperson

etc.

The Co-ordinators can help you keep in touch with each other to keep support and ideas flowing .. We would like the name and address of your co-ordinator as a contact person and to make sure that there is no unnecessary duplication of effort

· 33 .

The following moves down one place. This means they

only do one thing each week, so the not too onerous. but the

campaign becomes very effective,

Letters to the Editor can comment on "the previous writer" for/against the Save Manapouri Campaign. That can help maintain the Editor's interest.

On a local basis. you may be able to identify other targets. Imagine having a dozen or more people on the job? It would all get quite exciting.

If you have a public meeting during the campaign, take the phone numbers of people who are willing to help, and get them onto your roster. In that way, you'll get imput from a good variety of people.

Remember to make sure that people who telephone the talk-backs have the information they need. If you need further copies of our papers to help them, send us their addresses and we'il send it to them.

Remember, these letters need not be long and involved. A couple of examples are attached, but please try to make your own letters fairly original, including some of your own personal experiences if you can.

Don't be frightened of talk-back radio. Remember, the radio station doesn't normally identify its caners. You don't need to talk on an on. Just make a few quick ~)Qints and answer any questions.

It's a good idea to write out a list of the points you want to make BEFORE you make the call. then you'll fmd you won't be lost for words, and you'll find it's quite an enjoyable experience.

Always remember that the team in the Save Manapouri Campaign Office IS here to help you if you have any problems. Write (Box 11 057 Wellington) to us or give us a ring (04 844 369), Ask for Bob, Graeme or Ian.

Contact: Co-ordinators please make a copy of the names/address/phone list, marking your own, for us.

- 34 -

NZ tried to sell Agent Orange to the USAF

... and Sonja Davies was part of the cover-up

by Owen Wilkes

The only occasion on which NZ was possibly involved in Chemical Warlare production was in the 1960s, when there is a possibility that the pesticides/herbicides manufacturer Ivon Watkins-Dow1 of New Plymouth may have been manufacturing Agent Orange for US use in the Vietnam war.

Vietnam Quote & Comment, an antiwar publlcatlon" in mid 1967 was the first to print allegations by employees that Ivon Watkins-Dow was about to start exporting defoliant chemicals to Vietnam. A few days later Dan Watkins, managing director of IWD "admitted" (to use the NZPA wording) that his company was negotiating with the US Government for a contract to make defoliants for Vietnam. "I do not feel that there is a moral issue involved, and I have a completely clear conscience," he said.' There Were immediate protests, including a well-publicized one by scientists at the Ruakura agricultural research centre in Hamilton. On 28 July the US embassy denied that any negotiations had taken place, and Dan Watkins was quoted as saying "If they say that. I guess its right," and that his firm had decided to stop making comments about the matter." On 8 August the NZ Prime Minister, Keith Holyoake, assured Parliament that "the Government had been in no way involved in the matter," and that, according to the US Embassy, "the American Government was in no way interested in purchasing defoliants from New Zealand for use in Vietnam"." IWD workers were, however, stili claiming that a shipment was all ready for despatch."

The allegations surlaced again in 1989, after US Vietnam veterans had successfully sued for compensation for health impairment attributed to exposure to defoliants. The issue was raised by the Vietnam Veterans Association of New Zealand, led by president Victor R Johnson and research officer John A Moller. The WA was looking into the possibility of seeking financial compensation for their members, who may have suffered illness or injury as a result of exposure to Agent Orange. The VVA sent their evidence to the Minister of External Relations, and the Cabinet referred the matter to the Select Committee on Foreign Affairs and Defence for resolution.

The inquiry

From the way the Government handled the matter it appears that they were more interested in disposing of it than resolving it. The Minister of External Relations, Mike Moore, specified that the Select Committee "should be asked to determine only whether Agent Orange was manufactured in New Zealand" (his emphasis), and insisted that "the terms of the inquiry be kept very tight"_?

Moore's office put out a press release" which made it sound as though this was going

- 35 -

to be a rigorous investiqanon. powerful Parliamentary select committee is being asked to investigate," he was quoted as saying. "Returned servicemen and the chemical company Ivon Watkins-Dow both want the truth out Was it made in New Zealand or was it not? ... A New Zealand company shouldn't have to go through the trials I am putting it through.". The company and servicemen should not be haunted by rumour and innuendo for ever. I want some finality ... , The returned servicemen deserve an answer, The company deserves a fair hearing,"

Moore was laying it on a bit thick. IWD wasn't even a New Zealand company. Founded in 1944 as Ivan Watkins Ltd, the US chemicai giant Dow had bought 50% of it in 1964, acquired a controlling interest in 1973, and turned it into a fully-owned subsidiary in 1988, And Mike Moore certainly didn't put it through any trials. The company was treated with deference right through what little investigation ensued. One is left with the strong feeling that Mike Moore was more concerned about the company's reputation than the veterans' fears.

Mike Moore's press release continued by stressing the ordeal IWD would suffer, "Select committees have the power to summon witnesses and require documents to be produced. his press release said. "A committee may also require a witness to answer a question, If a person refuses '" the committee may report the matter to the House.i. The House has virtually unlimited powers if its request for information is not complied with."

This was all hype, and in the event there was no Spanish-type inquisition

The Select Committee summoned no-ons, but meekly placed an advertisement in the newspapers inviting submissions. The VVA came forward, IWO made a submission, a few Defence and Foreign Affairs officials spoke, and that was about it. The Committee's findings took up all of four paragraphs in a very slim report." The first paragraph was an introduction. Two paragraphs approvingly summarised what IWD had told them, ignoring inconsistencies.

And paragraph four gave their findings. In total it read "No conclusive facts or evidence were provided to the committee to substantiate the claim that IWO manufactured the formulation of Agent Orange in New Zealand during the Vietnam war. The committee has discounted all hear-say evidence, unsubstantiated claims and personal opinion it received ." 10

An examination of the Select Committee files 11 shows that they actually were given more interesting information than their report indicates. Before looking at the evidence, however we need to look at Agent Orange.

Agent Orange

The US sprayed several so-called defoliant mixes on Vietnam in the 60s. Defoliation was the desired military effect of the spraying, but the sprays were actually herbicides and killed vegetation rather than merely defoliating it. The most-used defoliant mix was Agent Orange, so called from the colour coding applied to the 200 litre drums. Orange was nominally a 50:50 mixture of n-butyl esters of 2,4,5-T and 2,4-0. IWO was making the same hormone-type herbicides at New Plymouth. 2,4-0 was effective against soft-

- 36 -

stemmed plants and was sold domestically as weed-killer, while 2,4,5- T was effective against woody plants and was sold domestically as a scrub-killer, especially for gorse.

There was nothing very sophisticated about Agent Orange - the USAF simply wanted to strip the leaves off everything green, so it bought two herbicides in a 50:50 mix. There was nothing special about using n-butyl esters, except that they evaporated faster from the sprayed vegetation and hence were more prone to 'drift', which was an advantage for military use, but often a disadvantage in agricultural use. By 1967 the USAF was spraying so much Agent Orange on Vietnam - they placed orders for SUS 57.7 mn worth in July 1967 alone - that agricultural herbicides were in extremely short supply in the US. The USAF wanted Agent Orange so bad they would probably have settled for any formulation of 2,4-0 and 2,4,5- T

The USAF had other defoliants for other vegetation mixes. Agents Pink and Green were also 2,4,5-T -based mixes, while Agent White was a mix of picloram and 2,4-0. Agent Blue was a non-hormone crop-destruction mix." Both 2,4,5- T and 2,4-0 contained dioxins.

What all this means is that it was not just a question of wnether Ivan Watkins Dow made Agent Orange or not. New Zealand and IWD (or any other NZ-based company) would be just as implicated if either 2,4-0 or 2,4,5- T alone had been provided to the USAF, or to another corporation that made up any of the military mixes. But the orders of reference for the Select Committee didn't provide for such possibilities. The Committee was asked very specifically, only to "investigate... whether the defoliant Agent Orange was manufactured by Ivon Watkins-Dow within New Zealand during the period of the Vietnam War".

The evidence

Much of the VVA evidence was flawed, but amongst salient points they made were:

1) IWD had been selling some 2,4,5- T overseas in the period of concern. Statistics for exports to the US showed an increase from nil in 1965-66 to $71 000 in 1968- 69, then back to nil. Exports to Vietnam could easily have been concealed.

2) A Mt Maunganui man had told the VVA that, as a spray contractor in Taranaki in the 1960s, he had been told by Dan Watkins of IWD that IWO was making components of Agent Orange. As a result 2,4,5- T was in short supply in New Zealand in that period. Large shipments had gone direct by sea from New Plymouth under extraordinary secrecy and unusual shipping/documentation procedures. Another spray contractor wrote anonymously that in 1964-6513 he was told by an IWO salesperson to get his 2,4,5-T order in early because the majority was to be sold overseas. "Being curious I said who the hell else has gorse?" He was told that it was going to Vietnam. It was going to be shipped incognito in old Coca Cola essence drums to Australia, and from there to "Cam Ran Bay" aboard HMAS Sydney.

3) A Wing Commander Saunders of Christchurch allegedly told the VVA in March

- 37 .

1989 that he had aware of IWD supplying Agent Orange in the 1960s, He had written reports on the matter while serving as defence attache in Washington DC "sometime during the Vietnam war." He had had contact with Milt Hunt of IWD, who regularly commuted between NZ and the USA. The matter was discussed between Mr Hunt & NZ embassy ottlclals."

4) Dick Simpson of Masterton, a former advisor to an international agricultural chemical company and former member of the NZ Weed & Pest Control Committee, reported that it was common knowledge in the industry that NZ provided Agent Orange.

5) IWD had denied that u-butyl ester 2,4,5- T, as used in Agent Orange. was made in New Zealand. But an IWD document (reproduced) from tWO used on a TV Eyewitness program in 1982 said that both butyl and tso-octyt esters were available in NZ. IWD had since retracted their statement about butyl ester.

While not particularly convincing, this information deserved to be given some consideration by the Select Committee. Instead they chose to "discount" it entirely. as noted in their "findings" above. This "powerful Parliamentary select committee", as Mike Moore called it, with its power to summon witnesses, demand the production of documents, and force witnesses to speak, made no attempt whatsoever to track down the retired spray contractors, or Wing Commander Saunders, or Dick Simpson, or Dan Watkins.

Nor did the Committee attempt to follow up on some very interesting documentation from the 1960s that somehow found its way into their files. This documentation showed that an attempt had very definitely been made in July 1967 to export defoliants to Vietnam, and that not just IWD but also the NZ Government were involved. Dan Watkins' 'admission in 1967 had been accurate, and Keith Holycaks had very definitely lied to Parliament on 8 August 1967.15 This documentation includes.

A 12 July 1967 memo from the NZ Secretary of Defence, Mr W. Hutchings, saying that the Defence Minister "rang me this morning saying that the United States Army" had a requirement for something approximating half a million gallons of defoliants for use in Vietnam. Mr Ivan Watkins [sic} of New Plymouth, who IS a manufacturer of pesticides and defoliants, has become interested." According to Watkins IWD could produce defoliant at NZ$6.50 per gallon against the US price of NZ $7.40. By working shifts IWD could get production up to 80 000 gallons per year. The only problem was that "of getting the stuff to South Vietnam. Suggestions made are air freighting by RNZAF '.' and a possible trip by HMNZS Enoeevout" .... I have been asked 18 for the matter to be fully investigated and I think we should start with a meeting with the commercial and military attaches from the US Embassy," Added to the memo was an annotation signed by David Thomson, then Minister of Defence, directing it to "Rt Han J R Marshall M.P. For your perusal & return, please" It was initialled as "Seen" by Marshall, who was then Minister for Industries & Commerce.

· 38 -

A "confidential" 14 July memo from the NZ Chief of Air Staff. Air Vice Marshall C A Turner, to the Minister of Defence with "comments on the feasibility of the RNZAF accepting a commitment to air-transport defoliation chemicals to the US Forces in Vietnam on a regular basis at an initial rate of 10 tons per month." The CAS was of the opinion that this would require one extra C~ 130 Hercules flight per month, which would "disproportionately limit our ability to discharge the variety of commitments which we are called upon to undertake". He costed the operation out to show that for each plane-toac there would "be only a modest gain in overseas exchange of $NZ 3,350 at a direct extra cost to the Defence Vote of $NZ 9,000.,,19

A 20 July 1967 memo from the Secretary of Defence describing how, at the request of the Minister of Defence, he had been discussing with the Commercial Secretary of the US Embassy the possibility of selling defoliants produced by iWD, The Commercial Secretary responded that he had already "conducted a survey of production in this country?" and he thought "the quantities which could be produced were not significant enough to attract his Government", Rather than IWD's 80 000 gallons a year, the embassy was more interested in an Auckland company called Polymer Proprietary which "on a Japanese supply of material, could produce half a million gallons per year".

These documents were not mentioned in the 1989 Select Committee report. The Committee apparently made no effort to track down Polymer Pty Ltd, Mr W Hutchings. Air Vice Marshall Turner, Sir Jack Marshall, the Rt Han David Thomson, or papers they may have left behind.

If the Select Committee had looked at this material and investigated the leads it offered they would probably have determined with some finality that IWD did NOT sell Agent Orange for use against Vietnam. But one has the uncomfortable feeling they were more interested in hiding NZ Government attempts to get into the defoliant trade than in exposing IWD failure to profit from such a trade.

Another possibility is that Polymer pty21 actually did win a contract to supply Agent Orange. Perhaps this is what the Select Committee had to cover up. If Polymer Pty were involved in some sort of deal to "launder" Japanese-made herbicides by importing, mixing, and re-exporting them for use against Vietnam, then this was surely even more worth investigating by the Committee, on behalf of the VVA, if investigation was really what they were charged with.

The IWD presentation to the Select Committee was not particularly relevant or convincing and does not need repeating here. They admitted that they had sold modest quantities of 2,4,5- T to a couple of US companies during the mid-60s. They doubted if this material could have ended up in Vietnam because

a) It was in a formulation that could not have been converted to the n-buty: ester form of Agent Orange.

- 39 -

b) The two companies

Orange in

bought it were not amongst those identified as Agent

c) It would not have commercial sense for the US military to import 2,4,5- T on the open market because of the artificially low price set by the US Government for Agent Orange during the war.

Essentially this was ali a red herring. No-one really suspected the US sales of being camouflaged Agent Orange. But even a red herring might have been worth dissection by the Committee. IWD shipping records from the late 60s, shown to the Committee on 2 November 1989, showed that n-butyl ester herbicides were being exported to Asian destinations, including the Philippines. Why weren't these investigated? The recorded shipments could have been cover for much larger unrecorded shipments. The Philippines. with its big US bases, could have been a transhipment point for Vietnam.

Even stranger, the Select Committee did not remark on the discrepancy between IWD implying in 1989 that their 1967 prices would have been far higher than what the US Government had been willing to pay, and their claim in 1967, documented in the Committee's files, that IWD could produce defoliant nat $6.50 against the US production at $7.40".

Dow Chemical is a giant corporation on the US scene with an unenviable reputation for all kinds of business, social and environmental nastiness. Dow chemical was the biggest manufacture of napalm for the war against Vietnam, and was by far the biggest manufacturer of Agent Orange. Even worse, Dow Chemical knew as far back as 1965 that dioxin impurities in 2,4,5- T were causing birth deformities, and, according to Time 2 May 1983, Dow shared the information with other companies, so that the chemical industry could put up a united front against any revelations of the ghastly side effects of 2,4,5-T. Given Dow's reputation for lying and misrepresentation on environmental and health issues the Select Committee displayed, at best, amazing naivety in accepting the pap that iWD fed them.

What was the Select Committee up to?

Why did the Committee not demand to hear from the people who ran IWD in the 19605, why did the Committee not request the cooperation of the US Defense Department in getting to the bottom of the matter?

There are only two possible answers. One, the most likely, is that the Committee members were incompetent, uninterested, too busy, or lazy, and failed to carry out the mandate Mike Moore announced Tor them. The other possibility is that all Mike Moore's huffing and puffing about rigorous investigation by a powerful committee was nothing more than huff and puff, and the Committee was really being charged with carrying out a cover-up, even if there was really nothing much to cover-up.

Who was on this Committee? The chairperson was Labour MP Sonja Oavies22, former chairperson of the NZ International Year of Peace, active on the Moscow-line World

- 40 -

Peace Council, and frequent participant in overseas peace conferences. The members were ~

Labour

Geoff Braybrooke, a Vietnam Vet Graham Kelly

Trevor Mallard

National

Doug Graham, now Minister of Disarmament Doug Kidd, onetime Nat Defence spokesman Don McKinnon, now Minister Ext Reins

Rob Munro, ex NZ Army officer

Conclusions

The evidence for IWD not exporting Agent Orange is stronger than the Select Committee made it out to be.23 If iWD had gone over to full 3-shift operation to produce 80 000 gallons a year, this fact would surely have become known at the time. The fact that the NZ Government/IWO/US embassy contacts in early July leaked to a protest publication before the end of July indicates that the anti-war movement of the day had efficient information gathering contacts in either IWD or the Wellington bureaucracy, and would surely have discovered if production for the Vietnam war had occurred." It seems safe to conclude that IWD did not make Agent Orange or components for it.25

Although IWD probably did not export Agent Orange or its components, there is incontrovertible evidence that both the NZ Government and IWD tried to export Agent Orange. The NZ PM lied to Parliament about this at the time, and the 1989 Select Committee covered the incident up, inadvertently or otherwise.

There is an intriguing possibility that another company, Polymer Pty, may have been "laundering" Japanese-made Agent Orange, and it was possibly this fact that the Select Committee was keen to hush up, since, if revealed, it could have given the Vietnam vets a legitimate basis for seeking compensation for health problems attributable to dioxin exposure.

The makeup of the Committee was quite amenable to such a coverup, since the Labour members would have wanted to undermine any case for handouts to the vets, and the national members would not seek exposure of what their PM in 1967 had been dOing.

As a side issue. it is worth noting the role played by a "protest" publication in revealing at an early stage that something was afoot. If Vietnam Quote & Comment had not blown the whistle when it did, negotiations might have proceeded undetected to a stage where it would have been much harder for public opinion to halt them."

The issue will probably never be sorted out completely. In the meantime what Dr B R Thomas of DSIR Chemistry Division told the Select Committee will serve here as the last word on the subject:

Politically New Zealand has been a full participant in the war in IndoChina and must inescapably share full responsibility for the use of chemical warfare agents and in particular of Agent Orange. The origin

- 41 ~

the

is

importance.

It is an academic whether Agent Orange was actually exported from New Zealand for use in Vietnam. All production here would, at the least, have aided diversion of material from other sources. For a time the military were taking all the Agent Orange they could get. The Dow chemical company, the major supplier. will have drawn its supplies from whatever source was commercially most convenient.

The excuse may be made that only 2,4,5- T and no Agent Orange was exported from New Zealand. This should be firmly rejected. Agent Orange is a simple mixture of 2,4-0 and 2,4,5~T that can be put together anywhere. Export of either component or of the mixture is equally reprehensible.

Notes

A draft of this article was sent to Sonja Davies: no comment has been received from her.

L Now called Dow Elanco, a wholly owned subsidiary of Dow Chemical of the us.

2. vietnam Quote and Comment (Wellington Committee on Vietnam), July 1967.

3. NZPA message from Dunedin, "May make war chemicals", NZ Herald. 25 July 1967 ..

4. "No defoliants negotiation says embassy", NZ Herald. 29 July 1967.

5. Hansard. 8 August, 1961, p. 2151.

6. The incident was described in more detail in Owen Wilkes, "Chemical and Biological warfare", Canb:! (University of canterbury student newspaper) 22 April 1969, pp.10-12.

7. In a letter to the Clerk of the House, dated 10 April 1989.

8. Reproduced in the committee report (See next note).

9. ReRort of the Foreign Affairs and Defence Committee: On the inguiry into the manufacture of Agent orange by I VQO Watkins-Dow in Ne'tL Zealand during the period of the Vietnam war. New Zealand House of Representatives, 1990. Amply padded with appendices, press releases etc, and lots of white space, the report is all of 14 pages long.

10, Judging by its report the Committee was also completely unaware of the controversy in 1967, including Dan Watkins' "admission",

'1. The file on the Agent Orange inquiry is available at the Parliamentary Library in Wellington.

12. Stockholm I nternational Peace Research Institute, The Problem of Chemical and Biological_Warfare, Vol II, "Chemical Weapons Today". 1973, p. 208.

- 42 -

13. A 11 other evidence points 1967 as when it happened, so "1964-5" probably indicates a memory lapse.

14. other material in the Committee file indicated that Saunders had not been an attache until the 70s. This does not necessarily invalidate what VVA was attributing to him. Saunders objected to being quoted by VVA, and declined to appear before the Committee. He did not deny that he had talked with Moller however. It appears that Saunders may have been pressured not to repeat what he earlier told Moller. or alternatively that Moller had misrepresented what Saunders said.

15. A perusal of Hansard indicates that the two cabinet ministers who handled the documents, David Thomson and Jack Marshal1, were probably in the Chamber while Holyoake was speaking, but chose not to correct him. So the cover-up must have been intentional, and Parliament was being intentionally misinformed.

16. Defoliant spraying of Vietnam was normally carried out by the USAF. and defoliant chemicals were normally procured by the USAF. Whether this was a mistake on Hutchings part, a mistake on the Minister's part, whether the Army was acting as agent for the USAF, or whether there was a separate US Army defoliation program is not apparent. It is also hard to see where the Minister first heard about the need for 1/2 mn gallons. One would have expected the request to have come through the US embassy, but the subsequent consultations with the embassy would appear to indicate this was not the case. Perhaps the original request came through New Zealand"s embassy in Washington?

17. A USN tanker on loan to the RNZN, and used in particular for support of NZ and US Antarctic operations.

18. By whom? IWD?

19. This gives us a fascinating Insight into the mercenary nature of New Zealand's involvement in the war against Vietnam. The NZ Chief of Air staff apparently didn't see defoliant transport as a contribution to winning the war which New Zealand ought to make even if it involved some financial sacrifice. He saw it rather as a simple exercise in earning foreign exchange.

20. It is fascinating to discover that the Commercial attache at the US Embassy appeared to already know more about potential defoliant production in NZ than did a senior NZ pub lie servant.

21. Actually Polymers (NZ) Pty Ltd, chemical manufacturers of Saleyards Rd, otahuhu, They were bought out later by A C Hatrick (NZ) Ltd, Parnell, which is itself owned by Australian Chemical Holdings.

22. 1 talked with Ms Davies in July 1991 about the "investigation". She claimed that the Committee had tried its hardest to get to the bottom of the matter, but ran into brick walls of obstruction wherever they turned. The VVA in particular let them down by nor fronting up before the Committee. I asked her why the 1967 documents were not mentioned in the report, and she seemed to be genuinely unaware of what I was talking about. I suggested that maybe the Committee had been 1et down by the officials who had written such a poor report on the Committee's behalf. but she insisted that as chair she had been completely 4n control of what went into the report and what was left out.

~ 43 -

23, Ther'9 ar-e other ar-ourrd. One story has it that. the New

Plymouth hor-mone expanded severalfold in expectation of

getting an Orange contract. But then r-eve lat.ions about the

teratogen'lcity of dioxin, ie its ability to cause birth deformities, forced the USAF to cease . Soon after the government of the day introduced a 1:1 sub s i y on agricultural herbicides. This t.heor y has it that the subsidy was intr'oduced to help IWD use their excess

production capacity. story has it that several hundred tons of

Agent Orange was to the USAF, Was not used, and was

eventually re;turned to NevI Zealand, to be sold under subsidy to NZ

farmers. This story was p by John Lees, described as p har ma

ceutical adviser to the VV 1\, and was written up by 0' Shea in the ~..:. 12 1'1ar'ch 1989, as "Agent Orange Affair: War stocks sent back for re-sale"

24. Yietna!lL..2.J.!.Q.t§L~,_QQD1Ill§Dj;" as def intte ly the fir'st to carry allegations about defoliant man That period ical, according to peace movement legend, got the information from A lister Taylor, then a radio current affairs jour nalist w it.h the NZ Sroadcorping Castr a+iori, who heard it from concer-ned wor-ker-s at i WD, He was not allowed to use the information because t.he US Embassy had rung the NZBC and newspaper; asking them to keep quiet, about the matter. The otago Daih._limes was the only news-provider to ignore the request (or perhaps they neve' heard about it), and they interviewed Dan Watkins about the a lle qat.iorprinted in ~Q&G. when he was in Dunedin

25. Or Agents Pink, Green, Blue O!~ White. It should also be noted that 2,4 D is likely to carry dioxins, and hence be a source of birth defects and other health problems.

26. A visit from General Maxvlel1 Taylor and Presidential emissary Clark Clifford most recently in the news f'or his association with the failed BCC I bank) was irnminent, They were hoping to convince the NZ Government to commit more troops to the war against Vietnam.After Dar' watkins spilled the beans the US embassy may well have decided, to ditch the attempt to procure NZ-made defoliants in order to avoid

inflaming antiwar d the level already reached. As it was

Clark Clifford r-epor-ted his return to washington that the level of

protests while he was in New Zealand made it obvious that it was politically difficult for the Holyoake Government to increase its troop commitment.

44 .

Overseas Investment Commission

April to July 1991 decisions

Plus decisions deleted from December 1989 release

December 1989 deleted decisions released

As regular followers of the ole decisions will know, the monthly releases of decisions invariably include deletions and alterations made by the Commission. Some of the alterations the Commission claims are to our advantage: they update the information supplied to them according to what actually transpired. Most are deletions of information (most frequently the consideration - the money involved), or sometimes the whole decision is censored As a test case, CAFCA appealed all the deletions and alterations to the first decisions we received under the current arrangements: the December 1989 decisions. The Ombudsman decided, after lengthy consultation and consideration, that some but not all should be released. After another considerable period, the Ole grudgingly released some of these. We are hoping to receive the remainder, and are also appealing all other deletions and alterations since December 1989.

All but three of the newly released decisions relate to the takeover of NZI by General Accident (U .K.) and the associated rearrangement of insurance portfolios. The releases SImply fill in the consideration involved in each case. Readers can get details from CAFCA If they wish.

The other three were decisions whose details (including the names of the companies involved) were completely suppressed in the original release. Harbinger Investments Ltd (Hong Kong. a subsidiary of Duty Free Shoppers International Ltd) paid between $3 million and $5 million to take over the remaining 49.9% of Miles DFS Ltd it did not already own.

Weddel Crown Corporation (part of the notorious Vesty Group, U.K.) started up a "funding vehicle" for the group, called Irion Investments Ltd, Though investing only $100 themselves, they used it to obtain finance from the National Bank in a way that required no approval from the Commission: the group issued $50 million of redeemable preference shares to the Bank. Irion was then to make "an interest bearing advance to the [Weddel Crown] group". Presumably this convoluted transaction had more advantages than just evading the toothless maw of the OIe.

Finally (in a decision still only released in part), Browning Ferris Asia Pacific Inc, a subsidiary of Browning-Ferris Industries Inc. (U.S.) took over Waste Care Ltd. The same month (December 1989) the U.S. magazine Multinational Monitor reported in its review of "The 10 worst corporations of 1989" that "Waste Management [one of the ten worst .. Ed.] also pleaded guilty in October 1987 to conspiring to fix prices in the Toledo, Ohio area with Browning-Ferris Industries," The information deleted from the decision sheet appears to be the consideration (difficult to understand almost two years later) and, most oddly, the reason for the decision.

- 45 -

to

One of the decisions still has information deleted from it

93, 94,
Dec 89 84,95
Dec 89 93, 94, 96,
97
Dec 89 6
Dec 89 12
Dec 89 6
Dec 89 12
Dec 89 97
Dec 89 84,94
Dec 89 84,95
Dec 89 96
Dec 89 93,96,97
DC'A 89 84. 93, 94.
95, 96. 97
Dec 89 12
Dec 89 12
Dec 89 12 Browning-Ferris Asia Pacific Inc, (US,) Browning-Ferris Industries Inc (US,) Duty Free Shoppers International Ltd General Accident Pacific Rim Ltd (U,K.)

General Accident Insurance Company New Zealand Ltd (U,K.)

General Accident and Life Assurance PLC (U.K.)

Harbinger Investments Ltd. (Hong Irion Investments Ltd (UK) Miles DFS Ltd

National Bank (U K.)

New Zealand Guardian Trust Company Ltd .K.)

New Zealand Insurance Company Ltd (U.K.)

NZI Insurance New Zealand Ltd (lJ.K.)

NZI Investment Services Ltd (U.K.I

NZI Group New Zealand Ltd (U.K.)

NZI Corporation Ltd (U.K)

Vestey Group (U.K.) Waste Care Ltd

Weddel Crown Corporation Ltd (U,K.)

April decisions

A number of significant of Carter Holt Harvey's the sale of New Zealand company taking a Pakatoa Island to a

V-'.L,SC'.'-".,,,'H0 were approved in April. They included the sale of most

sawmill and pulp to partners,

can company to a US company. a US public sale of

The by Carter

pulp mill to Japanese companies retained 10% of the compai

sawmill and are the Company CBH

partners were using the making profits from selling to them: they were

paid over the to reducing whereas CHH a higher debt

of the fact that its the Japanese but in fact were also Japan through their use of the materials Pan Pac was , Neither arrangement suited the local partner.

·,46 -

To get back to the Ole decisions: the CHH sale included forest and assets (excluding land) for four forests totalling which were sold to the Japanese partners for $185 million. These forest sales are also approved in the April decisions, and apply to the following forests: Mohaka (15,358 hectares), Gwavas (8571 hectares), Esk (7757 hectares), and Kaweka (7522 hectares),

New Zealand Breweries was given approval for its sale of its 75.1 % shareholding in New Zealand Can Ltd to the erstwhile 24.9% owner, PAC Enterprises Inc of the U.S.A. Though the consideration for the transaction was deleted from the OIC decision sheet, the Press reported (27 April) that it was $65 million in cash and loan repayments. [See the June and July decisions below for a variation on this application.] Lion Nathan (New Zealand Breweries' owner) is, like many large Aotearoa companies at the moment, scurrying around trying to relieve itself of assets to repay its debt The same Press report noted earlier sales included Woolworths, Big Fresh and Associated Wholesalers, which went to Jardine subsidiary Dairy Farm International (Hong Kong).

The issue of $100 million worth of shares in Robt. Jones investment'S Ltd to the Boston, U.S., investment funds management firm Grantham, Mayo, Jan Otterloo and Company was approved. This was done through the issue of 250 million "B Class" shares for 1 0 cents each, at a premium of 30 cents. "The Commission is advised that this issue will act as a springboard for additional debt/equity related growth in the company at a time when his toncally cheap property purchasing is available. This injection of capital may also act as a stimulant to the depressed local market". In other words, it shows the weakness of RTI at present - and the potential it sees for further property purchases in a weak market. The "B Class" shares have restricted voting rights, so although the U.S company has 27% of RTI's capital, it has only 11 % of its voting power. It had 4.7% of Rll before this share issue, A significant chunk of the country's central business district would pass into foreign hands if RJI became foreign controlled.

The Pakatoa Island controversy at last appears in the OIC's decisions. Gecco Venture Trust Ltd is given approval to issue 15 million $1 shares to Horst Meyer, Ralf Simon, and Wolfgang Boost (all German residents), in order to own and operate "as an island resort" the 20.0787 hectare island. The acquisition of the island by the company for $8,475,000 is approved in a separate decision. Not a sign in either decision that there was any question of the integrity of the purchasers.

A rural land decision involving tax avoidance measures shows overseas partners getting a shareholding in an 2.2846 hectare orchid breeding business, Geyserland Orchids at Tikitere, Rotorua, A "special partnership" called Andy Easton and Company will buy the business for $445.000. The special partnership structure is a favourite tax avoidance structure which gives special partners both the tax benefits of a partnership and limited liability. A General Partner - in this case, Mr A.W. Easton - effectively controls the partnership but carries the normal partner risk. The other "special" partners get the equivalent of a shareholding in the company, but with tax benefits, In this case there are sixteen special partners. "One will be a Japanese company, one a Japanese individual, and one will be three Australian individuals with a joint shareholding." Easton will have the right to purchase the special partners' shares.

Comalco Ltd features in this month's decisions, through its subsidiary Tlwai Stevedoring Company Ltd. It also shows the degree to which the Commission is a rubber stamp. Tiwai

.. 47 -

shows how the ",-,VLLL s; HL" authority.

General Accident another subsidiary,

its defunct subsidiary

Bank Ltd to

In mining, the Malaysian ""y·"rJt·'·' approval to explore, mine Central Otago, being world leader in the processing. Numerous new being met offshore." Sounds

on the Whitford Nawa Corporation thoroughbred horses with cattle farm at Orere

permanent Highway 56,

hobby farm. hectare rural 1 ,000; 811d a Family

$1 9,400

an "experienced" property on

for further the capital obtain the capital in

May decisions

In May, Qantas was

Air New for

Commission is Zealand regional Zealand tourism markets, New Zealand to simply a shareholders, Qantas,

a further 21.43% the 'B class' shares in

overseas owned. "The in a strengthened Qantas/ Air New

which will benefit both Australia and New

as to whether this might further relegate Air in with the plans of its airline

and It is not clear from the

application was for a previously undisclosed transaction,

- 48 -

or to position Qantas for the $140 million cash share announced by New Zealand

in late June. or to get belated approval either announced purchase American

Airlines' 7.5% shareholding or the secret deal it had with Brierleys to guarantee its share price. It is interesting that the share price quoted in this approval is $1.92 the price it secretly underwrote the American and Japan Airlines shares for. American Airlines had 21.43% of the original 35% foreign-owned shares in Air New Zealand, so it seems likely this is a rubber stamping of the American Airlines share purchase.

A consortium comprising Bell Atlantic International Inc., American Information Technologies Corporation, Tele-Communications Inc, and Time Warner Inc, was given approval to acquire 100% of the share holding in Sky Network Television Ltd, the cable TV company. This appears not have been announced publicly. What has been announced, is that Sky was given approval "if necessary" to issue 62,500,000 20 cent shares to the consortium. The price paid has been kept secret. The purchase was given Commerce Commission approval in May. The consortium now owns 51.1 % of Sky TV (formerly 20.4%), TVNZ owns 16.3%, Craig Heatley (Sky's Chairperson) 15.8%, Todd Corporation 8.8%, the Tappenden Group 7.5%, and the U.S. subscription sports Television network ESPN, 0041 %. By 11 June, the Press Association was reporting: "Sky Entertainment's prospective Wellington launch to coincide with the Rugby World Cup in October is in doubt and subject to a review initiated by its new American shareholder. Originally Sky was considering offering a free sports channel to all Wellington television viewers from mid-July, but that plan is now off. An American consortium, including Telecom's owners Ameritech and Bell Atlantic, bought a 51 % stake in Sky Entertainment early last month and all its long-term plans for expansion were placed under review. The new owners had changed the outlook of the network , Management now had a longer term, more brand-oriented view. Practically, the Americans had assisted by providing international advice from companies such as Home Box Office to Sky about the movie channel. The U.S. companies had not marched in and changed the business overnight but were offering advice on the running of the business."

The company takeover featured in the September TV3/Nimrod films documentary, "Sale of a Nation", features this month. The local saw blade manufacturer, Izard Manufacturing Company Ltd has been bought out by The Irwin Company of the USA for US$7.990,000 via a company called Izard Irwin International Ltd. The Commission's reasons: "The Commission is advised that Izard Manufacturing Company is in need of working capital in order to further its growth, Irwin intend to purchase the assets and business in order to participate in and expand the production capacity of the operation. The Commission is told net benefits in tenus of the Commission's criteria will result from the transaction." Note that it is clear that the OIC itself has not investigated the worthiness of this takeover. (An approval of this transaction appears again in the July decisions due to minor changes in the way it was carried out: the Irwin subsidiary's name changed from Izard International Ltd to the above Izard Irwin International Ltd.)

Macraes Mining Company Ltd (owned by The Union Gold Mining Company N.L. of Australia) has bought CRA subsidiaries, Globe Progress Gold Ltd, Blackwater Gold (Waiuta) Ltd, Sam's Creek Gold Ltd, and CRA Exploration (NZ) Ltd for an undisclosed amount. This is part of CRA's divestment of its Aotearoa mining activities. In the case of CRA Exploration (NZ) Ltd, a 7,826 square metre block of rural land in the Waitapu survey district also changes hands.

areas. "

Malaysian company" acquiring a "further already 61 % overseas

change - it is not made Pacific, got into Pacific is now in competitor Carter Holt Harvey allegations before the It also owns cutting rights to

London receivership by "',""",,'"',;,"" Island. There are

over forestry interests

In Sarawak, Malaysia,

The transaction which was to fanner rival liquor company, The full change did not occur:

Wilson Neill would not The full increase in shareholding was The transaction must go to the ore (Mungarn Holdings) of Asia

Ltd's shareholding in was approved In May that Magnum's ownership of cost Magnum $ J 7m

to the OlC's information. owned by a 50/50 consortium Brierley Investments Ltd,

As in March, Ford Company of Canada shareholding. 17,059,000 already 99.9% owned by

'05 parent company, Ford Motor for an increase in its Ford New Zeala..'1d was Company, U.S.A.

In rural land, renamed New Canterbury

genetics supply to

genetics from the insemination facilities technology transfer

No, 49 (to be at Te Pirita, Zealand is to use their existing artificial in Indonesian stock" This is

A somewhat property in Berghan ","vau. to take up permanent concerned with high been purchased as atmospheric impulses. Zealand."

couple buying a 20.89 hectare rural $125,000). The applicants intend continuing his research is advised that the property has

geographically receive or transmit electronic

intends to develop manufacturing operations in New

In other rural land farm a 120.3687 hectare l'Y""Yr\P1"t approval to purchase

farm at

to buy, settle on and Japanese residents have owns a 36.3988 hectare "propose to develop the

property to its full horticultural potential and produce fruit for export to

marketed through [Mr Shigeru Yazaki's] existing market "

will be

And Tomen Corporation (Japan) and Tornen (NZ) Ltd have been given approval to purchase 49% of Bloomers Growers and Exporters Ltd (for $184,000). This includes a 6.46 hectare property at Tauranga. "Tomen see this proposal as strengthening Bloomers base and increasing its potential to market its products offshore (especially in Japan). Toomers will market and distribute the plants offshore." Another example of a Japanese company purchasing an interest in its source of supply.

June decisions

The French/Singaporean owners of Griffins and Sons Ltd, the biscuit maker (until March 1990 U.S. owned), have rearranged their shareholding. Britannia Brands Holdings NZ Ltd, formerly 100% owned by the Singaporean/BSN Groupe (France) joint venture, Britannia Brands Pte Ltd now has approval to issue shares directly to BSN Groupe in order to raise more capital. "Anticipated expansion will help make the New Zealand company more internationally competitive. to

Magnum Corporations Ltd's J. Rattray and Son Ltd has successfully squeezed out the wholesale grocery business of GUS Wholesalers Ltd. Rattrays is buying GUS's wholesaling operations: the two wholesaling businesses will combine. "The vendor wishes to divest its interest as it is a small player in the market with little opportunity to expand its base and is suffering from competition in the market place." GUS own the Dollarwise and Supervalue retail chains and supply the lOA, Super Discounters. and Super Seven stores, and Value Rite hardware stores. Magnum (largely Brierley owned) runs Countdown supermarkets plus numerous liquor interests including Dominion Breweries.

Another Magnum Coporation Ltd subsidiary is selling the Parkroyal Hotel, Queenstown, to Wedson Holdings Ltd, owned by Malaysian, Singaporean and New Zealand interests, Magnum wants to get out of the tourist hotel business.

Corporate Investments Ltd, owner of Montana Wines and Newmans, among others, IS selling its priming business Business Printing Group Ltd to Bowater New Zealand Ltd, a subsidiary of the large U.K. group Bowater PLC for approximately $4.6 million.

The approval in April for the takeover of the aluminium can manufacturer New Zealand Can Ltd by the U.S, PAC International Ltd was modified in June (and again in July see below). New Zealand can will now be taken over by an (unnamed) joint venture between PAC International and Todd Corporation (through a subsidiary Todd Can). "The Commission is advised that current operations will be expanded to cover exports throughout the Pacific and Asian regions."

The Brierley Holdings Ltd subsidiary Angevin Investments Ltd, which owns the Chateau Regency Hotel, Christchurch, is being sold to Ascar Enterprises Ltd (to be renamed Shipfield New Zealand Ltd), subsidiary of Australian beef, finance and

leisure industry company Shipfield Pty Ltd for "approximately $20 million"

51 .

to provide

Kenwigs Investments Ltd, SEA Holdings Ltd Kong) and Brierley

Investments Ltd has approval to House in Wellington for a censored amount

Kenwigs is owned by the joint venture Veriscpht Investments Ltd given

approval by the Commission in to (says the Commission now) "invest in the Hong

Kong and New Zealand property , In February the story was that the joint venture

would "benefit the New Zealand commercial property sector by expanding the local market

while increasing international awareness of local opportunities,"

Mainzeal Group Ltd has to its sharehotding exporter Mair Astley Ltd

to 100% because Mali Astley overreached itself: "Mair Astley has expanded its

operations well beyond its f·'AMo,LULt<U core activities in the wool and hide industries and is suffering as a consequence. This acquisition is in an effort to further enhance [Mainzeal's] control. .. "

Moody Creek Mining Company, which mines Moody Creek coal mine, near Greymouth, has renewed approval to issue shares to a Bangladeshi who owns a Hong Kong company, W.E. Futird Ltd. In May 1990 he was given approval for exactly the same transaction, but

using a different company, Ltd. Apparently the issue never went through last year.

Macraes Mining Company Ltd (owned by Union Gold Mining Company N.L.) is acquiring a further 75,5548 hectares of rural land in the Highlay District to use mining

licences they hold over it "Any not used for mining purposes is leased back to the

original owners, and as before, WHen mining is complete, all land will be

offered back for re-sale to NZ farming interests."

Corbans Wines Ltd wants to Wines Ltd to 60% owner vineyard in Blenheim made the offer because "they the wine manufacturing "I~.'V".'''_''''H having a significant shareholding

is Kanematsu Corporation venture wen sewn up. See operation.

20% of its 30% shareholding in Sainte Neige Export Coo Ltd (Japan). Sainte Neige owns a

one in Napier (23,3717 hectares). Corbans vine cultivation agreement, together with the companies, there was little point in their Neige. The other 10% shareholder in Sainte Neige The two Japanese companies appear to have the 1991 for the initial approval of Japanese ownership of this

In a strangely secretive rural sale, Frontiers Group Co. Ltd was given approval to buy

a 485.4052 hectare neal' the Rakaia Gorge for $1,750,000. What makes it

strange is that Frontiers Group is described as New Zealand owned, so there is no apparent reason for the transaction to go to the Commission, Clues might be provided in the formal reason the Ole always gives for approving an application: in this case, the reason has been censored. However, the nature of the transaction is explained in the next decision released by the Commission: three Japanese citizens have approval to buy what is presumably the same land from Frontiers Group. This time, the selling price is censored.

In other rural land, the Japanese-owned Palmerston North International College, which caters mainly for wealthy Japanese students wanting to learn English, is buying another

a neighbour; a to reside

to purchase a 4.0838 property on

$70,000; a who "has for some years had the intention to move permanent

residence to New Zealand" and who will employ a "farm management consultant to manage and operate the farm" has approval to buy a 245.9080 hectare in Hora Hora Road, Cambridge; a U.K. couple who have permanent residence with their three children have approval to buy a 214.3 hectare farm in Downards Road, Taneatua, Tauranga: and corporate farm-owner New Zealand Farmlands Ltd has approval to buy a company, Beckett Hills Ltd, that owns a 311 hectare farm at Benrnore, Hokonul District, Southland for $590,000.

July decisions

The Quality Inns Group sale to joint US/Maori interests covered in this month's decisions . . The sale price is given as approximately $60 million. The parties involved are not identified.

Maori International, currently in the news over the Quality Inn affair, in July again got approval to run a joint fishing venture with Taiyo Fishery Co. Ltd (Japan) called Taima

~ Trawl Co. Ltd. Approval had already been given in May 1990 to an arrangement whereby Maori International supplied quota and Taiyo did the fishing. They have two processing plants (in Gisborne and Napier) owned by the joint venture company Taima Holdings Ltd. The Commission say: "Maori International and Taiyo already carry on business in New Zealand through two fish processing plants (Gisborne and Napier) and propose to use Taima Trawl to catch fish to supply the plants. Maori International are in the process of finalising negotiations for the lease of up to 13,000 tonnes of quota. Taiyo is a large international fishing company that will provide the latest technology and management expertise to the local operations. Employment opportunities will be created." The risk is of course that Taiyo exploits its access to the Maori fish quotas arid never gets round to handing over expertise, employment, etc.

ITT Corporation, the company that became notorious for involvement in the overthrow of the Allende government in Chile, has acquired further forestry rights in Horowhenua, Its subsidiary, Rayonler New Zealand Ltd, already owns the Kohltere (670 hectares) in the Horowhenua area, (Unlike many recent overseas purchases of forestry, this includes ownership of the land, not just the rights to the timber.) It now has the right to acquire a 82 hectare block of "timber and cutting rights" (not the land) on a property on Mcl.eod Road, Helensville. The Commission gives as its reason for approval: "Rayonier is involved in the acquisition of logs and standing timber in the New Zealand market and this proposal will enable the company to expand its source of raw materials for export. The vendor operates the property (encompassing 600 hectares) as a deer farm and is not in the forestry business. It has been decided to sell the cutting rights to the trees (not the land) and redevelop the affected land back into the deer fanning operations," Like a number of other companies purchasing rural land (mainly Japanese), ITT is buying up sources of raw materials. It appears that it is doing minimal processing of the timber in Aotearoa: the employment that would create is created elsewhere,

Raquel Developments Ltd, an Australian/lf.K, joint venture CRI Ltd (Australia), and Ridgely Enterprises Ltd (U,K,) has been set up

Jarmell Pty given approval to

,""V' . .LULLV'< 'v,,,,,, property /tourism sectors" however the shareholders advise that and acquisitions will benefit and help sure the shareholders do "advise" this. But how can the that hasn't happened?

New Zealand Duty shares to Worldwide Duty Free Ltd (registered

in Panama), Pierson Heldring & NV (Netherlands), and Schroders Asia Pacific

Growth Fund. These are of a share issue apparently approved "in principle" by the Commission in February 1991 (an approval we were never informed of) to issue 30 million

redeemable preference shares. issue failed: it was not fully taken up.

In rural land, a Taiwanese family approval to buy Green and McCahan Holdings Ltd. the owner of the Weitl Station (East Coast Road, Auckland) for $3.97 million; a Tahitian

couple under the shelter of Shelf' (No.7) Ltd, is buying a 29.6659 hectare rural

property in Geldings Road, next to the Franklin Trotting Club's Trotting Complex

for $510,000 "as a base for breeding, training and holding the [standard bred race] horses in quarantine prior to export."

In other commercial an Indonesia company, Bumi Raya International

Holding Co, Ltd is acquiring Hopuse, 21 Queen St1 Auckland for $15 million;

Cheemimet Finance Ltd, a subsidiary of the China National Metals and Minerals Import and Export Corporation (a Chinese state owned corporation) is buying twenty commercial

properties in the Auckland for $35,800,000 from its (unnamed) insolvent owner.

A Malaysian company, Zealand Ltd, has approval to It also wants to purchase inside the Wairakei "the hotel's

Berhad, through its subsidiary, KAH New the business and assets of the THe Waira!<ei Hotel. The land and buildings of 'TI1C Wairakei fall requires consent from the Commission only within the definition of rural land." Saved

by the

A petroleum """H~'nt"~"

approval to explore, n .. r,"·n""r~·

New .... .,_,"'"'u

been given approval to buy a $13,500.

<>,.",,,, ... Energy Corporation has been given

petroleum here through subsidiary, A & W

of whom is a mining engineer) have licence, Latitat No.5 Ltd for

Ltd, to operate "a share plan The plan will confer benefits in the top tier of its operating subsidiaries."

IS setting

established Telecom

management in Telecom

That unwanted child New Zealand Can Ltd, 75.1 % owned by New Breweries, 24.9% by a PAC Enterprises, Inc (U.S,) subsidiary, has another potential buyer, New Breweries wanted to sell it, and in April had gained approval for PAC to buy it too.

A company with a substantial cable television construction contract has sold out because it cannot complete the contract by itself. Kiwi Cable Company Ltd has the contract

· 54 .

and Todd International Ltd (registered in the British Virgin Islands and owned by members of the Klindworth family) has bought it out for US$200,OOO. "The Commission is advised that the vendors do not have the independent financial means to complete construction of a cable television system in the areas where they have negotiated the contracts. The purchase of Kiwi Cable enables the offeror to gain access to the Cable Television industry in New Zealand. The applicant informs the Commission that they have considerable experience in the establishment of small regional cable television systems," Does any reader know if this company is part of the local Todd empire?

Swiss-owned Milburn Cement Ltd is restructuring its subsidiaries Quikcrete Ltd and Owhiro Bay Quarries Ltd.

Index to April to July 1991 Decision Sheets Index compiled by CAE'CA

Five decisions had information deleted by the OIC from the April 1991 release. two were deleted in full. Twenty-eight were released.

Ten decisions had information deleted by the OIC from the May 1991 release, six were deleted in full. One had alterations or corrections. Twenty-three were released.

Eleven decisions had information deleted by the OIC from the June 1991 release. six were deleted in full. Three had alterations or corrections. Twenty-three were released.

Two decisions were deleted by the OIC from the July 1991 release. and two were altered. Twenty-three were released.

CompanylIndividual

Date

Page

A & W Exploration New Zealand Ltd (U.S.) Aberlour Farms Ltd

Air New Zealand Ltd

Alarn, Mr S. (Hong Kong/Bangladesh)

Allegheny and Western Energy Corporation (U.S.) Allied FH Ltd

Alrasjid, Mr A.H. and Tanfana, Mr E. (Indonesia) Alstone Holdings (NZ) Ltd

Amcor Ltd (Australia)

Amcor Packaging (NZ) Ltd (Australia)

American Information Technologies Corporation (U.S.)

AMP Superannuation Investment Trustee (NZ) Ltd (Australia) AMP Superannuation Management (NZ) Ltd (Australia)

Andy Easton and Company

Angevin Investments Ltd

Ascar Enterprises Ltd (Australia)

Asia Pacific Breweries Ltd (Malaysia) Auckland, 20 commercial properties Auckland. Downtown House, 21 Queen St

Auckland, South, Whitford Maraetai Main Highway, 30.6346 ha, horse stud Auckland, Weiti Station, East Coast Road, 900 ha. farm

Australian Mutual Provident Society (Australia)

B & U Ltd (Netherlands)

Bates. Stephen (U.K.)

Beckett Hills Ltd

Bell Atlantic International Inc (U.S.)

Jul91 May 91 May 91 Jun 91 Jul91 JuI 91 May 91 May 91 Jul91 Jul91 May 91 Apr 91 Apr 91 Apr 91 Jun 91 Jun 91 May 91 Jul91 Jui 91 Apr 91 JuI 91 Apr 91 Ju191 Jun 91 Jun 91 May 91

83

52

37

59

83

90

44

33

85

85 45,47,48 20

20

24

70

70

47

83

83

15

81

20

86

71

76 45,47.48

- 55 -

Blackford Road, Rakaia Gorge, 485A052 ha, rural property Blackwater Gold (Waiuta) Ltd

Blenheim, 33.5510 ha vineyard (Japan)

Bloomers Growers and Exporters Ltd

Boost, Wolfgang (Germany)

Bowater New Zealand Ltd (U.K.)

Bowater PLC Ltd (U.K.)

Brierley Holdings Ltd

Brierley Investments Ltd

Brierley Investments Ltd

Brierley Investments Ltd

Britannia Brands Holdings NZ Ltd (France) Britannia Brands Pte Ltd (France, Singapore) BSN Groupe (France)

Bumi Raya International Holding Co. Ltd (Indonesia) Bums Philp and Co, Ltd (Australia)

Business Printing Group Ltd

Cairn Enbergy Plc (U.K.)

Cambridge, 245,9080 ha, farm in Hora Hora Road Cambridge, Parallel Road, 120.368700 ha, farm Canterbury, Te Pirita, 209 ha farm Sharlands/Ardlul Roads Carter Oji Kokusaku Pan Pacific Ltd

Cascade Group

Chateau Regency Hotel, Christchurch Cheernimet Finance Ltd

China National Metals and Minerals Import and Export Corporation (China) Citizens and Graziers Life Assurance Company Ltd

North Road, 15.9597 ha, polo ground

Cokato Holdings Ltd (Channel Islands)

Coleman, Jeremy (U,K.)

Cornalco Group (U.K)

Comalco Ltd

Comalco Ltd, Australia ('u.K) Cornalco New Zealand Ltd (U.K.) Comalco Pacific (NZ) Ltd

"'"'"""'b"'F, (NZ) Ltd (Australia)

and Van Zandt, Ms G. (U.S.)

Northland. Berghan Road, 20.89 ha rural. property Corbans Wines Ltd

Corporate Investments Ltd

CRA Exploration (NZ) Ltd

CRA Ltd

CRl Ltd (Australia) Derulu Pty Ltd

Downtown House, 21 Queen St, Auckland Easton. A. W.

Elmshorn Enterprises Ltd

Esk Forest, 7757 ha., Crown Forest Licence and Assets excluding land Ford Motor Company of Canada Ltd (U.S.)

Ford Motor Company of New Zealand Ltd (U.S.)

Ford Motor U.S.A

Frontiers Group Co. Ltd

Gecco Venture Trust Ltd (Germany)

Jun 91 May 91 Jun 91 May 91 Apr 91 Jun 91 Jun 91 Jun 91 Apr 91 May 91 Jun 91 Jun 91 Jun 91- Jun 91 Ju191 Jun 91 Jun 91 May 91 Jun 91 May 91 May 91 Apr 91 May 91 Jun 91 Ju191 Jul91 Apr 91 Apr 91 Apr 91 Jun 91 Jun 91 Apr 91 Jun 91 Jun 91 Jun 91 Jul91 May 91 May 91 Jun 91 Jun 91 May 91 May 91 Ju1 91 Apr 91 Ju1 91 Apr 91 Apr 91 Apr 91 May 91 May 91 May 91 Jun 91 Apr 91

59,60 40

7S

53

19

74

74

70 26.29A 47 59.62 54

54

54

83

70

74

32

71

51 43,44 21

47

70

83

83

26, 29A 23,25 31

58

73

13

73

73

73

85

43

43

75

74

42 39-42 78 26.29A 83

24

16

18

35

35

35 59,60 19,23

CompanylIndividual

- 56 -

Date

Page

General Accident Pic (U.K.)

Geyserland Orchids. Rotorua, Tikitere, 2.2846 ha, Globe Progress Gold Ltd

Geldings Road. Pukekohe, 29.6659 ha. adjacent Franklin Trotting Club Grantham. Mayo, Jan Otterloo and Company (U.S.A.)

Great Barrier Island, 4.0838 ha, rural property

Green and McCahill Holdings Ltd

GUS Wholesalers Ltd

Gwavas Forest, 8571 ha .• Crown Forest Licence and Assets excluding land Helensville, Mcleod Road, timber, cutting rights over 82 ha land

Highlay District. 75.5548 hectares of rural land

Himatangi, State Highway 56, 11 ha. hobby farm

Hirnatangi, State Highway 56, 11 ha. rural property

Hokonui District. Southland, Benmore, 311 hectare farm

Holderbank Financiere Glaris Ltd (Switzerland)

Horowhenua, Kohitere Forest. 670 ha,

Hotel New Okabe (Japan)

Hotel New Shiobara (Japan)

Ikenaga, Takashi (Japan)

Industrial Equity Ltd

International Institute of Development Company (NZ) Ltd Irwin Company (U.S.)

Irwin Company, The (U.S.)

Ishikawa, Nobuo (Japan)

Ito Hotel New Okabe (Japan) ITT Corporation (U.S.)

Izard International Ltd (U.S.)

Izard Irwin International Ltd (U.S.)

Izard Manufacturing Company Ltd (U.S.) Izard Manufacturing Company Ltd (U.S.) J. Rattray and Son Ltd

Jarmell Pty Ltd (Australia)

Jaspers, Petrus Antonius (Netherlands) Jaspers, Petrus Antonius (Netherlands) Jones, Robt, Jones Investments Ltd KAH New Zealand Ltd (Malaysia) Kanernatsu Corporation (Japan) Kathman-Broring, 1.

Kaweka Forest, 7522 ha., Crown Forest Licence and Assets excluding land Kenwigs Investments Ltd

Kerr Brothers Pty Ltd (Australia) Kinugawa Kanko Hotel Suirnei (Japan) Kiwi Cable Company Ltd

Klindworth. John and Todd, and other family members Kohitere Forest. Horowhenua, 670 ha.

Kyowa Hakko Kogyo Co. Ltd (Japan)

Latitat No 5 Ltd

Leung Kwok Wing and Chan Yin (China) Lious, Jieh Jow and family (Taiwan)

Liu, Mr P.D. and members of the Liu family (Taiwan) Longburn, 2.0715 ha, of rural land

Lupan, Mr and Mrs (Tahiti)

Mackey, Danny James and Carol Jean (U.S.A.)

Apr 91 Apr 91 May 91 Ju191 Apr 91 Jun 91 Jul 91 Jun 91 Apr 91 Jul91 Jun 91 Apr 91 Jul91 Jun 91 May 91 Jul 91 Jul 91 Jul91 Jun 91 Jun 91 Jun 91 May 91 Jul91 Jun 91 JuI91 JuI91 May 91 Jul 91 May 91 Jul9l Jun 91 JuI91 Apr 91 Jui 91 Apr 91 Jul91 Jun 91 Ju191 Apr 91 Jun 91 Jun 91 Ju191 Jui 91 Jul91 Ju191 Jim 91 Jul91 May 91 Apr 91 Jul91 May 91 Jul91 Apr 91

14

24

39

88

30

58

81

67

17

80

56

27

86

76

33

80

84

84 59,60 55

57

35, 36 82 59,60 84

80

35, 36 82 35.36 82

67

78

27

86

30

89

75

94

19 59,62 70

84

87

87

80

75

93

36

16

81

36

88 23.25

- 57 -

Bank Ltd Macquarie New Zealand Ltd (Australia)

Macraes Ltd (Australia)

Macraes Mining Company Ltd (Australia)

Magnum Corporation Ltd

Magnum Corporation Ltd

Mainzeal Group Ltd

Mair Astley Holdings Ltd

Malaysia Mining Corporation Berhad (Malaysia) Mandeno, p_W_ and G.S.

Maori interests

Maori International (NZ)

Mcleod Road, Helensville umber, cutting rights over 82 ha land Meads, John and Nancy

Meyer, Horst (Germany)

Milburn New Zealand Ltd (Switzerland) Milburn New Zealand Ltd (Switzerland) Milburn Unit Trust (Switzerland)

Miller, 1.Z.

Mohaka Forest, 15358 M., Crown Forest Licence and Assets excluding land Mokuso Holdings Ltd (U.S.)

Moody Creek coal mine, Greyrnouth Moody Creek Mining Company Ltd

Mungarn Holdings

23.2717 ha.

National Australia Bank (NZ) Ltd (Australia)

National Australia Bank Ltd (Australia)

NawB (pte) Ltd

Naxos Investments Ltd Kokorua Road, 4.01 ha, rural property

Ltd (Indonesia)

New Zealand Breweries Ltd

New Zealand Breweries Ltd

New Zealand Breweries Ltd

New Zealand Can Ltd.

New Zealand Can Ltd

New Zealand Can Ltd

New Zealand Free Ltd

New Zealand Farmhmds Ltd (Australia)

Northland, Beach, Berghan Road, 20.89 ha rural property

NZI Bank Ltd (UX)

NZI Ltd (UK)

Oji Paper Ltd (Japan)

Sankoku Esk Forest Ltd (Japan)

Oji Sankoku Gwavas Forest Ltd (Japan) Oji Sankoku Kaweka Forest Ltd (Japan) Oji Sankoku Mohaka Forest Ltd (Japan) Okabe Enterprises Ltd (Japan)

Okabe Group (Japan)

Oriental Hollings Berhad (Malaysia) Owhiro Bay Quarries Ltd (Switzerland) PAC Inc (U.S.)

PAC Enterprises Inc (U.S.)

Apr 91 Apr 91 May 91 Jun 91 May 91 Jun 91 Jun 91 Jun 91 Apr 91 Apr 91 Ju191 Ju191 Jul91 May 91 Apr 91 May 91 Jul91 May 91 Jul91 Apr 91 Jul 91 Jun 91 Jun 91 May 91 Jun 91 May 91 May 91 Apr 91 Apr 91 Apr 91 May 91 Apr 91 Jun 91 Jul91 Apr 91 Jun 91 Jul 91 JuI 91 Jun 91 May 91 Apr 91 Apr 91 Apr 91 Apr 91 Apr 91 Apr 91 Apr 91 Jul91 JI1191 JuI91 JuI91 Apr 91 Jun 91

21

21 39-42 56 47 67

58

58

19

16 93

77

80

51

19

33

90, 92 33

94

17

84

59

59

47

75

38

38

15 26,29A 29 43.44 22

69

85

22

68, 69 85

79

76

43

14

14

17. 18,21 18

17

19

17

84

84

89

90,92

22

68,69

· 58 -

PAC Enterprises Inc (U,S.) PAC International Inc (U.S.) PAC NZ Holdings Ltd (U.S.)

Pakatoa Island, Firth of Thames, Hauraki Gulf, 20.0787 ha, Palmerston NoM International College (Japan)

Palmerston North, Tiritea Road. 4.4873 ha, rural land

Papakura, Orere Point, 440.8681 ha, sheep. beef and cattle farm Parkroyal Hotel, Queenstown

Perry Dines Corporation Ltd

Pierson Heldring & Pierson NV (Netherlands) Pohuenui Station and Island Resort Ltd Promet Berhad (Malaysia)

Prornet Private Ltd (Malaysia)

Prosaic Developments Ltd

Pukekohe, Geldings Road, 29.6659 ha, adjacent Franklin Trotting Club Purdon, Mr L.

Qantas Airways Ltd (Australia)

Qantas Investments (NZ) Ltd (Australia) QINZ Holdings (New Zealand) Ltd Quality Inns Group

Queen St (no 21), Auckland, Downtown House Queenstown Parkroyal Hotel

Quikcrete Ltd

Rakaia Gorge, Blackford Road, 485.4052 ha, rural property Raquel Devlopments Ltd (Australia/U.K.)

Rattray, J. and Son Ltd

Rayonier New Zealand Ltd (U.S.) Ready Form No. 46 Ltd (U.S.A.)

Reid Family Settlement Trust (Channel Islands) Ridgely Enterprises Ltd (U.K.)

Robt, Jones Investments Ltd

Rongopai Wines Ltd

Rotorua, Tikitere, Geyserland Orchids. 2.2846 ha Rowlands and More Ltd (U.K.)

Rawling, Thomas William and Valerie (U.K.) Rudeforth, Bruce Francis (Australia)

Sainte Neige Export Wines Ltd (Japan)

Saito. Yutaka (Japan)

Sam's Creek Gold Ltd

Sanyo-Kokusaku Pulp Company (Japan) Schroders Asia Pacific Growth Fund SEA Holdings Ltd (Hong Kong)

Selanil Holdings Ltd

Shipfield New Zealand Ltd (Australia) Shipfield Pty Ltd (Australia)

Siapno, Ronnie and Fe-Annabelle Simon, Ralf (Germany)

Sky Network Television Ltd

Southland. Hokonui District, Benmore, 311 hectare farm Squeers Investments Ltd

Stanton and Jimcock Ltd

Stavefield Holdings No. 49 Ltd (Indonesia) Sturmon Shelf (No.7) Ltd (Tahiti)

Jul91 JUD 91 Jun 91 Apr 91 Jun 91 Jun 91 Apr 91 Jun 91 May 91 Ju191 Jul91 May 91 May 9.1 Ju191 Ju1 91 Ju191 May 91 May 91 Ju1 91 Ju191 Jul 91 Jun 91 Ju191 Jun 91 Jul91 Jun 91 Jul91 Apr 91 Apr 91 Jul91 Apr 91 Apr 91 Apr 91 May 91 Jun 91 Apr 91 Jun 91 Jun 91 May 91 Apr 91 Jul91 Jun 91 Jun 91 Jun 91 Jun 91 Jul91 Apr 91 May 91 JUIl 91 Apr 91 JUri 91 May 91 Jul91

85

68. 69 68 19.23 57

57

16

67

34

79

94

34

34

94

88

88

37

37

93

93

83

67 90, 92 59, 60 78

67

80 23.25 31

78

30

31

24

51 71.72 29

75

59, 60 41

17, 18,21 79

59,62

58

70

70

93

19 45,47,48 76

26, 29A 71,72 43,44 88

Te Pinta, 209 ha farm Roads

Tele-Communications Inc

Telecom Corporation of New Zealand Ltd (U.S~)

Telecom House, THC Chateau Ho!d THC Wairak:ei Hotel

The Irwin Company

Time Warner Inc (U.S,) Tiritea

4 .. 4813 ha, rural land

Tiwai Todd Can

Todd Corporation

Todd International Ltd Tornen (NZ) Ltd (Japan) Tomen Corporation (Japan) Tower Union Gold

Virgin Islands)

Van

900 farm

Whitford-Maraetai Main Wilson Neil Ltd

ha, rural property

nW •. ·!l.UUI'-'. 30.6346 ha, horse stud

Zendel Consumer Products Zendel Ltd

Control

Christchurch.

Jul91 77
Jul 91 77
JuI91 77
May 91 32
91 53
Jun 91 71,72
May 91 33
Apr 91 31
May 91 43,44
May 91 45.47.48
Jill 91 84
Jun 91 59.62
Jul 91 89
Jul91 89
Jul 91 82
May 91 45,47,48
Jun 91 57
Apr 91 13
Jun 91 68
Jun 91 68, 69
Jul 91 87
May 91 53
May 91 53
May 91 38
Jun 91 S6
91 39-42
Apr 91 14
Jul 91 86
JuI 91
Jun 91 59
May 91 40
Jun 91 67
Jui 91 81
Apr 91 29
Ju191 84
May 91 52
91 15
May 91 47
Jul9I 79
May 91 52
Jun 91 5"
.s
JUlI 91 55
Jun 91 55 would to put

from the jaws information presented in

with honesty, depth and thorough

over a decade now, Peacelink has commented on media distortion, power

destabilisation in the Pacific Rim countries and published definitive analyses of secret warmaking policies at home here. Peacelink has not been sanitised and so sometimes people have squirmed or groups have disagreed. However Peace link has vowed to be truthful and factual,

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