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Battling to derail the TNCs in New Zealand

By Aziz Choudry, ZNet commentary, April 2001

The UNCTAD World Investment Report 2000 rated New Zealand as the most transnationalised economy in the OECD. Most of New Zealand's productive, financial, energy, retail, transport, media and communications sectors are now in the hands of transnational corporations (TNCs) that have sucked huge profits out of the country. TNCs have benefitted enormously from the privatisation, deregulation and liberalisation policies imposed here since 1984.

Naming and shaming was the name of the game when the fourth annual Roger Award for the worst transnational corporation operating in New Zealand was announced in Wellington on 5th April. It is a very modest effort, with a total annual budget of a few hundred dollars, to hold TNCs responsible for their actions in New Zealand.

For New Zealanders the name Roger Award has special meaning. The architect of New Zealand's neo-liberal reforms was former finance minister Roger Douglas, while the New Zealand Business Roundtable executive director is Roger Kerr. "To roger" is slang meaning "to screw". Then there's the "Jolly Roger", the pirate flag....

The Award is organised by activist organisations GATT Watchdog and the Campaign Against Foreign Control of Aotearoa (CAFCA). Finalists are drawn from nominations from the public and assessed by a panel of judges. Judges have included prominent trade unionists, Maori lawyers, academics, environmentalists, and the mayor of a major city. Organisers claim, tongue in cheek, that in its short lifespan, the Roger Award has had an uncanny track record of winkling out transnational wrongdoers.

"The 1997 winner was Tranz Rail, which made tremendous public protest at being named that year's worst transnational corporation in New Zealand. But now it is beating a path to the door to get out of the country", says Leigh Cookson of GATT Watchdog. "Virtually all of its business divisions are for sale. Its American owner, Wisconsin Central Transportation, has itself been the subject of a tremendous boardroom battle, and, most recently, taken over by the Canadian National Railroad Company. Monsanto was the 1998 winner - all the agrichemical and genetics transnationals are now under the scrutiny of a Royal Commission of Inquiry into Genetic Engineering. Power company TransAlta was last year's winner - it took advantage of industry deregulation to buy electricity services, raise prices and then sell out to an Australian company for a taxfree capital gain of nearly NZ $300 million."

The Roger Award is given to the TNC operating in New Zealand judged to have the most negative impact in each or all of the following fields: unemployment, monopoly, profiteering, abuse of workers/conditions, political interference, environmental damage, cultural imperialism, impact on Maori, running an ideological crusade, health and safety of workers and the public, and impact on women.

Tranz Rail is the first TNC to have the ignominy of winning twice. In announcing the inaugural Roger Award, the judges ruled: "The critical factor in choosing Tranz Rail was the calculated, callous attitude it has shown to the people it has injured and the families who have lost their loved ones through its negligence and workplace practices....Tranz Rail has abdicated its moral responsibility by putting profits before people." In giving the award to the company again, this year's judges highlighted Tranz Rail's recidivism, its failure to take heed of bad publicity and public reaction to its behaviour, and its "inexcusable" safety record.

The then state-owned New Zealand Rail was corporatised in 1986, and in 1993 it was sold for NZ $328 million to a consortium led by Wisconsin Central Transportation Corp and was soon renamed Tranz Rail. Between 1987 and 1991, the New Zealand government corporatisation programme had slashed the workforce from 15000 to 6000. Staff levels were reduced by 11% from 1993 to 1996, while revenue per employee increased by around 14% between 1993 and 1995. Tranz Rail owns the tracks, rolling stock and other equipment. It pays just NZ $1 a year to the government to lease the land under the tracks for the entire national railway network. Tranz Rail's new owners made huge profits after buying the assets from the government. In 1996 Wisconsin's shareholding was restructured through a share issue which left Tranz Rail's assets worth NZ $500 million more on paper than in 1993.

In just eight years, Wisconsin had transformed from being a small player in the USA, hauling bulk cargo in the upper mid-West, to becoming the largest American regional railway and a predatory transnational corporation. It enthusiastically participated in the railway privatisation boom sweeping the globe, also buying companies in the UK and Australia. Notorious for anti-union practices and the worst railroad safety record in the USA, Wisconsin displayed the same approach to industrial relations in New Zealand. Tranz Rail's singleminded pursuit of profits has seen constant restructuring and cost-cutting, reduced manning levels, dangerous equipment, and excessively long hours for remaining workers. Relatives talk of workers afraid to speak out about dangerous conditions for fear of losing their jobs. Cost-cutting measures to reduce staff and threats of layoffs pressured workers to take jobs for which they were poorly trained. Downsizing and inadequate maintenance of rolling stock means overwork and danger for remaining employees. Drivers regularly work on rostered days off. Self-directing teams of overburdened workers are now responsible for their work practices where half the work the bosses used to do. Shunting gangs comprising a remote control operator and one shunter carry out the work that five men used to do. The Transport Act prescribes that Tranz Rail must have safety at "reasonable cost" whereas all other employers must meet a higher "all practicable steps" threshold. Public safety has also been compromised with Tranz Rail reluctant to fund safety barriers at level crossings despite several fatal accidents.

Last October Tranz Rail announced further staff cuts - reducing to 600 from the current 4000 over two years. It wants to concentrate on the more lucrative freight business and sell its passenger services, including Wellington and Auckland commuter rail, and its long distance services. Tranz Rail's corporate ripoff of the New Zealand public continues. After Wisconsin and others had obtained rich pickings at the public trough through their purchase of New Zealand's rail network, it looks like taxpayer contributions will be used to buy back access from Tranz Rail for greater Auckland's rail corridors, if a much-needed suburban light rail network is ever to see the light of day in New Zealand's traffic-congested biggest city. The price agreed to between Tranz Rail and local mayors was a steep NZ$112 million - about a third of the 1993 sale price for the entire national rail network. There are renewed calls on the government to buy back the national rail infrastructure and prevent its dismemberment and further line closures.

After years of being ignored, public outrage and union pressure about Tranz Rail's appalling safety record led to a ministerial inquiry into its safety procedures last year. The inquiry report has yet to be released. Tranz Rail's record of fatal accidents is exceptionally high by international comparison. 15 of its workers - 14 rail workers and a seaman on the inter-island ferry were killed in accidents between 1993 and-2000. Sixty Tranz Rail workers had been seriously injured between 1995 and August 2000 including two shunters who had their legs amputated after accidents. Two Christchurch workers died in a week last May, with five killed countrywide in only seven months. Just weeks ago, nearly a third of Tranz Rail's Dc locomotives failed safety checks and will require repairs before engineers are prepared to operate them. Tranz Rail has consistently attempted to blame workers for its appalling health and safety record.

This year's Roger Award report also slammed Tranz Rail's environmental record. According to the Rail and Maritime Transport Union, road transport emits around five times as much carbon dioxide per tonne transported than rail transport. "Transporting more people and freight by train is an important way for New Zealand to reduce emissions that cause the rising seas that threaten many of New Zealand's Pacific Island neighbours. Yet at a time when the government has signalled its intention to reduce emissions back to 1990 levels, New Zealand's rail network is being dismantled to maximise profits for a handful of overseas investors".

As an exercise in exposing the activities of transnational capital in New Zealand, the Roger has certainly ruffled some feathers. After the inaugural Award, Tranz Rail spokesman Fred Cockram publicly attacked the judging panel for displaying "supreme ignorance" about Tranz Rail and other transnational corporations in New Zealand.

Media coverage of the Roger Award has precipitated phonecalls to the organisers from public relations firms seeking advance notice of the finalists' or the winner's identity in order to prepare responses, and attacks in the business press. After agribusiness/biotech giant Monsanto won the Award, the Rural News wrote in May 1999: "Despite the fact that this award is supposed to be a negative thing, ... the make-up of the judging panel makes [me] want to run out and buy heaps of Roundup for no good reason other than to upset this bunch of do-gooding lefties! Let's just hope the lentil sandwiches, no doubt passed around after the award ceremony and washed down with lashings of herbal tea, weren't made using genetically modified canola margarine!"

The Roger Award will not defeat the onslaught of corporate capital in New Zealand. Yet in a country subjected to one of the world's most radical free market economic experiments it is a valuable contribution to a public debate about the power of TNCs and the folly of maintaining an economy largely to cater for their improved opportunities for quick profits.

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Past Roger Awards


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