HAVE

/\

MARKET. ,

2 4

Blockade Lifted ....

7

8 10 1l 13 14 15 18

Government Procurement Agreements.

GATT Concerns .... " ..

ON TRADE ENVIRONMENT ....

Review "NZ

Wolfgang "".V"..,AJl""",1

IJUV L sold out .

by Bill Rosenberg .....

41

by Murray Horton. , . , .

Maori Capitalism ... , . , . 46

V AUJES" & "INDIGENOUS Roger Moody publications 49

. 49

Guide to Foreign Control. . . . ·50

The

""0h""j'",,1 because of our concern that "Watchdog" has been

We have reduced the typeface unless we receive

in

53 Waitaki sheep shaggers have saved the nation for Jim Bludger, or, more correctly, saved Jim Bludger for the nation. 53 of them. 'They Gould be profiled in the media.

But not only have delivered us from the of a

well hung Parliament, have saved The Market from

And this is because the poor

old Market has got a Woolworth's bladder and gets very nervous.

The result of the election and referendum demonstrated to just who is considered to tie the most important

sector in . The Market Shares went up and down

like the old proverbial; and the of Four

an made <"~""·,, .. vsv statesmanlike

statements ,,1"1"""'mcr the of The Market

it was not multinationals or local Big Business which panicked so much as the local investors. Hugh Fletcher said that it was "silly sellers" who sold out on the

Monday after the and that Fletcher Challenge, as an

l'~Z~based in countries

with (even happier in dictatorships,

like Chile). But CAFCA suggests that we call

the bluff of The Market Let the "investors" take money elsewhere, New Zealand could then concentrate on our economy in the interests of our own

not an incontinent collection of and

Come CHI, come on. We've hanged

now let's hang the Market

One is that. it is "investment" at all, This an

"investor" which creates and provides a return,

'file technical term is ie the investor builds a

in a green pays taxes, etc. The NZ

not reinvested here.

take our word for it The "Press" wrote an editorial entitled "The balance of 11'><1'>1""'/,,,1,,"·

"".01'1 November 3, the Government Statistician released the balance of payments situation for the lime 1993 quarter .. .The statistics show a in the June quarter of $133 million, compared with a large surplus of $544 million in the March quarter, This is a deterioration of $411 million, the result of a deterioration 011 "invisibles" of $805 million, yet a on merchandise trade which improved by million. The Government Statistician commented that seasonal tourism contributed $475 million to the $805 In ill ion deterioration in the invisibles deficit.

"So increased by New Zealanders tra veiling abroad was factor, but another cause was an increase in the income attributable to overseas investors from their investments in New Zealand, This is a consequence of Government sales of major assets over recent years to overseas buyers. In the years ahead such remittances will have even greater

es

So there you have it, from official sources, Foreign takeovers, specifically of the former publicly owned assets, are bleeding hundreds of millions of dollars out of the economy. Foreign "investment" is a liability, not an asset, The editorial concludes that New Zealand will have to more to "offset the rises in the deficit ill the' invisibles' items". That's great. Greater productivity, more competitiveness, more exports, are all catchcries of the New Right mouthpieces of

the multinational agenda. So now we are to become

more "attractive" to foreign so that we can try

to make up for the losses incurred 01'1 our national economy

foreign "investment".

Mind you, let nobody say that we have an open slather policy. ('""I"'1";nl,, not. The Ministry of Tourism has published a book, in English, Japanese, and Mandarin Chinese, advising foreign investors 1.0 be "culturally sensitive" when they come here ("Press", 12/10/93), Meaning that they should wipe their boots before tromping through our home.

Another is that foreign "investment" AI' necessary to pay "our" debt As for those assets sales, just look at the

of in the material from the

"''''.(,,,,,,1,,, s- 1993 PSA "Journal", Has debt been reduced?

TRu~ total as ofthe June 1993 """.~ .. ~,> ...

bimOl:l. ("Press", 13/10/93). It was .uV'LAf""'" came to power, and started this whole

process.

But The Market Loves Us

before the election, foreign buyers increased their share of the government securities market to 29.1%, snapping up government bonds, No wonder they were less than happy with the result Elections really are a nuisance, they impede the smooth flow of profits. And as for these New Zealanders! Don't the fools know what's good for them?

Before the election, the papers were full of articles from foreign newspapers praising New Zealand and Ruth Richardson to the skies, regretting only that ('iey weren't able to vote here. The reasons why the multinationals and the New Right love NZ governments, of both parties, since 1984, have been canvassed extensively in previous "Watchdogs" .

Tony O'Reilly, global boss of Heinz (which bought Wattles) gave an extraordinary interview to the "Weekend Australian" in October. He bragged of the bargain basement purchase: "It's doing so well I don't know why they sold it" ("Press", 11/10/93). Turning to NZ politics, he lavished

praise on the Bludger regime, being possibly rather too honest for Jim's electoral good. "He is unashamedly selling off anything .. .I'd say he'd sell his office" (ibid). O'Reilly earned $NZ65 million in salary and bonuses in 1992, making him one of the world's highest paid men; Heinz, with operations in 100 countries, is one of the world's biggest multinationals. So this is praise indeed for Jim and the Rogernauts from the Very Big Boys. What a pity we peasants don't seem to get the point.

One "Press" headline summed it up. "Foreign investment at record levels in October" (20/11/93). That is, the month

ASSET SALE SWINDLE:

Deeper in debt, despite the sell-off

Arresting New Zealand's national debt through asset sales has been about as successful as arresting George Wilder: recent figures reveal that since the asset sales programme began five years ago, debt has increased by $8.9 billion.

In 1988 Labour sold New Zealand Steel, the first of a long list of public assets (see below). It was cheerfully handed over to private enterprise, taxpayers were told, to payoff a $39 billion debt. But by 1993 .. that debt had risen to $47.9 billion.

. So New Zealand is now deeper in debt. but with fewer assets left to sell. Meanwhile, former state assets such as the Rural Bank. Telecom, and Government Print, arc earning handsome dividends for their new private owners. Some assets will end up earning vastly more than what New Zealand recouped for their one-off sale.

Asset

New Zealand Steel Petrocorp

Health Computing Service DFC

PostBank

Shipping Corporation Air New Zealand Landcorp Mortgages Rural Bank

Communicate New Zealand Govt Printing Office National Film Unit

State Insurance Office Tourist Hotel Corp

Telecom Corporation

Maui

Synfuel

NZ Liquid Fuel Investment Export Guarantee Office Govt Supply Brokerage Housing Corp mortgages Petroleum mining licences Bank of New Zealand

NZ Timberlands

Forestry cutting rights (sales continue) New Zealand Rail

Total

Sale Price ($ million) 327.22 (March 1988) 80106

4 25

I! 1.28

678.48

33.56

660.00 77.00 687.50 .06 38.58 2.50 735.00 73.85 4,250.00 254.00 161.54 (203.00) 16.28

3.20 523.98 121.14 849.95 366.00

1,027.06

400.00 (July 1993)

12,200.49

PSA Journal, September 1993

Is Sir Roger Getting Enough To I<-:.at?

What of Roger Douglas, the man who started all this? He cropped up in the media shortly before the election, pushing his latest book, "Unfinished Business" (look for it in the remainder bins soon), and generally urging full steam ahead to the l Sth century.

He's founded a new pressure group, with the coy acronym of ACT (Association of Consumers and Taxpayers). We doubt if too many of the "winners" from the Douglas years are very familiar with paying tax. Co-founder is Derek Quigley, whom Piggy had the sense to sack from his Cabinet. Quigley's quirk was that he was a Rogernaut before his time. Other founding members include: Sir Peter Elworthy, former president of Federated Farmers; Bryce Wilkinson, formerly of the Treasury's "A Team", and now a director of CS First Boston, the multinational bank that has done so wen out of NZ' s "restructuring"; Andy Gregory, the Employers Federation press officer; Rodney Hide, a Christchurch economist obsessed by "property rights"; and rabid Rightwing journalist, Deborah Coddington, whose new book praises Rogernomics, It grew out of the Backbone Club which distinguished the latter years of the Labour government, and whose personnel were prominent in Peter Shirtcliffe's laughably named Campaign for Better Government. ACT was launched on even more rabid Rightwinger Lindsay Perigo's Sky TV show. Deborah Coddington works as a researcher and producer for Perigo's TV and radio shows ("Press", 24/8/93; "Listener", 1819193).

But how is Douglas doing? This concerns us, so we were relieved to receive (from Tasmania, of all

Watchdog

Page 3

a copy of his CV. It lists his recent overseas consultancy work as including the following for the World Bank: in 1990, he advised the Hungarian government on economic reform; attended a public sector management retreat, and a seminar on privatisation (both in the US); in 1991, he undertook a steel privatisation mission to Brazil; an Asian Infrastructure Symposium (US); a seminar on the privatisation of energy, in Mexico; and an Asian Development Bank privatisation mission to Pakistan; in 1992, he undertook a World Bank privatisation mission to Russia, and attended a privatisation seminar in Austria. It also lists NZ consultancy work on: postal industry reform, health sector reform, air traffic control, electricity, telecommunications, and railways. Plus sidelines like reports on the kiwifruit industry and being a director of Brierley's.

So, rest assured, Sir Roger is getting enough to eat. But he might be getting just the faintest glimmer of rejection from the peasantry. Not only was Rogernomics trounced for the

second consecutive general election, he was even locked out of a board meeting in his new role as an independent director of the Auckland Warriors league dub. Even the stiff arm tackle boys are embarrassed to be seen with him. Never mind, he could always have another go at pig farming.

Its far from improbable that Douglas and co will metamorphose into a political party to contest the first MMP election. Already Graham Robertson, president of Federated Fanners, has predicted that a new Rightwing party win "push for more freedom, liberal trade and less government intervention ... Two new parties have already emerged as champions of the underdog and the victims of change. These occupy the political Left" ("Press", 20/11/93). Yes, the country's obviously too Leftwing, it needs some Rightwing to give it balance. Douglas, Prebble, and co will no doubt seek to gel their snouts back into the electoral trough. At least next time, they won't pretend to be in a "Labour" party.

UPDATES

Along with "Watchdog" 73, we circulated the Seafarers Union leaflet opposing the Government's plan to deregulate coastal shipping. That now looks likely to be a victim of the electorally enforced "consensus". Bludger has singled that out as a "controversial" measure that may not proceed. The official soothing line is now that the "reforms" are all in place, we can sit back and have David Lange's famous cup of tea (a packet of disprin would be more appropriate). But "reforming" coastal shipping might rock the boat (pun intended), so it might be sacrificed. Good.

"Watchdog" 72 analysed the car industry, and NZ's move to "integrate" the trans-Tasman car market, specifically by allowing NZ-assembled cars into Australia. The Australian government was baulking until NZ stopped massive imports of Japanese used cars. All year various NZ Ministers spoke soothingly of how the Aussies would come to their senses. They didn't Alan Griffiths, Australia's Minister of Industry, Technology and Regional Development, told the Australia-New Zealand Business Council's meeting that: " ... while (NZ) continues large scale importation of second hand motor vehicles, Australia cannot incorporate the automotive industry into closer economic relations" ("Press", 16/10/93).

"Watchdogs" 70 & 72 detailed the April 1992 police raid on the Auckland Peoples Centre, resulting in several arrests and serious eye damage to one person. The charges were subsequently dismissed and the judge was scathing about the police. The upshot is that 26 individuals and two organisations arc suing the police for a total of $1.8m. Donations for legal costs can be sent to:

Auddand Unemployed Workers Rights Centre, Box 3813, Auckland L

Ann Currie and Reg Duder, of the Campaign for Peoples Sovereignty, at the soup kitchen and picket outside Southpower in August. CPS was protesting Southpower's increasing domestic power prices by 25% over 2 years, while dropping business rates.

Page 4

I I

I undertook a three week

tom, the first such exercise

by my as the

started in and finished in covering an awful lot of the North Island in between. I spoke in Wellington, Palmerston North, Auckland, Warkworth, Hamilton, and Waihi, I only went. to places where CAFCA had received a response to our initial letter offering my services. And indeed I had to

decline invitations to Taupo, Russell and Kaitaia

because it was physically to there in the time

available. I have offered to visit them in the future, and arrangements are already being made in a couple of cases.

I travelled on an NZ Rail bus,

and ferry. 00, my staff travel finished when I

was made redundant byNZR in 1991. CAFCA for this. But I can thoroughly recommend it as a way to travel, to relax, and to what is an beautiful country, as this trip vividly reminded me .. It was exhausting, and I doubt that I'd undertake a 3 week (apart. from the fact that won't let I caught a cold in Auckland's vastly overrated weather, and virtually lost my voice, which some might consider a blessing in '''''·14''i''''':;.

The best about it was the In some cases it was finally meeting long term members who had only been

names on paper; in others it was contacts with other

networks. who now no It was a great

adventure. My host'> ranged from a Maori nun to an retired international marketing manager; from cL'liry farmers to "anarcbo-feminists" (their from students and workers to a Parliamentary candidate. Houses from the luxurious to one unfit for human habitation (no 110 hot water, an unusable stove, but plenty of beer); from central

Auckland to one on beach with 110 road access

and penguins under the floor. When asked

me: "Don't you get depressed all this?", I answered "No",

and all those reinforced my optimism.

The pre-election timing was deliberate. Although CAFCA

didn't endorse any , nor have any policy on the

referendum not on we

recognised the triennial heightened interest in things political. The trip had several to meet our members, and to secure new ones. In this respect, it was spectacularly successful, We printed over 150 extra copies

far more than usual, and all gone.

with the "'''.'-'''''J.;;', and via the media. This was Q"",·"t<l,I"

were

This was 1.1 new outlet

was to make the connection

with Maoridom. The best response was from small town papers and radio stations, particularly when I showed them that CAFCA held Overseas Investment Commission material about their local area, material they invariably knew nothing about. Thus, the Times" (Warkworth) featured me as front page lead under the headline "$55 buys Taiwanese 74111.1 farm control: OlC approves resort deal" (16/11;93). Ever since I in Waihi, in 1990, as opening act Moody, there has been an almost embarrassing fan club there in the form of the "Waihi Leader", which gave me lavish coverage and praise this time round as well. And I did radio interviews in towns that I didn't speak in.

There was coverage too, in Wellington, both

Hamilton papers, and Whangarei a couple of cases,

nothing came of the The most spectacular

success was my lengthy slot on Don Carson's "Saturday Morning" programme on National Radio, which drummed up a lot of new members. A thoroughly bemused Becky fielded calls from around the and as we have an unlisted number, they were definitely determined caners. I also got the opportunity to at bigger gatherings, for example, in at the Peoples Assembly. and to a lunchtime crowd on campus (with Sandra Lee).

, to make connections with other networks. This was a success but not an unqualified one. The Matakana Island article elsewhere ill this issue details our excellent links

and with my host, John Neill, Alliance candidate for

Matakana who made a point of speaking in support

of me in Waihi, BUl a convened activists meeting

in Wellington didn't achieve anything, reinforcing my conclusion that an outsider cannot bring together those who do not wish to be together.It has to happen from the inside, as happened in Christchurch for Peoples Sovereignty. But in other cities my visit galvanised people from different networks

work to my and to stay in touch,

bore out our hunch that the time is right for both CAFCA and the issue of foreign control.

Crowds sat through my 90 minute speech without

falling or slow handclapping. And the years of

teamwork by the CAf<CA committee bore fruit Ann Currie's inspired touch was the scroll of our index of 1992 (HC nh,·,j""'L"",,nIH'II by every paper I visited); Bill

v.,,,,'n~v.,,. did all the hard involved in processing the

Dennis Small gave me the bullets to rue at GA TI'. it was thoroughly worthwhile, it increased our U8«J"~"" and dramatically raised IOf both CAFCA and the issue, Lets do it

tour send us $5 for

We've vide oed it. See back page for

5

Watchdog

PageS

MATAKANA ISLAND Court Victory; Blockade Lifted

"Watchdog" 73 reported, in detail, the background to the decision of the overwhelmingly Maori residents of Tauranga's Matakana Island to, firstly, take court action against a raft of companies, and local and national bureaucracies (including the Overseas Investment Commission); and, secondly, to physically blockade the logging roads of their forest's new owner, lIT Rayonier NZ (a subsidiary of US multinational giant lIT, and the senior partner in a Matakana consortium including Malaysian forestry company Ernslaw One. These two are now among the biggest owners of NZ's exotic plantation forests, courtesy of the policy of both labour and National to sell off the cutting rights to publicly owned S tate forests). Briefly, they took grave exception to the receivers of bankrupt London Pacific accepting the bid of the multinational consortium rather than a matching one from the islanders. Hence the court action, and the blockade, imposed at the end of April.

The islanders' Te Kotukutuku Corporation applied to the High Court for an interim injunction, stopping the sale. While Mr Justice Greig reserved his decision, they imposed the blockade, fearing that the consortium would clearfell the forest in the interim, cashing in on the then boom in exports of NZ pinus radiata unprocessed logs to northern Asia (the boom has since nosedived, as they all do).

In August the judge delivered his decision, granting the interim injunction. He ordered the South Auckland District Land Registry to take no action to register the sale of the 4000 ha forestry block until further order of the court, "I am satisfied the plaintiffs have merit in their case to the extent of an arguable right for restraint of further action pending a full enquiry" ("Bay of Plenty Times", 12/8/93). He ruled that the consortium's corporate manoeuvrings during the transaction were clearly intended to avoid the need to get Ministerial consent under the 1952 Land Settlement Promotion and Land Acquisition Act, and the 1973 Overseas Investment Act. This was a signal for all parties to start negotiating for an out of court settlement, obviating the need for a full injunction court hearing.

But the blockade stayed in place. Community spokesman Howard Palmer said the islanders were "just over the moon" ("BoP Times", 13/8/93) and "when everything falls into place, then the blockade will be lifted", It was, in late October, It had been in place for 6 months, and was a remarkable achievement, one little publicised outside the Bay of Plenty. At the time of writing, details of the deal reached have not been made public.

There were other spinoffs, John and Tui Neill are one of the two pakeha families on the island, growing avocados commercially. John was chairman of the Matakana Island

Trust at the time of the court action and blockade. In the general election, he ran as Alliance candidate for the new Matakana electorate, which stretches from the edge of Tauranga up the Coromandel Peninsula. Neill belongs to the Liberals. He polled 5000 votes, finishing second, and slashing the majority of Graeme Lee, Bible bashing Cabinet Minister, to less than 1000 (ironically it was the 53 vote victory won by Alec Neill, a cousin, in Waitaki that gave National its majority),

CAFCA has built a solid link with Matakana, despite us being a pakeha organisation in faraway Te Waipounamu (perhaps it helps that Neill is originally a Mainlander), Our secretary/organiser, Murray Horton, visited the blockade during his 3 week northern speaking tour, in October. Trees had been dropped across the road, but the blockaders had built an imposing structure to live in. They had generator electricity, a caravan, a logbumer, and a full kitchen. Murray was served a 3 course sitdown meal (featuring puha and steam pud), and was privileged to be present at a meeting 1.0 discuss lifting the blockade (which was always conditional on the go ahead being given by the islanders' negotiators). The blockaders were not "Maori radicals", but conservative, rural, religious people. Hymns, prayers and songs were an integral part of everything.

But they were also absolutely determined to prevail, were not overawed by multinationals, and had maintained the blockade for 6 months around the clock. Murray was taken around the island, which consists of forest, farmland, and beautiful Pacific beaches which command the entrance to Tauranga Harbour. Crossing the harbour at night in the Neills' runabout was definitely a highlight. John and Tui hosted Murray, and were instrumen tal in getting him Tauranga media coverage eg he and John had nearly 2 hours live on the iwi radio station (when he met the blockaders, one said "You're that pakeha fella we heard on the radio today. You talked for 2 hours and wouldn't let the other fella get a word in edgeways"). John Neill spoke in support of Murray at his Waihi public meeting, the biggest of the trip, and has invited Murray back to speak throughout the region next year. Everywhere Murray spoke, he stressed the positive significance of the Matakana blockade as an illustration of ordinary, unsung New Zealanders fighting back against one of the world's biggest and ugliest multinationals.

The Matakana story is not over, and we'll keep you informed of developments. In the meantime, CAFCA offers heartfelt congratulations to the islanders who have said "Shove lIT' to the timber wolves, and put their bodies on the line for 6 months. They don't think they've done anything special; the history of the New Zealand people will record otherwise. Kia kaha!

Watchdog

Page 7

As the APEC meeting (November 18-20) made a strong can for the GATf Uruguay Round to be finalised. APEC is the Asia Pacific Economic Co-operation forum which embraces a number of countries 011 the Pacific Rim across Asia and Nosth along with Australia and NZ in the South Pacific. It is the NZ government's highest priority after GAIT, and is seen as the best fall-back option if GAIT fails. Once the election results were known, Prime Minister Bolger practically stampeded Burdon aside in his rush to get away and be seen shaking President Clinton's hand.

At the time of writing it is still unclear as to whether the GAIT negotiations will meet the deadline of 15 December. Deadlines for the Uruguay Round have become quite ajoke but Peter Sutherland, the GATT Director General, has indicated that this December date is definitely the final one. He may be right this time.

Whatever the outcome of the GAIT Round, we can be assured anyway that free trade forces will keep pressing on us key elements of the GATT and related free trade agreement, or free trade forum, agendas.

NZ Hypocrisy on Agriculture

The call for a settlement of the GATT Round has taken Orwellian overtones in NZ with government ministers, Burdon and Falloon, painting French peasants in petrifying terms. These fanners are portrayed as some feudal remnant blocking the glorious expansion of the free market and capitalist progress towards greater modernity. It is most ironic that the government's policies mean a new sort of foreign-dominated feudalism with private corporate interests exacting the dues on the pv~".u''''''.

However we might analyse the situation of fanners in

and the Common Policy, it is in the Third World that the GAIT threatens enormous rural devastation. As Kevin Watkins of the Catholic Institute for International Relations has remarked, the G A TI agricultural proposals "incorporate many of the worst aspects" of what the big industrial nations have proposed in regard to this sector. Falloon has labelled the French trade stance 11 "crime against humanity" and lamented that "the hypocrisy is incredible"; and charged France with poor countries to ransom, which is "an absolute disgrace" ("Press", 15110193). In reality, these accusations can wen be levelled against NZ's OWIfl trade stance. NZ has, unfortunately, been an assiduous purveyor of the food export model of development, geared to increase the influence of We stem agribusiness and the erosion of Third W orld food A 1987 cabinet paper obtained under the Official Information Act showed that the government withdrew from the Coffee and

International. the advice of

and because it was

(1)[KlS{n to for Third World commodities.

II

The results wrought by market forces can be seen from the

experience of a fellow member of the

free trader Cairns Group. In 1991 Brazil "'v'r'>n?h·£l billion of food although a third of its population is suffering from stunted growth due to malnutrition ("Press". 812192), Farmers blame the diminished production of food for domestic consumption on the steep fall-off in agricultural subsidies.

The Brazilian experience is merely an example of the human destruction commonly caused by free trade in agriculture. Ultimately, many hundreds of millions of lives would be endangered by the finalisation of the GAIT Round. In more general terms, the "developed" countries are promoting an industrial model of agriculture based on fossil fuels. This model is unsustainable, and its promotion is pregnant with the seeds of its demise.

APEC's U.S. Agents

There is indeed a hidden agenda to so much of the official propaganda line. Some of the machinations connected with APEC were described in "Watchdog", 69. APEC continues to take shape as a vehicle for U.S. imperialist design in the imposition of its "new world order" on the region.

In September 1993 on the island of Bali, Indonesia, about 600 representatives attended an informal meeting of some 20 Pacific Rim countries. APEC's executive director, William Bodde, was one of the keynote speakers and the forum was apparently intended to boost support for APEC. Hodde, a Singapore-based U.S. ambassador, participated in association with his comrade, Alan Carron, who acted as the forum chairperson. Both men have been linked to dirty work in the Pacific.

At the time ofthe 1982 Fijian election which saw Ratu Sir Kamisese Mara returned to power, Bodde was the U.S. ambassador to Bodde had demonstrated strong opposition to the Fijian nuclear ban. The U.S. later succeeded in persuading Mara to drop the ban. Mara's election strategy was mapped out by a U.S. consultancy firm said by the "New York Times" to do contract work for the C.I.A. Carroll was involved with this firm, Business International, and was the finn's key agent in its Fijian project. A Royal Commission of Inquiry into the Fijian election, although largely a whitewash, did manage to describe Business International's recommendations for Mara's election strategy as "morally repugnant". Business International had also helped the U.S:s man, Bob Hawke, ' into the leadership of the Australian Labour Party.

A strong critic of NZ's nuclear policy also addressed the Bali meeting. He was Richard Solomon, a former Assistant of State for East Asian and Pacific ,",."au,,~ and now head of the so-caned U.S. Institute of Peace.

8

Asian and Pacific Affairs, William stressed the importance of APEC for me US. Clark is now senior adviser to the U.S. Centre for Strategic and International Studies, the Georgetown University outfit closely connected to the C.I.A. and of which Carron is a graduate. AotearoajNZ's nuclear free stance remains an obstacle to U.S. foreign policy and still a possible target of U.S. economic leverage.

APEC was initiated by Australia in 1989, probably acting as a front for me U.S. It seems highly significant that both Bodde and Carron are playing such leading roles in me APEC process. Carron once openly indicated a threat to NZ's nuclear free stance from U.S. financial manipulation ("NZTimes",l & 819185). He suggested that the Kiwi dollar could get kicked around.

Shaping up the Free Trade Agenda

With Congress voting in favour of the North American Free Trade Agreement (NAFTA), U.Sc-pushed free trade is currently on a roll. A major objective is to turn APEC into a free trade zone and the November conference beefed up the programme for this. Apparently, the U.S. State department is also hoping for APEC codes on investment, and intellectual property (i.e. patents, trademarks, etc.) if the GAIT fallers ("Press", 11111193). The underlying tensions run deep between the trend of globalisation, and the fragmentation of the world economy into free trade blocs or zones, despite the possible current joint momentum to some degree. According to one count, there are now 32 trading blocs.

The "New Zealand Trade Policy" document released by the government shows how NZ's unilateral liberalisation under Rogernomics/Ruthenornics is tailored to the global free trade agenda. It indicates how dissent on free trade has to be stifled. Indeed, the document states at one point that, "The Uruguay Round has been a very good example of our country operating as 'NZ Inc.' (p. 39). There is a rather sinister edge to this and an indication that free trade does not fit easily with the free exercise of democracy. The NZ government is increasingly thinking like the transnational corporations (TNes) whose agenda it has absorbed!

Of course, there are still confused hang-overs of the past During the flak jackets affair, Police Minister John Banks cited a letter in his defence expressing the government wish that where possible, departments should "buy New Zealand first" ('Tress" , 2518193). Ironically, this policy is a direct contradiction of the GAIT's fundamental principles of nondiscrimination between foreign and domestic producers, due to be strengthened with the completion of the Uruguay Round.

The international significance ofNZ's role becomes clearer when considered in the light of current free trade proposals. This helps explain the special attention that the NZ experiment has received. Its implications yet remain unclear even to those heavily involved. For instance, Rob Storey, the Minister for the Environment, admitted in September 1993 that he has not received any advice 0111 law changes

that may be necessary to NZ statutes upon the completion of the Uruguay Round. The same went for the Minister of Forestry. In the government has told us that it is mostly waiting until the final settlement before it looks seriously at what will be entailed: "We have not yet assessed what legislative changes will be required to implement the results of the Round" (letter from Philip Burdon. dated 1319193). So, basically, the people of this country are being led blindly into a hugely encompassing agreement with a multitude of ramifications for our society and economy.

Whether it is GAIT, or NAfiA, or APEC, or some other free trade form, we are being dragged into a grim future. Hope lies in the possibility of using the tensions and contradictions inherent in the processes at work. Among the good news is the fact that the fervent free trade Conservative party in Canada was almost wiped out in recent national elections, There is much potential for the creative generation of alternatives as the myth of free trade continues to unravel even as it may appear triumphant.

Page 9

I

Whatever the fate of the Uruguay G ATf Round, and whether or not tariff barriers are lowered on New Zealand's agricultural products, the TRIPS component has already had a major impact. TRIPS stands for Trade Related Aspects of Intellectual Property Rights, and discussions in this area have been heavily promoted by the U.S. This has resulted in an advance draft of an agreement to be signed by all GATT signatories, as a minimum, on completion of the Uruguay Round. 'TRIPS represents a successful measure, in a series of successful measures, to promote U.S. and Transnational Corporation (TNC) interests in the global intellectual property sphere.

The draft, available since December 1991, covers 7 different areas of intellectual property: copyright, trademarks, geographical indications, industrial designs, patents, layout designs of integrated circuits, and trade secrets. It has 73 articles, which amount to too much to review here, but highlights include a 20 year patent term; specific protection for geographical indications, thus prohibiting terms such as "champagne style"; and specific protection against undisclosed test data required for regulatory approvals for pharmaceutical products.

Back in Aotearoa, the Ministry of Commerce first announced an effort to reform our intellectual property regime with its release of an "Options for Reform" paper in late 1990. In March 1992, the Ministry released its proposals for reform of the Patents Act 1953. Clearly the TRIPS draft has had a major impact, allowing the Ministry to avoid the inconclusive economic debate about the merits of the patent

I I

II )

I

(

Nicolas McBride

system, by giving priority to international obligations represented by TRIPS and the related World Intellectual Property Organisation (WlPO) agreement. Among the recommendations are: a new definition of "invention"; a new test of "novelty"; new procedure for granting a patent; a new definition of "infringement"; new secrecy provisions, allowing the Commissioner of Patents to withhold information on the Patent Office file until publication; and most significantly, a 20 year patent term, and the abolition of compulsory licenses except where the patent holder is guilty of "excessive pricing".

The National government has moved only on one recommendation. The Patents Amendment Act 1992, passed in August last year, amended the 1953 Act by abolishing s51. This section allowed special compulsory licenses to be granted for food and pharmaceutical products. A compulsory licence allows domestic companies to produce generic copies of brand name drugs which are patented by TNCs. At the time the amendment was passed, the Commissioner of Patent'> had decided that a generic pharmaceutical company had made out a prima facie case for being granted a compulsory licence under Glaxo's ZANTEC (an anti-ulcer drug) patent

The international and local context of the actual and proposed changes to our intellectual property law are highly significant. In Canada, recent legislative measures have also limited compulsory licences as well as extending the patent term to 20 years. Cheaper drug costs were a major reason behind Canada's famously successful health system.

CC1I11- come in hI! we .f\nali e ven1+hing !

Watchdog

10

Now that country faces some of the most costly drug prices in the developed world, Similarconcessions have been made by once proudly independent India. Mexico, as a result of ongoing trade talks with the U.S. has gone from a system of no patent protection for brand name drugs to the fun 20 year U.S. standard.

Turning to the local context again, patent attorney firm, West Walker McCabe, collected data on the nationality of companies who had filed for patents between January and October 1991. A staggering 35% of patent applications were filed by U.S. companies! NZ companies made up 21 % of the volume, and third highest were British companies who had filed only 9% of applications.

The Commerce Ministry listed the bodies who had made submissions on the proposals for reform. Among those represented were: Syntex (U.S.A.), the U.S. Patent and Trademark Office, the U.S. Pharmaceutical Manufacturers Association, and the Association of the British Pharmaceutical Industry. No "citizens" or consumer groups had made proposals and there was no sign of consultation with Maori.

When the Amendment Act was passed, the Labour opposition released a number of papers detailing the

background to the legislation. One paper noted that there had been consultation with supporters of the Bill, but not with those opposing the repeal of s51. It said that "in view of the government's decision on s51, no further consultations are envisaged".

No argument has proved the connection between strong patent laws and the economic or social well-being of a country. Indeed, the proponents of foreign investment are even on shaky ground in regard to the alleged advantages of stronger intellectual property protection. A recent United Nations study found "it as yet not possible to identify clearly how intellectual property rights and foreign direct investment interact".

There is plenty of evidence, however, on the correlation between huge mc profits and strong patent laws. NZ's jumping into line on TRIPS and other demands of the U.S. and mcs is consistent with the success of those bodies in attempting to make the world convenient for their investment and profit Little has been heard in opposition. It is time for more people to become aware of the danger to their health, their pockets and above all the self-determination of their country or their people.

(see also "Watchdog" 70)

TRIPping Up The Farmers

In response W criticisms, the government claims that Aotearoa/NZ stands to gain from the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement proposed under the GAIT ("Sunday Stay". 26 Sept., 1993). GAIT negotiator, Andrew Wierzbicki, from the Ministry of Commerce asserted in a letter to us (2/10/93) that

"The interest of developed countries in protecting intellectual property rights was not the only reason for our support for the TRIPs agreement New Zealand also sees benefit in the provision for better protection of intellectual property right'S. New Zealand is a nation that relies for its economic well-being on a fair and open trading system. We recognise that the protection of intellectual property is an important component of that system and one that New Zealand companies themselves stand to benefit from when seeking patent, trade mark and copyright protection when they trade overseas."

Yet the claimed benefits seem ephemeral given the very one-sided nature of NZ's bargaining position in these matters. Indeed, previous issues of "Watchdog" have drawn attention to the country's demonstrated weakness, and even confession of this weakness by the Ministry of Commerce (see nos, 69, 70 & 73).

There has been concern shown in certain quarters, especially

by Maori, about the possibility of foreign firms or interests getting control over native plants. In June 1993 the Commissioner of Plant Variety Rights, Mr. Bill Whitmore, made a public statement to the effect that rights to varieties of NZ native plants have not been lost overseas (UPress". 1516/93). He maintained that plant variety rights, which were similar to patents, did not apply internationally, and that no foreign companies owned the rights to varieties of native species. We addressed some questions to Mr. Whitmore as wen as to Mr. Wierzbicki. The former heads an office which is also a branch of the Ministry of Commerce. Since the proposed GATT agreement is not the only international agreement on intellectual property at issue our questions also included reference to one of these other agreements, the Union for the Protection of Plant Varieties (UPOV).

Worldwide, an international non-government organization (NGO) movement has been working to counter the growing control of seeds and plant genetic material by Transnational Corporations (TNCs). With the loss of command by fanners over inputs due to the development of chemicalised industrial agriculture, the rural sector has become highly dependent on the agrochemical companies.

"At first the agrochemical companies concentrated on the production of fertilisers and pesticides but, as part of the process of extending their control of inputs, they have increasingly taken an interest in, and come to dominate, the seed industry" (''The Politics of

Page 11

Industrial Agriculture: A Report by 'The Ecologist:", by Tracey Clunies-Ross and Nicholas Hildyard, Earthscan, 1992, p. 60).

The application of biotechnology, or more accurately genetic engineering, for private gain constitutes a major danger for indigenous peoples and the Third World (South). Fanners in the South are apprehensive about the manner in which free trade will threaten their livelihood and the food security of their countries. In December 1992, hundreds of Indian farmers stormed the Bangalore office of Cargill Seeds India and burned the office's records and approvals for investment proposals. Cargill's research is targetting the sunflower, sorghum, maize and pearl millet seeds markets in India. As the world's biggest grain TNC, Cargill is reaching out its tentacles wherever it can.

"By the late 1980s, if the seed houses were ranked in terms of sire, Shell, ICI, and Ciba-Geigy would all have occupied a place within the top ten. In Britain, three firms controlled nearly 80 per cent of the garden seed market. In the Netherlands, three companies controlled 70 per cent of the agricultural seed market, and four companies controlled 90 per cent of the market for horticultural seeds. In the U.S., one finnPioneer Hi-Bred - had tied up 38 per cent of the com seed market. Transnational seed houses now control about a quarter of seed sales in the North, and 5-10 per cent of sales in the Third World market."( "The Politics of Industrial Agriculture", p. 64)

In fact, a core group of less than a dozen seeds and pharmaceuticals companies command over 70% of the world seeds trade. In Aotearoa/NZ, Pioneer is the biggest supplier of corn seed. Among other overseas-based TNCs selling seeds here are leI and several Dutch firms. It is ominous that the seeds companies seem to have talked NZ farmers round into accepting a change to limit the present right." of

farmers to farm-saved seed. Mr. Whitmore puts it like this.''In this respect it is relevant to note that farmers themselves through their Federation have agreed that farmers' rights need to be limited and in particular that royalties should be paid on farm-saved seed" (letter to us, dated 4110(93).

Farmers, unfortunately, are sticking their heads further into the noose of dependency. Stronger patenting and plant variety rights could mean that farmers lose the general right to save and re-use seeds from their harvests since most of this reproductive material would be likely to become corporate property. The growing of genetically engineered hybrid plants requires farmers to get seed regularly from the TNG-dominated seeds industry.

Prtvatistng Flower Power

NZ has not yet ratified the 1991 UPOV convention. At the moment, the only change to the Plant Variety Rights Act 1987 being proposed by the government is to provide for fungi to be protected. A Working Party, originally initiated to advise on NZ's input into the discussions leading up to the revision of the UPOV Convention in 1991 has continued to meet periodically to discuss possible changes to the Act. To quote Mr. Whitmore again:

"The Ministry of Commerce intends requesting the government to consider a Plant Variety Rights Amendment Bill incorporating various proposed changes agreed to by the Working Party. Some of the proposed changes are to bring New Zealand law into conformity with the 1991 UPOV Convention - this will include giving breeders more adequate rights".

Mr. Whitmore declared that the changes that will be proposed have nothing to do with GAIT. But, in fact, there is a broad TNC-drlven international push for stronger TRIPS and this push is reflected both in changes already made to

Page 12

Direct

Investment", 1993, describes this in some

detail. The GATT would member

countries to protect varieties via breeders'

patents or a combination of both.

The Ministry of Commerce denies that there would be such a thing as an international patent or variety right under the GATT TRIPS since patent systems would continue to be national in origin.

"What. the draft TRIPS does is to establish minimum standards of protection and enforcement but these standards and the enforcement mechanisms can only become operative in each signatory country either if existing law is already compatible with the standards or domestic law is amended to the standards" (letter, 2/11/93).

But while there would not be such a as an international patent, the

with words to some extent GAIT would indeed create a harmonized international system of standards which would faciltate TNC control. The has already amended NZ's to remove the specific provision

to compulsory licensing

of food and medicines. As has previously

stressed, the removal of this provision was in deference to U,S, and TNC pressure, a pattern dearly pointed out in the United Nations publication mentioned above.

In similar fashion, NZ is yielding to such pressure on the issues relating to plant variety rights, The government has that it has not looked at these issues properly and is waiting for the outcome of the GAIT Round, In promoting GAlT, the NZ government is promoting free trade policies which benefit agribusiness lNCs at the expense of ordinary people.

(for more information contact Watchdog,

Box 1905, Otautahi/Chrtstchurch, ph:(03) 3662803; fax:(03) 3(52919)

For a few days after the November 1993 the public

could see the stark nakedness of the . They

thought they had elected the highest power of New Zealand' s sovereignty: Parliament. They were informed by the media that New Zealand's creditors were worried about what might happen - and all Government. and media sprang to attention. "Whatever we will do". they intoned, "it will not be to the disadvantage of you, honoured speculators, financiers and from overseas". In other words, with "our" $67 billion foreign Government in New Zealand is the servant, if' not the of overseas capital, whatever the names of the forming Government

Of course, the never had any but even

before the election the were anxious to create an

inrernational legal framework could

eliminate people's power from The

conspiracy to drive and Round

of the GAIT (Genera! on Tariffs and Trade)

without any public whatsoever is an of this

attempt to deprive New Zealand of power,

Some time ago I was able to obtain a copy of tile nn"",,,,>£1 Agreemens on Govemmclil.ft Preeurement which the New Zealand Government win accept without consultation with the of the Round of GAIT, and the Multilateral Trade Organisation, which win be the world established under the

Round

in

w Wolfgang Rosenberg

Agreement states that;

H")ijUU.U,j",,,, procedures and practices regarding government procurement should not be prepared, adopted or applied so as to afford protection to domestic products or services or domestic suppliers or service providers" ,

The Agreement also makes provision for the prohibition of regulating the activity of foreign investment by New Zealand's Government in favour of New Zealanders ~ be

they or workers:

to all laws, regulations, procedures and regarding government procurement the shall ensure that their entities" (which include

"shall not treat a established

supplier less favourably on the basis of foreign ownership",

The Agreement goes further, it obliges our Government and our Parliament to "not enact nor maintain any regulation, procedure or practice requiring or encouraging entities within New Zealand to act in a manner inconsistent

with the Agreement". Who then is or the

in our country - GAIT (through of New Zealand? The answer is clear:

have only covered But this new

Round Agreement will extend to construction and all forms of services as well. It will require all the usual stuff about non-discrimination on national grounds but will back this up with requirement'> that all bidding processes be open to challenge through a tribunal which will be able to suspend the tendering process, and award damages to aggrieved tenderers, This means that the Uruguay Round will introduce bid-challenge procedures so that successful tenderers for

government contracts for goods, services or construction have to plan not merely to place an acceptable bid in competition with overseas monopolies but to be ready to fight for their successful bid to be maintained in the face of legal challenges on the basis of the 55 pages of legal requirements in the proposed Government Procurement Agreement - kept secret before ratification by our Government.

Check List of Critical GATT Concerns

1. Sovereignty - under this heading come matters such as the powers of the new Multilateral Trade Organisation (MTO), of the committees on TRIPs, TRIMs and Services, and the dispute panels (TRIPs relate to issues of intellectual property like patents while TRIMs relate to foreign investment). A national government could be greatly restricted in the determination of its country's economic development, especially given that the MTO would work closely with the International Monetary Fund (IMF) and the World Bank in a kind of ruling triumvirate for the world economy.

Also involved here is the proposal for national conformity

2. Democracy - GAIT allows for no NGO participation.

of standards in line with international standards, and the fact that local authorities, even non-government organisations (NGOs), are expected to follow the standards laid down by such bodies as Codex Alimentarius. The Codex, which regulates food safety, is heavily influenced by Transnational Corporations (TNCs). See also 5.

Some concerns listed below obviously overlap with one another or with the general question of sovereignty, The deadline for a settlement of the Uruguay Round has been set for 15 December.

PHOTO, DEAN KOZANIC Murray Horton, with the help of a mascot called Gattasaurus, leads a "Who Owns Christchurch" foreign-ownership tour, organised by the

Gatt Watchdog Group yesterday. 9,f!J.i/, \ 7/1) /1 S

Dinosaur star of protest against Gatt

h. !'!reen) inflatable dino-:':

'HId Trade. The Uruguay round of Gatt is '" ,p.ttled by December 15.

stranglehold over the economies '

dev ~. ("1, •• ,.'

Watchdog

Page 14

"Transparency" is supposed to be a guiding of the GAIT but this certainly does not apply to its deliberations. Yet 1000 corporations have direct and regular access to the inner GAIT decision-making circle. Dispute panels are conducted in secret and the defendant is to be presumed guilty - bod! unless and until proved innocent

3. TRIPs - control over technology is more important today than ever in regard to the exercise of democracy and sustainable development yet GAIT would increase private rights at the expense of the public good. The myth of "free" trade is clearly exposed here as TNC double standards are shown up.

4. TRIMs - foreign investment for many countries threatens foreign control, whether the advent of this process, or the deepening and acceleration of an already current process. 5. Harmonization of standards - GATT intends to set

international standards with ceilings as low as possible, for instance for food safety, which would be the same for all member countries. The danger is that, say, certain pesticide levels in some countries could be reduced according to TNC demands in order to lower trade barriers. Strong environmental, health and labour standards are indeed endangered.

6. Environment - GATT would severely limit the ability to conserve resources. For example, TRIMs would prevent restrictions on "the exportation or sale for export by an enterprise of products ... in terms of volume or value of products, or in terms of a proportion of volume or value of its local production". GATT would disallow import bans on products which have been produced by environmentally unsound methods. As a consequence, GATT threatens to undermine international environment agreements that include the capacity for trade sanctions.

Testing the Government Theo Trade and Environment

A paper granted in July 1993 under the terms of the Official Information Act to some environmental/development groups presents an analysis on trade and environment that may indicate in certain respects the official government position. Titled "Trade and the Environment", this paper was written by Dr. Sandrey of the Economic Division of the now Ministry of Foreign Affairs and Trade (then MERT) and is dated June 1992. It is largely a counter-criticism of the critical policies on free trade of non-governmental organisations (NGOs). The paper is heavily stamped on every page to indicate that it was released under the Act.

At the time that the paper was made available, MFAT asserted that it had "no official status. It was intended for internal consideration by MERT officials only, not for external use, publication or quotation in other papers. It does not necessarily reflect the views of this Ministry [lor those of other Government agencies, non-governmental organisations, or business and industry representatives." Instead, according to the Ministry, "the paper contains a number of initial views designed to spark discussion rather than reflect a policy position".

This is all reasonable enough. But the paper contains plenty of views and interpretations in line with familiar governmental attitudes and opinions. Therefore, it is wen worth looking at in some detail, especially as it is intended as a refutation of NGO criticisms. What follows here are some extract" from a longer critical analysis of Dr. Sandrey's paper.

Dr. Sandrey wel] indicated how much Aotearoa/New Zealand has become open and so vulnerable to the trade forces of the world economy: ... "given the measured changes which we have made to our own import protection system in recent years, we have little in the way of' coinage'

on

to negotiate with. We are therefore fully committed to the muhilateral liberalisation of the international trading system, and to a successful conclusion to the Uruguay Round of the GATT in particular."

So, despite the growing problems of the world economy, and despite being such a small player in international trade, our politicians and bureaucrats have stupidly opened up an already overly dependent country even more to the dangers of trade wars, overseas political instability, global environmental crisis, etc. The government has given away any bargaining power in blind faith. Unless we get liberalised trade in agriculture, we clearly have nothing else going for us in the Uruguay GAIT Round. Again and again, government Ministers have said that unless NZ gets the deal it has agreed to in agriculture any settlement of the Round would be absolutely unsatisfactory. Yet even in agriculture, when the final draft settlement of the Round was first revealed, the government expressed obvious disappointment that the agreement was nor nearly as much

3'1 ("Press", 23/12/91)

Freeing up the Environment

Dr. Sandrey's overall approach is that free trade can be environmentally sustainable. This is certainly the government's general approach too. On the other hand, a number of NGOs see "a fundamental clash between development and the environment".

Dr. Sandrey does admit that "it will not be hard to find examples, even if! developed countries, of where environmental damage is compounded by GATT outcomes". But he comments in this connection that this "proof by example" is not very enlightening. Instead, he asserts that the "debate needs verifiable evidence and acceptable analysis

Page 15

on the overall impact to a more balanced final net result of these transfers", The government, of course, is trying to get a GATT settlement it takes a serious look at trade/environment relations.

In making his case for free trade, Dr. Sandrey approvingly cites an OECD report that the demand for environmental quality rises increasingly as income rises. As wen, Dr. Sandrey notes that this "same argument is used, with statistical support, by the GAIT in its contribution to the June 1992 Rio de Janeiro Earth Summit". So, following this line, he maintains that "the overall effect of trade liberalisation is likely to be beneficial" because of "modified" pollution in the developed countries; and because rising incomes will "allow developing countries to address environmental issues".

There is a nice touch to all of this in that Dr. Sandrey adds that.'These hypotheses await empirical confirmation".

This bizarre form of argument adopted by Dr. Sandrey has been well demolished by maverick World Bank analysts, Herman Daly and Robert Goodland, in their papers critical of GATT and free trade. It is in reality a quite stupid argument and amounts to saying that, given economic development causes damage to the environment, we therefore need more of it in order to enable us to mitigate the damage. Greater economic growth and expanded trade supposedly give us an increased income to cover environmental costs. The missing link is the fact that environmental costs are greatly increasing all the time.

To some extent, this is even recognized by Dr. Sandrey when he observes that "pollution is modified in the developed countries, albeit with a transfer to the developing countries ... " He thus explicitly acknowledges at this point the damage done to Third World peoples and their environment. We can go further than this and acknowledge the great and growing extent to which the West lives off the resources and ecological capital of the South (this is an explicit commitment by the Western political elite" see "Covert Action", no. 44, Spring 1993, p. 31). Genuine concern for justice therefore must mean radical change in the West and the industrial world generally. Ultimately, too, survival depends on it

Trading away

and Sovereignty

The second of Dr. Sandrey' s hypotheses about rising incomes in developing countries is pure fantasy. Export-led development has already spectacularly failed for most of the Third World. Even in the show-case instances it has an eventually damaging side - witness the growing inequalities and ecological damage in the Newly Industrializing Countries like Taiwan and Thailand. Unfair terms of trade have contributed greatly to the widening gap between rich nations and poor nations, and to the growing divisions within these countries.

Sovereignty issues are taken up in the course of Dr. Sandrey's paper, as well as NGO critiques of Transnational

Corporations (INCs) and alleged me exploitation. In a rhetorical question, he dismisses the p"-""".YAU

"New Zealand apple and kiwifruit orchardists, and Australian and Canadian wheat growers, all of whom market through TNCs, ... could. freely plunder the commodity resources and environment of the

A varied assortment of cases is tossed together here but let's look at the situation of the Canadian wheat growers. The first point to notice is that Dr. Sandrey implies an identity of interest of these farmers with the mcs which market their produce. In terms of the reality of the situation this is pure sophistry. The June issue of "Briarpatch:

Saskatchewan's independent newsmagazine" (vol. 22. no. 5) is a special one on the farm crisis in Canada. While global agribusiness corporations like Seagram and Cargill have made big profits out of cheap raw materials provided by Canadian fanners, many of these fanners have been going under, submerged by debt and rising costs. In the last decade, the price of wheat has fallen over 50%. The burden of farm debt in Saskatchewan alone, which amounted in June 1993 to over $5 billion, is way out of proportion to the amount of income generated from farm cash receipts.

Of course, Canadian farmers have protested the GATT and even the policies of the NZ government. just as French farmers have done. Meantime, Cargill Ltd. of Winnipeg, part of the giant trading Cargill empire, had net earnings of $25.6 million for the year ending May 31, 1992, as well as expenditures on capital projects of $53 million, Cargill has been accused, too, of effectively setting both the buying price and the selling price of Ontario grains. Agribusiness is doing very wen out of all this hardship. Indeed, it was Cargill and other grain TNCs which wrote the U.S. agricultural policy in the GATT negotiations - the one so praised by Mike Moore! (Kevin Watkins, "Fixing the Rules:

North-South Issues in International Trade and the GAlT Uruguay Round", Catholic Institute for International Relations, 1992, pp. 9, 38).

With reference to NZ's case, Dr. Sandrey makes a particular defence of the role of the NZ Dairy Board. Yet Dr. Verghese Kurien, chairperson of the Indian National Dairy Development Board, has warned about the NZ threat to poor producers. Dr. Kurien was reported by the "The Economic Times" (1911011989) as sayingr'We shall not hand over India's markets to the farmers of New Zealand or the soybean producers of Iowa just because today they enjoy temporary comparative advantage". Through the subsidies of the GATT International Dairy Products Council the developed capitalist economies have been undermining Southern industries (see e.g, "Merchants of Drink:

Transnational Control of World Beverages" by Frederick Clairmonte & Cavanagh, Third World Network, 1988, p. 129)

It is therefore telling and most ironic that Dr, Sandrey can make the following statement: "The New Zealand Dairy Board is 11 mc with a strong vested interest in the GATf, as our farmers probably have more to

gain from ill successful outcome than almost any other group. These gains come from access OK"! fair terms to the markets

of the industrialised not a of the dairy

sector in the LDCs (Less Developed " Our

farmers certainly deserve fair deal but our standard of living should never depend, even partially, on the deprivation of the poor.

Conflict over Scarce Resources?

One particular paragraph is rather extraordinary so it is worth almost totally reproducing: "A similar argument is associated with that of a potential loss of national sovereignty. The growth of direct foreign investment and the role of the mc has been a feature of the recent world economic history. Intra-industry trade is placing pressure upon trade barriers. Investment will flow 1.0 countries which offer comparative (competitive") advantages, and this advantage (sic) includes both labour and environmental costs. Governments need to recognise the impact of domestic, including environmental and trade, policies upon investment opportunities."

Here then is an explicit acknowledgement of TNC power and how governments are being forced 1.0 accommodate it. Thank you, Dr. Sandrey. We know that the government and the foreign affairs bureaucracy, our supposed defenders of the national interest, are practically falling over themselves in selling out to foreign forces.

After observing that there is a strong equality theme running through much of the NGO literature, Dr. Sandrey states that "adding income inequality imposes another level of difficulty 1.0 the solution possibilities, as the within country distribution is largely a value judgement, although it does have its economic implications". According then to Dr. Sandrey, the question of how income from economic development is distributed should not be of prime concern to policy makers.

This is the sort of statement that one might expect from some Treasury ideologue. It is certainly very revealing. What, indeed, we might wen ask is the goa! of economic development at all'!

Perhaps MFAT does not understand that in a world where only 20% of the population consume 80% of resources from a resource base which is diminishing under all sorts of environmental depredation, the question of distribution and inequality is clearly far from a secondary question. But maybe MFAT understands it only too well from the viewpoint of narrowly vested interest For a long time now, the defence and foreign affairs establishment have had a coldly calculated strategy of fighting resource wars as part of a wider Western programme, a strategy that even has a potential for application within a divided and disintegrating Aotearoa/NZ (see the special issue "Peace Researcher" on the NZ Ready Reaction force, M. 29. August 1(91),

Equity is only a question for the over-consumers and those benefiting from exploitation. Furthermore, the

20%:80% ratio is a broad division of rich and poor.

There is a mounting of evidence showing the increasing

inequalities within as well as between countries. And, indeed, this is due to the very process of globalisation, or global takeover by TNCs as an international elite is created, and varying sections of populations are consequently marginalised. It is, of course, happening too - as we know so painfully - in Aotearoa.

The need for radical positive change has never been greater or more urgent. In the conclusion to his article, Dr. Sandrey says, significantly enough, that: "It is important 1.0 liaise more closely with the NGOs, with a minimal view of damage limitation. The maximist view would be to harness a portion of the considerable energy and influence which the green movement has to recognise the benefits of 'clean green New Zealand'. Such a strategy is, however, not without risk."

At least one major environmental group, the Maruia Society, has been co-opted into the official free trade approach. The task ahead is to help prevent further such co-optation; and to spread the alternative message.

(A fuller critique of Dr. Sandrey's paper can be obtained from Action for Fair Trade, PO Box 33-176, Otautahi/ Christchurch)

GATTIS C

MING

What you don't know

win you

-

Page 17

Every four trainloads of logs ply the route to Port Whangare! from the Far North, bound mainly for the Korean and Japanese market Residents on busy Kamo Road say they can't keep track of the numbers of logging trucks rumbling along the main drag into a congested city centre. The results of clearfelling are obvious. At times logs no thicker than an outstretched hand make up an entire convoy.

This unseemly rush to the port follows the acquisition of the forests by transnationals ITT Rayonier NZ, Carter Holt Harvey and Juken Nissho. The Labour government (including one Ken Shirley) sold 70 years worth of cutting rights for a OOl1g, via an outrageously unrealistic Treasury formula for estimating the worth of the crop.

(Carter Holt Harvey, now owned by the International Paper Company of the US, is NZ's biggest owner of exotic plantation forests, holding 25% In' Rayonier NZ is a subsidiary of us behemoth IrT. and ownsS'io Juken Nissho. o.f Japan, owns 4% Labour sold the cutting rights to 550,000 ha of publicly owned forests. The process continued under National. Treasury figures record that. as of 1992, these sales realised $1.4 billion. Ed).

But it depends of course on how you look at it To Ken Shirley, now on the other side of the bargain with the foreign forest owners, a'> head of the euphemistically named NZ Forest Owners Association, it was a good deal. To the workless north, each truck and train holds the promise of jobs lost Sawmillers are powerless bystanders. unable to fill export orders or plan for future expansion because of price hikes and an uncertain supply of saw logs. I'FI'Rayonier has said it is "not in the company's interests" to give NZ sawmillers continuity of supply for longer than three months.

It is, however, in the foreign companies' interest'> to have a more conveniently located deep water port to facilitate the speedy exit of the raw logs. So Juken Nissho asked the Far North District Council to build a new port to enable them to reduce their export costs. Enter the Northland Port Corporation, more than willing to oblige, given their expected share of the spoils from portage fees. The best place for the $50 million port, they say. is at Whangarei Heads, beside the Marsden Point. oil refinery.

Plans for a dredged deep sea forestry port at Marsden Point have been around for about 15 years. In 1980 the then Northland Harbour Board commissioned an environmental impact report on the idea. So why now? A population bulge like the 60s baby is about to happen 10 the forests. In about six or seven years reach maturity. It would

take that long to gel. such a massive port to work.

The Northland Port Northland "",[,4,-,'.""

.orporauon is still 75% OWIlf'Al. the

In 1992, minion

from the sale of the other shares was transferred to a trust to encourage business in the north. The Council was upset to learn in September 1993 that it had to pay $2.5 million gift

on the transfer. It plans to invest $8 million into a ratepayer-owned forestry company, to which it has added its $8 minion M! Tiger forest, subject 10 a government waiver of the gift duty. NRC chairman, Michael Gross, has urged the north's district councils to invest their forests in the company, and potential assets could reach $30-$40 million. making the new company a player in the local market. Mr Gross says the company would give priority to Northland companies, rather than those based in "Taipei or Chicago".

The Northland Port Corporation general manager, Terry Archer, says Mardsen Point is the best port development site in Australia and NZ. To prove it, he commissioned an environmental impact assessment report which took two years to complete. The result is a three volume tome standing 12 em high and weighing in at over 5 kgs, Each one costs $100, and 200 were printed. Consultant Hester den Ouden subcontracted work to 12 other consultants, including the Danish Hydraulic Institute. The Regional Council invited comments from interested parties, before the Corporation formally requests consents, under the Resource Management Act (RMA). Because of the conflict of interest. the consents will be heard by representatives of the Regional Council, the District Council, and the Department of Conservation.

If you ignore for a moment the gleaming tanks, rumble and occasional toxic belches from the oil refinery, taking a stroll on Marsden Bay beach on a sunny day still qualifies as one of life's pleasures. The white sandy expanse at low tide is perfect for beachcombing, pipi (shellfish) gathering and fishing. The Patuharakeke hapu (sub tribe) of Ngati Wai live, work and play on this beach. The hapu will be a key player in the decision to allow the development, if the provisions for honouring the Treaty of Waitangi in the RMA are adhered to the consent authorities, Tarnihana Paki of Takahiwai says the hapu is seeking further discussions with the Port Corporation. He says he believes the Corporation is aware of the fact that the tangata whenua (people of the land, original inhabitants) have a responsibility in respect of the kaitiakitanga (guardianship) of the harbour. Given that the proposal "carves out quite a large chunk" of the seabed, he says the hapu needs a lot more information. The hapu has been promised the support of other iwi (tribes) should they decide to oppose the development.

In 1993 Ngati Wai lodged a claim to the Waitangi Tribunal for its mile (district) - stretching from Tapeka Point near Russell to the easternmost of Cape - which of the Whangarei Harbour bed. Te ",",",,,,,,, 0 Te Taitokerau is the regional forum for the runanga council, assembly) and trust boards representing each iwi ill Taitokerau. Its resource

18

management committee is a response to the of consultation and under the RMA. At any one time an iwi could have between four to ten Crown agencies vying for meaningful consultation time. These agencies in tum could have up to eight iwi authorities !D consult on an issue. The committee aims to: "reduce duplication, frustration, dilution of effort and resources, and increase the effectiveness and efficiency of agencies and iwi participation in the joint management of resources".

One of Ngati Wais representatives on Te Kotahitanga's resource management committee is Hori Parata. "There is 11 big difference between an environmental impact report (eir) and a cultural assessment of an area. We can't compete with massive eirs done by consultants with planning degrees. The real issues here are about ownership, about tino rangatiratanga (absolute, unqualified chieftainship and authority over affairs of the tribe and their land, forests, fisheries or other possessions; tribal sovereignty; enshrined in the Treaty of Waitangi) and about talking to each other".

Whangarei kaumatua (elder, wise man) Otene Makene says it is up to Patuharakeke to make the decision, but once made, this issue would become Northland-wide. "I know they would find a lot of support if they wanted to oppose it". Me Makene said reclamation on the upper reaches of the Hokianga Harbour had cut the tide off from mangroves and tributaries, damaging pipis, eels and spawning. "We need to hang on to our natural resources. When we play with nature, we pay the consequences". Me Parata is concerned that equal representation 00 the hearing committee be granted. "The Regional Council representative should be there with its tangata whenua partner; the same applies to the District Council and to DoC".

Reotahi, meaning one voice or all in agreement, is the name of a small bay on the northern side of the harbour, opposite the proposed port. The residents, mainly pakeha, have been involved in battles over refinery air emissions, oil spills and noise abatement demands. Part of the Whangarei Heads Citizens Association, they joined with their southern harbour counterparts to fight off a proposed PVC factory at One Tree Point, between Takahiwai and Marsden Point, in the 70s. Reotahi residents are again in agreement - they don't want the purpose-built forestry working 24 hours a day in their backyard, nor the continued of the harbour sands that would be required.

Citizens Association spokesman, Roland Mosely, a persistent and consistent thorn in the side of the refinery, is unimpressed by the idea of the Heads residents came in droves to the Mcl.eods Bay Han to hear his assessment of the ell' report. Boggled the logistics in the three

volumes, Roland and Darch Road Paul Cresswell,

decided to render the comprehensible

terms. They came up with football field

measurements, or fbfs.

Thus the sea area to be landfilled would be 32 hectares or the equivalent of 43 rugby fields, The dredge hole to accomodate the logging equates to 62 furs (45 ha), and will initially be 13m deep, later to be 15m. Current depth is Sm. The maintenance of this hole would

annual dredging of 50,000 cubic metres or 7 fbfs one metre thick. The kilometre-long berth face would be about half a kilometre from the existing shoreline. Some 225,000 tonnes of bund rock would form the outer wall of the landfill estimated to take 16,100 truck loads 250 days to complete. There is an anticipated loss of sand (siltation) during construction of 5% (194 fbfs lOOmm thick).

Apart from the size of the landfill and the dredge hole, Roland and Paul raised concerns over the possible effects on harbour fisheries and shellfish banks, noise levels, truck movements (rail links were not included in the proposal), air quality, contaminated ballast water containment, the use of TBT toxic anti-fouling on foreign ships, and the loss of beach access. They also say that a factor of 2.5 reasonably applies between estimated and actual costs on projects of this magnitude.

Heads residents, familiar with environmental politics after sustained battles with the refinery, the PVC factory proposers and the planners of the abortive Conzinc Rio Tinto Australia (CRA) coalfired power station, were not about to take the Port Corporation's information at face value. A unanimous vote endorsed a request for an independent assessment of the proposal by Parliamentary Commissioner for the Environment, Helen Hughes. Roland and Paul were also asked to rally support from Whangarei people. The Whangarei meeting turnout depressed Roland after the intensity of feeling at the Mcl.eods Bay Hall.

"People here think it's just our problem, but the impact of logging trucks coming through the city will be huge, and the loss of sand will eventually affect anyone who uses a harbour beach. There's also the issue of who will benefit - to my mind the export of raw logs is insane economically"

The meeting did, however, unanimously endorse the request for an independent assessment and added a further request that the project be underwritten by someone other than ratepayers, if it were to go ahead. The eir acknowledges the site is one of the more sensitive parts of the harbour. Locals say fishing with line and sinker is impossible in the area other than around high and low tides, due to the speed of the current The presence of Motukaroro Island (also known as Passage and Aubrey Island) in what is the narrowest

of the harbour means the area acts as a funnel for the emptying of the tide. The force of this movement creates cross-currents which can baffle and frustrate sailors. The sight of yachts struggling home against the tide even in robust winds is familiar 10 residents.

What worries them is me idea of the huge dredge hole in the middle of these fearsome forces, and the effects of sand movement on the shellfish in Mair and Snake Banks, which lie on either side of the proposed port. Cockles and tuatua

19

found on these banks arc accessible only by boat for an hour or so around low tide. The shellfish have had a cough time

of it lately. Affected by the toxic bloom in the

summer, they were hit again by a diesel spill from the coastal tanker "Kuaka" 00 August 22. Pip! taken from One Tree Point beach were found to be contaminated with the fuel. The diesel has gone, but commercial shellfish harvesting

a $1 million a year business - was banned from Mair and Snake Banks, after a recurrence of the algal bloom toxicity. While the ban has since been lifted, the safety and continuity of the shellfish beds has to be one of the overriding concerns in the resource consents procedure. It is the substantive issue playing on the minds of the people of Patuharakeke as they weigh up the risks in the proposal. For the pakeha of the north, the idea of life without tuatua fritters is an equally bleak prospect, despite the reassurances in the impact report that the beds will not be affected. "How can the Danish Hydraulic Institute really assess the likely impact, with a computer model?", asks Paul Cresswell.

Ironically, the NZ Refinery Company may become an ally of the people who have badgered it into, among other things, paying out $30 million for a system to eliminate sulphur dioxide emissions. The company has commissioned a report from Dutch hydrologists to assess the impact of the proposed wharf on the refinery's existing jetty. Hester den Ouden says the professional rivalry between the Dutch and Danish hydrologists could be a factor in the outcome of this report. A committed environmentalist, she says the port development is the best option for Northland. The inner harbour port is silting up too fast, she says, with 150,000 cubic metres of mangrove mud being dredged each year to

keep the channel open. The Marsden Point dredging would be 10% of this, and the sand would have commercial value.

"Logging ships come into the harbour now half full, and leave half fun because of the lack of depth". The old port is sloped so stormwater, sediment and bark run straight into the sea, whereas the new one would use modem drainage. den Ouden sees the call from the Whangarei Heads Citizens Association for an independent report as superfluous. "We are independent, and were hired for our credibility - which will be tested by the consents process". She admits that the stability of the seabed is the main issue, and that scouring would be "a really dangerous situation", but stands by the Danish report which rules out any effect on the pipi beds.

Port Corporation head, Terry Archer, says present volumes of exports will double in the next five years. He says the potential log volume "that will be surplus to domestic demand" will be 900,000 cubic metres by 1998. He is confident the development will go ahead. "Much of Northland's economic wellbeing is dependent on an efficient transport chain. Export viability is sensitive to internal transport costs and in some cases these charges can make or break an industry". The corporation has recently bought the SeaTow barging business, and he says barging logs from the Far North to the new port would ease pressure on the roads. A rail link from Oakleigh is also possible now the Railways ownership issue is resolved.

Planted Production Forest Ownership (as at May 1992)

Other (21.6%)

Carter Holt Harvey (25.1 %)

ITT Rayonier (7.6(~»)

Fletcher Challenge (16,2%)

Wenita (1.6'1<,)

[uken Nissho (4.0'X,) Oji Sankoku (2.3%) Ernslaw One (I.8%,)

Forestry Corporation of NZ (I2.n\,)

Other Crown (7.1 %)

Total area: 1.3 million hectares

Source: Ministry of Forestry

Page

Paul Cresswell says the not consider alternatives to the study would consider the wider whether New Zealand needs three water ports in the upper half of the North Island, for instance. It would also need to look at the cost 10 the country, as a whole, of encouraging the export of raw logs, and the effects 011 the Tauranga port's viability if Northland timber was withdrawn,

"If s not in the Port Corporation's interests to consider these alternatives", He acknowledges that it has used the best advice it could. "But what like the space programme, it goes wrong? If the export log trade were to crash, would we be left with another white elephant like the power station, or the money factory?" He says the sand is not a renewable resource. It is illegal to take sand off beaches in the harbour. "In were 10 ask the Regional Council for a permit to take 50,000 cubic metres of sand a year, I'd be laughed at". Cresswell says if people were encouraged 10 process the Jogs in Northland there would be no need for such a massive port. "Adding value breaks down volumes, and creates more jobs than the number promised in this plan".

Roland Mosely, a carpenter, agrees. "Logging on this scale affects everyone. Sustainable management is not necessarily of benefit to foreign owners - they can make more money clearfelling when prices are high, then reinvest the money elsewhere, rather than ploughing it back into replanting".

He says the recent price hike affected his business, and the ability of ordinary people to build timber housing. It doesn't help to know that Japanese consumers are told high prices in Japan are the result of high demand from domestic New Zealand sawmillers and restrictions on logging. The message, from the same company, in New Zealand, is that NZ mills will be guaranteed continuity of supply provided they pay export prices. Mosely says the most overlooked factor in the proposed port is the effect of the huge Siberian forests about to come onto the market The 100 year old, close grained timber will dominate the supply, he says, and leave Northland ratepayers with an expensive eyesore.

"We still own 75% of the Port and any reapairs or compensation claims would come back to us as ratepayers in the end. We'll pay for it one way or another".

He is pleased Ngati Wai has a claim 10 the Waitangi Tribunal, and sees their involvement as bringing a perspective to the issue currently lacking in the short term haste to maximise profit. He says he is sick of the boom and bust mentality which seems to pervade economics in the north. Both men stress the importance of the impartiality of the consents hearing committee members. "There's an inherent incestuousness between the Port Corporation and local bodies. Both regional and district councillors own

private Port Corporation shares", said.

Recognising the scale of the interest, Helen Hughes,

and the conflicts of Commissioner for

the Environment, has offered 10 assist the Regional Council in its representation on the tripartite hearing committee. It remains to be seen whether the councillors take up the offer. What is sure is that they will be careful to be seen to be impartial 10 avert appeals on the grounds of natural injustice. The project will be the biggest to be processed so far under the RMA, and will be watched around the country. Te Kotahitanga 0 Te Taitokerau sees the composition of the hearings committee as an opportunity for the regional and district councils to implement the sentiments on real partnership outlined in their operating plans. Ngati Wai's Hori Parata says equal representation on the committee would go a long way to cementing the bonds already established between Te Kotahitanga's resource management committee and local body planning staff.

"TheRegional Council representative should be there with its tangata whenua partner; the same applies to the District Council and to DoC. But in the end, it will be Tangaroa (sea god) who will have the last word".

Opponents of the port will be natural allies of Sir Wallace Rawling, chairman of the New Zealand-Owned Sawmillers' Group and the Stop Log Exports campaign. Rowling says a ban on exporting raw logs would lift export earnings by over $1 billion a year and could generate 20,000 new jobs. He says New Zealand is the only developed country in the world with a substantial forestry resource which allows unfettered access for foreigners. Half of NZ's sawlogs are now exported raw - in 1992, NZ exported more than 4.5 million tonnes of logs, up 1000% in six years.

The sawrnillers say taxpayers funded most of the development of the resource and regard it as a long term investment in future jobs and income for NZ. They cite a Heylen poll showing 90% of New Zealanders want some form of government intervention in log exporting. Filling offshore demands has resulted in overcutting and cutting immature trees. Almost all processing of Douglas fir has been phased out in favour of immediate cash from log exports.

The market driven instability of supply threatens the sawmillers' ability to meet their export orders. Valuable markets may be lost 10 foreign competitors, they say, and NZ will be forced into a long term role of a supplier only of the raw material. The sawmillers' call for protection ofNZ sovereignty is echoed both in the fight of the Matakana Islanders for control of their forest, and the Seafarers' Union campaign against legislation designed to allow uncontrolled entry by foreign-owned ships and crews into NZ's coastal waters. The sort of open house envisaged in the GATT Round is alive and wen, and working for offshore interests, right now in NZ.

The raw export "goldrush" is covered in detail in "Clearcut", Murray Horton's work in progress on the Maori translations from UTe Waipounamu" by Harry Evison, a book we recommend to aU members, Ed

The Overseas Investment Commission (Ole) was set up to oversee foreign investment in Aotearoa. Under its legislation, it can, within guidelines set by the Minister of Finance, reject applications for overseas investment if they do not meet certain criteria. Those criteria have for many years been set to be so lax that the Commission rarely rejects any proposal. However, all overseas investment worth $10 million or more, and all overseas investment in "sensitive areas" - such as land adjoining coastal areas, lakes and islands, and rural land - must go through the Commission, so it is a unique and valuable source of information on the nature of foreign investment in Aotearoa,

In February 1985, CAFCA wrote to the OIC asking for it to inform us on a monthly basis of all applications received by it, and their outcomes. Lengthy debates followed over both what information should be released, and the price to be charged for it ($400 to $450 per month was the Ole's first offer). The debate included the intervention of several Ombudsmen, a case in the High Court, and threatened legislation to prevent release of the information. Finally, we started receiving monthly information (averaging about $40 per month) in December 1989.

TIle information is in the form of copies of "decision sheets": the summary of each application which is presented to the Commission by its secretariat for its rubber stamp. Information is regularly deleted from these sheets before release to us; sometimes whole sheets are blank. We routinely ask the Ole to review these deletions, and take subsequent refusals to the Ombudsman. What appears in these sheets is largely determined by the applicants themselves: applicants to the OIC are asked to provide "a brief summary of information which the Commission could make publically available" consisting of "details of the ownership structure and country of origin, details of the consideration payable, and a brief summary of the rationale for the proposal and the perceived benefits in terms of the general investment criteria." It is clear that the Commission rarely investigates further what the companies present it with.

What follows is our analysis of the Ole's decisions for the months stated. This includes information from both the Commission's "decision sheets" themselves, and from our files. An index to the sheets is available from CAFCA, but to save space, the index to OIC decision sheets will no longer be printed in Watchdog. (Readers' comments on this are welcome.) If you would like to have a copy of the index to the above decisions, please request themfrom CAFCA, and enclose a stamped and addressed envelope. A consolidated index for each year is available as soon as the December decisions have been analysed (usually in February).

1

aHabout?

decisions

Telstra Corporation Ltd (Australia) is setting itself up to run the fourth cellphone frequency in the country. Its subsidiary Telecom Australia (New Zealand) Ltd is buying the right to manage the TACS 8 radio frequency spectrum for $13 million, after winning a tender for the frequency. Its other subsidiary, Telstra Australia (New Zealand) Ltd is setting up to provide the cellphone service. It will be competing against Telecom New Zealand and Bellsouth.

A U.S. firm is expanding its forestry interests in Aotearoa. MRGC New Zealand Ltd, owned by MRGC Company of the U.S. (50 per cent Merrill Ring Inc, 50 per cent Green Crow Corporation) "is an American based joint venture company involved in the development, harvesting and marketing of forestry products which wishes to expand its forestry operations into New Zealand. Initially MRGC wishes to acquire a half interest in land and trees and form a joint venture with the two New Zealand companies who presently own the land." The Aotearoa companies are Scollay Forests Ltd and Scollay Forests (Blenheim) Ltd. They are selling a half share of 2901 hectares of forestry land in Marlborough to MRGC for $10,875,000. Aotearoa is dearly flavour-of-the-month for forestry with log prices booming.

ITT Rayonier is further expanding its forestry interests with the acquisition of cutting rights to a 21 hectare forestry block near Gisborne "for a consideration equivalent to the market value of the timber at the time of the felling which will be advised to the Commission". Cutting rights, not the land itself, are being purchased, and "the current owners have indicated that they will replant the block when the timber has been felled."

The 80 per cent owner of the Golden Cross Mine at Waihi, Cyprus Gold New Zealand Ltd, has a new parent company. Formerly owned by Cyprus Exploration and Development Corporation of the U.S.A., it is now owned by Coeur New Zealand Ltd, a subsidiary of Coeur d'Alene Mines Corporation of the U.S.A, The price is suppressed. The other 20 per cent of the mine is owned by Viking Mining Company Ltd, a local company according to the commission. "Coeur believes that it has the operational experience and expertise to effect operating improvements at the Golden Cross Mine which will enhance the profitability of the operation." Around the same time (Press, 12 May. 1993), the Press Association reported: "Gold mining is threatening the future of a potential multimillion dollar export industry in Paeroa. Auckland-based company Kiwi Blue, which collects minerai water from a supply near the township may be forced to shift after the granting of a gold prospecting licence for the area and the possibility of another.

Page 22

Cyprus Gold was given the rights to prospect on several hundred hectares of land near the Golden Cross Mine at Waitekauri, west of Waihi last year. The Planning Tribunal has now recommended to the Minister of Energy , Mr Luxton, that a further 180 hectares of neighbouring land be allowed for prospecting. The approved area includes a water supply that Kiwi Blue has been tapping for the last year. The product is exported to Taiwan, Hong Kong. and Japan."

And in another development of interest in Waihi, Amax Gold Inc (U.S.A.) is setting up a subsidiary called Waihi Financing Ltd by issuing itself 100 $1 ordinary shares (that is, all the voting shares), and Poseidon Gold Ltd (Australia) an unspecified number of "$1 redeemable preference shares at a premium of $9999 per share". Waihi Financing is being used to buy Amax Holdings New Zealand Ltd for "$15 million plus 1 ,550 ounces of gold plus other cash adjustments totalling approximately $13 million." The purpose ofWaihi Financing Ltd staled to the Commission for "providing finance to the Martha Hill gold/silver mine at Waihi". However the actual purpose is to sen Amax's share of the Martha Hill mine to Poseidon. This has been bitterly disputed by the third part owner of the miner, Mineral Resources (NZ) Ltd (majority Australian owned according to the Commission in March 1991). Amax owned 33.53 per cent of the mine, Mineral Resources 32.94 per cent, and Poseidon the balance. Mineral Resources complained that the joint venture agreement forced Amax to offer its share to the remaining partners equally, and is taking legal advice. According to press reports, the sale price of Arnax's share was $15 million and 15,500 ounces of gold to be delivered over a five-year period. On putting this to the Commission we received an acknowledgment that the! ,550 ounces mentioned in the OIC decision sheet was a typing error. (See Press, 3 November 1992,1OJune 1993, 12 July 1993).

Mineral Resources is part of a group of mining companies including United Resources Investment Holdings (URIH, in December 1991, 62 per cent owner of Mineral Resources), Gold Resources Ltd (51 per cent owned by Mineral Resources). and New Zealand Oil and Gas (NZOG, in December 1991,28 percent owner of URIH). Control of the group has been in dispute for some years, with a Brierley company, GPG, trying to get a foothold. Gold Resources has significant operations in Chile, and also in Vietnam and Fiji. Mineral Resources itself has operations in Australia as well as Aotearoa, Mineral Resources and NZOG are at time of writing making a takeover bid for URIH (see the June 1993 decisions for further details). (Press 18 December 1991, 13 November 1992, 14 July 1993.)

A U.S. company, Quantrix Consultants Ltd, is buying Dynamic Controls Ltd, already 24 per cent Japanese owned, for "approximately $20 million". It is not clear what Dynamic Controls does, but "the parent of Quantrix Consultants Ltd has extensive involvement in the manufacturing and distribution of home medical products and mobility aids. The Commission is advised that the parent company intends to combine its technology and expertise with that of Dynamic and it is likely that this will result in enhanced products thus creating opportunities for increased

domestic and export sales."

In rural land:

II Two Canadian residents are buying a 497 hectare pastoral farm, Glenross Station, Hokoroa Road, Tauwharepara, near Tolaga Bay for $480,000. They intend to redevelop the property to a commercial forest operation. "The Commission is advised that the property has serious erosion problems which will be eased with the planting of trees."

., A 13.6050 hectare rural property in Peak Road, Waimauku is being purchased for $330,000 by Peak Road Farm Co Ltd. This company is owned by two Aotearoa citizens resident in Singapore who want to buy the property for a "lifestyle block:".

• A Swiss is acquiring a 143.0562 hectare property in Puketawa Road, Broadland, Hokianga, for $760,000. The land is at least partially forested, and one of the conditions imposed by the Commission is that the purchaser does not "undertake any subdivision or development. of that part of the property which is currently covered in mature or regenerating native forest without prior consent of the Commission." It is unusual for such a condition (or any significant condition) to be applied by the Commission.

• Two other Swiss are purchasing a 81.1243 hectare block of land in the Houhora East survey District for $570,000 through a company, Gele Ltd. "The offerors believe the property provides an investment opportunity to produce dairy products on a small scale. The Commission is advised Mr Hausheer is experienced in farming work."

• A 22.3 hectare deer farm in Matapour] Road, Tutukaka, which was already 50 per cent owned by two U.S. investors, R.A. Jacks and KJ. Mcintyre, is being fully acquired by them. They are buying the other half of Jackwelt Estates Ltd, the company that.owns the farm, for $237,037. The first half of the purchase (valued at $5000!) was never presented to the Commission for its consent and has been given retrospectively.

II A U.K. couple resident in Singapore are buying a 40 per cent share of two companies owning two pieces of rural land in Clevedon, The first, Colmere Investments Ltd, owns 15.6585 hectares of land in Tourist Road, Clevedon; 40 per cent is being sold for $430,000. The second, Bardsleigh Properties Ltd, owns 4.049 hectares of land on McNicol Road, Clevedon; the 40 per cent there is being sold for $325,000. In both cases the plan of the buyers is to "raise ponies for export and also 1:0 operate a polo pony business on the farm properties."

• I A couple from Tahiti are buying a 8.1321 hectare rural property on Jamieson Road, RD2, Pukekohe, currently used for Kiwifruit growing, for $300,000. It will also be used for growing flowers for export, employing a local manager.

• Telecom Corporation of New Zealand Ltd (U.S.A.) is acquiring "easements in gross for telecommunications equipment, power and right of ways" over two pieces of rural land: one at Pye Peak, Nelson (through subsidiary Telecom South Ltd), the other at Beltana, Kaikoura (through subsidiary Telecom Mobile Communications Ltd). The latter property is 2,200 square metres; the size of the first is not specified. Both are to extend its cellular phone

Watchdog

coverage.

In eommercial

• In the Commission consented to

Investments Ltd 62 commercial n"r'nP"rt"·~

venture between it and SEA Ltd

for $290,815'(X)()' The joint venture, Verisopht Investments

is 40 per cent Brierleys, and 60 per cent SEA Holdings Ltd. The Hong and Corporation Ltd now has been given consent to acquire a number of those not because it is buying them, but because it has a $65 mmio~ mortgage over them and would

them if there was a default on the loan. This is very similar to the consent given to the same bank (among others) to acquire Sealord's fisheries assets after it was mortgaged to those banks as part of the financing of the Maori Fisheries Commission (MFC)/Briedeys Investments Ltd joint venture set up by the government to satisfy claims under the Treaty of Waitangi. In this case, the actual properties affected are not named but are those owned by Brierley!

SEA subsidiaries, Gujrat Ltd, Isonzo

Properties Ltd, Jattoo Mantilla Properties

Ud, Miieto Ngapur Properties Ltd,

Naseby Properties and Glaive Ltd,

• Macquar ie New Zealand Ltd, a subsidiary of Macquarle Rank Ltd of Australia is buying Coalcorp House, IJm21 Dh::onl Street, Wellington from Cinema Properties Ltd (in statutory management), a subsidiary of Chase Corporation Ltd.

• New Zealand Ltd is selling off 2.8629 hectares or commercial land bounded illl part by Bn·oadway and Remaera Roods, Newmarket, Aucklilmd for $16,280,000 to Mr Lim Teck Hoo (Brunei, 25 per cent), Mr Lim Ming Si2m (Singapore, 25 per cent) and Mr Yeo 'fOOD Yit (Brunei, 50 per cent). "The property to be acquired is situated in a prime retail area dose In central Auckland. The applicant intends In develop the property into a major retailing complex. The Commission is advised the development will require extensive contracting and related employment and that it will generate further downstream benefits, and that. the applicants have extensive experience in property developments in Asia."

decisions

Aotearoa's first casino makes the OIC decision sheets this month: the Chr lstchurch Casino will be owned by

Christchurch Casinos whose overseas owners (23 per

cent each) are Aspinall and Premier Hotels

Chri..'ItchUirch Ltd. Aspinall, the holder of the operator's

licence for the casino, is owned 85 per cent U.K. casino

and 15 per AMstralian

based Aspinall managing director, MI' Osborne, who

will be a director of Christchurch Casinos Ltd. Premier Hotels owns the Christchurch Park Hotel, diagonally across the intersection from the casino she, which will 11'0>"('",,,11' food and to the casino. Its major (55 per

n"""·r"",.."t.,,..! of which

manages the Park and 65 other hotels around the 'Pacific. Fletcher Resorts of Fletcher Challenge),

Magnum and Prudential Assurance each own

10 per cent of Premier.

Daikyo was named by 1011. in his trial for

in last year, as him

During the Christchurch for the casino licence in March this year, the rival casino developer presented cuttings from the Sydney Morning Herald to support it" case and provided the hearing with reports and documents tabled in the Australian Parliament from the Australian Bureau of Criminal Investigation, and the Australian Criminal Justice Commission. These included allegations of various firms' links to the Japanese yakuza (organised crime) and money laundering. Daikyo had representatives on the Jupiter's Casino board of directors, the Queensland casino where it was claimed money had been laundered. One of those representatives, Sir Sidney Shubert, resigned when Daikyo sold its shares in the casino. He was one of six directors proposed by Christchurch Casinos Ltd. However cm Detective Inspector Martin Sears told the hearing that no investigation had revealed matters "adverse" to the Daikyo firm, though he conceded he had not seen one of the reports relating 1,0 money laundering in casinos by the Criminal Justice Commission in Australia. The commission had begun legal proceedings on some matters so had not made it public. He said that Australian Federal police had given him assurances that the context of that report revealed nothing suggesting Daikyo was linked to criminal activity. ("No evidence of crime link with casino investor .. witness", by Sarona Iosefa, Press, 11 March 1993.)

The other shareholders in Christchurch Casinos Ltd are Skyline Enterprises, an unlisted Queenstown-based public company running gondolas in Queenstown and Rotorua and three hotels (23 per cent); South Island Tourist Casinos, 63.4 per cent owned by me Helicopter Line, which runs the Treble Cone ski area, the Red Boats operation on Milford Sound, and helicopter services (20.5 per cent); Southern Equities, owned by Mr Louis Crimp, an Invercargill builder (6 per cent); and Trojan Holdings, whose shareholders include former Queenstown mayor, Mr John Davies. and which runs the Milford Track Walk (4.5 per cent). ("Three listed firms in casino venture", Press, 29 April 1993.)

Rupert Murdoch's News Corporation is continuing to play table tennis with its printing subsidiaries, Inprint Ltd and D.N. Adams Ltd (also known as Adams Print). It'> 49,7 per cent. subsidiary, Independent Newspapers Ltd (INL) is selling Inprint and "a freehold property from D. N. Adams Ltd" 10 Pac Rim Printing (NZ) Ltd, a subsidiary of News Corp's 45 per cent owned Australian subsidiary, PacifIC Magazines and Printing Ltd (PMP). The amount paid was suppressed. JNL sold printing subsidiary, Bascands Ltd to PMP last year, but couldn't agree 011 a price for Adams Print According to the Christchurch Press ("INL to sen Adams Prim to News arm", 11 May, 1993 ~ announcing the sale before approval was obtained me), Adams Prim is one of the largest commercial web-offset printers in Aotearoa, As well as continuing to prim INL magazines, Plv!P would print the newspapers published by the Geelong Advertiser and Independent Pty, a Victorian subsidiary of

INL Another INL

Gordon and Gotch has a 10

year extension of its contract to distribute P:MP's magazine

titles in and New Guinea. In other

developments, not yet the Ole, INL has bought

out both the home monthly, New Zealand

Gardener buys magazine", 16 March 1993), and the 127 year old Nelson daily, Nelson Evening Mail ("Group Nelson Newspaper", Press, 21 August, 1993). INL increased its profits by 34.3 per cent to $4 L165 million in the year ended 30 June, following considerable redundancies and the introduction of new technologies. Aotearoa is no longer the largest part of INL's operations, although in the last June financial year it was the most profitable. 51 per cent of INL' s revenue came from Australia ($4923 million) but only 32 per cent of its profits ($28.7 million), whereas 45 per cent of it" revenue came from Aotearoa ($436.7 million) and 66 per cent of its profits ($59.9 million). Foul' per cent of its revenue ($34.1 million) carne from i:he U.S.A. and 2 per cent of its profits ($1.7 million).

As reported in April, Brierley Investment s Ltd is selling off 62 properties in Aotearoa for $290,815,000. Instead of selling them to the joint venture, Verisopht Investments Ltd, 40 per cent Brierleys, and 60 per cent SEA Holdings Ltd, Hong Kong, some are being sold to another Brierleys/ SEA company, SEABIL(NZ) Ltd, which is owned in exactly the same proportions as Verisopht. Others are being sold to Bermuda front companies owned by Puffin Trust of Bermuda. It is not clear who the final owner is, though it seems likely it is another Brierley/SEA company, set up in Bermuda to avoid tax. The Bermuda companies are:

Fraise Properties Ltd, Delinm Properties Ltd, Gujrat Properties Ltd, Isonze Properties Ltd, Jettoo Properties Ltd, Majuba Properties Ltd, Mantua Properties Ltd, Mileto Properties Ltd, Rocroi Properties Ltd, and Minden Properties Ltd. The following are Aotearoa as to voting shares, but with some non-voting shares held in Bermuda: Hellenes Properties Ltd, Cromcorp Commerce Street Ltd, Cromcorp Gilmer Terrace Ltd, Cromcorp Broadway Customhouse Quay Ltd, and

Cromcorp Church Street Ltd. The following will be owned by SEABIL: Dargai Properties Ltd, Sanet Properties Ltd, Glaive Properties Ltd, Gorget Properties Ltd, and Fanion Properties Ltd.

The government property owning and management company. Government Property Services Ltd, which is currently in financial difficulties, with reports that government bailouts or privatisation are imminent, is selling subsidiary GPS Cecil Ltd to the NZI Corporation Ltd for $14 million. It is not clear what Cecil is, but GPS "no longer requires to own" it and "is satisfied with. the consideration, while NZI will be acquiring a future income stream in GPS [Cecil] which will provide a good yield for NZI." What's good for NZI is clearly good for New Zealand.

McCain Foods (NZ) Ltd, owned by McCain Foods Ltd of Canada, has permission to build and run a potato processing plant to be situated at Meadows Road. Wash dyke, Tlmaru. "McCain currently imports french fries into New Zealand." In March 1992, approval was given for McCain Foods (NZ) Ltd to acquire 2.5760 hectares of land near Christchurch for approximately $850,000, and operate a food processing plant on it. McCains received approval to buyout New Zealand Alpine Foods Ltd for $3,810,000 in June 1990. Since then its Washdyke processing plant has been a competitor with. Wattie Frozen Foods for peas, carrots, potatoes and beans for processing. It has initiated largescale plantings of sweetcorn for processing in Canterbury. Most of the processed food is exported. McCains Foods of Canada "has 46 production facilities in nine countries producing convenience foods and frozen vegetables." (Press, 20 December, 1991.)

Juken Nissho Ltd (85 per cent owned by Juken Sangyo Ltd and 15 per cent by Nissho Iwai Corporation both of Japan) has permission to build a timber mill to produce principally timber and plywood products at Matawhero, near Glsborne. The mill will cost $50 million and will process timber from "Juken's substantial forestry resources in the region." To increase those substantial resources, J uken

By GREG JACKSON

A lack of resources means the Overseas Investment Commission is not vetting foreign buyers of New Zealand land and assets, says the Campaign Against Foreign Control of Aotearoa,

The group monitors the monthly decision sheets issued by the corn" mission, which is a branch of the Reserve Bank.

The commission is responsible for the processing of all investment applications worth more than $10 million made by foreign individuals or companies. .

The secretary, Mr

Murray said that for rive

years the group had been appealing

against deletions from the sheets issued by the commission. The Chief . Ombudsman, Mr John Robertson, recently upheld deletions for the period January to November 1992.

He commented on the commission's statutory obligation to collect the required information from foreign investor applicants.

He noted it would not be possible for the commission to' check and verify all information without considerable resources being available.

"It is for this reason that the commission does need to rely on the information supplied by applicants to be of the quality necessary for the commission to carry out its function," Mr Robertson's letter said.

Mr Horton said this confirmed a long- held belief of campaign members about the scrutiny systems applied to foreign investment.

"Ever since an alleged German criminal bought Pakatoa Island without the commission having checked him out, it has been obvious that it is merely a rubber stamp to give respectability to foreign investment proposals," said Mr Horton.

"We suggest that the functions of the commission be contracted out to a monkey trained in the use of a rubber stamp.

"It would be an appropriate national symbol for a burgeoning banana republic."

Nissho is also entering into venture with the Gisbm'IDlI.!:

Distll'id Council to develop the 1601 hecta r e Pamoa and Fairview Stations into a commercial ~",",,,,,h,,,, Juken Nissho "intends to the land into a high quality commercial plantation and manage the forest in its entirety through to maturity, harvest and sale utilising their vast experience and expertise in the forestry industry," The forestry right covers land owned by the District Council surrounding the Gisborne reservoir catchment area. The approval was originally given "in principle" by the OlC in September 1992, according 1:0 the Commission. This must have been suppressed at the time, since the decision never reached CAFCA.

Juken Nissho is already a significant force in forestry in Aotearoa - and one of the few foreign owners mat bother to process timber here. It was a substantial buyer of Crown forests in 1990 and 1991. In January 1991 it was involved in a controversial project in Kaitaia, The Muriwhenua Corporation wanted to take over a bankrupt Triboard min and forestry rights (run by Northern Pulp Ltd) as a development project for its people. Juken Nissho was sold the project instead (for $17.5 million). Muriwhenua unsuccessfully challenged the OlC's decision to approve Juken Nissho's purchase.

The Japanese joint venture, SouUdand Plantation Forest Company of New Zealand Ltd is buying a further block of land for forestry. The company is owned by O]] Company Ltd (51 per cent), and C. Itoh and Co Ltd (49 per cent). This time it is buying a 1,077 hectare block of land situated 00 Beaumont Station Road, Waimatuku, Southland for $1,200,000, from me J. H. Pinckney trust, for production forestry to "provide wood for export to me Japanese pulp and paper industry ." Clearly log exports rather than processing in Aotearoa. We have previously reported 1295.1907 hectares of land at Lillburn Valley, Southland being sold 1:0 the company for $533,078, and a further 406.3044 hectares at Otautau, Southland, for $390,000, for the same stated purpose. C. Itch (with M.K. HmH Foundation) is also involved (33.33 percent) in another forestry company in Southland called South Wood

Ltd, which has 3163,1228 hectares of land it is developing into eucalyptus forest for chip

MRGC Company of the U,S.A. and Ring Inc and Green Crow is buying cutting rights to a further 97 hectares of forest in Marlborough. The vendor is a Mr R, M, Scott who "owns substantial forestry interests in Marlborough and is selling the cutting rights to this block (which has been unattended) to ensure the trees are harvested by 1999 thus enabling the area to be replanted as part of his overall forest management programme." The price has been withheld by the Ole. Last month MRGC gained permission to acquire half interests in 2901 hectares of forestry land in Marlborough owned Scollay Forests Ltd and Forests Ltd.

In rUl!'31~

A gang of financial corporations is up two

vineyards from Mildar» Wines Ltd of Australla ..,mJU""u

a company, M.

will then be sold to

make float sub-underwritten the shareholders of

M,E. The named shareholders in M, Holdings

are: National Mutual Uf\'2 Asserance Association of Australasia Ltd Ut'}5 pel[ cent), Prudential

NZ Ltd ]9.47 per cent),

Nominees NZ Ltd (Australia, 21.05 per and ANZ Nominees Ltd (Australia, 9.41 per cent) as nominees for Cigna international Investment Advisors Australia Ltd. The are Spring Creek Ltd, including 41.25 hectares ofhmd at Cloudy Bay, Marlborough, for approximately $1,000,000, and Morton Estate Winery Ltd, including a 53 hectare vineyard at Maungatah] and another n hectare vineyard at of Plenty, for approximately $8,500,000. Appellation was set up as an investment company specialising in the wine industry. Regal Salmon sold its majority shareholding in Cellier Le Brun wineries to Appellation, and will retain a 20 per cent shareholding after tile float, as will Daniel and Adele Le Brun (9 per cent) and Me Allan Scott (11 per cent). The remaining 60 per cent will be floated to the public. Appellation will have 130 hectares of vineyards. ("Appellation Vineyards set for $llm share float next month", Press, 8 September, 1993.)

• an Australian, MI" M.K. Meyer, is purchasing a 52.820 hectare Wanaka rural property on the Wanaks - Mt Aspiring Road for mullion, through his company, Trilane Industries Ltd, At me price, the wealthy Mr Meyer certainly wanted the property badly: "Me Meyer is a regular visitor to New Zealand and has been seeking to acquire a property in the Wanaka region for some time. This land has not been farmed for 10 years and is being sold by the beneficiaries of an estate who also own an adjacent block which is being retained by the latter. The property was extensively marketed over a period of time and it was eventually sold at a recent auction." He says he intends 10 establish an exotic timber commercial forestry operation on the land, though that hardly seems worth waiting 10 years for a Wanaka property for.

., in a similar Mr M,RW. Adams of the U.K. is buying a 24,2 hectare rural in Little's Road? Dalefield, for $420,000. "M! Adams has visited New Zealand several times and now wishes 1:0 purchase ill 01'1 which he will carry on cultivation and farming activities. The vendor of the property, Skeena Enterprises is owned by Mr A, Norbett-Munns and the Commission is advised that the latter is selling the property because he does not have the financial resources 10

or retain the a feasibility study will be

undertaken which win fill Adams on the best crop or

of for me land."

., two Taiwanese have set up a modestly named company, Universal to buy 1:1. ll.0330 hectare

business at '12 Road, Drury for

., TeYecmn is

26

land at Musick Point for a monthly rental of$19,386,791:0 extend its communication network. The lease is for 33 years, with two rights of renewal.

• A German couple have permission to acquire a 96.1650 hectare property at Mahurangi West, near Warkworth for $830,000, They "intend to settle permanently" here ill the near future and will carry out an evaluation on the establishment of forestry activities utilising the small stands of native trees already on the property.

The Cayman Islands owned company, Shiro Pacific Ltd (a subsidiary of Tectoria of the Cayman Islands) has been given permission to buy up to 100 per cent of the shares of Transmark Corporation Ltd on the open market at an estimated price of $1.30 per share giving a total of approximately $9,700,000. Shiro already owns 44 per cent of Trans mark, and National Nominees Ltd own 30 per cent In August 1991, the Commission gave Shiro (then spell "Shriro": we assume that was a typo) approval to acquire up to 50 per cent of Transmark for $11,191,856.47. Transmark was then already 42.97 per cent overseas owned.

P & 0 (NZ) Ltd has been given a four-year retrospective approval to acquire the 40 per cent of Clendon Holdings Ltd that it did not previously own. "Previously" means "before December 1989": "Consent [waslorginally granted in January 1989 to P & 0 acquiring 100 per cent of the shares in Clendon. Only 60 per cent of the shares were acquired before the original consent expired. The Commission's further consent was overlooked when the balance of the shares were transferred in December 1989." P & 0 (NZ) Ltd, subsidiary of the giant U.1e shipping transnational, Peninsula and Oriental Steam Navigation Company or London paid "approximately $1.22 million" for the shares. Perhaps it's so long ago they can't remember,

The decision sheets show New Zealand Oil and Gas Ltd and Mineral Resources (NZ) Ltd forming a 50/50 owned

company, Ltd to take over United Resources

Investment Ltd. The two will offer

their shares to DRIB shareholders million NZOG

shares and 14"7 Mineral Resources shares) and will get shares in in return: up to 33 million fully 110[1- equity A shares of 88 cents each to NZOG and up to 15 million paid non-equity B shares of $ 1.04 each to Mineral Resources. URIH would then be fully overseas owned, in place of the current 88 per cent overseas ownership. The value of the takeover is put at approximately $43,500,000, See the May 1993 commentary for more details of the structure of this group of companies.

In internal restructuring, the National Australia Bank Ltd puts a value of approximately $162 million on its subsidiary National Austr alia Bank (NZ) Ltd. And National Consolidated Ltd, Australia values its subsidiaries Dorf Industries (NZ) Ltd at A$3,768,701 and Lockwood Arrow Ltd at A$2,466,754. Finally, Foster's Brewing Group Ltd (Australia) has permission to change the subsidiary that owns its subsidiary Watficld International NZ Ltd.

July decisions

The big story of the month is the privatisation and sale of New Zealand Rail Ltd to Tranz Rail Ltd, a company owned 60 per cent by Wisberk J.V. of the U.S.A., for $328,300,000. The price paid by the new owners was actually $400 million, but $72 million of that goes to pay off debts. Although the owners of Wisberk are not specified by the OlC. it is clear from public announcements that they are Wisconsin Central 'Transportation Corporation, and Berkshire Partners, both of the U.S.A.,. The publicity given to the sale echoed the blurb regurgitated by the OlC (complete with Americanisms):

The Commission is advised that it is the objective of Tram Rail to make new Zealand Rail one of the most efficient transportation providers in the world and to this end Wisconsin Central Transportation Corporation (WCTC) is uniquely qualified to provide the necessary guidance as it has experience running a comparatively sized railroad in the United States and is generally recognised as a leader in the provision of efficient quality transportation. WCTC has indicated that there will be opportunities for senior management to undertake extended training at its facilities in the United States. WCTC has also advised that it will make available to New Zealand Rail any technological improvements developed for its railroad in the United States which are appropriate for the New Zealand environment.

Note that the references here are to "transportation", not simply railways (or even "railroads"). WCTC is keeping its options open for other forms of transport in Aotearoa. In the U,S., road and rail transport firms are merging, rail being used for long hauls and road for short hauls, with trailers and containers being designed so that they can be moved between truck and train with minimal handling. Fifteen per cent ofWCTC's traffic volume was in this form in 1992 triple the volume in 1987 - though it does not OWI1 trucks itself (Rails, September 1993, p31-32).

Watchdog

Page

The other 40 per cent of Tranz Rail is owned

Richwhite. According to Winston Richwhite

made $3 to million in " .. "',,.""'.-.,,<>

fees for the deal - and then

sale within twenty-four hours of it going

increase in share ("Fay Richwhite

rail buyout'", 5 August, He says they were

consultants to the government on the sale and then had used the knowledge acquired in the sale process to buy into it ("US-led consortium pays $400m for NZ Rail", 21 July 1993). Fay Richwhite state that they eventually intend to float and sell the shares to "New Zealand investors" (Fay Richwhite press statement, 20 July 1993). According to a TV3-GaUup poll of 500 people taken shortly after the buyers were announced, 68 per cent of those surveyed disagreed with the sale, 26 per cent agreed and 6 per cent didn't know. Forty-three per cent would support, buying it back. ("Labour support creeps up", Press, 5 August 1993.)

WCTC is described (by itself) as "the largest regional rail operator in me United States, operating in four stales and in the province of Ontario, Canada." This is not quite as impressive as it sounds. There are some five hundred railway operators in the U.S., and WCTC is not much bigger than New Zealand Rail. It has assets of $500 million, compared to the sale price of New Zealand Rail of $400 million, and a requirement for an investment of $600 million by the tum of the century and a further $800 million in the following decade. werc has however been on something of a takeover spree: it owns Fox Valley and Western Ltd, which in tum in 1992 announced the take over the Green Bay and Western Railroad Company, the Ahnapee and Western Railway Company, and the Fox River Valley Railroad Corporation. It has won a number of U.S. and Canadian media awards for "best railway".

Of significance is that WCTC has no passenger services, but says "we recognise the importance of passenger service, especially within urban areas, and believe that NZ Rail can and should continue to play a major role in providing alternative transportation to motor vehicles in congested areas." That. is presumably conditional on the continuance of subsidies for these services, which the government has promised. WCTe is "actively planning with transit authorities to initiate commuter and intercity passenger operations in the Chicago region" by 1995.

There are no "Kiwi share" protections attached to the sale, except that the sale does not include the land on which the rails run, which are effectively leased. If freight use drops 20 per cent (below what has not been publicly stated) or passenger use 50 per cent then the government could contract another operator onto the lines in competition.

The most sinister aspect ofWCTC is that it is a "non-union" finn, bringing U.S. industrial. tactics into the COWltry·_ tactics which fit in with the government.' s own attitude as enshrined in the Employment Contracts Act. WCTC has apparently assured the National Union of Railway Workers that it is willing to work with them, despite this. TIle railway workers have much to fear: Wisconsin has W60 on 3252

km of track and 5862 rolling stock; New Zealand Rail has 5300 employees on 4069 km of track and 10,323 rolling stock ~ though they do have passenger operations which are more labour-intensive than freight. Despite massive redundancies - 17,000 workers have been sacked since 1983 - Wisconsin will be looking to reduce New Zealand Rail staff still further'.

Labour Notes' (September 1993) reports:

Across the United States billboards advertise everything from TV evangelists to haemorrhoid cream. Taking a leaf out of Madison Avenue's PR machine, US unionists used their own billboard idea to get their message across to Wisconsin Central. Wisconsin Central officals arriving at work were astonished to find a giant billboard outside one of its main sites. To add insult to injury the billboard was located on WC land, rented out to a billboard company. The billboard urged WC workers to "vote for a voice" and work toward "workplace democracy." When a infuriated company official contacted the billboard company, Whiteco, he was told Whiteco had a signed contract with the union. After threats mat WC would remove all Whiteco billboards from its property, Whiteco agreed to take the sign down. But not until after the weekend! As a result of the action the United Transportation Union is considering a lawsuit against WC.

On a more serious note:

With wage costs 20 per cent below the average, Wisconsin Central's claim to respect NZ unions has a hollow ring. As New Zealand unions struggle to cope with the union-busting brought about by the Employment Contracts Act, US workers continue their efforts to win workers' rights at WC.

WC profits arc up 34 per cent on the second quarter last year. It had record revenues of US$32.9 million in the first quarter of this year plus a record operating income ofUS$S.4 million. All this comes on top of me WC's still pending U$$83 million purchase of the Green Bay & Western and Fox River railroads. For WC shareholders the story is one of expansion. But for the workforce it's been a case of shareholders first. employees last

The Green Bay and Fox River purchases are still awaiting an arbitrator's decision after local unions challenged that

"This was written before the election. Shortly before the election, rumours surfaced that layoffs were about to begin. A week after the election this was confirmed: ninety-three workers at the Hillside workshops in Dunedin and the Hull Valley engineering workshop were sacked. Another 60 layoffs were expected before the end of the year. This followed 45 redundan des in Wellington in October. ("NZ Rail lays off 93 workers", Press, 16 November 1993).

2LaboI.U Notes "is a forum of debate and information for union activists, delegates and organisers". It is available from P.O. Box 9721, Wellington, for $10 for four issues (individual) or $20 for four issues (institutional and sustainer),

Watchdog

Page 28

GB & Wand FRVR workers many of the enjoy under New York law. In a land where so many workers have so few rights, rail workers are OI'1e of the few sectors of the workforce to still have federal nrotecnon, The Railroad Retirement Act and the Railway Labor Act are just two of the legislative protections railworkers enjoy in an otherwise deregulated economy.

Wages consume just 33.7% of WC's gross revenues, compared with an average of35% 011 other graded railroads. Overall WC workers make 20% less in wages and benefits than the industry average for unionised rail employees. The company has slashed staff levels, reducing the crew levels on trains and risking safety violations.

U. S. unionist Mike Konopacki told Labour Notes: "The company hiring policy seems to be targeted at getting young men off the farm and paying them as little as possible."

In an attempt to head off critics WC has been promoting a profit sharing While the plan looks set to deliver some sort of bonus to the hardworking staff, its two-tier nature will mean company managers get at least twice as much as railway workers themselves. Linked to the company's operating the plan offers workers and managers a sliding scale of payouts. But when the benefits of the scale are compared, it's dear WC isn't interested in the majority of its workforce. At a ratio of 78.1 % rail workers would get a 4.5% payout while managers would get 9%. If the OR rises to 77%, staff would receive 5.5% , while top managers would receive 14%.

Reflecting the company philosophy, a company memo obtained the United Transportation Union says some employees "believe higher paid WC people contribute disproportionately to the Company's success, and they should be recognized accordingly."

Much is made of WCTC's president and chief executive, Edward being a "professional railwayman" who started off as a brakeman. In fact he was a brakeman while attending school. After he graduated from Yale with a BS in industrial administration he worked for two rail way companies before spending 20 years with the major railway company Chicago and North Western, rising from assistant general manager staff, to vice-president The local press also emphasised that his company is said to be in favour of multiskilling, but Burkhardt told Rails that "it was not done as often as might be thought. It was very useful in times of need, but generally it was best to keep specialists in their own areas."

Berkshire Partners is described by the Minister of Finance and Minister for State-owned Enterprises as a "Boston-based fund in investing in middle-sized companies. It is one of the founding shareholders of WCT. Its capital

resources of over million are complemented by those

of institutional which include several leading

United States insurance organisations and pension funds."

(Sources: New Zealand Official Yearbook 1993; press

Richwhite, Ministers of Finance and

State-owned and WCTC, 20 July

likes deal", Christchurch Mail, 22 July

shares in five , Press, 21 July 1993; "US-led

consortium pays for NZ Rail", Press, 21 July 1993;

''The Romance of Rair, Listener, March 20 1993; Rails, September 1993, p31-32)

Two months after the sale was announced, it was revealed that two more shareholders were part of the deal. Alex van Heeren, "who has interests in forestry and other export industries, and is the owner of Huka Lodge, near Taupo" will take a shareholding of 9.1 per cent The David Lloyd Group, a private investment company belonging to the Richwhite family, will take 4.5 per cent Fay Richwhite will hold 31.8 per cent and WCTC and Berkshire 54.S per cent between them ("Business pair named 'back-up shareholders' for NZ Rail", Press, 17 September, 1993).

The sale was the result of a tendering process conducted for the government by Bankers Trust. It was conducted with considerable secrecy, which was criticised in some quarters. The secrecy was effective: WCTe was never mentioned as even a potential bidder in press speculation. Parties reported by the media to have expressed interest included:

" a number of ports, including Lyttelton, Wellington, Auckland, Tauranga

" Freight and land transport interests:

• Freightways Corporation, owned by Alan Gibbs and Trevor Farmer, which owns 50 per cent of trucking company Freightways Group

1& Mainfreight, freight company

• Stagecoach, Scotts bus company running Wellington's bus service

• Shipping and stevedoring interests:

.. Owens Group, stevedore, freight forwarder, road

transport, various other activities

• Pacifica Shipping, coastal shipping operator

• the P. & O. shipping line (U.K.)

iii Sea Containers of Bermuda, with interests including English Channel ferries, container manufacturing and leasing, and hotels

iii Sofrana shipping line of France

iii Union Shipping, shipping and stevedoring, owned by TNT Australia and Brierley Investments Ltd

III Rail interests:

\0 Guilford Transportation Industries Inc., through its subsidiary Springfield Terminal - another U.S. rail company, owning Maine Central, and Boston and Maine, and operating in New York, New Hampshire, Vermont, Massachusetts, Connecticut and Maine

iii Railroad Development Corporation, Pittsburgh-based rail company

III Financial interests: \0 AMP insurance

iii Morrison and Co., merchant bank III National Mutual insurance

\0 Noel Group, New York merchant bank III Brierley Investments Ltd

\0 an unnamed Japanese company

Page 29

(Sources: "NZ Rail short-listed", and "North

American rail company attracted", 27 "Ports

join investors in bid for NZ] "Bids for

NZRai!", 22 June "Bids close for New Zealand Rail", 7 July 1993; "Brierley bids for NZ Railn, 10 While a number of Aotearoa owned interests are mentioned in the above list, none were without overseas partners. Richard

spokeperson on SOEs argued sounding consortia: those involving the He thought it would give them an unfair competitive advantage. Along such roads do corporatisation and privatisation lead. He also rightly criticised P. and O. Shipping as a bidder: "With its associated companies, P. and O. handles 60 per cent of New Zealand's exports", he said. ("NZ Rail buyers short-listed", Press, 27 April 1993.) Pity he doesn't propose doing something about it.

As usual the government had sweetened the cake, Primaril y, much of the dirty work of "rationalising" had already been done. Railways are beginning to make a comeback ill the U.S., and the sell-out is coming just as that possibility looms here. As Alliance leader, Jim Anderton it: "Taxpayers have spent approximately $2 billion in the last decade modernising rail. Now that it is making a profit the government is throwing away that billion investment for a mere $400 million". ("US-led consortium pays $400m for NZ Rail", Press, 21 July 1993). 111C 17,000 jobs lost in the process had been added to only two months prior to the sale with the announcement in May that a further 120 maintenance workers would be laid off. The National Union of Railway Workers claimed these were just the strut of another 1,000 lay-offs. ("NZ Rail to shed more SI workers", Press.A May 1993.) Then, as part of the deal, NZ Rail land is reportedly to be administered the (still state-owned) Railways Corporation at a peppercorn rental of $1 per year ("Rail bids allegation", Press, 7 July 1993). It makes unusually good sense that at least the land remains in public ownership. It is not so good that 11 realistic rental is not

extracted for it One rule fOK State house tenants, another for werc.

The merger of the of 1I"lr';!liVil'~ .. :illll'

~"",u'k",,,, Ltd and Foodland Associated Ltd (FAL) of

AustJrali~ gets this month. Coles Myel' New

Zealand of the Australian company, has

sold a 38, 14 per cent share holding in Progress! ve to F AL for (Coles Myer had a 38.6 per cent share holding; it is not dear whether it is retaining a 0.46 per cent share holding, or if there is a mistake.) This will leave Progressive 73 per cent overseas owned. In addition, Progressive has approval to issue up to 60 million ordinary 50 cent shares to Poodland (NZ) Holdings Ltd (the Press reports that 54.6 million were issued at 185 cents a share). This will give PAL a 57 per cent share holding, and control, of Progressive. Progressive is also taking over F AL (New Zealand) Ltd for $UH million 10 complete the merger. This will give the merged group control of the Countdown, Supervalue, Foodtown and 3 Guys supermarket chains, the Georgie Pie restaurant chain, and grocery wholesaler and retailer, Rattrays. This will include 83 supermarkets with 34 per cent of supermarket sales in Aotearoa, at $2 billion. ("Foodland set to take effective control of Progressive", Press, 16 June 1993.) The supermarket trade is now shared between Foodstuffs (a co-operative of 1100 independently owned stores) with 55 per cent, Progressive/Pal. with 34 per cent, and Woolworths (owned by Dairy Farm International, a Jardines company, of Hong Kong). Despite Consumers' Institute misgivings, the Commerce Commission could see "no ground for concern about the impact on competition." ("Merger 'not a threat'", Press, 16 June 1993). Foodland also partly owns the Farmers/Deb chain, which it bought in a 50.01/49.99 per cent joint venture with the Maori Development Corporation in November 1992. This includes Deb New Zealand Ltd (the former Woolworths variety goods chainj.James Smiths Department Stores Ltd, FTC Holdings Ltd (Farmers Trading Company Ltd), as wen as the Toy Warehouse chain.

With the South Island Casino in Christchurch already underway (see June decisions), the Auckland one is now making an appearance in the OIC's decisions. It appears that two companies are being set up to ram one, of the proposed casinos: Auckland Casino Ltd, which will "run the Casino premises but not operate the actual gambling activities, which will be carried out by a separate company", and Auckland Casino Development Ltd which will "carry on business developing and operating associated facilities to the Auckland Casino including an Expo-Pavilion, Hotel, Cultural Centre, car-parking building and Entertainment Centre," Both will be SO/50 owned by New World Development Company Ltd of Hong Kong and the National Maori Congress, described as representing "the 43 Iwi that were signatories of the Treaty of Waitangi," Naturally the Commission has no doubts about the usefulness of this project "the Commission is advised that the establishment of a successful Casino operation in Auckland win have significant benefits for the Auckland region as a whole. Tourist numbers are expected to increase and numerous new jobs created." Now, whose glossy will it have

that from?

the Casino licence and wants Notorious

New York

company Maxims lVlAllMl!';"""",,, operator licence if the bid succeeds. He is graciously wining to allow his name to be associated with the Casino "if that's what sells best". Mr Trump has all the credibility back home that Alan Hawkins or Robert Jones have here. New York's former mayor, Ed Koch called him "greedy and piggy", and he is reportedly hovering near insolvency. "Mr Trump arrived from Hong Kong yesterday, accompanied by a for an eight-hour stay that included a tour of the station, a with the Casino Control Authority, a Maori welcome and a round of news media interviews.

A rival for the licence is a Investments Ltd-backed

project, Sky City (or Sky Trump: "I just think that

while the semi-local person Ron Brierley) in this case

seems to have the I have the people who were here long before that .- and that's the Maoris." Where the colonialist in the and Country found a pliant priest to justify the righteousness of his cause, the modem transnationalist in Aotearoa finds a pliant Maori capitalist

Battle has been entered with the operator pledging "Maoris would be employed in all phases of its operation." Where Donald Trump has the National Maori Congress to bless him on his way into Brierleys has Dr Pita Sharples, Mr Waari Ward-Holmes (chief executive of the Maori Development Corporation), three other Maori. In making the employment promise to the Casino Control

Authority, Sharples a letter from Promus, the

parent company of which will operate the casino,

to support the pledge. Dr chairman of the H03ni

Waititi Marae and a associate, professor to the faculty

nU',-",Jl"HU, is part of a group of Tower casino proposal rather than the Auckland Station project. The group,

including the chief executive of Maori Development

Corporation, Mr Waari believes the Sky

Tower proposal offers Maoris more benefits. The Auckland Maori Council has written In to any illusion'

that they for other than themselves and challenging

their right to the wider Auckland Maori interest.

In evidence, Dr a letter from the vice-

president and controller of the Promus companies, Mr Mike

Regan, had a record of ensuring

30 per cent of its came from ethnic minorities.

Mr Regan said in consultation with his group, Harrah's

would put Maoris into every of the casino operation.

Sky Tower is 80 cent owned the Brierley group and

20 per cent by Harrah's, Maori jobs",

Press, 10

The

Souti1lland Plantation

'L,!;·m<!lallllJ). .Ud is a further

it is buying it for production forestry to "provide wood for

export to the Japanese pulp and paper See the

June 1993 commentary for details of previous by

this company, which include another Otautau property.

A further block of forestry cutting rights is being acquired by ITT Rayonier New Zealand Ltd (wholly owned by ITT Rayonier Inc, U.S.A.), the largest private owner of Aotearoa forests (see previous months). It is 92.7 hectares in the Manawatu forest, which is owned by Manuka Holdings Ltd. It is not clear if Manuka owns the entire forest or just those 92.7 hectares of cutting rights. The amount paid has been deleted from the decision sheet released to us.

And the Merrill and Ring/Green Crow U.S. consortium, MRGC Company has been permission to "acquire forestry cutting rights over afforested land in New Zealand provided such rights do not extend beyond 2 years and the consideration payable docs not exceed $10 million." In other words, MRGC has a green light to buy up forestry rights up to $10 million per time, without further surveillance. Meanwhile, it has acquired a further 10 hectares of forestry cutting rights in Marlborough, this time at Robin Hood Bay, Port Underwood, Martborough Sounds, for an undisclosed figure. The vendor is Gill Construction Co Ltd, which "owns substantial forestry interests in the Marlborough Sounds and is selling the cutting rights to this block to ensure the cyclic nature of it's [sic] overall forest management programme. Gill Construction intends to replant the block."

Juken Nissho Ltd (85 per cent owned by Juken Sangyo Co Ltd and 15 per cent owned by Nissho I wai Corporation of Japan) has approval to add buildings and plant to mills at Kaitaia and Masterton. Juken Nissho "is extending its capacity (estimated cost $60 million) at both sites to increase output of timber, plywood and reconstituted plywood products. The Commission is advised that the additional machinery will be used to process timber from J uken' s substantial forestry resources in each region." See the June decisions for further details. Of interest this month is a special condition of the approval: "That the applicant docs not extend its activities into commercial fishing within the exclusive economic zone without prior consent of the Commission." This seems to be tacked on as a standard condition to many, but not all, of the rural land sale approvals.

In Northland, a Singaporean company, owned by Messrs Chua and Lee, has permission to acquire a 557 hectare rural property at Mangamuka, Northland for approximately $4 million. "They propose to selectively log the 380 hectares currently planted in Pine and also propose to plant the rest of the property as well as replanting the areas logged." The vendor is Whangarei Hotel Ltd which docs not have the money to complete the development of the property.

In other rural land:

• Two Singaporeans who had bought land intending to

settle are

Assurance or Australia and New Zealand

a subsidiary of The Prudential Assurance Ltd

of the U.K. for J "Due to a in plans they

n"'-"""'h, to Prudential who owns an adjacent block which is used for deer farming. The farm being acquired will be integrated into the deer operation which will enable Prudential to diversify its deer breeding and velvet production activities."

• Two Hong residents, through their company, Top Time Ltd, are buying 11 company. Asherah Hoidings "Ltd which owns a 14.1156 hectare rural property in Littles Road, Queen. s town for $210,100. "''They intend to construct a permanent residential dwelling on the property which they will use as their permanent residence." It is being sold by Fordyce Farms Ltd.

• A U.S. couple are buying a 194 hectare rural property at RockeU s nay, Wananalki, Northland for $405,000, via the owning company, Andras Properties Lad. They "wish to acquire the property as a lifestyle block 011 which they propose to reside," A bit of money win be made of the side though: "The Commission is advised that the Shaws propose to create property fenced lots suitable for grazing, horticulture and/or runoff facilities which will be leased 1.0 local farmers,

• Eight Taiwanese are buying 55 per cent of a company, Hllaroy Holdings Ltd, which owns a 13.9830 hectare farm in Tongue Farm Matakana, Warkwortb. They are paying $55 for the 55 per cent interest, but the company will issue them with a further 20,345 $1 ordinary shares (issue price not stated) and the Taiwanese will lend the company $1 ,500,000 to repay existing debt The farm is "in urgent need for a cash injection". The present owner will be retained as farm manager, and "it is proposed to develop part of the property into a pri vate resort with accommodation for eighty guests and this will result in significant employment opportunities both in the construction and operation of the resort."

• A company owned by three U.S.A. Carolina !Farms Ltd, is spending $4.3 million buying two adjoining farms on State Highway 25, Whangamata, One is 482.1457 hectares, sold for $1.4 million; the other is 171.3328Iu .. xtares, sold for $2.9 minion. The new owners will keep the previous owners on, leasing back their former properties. The new owners "perceive New Zealand to be a good place to invest particularly with the potential in the forestry and farming industries." Clearly absentee landlords.

• Telecom Mobile Commnnicatlons Ud (subsidiary of U.S.A. owned Telecom Corporation of New Zealand Ltd) is leasing another small plot of rural land for its yuppy phone network. Ibis one is larger than usual at approximately 2.9 hectares, and is owned by New Zealand Forest Products

now a subsidiary of U.S.-controlled Carter Holt

Harveys. It is situated at north of

12.5 million Brown and and Maori

Il.A""'M:<",Ud per

The U,S. sellers have companies that own. the shares:

Fernbird Enterprtses and Ulric Projects Ltd, The remaining 30 per cent of QINZ will remain with the Maori interests, with whom CDL have agreed to inject another $135 million into QINZ by way of convertible notes ("CDL to buy 70% stake in Quality Inns", Press, 17 July, 1993). CDL is paying a current value of $17.2 million for the 70 per cent shareholding according to thePress ("CDL clarifies deal", 20 July 1993). The Quality Inns chain owns six hotels, leases four, and runs another three under management or franchise contracts. It has a total debt of $50.2m, and assets of $65.2m ("Countrywide funds Quality Hotels", Press, 7 September, 1993). CDL's parent company owns the Choice Hotels master franchise ill eight Asian countries, and has, since the Quality Inns purchase, bought Kingsgate International's five Aotearoa hotels, making it the largest hotel chain in the country ("Hotel chain valued at $60m", 10 August 1993, "CDL buys Kingsgate NZ hotels", Press, 9 September 1993,). CDL Hotels New Zealand Ltd is 72.3 per cent owned by CDL Hotels International Ltd, in tum ultimately owned 52.8 per cent by City Developments Ltd of Singapore, 37.8 per cent by offshore institutional investors and 9.4 per cent by "the Hong Leong Parties of Singapore",

A Singaporean company, Newmarket Newzealand Ltd, New Zealand. branch, (sic) is buying two Auckland commercial properties from companies in receivership or on the brink, It is buying the KPMG Peat Marwick Centre, 9 Princes St from the DFC, and 102·112 Symonds Street from the Girvan 'group' of companies, sold by the BNZ as mortgagee in possession. Price is withheld by the Commission in both cases,

Sir Ron Brierley's current investment plaything (a retirement hobby after leaving Brierley Investments Ltd), Gutnness Peat Group PLC has approval to fully take over art dealer, Dunbar Sloane European Art Ltd, at market price for the 15 million ordinary shares (80 cents). Dunbar Sloane was previously 22.8 per cent overseas owned - all of that owned by Guinness Peat. Guinness Peat is 39.77 per cent owned by Brierley Investments Ltd, 11.09 per cent by Lord Kissen of Camden, and 3.12 per cent by Brierley personally.

Containers Packaging (NZ) Ltd, a subsidiary of Amcor Ltd of Australia is buying John Sands NZ Ltd for an undisclosed amount, John Sands was owned by the Liberman famlly of AnstraH!ll and is operating at a loss.

A Minish'Y of" Defence controlled company, SCS New Zealand Ltd, 80 per cent owned by Singapore ~ ..... ~.~, Systems Ltd, is buying "all of the business assets

August decisions

A Singapore Ministry of Defence controlled company, SC§ New Zealand Ltd, 80 per cent owned by Singapore Computer Systems Ltd, is buying "all of the business assets (including current liabilities)" of the computer sales chain, Computer Land New Zealand Ltd from the franchise owner, Computer-Land Corp of the U.S.A. for $11,131,000. The Computerl.and parent is apparently ill some financial trouble and is trying to reduce it'> debt by asset sales internationally. Computerl.and New Zealand, which recently bought out Christchurch Apple computer dealer, Computerl'lus ("Computerland takes on new Apple team", Press, 23 March 1993), has had a chequered history. The first Aotearoa franchise was in Christchurch, taken up by a company founded by the Foulds brothers, from where it has expanded to retail outlets in Wellington and Auckland, plus franchise arrangements with another 12 dealers. Cornputerl.and, U.S.A., franchises one of the biggest computer retail chains in the world. In January 1990 the Foulds brothers were unceremoniously chucked out of the firm they founded and the chain was: taken over by the U.S. company directly. The Foulds came into work one day to find their U.S. masters had locked them out (ComputerWorld New Zealand, "U.S. chiefs shut out chain's NZ principals", 29 January 1990). They then founded Southrnark Computers (South Island) which has been in bitter rivalry with Computerl.and ever since, and puts some marketing emphasis on its local ownership. Ironically, barely a week after the Computerl.and sale to the Singaporean company was announced in early July, their company was in the news denying that it too was being taken over by an overseas company: its namesake in Wellington (from whom the Foulds licence the Southrnark name) has been taken over by Fujitsu New Zealand, a subsidiary of Fujitsu Australia, in tum owned 80 per cent directly by Fujitsu of Japan and 20 per cent by ICL (a British Fujitsu subsidiary) ("Southmarlc SI head: We are not for sale", Press, 13 July 1993).

The Singaporean parent company, Singapore Computer Systems Ltd, is controlled by the Singapore Ministry of Defence. It is listed on the Singapore Stock Exchange but is a subsidiary of the Singapore Ministry of Defence-controlled Singapore Technology Holdings, Singapore's largest industrial group which has subsidiaries in shipbuilding through to aerospace. It is active in Malaysia, Hong Kong, Indonesia, Brunei, Australia and Burma. It holds the Computerl.and master franchise solely or jointly in Singapore, Indonesia, Australia, Hong Kong and China. (See Press, "Singaporeans buy Computerl.and", 2 July 1993, and "Singaporeans reassure Computerl.and NZ staff', 6 July 1993).

A Saudi Arabian Sheikh has to buy up to 49.9

per rem of Salmon salmon for

minion ($US per share). Sheikh SI!Riman family own the O!ayarn of companies, which owns Cempetrol Pacific Ltd, the local agent for the purchase. According to the orc, already owns 18.1 per cent of Regal (but S<'..e below). The Olayan describe themselves as "a significant participant in the food and food related industries." Regal Salmon, which took over the domestic salmon farming interests of New Zealand Salmon in 1992, and recently sold a 68 per cent share of Cellier Le Brun to Appellation Vineyards (see June decisions), was in the midst of another takeover attempt by Salmon Smith Biolab (SSB) when the Olayan purchase took place. SSE had unsuccessfully offered the equivalent of between $0.98 and $1.04 per share for afull takeover ("Regal

Salmon rejects takeover offer", 23 July 1993). Then

a "mystery buyer", represented Jordan Sandman Were,

entered the market at $1.15 per share and reportedly bought up 18.7 per cent of Regal's shares, aiming for 24.9 per cent. "Under the Securities Amendment Act, any person who becomes a substantial security holder in a public issuer must give notice the [stock] exchange as soon as the person knows, or ought to know that they have become a substantial holder. Mr Giffney [of Jordan Sandman Were] said his client had been made aware of the requirement However, there had been some difficulty in locating his client yesterday as the client resided offshore. The broker expected the exchange would be informed today." 'The Securities Commission had even then been examining the trading of Regal's shares in the six days before the SSB bid, after the share price rose by one third in that time ("Mystery buyer takes Regal holding", Press, 30 July 1993). By 31 July the buyer had been identified as Competrol Pacific, "a Hong Kong company owned by Olayan." "International Capital Corporation (ICC), of Wellington, is acting on behalf of Competrol, ICC's chairman, Mr Errol Clark, was not prepared to say what nationality the principals of Olayan were, but added that the group had considerable food and consumer products trading in Saudi Arabia. Olayan had its main offices in

Watchdog

with other offices in Saudi Arabaia

31 3 SSB had

takeover",

The Mid Gty Manners Wellington is being sold to a Singaporean company for $16.5 minion. TIle Centre has been owned a consortium of banks since the Chase Group went into statutory management. It is being sold to DSJ Pte owned 55 per cent by the Tan family., 35 per cent by the Lee family, and 10 per cent by the Ng family, all of Singapore.

And the Central Tower and Cashel Street Car Parking Buildings, Christchurch are sold by irs owner (Cashel Street Parking Building Ltd, in financial difficulties) to Grand Central (NZ) ltd of Singapore for "approximately $10 million". Grand Central is a subsidiary of Hole I Grand Central Singapore. The Centre Tower "is vacant office space" which Grand Central intends "to convert into a quality hotel catering for 11 growing New Zealand tourist trade. Numerous new jobs arc expected to be created." This appears not to have been reported in the media. Grand Central has been on of a buying spree in Aotearoa since May. In May it bought Plimrner City Centre, Wellington for $15.75 minion and the DB Tower, Auckland for $7.1 million. It also owns the Grand Central Building in Manners Mall, Wellington ("Investor spends $23m in week", Press, 5 June, 1993).

'Three of the biggest overseas owners of Aotearoa forests feature this month, increasing their forest holdings.

Juken Nissho Ltd, owned 85 per cent by Juken Sangyo Company Ltd and 15 per cent by Nissho Iwai Corporation, both Japanese companies, is buying the 1.819.4662 hectare Waikatea Station on the MangapahilPukeor3ta Roads, Nuhaka for $1,115,000. "The property will be integrated into Juken's afforestation programme designed to supply the new mill under construction near Gisborne."

a further H 0 hectares of rural land in Southland is being acquired for to wood for export to the Japanese pulp and paper industry, by Southland Plantation

Forest Company of New Zealand which is 51 per

cent owned Ltd and 49

per cent owned Ltd of

The price is Southland Plantation was set up in

September 1992 with a of.2 million. In December that year, the company bought 1295.J907 hectares of land

at Lillburn Southland for and a further

406.3044 hectares at Otautau for With the

purchases in June and this year, Southland

Plantation now has 3211.4951 hectares of land tor forestry

in Southland, for which it has All the wood

for export to the pulp and paper

M.K Hunt is also involved

company in Southland called

South W cod

which has 316301228 hectares of

land it is developing into eucalyptus forest for chip exports.

And U.S. owned MRGC

21no SO per cent Green Crow

of the hall won a tender to cutting rights in

an afforested block in Clover Marlborough, under

which MRGC must the forest The area of the land and the price have been withheld by the OIC. The land is owned by Tetaraaui Partnership. This adds to MRGC's forest. holdings of a half share in a company owning 2901 hectares (acquired in May) and a further 97 hectares (acquired in July) of Marlborough forestry land.

Celebrities hit the OIC: Sam Neill and family - resident in Australia - through their Korlmako Trust are taking a 33.3 per cent shareholding in Lake Hayes Vineyard Ltd for$3,300. The latter company owns a 31.1 056 ha, property at Gibbstcm in the Shotover Dlstrict, Otago.and is selling 8_130 ha, to the Trust The 8330 ha, will be used for grape growing for "the overall viticulture operation". Lake Hayes Vineyards Ltd will produce wine from the grapes for local and offshore markets. Sam is from the Neill family that founded Wilson Neill, since November 1992 controlled by high-flying US entrepreneur, Phillip Adkins, through his Guernsey registered Cadenza International with the 49.72 percent shareholding he bought from the previous owner, Magnum after they got their subsidiary into trouble through too rapid expansion.

Four Malaysians with permanent residency in Aotearoa are buying, through their holding company, Borneo Sawmill (NZ) Ltd, the sawmill Oxford Sawmill, including 1.6463 hectares orland at 8 Mill Road, Oxford for approximately $265,000.

A company owning land atflroadwood, Far North District, is selling off parcels of land which it will then manage for forestry development. One] 9.0 hectare block is being sold to the LIJ family of Taiwan for "approximately $65,549", and a 20.0 hectare block to the Tsai family, also of Taiwan, who "are considering applying for New Zealand permanent residency" for $74,250. 'The Aotearoa company is Far North Afforestation (NZ) Ltd, which was set up in 1986 "to promote forestry investment in the area".

The Japanese company, Southern Wasabi Ltd has approval for a "profit a prendre" over 4.8460 hectares of land at Cargllls Rd, Barry town, WesUand in order to increase the scale of its Wasabi growing for export to Japan. "To date the operation has been an experimental one utilising approximately 1 hectare of land," Southern Wasabi is owned 25 per cent each by Tominaga Boeki Kaisha Ltd and Marui both of and three Aotearoa residents with 16.66 per cent each. In March we reported that

Another Japanese buyout of its raw material supplier is evident in the acquisition of a 50% shareholding in Southern Wasabi Ltd by two Japanese companies, Boeki Kaisha Ltd and Marui KK. (70% owned by Yasuji Iguchi). Each company has 25% of

Southern Wasabi, costing them $400,000 each.

Southern Wasabi "has successfully completed their first commercial harvest (of W asabi) and successfull y exported to Japan the resultant crop. The vendors see a clear path for future expansion. However, they feel the success of the venture is dependent on the benefits that will be provided by the applicants, including supply of plant, material, technical expertise and guaranteed market access."

In other rural land:

• The Eamon Cleary Family Trust (benefiting the Cleary Family of Ireland) is buying a company Luthien Holdings Ltd which owns a 261.5687 hectare property on Hal! Road, Te Kauwhata for $1.5 million. The family have applied for permanent residence in Aotearoa, but will be employing a local farm manager and a farm consultant. Mr Cleary is experience in intensive beef fattening in Ireland. • Three U.S. residents, two of whom have permanent residency in Aotearoa, the other seeking it, are buying a 14.91 hectare "mrs. lifestyle property" near Whangarei for $600,000. They are purchasing it through Vivaldi Holdings Ltd and plan to live there. In the long term they plan to develop the property into a "high quality fully serviced housing development." See September for further developments,

• An Australian family, the Goat family, is taking 100 per cent control of the company Secure Resources Ltd which owns a 56.8821 hectare property on Mangawero Road, Matamata. The company was previously owned 24 per cent by T.M. Gott, the balance (76 per cent) by Aotearoa shareholders. "Secure Resource Ltd currently leases the property to local farmers for grazing although it was originally purchased in July 1992 (in a run down condition) with a long term aim of establishing a self sufficient model stud farm .... Mr Gott ... has indicated that he will fund the future development and establishment of the stud farm from his own resources. The Commission is advised that only Mr Gott has the financial resources to fully develop the property so it was decided that the Gott family would acquire 100 per cent of the capital."

A horse-slaughtering and processing plant owned by coyly named Dutch firm, Clover Export Ltd, in turn owned by Exim Meat International BV of the Netherlands, is acquiring a 25.9988 ha property at Friend Road, Charlton 4 RD Gore for approximately $75,OOO."The supply of horses is erratic and this hampers the slaughter operation. Clover Export state that the property is being acquired to enable it to establish a buffer stock: of horses which will ensure that the plant can operate at its optimum level at all times." All the meat is exported, with export receipts expected to be $4 million in 11 full year's operation.

Macraes Mining Company Ltd, 39 per cent owned by Union Gold Mining Company N.L., Australia, has been give approval to make a rights issue to shareholders to 11 maximum of 33,000,000 unsecured subordinated convertible notes, convertible to 33 million 20 cent shares. Macraes is a successful gold miner, making a practice of reworking mines long abandoned, both in Westland and in Central Otago.

In internal restructuring, Vestey Group subsidiary, Weddel Aotearoa Ltd is over Select Downs Ltd, also a Vestey subsidiary. Calhena Holdings Ltd (to be renamed Yates New Zealand Ltd), a subsidiary of'Industrial Equity Ltd of Australia, is acquiring all the assets of Yates New Zealand Ltd, Webfiing and Stewart Ltd, Analytical Services Ltd, and F. Cooper Ltd for "approximately A$24,500,OOO" .

Watchdog

. URUGUAY ROUND

Page

E

s

FF

lntshed Accordingly

-Murray Horton, BP

Readers who make it as far as the signature on the Nudging letters sent out to keep me in the style to which I've become accustomed will notice that there is a new signatory.

Don Murray - treasurer of the CAFCN ABC Organiser Account since its inception in 1991; Anti Bases Campaign (ABC) treasurer for years; CAFCA committee member; and central figure of the ABC's Bearded Patriarchy (BP) - is permanently moving to Nelson, for personal reasons. He has been replaced as Organiser treasurer by Bob Leonard, another BP; and as ABC treasurer by Melanie Thomson, daughter of Warren, yet another BP. But it's fair to say that Don is irreplaceable,

refer readers to my profile of him ("Don Murray - 'people like him are in. short supply'"), in "Peacelink" (September

"Don Murray is familiar to anyone who has been to any of the Waihopai demos. Travelling in his extraordinary Cornmer van (with a map of Waihopai on the side, and the logo "Spies Inc" from an earlier Harewood demo), he looks every inch the old beatnik. He has a memorable voice for demos, ranging from a whisper to a stentorian roar that fills any city street.To the members of the Christchurch ABC, Don is a legendary figure. He turns up to meetings literally hours late, then sleeps through what remains of them. Don's posters, banners and badges are unique, quirky works of art ... He is a mathematician by training, a graduate with a double major, yet he still can't spell. His banners and posters have spelling mistakes which

make them collector's items or, at the very least, conversation pieces. He is an activist who thrives on the lunatic direct actions of the Christchurch ABC, with an extraordinary range of practical skills to contribute to them. His DIY masterpiece was a big medieval type catapult assembled outside Waihopai to bombard the satellite dome with bullshit, Literally ...

Wearing my CAFCA hat, and speaking as one reliant on Don as my paymaster for 2 years, I would only add that Don wall quite often days late for meetings, not mere hours. Always late and always in a mad rush, as backblock traffic cops can verify. I have a vivid memory of sprinting down my hall after him, as he ran back to his car shouting that he was late for his plane to the Chathams. I wanted to check that he had signed my cheque, which could never be taken for granted,

Don's extraordinary DIY skills are not confined to designing siege weapons for Waihopai. He has put in hundreds of hours of work at our place, seeking no greater reward than a meal, a cup of tea, and good company, He played an invaluable role in helping my wife Becky adjust to life in a totally different culture (and climate). I've seen him at his happiest when turning our dining room into downtown Baghdad, running amok on our hedge with his accursed chainsaw, or sitting in the gutter unblocking our drains. Between them, he and Becky converted a junk room in our house into the CAFCNABC office.

I will personally miss Don as the very best of friends, one with whom I could be completely honest When I lived alone (bar 4 bloody cats), Don and I became very good mates. I will miss the silly telephone repartee. He answers my calls with "Don Murray". I reply with "Murray Don" (my middle name). Never mind.

Photo: TONY' WEBSTER

CAFCA and ABC meetings won't be the same without the query (usually sometime between 9.30 and 10.30 p.m.): "Is Don coming?" Mind you sometimes. he could fool us (and himself), turning up a day early.

You usually have to be dead to be featured in the exclusive pages of "Watchdog". As we assume that DoI'I will be late for his own funeral, we thought we'd. better give him his celebrity roast now. We all wish him and Elaine the very best in their new life together in Nelson.

Page 36

N

LAN

CA

B

derequlatlo

DIF

does

Wolfgang Rosenberg; NZ Monthly Review Society; 184

How appropriate that during the current fad for dinosaurs, there should appear a new book by an economist often derided as one (import controllosaurus"), with a foreword and afterword by Jim Anderton and Bill Rawling, two others consigned to the same extinct species by the smart money. Wolfgang Rosenberg makes no apology for being an economic and political dinosaur, indeed he aims to make New Zealand a veritable economic Jurassic Park. The analogy is apt - after all, dinosaurs ruled the Earth much longer than the "clever" humans have managed; the free marketeers have wrought the equivalent of a comet strike on the New Zealand economy, so now the pendulum is swinging back towards the "dinosaurs".

Rosenberg's new book actually started as an update of his 1986 one "The Magic Square", which was a timely and telling critique of Rogernomics, The Magic Square is the four key indicators of economic activity: full employment at fair wages, independence from foreign creditors through balance of payments equilibrium, economic growth, and price stability. It is his contention that New Zealand, by active State policy, achieved this balance between 1938 and 1975, making us unique in the capitalist world.

And that the policy of both National and Labour governments since then have deliberately wrenched the NZ economy away from that balance, tilting the "playing field" in favour of multinationals and the local rich, and creating mass misery at the other end of the scale. Indeed the only

$24.95

-Murray Horton government economic policy since 1984 has been to obsessively concentrate on lowering inflation, to "get the Government out of Business" by handing over public assets to private ownership, and to grind the faces of the poor.

Bill Rowling describes this book as "an encyclopaedia of economic and political fact". The most sobering of the many tables records 1974 unemployment as less than 1000; today it is over 250,000; total foreign debt was $1 billion; today it is $67 billion (but weren't all those assets sold off to pay that debt? That's another story). For those familiar with Wolfgang's many other books, his material will be familiar. But this clumsily titled latest one does have welcome new material on the multinationalisation of the world economy, and the horrific implications of GAIT, which is quite the opposite of the salvation that it is portrayed as by politicians and their client media.

For those looking for socialism, they won't find it here. Rosenberg strictly works within the tradition of social democratic State capitalism. There will be many who feel that his prescription of a protected economy via import controls does not go far enough. But none can argue with his central point that any economy must be planned, and that only the Government can do that. The wreckage left by our current unplanned economy is all around us. This is a must read for all born again dinosaurs.

"IN DEEP WATER?" SO D 0

We have now sold out of "In Deep Water?", Murray Horton's study of the NZ fishing industry. There are no plans to reprint it, as it would require updating and rewriting in at least two chapters. Proof of our alarming respectability is the fact that the last 6 copies were sold to a president of a provincial Federated Farmers chapter. The next order (which we couldn't meet) was from one of the oil multinational Seven Sisters. Thank you to all those who bought it. We more than broke even.

CAFCA expresses our deepest sympathy to the following members who have suffered losses in their families recently.

To Owen Wilkes, whose 87 year old father Ron, and 84 year old mother, Tory, died within three months of each other.

To those who still want copies, we can supply a list of bookshops and libraries which stock it We recommend YOIl to One World Books, 177 Karangahape Road, Auckland; Box 68-419, Auckland.

Murray is still working on "Clearcui", his much bigger study of the NZforestry industry. That has been delayed by his 3 week speaking tour, and by preparing this "Watchdog". It will cost $10, and advance orders can be sent to: CAFCA, Box 2258, Christchurch.

FAMI

To Bob Consedine, whose 21 year old daughter Suzanne, a Radio New Zealand journalist, was killed in a tragic and controversial accident on an Outward Bound course. And to Brian & Lilli Stephen, whose 26 year old son, Edwin, a talented painter, died so tragically.

Watchdog

Banks and "Ethical Investment"

CAPCA lately received a letter asking for "any information we might have on the banks in New Zealand and their connection to international banks, Third World debt and environmental degradation,mld the arms industry." Readers may be interested in the information supplied in our reply and may be able to contribute further information:

Such information does not easily come to hand. I can give you some information on the main banks in Aotearoa and what I know of their international connections, but it would take considerable work to give you much more than what I outline below. You may have to go further afield 1.0 find out more about the transnational owners mentioned. More information on their links to Third World debt should be easy enough to discover, but links to environmental destruction and the arms industry will be more indirect and take some burrowing!

Other sources of information you could use include:

New Internationalist P.O. Box 4499 Christchurch

Multinational Monitor P. O. Box 19405 Washington DC 20036 U.S.A.

The Money Lenders:

Bankers in a Dangerous World, by Anthony Sampson.

Hodder and Stoughton, 1981, Coronet 1982.

ANZlPostbank

Owned by ANZ, Australia. One of two foreign banks (through its subsidiary ANZ Grindlays) to be implicated further in India's biggest financial scandal (along with the Standard Chartered Bank). The Bombay scandal involved dummy deals to cover up losses or camouflage transactions by favoured Indian sharebrokers (Press, 9 March, 1993).

Like Westpac, in Australia it was was named as being involved in the corrupt trade of private information from government sources in 1992.

ASBlWestland SO

Westland SB has now been absorbed into ASH. They are 75% owned by the Commonwealth Bank of Australia, which was also named as being involved in the corrupt trade in private information mentioned for ANZ and Westpac,

BNZ

Owned by the National Australia Bank (Australia), which was 49th biggest bank in the world by profit last year, and has 15 per cent ownership outside Australia. It owns three

banks in the U.K.: Yorkshire Bank, Clydesdale Bank (Scotland) and Northern Bank (Belfast), none of which did well last year.

Deputy Chairman is Mr Kerry McDonald, managing director of Comalco, subject of many scandals in Aotearoa, and heavily involved in extremely destructive mining in Australia. Comalco is part of CRA, itself part of the world's biggest mining company, R1Z (Rio Tinto Zinc) of the U.K. See Westpac below.

Countrywide Bank, United Bank

Owned by the Bank of Scotland, which has assets of $80 billion and also owns the Banks of Wales, the British Linen Bank (Chester) and the NWS Bank (Edinburgh).

National Bank, Rural Bank

Subsidiary of Lloyds Bank, London. Lloyds was the world's seventh largest organiser of syndicated credits internationally in the period 1976·1982 (U.N. figures), and one of the biggest to Argentina and the Philippines in the period 1974-1982. It was a member of steering committees overseeing the restructuring of debt in Argentina and Uruguay in the 1980's (see comments below re Citibank),

Trustbank NZ

This includes all Trustbanks except ASB, Westland SB, and Taranaki SB. It is the only major bank that remains in Aotearoa ownership.

Westpac

Owned by Westpac, Australia. Chair is John Uhrig, Chairman of CRA (Conzinc Riotinto of Australia, part of RTZ, U.K. - see BNZ, above). CRA is the biggest miner in Australia, and heavily involved in a number of extremely destructive schemes. One of the main forces opposing aboriginal rights to their ancestral lands. Owner of the Bougainville copper mine, the environmentally destructive and highly exploitative nature of which lead to the insurrection there: CRA can be described as the cause of the bloodshed in Bougainville. At least one other mining project in Papua New Guinea in which its behaviour has been criticised by the PNG government. We can supply a wealth of information on the RTZ/CRNComruco empire.

Westpac has also been involved in a number of scandals in Australia. It was accused of malpractice and fraud in the Australia in 1991 by Senator Paul Mcl.eanrinvestigated by the Australian Securities Commission in 1992 for the accuracy of its prospectus information; and was named as being involved in the corrupt trade of private information from government sources in 1992. In addition it has been suffering from similar problems to those the BNZ faced here in Aotearoa; bad management leading to huge indebtedness from large numbers of bad loans.

Watchdog

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Other mainly "wholesale", banks operating in Aotearoa include: Bankers Trust (U.S.), Barclays (U.K.), Citibank (U.S.), Hong Kong and Shanghai and Bancorp (Malaysia).

Barclays was the 10th biggest bank in the world by assets (1974-1985, U.N. figures), and Bankers Trust the IOth biggest by the volume of syndicated credits it organised 1976- 1982 (Barclays was 16th). Both lent heavily to the Third W orld, and were members of steering committees for restructuring debt in the Philippines and Colombia (Barclays), and Colombia, Peru and Bolivia (Bankers Trust).

Citibank has operations worldwide, including India, where it too is involved in the Bombay stockmarket scandal (see ANZ above). Citibank is part of Citicorp (U.S.) the biggest

bank in the world by asset"> 1914 .. 1985 (according to U.N. figures). Citicorp was one of the leaders in loans to Third World countries, leading lending syndicates, acting as coordinating to set up "bank committees" for major debtor countries in the 1980's in Argentina, Peru and Uruguay, and a member of steering committees for Philippines, Colombia (even though it had not lent LO Colombia) and Bolivia as well. These steering committees oversaw the restructuring of the debt of those countries, doubtless being heavily involved in the impoverishment that followed.

(Above information re Third World debt is from "Transnational Banks and the International Debt Crisis", U.N., New York, 1991. CAFCA has other publications on the Transnational banks from the same source.)

Current Comment

Telecom: obscene profits symptom of obscene social pollcles

The latest Telecom financial results graphically show the failure of economic policies based on privatisation and foreign investment, for all but a wealthy few. In the six months ended 30 September 1993, Telecom made operating profits of $421 million. In making those profits, Telecom paid out much less than half as much in wages and other staff costs - around $160 million. Its profits grew by 36 per cent, but its staff costs went down by 10 per cent - due largely to layoffs of staff.

After tax of $115.6 million, most of the net profit will go overseas, avoiding any "trickle down" in Aotearoa, Even though its two controlling shareholders, Ameritech and Bell Atlantic, have sold down their share holding to just under 50 per cent, the great majority of the remaining shares are still held overseas by various overseas owned financial institutions. And Telecom has recently reaffirmed a policy of paying out 70 per cent of earnings to shareholders. This is a U.S. style payout; here the ratio is typically 50 per cent paid out, 50 per cent retained for reinvestment. So even more goes overseas than for most overseas owned companies.

As if to emphasise the extent of its profitability - and to prove what a bargain the purchase was to its new owners - Telecom is buy back 20 per cent of its shares from its shareholders: effectively a tax-free payout to them of $472.4 million. This will raise its ratio of debt to equity funding from 33 per cent to 45 per cent, a ratio that its directors consider it can well afford.

Yet Telecom is still busy laying off its employees, creating more unemployment. Admittedly it does employ many contractors. These are frequently former employees it has made redundant. It. has shifted the risks of the ups and downs in the economy to those former permanent staff.

Services have improved - though only marginally for domestic telephone users - but at what social cost?

(Financial results from "Telecom ahead in half, but call revenue down", Press, 3 November, 1993. Dividend policy and buy back of shares from "Telecom shareholders vote on stock pian", Press, 19 November, 1993, and "Dividend policy unchanged", Press, 20 November 1993.)

Canadians step back from Free Trade

The landslide election results in Canada at the end of October, which almost wiped the pro-U.S., pro-NAFfA (North America Free Trade Agreement) Conservative Party from the Canadian Federal Parliament, are an overwhelming vote against free trade. From a country that has already experienced the job losses, cuts in social security and loss of sovereignty that the Canada-U.S. Free Trade area has brought, this is a strong and credible message that free trade endangers the welfare of working people, the poor and state beneficiaries. The new government -- no bunch of radicals --- nevertheless plans to step back a step from the Mulroney government's "all the way with the U.S.A." policies, and use public works programmes to reduce the 10 per cent

unemployment and revive the bruised economy. It has promised to renegotiate NAFf A.

The election is doubly interesting in that the new Parliament has a greatly strengthened Quebec separatist representation. The loss in national sovereignty brought about by free trade strengthens the desire for already disgruntled minorities 1:0 take whatever little sovereignty they can glean into their own hands.

(Sources: Press, "Liberals face battle to unite Canada", 28 October, 1993, and "New Canadian leader wants cooler U.S. ties", 6 November] 993.)

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In Watchdog Number Tl , November we that the government, through the New Zealand Qualifications Authority (NZQA), was attempting 10 give away the title Uni versity in order to attract overseas investment in tertiary education. This united the New Zealand Vice Chancellors' Committee (NZVCC, the voice of the seven existing, state .. funded, universities) with the main University staff union and professional association, the Association of University Staff (AUS).

The Auckland business school, Asia Pacific International, had applied to the NZQA for the right to use the title "University" so it could attract students - mostly from overseas. Both it and the NZQA admitted it did not meet the criteria that NZQA required an institution to meet to call itself a University. In fact Asia Pacific had previously been using the title, and had been ordered to stop by NZQA

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You've got to hand it to Comalco, it just goes on and on screwing the New Zealand taxpayer, courtesy of a succession of compliant governments and conniving bureaucrats. In August 1993 it finally signed a new contract with EeNZ (the new non-threatening name for the despised and bungling Electricorp). Naturally, like all of its contracts since it first latched onto this country (in 1963), all the terms remain strictly secret. Negotiations had dragged on, in secret, for 7 years ("Watchdog" 73 published 1987 Electricorp advice to the Lange Cabinet on the subject. We secured those papers from Treasury after a year long battle under the Official Information Act; and the "Listener" [19/6/93] ran them as a major story).

We are in a no better position than anybody else to comment on the new contract. However it was initially reported that the deal would effectively insulate Comalco from price rises that are expected to hit hard as natural gas reserves dwindle in the early years of the 21st century. Such a deal will also protect Comalco from the consequences of plans to separate transmission and energy charges that ECNZ is seeking to impose on its other customers. This was cited as reason enough to oppose the deal by Power for our Future's Molly Melhuish, who pointed out that the Government-appointed Wholesale Electricity Market Development Group was not due to report back until January 1994. She said:

"No cheap power should be made available to any industry. All consumers should get a shot at it" ("Press", 16/8/93). Comalco is regarded as such a rogue capitalist that even the staunchly Tory press criticizes it eg the "NZ Herald" (17/81 93) ran an editorial entitled "Cornalcos incomparable price". (The election result has put a big question mark over the creation of a wholesale electricity market).

Dr Keith Turner, ECNZ's negotiator and general manager, generation, described the new contract as updating the three currently existing ones - from 1963, 1981, and 1987. He claimed that the (secret) new price moves Comalco

- but was still using the name. The Auckland Asia Pacific International business school is part of a chain of Asia Pacific International institutions around the Pacific, based in Hong Kong.

Both the NZVCC and AUS consider that the granting of the title University to it, cheapens the title in the eyes of the rest of the world, and thereby downgrades the standing of our existing universities.

Wen, good news. The NZVCC took NZQA to court to overturn its decision. In October, the matter was settled out of court with both NZQA and Asia Pacific agreeing that it would cease describing itself as a university. NZQA has agreed to consult with the existing universities about guidelines to be used in the future to bestow the use of the term "university" on an institution.

ES IT AGAIN

significantly closer to paying the "full market level", but only "over time" ("Press", 23/8/93). The new terms are binding until 2012, but can be extended to 2022. Comalco has accepted a (secret) price increase, and also was given 180 days to decide whether it wanted to add an extra 35 mega watts (MW) to its requirements. For its part, Comalco undertook to improve its Tiwai Point smelter to the tune of $300 million, which will allow it to increase production by 1] % The interesting thing about this is that when Comalco was busting its gut, unsuccessfully, to secure ownership of the Manapouri power station, it said that failure to secure its own generating capacity meant there was no point in spending any money on a putative smelter expansion. Obviously that is no longer a Comalco imperative.

In September, TVNZ's "Frontline" examined the new Comalco deal, in a completely unpublicised documentary (Comalco had threatened legal action against TVNZ for a 1989 "Frontline" effort). This made extensive, but totally unattributed, use of CAFCA material. Although it was a much tamer affair than its 1989 predecessor (only half the length, and big on visuals with atmospheric music, as opposed to a clutter of bothersome facts), "Frontline" still incurred the wrath of Comalco NZ's managing director, Kerry McDonald. He officially complained to TVNZ that it was "not objective, and presented a one sided, negative view" ("Electricity Week", 27/9f)3). Specific grounds included that it ignored alleged refutations of the 1987 Electricorp papers stating that other power users subsidise Comalco by up to $1.5m per week (see "Watchdog" 73 for details), and Kakapo Kerry took particular umbrage at the use of the word "subsidy" at all in relation to Comalco. He much preferred "discount". Quite right, CAFCA learnt to discount anything Kerry said years ago.

For a company so obsessed by secrecy, headed by a man who even looks anal retentive, the "hung Parliament" election result must have been particularly inconvenient.

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During his 15 minutes of Alliance leader Jim Anderton said he wanted to discuss Comalco's new contract with the

born again consensualist Jim entered

into the New Age spirit saying Comalco would be

delighted to reveal contract details to all 4 in Parliament, but only on the that they kept it strictly secret! Above all else, the New Zealand taxpayer must not know. This is Kerry's mission in Hfe, and he must have breathed a deep sigh of relief when 52 Waitaki sheep shaggers saved the nation for Landslide Jim Bludger.

Goodbye Tasmania

"Frontline" compared Comalcos situation in both New Zealand and Tasmania, "Watchdog" 70 & 71 detailed its Australian manoeuvres, specifically in where it operates its oldest Australasian smelter, at Bell Bay. In March 1992, when the board met at Tiwai Point, Comalco's chief executive officer, Nick Stump, said that the company was weighing up its options in Queensland, Tasmania, and New Zealand, "They are all $500 million plus projects, The question is, who is going to be the first cab off the rank?" By which he meant, who was going to offer Comalco the best deal? The first answer came from Queensland, later in 1992, where the State Labor government to sell it

the Gladstone power which

Boyne Island smelter.

The second cab off the rank was obviously New Zealand, Our ever compliant Government and electricrats have offered it a suitably attractive deal, secret a'> always, That left only poor old Tasmania, where Comalco had been negotiating long and hard with the State Liberal government In buy, at mates' rates, some of the Hydro Electricity Commission's generating grid.

Talks broke down, and Comalco walked away from the table. It announced, on July 28, that because of it was scrapping plans for an $NZ8oom of BeU Bay. Accordingly, it was placing the smelter in "survival mode", and examining means of keeping it operating until Comalcos power contract expires in 2001. The dear implication is that it will then over 800 jobs. It immediately made 80 workers redundant

Comalco is 11 past master at ball squeezing 28 statement. it concluded:

and in its

"The fact that the company has not been able to reach agreement with the Tasmanian Government on the price for the transfer of power assets does not necessarily mean that the smelter win have to close

by 2001. If the Government was to

il.s posmon to the commencement of closure of the smelter, it might be to modernise the smelter at that time. This will on the

Government's perception of the value of the power and of the production, and wealth generated by the smelter".

How's that for a veiled threat Give us acceotaotc terms and

we continue to honour you with our presence. Failing that we're off to greener (with obviously greener negotiators). The Tasmanian media up the obvious connection between the Bell collapse and the new Tiwai contract eg "Comalcos NZ deal kills Tassie hopes" ("Mercury", 26/8/93). It quoted Kerry as saying:

"The Tiwai Point smelter is much younger than Bell Bay and can be made more productive with less expenditure",

This is a classic illustrationof how multinationals work, They playoff regions, states and countries against one another, aiming to secure the best deal. When it suits their interests, they spend in whichever "lucky" place "wins", Equally, they will close down, and create mass unemployment, in whichever other place "loses", They don't really want a "cab" off the rank, and they certainly don't want to pay the fare. They want a rickshaw. And the New Zealand people have been paying Comalco for the privilege of carrying it, and being bled by it, for decades. Seeing how Kerry is so fond of the word "discount", it's appropriate to title him Disf'ount McDracula.

CAFCA is indebted to Bob Burton, our longstanding Tasmanian contact. Bob, who works for the Wilderness Society.frequently makes lengthy visits to NZ, and appeared in both the 1989 and 1993 "Frontline" programmes on Comalco. He regularly sends us exhaustive clipping files on Coma/co in Tasmania, and comparisons between there and NZ. WJwt he supplies is far more than what we can publish in "Watchdog". If you're interested in the Tasmanian details and comparisons, contact us, and you can have it for the price of copying. Or you can contact Bob Burton direct at the Wilderness Society, 130 Davey St, Hobart, Tasmania 7000, Australia.

Do These moody Aborigines Think They Own Australia?

CAFCA's grimly determined research into Comalco NZ's bag of tricks has not gone unnoticed across the Tasman. We have been featured 011 radio, at totally different ends of the spectrum. A Queensland contact featured our work 011 his weekly show on Toowoomba's access radio. And the Australian Broadcasting Commission (ABC) rang us from Sydney. The National Radio reporter said that "nobody" was taking much notice of what Comalco was up to there, and it hadn't mattered until the 1992 Mabo court decision on Aboriginal land claims had threatened the interests of Comalco and other mining behemoths (including its owner CRA). He had noticed the similarity of negotiating tactics employed on either side of the Tasman. His only problem was that he wanted In interview somebody "respectable". We referred him 1.0 Geoff Bertram, the Victoria University economist who has done so milch research on Comalco (Geoff appeared on the September "Frontline" programme), He must have been respectable enough, because we never heard back.

So what is going on in Australia? Wen, not everything has been going Comalco's way in its Queensland manoeuvrings. Yes, it did secure State Government permission to buy the Gladstone power station. But the operation of its Boyne

Island smelter depends 00 a supply of bauxite from Weipa, on York Peninsula. And that was suddenly threatened by the Mabo decision, which abolished the legal monstrosity of "terra nullius" ie that Australia was uninhabited when Cook "discovered" it The Aboriginal people have been legally declared to exist Praise be! What's more they have legal rights, and very tightly circumscribed land rights are among them (nothing comparable to Treaty of Waitangi rights though), This was enough to cause a racist hysteria throughout white Australia, with a major fear campaign headed by the very powerful mining companies, Comalco was in the thick of it, because the Wile people of Cape York laid claim to Weipa.

Prime Minister Paul Keating, the fearless republican and groper of Her Majesty, did several flipflops, agonising between posing as the Great White Father or fulfilling the traditional role of the Australian politician, ie bashing the abos. He chose the latter, and retrospectively validated an Comalco's Weipa bauxite mine leases, plus guaranteeing Federal and State government responsibility for any compensation claims approved by the courts. That gave Comalco the go ahead to borrow $A1.75 billion to build a new potline at Boyne Island. So much for Aborigine land rights.

But "Watchdog" readers will doubtless be relieved LO know that Comalco's net profit, for the half year to June 1993, jumped 332% to $NZ5L5m ("Press", 31/8/93),

There is a multitude of material on the Mabo decision and the mining companies. People Against Rio Tinto Zinc and Subsidiaries (PARTiZANS) produces a regular newsletter. "Parting Company", The October 1993 issue includes a 6 page special on the subject. CAECA has a complete set of "Parting Company".

Here Comes Another Bougalnville

Comalco represents only one infinitesimal dot in the world's biggest mining empire, It is 67% owned by Conzinc Rio Tinto Australia (CRA), the 6th biggest mining company in the world. CRA no longer has any direct presence in NZ, but it is gigantic in Australia. And it's one mean outfit Every week we receive "Vanguard", the paper of the Communist Party of Australia (Marxist-Leninist), It chronicles CRA' s bastardry eg the November 10, 1993 issue has two headlines: "CRA' s open grab for national park coal" & "Workers firm against CRA's anti-union push".

CRA is itself 49% owned by Rio Tinto Zinc (RTZ), of Britain, the world's biggest mining company. Comalco doesn't even rate a mention in its reports, For the half year to June 1993, it made a gross profit of 339 million pounds (treble that for its $NZ equivalent); arid Australasia was its second biggest earning region, after North America, CAFCA's Murray Horton received a 27p share of that profit (the lucky bastard).

One country which RTZ has been aggressively pushing into is Papua New Guinea, seemingly undaunted by the rough

reccpuon that CRA has received there- being driven out of Bougainville at gunpoint, and abandoning its Mt Kare mine, on the PNG mainland, in because of security problems with aggro landowners. RTZ moved into the Lihir Island gold site (off New Ireland) in 11. big way, with the full support of Paias Wingti's embattled and autocratic government. Increasingly the PNG government is seeking economic salvation in the arms of mining and logging multinationals. The project is massive - it will cost $US650m - and is literally a hot prospect, with the richest deposit located in a 100 C hot spring.

Originally it was RTZ's baby, but in August, it sold 36% of its stake, primarily because the start up costs are huge and initial returns are slow. In September 1993, Wingti announced plans to put 40% of the Lihir gold project onto the international market, hoping to raise up to $US400m. R1Z will continue to own 40%. Mining Minister Masket Iangalio told Parliament: "What is contemplated is one of the world's biggest gold floats, It could well and truly put PNG on the map a" one of the world's great gold-producing nations" ("The Review", October 1993). The New Ireland provincial government and local landowners are less than enthralled however, and walked out of a forum on the project, insisting on a 30% stake, They said:

" ... We don't want another Bougainville. where landowners had no say in what the company was doing ... This is a non-renewable resource. We will lose the right of ownership and right of usage of our land, and we will never get it back until Jesus Christ returns ... The developers are foreigners and the State is only a concept. It is us, the landowners, who represent real life and people, The bottom line is that the landowners must have ownership in the mining company, be able to have control and acquire maximum benefits from the project.," ("Post Courier", 4/11/93).

It would appear that neither RTZ nor the PNG Government have learnt from the bloodstained Bougainville experience. This is the lineage of Comalco, which has always been the best possible example of the Ugly Multinational in New Zealand, It's no surprise then, is it?

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This was held at the WEA, Christchurch, 011 September 16, 1993. There were 16 members present. Bill Rosenberg was in the chair. Apologies were received from Don Archer, Gerry Cotterell, Ken Martin, Dennis O'Connor, Richard Suggate, and Allen Sheppard.

Ann Currie presented the treasurer's report. Wolfgang Rosenberg had not yet finished auditing the accounts, so she presented highlights of income and expenditure for the years 1989, 1990, 1991, 1992, and 1993. The full report will be published in "Watchdog".

Ann Currie explained that. to gain exemption from paying resident withholding tax, CAFCA Inc needed approval from the Inland Revenue Department. This would not be forthcoming until we changed our rules to meet IRD's requirements. The rule changes are as follows:

(1) fecuniary Profit

No member or person associated with a member of the organisation shall derive any income, benefit or advantage from the organisation where they can materially influence the payment of the income, benefit or advantage.

Except where that income, benefit or advantage is derived from: -

(a) Professional Services to the organisation rendered in the course of business charged at no greater rate than current market rates; or

(b) Interest on money loaned at no greater rate than current market rates.

(2) l:Yiodipg· Up

If upon the winding up or dissolution of the organisation there remains after the satisfaction of all its debts and liabilities any property whatsoever the same shall not be paid to or distributed among the

ANISE

I have been secretary of CAFCA for longer than I can remember, over a decade now, at least. Normally at an AGM I present a report on what the organisation has done over the preceding year or so. But the emphasis will be different this time, because structurally things have changed since I last reported to such a meeting.

Since December 1991 I have been the paid worker for CAFCA, working from an office at home. I am also the paid worker for the Anti Bases Campaign. But as this is a CAFCA AGM, I won't detail my ABC work. It is fair to say that CAFCA work takes up rather more of my time than does that for the ABC. I am funded for both positions by

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members of the organisation but shall be given or transferred to some other charitable organisation or body having objects similar 1.0 the objects of the first organisation - or for some other charitable purpose - within New Zealand/Aotearoa,

(3) Amendment and Rescission of Rules

No addition to or alteration of the Pecuniary Profit rule or the Winding Up rule shall be approved without the Inland Revenue's approval.

These amendments were moved by Bill Rosenberg, seconded by Owen Wilkes, and passed unanimously.

Murray Horton presented his organiser's report (See below). He was re-elected as secretary; Ann Currie as treasurer; and Bill Rosenberg, Dennis Small, and Geoff Soper as committee members. Reg Duder and John Ring were elected to the committee.

In general business, the results of a CAFCA committee special brainstorm meeting, held in March 1993, were read out and discussed, a'; proposals for directions for CAFCAc Issues such as the Queen's Chain and rural land sales to foreigners were discussed. It was agreed to clarify that CAFCA is not attacking individuals. Concern was expressed about the opponents of foreign takeovers being branded "racists". Owen Wilkes raised a suggestion for "Watchdog" to be an overall barometer of the extent of foreign control.

The AGM concluded by viewing the BBC documentary "Trade Slaves".

Quote of the AGM: "This has got to be the most unsuccessful campaign in New Zealand's history" - by Owen Wilkes, one of our founding Bearded Patriarchs and noted pommy (pigheaded old man). Owen is currently doing an archaeological field survey of the King Country coast, hoping to prove that the waka got here using perfectly safe nuclear propulsion.

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-Murray Horton money pledged or donated to the CAFCA/ABC Organiser Account, and I thank the members and supporters who have shown such touching generosity over the last couple of years, in a time of extreme economic hardship for many people. I only hope that they think they are getting value for money. And I can only urge members to keep supporting the Organiser Account, not only because it keeps me alive, but because it enables CAFCA to work in area'; that are not open to a part-time group ...

So, instead of reporting on what CAFCA has done, I win report on what I have done as the CAFCA organiser. This is not because I suffer from any conceit such as "Le CAFCA,

Watchdog

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c'est moi", but because, as the public it

is my job to organise, coordinate, travel, attend

meetings, picket", actions, make press etc, etc, Not

to mention the more routine duties of correspondence, phonelists, filing, dealing with the layout and printing of ali publications, and answering the myriad phonecalls we get from everybody ranging from school projects to merchant from journalists to cranks, I stress that I am not a one man band, far from it Everything is discussed by the committee at our fortnightly meetings, All correspondence is read to those meetings, and everything is decided by the group, not by me alone, Those meetings now regularly go on until after 11 p.m, which is very demanding on committee members who have "real" jobs to go to in the morning. Not to mention families. So my "public face" would not be possible without that rockhard core of activists - Bill Rosenberg, Ann Currie, Dennis Small, and Geoff Soper (plus Don Murray, who is leaving us, See elsewhere in this issue). They deserve your heartfelt thanks, because without them, CAFCA would simply not exist.

In my organiser capacity, I am a self-employed contractor who invoices CAFCA (and the ABC) fortnightly for services rendered. Thus my invoice book provides an unusually detailed record of my activities since December 1991. It is open for inspection (and, indeed, to qualify for my few weeks on the dole in 1992, it was officially inspected by the unemployment bureaucracy. I have nothing to hide there). I will report, as briefly as possible on my work as CAFCA organiser.

Every single invoice records the same basic activities: collecting mail, photocopying, correspondence, reading publications. I don't bother recording other basics such as clipping the "Press" daily for our files. These mundane tasks can eat up a whole lot of hours in any given day, but are vital. At meetings, the committee wants to know what is in the wealth of local and international publications we receive, It's my job to have at least skimmed them, preferably to have read them. We handle a power of correspondence, because we believe it is vital to respond promptly to members and supporters. Some of it is initiated by us, such as our plentiful requests under the Official Information Act. We spend at least $40 a month at the firm where we have a photocopying account. Just that, and the distribution of the material, can take hours every week,

Another constant is writing for "Watchdog". As you've doubtless noticed, "Watchdog" has become much easier 011 the eye, courtesy of Marty Braithwaite with his desktop publishing layout wizardry, and Brian McKay, the printer. It's also become much bigger, because I have more time to write copy, and we now get material regularly from several writers. Bill specialises in the Overseas Investment Commission material; Dennis Small in GATT, for example. Don't worry, we intend to reduce the size. It's becoming too expensive to print and post, and we fear that some of our more frail members might collapse under its weight But "Watchdog" has been our highly original standard bearer for decades now. We are justifiably proud of it; it has a very loyal and responsive readership (every issue attracts feedback

and favourable comment; every appeal brings in money); and we're pleased to report right now, its circulation is growing. The August 1993 issue of the "New Internationalist" (devoted to multinationals) included a CAFCA insert and we're picking up a number of new members, They are coming from other sources too. CAFCA is an organisation dealing with an issue whose time has come, "Watchdog" offers information available nowhere else; it is packed with facts; and it has an uncompromising style and sense of humour that render it unique. Not to mention a bloody good line in obituaries.

I write, on CAFCA's behalf, for other publications as well. The "Republican" runs my "Behind The Lines" column in every issue; it invited me to write a lengthy cover story; the US monthly "Multinational Monitor" commissioned a paid feature on Comalco; I have been invited to write for papers as diverse as the Coromandel Peninsula Watchdog newsletter and the paper of the Seafarers' and Harbour Workers' Unions. I have been reviewing books and writing articles in the PSA "Journal" for years, and it always describes me in my CAFCA capacity. I should also say that all this increased writing work has involved me, and my wife Becky Roque, in going beyond the dictates of duty ie I had to learn how to use the computer which CAFCA bought in 1991.

TIle less said about that the better, except to say I am no longer such a Luddite, I am a computer literate non-driver, and we are still married. I would describe that ie learning the computer as the most frightening task I have undertaken in the last two years. Taking part in Filipino protest marches or debating bourgeois nationalism with our friends on the Left pale into insignificance by comparison. I am living proof that boys can do anything. I was "downsized" from the Railways; but now I have been "upskilled" by CAFCA. All I have to master now is how to stop Daddy the cat from making heartstopping flying leaps onto the keyboard while I'm using it. He's missed the delete key so far,

Another constant entry in my invoices is media work, I would contact one or more journalists every week, and over the years I have built a very good rapport with a number of Christchurch journalists, and a few in other parts of the country. CAFCA, and CAFCA-inspired groups, such as the Campaign for Peoples Sovereignty, have appeared repeatedly in the mainstream media since I started as the organiser. I've done TV and radio interviews, plenty of press releases, and more importantly, got the media to chase up stories based 011 our legwork. This has happened several times with the "Press", but most notable was our success in getting Bruce Ansley to devote 2 pages in a recent "Listener" to documenting the most recent damning material we had secured about Comalco under the Official Information Act. We are a regular media source.

One job which Bill does exclusively is supply the OIC decision sheets, plus an index and his extensively crossreferenced analysis on a monthly basis to various media people. Apart from anything else, it's a nice little earner for CAFCA, Weare recognised as the best and probably the only source of this information, Don't take my word for it

The ()IC refers inquiries onto us, such as merchant

bankers. A Jot of my media is behind the scenes stuff

eg a up

coverage of an event, arranging interviews with a visiting

etc. The value of this of my job can be

measured by the fact that more than one journalist is among those pledging money to the Organiser Account No names, we protect our sources.

I used to do all this stuff before, in the evenings, or weekends, or on Railways telephones. My workmates got quite blase about incoming phonecalls for me from cops, the "Holmes" show, the National Party Research Unit, etc, etc. They stuck a star on the office door. But there is one vital area which I couldn't have done while fulltime in the workforce, and that is involvement in related groups, and strategic planning.

I have a meeting every Tuesday night, either CAFCA or the ABC. But since becoming the organiser, I have got involved in other groups. Since early 1992, I have been actively involved in the Canterbury Health Coalition, specifically its Can't Pay, Won't Pay, Don't Pay Twice campaign. We see a mass campaign of civil disobedience towards these iniquitous hospital charges as a positive fightback against the New Right agenda, and a kick in the dangly bits for the multinationals waiting to privatise our hospitals. Also since 1992, I have been an active member of GAIT Watchdog, of which Dennis is the driving force. CAFCA recognises the fact that the Uruguay Round represents a licence for multinationals to print money, and we are one of the very few organisations in this country doing anything about it. (I should mention that my other major organisational work, unrelated to CAFCA, is with Philippines Solidarity, which is becoming more time consuming now that the Christchurch group has taken on the national coordination functions, such as producing a newsletter).

The ability to plan ahead led CAFCA to take the initiative, in mid 1992, and call together a whole raft of disparate groups. This led directly to the formation of the Campaign for Peoples Sovereignty. I have been active in that since its inception. As it is a loose alliance of existing groups, there are no officeholders, but there is still specific CPS work to be done. A spinoff has been the successful foundation of a CPS neighbourhood group in my area, which functions as a specialist sub-group of the overall campaign. So far, Christchurch South Peoples Sovereignty (known to the vulgar as Catsl'iss) has put in a lot of work on the Southpower campaign - picketing, marching, leafleting, presenting submissions, forcing the right to attend board meetings, chasing them under the Official Information Act, getting the media to focus on them. The other campaign we got stuck into was the Can't one. We leafleted Saturday shopping crowds; we organised an extremely high profile public meeting addressed by a number of the nom-payers.

CPS work is extremely important to and to me personally. It has been a hobbyhorse of mine for years to break down the old Kiwi movement shibboleth of single issue groups all working away without connecting with each

other, I've seen the power of a united

movement in the That's what we're

for here. CAFCA' s was to groups

to deal with all the manifestations of foreign control; to

deal with these attacks as they impact on people

at the grassroots and to show the public at large that

we have nothing to fear by fighting back. At my instigation, CPS laboured for months to produce a simple charter of commonly agreed. beliefs. It took months, one weekend retreat, and a fair bit of raised hackles, but we were all still friends at the end. That became the inspiration for the Peoples Charter promulgated by the Building Our Own Future national campaign, and has been favourably viewed by other movements, such as environmentalists. CPS, for all its shortcomings (and I know only too well there are plenty), has been seen as an inspiration for people all around the country.

I have attended a number of different national gatherings recently where the mood is one of building a united, national movement The situation we face is far too serious for us to jealously guard om own little "issues" anymore. This was the message J conveyed in my speech to the Peace Power and Politics Conference in Wellington, and it was greeted with a standing ovation. So the time is right for this drive, we are a leading part of a movement that is on the crest of a wave right now.

Finally, being a fun time organiser has freed me up to meet all sorts of commitments that were not possible when I was a "real" worker. These range from attending daytime meetings to taking part in various pickets and actions. Reading through my invoices since December 1991 reminds me just how many of these I have taken part in. Plus numerous speaking engagements, ranging from church groups, to union stopworks, to schoolkids, to While Power prisoners in a halfway house (they were shocked by my languagel). And it's enabled me to travel, on CAFCA business. This has ranged from speaking at conferences such as Peace Power and Politics to spending a day addressing union members in Ashburton and Timaru. In the last month I've taken part in gatherings from Manukau to Motukarara,

In July I spent 3 days in Dunedin hosted by student activists, addressing a forum, doing media work, and building links with the newborn Aotearoa Youth Network (I'm delighted by this latter development, as a militant youth movement is vital for the movement as a whole. CAFCA grew directly out of the PYM. I wouldn't be here today if it wasn't for the sometimes incomprehensible world of youth activism. It is our responsibility as rniddleaged activists to work alongside the young). Ira a few days, I leave on CAFCA's most ambitious exercise ever in this field, namely a 3 week northern speaking tour ... (see report elsewhere in this issue).

All this is timeconsuming and sometimes frustrating work that earns me $150 a week gross. So Obviously I wouldn't do it if I didn't think it was worthwhile. The response to this imminent speaking tour; the response we get from our members and supporters all around the country (and even overseas, our material is carried ill publications in countries

TABLE

u I Opportunity Exploiter

committee a<; my ~"jHU,","'" hM'!,.n,"J<

to boot (even if we could

times). And I must pay tribute to who, from

an entirely different culture, language and was

dropped into a lifestyle where her home became an office and meeting place, her husband goes away on political business for weeks on end, and where she had 1.0 learn the quirks of an markedly different political movement. She is my kasama, my comrade, in all this, even if she does think I'm a bloody looney at times.

I look forward to continuing this job, which I find not only worthwhile but extremely enjoyable. More important is the fact that it is work that has got to be done. There are financial constraint.'> on just how long I can continue to do it, but as

I'll do it to the best of my ability. It's a very

fight; there are 110 shortcut" (such as the

racist easy to one we've survived the onslaught, we're thriving in fact; and now we're ready to take a leading role in the fight to reclaim Aotearoa from its present status as a floating branch office of the multinationals. Our job is to make this country as "unattractive" as possible to foreign investment. So, in a reversal of the usual slogan, "Let's Get Ugly".

Since Murray Horton presented this report at the September AGM, a couple of things have happened. Firstly, he has completed his 3 week northern speaking tour. And secondly, the improved response to the CAFCAIABC Organiser Account means that his pay has been increased to $170 p.w. gross.

CapitaU

I

"As the Government belatedly honours the it IS

becoming more and mom apparent that a large part of the nation's economic future will be in Maori hands. If this is right, the smart money may well be Maori money"; "Time", 19/10/92.

"I couldn't have imagined 12 months ago sitting down discussing million dollar deals with the likes of Brierleys, We're not silly enough to believe they're ill this because they love Maori"; Sir Graham Latimer, ibid.

Maori capitalism is becoming more and more a force to be reckoned with in the, broader New Zealand capitalist economy. There is nothing surprising nor new about this. Historically, Maori proved themselves adroit farmers, fishers, and merchants. They fed the first white settlers here, they ran their own ships across the Tasman to trade with the Australian colonies. Land was their most asset, and loss of it to the Crown, speculators and settlers, by war or trickery, seriously retarded the development

of a modem Maori capitalism.

However the Waitangi Tribunal has started to redress longstanding land grievances; there is win now to tackle the issue; and the traditional Maori ruling elite has made the necessary historical transition from feudalism to

restructuring their traditional structures

into the corporate model, Two tribes that are most advanced

along this path are the South Island's Ngai and the

Waikatos Tainui, Ngai Tahu's Tipene is ",'LIlJa'lJ'

the bext known example of the new breed of Maori capitalist leaders. It is no coincidence that he ended up as leader of

the new Treaty of Waitangi Fisheries whereas

Muriwhenua's Mat Rata, leader of Mana and

the man who did all the spadework for

-Murray Horton

claims, was conspicuously omitted.

Big Business, whether of the local or multinational variety, recognises a profitable deal when it sees one. And increasingly it has been moving alongside nascent Maori capitalism, particularly in the field of joint ventures (JVs). Land is not at stake as yet Land claims are still being sorted out with the Crown, and the 1989 Crown Forest Assets Act is an example of laws passed to deal with future contingencies (this Act establishes a mechanism to return forests to tribes if their Waitangi Tribunal claims are successful. It covers former Crown forests whose cutting rights, but not the land itself, were sold to local or multinational owners in the Labour/National sen off of 550,000 ha of publicly owned forests). Having been alienated from their land once, with catastrophic results, Maori are none too keen to part with it again.

But multinational/Maori JVs have been established in any number of other fields, Fishing is probably the most high profile. "The Treaty of Waitangi And The Fishing Industry", Ranginui Walker's chapter in "Controlling Interests:

Business, the State and Society in New Zealand" is the best potted history of the subject. Describing the Labour Government's 1989 Maori Fisheries Act, which established the Maori Fisheries Commission, he comments:

"The composition of the board ensured that the management and direction of Maori participation in the fishing industry would fit the capitalist model of development and be compatible with Government economic goals ... "

The Commission, assisted by the Maml'i Development Corporation (MDC), another Government-created body, bought out Fletcher Fishing's inshore operations for $20

Page 46

million, and launched aJV called Moans Pacific Fisheries, which the Maori an initiative of the tangata whenua themselves. Walker concluded:

"This effectively put the Maori into the extractive mode of Western capitalism. The social and conservation goals inherent in the Tangaroa Corporation were effectively obliterated". Ranginui Walker's view on the Sealord deal was pithy, "The deals are lousy and our negotiators return to the people and say 'Look at the big glass bead we got you'" ("Time", 19/10/92),

So fishing JV s became the fashion. Among the first were Taima Trawl Co Ltd and Taima Holdings Ltd, which were JV s between Maori International Ltd (MI) and the Japanese Taiyo Fishery Company, to catch and process fish in Gisborne and Napier. Approval was granted by the Overseas Investment Commission (Ole), in May 1990 and July 1991. They went broke and were wound up, because they weren't allocated any quota. (MI was founded in 1984 by Dr Kara Puketapu, the former Secretary of Maori Affairs. It is a public company, with prominent Maori Tory, Sir Graham Latimer, as chairman). More recently established is Ngai Tahu Fisheries, a JV between the Ngai Tahu iwi and the Japanese Anyo Fisheries. "Takaroa 1", its first vessel, arrived in Timaru in January 1993.

Of course, the most famous Maori/multinational fishing JV is the Sealord deal. The details are wellknown, with the parties being the Maori Fisheries Commission (replaced by the Treaty of Waitangi Fisheries Commission) and Brjerteys. It made a Maori corporate elite, working in partnership with a New Zealand-based multinational (one with over 40% foreign shareholding), owner of the largest fishing company in NZ, controlling 26% of fish quota, The most explosive detail about the Sealord deal emerged from the December 1992 OlC decisions. It approved a syndicate of foreign banks, namely the Hong Kong & Shanghai, ANZ and BNZ, to take out a $150 million mortgage over Sealord's assets, including its quota, to secure their loan for that amount. "The banks require this advance consent to protect their interests should a default occur on the loan facility".

Under the 1983 Fisheries Act, it is illegal for foreigners to own more than 25% of any company's fishing quota, unless an exemption has been granted by the Director of Agriculture and Fisheries. It transpired that in fact he had done so, without any publicity. The OlC had approved the mortgage without it being conditional on such an exemption. It means that in the event of one of the partners going bust, a syndicate of foreign banks would assume ownership of Sealord's assets, including its quota. Doug Kidd, the Minister of Fisheries, assured reporters that there were all manner of safeguards, and that approval for quota as security was given in advance because otherwise the company would not have got the loan. He described CAFCA as "financial ignoramuses". Doug Graham, the Minister responsible for the Sealord deal, pointed out that as all banks (bar one) are foreign owned, it is now purely routine for all New Zealand's

assets to be under hock to foreign banks!

The point of this is that the pro quo for the Government

financing Maori into Sealord was the dropping of all

of Waitangi fishing claims. So Maori have seen their leaders surrender those claims in return for a partnership with New Zealand's most notorious asset stripper (which is regarded by the OIC as a foreign controlled company, meaning that the fish quota ownership laws were broken even without the mortgage). And, to add insult to injury, if anyone goes bust, it could an end up in the hands of foreign banks.

Increasingly Maori capitalism has been moving into "classic capitalism", ie to do with the buying and selling of companies, not dependent on natural resources. In July 1991 the OlC approved the sale of the Quality Inns Group, for approximately $60 million, to aJV of Messrs Griffith, Brown and Schaefer, of the US (65%) and Maori International and Te Maori Lodges (35%) These latter two were described as holding companies acting for 1400 Maori interests. Maori board members of the JV included Kara Puketapu, Sir Graham Latimer, and Sir Howard Morrison. In March 1992, the OlC further approved the resulting joint venture, QINZ Holdings (New Zealand) Ltd buying Queenstown's Terraces Hotel for approximately $15 million, It was the Hawaiian partners of QINZ (Quality Inns NZ) which caused the controversy over [he Maori involvement in the chain and led to the dismissal of Winston Peters from the Cabinet. (At the same time, the Tai Tokerau Maori Trust Board was moving into hotel management, with a subsidiary, Pacitel, assuming management of the Malaysian-owned THC Wairakei and THC Chateau Hotels). In July 1993 the OlC approved CDL Hotels NZ Ltd (Singapore) buying 70% of QINZ, buying out the Americans' stake. The remaining 30% stays with the Maori partners.

The MDC has become a major player in the field of corporate investment and retail mergers. In July 1992, it bought out retail chains Deka and James Smith, in a JV 25% owned by itself, 25% between 5 North Island Maori trust boards, and 50% between 16 former Deb executives.Ml.C's other investments include 32% ofU nix, 20% of battery developer Powerbeat International, 20% of processing plant King Country Lamb, 17% of kiwifruit concentrate producer Green Juice Company, and 4% of Moana Paclflc Fisheries.

In November 1992, the OlC approved a huge trans-Tasman retailing chain owned by a JV, Sombar Enterprises Ltd, which was itself owned 50.01% by two Australian companies, Vox Ltd and Action Holdings Ltd, with the other 49.99% owned by the MDC. Sombar assumed ownership of Deka NZ Ltd (the former Woolworths stores in NZ), the James Smith department stores, FTC, and the Toy Warehouse chain. This gave it ownership of 148 stores in this country - 81 Deka, 52 FIC, 11 Toy Warehouse and 4 James Smith - plus owning the Venture Stores chain of 53 department stores in Australia. Gross sales were expected to exceed $NZ 1 billion, with asset'> of $200 million and net

earnings of $30 million in the first year. Thus we had an example of Maori moving offshore and becoming a reasonable size stakeholder in Australian retailing,

Foodhmd Associated Ltd of Australia is a major owner of both Vox and Action Holdings. In July 1993, the OIC approved the merger of FAL and Progressive Enterprises Ltd. Progressive took over F AL (NZ) Ltd for $101 million, giving the merged group ownership of 83 supermarkets in NZ, and control of 34% of NZ supermarket sales (worth $2 billion). This new conglomerate owns Countdown, Supervalue, Foodtown, 3 Guys, Georgie Pie and Rattrays. And in November, Foodland bought out 100% of Farmers Deb, for $t60m, ending the Maori ownership.

In mid 1993, Maori capitalism moved into the really murky waters of casinos. Two companies - Auckland Casino Ltd and Auckland Casino Development Ltd - have been set up to promote one of the bidders, namely the Auckland Railway Station site. If successful, the site will also feature "an ExpoPavilion, Hotel, Cultural Centre, car parking building and Entertainment Centre". Both these companies are SO/50 JV s between New World Development Company, of Hong Kong, and the National Maori Congress (representing "the 43 Iwi that were signatories of the Treaty of Waitangi"), This consortium has enlisted the backing of notorious US casino magnate, Donald Trump, whose colossal ego (he puts his name on everything he owns), gigantic corporate crashes, and tabloid private life have made him an unwelcome household name in the US. A subsidiary of his company Maxims Management Ltd will hold the operator licence if the bid succeeds. He is happy for his name to be associated with the bid "if that's what sells best". But Donald Trump has all the credibility in the US that Alan Hawkins or Bob Jones have here. Former New York mayor, Ed Koch, called him "greedy and piggy". He swept into Auckland in true Yankee bullshit style "accompanied by a bodyguard. for an eight hour stay that included a tour of the station, a meeting with the Casino Control Authority, a Maori welcome, and a round of news media interviews".

But the Maori elite split over which casino consortium to back. The rival Brierleys-Harrah's Sky City site has enlisted the support of Dr Pita Sharples, plus 4 other Maori. Sky City has pledged that "Maoris would be employed in all phases of its operations", According to the "Press" (10/9/ 93), the Casino Control Authority received from Sharples:

" .. .a letter from Promus, the parent company of Harrah's, which will operate the casino, to support the pledge. Dr Sharples, chairman of the Hoani Waititi Marae and a visiting associate professor to the faculty of education, University of Auckland, is part of a group of 5 Maoris who back the Sky City casino proposal rather than the Auckland Railway Station project The group, including the chief executive of the Maori Development Corporation, Mr Waari WardHolmes, believes the Sky City proposal offers Maoris more benefits. The Auckland Maori Council has written to them to 'dispel any illusion' that they speak for other than themselves and challenging their right to represent the wider Auckland Maori interest. In evidence Dr Sharples produced

a letter from the vice president and controller of the Promus Mr Mike Regan, confirming that. Harrah's has a record of ensuring 30% of its employees came from ethnic minorities. Mr Regan said that, in consultation with his group, Harrah's would put Maoris into every area of the casino operation ... "

Undaunted, Donald Trump responded: "I just think that while the semi-local person (ie Sir Ron Brierley) in this case seems to have the advantage, I have the people who were here long before that - and that's the Maoris". The tangata whenua might be interested to know that a man of Trump's calibre claims to "have" them. Mind you, they've been had by any number of other foreign white carpetbaggers going back over 150 years. In the US, ruling indigenous elites have allowed casinos into numerous Indian reservations. They have proved a nice little earner, and have also bought all the economic and social problems associated with casinos the world over ie gambling, crime, prostitution, etc.

How does this corporate wheeling and dealing benefit the ordinary flax roots Maori? Answer - no more than its whiteface equivalent benefits ordinary pakeha, It does, of course, benefit the tiny elite who run these enterprises and personally profit from them. Fortunately, there is healthy resistance in Maoridorn to this. There was ferocious opposition to the Sealord deal, causing rifts that have yet to heal. And the people of Tauranga' s Matakana Island showed exactly the right way to treat multinationals. For 6 months in 1993, they blockaded ITT Rayonier NZ, the local subsidiary of one of the world's biggest and meanest multinationals, preventing rrr from logging their forests. They had a simple demand - justice - and they stayed put until they were satisfied that they had got it.

The rapid growth of a Maori capitalist elite, working hand in glove with local and multinational Big Business, wheeling and dealing in New Zealand and offshore, is a development that needs to be monitored very closely. Capitalism is an equal opportunity exploiter. It doesn't worry what your skin colour is, as long as it can make money out of you. This is a problem for all New Zealanders, not just Maoridom, because these people are the newest recruits to a system that exploits all of us.

This was commissioned by "Mana Tangata", a Maori newspaper (Box 252. Wanganui). We recommend it to CAFCA members. It is published in English. and makes extensive use of our material.

Watchdog

Page 48

CAPCA's longest international

Against RTZ and Subsidiaries (pARTiZANS), personmeo in the inimitable Roger Moody. We are indebted to them for the material they send us on RTZ, CRA, and Comalco, which enables IJS to put the Tiwai Point smelter into international perspective.

More recently, that same core of London-based people has founded Minewatch International, dedicated to networking about all mining multinationals. CAPCA is a member, along with Peninsula Watchdog, of Coromandel.

"I I

Limited ition

For Sale

E

This exhaustive 700+ page work, edited by Roger Moody, was first published in 2 volumes, in 1988. Murray Horton reviewed it in "Watchdog" 62: "It details a complete hidden history, in all its richness and horror. It provides a voice for the voiceless".

Roger has edited the writings of indigenous peoples from all around the world, including Aotearoa. This is a revised edition, in a single volume, with a new introduction by Roger, looking at GAIT, the New World Order and neoliberalism, from the viewpoint of indigenous people.

It is a limited edition, with a print run of 600. CAPCA has no hesitation in recommending it to our members.

It costs 18 pounds SOp and can be ordered Minewaich at the above address. Add some extra postage from the UK.

Minewatch produces an excellent magazine, Values", which is now struggling for subscribers and money. It needs to attract 100 new subs, and/or 2000 pounds to survive into 1994. The latest issue we received (August 1993) covered mining multinationals in the Philippines, South Africa, Canada, Bougainville, Venezuela, and West Papua.

It would be a shame to see it go under. An annual sub is 10 pounds. Send it to:

Minewatch, 218 Liverpool Road, LondonN1ILE, UK.

sv

I

The

IN

I Voi

EDITED BY

ER 0 DY

orre

ion

In the last issue of Watchdog (Number 73, August 1993), we printed the following paragraph on page 8:

In Aotearoa it is likely that about a quarter of the companies are overseas owned. In the services sector of the economy (the most dynamic part of a modern economy, including finance, property, the professions, news media, and so on) 70.3 per cent of investment income went to overseas owned companies between 1986 and 1989. The corre=onding figures for the primary sector were

.ent and for manufacturing, 23.1 per cent

This should read:

In Aotearoa it is likely that about a quarter of the companies are overseas owned. Between 1986 and 1989, 70.3 per cent of the investment income going to overseas owned companies was in the services sector of the economy (the most dynamic part of a modem economy, including finance, property, the professions, news media, and so on). The corresponding figures for the sector were, 6.6 per cent and for manufacturing, 23.1 per cent

an

h

hi

CAFCA was greatly heartened by the great response to Murray Horton's 3 week northern speaking tour, in September and October. Not only by the direct response from those who attended his meetings, but also the follow up from those whom he reached via the extremely good media coverage. We've signed up so many new members that we were completely cleaned out of the 150 spare copies of "Watchdog" 73, and we've also sold out of "In Deep Water?".

Judging from the number of invitations that Murray had to decline, purely for reasons of time, and from the number of requests for copies of his speech, we've decided to experiment with something new for us.

We videotaped his Christchurch public meeting, at the end of October, and our old friends, Vanguard Films of Wellington, very kindly edited it, added titles, and made some copies for us.

The video records Murray's fun speech, and some of the question answer session, with Murray and Bill Rosenberg. It is approximately 2 hours long. Although not of broadcast standard, it is perfectly viewable (even though he does talk too bloody fast). With arms flying, this is definitely of the talking body genre, rather than strictly talking head. He is an entertaining, humorous, and insightful speaker.

The speech is intended to be a "Beginner's Guide to Foreign Control". It covers topics such as: immigration; racism; the global economy; Comalco; what are multinationals'l; making the economy "attractive" to foreign investors; the level playing field; the Overseas Investment Commission; who owns Aotearoa?; forestry as an example; the language of propaganda; the myth of the Asian takeover; rebutting Left and Right criticisms of CAFCA's progressive nationalism; myths about foreign investment; why we should oppose it; unemployment, the national debt and "restructuring" society; foreign control at the local level; becoming "part of Asia"; GAIT and "free trade"; what we can do about it all; the call for a new peoples movement and an end to single issue politics.

Audiences who heard this speech live found it fascinating, with a solid mixture of fact analysis. We are interested in finding out if there is a market for this, so we've only handful of copies initially.

Watchdog