NUMBER 81

APRIl1996

CONTENTS

PAGE

FOREIGN INVESTMENT IN NEW ZEALAND: The Propaganda Assault

by Bill Rosenberg. .. 2

OPPOSITION TO FOREIGN INVESTMENT HAS NOTHING TO DO W1TH RACISM But Actively Opposing Immigration Is Another Matter Entirely

by Murray Horton. 9

FLOGGING THE FORESTS - AGAIN 10

WENITA PROJECT STOPPED 12

BUT EVERYBODY SAYS SORRY TO THE TlONGS 13

TOMMY KLEPTO HAS TO SURRENDER HUGE CHUNK OF LILYBANK 13

TELECOM

Profits; Competition?; Deunionising; Service"; Opposition 15

WAIHOPAI 18

BLACK BIRCH CLOSES 19

INTELLIGENCE AND SECURITY AGENCIES BILL

CAFCA's Submission J 9

Overseas Investment Commission by Bill Rosenberg.

OIC DECISIONS: July to November 1995 21

SHIPS OF SHAME ON A SEA OF TROUBLES 41

CAMPAIGN FOR PEOPLES SOVEREIGNTY

Southpower; Submission Against City Council's Forest Sale 44

COMALCO

The World; West Papua; Australia; New Zealand 45

Review

"The Paradise Conspiracy" reviewed by Wolfgang Rosenberg 47

Obituaries

Bill Rowling; Doug Lake; Maurice Cowan by Murray Horton 48

Deaths In The Family 52

A DAMMED DISASTER

The Golden Cross Mine by Mark Tugendhaft 53

"CLEARCUT"

Price Cut For Last Few Copies 54

ALTERNATIVE FORUM ON FREE TRADE PLANNED FOR JULY 55

TRADING A WA Y THE ENVIRONMENT? 55

GATT GONE

Watchdog's No Longer A Small World: We Recommend The Big Picture 56

"A BEGINNER'S GUIDE TO FOREIGN CONTROL"

Murray Horton's Speech Available 56

CHEQUES

Please Make Then! Out Correctly 56

Membership of is $15 Enquries to the above

The material in this issue may be reprinted provided the source is acknowledged. A copy would be ISSN 11

I H

N

In one way, the 1995 Overseas Investment Amendment Act was useful: it forced many people to take a public position on investment. Unfortunately for the Government and most business organisations, many of those positions were far more suspicious of foreign investment than they expected.

Orchestrated propaganda offensive

The reaction has been a well orchestrated propaganda offensive on "why foreign investment is good for you". U.S.owned Bankers Trust, transnational accountancy firm KPMG, Malaysian-owned Bancorp, the American Chamber of Commerce, the Asia 2000 Foundation, and multiple cabinet ministers were among the many who spoke publicly or magically commissioned studies coming to the same conclusions: foreign investment is good for you. Perhaps the most prominent among these however was Dr Don Brash. Governor ofthe Reserve Bank, He is also, ex-officio, a member of our old sparring-partners .. the Overseas Investment Commission.

Brash should be singled out for attention for a number of reasons. First, he is in a position of considerable influence and power. Second, as a public servant he is purportedly there to serve the public interest, whereas most of the other apologists had an obvious commercial or political bone to chew. Third, he is almost unique among public servants in that he is for unexplained reasons being allowed to become publicly involved in matters of considerable controversy from a partisan viewpoint, this being one of them. Another recent example was his statement to a Parliamentary select committee that he would resign if the objectives of the Reserve Bank were widened beyond controlling inflation. These public utterances go well beyond simply defending current government policy, which top public servants are expected to do in public. His statements take a very personal viewpoint, as is seen in both these examples. He is clearly personally committed to the policies he advocates and carries out To make the distinction between his duty as a public servant and his personal advocacy of policies clear, we need only ask what would happen if his persona! views happened to be different from the Government's. This makes him currently the most public of the ideologues who aided in the Rogernomics revolution and gained powerful public positions in the process. it is a symptom of the politicising of the public service which is extremely dangerous to democracy.

On 20 November 1995 he gave a speech to the Wellington Rotary Club called "Foreign Investment in New Zealand: does it threaten our prosperity or our sovereignty?" It was widely reported and widely distributed: CAFCA received at least five copies of it indirectly, and it was sent to a wide range of organisations, presumably by the Reserve Bank. It is typical of the various "defences" of foreign investment and so is doubly worth answering.

Brash says that five main issues have been of concern to the critics of foreign investment. After addressing those issues,

WATCHDOG 81 APRil 1996

he looks briefly at different forms of foreign investment in Aotearoa, and gives his answers to the questions: "Do we 'need' foreign investment?" and "Does foreign investment benefit us?' He looks at the countries of origin of the foreign investment in Aotearoa and looks at whether there is a case for restricting foreign investment So as not to keep you holding your breath for his conclusion, it is:

"All of which goes to explain why J - a fifth generation New Zealander who yields to nobody when it comes 10 my loyalty to New Zealand am entirely comfortable with the guidelines which successive Ministers of Finance have given me as a member of the Overseas Investment Commission. Almost all foreign investment will be of benefit to New Zealand and New Zealanders."

Seeing the wood for the trees:

the loss of sovereignty

Before beginning to answer him point by point it is important to step back and look at h is approach to the subject It is, in economists' jargon, essentially a "micro" viewpoint: he looks at the benefits and costs of individual companies and industries. Even when addressing the crucial point of "sovereignty" he looks only at whether individual companies will obey our laws or pay our taxes (and of course concludes they will). Here he almost emerges from this narrow tunnel, saying, albeit in a partisan way,

"Indeed, one could make a strong argument that the greatest threat to our ability to control our own destiny arises not from foreign investment but rather from poor economic policy which leads to rising public sector debt, slow growth in rea! inflation and all the rest."

Another of the warriors in the propaganda offensive, Gavin Walker, chief executive of Bankers Trust, got close to addressing the real issue in saying as part of his defence of foreign investment that

"the indirect effects of any

action to limit

foreign investment would go further. If we were to backtrack, there would be a loss of confidence in the country's direction, an increased country risk premium (meaning higher interest and a fall in the value of the New Zealand sharernarket. Investors - foreign and domestic- would conclude if New Zealand was foolish enough to take such a step, worse would inevitably follow ...

PAGE 2

A liberal on foreign investment has much to commend it, both for traditional reasons and for the

on today to

What he is, that

rnent is seen as a touchstone economic

cies. 'There would be flight if the policy were changed. Put another way, foreign investors invest subject to certain political conditions, This is seen most clearly in the "credit

given international credit-rating

Moodies, and Standard and Poors. Their ratings explicitly have a substantial political content: for example, the likelihood of a post-Mlvll' government changing current policies, It is also seen repeatedly in politics particularly in the Labour Party, Helen Clark's recent panic which led to the abandonment of coalition talks with the Alliance arose precisely from this pressure, Bolger simply made a statement in his "State of the Nation" address to the effect that it looked like Labour was going soft on its economic policies, Clark called off the talks. It was carefully explained in her "State of the Nation address" a few days later, She said: "International credit-rating agencies knew that the election of a Labour government in New Zealand would not affect the nation's credit one iota, They knew that Labour would be both socially and economically responsible," (Press, "Clark belittles Govt tax move", 19/02/96, p.2.)

Second, Walker is telling us that a "liberal policy of foreign investment" actually constrains government policy. There is only a very limited range of policies that will be tolerated by investors, Our experience is that none of those policies are friendly to others: to workers, beneficiaries, families, the old, the young or the sick, In other words, the choice of the broad sweep of government policies is made by those investors rather than by the electorate of Aotearoa, What is left (as we have experienced) is a hollow democracy in which the important choices have already been made. Rather than design the house, we are left choosing the wallpaper. National elections become more and more reminiscent of local body elections. Even those with the best will in the world find when they take office that they have not taken power.

So, what Brash leaves out is the systemic, macro, social effect of dependence on foreign investment. We can debate long and earnestly the merits of each individual investment. What is much more important is the effect of trying to develop a country in this way. To use a topical analogy, there is little use in being able to choose the best seedlings if it leads to us losing the forest.

Need for scrutiny IOf foreign investment that does occur

In arguing on a "micro" basis, Brash in fact strengthens the arguments of those opposed to open slather foreign investment What he argues in many places is that some companies increase exports, some provide expertise we could not otherwise acquire, some replace exports and save foreign exchange, and so on. He of course does not emphasise the "some" but that is the fact of the matter.

WA TCHDOG 81 APRil 1996

he and other advocates

tremist to argue that all

for us, He for that "it is not

to demonstrate that the which

on their investment fall well short of. the value added

words, the But this can petition, full conditions.

investment creates additional value

It is not at ali clear that the takeover of Telecom, Post Bank or the BNZ have led to any benefits we would not have

if they had remained in New Zealand hands. the con-

trary: ask Telecom's thousands of sacked or

competitors to break into its or

residential subscribers who have seen benefits What evidence is there that the sale of hundreds of thousands of hectares of farmland to foreigners has improved New Zealand What of the "investments" that have been little more than assetstripping such as Canterbury Roller Mills or London Pacific? Or technology transfer in reverse, such as Powcrrnark, Allflex. Carter Holts, or genetically valuable farm stock?

The point is that if investment is to be considered at the "micro" then the logic leads inevitably to the need

for scrutiny over which (if any) we allow in,

Bearing these points in mind, let's return to Brash's "five main concerns" he attributes to critics investment I'll quote his statements of these concerns in italics.

companies are {,u,-yf,'nll annuallyfrom their investments overseas are earning some $o,jOO million on their investments

in New Zealand, investment is somehow

serious and permanent balance ofpayments

This is setting up a straw man to be knocked down. I haven't heard that as a concern. What does concern people is the overall effect on the balance of payments of $6.5 billion profits going overseas. For what it is worth, Brash answers the above "concern" by explaining that foreign companies have been investing in New Zealand for well over a century whereas New Zealand companies have only recently been allowed to invest overseas freely. He implies that the balance will right itself in time if only we allow New Zealand companies to become transnationals too. Even if that were desirable (Should we be doing unto others what we don't want done unto ourselves? Is it good for our savings to be invested elsewhere when they are clearly needed here") it is quite unbelievable. Does he really believe there is equal opportunity for mainly small-scale New Zealand capital to compete out there? Are our capital resources ever remotely going to match those of the economic giants? What his figures do show though is that the response to criticism of profits going overseas, "Oh, but we get profits from overseas in return", comes from the numerically challenged.

Brash does address the balance of payments issue later on. First he argues on what amounts to a case by case basis: that some companies add to our export earnings, or replace imports. He argues here and at the end of his speech that "except where subsidies are involved, the profits accruing to foreigners can not exceed the value added domestically by foreign investment and can not create a negative impact on the balance of payments." Again this requires some idealistic assumptions. Then he argues that foreign investment flows "almost by definition" widen the current account deficit be-

cause foreign exchange will be spent machinery and so on. long as the overall economic environment is sound, so that investment flows are not distorted, or diverted into unproductive areas by subsidies, protection or inflation, there is no reason to feel concern about such capital flow, or its impact on the balance of payments"

Yet the fact is that New Zealand docs suffer from chronic balance of payments problems. The consistent pattern over many decades has been "paying our way" in trade (we consistently export more than we import) but running heavily into deficit in the "invisibles" a large part of which is profits and interest payments. That is how New Zealand's huge foreign debt has mounted, and is still mounting by billions of dollars a year. It is only by getting further into debt either by loans or by direct investment - that the payments are balanced.

The degree of overseas

ownership of the economy

Brash: Secondly, it has been claimed that 56% of all the shares on the New Zealand market are now held by foreigners, up from 19%just six years ago

Brash says this is "somewhat misleading". He says that by far the largest increase in this percentage occurred between March 1991 (when the ratio was 23%) and December 1992 (when it was 46%) and was due to the listing of Telecom and the "restructuring of the ownership" (overseas control) of Carter Holt Harvey. He points out that most companies are not listed on the sharemarkct at ail. "Many of those un-

% voting shares overseas owned 1994 43.5 (Ordinary division);

42.8 (Forests division)'

o

more than 24.92 more than 503 more than 37.64 73

o

o

unclear: at least 6%, possibly over 50%5 approx 40

o

100

100

100

766 (49.7% News Ltd") ()

o

o

Not available 100

Table 1

Top 20 companies excluding financial institutions December 1994

(from Management Magazine 1994 top 200 listed by turnover).

Rank 1

Company Fletcher Challenge

2* 3

4

5

6 7* 8* 9 10 II * 12

New Zealand Dairy Board Air New Zealand Telecom Corporation Carter Holt Harvey Progressive Enterprises

New Zealand Cooperative Dairy Co Electricity Corporation

Lion Nathan

Brierley Investments

Foodstuffs (Auckland)

BP New Zealand Holdings Shell New Zealand Holding Co Mobil Oil

Independent Newspapers AFFCO New Zealand Foodstuffs (Wellington) Co-op Alliance Group

Wrightson

Caltex Oil (NZ)

13 14 15 16* 17* 18* 19 20

Cooperatives, statutory marketing boards or SOEs (though AFFCO and Alliance hac! significant minority Fletcher Challenge shareholding).

WATCHDOG 81 APRil 1996

PAGE 4

37 . .,85 1,014 22,011
52 61 55 62
-_ .. ,.----
-----" ----.---~
40,151 3,029 608 5.399 55,835 24.742 88,495
10 56 67 50 67 67 62 48
1 t 25,051 2,387 425 3,969 40.536 i 6.732 7(),129
55 62 79 70 74 73 68 79 listed companies are, to be sure, foreign owned, but many are not." It is a pity he has not encouraged the Government to collect such figures: nobody knows exactly what the situation is. But we do know that the New Zealand economy is heavily dominated by its big companies, and the top 20 com" panics in Management Magazine's December 1994 top 200 list are shown in Table I.

So eleven of the top 20 companies at the end of 1994 were overseas companies (remembering that the legal definition of an overseas company is one that is more than 24.9% overseas owned). Possible exceptions were Wrightson and Lion Nathan (the latter a significant transnational in its own right), a State Owned Enterprise, a marketing board and five cooperatives. Since then AFFCO has listed on the stock exchange and has a significant overseas shareholding, and Alliance has issued $40 million worth of shares, some to overseas institutions. What is preventing the commerce of this country being overseas controlled is the remaining state and cooperative-owned enterprises.

The top 20 were only a little more overseas owned than the rest of Management Magazine's top 200, as Table 2 shows. Overseas owned companies were 45% of the top 200, had half (52%) of the turnover, two-thirds of the profits (66%), 61 % of the assets, and 62% of the employees" .

A notable omission from the list of financial institutions in Table 3 is the Bank of New Zealand, 100% overseas owned, wh ich would have been number one on this list if its audited accounts had been available at the time. The great majority ofthe companies listed as being over 50% overseas controlled are in fact 100% overseas controlled.

Even more than in the non-finance sectors, only the remaining state owned and cooperative-type institutions prevent the sector being almost entirely foreign owned.

So a case could be made quite contrary to Brash's soothing words: that the control of New Zealand's core companies is

WATCHDOG 81 APRil 1996

even more concentrated overseas than the control of companies listed on the sharemarket

But" of course", says Brash,

"the ratio [of overseas to local ownership] tells us nothing at all about whether the impact of foreign invest" ment is benign or otherwise. It is not difficult to show that foreign investment in Telecom has been hugely beneficial to the New Zealand Government as the former shareholders and the recipients of taxation on the greatly increased profits, to the New Zealand economy more widely through the provision of a vastly improved quality of telephone service, and to the New Zealanders who were wise enough to buy the shares of Telecom when it was first floated at $2 a share (a group which, alas, did not include mel)"

This astounding statement tells us something about his method of analysis. Ifhe finds Telecom so beneficial then it is not difficult to see why he finds all foreign investment good" His analysis fails to compare what would have happened if an already revitalised Telecom, its technology newly upgraded before privatisation, had remained in public ownership .. With that failing, and in the knowledge that few social benefits have resulted from these taxes and proceeds of the sale, his justification basically adds up to saying that the wealthy who could afford the shares benefited, so "New Zealand" benefited. Or perhaps he isn't actually saying that

though clearly that is the conclusion he wants his audience to reach. Reading the statement carefully, you will see that he nowhere claims there is a general benefit from Telecom's foreign ownership.

land sates

Brash: Thirdly it is claimed that foreigners are buying up

vast blocks of land in New Zealand.

He acknowledges that "the information does not exist to say precisely how much land is owned by foreign residents." He

PAGES

quotes Overseas Investment Commission statistics showing that it approved the sale of "some 200,000 hectares" over the four and half years ending the middle of 1995: "an area equivalent to about 0.7';'0 of New Zealand's total land area" Again, he has used the tactic of misquoting the critics of foreign investment in order to belittle them. The concern is focussed on the increasing amounts of land being sold overseas: it is rising steadily and largely unchecked. The concern is about the lack of any scrutiny of those sales. But as a point of fact, 200,000 hectares is certainly a considerable understatement of the area affected: 761,000 hectares of'forestry land alone was overseas owned or managed in J 994.

Brash says it is "inevitably an emotional issue, with concern sometimes expressed that New Zealanders will be denied access to the land if it is owned by foreigners. His answer is that we don't have unfettered rights of access to privately owned land whoever owns it. That is correct as far as it goes, but again he fails to see the wider picture of increased pressure for those fetters, as more private playgrounds for the wealthy are created, such as the Indonesian owned Lilybank station.

He acknowledges the concerns that foreign purchases might drive up land prices, but points out that they constitute less than 3% of farm sales so could "hardly be said to be having a determin ing effect on the price of land". What he does not address is the possibility that that 3% may have a very important marginal effect on a weak market. Certainly foreign

purchases had a very effect Oil the commercial

property market in the tant factor in the current Auckland. In any case, he says, if advantage of New Zealand farm owners. the ques. tion as to whether the rises arc sustainable in terms of the land's earning power and productive potential. If they are not, then an increase in price, even if it goes to New Zealanders, is not a good thing.

He fails to address other concerns: speculation in land, absentee ownership and its effects, vertical integration of agriculture and forestry into agribusiness transnationals, the pressure on land of special importance, and ensuring benefits arise if land is sold into overseas hands.

A limited view of sovereignty

Brash: Fourthly, it is claimed thatforeign investment New Zealand will, if unchecked, make us "serfs in our own land ". Even discounting the hyperbole. the/ear thatforeign investment will in some sense lead to a loss ofeconomic sovereignty is a ver}! deep-seated one. Surely, it is self-evident that if most of our banks, most of our insurance companies, all our petrol companies, all o/' the large telecommunications companies, all of our motor vehicle assembly companies, and most of the shipping companies and airlines which serve our shores are owned abroad, we must have lost control of large chunks of our economy and perhaps of our identity.

Rank

2

3 4* 5

6

7 8* 9 10 11* 12 13 14 15 16 17* 18* 19 20

*

SOEs, community trusts, mutual societies and building societies.

Over 50% overseas controlled •

..

..

Table 3

Top 20 financial institutions

(from Management Magazine 1994 top 30 financial institutions listed by assets).

Company

National Bank of New Zealand

ANZ Banking Group (New Zealand) Westpac Banking Corporation

Trust Bank New Zealand

ASB Bank

AMP New Zealand Group Countrywide Banking Corporation National Provident

National Mutual Life

Bankers Trust New Zealand Tower Life Holdings

New Zealand Insurance Life BNZ Finance

Norwich Union Holdings (NZ) Prudential Assurance Co New Zealand Colonial Mutual Life Assurance Society TSB Bank

Southland Building Society

Australian Guarantee Corporation (NZ) Guardian Assurance

111 •

PAGES

WA. TCHDOG 81 A.PRIL 1996

"Actually, no, he answers. Those companies all have to

our laws, pay our taxes, and pay local wage rates. In

that try to "avoid New Zealand taxation or to

wriggle around a law or they are no different

from New Zealand companies. "No matter how many com-

are owned abroad, ultimate authority resides with the New Zealand Government, subject of course to the right of foreign investors to take their capital to more hospitable climes if the New Zealand authorities make unreasonable demands. There is no loss of sovereignty.

And yet in pointing out the "right of foreign investors to take their capital to more hospitable climes" he is pointing out the vital difference. That footloose nature, interests everywhere in and responsibilities nowhere in particular, allows those companies to evade and avoid laws (whether "reasonable" or not) and twist arms in a way that a local company cannot Because in the final analysis the local company must stay and make the best of the outcome. Transnational companies (whether New Zealand or overseas owned) by threatening flight, or refusing to come, can force countries to bid for their capital and expertise. The bidding can be to offer subsidies and tax breaks, or it can be to weaken social and environmental protections that the transnational can avoid by going elsewhere. Further, as I pointed out in my introduction, there are widespread systemic effects. To attract foreign investment, certain policies must be followed and international agreements signed. There clearly is loss of sovereignty.

International comparison of

New Zealand laws on foreign investment Brash: Finally, it is suggested that sinceforeigners severely restrict our right to invest in their countries, we should restrict their right to invest in ours.

This is a new one on me. I respect the right of other governments to restrict "our" right to invest in their countries. This kind of objection sounds like something Muldoon used against Australia in order to open up foreign investment, rather than the other way around. Brash gives examples of the U.K., North America, Singapore and Australia to show that other countries have an open door. He says: "Chris Butler, director of the investment unit at our Ministry of Foreign Affairs and Trade, tells of the British city which spends £100 million a year encouraging foreign investment to establish within its precincts." Such is the competition in the Dutch auction.

"Even in the case of foreign investment in land, it is an illusion to suggest that our policy is very much more liberal than that in most other countries," Brash says, quoting a Department of Survey and Land Information study which showed only seven had more restrictive land acquisition rules than New Zealand. But this was a restricted survey which looked only at the letter of the law, not the practice. In New Zealand the practice has been considerably more liberal than the letter suggests.

Brash concludes his answer by saying that even if others restricted "our" right to invest in them, we shou ld still allow foreign investment here if it is beneficial, Quite, and the re-

WATCHDOG 81 APRil 1996

even if others are besotted with mvestmenr, that is no reason that we should be.

verse also

What other concerns does Brash not address? These include: ® contrary to the assertion Brash makes that direct

investment "will almost a of things,

and, often, market knowledge and contracts", it leads to us becoming a

"branch economy" That is one where higher level processes such as research and development, and final control of what is and are taken away to a "metropolitan" country. Lack of significant research and development in New Zealand by transnational computer companies and Telecom, and the transfer of the highly successful New Zealand developed Unisys/Linc Development Centre out of New Zealand Unisys, are indications of this.

@ companies will bring unpleasant, ruthless, even brutal but possibly legal ~ methods of dealing with unions, national and local government, consumer and environmental groups. Examples include anti-union

cies, and tactics used by a number of transnationals to try to force the takeover of local body services such as rubbish collection. That is not to deny that New Zealand companies too can be, and are, but spanning countries transnationals hugely increased ann-twisting power.

Forms of foreign investment, savings and

reasons for restrictions

Brash goes on to discuss the various forms of foreign investment in New Zealand" Foreigners held claims against New Zealanders amounting to $98 billion in March 1994, while New Zealanders held claims against foreigners 01'$33 billion, leaving a net debt of $65 billion. Of the $98 billion, $26.5 billion was in direct investment (involving the ability to control) and the balance in portfolio investment consisting of shares ($1.5 billion), government and SOE borrowing overseas ($29.4 billion) and private sector borrowing overseas ($40.7 billion). He observes that the figures for direct investment and portfolio investment in shares are likely to be and that part ofthe private borrowing was by one branch of a company from another and should be seen as direct investment As CAFCA does, he also rightly debunks the myth in some quarters that foreign investment in New Zealand is largely Asian: in fact it made up only about 16% of the total over the last five years he says (though it is accelerating),

He asks "do we 'need' investment?". He condescends to "award a point to the critics of investment" here. "If New Zealand's own savings performance had been better over the ,if we were running balance of payments

the need to use foreign would have been

less. He says that the are "cautiously encouraging". The balance of payments deficit is "only" at 4% of Gross Domestic Product He attributes the III private sector savings to his anti-inflation policies. Yet there are here which he does not. adand the Institute for

Economic Research that household have

been underestimated because comparisons with other

Zealand residents after and

if there is a overseas borrowing and

So if government or economic events lead to

huge foreign investment it will by definition increase

the apparent The is what

causes the balance of payments deficit in the first and

a significant part is the of debt and investment.

The only Brash can see f"ilf in-

vestment is to protect "infant firms" Even that he on

the grounds that a foreign takeover would "probably" add to New Zealand's and management and would release the funds from the "infant firm" to be used elsewhere. That assumes the funds would indeed find a productive purpose elsewhere in New Zealand rather than being invested abroad or on And it makes

assumpr ions about the introduction

and tech-

I Fletcher 2 Air New Zealand is

which have

and pay invest more, employ still taxes. What else should we

IS

Senior Minister, and chief architect of

rnent since independence, foreign element in Singapore, managers, research scientists, accountants I til ink we'd filii below the mark," he admitted. "What IS [Singaporeans] at the top end. We can do the middle-end jobs i. the low-end 'not devel-

oped' yet", lOll p.v.)

Certainly foreign investment can try. The real questions are: whom does to, and what damage is done to the fabric of process')

1994. Figures are as at i August 1994

5% by Japan Airlines (Japan) "Air Bit may take

Investments Ltd (37.5%). There are other overseas m shareholders.

but the various minority shareholders include many overseas residents and

of20lune 1994. However the

Investments Ltd (32.0%) which was 75''10 owned

a New Zealand company for the purposes

company (more than 24.9%)~ Of the shareholders.

which to understate the overseas ownership

overseas controlled. Since then of course, International

control.

IS

there fore at

55.27% of the 490,576,166

of the held makes of their

it is

1994) which indicates own information. Companies which are overseas controlled

as this table is an indication of not

81 APR!t 1996

PAGE 8

N

IN

L~FCA regularly mistaken or accused

by our opponents, a racist Inevitably

the issue that leads people to this wrong conclusion is immigration After one such 1995 claim Philip Burdon, we issued this release. Ed

To The Minister Of Commerce others similiarly

Philip Burdon, the Minister of Commerce and lameduck MP for Fendalton (Press, 28/10/95, front page) has pontificated that a poll showing an increase in racist attitudes proves that parties campaigning against foreign investment have caused prejudice against foreigners.

This is arrant nonsense, all too typical of the Minister and his ilk, and involves the deliberate confusion of too quite separate issues - immigration, and foreign investment.

For our part, CAFCA has no policy for or against immigration. It is not our issue. But we most definitely campaign against foreign control and make no apology about that.

We find the term of "racist" particularly entertaining COIning from the National Party which, as its legacy to international and domestic race relations, has given us the Vietnam War, dawn raids, Bastion Point, the Springbok Tour and the fiscal envelope. Who the hell are the racists here?

It is absolutely not racist, xenophobic, or anything else to believe that the destiny of this country should be decided by its own people,

For the record, we have no argument with people of any particular race or colour. Power and wealth are our

not pigment. We are concerned about foreign control regardless of its country of origin and point out the obvious - the Asians come a long, long way behind the Australians, Americans, British, Canadians and Europeans as to how much of the New Zealand economy they own.

Sorry, Minister, you can't get rid of the problem by calling your opponents "racists". Previous National governments used to label their opponents as "communists". It's the same old smear tactic. And it's as wrong and inappropriate as it was then. Try arguing the facts, rather than name calling.

BUT ACTIVELY OPPOSING IMMIGRATION IS AN·· Ol'HER MATTER ENTIRELY

We define ourselves as a "progressive nationalist" body - we take the viewpoint of working people in Aotearoa, We reclaim the legitimacy of "nationalism". We reject racism, either as used against foreigners or as used against opponents of foreign control. We are also internationalists - as

81 APRil 1996

I

Horton

weare

work with global allies.

As a group, we have no on immigration. As for me

I am married to an I have Asian

extended family, I have lived then: and taken in the

ferocious of the Asian my

and as a New Zealand migrant worker in Australia I have experienced firsthand the racism directed at "Kiwi dole bludgers''. All of us,

Polynesian and are here and we are ail

Pacific Islanders. Some of us to be blue

Pacific Islanders.

It is not the race of the coming here that bothers me. But the class they come from - ie the rich bothers me very much. That class bias transcends ali other considerations of race, colour, language, or culture, as far as I'm concerned. I personally see no contradiction whatsoever in opposing foreign control whilst immigration. But CAFCA itself has no opinion on the subject.

However, it is quite another to actively cam-

paign against immigration indeed, against migrants.

Despite protestations to the contrary, that can very easily become racism. And it's at that point that we part company with New Zealand First. In 1995, we provided a platform for Winston Peters (alongside Jim Anderton) to speak in opposition to the Overseas Investment Amendment Bill (now an Act). We assisted Peters' staff research his speeches for his "New Zealand Is Ours" speaking tours (and have continued supplying information to them, upon request). But it would be fair to describe the relationship between CAFCA and New Zealand First as uneasy, very much a marriage of convenience. That was, and is, clearly understood both" Indeed had its back scratched by us, the party was not prepared to scratch ours when we asked a

favour to electorate

Peters has announced opposition to immigration as one of New Zealand First's major policy planks for the 1996 general election. He sees that as consistent with the party's position on foreign investment. We do not support a campaign of opposition to immigration, regardless of whether it's run by New Zealand First or the National Front. Let there be no misunderstanding at all about that.

people should get their information about the from the horse's not via the media. Both the Natl.ab coalition and the media have it in for Peters and will gleefully distort what he says and

use it as part of their attack on him. It happened

throughout his to the Winebox documents into

the public domain they've stopped berating him about that because it has become obvious that he was right all along.

The massive hectares of

State forest was started the Labour government

in the late ! 980s (it was when Richard Prebble was doing the thinking that he's now writing books about) and continued in the early 90s when National commanded it massive majority. There is precious little left of State Timberlands on the West Coast is a special case, fully slowly, with the transition from native to exotic for estry.The Ministry ofForestry exists as mouthpiece for the transnational corporations (TNCs) which now completely dominate ownership of this country's booming forestry industry There are scattered of State forest around the country that have not, as yet, been sold. There arc a number of reasons for that, primarily environmental or Maori claims.

(* the sale of cutting rights does not include the land

itself Maori land claims are the reason the land itself

has not been sold throughout this whole process).

As of 1993" the State still owned 20.1 % of planted production forests (269,000 ha). Although it is the third biggest owner it is a long way from the days when it owned 53% of the totaL The State's principal presence in forestry today is in the form of the Forestry Corporation of New Zealand (Forestcorp). It was formed in December 1990 to manage seven Bay of Plenty forests and two processing plants (Waipa and Mt Maunganui), totalling over 180,000 ha, 1993 official figures showed it owning 12.7% of the country's total plantation forest area. One of those forests, Kaingaroa, established early this century, is the world's largest plantation forest. Forestcorp's Waipa mill is Australasia's largest radiata processing facility, producing over 200,000 cubic metres per year. Its two plants process over two thirds of its logs.

In I

the Government announced that

to

sell Forestcorp, with cutting

star attraction The book value was

to the

J billion, All the evi-

dence was of an driven governrncnt planning to carry out as much of its programme of the State sector before the first MMP ejection. The sharks were immediately circling, in the water. At the time of flounced but the smart money

Weyerhaueser had

Forestcorp) or a consortium of it with All the other major forestry TNCs were very their hands on it too. (If Carter Holt

then workers can look

the actions of International

at

ers, IPC announced, in January 1996, that it redundant in the US and Europe). A new factorwas Maori capitalism. For example, Fletcher came to a ]995 agreement with one Maori group, Te Ika Whenua, But that

fell through and Te Ika Whenua includ-

Ruth Richardson (l), to them in their move to play

a pivotal role in the future of "n;,'<;.H·"rn

The Reasons Why It Should Not Be Sold

In addition to the usual tired old reasons trotted out by Min-

isters about why

public assets are

know they're good lor the new owners, just look at there was a new one, breathtaking in its implications, Dr Wink Sutton, a forest economist said that New Zealanders "don't have the capital or the brains" to run a forest indus-

See, we're too stupid to run our own country. The experts have told us so.

81 APRil 1996

PAGE 10

Opposition to the proposed sale came from a variety of sources, some of them

h"''nnw;,., and Mick O'Neil, three former directors general of the forest Service (abolished in publicly spoke out and called for an inquiry into the whole process of selling State forests.

"We are worried about the sales being rushed into without public consultation", We don't know if it will protect the many sawmills around the North Island, which supply local demand and create employment,.. (Dominion, 12/1/(6),

They were not convinced by Government claims of the great results achieved by previous sales,

'The great bulk of sales have resulted in massive exports of logs, There's a medium investment from (Japanese TNC) Juken Nissho in Masterton, a bit in Nelson, a bit in Southland. They are not big at all" (NZ Herald, 22/1/96),

This was not the first time these three had sounded alarm bells about the direction that our transnationalised forestry industry is taking. In 1993, at the height of the unprocessed log export gold rush, they released ajoint statement describing the log export trade as "bad news", They said that in 1989 10% of the saw log harvest was exported as logs; but in 1992 it was 40%. They attributed this to the sale of the State forests to their new owners and called for a detailed examination of the forestry sector with a view to providing long term stability and direction, They also called for Forestcorp to phase down its log export activities and concentrate on supplying the local industry, "We are in fact doing just about everything which is contrary to soundly based resource management" (Christchurch Mail, 28/10/93),

Apart from minor details like the Government not having any mandate to flog off the forests (or any other public asset), there is the inescapable economic argument against selling, Terry Hall, business editor of the Dominion, expressed this most succinctly in his feature entitled "Forests sale plunders nation" (26/2/90):

"It is giving no thought to maximising the economic benefit for New Zealand as a whole, and the prospect of creating worthwhile skilled jobs and new industries in a sector that the poor old taxpayer has funded for years, The benefit in jobs will be created overseas and benefit other economies, The price obtained will be too cheap.i.Overseas companies will be buying New Zealand's important forestry resource at a substantial discount The sales are being made in a high interest rate, high exchange rate environment This means that, temporarily, the wood resource is less valuable internationally. Wilen, as is inevitable, the dollar drops to a more realistic level, the overseas owners will be onto a bonanza, . .The rush to sell the forests, and other State assets, appears politically motivated, with the excuse that the money raised is being used to retire debt. In all, the Government is losing real productive assets .. ," That was written about the first wave of sales but is

FOR

sor e

SOL

Kaingaroa Belongs

CAFCA fully supports the opposition by people in Rotorua to the proposed sale of Forestcorp, and the jewel in its crown, Kaingaroa. Rest assured you are not alone - people throughout the country are outraged, This Government and its Labour predecessor have already sold the cutting rights for over 550,000 hectares of State forests, Now they want to finish the job,

Well, we paid for Kaingaroa and its sister forests in the Bay of Plenty They were created by New Zealanders, for the benefit of the New Zealand people, Politicians have no mandate to flog them off to finance election year tax cuts, reduce "our" foreign debt, or any other spurious reason.

We should oppose the sale of all public assets, Once gone, they become playthings of the transnational corporations J who now dominate our national economy. But there are particularly strong grounds for opposing the sale of forests (the sale of cutting rights amounts to the same thing), It's because forestry is a boom industry; the foresight of those who pioneered the exotic plantation industry is now paying handsome dividends, But to whom? Not to the New Zealand people, Not even very much to New Zealand business, No, the benefits are going to the new owners and they are overwhelmingly foreign and local Big Business, Carter Holt Harvey (US); Fletcher Challenge (over 50% foreign shareholders); Rayonier (US); Juken Nissho (Ja~ pan); Ernslaw One (Malaysia); Wen ita (China), Oji Sankoku (Japan), and a raft of smaller transnationals. These are the winners in this criminal giveaway,

New Zealand is now growing trees for foreign profit We have ceased to have any meaningful ownership of our own forestry resource, We have become a seedling nursery for the rest of the world. This selloff mania is not restricted to the State the Christchurch City Council is very keen to sell its stake in the Selwyn Plantation forest (which announced a record profit),

Matakana Islanders showed how to stop their forest being sold to transnationals in 1993, they blockaded the operation for six months until they got a deal that went some way towards meeting their grievances, So these sales are not inevitable, They only happen if we let them. A mass campaign has just stopped the highly controversial proposal by Wenita to build a processing plant on the Taieri Plains, near Dunedin. These transnationals are not invincible, they have feet of clay, But if we don't hit them, they won't fall,

So all power to your campaign. We join you in saying:

Hands Off Forestcorp. Kaingaroa Belongs To Us.

WATCHDOG 81 APRil 1996

PAGE 11

equally applicable to the Forestcorp situation.

The

To

The Sale

The sale will rule out the

of alternative uses for

Kaingaroa Apart from the question of Maori ownership and! or operation, an interesting idea was floated in 1995 by Geoff F ischer, a Forestry Ed ucation Centre tutor at Rotorua' s Waiariki Polytechnic. He correctly pointed out that the backbone of New Zealand agriculture is the family farm, and asked, why not family ownership of forests? "If retained by the State, Kaingaroa could be broken up into independent forest farms, of similar economic weight to sheep and dairy units, operated by individuals or self-managing hapu, families or cooperatives" When the sale proposal was announced, he set up Kiwi Forests for Kiwi Families and joined those campaigning against it The Socialist Workers Party held demonstrations, circulated a petition and leafleted throughout the Bay of Plenty. A broader campaign was waged by the Save Kaingaroa Coalition, spearheaded by the Wood Industries Union of Aotearoa. It organised a public meeting in Rotorua, in Decem ber 1995, attended by several hundred timber workers and members of the public. It unanimously passed a motion stating:

"This meeting of Forestry Corporation workers and the community calls upon the Minister of Finance to maintain the

Kaingaroa Cutting Rights and Forest as State Owned New Zealand Assets and calls upon all Political the Union movement and the public 10 take whatever steps arc

necessary to

a sale"

Needless to say, CAFCA does not carry a flag for Forestcorp. Since its creation in 1990, it' been run under the same obnoxious profit obsessed philosophy as all other SOEs (which are invariably headed by Government appointed SOBs). It has become very much the compleat corporate animal - working hand in glove with the TNCs; ruthlessly exporting unprocessed logs to gamer record profits; laying off workers in both its processing mills and forests .. It is completely commercially driven. To quote from a particularly insightful Independent article (19/2/93):

" .. .The effect of Government policy has been direct for the Forestry Corporation which is encouraged to cut down immature trees by directives to crank out specific cash flows" ("Forestry's hollow boom:

Chainsaw Massacre", Bob Edlin).

But we fully support public ownership of New Zealand's forest estate and strongly oppose the selling off (in reality, giving away) of our public assets. See the box on Page II for the message which we sent to the December 1995 Rotorua public meeting Ed

WEN ITA PROJECT STOPPED

Watchdog 79 carried a detailed critique on the proposed Taieri Plain timber processing plant to be built by Wenita, a Chinese/Hong Kong forestry TNe that, in the space of just a few years, has become the biggest forest owner in Otago. The proposed plant would be the largest of its type in the Southern Hemisphere and would cause a horrendous range of environmental and noise problems. Locals from Mosgiel and elsewhere on the Taieri campaigned very hard against the proposal; it became a very major issue in the 1995 Dunedin local body election.

We're pleased to report that it has been stopped. In November 1995, the Otago Regional Council (ORC) refused an air discharge permit for the proposed plant, meaning that it would not be allowed to discharge contaminants into the air. Although the ORC granted conditional water and land use consents and water and land discharge consents, and the Dunedin City Council (DCC) granted conditional land use consents, the ORC's refusal of the air discharge permit has put the whole project on hold. Most tellingly, the ORC didn't see how it could grant even a conditional air discharge permit That was rejected in entirety. "The scale and intensity of the plant when fully commissioned is inappropriate for this location" (Otago Daily Times, 23/11/95).

Plain Sense, the Taieri group that spearheaded the campaign, welcomed the refusal. Public unease about the DCC's relationship with the company was a big factor in the unseating of Mayor Richard Walk Dunedin's new Mayor, Sukhi Turner ("I'm the first Mayor of Dunedin not to be a middle aged white man in a kilt") welcomed the decision as "a victory for the environment" (ODT, 24/11/95) Before her election, she had made a submission as an individual, opposing the plant. (More recently, she has taken her disapproval of things Chinese to the extent of refusing to take part in a Dunedin delegation to sister city .. Shanghai). The ODT, which supported the project, editorialised:

"The fact that the regional council could not see its way clear to imposing conditions which would mitigate the likely adverse effects seems to leave little room for the company to pursue a plant of the particular type on the Taieri site" ("Knotty problem"; 24/11195).

But ruCs tend not to take these sorts of setbacks lying down, so, naturally, there will be interminable appeals. But we congratulate the people of Dunedin and the Taieri for winning this major battle. Hopefully you never will have to live with this monstrosity as a neighbour.

Plain Sense can be contacted c/o Taieri Plain Environmental

WATCHDOG 81 APRil 1996

PAGE 12

I

TVNZ Frontline programme on the New of the of

"","<:T1"'-1 company, Ernslaw contentious move, the

that the programme was "unbalanced" and ordered TVNZ

This is not the where the Tiongs have had their delicate Rimbunan

Group, is the biggest in New Guinean (a for uncontrolled despoilarion and exploita-

tion of the PNG was also covered by Frontline and an earlier Australian Four Corners programme. In

November I PNG media carried made on 1993 PNG radio programme, by the

then Minister for Forests, Tim Neville of the stars of both TV programmes). The PNG newspaper, the National, solemnly

reported the apology and pontificated about it in an editorial entitled "Media must be conscious of duty to truth" (7/1

The paper neglected to mention that it is owned by Rimbunan Hijau!

However, we can take heart from the fact apart from buying a radio the have apparently decided not to expand their media empire into NZ. Despite speculation that they were in the running to buy Radio New Zealand's network of commercial stations, they confirmed that, after only a cursory look, they decided not to get involved. After all, why go to all the expense of creating your own mouthpieces when you can bully the media into the same result That's the theory time will tell if the media, both here and regionally, have been cowed into silence or a PR role by the Tiongs' counter-punching.

TO

DE

LEPT HUGE CHUNK

For several years Watchdog has been chronicling the saga of Tommy Klepto, the most notorious SOil of President Klepto of Indonesia. Back in 1992 Tommy bought Lilybank Station, near Lake Tekapo, and proceeded to build Lilybank Lodge, a super luxury resort for the rich of the world to use as a helicopter potshot range for trophy shooting. Wilen Tommy bought it, he assumed he was acquiring the full 27,500 hectares. But that was not the case.

In 1984 the previous owners did a deal with the Government. In return for $300,000 of money, they agreed to surrender 25,000 ha to the conservation estate.

When of Tommy was less than happy and his

lawyers with the Government for three long years,

arguing that he was entitled to a special lease over the whole lot, ensuring him exclusive use. Whilst that was being sorted out, Klepto's resort management won themselves many enemies by trying their level best to bar recreational fishers, hunters and trampers from the property, going so far as 1.0

serve them with notices,

However, by late 1 the game was up and the December

handover of the ha was announced (the first of 17

big handovers of high country land to be negotiated between runholders and the Commissioner of Crown Lands), Chris Hutching reported in the National Business Review (24/111 95; "Surrender now in as hunters take 'potshots' at Tommy Suharto"):

"Commissioner of Crown Lands, Sam Brown, could not say clearly why the deal had taken so long to ce-

81 APR!l1996

K

ment. He said, as far as he could ascertain, Mr Suharto appeared to be 'not fully conversant with the purchase contract he signed with the previous owners of Lilybank", It was unclear what Mr Suharto thought he was getting for his $2.2 million and it had taken three years of negotiating with his representatives to obtain signatures for the formal surrender of the land ...

The was still a good deal for Mr Suharto, to Mr Brown. He' 5 bought a prime property, he's got 2,000 ha ofprime high country and that's

what he needs to establish his tourist project, plus there's still the prospect he'll be able to apply for tenure review and freehold some of that. The other 25,000 ha will be available to them, but not exclusively, that's quite clear'".

This means that the 25.,000 ha will be managed by the Department of Conservation and recreational users will have unrestricted access, There is still a boundary dispute to be settled between remaining land and the surrendered land. Resort management are still trying to fix the boundary in such a way as to seriously restrict access to the 25,000 ha.

Don't feel sorry for He's still got Lilybank which his core interest on the landholding, And

more besides. When Daddy is President of a bloodstained dictatorship, the world's your oyster. Tommy likes racing cars - no in 1995 he Lamborghini, Not a Lamborghini '. Lamborghini the company. Also in Italy, he bought a bicycle and a car manufacturer in the US.

PAGE 13

This is in addition to his various Indonesia.

In the meantime. "New Zealand transnationals arc

connections [0 enrich themselves in sia. Asial'ower owned

chant bank

fro!')"!

in flent

tOVIIyhlp. The door opus

cionate inside from the i);·FIJI irlpllie CliiTIi\te.

dn\/e which

Press 2518/94

WA TCHD()G 81 APRIL 1996

world standards. The Listener featured the "Full steam ahead": Noel O'Hare). Alongabout indonesia's growth rate and its market for New Zealand business, it filets.

have been by

with the . The CIA has esti-

Madame Tien , unaffectionately dubbed Madame Tien Percent, has been linked to a number of controversial business deals, including a car smuggling ring. The six Suharto children have followed suit, using political influence to win lucrative government contracts and amass billion dollar fortunes.

"It was almost inevitable that the AsiaPower contract would involve a joint venture company owned by the Suharto family. As journalist Adam Schwartz says: 'In recent years, hardly a single major infrastructure contract has been awarded without a Suharto relative or other having a part of it'. Some New Zealand companies doing business in Indonesia are wary of getting involved with the First Family, fearing the long term consequences. Many believe that, after Suharto goes, there will be a day of reckon-

, To get it right with the family in the short term is probably beneficial' , says one, ' but ultimate ly in the long term, there's going to be a fallout of some sort'".

And you can bet that when that fallout comes, Tommy will have arranged a global network of plush ratholes for himself Hawaii became the focus of global anger at the whole rotten Marcos dan when they were kicked out of the Philippines a decade ago; will sleepy little Tekapo fulfill a similar role when the long suffering people of Indonesia achieve democracy and demand justice for the innumerable crimes of the Tommy is one absentee land owner we can well do without It's got nothing to do with his race, and everything to do with who he is. His presence leaves a very bad smell,

Suhartos personal fortune at $US IS twice that if the entire Suharto family is included. Those sums', says {JS political scientist Jef-

lion geothermal power station in indonesia" Th IS . dwarf those stolen by South

~_"_~ ~~'~~' ~ __ ~_~~' __ <'" ' __ ._.' '<. East Asia's better known kleptocrat Ferdinand Marcos'. Suharto ' s wife,

PAGE 14

since Telecom was sold too in 1 it

rich rewards its American owners. Its 1994/

was over $620 the 1995/96 one is on tar-

to be a record $710 million. At the made $338 million and the third added another $182 million. It's to refer to these figures as telephone book numbers. Telecom ended 1995 as the country's top share investment, returning

total of 38% in dividends and tax credits (its

nearest Big Business rival was Lion Nathan on 27%). It sold for $4.25 billion; its worth is now in the $10 billion - $14 billion range. So lucrative has Telecom become that it

now paying quarterly dividends ~ the directors have announced that it will distribute at least 70% of profits. In

for the 1995/96 half year it was and 88% for the third

quarter. The directors themselves have done very Alliance leader Jim Anderton has estimated their gain, in shares, at $ I 24.7 million in four years (Press, 8/2/96). Telecom chief executive officer, Rod Deane, alone stands to make a $2.6 million capital gain in January 1998 from his participation in a special "executive share scheme".

Anderton has signalled that Telecom will be a major election issue for the Alliance. In February 1996, it released a report on Telecom, "The Case For Public Intervention", and declared a number of policies that an Alliance government would enact, basically to ensure regulation and competition (in itself, a major step back from the Alliance's earlier policy which was for the State to buy back Telecom). One interesting point Anderton made was that Telecom is so profitable it could easily afford to totally abolish residential line rentals and still be more profitable than most major New Zealand corporates, This led to a predictable uproar from the Murdoch Press which ran an editorial ("Outrageous fortune": 10/2/

concluding that the Alliance's views on Telecom were

"old fashioned envy and waded into the

- Clive

its

media communications manager, wrote to the Listener (6/1/ to the regulated New Zealand economy under

Muldoon as being "East without the tanks". Even

New Zealand First attacked the Alliance's proposals as palling". Finance spokesman, Bernard Downey, said

"The answer is not to give New Zealand a reputation as some sort of Eastern Euro perm socialist authoritarian State forcing the monopoly holder to supply services for nothing, but to move to expose them to competition" 9/2/96). The trouble is, as Clear can attest, that Telecom has resisted any attempt to open up its monopoly to competition (see Watchdog 80 for of the Telecom/Clear saga).

however, has no intention of abolishing or even reducing residential line rental charges, It claims it takes a $100+ million Joss per year on residential phone services. The 1990 Kiwi Share, which the Labour government imposed as its "condition" of sale, keeps local residential calls free and stops line rentals being higher than the rate of inflation. Sir Geoffrey Palmer, Prime Minister when Telecom was privatised and now an adviser to Clear, wants the Kiwi Share abolished. "The virtues of real competition would protect consumers more" (NZ Herald, 2111 0/95). Naivety was always Sir Geoffrey's distinguishing characteristic. For its part, Telecom increased monthly residential line rentals by $1.23 (3.54%) from February 1996, Anderton described that as "breathtaking greed" (Press, 2011 1/95). The Northern Advocate editorialised (6111 /95; "Mr Anderton is also out to profit") that his "outburst" was "patently absurd and churlish.i.shallow and nonsensical". It was a Monday editorial ~ the writer must have had a bad weekend.

WATCHDOG 81 APRil 1996

PAGE 'I

Competition: Even The MO And APEC Want To See Some In NZ

As for competition, Palmer pointed out that it had taken four years, court battles all the way to the Privy Council in London, $50 million in legal costs and the threat of Government intervention before Telecom announced that it would sign an interconnection agreement with Clear (and it hasn't actually done so yet).

Irony of ironies. The global free trade organisations set up to enrich TNCs such as Telecom are being used to pressure New Zealand to regulate interconnection. "The Case For Public Intervention" quotes a 1995 Treasury/Ministry of Commerce Discussion Paper, "Regulation of Access to Vertically Integrated Natural Monopolies":

"Currently negotiations are proceeding at the World Trade Organisation (WTO) under the General Agreement on Trade in Services (GATS) specifically on Basic Telecommunications. These negotiations are due to conclude in mid 1996. There is a general push for members to commit themselves to practical processes that will provide for timely interconnection by new entrants. More specifically, requests have been made for New Zealand to introduce such a process. Similar issues are being raised in other forums (such as APEC [Asia Pacific Economic Cooperationj) and in bilateral negotiations"

In December 1995, Clear won an injunction blocking Telecom from proceeding with programming and other agreements with Sky TV. An earlier Clear injunction stopped Telecom buying 25% of Sky, which had been' conditional on the programming agreement. Telecom's whole relationship with Sky will now be the subject of court hearings. (See the August i995 Overseas investment Commission decisions, elsewhere in this issue, for full details of the Telecom/Sky saga.).

Deuntontslng

Let's not forget Telecom's workers in all this. The company

A Telecom advertIJ!;rnent HI which a hunter recounts how his mobile telephone saved his life has been ruled misleading by the Advertising Stan dards Complaints Board. Even though the advertisement carried a warning that people venturing into remote areas should take proper precautions, its overriding impression was that a mobile phone would provide adequate security, the board said.

Telecom Mobile and the creators of the advertisement, Saatchi and Saatchi. said the advertisement was based on a real incident in the Kaweka Ranges and the warning to take precautions bad been approved by mountain safety and maritime officials.

-NlPA

Press 14/10/95

L.:......:....::...;=...:.....:.;....:....;;.:....::...;:........ """ __ " _

is making 40% of its workforce redundant over a five year period" By the third quarter of the 1995/96 year, staff was down to 9019 from 9307 a year earlier and redundancy and restructuring payments were down 63%. Restructuring is ongoing - from April 1996, there will be two new major divisions, Services and Network. Of those workers left, Telecom is very' keen that they not belong to a union. The Communication and Energy Workers Union (CEWU), the successor to the old Post Office Union, collapsed in a very undignified heap in late 1995 and has gone into liquidation (indeed CAfCA was amongst those approached by the liquidators, concerning an unpaid Watchdog sub from years ago. After careful consideration, we've written it oft). An internal memo to senior Telecom managers warned them to steer clear of the Engineers Union, which was expected to recruit the 5,000 Telecom members of the CEWU left high and dry by the collapse of their union. The memo, from David Bedford, human resources manager, said: "The Engineers Union is very professional and may present an image that is

Shares Held by Directors and Associated Persons.

As at 31 Marcb 1995

Number of Shares Held January 1996 Value. 1995 Dividend (30e
($6,20 per share). per share).
Peter Shirtcliffe 151,672 $940,366 $,t5,502
John King 356,248 $2,208,738 $106,928
Rod Deane 885,427 $5,489,647 $265,628
David Richwhite 14,332,000 $88,858,400 $4,299,600
Alan Gibbs 37,572,800 $232,951,360 $11,271,840 Telecom: The Case For Public Intervention" - Alliance

WATCHDOG 81 APRil 1996

PAGE 16

The company moved to WAAU'-.U"fo', union fees from

workers' wages (a service it had for the CEWU).

Telecom con finned that it was actively to its staff

onto individual contracts. it sees the CEWU's

demise as a golden to deunionise its

workers. It got a strong reaction from both Rex Jones, the Engineers national secretary and Steve Maharey, Labour's employment spokesman.

POOl" Service

Despite extensive selling its image, Telecom has a poor service record. In November i 995, Katherine O'Regan, Minister of Consumer Affairs, released figures showing that it took longer to fix a home phone fault (99 business hours average) than it did in 1992 (4.7). A new voluntary performance agreement was signed between the Government and Telecom, allowing for six monthly reports to the Government. It still didn 't include a fault answer time indicator. Earlier in 1995 Mrs O'Regan was so disappointed with Telecom's service performance that she asked for monthly, as opposed to six monthly, reports.

At the unglamorous end of the market, there is no service to be had. Mr and Mrs Lane of Taylors Mistake, a popular Christchurch beach, publicly complained about the lack of a public phone box. Their home had been used by hundreds of people over the previous five years, wanting to use the phone for all manner of emergencies, including life and death ones. The surf club phone is available for limited hours in the summer only. Jan Lane said:

"I think it's so irresponsible of a company which makes such a large profit. They say it's not financially viable to install a telephone, but don't they have some sort of duty to the public?" (Press, 27112/95).

Telecom wasn't entirely unforthcoming ~ it offered to install a phone at her gate - at a cost to her which would include the monthly line rental! Never mind, although it can't provide phone services in New Zealand, it can do so in Sri Lanka, where it's won a $45 million contract to design and build a regional public phone service carrying 33,000 lines, Presumably there's more money to be made in Sri Lanka than in Taylors Mistake.

The money for any to be

had in the market

things the Anti Bases made very good use of

one during the 996 demonstration at the Waihopai

spybase. But not all they're hyped up to be. Inevita-

the overselling of them and the ridiculously deceptive advertising has led to tragedies amongst the gullible, The most spectacular case was doubtless the Invercargill beneficiary who bought one for $1 and proceeded to use it to constantly ring the Hong Kong girlfriend he'd found through an introduction agency. Within three months he owed over $25,000!

More importantly, cellphones themselves, and their attendant transmission towers, are the subject of deepseated public misgivings. Christchurch have put restrictions on their use because they interfere with vital medical equipment - they are already banned from some hospitals in

of New Zealand, the US, Australia and Scotland, But the real battle is that over the towers and Christchurch is where it is fought most fiercely. Telecom has designated 24 city sites for telephone exchanges in the new City Plan and confinned that they are actually for transmission towers. This aroused the concern of the Environmental Protection for Children Trust, which is spearheading opposition to the citywide proliferation of Telecom towers and those of the other phone TNes.

Hearings have been held on objections to tower proposals in several Christchurch suburbs eg Beckenham, Bryndwr. Dr Neil Cherry, wellknown to Cantabrians as a meteorologist, peace activist and regional councillor, has been the scientific spokesperson for groups opposing the towers, saying that standards governing public exposure to radio frequency radiation are inadequate. In November 1995 he was instrumental in organising what was billed as the world's first sci .. entific symposium on health hazards associated with cellphone tower transmissions. Two international experts, from the US and took part- they had been flown to Christchurch by the Trust to testify at a Planning Tribunal

hearing (the Trust spent on its case),

The phone TNCs had started their tower proliferation drive by offering hardpressed schools $4,500 each to host towers

Capital Gains on Directors' Interests in April 1992 to January 1996

Peter Shirtcliffe John

Rod

David Richwhite Alan Gibbs Total

'Telecom The Case For Public Intervention" - Alliance

WATCHDOG 81 APRil 1996

$605,766 $879,469 $2,809,648

$47,43 I

$72,961 3

$124,691,556

PAGE 11

Alarm at this had kicked offthe public where three schools had been because

of Education reversed its In December 1995 the

dismissed an lift the ban

- the Trust announced it was delighted and said its

was now to get the towers out of the three North Island schools that had them. But opposition has also been mounted in Christchurch to proposed tower sites near schools

or kindergartens, in Ham and The pro-

posed Beckenharn tower was to be sited

next to Opawa School but was moved to Colombo Street because of opposition, only to encounter even fiercer local

flak. Jane for the formed incor-

porated society fighting the summed it

up in a nutshell: (Telecom) think it is safe and we don't" (Christchurch Star, 27112/95).

The grassroots opposition is winning significant victories. The Christchurch City Council has proposed a change to the City Plan, meaning that anyone wanting to install transmitters within a 300 metre radius of schools, kindergartens and houses would have to apply for a resource consent This issue hits home with councillors - for example, Christchurch 2021' s Garry Moore, who has a child at Shirley School, has pronounced himself concerned about Telecom's proposal to put up a transmitter next to the school. And, in February 1996, Telecom announced that it was putting its Bryndwr proposal on hold and looking for alternative sites.

The annual Waihopai protest, in January 1996, was miltant and got good national media coverage. Despite being small in numbers (about 30) and rather slapdash in organisation, it achieved the Anti Bases s of keeping pressure on this hideous blot on the Marlborough

side more importantly,

it in the public eye. The ABC action led directly to the Green Party meeting in the nearby Marlborough Sounds, holding their own separate action there and the Alliance strongly condemning both the base and police actions at the protest, as did John Blincoe, Labour MP for Nelson.

It hastened to add that health ones. Even local

was for aesthetic reasons, not

MP" the band-

",.,.,nr r ~>" Templeton to erect a 20 metre tower

wagon. residents on the Main South Road.

He

that. he wasn't involved in "the health

side of the issue .. What I resent is the people of Templeton to look at this thing every of their as well as the poor tourists coming into the

with this There must be i 0 I

to site this won't rest until

every step has been taken to ensure this stupid idea is

not allowed to j 5/2/96).

Which just goes to show that, despite all the hype of relentless TV advertising (which cashes in on New Zealanders' wellknown love of new status symbols), the phone TNCs are not winning the hearts and minds of the people when it comes to cellphones. Couple that with the fact that Telecom and its obscene profits have become a public villain (TVNZ's Holmes regularly taps into this populist vein) and we can take comfort from the fact that it is seen for what it is. A profiteering bloodsucker. No amount of cutesy anima! ads, Spot the dog or $5 Weekends will alter that perception.

"Telecom Industry The Public Intervention" can be ordered from any Alliance electorate or directly/rom the Alliance Parliamentary Office,

(The ABC was pleased to welcome back Moana Cole at this year's action. She'd only been back in the country a few days from Australia. She'd had to leave there because the Australian Government officially classifies her as being of "bad character" and only let her in on a six month visa, for family visiting. She was not allowed to study or appeal the visa).

WATCHDOG 81 APRil 1996

Protesters ignored a ban 011 entering any of the base's land (the high security compound, which is protected by electric fences, floodlights and security guards, is surrounded by hectares of farmland owned by the Government). Six were arrested and charged with wilful trespass. Among those arrested were Warren Thomson and Bob Leonard, leading

18

ures in the ABC. This Communications Bureau

has ordered its land. It is also the first

that the

the arrests. have been allowed up to the fences of the spy base compound. the cops were aggro ~ 1:\\10 ofthose arrested were handcuffed to a fence and left there in the blaz-

sun. When the cops came to cut the they discov-

ered that they could do so with a lot of effort.

charges the four arrested at the B 995

protest have not been heard yet and the police have recommended that they be withdrawn because of the . This is further evidence of official reluctance to prosecute cases and focus attention on the base. In the past, defendants have used tactics like subpoeaning the GCSB director and

BLACK 81

But one other installation, close Waihopai, is closing in 1996. The US Naval Observatory atop Black Birch ridge is not merely being closed but demolished. Halleujahl It has completed its ten year programme of mapping Southern Hemisphere stars, an essential prerequisite of missile targeting for US nuclear monstrosities, such as the Trident submannes.

CAFCINZ (as we then were) kicked off the campaign against

INTELLIGENC

AND S

In the fashion made notorious by the old style politics that people voted MMP to get rid this Bill was announced by the Prime Minister just before Christmas J 995, with submissions at the end of January 1996. They were con-

sidered, not by any old select committee, but by 11

special committee the PM, three other senior

Cabinet Ministers, the Leader and Opposition and the leader of the United tional you when you don't vote National). After wide-

spread public uproar, the committee to extend the

deadline for public submissions further into It is

CAFCA'

SUB

Our submission is short and to the Despite the obstacle of the deplorable haste with which the Government has tried to slip this Bill through unnoticed over the season, it didn't take us long to arrive at our central conclusion, which is

11 the agencies at the centre of this Bill .. the SIS and the GCSB· should not exist, full

In the evocative words of the lovely old song

Was He

WATCHDOG 81 APRil 1996

him to cross examination. In the

Warren is amongst those his annual

_ ----c ... c, .. costs money) for mundane

up the camp to more substantial

the bill for

"'''''''''t",S is $ These 1996 arrests will

add to the total. The ABC is deeply grateful to those people who have donated money over the last 12 months. But. as

more is needed.

Donations can be sent to.

Box Christchurch.

AhC'()''''J(1l'n: it with a note saying it's/or

costs.

H

L SES

Black Birch back in the early 1980s, organising two protest climbs up the 1,500 metre hill. Once the ABC was founded, later on in the 1980s, we handed the campaign over to them. But we are delighted to see the US Navy climbing down from its hilltop perch. That leaves one American base here (Harewood). Plus the two "New Zealand" bases - Waihopai and Tangimoana - that work for US intelligence. But as Wally Hadlee said, talking of how to win a cricket match: "We'll take them in singles".

URITY AGENCIES BilL

the first law involving these agencies since the 1977 Security Intelligence Service (SIS) Act. The GCSB has never been specifically covered any being simply treated as part of the Ministry of Defence.

The A Be' s sue-

a number of individuals and

to the existence of this Bill - no mean feat in

and opposition to it. He

before the committee at Parlia-

ment.

Box

Christchurch. Enclose $5 to cover costs

ISSION ON THE Bll

Born So Beautiful?" "He's no bloody good at anything; he's no bloody at air'. That sums up exactly our feelings about the SIS and the GCSB. They are useless, dangerous, waste of public money, and an anachronism in this day and age. The words "intelligence" and "security" are misapplied in the Bill's title - the New Zealand public has

seen little evidence of either.

21

not be put out of their misery, then

need radical sur-

PAGE 19

gery. For starters, should astonish themselves and start

for the New Zealand stead of for the what to do. This means that New Zealand should get out of the 1947 UKUSA intelli-

Australia and New Zealand Ed) and all commitments that flow from it After ail we're out of ANZUS, so let's finish the job and quit U KUSA as well That should the eavesdroppers at Waihopai plenty of spare time in which to think of ways to actually gather intelligence that might be of use to the New Zealand taxpayer, rather than the US National

Security Agency (the NSA is the US

agency in the US, much

In or electronic

than the CIA. It specialises Ed), And the SIS could

stop a (very) junior partner of British and American intelligence and start finding ways to ensure the security of those who pay its wages, Where was any evidence of its "intelligence" or "security" when real foreign terrorists attacked this country in 1985? The Rainbow Warrior killers were caught good old fashioned police work, not by any covert agency. Nor do we accept that providing a private gossip supply for successive Prime Ministers constitutes a useful service to the New Zealand people.

31 Who is the enemy? This is the big question in the post Cold War era, We submit that NZ's intelligence and security agencies undergo a radical reorientation and define who the enemies of New Zealand really are. Who has the capacity to actually destabilise our economy? International currency speculators. These agencies could actually do something useful if they turned their attention to this real enemy. Nor is this wishful thinking, Very recently Italy, a much bigger economy than ours, announced that it was directing its intelligence services against this very same group. Who else? Corporate tax dodgers, They can wreak havoc in an economy as small as ours. Lets see our secret agents deployed against European Pacific (the mysterious tax dodge company I1t the centre of the Wine Box Affair. and its ilk

THE POLITICIAN

with the same into court and into his grave WE.

Official Secrets and represents

in the of the SIS

4/11lternational wellbeing and economic These

are the only actual clauses of the Bill that we wish corn-

rnent 011, and only to reiterate the much more detailed sub," missions of any number of other groups and individuals. These are truly ominous clauses, that all manner of

groups (including ours, no doubt) become the of in··

telligence and security agencies because we be per-

ceived as adversely affecting either or both of the internetional or economic wellbeing of New Zealand, Other sub· missions have given the detailed critique of these clauses we endorse their comments. They tum criticism of government economic policies, which is the very in a democracy, into an activity worthy of covert surveillance and investigation. This confirms our views that the ing politico-economic ideology cannot abide wishes to see it weakened as far as possible.

51 Unless these agencies are reoriented and restructured to perform the useful tasks outline above, then the country is better off without them. Think of the money that could be saved. It could go towards clearing the national debt, or the Government could demonstrate real intelligence ami provide security for the education ami health systems.

We have no doubt that Waihopal could be sold and turned into a resort with a difference. The satellite TV dish in the country would be a drawcard in itself. And wealthy tourists would value the security offered by electric fences, surveillance cameras and floodlights. Any number of redundant SIS agents could be hired as security guards.

By David Fletcher

YOU WANT M! TO SPY ON MY OWN GOVERNMENT COLLEAGUES! WHAT kIND OF f't'lAN DO YOU THINK lAM?

fL .. '" PAY FOR THIS LUNCH.

81 APRil 1996

PAGE 20

J

N

1

I

M

I

July 1995 decisions

This month reports the largest number ofOIC decisions since we started analysing them in December 1989: 63, including eight deletions. However, 17 of these relate to one forestry operation hawking off small blocks of land to Taiwanese residents. The majority relate to land sales.

The controversial combined cycle gas turbine power station proposed for Stratford, Taranaki features this month. National Power Pic, a U.K. public listed company which "currently operates four similar plants in England and state they will provide leading edge technology and experience to the project" gained approval to "carry on business in New Zealand on its own accoun in partnership with Todd Petroleum Mining Company Ltd." The consideration was "approximately $300 t andmillion"

National Power and Todd were selected on 16 June as sole preferred bidder for the 350 megawatt power station by the Electricity Corporation of New Zealand Ltd. However the good intentions disintegrated only two months later when Electricorp announced that the partnership had withdrawn and it was putting the station up for tender again. National Power blamed "unexpected technical problems" that transmission SOE, Trans Power. had raised regarding the suitability and reliability of National Power's proposed design. The plant might automatically disconnect at times of system stress said Trans Power (Press, "Power station back to tender after problems", 21/8/95, p.35). Presumably National Power's claims to the OIC of leading edge technology were not to be taken too seriously.

Just a month later Electricorp announced that a consortium comprising Fletcher Challenge, TransAlta Energy of Canada, and A uck land distribution company Mercury Energy would build it. Each of the three companies would provide a third ofthe equity for the station, which was expected to cost $400 million. Electricorp said the sale of the project to the consortium was a "major step in the creation of a competitive electricity generation market". In other words it will be the first significant privatised power station in Aotearoa. The sale included a 12.6 hectare site near Stratford and a supply of230 petajoules of gas. The station should be commissioned in 1998. "Consortium wins power project", 15/9/95, p.I8.)

Whether the station provides real competition is a moot point:

I

1

I

Sill Rosenberg

all three partners in the consortium are significant owners of electricity supply companies and will want to maximise the benefits ofthe Stratford plant to their own operations. Added to that is Fletchers' 33% shareholding in the Natural Gas Corporation. And then there is the original reason for the plant being controversial: its carbon dioxide emissions.

Kingsgate International Corporation Ltd, 50.35% owned by CDL Hotels New Zealand Ltd and 31.79%, by Tai Tali. Securities Pte Ltd and Tai Tak Holdings Ltd of Singapore, has approval to issue up to B 1,060,443 shares at 10 cents a share to CDL Hotels New Zealand Ltd and/or Tai Tak Securities Pte Ltd to raise more capital. COL Hotels New Zealand Ltd is 68% owned by CDL Hotels International Ltd, itself52.8% owned by City Developments Ltd of Singapore, 37.8% by "offshore institutional investors" and 9.4% by Hong Leong parties of Singapore. Tai Tak Securities Pte Ltd is owned by Messrs Ho Whye Chung and Ho Sim Guan of Singapore. COL acquired its shares from the Has' companies in 1994 (see April 1994 decisions).

CDL Hotels New Zealand Ltd has also been given approval to acquire the whole of Kingsgate International Corporation Ltd. However this is strictly "on appro": "The applicants state that currently there are no firm arrangements in place to acquire further shares but that they wish to be in a position to do so should the opportunity arise. They already had had approval from the OIC in April 1994 to acquire 85.34'% of the shares. Kingsgate's major assets are two tourist related property investments in Australia. They are both in Sydney: the 400-room Hyatt Kingsgate Hotel and shopping centre, and the Birkenhead Point waterfront warehouse and marina,

A Singapore/Malaysia consortium has approval to buy the James Cook Hotel and associated car park and commercial and retail properties in Wellington for $37,500,000. The property is currently owned by the JR McKenzie Trust through James Cook Hotel Ltd and Rangatira Credits and Investments Ltd which it controls. The Malaysian partner is in the final analysis, the Government of'the State of .Iohor Malaysia through its investment arm, the State Economic Corporation, which in tum owns .Iohor Land Berhand, The Singaporean partner is Hotel Grand Central Ltd which "is a publicly listed Singapore company with expertise acquired through its hotel and property investment activities in south east Asia. It owns a number of hotel investments." In 1993, Grand Central acquired PUmmel' City Centre on

I. Note: All spelling of geographic and company names is as supplied by the Ole unless otherwise it is clear from the context that the source is from elsewhere. Errors are those of the OIC.

Areas are rounded to the nearest whole number.

Information quoted, unless otherwise noted, comes from the "decision sheets" of the Commission.

WATCHDOG 81 APRil 1996

PAGE 21

the comer of Gilmer Terrace and Boulcott Street and on Plimrner for $15.75 the Central Tower and Cashel Street Car Parking Buildings, Christchurch $10 million" to convert into a hotel, and Auckland for $71 million. It also owns the Chand Central Building in Manners Mall, Wellington.

New Zealand Properties (No. 1) Inc of the U.S.A. has ap-

to buy Aurora House and Chambers on The Terrace, Wellington for $36,450,000 The owner of New Zealand Properties is "Trust interests" associated with five U.S. residents, who "state that they have embarked on an investment strategy whereby available funds are spread internationally in commercial property. This property (owned by Mayfair Ltd lin ltquidationj) has been in receivership and liquidation since 1989.

Hind Hotels International Ltd, a Singaporean public company controlled by the .Ihunjhnuwala family of Singapore has approval to acquire Florencia Properties Ltd, a wholly owned subsidiary of the Skellerup Group Ltd for $15,100,000. Florencia owns one property in Auckland and one in Christchurch from which Sk ellerups undertake manufacturing operations, which they will lease back. "Hind Hotels views the acquisition as a natural extension to its investment property portfolio in New Zealand. According to the Press ("Offices planned", 25/1/96, p.20), Hind owns "more than $90 million in property in New Zealand". In May 1992 we reported:

In a decision initially suppressed but released on appeal, the Commission approved UK company, Chapman Properties Number One Company Ltd ("owned by Nzm Investments Ltd which is acting for a syndicate of creditor banks") buying an office complex in Great South Road, Penrose, known as Central Office Park, from Central Office Park Ltd (under statutory management) for "approximately" $38 million. Central Office Park Ltd is owned by the Aurora Group, from which "the applicant [Chapman Properties] will acquire certain other assets." By June this had been sold on to Hind Hotels International Ltd (major shareholders C.L, S.S. and L.N. .Jhunjhnuwala) of Singapore at the same price.

Permanent Trustee Australia Ltd of Australia is setting up a company, Big Bonds (NZ) Ltd. "to carry on business purchasing financial assets and issuing debt securities."

Benchmark Building Supplies Ltd, owned by Howard Smith Ltd of Australia, is taking a 30 year lease on 2,62 hectares of land in Ti Rakau and Burswood Drives, East Tamaki, Auckland to establish a retail outlet. Rental rates are yet to be determined but initial monthly rent instalments were $50,467 + GST. The land is owned by Burswood Developments Ltd.

Swift Energy International inc of the U,S.A. has approval to undertake "petroleum prospecting and the exploitation of any petroleum resources located in any licence area as may be approved ... " "Swift is engaged in the exploration development and operation of oil and gas properties in the

United States of America."

of

Further "regularisation" the position of Apple Fields Ltd is

decisions after it, "unknown to Fields", became an

overseas company in March 1994. One decision spective consent to acquire "interests in orchard and land owning companies (approximately 23

for "approximately" $199,925. A second tical terms, applies to 20 hectares third decision retrospective consent to "entering into transactions with Rural Super Bonds Superannuation Scheme (approximately I, 163 hectares),' priced at "approximately $11,400,050" This super scheme was the subject of significant criticism by the Securities Commission commentary on the January 1995

The fourth decision gives retrospective consent to the venture set up with the former owners and founders of Killinchy Gold icc cream manufacturers to form the processor Killinchy Gold Dairy Foods Ltd, for '",u',nnw mately $1,200,000". Since we last reviewed this venture (see January 1995) it has found itself in a spot of trouble. The structure of the joint venture is that 2 I ~/;, of the shares are held by Killinchy Gold founders, Brent and Thornton. The other 79% are held by Brands New Zealand Ltd, which is half owned by Apple Fields and the other half was to be sold to "processors and investors", in .. terest coming from "overseas as well as New Zealand". Daily Brands owns the dairy assets of Apple Fields, including 31 dairy farms in Canterbury, Otago and Southland. Its directors are a line-up of the Politically Correct of the New Right:

Ruth Richardson, Murray Valentine (Apple Fields chairman), Rob Campbell and David Bainbridge, a Tauranga businessman, The float was principally a means to reduce the debt of the parent company: its rationale was said by Tom Kain to be to realise the assets of the in-fated Rural Super Bonds scheme which owned most of the farms. It was preceded by Dairy Brands (projected profits to September 30, $2.91 million) paying a $27.05 million dividend to Apple Fields, leaving the company with a non-interest bearing debt to Apple Fields of$20 million, the bulk of which would be made up by the share issue. Loans of $2.55 million to Apple Fields by a company controlled by two executive directors of Apple Fields, brothers Tom and Charles Kain, would also be repaid and used partly for them to buy Brands shares.

"Dairy Brands to add value - chairman",

The float of those shares to existing Apple Fields shareholders ran into considerable trouble. Questions were asked as to why the Kain brothers were not taking up their entitlements to shares, although they did underwrite the issue by about $2 million. They, along with other underwriters, were paid fees of $94,395. Another major Apple Fields shareholder, Societe Generale, also declined to take up its shares, Apple Fields' confrontational stance against the and Pear Marketing Board then returned to haunt it when a minor (320 share) shareholder from Nelson, accountant Thompson, hired a public relations firm and an Auckland accountant to query the float. He that the 110at would leave Apple Fields with the risk of minimal forecasts in the Dairy Brands prospectus were

WATCHDOG 81 APRil 1996

PAGE 22

and questioned why shareholders should pay for

sets that they own. when

was paying 32.8 cents for shares where other share-

holders were 90 cents. Tom Kain said "it would be

unreasonable fix Apple Fields to pay fix something that it

already owned." Brands share float stirs con-

I "Further details sought on Dairy

Brands float" 2219195, p.I surrounds Dairy

Brands float", p,22.)

While this was going on, supermarket owner Progressive Enterprises claimed that letters of support in the Dairy Brands prospectus from four of its supermarket chains were printed without approval. Trevor Herd, Progressive's Chief Executive, said he "nearly died" when he saw the letters in the prospectus. Trading managers in the Countdown, 3 Foodtown and Super Value supermarkets had been approached in March with a request to comment on marketing strategies for Killinchy Gold's products, but no approach had been made to Progressive's management for permission to print the letters, and no approval had been given. The letters were not to be taken as endorsing the prospectus offer of Dairy Brands shares, and he disassociated the supermarkets from the document. However it appears that Apple Fields did have the various supermarket managers' approval to print the letters, but those managers hadn't checked company policy with the Progressive hierarchy. (Press, "Progressive lashes A Fields prospectus", 20/9/95, p,25,)

According to the Ole, Apple Fields is now 28''/0 owned by T/A Pacific Select Investments, and 13.21°/ .. by "various other overseas persons".

For some years, a company at Broadwood, Far North District, has been selling off small blocks of land to overseas residents as a way of raising funds for forestry development.

Such transactions continue in the

A similar scheme is district. It is related to the

Broadwood scheme because the contact for both is Ms

Deborah Auckland. "The New

Zealand a New Zealand company,

has a substantial area of poor quality farm land in

the Wanganui area which it is converting into a commercial forestry To date there has been little interest from New Zealand investors." So it is selling 19 blocks of land totalling 497 hectares at dents of Taiwan (different in each and in one case (Spruce Forest Company Ltd), Hong Kong New Zealand Forestry will manage the whole development and in each case a holding company is being set up as follows:

Hectares $ Value
Big Land Forestry Company Ltd 28 lO9.2()0
Braybrook Enterprises Ltd 25 110,000
Champion Products Company Ltd 20 88,000
Chen New Farm Company Ltd 51 224,000
Edwinton Ltd 25 1 J 0,000
Grand Innovation Company Ltd 24 92,400
Kaiben Properties Ltd 21 92,400
Kingo Forestry Company Ltd 20 89,760
Lin's Forestry Company Ltd 23 89,700
Loughborough Properties Ltd 25 110,000
Mou Fang Company Ltd 20 88,000
New Art Company Ltd 23 89,700
New Life Ltd 26 114,000
Pei-Li Management Company Ltd 20 88,000
Spruce Forest Company Ltd 30 117,000
Wen Chu Forestry Company Ltd 20 88,000
Winnie Trading Company Ltd 40 176,000
Wu Lin Company Ltd 20 88,000
Yungmaw Forestry Company Ltd 36 124,800
Total 497 2,088,960 The Bargain Hunters Arrive Early

81 APRil 1996

PAGE 23

Another unusual scheme surfaces in Northland this month, "approximately" Ltd for $1,500,00(1, The

of the company is apparently held local sharehold-

ers It owns 103 hectares land in Kertkeri, Far North Distrtct.v'The land will be subdivided into 12 orchards, ! 2 a main farmhouse and a small strip for golf course," The blocks will be allocated by ballot to the shareholders, but the orchard blocks, which will be adjacent to each other, will be planted and managed as if they were one entity by New Zealand appointed managers,

Evergreen Forest Ltd, which approximately ()2% owned by Funds I L.P. of the U.S,A. is buying 3,996 hectares of land from the 11,000 hectare Waipaoa Station near Cisborne for $7,700,000, "Evergreen proposes to convert the land, much of which is mudstone based soil and susceptible to erosion, into a commercial forestry operation, Such uti lisation of the land in the area has been actively encouraged by the Gisborne District Council. It is intended that 1,300 hectares will be planted by the end of July 1995 with the balance being planted by the end of June 1996," Pretty good going to plant I ,300 hectares in less than a month!

On in a report headlined "Waipaoa Station for inter-

national tender", Straight Furrow reported (p,21)

"One of New Zealand's largest privately owned farms, the 7,966 hectare Waipaoa Station in Poverty Bay, is for sale, Bayleys Real Estate has been appointed to market the property, which has been owned by the Clark family since [907, It is currently carrying more than 43.000 stock units and also contains 891 hectares of established pine plantations, The station has its own primary school, swimming pool, community hail and contains nine houses as well as single men's quarters,

The property is being offered for sale by international tender. Bayley's John Dobrowolski says because of its size, tenders will be able to be made either for the entire property or for one oftwo blocks of 4)73 hectares or 3,693 hectares. Mr Dobrowolski says each of these blocks has its own dwellings and farm facilities and could be operated as a stand-alone station,

Radiata pine has been planted on parts of both blocks progressively since J 985. The station currently winters approximately 24,050 sheep, J 7,500 of which arc Romney ewes, It also carries just over 4,000 cattle, half of which arc angus hereford cross cows, Over the last two years lambing has averaged 107 percent and calving 90 percent. The property contains two wool sheds. sets of yards, a range of general purpose sheds. stables and killing facilities,

The station takes its name from the river which forms its boundary. It is adjacent to Mangatu Forest, formerly a state-owned forest estab i ished in the j 960' s and now

owned Rayonier New Zealand, The farm was pur-

chased present owner David Clark's great grandfa-

ther John Clark in 1907, David Clark says he is selling the station to pursue other business interests.

---~--------.,---------

Mr Dobrowolski says the ",",,,,,e'riv be

an initiative introduced in the

1992 Budget to encourage in the

region.

Tenders for the property close on March 15, 1995,

We are not sure how to reconcile the contradictions between

this report and what the Ole tells us. First there the dis-

crepancy in size (1 1,000 versus 75,166 and sec-

ondly the ore reports: "Mr Clark claims that the sale of the land will provide him with the funds which are required to fully develop the potential ofthe remainder of Station," Presumably the tender fell through.

For details of who Evergreen and are, see the 120111-

mentary on the December 1994 ole decisions,

A joint venture between two major n.s, entrants to the forestry industry in Aotearoa is being formed. New Zealand Ltd (a subsidiary of Rayonier Inc of the and RIl, which has various subsidiaries in Aotearoa, but "ultimately predominantly owned nonprofitable, charitable and educational institutions from the U,S.A," are forming a joint venture to run their combined forestry holdings in the Wanganut area. It is identified by the OIC as the RH Madaket Ltd/Rayonier CNI Ltd joint venture, in which RII has 75%, and Rayonier (which will apparently do the management of the forests) 25'Y" , From RH Marlborough the joint venture receives approximately 1,957 hectares of land near Hunterville for NZ$2,254, 125 From Rayonier New Zealand Ltd it receives approximately 12,785 hectares for US$46,428,OOO (approximately $71 million). These consist of the Crown Forestry Licences and assets of the Ptrongia Forest, the Tawarau Forest, the Pureora North Forest, the Pureora South [Tfhoi) Forest, the Mangaokewa Forest. the Waituhi Forest, the TeWera Forest, the Erua Forest, and the Taurewa Forest,

In other rural land:

.. Three Hong residents are 20 hectares of

land at Peria, Far North District, Northland for $95,000 via the company Codima (NZ) Ltd. They wish to develop a commercial forestry operation using "New Zealand appointed managers",

~ Two Hong Kong residents who "state their long term plan is to immigrate to New Zealand" have approval to buy seven hectares of land at Kerikeri, Northland for $142,000 from Emerald Properties Ltd, owned by two other Hong Kong residents. The vendors must have been neglecting their land because the new owners "intend to tum the present unproductive orchard into a profitable business. The vehicle for the sale is Properties Ltd.

~ Three more sales of blocks of land for at

Smallwood, far North District, Northland have been approved, this time all involving residents of Taiwan. In all cases, the development will by "New Zealand appointed managers", In the first, four people,

PAGE 24

WATCHDOG 81 APRIL 1996

named company Great Asia 20 hectares for Pacific

of Green Nation Green Nation owns 40 hectares

25% of the share Ltd for but it is not dear

who owns the other 750;" of the company

Carter Holt forests Ltd, 51. ''!., owned by [11"

ternational Products of the is buying two

blocks of land new forest development "south of

Tokaroa" One 310 hectares for the other 165 hectares for $41 from PC Farms Ltd. There is no "Tokaroa" in the atlas on Iy South Auckland. Taranaki. The ole seems as

us as to where it is it fails to

the usual location. We assume it is Tokoroa.

\} U.s.A. residents, Messrs Dittmar, Druckenmiller and

arc restructuring their ownership of three farms on the Coromandel Peninsula. Carolina Farms Ltd will own I, i 89 hectares of land previously owned by Ned Farm Ltd Whangamata Farm Ltd, and Ohinernuri Farm Ltd, The farms were bought in 1991, when were reported by the Ole to total I 120 hectares, It appears more land has been acquired without notification. The same people own 212 hectares of sheep

land at Lake Hayes ncar Queenstown which they purchased the same year (then reported to be 210 hectares). The ownership of this is also be restructured, moving from Threepwood Farm Ltd to Protocol Holdings Ltd. Carolina Farms and Threepwood Farm are to be owned the Coromandel Settlement Trust, the

Stanley F. Druckenmiller Jersey Trust and the pel

the settlers of which are the three men

interests.

" Forestry Partnership, owned by

"a group of individuals from the United Kingdom", is buying 121 hectares of land at Mohaka, near Gisborne for through a company, Southern Forestry No. 28 Ltd. The land "which has deteriorated due to ero ..

sion problems and the infestation fern and black-

will be for forestry by Southern 1'01'-

New Zealand company which has extenYr.>"'Ci,r{f activities."

'" owned the Tiong of Ma-

five hectares of land near Rotorua, from the Ministry of Maori Develop-

meld for up to four years for per year. The

land will be used for a and stool bed nursery for

Ernslaw One's Titoki Forest in the southern Hawkes

'" square metres of

land near Hawkes for S'l "In Novern-

berl994 consent was granted to Ernslaw acquiring 512.1439 hectares of land near Dannevirke from R.W.

This of land was overlooked at the time

and "has now been trans ferred to Ernslaw as was origiintended"

Telecom Mobile Communications Ltd, a subsidiary of Telecom of New Zealand Ltd of the is buying another cellphone site, this time 400

square metres at Hawkes

WATCHDOG 81 APRIL 1996

"

and it bark to the

Ltd. "While Nelson Pine

A Field and Sons with its and

statutory requirements in these matters nevertheless it wishes to remove the source of complaint.

" Two citizens of the U.S.A. who will New

Zealanders to run the are 45 hectares of

land at Golden

Abrahamson Ltd for 8 to carry out organic farm-

"Their international contacts will assist in establishing export markets for their organic produce."

'" Two residents of who

intend take up New Zealand buying nine hectares of land at Pokororo,

Nelson for $260,000 company Motueka

Farms Ltd. They intend to develop the properly hornestay/tourist activities.

.. Southland Plantation Forest Company of New Zealand Ltd, which is 5! '% owned by New Company Ltd of Japan and 49%, owned by Itochu Ltd of Japan, is a further 77 4 hectares ofland in the Lilburn District, Southland for $900,000. The propcity is currently a "marginal economic sheep and cattle operation" The actual conversion of the land to

and subsequent will be contracted to South Wood Export Ltd, which is '/yo owned by C Itoh and 662/,% by M,K. Hunt Foundation Ltd of Aotearoa. Similar sales and developments were reponed last month.

Milburn New Zealand Ltd is restructuring some of its as-

sociated companies, McDonald§ Lime 52''10 owned

Milburn, is acquiring "all the property rights, powers, privileges, liabilities and obligations" belonging to its wholly owned subsidiary McDonalds Coal Ltd, in Taranaki. Milburn is approximately 72.5%, owned by Holderbank Financiers Glaris Ltd of Switzerland.

August 1995 decisions

The highly contentious Telecom Corporation

of New Zealand to purchase its u.s. parents' interest in Network Television Ltd has been approved by the OtC without even a blush. This despite the fact that it earned widespread public criticism for the privileged position it would give Telecom in yet another strategic market and eventually was subject to an appeal to the Commerce Commission, A High Court injunction was taken out to prevent the sale going ahead after the Commerce Commission initially allowed the sale.

At stake here is the future of the much-ballyhooed "information highway" in Aotearoa. Though Sky Largely an entertainment medium, a cable TV in competition with Telecom could well see it worthwhile to progressively lay fibre-optic cables to subscribers (and potential subscribers). This would put pressure on Telecom either to do the same or at least lower costs and access barriers to its competition, In other words, Sky could potentially be to

Telecom

information and what Clear

been in toll calls, That could I<"'lt""'1nT of om information also be used for many other the Internet

As Clear Janiene said: "It is

that the dominant telephone company could nant pay television company without it

of dominance. Clear and fellow tor, BeHSouth (of tho are the to the proposal in the High Court and to the Commerce Commission, BeUSouth spokesperson, James Norman, said the Commerce Commission had missed the point and completely overlooked the big picture - convergence of telecommunications, entertainment and computing. The offered IlLII,<O!!I""U for a monopoly to dominate the industry so that it might be uneconomic for competitors to bring in other technology, he said,

Though more independent, the Telecommunications Users Association of New Zealand Inc (TUANZ) came to similar conclusions. The last sentence of the following comment by its chairman, Don Hollander, is particularly telling:

"TUANZ opposed the acquisition in a submission to the Commerce Commission .. Our argument was that what the Commerce Commission perceived as separate markets (telephony, television distribution and television transmission) were converging in to one. With Telecom the obviously dominant player in telephony services and Sky the obviously dominant player in subscription television services, TUANZ felt that the acquisition would put too much market dominance into a single organisation without any formal structure for resolution of network interconnection issues. Indeed TIJANZ made the point that with recent refinements of technologies, the natural monopoly was not the transmission infrastructure, but the customer base required for ubiquitous service, (TUANZ Top-

ics, "Chairman's Comments", October I p.L)

For most people, the "information is likely to be

predominantly the "entertainment giving access

to the likes of pay TV channels and video on demand. But information can also ride along the same cables- and can be cheaper if it is shared with the high use of entertainment So while the public squabbles may appear somewhat frivolous and focussed on multiple cable TV entertainment channels, there is a very serious side to the matter: who controls our information channels of the future')

Of course the issue is not the monochrome sus bad guys movie that the warring ing. Even if Telecom is eventually prevented from its shareholding, the shares it is buying were owned by subsid-

iaries of its Bell Atlantic Ltd

and Ameritech Ltd of the lULA,

cry interest in putting pressure on Sky in the same way that

Telecom would. Even don't. are Clear, BelfSouth or

U.S.-owned Kiwi Cable present putting experimental

cable into Hutt Valley homes) to be preferred? Any of these

lation cities and towns, the costs of of facilities

in fact up from that of a controlled mo-

Which us back to the of the owner-

of Telecom itselfI f it had had not been and

the to use some of its

none of these

The Ole says in

that

"The effect of the is to increase the ultimate New Zealand beneficial ownership of through Bell Atlantic and Ameritech (which are both 100%

United States owned and transferring their

interests in the HKP to Telecom which has

a significant New Zealand presence and shareholding.

Telecom see the acquisition of an interest in Sky as providing it with access to the skills and facilities necessary to its of becoming a provider of entertainment and information products as a supplement to its core telephony services. Telecom believes that the with TCl New Zealand and Time Warner New Zealand through the HKP Partnership and with itself will benefit Telecom and New Zealand as Telecom establishes its entertainment and information services,"

Do we want Telecom our information as well as

our Does the OIC cam?

The formalities of the share exchange are somewhat complex. :5 !.13''/o of the shares of Sky are owned the 50-

called HKP of New Zealand. This "'HH11'T'_

ship consists of the cable TV nn,pr"t,w

TeieCommlmicatiol1ls hie of the U.S,A. subsidiary TeI New Time Warner of the V.S.A. Bel!

Atlantic and Ameritech. Telecom is up three subsid-

Pippin Ltd Pippin Investments

~Ltd (PIL), and Splendour investments Ltd First PUL, then PIt, would take 24,5% ofHKP from Bell Atlantic, SIL would take 24.5% of the from Ameritech, Telecom then has 49<% of HKP and 25.05% of The

amount to be paid has been though HKP paid

$ I 00 million for the shareholding in in 1991. The other

shareholders in are Construction (headed

by A Ian Gibbs and Trevor 7.5 Todd Communi-

cations of the Todd Corporation) ILS.

sports TV network ESPN 0.4 and and

Terry Jarvis 15.85% between them. HKP has a con-

and its New Zealand partners include some and New Rich of the New Right

New Zealand 1/7/95, Sect 4, p. I;

"Telecom takes 25pc of Sky", "Opponents appear after Telecom

WATCHDOG 81 APRIL 1996

26

· "C'kar

with

ofSalmond Smith Biolab Ltd Tlong Fam-

Kar am ea Holdings Ltd for

The of also

construction and other interests in Salmon Ltd in which they

have increased their shareholding to 35.55% of

71 ofthe partly-paid shares and all

of the convertible notes. The two companies are the princi-

salmon in Aotearoa: Regal Salmon 42% and

Southern Ocean Seafoods (Salmond Smith's fish-farming

29'% of the country's production. So if the Salmond

Smith takeover the will control 7 j % of the

farmed salmon output.The Tiongs say the Commerce Commission shouldn 'tworry because of competition from and other foods. They are considering merg-

the two salmon farming operations.

The takeover bid depended on the attitude of the Treaty of Fisheries Commission which owns 43% of Salmon Smith, and took several months to gestate because of disover the fairness of the Tiongs' offer. The final involved the Waitangi Fisheries Commission assets hack from Salmond Smith Ihese include lobster and paua quota in the Chatham a Palmerston North export canning operation, and abalone operations. Salmond Smith's other assets include Newman's processors and marketers of berryfruit and owners of a sphagnum moss operation; the New Zealand and Australian business of Rhone-Poulenc

Products a scientific products group;

an Australian based manufacturer of dispos-

and Artel, a and brushware opera-

tion. The Ole lists in Auckland and Nelson in

addition 10 the Chathams. Both Salmond Smith and Regal Salmon are in some financial Salmond Smith an-

SI fall in profit in the year ended 30/6/95,

bailed out by the (see our analysis

1995 A. valuation of Salmond

The OIC approved $1.75 a offered by the Tiongs was buy", 15/2/94;

Newman's ,25/2/94; "SSB

SSB looks for higher share "SSB warned of grim p.26; "Tiong nets Regal p.29; "Sal Smith takeover de-

WATC:.HDOG 81 APRil 1996

The merger between Tasman

old and SEAJUL

This was foreshadowed in the December 1994 dec.! sions when SEABIL set up Trans Tasman The vehicle for the full

approved Tasman Properties (NZ) Ltd. "As part of the

issue shares to SEABlL mandatory convertible notes in SEABIL notes will ultimately become notes in Tasman. is for Tasman Properties Ltd to the assets of SEA BII, (NZ) Ltd and to issue ordinary shares to SEABlL Holdings Ltd and convertible note holders. SEABI! is venture between SEA Holdings of Kong and Brierley investments Ltd (BIL). Before the merger it was already said to be the biggest commercial property owner in Aotcaroa. Tasman's main shareholders other than SLAB!L are Grantham Mayo Van Otterloo and (GMC)) 01

Boston, U.S.A. and Franklin Resources Ltd

also of the lLS.i\.

No value is put on the Ole-approved but news reports put the assets ofthe new company at about $1 bi [lion in Aotearoa and Australia: 30'% in Wellington, 28°;(, in Auckland, 20% in 6'?o each in Christchurch and Brisbane, and the remainder (Press, "Halfprofit payout from T las SEABIL held about 35% of Tasman's

and the other

strategic overseas shareholder, GMO, also appears to support the merger. "Tas Prop holding", p.33· "Lu stakes company reputation on Seabil- Tas Props 7/10/95, p.27.) The merger raised controversy in its early because some considered that shareholders would lose from the deal. Sharebroker Jordan Sandman Were said SEABIL minority shareholders were saying that the merger would tum company into a company with a debt-to-equity ratio of 120%. SEAB II. had a ratio of 66% and Tasman 185% before the merger. It was to the original intent ofthe SEAHlI plan hurts the minority, says broker"

Mct.aughan said holders would be merger" The new company would not pay a even if it did it would be funded Tasman's cash flow, One of the reasons fC)T the merger was to enable SEABIL to fulfil its prospectus of a dividend through its existing cash flow, the author ofthe Warren Doak, said. Otherwise it would have to sell properties. Tasman was just emerging from several years of losses. (Press, "Tasman shareholders the merger losers broker"

p.24.)

Doak also made the telling statement that "the merger would give the group sufficient size and liquidity to attract over-

PAGE 21

Tasman form $1 b prop-

tion" on the success of the merger. He the

group to pay a dividend of 4.5 cents a share out of cash but that the merger did not Tasman shareholders would no! receive a dividend. ttl reiterated Doak observalion that the company would be to at-

tract overseas interest. stakes company repura-

lion Oil Seabil-Tas Props , 7; 1 A report

independent Tasman directors from Cavill made recommendations on the final details of the merger and said that "Tasman Properties shareholders will trade potential capital gains for reduced risk" in the merger. It gave no recommendation for or against the

merger. A parallel report commissioned independent

SEA BIt directors, Bancorp concluded that

SEABIL holders of convertible notes would benefit but those not to take mandatory convertible notes would only

maintain their position after the merger, "Tasf'rop

Seabil benefits outlined", 19/10/95, p.39.)

In order to raise Alliance Ltd has approval to issue up to 40 million $1 shares to a syndicate of overseas banks and other financial institutions. "Alliance as part of it; on going capital raising plan has agreed with its syndicate of banks and other financial institutions that it will issue secured capital notes with an aggregate principal amount

The takeover is neither unnoticed nor unopposed.

Seafarers Union during 1994 dispute with NZ Rail

of $40 million. The

Dotes are convertible into shares

upon the occurrence of certain default-related events." The "from time to time":

Ltd

Bank of New Zealand Bank Pic

Hongkong and Shanghai Corporation Ltd

Indosuez

National Bank of New Zealand Ltd NZiB Investments Ltd

South Australian Asset Management Westpac Banking Corporation Banque Francaise du Commerce Exterieur

Berliner Bank AG

Commerzbank Aktiengesellschaft Rabo Australia Ltd

Halbury Ltd, a subsidiary of Pacific Century Telecommunications Ltd which is controlled by R Li of Singapore has approval to carryon business, being "in excess of $10,000,000". Halbury modestly "intends to establish a private satellite based telecommunications network to customers throughout Asia and elsewhere.

A Taiwanese, Mr T.Y. Tseng, is taking full control oftwo developments he has been involved in, In each case he tells the Ole that the developments have been completed or "reached maturity" and there is therefore no need for his partners' continuing involvement. The total price paid is $4,500,000.

First is Woodland Property Holdings Ltd which was 50'% owned by Tseng and 50%, by Woodland Group Uri of Aotearoa. It was "established in 1993 to undertake primarily commercial and retail property developments." In this he is as good as his word because in the approval for setting up the company, he told the OIC that "once the development is completed then Woodland Property will acquire the development from the Woodland Group". The Woodland Group was formed by Neville C. Mahan, a prop' erty developer who also is a business associate of Christopher Norrie, an American lawyer who was responsible for an elitist residential property development in Newmarket Auckland. A Norrie/Woodland project in March 1994 had the Queenstown Lakes District Council a hectare property at Queenstown to Fernhill Hotel Ltd, for a price that was been withheld. "It is proposed that the property be developed as a resort Hotel/Condominium complex, There is already in existence planning rights for such a development .jhe vendor (the Queenstown Lake District Council) is disposing of the property in order to promote the objectives .. " Fernhill was 25% owned by Norrie and 75%, by Woodland Property Holdings Ltd.

Second are Custodian 1008 Ltd and Formosa International Golf Club Ltd which were both 87,5% owned by Tseng and ]2,51)/" owned by Mahan. The two respectively own 72 hectares and 126 hectares of land at Maraetai/Whltfcrd, Manakau Auckland. They "were established to develop an international class 18 hole golf course with all related facilities ... the development of

WATCHDOG 81 APRil 1996

the related facilities have now reached maturity, , ongoing work in respect of the development of the course will be carried out by professional consultants Boffa Miskell," This development was approved the Ole as recently as December! 994:

"'I. Y. Tseng and associated family interests, of Taiwan are spending $8 million to buy a total of 98 hectares of land in two blocks in Maraetai/Whitford, Manukau City to develop into an international class J 8 hole golf course 'with all related facilities including residential condominium and hamlet developments and a resort hotel,. Mr Tseng who owns a number of international golf courses and clubs in Taiwan which he has developed has the expertise and financial means to undertake the development The applicant states that the development will be New Zealand's first truly international golf course and Mr Tseng proposes to promote the course to be placed on the "circuit" for international golfing events in conjunction with his existing golf course facilities.

A Mr T. Y. Tseng, chairman of the Taiwan First Investment and Trust Company ("one of the largest investment trusts in Taiwan", 40 per cent owned by Citibank), visited Aotearoa on a trade and investment mission with other businesspeople in September 1992. He was described then as being the owner of the First Formosa Golf Course and the Yangmei Golf Club, and mentioned to the organisers of the mission "an interest in investing in or purchasing a New Zealand golf course with a view to developing it into a complex which would appeal to international tourists offering accommodation, restaurants, bars, tennis, squash, spa pools, etc." He was "reputed to be one of the richest individuals in Taiwan" and on his first visit to Aotearoa, accompanied by his wife. He was described as "a very keen golfer currently playing off a 3 handicap having played to a scratch handicap for many years.t'(I)

Once again there are a number of sales of small blocks of land to residents of Taiwan for forestry development, organised by Deborah Miller, Brookfields, Auckland, Two arc each 0[20 hectares at Broadwood, Far North District, Northland, each being sold for $95,000 to .Iadebrook Developments Ltd and Elmere Enter-prises Ltd respectively. The other six are at Paparangi, Wanganul. Though the creativity in naming the various holding companies which we saw in the early Broadwood sales has largely vanished (remember Loyal View Properties Ltd and Prime Prosperity International Ltd"), the name of one company involved in the Wanganui sales must get high marks for black humour:

Yanganui Ltd, owned by three people including Yang ChiaLin, The sales are as follows:

Holding Company Globe Ltd

Grace National Trade Ltd

Hectares 20

21

$ Value 88,000 83,160 117,000 109,156 93,600

127,600 618,516

Huang Ying Forestry Company Ltd 30

Liann Commerce Group Ltd 23

Winmax International Company Ltd 24

Yanganui Ltd 29

To~i 147

WATCHDOG 81 APRil 1996

In other rural land,

e A Hong resident "who

Zealand permanent hectares orland at through Brookbank ~'r,'''r',''ll''T based management group", Franklin Rural

ment, will manage the property which has

proximately 30 hectares" in forestry. The remain-

der will be planted with trees,

.. Two residents of Switzerland have approval to buy 21 hectares of arable land at Kill Waikato, for $625,000. They have applied for permanent residency and propose to establish a business for tourists on the property.

.. Carter Holt Harvey Forests Ltd, owned mately 51 ''10'' by International Products of the U.S.A .. is entering into a joint venture with the lessees and the owner of 272 hectares of land near Kawhia In the King Country, South Auckland. The joint venture is acquiring a Forestry Right for approximately 32 years over the land for $34,96]. Three-quarters of the land is on unstable soils, about 50 hectares being moving bare sands. Approximately 72 hectares are already planted in pinus radiata and the lessees and land owner wish to stabilise the majority of the remaining land. "It is claimed that without. the assistance of Carter Holt in the joint venture the land would remain unproductive."

<8 Carter Holt Harvey Forests Ltd is also buying 264 hectares of land north ofTaumaranui for $450,000 for forestry planting as part of its "purchase programme to enable it to establish new forest areas to provide the necessary renewable resource for its forestry related operations.

" The Muttamara Family ofThailand arc buying S hectares of land at 529 Pys Fa Road, Tauranga, Bay of Plenty, for $542,500 for use "as a small lifestyle block". Members of the family "propose to apply for permanent residency". The company used for the purchase is Lawbase Shelf Company No. 30 Ltd.

® Ernslaw One Ltd, owned by the Tiong Family of Malaysia, is buying another large block of land for forestry development near Dannevirke, Hawkes Bay. This time it is "approximately" 786 hectares for which it is paying $t,OOO,OOO. Apart from the minor purchases last month, Ernslaw last bought several such blocks of land in December 1994. According to the

"Ernslaw aims to establish approximately 12,000 hectares of primarily Pinus Radiata forest ill the Horowhenua/Manawatu and Southern Hawkes Bay/ Dannevirke regions over the next five years, To date approximately 5,725 hectares have been ." The new planted areas in conjunction with Ernslaw's existing forest interests in the region will provide Ernslaw with the resource base required to establish a major wood plant in a ]5 to

20 year time frame. The Commission is further advised that the land is considered farm land due to its contour and poor soil property would be better utilised for forestry than pastoral farming."

<I!l Two U.S. residents seeking in

Aotearoa are buying 23 hectares of land at Nelson for

PAGE 29

to reside. As well of the prop-

also propose to develop a

micro business tailored to upper United States of America market clientele the prop-

at 66 Upper Sefton North Canterbury for $410,000. It "will allow for future expansion by providing additional land over which the mobile irrigators can deposit the mill plant effluent" from their panel mills.

(1j An Australian who already has two farms at Cheviot in

is buying another hectares of pasto-

rat lease adjoining them for $913,000. It will be man-

aged by the same farm manager as the other two. The new owner is ,J. who a member of the Black Family which owns the 730 hectare 'Glencaim' station, at Dipton, Southland (being developed for for-

and the 5,967 hectare Mendip Hills Station in Canterbury. The Family is also 49.5% owner of Craig pine Timber Ltd (Donaghys Ltd owns the remaining 50.5%), which owns a six hectare rural property containing a sawmill leased from Addington Joiner; Ltd (in receivership), Yaldhurst, Christchurch (see May 1994). The two Cheviot farms are 408 hectares offreehold land and 824 hectares of pastoral lease. All three farms are owned by companies carrying the Koromiko name. This month's property is owned by Koromiko Property (1993) Ltd.

" A man from New Caledonia with New Zealand permanent residency has approval to buy a seven hectare block of "barren and unproductive" land near Queenstown for $150,000 on which he proposes to establish a vineyard. It adjoins an existing vineyard which he owns.

® Southland Plantation Forest Company of New Zealand Ltd, which 51 ''10 owned by New Oji Paper Company Ltd ofJapan and 49% owned by Itochu Ltd of .Ispan, is buying a further 482 hectares of land in the Centre Hill Survey District, Southland for $800,000. As in previous similar purchases (such as last month), the actual conversion of the land to forestry and subsequent operation will be contracted to South Wood Export Ltd, which is 33 ii/X! owned by C Itoh and 662/)% by M.K. Hunt Foundation Ltd of Aotearoa,

1995 decisions

Treneait» takes control of

TranaAlta Corporation of Canada subsidiary TEC Utilities Ltd gained approval this month to take a further 21 % shareholding in Hutt Valley and gas supply company, EnergyDill'ect Corporation Ltd for

$69,004,433. TEC at the time had 20%" of

Energyfrirect. This limit was forced company rules dis-

allowing anyone shareholder more than 20% of Energylrirect, a cap common newly privatised power supply companies to protect local control. A month

earl in Trans-Alta was working to persuade

Takapuna supply company, Power New Zealand

(itself 34% controlled by of the to sell its 20% stake in Energyljirect, and to Community Trust which is a major

WATCtmOG 81 APRIL 1996

nadians move to raise stake in

The removal of the cap was forced

which banned such caps "Power company majority of shareholders was vote for the removal of the cap, but Trans/vlta made a conditional of Power New Zealand's 20% and Todd 0.92% on September 12 power merger closer", I p,28), and obtained the approval from the Ole in anticipation of that vote on 13. TransA Ita had previously used its 20% stake to prevent a merger he tween Energyfrirect and Power New Zealand hypocritical "local control" rationale; hence the readiness of Power New Zealand to sell its shares (see commentary on the November J 994 OIC decisions). Eventually TranaAlta persuaded the EnergyDirect Shareholders' Protection Association and the Community Trust to support removal of the cap, despite opposition from the lobby group, Community Power (Press, "Way cleared for TranaAlta", 2019195, p.27) and the vote went 39 million for and 700,000 against, a week after the OIC approved the sale "Vote waives Efrirect cap", 23/9/95, p.24). The formal sale of shares went through in early October giving Power New Zealand a handy $20 million profit (Press, "Power NZ sells Efrirect", 7!l 0/95. p.27).

TransAlta is regarded as a "cornerstone shareholder" in Energylrirect with 41% of the shares. In November Mike Pavey, Trans Alta's senior vice-president and chief financial officer, was appointed to Energyfrirects board giving TranaAlta effective control through a formal agreement with the Community Trust However the Shareholders' Protection Association fears Trans.Altas control will mean job cuts and big rises in power prices. Energylrirect chairman Ron Arbuckle and Community Trust chairman John Burke agreed that job cuts were possible through contracting out maintenance work, but claimed "large" increases in power bills were unlikely. (Press, "New post likely to hasten power

merger",llIll p.27.)

TranaAlta also has management control of the neighbouring Wellington city power company, Capital through a 49% shareholding. The Wellington City Council owns the other 51 %. A merger of the two companies appears inevitable. TranaAlta's control of both companies has been followed by discussions expected to lead to firm merger proposals. (Press, "Wgtn power merger closer", 13/9/95,

"New post likely to hasten power , 1111 1/95, p.27)

TranaAlta also is one third of consortium (with Fletcher Challenge and Auckland power company, Mercury Energy) which took over the construction of the controversial Stratford power station when Todd Petroleum and U.K. cornpany National Power were forced to withdraw (see commentary on July 1995 Ole

Changes in the Insurance" '''''''''' .. '., The insurance industry features in three approvals which appear to have received little press coverage:

Sun Alliance Insurance Ltd, a subsidiary ofSI.H1 Alliance

PAGE 30

Pic of the U,K. has 'W""r{Hf'> cial Union Gell!~ral Assurance Commercial Union Pte of the iLK, Commercial Union has operations in and Auckland. The has been

Commer-

Hunter Premium Funding Ltd, a ofMMI Ltd, a public company from Australia is setting up in Al.lckll111111 for a sum that "exceeds $10,000,000". "It has identified New Zealand as an opportunity for expanding its Australian operation of funding commercial insurance premiums ... the

markets will be the insurance pool managed by local and international insurance brokers which currently generates very little funding. The applicants claim that their entry to the market will bring significant expertise to the New Zealand insurance industry."

And the AMP Society of Australia is "rearranging the way it conducts its New Zealand business" by setting up AMP General Insurance Ltd for "in excess of$1 0,000,000". "It is moving from a New Zealand subsidiary operation to a branch operation"

Increase in Singapore Government share in BellSouth eel/phone network

The Singapore Government has approval 1.0 increase its shareholding in the Bellbouth cellular phone network from 20% to 35%. The price is suppressed. Singapore Technologies Pte Ltd (ultimately owned by the Singapore Government) currently has 20% share in BcllSouth New Zealand Partnership, with the other 80% held by Bellxourh Enterprises Incorporated of the U.S.A. The increased interest is through subsidiaries Singapore Technologies Cellular (NZ) Pte Ltd and/or ST Telecommunications Pte Ltd. "Singapore Technologies has interests in new technology ventures throughout the world and its interest in the BellSouth mobile telephone network is in keeping with its technology focus. BellSouth is Telecom's only current competitor in the cellphone market, claiming 90% coverage of the country but probably only 5% of the market. Its strategy is to pick the eyes out of the market business and heavy users. It claims problems with local authorities in establishing its cellphone sites (for example local residents in Christchurch are currently fighting its sites on health grounds), but interestingly it has never applied to the OTC for purchase of such sites, though Telecom regularly does so. (Press, "Bell Sth nears 90% cover", 19/6/95, BelfSouth is rumoured to be interested in buying part ofTelecom's main toll competitor, Clear Communications.

Unllever's Abels division sold

Unilever Pic of the U.K, selling its Abels division in Aotearoa to Aspak Foods Ltd, which is equally owned

.3% each) by the New Zealand Dairy Board, "New Zealand based companies", and Goodman Fielder Ltd of Australia. As the ole points out, "the acquisition will result in the Abels business reverting to majority New Zealand ownership", though in fact Aspak is by law an overseas company, more than 25% overseas owned. The price has been suppressed. Abels was owned by Unilever New Zealand Ltd" a subsidiary of the U.K. parent.

WATCHDOG 81 APRil1996

to

July 1995, were

tium which bought the James Cook Hotel and associated car

park and commercial and retail in Wellington for

$37,500,000. It has other in Auckland. Wellington

and Christchurch (see the

The Tiong Family of Malaysia continues to extend its in terests in Aotearoa, It is two further substantial areas of land for forestry development and it is increasing its control of fish fanning. The blocks of land, both being sold to Ernslaw One Ltd, a Tiong company, are:

'<11 2,359 hectares at Lumsden, Southland, purchased for Sl,750,OOO from the MH Heenan Family Tnast. "The acquisition is the ninth in a series of purchases in the Southland/Otago District by Ernslaw and represents continuation of Ernslaw business strategy of establishing a substantial Douglas Fir resource in the area. Ernslaw aims to take advantage of the market opportunities ereated by Douglas Fir production failing in the Pacific Northwest by establishing a Douglas Fir Resource in New Zealand ... Ernslaw claims that afforestation programmes are more labour intensive than farming generally and it

hectares will be

is en visaged that one person per employed."

569 hectares at Birch Road North Weber ncar Dannevtrke for $900,000. "Ems law aims to establish a Pinus Radiata forest in the Horowhenua/Manawatu and Southern Hawkes over the next five years. The new planted area in conjunction with

Ernslaw's forest interests in the will pro-

vide Ernslaw with the resource base to estab-

lish a wood in a J 5 to 20 year time frame." The sale allows the vendors to move nearer to town, although they will lease back the property until forestry planting begins and find another farm There has been a series of Ernslaw, the last one

The fish farming company is Salmon Ltd. Before the latest approvals, it was owned 24.8%, by Sheikh Stillman Olayan of Saudi A rabia and I L29%, (NZ) Ltd, a on Stewart Island and in

convertible notes issued in

which when converted March 1 will

47% of Regal.The second "n'nnH/~

Sheikh Suliman "wishes to realise his investment"

PAGE 31

to Oregon for an immediate because news reports quote director Thomas Song as

brought the Tiong' shareholding to 7135'}~ of the partly-paid and all of the convertible notes. The Tiong's 70% control of Aotearoa's fish farming was described in our commentary on the "Tiong nets Regal

Six more blocks of land bought for forestry by Garter Holt

Carter Holt Harvey Ltd .. 51 % owned by International

Products ofthe tlSA. has approval to buy six blocks of land, totalling hectares and $4,669,400. all "to enable it to establish new forest areas to provide the necessary renewable resource for its forestry related operations":

'" i58 hectares at Taumaranui for "approximately" $205,400;

e 779 hectares at Taumaranui for $840,000 (in this case 175 hectares closer to Taumaranui is being sold to the vendors by CHH);

.. 455 hectares at Owhango, King Country, for $550,000; " 537 hectares at Owhango, King Country, for "approxi$850,O()O;

"1,031 hectares at Owhango, King Country, for $2,038,000;

<11 90 hectares in Hawkes Bay for $186,000;

More Telecom eel/phone sites

And while on the corporates, cell phone sites are springing up all over, with Telecom Corporation of New Zealand Ltd subsidiary, Telecom Mobile Communications Ltd, buying up no less than seven small sites around the country this month. All had the price suppressed. They were:

.. two in Rotorus: one of5,500 square metres in Rotorua North, the other 01'3,000 square metres in Rotorua West (purchased from "proprietors of Ngatiwbakaue Tribal Lands");

" two in Canterbury one on ,600 square metres at Greta , the other 00,500 square metres at Mt Michael; <Il two of 400 square metres each at Hunterville, Wanganui and Taihape;

" 900 square metres at Masterton, Wairarapa,

And more blocks of land sold to Taiwanese investors

Uehon.ih Miller of Auckland is organising the

further blocks of North Island land for forestry deunder local managers. Again they are at Broadwood, Northland and Paparangi .. Wanganui, but there

are some twists this month:

® A block of 19 hectares at Bruadwood, Far North Dis-

Northland. owned by two residents of

is resold to another Taiwan resident. The

vendors, when they bought it in December 1993 (via Ms

from North Afforestation (NZ) Ltd), pro-

claimed it as term investment" They

it for and are now selling it for $80,000.

The holding company for the land is Moonglow Prop-

---_. _. -.-~----~.

WATCHDOG 81 APRil 1996

erties Ltd.

., Two blocks are

sold from

District to Taiwan residents. One

$101,200 (via the Eternity hectares for .a- ,.:~. ';'"",,

Ltd).

" In a considerable departure from the usual property of 2,Hi2 hectares at Ruakaks is being sold to five Taiwan for $2,500JHIO. Again the forestry development proposed for the land will usc a "New Zealand based

Other rural land sales In other rural land:

.. A resident of the U.S.A. who "is investigating the possibilities of taking up New Zealand has approval to buy four hectares of land at Mahinepua, Northland for $280,000 "to erect a personal residence for her own use on her regular visits to New Zealand" It is purchased via Bundaron Holdings Ltd,

@) A U.S.A. resident who "will be applying for New Zealand permanent residency" has approval to buy! 1 hectares of land at Kaukapakapa, Auckland for $:165,001.1. He proposes to erect a house on the property for his own use as a "lifestyle block".

II A resident of the U.S.A. who "is seeking New Zealand permanent residency" has approval to buy two hectares of land on Waiheke Island for $395,000, He "states that he intends to construct a house on the property which will be used as an exclusive tourist In addition. the applicant states that yachting charter services will be operated. The property has been on the market for approximately 3-4 years and is being sold as part of a subdivision of a larger property." The purchase is through the company Island Holdings Ltd,

~ Two decisions approve land being used for ostrich farming. A. and E. Embrey and K. and J. Lester, all of Australia each own 50% of Kea-J Ostriches Ltd and 33,3"/0 of'Phoentx Ostrich Company Ltd, The remaining 33.3% of Phoenix is owned by two New Zealanders Kea-J has approval to lease for up to nine years approximately 65 hectares of land on Puketutu island. Manukau, Auckland. (It is noted that "Puketutu Island although so called is not an island as it is connected to the mainland in three different places, ") The rental is $60,000 per annum. Kea-J also has retrospective approval to carry on business in Aotearoa. Phoenix has retrospeetive approval to buy eight hectares of land at

Wattoki, Auckland for $355,000. Ostrich in

which the Embreys and Lesters "have expe-

rience and expertise", will be carried out on both blocks.

@ .Iuken Nissho Ltd has approval to buy "approximately" I ,220 hectares of land at Wuhaka, Gisborne for

$675,0(1) as "a continuation of its

afforestation

programme in the Gisborne region. Juken Nissho pro .. pose to establish a commercial forestry operation 011 the property which will provide an ongoing supply of

to their existing mill as well as to their new

mill."

@ Nelson Pine industries a

Forestry Company Ltd of Japan, has 580 hectares of land for Tn'-PUir\!

in the

PAGE 32

Valley,

The reason for the is to it some in-

dependence from its competitor, Fletcher Challenge:

"Nelson Pine owns and operates a substantial medium density fibreboard manufacturing plant in Nelson. The Commission is advised that although Nelson Pine owns areas of forest it is to a very large extent. still dependent on annual purchases of chip wood from Tasman Forestry Ltd, a significant competitor of Nelson Pine. the establishment of the forestry operation will assist in Nelson Pine becoming more self sufficient in chip wood, thus ensuring the ongoing viability of the Nelson manufacturing operation.

., A U.K. resident who "has applied for" permanent residency has approval to buy Nockatunga Farm Ltd which owns a 68 hectare farm near Oamaru, Otago for $325,000. He wants his own farm in Aotearoa and "states that he has both business and practical skills that will enable him to introduce new and innovative ideas in livestock management particularly in prime lamb production in which he has specialised in the past.

.. Fulton Hogan Ltd, which is 36.67% owned by Shell New Zealand Holdings Ltd of the U.K has approval to buy eight hectares of land on the Balclutha/Lawrence main road, Otago for $80,000. Fulton Hogan already has a quarry on adjoining land which it wants to expand into this block.

I!I South Wood Export Ltd is leasing 98 hectares of land in Southland for forestry. The price is in kind: "30% of the market value of the lumber harvested". South Wood has until now mainly been seen as the manager of forestry developments for Southland Plantation Forest Company of New Zealand Ltd of Japan, but does own other forestry developments in its own right. It is owned 66.6('10 by MK Hunt Foundation Ltd of Aotearoa and 33.3%1 by C Itoh and Company of Japan. C Itoh is also a 49% owner of Southland Plantation Forest Company.

Internal reetructurinqs In internal restructuring,

.. Smithkline Beecham (NZ) Ltd, a subsidiary of Smithkline Beecham Pic of the U.K., is acquiring another Sm ithkl in e Beecham subsidiary, Ster ling Winthrop (New Zealand) Ltd for US$1 ] ,900,000. Drug companies Smithkline Beckman and Beecham merged in 1989 forming Smithkline Beecham which is now the eighth largest drug company in the world by sales ($5.5 billion) (Time, "Remaking an industry", 4/9/95, p.53).

.. ANZ Banking Group (New Zealand) Ltd is buying out subsidiary ANZ Holdings (New Zealand) 1990 Ltd for $53,680,132.

OJ} Toyota Finance New Zealand Ltd is raising S20,280,OOO from its ultimate parent, Toyota Motor Corporation of Japan by the issue of 6,000,000 ordinary shares (at a premium of $238) to Toyota Motor Corporation. The money will be used to expand its business in Aotearoa, Previous to this, it was a subsidiary of Toyota Finance Australia Ltd, another Toyota Motor Corporation subsidiary.

<fJ Interests associated with the Pacific Group of property investors are restructuring one of their holdings. NZL

Investments (Wyndham) Ltd which is owned by the New Zealand Land Trust is sold to beneficiaries of the Trust Those beneficiaries are Tan Pot!

(otherwise known as

Dynasty Yoke

Johnny 0 Sy all of and their

George Horsburgh of Aotearoa. The presumably associated with the hotel operator, Dynasty Hotels International, which is controlled by the Tang family. The Wyndham company was one acquired by the Pacific Group when New Zealand Land Ltd merged with Kiwi Investment Property Trust in 1994. It owns properties KIPT didn't want in the merged cornpany. NZLL was owned by the Pacific Group, which is ultimately owned by Stanley and Freddie Tan and Horsburgh.

" Revlon International Corporatien of the U.S.A. is quiring all the issued capital in Revlon New Zealand Ltd at a cost of $0.

" EDS (New Zealand) Ltd, a subsidiary of Electronic Data Systems Corporation of the U.S.A., is EDS subsidiary, GCS Ltd for $39,690,000. GCS is the former SOE, Government Computing Services. See November 1994 for the original takeover which cost EDS $47 million. EDS also owns Databank, and is a General Motors subsidiary.

October 1995 decisions

Kraft products and assets sold to HeinziWatties From one transnational to another ... Kraft General Foods New Zealand Ltd, a subsidiary of Kraft General Foods Inc of the U.S.A. is selling Craigs and Kraft products to J Wattles Foods Ltd, a subsidiary of RJ. Heinz Company of the U.S.A. Assets affected are "all the business, related assets and related liabilities (except for those assets and Iiabilities agreed not to be included) associated with the 'Craigs' jams and marmalade business, the 'Craigs' and 'Kraft' flavoured and salad beans business, the 'Kraft' salad dressings, mayonnaise, and sauces business, and the 'Kraft' portion control unit business Wattie (now officially HeinzWattie, according to the "Wattie' s now Heinz- Wattie". 20/4/95, p.33) told the OIC that, as well as "economies of scope and scale", the acquisition would "provide for it tification for further investment in glass container and other capital equipment, more quickly and to a greater extent than would be possible without the acquisition" Kraft is said to be selling "as part of its global strategy of shedding nonstrategic businesses" It is part of the Philip Morris group of companies.

Kraft announced in May 1995 that it intended to sci! its New Zealand-based Craigs and Chesdale processed cheese operations, Craigs' annual sales are reported to be $30 million. Heinz- Wattle received Commerce Commission approval for the acquisition in October, the Commission saying that though Heinz- Wattie would become a producer, there was sufficient competition from imports and smalljarn producers. It would mean a "slight increase" to HeinzWattie's share of the baked bean and market where it already held 83.5%. "However, there is ease of entry into production in New Zealand, and there is possibility of in-

WATCHDOG 81 APRil 1996

PAGE JJ

under the manufacturer's brands or as house-

the Commerce Commission. after

"Wattie

active in New Zealand by the 1970's, However, its first attempt at takof New Zealand products was in

3- 74 and highly controversial. It was strongly

parts of the industry, the Federation of

Labour and the Workers and other unions. Kraft wanted to enter the dail-Y industry by trying to take over the Burland I group which made Chesdale and Dairylea cheese,

,n",pw"" dried fruit and other products, Craigs and Blue Bonnet jams, and other processed products. Opposition was based on fears that transnationals would dominate the industry. including warnings from fanners' organisations in Canada, based on their experience of Kraft holding down milk prices and knocking out Canadian cheese producers. In addition. Nestle was clearly waiting in the wings if Kraft succeeded. The Labour Government approved a 60% takeover of But land subsidiary, New Zealand Cheese Ltd, as long as Kraft had only 50% voting power. However, Kraft was forced to withdraw in the face of the public opposition, saying it "was not going to impose itself on a country in which it was not wanted".

Instead, Kraft craftily waited quietly until 198 L when the Muldoon government allowed it to buy 49% of Butland industries itself. By then, Butlands and the New Zealand Dairy Board each had a 50% share in a large-scale cheese processing plant at Penrose, Dairy Industries Ltd. The Dairy Workers' Union still had concerns, but the public opposition had apparently been either exhausted or satisfied by the involvement ofthe Dairy Board in the deal. In August 1989 it bought the remaining 51 % of Butlands it did not already own.

It is not at all obvious that any of the promises of the Butlands takeover by Kratt have been fulfilled. These included wider markets (especially access to the United States market), and production of a greater range of products in New Zealand. Most of the most important developments were already un-

when it was locally owned. Whatever has been de-

veloped is now passed on to another transnational.

Australian Financial Review, "NZ Government, labour turn cold to Kraft Foods entry", 26/11173, p.28; "NZ lets Kraftco in - with strong strings attached", 29/11/73, p.16;

'.I' Voice, "Kraft cheese take-over 'safe-guards' designed to stifle widespread protests", undated 1974?; Press, "Kraft succeeds at lase, 12/11/81, p.21, "Dairy Workers' Union still concerned over Kraft" 9/2/82; "Kraft to buy all of Butlands Inds", 12/8/89.)

Services

venture

A company which will own rubbish UI:,!JlJ'"Ql O[Jt;;!,UHJll', Auckland and the South island, Envirowaste Services

is being set up Fulton Ltd and Auckland Regional Services Trust-owned company, Northern Disposal Systems Ltd (50%) It is taking over Zelman Ltd, owned by Northern Disposal Systems, for SO, all the assets of North em Disposal Systems itself, for $12,000,000,

based Tartan Enterprises Ltd, owned by Fulton Hogan, for $0, and the "refuse disposal assets" of Fulton Hogan itself, for $10,000,000, Fulton Hogan is Dunedin-based but is owned 36.94%, by Shell New Zealand Holdings Ltd of the lJ.K As part of the establishment of the joint venture, Enviro Waste is also issuing 10,000,000 $1 ordinary shares to Fulton Hogan for $10,000,000. "It is .. claimed that the proposal will result in increased efficiency of the refuse dis, posal and landfill businesses in the South Island and Auckland by a synergistic combination of the two.

The company will be the third-largest waste management company in Aotearoa. Northern Disposal operates two transfer stations and two landfills in Auckland. Fulton Hogan, a civil engineering and contracting company with 29 branches in Aotearoa, has rubbish operations in Nelson, Blenheim, Timaru, Christchurch (Waste Systems) and Dunedin2 .

The background to this development is the oozing (in some cases spurting) privatisation of local body services. The largest private contractor in rubbish is the notorious but rapidly expanding Waste Management NZ, and it is undoubtedly that company which the joint venture has in mind when it talks of the need for size. Auckland Regional Trust member, Neville Aitchison, commenting on the announcement, said that "New Zealand's waste management industry was dominated by two big companies. Northern Disposal Systems needed to boost its 'critical mass' if it was to seriously contemplate expanding its range of services and compete against larger operators." Effectively it is Auckland's capitulation to privatisation of its rubbish disposal services, and an expression of interest in those of other local bodies.

(Ref: "Sales skyrocket in a disposable market" 15/8/ 95, p.32; "Ful Hogan joins Disposal in waste group", 28/8/ 95, p.n.)

Wines

DB Corbens sells its share in Sainte to Japanese shareholders

Cor bans Wines Ltd is selling its remaining 10% shareholding in Sainte Neige Export Wines Ltd to Sainte Neiges controlling shareholder (80"/0), Kyowa Hakko Kogyo Company Ltd of Japan. The price is a peppercorn: $1,000. The other 10'% is owned by Kanematsu Corpora-

I It is that Butlands itself was a beneficiary of an early privatisation - that of the New Zealand Packing Corpo-

ration. the National Government in 1957. Butlands' chairman just happened to he chairman of the Corpora-

tion. Butlands assets at well below cost. (People's Voice, "Nestles eager to follow Kraft in 'Labour's' hand-over

bonanza", undated (1974?).)

2. See the November 1995 decisions for further developments.

WATCHDOG 81 APRil 1996

PAGE 34

tion also of .Iapan. The company owns 21 hectares of land in Hawkes Bay Napier) and 34 hectares in Marlborough (near Blenheim). Corbans is owned the DB in turn, over 58% owned by Asia Pacific Breweries Ltd which is itself jointly controlled (80%) by Heineken NV of the Netherlands and Fraser and Neave Ltd of Singapore. Corbans approached Kyowa to sell its share in Sainte Neige because of "a change in philosophy by DB Group not to hold minor shareholdings in companies that they do not themselves manage". Yet "Corbans will continue to manage the vineyards and manufacture the wine for Sainte Neige using their local wineries".

Kyowa gained control of Sainte Neige in January 1991, buying 60%, with 30% held by Corbans and 10% by Kanematsu. It was previously 24% owned by Kyowa; the extra 36% was reported by the OIC to have been purchased for $3,600. At that time, Sainte Neige owned and operated vineyards, and exported wine from 134 acres of rural land in Hawkes Bay and Marlborough. "It is claimed new technology and expertise will be introduced. Kyowa has assured Sainte access to overseas markets," said the Commission. In June 1991 Corbans sold 20% of its 30% shareholding to Kyowa. Corbans made the offer because "they felt with the existing vine cultivation agreement, together with the wine manufacturing agreement, between the companies, there was little point in their having a significant shareholding in" Sainte Neige. So much for "new technology and expertise"

Gold Resources becomes wholly owned subsidiary of Mineral Resources

Otter Investments Ltd, a wholly owned subsidiary of Minerai Resources (NZ) Ltd, has consent to acquire the 46% of Gold Resources Ltd which Mineral Resources does not already own, for $3,500,000. Mineral Resources is "just over 25''10 owned by overseas persons primarily from Australia". The Commission reports that Gold Resources has interests (undefined) in Bay of Plenty/Coromandel, Waikato, and Otago. With unusual scepticism, the Ole notes that "it is claimed that the proposal will provide Gold Resources with the necessary access to capital. It is also claimed that Gold Resources as a wholly owned subsidiary will have greater access to the expertise and management skills available in the Mineral Resources Group throughout Australasia."

As part of the takeover, Mineral Resources subsequently changed its name to Otter Gold Mines. An Australian company, Otter Exploration NL, which controls the Tanami gold mine project in Australia's Northern Territory, was 86.2% owned by Mineral Resources and 13.8% by Gold Resources. The owners of the Tanami project signed a mining agreement with the area Central Land Council and "traditional owners" in late 1995 and expected to produce 100,000 ounces of gold a year. The group is also mining at the controversial and environmentally destructive Martha Hill mine at Waihi in the Corornandel, and has begun prospecting at Union Hill at Waihi. Gold Resources has significant operations in Chile, Vietnam and Fiji. Mineral Resources itself has operations in Australia as well as Aotearoa, Otter has a 45% listed subsidiary, Allstate Explorations, which is the majority participant and manager of the Beaconsfield gold project in Tasmania. (Ref'): Press, "Otter likely name for Min Res", 23/9/95, p.23;

WATCHDOG 81 APRil 1996

"Minkes makes full bid for "Martha Hill rock solid", 2/1 and "New

19/] 0/95.

Guinness Peat after Colonial Motor Co GuiI'Dness Peat Group ltd, Ron U.K.~based retirement hobby, has consent to acquire 49.99"A. of the Wellington-based car dealer Colonial Motor Company which is currently controlled the Gibbons family of Aotearoa. The price is $39 million. "Gu Inness Peat will brmg valuable management expertise and experience to the ongoing operations" of Colonial. $0 the OIC is advised. It apparently was not advised that the Gibbons family is not convinced of the value of the bid they have been resisting It for several months.

Grocorp buys Hawkes Sa.vasparagus G rocorp Pacific Ltd, which is 49"/0 owned by Sanyo General Capital Company of Japan has consent to acquire a supplier it had formerly been in partnership with. Link Agencies Ltd, which leases III hectares of land in Hawkes Bay to grow, market and pack asparagus for export to Japan, is being bought for $215,000. "In November 1990 Grocorp formed a partnership with Kalpana Orchard Development Company Ltd through Link Ltd to carry on business growing, marketing and packing asparagus fix export to Japan .. it is now proposed to terminate the partnership and the Grocorp [sic] wish to acquire Link Agencies to enable them to continue the operation on the land leased by Link."

This is similar to an acquisition we reported in September 1993'

"A further example of vertical integration concerns a Japanese-controlled company, Mangatawhiri Squash Packers Ltd. It is acquiring all the assets (except land) of its 45.5 per cent shareholder, M.e. Pope Ltd, an Aotearoa company which was in debt to Mangatawhiris other shareholder, Grocorp Pacific Ltd. Grocorp is approximately 50 per cent owned by N itto Tochi Tatemono Co Ltd of Japan. "Grocorp lent funds to M. C. Pope so that the latter could grow squash to sell back to Grocorp.' This arrangement was converted into the Mangatawhiri joint venture, with the debt to Grocorp satisfied by issuing it shares in Mangatawhiri: 54,500 $1 ordinary shares, and 835 $1 redeemable preference shares at a premium of $999 a share. So the Japanese squash buyer is buying the producer."

No explanation is given for the apparent change in own~rship of Grocorp.

Further land sales to Taiwanese investors

Deborah Miller of Brook fields, Auckland is at it This month she has branched out from Broadwood, Northland and Wanganui to Otago. She has organised the following land sales at Palmerston, Otago, all described identically as being for forestry using "expert management skills of New Zealand appointed agents and their managers":

PAGE 35

via front company .Iadefield 17 hectares of land for

three of whom have permanent resiR 5 hectares of land for $57 Their Properties Ltd.

both with permanent residency, are buy-

hectares for $1 4 via Happyfleld Proper-

ties Ltd. '" another Taiwanese who has permanent residency is buy- 6.5654 hectares of land for $24,620 via Cadison Ltd ..

There are two more sales in Wanganui:

via Ho Trading Company Ltd, 20 hectand

'" and to two Taiwanese via Chen-Hsuan Trading Com-

pany 22 hectares for $96,800.

Carter Holt continues to buy up blocks of land, in~ eluding one from the Crown

Carter HoltHarvey Ltd, "approximately" 51°/ .. owned by International Paper Products of the 'U.S.A. has consent to acquire a further three blocks of land near Taumarunui in the King Country:

., "approximately" 357 hectares at Hikumutu for $SOO,OOO;

<ll "approximately" 85,6 hectares at Taumarunui for $265,000;

'" and "approximately" 620 hectares at Owhango for $1,260,000.

It also has consent to acquire "approximately" 559

hectares in Hawkes for $1,100,000.

A more unusual transaction in Hawkes Bay gives it consent to acquire 340 hectares for $265,000 from The Crown. The property was formerly owned by a Mr S.R. Allen but was forfeited to the Crown under the provisions of the Proceeds of Crime Act 1991 It is surprising this was not put in a land bank for settlement of Maori land claims.

These follow a pattern of buying blocks of land in

the North Island in June this year.

Other ruret land sales In other rural land:

'" Telecom Mobile Communications Ltd, a subsidiary of Telecom Corporation of New Zealand Ltd, of the

has consent to acquire another piece of land for a ceil phone site. This one is 400 square metres at Te of Plenty, being acquired from the Redall Ltd for an undisclosed sum.

.. Consent has been given for a company which owns 43

hectares of freehold land on the northern side of Lake RotoHJ3 and leases an adjacent 36 hectares from the of Conservation to become 100% owned a Taiwanese for a peppercorn price. Hamurana

(;al'dem; Ltd was 24% owned Dr Huang Ming-

he has consent to acquire the remaining 76% for

$76. "The states that it is proposed that the prop-

will be developed into a tourist complex which will include a hotel, residential cottages, a golf course and

WATCHDOG 811 APRil 1996

other associated tourist facilities be undertaken so that the natural

will

IS

the further block of land for hectares near Cisborne .. for $6,460,000. "Ernslaw propose to establish a forest principally comprising pinus radiata in the Gisborne region. It is intended that the land purchased will generally be agricultural land that has reverted to scrub or has been scarred erosion and that any areas of good agricultural land will be subdivided out and onsold for continued purposes."

.. .Iuken Nissho Ltd which is 85'Y" owned by Juken Sangyo Company Ltd of Japan and 15% by Nissho Iwai Corporation of .lapan is acquiring 394 hectares of land in the Masterton District, Wairarapa for $700,000. Juken Nissho "requires more land for afforestation to provide security of wood supply to its Mill at Masterton" (presumably the Waingawa timber mill) The land adjoins the Ngaumu Crown Forest which is owned by .Iuken Ntssho. It is "marginal for agricultural pur" poses and is better suited to afforestation" because of its contour.

ill The shareholding in Ryton Station Partnership and Ryton Station Ltd is being rearranged. Both entities are 30% owned by a New Zealander who is resident in the U.S.A, "due to business commitments" He has consent to acquire a further 5% of each for $37,486 and $62,514 respectively. "Ryton Station Partnership carries on business sheep fanning on land leased from Ryton Station Ltd". The land is 14,146.2238 hectares of pastoral lease and 443.2734 hectares of freehold in Canterbury.

Ii> Telecom Mobile Communications Ltd, a subsidiary of Telecom Corporation of New Zealand Ltd, of the U,S.A., has consent to acquire a further piece of land for a cell phone site. This one is 2,500 square metres at Hillside, Te Anau, Otago.

II! Retrospective consent is given to a purchase of a pan share in two blocks of land in Southland. Pacific Tristar (NZ) Ltd has acquired a half share in 51 hectares and a one quarter share in 39 hectares for $260,000. Pacific Tristar is owned 33.3"/ o by an Australian couple and the balance by two New Zealand couples. It bought the shares from previous owners who wished to retire. The remaining owners are personal friends of the shareholders of Pacific Tristar, The land is used for dairying and is overseen by a farm manager and operated by sharernilkers. The acquisition was made in September ]993.

Internal restructurinqs

" Aetna International of Aetna Life

and Casualty Company of the lLS,A" is taking over another Aetna subsidiary, health insurer, Aetna International (NZ) Ltd for an undisclosed amount Aetna is 50% owner (with Brierley Investments Ltd) of Aetna Health (NZ) Ltd, which owns Medic A id and is the second health insurer in Aotearoa. The story of the change in ownership was anything but healthy see April

PAGE 36

and December 1994.

.. Comalco some of its subsidiaries.

Comalco Pacific New Zealand Ltd has set up Comaleo New Zealand Investments Ltd for $17,450,000 which has acquired Comalco Extrusions Ltd for the same sum. Comalco is owned eRA Ltd which the OIC describes as being Australian but is in fact ultimately U.K controlled and has since merged with its majority shareholder, RTZ.

" Milburn New Zealand Ltd, which is "approximately" 72,5'X. owned by Holderbank Financiers Glaris Ltd of Switzerland, is amalgamating with its subsidiaries:

Fraser Shingle Ltd, Guardian Environmental Ltd, Ready Mixed Concrete Ltd, Scott Quarries Ltd, Taylors Lime Company Ltd, Western Coal Mining Ltd, and Specialised Paving Ltd.

.. Tasman Properties Ltd is rearranging the ownership of properties it owns in Aotearoa:

" in Auckland it is selling New Zealand Guardian Trust Building at 101-107 Queen St to a subsidiary, Tasman Properties (107 Queen Street) Ltd for $17,424,000;

<Ii in Wellington it is selling the following subsidiaries to another subsidiary, Tasman Properties Equities Ltd for $38,851,914:

Tasman Properties (The Terrace) Ltd Tasman Properties (Jervois Quay) Ltd Tasman Properties (500 Victoria Street) Ltd Tasman Properties (Boulcott Street) Ltd Tasman Properties (Featherston Street) Ltd Tasman Properties (Garden Place) Ltd Tasman Properties (Hereford) Ltd;

., in Christchurch it is selling Forsyth Barr House at 764 Colombo St to Tasman Properties (Colombo Street) Ltd for $26,730,000.

Tasman Properties Ltd is listed as being 28.57% owned by Grantham Mayo Van Otterloo and Company Ltd and 5.6% by Franklin Resources Ltd, both ofthe U.S.A. and hence a U.S. company. This is before the merger with SEABIL which will give it substantial Hong Kong ownership.

WI pledget:dllfgiance to the flAg of the cOi8:niry

that me the bt:st deal."

EnviroWaste Services fill Site from itself

Envirowaste Services Ltd! which last month was formed by the Auckland Regional Services Trust and Fulton

Ltd to become a major force in rubbish services in Auckland and the South Island, has reshuffled its control ofthe Dunedin Landfill Site Former Fulton Hogan subsidiary Tartan Industries Ltd was given to Enviro Waste last month as part of the setup of the company.It has been sold the 79 hectare Landfill for $5,000 by EnviroWaste, which then leased it back for 20 years for $20.

Enviro Waste is 50% owned by Northern Disposal Systems Ltd (an Auckland Regional Services Trust company) and 50% by Fulton Hogan. Fulton Hogan itselfis 36,94'%, owned by Shell New Zealand Holdings Ltd of the lLK

Auckland Regent Hotel sold to Indonesians

The Regent Hotel in Auckland has been sold to Investments Ltd, a subsidiary of Perfect Match Investments Ltd of Hong Kong, which in tum is owned by IwO (unnamed) Indonesian residents. The same interests "have substantial interests in the hotel industry including the Centra Hotel in Auckland". The Regent was owned by the "Togen group" which is ultimately owned by Eastern Prime Line Ltd (the Liu family) of Hong Kong. They say they have been actively seeking to sell the hotel, which "urgently" requires further development and maintenance, for some time. Perfect Match "is committed to providing and future funds to enable the Regent Hotel to reach its potential". The price was suppressed.

Confusingly, press reports give the buyer as the Hal Sun Hup Group of Singapore, and the price $80 million. The hotel was built in 1985 for about $60 million. It has 332 rooms and is rated five-star. (Press, "Singaporean group buys Regent Hotel", 24/1/96, pA5.)

In February 1990, Perfect Match Investments Ltd was given consent to acquire the remaining 5% it didn't own in Winstone Pulp International Ltd which operates the Karioi Pulp Mill (in partnership with Samsung of South Korea) and owns the Waimarino Forest. It paid $12 million for cutting rights to Crown forests in 1990. In January 1991 Winstone Pulp received consent to acquire the Karioi Crown Forest cutting rights and assets (after having pulped it for some time). In August 1993, CHH sold the Tangiwai sawmill to Winstone Pulp.

In October 1991., the Queen City Centre complex on Albert and Elliott Streets in central Auckland was sold by Chase Securities Investments Ltd (under statutory management) to Colwall Enterprises Ltd, a subsidiary of Perfect Match Investments Ltd for a suppressed amount.

Togen are 45% shareholders of Wenita Holdings (NZ) Ltd, a major buyer of Crown forest licences and land for forestry particularly in Otago and Southland. Another 45%, of Wen ita is owned by a Chinese Government Corporation. China National Foreign Trade Transportation Corporation. 101% is

WATCHDOG 81 APRIL 1996

PAGE 37

held

Chen Wen

of

full control of Mair

which is 50.95%} owned Richina

Ltd of China is to wrest full

owned Mair Hold-

owned by Mainzeal subsidiary Ipoh Hold-

Ltd). The ole has its consent for Mainzeal to

buy 100%, of Mair, for a price of $36,957,904. The owner-

would be through Investments Ltd, a wholly

owned Mainzeal subsidiary.

The deal was not welcomed minority shareholders and at time (January i 996) had not been accepted. An

Peter who owns 66,000 shares in

Mair which he bought at $1.80 each, considered the offer of

cents a share undervalued the company. He suggested to the independent directors that Mainzeal and Richina were privy to in-depth reports, including forecast benefits from a proposed Shanghai tannery. However an independent director said that their advisors, C S First Boston, had access to all information available to Mainzeal and valued the shares between 80 and 95 cents.

Mainzeal has organised a joint venture tannery in Shanghai with Shanghai Leather Corporation. This has been held up by the dispute.

Mainzeal, primarily a construction and property development company, is rapidly developing as a minor conglomerate including trying for project management contracts for power generation and water supply in Indonesia, and the development of a $90 million 330-room hotel in central Auckland. Richina says its objective in investing Mainzeal was to build it and Mair Astley domestically so that they were "financially strong, world-class companies able to operate successfully in the international arena" (Press; "Confident Mainzeal hope to pay div", 15/11195, p.33. "Mair re-

advice . 5/l/961 p.16.) The company has a 50%

interest in 39 hectares of leased land in Canterbury.

We in April 1995 that Richina had taken control of Mainzeal. Reportedly Beijing-based, it is a Chinese/U.S. consortium which bought its controlling interest at 28 cents a share accompanied concern from some observers who feared unethical tactics Though bought in March, it did not receive OlC approval until after the event The consortium at the time comprised "from time to time", Richina Enterpnse Ltd which is ultimately owned by Richina Equity Trust! of China, Anaconda Partners, LP., which is

owned Junction Advisors Incorporated of the

U.S.A.. Chemical Asian Equity Associates LP., which is a limited of which Chemical Banking Corporation of the USA. is a a number of Ll.S, individuals and investment partnerships, and three locals. See our analyses 1995 and December 1994 decisions for details.

from the which already owns

33.3'% ofWaikatu's electric povver supply company WEL Ltd, has consent to acquire a further 15.7%.

"by time' . According to the suing shares to Utili corp

in August 1992. That decision was never been re-

leased to us: the 1992 releases were

approvals to WEL Ltd, a of the

Waikato Electricity Authority firstly to issue 960 $1 ordinary shares at a premium of $77,749 to Utilicorp United Inc or its subsidiaries and then a to issue shares up to 33.33% of WEL to Utilicorp We queried this discrepancy with the ole who replied:

. .. the Commission originally gave consent for Utilicorp to acquire a 49% interest in WEt. subsequently the parties sought an amendment to that consent As it was an amendment it was appropriate for the Commission to amend the existing decision sheet rather than prepare a new one as this would have resulted in the investment proposal being included twice in the Commission's statistics."

Which doesn't make a great deal more sense, and puts in doubt the accuracy of the information the Commission releases,

Further land seles to Taiwanese investors

Sales organised by Deborah Miller of Brook fields, Auckland this month include two more for forestry development at Paparangi, Wanganut, two more near Palmerston, Otago, and one in Watuku for "lifestyle" purposes, all to Taiwanese:

110 Two people have consent to acquire 59 hectares orland for $224,250 at Paparangi through the holding company, Chun Mei Company Ltd;

Il> Two others have consent to acquire 24 hectares of land for $93,600 at Paparangi through KH. till'S Company Ltd;

110 Four others, through Crumber Properties Ltd, have consent to acquire eight hectares of land at Palmerston for $31,1

II> Four others, via Hibrook Properties Ltd, have consent to acquire II hectares of land at Palmerston for $42,528;

110 And a Taiwan resident "who has applied for New Zealand permanent has consent to acquire four hectares of land in Glenbrook Road, Waiuk», South Auckland for $330,000 through the holding company Morden Properties Ltd, and plans to reside on the property, establish a home stay and "further develop the avocado crop and walnut trees currently on the property utilising New Zealand expertise".

Wharekauhau Lodge sold to U.S. interests Wharelmuhau Lodge and Farm in the Wairarapa is being sold to four residents of the U.S.A. in order to "create one of the best and most exclusive lodges in the world". The lodge includes 931 hectares of land. The current owners, W. and A. Shaw, are retaining a 10'% interest in the property and will "have an ongoing involvement in the development and management of the property".

The new owners are Wharekauhau Holdings Ltd (WHL) which is owned 24.9"/" by J. Davidson, 24.9"/0 by A. Miller,

PAGE 38

WJlI.TCHDOG 81 APRil 1996

24.9"/'~ by M. 15.3% by J. Sevo (all of the U.S.A.) and 10% by the Shaws. They are $4,800,000 for the the company Wharekauhau Station Ltd.

'The Commission is advised that the Wharekauhau lodge is one New Zealand's leading lodges but currently has limited accommodation facilities.

The Commission is advised that WHL propose to implement a development plan that will create one of the best and most exclusive lodges in the world, while also enhancing the current scenic splendour of Wharekauhau. The Commission also is advised that the development plan envisages building new villas and estate homes and extending or replacing the existing lodge house.

It is also intended that the farm business will be maintained as a Romney sheep stud. This will be developed into a model farm with some hill facings being planted in trees and fencing and fertility being improved.

Christchurch Coutts Island golf course development changes ownership

A controversial golf course development proposed by Japanese interests for the Groynes, Coutts Island, outside Christchurch has run into "some financing difficulties" and its financiers are taking over the company, New Zealand Plan International Ltd. The company was owned 50% by the Hirai family of Japan, and 50% by M. Ishizuk of Aotearoa. However "initial purchase and subsequent development costs were financed by" T. and Y. Souma of .Iapan. The Soumas are willing to put more capital into the venture as long as their "existing interests as lender have been converted to equity." They have lent "in excess of $3 million" The proposal included a "destination golf course resort and associated facilities including tourist accommodation" on 113 hectares of freehold land and 40 hectares of leasehold land which was a "fine wool farm" purchased in September 1992 for $895,000.

At that stage, a New Zealander, Roger B. Sandford, also had a O.l % holding and acted as spokesman for the company. The company told the OIC in 1992 that "the total estimated expenditure on the project will be approximately $96 million over a ten year period." Sandford told the Press (10/111 92), that

"the development would be for the use of the local community, visitors and tourists ... Its main attraction would be an IS-hole golf course of international standard, suitable for professional tournaments ... The course would be developed as New Zealand's only lagoons-style course, thanks to the good water supply in the area ... The proximity of the site to Christchurch Airport was ideal for helping to attract tourists ... To expand the resort theme, a riding school, stables and equestrian facilities, a working farm, jet-boating trips, tennis and squash courts, swimming pools, horse trekking, cycling and walking paths, a spa and gymnasium could be included.

WATCHDOG 81 APRil 1996

In the meantime it has run into local opposition for environ-

mental reasons. It by the

Christchurch City Coun-

cil concerns that it in the Waimakariri River flood plain

and required its consent led to appeals to the High Court The Regional Council consents were granted in March 1

but City Council rezoning proposals were still opposed by locals and the Airport company. Support for the project came from the golf course designer, Bob Charles, real estate developers {"research had shown that one of the main reasons Japanese enjoyed New Zealand was because it was relatively easy and cheap to play golf" (I) and the Christchurch Casino. Two hundred submissions were made to City Council hearings in 1993, a third of which opposed the plan, many neighbours worried at the precedent set for "nibbling away" at the green belt. The proposal then was for a four storey 200 bedroom hotel and 30 fairway villas. This was a revision to the original plan which included 40 resort villas. 200 fairway villas and an 80 room three-storey hotel. The 30 fairway villas were each capable of being subdivided and sold with freehold title as permanent residential accommodation, thus raising the possibility of permanent residential accommodation within the green belt. (Ref: Press, "Groynes resort submissions pour in", 28/9/93; "Charles backs planned golf resort for Chch", 1112/93; "Approval for golf resort 'necessary for tourism "', 2/12/93, "Belfast residents upset by Groynes 'precedent':', 8/3/94; "Granting of consents brings Groynes golf resort closer" 27/3/95, p.4.)

However the public story regarding the financing of the developments was quite different from what the OlC has approved. According to Justin Prain, a spokesman for a consortium of local investors, Canterbury Golflntemational Ltd, they were going to take over the now "$120 million" development. They had "offered to form a joint venture with the Japanese developers but the Japanese decided last month to sell their interests in the project. The details of the project would be unchanged. "While Japanese tourists would be the target market, the company planned to attract local people as well. The arguments for local body consents were still continuing. (Press, "Chch takes over resort pian", 23/12/95, p.2.)

Other rural land sales

CI A resident ofthe United Arab Emirates has consent to acquire 98 hectares of land at Rawene, Northland for $292,500 from Radiata Holdings Ltd which win "manage the planting programme and ongoing forestry management programme"

iii Three Australians have approval to buy four hectares of land at Maungatapere, Northland to farm ostriches. The ownership is via a company, Ocean View Ostrich Farms (NZ) Ltd and $285,000 is being paid for the land. "The Commission is advised that the applicants who all have extensive experience in ostrich farming propose to establish an ostrich rearing operation on the property ... J. E. Hearn intends to move to New Zealand to oversee the operation." The other two individuals are M. M. Hearn and P. .J, Rogerson.

I» Maltese Cat Ltd. which is owned by I. and L. Mcl.ean from Singapore (25"/0), C. Macl.ean from Singapore (25%) and C. Mcl.ean and C McLeod from Aotearoa

PAGE 39

), buying 4.42 hectares of land at Clevedon,

Auckland for $109,000 to add to J 5.6585 hectares they bought in 1993 to raise polo ponies for export. The four hectares adjoin the original land and they entered into an option to buy the extra land at the time of purchase. The OIC asserts that Maltese Cat received consent to acquire the land in May 1993. However, that is not quite accurate: the consent was for Mr LA. and Mrs L.M. Mcl.ean, described as U.K. citizens resident in Singapore, to buy a 40 per cent share of two companies owning two pieces of rural land in Clevedon, The first, Colmere Investments Ltd, owned 15.6585 hectares of land in Tourist Road, Clevedon; 40 per cent was being sold for $430,000. The second, Bardsleigh Properties Ltd, owned 4.049 hectares of land on McNicol Road, Clevedon; the 40 per cent there was sold for $325,000.

" Carter Holt Harvey Ltd, 51 % owned by International Paper Products ofthe U.S.A., is buying further land at Owhango in the King Country (Wellington). This time it is 370 hectares for $620,000. It is also buying 427 hectares at an unnamed locality in the King Country for $770,000.

.. Wattle Frozen Foods Ltd, subsidiary ofH.J. Heinz of the U.S.A., is buying 23 hectares of land at Feilding from the Manawatu District Council to enable it to expand its food processing plant. The price is "to be advised".

.. A German couple, M. and A. Brueck, have consent to acquire "approximately" 27 hectares of land on the Coromandel Peninsula for $200,000, of which seven hectares is covered in regenerating bush and protected by a QEll covenant (a legal protection entered into with the Queen Elizabeth II National Trust). "The Brueck's propose to undertake an eco-sensitive development of the property which will complement" the QEII covenantprotected land. "In this regard it is proposed to plant the area surrounding the covenanted area with native trees. The Commission is also advised that in the longer term a ceo-tourism operation may be established on the property.

.. CDL has retrospective consent to acquire 16 hectares of land belonging to Oteki Farms Ltd at Welcome Bay, Tauranga, Bay of Plenty for $775,000 for "immediate subdivision into residential lots". The subdivision will occur over four years and "will provide residential sections in areas where currently sections are at a premium". "The need for retrospective consent is required [sic] as the Commission's consent was overlooked at the time of acquisition. The consent of both the Ministers of Land and Finance under the LSP Act was previously obtained prior to the purchase." It is not stated when the unapproved purchase took place. The company carrying out the purchase is CDL Land New Zealand Ltd, a wholly owned subsidiary of CDL Investments Ltd, which is 57.36% owned by CDL Hotels New Zealand Ltd. In tum, COL Hotels New Zealand is owned 69% by CDL Hotels International Ltd which is 51 % controlled by the Hong Leong Group of Singapore.

'" The Snoxell Family Trust is selling their 162 hectare Kerikeri, of Plenty, farm to the Mcl.eod Family Trust for $2,100,000. The beneficiaries of the McLeod Trust are residents of Aotearoa but the trustee of

the trust is currently resident in Australia "but will take

lip New Zealand it"

e Carter Holt ,51% owned by international

Paper Products of the is also further land

for forestry in Hawkes this time 67 hectares at

Walpatikl for $112,320.

'" Two Australians who are taking up permanent have consent to acquire five hectares of land at Napier, Hawkes Bay for "lifestyle" purposes.

Ii> Two Hong Kong residents who "will be taking up New Zealand residency in the near future" have consent to acquire Big Impact Ltd which owns four hectares of land at Motueka, Nelson. The price is $330,000 for the land. They propose residing on the property and to establish a marketing and consultancy business from it.

.. A Hong Kong resident, Mr H. Barkell-Schmitz, has consent to acquire 30 hectares of land in North Canterbury for $65,000 via the holding company Lichfield Nominees No. 49 Ltd. He is seeking permanent residencyand

"wishes to acquire the property to erect a residence for his own use and to develop a tourist lodge on the property. It is also proposed to plant forestry on about half the land. The Commission is further advised that the lodge would cater for approximately 30 guests and that Mr Barkell-Schmitz intends to target South East Asia tourists utilising his existing business contacts in the region. The Commission is also advised that the land is part of a larger former farming property which has been progressively subdivided for development into rural residential blocks."

.. Ernslaw One Ltd, the forestry company owned by the Tiong family of Malaysia, has consent to acquire 15 hectares of land at Roxburgh, Otago for $240,000 which they intend to develop into a nursery for Douglas fir seedlings. They had commissioned the Forest Research Institute to find a suitable area for the nursery.

@ The J.T. Wasserburger Family Trust, the sale trustee of which is J. Wasserburger of the U.S.A., is taking a 50% share in "agar Investments New Zealand Ltd which owns ten hectares of land at Wanaka, Otago. The other 50% is owned byJ, T. and T. ,1. Fraser, friends of J. Wasserburger but of unknown origin, and the share is being sold for $275,000. The trust lent money to Jagar to purchase the property.

@ In a partially suppressed decision, an unrevealed person from the U.S.A. has consent to acquire 11.1 hectares of land in Otago for "lifestyle" purposes. The holding company for the land is Kordel Holdings Ltd.

manage

Internal restructurinqs

'" The ownership of Canterbury Meat Packers Ltd, which is the company set up to take over the Seafield assets of the bankrupt Fortex meat processing and export company, is being reorganised. It will be directly owned 80'% by Asian New Zealand Meat Company Ltd (ANZCO) of Japan. Formerly it was 30% owned by ANZCO and 50% by a subsidiary, Five Star Beef Holdings Ltd. The latter 50% is being transferred to ANZCO for $9,000,000.

WATCHDOG 81 APRil 1996

PAGE 40

The other 20"/" is owned by Phoenix Meat Company Ltd. Meat Packers owns 594 hectares of land in

, this

is different from what the

OIC last approved, which was 50/50 Phoenix/Five Star January 1995 and September 1994). We queried this with the Ole which replied that ANZCO acquired the further 30'% from Phoenix in "early 1995".

"Consent for this acquisition under the Overseas investment Regulations 1985 was not required as ANZCO was exempted from the provisions of the regulations by the Overseas Investment Exemption Notice 1992 No.1. This exemption related to Brierley Investments Ltd and all companies that were Overseas persons but would not be if Brierley investments Ltd was not an overseas person. One of these persons was ANZCO"

ANZCO is owned 13'Yo by Itoham Food Inc of .Iapan, 20.45% by Buttons Kiwi Ltd, 10.09% by various employees of ANZCO, and 56.46% by Janz Investments Ltd. Janz is owned 53.25% by Itoham Foods, 17.75% by Nippon Suisan Kaisha of Japan, 17.75% by Romney No 19 of Aotearoa, and 11.25% by various employees of ANZCO. For further details of these companies, see our analyses of the OfCts September 1994 and January 1995 decisions.

e Bell Canada is Communications Ltd. i-<mTn{·,.hl held its 25% shareholding

Canada International Ltd. That is now to

be held through BCE 30HH05 Canada IIH:

The is suppressed.

go Members of the Mallinckrodt group are

reorganised. Matltnckrodt Veterinary Ltd is

shares to Mallinckrodt Holdings Ltd and Mallinckrndt Veterinary international inc for $76,390.

'" SEABIl (NZ) Ltd, which is 60"/"

owned by SEA Holdings Ltd of Hong Kong (and is in the process of merging with Tasman Properties Ltd), is moving the ownership of a number ofAuckland subsidiaries from SEABIL (NZ) to another Trinidad Holdings Ltd for $21,359,376.

Kenwigs Investments Ltd Dargai Properties Ltd

Claive Properties Ltd

Gorget Properties Ltd

Sallet Properties Ltd

Thersites Properties Ltd

UDC Finance Ltd, a subsidiary of ANZ Banking Group (New Zealand) Ltd, is acquiring all the redeemable preference shares in UDC leasing Ltd, another ANZ subsidiary, for $18,280,966.

S IPS OF HAME ON A SEA OF TROU LE

Watchdog 77 detailed the squalid controversy surrounding the wages and conditions of foreign joint venture crews employed by New Zealand fishing companies. Fishing re~ mains one of the last protected sectors of the New Zealand economy and foreigners can only get involved via joint ventures with New Zealanders. This was the cheapskate way to create an instant fishing industry - instead of building a genuine industry using local ships with local crews - the Big Boys, dominated by Sealord, Talleys, and Sanfords, simply used foreign sh ips and crews with New Zealand involvement confined to Jowpaid and preferably non-unionised process workers. The story is even worse for the foreign fishermen. In 1994 there was a heated public debate within the New Zealand industry over whether the Russian or Ukrainian crews were paid $US4.50 or $US 1 0 per day' Talleys, which has a particularly chequered history with regard to unions, led a campaign to get the other companies to use New Zealand boats and crews. Peter Talley described his company's campaign as being

"the lone ranger out there ... the big boys. using charter boats and foreign crews, hate me and try to shut me up" (Independent, 5/5/95; "Kidd called to account for Kiwi fish caught with coolie labour"; Bob Edlin).

Doug Kidd, the Minister of Fisheries (he has that piscine

look about him) said that he would legislate to bring foreign fishermen working in New Zealand's 320 kms Exclusive Economic Zone under New Zealand law, including the minimum wage.

It took until the end of 1995, when the Fisheries Amendment Bill was introduced to Parliament. But that gives the industry until 2003 to directly employ all foreign crew working in New Zealand waters (as opposed to the current charter arrangements) and pay them the minimum wage. And this protection, such as it is, will not apply to crews that fish for less than one third of the year in New Zealand waters. Eric Roy, the National MP chairing the select committee, defended the delay.

"He agreed that some foreign crew members could be paid as little as 75c a day, but it had yet to be decided whether it was appropriate to pay Third World crews First World pay rates. 'In standard terms it would make some people millionaires'? (Press, 1011/96). So much for National being the millionaires' party.

Labour, led by its fishing spokesperson Graham Kelly, announced that it would move an amendment to the Bill, requiring that foreign crews be paid the minimum wage as soon as possible, not 2003. Both the Alliance and United

PAGE 41

WATCHDOG 81 APRIL 1996

said would vote for Labour's which means that it may pass when the Bill comes back into the House

later in 1996. Meanwhile Kidd has backed away from

his earlier SUppOIt for the minimum wage now, say-

the Crown I .aw Office has advised him that it would be unenforceable. Some National MPs have indicated support for the amendment - Tasman's Nick Smith has campaigned for the fishing industry to clean up its act with regard to foreign crews. "Squalid conditions and pay rates are a national and provide a strong disincentive to

employing New Zealanders" IS/l/(6).

Talleys has continued its campaign to New Zealandise the industry and, in October 1995, won a court ruling against Sealord, Sanfords, independent Fisheries and United Fisheries, that the industry must make more effort to show no New Zealanders were available before hiring foreign crews. Practically, this means that the Immigration Service must obtain more information from fishing companies before granting work permits to foreigners. Michael Talley said:

"The only problem our young have in this is that they will not work for $4.50 a day, and neither they should, To bring in foreign crews on wages of $4.50 a day is morally CO[rupt" (NZ Herald, 121 I 0/95). The industry has always retorted that there are too few New Zealanders ready, willing and able to work as deepsea fishing boat crews, Independent's Mike Donner, who very vocally defended the slave labour wages during the 1994 controversy, described Labour's pro-

sensical

showed which way

said:

"Some of these overseas crews are not much by our standards, but much better than in their home countries where there is often no work

anyway ... We need minded run-

ning this country. we have

schoolboys" Labour's Graham

while welcoming Independent's pointed out that the new trawler will be too small to replace the kind of charter vessels used to catch the range of fish that the company processes.

Interestingly, some of the worst offenders in this whole sad story tum out to be the Maori capitalists now moving into deepsea fisheries in a big . Takaroa Industries, a Christchurch company half owned by the Tahu Trust Board, created uproar in May 1995 when it specified that it wanted Indonesians to work on its chartered Japanese trawler, the Anyo Maru. Among the reasons it gave were that, as Asians, they would happily eat Asian food, whereas New Zealand crews wouldn't; they are small enough to work in

WATCHDOG 81 APRIL -1996

42

whereas New Zealanders are too

work 18 hour unlike their more

this stuff about bunks

to be installed reminds us of the arguments employ-

ers used to women out of the

around put to the expense of

women's toilets), Others in the industry ,'n,_",p,,,th Takaroas move as an attempt to secure

It caused within the tribe, Te Wai Pounamu, a

Tahu fishing group and part of the Federation of Maori Aquaculturalists and Fishermen, objected strongly, Its chairman, Bevan Wilkie, wrote to the Japan Fisheries Associathat any Maori fishing joint venture must have at least 50% New Zealand crew "from s officers down

to the . .ln conclusion, as one warrior race to an-

be assured we not" Wilkie had

also said that his group couldn't guarantee the safety of the

Maru Japanese crew when they came ashore: "The 1951 wharfie stuff will come in" (ibid), Sir Tipene O'Regan, chairman of the Ngai Tahu Trust Board, defended the joint venture and said Bevan Wilkie's demands would shut Maori out of fishing, BuL he also announced that Ngai Tahu had no control over its other partner in the joint venture company and had asked it to buyout the Board's share, simply because of the had publicity.

Appalling life For Foreign Seamen

Life for foreign seamen generally is very unpleasant indeed,

"Beatings by officers, rotten food, and pitiful wages. It sounds like Captain Bligh, but it's only too common on ships which visit Lyttelton" (Christchurch Star, 17/1 seamen' working in appalling conditions"')

Rob Ballantyne, the manager of the Lyttelton Seafarers Centre, described ships of shame infested by cockroaches; failing apart from rust; crewed by seamen subject to systematic physical violence and below the International Labour recommended minimum wage,

are so do not realise what we risk,

It needs only one to break down offthe Kaikoura coast or a tanker in poor condition, and that would be the end of our tourism there for many months.i.I've noticed in the last six to nine months a lot of cases of seamen beaten up by their senior officers. We had one on Christmas Day where a Filipino seamen was beaten up a officer on a container ship" (ibid). Violence has also been reported on Korean fishing boats, leading one crew to walk off in Wellington, in

1996.

Not some foreign crews fight back, The Rus-

Ruban boat went on strike in

in i because had not been

for two months (not that the pay was anything flash, $lJS5 per the top As has happened in several other cases, the New Zealand Seafarers Union was called upon to try to sort out the mess. Russian crews not only have to con-

tend with being ripped off by their

but the chaos

birth as it economy, one dominated

and the worst sort of Stuart South

Island ofthe Seafarers Union. said:

"This sort of thing not unusual. Russia is in such a state at the moment and there are a number of entrepreneurs trying their sea This is the third crew I've dealt with recently where Russian owners have gone bankrupt, leaving their crew stranded high and

dry ... Our aim is to help them to the where

they can leave New Zealand with If they are

going home, they should go with their wage entitlement" (Press, Ilil/96),

As for the ships of shame the Maritime

Authority announced a stepped up drive to identify and publicise them, hoping to embarrass their owners into ac tion. In the first six months of 1995, it inspected for, eign-flagged ships 194 had deficiencies; eight were detained for posing a threat to life or the environment

New Zealand Shipping Under Threat

A II indications are that more, not ships and crews will be plying New Zealand waters, The Maritime Trans, port Act, deregulating coastal shipping, came into effect in 1995. This allows ships to work the New Zealand coast Federated farmers was the most vocal proponent of this Act and within months of its passage was touting its advantages to farmers, For example, in April 1995, a Dutchowned ship was chartered to transport grain from Timaru to Auckland, at a cheaper rate than local shippers (who have to pay New Zealand PA YE, GST and ACC), Foreign shippers are planning to break into the trans-Tasman market, one which has been confined to New Zealand and Australian crews since a Australasian maritime union accord dating back to 1931 (but which has no legislative status). The French" owned Australia-New Zealand Direct Line is the first to look likely to move into the Tasman; British-owned Blue Star Line and German-owned Columbus Line are not far behind, The NZ Seafarers Union, fearing job losses on the 17 New Zealand owned and operated ships dedicated to the transTasman trade (out of a total of 21), promised a major campaign of pickets and stoppages,

This Tasman encroachment by the shipping TNCs has already created casualties in the New Zealand industry. South Pacific Shipping, the largest shipping line, withdrew a vessel from the trans-Tasman run in November 1995, saying it couldn't compete with low cost foreign ships. This cost 26 jobs and significant revenue for maritime industries, but the company was losing $300,000 a month on that ser-

vice, Managing director, Captain Ross said:

"New Zealand shipping is reformed and really efficient. The Government must ask if New Zealand wants a shipping industry' III He reminded the deregulators of the lessons of history:

",,,once foreign lines dominated the they

would raise prices. History would 21& the

WATCHDOG 81 APRil 1996

PAGE 43

former Union made Tasman

when owned by P & had

in the world"

Australia decided that it does want a national shipping

and has taken steps to help it. In its 1995

the! .abor Government announced that it would exempt Australian shipowners from PAYE on crew wages, New Zealand refuses to consider a similar tax break for local shippers. This move would save Australian companies up to $1 million per vessel per year and give them a distinct competitive over their New Zealand counterparts, The result?

I

s V

The Campaign for Peoples Sovereignty (CPS) is continu-

albeit in a lower key than before. After three years, enthusiasm ran out for monthly Saturday meetings and a smaller group is now meeting on a weekday. But there are no shortage of things to get our teeth into on the local scene.

South power And Our Foray Into Theatre

We're pleased to report that the 1995 Christchurch local body election has resulted in the proposal to institute charging for water to be dropped for the foreseeable future. But the City Council's primary cash cow, Southpower (which provided half of the Council's total revenue for the 1995 financial

has announced a 4.9% price increase, effective from April. Remember, this is on top of the 1 % per month increase between 1992 and 1994. There has been considerable public uproar. Coupled with renewed pressure from the Business Roundtable and the Building Owners and Managers Association (BOMA) for wholesale privatisation of Co uncit-owned assets, this means Southpower will be a renewed focus for our attention.

One novel approach was "Power", a musical/play presented

the Free Theatre, in February 1996. Originally a 1937 American production about the ownership and control of supply in that country, the Free Theatre added a substantial portion to look at the current Southpower situation in Christchurch. The company approached CPS and made excellent use of the voluminous material in our files and electricity companies in general. By

coincidence, the show coincided with the price rise so the script was changed daily to keep it topical. "Power" became a news story in itself, was extended by an extra week and was hit. Apart from all that, it was a thoroughly entertaining, thought provoking show, one with

which CPS is to have been associated.

In late 1995, the public j·vas asked to its opinion on

Council should sell all or part of its minor-

ei>"w .. ·/r".IAiMa in the Plantation Forest Board

Ltd. The Council information was heavily

slanted towardsfavouring

New Zealand

10

dustry,

So while New Zealand's on foreign rustbuckets with crews

than the how! of hardwon shipping industry is bination of homegrown

TNCs. The of an island nation

on others to work our seas and our maritime links is

obvious to all but those blinded and/or

to

F R

P N

I

These are excerpts from the CPS submission opposing the suggested sale. Our objections fall Into two {'{f,WT'!JI}f

Exotic plantation forestry is a boom But because of massive policy changes wrought by both Labour and National governments, the benefits of that boom are largely not benefiting the New Zealand people who financed such a great chunk of that industry for nearly 100 years. The benefits are now flowing to the new owners who bought the cutting rights to the State forests in the selloff of the late 19805 and early 1990s.

Any shares sold by the Council will be these major players. And the nearly all of them is that they are overseas owned and/or controlled companies. Caner Holt Harvey is now American; Fletcher Challenge is NZ controlled but has over 50% foreign shareholding; Rayonier is American; there are four major Asian companies; and any number of nationalities represented in the "Other" category The Crown currently planning to reduce further its share of the total by offering Forestcorp for sale.

So, if the Council sells, it will he contributing to the further alienation of a very important natural resource and a vital sector of the NZ economy. Given this Council's laudable commitment to local ownership and control of its own trading enterprises, it would be deeply ironic for it to hand over yet another public asset into the hands of overseas or local Big Business.

And the Selwyn Forest is We consider the Council information piece detailing reasons for and the sale to be heavily slanted in favour Nowhere in it does it mention that the Plantation Board made a net profit of over $500,000 in the six months ending ,pnl,'ml··,,', I a threefold increase on the same in 994. Nowhere did the Council say that this was 167"Z ... over ''-'''''''''' .. e., or that total income was up by 42% (10% over budget). These

1996

44

by former councillor who

plantation If the

what will it invest in that will

The Plantation Board Ltd could truthfully be de

scribed as the Council's most obscure shareholding,

that's why the water is being tested first with it Southpower, the Airport and the Port Company are all very high profile and the Christchurch public has made it very clear that it doesn 'twant them wholly Of partly privatised.

Since the 1995 local body election (hut not during it) the

The World

Business Roundtable and BOM!\ have resumed their

for Council to all its enter-

and a for your resolve.

But if the Council decides to quit the it will send all

the wrong to the Kerrs Roundtab le)

and Hugh Pavletichs of this world. They will say

some If you can quit that, why not the

rest? Why not indeed? It would set a precedent and an ominous one at that It would be the thin end of the wedge.

For these reasons, we urge the Council not to sell all or any

of its 39% stake in the Plantation Board r .td.

committee hearHorton added Council

Warmth essential service in a

Christchurch winter, and the firewood market il-

lustrates all the pitfalls market" If the Council

can own and supply heating?

Nothing much to report on the domestic front this issue but there have been absolutely momentous developments globally and regionally. The most important has been the merger between Comalcos parents - Rio Tinto Zinc (RTZ) and Conzinc Rio Tinto Australia (CRA), creating the world's biggest mining company, with a combined worth of$US27 billion. RTZ already owned 49% of CRA - as part of a deal with the A ustralian government to secure its approval of the merger, the transnational corporation (TNC) agreed to progressively reduce RTZ's ownership of eRA to as low as 20%. over a long period of time. RTZ and eRA will retain their listings in Australia and the UK but the two will have the same board. RTZ was a behemoth before the merger.

"Now with op·-

orations as far afield as Papua

New Guinea and Chile, RTZ remains

the world's producer of tita-

nium and second largest cop-

per and lead producer, third

of iron ore and molybdenum, producer of bauxite, gold and silver and the world's seventh

The merger was December 1995, ers at an Extraordinary General Meeting in London but not before a last ditch campaign against it was waged by our long time partner, London-based

WArC~IDOG 81 APRil 1996

People Against Rio Tinto Zinc and Subsidiaries (PARTI, ZANS). It circulated an Letter emphasising the dan, ger posed to indigenous peoples and their environment by this merged company and pointed out the dismal track record of RTZ and eRA -, it specified West Papua, the US, Papua New Guinea, Bougainville, Australia, and the Philippines.

"We call upon shareholders in both companies to

" Oppose the proposed RTZ/CRA merger

,. Demand that all RTZ and eRA operations which impact in any way on should be halted, until these communities have been guaranteed the following:

Indonesia IS troubled zones with secessiorusts s8slong mdepend(:3nCB,

Gemini News

---

PAGE 45

11 Full and take

any

of land water, and

water and land cover

Full access to all the companies' or

tion data, with an veto to halt such operations

when considered to be

A number of New Zealand groups LetterMurray Horton did so on behalf of both CAFCA and the Philippines Solidarity Network of Aotearoa

West Papua

Among the worst affected of the indigenous peoples are those of West Papua, or Irian as it is called by its Indonesian occupiers. RTTs depredations are well documented over

the border in Papua New most spectacularly on

Bougainville and more on Lihir Island. Less well

known is the fact that it holds an 11.8~..j, stake in the huge Freeport copper and the world's in West Papua (the majority owner is Freeport-Mclvloran, of the US) This is the single biggest investment in Indonesia, domestic or foreign; the absolute lynchpin of Indonesia's brutal occupation of West Papua; and a focal point in the more than 30 years of national liberation war waged by the Organisasi Papua Merdeka (Free Papua Organisation - OPM). The Indonesian invasion, in the early was commanded by the then General Suharto: as President, he sees West Papua as a personal test of his credibility. The indonesian occupation has lasted longer and been every hit as brutal as its more infamous annexation of East Timor - the war only captures world attention when the OPM takes foreign as happened in January 1996. The PARTIZANS Open Letter stated:

"(The mine has) resulted in forced relocation' of

Amungme, Dani and other

Indonesian mine company fa-

cilities, have been confirmed by two recent

dent investigations. The US government's Overseas Private Investment Corporation (OPle) condemns the West Papuan operations for their huge damage to the environment, specifically rivers and rainforest RTZ is the financier for expansion and exploration on 2.6 million hectares of Indigenous land".

When the aPM seized the foreign it made a number of environmental demands, focusing on the mine which dumps 100,000 tonnes of pulverised rock per day into local rivers (a similar scenario over the PNG border at BHP's Ok

Tedi mine has led to a billion claim

filed the company landowners. Indonesia's

of terror that m ining TNCs face no such irritants

in their half of the island). PT Freeport Indonesia is shamelessly Paul Murphy, executive vice president, said:

WATCHDOG 81 APRIL 1996

dom here"

The company has worked hand in sians and has an awful Jot of blood on

rectly as the

third of relocated who died of malaria after be-

forced from their mountain homes down the low-

lands.

011 the

avail-

the Australia-West Millers Point, NSI1/20SS. age).

post-

But irs in Australia that Cornalco has the

Not this time for its business activities it has an-

flounced that it will be building a $A 1 billion alumina refin ..

cry in Queensland addition to its Gladstone alumina re-

finery, the world's also in that it was for

its attempts to smash the unions at its Weipa bauxite mine on north Queensland's York Peninsula (Weipa is the source of the Bluff smelter's raw Since 1993 a New Zealand Weipa workers up to an

extra $A I each per year left the union and went

onto individual contracts company eRA has

atically campaigned to rid all its Australian mine sites of

unions and awards, using heavyhanded tactics.

For example, at eRA's Iron in West-

em Australia's Pilbara are now on individual

union numbers fell from 450 to 75. Union members

on the award rate were the same job for $A !

next to workmates doing

In November 1995 the enough was

Not merely struck but the mine site so

that it was forced to a halt As is the way with in-

dustrial disputes, it escalated, with coal miners and waterside workers in All Australia' were closed

down. Now there is a lot about the Australian

Council of Trade Unions but unlike New Zealand

(the which rolled over and has most con-

vincingly dead ever since the Contracts

Act was first mooted National back

as have tried to

into Australian industria! relations.

The ACTU backed the workers

struggle at Hamersley Iron) and even

the earlier for them to

PAGE 46

."""no"" Palmer """Y'''orr.c

succinct in his summation ofComalcos case: "The guts of this case is the elimination of the trade unions from the work

III The Commission accepted the

It ruled that Comalcos workforce policies were inconsistent with the Industrial Relations Act and that award-covered workers were entitled to retain colo> no Employment Contracts Act nightmare for Aussie workers. Yet. Not that the Weipa workers

got what wanted. They won an 8% pay rise

and returned to work on the promise of equal pay and conditions 'with their non-unionised workmates. That has yet to be implemented by Cornalco.

NewZeaiand

New Zealand, of course, has had several years of the Employment Contracts Act. Comalco NZ was one of the first to take advantage of it and totally deunionised its Tiwai Point smelter production workforce, getting them out of the Engineers Union and onto individual contracts. Other employers have lauded it as an example. There are still un ionised workers at the smelter all the cleaners, for example. But the Act gives employers an enormous advantage and Comalco continues to exploit it to the fullest. New Zealand bricklayers working on the smelter expansion are paid $38,000 per year - Aussie brickies working next to them are on $68,000. They are all on individual contracts and paying different workers hugely different amounts for doing the same job is perfectly legal under the Act

ISE

Roth Labour and the Alliance have

Act should win the 1996 election.

Mcfronald, Comalco NZ's at the 1995 annual is worried that an MMP election will that favours what Mcl.ionald labels

deliver a

""'",,,,,,,, rather than the more to deliver sustain:lOll 0/95). Comalco

"short term social and green difficult policies which arc more able living standard increases" wants more of the same.

Globally, things are looking bright for Cornalcos big brothers in the aluminium industry. Blithely ignoring their own twaddle about market forces, the aluminium TNCs got their home country governments to sign a Memorandum of Understanding on Aluminium in March 1994. This .. nn",~p,' global production cutbacks to handle the "crisis" caused by Russia flooding world markets with cheap aluminium (capitalism did not welcome this particular bit of the post-Cold War "Peace Dividend"). Russia was the hardest hit But the Memorandum's two years are up, and in that time, the global aluminium cartel's actions have ensured that prices have skyrocketed. So now the TNCs are resum fill! production, led by smelters in Europe and North America. Back to unrestricted production and profiteering, having put those annoying Russians in their place.

Capitalism is just the ticket as long as it involves cosy private dubs and no competition. And workers that don't cost too much and don't belong to unions. And, if available, an obliging mil itary to permanently eliminate anybody else that might in the way. How come none ofthat is in Comalcos folksy TV ads?

N

Ian Wishart Howling At The Moon Productions. 363 pp, Illustrated.

~ Wolfgang Rosenberg

This book is a MUST for any New Zealander who falsely believes that in this country any other capitalist country, for that matter) means government based on power, The book's author, Ian Wishart, a truly "injournalist (another word for "high class criminal detective"), summarises his findings correctly as follows:

"As borders shrink and multinational corporations intake control of the world's economic destiny .. it becomes easier for those in business to impose their wishes on Government whilst bypassing the ballot box"

"The Paradise Conspiracy" is a description of some of the extra-legal activities of the thin top layer ofthe New Zealand business class who were liberated by Roger Douglas to assume transnational activity: Fay Richwhite, Brierleys, Carter Holt Bank of New Citibank. For good measure Wishart throws in suspicions about the death of the discoverer of the "Winebox" papers, Paul White, by foul

play in the Chicago tradition. It is indeed astounding that the discoverer of the papers should have died a sudden death after trying to make use ofthem by pressure on some of their originators to pay • .or else.

The "Winebox" papers, collected by a dissatisfied partner of the European Pacific business activities in the Cook Islands, finally handed to Winston Peters MP and also to Ian Wishart, are a unique historical record. They describe in detail how powerful financial tycoons not only circumvent legislation but in some instances have sufficient power to write and have passed legislation with a view to lining their own bottomless pockets and those of their anonymous shareholders.

Not only does Wishart thus have the chance of describing capitalists' business from the inside without any speculation, but ill preparing a TVNZ Frontline documentary on the subject, he had also the opportunity of watching the relationship between this capitalist ruling clique, "public opinion" (the media circus) and "democratic" government. Noth-

WATCHDOG 81 APRil 1996

PAGE 47

could better confirm the Marxian theory that govern-

conditions of

of one

"The Paradise has international ramificarions It goes to the heart of the struggle between democracy - government of the people, by the

for the people .. and government by the

rich and A weapon in that struggle is the

court more often than not used to ef-

fect by the plutocracy. An example is the series of injunctions taken out European Pacific to prevent these matters being exposed" (p326).

Ihere can be no question that "national" have the same ideology of irresponsibility when it come!'; to avoiding taxes by all means, fair or foul, as transnational capitalists. The movement to cheat governments and the State of income required for the health, education and welfare of the nation is truly international. In this fascinating volume, the Japanese government and people, Australia and other countries have been betrayed by their own capitalists as badly as New Zealand. But "internationalisation" of economies, in other words foreign control, has been the means by which these anti-national transactions were carried out Let no one believe that "globalism" is a good thing for the peoples of the world. It is the antithesis of democracy. What appears at first sight a lot of empty rhetoric then has, by the accident of

of the wineboxes

like Ian Wishart without their self

you disc Conspiracy", fWI:iJl'L'"

plunges into the world

ber how the /986 "Maori Loans was back /0 the Honolulu CfA via the Cook Islands? That "Affair" alsofeatured Winston Peters documents in Parliament) Wishart also unearths gems on both the SIS'

and the SAS that the latter

no on

leave that to our sister publication,

we used to do a tot For

halfof the 1980s we ran stOIJ! after storv about the r n ar rruriv offshore activities of the 5,'AS. We proved that two ofthem were killed in a US military plane crash on an international

Special Warfare Exercise inside US base at Subic

Bay in Ferdinand Marcos . and we pursued that

story to the extent of getting the (heavily US Air Force report on the crash under the Freedom of Information Act.

"The Paradise Conspiracy" simply confirms what we were warning about {4 decade and a half ago the New are deliberately kept in the dark about the spooks and legalised killers whose wages ,vc pay but whose loyalties are definitely to their Brothers overseas. Even if you don Of read one word in the book about the "Winebox ", the intelligence subplot isfascinating. And remember, you heard about it in Watchdog ages ago. Ed

The walls ofJim Anderton's electorate office are lined with cartoons (of Jim) and photos of past Labour prime ministers. They end with Bill - none of Lange, Palmer or Moore. There's certainly no sign of Sir Roger (although I can't vouch for the toilet). This is appropriate because the New Labour Party, which Anderton heads, is in reality the Old Labour and Bill Rowling, who died in late 1995, was the last leader of the Old Labour Party. He was a genuine social democrat, unlike his successors who were neither social nor democrats. I never met him, so can't say anything about him personally. The fact that he preferred to be called Bill rather than his given name of Wallace indicates that he'd rather be known as a Willy than a Wally.

This is not the place to examine Rowling's overall political career nor the very shortlived government that he headed between Norman Kirk's ! 974 death in office and the Muldoonslide of 1975. The mainstream media have already

done that, with Brian Easton's Listener column ("The

formidable, 9/1 the most insightful.

Rowling's death means that there are now no pre- I 984 prime

WATCrUJOG 81 APRIL 1996

Horton

ministers still alive. But we should not fall into the of

looking back on that 1972-75 Labour he was firstly Minister of Finance and then rosetinted glasses. I only have to read my own as

1974 editor of Canta, the student newspaper, to

refresh my memory of that faults. For example,

it presided over the arrest and trial of Bill the most outrageous of the various Cold War absurdities inflicted on this country. He was but was dead within months, which was doubtless the aim of the SIS and their CIA mas-

ters. This was the Labour that came into office

on a fearmongering "law and order" and which

cancelled the 1973 tour, not on moral grounds, but because law and order could not be It encouraged Gideon Tait, the megalomaniac Christchurch police commander, to attack the 1973 demonstration at the US military base at Harewood with a huge force of cops and military personnel.

Out of office, it was Rowling's fate to be Leader ofthe position during the most vicious years of

PAGE 48

member the Affair? The lists of alleged Corn-

munists and KGB Not to mention the 1981 Tour).

Muldoon described being attacked by him as similar to "being gored by a white mouse" The vagaries of First Past the Post meant that Labour more votes than National in both

1978 and 19tH, lost both elections (I' ll never forget the

stunned look on face on election night 1981, not

helped by his prematurely lifted him shoul-

der his head on the ceiling and rendering him

Labour's and schemers judged him

unlikely to defeat Muldoon never led Labour to victory),

and overthrew him in favour of David Lange. The rest is history. As a booby prize, the new Labour government appointed him Ambassador to the US during the height of the ANZUS Row. As a longtime proponent of the nuclear free law, he acquitted himself well with the Reagan Administration that tried, and failed, to bully New Zealand back into line.

There are a number of deserves special attention from CAFCA. As Leader of the Opposition, he sacked from his shadow Cabinet, for puban unauthorised alternative Budget Would that David had done the same a few years later. As Minister of

he through the 973 Overseas Investment

Act which founded our old mates, the Overseas Investment but bloody feeble

about the tide of foreign control that in the following two decades. led to the birth of this

It seems viewed from an age when

allow the likes of Tommy Klepto to swathes

of our rural that Bill as Minister of Finance,

the on one very high foreign land

It such cause celebre that it featured as one

first Stockton an American. had

land near Te Anau and built Takaro an early precur-

had opposed the when he was in opposition, and once in office he was after it. Takaro was mothballed and dosed in 1 because the Labour government refused permission for it to raise additional overseas finance to build a golf course (this was in the when you needed official permission to purchase overseas funds). Rowling stated that permission was refused because Rush planned to finance it

out to a new partner. Rush took Rowling

to the Supreme Court and won, the first time ever that a Ministerial decision had been successfully challenged in court Appeals and a $1 million damages claim against the Crown dragged on well into the J 9805. But Rowling had the last laugh while the court. process dragged on, Rush had to auction everything at Takaro Lodge, right down to the gold taps.

On the debit Rowling disgraced himself as Leader of the Opposition when Muldoon, in his first term, confronted Japan (unsuccessfully) with his "fish for beef' demand over improved trade access; and when he (more successfully) forced up Cornalcos laughable power price for the Bluff smelter. In each case Rowling ran around gutlessly wringing his hands about how this was no way to treat a major trade partner and a major investor. In each case we found ourselves on Piggy's side.

Out of politics, Rowling spoke out against Rogemomics and Labour's sale of public assets. He criticised aspects of the foreign takeover. When Sumitomo of Japan bought out 100% of Nelson Pine Industries and its processing plant in 1992, Rowling attacked it, in his capacity as former longtime MP for Tasman, a major forestry region.

"We are making ourselves the hewers of wood and drawers of water for other nations ... You alienate what is a renewable resource. I don't know how we will ever get that back. When I was Minister of Finance we introduced legislation where you could not alienate more than 24.9% of any company without the approval of the Ole. That Commission looked at the overall effect on New Zealand (sic). This deal sounds like we will be earning for another country. True, some money will be reinvested but ultimately the company is responsible to its investors in Japan, not New Zealand ... Canada had to take steps to stop too much ownership from the US. What we are seeing here is a deal with short term financial gain with potential for long term harm",

was one subject that vexed Bill Rowling III

his final years. He tried, unsuccessfully, to through to his Labour successors in 1990, the year ofthe big State forest selloff.

cc ••• Rowling visited the traps to point out the stupidity of selling offthe forests.' I started with the Minister of Forests. That seemed to be the logical place to start, It

was then Tapsell. He threw up his hands in honor and

WATC.~DOG 81 APRIL 1996

PAGE 49

town of Nelson. Zealand has an obi Zealand. are the

nom ics" .A lastair

One of his last

log export crisis in the

logs were in New Zealand

would have added $! billion to

our economic with such an We are ask-

has

renresenrs the Tasman once Sir Wallace's

in the water

the water- common sense.

our recent

had won an election

effects would been

wishful It would take

more than halfhearted and an eye on the

polls to reverse the course for us the

cal fundamentalists. The best we can do is to damn him with faint - he meant well he wasn't up to it.

he was one of six SOilS

paper

when Mrs Lake

an article on life in the Soviet

Murray Horton which offended

anti-communist attitudes. The couple were

of a network up the 1951 water-

10 waterside workers when it was

In

contacts there. It was the hunt the US and the Petrov spy case That the end of his career in the

tion news editor.

up as the

"Are in one million serfs or a few hundred feudal land owners'!" The

50

Soviet split - he with the Chinese assessment of the Soviet Union as "revisionist". Most fascinatingly, lived there during the Cultural Revolution. Indeed all three daughters were Red Guards. Doug regarded the Red Guards as "people to be admired" and the Cultural Revolution as an event of breathtaking scope: "A whole nation purposely thrown into a state of political turmoil by its leaders". He wanted to stay there to see it through to its conclusion but his daughters wanted to grow up in New Zealand .. The family returned to Wellington in 1968 (in later years, Doug spent two six month spells in China. He was there during the 1989 Tiananrnen Square uprising).

This has to be placed in the context of the times. "Red China" was the devil incarnate, with absolutely no contact with the West. It was the enemy and believed to be behind the Vietnam War which was presented as "Communist expansionism which has to be fought there before we have to fight it here". New Zealanders who lived in China then, such as Rewi Alley, were automatically written off as "Commos" and by definition, to be shunned.

So the family got a hard time when they came home. "He was attacked by Truth and pilloried on Brian Edwards' first television programme" (Dominion, ibid). They weren't frightened off - indeed Sally, the oldest daughter, became an active member of the Wellington Progressive Youth Movement (PYM). But they got swept up in the infighting of the local Left, specifically the mass expulsion of the entire Wellington District from the Communist Party of New Zealand (now the Socialist Workers Party). In his interview with me, he described the Left's greatest problem as frag-

mentation and sectarianism.

For his first few years back home, worked as

storeman, which he found an education in itself He and Ruth wrote a 150,000 word manuscript on China it was never published. Nixon's visit to China magically undemonised the place, so Doug was able to resume his journalism career. By the time of his 1985 retirement, he was deputy ch ief subeditor on the Dominion. Ruth died in 1991 - Doug was devastated. He moved to Nelson to live with Sally and her family.

He maintained an active interest in politics. He joined CAFCA just a few months before his death (he sought me out at a public meeting I addressed in Nelson). At the time of his death, he was in Wellington attending the Fintan Patrick Walsh historical trade union seminar. "Mr Lake was not a banner waver but a man of strong convictions. When the 1981 Springbok tour went ahead, he decided the Rugby Union would get no more of his money" (Dominion, ibid). He never attended another game. There was a certain appropriate irony in the fact that he actually died whilst watching the World Cup final on TV - any AU Black fan knows how he felt.

Doug Lake's life reflected many of the twists and turns of twentieth century history, not only here but in that most fascinating of countries, China. He experienced both the humiliation of being hounded out of a career and the vindication of being accepted back into mainstream society without having to compromise his views. A very interesting life indeed.

OBITUARY

MAURICE OWAN

Waihi is a fascinating place, a town steeped in mining history and the site of NZ's only death in a strike (that of Frederick Evans, bashed to death by cops and scabs during the 1912 miners' strike). The miners are back - courtesy of the foreign-owned Martha Hill Mine, Waihi can truly claim to be the only town in the country to resemble a doughnut. It's got a great big hole in the middle. The mine arouses great passions among the residents and Waihi has a level of political awareness undreamed of by most other Kiwi communities, regardless of size.

It boasts a great local paper, the Waihi Leader, produced by mother and daughter team, Annette and Cyndy Bowater. This is the paper that has been the staunchest media backer of CAFCA for years (it might surprise you to learn that it's not owned by Rupert Murdoch). I've spoken there twice - once solo, the other as opening act for Roger Moody. Each time Waihi provided the biggest crowd of the tours and was the highlight

Waihi, and its passionate battle against the mining transnationals that are intent on devouring it from within, has produced some larger than life characters. None more

- Murray Horton

so than Maurice Cowan, who died in late 1995, at the tragically early age 01'47 (it was a massive heart attack). Maurice was the personification of the campaign against the mining transnational corporations (TNCs). To refresh my memory, I rewatched Vanguard Films' excellent 1989 documentary "Prospects". Maurice is the star and he got all the best lines

WATCHDOG 31 APRil 1996

PAGE 51

learn from ali over the Com,

mandel

never a CAF( A member but he didn't need to be.

We ve had an active alliance with Coromandel Peninsula

and its Waihi offshoots since the 1980s.

first mel him in 1981 where he briefed us in the

basement of his family home. 1990 he

an overnight of Martha Hill for

as the mere road manager, there was no room for me.

When J first met him he mayor Over the years

he was also a Waihi councillor. Hauraki district

councillor and Waihi community board member. At the time of his death, he had retired from local politics. But he was far from your typical small town and local body

politics were a part of his life

His friend, Kevin ute at the funeral:

delivered the most succinct trib-

"Maurice, of course, was known widely in the community for his vocalness with the mining issue. He wasn't anti-mining, as he told us many times, he was pro- environment Even more than this, he was antiBig Brother. He didn't believe in having companies

and themselves on

when those people had little chance to have much choice on these to their lives. He felt the min-

with all the financial resources and so

scientific opinion at their disposal were not giving many ill this town a fair deal and so he had done, and was continuing to do, something about it. Even he was humorous in his approach to 1iI~: ... even know how much this was

contributing to J4il

awav him, even

early death" (Waihi

Maurice' credibility as a opponent ofthe INCs was because he was a local born and bred, never having left Waihi for more than a few He wasn't an "outsider" a "hippie" or a , or any of the other epithets. He was a

a man, a plumber who said of

himself "once couldn't spell plummer, now I are one" (Waihi Leader, 7/1 1/95). He was a Rabelaisian character. "He said there were only two things plumber needed

to know that pay day was and that shit doesn't

flow up hill' tWaihi He loved giving

hard time and he drove around with AC/DC

van stereo. One entitled

"The humoristic anarchist" included: "I'Il miss him

in my kitchen"

Maurice was a whirlwind the kids of Waihi. hind the local

in

the environmental resources manager at the

Golden Cross Mine- because his son was Maurice

and worked on roller

honoured that that! was able to call Maurice Mate' andthat he me for what i am and did not shun me because

! worked for Leader, 7 1l1l(5)

in Waihi coverage of il filled

most of two consecutive issues of the Waihi

A he was accorded the honour of

the local marae, The funeral itselfwas attended over I.UOO which is an enormous number for a small town like Waihi

Kevin tribute concluded:

folks there are

boots to fill. In fact there will

never be another like him. No

up the

way of a There is a new hole in this town, a proverbial hole that IS than the famous, or infamous, Black Hole up the road" (Waihi 14/11/95) He had the aplast ,'VOId commenting on Maurice's wish

for his ashes to be scattered off a local Corney said. "it will stuff up the the fishing there forever" (ibid).

So Waihi and the Coromandel have lost one of their most defenders from the ravages of the mining transnationals. But if there was one lasting legacy of Maurice Cowan. it was was that others to off their arses and get stuck in. His successors will be that much more determined to carry on the fight, because they'll be doing it for Maurice.

25 minute aocumentarv

Waihi and tnrouvnout

Liz

be kept out struggle continues undiminished.

transnationals need 10 part of the country. The

CAFCA expresses our deepest to the

following members who have suffered losses in their families

whose son U""""''''', aged 19.

died in

To Sue IU1Jd Bill

To Ken and Paul

PAGE 52

It would be

I

to blame the failure of the Golden Cross

tailings dam on the Resource Management Act and look there for a solution for future applications, the failure in the hills between Paeroa and Waihi is the culmination of the failures of the bureaucrats within the These failures are the result of Planning Tribunals and council officials who continue to accept evidence from paid industry witnesses at face value, motive ignored; regional councils made up of old boys with "developers' rnindset" and "it's my land" farmers who lack any downstream philosophy.

It began with Think Big and Bill Birch. The United States company AMOCO (as in the AMOCO of oil spill infamy) began an intensive drilling programme in the area called the "Golden Cross", where there had been several gold mines in the pick and shovel days last century. Coromandel Peninsula Watchdog tried to stop this company that was also making a mess on Great Barrier Island and in the bush near Whangamata, This was 1980, when prospectors had the au· tomatic right to mine and District Court judges were brought up from the West Coast to hear and then reject any and all objections, Needless to say they found gold,

Then, for some reason, they sold their licence to another US company Cyprus, Watchdog fought the new company at every stage, It was at that point, in the early 80s, that the information we gathered showed that the proposed tailings dam was to be built over a num-

ber of streams, including an active earthquake fault and sit on land with a geological history of massive ground movement We failed to impress the council or the appeal judge. Everything we said about land instability, sulphide ore leachates, was just blah blah blah from "hysterical" locals. to the soothing assurances of the overseas experts who were paid to impress, got their licence and sold the mine to a third US company - Coeur Gold. The same who decided that the dam site was safe is now in the process of deciding how much costs to award against Watchdog for challenging this mine's application to use more cyanide and discharge more ammonia, How wrong can decisions be before the question is asked: what is wrong with the system of decision making?

I" "

• Mark

WATCHDOG 81 APRIL 1996

If the

to one of these applicawants to put in a septic tank or

there is enough local to

. However, when

not adequate. The result

marion on the comes from the mining companies or

committed to, and by, the

voluntary locals or conservation groups. It has no show of

on the and is usually seen as nuisance value by

council officials.

To finish a long there are about four million tonnes of

dust and mud containing cyanide, cadmium.

copper and other metals sitting behind an earth wall unlined dam, perched in the hills and sitting on a 1.5 kilometre block of land that is sliding hut downhill right now. There are cracks, seepages and leaks of various descriptions. Government bas placed responsibility for the whole thing on the Waikato Regional Council (WRC). Historically, the WRC has been committed to this mine, The company now has a free hand to solve the problem, for as long as it takes .. with no guarantee required. In the meantime they can continue mining, at full speed ahead, In fact, the Council is considering legal ways of letting the company discharge more

PAGE 53

aVilllablilly of CUfIFY'CY slabillty and low rate of Inflatliln

Folitical stability

No chanC)e to env.ronmcr.tni cni:c;aqed

of qcoloqical and rrlin1nq con.~;;I_llt;Jnt:::;

"nVllonrncnt

GovernlTIent lor

toreion :rwestmont

L.ow corporat« tax

low royalties or: production l'Jo payroll tax

N() stamp duty sh;:)re

transactions

New Zealand Country Supplement to Mining

dam will centuries after the mme finished. The of all the water from the dam and the entire means that the dam will now be a

abandonment dam. This

of dam is worldwide as an environmental lime bomb that

inevitably leads to

and 5Uf,-

water from the mine to the while nor requiring them to putting more into the dam at the same time.

The company says it will "stop the Earth from rather than stop mining. They claim to have to keep mining hecause putting more tailings in the dam will help stabilise it. That plan just doesn't hold water. The dam is currently rated at a safety factor of .93, which is some 50% less than minimum engineering standards. Ifthe "fix" takes five years to achieve, as is projected, there will be another four million tonnes in the dam. So, if the "fix" does not work, we'll have twice the problem, sort of double or nothing with our environment. In fact, whether it works or not, we will have a problem.

Coromandel Watchdog Ph/fax (07) 8668675

face water pollution. So bad the world with these darns that bill has been introduced to the Wisconsin which, if

"until one mine in the United States or Canada can be run without surface and ground water pollution and one mine in the United States or Canada can be abandoned for ten years without surface or ground water pollution".

At a public meeting below the mine site, in February 1996, the tangata whenua and other locals opposed the continued operation of the mine and passed a resolution 10 close it. Needless to say. it has been ignored by the company and the council. the unlikely move by licensing authorities that the mine be permanently shut down, the site should be closed immediately, drained and proven safe to the highest

standards by independent and blessed

by the locals before it is even considered safe to put another kilogram of mine crap into it.

Hauraki (formerly Coromandel Peninsula

can be contacted at Box

Coromandel.

"

"

Murray Horton's 98 page booklet on forestry in New Zealand has sold well since its 1995 launch. There are only a few copies left and as the material is now over a year we have cut the price. "Rernaindered" is the correct book trade name.

Forestry continues to be a very big and one even more dominated by TNCs. Most recently, the Government has

announced that it intends selling the which includes Kaingaroa State Forest, the New

Zealand's crown, Likely bidders are headed by US behemoth Weyerhaeuser, one of the world's for-

estry TNCs, and one which is anxious to a foothold in this country's booming Other forestry TNCs

continue to embed themselves here - elsewhere in this issue for stories on Wenita, et at

members and bookshops) or

Copies "Clearcui" are available for $5

orders to Box 2258, Christchurch.

the public). Send cheques and

WATCHDOG 81 APRIL 1996

PAGE 54

I L

From The Big From July 14-16, the APEC (Asia Pacific Economic Cooperation) Trade Ministers Meeting will take place in Christchurch Town Hall. GATT Watchdog (GW) plans to organise a two day alternative forum enitled "Trading With Our Lives: The Human Cost Of Free Trade", Some of the areas the forum aims to look at will include: free trade and colonisation: indigenous rights; free trade, labour rights and standards; women and free trade; the role of transnationals and the erosion of economic sovereignty; market reforms - the New Zealand experience; links to the global picture.

Needless to say, it will cost money to organise and publicise. Given the enormous implications of the free trade agreements that the Government has entered into and the corresponding lack of space for concerned people to come together, talk and strategise on these issues, and because New Zealand will host the 1999 APEC Summit (in Auckland), we think it is vital to inject some momentum into opposing what is going on,

GW has already received expressions of interest in attending an alternative forum from overseas contacts, and hopes to raise enough money for three international airfares as well as all the other costs associated with the conference, The

I

10

In Aotearoa/New Zealand, there is a yawning gap in the field of critical research studies on the implications of the General Agreement on Tariffs and Trade (GATT), However, one important study should certainly be read those interested in the subject. This is a thesis written by Victoria Owen, a student at the Centre for Resource Management, Lincoln University Titled "Trading Off The Environment?", this thesis might be an academic paper but it is still a very readable document. It is 96 pages in length, including appendices and references.

With the establishment of the World Trade Organisation (WTO) to succeed GATT, official rhetoric has sent a stream of smokescreens into the air to try and obscure any clear scrutiny of the of GATT. But Victoria, writing in ]994, aptly observed:

"Findings suggest that GATT is already impacting on our options for environmental policy in New Zealand, with the Government reluctant to employ environmental measures that contravene GATT rules. This was highlighted when the Government declined to implement a ban on the import of refrigerators made with citing GATT commitments

WATCHDOG 81 APRil1996

idea is not to engage APEC itself in discussion - many re-

NGOs and other organisations have strongly voiced the view that APEC is anti-democratic, lacks political legitimacy and that we do not wish to be given some sort of"consultative status" within it. But our forum will be the one where the real issues get talked about not just the statistics of economic growth and the rhetoric of economic cooperation, It will link into the hard work which many people throughout the Asia/Pacific region and indeed, the world, are doing to build fairer alternatives to the current free market madness which is so in vogue with politicians and big business. GW will be applying for funding from local and overseas a"'~JH"",,', But it would appreciate any support that you might be able to give,

CA FCA fully supports this alternative forum; we will put money into it; and will be actively involved in organising it. We urge our members to support it in any practical fashion, including attending it

For more in/ormation or to make a donation, write to:

Alternative Forum Fund, GATT Watchdog,

Box 1905, Christchurch, NZ.

T

E

as the reason for the decision, The Government has also withdrawn a ban on the import of potentially disease carrying bovine genetic material, on the basis of GA TT obligations (p.

Victoria goes on to note that "it is important for all New Zealanders to recognise that trade agreements are no longer just about trade but they are significant determinants of domestic health and environmental policies (p. 73)"

"Trading Off The Environment" includes chapters on the background to the acceptance of GATT in Aotearoa/New Zealand; GATTs interactions with environmental policies; and the implications of GATT for national environmental policy. In the last-mentioned chapter, Victoria looks at, among other issues such as the "least trade restrictive criterion", scientific justification, risk assessment and harmonisation.

This very worthwhile paper can he obtained from the Centre/or Resource Management,

Box 56, Lincoln avn or rvrrrvr Ph (03) 3253841.

PAGE 55

\.'

A

ince J 99] every issue of Watchdog has featured a sizeable chunk Oil GATT and all related of the free trade issue. In

the last couple of years, we formalised the arrangement and gave it one third of the space in each issue. The writer has been Dermis Small.

A no more. In 1996, Dennis is training to be a secondary teacher and has no time available to write for Watchdog. Being realistic, he' highly unlikely to have time either when he starts teaching, That leaves two regular Watchdog writers - Murray Horton and Bill Rosenberg. Neither have the expertise nor, most importantly, the time to replace Dennis' section. That doesn't mean that Watchdog will get any smaller, just that it will be full of other things.

What it does mean is, that for the foreseeable future, Watchdog will be publishing little or nothing on free trade. Dennis is not lost to CAFCA - he remains a committee member. Nor has he finished writing about GATT, His CAFCA project for the past couple of years has been researching and writing a book on trade and the environment (working title "Free Trade Attack"). TIllS is a major publication - the manuscript is over 200 pages; it is finished and, all going well, we aim to launch it at the July alternative forum on free trade (see above for details),

But if you want to continue getting the goodies on GA TT, we recommend that you subscribe to The Big Picture, the quarterly publication of GATT Watchdog, It costs $15 or $10 if you're unwaged.

Send 10, GATT Watchdog, Box J 905, Christchurch, NZ Specify thai it is payment for a sub to The Big Picture.

"ABE

INNER'S GUIDE TO

FOREI N NTR L"

Murray Horton's Speech Available

For the past three years, Murray Horton has travelled extensively throughout the country delivering a speech entitled "A Beginner's Guide to Foreign Control" He makes sure that it is continously updated. But at nearly 30 pages it's far too long for us to consider publishing, even in such a longwinded volume as Watchdog.

That's why we have decided to make copies available to members who request them. It covers: the global context: foreign control in Aotearoa; myths about foreign control; future trends; GATT; and what we can do about it.

You can order itfrom CAFCA. Enclose $5 to cover copying and postage.

CHE

Please Make

UES

ut Correctly

At the beginning of 1996, a new law came into effect tightening up the acceptability of cheques. If they are marked "not transferrable", then they can only go into the bank account of the person or group named on the cheque, They can not

be over. If they are incorrect, we have to return them to sender, with a request that s/he start again.

We have and continue to receive, cheques intended fix CAFCA but which are made alit to Watchdog (no such bank account), or Murray Horton (thank you very much but no thank you). In the past they could be signed over to CAFeA. That is not possible now. Another organisation (not actually received a cheque made out to ASAP

(the sub said: "Please send your cheque ASAP to ... ")! All in all it's a hassle and not one of our making.

Please ensure that your cheques, for subs, donations, purchases, etc, are made out to CAFCA, and nobody else, If YOIl wish to make a donation towards Murray Horton's pay, then make your cheque out to the CAFCA/ABC

Account is a totally separate account).

WATCHDOG 81 APRIL '1996

PAGE 56