CAMPAIGN AGAINST FOREiGN

NEW ZEALAND

PO BOX 2258

NUMBER 80

NOVEMBER 1995

CONTENTS

PAGE

FRENCH INVESTMENT IN NEIl\! ZEALAND

Business As Usual ... , ,,," , " ., "'"'''' ".""" .. ",.". """"" .. "., DON'T SAY WE DIDN'T WARN YOU

2

European Pacific "'"'' ....

DON'T ROCK THE RULERS:

3

"TVNZ Ordered To To Malaysian Logging Barons" - by Murray Horton ,,,.

fHE TIONG EMPIRE ,,, .. '''''' "'" . "'" .. , ... " , ". " ..... ,,,.,,", .. " .. , ... " .. " ,,, ..... "MAD COW'

4 7

The Broadcasting Standards Authority's Decision "" .. '''''''' ., "."". "'" 11

'CLEARCUT"

Copies Of 800k Still Available ".. ""'"."""""""" .... "" ...... "......,,'" 11

1995 CAFC,I\ AGM MINUTES ..... ". " ..... ,,""" ..... , .. , """."" .. , ""'" .. ".". "".... 12

12 15

ORGANiSERS REPORT Horton

CAFGA'S ANNUAL .ACCOUNTS 1994/95 TELECOM

Phone TNCs Told To Get Their Willigs Out Of Their Baurnols 16

TAXATION AND FOREIGN INVESTMENT by Wolfgang Rosenberg 18

Overseas Investment Commission by Bill

DUBiOUS REVISIONS 20

GLAXO CLOSURE S!-lOVVS FOREIGN "INVESTMENT' DESTROYS JOBS . 23

OIG DECISIONS and June 1 & appeals ... . 23

WHEN IS A FO~,EIGN COMPANY NOT A FOREIGN COMPANY? .. , ....... .... 25

CAMPAIGN FOR PEOPLES SOVEREIGNTY

34 34

"No To Privatisation!"; SOMA Picket .,' ...... '" "", ........ " ....

THE SINGLE BIGGEST FOREIGN INVESTOR IN NZ SHAREMARKET." GA HITRADE by Dennis Small

TRADE REVIEW

Trade And Environment: Some Examples Of Specific Concerns

TRIPS UPDATE POWER PATENTING .. , .. "'" "." ..." ,

AGRICULTURE UNDER ATTACK ,,, ......... ,,.. ..,., ,,,.

WASTE MANAGEMENT

35 ............. 39 43

The Invasion Of The Wheelie Bins, "Titans Of Trash" Video Available COMALCO

New Zealand: New The World, , .. ,"" "" .. " "........ 48

SPURIOUS REASONING AND HOME TRUTHS . , " " ., 50

TAPE FOR SALE

Anderton And Peters Against The Bill

"A BEGINNER'S GUIDE TO FOREIGN CONTROL

, , . ,' 47

48

50

50

N

IN

EN

III

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It needs 10 be made clear that this article can only cover some examples of French investment. Unlike some of our previous investor country profiles - such as that on Singapore in Watchdog 79 - French investment is much more long established here and less likely to be encompassed by the database we have compiled from Overseas Investment Commission material this decade. We/ace the same problem researching any ofthe oldest and biggest investors here, such as Australia, the US, Britain and Europe.

As outrage continues unabated in New Zealand and around the world at the French resumption of nuclear testing, it is useful to consider the commercial relationship between France and New Zealand. Public attention has been focused on things such as Mt Cook Line's extremely illtimed purchase of French aircraft or on calls to boycott French products (see box).

National Mutual by AXA, which bought a 510/,) stake for $1.2 billion in August 1995. AXA is France's second largest insurer and the most profitable. This marked a truly massive French push into the Australasian insurance industry - National Mutual has 280,000 policy holders in New Zealand alone.

How lucky for the "nuclear free" National government (led by Jim Bludger, that long time peace campaigner and personal friend of Nelson Mandela) that Jacques Chime didn't announce the testing resumption until mid year. Because, in March 1995, there was a little noticed privatisation ECNZ sold its maintenance and power subsidiary, Powermark, to GEe Alsthom New Zealand Ltd, for about $18 million. Alsthom is jointly owned by General Electric ofthe UK and Alcatel Alsthom of France. It leaves our electricity system without its own engineering expertise. Powerrnark employs 850 staff and made a $5.5 million profit in the 1993/94 year. GEe Alsthom employs 73,000 people in 23 countries. Bill Rosenberg commented in Watchdog 79 that this represented technology transfer in reverse - to the European GEC Alsthom said the purchase represented its into the New Zealand electricity market, one which is in-

But France has got considerable direct investment in this country. In 1994 the Overseas Investment Commission (OIC) approved two French applications, totalling $141.9 million, one very big jump from the $22.1 million worth it approved in 1993. France ranked eighth biggest investor, by value, in 1994, coming well ahead of Japan. However one thing the French are not buying is rural land - there were zero pur .. chases in 1992/93/94. There have been a couple of minor land buys - in October 1991, the Ole approved winemaker Veuve Clicquot paying $665,000 for 78 hectares ofBrancott Valley, Marlborough. And in April 1995 a French resident bought three ha at Kerikeri for $420,000 to establish a holistic healing clinic.

The most high profile recent French takeover was that of

BOYCOTT FRANC

BOYCOTT FRANCE

Supporl1hc protests against Fn::nch nuclear lc:.:,B in the Pacifie. Don't buy'

• French wine:" brandies and liqueurs, eg Bollinger, Courvoisier Grant! Munier, 1I<:"".%y, M",,1.

$ French food, ell, D~5'):dUi, POUPOtl, Pouuncry, Edmond Fullot (mustard): Evian und Pcrr ier (mineral water); Sf Dalfour (fruit spreuds):

T'piak (couscous)

• French cosmetics & designer products, c~, "''1'CgC, Chanel, (brisli.I! Dior, G;vc"chy, Heiem. Rubinstein. Lancomc, L'O'«lI. LOll" Vuitton, Yves Saint-Laurent

@ The following product- which arc made ill France or arc m.idc by l-rcnch.owru-d companies: Ali' Liquid (industnal, medical food g;jscs)~

Afraid (telephones, P:\llX systems); Arcorcc (gia.sswarc); Aspro, Aspro Clear (aspnn): Aqua LUll!: (divJII[ cqutpmcnt): Biro Ilie (pens. lighters. shaver:;); Boslik (adhesives. sealants}; Citroen t cars); Cloudy Ray (wine); Elf Aquitaine (industrial chemicals & plaslic,,); Emile lI'cory (bakcware}; Le Carbone-Lorraine (carbon brushes); Le Creu.set (bakewarc ). Legrand (electrical cqutpmrnt): Luminarc (glassware}: tH('{'OU10 (toy»): I\'1il'hdin (tyre s), Muulincx (kitchen ware) p(~Ul!.cot (cars). Pol'l:dan (h)draulic:;;); Hl"nault (C~lL.)~ HhmwPoulenc (chemi<:ab & agrodlcmicals); Schneider-Telcruauique (electrical distribution & conu ot ,-:qLJiplHt~nl): Virbur (vctcruuuv prodw'hL Zig Zag (cu..ucne P"pcrs)

i'uhli"hcrl by U,,· tJZ Council ollrrilk Union· .. PO Hox bell:'. WcllinL'.(oll

creasingly attracting a growing number of TNCs eager to make a killing. So the Government that has been fulrninatat France for resuming nuclear testing, happily sold a

strategic public asset to a transnational half owned the

French.

French investment covers a number of fields. In 1990. a French/Singaporean joint venture bought out Griffin and Sons Ltd, the biscuit maker. Previously it had been Ameri .. can owned. By 1994, it had become majority owned by the French partner BSN SA, the sixth biggest food 'INC in the world. Think about that as you're dunking your next Frenchowned gingernut. BSN used Griffins as a takeover vehicle within NZ. In 1993 it spent $22.1 million buying an initial 20% of the Best Corporation, a small goods manufacturer, previously owned by the Huljich family. Best also owned Australian speciality food companies, so BSN got its foot in the door of that much bigger market. In April 1994 the Ole approved BSN fully buying Best for $135.9 million. It planned to keep its shareholding at 67%, back the other 33% to the Huljichs.

Allflex was one of the great Kiwi export success stories of the 1970s and 80s. It virtually created a world market for plastic and electronic animal ear tags, setting up factories around the world, including Europe and Latin America. In July 1990 the Ole approved its takeover by the French company Societe Francaise D'Tnnevations Pour L'Elevage. Only a small part of Allflex's production is now sourced from this country - it has become just another subsidiary of aTNC.

There is French connection in the textiles and wool industry. In November 1990, an internal restructuring revealed that Hartwool (NZ) Ltd is owned by the Chargeurs SA Group. in May 1994, the Ole approved Alliance Textiles

D

N'T 5

y

E DIDN'T W

selling its wool topmaking business to a joint venture between itself and Prouvost Hart Ltd, a subsidiary of Chargeurs,

Some everyday household names turn out to be French owned. For example, in 1992 the worldwide Sellotape group of companies was bought by holding company Kirk Holdings BY., owned by three French industrialists, G. Wahnich, F. Ullmann-Hamon and G. Silberman.

Watchdog 79 detailed the dominance of Singaporean companies in hotel ownership in NZ. There is a French connection there as well - for example, the Auckland Park Royal and the Queenstown Holiday Inn, both Singaporean owned, are managed by the French company Accor Asia Pacific Ltd, under the Novotel brand. As of 1994, this French TNC managed over 2,000 hotels worldwide. Direct French investment in this sector comes via New Caledonia. At the time of the controversial 1994 sale of the Waitangi Resort hotel, there was a 25% French stake held by New Caledonian Enterprises.

There is minor French involvement in the booming forestry and horticulture industries. For example, the Societe General International Fund, an investment group, is a small shareholder of Evergreen Forest Ltd. The same SoGen International Fund is a small shareholder in Apple Fields Ltd.

This is only a brief summary of what is a wideranging and long established French investment presence in NZ. It certainly involves more than wine, perfume, cars and ballpoint pens. While New Zealanders, quite rightly, express our outrage at France's nuclear arrogance and 19th century colonialism in the there is substantial French economic colonialism right here.

RNYOU

......

To those politicians who say "we didn't know" to the revelations about European Pacific , ..

From Watchdog No. 59, July] 988, "Transnationals Dominate Top 20 Companies", by Bill Rosenberg, p.7 (prepare for feelings of nostalgia):

Labour and taxation laws arc two types of legislation transnationalisation helps a company avoid. There are others. The Luxembourg-registered company, European Pacific Investments (EPr), was formed jointly by the BNZ, BIL and Capital Markets (a Fay Richwhite company) in 1986. It acquired at its formation the Cook Islands Trust Corporation Ltd as the base for its trust operations. "Ultimately the COmpaI1Y intends to have a global network of trust operations situated in a number of different jurisdictions so as to offer clients complete flexibility in managing their business, it stated when declaring its maiden dividend (Press, 16/9/87). It repeated this in May this year [1988]: "It was essential that the company was able to provide services to its world-wide clients in a confidential manner and free from the constraints of any particular jurisdiction. (Press, 31/5/88). EPr was, in plain language, set up to enable its clients to avoid the laws of any country they wished. That New Zealand's state owned bank, BNZ, is involved is deplorable but scarcely surprising.

Evading Laws

The intent could hardly be

the results of Rogernomics could hardly be more obvious.

3

,

ise

Investigative journalism of anything other than the most mawkish tabloid variety is that rarest of endangered species in the corporate wasteland of Television New Zealand. Even rarer is an investigation ofa transnational corporation (TNC). There have been honourable exceptions, such as the excellent 1989 and 1993 programmes on Comalco (both of which we've got availablefor hire at $10). It wasn't always thus - for example, TVNZ did us a major service by tracking the origins of the 19805 "Maori Loans Affair" back to the Honolulu office of the CIA. Mind you, it's understandable why there is such reticence to probe the delicate sensibilities of local and global Big Business. Freedom of information has never featured highly in the priorities ofthe free marketeers, Substantial amounts of taxpayers' money are still being forked out to settle libel claims arising from the famous 1990 Frontline programme investigating the financial links between Big Business and the Douglas Labour government

So we were pleasantly surprised to be informed in 1993 that Frontline intended to look at the Tiongs, a Sarawak-based Malaysian family who have built a regional logging empire, principally represented in this country by their forestry subsidiary Ernslaw One. We heard no more about it until later in 1994, when we were informed that it was going ahead and I was asked for background material gleaned from re"Clearcut: Forestry In New Zealand"

In the meantime Correspondent screened an extremely hardhitting Australian Broadcasting Commission Four Corners programme on the Tiongs' activities in Papua New Guinea through their tropical rainforest logging flagship Rimbunan Hijau ("green lushness" in Malay). The programme included claims by Tim Neville, the former Minister of Forests, that he had been both offered very large bribes and been the subject of physical attacks.

Frontline broadcast its programme in October 1994. It drew heavily on the Four Corners footage in PNG but had done substantial legwork of its own. Reporter Rod Vaughan went unannounced to Rimbunan Hijau's operations in Sarawak and interviewed Malaysian politicians who were scathing about the company's impact on the rainforest (TVNZ itself described this trip as "covert'} Back home, Vaughan interviewed Thomas Song, the Tiongs' manager in New Zealand, and looked at their business activities here, concentrating on Emslaw One. He interviewed Paul Bibby, who owns a Coromandel dairy farm next to the Whangapoua Forest. Emslaw One bought the cutting rights to this during the 1990 sale of State forests by Labour. Bibby was critical of the company.

Frontline also featured an interview with me. This was not scheduled. I was in Auckland for a number of

speaking engagements. I rang Rod Vaughan to find out how it was going and was told that as I was only a couple of blocks away from TVNZ's head office, I could be interviewed there and then. I wasn't prepared for a forestry inter" view (I was in Auckland to talk about foreign debt) but duly did it, in a TVNZ courtyard. I then had to literally run back to my speaking engagement at the Peoples Centre (I needn't have hurried. An old bloke in the audience had a heart attack before I'd started and the subsequent high drama of getting him revived and rushed to hospital- he lived - tended to put a dampener on things).

It's not my intention to analyse the actual programme. It screened over a year ago; it was on primetime TV, so a lot of people saw it; and if you didn't, you can hire a copyjrom us for $10. It's what happened next that's interesting. Not surprisingly, the Tiongs weren '1: very happy. As the first step in damage control, they produced their own 24 minute company video for clients, by way of rebuttal.

The Tiongs complained to friendly media outlets that they'd been sandbagged .. the Sunday Star Times obliged by running a real snow job on them in December 1994. They officially complained to TVNZ about the programme. To its great credit, TVNZ stood by Frontline and rejected the complaint. So then the Tiongs complained to the Broadcasting Standards Authority (BSA). And that's where they struck gold.

The BSA released its decision in July 50

pages long, including correspondence from both and

provides a fascinating insight into the INC approach to the media.

The Tiongs listed six grounds of complaint. Basically, they asserted that Frontline misled them into believing the programme would be about NZ alone, and not about the Tiongs' activities elsewhere; that it unfairly compared their activities here with those abroad; that it lacked balance COIlceming Ernslaw One's operations at Wnangapoua Forest and Matakana Island; that it didn't present any of the positive aspects of the company's activities in NZ; that it presented the opinions of opponents, both in NZ and overseas, as facts; and that the programme's editing was prejudicial and biased against the Tiongs. Specifically, they complained that

got less air time than their opponents; that "emotive" language was used (such as "the tentacles of the Tiong timber empire"); that the interview with Thomas Song was an unfair set up (because he didn't know that Rod Vaughan had been to that "alarmist" music and "wasteland"

that comparisons between in NZ

and Asia were that Vaughan had used the word

"hardball" to describe their and that their

on Matakana Island had been /\5 far mv appearance was concerned, the Tiongs complained that gave "unqualified and unsubstantiated opinion" and used "emotive language" to which had no opportunity to Furthermore, my credentials had not been presented'

Regarding the 1993 Matakana Island blockade, Ernslaw One claimed that it was aimed entirely at ITT Rayonier, the American major partner in the venture.

"We were also aware that Frontline did interview Maori and that they declined to say anything detrimental about Ernslaw based on their experience of the company as a fair operator. Representatives from the Matakana Trust are the only credible spokespeople on this issue - Murray Horton, the source used to 'substantiate' the already inaccurate blockade comments by Mr Vaughan, has no substance and no connection with the issue".

Ernslaw stated that it had "suffered significant embarrassment and loss of reputation" and accordingly sought "a number of broadcast and written apologies, compensation and costs" It claimed that TVNZ had played upon "prejudice" about Asian investment in NZ and rainforest logging to influence viewers against Ernslaw.

It produced a quite extraordinary letter from Datuk Leo Chai, the Director of Forests in Sarawak:

"The stage managed video designed to discredit Sarawak, the and their companies overseas,

Matakana Island Blockade. 1

in Papua New Guinea and New Zealand, is unfair and mischievious as it is full of and false information. It is unfortunate, that many viewers in New Zealand who have no knowledge of the truth or have any experience of tropical forests and Asian culture will tend to believe what they viewed in the video. Those of us who had studied in Universities in New Zealand, Australia, United Kingdom and North America are only too familiar with such unethical tactics used by NGOs from such countries to belittle developing nations like Malaysia who are becoming more successful in international trade than their own countries. Their destruction of their indigenous forest and treatment of their own indigenous races are not only historical records but serve as testimony to their perceived supremacy of their own race. Many of them still could not accept that Asians can be just as intelligent, capable and honest like themselves". Touchy, touchy!

To its credit, TVNZ stuck to its guns and answered every single one of the Tiongs points, without giving ground on any of them. It stuck to its description of the programme as "a cautionary tale" Tackling some of the specific complaints, TVNZ said:

" ... first, that dairy farmer Paul Bibby was not a lone anti-forestry voice but chaired a local action committee; secondly, that the High Court's decision that Ernslaw had intended to circumvent legal controls on land sales (at Matakana Island Ed) was evidence of "hardball" thirdly, that the blockade on Matakana was

ofPlenty Times

was tent that his views lacked affiliations" TVNZ also referred to "Mr Horton's acknowledged in the area ".(his) comments were a relevant and informed perspective".

the "covert" filming visit to Sarawak, TVNZ re-

sponded:

"It is inconceivable that Frontline would have been allowed to film there had prim' permission been sought This can be attested the experience of other camera crews who have been refused permission to film there in recent years. Of course, this the question - if has nothing to hide about its forests, why

docs it try to prevent foreign

from filming there?"

The BSA decided to consider the complaints in relation to two sections of the ] 989 Act- namely the need 10 show impartiality and fairness in dealing with matters, current affairs and all questions of a controversial nature"; and the need for not to distort. It ruled that Frontline had not edited to distort. But it did agree with Ernslaw that the programme was not "balanced, impar-

tial or fair". H several reasons for this.

"First there little attention to the impact of the different business cultures in each country. Sec-

and of central there was minimal

of the different environmental regimes

which in each The Authority has little

knowledge of the in Papua New Guinea and

Sarawak but it is well informed about the effect and impact of the Resource Management Act in New Zealand .. .However the item portrayed Mr Bibby speak-

of problems which had occurred before the Act was enacted... the Authority was unable to accept that the Matakana Island operations and the legal disputes which emanated therefrom justified being advanced as 'hardball' tactics. To play hardball, according to the Concise Oxford, is to pressure or coerce politically, and it is a highly critical phrase. In the Authority i s opinion, the use of shelf companies (in the illfated Matakana Island purchase. Ed) is an accepted aspect of business practice and whether or not it is successful in legislation does not amount to '. playing hardball'.

without question that which TVNZ was entitled to present. It did not, however, accept CAfeA's perspective (in addition to the

Mr

travene the standards.

absence any comment from an "',·"»n.M, ..

dent person in ment 011 them in balance on this was in breach.

or indeed to com.and because of the lack of another aspect of the broadcast

"Overall, as will be apparent, the Authority had considerable reservations about the programme. It seemed that TVNZ had adopted the approach that, because of the questionable operations of the Tiong family companies in Papua New Guinea and Sarawak, the operations of Ernslaw One in New Zealand were also suspect By not distinguishing between Asian business and environmental practices and those in New Zealand, and by not including information from an independent source about the company's operations in New Zealand, the Authority concluded that TVNZ had used the guilt by association method to convict Ernslaw One Ltd ... The Authority declines to uphold any other aspect of the complaint".

The BSA ordered TVNZ to broadcast a summary of its decision and a public apology, within one month. This was duly delivered by Susan Wood at the end of an August 1995 Assignment (the programme which replaced Frontline). TVNZ's management and board had decided not to appeal the order.

The most interesting critique of the BSA decision comes not from anyone in the NZ media (nobody has commented on it nor reported it in any detail) but from Papua New Guinea. David Robie, NZ's best writer on the Pacific, is currently lecturing injournalism at the University ofPNG. He analysed the decision in the student paper Uni Tavur (1 It had been reported in the local paper the headlined "RH (Rimbunan Hijau) gets apology".

"Or did they? .. .It is also interesting to put this little item into context, given the Malaysian logging group's penchant for defamation or other cases against media and non government organisations in the region. In PNG, RH has a defamation case pending against N Be's Radio Kalang and talkback host Roger Hau' of a, while in Malaysia it is pressing a lawsuit against a rainforest action group.

"First, this news item went unreported by the rest of the Papua New Guinea news media. However, it isn't surprising it was given a run in the National which, after all, is owned by the RH group, Second, it is intriguing to see the extent to which the company wants to "sanitise' its logging reputation in PNG and Sarawak in New Zealand where it is a fast growing forestry investor.,

"Needless to say (Rod) Vaughan is unimpressed by the BSA ruling, saying: 'This was a cautionary tale and this judgement goes a long way towards undermining investigative journalism in New Zealand' ... Of course, when it comes to the crunch, any open ended definitions such as these (offairness and balance. Ed)

are bound to be to wide mtpnwpmr

when with

6

which, by its very nature, sets out to establish a hypothesis or case. So it' not surprising that this ruling itself should be rather controversial...

"The ruling then was a far cry from the bald apology to RH that the National would have LIS believe","

In Papua New Guinea, the Tiongs decided that the best approach to the media was, if you can't beat it,join it. So they established the National, their own paper. It was a highly controversial move, Now they seem to be applying the same philosophy in New Zealand - in September] 995, they bought BoP 1521, a Tauranga radio station, for an undisclosed sum. Thomas Song said it followed an unsolicited approach from the station's owner. This first move into media ownership

T

NG

TI

In the space of only a few years, the Tiongs have built a business empire in New Zealand estimated at several hundred million dollars. They run a tightly interconnected myriad of private companies, under the family's direct control. Not all of them arc connected to forestry - for example, they are building a residential subdivision near Albany, including the country's biggest shopping centre. Oregon Forestry is the family's major investment company here. Non-forestry companies include Neil Holdings, Naraya Holdings, Himley No 6, and Ascot Management Corporation, They are substantial shareholders in Salmon and most recently have taken over Salmond Smith Biolab. They are major shareholders in Port of Tauranga and Southport (Bluff), both

of which are directly connected to their activities.

But forestry is their OVerwhelm raison detre. in New

Zealand, Papua New Guinea and Malaysia.

RIMRUNAN HlJAU GROUP

RIlG started logging in 1975 and is currently the largest. timber group in Sarawak and all of Malaysia. It exports logs, plywood and pulpwood with a 500,000 cubic metre annual capacity for plywood and veneer In Sarawak alone, RHG employs 15,000 and is involved in 800,000 hectares of forest concessions directly or indirectly. In December 1993 it announced plans to float Malaysia's publicly listed timber company.

Rimbunan is involved in copper, gold, plantations, shipping, insurance, heavy machinery, banking and owns Malaysia's largest Chinese language newspaper, in Kuala Lumpur, with a circulation of about 150,000, The Tiong family is estimated to earn up to $M2 billion per year from logging and timber processing. The chairman, Tiong Hiew King, extremely well connected in ruling circles. In 1991 Forbes magazine estimated Tiong Hiew King's worth at $M2 billion. In November 1991 his Sarawak head office was raided by Federal Police and Inland Revenue for

consolidates the

biggest port. The National

95) estimated the

fhe

journalist stated that if country's richest family.

would be the

And what is the emphasis of their new radio station') judge from this. In September I was rung by a n'T1nrjp,' booked in to comment on its business show about the proposed selloff of the State-owned Shortly before airtime was rung back to be told the inter-

view was cancelled, to be by one with

spokesperson on adding value and creating jobs, CAFCA was not to be approached again for comment.

I

evidence of widespread tax avoidance by the common transnational method of transfer pricing. The have diversified. They run a sawmill in own a mammoth cattle station in Australia and have m Singapore.

In 1992 Malaysia introduced strict limber

restrictions on its Borneo states of Sarawak and the result that Malaysian New Guinea (PNG) and the tiable Japanese and Korean markets.

countries in the world to still allow

exports, which totalled

RHG's logging in PNG

exports there although it has

1988. it directly employs than the combined revenue from PNG

oil sales. It has two million ha of eight provinces and close relations with top o"·\f{·rnm,,,nl ures (Papua New Guinea emerges from the woods"; Journal). RHG has announced veneer and plywood plants. It unsuccessfu I opposition to PNG' s 1993 amendment to the Forestry Act, namely that the Government would not approve forestry development projects until were adopted (Independent, 3017/93, "PNG takes on Malaysian loggers in surprise bid to save forests" David Robie). RHG's campaign did not go down well with Tim Neville, PNG's then Minister of Forests:

"I am to learn that a company

parently sponsoring public criticism of a

Guinea law In effect, it that

apNew

tel' than Parliament what don' t like our

If you Port

ance of Non Government Organisations, described the log-

companies as "daylight robbers" (Uni 30/7/93:

University of PNG student paper), In September 1993 the then Prime Minister, Paias Wingti, announced a plan to phase out log exports, saying: "We are not interested in advice from people who are only interested in raping and destroying our forests for their own gain .. ." (Post Courier),

So RHG decided on another tack, namely publishing its own newspaper, the National, which started publication in November 1993 (even the title is controversial as it denotes an indigenous PNG citizen). RHG went on a public relations offensive, inserting "advertorials" in business papers and es-

tablishing a scientific research unit to "promote conservation".

Sir Frederick Reiher, a prestigious columnist, noted in a rival paper:

"What irks me is the alleged deal of a joint venture between the State and Rimbunan Hijau, which has the timber rights to 80% of our country and at the same time ripping us off and one day we will look around and see naked land that was once a farm. And the bare land shall remain a useless waste" (The Review, July 1993; "Plan for new daily stirs furore: Malaysian timber conglomerate interest raises issue of media freedom", David Robie),

Joseph Ka'au, of Greenpeace PNG and the National Alli-

SOUTH ISLAND

Auckland - Ernslaw One, Oreqon Forestry. Himley No 6 Ltd Neil Holdings, Naraya Holdings

• Coromandel Peninsula -

NORTH ISLAND

Christchurch Ascot Management Corp

/'

Dunedin - Forestart

forests

NEW ZEALAND LOCATION OF FORESTS AND COMPANIES

D Bluff - Southport NZ Ltd

WATCHDOG 80

"In this particular instance, the new media investor is the single largest forestry development company in our country. One can imagine the outcry if one of our largest mining developers decided to establish a newspaper.. In this case, no matter how worthy the objectives might be, there will always be a suspicion that there is a wider agenda behind the newspaper (quoted in The Review, December 1993IJanuary 1994; "Newspaper showdown in PNG", David Robie).

I<~RNSLA W ONE

Its holding company is Callander Ltd, which is registered in Liberia; other shareholdings are held by Habacus Pte Ltd of Singapore and Shiang Yang International Ltd, of Hong Kong

PAGES

(the is SOil 0/1 It was Auckland in January I with a nominal The founding directors were Robert Narev and

both of whom in June 1990 to make way for the

present directors - Thai lk and Tho-

mas Song Chai known as Thomas Jack

Tiong Thai is a

Thomas Song, firstly manages the family's hold-

ings in New Zealand which, as of December 1 were

worth $160 million.

In August 1990 Ernslaw One was permission by the

Overseas Investment Commission to buy for $102

million, the Crown forest licences and assets of: Whangapoua Forest (Coromandel); Lismore Sand Forest (Wanganui); Santoft Forest (Manawatu); Tangimoana Forest (Manawatu); and Tapanui Forest (Otago). It also got permission to buy the Conical Hill sawmill at Tapanui. The Ole noted:

"The overseas shareholders claim they will provide access to a world-wide marketing network which should ensure that the New Zealand timber products find the right buyers at the right prices on the international market"

Ernslaw One owns or leases about 40,000 ha of New Zealand's planted production forests, in both islands, and is aggressively expanding. It made a net profit of $3 1.1 million in the 1993/94 financial year and employs over 300 staff Thomas Song stressed that it employs nearly 100% New

Zealanders :lOl! of March I

it had total debt of

The December 1991 Zealand Forest Bulletin detailed

the history of Ernslaw One" of Commander

environmentalist Evan aged by the calibre of the Ernslaw One making the right sort of decisions as far as the concerned". But Ernslaw One was not and is not

welcomed in Coromandel. Dennis the Green candi-

date for Coromandel in the 1990 general said:

"There is a history of serious erosion and siltation of the Whangapoua harbour from various land uses, in ..

eluding previous We really needed

a New Zealand understand-

ing ofthese problems and to harvest and man"

age the forest for long term sustainable A New Zealand buyer would have been likely to have processed the logs "Forest sale slammed")"

Whangapoua on Frontline and reiterated

concerns from four earlier. His worry that

too much too fast and that the bare hillsides

silt had

Paul told me in a later

on behalf of the Whangapoua Environmental Protection Soci

ely he said "We)ve had no satisfaction". Interest-

ingly the very same Evan who is now on the Waikato

Regional Council, was acti lved with the Whangapoua Residents Association in its with Ernslaw One" So perhaps he should not sively on the basis of his 1991 pany.

Emslaw One's biggest purchase since then attracted

controversy, In February 1993 the OIC its

purchase, with ITT the Matakana Island land and forestry rights of London Pacific The March 1994 High Court decision Ernslaw One's presence on with the islanders purchasing the title for $9.6 million. Mr Justice ruled

that Emslaw One's introduction of a shelf company.

Caldera Holdings, into the transaction was intended

to avoid the need to Ministerial consent under the I Land Settlement Promotion and Act the 1973 Overseas Investment Act

The islanders a clever way around New

of islands to

valuation of its forest estate revaluation was put at $360.8

"Clearcut. /995).

of

at district. In November 1993 it pur-

chased 106 ha (for $20,000 The stated "Ernslaw aims to take advantage of the market opportunities created by Douglas fir production in the Pacific Northwest by establishing a Douglas fir resource in New Zealand" "Benefit" included that forestry is more labour intensive than farming and this land will employ one person per 90 ha, The land was acquired from the Southland Regional Council which had been rationalising its forestry op·· erations.

As a virtual afterthought, in April 1994, the OlC approved Ernslaw One acquiring a forestry right over part of 1,509 ha at Slopedown district. The price? $10. This acquisition of Southland farmland for its Douglas fir plantations continued throughout 1994. By mid 1994 it had bought 12,000 ha of Southland for $7.5 million (New Zealand Forest industries; September 1994, "Forestry's land grab"). These Southland and South Otago land purchases have continued throughout 1995. The aim is to diversify into Douglas fir, aiming for 20,000 ha in Southland by 1997. Thomas Song said:

"The Japanese prefer fir to build houses and it is established in the consumer mind there. Japan is currently our main market.i.Everyones planting pine. Thirty years down the line, it's very hard to imagine how they will compete. The difference will be in price. With Douglas fir, you only have the United States and ourselves growing them" so there will be less competition" (Sunday Star 4/12/94; "Tiongs at home

in .Bob

But diversification is going slower than planned, with the 1994 directors' report that Ernslaw One would only plant 600 ha ofDouglas fir in the coming year, not the anticipated 1,000 ha. said that the company is committed to sustainable management and harvests the minor

in its plantations "to clean up the forests" (ibid).

There have been purchases in other parts of the country. For example in March J 994 the OIC approved Ernslaw One buying a 1,330 ha block in Waitotara Valley, for $540,000, to expand the 5,000 ha it already manages in the Manawatu/ Wanganui region. This was followed in April by OlC approval for it to buy (for $11.2 million) 100% of the shares in Manuka Holdings Ltd, a private company which owns 1,665 ha of Manawatu land, of which 465 ha was leased from the Crown.In November 1994 the OIC approved it freeholding 314 ha of this Crown land at the absurdly cheap price of $80 per hectare. This fire sale of Crown land (not mere cutting rights) to a forestry TNC has major implications for Maori land claims.

From October to December 1994 the ole approved Ernslaw buying, in ten separate transactions, over 5,600 ha near Dannevirke, for a total of $6,6 million.

"The Commission is advised that Ernslaw aims to establish a pinus radiata forest in the Horowhenua/ Manawatu and Southern Hawkes

will Ernslaw with the resource

base to establish a wood "rl-,r,'~cmu

plant in it 15 to 20 year time frame".

The local weren't ecstatic at being bought

out holm; bolus by Ernslaw, realised that pinus radiata

takes up to 30 years to harvest; in the meantime they can visualise their community dying. One farmer who sold and moved put it succinctly: "Who'd want to live in the middle of a with pines in all directions?" (Rural News, 26/6/ 95).

BLUE MOUNTAIN LUMBER LTD

This is a wholly owned subsidiary of Emslaw One which operates the Conical Hills sawmill near Tapanui, south Otago. This is the Tiong's only processing plant in New Zealand. Blue Mountain Lumber has spent about $15 million upgrading the mill since purchase in 1990 and spent a further $2.2 million on new equipment (Rural News, 21/11/94). Blue Mountain Lumber is registered at the Dunedin Companies Office and Thomas Song was listed as its manager in the 1994 "Who's Who in New Zealand Business". Song originally lived in Gore to be close to Ernslaw One's Otago/ Southland operations but is now resident in Tauranga.

The 1994 Ernslaw One directors' report said: "Blue Mountain Lumber achieved a small profit in the year (1993/94) under review ... This state of affairs will reverse in the current year as the outlook for woodchip has improved substantially". In October 1994 the OIC approved it buying 149 ha for to enable it to continue disposing of bark from the mill.

Anderton of the Wood Industries Union told me in a interview that Blue Mountain Lumber is a good employer, whose workers enjoy a collective contract very similar to the old award. "They have conditions that other mill workers can only dream about" He specified overtime, allowances and leave provisions. The redundancy agreement

generous but Anderton said that Thomas Song told them it would never be needed because there wouldn't be any redundancies. Anderton compared Blue Mountain Lumber very favourably with other Otago sawmills owned by other transnationals, singling out the Chinese-owned Wenita for criticism.

FORESTARI

This is the vehicle for the Tiongs to operate their own nursery to supply their ever expanding forestry holdings in Otago and Southland. "The unreliability of outside nurseries inspired the group to establish its own joint venture nursery to ensure future success in development".

meni" than

and Ernslaw One in parcomponent of that Malay-

stan presence

10

h

"

,

The programme on the Tiongs was not the only Frontline programme reprimanded by the Broadcasting Standards Authority (BSA). There is an obvious pattern ofdiscouraging investigative TVjournalism of anything other than the tabloid variety. Ed.

On 4 September, 1994. the Frontline programme broadcast an item on the risk of "Mad Cow" disease from bovine genetic imports from Britain. This item was called "Dicing with Disease". "Mad Cow" disease has been a big problem in Britain and there has been controversy over whether this disease can be transmitted by such imports. The NZ Ministry of Agriculture and Fisheries (MAF) had decided to lift an import ban. A key factor here wasthat under the new GATT regime, bans can no longer be maintained unless a set of very demanding conditions can be satisfied.

Various aspects of the Frontline item upset MAF and it laid a strongly critical complaint with the Broadcasting Standards Authority (BSA). In its judgement (report, 12/4/95), the Authority upheld a number of aspects of the complaint, including the general complaint that the item overall was unbalanced, and ordered Television NZ (TVNZ) to broadcast a correction.

From research on this case, the writer considers that the BSA clearly did an injustice to Frontline and its presentation of the issue. Moreover. and most the finding i, likely to seriously inhibit any further on similar matters. With what is left of the publicly-owned mass media becoming ever more subject to the globalisation process, the official "good news/all is well" storyline is to dominate to a yet greater extent than even the

"

This subservience has matters which makes the cant when seen in overall the Frontline team did an

tackling the new trade-driven although more attention and its implications.

There are various of the BSi\" decision that deserve analysis and the writer covers these detail in his forthcoming booklet on GAlT, illustrate the BSA's failure

to deliver fair treatment in the "Mad case, let us take

what TVNZ believed "to be an namely the

failure of the authorities here to carry out a risk analysis,

despite official assurances that such an was being

conducted", While the BSA noted this made

by TVNZ, the it in the rest

of its report. For any

mance in :>a!lC.l:.ualUJnHi.

the procedures in its determination of the plaint.

At one point, the BSA even the effect that prior to the ban

later

good but the "Mad Cow

Murray Horton's 98 page booklet on forestry in New Zealand has sold well since its

are only a few left.

Forestry continues to be a very big story, and one even more dominated Government has announced that it intends selling the Forestry State Forest, the jewel in New Zealand's forestry crown, Likely bidders are headed Weyerhaeuser, one of the world's biggest forestry TNCs, and one which is anxious country's booming industry, Other TNCs continue to embed themselves here ~

this issue on Emslaw One.

Copies of "Clearcut" are available/or $10 (CAFCA members and orders to

The 1995 Ci\ FCA A GM was held at the Christchurch WEA

28 members were Bill Rosenberg

chaired were accepted from Bob Mary McAlpine, John and Katherine and Deirdre Kent. The 1994 AGM Minutes were read and accepted.

Trw audited accounts were presented by the honorary auditor, Wolfgang Rosenberg elsewhere in this issue for full details) Bill presented the latest available bank statement for the CA FCA/ ABC Organise! Account, which exists solely to pay Murray Horton. As of October 6, it stood at $7,997.09,

Election of officers, Murray Horton was re-elected as secretary/organiser. Lana Le Quesne was elected as treasurer, a position which had been vacant since Ann Currie's resignation in J 994. The existing committee was re-elected unopposed- Bill Dennis Small, John Ring, Reg Duder. Liz Griffiths volunteered to join the committee and was elected. Wolfgang Rosenberg was elected the honorary auditor.

Murray Horton presented the

report (sec below).

discussion on a number of issues, For

how to deal with the problems caused by a steadily membership and the impact that will have on our resources and style of work, Members present

that there a need for more to make them-

E

Due to the this "annual" report actu-

ally spans 18 months. Never mind I will aim to give a

on what I've done as , and something of

what C\FCA itself has done.

The basics of my work don't change, just the volume, As CAFCA secretary, there is a daily grind of administrative

Lately, because the annual subs have been pouring in, secretarial work has taken a disproportionate amount of my time, Six days a week J clear and process mail; there is a constant flow of copying to be done; publications have to be read and reported on for fortnightly committee meetings: is a daily job; the mailing list has to be COllin the absence of a treasurer, I handle all such as banking, bill paying, and or-

ders. A lso in the routine are the unpredictable in-

from members, media and the public for information on a whole raft of fun but time consuming. It's this humdrum stuff that takes up a lot of my time and, if

away on me when I'm out of town), can be a

to be cleared, Don't me wrong, I'm not

Our problems are those of success ... of a

still

12

I

selves available for the to be done. There was an explanation, the committee, of some of the pitfalls of establishing CAFeA branches, This led to a discussion on the need for CAFCA to clarity that it is a progressive, anti racist and Leftwing organisation, The committee assured that this indeed is spelled out in everyone of our publications and talks by representatives, One member stated his readiness to involved in a campaign on foreign debt, the need for which has been stated in the Organiser's report for the past couple of years, The committee explained that it felt the most CAFCA could do would be to "kick off' such a campaign, which would hopefully result in a specialist group, similar to GATT Watchdog.

At the conclusion of business, we screened the 1994 Frontline documentary on the transnational empire owned by the Tiong family of Malaysia, principally represented in NZ by forestry company, Ernslaw One (this is available for hire from CAFCA for $ I 0, See elsewhere in this issue for the Broadcasting Standards Authority's ruling that TVNZ apologise to the Tiongs for the programme; and for details on their business empire in this country).

The mood at the AGM was upbeat and it was the biggest turnout yet Special thanks are due to the CAFCA Catering Corps of Duder and his daughter Colleen Hughes for the magnificent supper (following th~ precedent set at the launch of "Clearcut" earlier in the year).

,

- Murray Horton

I continue as editor of a job that I thoroughly

It is our flagship and the biggest factor in spread-

our message and information, It attracts members and money in ever growing numbers. It goes to an increasingly broader range of individuals and organ isations right around the country a Christchurch group, but the bulk of our members are in the North Island), It also goes to a number of overseas individuals and groups, Unlike other publications with which I am involved, the Watchdog mailing list is growing steadily, Long before Roger Douglas claimed to have invented it, we were practising user pays, What this means is that, once again unlike many other publications, our mailing list is comprised of currently financial subscribers, We have a straightforward procedure, if the sub still isn't after the reminder that subscriber is reof who they are, We purged over 50 from the mailing list this year Within a few months, they have

been more than For the record, the mailing list is

currently 500 (in round and growth is so steady that,

fC)l" the first time we have decided to impose a mem-

bership cap. 1. our limit above that we reckon it

would be impossible to cope without a quantum

in our methods of work Just Watchdog mailed

out takes a number of us several hours solid work at

We have produced three issues since the 1994 AGM. We aim to produce four in a calendar year but three is more realistic. Mind you, nobody complains that they don't get value for money. We have held the size of each issue to an average of 50 sides (which always leads to heartrending arguments among myself, Bill Rosenberg and Dennis Small as to whose quota will be cut). We're happy with Watchdog. We have sporadically discussed changing it .. for example, putting a cover on it to make it more attractive fell" bookshops (as a firm believer in the cult ofthe personality, I. wouldn't be averse to having a flattering backlit photo of me fronting every issue). But we've decided to let sleeping Watchdogs lie, because the Welders genuinely value it as it is.

It has limitations - it will never have mass appeal, for the simple reason that it's heavy (in every sense); and will never be a "news" letter. For two consecutive issues this year, we have had to add a "Stop Press" sheet, because of the long lead time between writing copy and mailing out the finished product. It cannot respond quickly enough to breaking stories such as legislation being changed in Parliament (the subject of those "Stop Press'"), It is a newsletter of inform ation and analysis (or vitriolic abuse, depending on who you are). And it definitely needs improvement One area needing work is illustrations - sadly, Ron Currie has stopped cartooning for us, due to a quite unreasonable wish to feed his family I can compare Watchdog with Kapatiran (Solidarity), the newsletter! edit for the Philippines Solidarity Network. The latter is shorter (the biggest issue being 20 illustrated; has a cover story;

features articles by and about women. But Watch-

is one of a kind, the aircraft carrier of movement newsenough firepower to blast our various foes

out of the water, not 10 mention their knavish

tricks

Watchdog not the only CAFCA publication I have produced since the j 994 AG1\1 At long bloody a mere two and a half years after starting it, and two years after we first advertised it, I finished "Clear-cut: Forestry In New Zealand", the companion piece to my 1993 "In Deep Water? Fishing In New Zealand". By reducing the typeface to nine point (one size smaller than Watchdog), we kept the size to just under 100 sides. If I say so myself, it's a good quality publication, and proofthat T can be as respectably boring a writer as the next fellow (it's nothing at all like the scatological tone of Watchdog. 100 pages and not one person gets called a bastardl). We launched it in April with a print nm of JO(L We haven't yet tallied up the figures but it has more than broken even in just a few months, and there aren't many copies left. Forestry is such a big and newsworthy industry, and such a textbook case of foreign control, that we knew we would be onto winner with this.

said that, it has reinforced my determination not to get involved in writing any more books. It is sheer hard work -"C!earcut" was only finished by a monthlong over last

Christmas - and once is instantly out of date. I much

the newsletter which has flexibility to

update stories from one issue to the

Travel has continued to be not on the timescale My biggest trip was not strictly a CAFeA. one

days on the road with Professor Leonor the

dent of the Philippines Freedom From Debt Coalition We spoke in Christchurch, Wellington, Palmerston North and Hamilton. It took us into the mael strom of the Asian Development Bank conference

in Auckland. This was a Philippines Network

project, one that I had initiated and saw tion (including getting her to international a.m.), But CAFCA supported the money into it and publicised it, not to humour me, but because for, eign debt is an international problem, and one of vital relevance to this country, Leonor was a very high speaker, and this was only the second lecture tour she,' sever agreed to do. So we were lucky to her. In my role as supporting speaker, I was able to contact networks ously unknown to CAFCA - such as the church groups. It led to me attending my first

services in 30 years! (Anyone wanting a Briones' visit can contact PSNA, Box fax [031 3652919), I made CAFCA speaking

Auckland, Hamilton and the Far and to Nelson/

Motueka, Of course, I have also in Christchurch.

Before moving on to CAFCA I should mention my

other work, I am co-employed by the Anti Bases although it is no secret that bulk of my time. However the ABC

manner of productive work the last

all, it has relaunched Peace Researcher

nal, and that is coming out

I do some for it

provides a focus for the group and manner of networks. ABC has concentrated two Harewood and Waihopai. Harewood activities have

from picketing the 40th celebrations of

tion Deep Freeze to a Hiroshima sit in that led to two

arrests, ABC has also produced a video "Base The US Military Presence at Christchurch activities tend to revolve around an annual protest camp. There arc still pending court cases from the last one.

I have continued to work with the Sovereignty, which deals with a number foreign control, at the grassroots level In the last! 8

my CPS work has ranged from a full

the Christchurch City Council about '';n,"th,n()w{'y'

ing at a Lyttelton public as of successful local

campaign to stop the Banks Peninsula District Council ing its shares in the Lyttelton Port the Building Owners and Most recently CPS hosted a "No To

to the

ing privatised. We have researched

coming into Christchurch, such Serco. Throughout I have been the

albeit in it lasted three years, which is very intend to learn from the lessons of why it

ran out of steam.

I am also on the committee of GATT Watchdog (it hasn't

a new name to reflect the fact that GATT has

now become the World Trade Organisation Suggestions welcome). The biggest development there has been the ereation of its own newsletter, The Picture (I take full credit for the name), which is growing rapidly. I do some writing for that. I resigned from the Canterbury Health Coalition,

for reasons of time and priorities. I am on the comrnittee of the Monthly Review Society and continue to write regularly for the Monthly Review, as well as the PS'A Journal. The major "outside" job I've done was a Greenpeace NZ contract to research and write a report on a forestry transnational.

I've been the Organiser for nearly four years now, which is a very long time for a job supported entirely by the generos-

ofCAFCA and ABC members and supporters. I take this opportunity to thank all of you who have either donated money Of are regular pledgers. It really is most gratifying and the healthy state of the Organiser Account reflects that. We're keeping it quite high because it's unpredictable. If we draw off a lot of money by way of paying me more, it might not prove sustainable. Pledgers leave and join on a

basis; it's the donations that are vital, And they are the unpredictable part. I'm pleased to report that my pay has gone up from $170 p.w. gross at the time of the 1994 AGM to p .. w, gross now, which is the equivalent of the minimum wage. This livable and we'll hold it at thai for the time From the i made no secret that I would like to what I was being paid as a Railways labourer when I was made redundant in 1991 about $350 But I'll

settle an Italian suit and cell phone,

CAFC'A itselfhas gone from to strength. This is not mere as reflected in our steadily growing mailing Christchurch-based organisation with a com-

mittee of volunteers and one worker, there are obvi-

limits on what we can do, But we have developed effective as a way of reaching far beyond our own members. Our information, analysis and message has proven to be truly catholic in its appeal. For example, since the last AGM we have stood shoulder to shoulder with the Seafarers' Union in its 1994 struggle against the attempts of NZ Rail's American owners to smash the maritime unions (one ., a.m. midwinter was enough for me); we have simultaneously developed a solid working relationship with people in the agricultural sector. I was invited to address a Canterbury Federated Farmers meeting, which is definitely not C:AFCA 's normal (the notion was so appealing to Bruce Ansley that he used it as the lead in to his major Listener feature on the Overseas Investment Amendment

That which is now an Act (courtesy of the lame ducks in the United to CAFCA. The fight an awful lot of our time since last

newspapers,

media outlets that had never come near us before, indeed had never heard of us. In Christchurch the highpoint of our

campaign was a in the Town

Jim Anderton and Winston Peters as speakers (along with myself and Eugenie of Forest and Nearly 400 people attended this, and the collection recouped over $1,000 of our costs. Both the Alliance and New Zealand First vigorously opposed the Bill, indeed Peters launched a whole campaign on it. New Zealand First asked for our help in compiling material for his speeches - for a price, we obliged, Our huge database of information was called upon by all manner of individuals and groups.

The Bill became law but that wasn't a defeat for us. The very wideranging opposition to it, including within National succeeded in removing some of the most obnox ious clauses. More importantly, it put the whole issue of control squarely into the political mainstream. It led to Bill Birch, Mr Personality himself having to wage a PR campaign in favour of the foreign takeover. And it has also led to CAFCA becoming mainstream - neither Anderton nor Peters would have been seen dead with us if we'd been perceived as some sort of political liability to them.

Our work hasn't been all a kneejerk reaction to hamfisted Government legislative moves. We recognise the need to be proactive and plan ahead. The committee held a strategy session in April and frankly discussed a wide range of con-

cerns, That was off the but there are several

things that can be 011 we decided to produce some

short, snappy fact sheets. Hill has done the first one, on foreign ownership of rural land; I'm scheduled to do one on foreign debt We resolved to look at up a

code of conduct fill TNCs and for them to be

legally bound to it We decided the multi-

tude of new political and for our political

independence. Most importantly, at this we decided

to expand our networking. This is on with a variety of groups - we have contacted every electorate branch and subgroup of the Alliance, with a response. We have made first tentative contact with the Maori nationalist movement - we have obvious things in common, and I personally believe that they the most movement for social change in the country at present As an organisation run by South Island CAFCA is bound to have only a limited relationship with them but it vital that we make the effort.

CAFCA has been going fell" over 20 years, but only now are

those long years of labour fruit. The issue has as-

sumed crisis proportions and is obvious to all. It is

invaluable to a lot of people that we exist as a specialist group,

which has stuck to its guns for so and has an awful lot

material at its We need to build on

been achieved and find creative ways of

to the next Our time

1

,

L

CCOUNT

rThe

r

nded March 31,1995

Profit and Loss Account

Expenditures

Revenues

Wages 9,098.1

NZES

subsidy s_,_~_(LQQ

Watchdog production Photocopying

Book production

538.15 3,696.30 1,147.45

Subscriptions

Donations (excluding those to Organiser Acct. See under Expenditures) OIC sales

Sale of information Video & book sales Interest received

6,104.00

("Clearcut")

advance

sales 11ic8_Q

Communications & Information purchased

Office supplies,

2,215.69

3,563.41 1,975.00 365.00 351.50 139.13

2,039.89

1,541.11

sundries, rent & bank fees Ole costs Fravel Donations

CAFCA/ ABC Organiser Acct Received 905.00

paid to Acct

794.54 134.05 595.00 651.85

Depreciation

SI JRPLLJS for 1994/95

431.60 928.1Q

12,498.04

Balance

as at 31/3/95

Assets

Liabilities

Postbank Cheque Acct Postbank Key Acct Wages Acct

Equipment (less 431.60 depreciation)

5A37.17 493.82 1,190.49

Accumulated fund at 1/4/94

pius 1994/95 surplus

7,228.38

928.10

1.Q3_5.M! .lU56.48

8,156.48

Audit:

I certify that the above Balance Sheet and Profit and Loss Accounts divulge the correct position ofthe Society according to the books and information supplied to me. No account has been taken of accruals.

14th September, 1995.

W1o~~

~ - ~

Wolf Rosenberg

Hon, Auditor

80

PAGE 15

very to contributors under the title appear as 1\ '5 bank accounts. The balance in the CAFeAl

Account c/o Mr Bob at the account number 164470-0543454-

H at 3 Jl3!95,

Box

of Trustbank, ch.'"'''''' a balance of

Currie CA FC'A has not had a treasurer nor a proper This is and we taking steps was elected treasurer at the

money goes into the CAFCA/ABC

send with part of the

an annual sub and the rest a dona-

Accouni. We have to the cheques

the balance to the those trans-

actions show up our books. Ed

This was the end result of the Government's fabled light handed· the didn't

16

"There is a risk it will go on the back burner but that would be very shortsighted. The Government is com-

misreading the level of political support for curbs on monopolies. This is a winner for them ~ protecting consumers from rampant monopoly abuse" Herald, 8/9/95).

Not that we should feel sorry for Clear as some sort of underdog. It is a major TNC in its own right. For once we agree with Maurice Williamson. Minister of Communications:

"Clear's going to want to cherry pick in the network as well. They'll go into downtown Lambton Quay but you can forget downtown Ekatahuna .. Telecom can have that" tListener, 9/9/95. turf wars", Russell Brown).

Telecom continues to rack up super profits. most recording a 15% increase with a 1995 first quarter profit of $159.3 million. Its ] 994/95 $620 million profit represented

30% return on equity. Bell Atlantic and Ameritcch, the major American shareholders, have done very out of it. The former has made billion profit out of the $ 1.7 billion it paid for a 50% stake in 1990. A recent Council of Trade Unions paper estimates that over 95% of Telecom net earnings since privatisation have been distributed to rather than reinvested. But it hast! 't the pOOL In conjunction with it:; record announcement. I elecom offered half rentals to of the

. s other of Com-

merce Commission a 25% stake in TV

It 'was an incestuous arrangement, with the sellers the

very same Bell Atlantic and Ameritech. Rival TNCs Clear and BeliSouth promptly announced Clear followed it through with court takeover in the meantime, The buzzword is

as in the telecommunications industry entertainment and computer industries. A business column In the NZ Herald (16/9/95) stated

"Given how high the stakes are and how complex the issues raised, Clear's move serves not its interests but those of the public ... For what is at stake is, arguably, who will own the key infrastructureof the next century, the fabled information super

into the

running an network in

at a number of other new

g and into Pacific But Clear is not the to court for

m confidential information

"Walter Little/Waltz A Little" TV ads. The

Court awarded writ against Telecom and its TNC

ad agency, Saatchi and to establish whether

had Bell South' script. And Telecom has been

condemned by a number of authorities for its series of ads proclaiming that its cellphones saved the lives of various fishermen and hunters in distress, It had to change them to highlight the need to carry proper radio equipment

Of course, Telecom has achieved its cushy position 011 the hacks of its workers. [1' s in the process of making 40% of them redundant over five years. And not content with bashing current Telecom is happily knifing its retired em-

as well. In 1991 it abolished the 66% discount on phone rentals for retirees and cut their 50% concession on national calls back to 25%. The latter concession was abolished altogether in 1993. The Telecom Retirees Association was established to take court action seeking lump sum comDennis Mahn said:

'This unjust and immoral action is analogous to a takeover employer grabbing back gold watches which have previously been awarded to retired employees in recognition of their long and faithful service, simply to further increase company profits" (NZ I 1/9/ (5).

Telecom, Clear and BeltSouth no longer have the field to themselves. Callback services are the new craze. You dial a number in the US at no charge and it rings you back,

EMPLOYMENT LEVELS - 'tELECOM I CLEAR

BTfUCOM

in New Zealand, says it win move to impose investment in

New Zpaiand.

"If there were control issues in investment, if there were attempts to do a forced divestiture, we'd be very negative about that," said Walter Carlow, a director of Telecom Corp of New Zealand, and vice-president of Ameritech with responsibility for international operations and business development.

He was commenting on proposals some political parties to limit investment in New Zealand. ~··-Reuter

/7/':2i

in the world from within the US network, It

in At least six US callback compa-

for business in NZ and they're cheaper than either Telecom

The latter has described them as

In the meantime, community groups are mobilising opposition to

the microwave transmission towers that all the phone TNCs are

erecting the country and which are vital to their business. This

opposition has been organised mothers and school committees concerned about the effect of microwave transmissions in residential areas, especially on kidsPirstlv Telecom tried to locate its towers in school playgrounds, offering each cash strapped school $4,500 by way of inducement. Resultant uproar in Christchurch led to the Government reversing its policy and refusing to allow the transmitters in schools, so now Telecom is forced to try and locate the towers in suburban areas. It became an issue in the 1995 local body elections in Christchurch and, in September, the City Council recommended altering the city plan to include a provision banning cellphone towers within a 300 metre radius of schools, kindergartens and housing. Which is POSItive ordinary people can thwart the profitmongering plans of even the biggest TNCs and their incessant advertising campaigns to convince us we all need their new Mothers have always known about dangerous toys and in this case, Mother knows best.

I

I

N

ernment, through the Ministers of Finance and

issued a "Discussion Document" number of further

b/ an tax avoidance the Government's ideology concerning the of attracting foreign investment into NZ.

I shall deal with these subjects one one.

their

'There will be a reduction ofthe tax rate on NZ branches of nonresident companies from 38% to 33%. This will lead to a reduction in tax take estimated at $15 million. "branch". as to a subsidiary of a foreign owned company, is not incorporated separately. Intra-company transactions are, internal bookkeeping transactions in the

There will be an extension of investors' tax credit

which was only to investors

than I 0% of a firm' s capital to direct inves-

tors. This extension of from mere portfolio es-

investors to the long term controllers

Wolfgang Rosenberg

will cost

like

On the other

the Government now realises that for-

and direct investment by nonresidents in has been used systematically to avoid, if not evade taxation. Two main ways of cheating the invested country of its just share of taxation are "transfer pricthe next subsection below) and calling capital invested "loans" Dividends carry a much higher rate of tax than does interest on loans. The financing of foreign operations in New Zealand through loans rather than capital is called "thin capitalisation".

To for the reduced tax rates on branch earnings

and direct the Government has decided to deal

with the problem of transfer pricing and "thin capitalisation" in the Taxation (International Tax) Act 1995. The new transfer regime is estimated to raise between $40 million and $140 million extra. (Note the inability to make an accurate estimate. A few million dollars paid in fees to "tax consultants" - usually part of the six or so large accounting firms who are monopolising the large scale accounting business in NZ will reduce what might have been $140 million to $40 million. Or will they"). By dealing with "thin the Government hopes to receive an extra $25 "Economic and Fis-

18

The new international tax nov, mtroduced is the result of a belated discovery of the fact that "foreign investment" is not ail beer and skittles as we are being taught by our owned media and government, but that it carries substantial disadvantages with it.

The reason for expansion of huge international trusts and corporations beyond their original national borders (and the consequent colonisation of the world) is not their desire to assist the peripheral world to overcome backwardness and underdevelopment in a period of ever growing population pressure against backwardly managed national resources, but the maximisation of money income for their metropolitan shareholders and directors - so that they can bathe in luxury and champagne, if so desired,

The "market" is a joke as far as these ideologues of the market economy for the peripheral countries are concerned, The

of raw materials, semi-manufactured parts, partly finished final products their re-assembly and their market, ing and distribution are not entrusted to "the market". They

arc ofvintra-business" transactions, arc

ing entries as far as the financial of their transfer

from one branch or subsidiary or associate of the control-

transnational corporation (TNC) to another is concerned. 'The price at which say, the compressor of a transnational motor car company's product is being transferred or the unassernbled or assembled car, or the petroleum extracted from West Indian to another such at which these

Price transnational <",.·n",,'"

in the "Discussion Document

described

if a New Zealand from its offshore consideration .. the cost of sales of the New Zealand subsidiary is inflated and profit and taxable income is depressed" (p45)

On the other hand, an New Zealand foreign TNC may underprice its product, thus losses to accrue in NZ (possibly with simultaneous arguments that high wages in NZ have rendered them "non-competitive"), and thus de-

the New Zealand government of tax, and workers of income, Profits will be made (and, if taxed) taxed abroad.

Where these "transfer transactions occur between NZ

subsidiaries and their "customers", they can be

channelled the Customs and

tern The Government proposes that ie as if the customer was and followed the textbook rules on "free com-

and have been

textbooks. But what

The

Government

that

"foreign investment" hides from the New Zealand and citizen

the finance of

When it comes to "thin "foreign investment" loans, interest on which is ternational Act 1995 introduces measurement of what is "thin" capitalisation. That measure is that at least 25% of

the foreign investor's must in the form of sub-

scribed capital and the New Zealand resident owned

corporation or branch must have less than II D'Vo ofthe head office TNC's overall international debt" structure,

While Australia has the same 75% 60% provision and the 40 (which, incidentally, are overwhelm have a SO/50 ratio of debt and

Docu-

rnent", p56). Incidentally, finance business is excluded from the "thin capitalisation"

In addition, it appears that . defined for

this tax purpose, has been extended least 50%

for Overseas Investment Commission purposes it is

The new international tax law feet. How important the

"private debt"

to have much ef-

]\!ew Zealand economy:

Growth of

Private

owned abroad 9,790

abroad

1989 1990 1991 1992 1993 1994 1995

41,804

n.a.

Sources; 1994 Yeur Statistics Hot Off The

Zealand's Total Overseas Debt

New

Total Non Resident Tax on these astronomical amounts was $323 million in 1994/95 .~ $21 million down on 1993194' "Economic and Fiscal Outlook" J 995,

While the proposed international tax looks at first blush like an honest attempt to deal with the erosion ofNZ's company tax base by foreign investment, in fact it does not appear that the proposed "tax reform" will have any noticeable effect. Indeed it is described as "revenue neutral"! (from a media release by Ministers Birch and Creech, 13/7/95).

ideology Behind The New Tax Regime

The "Discussion Document" on international tax .. issued by the Government, gives a good insight into the mental world which is leading to NZ' s present surrender by its leaders to foreign capital.

Whereas the basis of "classical" political economy (Adam Smith and David Ricardo) is the circular flow of money within the nation (because there is 110 international mobility of capital), the "Discussion Document" considers the encouragement of international capital mobility, that is, the flow of capitalists' money streams away from the nation, basic for a good taxation system.

The international tax regime introduced by the administration in NZ is designed to make this country as attractive as possible to international capital. At the same time, consider-

I

In the last (number we the latest statistics from the Ole. We noted that shortly after that ar-

ticle was

we received a further release from the ole

entitled "Overseas Investment Commission releases revised 1994 . This reduced the total approvals for 1994 by exactly $493 million to $5.1 billion and rural land sales from

hectares to 58,650 hectares, but in value only from million to $351.3 minion.

We speculated as to why the reductions were while not questioning the value of revising statistics as new information comes to hand, concluded that 'these revisions fall into the category of "lies, damn lies, and statistics". Unless the ole provides us with further evidence, we believe their original figures are, read with the warnings that we faithfully reprint, the most valid comparison to make with

ous years.'

We suspected political meddling due to the comparisons made in the new release by the Ole and the changes made, most of which had the effect of reducing apparent land sales.

Since as promised, we have asked the Ole for their

reasons for the changes. It brought an full and

polite though not ... response. Our first

is to maintaining the of

money resources in NZ to be able to transfer their resources out of the country.

The purpose of this encouragement of international transfers is to create rates of profitability of money (through interest and profit policies) which arc equal to those in the "global economy" - whatever that means.

"The amount of capital imported into a country will be influenced by the extent to which foreign investors can switch from investments in one country to investments in other countries. The comparative rates ofreturn available from investments between countries will be important in driving switching between countries" (p9).

Thus the ideology, on which the present government's taxation and economic policies are based, requires the NZ economy to be favourably comparable to the cheapest overseas economies. That is called "competitiveness". Tax rates, wages, work conditions, political system and favours to TNes must be regulated to come down to foreign standards. NZ citizens are of secondary importance - if of any importance at all.

In the framework of this article we shall leave the description of the "Discussion Document" at that. In an article to follow, however, the false assumptions resulting in policies of national betrayal will be discussed.

I

three questions related to obvious mistakes in the data supIn each case, the ole acknowledged the mistake and thanked us for bringing the error to its attention.

The third question brought a splendid example of "blame it on the computer": "The error seems to have occurred due to

failure by the computer to back up an amendment made when Attachment 7 was being compiled. Leaving aside the fact that computers seldom make errors: they just dutifully reproduce the nonsense that humans feed them, this piece of gobbledegook makes as little sense to a computer professional like myself as it probably does to you.

Most of the figures in the Watchdog article had already been corrected by us. The only ones we couldn't correct were the 1993 land usage values which should total $138,492,752 instead of $138,522,752 because the 1993 value for Vine-

should be $10,633,300 instead of $1 0,663 ,300

Here are the other questions we put and the Ole's secretary's

Other "revisions" to the "Land Usage" table

7) include a reduction in Sheep by $ I, 700, (JOO

in by 000

tachmcnt all overseas investment shows no revision in

these classifications. Neither does the table headed "Rural Land Sales ", show any revision in the style or Market Gardeningfigures Why? Which is correct? Please identify the decisions involved in the two OOD revisions.

Ole reply: The reductions in Farming and in Forestry in Attachment 7 were made because the proposals did IlJJj involve rural land The proposals involved a pastoral lease and forestry right respectively. Accordingly, it was incorrect for them to be classified as land sales.

Our comment: The Erewhon sale was of a lease, rather than a freehold. The forestry sale was of forestry rights, not of the land. The OlC is thus quite right in land "sales" were not involved. But the point we have made is that if this kind of revision is being made in 1994, similar revisions should have been made for previous years, otherwise the comparison which the Ole tries to make with previous years

is invalid. 6 below.)

Ole reply continued: The revision of the Lifestyle and Market Gardening figures in Attachment 7 related to the misreclassification of one application. The correct should be as per the provisional figures 126 and Market Gardening $526,000. I am unable to identify the decisions involved as the transaction did not and has

Our comment: We accept introduced a new error rather than ones. The

revisrons

H'e request an revisions,

the one In Overseas Investment area

Westpac Group Investment NZ- Hold

-NZ- Ltdfor $493 million), were made. If the applications were withdrawn

were we not notified the other

revisions reflect a change in the actual outcome of each transaction, why were only these transactions revised, when the Ole has admitted that it does not on the outcome of applications? Man}' other applications could have had outcomes differing from that applied for, potentially both increases and decreases. Surely, the usual issued with these statistics cover such eventualities?

Ole'reply: We have already under paragraph 4

the reason for the revisions to the land applications.

With to the overseas investment area

we advise that the was the

varied consent. the varied consent entered into the statistics with a consideration million. On check-

the statistics it was discovered that the varied consent

resulted in the of the transaction counted twice,

to ensure

that the value was

Why does the ole' go on to compare with unrevised 1991 to 1993> On

IS a quite the

a political motivation

Ole reply: The figures released visional. They were produced very tabase which hadn't been checked for absolute accuracy. The Commission decided that it would be appropriate for it to revise the provisional statistics for 1994 once some of the workload pressures associated with the Overseas Investment Amendment Act were lowered. This decision was taken in an effort to be in a position to statistical analysis for interested also seen as a first step in a more accurate data base which wilt be further enhanced once the monitoring provisions contained in the Overseas Investment Amend-

ment Bill into force,

The revisions that were made were of minimal nature and were made to more reflect the Commission's ac-

tivities in 1994. We felt we had a to correct the provi-

sional of a political motiva-

tion behind the revised the Commission

was not in a for I I to 1993

it decided to use them as in an endeavour

10 provide interested overview of in-

vestment approval trends.

Our comment: We a minimal nature" and almost half billion dollars

of the revised figures with years, we rest our case,

Readers can judge motivation as well welcome the nn.tnH,,.

sis" It is to see we are

open the curtain of red tape which the Commission has used to hide its activities. We arc sorry more ways than one) that the Overseas Investment Amendment Act caused such

are to revised to increase their

accuracv, why do the revisions not include the

of land inherent in. Carter Holt 's

becoming an overseas

revisions were chosen to reduce make them more accurate,

not to

With

ownLim

Heel that you have cited I advise that it to include that in the revision of the 1994 sent which enabled the

Our comment: The reply of our

Their specific point as regards Carter Holt

correct. International of the U.S.A. was

permission to buy as much as it liked of CBB back in i 991 when it gained control ofCHH through ajoint venture with Brierleys. It therefore needed no further "nlrm.V>l

the Ole when it took complete control (over 50%) this year. But this was just an example. There have been continual overseas takeovers of (for example) forestry ,.,vrr;r."" whose land thereby was transferred into overseas ownership without being recorded by the ole.

Similarly, what was the rationale for the choice

in the "Four Year Overview" (Attachment J)? ures are givenfor total consents as percentage sales (despite all the Ole's warnings as to the validity figures); but no figures are given in the "All Transactions" part of the table that would show (for example) total over seas investment as a percentage of total investment in New Zealand Again, the appearance is of choosing statistics if) allay public concern, rather than to give an accurate and balanced picture of overseas investment in New Zealand

Ole Reply: The 'Four Year Overview' in Attachment I was compiled hi a further endeavour provide information on the Commission's activities, A more detailed overview in relation to total investment was not able to be undertaken The reason for this is that the Commission screens general investment that exceeds Hl million or. in the case of

share also exceeds 25% of the

where the total assets exceed $10 million. Commission not in a position to know what

the total investment in New Zealand was made up investments which did not exceed the thermore, a figure for total investment not and accurately available. This is in contrast to sales of rural land to overseas persons where the Commission's consent is

in all instances. Moreover, the aimed at

perspective the land sales compared to total farm sales and land areas were provided to meet a number of

were receiving about whether the were '"'',''''' ,'-"u"

not. We, therefore, sourced publicly available: data to

answer the enquirers' questions.

Our comment: The overview referred to, land sales to overseas residents with the number and value of all land sales in Aotearoa. We dispute their reasoning this comparison and not one for genera! investment. We have

and the Ole has that

of land (such as that involved in the CHH

are missed in the OIC's statistics" Therefore the

make for land sales as ['["-""'\1""rn

one for investment. There are in fact

able statistics that could compare

an idea of overseas investment"

the New Zealand

economy

does Carter Holt the Overseas Invest-

consent given to the several hundred thousand hectares of Cf1!-f-·owned or controlled land into overseas ownership?

that had previously been Limited was revoked on 2

The by International Products of its control-

interest in Carter Holt Limited was by way of a

share acquisition. Accordingly, the consent sought from the Commission and which was subsequently granted was for International Products to acquire shares in Carter Holt Harvey Ltd not the assets ofthe company. Accordingly, no

consent was required for the transfer of the land

owned by Carter tIolt Ltd as the title to the land was

still to remain with the company.

Our comment: This illustrates one ofthe loopholes of the old Overseas investment legislation with regard to

and one. to it the new legislation

tries to The issue of exemptions from the regulations

is covered elsewhere in this issue of

the Commission' s for

the to 3 December 994 has been forwarded to the Minister of Finance who will table it follow-

the 1995. The

1995 to 30 June 1995 is cur-

were instigated at the promptin acknowledgment of our repeated evidence the Oles backwardness in supplying public information. The Ole used them in the process of justifying the Overseas Investment Amendment Bill's secrecy provi-

sions to show how it was to make information avail-

able to the In fact it had only one such

on the

BilL it is

may received

purposes

1995 Ut:I~I::SIOI Most significant news this month is the merging and "world wide integration" of the drug manufacturers, Glaxo Pic of the U.K. and the Wellcome Group, owned by Wellcnme Pic of the U.K. Though originally founded in Aotearoa (in the Man awatu), Glaxo became a U ,K, controlled

GLAXO .... L ... J!~~ "INVESTMENTH DESTROYS

This is a CAFCA press statement released in August,

We are frequently told that foreign investment the pana cea needed for our salvation and that one of its strengths is that it "creates jobs", Tell that to the 120 workers at the Glaxo pharmaceutical plant at Palmers ton North -

will evaporate with the closure of the plant

Glaxo merged with British transnational Wellcome recently, and this plant closure is part of the inevitable "rationalisation" that follows such of convenience between giant corporations. New Zealand workers have been declared surplus to requirement their function will be transferred to a more "convenient" part of Glaxos

In cases such as the Glaxo

not does not create

Th is far from the

40% of its New Zealand whilst repatriating

record profits to its American owners,

Glaxo management has blamed an hostile" operating environment in New Zealand, What this means. in plain English, is that the drug transnationals can't get everything their own way. They have waged a ceaseless lobbying campaign to tilt the mythical "level play-

field" in their favour. For example, they succeeded in getting the Government to amend the 1953 Patents Act, stopping New Zealand drug companies replicating

cheap copies of drugs patented the transnationals,

How ironic that at the vcry time the Government is perin pushing through Parliament its Overseas In-

I vestment Amendment Bill a law which will put New Zealand even m?re at the mercy of the transnationals - one of the world s companies is pulling out of the The likes ofGlaxo are fairweather friends

only' when things no they go else"

where, This can't be called "investment" it's

take the money and run. New Zealand doesn't need them nor do we need laws that hand them this counon a

transnational July 1992 and the biggest drug group in Europe, Its takeover of Wellcome created the world's biggest drug company with subsidiaries in Aotearoa including Glaxo New Zealand Ltd, Glaxo Pharmaceuticals, Transact Computing Ltd, Allen and Hanburys (NZ) Ltd. The Glaxo Foundation for Medical Education Ltd, and Origen Pharmaceuticals Ltd. The price paid for the New Zealand business is suppressed,

One of Glaxos most significant operations here was the manufacturing and technical centre, Glaxo Laboratories. in Palmerston North. Only two months after the Ole approval, Glaxo announced its closure with the loss of t20jobs by the end of the year. Only its Auckland based marketing, sales and distribution operation would be left: in Aotearoa. Glaxo gave as its reason an argument it had been having with Pharmac, the government's drug buying agency, but that was more likely playing politics. It is stretching credulity not to attribute the decision to move the overseas to the takeover of Wellcome, Analysts noted when the takeover was being debated at the international level, that heavy job losses were likely to follow. "One of the disappointing features of the Glaxo bid is that it focuses so heavily on job losses," the head of Wellcome, John Robb, said" Analysts 10,000 to 15,000 of the combined workforce of

65.000 could lose their losses being

in research and "Trust sells

out to Glaxo", 30/1/95, manufacturer to close

plant", p

The dispute with Pharmac was classic case of the big phar-

maceutical manufacturers to their profits

against the use of cheaper , alternative brand drugs

that do the same as the more brand .. name ones,

Pharrnac has an "interchangeable medicines list" containing around 300 alternative brand medicines the Ministry of Health has endorsed, In October last year, Pharrnac general manager, David Moore warned that tens of millions of dollars could be saved, but that "groups with vested interests" could threaten the existence of the list. In unusually language for a government agency, he said that

"It would be 'sheer greediness' brand-name drug companies blocked the project to preserve high prof-

its, Pressure already being on doctors to ignore

the list was' aggressive .. , "Ken

Linke, the chairman ofthe Researched Medicines Industry [read: big brand-name manu-

facturers], which New Zealand's 40 re-

search-based said RMI had

written to

In contrast the

Man u Iacturers '

Association the market Zealand."

stated that "in Britain

This with

held

in New

However the RMI campaign to sow doubt in doctors' minds appeared to be working: the chairman of the Medical Assn" ciation said that

"doctors accepted there had been a detailed study of

the drugs on the list. However before could have

full confidence in prescribing drugs

wanted to see proof that the studies had shown

were equivalent in every way. The association was also concerned the country's drug bill may not be reduced by the move." (Press, "Generic medicines 'could save

tens of millions':', 24/10/94, .)

The independents are under attack in the wake of the GATT settlement in any case. Changes in patent laws forced by the new agreement will make it even more difficult for generics to be produced. The NZ government has away its ability to authorise competitive manufacturing where a patentholder is charging too high prices or refusing to supply.

Glaxo was in the vanguard of those big companies obstructing the cost-saving challenge to their monopoly In February 1995, it obtained a hearing in the High Court to set a date for a judicial review of the list. It was a competitor to its asthma drug Becloforte: Atomide made by Douglas Pharmaceutical. The grounds of the challenge were that it was not equivalent - though it was in fact

the same G!axo $17 million a year from its in-

haled asthma drugs generics in the same

turn about $! million to their

"Government's generic medicines list

from

., L

The RMf and the !PMAjoined forces later in the year

to threaten Pharmac with legal action it didn't allow certain drugs onto the subsidised list. The Associate Minister of Health. Maurice Will defended Pharmacs practice saying "there is no way public money should be spent to buy or subsidise 'which offer no effective improvement over medicines or which are slightly more effective but where there are others as

which are lower in price." "Minister backs Pharmac

in row with firms", firms file suit

Govt agency:,

The merger between Glaxo and Well come came after several months of board-room tussles. Initially the 39.5% owner

of the Wellcome refused to sell out to

Glaxo, In March it conceded after to find other

Glaxos star product is an anti-ulcerant

which is the selling drug in the world with annual

sales of $US3.8 billion,

Wellcomes biggest is ment of fourth

43% of Glaxos

which is used in the treat"

Issue of

11'('1;'01i'<1I'< because it considered that the company was in "New Zealand hands", Note however that accordto .1\ ian Williams in the Press

ers

"overseas

institutions ordinary

Division shares and 57%) of the forest Division shares."

limited n",.h"'''.~hl'n international timber-related eq-

investments. The share issue which represents

2.9% of the shares Fletchers was way

will Fletchers with additional

have advised that the shares investment and that they are interest or board

owner of shares in CBS Forests and the Public Employees the company Xll/Ohio of December 1994

electricity and gas retailer which also owns 69% of the North Island gas

in the South Wanganui Tasman across Wanganui and the Manawatu: Enerco would pay $2 million for its half-share and then $2.5 million would be spent on sinking an onshore well, beginning before December. Energy Corporation, based in bought the licence from another American explorer and sought a local partner after assessing the area (Press, "Enerco returns to gas exploration", 29/7/95, p.23). In August the government announced that 26 applications had been received for 26 petroleum exploration permit blocks covering about 34,000 sq km in the Taranaki, Canterbury, and Westland basins. According to the Minister of Energy , Doug Kidd, this would likely more than double the number of permit areas being explored in New Zealand. "Most of New Zealand's sedimentary basins are now available for exploration under the Acceptable Frontier Offer provisions", he said Another 14 large blocks off the east coast of the North Island had also been offered (Press, "Fresh interest in NZ petroleum

ration areas", 5/8/95, p.34).

A "company yet to be incorporated" which will be a

owned subsidiary ofIpoh Ltd of Australia .. which in tum owned "approximately 40%" by 1GB Corporation Berhad of Malaysia is being set up for "in excess of$16 million" in order to "conserve, restore, and earthquake strengthen the 'Old BNZ Site' in Wellington" under an agreement with the Wellington City Council, "The

a will be

centre and commercial offices. number of restoration and

in

tralia."

An rural land sate sees Manuka n"",~,,,.~,,

subsidiary of the Malaysian family company Ernslaw One Ltd, acquiring the freehold of 15! hectares of land in the Manawatu from the Crown for

"In 1994 consent was granted to Ernslaw all of the shares in Manuka. At that time Manuka owned/ leased 1,665 hectares of land in the Manawatu, The land included 15 J hectares of land leased from the Crown under a long term renewable lease. Pursuant to the Land Act 1948 there is an ability for the tenant under the leasehold estate to purchase the freehold in" terest in the land. Manuka has now decided to exercise this right."

"Ernslaw One Ltd, Manuka J Ioldings Ltd" is also forcing the Crown to sen it, for an absurdly price, 14 hectares of land in the

Manawatu which it had been It will pay

$25,020 or $80 per hectare. In the Ole

gave Ernslaw One to

land in the leased from the Crown under

term

The cost

3 l4 hectares of'the leasehold

Act 1948 which leasehold estate to purchase the freehold can be sure that the drafters of the have this in mind.'

One

In other rural land, <II> Telecom Corporation of N e ,w Zealand Ltd Telecom Mobile Communications Ltd is

Watchdog 78 ran an article under this headline. only in 1994 that we became aware that the

Investment Commission of

from any company more than 24. The bland explanation was:

"The Commission considered

a case case baSIS and where it

the control of the company Zealand hands', vocable

In I

Fletcher NZ Guardian Trust

H.1"1ii'rIIPV Investments

Fisher &

Greenstone Fund

Wrightson Freesia Meat Apple Fields Skellerup

of its shares.

A German is

of Islands for the

property for recreational The land was sub"

divided from a larger farm and "is not suitable for farm"

due to its contour"

® Ellis

Ellis Campbell Group of the United

buying a further 98 hectares of land in for $150,000. It "proposes to develop to property, which is currently reverting scrub land into a commercial forestry operation." Ellis Campbell bought 240 hectares of land in Marlborough in March 1990 and a further 807 hectares in December 1991. Some was the rest was scrub land "reverting to weeds", which would also be converted to forest.

venture between Danne Mora Ltd and

Fulton Hogan Ltd has approval to buy two separate B hectare blocks of land at Hawick/East Auckland to develop into a residential subdivision. One was for $2,790,000, the other $2,817,460. Fulton Hogan is 36.94"/" owned by Shell New Zealand holding Company Ltd.

" Fulton Hogan is also buying 31 hectares of land in

for for landfill. It lies between two blocks

of land already owned by Fulton and used for landfill and "was previously used as a landfill in the

1970's and 80's".

" And a company 50% owned by Fulton is ac-

the and mineral interests in a 171 hect-

land it

The land owned Blackhead

50~'" of "which is owned by Palmer and Scm Ltd ot Aotearua. and mineral interests wen: owned

Milburn New Zealand 72.5''/" owned

Holderbank Finaneier Glarus Ltd ofSwitzerland

will be used Blackhead "to expand their lime-

and rock activities in the area'

In ·"p,,,tc'TnI·,,"·

during the summer, It for its employees during the It had bought a 464 hectare in April Ltd.

eration"

)

land on the subdivision. This time it .J·.'_',"""V. and gO hect-

has been but until now it has all been

in Albany. The 80 hectare block of a hectare

farm subdivided.

OJ A WB New Zealand Ltd which is owned two Aus-

of land at "a high

stud". It will be by the

brother and sister-in-law one of the owners of A. WB

all members of the Slade RUR New Zealand Forests i Inc and T111§mlUI Ik'" .. ""vtw'" Ltd (it IPll:tduT

block

will assist the

Tranz Rail Ltd of the owner of New Zealand Rail

Ltd transferring "certain operational assets" to a

formed subsidiary, Tranz Rail Finance Ltd for an amount identified only as "in excess of $1 O million".

J<'UltOIl Hogan Holdings Ltd (formerly Fulton principally engaged in transport services, but including road construction, quarrying and other activities, and 36.941'% owned by Shell New Zealand Holding Company is amalgamating all its subsidiaries:

Fulton Hogan Canterbury Ltd Fulton Hogan Construction Ltd Fulton Hogan Contracting Ltd Fulton Hogan Central Ltd Fulton Hogan Southland Ltd Fulton Hogan Ltd

New Zealand Bitumen Emulsions Ltd Pavroc Holdings Ltd

Micro Tunnelling (New Zealand) Ltd Rowell Asphalts Ltd

Asphaltic Mixes Ltd

Husband Construction Ltd

June 1995 decisions

Biggest story this month is the sale of the last remaining major newspaper owner in Aotearoa to overseas control. Wilson and Horton Ltd is now under the control of the irish media company Independent Newspapers Pic (INP) and its owners, the O'Reilly family. Independent ".1",,,,,.,,,,_ pers and The O'Reilly Trust set up two 50/50 owned com-

Independent Press and

Ltd in order to Horton for $292,741 32.94%) and declared an intention to raise it to

next six to twelve months, The the same former rugby international Dr previously hit our screens as the CEO of ILl Heinz and Company when it took over another national Watties Ltd.

The other principal news media owner in Aotearoa is Independent Newspapers Ltd (lNL: similar name, but no more independent). INL is 49.7% owned and therefore controlled by the U.S.-based News Ltd of Rupert Murdoch. In total, it is 76% overseas owned and publishes about 70% of New Zealand's newspapers, magazines and sporting publications. Between them. INL and Wilson and Horton in 1991 owned 65% of provincial press circulation and 90.5'% of the metropolitan readership no, 30. "The economy of communication", by

Wilson and Horton, in addition to its flagship, the New Zealand Herald, the circu lation newspaper in Aotearoa, owns eight other dailies: the

(l1}f)('f1W the Rotorua Daily the

Christchurch Zealand Women's

Almost Wilson and Horton an· nounced it had bought the Northern publishers of the community newspaper, the

and of tile Northern one of the last inde

pendently owned newspapers in the

The takeover O'Reilly came courtesy of'araid

Investments Ltd 011 Wilson and Horton's shares in

as unfriendly the Horton

reason that Brierleys were the kiss of death when owned the Auckland and Christchurch Stars. This gave BIL the position any mafioso would delight of able to tell the Horton family to find another buyer or to make themselves at horne. In the end made around $70 million profit from the shares after holding them for just six months, it left, $53 million in as a loan to Independent Press. Various other newspaper groups had shown interest, West Australian Newspapers, the

Tribune Company (publishers ofthe Tribunes, and

Times Publishing, oLStraits Times, The

Irish newspaper the

Horton

the company before the sale. However, bitterness remained, Deposed Peter criticised institutional out to

he was then

Also the other newspapers around the coun-

felt it necessary to publish

O'Reilly himself "Now 0' fawned the New Zealand Herald itself

and Horton

Christchurch Star ( international

career. Wilson and Horton's Listener had "The Irish

answer" ( "The charm of 0' of INI,-owned

The interests extend to oil and gas exploration (A tlantic Re-

manufacturing, department stores, food

and cars (FitzWilton PIc, an Irish conglomerate), fine glass and china (Waterford Wedgwood), and Irish "castles-cumhotels" (Dromoland and Ashford). Reports the Listener:

"After a lO~year court battle against what he calls 'environmental lunacy' .he hasjust won planning permission to open an $1 Ou-million mine in Ireland, which will produce much of Europe's zinc over the next 10 years." With Sir Michael Fay he set up the Ireland Fund of New Zealand, a charity with branches in North America, Europe and Australia supporting "non-sectarian" projects in Ireland. The O'Reilly family trust is reportedly worth about $65 million.

All of which leaves Aotearoa with desperately few independent voices in the mass news media other than in public radio. With the intertwining business interests of the owners of our main sources of news, and state TV dependent on corporate advertising, critical investigation of business activities or of pro-business government policies become decreasingly likely.

(Ref: Press, "INL to sell Adams Print to News arm", 11/5/ 93; "One-for-eight bonus as Wilhort has record half-year", 6!ll!93: "INL tipped to fall short of$48m target", 18/8/94., p,37; move needed by BIL on Wil Hort sale", 201 4/95 p.34, "Successful try for the 'Herald', 6/5/95, p.l ; "Will-lort sale price vindicates BIL faith", 6/5/95, p.2S, 27;

"Wilson and pA2.' "Irish share"WilHort

"Horton with share sale",

Horton buys 'Northern Advocate'", aims to increase WilHort profit", holder increases WilHort stake", head criticises institutions".

The buyout of household name, Huttons Kiwi Ltd, by Japanese controlled syndicate, has ended in the stripping of the company of its familiar smallgood, ham and bacon products in order to give a $39 million cash handout to its new owners and turn it into a beef processing company closely tied to ANZCO. The syndicate is buying 57.08"/0 ofHuttons Kiwi, a public listed company, for $31,048,405. The syndicate consists of Itoham Foods incorporated and Nippon Suisan Kaisha Ltd, both of Japan, Rangatira Ltd of Aotearoa, and "various employees" of Asian New Zealand Meat Company Ltd (ANZCO).

At the time of the takeover, Huttons was a major food processor, making bacon, ham and smallgoods, with operations in the Waikato, Manawatu and Canterbury including the Riverlands group which owns three beef processing plants accounting for 7% of the national beef export kill. It was developing a pig farm in Canterbury. It had a 23.5% shareholding in ANZCO, which it was considering increasing to 30% early this year. The 57.08% being sold in this transaction was owned by Brierley Investments Ltd, and the members of the purchasing syndicate are all associated with

PSA Journal : ! 994

ANZCO. ltoham will get 30.4% of

10. 10.1 and ANZCO

in

and Coloma!

also had 6 .. 95% of Huttons.

In announcing the purchase in May, ANZCO's director, Graeme said the syndicate would also "seek to purchase all the shares in ANZCO and the New Zealand Casing group of companies." ANZCO is 64.9% owned by the New Zealand Meat Producers' Board. The syndicate would also sell back to Brierleys the core small goods business for $43.6 million (later increased to $4522 million), retaining Riverlands, However the purchase of the Meat Board's shares in ANZCO only eventuated in October (Press, "JANZ in Anzco", 3/10/95, pA2; the transfer was to take place in December). It is not even clear that the Meat Board was consulted before the initial public announcement was made. Instead, Huttons announced a $39 million handout to shareholders in a return of capital financed by the sale of the small goods business to and re-· named itself Pacific Beef.

Rangatira is a private investment company based in Wellington, It gained its shareholding through a subsidiary, Romney (No 19). Rangatira's board contains a group of major businessmen including Sir Roderick Weir (chair of Amuri Corporation and Sun Alliance Insurance), Norman Geary (chair of TVNZ and the Tourism Board; director of Cedenco Foods, Owens Group, and Amuri), and Murray Gough (former chief executive of the Dairy Board, director of ANZCO, AMP Society, and New Zealand Rural Proper-

A Auckland company, Green and owns HU)2% of Buttons "Huttons stake bought" 3/ i 0/

"Huttons stake cut", J

Huttons Kiwi stake",

p.28; "Minority holders for Huttons'

i; "Rangatira shares switch at Huttons K" "Meat Board's ANZCO stake in doubt", "Huttons to return $39 million on shares"

"Huttons Kiwi nod", 8/9/95, p,16.)

One of the top appliance retailers in becomes Singapore controlled this month. ILion

iogs Pte Ltd, a private company controlled the

family of Singapore, received approval to up 100% of

the issued share capital. The Ole records $16 million as the

paid for "approximately 38'%,". However, the initial stake, bought as Leernings fought off a bid by the Investments controlled Skellerup Group, was to be 38.5% for $J6,5 million, and a month after this deal went through Lion was reported to be stake. Lion City specialises in duty free and retail electronics It is owned

Jumabhoy controlled Scotts

"Lion

Apple Fields comes clean - and rewarded with an open

"The Commission has been unknown

to Apple it and thus, the group,

person in March 1994 due to various small

been by various overseas persons. The

ing of this consent the transactions entered into

by the group from the time it became an ;)u."'·"'·<'I"

These transactions include total 1

land in Canterbury

'" acquiring interests in orchard land own

ing companies (approximately

@ acquiring interests in rural land 957

., entering into transactions with

"'U.n.g.,u"", Scheme

These will not be the total land

eludes some double

approval covers sition of shares in

at ion for all these

The reaction of the ole to this was Fields for

overseas interests.

The sidiaries to maximise its benefits the health

This latter sale has a twist to it because

"Stevens KMS holds shares in a number of Australian subsidiaries most of which are involved in the Halas dental distribution business in Australia. The Commission is advised that the sale of the Halas dental distribution business will considerably strengthen

New Zealand's balance sheet through the elimination of a substantial amount of debt The Commission is further advised that the sale will also enable Zuellig New Zealand to concentrate on its other investments including in particular its pharmaceutical sale and marketing division where it will be better able to take advantages of the opportunities available as a result of the recent health-care reforms in New Zealand".

So Zuellig is clearing the decks for action --- to ensure that the creeping privatisation of the health system creeps its way, [Note: the ore consistently and incorrectly spells

as .J

Avnet inc, a United States company is taking over VSi Electronics (NZ) Ltd for a suppressed amount VSI was a of Electron House Pic of the U. K. and is a distributor of electronic components and computer products. !\ vnct describes itself as "a world leader in the same business field",

Nothing to do with motorbikes: U.S. company Norton is

over the abrasives manufacturer Artec Abrasives New Zealand Ltd. Norton has a local subsidiary Norton New Zealand Ltd. It is setting up Norton New Zealand (Op- 70% owned by Norton New Zealand and 30% by Arter Holdings Ltd, which is taking over the assets of Norton New Zealand and Artec Abrasives New Zealand for $11 "Norton is also involved in the distribution of

Ihe worldwide merger of the General Reinsurance and Reinsurance groups (U,S.A.lGermany) has resulted in subsidiary Cenerat ami <Cologne Re Management Ltd acquiring the local business interests of the two groups for "in excess 01'$10 million" The local companies formerly belonged to General Reinsurance Australasia Ltd and Reinsurance Company Ltd. "It is claimed that the merger will result in an enhanced product range and service being available to the New Zealand market

shopping centre is being sold off to to meet the debt. The mortgagee was Farran subsidiary of South Australia Asset MarlCorporation of Australia, and the shopping centre is Lincoln Road Shopping Centre, Henderson, owned by Lincoln Centre Ltd (in statutory an Equiticorp company. The shopping centre

itself is under four but an adjoining

square metres at :5 Moselle Avenue is also being acquired to preserve a of way and make provision for expansion. The deal is valued at

company is The Ar-

senal Anorco owns four hectares of land

Auckland which he intends to subdivide and build houses on.

Cook Street

three residents to develop 3751 of Auckland City" by

units, The is

has ""'rH!'V"

square metres orland "on the 66 commercial and retail suppressed,

Gerard Ltd .. a of private Australian company, Gerard Industries Pty Ltd, is buying an electrical distribution business, Blue Point Products Ltd,

and a 2,271 hectare and deer farm at Oxford, Can ..

terbury for from a consortium of Hong Kong

residents. The farm is owned through the company Wharfdale [,tli. "The proposal will Blue Point's electrical distribution business to control the distribution of their own products in New Zealand. The Commission is also advised that Gerard

area through its Aus-

Some familiar names are in Auckland for $12 million for Burtlea Investments No" 65

the Farmers Buildiug A company, set up to own the

the Pacific "the beneficiaries of which are associ-

ated with Messrs Tan, and

and Mr

ing a 200-f00I11 hotel and five-level retail centre on the I

hectare site which borders onto Hobson and

some would say and Chris

as are

to meet its re-

porting deadline. The annual accounts when did arrive

had the auditor that owned by the

group had been overvalued. Correct valuation would show

s funds to be As a fe,

it owns by its

race, Wellington at above and

lion. Otherwise Habitat would have had to cal! in

"Chase men buy Farmers site"

erties overvalued in Habitat accounts", l: "Pa

cific makes fresh bid to Habitat" p.J ;

Dominion, "Habitat to call receiver if sale plan fails", 16/81

p.Ifi. )

mil

Morton Estate Ltd, of which Prudential Assurance Compliny Ltd of the U.K. owned "more than 25%" is

sold to the Coney family of Canada. The family is sheltering behind the Morton Estate Wines Trust which is acquiring Morton Estate for a suppressed amount Morton Estate owns 138 hectares of land in Hawkes Bay, 41 hectares in Marlborough, and 0.36 hectares at Katikati,

of Plenty. J. Coney says he has U.S., Canadian and Australian market contacts. Morton Estate ended up in Prudential's hands when a sale to Appellation Vineyards fell through see our analysis of the October 1994 decisions.

Transnational prayer/retreat centres are the latest inves tors. Mrs Cye Hwa Kim of Korea "who has established and manages 41 prayer/retreat centres through Korea and the United States" has taken over Hallelujah Holdings Ltd which owns 12 hectares of land at Akaroa, Canterbury She is not paying for it: she is acquiring all the shares in the company in exchange for a $580,000 loan she has advanced to it. The property is used by the Hallelujah whose trustees arc Messrs Ohn and Song of Christchurch, for the purpose of "promoting, developing and encouraging the Christian religion within New Zealand". Mrs Kim Hallelujah Holdings the money for it to

erty originally and has "become involved

operation of the centre." The purpose of the

the ole is "acquisition of land for other

Carter Holt Harvey Forests Ltd, 51 <;10 owned by International U,S.A,", is buying up forestry right§ to a Dumber of

areas of land in the Watkato, Taranaki and This is particularly interesting because the ole informs CAFCA that Carter Holts, which the ole had granted an exemption from the Overseas Investment lations because the OlC regarded it as New Zealand controlled, had the exemption revoked on 2 1995 due to the controlling interest taken in it by International ucts. So the Carter Holt Harvey name is now

amongst the decisions of the Commission as than victim.

The present deals are:

o In the Waikato, a forestry right for years over 41.2 hectares of land between Hamilton" for $6,333 per annum. The land is on a gorse- infested part of a farm ..

.. Again in the Waikato, a for

32 years over 214 hectares of land near

acquired from Forests Ltd for

per annum. The land is farm which the owners

33 years over 60 hectares of land between Rotorua and per annum is being acquired. The

of a 120 hectare and cattle farm which

the owners wish to convert to Half, which IS

with difficult access' has been granted to eHH,

in order to allow the owners to fund their own tation.

Again in the or eBB has another joint ven

ture, this time with the F Lands Trust of

Aotearoa. The right is "for approximately 33 years over 5304 hectares of land near Atiamurt' at

per annum,

"The Commission is advised that the property is Maori freehold land which has for many years been let to successive none of whom have condition. n,~!-",,""~ Trust assumed posses-

most of the was infested with gorse and

showing little Because the

had returned very little rental the Trust was unable to fund any

~ CHH is acquiring a

for years over 52 heet-

ares of land near Aria" for SUI!) per annum. The

unit The owner has been Council to fence on and this is pro· that without the Holt in the Joint Venture this land would ti1e.1R(: ..

rcsi-

are and as their residence in Aotearoa. "Dr J. Dvorak ... is a world leader in musculoskeletal medicine. [his] mediwill be invaluable to medi-

in New Zealand".

of Rayonler finn- hectares of Road and

is

part of a large 740 hectare farm property and rM">t'p,:cmT<' the portion of the property which is uneconomic for pastoral farming due to erosion problems. The applicant states that the property will be converted from pastoral farming land to a commercial forest production operation. The applicant states the proposal will result in the introduction of the practical application and testing of many forestry technological advances that its parent company has been associated with in Canada.

.. A number of U.S. residents and a company, RLC Inc, arc buying "approximately" 500 hectares of land in Kotare Road, Marumaru, north of Wairoa, Hawkes Bay for $800,000. The vendors say the land "is no longer suitable for arable farming due to its contour and scrub infestation" and the buyers intend to plant trees on it. They state that "knowledge and contacts will be utilised to help encourage more efficient timber processing generally within New Zealand and that new innovations [sic] in the forestry industry will be shared with other New Zealanders."

.. Telecom Mobile Communications Ltd, subsidiary of Telecom Corporation of New Zealand Ltd of the U.S.A., is buying another cellular phone site. This time it is in Bulls, Manawatu, and is of 400 square metres. The price was suppressed.

" Hmood Ai Ali AI Khalaf Trading and Transportation New Zealand Ltd, which is owned by Mr H.A.A.A. Khalaf of Saudi Arabia and Mr G.A. Assaf of Australia, is buying 393 hectares of land in Hawkes Bay for $2,050,000 to "establish the A wassi sheep, a middle eastern sheep ... which is renowned for its milking capacity and the applicant also states a sheep milking industry can be readily established using Awassi ewes."

II) 'Fulton Hogan Ltd, 36.94'% owned by Shell New Zealand Holdings Ltd of the U.K., is buying Horokiwi Quarries which owns t 08 hectares of land at Petone, Wellington, for $7,.250,000. "The business of Horokiwi Quarries Ltd is complementary to the road building business undertaken by Fulton Hogan Ltd."

.. A U.S. resident, Bruce Marcus Kerner, is buying the: 76'Yo of Vineyard Investments Ltd that he does not already own, for a suppressed amount. The company owns 73.4 hectares of land at Blenheim, Marlborough and Mr Kerner wishes to establish a vineyard on the property, exporting all the wine produced "initially primarily" to the U.S.A. The land is currently used for pastoral farming.

q;) Two members of a Canterbury farming family who arc currently resident in Singapore are buying 81 hectares of land for $655,000 to add to the family's adjacent Ashburton crop farm which is farmed by two other family members.

" Global Network (New Zealand) Ltd, a company owned by S. Wuu of Australia and G. Willi of Singapore, is buying four hectares of land on Highcliff Road, Dunedin for $190,000 "for the purposes of establishing a tourism venture on the Otago Peninsula, including walks to a nearby historic statue, as well as a base for other tourism related activities in and around the Otago Peninsula."

e Southland Plantation Forest Company of New

Zealand Ltd, is buying two large blocks of land in Southland. It is owned by New Ojl Paper Company Ltd and Itochu Ltd, both of Japan. One block is 384 hectares of land in the Centre Hill Survey District, Southland, purchased for $305,571; the other is 2,322 hectares in the Hokonui District, for $2,600,000. "All activities such as planting, maintaining, harvesting and replanting the forest will be conducted under contract by South Wood Export Ltd." We last heard of Southland Plantation in December 1994 (again buying land in Southland), when it was owned 51 % by Oji Paper Co Ltd and 49% by C Itoh and Co Ltd. South Wood Export Ltd was involved then too: it is 331/,% owned by C Itoh and 662//% by M.K. Hunt Foundation Ltd of Aotearoa.

In internal restructuring,

• Sterling Winthrop (New Zealand) Ltd, already a subsidiary of Smith kline Beecham Pic of the U.K. is being sold to another subsidiary of Smithkline, either Smlthkline Beecham Overseas Ltd or Smithkline Beecham Intercredit BV for VS$11,900,000.

Oil Barclays Bank Pic of the V.K. is buying all the shares in Barclays New Zealand Ltd for £14,600,000.

~ Metal Manufactures Ltd is restructuring the ownership of its local subsidiaries. They are MM Cables Ltd, MM Metals Ltd, and MM Good One Ltd, all of which are being transferred from the parent to another subsidiary, Metal Manufactures New Zealand Ltd, for $62,970,000. While the OlC identifies the parent as being the Australian company, in fact Metal Manufactures Ltd is itself owned by a U.K. engineering and manufacturing company, BICC. MM makes copper and fibreoptic cable in Christchurch and recently won a $2 million order for 400 km of fibre-optic for Clear Communication's Christchurch to Dunedin link (Press, "JVIM Cables wins $2m Clear contract", 10/5/95, p.29) and a $2 million-plus contract for fibre-optic for central business district extensions to Telecom's network using cable imported from BlCC (Press, "Multimillion-dollar fibre optic cable contract to Chch firm", 18/09/95, p.35).

Released on appeal

May 1994

Two decisions previously completely suppressed apart from the country of origin have been released. Both relate to the purchase from Challenge Properties Ltd, a Fletcher Challenge Ltd subsidiary, of levels " to 15 inclusive, together with associated carparks in the ASB Bank Centre in Albert Street, Auckland. For some reason this was done in two steps. First ASH Bank Ltd associate company, ASH Nominees Ltd, bought the property for approximately $55 million. Then AMP Perpetual Trustee Company NZ Ltd, a subsidiary of AMP Society, bought ASB Nominees from ASB Bank Ltd for $57 million. Both ASB Hank Ltd and AMP are Australian. ASH Bank Ltd is owned 75% by Commonwealth Bank of Australia Ltd and 251'/., by ASH Bank Community Trust

June 1994

In a decision of the names of the

Macraes Mining Company Union GoRd Mining NL of hectares of land at Macraes Flat, for It will be leased out to he fanned until required for Macraes mining activities.

A second decision was previously released the consideration. The giant Thomson Corporation of Canada subsidiary, Sweet and Maxwell (NZ) Ltd, received approval to buy the law publishing Brooker and Friend Ltd, for $15,000,000.

July 1994

Again, a previously completely suppressed decision is released. Wenita Lumber Ltd, 45% owned by China Foreign Trade Transportation Corporation of China, 45"/" by Togen Ltd of Hong Kong, and 10% by Chen Wen Dong of Hong Kong, was given approval to acquire the assets of Rosebank Timber Ltd and Jacs Hardware and Timber Ltd for $669,000. These assets include "nine hectares of rural land at Balclutha, and the undertakings of a commercial saw milling business being conducted on a site known as the Rosebank Mill. Wenita's activities are a matter of some controversy among locals on the Taieri plains (for details see Watchdog 79, "Wenita on the Taieri?", by Trevor Reeves, p.9-10, August 1995).

A second decision released fills in the purchase price from a decision originally completely withheld for the country of ownership, and then released apart from the

in January It is Arnott's Biscuits Arnott's Biscuits Ltd Biscuit Company Ltd for $16,000,0(10

February 1995

Two deletions from the Ole s 1995 decisions have

been released after appeal CAFeA.

The first reveals that the "consideration" was $550,000 for

the transaction which we previously as follows:

Coeur Gold New Zealand Ltd of the U.S.A. and Viking Mining Company Ltd of Aotearoa have con .. sent to "acquire as an option to purchase 120 hectares of land in the Ohinemuri survey district near W aihi". "The applicant advises that the proposal is part of a land swap to enable continued prospecting operations." Coeur is owned by Coeur d'Alene Corporation of Coeur d' Alene, Idaho, U.S.A. It owns 80% of the Golden Cross mine at Waitekauri, which it bought from Cyprus Gold for $97 million in 993. The mine has caused considerable environmental concerns

May 1993 decisions).

The second was almost withheld when other February 1995 decisions were first released. It is for Potter

Ltd of Australia to the 50"/"

of Buttle Wil:lilm Lid that it doesn't own.

The consideration is be advised the settlement",

"The will enable Buttle Wilson to remain/become

fully in the New Zealand market against other

Australian and New Zealand and other financial intermediaries with resultant benefits' Just whom the benefits are

not stated. However the integration takeover of its

met problems in

ultimate NZP A reported

structures management", I

"The Auckland sharebroker Buttle Wilson has restruc-

tured its but faces an uncertain owner-

ship structure the integration of SG Warburg

investment banking into Swiss Bank Corporation. Buttle Wilson said it had suspended work on operational integration with its 50% shareholder, Potter Warburg, of Australia. Buttle Wilson is 50% owned by 23 of its executives, while the 50% major shareholder, Potter Warburg, is 50°,l.J owned by the London investment house SO Swiss Bank Corporation recently announced an £860 million takeover bid for Warburgs investment banking subsidiaries but not Mercury Asset Management, its 75'% owned institutional fund management unit. The integration of

investment operations into those

of Swiss Bank Corporation will create a new global

investment bank - SBe "

March 1995

Harbridge Fields doesn't No t

which owns 5.6473

The SOC;.;,

was owned four individuals the sale "will allow retir-

mg to be released from future liabilities in the part-

nership" and "allow Fields Ltd to exercise complete

control over the the potential

to increase is now released after ap-

peal to the Ole way of of the

liabilities of the

1. Note: All of and company names is supplied the OK unless otherwise it is dear from the context that the source is from elsewhere. Errors fife those ofthe Ole.

Areas arc rounded to the nearestwhole number,

Information unless otherwise noted, comes from the '" de-

cision sheets" of the Commission.

I

I

N

CPS undertook two activities in mid 1995, both in Firstly, it organised a public meeting entitled "No To Privatisation". It aimed to present an overview of what was happening in Christchurch in the ideological drive towards privatisation. Several CPS members spoke Murray Horton on the forces behind the drive: John on the user pays emphasis ofthe draft revenue policy study for the Council; and Ken Martin on water charging.

Paul Piesse, of the Local Government Officers Union, detailed the contracting out of Council services, increasingly to TNCs. On a more positive note, fellow unionist and Lyttelton activist, Graeme Young, spoke about the successful 1994 campaign to stop the Banks Peninsula District COlU1- cil from selling its shares in the Lyttelton Port Company. An extract was screened from "Titans of Trash", the 199 i Australian documentary on Waste Management Inc, which is trying to muscle into lucrative Christchurch garbage contracts. Councillor David Close, leader of the Labour city councillors, attended and reiterated his support for continued local body ownership of trading assets. A couple of'resolutions opposing privatisation and user pays were passed and sent to Mayor Vicki Buck and all councillors.

A week later CPS picketed the national conference ofBOMA (the Building Owners and Managers Association), one of the leading groups ceaselessly lobbying for user pays, lower rates for etc. etc. The conference fea-

hued speakers across the whole of corporate

Ism, with papers on foreign investment in commercial propCIty, Maori and the impact of the casino. We were astonished to discover that the whole thing (entitled

High With Property") was sponsored Radio New Zealand.

When a was sent, Chief Executive

Milan blithely disavowed any knowledge of BOMA 's political lobbying but assured us that it was nothing to worry about. He said that the sponsorship arose because of Radio New Zealand's relationship with the NZ Council of Shopping Centres, which has merged with BOMA. Coincidentally or not, nothing has been heard of from SOMA since our picket Silence is definitely golden, in this case.

WELL YO HO HO, IT 5££MS OUR PU8LlC SERVICES KME BE-E.N PR\VATEERED.

(THPTS PRIVATIZED. YO U 5C UP VY DOC" PRIVATIZED.'

---7

There's no let up in the need to be vigilant against privatisation, After a year's hiatus, the City Council has announced again that it plans to consult the public on plans to sell all or part of its 39% shareholding in the Selwyn Plantation Board Ltd. Quite apart from the stupidity of quitting such a boom industry as forestry, this sale of the Council's least known public asset would see a foot in the door for privatisation. Some of the smaller rural councils have cornbined forces to enable a float of J 9% of the Lyttelton Port

But public pressure has succeeded in keeping Christchurch away from the disastrous errors of so many other local bod-

- remains in local body ownership, although

there' plenty of other things to be critical of about it. The

Council rejected the submission of the Business Roundtable to its draft Annual Plan - one which a Press editorial pithily summarised as wanting to reduce the function of local bodies to "fixing holes in the road". And public dissatisfaction Jed to a major aboutface on proposals to charge for water, which were put in the too hard basket until after the local body elections.

This position has now been taken by is believed to have $2.5 billion invested in NZ alone is valued at $[ billion. It is a substantial Nathan, and St Lukes higher overall holding, AMP'sl billion investment is

Inc, based in Los It has supplanted the AMP Society.

with Telecom being its main holding, Its stake in Telecom owns 5% or more of the shares) in Brierleys, Lion and Fletcher Challenge. But while Capital has a

R I N RKET

Enl'vir(mmi£il1t concerns

I'ariffs and Trade (GATT)/World the The Government

not restrict our domestic enGATT Uruguay and Environment", Ministry of Foreign AfNovember, p. 40). But, in of amounts to a gross intervention in domestic af-

One can a sense of this reversing the

.. trade should have as little an impact on the envi ..

militates against bans or prohibinanverou« imports. The of Agriculture and

has said that. the notion

which says that this issue has 6/

interests. Protection

in fact be very biased to vested Andre Dooms of the h",.,,,,,,·o,,,

a manufacturers' trade

has indicated that international standard-set

ring for food the GATT~mandated

Codex agency on

"almost all the data used is ftr,''''''''c'cI

tional Monitor,

Yet a GATT paper distributed loNGOs some time ago by MFAT gave the quite that Codex was supplied with information by mr'"~,,.'n

(5) The risk assessment in GA TT/WTO is purporting to be a SOIt of science when in fact it must always remain spurious exercise to convey the ment can be a science. Yet MAF split into two departments) has been closely involved in

ing this the current approach

very in the field of'bio-

technology which is

the risk assessment cou ld the green light to some

~u,,,,.<4F."'r; innovations, A wider concern is that "envi-

ronmental in seems to be to

adopt this commercial/trade-driven

"Free Trade

This booklet

examination of the

Round.

Affairs and Trade

from the GATT all possible worlds. MF AT remains

leaders. news the West on international economic matters, there is

an occasional in the even an effort to show

some balance the industrialised

countries tures at may still be.

effects of the power struchowever distorted and incoherent the

On page the as to whether

countries like NZ will benefit at the expense of the less developed countries'?" While there no to look at this

question in any the impression is certainly

that NZ and other developed countries will not benefit this way. The report's assumptions arc that the distortions perpetrated by transnational corporations (TNCs) make for the most efficient allocation of the world's resources on the level playing-field of economic myth.

In particular, it is asserted that: "Developing countries will be the prime beneficiaries over the next decade" from the liberalisation of the international trade in textiles and clothing (p. 4) .. More generally, it is explicitly stated that: "Most developing countries seem likely to be major beneficiaries from breakthroughs in the Round such as the phased removal of quantitative restrictions on their textile and clothing exports to industrialised countries" (p. l5)

So far as the overall assertion is concerned that developing countries will probably be major beneficiaries, this assertion amounts to pure propaganda. Official estimates released at the time of the GATT settlement in December, 1994, clearly showed that the South (Third World) will receive only a rise in net income (over a ten year period) of$US16 billion whereas the European Community will gain by $US61 billion, the United States (US) by $36 billion, Japan by $US27 billion, and the former Soviet bloc by $US37 billion. These so-called estimates, of course, are rather "guesstimates" since economists are notoriously unreliable as crystal-hall gazers. What is glaringly clear. however, is that only

very bizarre collection of would allow one to

estimate substantial for poor countries. The pattern of

among the industrialised countries could tum out to different

Losers in the South will include: some of the world' countries. Indeed, statistics produced by the Paris-based for Economic Co-operation and (OEel)) indicate that Africa as a whole will lose $2.6 billion a year in trade benefits from 2002 and Indonesia $1.9 billion. Thus, it is estimated that the overwhelming benefits of the GATT deal will accrue to the developed world. GATT is not so much about increasing economic growth as redistributing incomes - from the poor to the rich, continuing and deepening the process of the last decade or so. According to some estimates, the industrialised countries, which comprise only 20% of the GATT membership, will appropriate 70% of the additional income that will be generated by the implementation of the Round.

Agreement on Textiles and Clothing

With regard to the alleged benefits for countries of the textile and clothing a number of Third World countries do have the potential to from the to be made but there are some very real limitations involved for others.

To quote one countries wou ld

"It is difficult to which

most from liberal trade.

tries that can marry technology with

low labour costs and fashion sophistication (such as Malaysia, Thailand and, possibly, South will benefit So will countries with advantages

of market proximity (Central America for the United

"But there will inevitably be losers, as the Multi-Fibre Arrangement (MFA) quotas guaranteeing protected market access and foreign exchange are withdrawn. One such loser is likely to be the Caribbean industry. which has grown rapidly thanks almost entirely to its preferential access to the United States market, but which would find difficulty competing against more technologically advanced suppliers elsewhere. According to some estimates, the withdrawal of MFA preferences would put 25,000 jobs at risk and cost up to $L7bn. in foreign exchange. Countries such as Sri Lanka and Nepal would be similarly ill-equipped to compete with their Asian neighbours in the European Community's market" (from "Fixing the Rules: NorthSouth issues in international trade and the GA TT Uruguay Round" by Kevin Watkins, 1992, p. 52, 53).

Special provisions that would actually be put into effective practice are needed

to safeguard the interests of the more vulnerable nations but in fact protective measures are far more readily available to the big Western importing countries.

The US has made plain it will apply (or bend) the rules of the Agreement on Textiles and Clothing as it suits. Mean-

a small country I ike NZ has left itself open

to the machinations of market forces.

Since the Agreement on Textiles and Clothing in the Final Act is essentially the same as was presented in the Dunkel draft in December 1991, there is only minimal provision for the interests of potential losers. For instance, Article 6, clause 6 (a) ofthe new Agreement says that: "Least-developed country Members shall be accorded treatment significantly more favourable than that provided to the other groups of Members referred to in this paragraph, preferably in all its elements but at least, on overall terms". This clause refers specifically to the application of protective measures, namely what is called a "transitional safeguard". But given GATT's record and the way the system really operates, this sort of provision simply amounts to the usual pious empty rhetoric which routinely goes into such documents.

The Final Act would integrate textiles and clothing trade into the GATT over a ten-year period although few developing countries approve of the manner in which this will occur.

"During the transition period well-established exporters, such as Hong Kong and South Korea, will get a better deal than countries still building up their industries and seeking export outlets. But even these coun-

tries remain unhappy about the heavily end-loaded by the GATT secretariat at the behest of the industrial countries" (Watkins, p.l

Four ofliberalisation In the

for 16%) of the total volume of into the GATT The sec-

ond year another 17~'O and the third a

further 18% (on the first of the 37th month that this

1S in and on the first of the 85th month,

Under this arrangement about half of the MF./\.'s restrictions will be retained until the first day of the 121 st month that the the WIO is in effect .. up to 200S!

Food Security

"Trading Ahead" that concerns have been expressed that developing countries may be losers from the Round. Higher food it has been suggested, could lead to hardship, , . But higher world prices and improved market access for temperate and tropical farm products will reward countries which organise their economics to take advantage of the new opportunites (p. 16), Yet an OECDWorld Bank study has predicted price falls of 4% in cocoa and 6% in coffee!

This is the same old bankrupt stuff about comparative adthat has been trotted out now for so many years. It a continuation of tho disastrous "structural adjustment" programmes exacted the International Monetary Fund (lMF) and the World Bank over the last decade or so. A multitude of countries have been forced into export programmes supposedly intended to enable them to earn lots of for crops and other primary products market demand, Yet Africa's Gross National Prod-

an average of2.2(Y'l in the I by 1990

income on that continent down to its level

the time of in the i 960s. As Latin Ameri-

the reverse financial flow from their continent since Cortez", and refer to the 9803 PCI income in 1990 is at virtuearlier.

In net transfer of financial resources $1

billion from the South to the North took between 1984

and 1.990 "Global Economic Counter-Revolution" by

Walden Bello in pp.

1 L Bello was the

Power

The real beneficiaries ofthe IMF/Worid Bank programmes have been the rich countries with easy access to abundant

cheap resources with this financial Control

of inflation in the West been at the calcu-

lated expense in poor countries. A 1987 NZ Cabinet paper obtained under the Official Information Act reveal ed thai MFAT and other Government departfor Third World commodi-

proper

Various on

takeover by corporate interests e.g. targeted at infrastructure programmes to facilitateTlvt.-dominated export Local can starve while crops

Ahead" comments that had been per-

need for self-sufficiency in

down this perception apparently of Third World nations NZ has been a collaboraCIA TT pressure to open South Korea's market to etc. MFAT has appreciatively noted that Mexico has eliminated it') quantitative restraints,

including on all dairy products (p. 30).

oping countries to achieve "self-sufficiency in food" is horrendous in its implications and the NZ government should be roundly condemned for an obscene policy. If these words sound rather emotive the fact is that many millions of lives are at stake. In a world of growing population with

enormous environmental threats like climate

change, it is most that people everywhere and

ensure that they are as self-sufficient in food as possible.

NZ's contribution has been

with the US government success but also US

cost" "Lower cost" costs of US food

Eastern oil

between the US and the Eurobefore the final

ments", its main means for and EU nwnn,'YI

even more. US food on world

had been allowed

under th .. ~ Blair House accord of November 1992. As a consequence of the last m inute deal at the end of the EU million tons of wheat and

wherever it goes

This deal

and food

EU

While

Ahead" refers to the GATT·mandated 21 %

reduction in volume of subsidised it does not make clear all the '.h!J,"llWLULIl' on page 26.

on pages 23 and outlined

NZ will suffer from

Other Points to Note:

The Government says that attention to

trade in tropical products, its econom Ie

to developing countries. For tropical which are principally classified as Zealand has made a tariff cut of 55%

of all this close examination to de"

the truth of benefits.

and Martin Khor Kok World Network as form of "recolonisation".

countries are evidently welcomed on the weak!

More pressure

and Manufactured Goods

result of the the of develc{"m'{1"'f imports secured by bound tariffss will increase 12% to 65%. Also the direction of economic

these countries is towards market openness

Pressure from the countries and their

to determine one's develof

all sewn-

Further

of

established

of Western dominatedtrue for those probing behind

relations facade. A the UnitedNation's

(UN's) Economic Commission for Africa has found that the GATT/WTO's elimination of Africa's preferential trade treatment along with the markets will make it more difficult for the continent's countries to export goods,

the continent a total of US$2.6 billion a year.

and income

To answer the posed at the start Ahead" - yes, developed countries like NZ will indeed benefit at the ex pense of the less developed countries. The Government claims that the CIA TT outcome will strengthen the international trading system (pp. 3 & Instead, the outcome will ultimately destabilise it

I

In July 1995, Philip Burdon as the Minister of Commerce distributed a form letter telling interested parties that the proposed Intellectual Property Law Reform Bill would not be introduced into the House in 1995. According to Mr. Burdon:

"The proposed Bill would have completed the reform process begun last year with the Uruguay Round implementation legislation, in particular updating New Zealand's industrial property rights and Plant Variety Rights legislation". However, Maori opposition to various "reforms" was instrumental in the Bill postponed. This is very definitely something which many Pakeha might well appreciate.

What arc called "Trade- Related Aspects of Inte llectual Property Rights" or TRIPS constitute focal elements of the proposed Bill. To use the government's definition, intellectual

property rights comprise: of the

sess or dispose of products created human

Round on TRIPS establishes minimum

standards for such trademarks

and copyright". The Bill would various

the TR IPS of the new World Trade

the former GenSince

NZ's intellectual property law to their U,"II"U."U~, In line with previous alterations.

Patentability of Bioteehnologlcal Inventions

Burdon signalled that the Ministry of Commerce (MoC) had not been able to complete in time its consultations with Maori,

the complexity of the issues. He went on to say that this decision means that further progress may be able to be made on the Maori claim before the Waitangi Tribunal relating to indigenous plants and animals (WAI before the introduction of the Bill. The delay would also enable MoC to take further consultation with interested on

other issues on which there are issues include the "'''?'''''''"'' tions,

views. These other of biotechnological inven

Earlier in the year.Mot: had distributed a paper called "Patentability Inventions Issues for Discus-

sion"

Government has nostnon

Results in

will mean more harm to those

,"Y'''H~'H ofthis harm. At one the Government actu-

does acknowledge that trade liberalisation will create losers as well as winners but is most careful not to identify

the Third World in as out (p. I Trade

liberalisation will be far more than the Govern-

ment is ever to

III III

iii!

I

9

Small the Intellectual Property Law Reform Bill, the issues raised in Moe s discussion paper are still highly relevant. The Government could yet implement certain proposed changes to existing legislation which Moe is strongly recommending .. either within the Bill or even as statutory amendments. Most of the following article is based on a submission in response to MoC's discussion paper.

There were two central questions to be addressed in the discussion paper by people to make submissions (besides and overlapping with the issues that especially con-

cern Maori). These were:

what exclusions shou Id there Act?

from the Patents

shou ld the Commissioner of Patents continue to have the

10 make on the

Intrednction and Overview

Many of the issues involved here relate to fundamental unabout life and life forms - what

should be

and of en orthere is be-

The issues mous scope and

offered the vision of a locked for humankind the of biotechnology. On the there is instead the nightmare vision of a "Brave New World" pervaded with all the abuse of biotech no log ical innovation" control of other human beings: grotesque manipulation oflife forms in and ruthless

exploitation of animal creation of more horrific weap-

ons; and the of enormous destruction,

including uncontrollable new diseases and that could

wipe out humankind artozetner

Indigenous have

currently cultures and resources.

is col-

samples from and unique com-

munities, to be stored in gene banks in the North. Products and processes extracted from these could have great commercial value. The material itself may be patentable without further research" (from "The Real Pushers and Pirates: GATT and Pharmaceuticals", a GATT Watchdog leaflet).

As the MoC paper says in a very understated fashion: "The potential applications of biotechnology are very wide and new applications of biotechnological inventions are constantly being developed". This statement indicates we face both the challenge of bewildering ramifications and the rapid pace of change from the impact of technology. Surely the rational approach in such a situation is to be try and be as cautious as possible and to carefully control the rate of change, as well as to monitor the changes that are happening?

This means taking seriously the precautionary principle that New Zealand adopted as part of Agenda 21 at the Earth Summit, Rio de Janeiro, in 1992. History has repeatedly demonstrated that technological optimism is a mindless premise of human behaviour. There are technological innovations that we should suppress because of the danger to humans and the environment, e.g. the commercial use of nuclear power is the most obvious for many of us. A major reason is that the spread of nuclear power is inevitably linked with the spread of nuclear weapons.

The principle, as articulated in the Rio Decla-

ration on Environment and Development, states:

"In order to protect the environment, the precautionary approach shall be widely by States accord-

to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation."

This principle can be broadened to refer to social implications too. But it was clear from the paper that not only was our freedom as human beings under siege from the technological imperative but that this was now closely linked with the imperative of "maintaining international competitiveness" Capitalist development hardly fits with the application of the precautionary principle. We are being driven into an aimless future blinded by the short-term goals of economic growth, materialism, consumerism, etc. Major issues of the application and effects of biotechnology on our society are already being construed within a limiting ideological framework without New Zealanders being given the time and information to discuss and debate such issues in the depth and detail required.

into Biotech and Butchering

Liberalisation in the GATTiWTO programme

driven by the TNC agenda to exploit profit- po-

tential

This has been at the

other this

programme

"* Drive the mass of small fanners out >I< Concentrate control of markets and inputs still further in the hands of the multinationals; and

" Remove the setting of safety limits for pesticides from national governments and place them in the hands of an unelected body"

("The Politics of Industrial Agriculture: A Report by The Ecologist" Tracey Clunies-Ross and Nicholas Hildyard, Earthscan, 1992, p. 1(6).

Biotechnology or genetic engineering is the growth area where profits appear most rosy and TNCs are moving to develop this in a big way. Since 1970, 1,000 small seed and plant breeding companies have been acquired by 1NCs ("The Big Picture" video .. see footnote of article on agriculture for details). During the last decade, corporate takeover has been particularly dramatic. Today, less than 20 giant corporations dominate the international seed market. Control of seed inputs and corresponding creation of genetically adapted varieties are critical for total TNe capture of future agricultural development According to the Food and Agriculture Organisation (FAO), 75% of the genetic diversity in agricultural crops has been lost this century. Yet biodiversity will be essential for human survival.

One major line of research and development is adapting crops to accommodate a company's pesticides and so allow even more liberal doses of chemicals. Another avenue is to create plants that have had genetic material transferred to them, and which consequently enables them to resist the attacks of certain pests or diseases. Yet the environmental problems with this kind of intervention may be portentous.

"Just as the widespread use of chemical pesticides has led to over 500 species of insects developing resistance to one Of more chemical pesticides, so the use of transgenic biopesticides is likely to exert: strong selection pressure for pests with a resistance to the natural biotoxins utilised" ("The Politics of Industrial Agriculture" p. 1 Research has already indicated that pests are capable of developing rapid resistance to genetically-engineered insecticidal crops. Cultivation of such crops could generate large-scale problems. Interfering with the natural processes of evolution and ecology in this way might even prove disastrous.

Exclusions from Patentability

This writer would exclude human beings, animals and plants from patentability in New Zealand. Biotechnology, with its far-reaching potential, needs to be much better controlled for the future. Even in agriculture where New Zealand is eagerly looking for greater benefits there is a likely drastic downside as we have just noted.

Time and time again human have rushed to develop some technological innovation with ultimately severe ceo· logical consequences. threatens to be the most

of all in

era with all sorts of negative

senous for democracy, with-

out proper consideration and without the forms

deal with the issues and

Since so much of what is at issue in connection with bioinvolves deep moral/social matters the Government ought to bring these matters out into the public arena

much as possible. One has only to look over minutes

of the Security Consultative Committees to see

the of the sort of decision-making that is now

taking place. democracy is already in demise as

rule by corporate technocrats takes over. While these Committees function as an important safeguard, there should be far greater provision for input, review and monitoring by non-government organisations (NGOs) and interested individuals with regard to the new technology and its implications. An improved flow of information is vital for this to be effective.

An ever greater amount of what is being decided relates to the increasing influence of trade and foreign investment and consequently a lot is being hidden from the public under the cover of commercial sensitivity or obscured in a technocratic

There a real that more and more decisions in

these areas will be left to the so-called "experts" to decide when rather the role of expert opinion should he to help inform decisions that need to be democratically made in an open process. Indeed, the trends to trade-driven are very clear to those who want to of a very rapid decline.

that there should be no excluthat the exclusion relating to should be repealed)" Reform Bill Maori Consulta-

The has simi-

law is not an effective way

undesirable" inventions extent TNC programme on of genetically modi-

here is to see supposedly to this pressure so much that looking to go beyond the TRIPS Agreement

of th is specifically says that:

"Members may exclude from inventions, the within their territory of the commercial of which is necessary to protect ordre

to human, ani-

life or health or to avoid serious

environment, .

in 1 "reform"

tried to make the

and had to back off at

MoC's TNC bias was

ents continuing to have cal questions (p. 4).

of the Commissioner of Pat-

for ethi-

This proposal for removal of the clause r"rlrp',enh a dereliction of governmental duty. Why should the law on biotechnological innovations be looser than that for criminal behaviour, especially when the consequences could be

far worse in certain specific instances all the eventual

environmental and human costs? if it

propriate for the Commissioner of Patents to be sponsibility for determining ethical then who should have this responsibility? It seems the answer for the government is the moral vacuum of the market.

removing the morality the Government would in

fact remove any potential proper control over biotechnology, This is evident enough too from in the Hazardous Substances and New

Bill for which the Government stales that assessment

of a new

melle, p.4).

Furthermore, the new Environmental

Authority (ERMA) will the

proval of low risk modifications"

ofthe current HSNO Bill empowers the ERMA

"to delegate its powers.

become such a special meetings? way to remove it, a rush which has held up.

Better Biotecf Controls'?

of the clause would mean the existence of a

tial obstacle for the the Cornmis

sinner ofPatents were to respond to any concern about

innovations. It is thus of the TNC

rid of it. All the more reason then for it to

This writer would strongly argue for an alternative view to that of the Ministry - the morality clause should stay and indeed be strengthened. The question is how do we try and ensure a better system of control over biotechnology for our

instead of leaving it all largely in the hands of foreign-based TNCs? Aside from the MoC's obvious bias, the Ministry docs have at least a sort of point in that it is perhaps inappropriate for one person to carry the heavy burden of responsibility in these matters. Therefore a new Council on Biotechnological Patent Applications should be instituted. This new Council would routinely review biotechnological applications under the Patents Act

The Commissioner of Patents would be a member of this Council which would draw on various sectors of New Zealand society, including environmentalists, animal rights activists and people variously concerned with the social effects of biotechnology. Incidentally, the Ministry's mailing list was fill' from democratic with a heavy preponderance of representatives from government, business, and the legal, academic, scientific and related professions. Biotechnology has relevance for all members of society.

A new along the Jines

with the new ERMA in patent applications. There would be a concerted continuing effort 10 make this system as democratic as with

public use of the mass media

for public input to the Council, Unless such

body set up the ERMA is to carry

onerous burden in GMOs along with

all the other duties it has to carry out.

Apparent pressure on the Government to remove the moral-

clause from the Patents Act tallies with TNC and GA TT pressure on the government in 1992 to remove Section 51 from the Act. This particular provision had given the Commissioner of Patents the freedom to readily allow local com-

drugs by foreign firms

no. 77, Dcc. 1994, pp. 2

Some other Considerattons and Recommendattons

(l) The Ministry considers "that the nature of the specific reforms to be included in the Intellectual Reform Bill is such that Maori interests will not be affected" ("Maori

Consultation , p. This view is quite

and Moe may well revise its position in light of the further consultations that it has been In the "that there are some inherent lirntations

10 the Patents Act in addressing Maori concerns" 7) while

it to further weaken this Act. at the same

it to fail to indicate any meaningful alterna-

tives. Retention of the clause has some potentia! to

address certain of the

if this clause were be

above.

to the international Convention on

retention of the clause again very

relevant. The Department of Conservation is developing a national policy in terms of an international agreement wh ich tries to capture the benefits of genetic resources and yet also conserve these same resources. More time is needed for adequate examination and consultation.

(3) On page 8 of the Ministry paper, it is noted that: "It is not possible to prevent or regulate the use and development of biotechnological inventions solely through the Patents Act". This should certainly be acknowledged as true. Indeed, a range of related legislation and controls along with the new Council proposal ought to be put in place. This should include better terms of reference for the ERMA.

Plant

- will the farmers hold their ground?

Part of the TRIPS package of changes that TNCs have pushed through the GATT Uruguay Round and other negotiating forums has strengthened their private property power in the field of plant variety (PVRs). An important forum has been the Union for the Protection of Plant Varieties (UPOV). Like the GATT/WTO, this organisation is based in Geneva and is closely linked to the international trade authority in its work on trade-related aspects of PVRs. A new version of the UPOV Convention was adopted in 1991.

The UPOV is financed the agrochemical/biotech TNCs

which have been up the traditional seed

Environmental Issues"

ed. Edward Goldsmith and Child & t\s~

1 p. ]

One of the issues involved concerns the so-called

"farmer's privilege" no. 74, December

pp. 11-1 An objective of the Intellectual Property La'N Reform Bill has been to remove this right. To quote a letter on TRIPS from Moe regarding the farmer's privilege:

"This refers to the right of farmers to save harvested seed of a protected variety and to resow it to produce another crop. This can be done without paying a roy-

to the breeder or without seeking permission from the holder ofthe PV R. This is currently provided for in the Plant Variety Rights Act but it is proposed to remove this in the amendments proposed in respect of the Act", and ratify the 1991 revision of the UPOV

Convention

2

Oddly enough, NZ farmers have in this proposal the situation might be changing. The writer has pointed out that the Government wants to go even further than what required by an international

. in this the conditions of the UPOV Con-

it does explicbreeder' rights to

accommodate the right of farmers to use the product of their

harvest for "propagating (article ! 5, clause

Apparently, the Government is intent on boosting corporate biotechnology over family farmers.

Let's hope that the farmers really dig their toes in defence of their right to freely sow their seeds. Further input to MoC

A

ricultur

Free Market Feeding Frenzy

In the trade review article, Third (Majority) World agriculture has been identified as a prime sector for free trade attack, a continuing attack in which NZ is deeply implicated. It is ironic that a number of "developing" countries have even indicated that recent economic "reform" programmes have far outstripped measures proposed by General Agreement on Tariffs and Trade (GATT)/World Trade Organisation (WTO) and have warned of consequent problems in implementing the trade agreement. The "reforms" have resulted in cutbacks or total withdrawal of governmental service to dairying, which has made it more difficult for them to comply with WTO requirements on health issues in general. So at the same time as their dairying industries become more vulnerable to erosion from "developed" country exports, they are less able to properly fulfil public safety conditions. These "reform" programmes, of course, have been imposed by Western interests in the form of demands by the International Monetary Fund (IMF) and the World

backed by plenty of bilateral arm-twisting.

The ultimate irony here has been the reported concern by the group of the International Federation of Agricultural Producers which has recommended that the attention of the World Bank, IMr, World Health Organisation and other intergovernmental agencies be drawn to the predicament of these countries (Dairy Exporter, Oct. 1994). This is like asking a Mafia enforcer to a friendly eye on his victims!

Free market agriculture means the few get fat at the expense of the many .. Capitalist development and integration of markets has delivered huge body-blows to small scale food farming. The devastating disruption in Africa to traditional systems is today reaping a grim harvest in hunger and malnutrition and so, ironically again, marginalising peoples of this continent on an unprecedented scale. Worldwide, market forces have pushed country after country into a situation where people are no longer able to properly feed themselves and have instead become dependent on imported grain and other food. Vulnerability to volatile markets is a chilling reality.

The China Syndrome

Market meltdown for local food production in China is rap-

as a world constituting a dramatic

on this issue and other matters can offset TNC

ing and the Government's TRiPS

programme to some extent

Actionfor Fair Trade PO Box 33-176 Otautahi/Christchurch

unde

ttack

Dennis Small

indicator of the insanity of the industrialised export model of development - the model to which New Zealand has dedicated itself The big conundrum is ultimately this: how can a finite planet accommodate endless urban industrialism? Perhaps we can find other planets willing to take our exports?! An item on One Network News (TVI, 6pm, 25/9/ 95) gave an overview of China's growing rice crisis. This crisis stems from the adoption of West em-style free market "reforms" which have meant declining rice production for local consumption as:

>I<

land is taken for "development" in the form of factories, urban growth, etc;

the younger generation do not want to work so hard or stay on the farm;

mass migration is triggered from countryside to the cities;

environmental damage is increasing in a land where such damage is already considerable;

export cash crops are promoted and cultivated over bask food crops like rice which constitute the staple fare for the country's people,

*

*

*

Whereas market reforms were earlier praised for substantially increasing food production, the pattern that is taking shape has become more evident This pattern is a very familiar one throughout the Third World. In China, the Western urban/industrial market model is now regenerating the classic Marxist contradictions - the "Three Great Differences" - against which chairman Mao continually fulminated: between town and country; industry and agriculture; and manual and mental labour. Chinese communist ideology has long held the belief that such differences should be overcome. In the end, these differences look likely to overcome the communist ruling elite While in one sense the expansion of urban industrialism is eroding town-country and industry-agriculture differences, in other respects this expansion is acutely heightening them.

Ironies abound. In May 1995, China warned that superpower politics and the increasing gap between rich and poor nations threaten world peace (Press, 9/5/95). An editorial in the People's Daily, organ of China's Communist Party, proclaimed that: "The history of World War 2 tells us world peace is in the end decided by balanced economic development" It went on to say that while there had been great changes over the last 50 years, the development of the world economy remained with the gulfbe-

and the poor South

China's secret service was that the country

the older of

According to a German account of severe crises would be inevitable had gone, "There will be a revolt of any social ad-

unemployed, and more people were due to lose as a result of new laws allowing firms to go bankrupt. As a consequence of the trends in process. the num ber of urban migrants would reach dangerous levels, Social differences would become explosive,

Besides, and linked with, the threat of mass violence was the problem of growing corruption. Indeed, as market

economy reforms progressed, state power was

threatened by this problem. But although conflict and corruption were apparently predicted as inevitable, the report stili endorsed the economic reform project, and, judging by the newspaper story, seemed to suggest that a solution lay in a more system. Groups in the provinces were call-

for reduction in the centralist power of Beijing and more communist party members were coming to the view that the up its monopoly on power in the next few

years. the report also strongly warned

nationalists and "far-left" groups joining forces under the

banner the

China merit dilemmas.

the international

rocketing

multiply and reaction-

could both internally and

of looming chaos and dis integrabeen screened by the enthusiastic Western promoChina as the boom investment market of the East in economic growth rates. Western

"NT' have eagerly seen China

with labour and overflowing with

Last year, China was the biggest borrower from the World Bank

ambivalent in some quarters toof market forces is leading to the for destabilisation on a massive scale and scape-

are Besides the spectre of fanatical

Islamic hordes the "Yellow Peril" is being reborn. A Daily '1eJ'e{7JC(1r;oh article reprinted in The Press (5/7/95) pointed to

potennat monster in our midst". Paradoxically, elements of the Western establishment are coming to see "the rise of China", the once "sleeping giant" which capitalism stirred out of its isolated slumber, as an economy which "is grow-

at such a pace as to make unsustainable demands on the world's resources". An Economist article had earlier called for military containment (Press, 1 J /5/95). So the capitalist need for enemies is also beginning to be projected on China as the international market, driven by the

transnational and their support institu-

lions of IMF/World Bank and along with

their bound-

of

are coming to be by an at least nomi-

which has embraced the internarationalised in terms of narrow short-

term by TNC market

indeed highly irrational when viewed from a broader

Among other things, China's growth will make huge demands on the world's granaries which are again showing signs of strain. More and more China will look to imports to feed its population, Declining self-sufficiency means less for people elsewhere who are unable to pay for the food that China can afford. Tighter supplies and unstable and higher world prices for grain could result in famine and hunger on an unprecedented scale with all the international disruption that this might entail if the starving or those under potential threat do not lie down quietly, Lester Brown of the Washington-based Worldwatch institute, who was also interviewed on the recent television item, has indicated that if China turns to the global market on a large scale, its food scarcity will become that of the whole world. NZ. too, might find it has bit off more than it can chew.

Modem agriculture depends on the rampant exploitation of the planet's oil resources and China is showing a similar trend for energy growth and subsequent external dependence as it is for food. China has already clashed with the Philip-

over the oil-bearing Spratly Islands. The Daily Tele-

is greatly alarmed - its message is "They could devour the world". After all, oil reserves are again at stake and so the lifestyle of Daily Telegraph and Economist (and Press) ideologues .. The irony of capitalist growth and the long history Western imperialism yet obviously eludes this bastion of the conservative British press. Forthe Dailv

writer the real is only China's failure to

become 2l "modem state" and thus properly

civilised

"Conservative"

must fail to understand, or rather so many of them arc rethe ultimate contradiction between capitalism and the survival of civilisation. They must still try and hide its class war and resource war implications even when they scream out to any unfettered rational We have not quite reached the point where the system can go naked, Civilised values are not only useful for ideological dressing - these values still do have some real appeal among the people, although much of the elitist set is working hard to try and change this with their attack on the welfare state and generally humane values. Again. face the problem in that instead of acquiescence in ininequality they might eventually elicit a more agresponse. Since they are becoming more nakedly a

minority they confront the of keeping control.

J\IZ's own development, like other capitalist countries, has

",~,mr'"'' hugely on the exploitation of external resources - whether phosphate from Pacific islands or oil extracted hom Middle East External costs, both environmental and

human in have been suffered more

outside the for the

whcnua.

Of course, the contradiction is wider than simply capitalism versus As the East experience under communism has demonstrated, bad industrial planning can destroy the environment as efficiently. Indeed, within a specified such planning can be even more devastating because a closed cannot externalise its costs elsewhere as easily. Under a Stalinist regime the command economy can have horrendous impact.

More generally, however, the international spread of urban industrialism the threat ofa globally unsustainable and ultimately self-destructive system. The fact is today the salient form of the contradiction finds its clearest and greatest expression in the worldwide expansion of the corporate free market, as facilitated by the grand consortium of GATT/ WTO-IMF/World Bank-Tt+Cs-Organisation for Economic Cooperation and Development (OECD)/G7 (leading capitalist countries), etc. Centralisation of development direction is operating from the command core of a globalised system rather than from within an isolated closed system. This "development" is really gross "mis-development" because, as emphasised by Herman Daly and other ecological economists, the economic "system" is in reality only a subsystem within the planet's ecology, an obvious enough but regularly overlooked fact. Indeed, capitalism is so weirdly perverse as to deny this fact or at least its implications. Hence the official illusory doctrine that free trade is compatible with environmental protection.

Clarification of the NZ Connection

The contradiction between capitalism and sustainability completely eludes the NZ Ministry of and Fisheries (MAF) if an essay in its latest "Situation and Outlook for

New ·1995) is any indication.

The essay Ronnie Horesh is titled "The Business of Farm-

ing and the Mystery of Agricultural Support", pp. 88-92. It is basically an attack on the Common Agricultural Policy (CAP) ofthe Union (EU) as a romantic anachronism in the modern industrial age, Modem agriculture means industrial agriculture, Mr. Horesh is clear as to what this means:

"Nowadays, it is more accurate to speak of an agrifood industry, with most of the characteristics that industrialisation implies: vertical and horizontal integration; increasingly demand driven; large scale; increased product specification to meet manufacturing and retail needs; market concentration of processors and retailers: use of contracting; usc of a wide range of risk-reduction and risk shifting tools; global in scope with multinational companies playing a big role" CP, 88).

Technological change coupled with profit-seeking has drastically altered the nature of farming and the trends project over the horizon. Horesh refers to the global trend

to a decrease in farm numbers with an associated in-

crease in farm

The

are clear and manifest the

forNZ

corporate takeover we have described in previous Watch-

e.g. no. April 1994. It is indeed enlightening (if

frightening!) that we can get our own confirmed out of MAF' s own mouth as it were. NZ farmers should now have no illusions about how MAF sees their future: other than becoming one of the relatively few large successful farmers, it is either ultimate displacement from the absorption by corporate enterprise: or reduction to the role of an exploited worker. MAF itself'will become more clearly an agent of the TNC programme.

A MAF analyst, and the overseas specialists that he cites, see then much the same trends as those identified by prom inent "radical" analysts like Susan George and the staff of Food First (Institute for Food and Development Policy, San Francisco). Where they so obviously differ is the interpretation of what these trends mean and what the response should be. For the latter what these trends mean is the disempowerment of "ordinary" people in relation to a most basic human right - access to sufficient good food for the maintenance of both life and proper health. The modern industrial system outlined in the MAl" article means food for the few at the expense of the many; the loss of democratic control over the resources for food production and distribution; and eviction and exploitation of peasant and small farmers everywhere with all the deleterious social and environmental effects. Export agriculture causes and exacerbates hunger and socio-economic inequalities. Chinese experience is encapsulating all this at present.

industrialised agriculture is so obviously an unsustainable system, grounded in the extravagant use of fossil that one may well wonder how any rational person can take it seriously on a long-term basis. The frightening thing is that MA F analysts like Mr Horesh apparently do. They are

blinded by the "realities today" as see them.

J-Ioresh is critical of the and even criminal

malfeasance of CAP finances. But his vision so technocratic it is surreal. He contends that traditional rural values are irrelevant and that in fact, iron ically, it is city bureaucrats like those managing the CAP who account for the "mystery of agricultural support".

Moreover, there is no mystery about why such analysts nore the market distortions perpetrated by TNCs, Government has become so subservient to the corporate agenda that it is now even more open about the "big role" played by these market forces, often kept so invisible. The original radical policy of agricultural "reform" pushed by the lJS in the GATT Uruguay Round was orchestrated by agribusiness. "Written and strongly backed by powerful cereals exporting corporations - such as Cargill . this demand represented the multilateral extension of the deregulatory philosophy of the ]985 Farm Act" (CATT on Food Security and the Uruguay Round', no. 4 in GATT November 1990, p. 6). While only a much watered down version of liberalisation actually enshrined in the GATT Final Agreement, the corporate programme to undermine

and hunger goes on ("Captured by the

by Brewster Knecn in the New r rntr nr n reveals

ricultural commodity trader Archer other

any

onlv amount to a weak market manipulation. fVI/\.F, of course, is not interested

the environmental

caused by TNC power but in the NZ Commerce Commission

price fixing of livestock

Island involved in the meat

(Press,21 This is small-time stuff

global machinations of

Let us contrast Mr. Horesh's ture with that articulated in

and Nicholas to the agricultural revolution in the Northern industrialised countries since the Second World War. have

increased

this revolution:

"has also been

for.

* Extensive rural and Joss farmers from

the land;

chemicals and An increase in the routine 'hire! World

For The

for disaster.

Thankfully, at the same time

movement as much as

is to

N fthe

out the video

on organic ag-

riculture. This video can obtainedfrom The Picture

PO Box 9526, Te Wellington.

An international organic conference was held at Lincoln University in December 1994. This was the l Oth conference of the International Federation of Organic Agriculture Movements (IFOAM). Conference proceedings.

he Invasi

n

Watchdog 79 detailed the woeful international record of Waste Management Inc, the world's biggest garbage transnational and quite possibly the most convicted company in the US (no mean feat, given the fierce competition). We can now fill in some of the detail of its growing presence in this country.

The best study to date of Waste Management NZ appeared in Metro ("An offer you can't refuse?"; April 1992; Max Chapple). This was all about the battle of Rodney residents to try and stop the company from building the country's big-

landfill at Dairy Flat This is no mere rubbish dump - completed, it was to be a kilometre long and 60 metres high. The residents' case was most succinctly presented by John Raeburn:

"It's both the fact of the assault on the landscape, and

all the ecological of that, and the very

concept of having a pile of rubbish on

one's doorstep or to pass by that every day.

Plus the fact that it's being organised by one of the biggest companies which seems to have a track record overseas that's less than marvellous. It's the combina-

tion of those things that have people very upset"

Watchdog 79 reported Christchurch City councillor Garry 1\1100re (Labour) as saying "I believe that we are being subjected to the threat of litigation to get a commercial advan-

WMNZ threatened court action against Christchurch's existing landfill but offered to drop it if the Council agreed to a joint venture). Threatening local bodies is nothing new for it.

"Last year (ie 1991) WMNZ tried to silence an elected representative when it sent letters to Auckland City councillor Dr Bruce Hucker ... · We must suggest to you that you desist from any further public pursuit of these unsubstantiated issues in view of the potential damage to our company's good mane and reputation which might result.i.Our company feels strongly enough about the position to take formal if there is any future occurrence of this nature' Hucker views this as serious. 'in it is an threat to an elected person who was comments in the public interest"

ph (03) 3253819.

onfree trade and general c orp oratisation. Send to: Box 1905, Otautahi/ Christchurch - $15. or $10 ifyou can 't afford that. GATT Watchdog also has a range of leaflets available)

heeli

III

Ins

(Metro). But in the Christchurch case, Cr Moore said:

"Anyone who threatens a city council with that should be told to go to hell" (Christchurch Star, 22/3/95).

Mind you, NZ councillors have

off lightly.

"On October 7, i 988 the Times-Picayune of New Orleans reported that two representatives of a WMI subsidiary told two city employees they would 'wear cement boots' and meet their maker' if they kept investigating alleged overcharging of the city by the company" (Metro).

In New Zealand, Waste Management has pursued its global strategy - to win local collection contracts: own or control landfills; and convert customers to mobile garbage bins (MGBs), the whee lie bins which are feature of Auckland streets and more and more New Zealand cities and towns. In

1992, the Auckland Council engaged waste specialist

Richard of the likely impact He COI1-

eluded:

"MGB waste collections result in a significant increase in the volume and of waste placed for collection and disposal. In Auckland it is estimated that MGB collections will result in ... a 70% increase in the amount of waste collected by a bin collection regime over a bag system ... The cost of collecting and disposing of the increased waste quantity represents an estimated increase of.. $46.56 per household per annum"

"In the past five years the private waste management industry in Auckland and nationwide has seen increasing dominance by multinational companies who have actively promoted MOB waste collections. At the same time these businesses are actively pursuing ownership of landfill sites ... the business interests of private sector in this field are directly related to the volumes of waste handled and, particularly if private disposal sites are disposed of Through active involvement in all aspects of waste handling and sector interests achieve vertical diate business interests to contribute to effective waste

47

minimisation policies

Translation: the more muck the more money for the garbage TNCs.

Waste Management has been systematically establishing itself throughout the country, starting with Auckland, Waikato, Bay of Plenty, Poverty Bay Taranaki, Wellington and Canterbury. For the June J 995 half year, it made a $2.99 million profit. The core business remains the Dairy Flat landfill and rubbish collection contracts throughout the country. In recent years it has won council contracts ranging from North Shore to Wairnakariri and South Waikato. In September 1995 it won a ten year contract with the Whakatane District Council, undercutting the local contractor by more than $30,000.

WMI is definitely one TNC that belongs in an MGB.

c

CAFCA has a copy of this 991

Com-

mus-

Waste Management's criminal talks to leaders of communities afflicted ence, and refutes WMI's corporate citizen. It contains many local bodies. The company ject of a "journalistic tion.

It is availablefor hire for $ ! 0

_________ . ._~ .. ~_~." ._._._ ...... _ .. __ ..... __ . .J

New Zealand

The most interesting news recently was that Cornalco NZ is planning a $l50 million float on the stock market. The business media speculated that this would be more for political than commercial reasons· to give the much vilified company an ownership base of "ordinary" New Zealanders (more likely to be the major institutions that dominate all sharehold ings),

As had been predicted, the cost of Comalcos Tiwai Point smelter expansion has ballooned from $400 million to $480 million. The completion date for the project has been delayed also. But Comalco NZ is in the black again .. a 1994/ 95 net profit of$37 I million, compared with an $18 million loss in 1993/94. The skyrocketing of the world aluminium price (see earlier Watchdogs for details of how a cartel of major aluminium TNCs jacked up the price and the market to suit themselves) has paid dividends for Cornalco NZ. 1995 prices are comparable to six years earlier, when Comalco NZ made a bumper $118 million profit 60% ofT iwai Point's output goes to Japan; lesser amounts are exported to Korea, Taiwan, China, Thailand, Singapore, Indonesia and the Philippines.

Parent company Comalco announced a "massively increased" half year profit of $A96 million (up from $A 15 million in the previous first half); and its parent, CRA, posted a SA 145 million half year profit. CRA is consolidating down to its core mining and processing business, selling businesses such as Comalcos Commonwealth Aluminium subsidiary in the US and divesting its rolling, extrusion and distribution businesses in Australasia. Hence, Comalco N7 announced it was selling its joint venture Comalco-Carter Holt Harvey Aluminium to Capral Aluminium.

But all is not rosy in the NZ garden for Comalco. The Alli-

ance has pledged that. once in Comalcos latest power contract with ECNZ. Jeanette Fitzsimons said: "Cornalco has had a

deal. We did a very substantial and concluded that

it was not in New Zealand's interest"

Papua New Guinea

people of

is so keen to

of returning to full lip to K500

said it would take up to l S months. But the company is still being thwarted by the which has prevented Papua New Guinea from

control. But better elsewhere in Papua

New Guinea for eRA's Rio Tinto Zinc the

British mining detailed how New Ire-

land landowners baulked at

have the biggest gold Russia. After three years of

lease was in Mardi 1

tinue, with commercial ber 1997. The initial

Politics was the

PNe;

WATCHDOG

ernrnent, Prime Minister Sir Julius Chan stated: "We are tell

the world that business can be done successfully here.

We are telling the minerals sector that past problems

that past problems" Courier 20/3/95). Indeed Chan's government has gone to extraordinary lengths to accomodate the mining TNCs. Most recently it proposed a law criminalising any court challenge to BHP! This was aimed expressly at mainland PNG land owners who had, via a Melbourne law firm, filed a $A4 billion damages claim against BlIP for the enormous environmental damage caused by its Ok Tedi mine. The law, which was actually drafted by BHP, offered $AIIO million compensation. Not surprisingly, the long suffering land owners are holding out for something closer to $A4 billion. This has all the makings of another Bougainville and is the clearest possible example of contemporary colonialism .. demonstrating the master/servant relationship between TNCs and weak and compliant Third World governments.

"Hell in the Pacific" is a 1993 British documentary about RTZ's operations in Papua New Guinea, including

,-------_._--_._---------

and Lilli!'. It

The World

RTZ and eRA have announced a 1.1 billion merger, due to take effect from January 1996. If approved by shareholders of both companies, this will create the world's biggest mining company. RTZ is already the world's largest copper and gold producer; CRL\ is a leader in iron ore, aluminium and coal. They claimed the merger was caused by further "Iiberalisation" in Latin America. Asia and Eastern Europe. Their greed for greener fields to plunder has caused them to band together. In true imperial style, the two will divide the world between them - eRA (which is currently 49% owned by RTZ) will be responsible for the eastern hemisphere, from the Indian subcontinent to the eastern Pacific. They will join forces under a dual listing companies structure, similar to that operated by Unilever or Royal Dutch/ Shell. There will be a common board and distributions will be made on a proportional basis.

"(;OING UP. .• NEX( S1~ LADIES' Wf:AR " , MILUN£R~, LINGERIE, rcof~EAR.

ff.WCKS ... AU f?ARGAlN

~GOING WWN ,. ~orflS,

Press -

I

One of the more novel defences of investment came

recently from Gavin Walker, NZ chief executive of the

eign owned) Bankers Trust He said that New Zealanders are regaining control of our economic

losing it, as result of investment

foreign debt "we're buying back the farm" It all depends on your definition of "we". But there you are

- sovereignty is apparently all about an economic

colony. We could have sworn it meant the

Bill Birch is a past master in painting black has managed to put a glossy sheen on the deteriorating balance of payments deficit titled the main cause as those elusive repatriating profits out of the country. But. instead of pro-

claiming this to be the drain on the economy that it

Bill sees it as a vote of confidence TNCs who can make

money here.

In the home truths department, two recent stories stand out We've always been told by whole of insufferable "experts" and politicians that we must have invest-

merit,

we don't save enough money. It's all our own to a 1995 survey by Westpac. David manager investment said: "We have been to find that New Zealand is in a better than most of our English-speaking trading partners" The domestic savings rate is 8.2%, comwith an OEeD average of 10.8%.

The other home truth also came from an Australian bank. Bernie the governor ofthat country's Reserve Bank, said that "our" Reserve Bank could afford to operate a laissez because Australia efectively

'There' one reason why the central bank in New Zealand can afford to be so laissez faire about superit is because about 90% of the banking system

is owned banks, with about 60% of it owned

Australian-based banks. We are effectively super-

those banks that arc in New Zealand,

and in way, they're getting it on the cheap" (Press, I

A

ill

in June!

and Winston Peters

the Christchurch Town Hall to oppose the Overseas

move the were Jim Anderton

The following week, the same double act was the star ofa

went one better than us taped the ",r_'"",,,,,,.

Cassettes can be bought for $ Wellington, ph (04) 4758092.

Wellington Central

Association, 24 Glasgow Street, Kelburn,

L"

For the

delivering a speech up"u",",u. But at nearly 30 pages

the global context;

50