ROGER AWARD 2001
STATEMENT FROM THE JUDGES
- Michael Gilchrist, Prue Hyman, Glenn
and Sukhi Turner, 25.2.2002
The judges for
the Roger Award for the Worst Transnational Corporation operating in 2001 in
Aotearoa/New Zealand had a difficult task. Several other companies could almost
as appropriately have made the short list of six, while a strong case could be
made for each of the six to win the award - with their poor records spanning
some or all of the criteria. These cover areas such as unemployment, abuse of
workers, profiteering, political interference, cultural imperialism, and
negative impacts on some or all of tangata whenua, women, and the environment.
The finalists this year were Tranz
Rail, Monsanto, British American Tobacco, Carter Holt Harvey, Mobil, and United
Water. We will discuss each of the six here, working up to the “winner”. We
should note with displeasure that the first three on this list were also on the
shortlist last year: Tranz Rail has achieved this dubious distinction each year
since the Award was started in 1997 and won the Award for the second time in
2000, narrowly beating British American Tobacco. Monsanto is also a past winner
for 1998. It is appalling that these recidivists fail to improve their records
or take account of bad past publicity and justified public reaction to their
behaviour.
Tranz Rail would, sadly, be a worthy
winner in any year, as the input of the public to this Award testifies. It
received the most public nominations and the judges were sorely tempted to complete
their hat trick. However, its bad behaviour is well known, more so than some of
the other finalists, so in the end we decided that condemnation rather than
another Award was appropriate. Its record in 2001 was no improvement on past
behaviour, with disregard of the health and safety of passengers and the few
workers who have not been downsized out of the company an ongoing scandal
(4,000 left of 24,000 employed in the early 1980s). Cost-cutting staff
reductions contribute to the lack of safety of DC locomotives, with 19 of 68
audited engines being found to require repairs; of level crossings where few
have been upgraded after collisions; and from unfixed track, with breaches of
guidelines continuing. Tranz Rail continues to thumb its nose at environmental
concerns, speeding through the Marlborough Sounds and opposing lower limits
with pressure tactics. Its single minded pursuit of the bottom line,
unconcerned with any resulting withdrawal of basic passenger services to a
large proportion of New Zealanders, has led to narrow specialisation in only
the most profitable freight and mainline passenger services. Provincial New
Zealand, Marlborough Sound residents, and other victims of what one nomination
called its “callous disregard for social and economic outcomes” make Tranz Rail
an inevitable finalist for the Roger Award.
Monsanto was slightly quieter in New
Zealand in 2001 than in some years, with the Report of the Royal Commission of
Inquiry into Genetic Engineering (GE) and Government reaction perhaps making it
seek a low profile. This is not so overseas, where pressure on farmers over
Terminator seeds has intensified, with threats of lawsuits and jail turning
into reality. A Canadian farmer was forced to pay $85,000 when a court ruled
that he had stolen Monsanto genetic material despite his contention that GM
plants resulted from pollen contamination from neighbours. In New Zealand,
Monsanto continues to promote GE and manufacture herbicides while being active
in the pressure group, the NZ Life Sciences Network. This organisation pretends
to an objective scientific stance but is in fact a lobby group for abandoning
controls over GE.
British American Tobacco is a finalist
largely because the whole tobacco industry richly deserves opprobrium for its
attempts to recruit young people, especially Maori, to smoke an addictive and
harmful drug while continuing to downplay its harmful effects. BAT is singled
out because of its near monopoly position following the international merger
with Rothmans.
Special “Egg On Face” Award: United Water, Assisted by
Papakura District Council (Past Councils)
The judges deliberated hard about this
award. United Water’s New Zealand impact is for the moment confined to
Papakura. Further, its major impact came with its winning the contract to
supply Papakura with water back in 1997, and the District Council could be said
to have been complicit or at least a major player in that decision - hence the
‘’egg on face” award covers them too. However, United Water’s ongoing policies
under the contract, oblivious to popular unrest about its actions, the Audit
Report on the management and monitoring of the franchise agreement, and its
successful pressure on the Council to reverse a tiny $500 grant to the Papakura
Water Pressure Group in 2001 make it a worthy recipient of this special award.
A postcard poll in 2001 with 1160
returns showed that 96.7% were opposed to the franchise, which grants United
Water the right to run water services for 30 years, plus a 20 year extension
option with no extra fees. Water charges are unaffordable to many, yet some
United Water staff intimidate and threaten customers and cut off supply of this
essential commodity to those behind with payments. Varied options for charging
have been resisted or made unaffordable - charges are unfair to those who use
much of their supply for gardening, which makes an assumed 80% of wastewater
unreasonable, but a second meter to assess this has been priced way beyond
cost. Monopoly power has allowed such exploitation, as well as over pricing to
commercial customers. The lessons that must be learned from privatising such an
essential commodity, have led the judges to make this special award to United
Water. It comes at an important time, when sensible legislation to learn from
this episode and make water and wastewater services core council activities,
not to be privatised, is under consideration.
Mobil, like British American Tobacco,
is a representative of an industry in which all firms have questionable practices.
The oil industry is highly concentrated, with cost-plus pricing and competition
through market share rather than price leading to suspicions of profiteering.
The area of greatest current concern is the almost total disregard of
environmental damage done by many of the industry’s policies, here and
overseas, with lobbying for policies to continue this through ever greater use
of motor vehicles. However, Mobil and its parent Exxon in the US stand out in
2001 with its resistance to actions in New Zealand to reduce the proportion of
sulphur in diesel. Exxon has also been the company pushing President Bush
hardest to resist the Kyoto Protocol, showing a callous disregard of the
effects of global warming.
The lobbying activities of the whole
oil industry, and Mobil in particular, to force governments to avoid actions
detrimental to its interests are well known, with 91% of its political
donations, the biggest by any oil company, going to the Republicans. Denying
the links between its business and global warming, dismissing the issue as
exaggerated, and downplaying renewable energy options, Mobil seeks access to
ever more remote and beautiful areas to look for oil, including the Arctic
National Wildlife Refuge. Mobil in New Zealand held out against the proposals
for Auckland’s low sulphur diesel, when the other three big companies had
agreed. All this makes Mobil’s runner up award richly deserved.
Winner - Carter Holt Harvey (CHH)
This is Carter Holt Harvey’s second
appearance on the short list for the Roger Award. The range of negative impacts
on New Zealanders for which it is responsible makes the forestry giant deserved
winners. It has unashamedly over many years acted to subdue its workforce and
damage their conditions, bringing in scab labour, and destroying the social and
economic fabric of small towns dependent on their enterprise. In 2001 its
attempts to casualize stevedoring was centred on Nelson, bringing in Mainland
Stevedoring workers from Tauranga. Nelson employment was further eroded when the
local tree maintenance contractor was replaced by a North Island firm. Maybe
North Islanders do not know of CHH’s poor safety practices: CHH Wood Products
was fined $6,000 in October 2001 following serious injury to a worker who fell
onto a concrete pad while working over six metres up without protection. He had
not been warned or given fall-arrest protection. But it’s not only South Island
employees who are affected by CHH practices: 2001 saw industrial disputes at
Kinleith and Tokoroa over labour practices possibly illegal and certainly
anti-worker.
Its plan to save labour costs at the
expense of workers is necessitated largely by CHH’s own inefficiencies. CHH
instituted a strategy for monopolising the market in logs in order to inflate
the price. When this failed, it was left with major problems including rotting
trees and reduced profits.
Damage to the environment, physical and
social, is also a feature of many of CHH’s activities - from driving logging
trucks through residential areas, through erosion and silting up of fishing
grounds, to continued use of dioxin producing chlorine bleaching processes.
Alternatives are available, and the only pulp and papers mills left in New
Zealand using this process are CHH owned. Not surprising when parent company International
Paper is known as one of the top polluters in the US. The whole forestry
industry is lobbying against New Zealand leadership on Kyoto, arguing that
reducing greenhouse gas emissions to reduce the impacts of global warming will
be economically costly to the industry and to New Zealand in general, using
doubtful models.
CHH’s other unwelcome activities
include participation in growing genetically modified pine trees. Arborgen is a
joint venture company with Westvaco, another US based TNC forestry company, and
Auckland based biotechnology company, Genesis, to fund and undertake research
in this area - also involving Monsanto to try to build resistance to Round Up
into such trees. The impacts are quite unknown on cross pollination, the insect
population, the lignin content that gives trees the rigidity they need to
withstand environmental stress, and tree longevity. Some benefits might even
result - but the venture is to serve the interests of those involved, and the
usual intellectual property ownership issues arise. Finally, CHH’s lack of care
for public amenities is shown by its withdrawal of Hanmer’s public forest
reserve, a popular local walking area. It is indeed a worthy winner of the 2001
Roger Award.
--------------------------------
1997
Tranz Rail,
Coeur Gold, INL, Telecom, Comalco, WestpacTrust, Juken Nissho, Lion Nathan, and
Brierley's.
The winner was Tranz Rail.
Coeur Gold and INL were equal runners up.
1998
Monsanto,
Tranz Rail, Fletcher Challenge, INL, Carter Holt Harvey and Telecom.
The winner was Monsanto.
Tranz Rail got a
Continuity Award; Fletcher Challenge a Dishonourable Award; and the judges
especially created a Collaborator's Award for the Business Round Table.
1999
TransAlta,
Tranz Rail, Monsanto, News Ltd (which owns INL), WestpacTrust, Telecom and
Waste Management.
The winner was TransAlta.
Tranz Rail got
another Continuity Award; Monsanto was put on the Roger Award Watchlist.
2000
Tranz Rail,
British American Tobacco, BP, WestpacTrust, Shandwick and TransAlta.
The winner was Tranz Rail.
British
American Tobacco was the runner up.
Carter
Holt Harvey is everywhere. From growing Pinus Radiata to Handee Paper Towels to
Treasures Disposables to Pinex Wood. Even a stake in the “new” economy:
business electronic solutions and communications. Stevedoring too. It has a
firm foothold in the New Zealand economy. Carter Holt Harvey is also the winner
of the 2001 Roger Award for the Worst Transnational Corporation operating in
Aotearoa/New Zealand.
Sadly Carter Holt Harvey was not alone in its
endeavours to be the worst transnational corporation in Aotearoa. The six
finalists were all strong contenders for the award. They included incumbent titleholder and two times winner,
Tranz Rail, one other previous winner, Monsanto, and a runner up, British American Tobacco. In
addition to those four finalists was United
Water, a brand new entrant and Mobil, a past finalist. While Carter Holt Harvey
was a clear winner, the judges decided that Tranz Rail is in a class of their
own and eliminated them. Mobil was chosen as the runner-up and United Water was
given the special “egg on face” Award.
Now what of Carter Holt Harvey? Carter Holt Harvey’s
monopolistic activities in the South Island came under much criticism by the
judges. True to the stereotypical scripting of how transnational corporations
operate, Carter Holt Harvey - owned by the US-based polluter, International
Paper - showed no regard for eroding the small town economies, being anti-union
and anti-worker. Monopoly capitalism being in the stagnant, moribund stage that
it is, Carter Holt Harvey’s attempts to monopolize the logging industry was a
disaster for both the company and the communities where these operations are
based, and allied sectors. In fact the only responsibility that Carter Holt
Harvey has shown has been to generate or, more accurately, attempt to generate,
profit for its shareholders.
Following
the Roger Award Judges’ Statement, we will examine in more detail what made
Carter Holt Harvey the winner of the Roger Award for 2001.
Carter Holt Harvey has shown a gross disregard for
workers’ conditions and, worse still, no respect for their labour in itself.
Even the minimum legal protections afforded by the dithering, “Third Way”-ist
Employment Relations Act were sorely tested and compromised. The Roger Award
judges identified that Carter Holt Harvey acted without responsibility to its
workers and was keen to casualize work.
In an industry where heavy machinery is used and
safety provisions are an essential to getting the work completed safely, Carter
Holt Harvey has been negligent in meeting those conditions. According to the
judges, Carter Holt Harvey shirked when it came to worker safety leading to a
$6,000 fine from Occupational Safety and Health (OSH).
The fine was for failing to provide fall-arresting
equipment resulting in a worker falling over six metres onto a concrete pad and
sustaining multiple injuries, in Nelson, in October 2001. The worker was
conducting maintenance work when the jackhammer got stuck on the conveyor belt.
While trying to free this, the worker overbalanced and fell. According to OSH,
“employers in all industries need to be aware that there is a legal duty to
ensure anyone who risks a fall of more
than three metres is aware of the risks and provided with the means to
prevent a fall” (emphasis added)!
When sentencing, Judge Walker pointed out that this
was an obvious risk and that no one should work that height without
fall-arresting safety equipment. The worker was not warned of the risk, nor had
been made aware of the availability of the safety gear.
Guilty. Guilty. Guilty. Of course Carter Holt Harvey
would not plead that but according to the Roger Award Judges’ Panel, it was
these practices that really entrenched a win for them. Union-busting, using
scab labour, and casualization has all been done under the aegis of the new
Employment Relations Act that is supposed to be more worker-friendly! So what happened?
In the South Island, Carter Holt Harvey contracted out
the loading of logs from the docks to a third party. This was one part of its strategy, discussed later, to monopolize
the log industry in the South Island and in Korea. Mainland Stevedores, from
Tauranga, brought in casual workers from Tauranga and the other parts of the
North Island to load the ships. These workers, who were flown in by Mainland
Stevedores, were on 72-hour contracts and were members of the company “union”!
Nelson Stevedoring Services, whose workers are members of the Waterfront
Workers’ Union, were unable to contest the tendering process as this was done
with no consultation with their employer. Tension between the scab labour and
watersiders grew. Support for their actions came from across the community and
country. Concern was expressed about the decline of domestic jobs. Even the
Maritime Union of Australia and the Korean Transport Workers’ Union came out in
support of New Zealand workers with a threat of a ban on Carter Holt Harvey
ships.
Waterfront Workers’ Union, whose members were
affected, and the Council of Trade Unions have raised concerns about the casualization
of employment and the impact that the disappearance of permanent jobs will have
on small towns. Concern was expressed by small town businesses that casual
employment and the absence of permanent jobs will introduce even more
uncertainty into already shaky economies. While much of the focus has been on
Nelson, concerned parties have expressed alarm that this is the start of a much
wider trend in the South Island ports. 20% of the logs that are handled by
Nelson, Port Chalmers, and Bluff are from Carter Holt Harvey. This precedent
can be used to introduce a new wave of attacks on job security and conditions
of employment on the basis of the need to be competitive. The introduction of casualization
means, for Carter Holt Harvey, an increase in profits to be expropriated
overseas. For workers in small towns this is bad news.
Carter Holt Harvey’s anti-worker practice has not been
restricted to the stevedoring: at the Kinleith Mill in Tokoroa there was an
industrial dispute where Carter Holt Harvey workers were forced to take their
holidays while production had stopped to increase demand. The matter flared up
when Carter Holt Harvey tried to force workers to take Auckland Anniversary Day
- a statutory holiday - as part of annual leave. Even the Engineers’ Union boss
came out declaring this a breach but with no consultation, as though the
trampling of worker’s rights should be consulted about. Workers were advised
not to bother with taking leave if it did not conform to production downtime.
Other sites where workers’ dissatisfaction was expressed were in Eve’s Valley
Mill in Nelson and Browning Street Mill in Tokoroa.
In Nelson, a North Island company replaced the local
tree maintenance contractor. At Kinleith Mill workers were subjected to an
illegal drugs search with no drugs found.
Amidst all this, it should be noted that the likely
lads in blue colluded with the bosses in all instances to trample on workers’
rights. The Police force’s role in Nelson was notably a long-term operation
lasting months. Furthermore the Police went beyond the call of duty with major
State-sanctioned violence against dissenting voices from both the workers and
their communities.
So much for the self-regulation of the free market,
hey Roger? Self-regulation is, really, the sheer financial will of big
businesses like Carter Holt Harvey.
Carter Holt Harvey does not just have no regard for
the social environment, it also has no regard for the physical environment. Now
for a company that exploits the physical environment, one would not be too
generous to expect Carter Holt Harvey to act with more care. But, that is not
so. Carter Holt Harvey is only concerned with the bottom line: maximization of
profit.
Carter Holt Harvey’s environmental record included
driving heavy-duty logging trucks through residential areas enough to disrupt
school lessons, but all this was done with the collusion of city councils.
Carter Holt Harvey has also played a significant role in contributing to
erosion and the silting of fishing grounds. However there were two aspects that
really wound up the Roger Award Judges’ Panel: the continued use of dioxins for
bleaching of timber and, that brave, new world of genetic engineering, now in
forestry.
Dioxin is formed as a by-product from chlorine
bleaching of timber and timber products. Carter Holt Harvey mills and
processing plants use the chlorine bleaching process extensively. But what is
the big deal about dioxin?
Dioxin affects the immune system, causes cancer,
reproductive and learning difficulties. According to a draft report from the US
Environmental Protection Agency (EPA), there appears to be no safe level
contact with dioxin. Dioxin, a fat-soluble substance, accumulates as it moves
up the food chain. For example, a fish will have a higher level of dioxin than
its surroundings. Dioxin is found in mainly meat and dairy products.
It is not as though there are no other bleaching
processes for timber. In fact there are less harmful processes, alternatives
that have widespread usage in Europe, but the only pulp and paper mills left in New Zealand that continue to use
dioxin-producing chlorine bleaching processes are … little guess, Carter Holt
Harvey-owned mills. Of course, the parent company, International Paper, rated
as one of the Top Ten polluters, uses similar dioxin-generating processing. So
much so, that the usually lethargic US Environment Protection Agency was forced
to engage with the toxicity of dioxins and fine International Paper for
contamination.
Despite public criticism, Carter Holt Harvey has
continued down this path of dioxin contamination. If it was not for similar
environmental transgressions in the US, a skeptic might make the connection
between the notorious Lawrence Summers “it-was-a-joke” memo and dioxin being
released into the environment here. Summers, as Senior Economist for the
World Bank, did a cost-benefit analysis that argued for toxic waste to be
dumped in the South were lives were “cheaper”, rather than the North. But we
won’t make that point. Dioxin is understood to be a key component of Agent
Orange. Gee, thanks Carter Holt Harvey.
The Roger Award Judges’ Panel identified that other
“unwelcome activities” included involvement by Carter Holt Harvey in a joint
venture to grow genetically modified pine trees here in Aotearoa. Understood to
be worth about $60 million, ArborGen has united corporate forestry interests.
Named were Fletcher Challenge, known for its poor environmental record in New
Zealand; Westvaco, US-based forestry corporation; and Auckland-based bio-tech
company, Genesis. Monsanto, the shameless 1998 Roger Award winner, 1999 and
2001 finalist (with special Watchlist status in 1999), has been included for GE
pest-management and, possibly, Terminator-type technologies for pine trees. It
should be noted that the background mover is International Paper, which has
controlling shares in Carter Holt Harvey, and specializes in the forestry
sector globally.
Unlike other domesticated flora, trees, on account of their
slow development, have not yet received much attention from bio-technologists.
It can be expected that ArborGen’s bio-tech work will focus on specific areas
which have made domestication difficult. These include the speeding up of the
tree maturation cycle from 15 years to seven years, as for eucalyptus, with an
incentive to halve that time; the inclusion of pest-management; and the
introduction of that morally repugnant Terminator technology. However the
centrepiece of ArborGen’s work will be on the altering of lignin - the material
that makes trees rigid. While a reduction in lignin has implications for ease
of processing, but it is unclear what will the implications be in real terms,
for example, the possibility of having “wobbly” trees!
As with other GE ventures, breakthroughs for profit-maximizing,
business-funded research mean that the only concern is to generate more profit
and no concern for society. Not surprising, there is no research on the
long-term implications of biotechnology, specifically GE. The use of Terminator
technology could be devastating if cross-pollinated with non-GE trees.
Similarly, the use of pest-management technology in GE trees could change the
diets of insect populations to less vigorous non-GE trees. Even with the
lowering of lignin levels, GE trees could become weaker and more susceptible to
destruction.
The partners in ArborGen are not really known for
their good environmental record, or their social responsibility, therefore the
Frankenpine™ enterprise is grounds for concern. As the wisdom of the Royal
Commission on GE lets such lunacy prevail, this has been taking place without public
knowledge and the sites for Frankenpine™ forests are secret.
Carter Holt Harvey has a reputation of being a
merciless operator when it comes down to monopoly stand-over strategies. With
the whiff of another monopoly, in this case the Korean log market (estimated to
be worth $150 million), Carter Holt Harvey acted to corner the supply and
demand markets. According to the Roger Award Judges’ Panel, Carter Holt Harvey
“instituted a strategy for monopolizing the market in logs in order to inflate
the price”.
In a bid to corner the log market around the South
Island, Carter Holt Harvey embarked on an aggressive strategy of buying up logs
at inflated prices. Industry analysts estimated that this led to increases in
tendering up to 20%. It is further estimated that they bought up an eighth of
the total forest pool targeted for Korea. The strategy to create scarcity and
keep prices buoyant, followed by suspension of purchases, led to other industry
players having to deal with market-distorted pricing. In its wake - rotting
trees, excess harvest left on the side of the roads and a complete loss of
money. This boom or bust scenario has left the industry in tatters and not
quite sustainable.
It was claimed by industry sources that Carter Holt
Harvey sold the logs at a loss in the Korea market. Of course, Carter Holt
Harvey maintains that this is not wholly its making as Korean markets took a
dive. But you’ve got to wonder … a few years ago, Carter Holt Harvey activities
in the building insulation sector left even the limp Commerce Commission
gasping as their pricing was set below 40% of cost! In that context, its
monopoly strategy did not break the other players but instead led to a
complaint about “uncompetitive” activities, Carter Holt Harvey subsequently
withdrew from that sector.
Whose Invisible Hand?
International Paper, the US-based corporation, has a
50.1% share in Carter Holt Harvey. IP has a global empire in forestry and its
by-products.
International Paper has a reputation for being
anti-worker and using stand-over tactics with unions. At times not even abiding
by the law. International Paper has a reputation of sharing no responsibility
in closing down mills in small towns. This usually means that large-scale
unemployment, along with the destruction of the social fabric of those areas.
International Paper is one of the Top Ten of US polluters. EPA identified that
cancer risk from dioxin at a Georgetown mill to be ten times higher than any US
paper mill. Between 1986 and 1988, International Paper was fined $US2.2 million
for environmental damage and knowingly making false statements. If all that was
not bad enough, IP was the second largest employer during the economic boycott
on apartheid South Africa.
One is immediately struck by how similar the social and physical
environmental transgressions of International Paper are with Carter Holt
Harvey. It must give life to the “disposable environment” approach that IP puts
out in its advertising material. This invisible hand has been named.
If all this was not bad enough, Carter Holt Harvey
recently closed down the public forest reserve in Hanmer Springs (North
Canterbury), where the walking tracks had been revered by locals and tourists
alike.
While the judges have not raised the issue of the
Carter Holt Harvey dealings overseas, it is crucial to touch on the fact that
on account of “cheaper trees”, Carter Holt Harvey had substantial operations
between 1973 and 1990 in Chile, under the fascist Pinochet regime. Awash with
planting subsidies and export grants under the dictatorship, and Carter Holt
Harvey’s subsequent departure post-Pinochet, the changing opportunism is
interesting - disgusting as it is - when contrasted with events at home in
Aotearoa. In bringing in scab, casual labour and seeking to corner the log
markets, the Carter Holt Harvey bosses saw this as making the best of “free
market opportunities”! The irony should not go unremarked.
Shame on you, Carter Holt Harvey.
In March 2002, the news broke about the restructuring
at the Kinleith Mill in Tokoroa.
402 workers, including workers from maintenance, store
and production, were to lose their jobs! This reduced the workforce at the mill
by half. According to Carter Holt Harvey, they would then contract-out
maintenance and expect up to 190 positions to be created but with no guarantees
that the affected workers would be included. This was all so reminiscent of
Nelson.
The news of the job losses has stunned Tokoroa
residents. According to Mayor Blake, “when there is a sniffle at Kinleith the
whole of Tokoroa catches a flu”. Tokoroa residents are heavily reliant on work
from the mill. The unemployment rate is 10.3% compared with the national
average of 7.3%. The loss will therefore impact heavily on the small town
economy.
Carter Holt Harvey is, sadly, a deserved winner of the
Roger Award.
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