FOREIGN CONTROL

PO

NEW ZEALAND

NUMBER 76

SEPTEMBER 1994

CONTENTS

LAND GRAB: They're Not Making Any More oflt

Indonesians Flock to the Hills .

MA TAKANA [SLAND UPDATE

Court Victory; Forest Sold; Another Court Challenge .

CLE'ARCUT WRITTEN .

CAFCA ANNUAL ACCOUNTS, 1993/94 .

WE SUPPORT THE SEAFARERS!. .

Ron Currie cartoons for Watchdog GATT by Dennis Small

GATTING ROUND: NZ's Uruguay Round Offer .

GATT (Uruguay Round) BILL: Patents Act changes .

MOBIL-ISING FOR GATT The Demise of Democracy? .

1994 AGM MINUTES & ORC,ANISER'S REPORT.. ..

ANN GOES OFF FOR SOME R & R: Our Treasurer Quits ..

Richard Nixon, Mass Murderer . ..

Scoop' Rupert Murdoch is a Cantabrian ..

"HELL IN THE PACifIC" new video available ..

Letter to the Editor...... .. ..

Overseas Investment Commission by Bill Rosenberg

REA.DERS SURVEY RESULT . .

1993 STATISTICS: Another Big Jump .

OMBUDSMAN AND MINISTER ADMIT NO OlC CHECKS .

mc DECISIONS: December 1993 to April 1994; & appeals ..

CALLING ALL OVERSEAS SUBSCRIBERS .

COMALCO: New Contracts; New Documents; Same Old Story ..

DEATHS IN THE FAMILY .. .

CAMPAIGN FOR PEOPLES SOVEREIGNTY

Southpower: Lyttelton Port Company; The ChCh "rates war" 46

Obituary: Bernard Wens 49

TRADING WATER 50

WAIHOPAI WARREN BEATS RAP AGAIN 50

PEACE R.ESEARClIER REBOHN 50

Review

"THE WORK OF NATIONS": The Effects of Globalisation

by Wolfgang Rosenberg 51

AUWRC WINS RIGHT TO SUE COPS: And Gets Busted Again 53

Review

"INDEPENDENCE & FOREIGN POLICY": CAFCA & the OlC

by Owen Wilkes 54

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5 (,

6 8 9

10 14 16 18 20 21 22

22 22

23 24 30 32 43 44 45

Rural land by foreigners constitute a very small

percentage of the total foreign takeover of New Zealand the Ole approved $B8m worth in 1993, out of a total ap proval of $9.4 billion. See" Another Jump in Overseas Investment and Rural Land Sales", in this issue. Ed). But they are the ones that seem to have the greatest emotional impact on New Zealanders, because they impact in the heartland. and quite literally in the backbone of the country. When we released our statement on the overall (He statistics, it got local circulation on ly. But the one on rural land sales was circu lated nationwide, and papers up and down the country ran it. It led to us being approached by several provincial papers wanting details for their area - this happened in Nelson, Marlborough, and Hawkes Bay. It is a whole new area of niche marketing for us.

It led to us being approached by papers that normally wouldn't be seen dead with the likes of us. For example, Bill Rosenberg was quoted sympathetically in the New Zealand Farmer (18/5/94), even if they got our name wrong. CAFCA now has a number of farmer members, and one provincial branch of Federated Farmers which subscribes to Watchdog. And it led to the mainstream media deciding to investigate the issue. For example, Fiona Rotherham of the Independent ran a story entitled "Sales of rural land to foreigners treble" (29/4/94). She highlighted outrageous transactions from the 1993 OlC approvals, such as 55% of a Warkworth farm changing hands from one lot of Taiwanese to another for $55. She uncovered division within farmers on the subject, and an interesting admission on the propaganda about GATT, from Federated Farmers acting presi .. dent, Bill Shepherd:

"We're worried the investment decision on the economic viability of the land purchase for the prices being paid is based on the unrealistic expectation of what GATT will deliver. While farm incomes are likely to rise from the benefits of GA TT, it will also bring significant benefits to competing fanners overseas".

When Winston Peters' winebox of Cook Island tax scam documents was finally made publicly available, it revealed a fiddle headlined by the Press as "Aust company skirted NZ laws to buy SI farmland" (I 0/6/94). It involved a company being incorporated in NZ in 1988, and used to buy farms, without any OIC consent required (because it would be a "New Zealand" company).

The Ole's rural land statistics need to be treated with caution, for the reasons detailed in "Ombudsman And Minister Admit OlC Doesn't Check Applications", in this issue.

Hills

It was the revelation, in May 1994, that the OlC had actually

M

it

approved two Indonesians purchasing the Canterbury high country station, Flock back in July 1993 that really inflamed opinion. Not only approved what was the single biggest foreign rural land purchase of 1993 (by area) 14,000 ha, for $3m - but suppressed that approval. It was uncovered by chance, by Ustenerjoumalist, Bruce Ansley, whilst doing another high country story (the full details of the Flock Hill purchase are in this issue's OlC decisions coverage. See "Released on appeal; July 1993"). This one sale accounted for all but 746 ha of Canterbury land sold to foreigners in 1993, and gave that province the dubious distinction of most foreign land purchases by area.

When approached by both us and journalists from the Press and National Business Review, the OIC blithely released its nearly year old approval, and gave its usual "commercial confidentiality" answer as to why it had been withheld. Journalists uncovered intriguing hints that the purchase had been irregular, in terms of resource consents, etc, so we asked the Chief Ombudsman, Sir John Robertson, to investigate. He replied that he has no power under the Ombudsman Act, or any other legislation, to investigate any decision of the OIC, and that the OIC relies on the powers of rejection or revocation in its own Act. The fact thai only four applications out of 6738 were rejected by the ole (1987-93), and none since 1990, tells the story. Apart from the well publicised revocation of the consent granted German criminal Ralph Simon to buy Pakatoa Island, we can think of no other revocation at all.

The revelation of the Flock Hill sale, and to whom, really made high country sales to foreigners a hot issue. For example, a longstanding Arthurs Pass identity tracked down Murray Horton at his unlisted number to discuss it with him, and ask what could be done. CAFCA is acutely aware that we have to be careful in this delicate area. Some of the opposition to these purchases come from people who don't want any "outsiders" buying into "their" high country, and, in their that includes Maori. Ngai Tahu leader, Sir Tipene O'Regan was angered by confirmation of the sale, which, he said, had not bought "the scream of anguish" which accompanied news of any Tahu pastoral purchases (Press, 7/5/94). Now we have our own arguments with Maori capitalism of the kind spearheaded by O'Regan, but we were perfectly happy to meet a request from the Ngai Tahu Trust Board to supply it with all ore material on South Island rural land purchases by foreigners (for a fee). They wanted this to bolster their case that while opposition has focussed on Maori purchases, foreign ones have gone on apace.

"Greenies" are the other category of outsiders not wanted in the high country, and it was in the context of researching local opposition to ceo-tourism promoter Gerry McSweeney buying Cora Lynn station that the Listener's Bruce Ansley stumbled upon the Flock Hill purchase (and solved the mys-

2

tery for us ofthe solitary Indonesian purchase in the 1993 Ole rural land statistics), This convinced him of the need to devote a major story to the broader and this duly as the cover story country sell-out The end of a New Zealand way life?", I CAFCA is cited in it the Listener with OIC data re-

vealing that tions ill the

had purchased six country sta-

three years, totalling 70,000 ha,

Ansley uncovered a whole lot of valuable new information, Flock Hill is among the 73,000 ha of high country owned or administered by the University of Canterbury, the biggest private landowner in the province, Flock Hili is on a 33 year renewable lease from the university, and the new Indonesian owners applied to buy the freehold, In June 1994, the University Council considered selling all of its 73,000 ha. The sale was only delayed by a call, headed by councillor Diana Shand, for a report This is still pending, He uncovered the fact that when the previous owners, the Innes family, applied to the Selwyn District Council for planning approval for a major tourist development, they made no mention of the new Indonesian owners, Indeed the vendor's lawyer wrote to the council asking that the public not be notified of the planning application either. This was declined, but the notice calling for objections appeared only in the late classifieds of the Press. Funnily enough, there were no objections, The Innes family staunchly defend themselves:

"It was a sensitive issue. We have had nearly 10 years of the public trying to dictate how we farm and manage a lease, We are private people, We are up in arms that a private deal has been so publicly aired, We have no qualms about selling to an overseas buyer. The country needs it Our rules are so strong that the new owners simply can't do anything but abide by New Zealand standards",

It was the Listener cover story that really put the cat among the (flock of) pigeons. One ofthe farmers featured in it took out a public notice in the farming page of the Press (2817! 94) disassociating himself from it, and claiming he had been misrepresented. He was eager to state that "there is also no foreign investment" in his station. In the space of one day, Murray Horton was rung by Allan Evans, patron of Federated Mountain Clubs ("I'm concerned about anyone from overseas buying the high country"); TV2's tabloid Eyewitness News ("Elvis buys high country station" perhaps); and by Barry Lawrence, a Queenstown-Lakes District Councillor eager to officially raise the subject with that body.

This latter contact resulted in the Council passing a resolution, at its July meeting, to write to the Minister of Lands urging that he review the and criteria of the OIC; audit the OICs decisions In light of its own criteria; and impose much controls. The Council also resolved to inform the Prime Minister of its concerns. This

no small matter in the tourism of the South Island,

from a Council whose mayor The Otago Daily Times ran it as a frontpage story (2817/94), and referred to Cr Lawrence's 28 page list ofOIC approvals of rural land purchases (courtesy of the indefatigable Bill

Rosenberg), What up the nose of the Council was that the OIC had given approval for that were not pos-

sible under the district The DDT was moved

to write an editorial ownership", 30/7/94) about

the "advantages" of foreign investment, and how the remedy lies with the Council's own planning process. When Barry Lawrence was interviewed on National Radio, he had the decency to express his "gratitude" to CAFek Thanks, Barry!

Reading the Listener cover story also led to Aucklander Ben Smith forming Earth Guardians and campaigning in the Selwyn by-election on the issue, highlighting Government plans to freehold vast tracts of Crown pastoral leases, National's candidate, David Carter, said he had "no problems at all with foreign ownership." because they can't take the dirt away with them" 5/8/94) Smith responded:

"But you don't have to take the dirt away to take control of significant sections of New Zealand's most important productive resource, as the Maoris found out in the 1860s" (Press, 8/8/94). John Chaffey, the Mayor of Hurunui District, said that foreigners should be able to lease but not buy farm land, "We are one of only two or three countries in the world doing this sort of thing" (ibid). There is a certain irony now, of course, in seeing pakeha feeling the impact of what their ancestors did to Maori last century. The word is dispossession.

Tommy Klepto buys a pig in a poke

Watchdog 73 ran a detailed account of Indonesian investment in New Zealand ("Forgin Thy Enemies: Indoamncsia"), and specifically focused on the 1992 purchase of the Mackenzie Country's Lilybank Station by Tommy Suharto, the most notorious son of the bloodstained and corrupt ruling family. We described Indonesia as a kleptocracy, as the Philippines was under Marcos. After the Flock Hill revelation, in May 1994, we released a statement, and here's the bits the media didn't run.

"The people of New Zealand are entitled to know who is buying our country, Even more so when it is Indonesians who are doing the buying. This revelation comes hard on the heels of John Pilger's compelling documentary on the Indonesian genocide in East Timor, and in a month when the Prime Minister is making an official visit to Indonesia .. New Zealanders mighl be surprised to learnjust how much Indonesian investment there is already. For example, Indonesians own upmarket Auckland real estate, such as the Centra Hotel, and Winstone Pulp International, which owns the Karioi forest and pulprnill. Plus a number of land purchases in Canterbury and Queenstown.

"In a dictatorship such as Indonesia, the tiny clique around the dictator do very well financially, None more so than President Suhartos own family. His most notorious son, Tommy Suharto, bought Lilybank Station, in the Mackenzie Country, in 1992, turning it into a

3

safari for hunters and tourists, Thus those

who personally from the are invest-

their in South Island rural land

New Zealanders don't want the butchers of Timor

befouling our When comes to In-

there will be in the Philip-

pines after Marcos. New Zealand should no part

in letting the guilty hide their illgotten gains."

The Listener cover story revealed some very interesting things about Lilybank, namely that in 1 the previous

owners, NZ Trophy did a deal. in return for $300,300

of taxpayers money, it to surrender 25,000 ha (of its

total 27,500 ha) to the conservation estate. In the land was never surrendered, but the Commissioner of Crown Lands is intent on completing that surrender. The question arises as to whether knew whether he was effectively buying only 2500 insisting, through his NZ that the Commissioner is obliged to consider an application for a special lease over the whole block, ensuring him exclusive use. The Commis-

sioner Federated Mountain Clubs' Allan Evans:

"I'm going to push through hell and high water to make sure that land goes into the public conservation estate. But I'm worried that the Indonesians could throw a spanner in the works with all their money. And what's President Suharto going to do when he finds his favourite boy has bought a pig in a poke?"

Buying any sort of a would be offensive to the citizens of the world's biggest Muslim nation, but buying a pig in a poke must be particularly to one used to getting his own way on a global scale. Tommy is unlikely to up without a fight. to managing director, Gerald Olde-Olthof, he has built. a $2m lodge and invested $601 in the property, ! Ie has also been very keen to restrict or ban traditional access trampers and deerstalkers. Tommy has both wealth and clout. The most recent play-

thing he bought was the car company. Presi-

dent Klepto gave him his own and when Tommy

and a bunch of mates into Christchurch in 1993 en

route to some NZ authorities gave the

plane diplomatic status and thus from NZ laws

requiring hushkits, etc. Tommy has been at home too.

Entrepreneur Eddy Tansil is standing trial over the small matter of defrauding a State bank of $US436m. His contact

man in the ruling kleptocrats was Tommy, who was a onetime partner, and who now stands ready to buy up Tansil's seized assets (Time, 23/5/94).

doubting the sheer ruthless brutality of the Indonesian dictatorship need only reflect on the mass murder committed in Klepto ' s ascension to power (more died there than in Rwanda); the ongoing genocide in East Timor; and, most recently, the closure of critical papers and the public beating of people protesting about it. President K lepto has never hesitated to interfere in his neighbour's affairs, as evidenced by his determined attempt to get the compliant Ramos government in the Philippines to ban the May 1994 Asia Pacific Conference on East Timor (see Kapatiran 3, the newsletter of the Philippine Solidarity Network of Aotearoa, for full details. It's available from Box 2450, Christchurch. Annual sub is $15. Ed.).

Bludger crawls to Jakarta, with no Dili dally on the way

Landslide Jim Bludger's humiliating grovelling to Klepto during his May 1994 State visit to Jakarta doesn't inspire any confidence that his Government would withstand any Indonesian pressure applied to safeguard the interests of Tommy Klepto, Bludger ignored a petition signed by 5] Mrs, including some of his own; ignored the critical speech from the Governor General to the new Indonesian Ambassador; ignored the Pilger documentary; ignored outraged New Zealand opinion, He "understands" Indonesia's position on East Timor, and furthermore, he backs Asian governments who say they don't want a charter of workers rights as part of sweetening GATT Bludger says all these are "interference" in internal affairs. He said it just after returning from President Mandela's inauguration, an event made possible after decades of just such "interference" But President Klepto doesn't hesitate to interfere in other countries affairs, even to the extent of invading them (viz West Papua, East Timor). Obviously, it depends who is interfering with whom.

The Kleptos are one family this country would be well rid of. They can go to Paraguay or somewhere more suitable to people like them. Maybe Miami And they are indicative of what is happening to both our high country and our rural land in general. The sell out needs to be stopped, and stopped right now.

appUt&UGOS ru¥olv~

:1ng of more that! 10 bee-

tares.

iUgged use for iattd W&Jj £orutry r with 32 Df 11'.1£ ep-

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tares.

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fftlfa~dc both I .s rwiling off date forest cutting rlgM. I. 10<'01 snd mt¢rM' tionmJ h~g eustness".

,j Piru,ls rmd1Jjt~ gOiotdr;w- is bo"",mg. bul !I ill ,b .....

Saturday April 23 1994

more

forelgi1 owners who are reaplag Ihe prollt., ne t New Zeaianden,H he said.

edAth8:rSt~eO~!~~ei~~ed ~h6i:~

Investment boom in New ZeaI&nd was In fact oversh.dowed by more Irodl· 110 •• 1 buyers. United KiQgdom bu)'€u accounted

~~n!~e~;:~f'~~ith~°t!t!1 ~~

mor.than$<4 ",llIlon.

Tile largest number o( appUcatloD6 had come rrom Am.rlcan boyero, with 2Z

·px~~;~rr.':;G lodged lb.

aeeend-largest number or

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appllcattens with $; total cf 11, Invo!vlr!g 215Q nectar es for more thill'i. !'14 mutton.

The largest .lDgle appllc.· tie" '11&6 from all Indouesf an

~:l.~rl:;'h$; :::WI,~!H,OOO hec-

t; AU.u1y6is of the rlgureB also show, tbs.a Americun flgri,bu§tneIiEe5 are muscUilg Is OD brming 1.011," sold IIIr Horton. One American com" PfUiY bad been ~dhrely buylog farlns around Wbs.ngaUlata ill Cernm andet.

~'D~batet about

repuulleeatam are Ii W86t.e af tlme when we ne IO~tger own our fUlldEH::iH:JFchJ pbylilcl!1 asset, the I and. 11

4

AI

Watchdogs 73 & 74 carried detailed accounts of the struggle for control ofthe forest plantations on Tauranga's Matakana Island. To briefly recap. Matakana was formerly owned by London Pacific, a Singaporean company, which went bankrupt but not before it had criminally looted the island's resource. The overwhelmingly Maori occupants, through their Te Kotukutuku Corporation, matched overseas bids in an attempt to buy their own forests, which constitute their livelihood. The receivers, in their wisdom, instead decided to sell to a consortium of forestry transnationals.

ITT Rayonier NZ (since renamed Rayonier NZ), of the US, bought approximately 1300 ha of older forest for $13.2 million, and Ernslaw One, of Malaysia, bought the younger forests, minor assets and nearly 4000 ha of freehold land and 350 ha of leasehold and forestry right land for $7,950,000, making a total purchase price of over $21 million. Wellington-based FAR Forestry Investments bought the Matakana sawmill for $50,000, plus a $621,000 commission. Both Rayonier and Ernslaw are among the biggest foreign owners ofNZ plantation forests (Carter Holt Harvey, which is now an outright US company, owned by International Paper, is the biggest). Both have only appeared on the NZ forestry scene since Labour started the disastrous policy of selling off State forests.

The Matakana Islanders reacted, firstly by taking a whole raft of organisations to court (including our old friends, the Overseas Investment Commission), and whilst that was grinding its slow way, blockaded forestry access roads on the island, preventing their asset being stripped while the case was being decided. This had the desired effect of bringing the new owners to heel, and attracted major national attention (CAFCNs Murray Horton was among those who visited the blockade). In August ]993, Justice Greig delivered his reserved decision granting an interim injunction stopping the sale, accepting the islanders' case that the consortium had structured its approach to the purchase to get around requirements of the 1952 Land Promotion and Land Acquisition Act, and the 1973 Overseas Investment Act. The blockade was lifted, in October 1993, after six months.

In March 1994, the High Court handed control of Matakana' s 4000 ha forestry to the Matakana Maori. Mr Justice Greig accepted Te Kotukutuku's case that the contract was illegal because control was given to Ernslaw One through its shelf company Caldora Holdings, without securing the necessary legislative consents needed for overseas investors buying land. He allowed the transfers of Emslaw and Caldera assets to Maori interests, for $9.6 million. This gave them title. A Te Kotukutuku director, Don Shaw, said:

"It means that we would have the rights that we have struggled for for 100 years or more. The Treaty of Waitangi under the present law only gives compensa-

WATCHDOG

II

r

u

tion, What we did was commercially secure those places that had been relevant to us. It has been a long hardjob. If you look at what we have done, it's been a group of New Zealanders who have had their backs to the wail and done something" He pointed out that, apart from one or two donations, all costs had been met by the islanders ("Bay of Plenty Times", 22/3/94)

Mr Justice Greig said that the Maori owners had "reluctantly and regretfully" agreed to the sale of half the land ( 1980 ha) and forestry rights to Blakely Pacific Ltd (US), a subsidiary of the 130 year old Port Blakely Tree Farms Ltd, for approximately $15m. This was necessary to finance the purchase. The Seattle based company has substantial Douglas fir plantations in Washington, Oregon and Idaho. Don Shaw, said the agreement was the first of its kind between Maori owners and a forestry transnational. He said it was an important agreement not only because of the acquisition of lost land, but because it proved that there could be commercially negotiated agreements between Maori and mcs. The judge said the return of at least half the ancestral land to Nga Terangi Iwi was important in light of Waitangi Tribunal claims. In the "Benefit" section of the Ole's March approval (not released until August) the vendors:

"state that the proposal provides the Maori people on the island with the opportunity to preserve and protect all matters of cultural, religious and historical significance while utilising Blakely finance and expertise to develop the island's forestry operation".

John Neill told Watchdog, in a phone interview (8/6/94) that the islanders found Blakely Pacific "acceptable", that they did not fear a repeat of the London Pacific asset stripping approach because management plans were mutually agreed, and more importantly, should Blakely Pacific ever sell, the islanders have first refusal.

In April 1994, the OIC approved Rayonier NZ acquiring Matakana forestry assets, including an additional forestry right over 51.6 ha, for $900,000. The seller was Caldora Holdings Ltd, Ernslaw One's shelf company. Rayonier stated that this was a final step in securing its current forestry management activities on Matakana Island. Rayonier retains cutting rights over the half of the forest now owned by the islanders, but is scheduled to sell out after the second cut. The islanders own the sawmill, but lease it to Rayonier. Ernslaw One and FAR are off the island.

However this was not the only court challenge to the controversial sale. Arklow Investments, headed by Rotorua businessman, Chris Wingate, had been an unsuccessful bidder. He had proposed a $250m tourist resort, complete with hotels, canals and marina, golf course and a bridge-causeway to the mainland. Undaunted by rejection, he sued FAR For-

PAGES

estry. His caveats blocking the sale were rescinded Justice Greig's March decision. He announced all immediate appeal and the deal was put on hold until this

It was heard in the Court of

and proved to he a in the ointment be-

cause it was allowed. was awarded $1 costs,

and the case sent back to the High Court at Rotorua for a full hearing, on a date yet to be set He was absolutely blown them out of the water. Greig did was overturned and thrown emf' Don Shaw said

that the islanders were innocent in the

between Wingate and FAR ("BoP Times", 116/(4) case was that Arklow had been with the receivers to buy, debt-free, the 4000 ha Matakana block. He had approached FAR for advice and, in confidence, explained his intended purchase method. Wingate contends that this was exactly the method used by FAR to make the purchase, in November 1992. As its share, FAR bought the sawmill stock, plant and equipment for $50,000 and commission of $621 ,000. The judges pronounced themselves satisfied that there was an arguable case that FAR had indeed used Arklow's confidential information as a "springboard" for its own bid. The full hearing will have to determine if FAR's conduct amounted to a breach of fiduciary trust.

"It may not be a strong case, but there is sufficient to warrant the inference that FAR received confidential and valuable information from Arklow- Wingate that they put to their own use" .. 1317/94). What this means, in plain English, is that the whole deal is up in the air again.

At the time of writing (August 1994), the outcome of this case is not known. John Neill told us, in another terview, that the islanders were "~'V"'''M' the status quo established by Mr Justice March ruling. It is ironic that. in order to secure control over their own forestry resource, the islanders had to sell half (land and cutting rights) to an American company. But to a eli ..

c

r

r

1, 1

(1) Profit and Loss Accounts

AI Watchdog for year ended 3V3/]994

Expenditure

Production account (including all printing and copying)

3667.45

Wages ~funding

WATCHDOG

none. The Matakana Island and

of New Zealand. TNCs head on, and if court action doesn't do the trick, then blockade them.

its Parent

"Foreign Correspondent" has featured so much tabloid

crap that it's a surprise to find it screening some-

thing hardhitting, On it screened a graphic

Australian doco detailing the pillage of Papua

New Guinea's rainforest. One company was overwhelm-

to blame -Rimbunan of Malaysia (ironi-

as "green lushwhich now owns 1.8%)

forests in Coromandel, Otago,

Matakana. "Clearcut" has the

Subscriptions Donations

Ole sales 987.00

4512.75 324135

764.05

Expenditure

NZES ABC

5136.00 1822JlQ 6-.9..6:i.OQ

Information Buys Administration:

Postage 449.25

General 306.35

Phone 281.53

Donations Office

163.66 J5JJU

Depreciations Watchdog surplus

H/ Campaign for year ended 31/3/1994

Travel Forum Typing

Revenue

221.82

Stock sales

In Deep Water? less cost

249.79

Interest

1352.62 690.00 ~58_j).8. 864(LJ6

1031.00 45.00 61.00

] 137.00

Sale of Speech Notes Video sale & hire Deficit

C/ Combined Profit and Loss Account (A + B)

Loss on Campaigning Overall 1993/94 surplus

D/ Use of surplus 1993/94

Reduced Assets

or Increased Liabilities

Sale of In Deep Water? Stocks in trade 1992193 Advance sale of Clearcut Depreciation of equipment Surplus 1993/94

to "accumulated fund"

(2) Balance Sheet as at 3113/1994

Source of Funds

Accumulated Fund Carried Forward ~ ]993/94 surplus

Advance sales Clearcut

909.03 1549.65 ~

Surplus on Watchdog

Increased Assets

1063.40 75.00 690.00 1549.65

Cheque Alc Key Alc (reduction) Cash increase Transfer of cash

to ABC Organiser Alc (for future wages)

1123.72 1063.40

60.32 61.89

97.97 130.00 909.QJ lU1JlQ

2458.68

3512.73

989.68 2523.05

5265.15 491.48 855.00 1381.75 6900Q 691.75 7303.38

Audit:

I certify that the above Balance Sheet divulges the correct position of the Society according to the books and information supplied to me. 25th April, 1994.

~~~'

W. Rosenberg Hon, Auditor

J311t05

Use of Funds

5678.73 1549.65

Bank Accounts Cheque Account Key Account Organiser Account Equipment

k£i Depree

The audited accounts/or 1992193 are available upon request. Ed

75.00

WATCHDOG

PAGE 7

CAFCA had no hesitation in actively supporting the Seafar .. ers Union (and the other maritime unions) in their struggle with NZ Rail over the Cook Strait ferries. We did so because they were pitted in combat with an American-owned company, one which has continued the previous management's policy of slashing staff (over 20,000 a decade ago; now down to 4400), and which has declared a 1993194 profit of$38.9m.

We did so because it was a nakedly brutal move by an employer, using the Employment Contracts Act, to attempt to slash staff further and reduce the conditions of remaining workers. It also seemed hellbent on smashing the union, and took extraordinary steps to provoke a showdown ._ serving lockout notices, recruiting local and international scabs at exorbitant rates, setting security measures in place for a 1981 Tour-like scenario. NZ Rail and Telecom, which is virtually printing money for its US owners, have both introduced American heavyhandedness to their industrial relations, and in the case of Telecom, succeeded in stirring up a workforce that hadn't taken industrial action since the I 970s.

In Christchurch, CAFCA members took part in the weekly

n

solidarity meetings with the Seafarers; we attended their pickets (even the midwinter dawn ones at the railway station); we helped write leaflets; and we did two mailouts, one to Christchurch members, and one to everyone (the "castrated horse" cartoon on this latter one meant that it didn't get any wider circulation. So treasure it, you've got a limited edi .. tion). We also got Terry Stuart, the Seafarers South Island secretary, to speak to a monthly meeting of the Campaign for Peoples Sovereignty (in 1993, Terry addressed a CPS meeting on the open coast policy).

In the end, of course, it didn't come to Apocalypse Now. As with any negotiated settlement, both sides claim victory. The Seafarers certainly lost some jobs, but not as many as NZ Rail wanted. The employers got their 24 hour sailings, but failed to get rid of the union. We aren't concerned with the details of wages and conditions. The settlement has been accepted by rank and file seafarers. We see it as an important victory by a union facing a very determined attempt to strangle it. The employers knew that the Seafarers have a long history of militant struggle. Most recently the union beat the previous Railways management in 1989 despite being sequestrated (sounds like what happened to the poor

8

horse, In recent years, it has run the ever picket, several years; and attacked the non-union "Straitsman" at every

We also time. For 20 years,

actively CAFCA We have

issues like the export of Bu ller

donated to us, and assistance to individual

CAFeA Most we have backed their cam-

paign against the lunatic open coast policy, and mailed their

material out to all members with a 1 Watchdog.

Pre-election the Government was hellbent on opening up coastal shipping, which is opposed both the local industry and unions, This would cost up to 7000 introduce rust bucket ships crewed by cheap labour, commanded by Kong officers who have bought their skippers' tickets, and would inevitably lead to environmental disasters caused by Post-election. Bolger strongly hinted that this could be a casualty ofthe new Age of Aquarius, and its strongest proponent, Rob Storey, was dumped from Cabinet End of Storey, so to speak. That world governments could not reach agreement on including maritime services in the l lruguay Round of GATT may also be a factor.

But we spoke too soon. The Maritime Transport Bill continued on through the select committee and indeed Rob Storey, a former president of Federated Fanners, was the chairman of til at select committee. His replacement as Minister of Transport, Maurice Williamson, indicated h is support for it. Federated Farmers launched an all out campaign to get it passed, backed by the newly formed Chamber of International Ship Operators, lobby group for foreign ship owners ("Press", 2/3/94). There was the ironic of the Seafarers Union picketing the Chinese Embassy, protesting interference in NZ politics China's State shipping tine. The open coast policy was being pushed through at the

same time as the (and unsuccessful) attempt to de-

stroy the Cook Strait unions by Wisconsin Central and

its hired gun, Richard Prebble, Although it was substana Labour filibuster in Parliament, the Gov-

passed one vote. Ironically, the

one of its most ardent proponents, things up more than a little, and it remains the most contentious piece of legislation in a very close Parliament

The spirited campaign against coastal deregulation has been led both the maritime unions and NZ shipping companies. Pacifica Shipping has run a virtually nonstop advertising campaign about it. A World Bank shipping paper reported that 16% of seafarers on international ships are Filipinos and many have phoney accreditation, Pacifica's chief executive Rod Grout personally proved just how much of a problem fake accreditation is. On a recent trip to the Philippines, he bought a master's certificate of competency for $500.

"'I could buy a complete set of documents for a ship and all its crew for about $25,000. It means I could run a ship virtually anywhere in the world and get the papers accepted in any port'.., The Marine Safety Authority seldom checked certificates and would accept the bought Filipino tickets if they found them, Mr Grout said" ("Press", 2115/94),

Other analysts have pointed out that foreign newcomers to NZ's coastal trade won't pay income tax, company tax, ACC levies.GS'I', or fringe benefit tax. This will give them a 30% advantage over locals, and the tax loss to NZ has been estimated at $ i 15m, Already one local company, South Pacific Shipping, is looking at moving offshore and registering in Vanuatu to take advantage of this; and foreign rustbuckets have turned up in NZ ports. It's just more free market lunacy from the ideologues.

exclusively for Watchdog. He has been away from it for far

talented builder/renovator, and raising a family. Ron was a precoof the early 70s (viz his "Let's Yank Out the Yanks" one for out of Uncle Sam's mouth). He worked as layout editor oi Canta, work for CAFCINZ was to draw "Power Junky", our Comalco comic it as the occasional hobby,

We are delighted to announce ROll'S return to

too long, whilst as an pv,·r",.."p

dow; genius who drew some of the c lassie

a Harewood with Starlifter

the Canterbury students paper, his

(Pete Lusk did the But the 80s he was

him to draw for us again. He has done several cartoons specially for this to do so in future. He has also been drawing for local groups eg the Campaign for

leaflet this Ron's work has always had the power to shock, and his

definitely upset some people. We make no apology for that. and the politics of his cartoons are a refreshing contrast to the reactionary or

His work is neither racist

vapid pap served up in the mainstream media. Welcome back, Ron.

PAGE 9

I

GATT

in

The Pacific Institute of Resource Management (PIRM) is holding a seminar on GATT in Wellington during Friday 23/Saturday 24 September. Titled "GATT and the Global Economy - the hidden agenda", the seminar is intended to help boost the growing opposition to corporate free trade and the movement for development alternatives. For further information contact PIRM, PO Box 10-123, The Terrace, Wellington, ph (04) 4738312.

The following week free trade forces are having their own seminar. Peter Sutherland, the director-general of GATT, will be the keynote speaker at the Australia-NZ Business Council conference in Auckland, This conference, called "Life after GATT - the role of CER in the new world trade era", will be on September 29/30, Chairperson of the Business Council is our old friend, Kerry McDonald, head of Comalco, a branch of the earth's biggest, greediest and most ruthless mining transnational corporation (TNC), Rio Tinto Zinc.

NZ's GATT Uruguay Round Offer

With the help ofthe Official Information Act, GA TT Watchdog eventually got hold of a copy of NZ' s CIA TT Uruguay Round offer earlier this year. The two documents acquired constitute the broad principles informing NZ's commitments to other negotiating partners in the Round. They are "in the form ofa Schedule ofNZ's concessions relating to market access for industrial and agricultural goods and commitments on export subsidies and domestic support, and a separate Schedule of commitments on services".

Wolfgang Rosenberg did a provisional analysis of the NZ offer for GATT Watchdog. Among the points made by Wolfgang, the following are noted here:

(a) Reduction in tariffs means a lot less in indirect taxes, and so less for social services, public works, etc.

(b) A number of industries are clearly losing protection to the point that imports will replace local manufacture. This causes more unemployment and increases imports.

(c) Supporting exporters, so as to earn foreign exchange to pay for the imports forced on NZ, is now forbidden or severely restricted.

(d) NZ is thus committed to a development path which cuts off other options.

(e) The NZ people are at the mercy offoreign financial interests. We have to put up with an almost fully foreignowned banking and finance sector which is not only extremely costly in terms of foreign exchange payable for their services, but which is also capable of sabotaging any financial regulation which a future NZ government might try to implement

(0 Senior staff of foreign service providers have the right to obtain work permits from the Immigration Department, cut-

N

ting more New Zealanders out of employment This will also make it more difficult to plan for efficient education! training programmes,

(g) Preference for New Zealanders in the services sector will be increasingly hard to maintain as any restrictions on foreign competition are likely to be whittled away as further negotiations on the liberalisation of services proceed.

(h) The freedom to develop economic policies for New Zealanders is being replaced by the dictates of an international command economy centred on the exploitative policies of TNCs and foreign capital.

The Return of Flipper versus GATTzilia

The event that really galvanised international environmentalist opposition to the GATT Uruguay Round agenda was the finding in August 1991 by a GA TT disputes panel against a US boycott on tuna caught by methods that killed too many dolphins. This boycott had been implemented on imports from Mexico and Venezuela.

In actual fact, the US Administration had only enforced the boycott as a result of legal action by an environmental group, the Earth Island Institute. It was very reluctant to apply its Marine Mammal Protection Act to such imports. Mexico then challenged the application of the Act by appeal to GATT.

Environmentalists reacted strongly to the August 1991 finding of the GATT disputes panel because of the panel's stated reasons as to why the US boycott was GATT-illegaL In brief, the GATT panel argued that: (a) no country could impose trade restrictions to protect natural resources located outside its national borders - the so-called principle of extraterritoriality; (b) GATT membership precludes discrimination against imports on the basis of their methods of production. These were the major points made by the GA T1' panel, and many environmentalists quickly appreciated the threat to international agreements like the Montreal Protocol on the Ozone Layer and the Convention of International Trade in Endangered Species, agreements which use trade restrictions to enforce compliance. Free trade clearly conflicts with environmental protection,

But GATT was reluctant to face up to the issues and the panel decision was not officially endorsed. Instead another hearing eventually took place. Now concern has resurfaced again about this case with a second GATT panel ruling that the US boycott of tuna is illegal. While the new decision recognises the rights of countries to enact extraterritorial laws, it found the boycott illegal because GATT prohibits trade bans based on how a product is produced. So there is some sort of compromise of conflicting principles but one that is unlikely to prove satisfactory to either free traders or environmentalists. Indeed, the GATT panel decision will only reinforce the worst fears of environmentalists. The panel has recommended that the US should change its law, calling the law economic protectionism cloaked as environmental-

PAGE 10

WATCHDOG 76

by number of

Ism.

are

New Zealand! Our government has been one of tile reactionaries on environmental issues.

The new GATT World Trade has es-

tablished a Committee on Trade and Environ-

ment which is to look at such matters and "report

to the first biennial the Ministerial Conference

after the entry into force of the WTO when the work and terms of ref ere nee ofthe Committee will be reviewed, in the light of recommendations of the Committee". One task of the Trade and Environment Committee will be to determine how dispute settlement mechanisms agreed to in the Uruguay Round will relate to international environmental agreements.

The struggle for sustainable is going to be tough although the NZ fix the Environment has signalled its readiness to at least engage in on the issues. Non-government organisations should take up the opportunity.

With the coming into force of the WIO next year, a new triad of Western control is In January this year a strong critique of the results of the GATT Uruguay Round was made by Luis Fernando Jaramillo, chairperson of the Group of77 (a negotiation bloc over 100 Third World countries) and Colombia's permanent representative to the United Nations. Jaramillo declared that, "Unquestionably, the developing countries are the losers, both individually and collectively". Philip Burdon, NZ Minister for Trade Negotiations, can unabashedly say that, "Devel-

oping countries have been in their support for

the Uruguay Round, and suggestions will somehow be

disadvantaged are also wide of the mark (Press, 9/2/94). This is breathtakingly blatant propaganda. The Uruguay Round was launched in the face of Third World opposition and even the official projections to a bad outcome for the majority of the world's people.

Jaramillo drew attention to the potential joint force of the World Bank, the International Monetary Fund and the WTO, and warned of:

"the birth of a New Institutional Trinity which would have as its function to control and dominate the economic relations that commit the developing world .; The institutional reform of GA 1'T is directed

at bringing in the area a further weak-

ening of the United multilateral

mechanism in which the developing countries can have some say." distributed copies of Jaramillo's speech to some media but these were nored as usually happens with such rnaterial.) "The GATT Uruguay Round Final Act and Agreement Establishing the World Trade Organisation", 1994, calls for the new triad to achieve "greater coherence in global economic , i.e. to impose New Right economics worldwide.

July this year saw the 50th the IMF/World Bank. The

of the terrible twins, "50 Years Is Enough" mobilisation against

was

exacted by these interna-

tional institutions. Walden at the

US institute for Food and (Food First),

has looked at these policies in depth. (Bello was the keynote speaker at last year's "Peace, Power, and Politics" conference in Wellington.) He calls them "Destruction by Design"! Aotearoa/NZ, of course, has been subject to a de facto structural adjustment - "Rogernomics" - during the last decade.

Such adjustment, or rather restructuring, means lower barriers to imports, the removal of restrictions on foreign investment, privatisation of state-owned activities, a reduction of social welfare spending, wage cuts, and devaluation of local currencies. Poor as an expendable human resource, suffer the pain of being adjusted so that higher income people can continue to benefit The local "50 Years Is Enough" campaign has produced an excellent leaflet Contact PO Box 22-652, Otautahi/Christchurch.

Maritime Transport Bill

This bill is linked to the government's Uruguay Round services offer although cabotage was excluded. In the GATT "Final Ace NZ is listed on page 412 as intending to take part in negotiations:

"on a voluntary basis in the sector of maritime transport services within the framework of the General Agreement on Trade in Services. The negotiations are to be comprehensive in scope, aiming at commitments in international shipping, auxiliary services and access to and use of port facilities, leading to the elimination of restrictions within a fixed time scale."

It is noted that commitments scheduled by participants on maritime transport services at the conclusion of the Uruguay Round shall enter into force at the same time as the WTO (due to start as soon as possible in 1995). The NZ government is being driven to open up our coasts by international pressure along with its own sell-out ideology.

- on

The Association of Taxpayers and Consumers (ACT) of Roger Douglas represents the end goal of GA TT and free trade, the corporate command economy. In the government's publication of its version of the GATT results for Aotearoa, the title of Douglas's book, "Unfinished Business", is used to point ahead to further free trade negotations ("Trading Ahead", April, 1994), Douglas is talking of "global is at ion" and weakening of governments. In other words, the rise of corporate feudalism through takeover by TNCs is not something to be resisted in the names of democracy, freedom, justice and national sovereignty but rather something to be embraced - at least for those with plenty of money, or those who can be conned into the illusion of consumerist choice.

PAGE 11

One can read in that classic study of the Reach: The Power of the Multinational

Richard Barnet and Ronald I

leaders said in the

or Moore today, of media hype.

Citizen participation is to be reduced to the target of advertising. Government itself is to be reduced to the function of policing the nation and the world for corporate enterprise and the narrow vested interests that this economic power reflects. The atomised individual in the global marketplace is supposedly to reign supreme as TNCs drive down publicly sanctioned environmental standards, labour conditions, safety and health standards, and the other collective social achievements of the last century or so.

Capitalist rulers facilitated the development of the welfare state because they came to see it in their long-term interest to prevent the outbreak of open class war. Now the welfare state is being pared away because the capitalist ruling elite see it as in their immediate interests to do so - one of the great ironies of human events. The ultimate result w ill not be to their liking.

William Keegan, Economics Editor of the Observer has warned that, "If people's lives are left to vagaries of the free market, capitalism is indeed a dangerous spectre" (see "The Spectre of Capitalism", 1992). Keegan's analysis of the world economy is perceptive but he still fails to fully grasp the nature of the stage towards we are now lurching. Unless we can work out ways to fairly share resources and income in sustainable forms of development, we will surely selfdestruct as a species, New Deal Keynesianism will not be enough.

The Invisible War

Hardly anything of the GATT fallout for the Third World (South) has appeared in the NZ established media but on Sunday, 12 June this year, the "Insight" programme on National 3Y A radio presented an item called "The Invisible War". On the odd occasion, the gatekeepers of Western mainstream media let something really critical of the system slip through. After all, it gives an impression of lipservice to democracy. Anyway, this item gave an excellent overview of GATT's negative impact on the Third World.

It blows away the propaganda of Moore and Burdon. Interviews are conducted with a number of informed people, including well-known figures like John Kenneth Galbraith and Noam Chomsky. The "Invisible War" indicates that a "wall" like the Berlin Wall is being built higher and higher between North and South with the New World Order meaning even greater impoverishment for the poorer countries. Obviously, the title of this radio item speaks volumes. There is indeed a war going on. It has in fact gone many phases since the Portuguese started their colonial inroads into Africa in the early I Sth century. It is invisible because for the most part knowledge of it is systematically or distorted. You can own an exotic child through charity sponsorship as

advertised on TV; and comfortably continue to and exploitation of the world's resources of a small proportion of the human vision now all-encompassing.

"The invisible War' is It can be ordered from Wellington, for $20.

antidote to the GA TT myth. Radio, PO Box 2091,

Two petition forms, a anti-Uruguay Round one and another specifically opposing the GA 1'T intellectual property rights agreement were distributed by Action for Fair Trade for a few months (over summer 1993/94). Little in the way of resources could be put into these but we were pleased to get over 1200 signatures. "Thanks" to all who signed!

GATT Watchdog also carried out a survey of Ml's. A grand total of nine MPs replied, with two National MPs formally declining. The seven filled questionnaires, five of them from identified National Party members, supported the GATT agreement (one response was anonymous), The only Labour respondent, Mike Moore, felt that the labour and environmental aspects of GATT need improvement, as does the textile agreement for the Third World. Of the five National MPs, John Luxton was unaware of any rationale to oppose GATT felt we were ignorant of its basic economics, and would be delighted to enlighten us, (We'll send him a Watchdogl) Similarly, John Falloon felt critical comments were ignorant and that any critics had not bothered to do their homework. Michael Laws saw no problems with the agreement and considered it would have a very favourable impact (He should reflect carefully on his support for producer boardsl) The Alliance, of course, has already expressed grave misgivings about GATT in media releases while NZ First has indicated a lack of confidence in GATT's success, We thank our respondents.

Trade

One ofthe world's major issues is the question of who will control the production and consumption of food - will it be the people in the widest sense, or will it be narrow vested interests? The Final Act of the GATT contains an agreement on food safety standards which threatens to erode efforts for high standards by handing over international authority to a TNC-dominated agency, Codex Alimentarius.

Codex is an agency which is jointly run by the World Health Organisation and the Food and Agriculture Organisation. It relies almost entirely on data supplied by industry sources

and has been slammed for bias consumer groups. The

government is in the process of and revamping

our food regulations according to Codex criteria. Already these regulations have been weakened to accommodate CER demands as the success of Kelloggs' on additives in breakfast food cereal has demonstrated, Government/ GATT objectives include getting "fast approval" for producers and of food and placing "responsibility for

12

quality management on ernment has indicated it is ",'''''Ullk:. your say as soon as you can. ment for an update. Soil and Health is running a Clean/Safe Food campaign Contact PO Box 36-1 Northcote, Auckland 9, ph (09)

GATT Opposition Continues

Opposition to GATT continues to mount across the globe. There have been strong protests in India, South Korea, the Philippines, and elsewhere. In the US big business is marshalling the corporate troops but resistance is vigorous from labour, consumer, environmental and allied groups. In July 1994 an association representing county governments throughout the US expressed concern to President Clinton that local laws and regulations could be undermined by GA TT. In its letter addressed to the President, the National Association of Counties warned that: "The GATT proposals could well undercut the very best of our system of government, which allows ordinary citizens to translate their concerns about issues such as public health, safety and the envi-

...---------- ---..

( ,,5 mE vs.'(

/111£ C;ln~UAKj

CpAJ _- sPECIA,(L Y DF.-SI<9JE.,D fZ:8e. "1If11lD~ ('OA/DmOAJ I

ronment into that makes a difference in the com-

The Citizens' Trade Campaign organised a GATT

20 in Washington.

the Bloated Boosted GATT

Government Minister, Doug Kidd, has vowed that NZ will to a bureaucratic monster in Geneva. In to criticisms of the Employment Contracts Act (ECA) by the International Labour

(l Kidd asserted that NZ government

policy and courts will not be subject to the dictates of a "bloated bureaucracy in Geneva" (TV I News, 6pm. 30/3/ (4). The great is while the ILO is toothless. the government is happily serving its people up into the maw of GATT, armed now with some real legal teeth. GATT, in its new form of the WTO. will be able to intervene in Aotearoa! NZ in aid of the corporate free market. But, then of course, the ECA was designed for the WTO .... (The CTU has available a paper titled, "The ILO, The Social Clause And

New Zealand", PO Box Wellington, July 1994.)

·-----------·-~·--·---'-'----------I

"REBELS IN R

R

Both CAFCA and ABC grew out of the Progressive Youth Movement (PYM). This video, by Russell Campbell, of Vanguard Films, is a 74 minute documentary on the Christchurch and Wellington PYM, covering the period from the late 1960s to mid 1970s. It is both informative and highly entertaining, being largely filmed at an action packed 20th annniversary reunion in 1989. So if you want to learn om whakapapa, this is the video to see (not to mention to have a laugh or cry about the Good Old Days).

Murray Horton has a spare copy available for sale. It costs ally, at Box 2258, Christchurch.

Make the cheque out to him person-

WATCHDOG

PAGE 13

T (Urugu

On 14 July Trade Negotiations Minister Philip Burdon moved the introduction of the GATT (Uruguay Round) Bill It was given its first reading and referred to the commerce select committee. This Bill is intended to enact the implementing legislation for GA TT.

It amends a number of Acts in order to give effect to the specific Multilateral Trade Agreements that form an integral part of the Agreement establishing the World Trade Organisation (WTO). The Acts to be amended are: The Patents Act J 953; The Commerce Act 1986; The Trade Marks Act L 953; The Fair Trading Act 1986; The Animal Remedies Act J 967; The Pesticides Act 1979; The Medicines Act 198!, The Customs Act 1966; The Temporary Safeguard Authorities Act 1987; and the Dumping and Countervailing Duties Act 1988. The Bill also contains provisions relating to geographical indications to give effect to the WTO Agree, ment. These provisions are meant to become a separate Bill with the name, The Geographical Indications Bill. Finally, the GATT Bill repeals the General Agreement on Tariffs and Trade Act 1948 and revokes Orders in Council made under that Act As well, other amendments to legislation giving effect to the WTO Agreement are included in the Copyright Bill and the Layout Designs Bill.

Patently Privatising the Public Good

It is in the area of the proposed Amendments to the Patents Act j 953 that Loss of national sovereignty is most evident. The Amendments implement section 5 of Part II (Articles 27-34) of the GATT Uruguay Round agreement on Trade-Related Aspects oflntellectual Property Rights (TRIPS). To quote from the Bill:

"The principal amendments are the extension of the term of patents (including existing patents) from 16 to 20 years, changes to the circumstances in which compulsory licences may be granted, and changes to provisions governing Crown use of patented inventions."

The sections on compulsory licensing have already suffered a GATT-mandated deletion. Section 51, the

76

)

ill

clause earlier eliminated the Patents Act J allowed the Commissioner of Patents more readily grant compulsory licences to local firms with regard to patents applying to food or medicine.

Section read:"!» the terms of licences under this section the Commissioner shall endeavour to secure that food, and surgical and curative devices shall be available to the public at the lowest prices consistent with the patentees' deriving a reasonable advantage from their Food and medicine/health care - so vital for human basic needs but increasingly a major means for transnationals to make more money.

The current proposals amount to a very significant further weakening of the governmental capacity to exercise compulsory licensing for the collective public good. They also substantially reduce the government's power to get reasonable prices for prescription medicines.

Compulsory licensing is a whereby government gives

itself powers to assign patent on account of certain

specified reasons and under certain specified conditions, to applicants for the better use of these rights. This can help protect the public interest An example of the proposed

ntAr NoW o~~ O()~

~ RcUCAHg.,fc.o

PAGE 14

changes indicates the extent and depth of commitment to enacting the policies demanded by the transnational corporations (TNCs).

The Patents Act 1953 is to have section 46 repealed. Section 46 deals with "Compulsory endorsement" and reads in part:

" (2) The grounds upon which applications may be made for an order under this section are as follows, that is to say:

(a) That the patented invention, being capable of being commercially worked in New Zealand, is not being commercially worked therein or is not being so worked to the fullest extent that is reasonably practicable:

(b) That a demand for the patented article in New Zealand is not being met on reasonable terms:

(c) That the commercial working of the invention in New Zealand is being prevented or hindered by the importation of the patented article:

(d) That by reason of the refusal of the patentee to grant a licence or licences on reasonable terms-

0) A market for the export of the patented article manufactured in New Zealand is not being supplied; or (ii) The working or efficient working in New Zealand of any other patented invention which makes a substantial contribution to the art is prevented or hindered; or

(iii) The establishment or development of commercial or industrial activities in New Zealand is unfairly prejudiced.

(e) That by reason of conditions imposed by the patentee upon the grant of licences under the patent, or upon the purchase, h ire, or use of the patented article or process, the manufacture, use, or sale of materials not protected by the patent, or the establishment or development of commercial or industrial activities in New Zealand is unfairly prejudiced."

Reference to these grounds upon which application can be made are to be replaced by:

"(2) The grounds upon which a licence may be granted under this section are that a market for the patented invention is not being supplied, or is not being supplied on reasonable terms, in New Zealand." Certain specific conditions are attached to any successful application e.g. limitation "to the supply of the patented invention predominantly in New Zealand".

Such restrictive changes to the governmental capacity for compulsory licensing thus represent a very substantial capitulation to the demands of the TNCs which allow them, under most circumstances, to avoid any obligation to the public good. Note that companies are now free to simply import their products with no commitment for local working. National sovereignty and democratic control, let alone the more specific goals of employment creation and beneficial use of local resources, are cast aside under the new GATT regime.

Tracking the GATT

The GATT Bill amends anum ber of existing Acts. But this is not all the legislation under way or in the offing (and even beyond), which has (or will have) GATT connections. For instance, changes are now being considered to NZ's medicine and food safety laws and regulations, changes which have GATT-mandated objectives.

Such changes are being smuggled through outside the direct ambit of the GATT Bill.

As well, some government ministers have acknowledged that their departments have not examined the implications for existing legislation. As these implications become clearer further legislative changes will be made - that's assuming a free trade government of some sort stays in power. It is important at this stage then to note what has been omitted from legislative change.

Most significantly, there are no proposed amendments to environmental legislation. The Resource Management Act is supposed to provide for "sustainable management", a term which includes protection of the environment along with economic development, as well as the requirements of safeguarding the potential to meet the "reasonably foreseeable needs of future generations". But there has been no environmental assessment of GATT on this Act or other environmentallaw. Corporate free trade subverts sustainability, something the government seems to ignore! Famous environmentalist Edward Goldsmith, founder of The Ecologist and one of the authors of "A Blueprint for Survival" (1972), denounces GATT as a disaster for humankind (Press, 10/5/ 94).

There are obviously a number of interrelated and intermixed factors involved here. One is that, given the narrow selfinterest of the forces they represent, some National government ministers probably don't care anyway. Another factor is that ministers like Luxton have already been pointing ahead to minimalist government - a government that will simply police the people for the benefit ofTNCs. Thirdly, faith in free trade simply prevents some from following through the implications of their policies. Finally, and certainly not least, it is clear that the Government is quite prepared to compromise on, or even sacrifice, sustainability when obvious conflict arises. A relevant example has been indicated by the Royal Forest and Bird Society Protection Society which cites the weakening of our draft hazardous substances and new organisms legislation due to GATT considerations.

The movement against the corporate command economy in AotearoafNZ is starting to expand. As worldwide resistance mounts, our allies will also increase. The growing challenge is to chart alternative paths committed to sustainable development, social justice and participatory democracy.

WATCHDOG

PAGE 15

il-lslnq f r f em

An address on GATT by Philip Burdon, the Minister for Trade Negotiations, was presented on 27 July 1994 this year at a special dinner in Christchurch sponsored by Mobil Oil NZ Ltd. It comes, of course, as no surprise that one of the giant oil TNCs would sponsor such a dinner.

As one of the original infamous seven sisters (see "The Seven Sisters" by Anthony Sampson, Coronet, 1988), Mobil has long had an active political agenda on trade matters and how to protect and further its interests. Of the American oil companies it has been among "the most politically conscious and aggressive" ("The Seven Sisters", p. 340). With its advertising/sponsorships and the occasional attention it receives over petrol prices, Mobil has a strong presence within the local corporate scene. But Mobil's moment in the sun here in AotearoaINZ really came in October 1986 with the allegation by then Minister of Energy, Bob Tizard, that Sir Robert Muldoon had used a CIA agent to persuade the previous government to adopt the Mobil synthetic fuels plant (Star, 30/10/86). In this light the "Think Big" deal seemed somewhat shady. Tizard drew a network oflinks involving NZ's secret External Intelligence Bureau, the CIA, NZ top bureaucrats, Mobil and the American Ambassador. Bill Birch was also later accused by Labour of meeting international oil companies in secret (Star, 27112/86. See Watchdog 65, Oct. 1990, "Think Big, the CIA, and Battling Bob" for full details ),

This cloak and petrol hose stuff is all part of the wheeling and dealing in big oil. Mobil has been a keen promoter of the TNC agenda for GATT. In 1993 it ran an advertisement in the US with the slogan of "Let's keep GATT on the fast track", supporting President Clinton in his successful bid to renew "fast-track" authority for GATT. "Fast track" is regarded by perceptive Americans as a fundamental abrogation of their democratic rights.

Let Ralph Nader, the renowned American consumer advocate, explain what is meant by "fast track" in the US governmental system:

"In the United States, Congress has limited the effectiveness of its own role in the trade agreement negotiation process by deciding that it wi!! consider the agreements according to a uniquely anti-democratic procedure. Called "fast track", the special rule for Congressional consideration of trade agreements allows Congress to avoid its responsibilities by assuring that the agreements will not be subject to the full scrutiny they deserve. Under fast track .. Congress must vote up or down on the agreements - with no amendments permitted - within a brief 60 to 90 days of the President's submission of the agreement, and must limit its debate on the agreements to not more than 20

TT:

he

e

III

rse

crac

?

ill

Dennis Small hours in either the House or Senate! Congress must agree to deal with completed trade agreements in this fashion before the President even begins to negotiate." (see "Free Trade and the Decline of Democracy" in "The Case Against Free Trade: GATT, NAFT A and the Globalisation of Corporate Power", 1993, Earth Island Press, p. 5)

In its advertisement, Mobil was explicit enough - "Negotiating fair rules of global trade is hard enough without the possibility that our Congress - and other governments who must also ratify it (sic)- could get into the act and attempt to renegotiate it item by item. That's what fast track is designed to avoid", So negotiating "free trade" means the deliberate reduction of the national democratic process to the exercise of a rubber stamp, and this in the world's most powerful nation and self-proclaimed bastion of democracy. Nader calls GATT "an unprecedented corporate power grab".

TNCs like Mobil enjoy fast tracking because it gives them free rein to ride over the rights of citizens in the US and elsewhere. They have regular access to the inner decisionmaking processes of GA TT. Their lobby organisations like the Multilateral Trade Negotiations Coalition drove the GATT agenda and shaped the final outcome. Philip Burdon's "Good GATT" speech in Christchurch was certainly wellgreased by Mobil and co. Burdon has denied that foreign TNCs will "acquire enhanced power" over NZ business (Press, 9/2/94) but this denial is a contradiction of governmental policy. Government policies of the last 10 years have been tailored to the requirements of increased foreign control and GATT cements in this process ofTNC takeover.

His predecessor, Mike Moore, spelt it out some years ago. Mike said GA 1'T and globaIisation were so important to NZ because, quoting West German Chancellor, Helmut Schmidt, "national strategies are anachronistic in our present-day world" (Press, 16/8/88). It was especially "outdated nonsense" for small countries like the Netherlands or Luxemburg to even think of a "purely national economic policy, a purely national foreign policy or a purely national security policy". From the perspectives of the environment and human solidarity, nationalism is indeed a concept with reallimitations unless properly balanced. The trouble is that the solution, according to Mike's muddled mind, is relinquishing control to the TNCs - an ultimately destructive outcome.

Marginalising the GATT Critics

The charade that passes for the practice of democracy today has been nicely pointed up by an article on GA TT and environmentalism in the Economist, one of the leading pillars of established capitalist wisdom. This article was reproduced in the NZ Herald (9/1/93). To quote:

PAGE 16

WATCHDOG 76

"Greens object to what GATT does, but also to how GATT does it Whereas trade lobbyists are usually to operate in secret, providing confidential commercial inforrna-

tion to strengthen their case with greens know that

their power is based on their public

opinion."

Yes, that's what the Economist said! Let's look closely at this statement, especially the last line - "power is based on their ability to manipulate public opinion". This is a remarkable confession of how capitalist democracy functions, and how in practice the guardians of received doctrine define the system which they run, Trade lobbyists, according to this view, are not trying to manipulate people, but instead those who appeal to open discussion are attempting such manipulation. This is a reversal of the usual understanding of the operation of the democratic process whereby sovereign power is supposed to reside in the people and their active participation in the decision-making that affects their lives.

With further deliberate distortion, the Economist cynically referred to the "fragile and dispersed" free trade lobby, calling it "ill-equipped to stand up to an onslaught from wellorganised greens with their skills at twanging the heartstrings of wealthy westerners". Mobil and co. would surely gush tears of sympathetic understanding.

Western democracy is today permeated with hypocrisy. It is now 10 years after 1984 but the warnings of Orwell ring on more relevant than ever. GATT involves major issues of democracy, sovereignty; environment; development; sustain ability; technology and intellectual property rights; food/safety/health/labour standards; employment; hunger and poverty; justice and freedom; bask human rights; the future for billions of people in the South (Third World); and, in fact, the future of humankind. But critical scrutiny of GATT's negative implications has been almost systematically suppressed by the government and its allies in Aotearoa/ NZ.

Earlier this year rang up the editor of a major daily paper. I wanted to respond on behalf of GATT Watchdog to an article of Mike Moore. The editor made it plain, however, that he considered thai we had already been more than adequate space to put our views. Yet if one did an analysis of the newspaper coverage of GATT over the years since late 1986 that cited NZ individuals and/or organisations, one would easily deterrn ine that the GAIT critics have only got a minute percentage of this coverage. Normal practice for the media has simply been to print government hand-outs, constantly repeating the standard message. The particular Moore article at issue was largely an echo of the claims of the government's "Trading Ahead" publication, previously published in the same newspaper. Credibility is defined in terms that suits the system. There is in fact more democracy on trade issues in the US than here in NZ.

The editor said that we were retreading old ground. Anyway, the GATT Round had been completed. While he would consider an article if we were to send it in, he had to state his

frank opinion that he felt there were more interesting and important things for readers. Is this a reflection of a bankrupt intelligence, a vacuum of moral concern, or simply another example of the manipulation of wealth and power? The of and moral sensibility is inextricably linked to socio-economic structure, whatever the personality/psychological factors may be.

GATT Corporatlsation of Government

In an article in Terra Nova, June 1992, Peter Fowler, who is a journalist with National Radio, Wellington, spoke of "The GATT Secret Society" and how "NT s resource management policies" were being decided in Geneva. He noted that there was no public debate over GATT and the environment, and that "there is even evidence to suggest the government is deliberately trying to avoid such a debate".

Yet, as indicated above, the issues involved in GATT are fundamental to the operation of democracy. The ability to participate meaningfully in determining the socio-economic conditions that shape one's life is the very essence of development. Even now the Government and its agents continue to deny the proper exercise of these rights to the NZ people. Tim Groser, the Government's chief GATT negotiator, was reported in March 1994 as saying that there had been a change in the policy of the Ministry of Foreign Affairs and Trade (MFA T). Instead of "hi ding behind glass walls in big buildings on the Terrace", he was out speaking to people which was "something new" (The Independent, 25/3/94). This supposedly new MFA T policy is in fact still carefully orchestrated. More open communication, sensitively managed, with selected groups is okay now. In April this year MFA T even hosted a junket in Wellington for newspaper editors from around the country to help ensure that the already pliable mass media would toe the party line and promote the good news story.

As government becomes the creature ofTNCs and foreign investors, national development policy is more and more determined by the money markets, and those who live off them (regularly paraded on TV and other media). Consequently, low-income people and their allies will need to organise their own democratic responses for survival beyond the devastation of the corporate command economy. The national organising groups of the Peoples' Network in Auckland and Wellington, the Auckland Unemployed Workers' Rights Centre, the Christchurch-based Campaign for Peoples' Sovereignty, and similar groupings/networks throughout the country represent incipient efforts in this direction that we need to foster for the future.

(A Newsletter is now available on this theme. Called Common Ground, it is the "Newsletter of the Peoples Network Arising from the Building Our Own Future Project". Contact PO Box 3813, Auckland, for vol. 1, issue 1, July 1994, $10 a year's subscription. A significant initiative is the Next Step Democracy Movement which is using the Citizens' Initiated Referendum Act to help empower people through work on health, employment, and other major issues. Contact PO Box 11578, Wellington.)

PAGE 17

The 1994 CAFCA AGM was held at the Christchurch WEA

on 2!L 19 members were present were ac-

cepted from Betty Roberts, Paul and Richard

Suggate. The 1993 AGM Minutes were read and accepted.

The Treasurer's report was presented by Ann Currie. The books for the years J 992/93/94 had been audited by Wolfgang Rosenberg elsewhere in this issue for full details). The CAFCA/ ABC Organiser Account, which exists solely to pay Murray Horton's wage and attendant expenses, has not yet been audited, although it will be, As at March 30, 1994, it totalled $5688, II.

Election of officers. The present committee was reelected unopposed ie Murray Horton as secretary/organiser; Ann Currie as treasurer; and Bill Rosenberg, Dennis Small, John Ring and Reg Duder as committee members, (NB. Within a week of the AGM, Ann Currie had resigned as treasurer and from the CAFCA committee, citing pressure of workfrom

I

E

My last "annual" report had to cover a period of several years. This one covers just over 6 months. So here you have the new, improved, market-driven CAFCA ("Our Mission is to be the Very Best Campaign Against Foreign Control of Aotearoa"), This report will be commendably briefer than the last one.

I'm not going to repeat the basics of what I do on a day by day basis. I refer people to my previous Report, published in Watchdog 73. The basics are all detailed there. Anyone present at this AGM is perfectly welcome to inspect the invoice book which records my services for CAFCA and the Anti Bases Campaign on a fortn ight!y basis. Essentially, since the 1993 AGM, my work has been more of the same.

There has been one major new strategy adopted, however, and it started within days of that last AGM. I have undertaken a number of speaking tours. In September/October 1993, I spent three weeks touring the country from Blenheim north to Whangarei, That was also detailed in Watchdog 73. In December I visited Westport; Taranaki in January; and in March it was Taupo (the latter two being places I was unable to get to on my major tom. I still have outstanding invitations to visit Kaitaia and Russell).

These have been a great success, and I thoroughly recommend them. There's nothing new about them - provincial whistlestop tours were the secret of Larry Ross' campaign to get NZ declared nuclear free; provincial tours by first Trevor Richards and then John Minto were the reason HART

WATCHDOG

MI

her day job, See elsewhere in this issue for her "living obitumy". CA FCA currently has no treasurer per se. The work is shared, and Becky Horton volunteered to do all bookkeeping. Ed).

The Organiser's report was presented by Murray Horton.

There was a general discussion on CAFCA's 1994 priorities. We discussed the need for better media work; better use of resources; and particular use of video as a medium. It was felt that we need to focus more attention on GA 1'1'; and on getting our information out to more people, particularly young people. Murray suggested a specific campaign on debt, similar to that on GATT.

At the conclusion of business, we screened the British TV documentary Hell in the Pacific (see elsewhere in this issue for details).

,

REP

T

- Murray Horton

could build a national anti-apartheid movement. Response has been uniformly enthusiastic among people I've spoken to on these visits; and interest is satisfyingly high among the provincial media. Without fail, all visual media loved my one low tech prop, namely a scroll of Overseas Investment Commission approvals offoreign takeovers, It stretches for metres, and is the result of Ann Currie's stroke of genius. It is invaluable to finally meet people who have been longtime members, and to tap into other networks. it is important that CAFCA's wealth of information and our analysis be put to practical use in the regions where people are quite often confronted by transnationals on their very doorstep. And it's vital that CAFCA be seen to take part in the struggle of others eg on that three week trip, J marched with students, and I visited the Maori people blockading ITT's logging roads on Matakana Island. These trips have been great for signing up new members. Taranaki was far and away the best for this. And for putting us in touch with a whole lot of new people and new media outlets eg iwi radio stations. They are the way to go, and the reason I can undertake them now is precisely because I am the fulltime organiser.

Having to do a lot of public speaking finally led me to writing a comprehensive beginner's guide to foreign control. It will never be published in Watchdog, because it's too long (20 sides). It definitely beats my previous ad hoc and often ad lib method. It is structured so that it can be either given as a speech (albeit a 2 1/2 hour one), or read as a paper. I can also deliver an edited version of it, and have done so to groups ranging from resource management students at Lincoln Uni-

18

American students who

were the world on a global course. On ev-

ery occasion I've delivered it, there have been requests by

people it as a paper. As an we video-

taped my October Christchurch and advertised the

tape. We sold about a dozen

So that's been my major new and one that I've wanted to do for years. It has convinced me more than ever that ours is an issue whose time has come, and that there is a very solid nationwide groundswell of support for us. Networking has also taken me to national meetings at Picton and Porirua, so far this year. There is a condition attached to all this travel - I only go when and where somebody else

(preferably not pays for it.

But I certainly haven't been neglecting my routine Christchurch-based activities. l remain as CAFCA secretary, with all that entails, and as our organiser, am involved in a number of issues and groups, ranging from GATT Watchdog to the Canterbury Health Coalition to the Campaign for Peoples Sovereignty. The fight against foreign control is a common denominator in all these campaigns. I continue to regularly write for various publications, ranging from the PSA Journal to Monthly Review. And media work is a weekly, sometimes daily, reality eg within the last week, CAFCA's analysis of the 1993 statistics for rural land sales to foreigners has had national coverage. It's not just releasing press statements or directing reporters to stories. It's got to the stage now where they give us stories in some cases, because of our good relationship. Whenever time allows, I do some more work on Clearcut, my study of the forestry industry. I'll be as glad to see it finished as the loyal people who've already paid for a copy (see elsewhere in this issue for a not ice)

And I am the editor of Watchdog. We have produced two issues since the last AGM. We have decided to restrict it to no more than 50 and we reduced the typeface one point to save space, We are with the new two col-

umn format; we are more illustrations (indeed Ron

Currie returning 1:0 especially for Watch-

dog); and we've started running even nude ones, no

less might become a regular feature as

we jump into the ratings There always too much

copy to fit it all in, so are evaluating a reader

survey on how much space per issue to devote to the monthly decisions of the Overseas investment Commission (see Ole

Results in this Watchdog has a well

earned reputation as a mixture of solid fact, scathing analysis, and idiosyncratic humour; we have a regular team of

good quality writers (Bill and Dennis Small be-

ing the other members of the we have a

out man and printer; we receive unsolicited articles from internationally renowned journalists such as David Robie, and, equally valuable, from rank and file members. In short, Watchdog is booming. I'm actually sorry to have to impose the discipline of editing on it, but it's necessary for reasons of money, sheer bulk, and because, like everything we hate, it's good for us.

I should briefly mention my ABC work. This year, we held

the biggest most and best

for at least five years. In the Peace Researcher the lady

Thomson has responsibility backing of other sectoral

the last 12 months, the ABC

So, very briefly, this is what I do for a You'll be

pleased to know that it costs you no more than the that none of my wage comes from the State wanted State funding, I am ineligible). hesitation in recommending myself for a raise. L",'"u<"'··'.

with a working wife, a freehold house .. no kids

is impossible to save on $170 gross per I will reach a point where my bank account and my bills will

tell me I have to chuck in this lark and

job. And that would be a pity. So post that

today folks. T don't need to convince you that you get

for money, both from CAFCA and from me will happily keep doing this I' d be lying if I said that l'1I subsistence wages.

That aside, CAFCA is doing and I'm

be in the thick of it have a rea! belief

CAFCA into a national movement

scale of the problem demands such a response. There's

plenty of we could better,

things we're currently not strong as the number of committed

upon. So we need your and

then we need your help for us to do our I quote the old Chinese There is Heaven, the situation excellent.

ANN

ES

(

Horton

Ann Currie resigned as CAFCA treasurer, and from the committee, in May, less than a week after accepting re-election at the AGM. On reflection she decided that the increasing workload, coupled with the pressures from her new job, made the prospect of another year as treasurer just too much to bear. She made a clean sweep, resigning as treasurer of Campaign for Peoples Sovereignty, (being replaced by Averill Williams), quitting that Campaign and Buswatch. She decided, quite understandably, that she wanted a life. She left us on good terms.

Ann was treasurer for six years, and the workload grew steadily. A treasurer's job in any voluntary group is always both onerous and thankless (as evidenced by the fact that nobody has volunteered to replace her. The work is being shared). Ours are the problems of success - an increasing membership, a greater flow of money in and out, more special purpose accounts to juggle. Not only was she responsible for all financial matters, but for keeping the mailing

)

list up to date. Not she decided that it was all getting too much for her, and was showing definite signs of burnout. Since quitting, she has looked like a great load has been lifted from her.

Ann comes from an activist family, starting with her Iivewire parents, Jock and Betty (who, after a lifetime in Timaru, now live over the road from her) Brother Tony, who lives in Sydney, was a CAFCINZ founder; brother Ron a talented cartoonist who has agreed to draw for Watchdog. After training as a school dental nurse, she spent several years in Britain on the Big DE. She returned in time for the 81 Tour (you can see her in "Patu" describing the layers of protection she was putting on before the Christchurch test). She became a long time leading figure in The Health Alternatives for Women (THAW).

"The 1980s were very stimulating times from within this womens health collective. It was during this time that I clarified my understanding about the murky politics of womens health and developed ideas with my collective colleagues of how to push for change over a whole range of worn ens health issues. Along the way we encountered considerable ignorance and resistance from the health bureaucrats and policy makers, but we achieved some significant changes in spite of everything". CAFCA leader Christine Bird spent the best part of a decade working at THiI.W.

Ann Currie (with Warren Thomson) and the original "scroll of control", 1991.

WATCHDOG

Ann came to CAFCA after several years as a committee member of Citizens for Demilitarisation of Harewood (now the Anti Bases Campaign), reflecting her activism in the peace movement of the 80s. She took a leading part in the first few Waihopai demos. So I've been attending fortnightly meetings with Arm, of one kind or another, for over a decade now. Shortly after joining, she replaced Terry Moon as treasurer, and did a very competent job of handling an ever increasing workload, Ann was not merely a financial administrator, but deeply committed to CAFCA's cause. This took her into other groups as she was a founder member

of and of one and only function-

ing in Christchurch South,

which has run the South power campaign.

Fortunately, Ann has not been lost to us. She remains a CAFCA member, and has

PAGE 20

offered us her talents. She has finished with numbercrunching and sending out overdue sub notices to recalcitrant members ("but I just paid that!"), but is keen to use her proven creative skills to spread the message. She wants to look at videomaking; and volunteered to a CAFCA display in the Canterbury Public be on for a week in March 1 at various cabarets and secret fantasy parties over the years - her stage name is Zara 0' Ham - and I'm wondering if there's some way we could promote CAFCA through one of her justifiably famous hat parties. All of you who have attended my public meetings and were wowed by my dramatically unrolling a gargantuan scroll of OIC approvals (newspaper photographers love it: I've been photographed looking like an extra from "The Curse of the Mummy's Tomb") may not have realised that it was all Ann's inspiration and work. It's

a very simple visual aid for a subject notoriously difficult to present visually, but a stroke of total genius. It works a treat every time (and it's a bloody sight lighter to carl)' in my pack than 50 Watchdogs).

We wish Ann well in getting on with her life. Her resignation also removes the woman from the committee, one which used to include her and the formidable duo of Terry Moon and Christine Bird. This is very unfortunate because ... none of us knows how to boil water to make a cup of tea, No seriously, because foreign control affects all of us, and women have a whole other insight into the subject. So, please form a queue (and no, you won't have to be treasurer). There's a distinct bender in CAFCA's gender, and we want to straighten it out.

HA M

NIXON, MASS RDERER

RI

The nauseating spectacle of Presidents Clinton, Bush, Reagan, Carter and Ford all solemnly farewelling that unpunished criminal at his funeral earlier this year was only rivalled by the hypocritical cant spouted in the world's media about this "elder statesman". Elder statesman my arse. Nixon was living proof that if you're going to be a crook, be a really big one, and nobody will touch you. What's more, they'll cry at your funeral.

Let's forget the Nixon who was the vicious McCarthyist witch hunter of the 50s. Let's forget about Nixon the perpetrator of the Watergate monstrosity of the 70s. They say people deserve the politicians they get, and this was "only" a crime against American democracy, and, after all, nobody got killed by it.

But the people of Vietnam did nothing to deserve Nixon, and the regime of mass murder and terror that he waged against them for several long years. Him and his fellow "statesman", Henry Kissinger. All the Vietnamese people wanted was national independence and socialism. Despite Nixon's B52s and napalm, they got it too. The Yanks have never forgiven them.

I, and my contemporaries worldwide, are all Nixon's children. I started varsity and joined PYM in 1969, the year he assumed office. My first arrest was at the Auckland protest to greet his Vice President, Spiro Agnew (another bloody crook). What is now CAFCA grew directly out of the antiVietnam War protest movement. We remember the crimes committed in those years, not only against the people of Vietnam. The whole Cambodian dates back to then (that was another arrest for me, when the Yanks invaded there). And Chile is still coming to grips with the aftermath of the murderous J 973 coup that Nixon and Kissinger oversaw. By the time Suharto's butchers went into East Timor in

WATCHDOG

-Murray Horton

1975, Nixon had resigned in disgrace, but Kissinger was still there, wading in blood. In his own country, he presided over the repression waged against the protest movement, and people were killed, including the Kent State students and numerous black and Native American activists.

Good riddance to the bastard. He was a mass murderer and a war criminal, and should have been treated accordingly. But imperial powers reserve the force of Jaw for their opponents, never for themselves. Disgraced emperors become "elder statesmen". And their toadies attempt to rewrite history. Let's ensure that they don't succeed

PAGE 21

RU

M

CAFCA has regularly produced a "Who Owns Christchurch" paper. Indeed we incorporated it into both a walking tour of the centra! city and a wider ranging bus tour in 1993. Many's the time that we have suggested that the local media, with their much greater resources, should be doing this work. Once or twice they have, usually after drawing heavily on our resources.

Well the Press finally decided to do something about it and in May ran a front page lead, complete with colourcoded graphic, on who owns Cathedral Square. It was most informative (even if the odd correction had to be run later). But the colourcoding was quite something else. Buildings owned by Telecom, Westpac and BNZ were listed as being owned by "national" companies! They must have left out the prefix "trans". And they listed their own building as being Christchurch owned! If you want to see who does own the

LETTER T

Ballantyne Road RD2; Wanaka 23/4/94

There is another angle to one of the ()IC decision reports (in Watchdog 75, April 1994) regarding the Milburn property acquisitions by Blackhead Quarries Ltd at Clarendon. The three properties now acquired have the only known significant phosphate deposits in New Zealand. Apparently the deposit is substantial and the deep open cast technology needed to extract it is now becoming viable and cost effec-

N

w

"HELL I

and most of the NZ read Bill Rosenberg's

excellent article in Watchdog 75 We never knew that Rupert Murdoch was a local . He must be OK then, musn't he.

When we rang the deputy editor to point this out his sole response was "point taken" We asked for permission to buy and reproduce the graphic, as a poster and in Watchdog. We were told this was the first request the Press had ever received for a graphic and that any decision would have to be made at a "higher" level. After several weeks, permission was denied. Reason? It would be too much bother to set up systems to handle such a request.

Too much bother to get the facts straight too, apparently. Never mind, at least they had a go, which is more than they've done before. 7 out of 10.

THE EDIT

R

tive, The idea that you can go corporate farming with seasonal labour is crap. It appears that the prospect of rock phosphate extraction would suit the corporate expertise quite well.

Keep up the good work.

Regards

Gilbert van Reenen

If other members can provide further detail on individual Ole approvals, please let us know. Ed

IFI

This is a Channel 4 documentary screened in Britain in late 1993. It was sent to us by Roger Moody of Minewatch, and was first screened at our AGM in April.

It is 55 minutes long, and details the Papua New Guinea activities of our old adversary RTZ, and its subsidiary eRA (the parents of Comalco). New Zealanders are familiar with the tragedy resulting from the RTZ/CRA mine on Bougainville, but are less aware that eRA has also been forced off the Mt Kare gold mine (in the Highlands ofPNG itself) by militant landowners. The video also looks at the proposed RTZ/CRA project on Lihir Island. It covers the big picture of racism, corporate colonialism, and murderous exploitation.

This is an invaluable study of the reprehensible activities of the world's biggest mining transnational in one of our closest neighbours. It has led directly to war on indigenous peoples by the client government of PNG. This is a documentary that should be viewed by all CAFCA members, and by all concerned New Zealanders.

It

L

You may recall that in last you were asked to fill out a survey on your opinions on how we should deal with the analysis of the decisions of the Overseas Investment Commission, which fills a large part of each Watchdog. We had a reasonable return -- 55 in all. or about 15% of readers. The exact results are shown below.

in summary, the great majority usually read the analyses right through (24) or skim through them for items of interest (21). A fair num ber (14) used the index when it was published, but the majority (25) did not. Most (36) have also used the analyses at least occasionally for later reference, and a number of strong comments were made saying that this was important source of information and "someone needed to do if' as a matter of record. Finally, the largest number of those responding (22) preferred that the analyses remain at their current degree of detail, though there were also significant numbers wanting the index as well (11), or just summarised highlights (15).

So we have decided to continue to publish the analyses as before. without the index. but with reports (?f older decisions released on appeal limited to the more important ones. Time currently prevents providing summarised highlights We much appreciated the many encouraging comments received

The annual indexes are available from CAFCA for the years 1990 to 1994 (year to date) If you are a CAFCA member, they're free (though a donation would help with photocopying and postage). If you are not a member, we charge $5 per year's index. They can also be supplied on computer disk (IBM-compatible only). Please supply the disk and tell us your preferred format (e.g. WordPerfect 5.1, Word for Windows 6.0). We can supply most formats. The indexes are up to 100Kbytes each, or 24 A4 pages.

We also have a service which we charge for, supplying photocopies of each month's decision sheets and the analysis of them, within 3-4 weeks of their arrival. This costs $50 per month, discounted by 50% for news media, payable three months in advance.

Question 1: Do you read the write-up of ole decisions in Watchdog?

Usually, right through 27

Usually, skimming for items that interest me 22

Occasionally 3

Never 2

No answer

Question 2: Did you use the index to the decisions when it was published?

Yes 14

No 28

Not applicable to me No answer

12

Question 3: Have you ever used the analysis for later reference?

OO~ 7

Occasionally Never

No answer

32 14 2

Question 4: please rank the following in your order of preference:

1st 11 22 3

2nd Jrd
3 0
8 0
7
1 0
6 5
0
35 43 Go back to publishing the indexes and detailed analysis As is

Summarised highlights of rural land; full analysis of rest Rural land in full, summarised highlights of rest. Summarised highlights only

Stop publishing this information

15 o 3

No answer

WATCHDOG

PAGE 23

AN INVEST

I

1

u

SA

The value of the applications made to the Overseas Investment Commission by foreign investors in 1993 have increased rapidly over the frightening levels we saw in 1991 and 1992. This is shown in the official OIC statistics for 1993 released in January. Comparable statistics were released for the first time last year, for 1991 and 1992.

In 1993 applications for foreign investment approved by the OIC totalled $9.4 billion, a 37% increase on 1992 ($6.8 billion). In 1991 the amount was $6.3 billion. Compare this with total private sector gross fixed capital formation in Aotearoa in the year ended March 1993 of $11.0 billion. Although the $11.0 billion is not strictly comparable. because it is net ofthe sale of capital assets (such as occur in a company takeover). the scale of the foreign investment is still huge.

For the first time, the OIC have also released detailed statistics on rural land sales. Again, the increase appears startling. Approvals total $138 million, compared to $44 million passing into full foreign ownership in 1992 (though approval was given for $190 million in sales that year). The area involved in 1993 was 48,997 hectares; in 1992 it was only 19,534 hectares (1992 statistics quoted in the Press: "Land Sales to foreigners", 15/6/93.). The average per approval in 1993 was $1.2 million and 430 hectares. Rural land sales gain considerable public attention, and for good reason, but it is worth pointing out the tiny value of land being sold in comparison to total foreign investment. Forestry has been a major catalyst for land sales.

The main source of investment remains the old colonial masters. The U.S. and Australia are easily the top two, but a few transactions have put Canada into the third position for non-land investment ($1 billion). The buy-out of Fletcher's methanol assets accounts for part of this, but releases from the OIC appear to have suppressed where the remainder comes from. Then comes the U.K., with Japan, Hong Kong and Singapore distant but significant followers up. Taiwan ($74.2 million), Switzerland ($43.7 million), France ($353 million), Brunei ($304 million) and Malaysia ($27.9 million) are the next biggest. By dollar value, the order is similar in rural land, but with the U.K. easily at the top and Hong Kong pushing out Australia for third place. A surprise entry is Qatar which spent $5.7 million in just three purchases. By land area, Indonesia is out front with 14,000 hectares, for which it paid only $3 million. Though Taiwan is fourth by number of applications, they are of low value and land area: buying up small areas of land for forestry development appears to have been attractive.

The ole statistics must be read with care: they record the applications to the Commission. The Ole bothers to follow up to find out neither whether the applications went through, nor if the amount of money stated was ever invested. In addition, for a particular takeover, there may be a number of bidders, all of which ask for clearance from the OIC, but only one of which is successful (such as in the sale of state assets). However, our experience in watching the applications go through is that there is not a huge amount of duplication (there is some), and most applicants appear to make their application when they are sure they have the transac-

tion sewn up: it is common knowledge (and a point of pride for the Commission) that it takes only days for applications to be approved.

Foreign investment totals $904 billion, says group fl~~/q!r

by Greg Jackooll

The Foreign Investment Commission approved a total of $9.4 billion of foreign investment in New Zealand in 1993, according to a group opposed to foreign control of national assets.

A spokesman for the Campaign Against Foreign Control of Aotearoa, Murray Horton, said the commission had approved 382 applications last 'year.

None of the applications was declined.

The commission's figures covered two categories, for overseas takeovers and overseas companies acquiring assets or starting businesses.

The figures did not. provide a total over-ail picture of foreign investment but did identify investment trends, said Mr Horton.

"Incomplete as they are they simply record New Zealand's con-

WATCHDOG

tinuing decline into being a branch office of the transnational, a 'nation' in name only, an economic colony," he said.

New Zealanders had become "tenants in their own home".

The 1993 $9.4 billion total of approvals was up sharply from 1992 when $6.9 billion had been approved.

The biggest investing nation. by value was the United States with $3.7 billion, followed by Australia with $2.2 billion.

Singaporean investment totalled $540 million, Hong Kong $520 million, and Britain $490 millfbn, The Japanese were a' "distant !ailt" at $170 million. The major activities attracting foreign investment were manufacturing ($~1b), communication and telecommunication C.t L9b), and conunerclal leaslng ($L8b).

The Minister of Commerce, Philip Burdon, said critics were ignoring the realities of New Zealand history.

In the period 1987-1993 the statistics cover, only four applications out of 6,738 have been declined by the Commission. The last one was declined in 1990.

There are three categories of statistics supplied. The first two are for all investment: firstly. takeovers of existing companies, and secondly, "asset acquisitions and business commencements" (essentially, new investment). The third category is rural land. Readers will notice an sudden drop off in applications between 1989 and 1990. That is not

because the started to take a

hard line on investors: on the contrary, it is

simply because the rules were loosened in August 1989. From that the threshold at which the permission of the Commission was required (for other than rural land and fishing) was raised from $2 million to $10 million.

24

---.-- ---
Overseas Takeovers in New Zealand 1987-1993
1993
A12121 ications
Registered 849 1060 862 219 156 140 163 4,924,939,997 4,786,188,619
Declined 0 0 1 1 0 0 0 0 0
Total approved 849 1060 861 2]8 156 140 163 4,924,939,997 4,786,188,619
Final_Qwnershil2
u.K, 106 140 96 43 31 35 25 1,415,917,824 270,252,657
U.S. 64 90 93 20 17 20 27 28,970,914 1,118J97,949
Australia 470 523 487 78 42 46 40 2,999,718,580 1,462,972,869
Japan 24 35 43 33 25 16 6 172,475,783 30,010,051
Hong Kong 37 24 19 8 5 0 16 0 180,660,100
Singapore 2 18 13 8 5 7 17 68,267,308 168,330,720
• 146 230 110 28 31 16 32 239,589,588 1,555,564,273
Others
Total 849 1060 861 218 156 140 163 4,924,939,997 4,786,188,619
_ % Overseas Ownershil2
Up to 49.9% 45 60 21 5 9 6 6
50% 14 23 17 4 4 4 4
50.1 to 74.9% 44 22 37 2 9 7 7
75 to 100% 746 955 786 207 134 123 146
Total 849 1060 861 218 156 140 163 4,924,939,997 4,786,188,619
'* Of the "other" countries, Canada, in four transactions, accounted for $1,444,784,035. Overseas Takeovers by activity: 111/91 to 31112/93
Activity 1991 1992 1993 s 1991 s 1992 $1993
h£<!_gJl}modation
Farm Stay Accommodation ° 0 5 7,496,055
Accommodation - Hotel/Motel 6 6 6 98,811,813 49,267,308 8,000,101
Agriculture
Beef Farming 4 0 1 4,830,000 1,500,000
Crop Farming 0 () 0
Dairy Farming 1 3 2,000 2,560,000 570,000
Deer Farming 2 4 3 200 2,786,530 607,037
Floriculture/Nurseries 0 1 5 252,000 280,200
Goat Farming 0 0 2 570,100
Market Gardening 5 1 2 1,137,500 115,000 265,100
Mixed Farming 2 2 0 674,250 1,594,687
Orchard 4 3 1 3,332,940 781,983 640,000
Pig Farming 0 0 0
Poultry Farming 0 0 0
Sheep Farming 10 3 7 4,694,412 1,755,200 10,008,210
Vineyard 5 5 4 698,940 97,705 1,008,300
AmusqmentiEntertainment 3 6 2 2,580,000 17,821,700 115,460 WATCHDOG

PAGE 25

,---'---------' "---------------

~ormnunications and 2 2 2 14,000,000 2.263,752 0
lclecommunications

finance
Banks 7 8 1 38,500,000 2,656,476,622 162,000,000
Insurance 9 4 141,801,595 14,159,254 23,432,783
Fishing
Commercial Fishing ° () 0
Fish Farming ° ° 1 16,400,000
Forestry 2 15 3,970,000 101,900,000 107,581,125

Manufl,lc turing 20 26 29 750,400,552 518,801,]85 2,673,870,887
Media
Print Media 0 3 I 75,000,000 33,440,000
Radio Broadcasting ° 0 0
Television Broadcasting 5 0 0
Mining
Coal Mining 1 ° ° 222,000
Crude Petrol and Natural Gas 2 ° 0 14,106,668
Metal Ore Mining 1() ° 4 42,122,539 169,648,148
Other Mining 2 0 ° 478,500
ProperlY
Commercial Construction 3 0 1 30,300,001 570,000
Commercial Property Leasing 6 1 23 64,070,170 38,000,000 546,034,000
Lifestyle 2 10 5 J,189,900 1,701,875 1,380,775
Residential Construction ° I 2 750,000 19,800,598

Building services 0 ° °
Business Services 3 5 6 5,001,000 9,912,337 15,786,569
Education Services 0 0 0
Financial Institutions/Services 10 5 5 185,272,748 419,714,361 107,759,678
Health Services 0 0 0
Tourist Service Industries ° 2 0 414,488
Transport Services 5 4 5 190,180,002 32,625,891 342,000,000
Veterinary/Animal Services 0 ° 0
Ihor()ughbred Stud 0 4 560,000 2,105,076

Utilities
Electricity Supply 0 0 0
Gas Supply ()
Water Supply ° 0 0
Wholesale and Retail Trade 21 25 16 681,504,731 645,174,631 533,318,417

Holdin_gi:ompanies 4 11 3,014,293 331,008,488
------------
Total 156 140 163 2,283,456,754 4,924,939,997 4,786,188,619 WATCHDOG

PAGE 26

Overseas companies commencing business or acquiring assets
in Aotearoa 1987-1993
1987 1988 1989 1990 1991 1992 1993 s 1992 $1993
Applications
Registered 891 919 677 201 179 203 219 1,934,867,017 4,622,666,506
Declined 1 0 0 1 0 0 0 0 0
Total approved 890 919 677 200 179 203 219 1,934,867,017 4,622,666,506
Final OwnershiE
U.K. 128 97 68 22 16 20 19 130,466,305 219,03 J ,325
U.S. 82 102 69 23 32 33 58 525,067,605 2,610,432,665
Australia 490 483 330 88 32 78 39 599,617,742 787,259,135
Japan 28 61 57 24 18 26 21 267,050,748 142,054,656
Hong Kong 20 18 20 14 7 1 13 150,000,000 336,245,000
Singapore I 7 8 6 14 14 28 92,735,199 366,488,481
Others 141 151 125 23 60 31 41 169,929,418 161,155,244
Total 890 919 677 200 179 203 219 1,934,867,017 4,622,666,506
o/~ Overseas OwnershiE
Up to 24.9% 7 1 9 1 7 3
25 to 49.9% 44 29 36 4 17 11 7
50% 52 59 36 12 3 9 14
50.1 to 74.9% 43 39 49 8 13 6 25
75 to ]00% 744 791 547 175 139 174 173
Total 890 919 677 200 179 203 219 1,934,867,017 4,622,666,506
. Purpose of Application
Incorporation of a 434 446 238 14 8 12 18
company
Registration of a Branch 10] 106 80 5 6 8 0
Increase in Share Capital 84 65 91 26 36 9 24
Acquisition of Assets * * * * 112 117 156
Activation of a Name * * * * 14 11 0
Protection Company
Individuals * * * * 1 8 II
Unincorporated Body * * * * 2 5 1
Extension of activities * * * * 0 33 9
Name Protection 130 111 62 0
Other 141 19] 206 155
Total 890 919 677 200 179 203 219 1,934,867,017 4,622,666,506
* Prior to 1991 these types of applications were amalgamated under the heading 'Other' WATCHDOG 76

PAGE 27

Asset Commencements to
1992
AccommQdation
Farm Stay Accommodation ° 1 2 1,500,000 2,195345
Accommodation - Hotel/Motel 11 3 9 187,785,244 30,060,000 116,017,916
Agri culture
Beef Farming 2 2 260,000 760,000
Crop Farming 1 0 2 100,000 600,000
Dairy Farming 2 6 4 2,110,000 3,545,000 480,000
Deer Farming 2 2 1 927,500 2,450,000 315,000
Floricul ture/Nurseries 1 4 4 445,000 2,985,000 1,200,000
Goat Farming 0 0 °
Market Gardening 2 2 6 525,000 1,300,000 2,101,474
Mixed Farming 2 2 2 501,875 528,938 805,000
Orchard 0 2 2 245,000 500,000
Pig Fanning 0 1 0 1,500,000
Poultry Farming 0 1 0 0
Sheep Farming 6 10 5 6,976,524 7,343,841 7,897,425
Vineyard 3 7 4 1,211,250 1,930,250 9,674,950
Amusement/Entertainment 8 6 5 2,067,125 29,515,000 40,000,000

Communications and 6 8 13 236,056,500 59,171,835 1 .. 884,977,439
Telecommunications
Finance
Banks 4 2 2 127 ,925,000 204,315,305 165,0()0,00O
Insurance 3 0 2 246,500,000 10,719,100
Fishing
Commercial Fishing 3 I 2 200,000 910,000 8,000,100
Fish Farming 0 0 0
Forestry 12 20 43 392,388,200 525,600,324 76,781,392
Ma,nufacturigg 29 15 21 882,070,169 88,774,261 360,669,.103

Medi!!,
Print Media 0 2 1 0 15,000,000
Radio Broadcasting 0 ° 0
Television Broadcasting 2 0 o 34,681,543
Mining
Coal Mining 1 1 2 780,000 140,000 5,000
Crude Petrol and Natural Gas 4 5 2 54,985,642 41,000,000 10,000,000
Metal Ore Mining 4 1 8 350,0()2 12,000 72,012,747
Other Mining 2, 3 0 930,000
Property
Commercial Construction o 6 100,000,000 85,680,100
Commercial Property Leasing 21 8 33 1,008,075,000 1,168,506,624
Lifestyle 8 8 10 1,948,500 1,610,000 2,071,750
Residential Construction o 2 0 Services
Building services 0 0 0
Business Services 3 8 3 39,285,288 256,046,077 20,600,000
Education Services 1 0 0 183,500
Financial Institutions/Services 3 31 4 217,325,000 21,000,000 31,000,000
Health Services 0 ° °
Tourist Service Industries 1 3 ° 295,000 887,000
Transport Services 10 3 12 310,769,999 15,250,000 406,270,100
Veterinary! Animal Services 0 ° °
Thoroughbred Stud 3 3,560,000 6,000,000 320,000

Utilities
Electricity Supply 2 1 94,640,000 74,640,000
Gas Supply o
Water Supply ° o o
Wholesale and Retail Trade 9 15 5 131,663,519 144,863,984 47,865,941

Holding Com}2anies 9 15 24,000,000 167,473,203
Total 179 203 219 4,016,882,380 1,934,867,017 4,622,666,506 Rural Land
Country of origin of investment Land Usage proposed in application
Countn: Appns Hectare s Land Use Ap~_. Ha. s
--------
United States 22 6,066 26,285,648 Forestry 32 25,356 42,881,092
Australia 17 2,159 14,709,158 Lifestyle 12 309 3,452,425
United Kingdom 11 1,146 44,393,985 Sheep Farming 10 5,311 15,254,635
Taiwan 10 263 3,340,529 Tourist related 9 14,838 9,Ol7JJ55
Singapore 9 698 7,160,000 M anufacturing 7 58 41,566,250
Japan 8 4,606 4,353,082 V iticul ture 7 224 10,663,300
Malaysia 7 9,326 4,805,000 Thoroughbred 5 481 2,425,076
Hong Kong 6 5,564 15,440,100 Stud
Switzerland 6 270 1,740,250 Flor icul ture 5 45 1,480,000
Germany 4 108 1,705,000 Market 4 62 1,465,000
Qatar 3 2,378 5,700,000 Gardening
Netherlands 2 59 750,000 Dairy Farming 4 294 1,050,000
New Caledonia 2 33 735,000 Deer Farming 3 104 917,037
Canada 2 501 925,000 Beef Farming 3 734 2,260,000
Indonesia I 14,000 3,000,000 Orchard :; 17 1,140,000
Italy 1 1,193 1,350,000 Crop Farming 2 188 600,000
Ireland 262 1,500,000 Mixed Farming 2 275 805,000
Tahiti 8 300,000 Goat Farming 2 34 570, 100
_faragu~ 1 357 300,000 Residential 70 2,400,000
Total 114 48,997 138,492,752 Subdivision
Commercial 23 570,000
Construction
Coal Mining 19 5,000
Metal 555 782
Total 114 48,997 138,522,752 WATCHDOG 76

29

of

Northland 141 Less than 1 ° ha. 26 6373,850
Auckland 4 72 2,000,000 10 to 100 ha. 45 64,674242
South Auckland 10 1,458 9,588,500 Over 100 ha. 43
Bay of Plenty 4 97 8,908,000 Total 48,997 11I::ll, 114 138,492,752
Waikato 5 387 2,246,076
Gisborne/ 8 4,778 48,295,000
Hawkes Bay
Taranaki 2 710,000
Manawatu 115 460,000
Wellington 6 338 3,770,000
Nelson/ 7 4,685 14,484,536
Marlborough
Canterbury 14 14,746 6,470,750
West Coast 2 24 7,250
Otago 20 8,350 24,19IJ17
] 1 11 182
Total 114 48,997 138,492,752 BU D

S N NO MINISTER

ESN'T CH K APPLIC

OMIT ole TI NS

CAFCA continues to attempt wring the maximum information from the Overseas Investment Commission (Ole), Bruce Ansley's image of its secretary, Paul Tindill, "languid in his office chair, perhaps swinging his rubber stamp" ("High Country sell-out", Listener, 1617/94, p20) can't be too far from the picture we see, Every month a significant proportion of the decisions we report to you have had information deleted from them (typically the price paid) and several other decisions are withheld in total. Three months later, we routinely ask the OIC for the deletions to be reviewed. Sometimes they cough up, sometimes the continue to withhold the information, usually on grounds of commercial confidentiality. We also appeal their refusals to the Ombudsman.

A few of our most recent requests have been of more than usual interest, even if they haven't borne fruit of the we had hoped. This includes an admission by the Minister in charge of the Ole, and by the Ombudsman, that the ole depends for its information on the companies applying for permission to invest, and it doesn't check what they tell it

We regularly appeal to the Ombudsman against the OlC's withholding of information, One of the grounds for withholding information is that releasing it would prejudice the supply of such information in and it is in the public interest for that information to continue to be supplied .. "That information" is in these cases the information supplied by

Bill Rosenberg

the company applying for consent to its investment It is (as far as we have seen) frequently little more than a sales pitch for what they want the public to think they are doing, Throw in some combination of the words "increased employment", "expertise", "exports" and "overseas contracts" and you're there .. Nonetheless on some occasions the company (perhaps in embarrassment at its lack of imagination) doesn't want the information released and the Ole dutifully obliges. It regards the companies as its customers - customers more important than the public whose interest it theoretically represents, We argued to the Chief Ombudsman, John Robertson, that the mc was supposed to check on these applications, that it should not rely on the applicants as its source of in formation, and that in any case it could require the applicants to supply the information using its statutory powers, so the information would continue to be supplied. His reply (22 March 1994) is revealing:

": the Commission does not have the resources to enable it to check on all information supplied by the applicants, and it accordingly does need to rely on the information supplied to be of sufficient quality and accuracy to enable it to carry out its functions. Even if there is a statutory power to compel the supply of information similar to the information at issue or information from the same source, the supply of information of the quality necessary for the Commission to

30

properly carry out its function would be to be prejudiced disclosure of the information at issue,"

This is a frank admission that the Ole doesn't check what

the tell it

We offered to give examples of where the information supplied was shown to be incorrect While ac" cepting our invitation, the Ombudsman subsequently declared he had no jurisdiction over the OIC's activities and so could do nothing further. We will pursue the point however.

In his last Annual Report, the Ombudsman covered similar

ground, but in more detail. A shows that the lack

of checking is not nor simply inadequate re-

sources: it is explicit government policy:

"The small number of staff in the Commission to

handle has been explained the Minis-

ter as not a lack of resources, but a

reflection of the Commission's role in the wider con-

text of government the

of strong international linkages" The Minister has commented ,. the some time has been to encourage theflow of international investment into New Zealand The regulatory applying to

overseas investment is a broadlypermissive

one, with tighter controls in only a small num-

ber of sectors ". The Minister continues, "The Commission's operating procedures are consistent with the Government's intention that the regime facilitate positive investment The Commission makes its decisions based on material supplied to it applicants, and regard the information as having vided in goodfaith. " [Ombudsman's

That is why crim inals like Ralf Simon are given consent to buy offshore islands, and companies can buy land for purposes for which have no planning permission: the Ole is designed not to care. Note that "foreign investment", which became "overseas investment", is now in global-speak "international investment".

More positively, the Chief Ombudsman in the same Annual Report

u: ••• considered that satisfying the interest in trns manner on each request was not as effective as it could be and involved a great deal of time and resources at both the Commission and the Ombudsman's offices, In his view insufficient information was being made available to the public by the Commission to satisfy the public interest in the nature and extent of overseas investment in New Zealand, and that there was room for improvement in the manner in which the Commission accounted to the public for its

The Ombudsman has discussed this with the Min-

ister, the Chairman of the and its staff He

ing a detailed six-monthly to Parliament. At the time

of the Annual Report, the Minister Ruth

was "actively considering this proposal." In March 1994 the Chief Ombudsman was about to meet with the new Minister

for the Bill Birch, to "progress the issue,"

The rest is silence,

No

needed for

rural land if

to

In we asked for an explanation of why a purchase by a U.S. controlled company of property on Waiheke Island was

in April (as the decision revealed) had in fact

taken in I The ole with the information

that "overseas need to get to acquire

rural land only if they intend to use it in carrying on a business Since the land was originally acquired as a "lifestyle block" with no business intentions, no Ole permission was required. Now that the owners intend to carry on a business from the property the consent of the orc is required, This was a little mysterious to us since a large number of approvals of rural land sales for "lifestyle blocks" come through among the decisions.

However, the important point is that there could be a considerable number of land sales which we are missing because the owner doesn't own up to any business intent. Presumably under this policy, a corrupt Indonesian politician could buy up a high country station as a holiday retreat for himself and his family, without the OIC secretary even having to raise his rubber stamp, let alone swing it

Loss of ownership information

Finally, in April the ole also changed the format of their "decision sheets". The new format is easier to understand, but importantly leaves out two items of information that were provided previously: the percentage that was overseas owned before the transaction took and the percentage that will be afterwards. We complained and received a long reply complete with examples and explanations telling us that the old items "could be, and were, misinterpreted". The correct information would be supplied but in a different form. We remain to be convinced: it is all to do with whether ownshould be traced right back to final own-

1

N

1

The recently launched retail property-owning spin-off from Fletcher Challenge Ltd, St Lukes Group Ltd could theoretically have ended 1 ()O% Australian owned, The Australian Ord Minnett Creup Ltd, through its local subsidiary Ord Minuet! Securities (NZ) Ltd, and Ord Minuet! Securities Ltd in December were given permission to own 100% of St Lukes if their underwriting of the deal had fallen through, However it had a number of sub-underwriters and none would hold more than 10% of the shares in St Lukes. The price would have been $1. 10 for 111,500,000 ordinary 10 cent shares. (See also "internal restructuring" below.)

Foodland Associated Ltd of Australia and its subsidiary, Foodland (NZ) Holdings Ltd, have approval to buy the other 50(% of Farmers Deka Ltd they don't already own, plus the 25% owned by Vox Ltd of Australia (itself 19.9% owned by Foodland), F AL had 25% of Farmers/Deka directly, and another 25% through a 50/50 joint venture with Vox Ltd, V. A. Holdings Ltd. The remaining 50% was owned by the Maori Development Corporation, five North Island Maori trusts, and sixteen Deka executives. The OIC's information puts the price for the 50'% share at "approximately $100 million" and for Vox's 25% at A$42,OOO,OOO. According to the New Zealand Press Association (e.g. "Foodlands to pay $160m for Farmers Deka retail chain", Press, 23 November 1993) the deal was worth $107 million for the 50Cto of Aotearoa-owned shares and $52.4 million for the Vox shares, No money actually changed hands: it was paid for in F AI. ordinary and preference shares. Farmers Deka managing director, Wayne Walden said Farmers Deka was "New Zealand's largest non-food retailer". It includes Toy Warehouse and Venture, an Australian retail chain. See July 1993 and November 1992 decisions for further details.

Bernard Matthews PLC, owned 41.1 % by BT Matthews of the U.K., is taking over Advanced Foods of New Zealand Ltd, a subsidiary of the New Zealand Meat Producers Board. Advanced Foods also owns 19 hectares of land in Waipukurau. Bernard Matthews "wishes to obtain control over a source of supply of processed meat products." Sounds a repeat of the bad old days when CWS and Vesteys controlled our meat exports because they wanted to reserve them for "home" consumption.

Sealord Products Ltd, owned by a Maori Fisheries Commission/Brierleys Investments Ltd consortium, is entering into a joint venture with Nippon Suisan Kaisha Ltd subsidiary, Nissu] NZ Ltd, "to acquire initially one vessel and possible later additional vessels and any other property for the purpose of undertaking a commercial operation in New Zealand". Nippon Suisan will market any fish caught.

1

RH New Zealand Forests 1, Inc, a U.S. owned company registered (presumably for tax purposes) in the British Virgin Islands has permission to acquire "in association with" Tasman Forestry (Nelson) Ltd, a Fletcher Challenge Ltd subsidiary, certain "plantation assets" in the Nelson and Marlborough regions. The "assets" are approximately 665.9282 hectares (If freehold land and various Forestry, Tenancy and Licence rights over approximately 85.3038 hectares. This adds further forests to a deal originally approved by the Commission in January 1992 when Tasman sold part of its interest in Crown Forestry Licences in Wairua Forest, Golden Downs Forest, and Rai Forest in Nelson and Marlborough and approximately 13,200 hectares ofland to RIl, The whole deal is part of Fletcher's debt reduction program, In addition Tasman and RII are jointly acquiring a 235 hectare block of land on Taylor Pass Road, Marlborough for $235,OO() for forestry development. It is part of a property, a further 990 hectares of which is not being sold by the vendors,

A relatively innocuous looking commercial property purchase has a story behind it. Oregon Forestry (NZ) Ltd of Malaysia has permission to buy Himley Enterprises No.6 Ltd for an undisclosed price. "Him ley will continue its involvement in the development of commercial and residential properties and subdivisions and also retain its current employees ... Hunley's operations will be expanded both in the Auckland area and to other regions in New Zealand." Oregon Forestry is one of the front companies for the powerful Tiong family of Malaysia. The Tiongs also own the company Ernslaw One which gained notoriety, along with ITT Rayonier, for its activities on Matakana Island (see Foreign Control Watchdog, numbers 73, 74, August and December 1993). It has other forestry interests in Otago, Wanganui and Coromandel and also owns 75% oflisted cashbox company Ascot Management, bought for $2.9 million from Broadway Industries in August possibly a sign that the family intends listing some of its Aotearoa holdings ("Family interest in Port", Press, 3 February 1994). The family reportedly has $150 million worth of investments in Aotearoa, their latest being a 10.2% shareholding in the Port of Tauranga, New Zealand's largest forestry port (Press, 111 6/94). The Tiong family includes Malaysian senator, Datuk Tiong Hiew King, and owns the large Sarawak-based timber company Rirnbunan Hijau which now dominates the Papua New Guinea export log trade with an 86% share. PNG is one of the few countries still exporting tropical timber. The company has been received with considerable distrust in PNG and in response has set up its own newspaper, the National - a somewhat hypocritical name given its ownership, and especially since in PNG, "national" is the term used to describe an indigenous PNG citizen. It has taken a progovernment, pro-logging political line. The Tiongs also own Malaysia's biggest Chinese-language daily, Sin Chew Jit Poh (Kuala Lumpur, circulation 150,000). (For further details

PAGE 32

see "Timber Zealand Monthly 1993.)

David New

pp17· 9, November/December

Mr Lee of Indonesia" owns *·""",<c,f .. " hectares of afforested land on the West hectares of afforested land in Canterbury, Their shareholding in Excella this month was transferred from them in their own names to their

Ltd, (See and October

released in March and April 1994 on

The ownership of the Pan Pacific Hotel, Auckland

this month, It is owned and managed Pan Pacific

erties Ltd, This was owned 54,9'% by Tokyu

Corporation, 35.8"/0 by S C Ltd, and 93%.

by Tokyu Tourist Corporation, all of Japan. It will now be fully owned by the two Tokyu companies, The price was withheld by the Ole, se Properties is a subsidiary of Shimizu Construction Company Ltd of Japan.

In commercial property,

..... A Singaporean owned company, Switch Enterprises Ltd, New Zealand Branch, is buying Mayfair House, 44 The Terrace, Wellington, for 50,000 from Aurora Group, under statutory management SWitch is owned 33 ,3°/') each by three Singaporean families: the Chaffar the Parikh family and the Musthafa Ol?" A Taiwanese, Mr T. Y.

Property will be undertaken by the

land Group and financed Mr

Woodland Property Holdings Ltd .. , Once the is completed then Woodland will acquire development from the Woodland Group". This may be the last we hear of these developments through the OIC: the

is a carte blanche for Woodland to

the Woodland of companies "various real

veloprnents". II!iI" The Kiwi income Property

Northlands

which is 63% Canais buying the

for W"-"~,,"'·'P.'''''''

via the company Forfar Investments Ltd, Last month we reported it was buying the Kmart Plaza in Porirua and the

Palmerston North Centre,

Macraes Mining 754.5368 hectares of land at

which it wants to expand land is being bought for and any not required for mining will be leased back to its former owners who also

have the to buy the land back in the future. In

1993, Macraes announced a convertible note issue which raised the company $90.2 million, The money will be used

strong submission to report angers group",

a U.4422 hectQueenstown for Arrnalite Holdings Ltd ;~ Mr Chan already holds

shares in and has decided to pur-

chase this property to as a tourist related venture,

The property is situated in close proximity to the Millbrook Resort and centre and it is claimed that it would

A

accommodation."

In other rural land:

.;;r A New Zealander

and a farm in Para-

in a 357,3538 hectare ruNorthland

will run the farm, sold

to buy a 50% which owns

in l'e for $90,000.

skills in the food pro-

the U.S.A. but intending to a 29,8441 hectare rural

property at $500,000 for a house, t'ff A German couple with

have permission to Garland ami

Ltd for $640,000, The company owns

orchard iii Hawkes Bay, known as pose to convert the existing homestead into

and restaurant".

Manders Pic of the IJ.K is buying Croda Ltd, beneficially owned by Croda International Plc, for $12,000,000. Manders is buying shares and business assets of parts of the Croda Group world wide, preparation for this, Croda Polymers International subsidiary of V.I<. finn, Croda international Pic is ing out another Croda International subsidiary, Croda Lusteroid Paints Ltd. Croda deals mainly in for the printing industry,

Internal restructuring:

.... New Zealand Rail Ltd is establishing two companies, New Zealand Rail Communications Ltd, and New Zealand Rail Communications Holdings Ltd to hold its interests in Clear Communications Ltd.

/JIll' Last month recorded industrial powder coatings manu faeturer, Evode Powder Coatings (NZ) Ltd, ultimately owned by Laporte PLC of the U.K., being sold to RD. Fuller Company (NZ) Ltd, a subsidiary of H.R Fuller Company of the U.S.A., for between £5,300,000 and

Evode onto

sub-

out Deancourt Investments Ltd for an undis-

closed sum foster's owned Carlton and United Brew-

Lion Nathan' s main rival in and curto its way into the Aotearoa market against

hold on outlets last month).

owned by Biron Manage- 50,}.) owned by Fletcher ChalLtI.! and 5()(% by Lend Lease of Aus-

are namesakes which have exactly the same

pedigree. Shore Centre Ltd is buying Shore

City Centre Henderson (1993) Ltd is buying

Henderson Ltd, and St Lukes Square (1993) Ltd

is buying St Lukes Square Ltd. It's not clear what is going on here ._ the added 10 by the fact that all three are clearly related to malls hived off by Fletchers to its new offspring, St Lukes (see last month's decisions).

The company owning the Parkkoyal Hotel, Auckland is being reshuffled its owners, R. and A. Kumar of Singapore. The company the hotel, Raffles New Zealand which is owned by the Kumars, is being sold to another Kumar company, Royal Worldwide Pte Ltd. See

The Gatecrashers

the Farty

WATCHDOG

the October 1993 decision released on appeal (below) for details.

Internal restructuring in the Pilkington PLC glass empire shows local subsidiaries Pilkington (New Zealand) Ltd, Azhold Pty Ltd, and New Zealand Window Glas§ (1993) Ltd.

January 1994

This was the quietest month we've had since we started analysing OIC decisions four years ago: only seven decisions, admittedly after a relatively busy December with 40 decisions. It's also the only month we've ever had in which the Ole has made no deletions to the decisions it releases to us.

It features a takeover bid by Spotless Group Ltd of Australia, through its subsidiary, Spotless Catering Services (NZ) Ltd for Taylors Group Ltd, the drycleaning, laundry and linen hire group. It already owned 54.39% of the Taylors, and offered 120 cents per share for the remaining 45.61 %, making a total offer of $2,216,759. Spotless is involved in uniform rentals, contract laundries for institutions. and catering for organisations (Press, 20/1/94). However the independent directors of Taylors weren't impressed by the greater control that Spotless (and the OlC) saw as the benefits of the takeover:

"Due to its existing shareholding in the offeree, Spotless already bas the opportunity to influence the activities of Taylors Textile rental operations. The additional shareholding will give Spotless the opportunity to have greater control of those activities. The applicant advises that if the offer succeeds, Spotless proposes to bring Taylors under its own financing facility umbrella, thus reducing the cost of borrowing significantly."

In February, Spotless dropped its bid after an independent report concluded that the 120 cents a share undervalued the group by up to 65 cents a share. The independent directors, who commissioned the report, had enough shares to prevent the takeover. (Press, 5/2/94).

New Zealand Oil and Gas Ltd, and Mineral Resources Ltd, both of Australia, have been given permission to issue 22.6 million ordinary 50 cent shares, and 14.7 million ordinary 20 cent shares, respectively, to United Resources investment Holdings Ltd. The use of these shares to pay for the acquisition of United was approved in June 1993, but "a consent for the issue of these shares was inadvertently overlooked." That month the two companies were given consent to form a 50/50 owned company, Minzog Ltd, to take over United, making United fully overseas owned. The value of the takeover was put at approximately $43,500,000.

Sam Neill and family, resident in Australia, receive the OIC rubber stamp this month, selling a block of land in which they have owned since 1968. Through their

Korimako Trust, they're $260,O{)O "to ensure the

natural scenic features on the The Trust last ap-

peared in the Ole decisions in taking a 33.3%

shareholding in Lake Ltd which owned a

31.1056 ha, property at Gibbston in the Shotover District, Otago" and was selling 8.:no ha, to the Trust.

In other rural land:

er In an indication of the South African invasion, a couple of Italian and Brazilian citizenship who have recently moved from South Africa. are buying a 6,1294 hectare "lifestyle block" on Forestry Waitoki, for $405,000. ,.". RF. and L Sobol ofthe U.S.A. are buying approximately 184 hectares of rural land at Akatore near Dunedin for approximately $502,500 "with a view to emigrating to New Zealand". In the meantime they are absentee owners, employing a farm manager, who believe "they have the financial ability to develop a currently uneconomic farm into an economic one".

In internal restructuring, Bell Canada International Inc, wholly owned by BCE Inc of Canada, is buying another BeE subsidiary, Bell Canada International (NZ) Ltd. It is "to be funded by Bell Canada International Inc issuing fully paid shares being an amount determined as fair market value for Canadian income tax purposes to BeE Telecom International Inc."

February 1994

This month's release of decisions was distinguished by the number of deletions. Out of twenty decisions, nine (almost half) were been withheld by the ore - all in full.

U.K. butcher, Bernard Matthews PLC, 4.1.1 "/0 owned by ItT. Matthews of the lLK, is buying out Advanced Foods of New Zealand Ltd, a subsidiary of the New Zealand Meat Producers Board for $4() million. This includes 19.2104 hectares of land in Waipukurau. The OIC notes that this replaces a previous consent dated 23/12/93 .. one which was evidently withheld since we never received it. According to the Independent, the company employs 250 people at the peak of the season and was set up 10 years ago to produce Bernard Matthews boneless lamb roasts under licence ("Meat Board offloads export unit", 15/4/94, p28).

The Majestic Centre, Wellington, is being purchased for "approximately" $48,550,000 by Waihara Holdings Ltd, 50% owned by Kiwi Income Property Trust (KIPT), and 50% by the FCMI Croup of Canada. KIPT already owns the Plaza, Palmerston North, and KMart, Porirua, and commercial buildings in Auckland and Christchurch (see Ole decisions in November and December 1993). As part of this transaction, Waihara is issuing 10 million $1 ordinary A and B shares to each of KIPT and Wynford Holdings Ltd (a FCMI subsidiary), and 12,225,000 redeemable preference shares to KIPT. Waihara also has the OICs "consent if necessary" to purchase a $48,550,000 debt from DFC New Zealand Ltd for $48,550,000. (The building is the "fi-

nal significant property owned by the DFC" - Press, 25/21 94, "Kiwi Trust confirms Majestic Centre buy".)

In December 1993, the

Centre was the centre of

complaints by a Wellington real estate that the Govemment Valuation of Wellington buildings were "on a different planet" when compared to the prices actually being paid. David Taylor of Raine and Horne gave the example of the Majestic Centre (which he was trying to sell). The 28 storey building, completed in J 991 for around $200 million, has a GV of $17 million. Such gaps between GV and sale prices "are likely to jeopardise the recovery of the local property market. Mr Taylor said foreign buyers, especially, were likely to lose confidence in Wellington property if they were asked to pay double the price of the new GVs on some of the city's major buildings. (Press, 15112/93, "Wellington property valuations questioned'") Clearly Mr Taylor need not have worried: he or one of his colleagues has been very persuasive.

According to the Press (30/10/93, "Kiwi Income Property Trust seeking $46m through issue"), the manager of KIPT is Kiwi Income Properties (KIP) whose directors are Robert Narev, an Auckland lawyer, Ross Green, executive director, James Macaulay, chairman of Mercury Power, and Murray Valentine, chairman of The Helicopter Line. KIP is equally controlled by interests associated with Green and KIPT's managing director, Richard Didsbury, and FCMI Corporation of Canada. FCMI's controlling shareholder is Albert Friedberg (Press, 25/2/94, "Kiwi Trust confirms Majestic Centre buy").

Allee Finance (NZ) Ltd, a subsidiary of Allen Overseas Holdings Ltd, part of the Allen Group of Australia, has been given consent to enter into an underwriting arrangement "in respect of certain securities to be issued by an offshore entity."

A number of familiar names appear in a flurry of forestry developments:

... Southland Plantation Forest. Company of New Zealand Ltd, owned 51°/" by OJ! Paper Co Ltd and 49% by C Itoh and Co Ltd, both of Japan, is buying a weed-infested 445.3565 hectare block of land in the Takitimu District, Southland for approximately $452,095 for forestry development.

.. Tasman Forestry (Nelson) Ltd (a Fletcher Challenge Ltd subsidiary) and RH New Zealand Forest I Inc (U.S.A.) are buying a 202.9013 hectare block on land in Rabbit Gully, Nelson for approximately $250,000. (See also January J 992 and December 1993 OIC decisions.)

..,. ITT Rayonier New Zealand Ltd, subsidiary of ITT Rayonier Inc of the U.S.A. is buying 142 hectares of land on Double Corner Road, Amberley for approximately $800,000 to "create a seed orchard for use both by ITT Rayonier and other unrelated New Zealand Forestry companies as a source of seedlings for forest replanting."

In rural land:

Irlir A V.K. citizen wishing to emigrate is buying the remaining 76% ownership of a 23 hectare property on Cable Sta-

WATCHDOG 76

tion Seddon, for $170,000. The property is held by World Gourmet Ltd which was already 24% owned by the U.K. citizen. "He intends to become a farmer and will use

the for up a company to market

New Zealand food products. both grown by him

and others, in the area of niche markets."

e Milburn New Zealand approximately 72.5"/" owned

by Holderbank Financier Glads of Switzerland, has permission to acquire 28.574 hectares of land on Waitohu Valley Road, Otaki, for $250,000. "Milburn believes that the land in question has reserves of aggregate, which are significant for the Otaki area, for use in roading and building material. The opportunity to purchase the property. is considered to be a strategic investment on Milburn's behalf." Milburn is also being sold three parcels of land in the Nelson Land Registry area by Landcorp Property Ltd. They are of 887 square metres ($260+GST), 2.8702 hectares ($S740+GST) and 1.3668 hectares (S2500+GST). They are "of great strategic value to M ilburn' s continued operation at the cement works at Cape Foulwind. Landcorp Property Ltd (the vendor) recognised this and first approached Milburn to offer these sections for sale prior to undertaking sales marketing proposals. The proposal will allow Milburn to formalise present arrangements in respect to usage of one ofthe blocks, and will provide future access for possible expansion of their activities with the resultant flow on benefits." We hope Landcorp got a "strategic" price given Milburn's special interest and privileged position.

March 1994

An alarmingly elitist step in residential development has received consent from the Commission. U.S. investor, Christopher Lortllard Norrie, has consent to, through the Middleton Trust, enter into a joint venture to acquire land in the central business district of Newmarket, Auckland for the purpose of development and sale of residential units. Norrie bought the land from New Zealand Rail as part of its disposal of Crown assets in 1992. The Sunday Star-Times reported ("Dreamland becoming a reality", 13/3/94) that "Last April, American investor Christopher Norrie ... embarked on a speculative residential project that should result in more than $200 million of apartments, duplexes and houses being built over the next four years .... Project general manager, Trevor Bolland says demand, already strong, should be assured by a heightened interest in inner-city living, zoning constraints on existing properties, the changing desires of an aging population and the opportunity to create an estate with various densities in a style not seen in New Zealand." It will be called "Broadway Park" and is clearly aimed as an enclave for the rich and insecure:

"The estate will sit on the Remuera side of the Newmarket railway station with walkway access to the station and neighbouring Broadway shopping district. Streets will belong to the estate and, as with the park, extensive landscaping, sports and community facilities inside the boundary, will be owned by a body corporate. Mr Bolland says that having private roads and facilities offers two advantages.

PAGE 36

"We are building our roads and footpaths to a higher standard than the council would require, particularly in regard to landscaping - pavers rather than tarmac, special street lamps, state-of-the-art cornmunication facilities. There will be no television aerials, everything will come in cable. The second thing is security. You know if someone is in there who doesn't belong. We have surveillance cameras, management on site, but the public will have access to a walkway in daylight."

Prices are likely to be from $500,000 per property up: construction costs will be (by covenant) a minimum of $200,OOO+GST, and section prices (450 to 800 square metres) between $230,000 and $400,000.

This is highly reminiscent of Robert Reich's description of how what he calls "symbolic analysts" - the highly paid professionals, executives and capitalists who make up the wealthiest 20% of society -- are "quietly seceding from the large and diverse publics of America into homogeneous enclaves within which their earnings need not be redistributed to people less fortunate than themselves.

"With each sought-after reduction in their taxes, symbolic analysts in effect withdraw their dollars from the support of public spaces shared by all and dedicate the savings to private spaces they share with other symbolic analysts. As public parks and playgrounds deteriorate, there is a proliferation of private health clubs, golf clubs, tennis clubs, skating clubs, and every other type of recreational association in which costs are divided up among members. So also with condominiums, cooperatives, and the omnipresent "residential communities" which dun their members in order to undertake efforts that financially strapped local governments can no longer afford to do well - maintaining private roadways, mending sidewalks, pruning trees, repairing streetlights, cleaning swimming pools and paying for a lifeguard, and notably - hiring security guards to protect life and property." ("The Work of Nations", Robert B. Reich, Vintage Books, New York, 1992, pp 268-269.)

Meanwhile the Taiwanese Suncern Group are planning a luxury apartment development on a nearby vacant block on Khyber Pass, and the 277 Broadway development is Singapore owned and its supermarket run by Dairy Farm International of Hong Kong. Development of the commercial area is being driven by the recently listed Newmarket Property Trust, 33.3% owned by FAI Metropolitan Life Assurance. It has a $70 million shopping and cinema complex planned, including a three-cinema multiplex. tSunday Star-Times, 13/3/94, "Bold boost for inner city living"; Press, 19/5/94, p.24, "FAI takes 33.3%".) Interestingly, none of these developments appear to have been approved by the OIC (or have been approved but details suppressed.)

The Sunday Star-Times reports that Nonie "is an American lawyer who was based in California when he bought the land, but has since moved to Seattle, has interests in horticulture

in Hawaii and was distantly related to former GovernorGeneral Lord Norrie .... His joint-venture partner is Neville

Mahon, who had r)ecn Project Group's Wellington

operation until that s demise in 1988. Woodland

Group, the company Mr Mahon formed after leaving Project, is the main contractor for the Broadway project."

In another Norrie/Woodland project this month, with a similar flavour to it. the Queenstown Lakes District Council is selling a 2.5 hectare property at Queenstown to Fernhill Hotel Ltd, for a price that has been withheld. "It is proposed that the property be developed as a resort Hotel/Condominium complex. There is already in existence planning rights for such a development ... the vendor (the Queenstown Lake District Council) is disposing of the property in order to promote the objectives .. " Fernhill is 25% owned by Norrie and 75''10 by Woodland Property Holdings Ltd, in turn 50% owned by T.Y. Tseng of Taiwan (see December 1993 decisions.) The other 50% ofWoodJand Property Holdings is owned by the above Woodland Group.

In another residential subdivision development, the Tiong Family of Malaysia (the owners of Ernslaw One, one of the largest overseas owners of Aotearoa forests) is buying 29.3 hectares of land at Albany, North of Auckland for $6.42 million through their company Neil Construction Ltd. The land is apparently for speculative subdivision: the "benefit" of the purchase according to the Comm ission is that:

"The proposed purchase falls within the portfolio of subdivisional activities within the Auckland Region which are targeted by Neil Construction as part of its subdivisional programme. The Commission is advised this purchase will increase competition on a local and national level. The applicant states that technological and management skills will provide long term benefits for New Zealand subdivisional development and the construction industry."

Their company, Ernslaw One Ltd is also buying further forestry land this month. It is buying 1,330 hectares of land in Makakoho Road, Waitotara Valley for "approximately" $539,440. "The Commission is advised that the proposal represents a further expansion of its New Zealand forestry interests and the choice of the Wanganui/Manawaru region is because Ernslaw manages approximately 5,000 hectares of forests in that area and there is a need to expand this resource base to enable the company to produce wood fibre for a suitable industrial base." Ernslaw is also acquiring right of ways over land at Slopedown District, Longridge, Southland. The land is owned by Longridge Ltd and Landcorp Investments Ltd. The right of ways are to get access to a BOO hectare property at Slopedown District, Longridge whose acquisition by Ernslaw was approved by the Commission in May 1993 - but until now that approval had been suppressed.

For more on the Tiongs, see the commentary on the December 1993 decisions.

The Sydney Futures Exchange Clearing House Pty Ltd,

31

a subsidiary of Sydney Futures Exchange Ltd has consent to carry on business in Aotearoa because ...

"The London wishes to terminate its current contract

New Zealand Futures and at the earliest possible date. The Commission is ad-

vised that the of New Zealand Futures and

Options market Futures and

Options Ltd is the viable alternative

for New Zealand Futures and Options Exchange. The Commission is further advised the proposal will promote New Zealand's economic ensuring New Zealand retains its domestic futures and options exchange. The applicant states that the benefits of a futures and options exchange for New Zealand are that it provides a local facility for hedging risks and a system for price discovery.

(In other words it is another cost of the uncertainty brought about by open markets, particularly in currency, and another avenue for speculation.)

Internal restructuring shows SEAmL NZ Holdings Ltd, a joint venture between SEA Holdings Ltd of Hong Kong (60%) and Brierley Investments Ltd (40%), being set up to own SEABIL NZ Ltd, and Fanion Properties Ltd. Aco< cording to Fiona Rotherham of the Independent, SEABIL is about to become the biggest listed property owner in Aotearoa with the $218 million acquisition of "the cream of Fletcher Challenge's remaining property portfolio, five commercial properties in Auckland and Wellington." The properties include a 40% interest in the ASB Bank Centre in Auckland, FCt's Penrose head office, Prudential Plaza in Takapuna, the Ministry of Commerce building and Morrison Morpeth House in Wellington. SEABIL already had 34 properties, including recently acquired Lufthansa House in Auckland, and has $450 million in shareholders' equity. Its property management is contracted out to Terra Filma Group, a company owned by four former Brierley Properties Ltd staff who also manage the Auckland Sky Tower casino project. The SEABlL parent company, SEAmL Pacific, is focussing on investing in China in Chengdu and Sichuan province. (Independent, "$500m portfolio will tum SEABlL (NZ) into NZ's largest listed property coy", 15/4/94, p.20)

Retrospective consent is given to a businessman to take shares in Tranz Rail Ltd, the holding company for New Zealand Rail. Mr Alex van Heeren (nationality unstated, but a resident of Aotearoa) is given retrospective consent to take up 9,545,455 $1 ordinary shares at par through his company Tessaro Developments Ltd, The consent was requested because "the solicitors acting for Mr Van Heeren have doubts as to whether he is deemed to be an ordinary notwithstanding he has been here for fourteen years." In commenting on the July 1993 decisions (when the takeover of New Zealand Rail was approved the Commission) we reported:

"Two months after the sale was it was revealed that two more shareholders were part of the

deal, Alex van Heeren, "who has interests in rrw-s-crt-v and other export industries, and is the owner ofHuka

will take a of91%,

a private investment com .. pany to the Richwhite win take

4.5%. Fay Richwhite will hold 31 J~% and were and Berkshire 54.51% between them ("Business named 'back-up shareholders' for NZ Rail", Press, 17 September, 1993)."

A IVU.M. Holdings Ltd subsidiary, Highlands Gold (NZ) Ltd, is being set up to "take an assignment of 70% interest in each of two prospecting licences granted under the Mining Act"

In other rural land:

W' Southland Plantation Forest Company of New Zealand Ltd of Japan is buying two further blocks of rural land in MOSS!JUfi1, Southland for development: one 0[250 hectares for $250,000. the other of 513 hectares for $S13,OOO. The company is 51 %. owned by Ojt Paper Company Ltd and 49'% owned by C Hob and Company Ltd, both of Japan. (See for example the July and August 1993, and February! 994 decisions for previous such purchases.) ,q Another C Itoh and Company Ltd joint venture is buying 7.6 hectares of rural. land at Awarua, Southland, for $2,000 + GST, to stockpile sawdust and bark from their chip mill. The joint venture is South Wood Export Ltd which is 331/J"% owned by C Itoh and 6611.1% by M.K. Hunt Foundation Ltd of Aotearoa. See June 1993 decisions for previous purchases by this company .

.. Another piece of Watheke Island is being sold to a German as a "lifestyle property" for the purpose of "building a holiday home and establishing a vineyard operation. It is a 104 hectare property adjoining a 2.7 hectare property which the Commission approved him buying in June 1992. Detlev Dannemann is buying it for $95,625. (The 2.7 hectare property cost $240,000 in 1992.) Apparently as an alternative, Dannemann and Dr Rainer J. Eschenbruch of Aotearoa have been given approval to lease up to 4.1 hectares of land on the island: this appears to be the same land. Dr Eschenbruch is involved with Rongopai Wines of Te Kauwhata and "will oversee the proposed viticulture operation."

,.,. They liked it so much they bought the farm: a U.S. couple, Richard and Barbara Sahlie are buying 15.388 hectares known as "The Crossing" on Woodbury Road, Geraldine for approx irnately $850,000. "Mr and Mrs Sahlie have stayed at the property on a number of occasions before and have always enjoyed the property and that is their reason for wishing to purchase ... the purchasers will market the property as an exclusive accommodation establishment through existing offshore business contacts."

<fj- A Mr Bayer of'Vanuatu, through his company, Nu- Tech Ltd, is buying 4.1 hectares of land on Clifton Road, Auckland, as a "Iifestyle" block.

If}f' A Singaporean owned company, Sweetwater Nurseries Ltd is leasing 27.82 hectares of land at Awanui, North Auckland! Land Registry, for 5 years, for a total rental of $58,750. The land is adjacent to 29.8 hectares of

land purchased by Sweetwater in 1993 and will be used for a forest nursery. the October 1993 decisions for further details)

i&" Nikko Forest Ltd, owned by Mr Kan'fchlro

Sakurai of 107 hectares of rural land in

Gebbies Hanks Peninsula for $248,000. It will be

used for development to export timber to Mr

Sakurai s Japanese business.

~ Yet another piece of land at Broadwood, Far North District is being sold off'for forestry. This time it is 40 hectares being sold to members of the Liu family from Taiwan, through Diamond Enterprises Ltd.

... A 19.2 hectare orchard in Kerikert is being sold to H & Y's Orchards Ltd, owned by Stanley So of Hong Kong, for $430,000. "Mr So sees an opportunity to develop and cultivate the orchard utilising New Zealand expertise and creating a long term lifestyle for him and his family" using an Aotearoa manager and workers.

.".. Telecom Auckland Ltd, a subsidiary of Telecom Corporation of New Zealand Ltd, is buying more land for its yuppy-phone repeater sites: this time 2484 square metres in the North Auckland land registry area.

In an intriguing "internal restructuring", Toyota Finance New Zealand Ltd is acquiring new vehicles from TFNZ (Wholesale) Ltd for "approximately $42 million". Both companies are ultimately wholly owned by Toyota Motor Corporation of Japan, through Toyota Finance Australia Ltd.

And Sumitomo Forestry Co. Ltd of Japan is moving its 50@/0 ownership of Nelson Pine Industries Ltd from one subsidiary which is being wound up, Sumtrin Capital Investments NZ Ltd, to another, Sumir'in NZ Ltd.

April 1994

The U.S. 33.3@/., owner of WEL Energy Group Ltd, Utilicorp NZ Inc, is transferring its shareholding to Utilicorp South Pacific Inc. Both companies are owned by Utilicorp United Inc of the U.S.A. so this gives no change in beneficial ownership. The approval of the original acquisition of that 33.3% was never released by the OIC (assuming approval occurred). WEL, the former Waikato Electricity Authority in Hamilton was privatised last year, but not until the process had been challenged in the High Court by the Hamilton City Council. The Authority's privatisation plan, which cost $2.5 million, put half the new company's shares into a community trust, half to customers and then issued enough new shares to enable Utilicorp to own 33.3%. In June 1993, the City Council asked the Court to rule that the plan went beyond the Authority's legal powers. The case was lost, and Utilicorp paid 650 cents each for its shares - a total of $39 million. WEL listed on the stock exchange in December 1993 after a share tender amongst large investors and a share give-away to 56,000 customers of 105 shares each. Bidding by the large investors set a price of750 cents per share, so Utilicorp got a bargain and effective control. A Hamilton finance company, Medici Financial Services offered 762 cents per share to customers immediately after the issue took place. WEL's chairman is Brian Corban, an

Auckland lawyer and former chairman ofTVNZ. (Sources:

Press, "New chairman for WEt Energy Group", 12/6/93; "City challenges WEL privatisation", 24/6/93; "Share issue, partnersh ip separate issues", 3 0/6/94· "Three electricity stocks by Christmas", 9/8/93; "Power boards move on listing", 1/9193; '''Hectic' trading in WEL", 24/1l/93; and NZ Herald, "Challenge to power plan fails". 17/8/93.

In a dirty transnational squabble over a health insurance company that shows how the new health (or rather its failure) is making health insurance an attractive investment, Cuinness Peat Group PLC subsidiary, Parsifal New Zealand Ltd has approval to buy First Medical Corporation Ltd from Manchester Unity Friendly Society for $4,000,000. Guinness Peat, Ron Brierley s retirement hobby since he parted company with Brierley Investments Ltd (which itself recently bought 50% of health insurer Aetna Health (NZ) from its giant US. owner, Aetna International - see Press, "Brierley joins health insurance venture", 12/11 94), is buying Parsifal for $400,000 through its subsidiary Ithaca Investments Ltd. First Medical is in fact Medic Aid, Aotearoa's second largest health insurer with 80,000 policies for between 180,O()O and 200,000 people and 15% of the health insurance market, the purchase was the subject of one of the more interesting corporate fallouts, and examples of corporate double-dealing and greed, in recent years.

In December 1993, Manchester Unity announced it had sold Medic Aid for an undisclosed amount to undisclosed new owners. (No decisions relating to this have been released by the Ole.) Not until February-March was it revealed that the new owners were U.S. Community Health Plan (CHP, 40%), Parsifal, representing a group of private investors, including a Medic Aid director, David Simpson (20%), Hawaiian property developer Harold Spector (10%), retired Auckland engineer Eric Smith (10%), former publisher and National Business Review executive, Michael Wall (l0%) and Maori interests represented by Dr Ralph Love (10%). CHP is the 21 st largest multi-state medical insurer in the U.S. with income ofNZ$1 billion, 34 hospitals, a network of2,800 specialist and primary physicians, and a reinsurance subsidiary ill tax haven Bermuda. It was also disclosed (and confirmed in the present decision sheet) that the sale price was $4 million. The Commission has revealed to CAFCA that the application to it did not mention CHP: "the Commission's records show no involvement by Community Health Plan" (letter from P.Tindill, Secretary, Ole, 20 July 1994).

Parsifal itself had interesting backers. According to the Independent, David Simpson and Michael Wall were its directors.

"Parsifal was owned Warbrook Nominees, whose directors were Auckland lawyer Tony Thomas and Peter Harris, formerly connected with collapsed insurer Multicorp and the Southern World Airlines fiasco. Harris was also a director of former merchant bank Case Weston, now restructured and renamed General Capital and Commerce. Companies Office records at the time showed General Capital and Commerce to be owned 50% by Harris and 50% by Von Temsky Nominees _. a former Case Weston associate owned by Tony

to Parsifal

in The Serious Fraud Office ap-

that Parsifal was planning to use Medic

Aid's own money to pay for the March the

scene had descended into wonderful and con-

fusion. On 28 Manchester Unity announced it had taken back Medic Aid from the buyers. that "sale

conditions had not been to the satisfaction of the

and that ail the handshakes would be repaid

except for the one to Flannagan. which had been paid by the new owners, It had obtained a High Court interim injunction on 24 March the sale on the basis that, by using Medic Aid's money to pay the final $3 million instalment for the it breached the Companies Act's prohibition on a company buying its own shares. They also paid

it one late, The Independent reports:

"Documents presented to Justice Anderson in May reveal that some time after paying $1 million deposit and getting their hands on Medic Aid' cheque book on 3 December, the 'old' pre-Gl'G) Parsifal directors shunted Medic Aid's insurance business into a company called M A Community which they also controlled, Medic A lei a hollow shell. It was they then tried to settle the deal on 28 using $3 million of Medic Aid's own cash. This money is said to have gone from Medic Aid, to M A Community Health, which which was then going to pay

Manchester

The

this saw an

took control of Parsifal,

for the from the OlC only on

"""'Ar,,'rl on the CHe: replied to

CAFeA: "the Commission's records do 110t indicate the take-

had to the Commission granting

this was in fact the case in terms of

.5 of the Overseas Investment Act 1973 once conto any transaction entered into prior the consent, then that transaction is deemed to be valid and effectual as if consent has been obtained before

the into the transaction.")

the ensuing court actions with apparent

that Manchester Unity had shown itself to be "unrim Medic Aid and that contracts entered into by Manchester to pay employees and directors of Medic Aid "excessive". in the Court ruled in Parsifal's favour. Parsifal took control of Medic Aid on payment of million and to number of

other conditions, GPG then demanded the return ofthe

handshakes

to Medic Aid's non-executive directors

Unity $1

details not made its investigation with a non-committal statement of ODe sentence: "no further action was CiPG now resist the cash it has in Medic Aid's bank accounts? (Ref: Dominion, "New owners of Medic Aid named", 10/2/ 94; Press, "US health group has 40% of Medic Aid", 1113/

94; Dominion, "Medic Aid sale confusion

29/3/94; New Zealand Herald, "American comfortable on Medic Aid", 1 "Serious Fraud Office probes Medic Aid sale", 9/4194; "Medic Aid sale to court", 2/5/94, p,28; "Court returns Medic Aid shares to Parsifal", 7/5/94, p.31; "Medic Aid wants 'golden parachutes' repaid" 11/5/ 94, p.28; "Deal reached on Medic Aid sale", 18/5194; Independent, "Serious Fraud Office abandons Medic Aid probe", 5/8/94, p.L)

Griffins Foods, until March 1990 a Ll.S. company, now owned by BSN S.A, of France. is completing a takeover of Best Corporation Ltd, Rest, which became 20.01 % owned by BSN in June 1993 (see OIC decisions for that month) at 325c a share, is a smallgoods manufacturer formerly owned by the Huljich brothers, Paul, Christopher and Michael. The price paid for Best by BSN is $135,966,000 according to the Ole BSN offered 400c cash per share in March, which compared with the going price of 300c prior to the takeover bid" At that stage BSN said it was seeking 67% of Best, which it would acquire by taking 100% and then selling back up to 33% to the Huljich brothers, who will remain as directors, at 400c per share. Acceptance for 90% of shares was reported in May. BSN is said to be the sixth largest food multinational in the world and is based in Paris. "Griffins makes bid for Best", 3 1/3/94; "Griffins intends to delist Best", 2/4/94; "Independent Best directors say sell", 13/4/94; "Best offer unconditional", 12/5/94, p.33.)

Kingsgate International Corporation Ltd, whose main assets are two "tourist related property investments in Australia" is being acquired by CDL Hotels New Zealand Ltd of Singapore. CDL is now the biggest hotel owner in Aotearoa (Press, "CDL tips hotel room rates to rise", 5/5/ 94, p.50) with 19 hotels including the former Aotearoa Kingsgate chain. This purchase gives COL an into Australia costing $86,140,789 for 85,34!% of the shares. Kingsgate was owned by Mr Ho and Mr Ho Sill Guan of

According to news reports, COL in fact acquired only 50.35% of Kingsgate in May (for million) from lit King Investments Pte (presumably a Ho family company) but granted Tai Tak Holdings Pte, also representing the Ho family, a put option (an undertaking to buy from Tai Tak) on their remaining 34.99% of the shares, at the same per share (Press, "COL completes Kingsgate acquisition", p.24). In June it was announced that Tai Tak would hold onto its shares (Press, "Tai Tak keeps stake", 2/ 6/94, p.27), The Australian assets thus acquired are both in

Sydney: the 400-room Kingsgate Hotel and shopping centre, and the Birkenhead Point waterfront warehouse and marina.

CDt Hotels New Zealand is 68"% owned

CDL Hotels

International which in turn is 52Ji°,{, owned City Developments Ltd of Singapore, 37.8% by "offshore institutional investors" and 9.4'% by HO!1g Leong Parties of Singapore.

$218 million has purchased various Fletcher Challenge Croup properties by various subsidiaries of the SEA Holdings Ltd of Hong Kong and Brierley Investments Ltd 60/ 40 joint venture. The properties (with the relevant purchasing SEABIL subsidiary) are as follows: Penrose Complex, Great South Road; Penrose, Auckland (Charmain Properties Ltd); Prudential Plaza, corner of Lake Road and the Strand, Takapuna, Auckland (Phoebus Properties Ltd); Levels 4-15 and carparks of the ASH Hank Centre, Albert Auckland (Octarta Properties Ltd); Ministry of Commerce Building (and carparks), Mowbray St, Wellington; Morrison Morpeth House, ! 05-109 The Terrace, Wellington (Polonins Properties Ltd). Penrose Complex is FCL's headquarters. After this consent was given by the OlC, ASB took up pre-emptive rights to buy Fletcher's 40% stake in the ASB Bank Centre, so SEABIL is not now planning to include that building (Independent, "SEABIL pulls advertising", 10/6/94, p26)0 SEA BIL, now the largest commercial property owner in Aotearoa, is at present raising $119 million in a public share issue to raise money for these purchases. The lavish advertising preceding the float included a series of double-page advertisements in the daily papers featuring photos of Jesse Lu, SEA's managing directOL It shouted in 60 point capitals: "Why would a two billion dollar international property company want to invest in New Zealand? The market has turned the corner, now is the right time to be investing in a New Zealand property company." (e.g. Press, \/6/94, p33)0 (What will be the right place next year?) However it was forced by the Securities Commission to pull out its ads after only one of the two weeks it had planned because the Securities Commission was concerned that they contravened the Securities Act by advertising for funds without a prospectus (independent, "SEASlL pulls advertising", 1 0/6/94, p26)0 SEA BIt plans to list both here and in Australia, Then 40% will be owned by the public and 60% by SEABIL Pacific, a 70/30 joint venture between SEA Holdings (70'%) and BIL (30%)0

The Singaporean owned Pacific Group Ltd is buying out the Singaporean 54.81% owner of The Habitat Group for $4,018,0000 Both are commercial property developers, The Pacific Group is 93% owned by Fide Holdings Ltd, in turn 333% owned each by Stanley Tan (Tan Poh Leng) and Freddie Tan of Singapore and George Horsburgh of Aotearoa. The 5408% share in Habitat was owned by Panoramic Island Ltd, controlled by Messrs Mohan Mulani and Ho Dhalomal of Singapore. Habitat and the Pacific Group had close links previously, with Habitat planning a shareholding in Pacific following a share issue (Press, "Prop" erty Link proposes 4:1 cash issue", 3/2/94)00 It was previously called Property Link Holding which "began returning

to the black in its 1991-92 year, having reported a of

losses since being listed in 19860" "Property Link

springs to life ahead of cash issue" I It went back

into the red for the six months ended 3 I December 1993

(Press, back into the red" Also

associated is New Zealand which is controlled

Pacific Group and has Horsburgh as director (see Septem-

ber and October 1993 decisions} Tan is no small

fry: he publishes The Peak an "upmarket lifestyle

magazine, the Asian equivalent of North and South" and other "lifestyle" magazines in Singapore, as well as being a commercial property owner and having interests in food and paper products. Horsburgh was in foreign affairs for over 20 years, including Aotearoa High Commissioner to Singapore in the mid 1980so He set up merchant bank Pacific Suisse in 1989, specialising in Singaporean investment in Aotearoa. (Sunday "New Zealand Land rides wave of rising property values" 13/2/94.) Mohan Mulani took a controlling 75% stake in independent Canterbury Roller Flour Mills in March a deal too small to need OIC approval. Possibly the smallest company on the Stock Exchange, Mulani clearly took over the company to get a listed company which he intends to "transform into a broader business in the food industry". In early April Canterbury Roller announced it had sold all its flour-milling assets to Associated Milling, a subsidiary of River Mill Bakeries of Huntly. This leaves River Mill probably Aotearoa's largest independent bakery, and one of very few independent bakeries that does not depend on one of the giant millers for its supplies. Mulani holds his interest in Canterbury Roller through Transco Asia Pte. It previously had anonymously acquired a total of 132% of the company through Rabobank Asia. (Press, "Canty Roller stake", 5/2/94; "Singapore bid for Canty Roller", 18/2/94; "Transc o increases bid for Cankoller", 1/3/94; "Canterbury Roller sells fixed flourmilling assets", 2/4/94; "Flour mill boost planned", 23/4/ 94)0

Prudential Assurance Company Ltd of the U.K. has approval for its subsidiary, Prudential No 5 Fund Nominees Ltd, to redevelop Riccarton Mall, Chrtstchurch, which it owns, for $30 million,

Pacific Dunlop Holdings Ltd, a subsidiary of Pacific Dunlop Ltd of Australia, is taking over Swedish transnational, Asea Brown Boveri Ltd subsidiary, Tyree Power Construction Ltd for "$20-30 million". "Tyree is currently disposing of its non-core activities world-wide, part of which is the electrical wholesaling business."

A Singaporean company, Agroforestry Development (NZ) Ltd is selling 75% of its shares to a company owned by the Provincial (the OIC has put "Provisional" but we assume that is a temporary oversight) Govern ment of Gwang Dong ofthe People's Republic of China called most inappropriately Fortknox Investments Ltd for $5,855,0000 Before the transaction, Agroforestry, and its subsidiary transferred two pieces of rural land they own to Cambridge Nursery Ltd, set up for the purpose and owned by Messrs w.es. Chua and K, G. Lee of Singapore, the former owners of Agroforestry. The land is a 57.58 hectare block at Awanui,

Northland. owned

merly an Agroforestry subsidiary, now a Nurs-

ery subsidiary), sold for and a hectare block in

Mal ri Cam for

Agrofcrestry is left with a 557 hectare Northland,

in October ]993, Sweetwater Nurseries 29.7646 hectare rural property at Awanui, "approximately" $! flO,OOO. The property was a "former for--

estry development nursery which is owned the

New Zealand Forestry Corporation", it "has not

been used as a nursery for some years and is in need ofredevelopment", The property "is being to establish a nursery for propagating forestry trees, which will be used principally to plant, and where recently acquired in Northland" In July

and Lee got permission to buy the

approximately $4 million. propose to

the 380 hectares currently planted in Pine and also propose to plant the rest of the property as well as the areas logged." The vendor was Whangarei Hotel Ltd. In

March 1992, Agroforestry was given to

of Crown land being sold "in terms of the Government's policy to sell non-forest properties which are surplus to re· quirernents", The land was a 95.2529 hectare rural property on Maungatautari Road, Cambridge, sold for $925.000. Agroforestry said it intended to use it for growing "chestnut products" paulownia (tree crop) for timber and herbs, all for export. At that stage Mr Chua was described as a Singaporean resident who "currently spends of each year in New Zealand."

Local subsidiary ofITT Rayonier, Inc which has changed its name to Rayonier New Zealand Ltd (perhaps

to disguise its link with the infamous has permission

to acquire forestry assets on Matakana a

forestry right over approximately 5106 hectares of land. They are being bought from Caldera Holdings Ltd for $900,000. ITT's, and Ernslaw Ones, of forest rights and land on Matakana Island have been the

vociferous and effective protests, a

Matakana Maori. The results ofthis and a court case to establish their right to the land are a

In a decision, most of which has been pany has been given approval to the timber and a Forestry Right over a piece of afforested land in the Wairarapa. The name of the company, the term of the the area of the land and the price have all been An earlier decision, in June 1993, where the U.S. company was given approval to acquire the company has not been released either.

A U.S.A.!Fletcher joint venture is buying 524 hectares

land on the Top House-Korere Road for both and

forestry for $485,170. Tasman owned by Tasman Forestry Ltd and Fletcher Challenge Ltd, and RH New Zealand Forests 11m: pension finds and non profitable charitable institutions in the U.S.) are the partners.

Ernslaw One

IS further land in hectares for $11 ,"''.iV,''''"U oft 509 hect-

n('{wnm·~,tp" in that contract was the granting to Ernslaw over some of the land which was retained The terms of the forestry rights

have now been finalised. This 1993 decision was re-

leased the Ole only on in 1994. after it was

referred to in a March 994 decision. The price paid for the property was still not revealed. Ernslaw intends to plant

Fir on the to take advantage of falling pro-

duction in the Pacific Northwest

In other rural

trusts, two from the U.S.A.. and one from own a 4 .. 8 hectare block 01' land on Waiheke Island. "The property in 1992 but as no business was to be undertaken the ole 5 consent was not re-

quired. Moami Ltd (the company owned

by the trusts] have decided to establish a small vine-

yard, hence the need for consent to carry on business." We have no record of the original land acquisition being approved. The trusts are the Hoogendijk and. Maas Family Trusts of the U,S.A. and the Gilmour Family Trusts of Aotearoa .

... The Paranui Plggery Ltd which is 80% owned in Tahiti is buying a 27 hectare piggery in Paranui Road, Hlmitangt, Palmerston North for $385,000. The company is owned by IF,A, and J. Jardonnet of and 20% by S. of Aotearoa. "Francois Jardonnet wants to move to New Zealand " He is said to be a "skilled pig farmer". Half the farm will be planted in radiata for forestry; the remainder will remain a piggery.

Four Taiwanese are a 40 ha, forestry block in

Far North District for $1i47,4130, another eight a 30 hectare block for $1 and a further four a 20 hectare block for in the same area. are prob-

further blocks to those of similar size in Broadwood

to Far North Afforesta-

""" Three

and restaurant. It is not stated whether or not have permanent residence. The company the land is called Canterbury House Ltd ..

of National Australia issued $US119 million of shares by its Issue Ltd to "enable it to redeem on issue to

nese investors."

Released on appeal

Earlier decisions released on appeal include the following:

Several significant blocks of land have been HI Southland for forestry Malaysian owned Ernslaw One Ltd (of Matakana Island infame: see the December 1993 commentary).

July 1993

Unusual circumstances led to the release to CAFCA by the ole of a decision suppressed in its entirety in July 1993 It was the sale for $3 million of the 14,000 hectare Flock Hill Station, West Coast Highway, Canterbury to two Indonesian residents, A. Haran Alrasjid and Eeca Tanfana. The sale was discovered by accident by Listener journalist, Bruce Ansley, and immediately sparked interest after it was made public.

The high country station is in fact on a long term lease from its owners, the University of Canterbury, reputedly one of the largest land owners in Canterbury. The new owners have previously appeared in orc decisions: they own several pieces of land totalling approximately 1090 hectares at Te Pirita, Canterbury. They expect that Flock Hill will complement Te Pi rita in terms of wintering stock, making hay, and fattening lambs and cattle. They also propose extensive developments "centering on tourist accommodation and activities (including skiing, fishing, horse treking, hunting, jet boating as well as traditional farming activities)." The previous owners, Mr and Mrs H.G. Innes, are selling the property because they do not have the financial resources to develop the pastoral and tourist activities, but have leased the property back and will continue to farm it.

In May 1991 we reported the first of the Te Pirita land sales to the Indonesians:

"Two Indonesians via a company called Stavefield Holdings No. 49 (to be renamed New Indo Holdings Ltd) are buying a 209 hectare property at Te Pirita, Canterbury for $260,000, which "they propose to set up ... as a base to source New Zealand genetics for supply to their existing farming interests in West Java. The intention is to use genetics from the New Zealand facility in conjunction with their existing artificial insemination facilities in order to improve the genetic base in Indonesian stock." This is technology transfer in reverse!"

Purchases of adjacent land followed in August and December the same year.

October 1993

The Parklcoyal Hotel, corner Elizabeth Square and Customs Street East, Auckland, is being sold to Raffles New Zealand Ltd, of Singapore by DB Group Ltd of Singapore for "approximately" $23,000,000. Raffles is 34%

WATCHDOG

33% by Kumar, and 33% by

V, all of Singapore, The hotel will be managed

French company, Accor Asia Pacific Ltd under the

Novotel brand. Accor manages hotels

worldwide" and to be interested in

$25 million hotel in Hamilton 29/1

hotel'} Media Broth-

ers Group" "Parkroyal They

were also trying to buy the St Kilda Rd Parkroyal in Melbourne. The Auckland hotel had been difficult to sell while it was on leasehold land, but the Kurnars had in quickly" when the land had changed to freehold in a deal with the Auckland and Regional Councils which gave the Councils some adjoining buildings in return (Sunday StarTimes, 24/4/93, p.Cl "Over the moon at Parkroyal purchase").

The Wairakei International Golf Course, the centre of controversy just prior to the 1990 election when it was sold by an already privatised and U.Si-owned Tourist Hotel Corporation to Japan Golf Systems Ltd, is apparently likely to change ownership again. The sale was initially vetoed by the then Labour Minister of Lands, Mr Tapsell, The veto was rapidly overturned by the incoming National Government Mr Masafumi Fukumoto of Japan now has approval to buy it for a suppressed amount. He apparently received consent to buy it in July 1992 (never previously disclosed), but that consent has now expired. The Commission has obligingly extended its consent.

Serra Pic of the U.K is raising its shareholding in Sereo Group NZ Ltd from 47% to 98"/" for a still undisclosed amount. Serco Pic is owned by Serra Group Pic of the U.K. Serco bought the Works Property Division ofthe Works and Developments Services Corporation (NZ) Ltd, formerly part of the Ministry of Works and Development, when it was privatised in September 1990, It "considers the market for facilities management services in New Zealand and the Asian! Pacific region is expanding. Further investment in the New Zealand operation is seen as the best option to ensure that Serco New Zealand take [sic] advantage of these opportunities."

CALLIN A SUBS

aVE EAS BERS

Courtesy of Sir Roger Douglas (God bless him), New Zealand "enjoys" 11 fully deregulated foreign exchange market. That being the case, organisations such as ours have no difficulty accepting foreign currency - as long as it's a major recognised one.

So there is no need to write to us saying: "I'll pay my sub when I've got some $NZ"; or "I'Il pay it next time I'm over" (or even: "Come and get it"). We will happily accept foreign currency and in the past have done so, including $A, $US, $C, OM, and sterling.

A t the conclusion of its 180

"think-

Cornalco accepted the new contracts neeotrateo with ECNZ back in December 1993 for its Tiwai Point aluminium smelter Watchdog Its power prices under its main contract will almost double by 20 I 0, but it will only rise 10% over the first ten years. More to the point, it will not start commercial prices until after the Maui gas fields run out. it secures exclusive access to 16~'f! ofNZ's total output until well into the 21st

and an additional allocation of 35MW. The

details are under its original 1963 contract. the price

increases from 45% to 90~/o of the going industrial rate by 2010, Under its 981 contract, the increase is from 75% to 9()'% of the rate. As of April l. 1994, all Comalcos power

will rise in line with movement in average wholesale

prices.

In case you think that's favourable treatment, just consider the cushy (and still deal that Comalco got under its old contracts. In the fleeting Age of Consensus (a fortnight actually) following the 1993 general election, the Government was obliged to let the Alliance see both the old and new contracts.

"Until the new rates are agreed, it pays 2.25c a kilowatt. This is almost half the rate paid by other large industrial consumers, and less than a quarter of the

10.43c paid domestic consumers". Jeanette energy spokesperson, commented: "the new contract leaves the smelter just over half

the wholesale for two thirds of its power for an-

other ten years. in 2004 does the price start to

climb. Other large industries may now demand similar contracts, but if the Government agrees to them it will further reduce our options to manage energy resources in a sustainable way" (Alliance, April 19(4).

different about these new contracts, la-

mentable that are. that the Government has

to partially lift the veil that shrouds every-

thing to do with Cornalcos whole existence in

this country. We congratulate NZ's power and

energy the highly Kirsty Hamilton,

for the Government under the Official Information

ActWhat' s more, March 1 she secured nearly 100 pages of official documents backgrounding the contract ne-

And if you think that's then we refer you

to Watchdog 73 to read about our last battle to secure official documents. We did but it took years and a leak - to get anything, And those were 1987 papers, not released until 1993. They were so rare that the Listener featured them in a of the Century; The $80m Power Price Bruce

The 1993 documents that

secured have been cut, and

whole sections deleted, but nonetheless they are a fascinating insight into the whole process. They are far too bulky for us to analyse in the new slimmed down Watchdog, but if you'd like a copy, then sella us $10, to cover copying ami postage.

have already been covered extensively in the media, principally the Dominion. It had already been reported that Simon Upton, the Minister for the Environment, and Doug Kidd, the Minister of Energy, had advised Cabinet against approving the new contracts. These documents reveal that that the shareholding ministers in namely Bill Birch, the Minister of Finance, and Phillip Burdon, the Minister for SOEs, could not decide themselves if the deal was a good one. They told their colleagues that they could either agree to it, or not agree. Effectively, that's a nil recommendation. As we know, Cabinet did approve, The officials' report, by officials from the PM's Department, Treasury, Ministry of Commerce and the Ministry for the Environment, advised that the profitability of the contracts from ECNZ's point of view depended entirely on how it can increase prices to other customers.

In plain language, the new Comalco contracts will mean power price increases for everybody else. Indeed Kidd and Upton based their opposition on their calculation of a 40'% increase for the rest of us. It all became rather ridiculous when revealed that Treasury withheld the new contracts from the officials committee, and ECNZ may have even withheld them from all on the sacred ground of commercial confidentiality. It just makes reaching an informed decision that little bit harder. But despite the extraordinary revelation that two relevant ministers recommended against it, and the two crucial ministers gave no recommendation, the deal went through. Which just goes to show the power of the Comalco lobby around the Cabinet table.

Keith Dimond, writing to the Listener (18/6/94) shed light on the contempt with which Comalco has justifiably felt towards NZ politicians.

"In October 1972 I attended a Comalco management seminar in Sydney where the 99 year power agreement was discussed. A Comalco director advised that the agreement was unbelievably good (for Comalco). The only New Zealand minister who questioned the deal was Muldoon. The rest 'were farmers who did not understand industrial agreements'".

The politicians taken care of (as usual), Comalco stopped playing footsy and announced its long awaited $400m upgrade of Tiwai Point Having announced it was pulling the

on its Bell smelter when that contract in

200 I, because it can't get a satisfactory deal in Tasmania, this was the confirmation that New Zealand is flavour of the

44

month. Tiwai's output will increase from 270,000 tonnes p.a. to about 313,000 within five years. The upgrade is going ahead despite Comalco NZ's $ J 8m loss in 1993.

And how has it rewarded its workers? Well, in June. it sacked 46 of them who worked for its Tiwai Stevedoring Co Ltd, citing poor productivity, something the newly-redundant hotly denied. On the subject of Bluff harbour, Southport has been floated on the sharemarket, and it's a fair bet that Comalco will snap up any shares that come its way, along with the forestry TNCs that are increasingly moving into Southland. Comalco also got a ruling from the Broadcasting Standards Authority that partly upheld its complaint about the 1993 Frontline documentary about it. It's very sensitive about the word "subsidy" when applied to its relationship with the national economy.

Having stitched up its new contracts and upgrade, Cornalco NZ could now afford to belatedly join the rest of the aluminium TNCs who had agreed to cut global output, to safeguard their profits. Cornalco had been one of the holdouts, but in June 1994, Kerry McDonald announced that it was coming to the party. Worldwide, the situation was caused by Russia (which has the world's biggest smelter) privatising its aluminium industry, and with the Cold War gone. flooding the. market with a hugely increased output. It's called capitalism, but TNCs don't actually like market forces. They ganged up on Russia, and forced it to cut production by 300,000 tonnes.

Closer to home, Coma!co and its minority Japanese partners signed the deal to build a $1.1 billion third potline at its Boyne smelter, following its $940m purchase of the adjoining Gladstone Power Station from the Queensland Labor Government. This gives Cornalco and its owner, CRA, vertically integrated control of the Queensland aluminim industry from bauxite mine to coal mines to smelter and refinery. But CRA has still not got its claws back into the fabulously rich Bougainville copper mine. And there are signs that the Bougainville "disease" is spreading in Papua New Guinea. CRA was chased away from the Mt Kare gold mine by militant landowners. Another group of landowners has filed a writ in the Australian Supreme Court against BHP $4.9 billion for massive environmental damage from its Ok Tedi mine. This embarrassed the Wingti government so acutely that it has legislatively tried to the action going ahead.

Comalco NZ was wise to sew up a guaranteed supply deal to cover it after Maui gas runs out Now the Petroleum Exploration Association is scaremongering that the petrochemical industry may have to shut down by 2003 and there may not be gas for electricity generation 2008 if the Government's draft Minerals Programme for petroleum is brought into law. This is an argument over royalties and how companies bid for exploration acreage. The Association, representing oil TNCs, is invoking the memory of the winter 1992 power cuts.

As for the new user friendly ECNZ

to be confused with

WATCHDOG

Electricorp, oh dear me, no), well it announced a 1993 profit and promptly added that there would be no more Obviously not, when you've got suup. It's doing its bit for extra generation by studying the of spending up to $200m of taxpayers money to add a second tailrace to the Manapouri power station. And who is the prime beneficiary of Manapouri? Comalco.

In the broader energy field, the Government pressed on with its wholesale electricity market. Power For Our Future listed its deficiencies as: it's thoroughly artificial; it will be dominated by the electricity industry and large users; there will be more Cornalco-type deals with no public scrutiny; the proposed breakup of ECNZ will not result in competitive pressure; relying on the Commerce Act to prevent anti competitive behaviour won't work: capacity charges for not contracted power stations will perpetuate present inefficiency and waste; the new market will soften up the public for price rises once the benefits of low cost hydro power are captured by the industry and large users; the industry will usurp the market for energy efficiency, to the detriment of independent suppliers; and tradeable contracts for low cost electricity are simply a means to privatise our hydro resource.

The results of this deregulated energy market have already been experienced by ordinary people at the sharp end of it - namely, in their local power companies. That's retail; wholesale is being carved up in the same fashion, for the benefit of the big boys. And they don't come bigger than Comaleo, which knows a good thing when its on to it Now that its got what it wanted, the PR offensive of several years back has been quietly scaled down. Remember Kerry McDonald saving the kakapo? They're no longer trumpeting that (which is just as well, because the poor old kakapo is still as endangered as ever. Even those on the verge of extinction gag at being "saved" by Cornalco). The only saving Comalco is doing at present is its usual variety - saving heaps of money on power bills, and saving a privileged position for itself in the national economy. Who is going to save us from Cornalco?

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

To Lana Le Quesne, whose youngest daughter Carly died, after a long battle with a very rare blood disease. She was 20.

To Paul Burgham, whose mother Margaret died while doing what she loved - long distance walking.

She was 75.

PAGE 45

NF

I

As CPS doesn't have its own newsletter, Watchdog will run a regular report on CPS issues and campaigns. As the founder of CPS, we believe its work is important in confronting the manifestations of foreign control (and "making the economy attractive to foreign investment "] at the grassroots level. Ed.

uthpower

nual Statement of Corporate Intent. However, David Close, the leader of the Labour councillors, had suggested that we could ask to address the full meeting of the City Council at which the Statement was reported back. We did so, and Murray Horton and Reg Duder spoke to its May 1994 meeting.

Watchdog 75 reported that CPS was pressing on with its Southpower campaign. Since corporatisation into Southpower Ltd. it has gone behind closed doors, and CPS had been told by its major shareholder, the Christchurch City Council, that there is no public input into Southpowers an-

They got a fair hearing. indeed some councillors seemed

With It.

Get

PAGE 46

taken aback by the novelty of members ofthe public turning up in person to criticise aspects of their favourite corporate cash cow. One Citizens Action councillor asked the classic question "Don't you trust your elected The answer: "How can we when we don't know what's

on"? The following extract from a CPS leaflet briefly summanses our concerns:

"DOMESTIC PRICES MUST BE CUT

South power is predicting its profit to double by 1996/97. Since 1992 it has increased domestic power prices by 23%, while dropping business rates. We say that Southpower can easily afford to substantially cut domestic power bills.

THERE MUST BE PUBLIC ACCOUNTABiliTY

Since Southpower became an energy company, all its business is conducted behind closed doors. We say that it must be publicly accountable.

NO PLAYING THE MARKET WITHOUT A PUBLIC MANDATE

South power has plunged into the world of corporate wheelerdealing, spending $140 million buying Enerco, a North Island gas company. This was underwritten by Christchurch ratepayers' money. It is looking at other acquisitions. We say it should not be playing fast and loose with our money without any public mandate.

SOUTH POWER MUST REMAIN PUBUCL Y OWNED & CONTROLLED

The legislation that turned supply authorities into energy companies allowed takeovers by local or foreign predators. This has happened elsewhere in NZ, ft hasn't happened here. We say it must never happen because SOUTHPOWER BELONGS TO THE PEOPLE!"

The Council agreed to delay approving the Statement for one month, to allow time for a considered response 10 CPS. This duly came in a three page letter (517194) rebutting every point, and pronouncing itself satisfied with all aspects of Southpower's operations, claiming that the company is accountable to the Council and has a mandate from it. Subject only to the requirement that Southpower hold an annual public meeting, the Council approved the Statement

That public meeting, the first ever, was held in August. CPS turned out to picket it, and to ask questions on our subjects of concern. The whole Southpower board and were present, and were acutely self-conscious of CPS. Chairman John Gray quoted from our submission to the Council's Draft Annual Plan; told us that that and our appearance at the Council meeting was an example of public accountability and input (ignoring the pressure that led to even that being granted); and, most extraordinarily, brandished aloft his

own placard "No Privatisation of South power!" It was a bravura PR performance, but he had no real answer to many of the questions asked by Murray Horton, Reg Duder, Ken

John Ring, Dennis Small and Averill Williams of

CPS

Southpower has become the compleat corporate animal. Its 1993 purchase of North Island gas company, Enerco, has made them the biggest supplier (25%) in the country's retail energy market Never mind that the volatile sharernarket knocked $14m off the value of Enerco shares between December 1993 and July 1994. The incredibly profitable nature of electricity supply is evidenced in Southpower's own projections in its Statement - the 1993/94 profit was $12.4m; by 1996/97, it's predicted to be $24.1 m. A 100% increase in three years. Not a bad little earner, very tempting for any bigger sharks cruising just outside the reef And its looking at further acquisitions eg it was named as a likely bidder for the 49%, of Capital Power that the Wellington City Council decided to sell (in the face of a strong public campaign), The directors think they're worth more, and unsuccessfully moved to increase their fees by up to 60%. Public outrage from groups as diverse as CPS and the Selwyn District Council (a Southpower shareholder) squashed that plan,

It has to be said that Southpower is one of the country's better power companies, in contrast to some of the cowboys who have emerged in the new Mickey Mouse energy market. Out of 43 power companies, it is one of the nine still fu lly in local body ownership. It is not listing on the sharernarket (unlike Rotorua); it is not issuing shares to the public (unlike Ashburton); merging (unlike Waitemata); contracting debts worth more than twice its capital to build its own power schemes (unlike Wairarapa); or selling out to foreigners (unlike Hamilton). Nor is the power company a major issue in Christchurch. But there is still plenty to be concerned about, and in the new deregulated environment, there is every likelihood that it will become a major issue, as it has in so many other parts of the country. In which case, CPS has laid the groundwork and will be ready.

The whole rosy projections of energy supply are based on the notion of an export-led expanding economy, with a huge upsurge of demand for electricity. Where is that going to come from? Both Greenpeace and the Electrical Supply Association agree that it can only mean a whole new burst of dam building. But demand could easily outstrip supply if that scenario came to pass, and industry could grind to a halt. We currently have the spectacle of the country's.biggest city threatened by a critical water shortage. This illustrates one inescapable economic fact - since "Market Forces" became the religion, there has been no economic planning. The June 1994 PSA Journal headlined its report on the proposed wholesale electricity market: "Electricity system needs more planning and less market". We couldn't have put it better.

PAGE 47

WATCHDOG

wish owners or

to pay no more. This happened in the mid 80s, and it in 1994. Labour councillors succeeded in convincing others to join them in scrapping the $100 uniform charge levied on all Their argument. with which CPS was that to ask rich and poor alike to pay the same amount was unfair. in fact. CPS sees a household uniform charge as the closest NZ equivalent to Thatcher's notorious poll tax ..

The rich were not going to take this lying down. Led by the Merivale Precinct Society. they claimed that this would lead to their rates going up, and "carrying" the poor. There was a new player this time ~ the South Island branch of the Building Owners and Managers Association (BOMA). Its president, Hugh Pavletich, berated the Council at every opportunity with quite extraordinary claims, and pushed his own barrow ie that the Council should completely get of "business", sell all its assets (including Southpower), and let businessmen get on with running the city. He attracted the

of our old

the Business Round Table.

Pavletich incensed the Council that it decided that its own membership of nOMA was and promptly quit. Bob Lineham. Council group manager of finance: "It's about time the public know that BOMA, who represent large property owners, are trying to incite public unrest for the benefit of a minority of property owners" (Press, 26/5/94).

BOMA did manage to incite public unrest, and of the several thousand submissions on the City Council's Draft Annual Plan. the great bulk were in favour of reinstating the uniform charge to prevent a rates rise. CPS was one of the few to actually support the uniform charge. Our submission, presented Koa Saxby. stressed also that we supported the retention of a rates differential in favour of domestic over commercial ratepayers; that the interests of domestic ratepayers should be put before those of business; and that we were concerned that the more than $60m of borrowing required for Council enhancement projects (particularly a convention centre, whose beneficiaries would be the foreignowned tourist business) could endanger public ownership of assets such as Southpower and the Port Company. We picketed the Council building on the day Koa presented our submission, and stated what we thought of BOMA (in a statement that was not published):

PHOTO. JOHN KIRK· ANDERSON

Brian Stephen, left, and Stan Hemsley were among members of the Campaign Peoples Sovereignty

who demonstrated outside the Christchurch Council offices yesterday q J..t-

"We are disgusted by the self serving hysteria whipped up by BOMA and co, who obviously have not realised that the 1980s decade of greed is over, and that even the rich are expected to pay their share. Their political agenda, including Council asset sales and placing the interests of Big Business first, must be strenuously opposed. It is an ominous sign that the Business Roundtable has stuck its nose into Christchurch affairs, urging the Council to totally divest everything. We congratulate the Council for quitting BOMA, and urge others to do likewise.

PAGE 48

As for BOMA and its ilk, we suggest they move to the Cook Islands. They'll find it a more congenial climate, in every sense."

But we were on the losing side in this. The Council voted to reinstate the uniform charge. One Citizens Action councillor made the Kafkaesque claim that to keep it would mean

86.000 would pay less, and this would be "wrong at a time of increasing costs". So that was the real agenda. Screw the poor There is also talk of selling all or some of the Council's share in the Selwyn Plantation (which is madness the current forestry boom). CPS does not intend to simply walk away from this issue however. We have just started.

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In II surprise move, the Ranks Peninsula District Council has reversed a long-standing policy of opposition to selling its shareholdlng in the Lytteltun Port Company. In a short-sighted attempt to rectify their rates budget, the Council nip-flopped its position and advocated the sale of its sharcas the main method of achieving financing for capital works.

Fortunately the Council was pulled lip short in its haste for a oncoff short-term gain. Lack of meaningful consultalion saw growing opposition from the local community. supported by the Harbour Workers Union. to the point where a well-attended public meeting savaged the Mayor and Councillors, unanimously rejected the sell-off, and called for a district survey before any decision was formalised. Invited speakers included Ruth Dyson (Labour MP for Lyttclton), Jim Anderton (Alliance Leader), Gary Moore (Christchurch City Councillor) and Murray Horton (Campaign Against Foreign Control of Aotearoa).

The heat of opposition from residents and ratepayers was such that the Council was forced to abandon its July I implementation date and concede to the $11,000 survey.

Po

This in itself was a major victory for the opponents. as no local authority in New Zealand has been placed in this position 011 the question of asset sales before.

The Christchurch City Council has been placed in a tricky position. as it is not only the approving authority for the Resource Management and Planning Act. hut it also has a commercial interest in the Port Company. The fear is that it is in a position to compromise environmental and planning interests 10 increase its rate of return.

The Council agreed that when the survey was sent out the groupco-ordinating the opposition to the sale would also have the right to include it report on why voters should reject the share sale.

42% of the 76()O eligible voters returned their votes which is a large percentage for thise type of poll.

68% of these votes opposed the sale.

Grenville Christie, spokeperson for the Concerned Residents and Ratepayers. said the success of the campaign was extremely encouraging and should be a lesson to the wider community and other Councils that there is strong, opposition to the sale of Cornmmunity assets.

Palll Corliss

r-.--------.--------------------------------------------------------------------,

Of_BI Tl.lfJl!RY Bernard Wens

Bernard Wells was a CAFCA member from 1979, and, for many years, he, and the Nelson Action Committee on International Affairs, were among our principal Nelson contacts. The following obituary, by fellow WWII detainee and peace activist, Wilf Foote, appeared in the March 1994 Peace of Action. Ed.

Bernard Wells, who passed away recently at his home in Mapua, was one of those young Methodists whose Christian Pacifist convictions led to their incarceration in detention camps during World War Two. On his return to the Nelson area Bernard took a leading part in the anti-conscription campaign, the opposition to the Vietnam war and the Springbok tour, and the nuclear free campaign. Bernard was one of those who formed the Nelson Action Committee on International Affairs, later known as the Nelson Peace Group, and was its main spokesperson and secretary for many years. Bernard was very conscious of the need for greater cohesion in the wider peace movement and was one of those who formed Peace Movement Aotearoa (NZ), the national coordinating organisation. He also served as the Nelson member working group in the early days of the organisation. The peace movement owes a great deal to Bernard; we for what he achieved and express our sympathy to his wife Dorothy and family.

PAGE 49

!II

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Energy, food, water, shelter, health care these are all basic human needs that on the of resources for their satisfaction. As global population and environmental pressures mount, emerging water scarcities threaten serious competition in many parts of the world.

To quote Sandra Postel of the authoritative Worldwatch Institute: "Although water deficits currently are limited geographically, they are certain to spread if consumption goes unchecked. The question for many areas is not if a crunch will come, but when. Where scarcity looms, heated competition is brewing between neighbouring nations, between regions within nations and, increasingly, between cities and farms." ("The World Watch Reader", 1991, p. 128)

As resource scarcities such as water grow, the rich and powerful are pressing for even bigger shares. They want to commodify water, to privatise it, to get it into the capitalist market as a consumer product, and so make money out of it at the expense of others, as well as make sure they tighten their grasp over this resource. Instead of wanting to ensure fair use for ail, they want to use it freely for their own greedy purposes and screw the poor in the process. Access, distribution and use all start to become major issues.

A World Bank proposal to charge more money in poor countries to users of water, transport and electricity has been strongly criticised by development non-government organisations as favouring the rich. In 1988 an important study of the beverage transnational corporations (TNCs) - "Merchants of Drink: Transnational Control of World Bev-

WAIH

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Watchdog 75 reported that Anti Bases Campaign veteran Warren Thomson was one of two people charged with cutting the fence and entering the Waihopai spybase during January's national protest. The charge was dismissed because the cops hadn't got their act together enough to actually get their evidence sent from Blenheim to Christchurch. Ironically, Warren had opted to plead guilty, in order to avoid having to travel to Blenheim for a defended hearing.

Well the cops decided to have a second bite of the cherry. Obviously no respecters of holidays (or holy days) they

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The bad news is that both Peacelink and Peace of Action have folded. The good news is that Peace Researcher has resurfaced, after a hiatus. It has a new address (same as ours), a new slimmed down format, and a new function, namely that of being the journal of the Anti Bases Campaign. Warren Thomson has joined Bob Leonard as editor. It will cover the bases (pun intended), and a wide range of intelligence issues.

WATCHDOG

Frederick Clairmonte and

Joseph untapped resource for these conglomerates. it was in imm inent peril of extortionist exploitation on a large scale. Groups like the for Peoples' Sovereignty (CPS) in Aotearoa/Nz have been trying to counter electricity price rises and the corporatisation of energy. Water now also requires some attention if we are to safeguard this resource. Instead of having to be on the back foot all the time we can be pre-emptive here to some extent.

Debate is hotting up over the planned export of drinking water by Okuru Enterprises Ltd. from Tuning Fork Creek and this is not the only enterprise of this sort in the pipeline. The 1992 hydro lakes shortfall and the Auckland region drought have stirred general concern about water supplies. In Otautahi/Christchurch, the smug boast has long been that we have the best water in the world. It may become somewhat emptier in the very ncar future as the local water table drops. In fact, there is a prediction that the late J 990s will see constraints on water use here. Meantime, the Canterbury Regional Council is intending to use tradeable water permit regimes as a method of promoting efficiency in the use of water. Privatisation, user pays, export economy - TNC and local privileged interest control is on the way unless we fight back.

People actively concerned with water rights need to build up their networks. A CPS member, Ken Martin, has been a local pioneer in this area, He can be contacted at 2/30 Berry St., Christchurch 1, ph (03) 3557014.

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summonsed Warren again, on Good Friday. The charge was exactly the same as the first one. This made his red hair stand on end, he decided to tight it, and hired a lawyer. The latter succeedd in getting the charge dropped (again) without Warren having to appear in court, for the simple reason of double jeopardy.

But it left Warren with a legal bill of nearly $250. Both CAFCA and the ABC made donations, and we're pleased to report that his costs were fully covered, as were those of his fellow defendant, Matthew Kidson, in Nelson.

That the case, will scale back our coverage these subjects. We will definitely have less intelligence (some of you have doubtless suspected that all along). And you will no longer have to deal with photos of naked crowd scenes disturbing your reading of what has always been a family publication (the Addams Family, perhaps). By the way, on the subject of those nude photos, we forgot to credit the photographer - Allan Cumming.

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This has been edited drastically from the original 17 pages. Ed.

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In his book, "The Work of Nations" , which has found wide acclaim in America and Robert B. Reich of Harvard University, and now President Clinton's Secretary of Labor, has described the consequences of globalisation. He has analysed the sociological aspects of the policies which have given freedom for capital to move globally under the name of free trade. He describes how economic policies, formerly aimed at the wealth of nations, have been replaced by business strategies relating to the wealth of global traders. (NB. The book's title is a play on Adam Smith's 'The Wealth of Nations", the Bible of the free marketeers. Ed).

Percentage share of poorest 20% of world population

1969/70 1990
World GNP 2.3 I.3
World trade 1.3 0.9
World investment 3.5 1.1
World savings 3.5 0.5 % of total disposable income (after housing costs) III Thatcher's

Britain

1979 1990/91
Richest 20% 35 43
Poorest 20% 10 6 Source for both tables. New Statesman Professor Peter Townsend,

Reich's book describes the consequences of the developments on the US. Between 1977 and I the average income of the poorest 20% of Americans declined about 5%, while the richest 20% became about 9% wealthier During these years the average incomes of the bottom 20% of families declined by about that of the top 20% increased by about 15%. The top 5% commanded 26% of American income, so that the remaining four fifths had to share the other half. Reich estimates that, if the present trend continues, the top 20% will receive in 2020 60% of America's income, the bottom 20% will receive 2%!

Peripheral countries like New Zealand have suffered as much and more than the metropolitan countries such as the UK and US: On a basis 1981 =100 the real disposable incomes of fulltime wage and earners in New Zealand have fallen steadily and in December 1993 (in the face of'the much touted "recovery") had fallen to 9!U % ofthe 1981 average

- 12 years before.

Why growing

Reich debunks what he calls "vestigial thought" - which is the false assumptions of current academic and official economic thought. His first and most powerful attack is on the "trickle down theory" saying that the reality of the deregulated post Reagan globalised economy is that corporations and investors now scout the world no longer the nation for profitable business activity. Thus businesses ("corporations") and investors are becoming disconnected from their home nations.

"As almost every factor of production - money, technology, factories and equipment - moves effortlessly across frontiers, the very idea of an A merican economy is becoming meaningless as are the notions of an American corporation, American capital, American products and American technology, America's core corporations no longer serve as a gateway to the American middle class. In fact the core corpration is no longer even American. It is increasingly a facade behind which teems an array of decentralised groups and subgroups continuously contracting and subcontracting with similar diffuse work units all over the world"..;

How

by

Reich divides the working nation into three classes. "Symbolic analysts" are the which benefits from the immiseration of the rest of the nation and the world. comprise no more than 20'% of America's voting age population. Symbolic analysts include all the consultants, PR executives, investment hankers, lawyers, accountants, top management, tax and marketing experts. They also include occupations ranging from researchers to journalists and academics ... They are the middlemen ("brokers") who connect skills from all over the world through their computers for "adding value" to the product of the core firm. American law firms earned $US73 billion in 1990 and their earnings were growing by more than 10% per year. Even after the market crash, Wall Street still employed more Americans than the steel industry.

"The salaries and benefits of America's top executives and many of their advisors and consultants, have soared to what years before would have been unimaginable

even as those of other Americans have de-

dined"

Symbolic earned over half of all American incomes. The res! shared between "routine producers" and "in-person servers" ie the industrial class and service workers. The search for ever lower wages has not been confined to heavy industry. Routine data processing is equally footloose. By 1990 keypunch operators in the US earned at most $6.50 p.h. But the "strategic analysts" of American data processing firms contracted work out in the Philippines where the cost is about $1 p.h ... The US Bureau of Labor Statistics estimates that of the 2Js million manufacturing workers sacked during the 19805, one third found jobs in service trades - for at least 20% lower pay. He concludes that like the boat of routine producers in the US economy, the boat carrying in person servers is sinking as well. We then have the present American (and generally industrialised countries) living standards rapidly deteriorating.

On the other hand, the standards of the top 20% including symbolic analysts are concentrating in their incomes the entire progress of mankind's ever improving science and technology. The personal interests and greed of the top twenty class (who also happen to monopolise public relations and increasingly even education and science) favour these false theories about economics, such as "trickle down". Reich describes the "secession" of the top twenties from the nation. Geographically the top twenties enjoy strict separation in America at least from the bottom eighties. They live in closed communities which have all the advantages of high culture and entertainment as well as education and relaxation. Amongst their advantages are those of education which in their private institutions they can have bestowed on their offspring when education standards among the bottom eighties fall.

Critique

Reich offers as a (partial) solution to the 20-80 problem a new form of economic nationalism which he calls "positive economic nationalism" ie he advocates the use of public finance to redress the balance - partly by direct income subsidies and partly the investment of the State's resources, obtained by taxation of the

in creating a population which can, by good education, obtain the benefits which at present are monopolised by the top twenties. He puts forward a strong argument for universal education based on Government finance,

His book is written in America for Americans. It is, in American terms, radical book because it advocates increased taxation ofthe rich and an increased activity by the State sector in investment infrastructurally. One would have to be an American to criticise it. President Clinton, in appointing Reich his Secretary of Labor, showed his appreciation of at least some of his unorthodox and valuable criticism of "vestigial thinking" and established dogma.

If one looks at his thinking from the point of view of a peripheral country like New criticism, however, must be directed at his uncritical acceptance of investment the most important form of formation in the present world. Because he has come to the conclusion that since the introduction of international production chains there is no longer such a thing as an "American corporation" or an "American product", he concludes, after showing the transnational origin of various things: "Which of these is an American product? Which is a foreign'? How does one decide? Does it matter?" And he answers that it does not matter. He can only come to the conclusion that ownership and control of the productive process by non-resident interests do not matter because he neglects absolutely, and right throughout his entire book, the question of the significance of the balance of payments to a small nation. People will continue to supply the US with all imports required by its consumers and industries and be glad to accumulate "dollar funds" which are international currency to the exporter. The same does not apply to a small country like New Zealand. If we can't accumulate enough foreign funds by our exports, we have to borrow the money. Now borrowers tend to become controlled by their creditors, whose only interest in the borrowers is repayment of their debts.

Reich gives examples of the thinking of American foreign investors. American Telephone and Telegraph (A T&T) had a phone assembly plant in Lousiana until they shifted production to Singapore in the late 70s.

"By the late 1980s AT&T' s strategic brokers found that routine producers in Thailand were eager to assemble phones for a small fraction of the wages of routine producers in Singapore. Thus, in 1989, AT&T stopped hiring Singaporeans to make phones and began hiring even cheaper routine producers in Thailand" ..

PAGE 52

This book is

It de-

the rich richer and the poor poorer. Where it fails is that Reich describes the process of the current immiscration of the world 's underlying population very between the situation in the and the exploited economies, although he well shows how the of the top 20% of incomists in the US has achieved its unparalleled wealth at the cost of the underlying 80% of the world's citizens.

Although he advocates economic nationalism" in the welcome form of strengthening the State's role in maintaining and expanding education, health and public works based at least partly on increased taxation of the top twenties income group, we in New Zealand must pursue an even wider form of economic nationalism if we want to avoid

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For the past couple of years, has been regularly

reporting the course of events from the April 1992

militant demo against the New Zealand Investment Confer-

ence, in Auckland. Following the police conducted a

particularly brutal raid on the Centre, which led to

several people being injured Buchanan was batoned

in an eye, and virtually lost the use of it), and a number of

arrests. All charges were dismissed who was less

than happy with police conduct, that raid has

entered the annals of State . Sam Buchanan was one

of the cases featured on the recent Frontline Of! police violence and Matthew Innes, he can consider

The Auckland

Workers Centre, in turn,

over the raid. But the Court

ruled that the police are immune from action under the Police Act. A UWR C went to the Court of Appeal. and in

July, it ruled that claims can be made

the police for breaches ofthe Bill of Rights Act. It awarded

$10,000 costs to AUWRC. We'll you posted.

the new Aotearoa which introduced the Reserve Bank buildis where the Overseas In-

vestment Commission is located. We were all

They could to a halt without constant supply of rubber stamps). They were protesting the Reserve Bank Act, which reflects the Natl.ab anal retentive obsession with keeping inflation below 2%, to the exclusion of

everything else (since replaced debt repayment as the

ideologues' idee fixe. can handle one thought at a

time).

Network

Without national sovtakeover of New Zealand

all nation we are unable to

shoulder our international tasks of those even

need than us Thus national economic policy the

basis of internationalism.

Nationalism and internationalism are not irreconciliables, one is the precondition of the other, On the other unconditional acceptance of dens our balance other proprietary rem ittances, threatens national sovereignty which allows us to introduce people friendly policies. Freedom for investors is not international citizenship but a way of surrender to transnational money power, concentrated in a small proportion of the world s population, comparable to the membership of NZ' s Business Round Table but internationally.

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The blockade was major media coverage. It was ended by the police (non-VIOlently this time) arresting 12 people from around the country, including leading figures from AUWRC, such as Sue and Bill Bradford. All pleaded guilty: some got diversion, and some community service. The Bradfords got 50 hours community service, and Sue had a "final warning" entered on her file, which means that if she IS convicted of trespass she will be sentenced to periodic detention or prison. The heaviest fines" $345 - were imposed on Dunedin Joss

Debreceny and Locke, who are leaders both of the

extremely well Otago student movement and of

the Aotearoa Youth Network.

Because we support the

the A YN, and the Re-

serve Bank action, CAFCA was happy to donate towards loss and Cybele 's costs. So was the ABC and the Campaign for Peoples Sovereignty.

Ifyou want to contribute towards legal costs to the Auckland UnemA uckland. .. vith

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Sounds just I ike the book we all need to read, doesn't it? Independence for New Zealand is what we want, eh? Right from page ix there are hopeful signs - the acronym "CAFCA" is listed in the glossary of abbreviations, right next to "CAP", the Common Agricultural Policy of the fCe. Wen, this book is not the one we have all been waiting for. Malcolm Mckinnon has a definition of independence that conveniently allows him to ignore most of the issues that CAFCA is campaigning on.

Malcolm McKinnon, a historian formerly at Victoria University and currently working on a Historical Atlas of New Zealand, generously provided CAFCA with a l Ocm high stack of formerly secret despatches from the American Embassy in Wellington, which were summarised in Watchdog 65 (October 1990).

For McKinnon, independence is not secessionist nationalism or revolutionary socialism. Hell no. Independence is the "articulation of interest" within an accepted international framework of power. That means we can be in ANZUS, in hock to the IMF, going all the way with LBJ, and still be independent as long as we are still asserting our interests. It doesn't matter if noone's listening. It has to be admitted, these academics have a way with words,

It is still a book worth reading. It is an interesting history of how New Zealand has tried to assert itself in the world with a reasonable amount of success at times, and how New Zealand has been stuffed around by Britain and the US before, during and after World War [I, during two cold wars, during the disintegration of the British Empire, during the Vietnam War, during the nuclear free crisis, and during various financial shenanigans.

Certain things come through strongly. Cyncical we may be, but New Zealand has played a principled, even noble role at

and not just in the nuclear free controversy either.

Too small to matter in any other way, on several occasions New Zealand made a difference by the moral high ground and acting according to principle even if noone else did. This happened, for example, when the United Nations was being set up after the Second World War, when New Zealand argued hard for smaller nations to have a bigger voice in that organisation, and strongly opposed the big pow .. ers having the veto.

It is also clear that the main distinction between National and Labour over the years is that Labour has innovated, National has administered. When labour initiated something either good or bad the Nats would grumble, but when their tum came as government they more or less maintained the

'Wilkes

Labour innovations rather than Labour's policies and interesting than those of National

tamper with them. end up being more

Mckinnon is reasonably generous in giving credit to protest movements for bringing about change. The anti Omega and anti base campaigns of the 70s get more than a mention, and we learn that the anti Vietnam War campaigns had more effect on Holyoake than was visible at the time, There is a fascinating chapter on "Kith, kin and South Africa" in which McKinnon pays tribute to "the protest movement's heroic efforts to challenge and eventually transform mainstream New Zealand thinking on South African issues".

There arc some mistakes and omissions that rankle. The long ago campaigns against US Air Force bases at Woodbourne and Mount John are described, but the far more significant and continuing campaign against the military operations of Operation Deep Freeze doesn't even a mention. The day of the big 1973 demo against Deep Freeze was, it needs to be remembered, the day on which the NZ police "broke the back of the organised left in New Zealand", if we are to believe the autobiography of assistant commissioner and deceased bigot Gideon Tait,

There is one single line about the Overseas Investment Commission, the establishment of which is attributed to a revival in economic nationalism in 1972. 14 pages later there is half a paragraph describing CAFCA as a manifestation of economic nationalism which surfaced in the 9805_ No mention of the fact that the orc very became a rubber stamp of proposals for overseas takeovers and land

No mention of all the effort CAFCA has put into documenting the avalanche of foreign takeovers approved by the Ole.

No way, Mckinnon relies on the of other

together with bits and from the likes of Metro, the National Business Review_ and the Post. our loss of control over telecommunication and transport netchunks of the economy, most of our natural

resources and vast tracts of our loss

of independence. Not according to McKinnon's

definition of independence. Given the lack other quantitative data in the book on this shouldn't Mck.innon have either quoted CAFC/\. data or else criticised CAFCA

data to explain

But no.

is

"articulation of interest", our interest as we

WATCHDOG