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five dollars a litre for petrol? coming soon to a pump near you - oil companies prepare for the biggest oilshock ever



WHEN THE B RBL~~~\_\~~~, l?L/R SJJl.TE OF THE ,NA_t\(J~\_~~~~ OUR HEALTH:


and why you're paying for the hit and myth of global warming

science sheds new light on 'industrial disease' - we all have it!



can binding citizen-initiated referenda bring politicians back under public control?

an anxious world waits amid signs suggesting America is heading for its biggest financial crisis since the Depression

$6.95 inc GST, February 2004


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As the Kyoto Protocol lurches into its death throes because of a refusal by Russia to ratify it, we ask the question "What Next?" . And why should New Zealanders be forced to pay "carbon taxes" if no one else is? HAMISH CARNACHAN reports ... Here's the good news. the world has extensive oil reserves. Here's the bad news: they're locked away under miles of ice and will push petrol prices so high you'll wish you owned a horse. CLARE SWINNEY investigates the fuel crisis the oil companies are quietly preparing for - just five years away - when the wells go dry Steve Baron is a man with a mission - to introduce binding citizens referenda as a check and balance against the excesses of big government. HAMISH CARNACHAN profiles the push to get BCIR accepted, and asks, "Can it work?" There are only four extensive, pristine primeval forests left on the planet. JOCELYN MCILRAITH explores one of Earth's last remaining jungles, and its battle to stay alive



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They're keeping the US financially afloat to the tune ofUS$240 million a day in loans, but is China really a white knight or simply feeding America's consumerism addiction? JOHN SCHMID probes China's role in the USA's looming financial crash




nz first is pledging to introduce binding citizen-initiated referenda if it becomes part of the next government. HAMISHCARNACHANprofiles the state of accountability in politics
irst impressions can so often be deceiving. Baron has decided to try and do something about it. In March last year he'd had enough of what he describes as sheer Sitting at the oak and leather helm of his Auckland-based advertising agency; Steve frustration with politicians not listening to the public. Rather than Baron looks like your middle-of-the road, call talk back radio or write another letter to the editor he got average Kiwi. The odd middle-aged line proactive and founded the Voters Voice Action Group - a lobby creases his face and he wears a worldly ex that aims to "restore power back to the people". Baron reflects on the 1999 election as an illustrative example of pression that almost dictates a life-story familiar to so many of us - years of hard that "annoyance and dissatisfaction", which was partly respontoil building up a business, a mortgage sible for the group's formation. Cast your mind back to the vote tantalisingly close to being paid off, 2.7 kids who have almost and you might recall that New Zealanders sent out a very clear flow? the nest, and the children's dog (that isn't going anywhere). message to their elected representatives - "There are too many of Fact is, Baron's a little bit different from the average New you." Of the 85 per cent who posted ballots, 82 per cent called for Zealander. Sure, like most of us he's prone to moan and grumble about the state of politics in this country. But unlike the majority, fewer MPs. What happened? The Government ignored the voice
44, INVESTlGATEFebruary 2004

of those 1.7 million people who voted to feel their democratic rights are being eroded, reduce the number ofMPs from 120 to 99. and why Baron's movement continues to "Where's the democracy in that?" asks garner an increased following even in the Baron. "They [politicians] simply think they face of a "minor setback". can do what they want, when they want. The Government pushed through legisThere's only one day of democracy then lation to sever ties with the Privy Council three years of an elected dictatorship .. " despite New Zealanders demanding a say Voters Voice wants to change all that but on the issue in the form of a referendum. first, the disclaimer. Prostitution has been legalised against the Baron eagerly points out that he is not a wishes of the people. Labour has lifted the member of any political or religious group, moratorium on the commercial release of and he stresses there was no single issue genetically modified organisms, ignoring an behind setting up the lobby. The initiative, overwhelming majority of Kiwis (almost he says, comes from an underlying feeling 80 per cent) who opposed the move. that real democracy has been and is being In fact, says New Zealand First leader threatened in New Zealand. Winston Peters, "Helen Clark obviously "Many of us feel we have lost control of believes that the people are not capable of the politicians we elect. The ideological be- making decisions on the major issues facliefs of past and present politicians are be- ing their country." ing forced upon us without a mandate or Major issues that Peters says also include, majority support of New Zealanders and "The foreshore and seabed; gender-bendmany feel powerless to check this unbridled ing legislation in which women become fapower." thers; killers, drug dealers and rapists on To try and force upon politicians what he home detention; closing hundreds of believes are missing checks and balances, in schools; the sale of state assets; property April last year Baron applied to the Clerk of speculation in large tracts of farmland, the House of Representatives for a peti- lakeside, coastline and high country; road tion to make referendums in New Zealand tolls on public roads already built and paid binding on the government. for. .. " It soon became apparent that throughout the country there was a good deal of grassroots support for his ideas and subseespite its self-proquently Voters Voice was formed to rally claimed "apolitical position", the Votsupport for that cause. And while the group failed to acquire the number of signatures needed to trigger a nationwide referendum on the Binding Citizen Initiated Referenda (BCIR) proposal, a respectable 20,000 sig-

zens initiated referenda by holding a binding referendum on the issue instead of "consulting the mirror on her bathroom wall". The party has also promised that, if elected, it will make referendums binding. "The idea of giving the people a say on major issues fills the Prime Minister and! her political coven with dismay because they know most people oppose Labour's agenda to transform New Zealand into a politically correct, gender-bent, lawless, Third World! republic," says Peters in his typical minceno-words manner. "We trust the commonsense of ordinary people more than the cultural commissars and ethnic engineers in the Labour Party. "Democracy is dying under Labour but New Zealand First will breathe new life into it at the next election." Proponents ofBCIR, like Baron and Peters, suggest that under the current system of governance - in which they argue there are virtually no checks and balances, no Upper House or written constitution - there are no safeguards to protect the people from politicians and political ill will. Most people thought that by voting for the MMP system of government the

stranglehold of the old First Past the Post "practice would be broken. FPP was rejected, arguably, to dilute the absolute power held by minority governments and to stop politicians betraying the electorate. Ten years on, there is a growing concern ers Voice crusade that MMP has been perverted back to a syshas clearly struck a tem where, once again, a minority governchord with New ment is doing exactly as it pleases. Smaller Zealand First. Binding referenda may have parties, seduced by the ramblings of media

"The idea of giving the people a say on major issues fills the Prime Miriister and her political coven with dismay because they mowID()St people oppose Labour's agendato transfonn New Zealand into a~litlcally correct, gender-bent, lawleSs, Third World repuBlic"
- Winston Peers
natures were collected, signalling, at least, a come up against a hurdle in its first push start to Baron's quest to shift the power towards Parliament but Peters promises to make sure the initiative doesn't disappear .. base from the elected to the electorate. Looking back over the last term of gov- Late last year he challenged the Prime Minernment it isn't too hard to see why people ister to seek the opinion of voters on citi46, INVESTlGATE February 2004

and business commentators, have sacrificed their principles in favour of so-called "stability" - a don't rock the boat mentality. The net result, argue the critics, is that the majority of New Zealanders are being left

out of the process. Peters seems to sum up the general discord: "Instead of placing the interests of the people first, [politicians] put their parties first or pander to some self-interest group in return for prejudice, cash or votes or all three. "Is it any wonder that ordinary New Zealanders feel powerless because they have no say in deciding the momentous issues facing society?" In 1993 the National government introduced the Citizens Initiated Referenda Act. This was intended to give New Zealanders more of a direct role in democracy by giving voters the power to initiate referenda on any subject. The procedure involves a person submitting a proposal for a referendum to the Clerk of the House of Representatives along with a fee of$500. The Clerk, in consultation with that person and others, determines the final wording of the referendum question so that it is precise, clear, and so that only one of two answers may be given to the question. The person then gathers a minimum of 10 per cent of voters' signatures on the approved petition and delivers it to the Clerk, within 12 months of the date of determination, to validate the signatories. If everything is in order the Clerk then presents the petition to the House of Representatives from which date the Governor General has a month to set a date for the referendum. The referendum must then be held within 12 months of the date of presentation unless 75 per cent of the members of the House vote to defer it. The House may defer the date for 12 to 24 months, or it may change the date to coincide with the next general election if Parliament will expire within 12 months of presentation. Once the referendum is held, the result is non-binding however - the government is not legally bound to give effect to the result, it is 'indicative' only. In an Australian parliamentary discussion paper on CIR, Former National MP Douglas Graham notes that "unless a fundamental principle is at stake, the government is unlikely to place itself in a position where it would be required to justify its refusal". However, with the disregard for referendum votes that has been witnessed over recent times, and ignoring the public outcry for referenda to be held on particular issues, some argue that refusing the popular voice has become the norm. Citizen-initiated referenda have not been used frequently in New Zealand but past examples show us that politicians are in no

the topic of industrial relations was inappropriate for a referendum. way averse to overruling the will of the people. According to Baron, it is common practice for politicians to Take, for example, the Firefighters Referendum of 1995; initiated by the firefighters union in response to the proposed restruc- invent reasons to snub referenda results that threaten to derail turing of the Fire Service - 'restructuring', of course, meant reduc- their political agenda. He says the Norm Withers petition is aning staff and increasing working hours. Of those who voted, 12 other classic example. Leading up to the 1999 general election, Withers, now a per cent were in favour of the restructuring while 88 per cent Christchurch City councillor, gathered enough signatures for a refopposed it. But because the government is not bound by the results of erendum on violent crime after his mother was brutally attacked citizen initiated referenda, legislation to restructure the Fire Service with an iron bar whilst minding his shop. was not put on hold to take into consideration the public reThe question asked of voters at the 1999 election was: Should sponse. Instead, various ministers brushed aside concerns about there be a reform of the justice system placing greater emphasis on the move jeopardising community safety, claiming at the time that the needs of victims, providing restitution and compensation for


February 2004, 47

them and imposing minimum sentences and hard labour for all violent offenders? Despite another overwhelming majority in support of such a change, again the result, and the want of the electorate, was . ' tgnore. d "Politicians said [the question] was poorly worded and confusing. I disagree. I think the objective was quite clear - that we wanted tougher sentences for violent offenders - but the Government simply ignored it," says Baron. That is precisely the reason why Voters Voice and New Zealand First want to make referenda in New Zealand binding on the government - referred to in Europe as 'direct democracy'.

laws that left loopholes open for criminal elements to corrupt political parties and officials. None of the politicians had the courage to take on such organised and entrenched criminal syndicates on their own. An Australian Parliamentary discussion paper on binding referenda, which investigated the systems operating in some of the aforementioned nations and states, concludes that "voting under a modern representative government is so remotely connected to political decision-making that it can not be ascribed any real participatory quality". In general terms, the paper suggests greater participation in government adds legitimacy and therefore stability to the political system. It argues that high participation and the related familiarity with democratic procedures can guard against "the sudden intrusion of groups which will constitute threats to democratic values". "In most representative systems of liberal democratic government. .. there is an 'indirect democracy' where the citizen's role as participant is limited," writes the author, Helen Gregorczuk. "Indirect democracy is characterised by the existence of a 'political layer' which performs governing roles, with most citizens accepting that by and large, decision-making is the job of politicians, who can be called to account for their performance at the next election. "This can be contrasted with the idea of direct democracy which proposes a more continuous, active role for citizens." It's a point that has been reiterated time and again by ce~ain members of the European Union. For years nowthe EU has been running a sustained debate about direct democracy and the provisions with which binding referenda could benefit both democracy and the citizens of the multinational bloc. In a 2001 Netherlands government report on The State of the European Union, it was suggested that, "Out of concern for democratic legitimacy ... one of the ideas which is worthy of consideration and which maybe should be investigated, is the idea of a European rejective referendum." It was considered as a means of reducing the power of the governing institutions and letting the European people have the final say on important societal issues likely to affect them but stalled by impasses. "In this way the European citizens have

the final say.In this connection, there is also thought of a popular initiative ... These ideas emanate from the consideration that citizens should have a more direct voice in influence." "I think that forms of direct democracy are necessary as an iron bar. Besides choosing the chairman of the European Commission, a European rejective referendum and a European popular initiative are important weapons for the citizens," agrees Netherlands Secretary of European Affairs Dick Benschop. "In theory, this could now and then lead to a set-back. But it would amount to arrogance to build a political union upon a half-functioning democracy." Similar calls have been forthcoming from the German Bundestag. Arguments from wider circles, posited in favour of direct democracy, say that citizens' or electors' initiatives will promote government responsiveness and accountabilityif officials ignore the voice of the people, the people will have an available means to make alternative law. It is suggested that citizen initiatives enable voters to separate issues from personalities, and overcome voter apathy and alienation because it allows greater participation. This is supposed to instil a greater sense of responsibility in the electorate for public affairs. The mistrust surrounding the Labour Government's scrapping of the Privy Council clearly illustrated that New Zealanders want a greater say when it comes to issues of constitutional change. Direct democracy, through binding referenda, is hailed by its proponents as a way of gaining wider acceptance of such changes and other proposed alterations. Direct democracy is also claimed to increase the legitimacy of law and therefore promotes a greater respect for the law because laws instituted as a result of citizen initiated referenda are more dearly and direedy derived from the popular expression of the people. And perhaps what could, arguably, define the benefit of direct democracy in the current New Zealand political landscape is the assertion that initiative and referenda will produce open, educational debate on issues that otherwise might not be adequately discussed - it is supposed to allow for controversial social issues, which legislators might be loath to enter into, to be



n Switzerland, the 1848 constitution provided for a popular initiative in which a petition containing 50,000 signatures could be used to propose a constitu.... ..... tional amendment that would be put to the entire Swiss electorate. Revisions to the constitution in 1874 ensured that direct democracy was further entrenched in Swiss law. It was extended with the introduction of the legislative referendum, which effectively meant that any federal law or decree had to be put to referendum when required by 30,000 electors or eight constituencies out of 26. In the last 130 years the Swiss have voted on just over 300 issues of which approximately 50 per cent have been approved. In 1977 the people rejected a value-added tax and in 1986 they rejected a proposal to join the United Nations. Other nations have alsoadopted direct democracy. Canada has differing systems of binding and non-binding referenda but powers of enforcement depend on whether they are used at provincial, territorial or federallevel. Still, direct democracy is gaining momentum. Australia also employs binding referenda but only when issues of constitutional concern arise. In the USA,. 23 states have some form of BCIR. The people of Florida recently passed a petition to force the state government to balance the budget on only 80 per cent of total revenue. In the early 1990s, Italian citizens used their rights of referenda to remove existing
48, INVEsnGATE February 2004

resolved. For every put supporting direct democracy though, there is an equal criticism. In his latest book, Bridled Power, former prime minister and constitutional lawyer Geoffrey Palmer quotes the 1986 report of the New Zealand Royal Commission on the Electoral System to reinforce opposition to BCIR. It reads: "In general, initiatives and referenda are blunt and crude devices which need to be used with care and circumspection. Their frequent use would amount to a substantial change in our constitutional and political system. They would blur the lines of accountability and responsibility of governments and political parties and blunt their effectiveness. "In our view, those elected to govern should be able to do so without formal reference to the people as a whole, provided they can be formally held to account at regular and frequent intervals, provided they are responsive to an informed public opinion, and provided there is contin ued development of restraints on the power of government, such as through parliamen tary select committees, the Ombudsman, the Official Information Act, and administrative review through the courts. "There are other ways through which popular opinion can be expressed and have an effect on the legislative and decision making process. Initiatives and referenda can adversely affect minorities. There are very real practical difficulties. It is our view that under our present political and constitutional system, the regular use of initiatives and referenda would detract rather than enhance the ways our democracy generally works." But proponents argue that the conditions listed in the quote are actually a threat to the position against direct democracy. They ask, what other mechanisms could be recorn-

mended to reign in the power of a government that is not "responsive to an informed public opinion"? The Labour Government has shown its intentions when faced with popular opposition - ignore it and adopt the "we know best" attitude, reminiscent of the Prime Minister's 'modest' self-appraisal. As German minister Peter Muller recently told an EU assembly, "There's a range of states who have direct decision making by the people at the national level. And they have no worse democracy than Germany." Still, Sir Geoffrey'S quote sums up the more popular criticisms and there are other perceived problems too. In a Business Round Table paper titled

ply to a minority natural justice. "Referenda increase the influence of the median voter and reduce the influence of minorities and special interest groups, compared with legislative process." Coming from a group promoting the interests of the business elite, the irony of such a statement is not lost; however it is a concern also raised by oth~r, less partial, commentators. Other leading arguments against direct democracy are that binding referenda are costly and destructive of good planning, and that they serve to encourage either radical or conservative measures. What about minority groups such as Maori, could they be disadvantaged? Not according to Baron. "That would mean New Zealanders would have to be unreasonable and I don't believe they are," he says. "In Australia they had a referendum to reform the constitution in relation to Aboriginal rights. Almost 91 per cen t were in favour and that was one of the highest affirma-

'Constraining Government Regulation', author Bryce Wilkinson suggests the citizen-initiated referenda process can be captured by well financed interest groups acting to serve sectional interests. "On complex issues, voters are likely to be less informed than representatives," he says. "They may also be subject to official misinformation, reflecting the self-interest of those controlling the release of public information. " He goes on to warn that another risk is that a majority vote will be driven by selfinterest on"a factional issue - voters would support populist measures. "For example, to allow a majority to determine a discriminatory rate of tax to ap-

tive referendums recorded in democracy. "In California a state senator launched a campaign to prohibit homosexuals from teaching in public schools but it was soundly defeated." The Voters Voice founder suggests there is little worry about minority groups disrupting society either because "anyone with any experience of obtaining signatures to petitions knows that if 10 per cent of the electorate can be organised to sign, then there is a groundswell for de bate and change". As for the notion of binding referenda leading to demagoguery and mob rule, Baron challenges those critics to find any historical evidence to prove their case. "In fact," he says, "binding referenda are

50, INVESTIGATE February 2004

a definite safeguard against that. There have been a number of demagogues in countries dominated by party politics, but none in Switzerland. "Referendums aren't expensive either and that has been proved in Switzerland. The financial costs are higher there too because brochures and ballot papers must be published in three major languages. "If New Zealanders aren't willing to pay ~ a few dollars a year to finance referendums, then they are not interested in controlling their own affairs. This suggestion is an insult to the people. It has been demonstrated that the financial benefits of the referendum system far outweigh the costs." Baron is also defensive about criticism that voters are not competent. He says that in an electronic society information is now easily disseminated via the Internet and points out that it wasn't so long ago that women were considered not intelligent enough to have the vote. "Opponents point to Proposition 13 in California as a case for saying the people are not equipped to make responsible decisions

on matters of taxation and government spending but they don't tell the whole story. They forget to tell you that property taxes had risen steadily for a period of five years even though the Californiangovernment had amassed a surplus of five billion dollars. "Opponents also forget to tell you that Proposition 9, which would have halved state income taxes, was defeated by a majority of two to one." Included in the Voters Voice list of referendum objectives is a clause that would limit the amount spent on advertising a petition to $100,000. A further $100,000 limit would be placed on promoting one of the answers put to voters. Any advertisement published or broadcast either for or against the referendum petition, or for or against one of the answers, must clearly show the name and address of the person or organisation paying for the advertisement. According to Baron, this would help to add transparency to the process that is, essentially, about opening up New Zealand's democracy and giving it back to the people.

"Voters is neither for nor against issues such as prostitution, euthanasia, smoking, the Privy Council, foreshore and seabed or any other contentious issue that might arise," says Baron. "New Zealanders should simply be able to have more say on issues that directly affect them when they feel it is important to them. I'm not proposing a referendum on every working of government, but we believe that Members of Parliament work for New Zealanders, not the other way around. There should be checks and balancesin place and Members of Parliament should be answerable to New Zealanders more than just every three years at a general election. The only way to do this is by making referenda binding on government." Now the real issue is getting the politicians to agree to a referendum that may see them relinquish their so-called stranglehold on power. It may sound good in theory but, as in most cases, putting ideas into practice is an entirely different matter - especiallywhen politics abounds.

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