Keep Our Port Public!

Christchurch Wants To Flog Off Lyttelton
Port Company To Hong Kong TNC

- by Murray Horton

In February 2006 the City Council of the “People’s Republic of Christchurch” dropped a bombshell. It announced that, via Christchurch City Holdings Ltd (the holding company for all the city’s trading assets) it would bid for the 31% of the Lyttelton Port Company that it does not already own. If the announcement had stopped there, all would have been well, as that would have ensured 100% public ownership of the South Island’s largest port (and just in time to coincide with Lyttelton, and the rest of Banks Peninsula, becoming a part of Christchurch). But it was a two stage announcement and the sting was definitely in the tail. Assuming that its bid was successful, the Christchurch City Council would then immediately sell half of the shares in the port company to Hutchison Port Holdings of Hong Kong, a part of the multi-billion dollar business empire of Li Ka-shing, the world’s tenth richest men.

This is both a privatisation and sale offshore of a strategic asset, the biggest cash cow in the City Council’s treasury. The Council uttered reassuring noises about it retaining half of the shares and therefore control. The law is, and has been since 1973, that any company more than 24.9% foreign-owned is a foreign company. The Council reassures us that Hutchison Port Holdings is an experienced port operator. But the fact is that once this deal is through, it will be Hutchison calling the shots with our public asset, not the Christchurch City Council. That’s the central reality of foreign control – ownership means control, and decisions are made elsewhere, in the interests of the foreign owner and its shareholders. That may well include on-selling the asset to another foreign owner. Or, as the taxpayer had to do in the case of both Tranz Rail and Air New Zealand, the Christchurch ratepayer may be left to clean up the mess and buy back what was once ours. As the saying goes, “That’s business”.

Full Speed Back To The Glorious 90s!

This is the latest move by the ideologues within the Council (both management and councillors) who are driving an agenda of running Christchurch as a business. It graunches back into life a process that was stalled and discredited back in the unlamented 1990s, namely that of privatisation and its various guises, such as Public Private Partnerships. This is the first such sale in Christchurch since National government legislation forced it to sell Southpower in the late 1990s. But this one has not been forced on it by anyone else, it is all the Council’s own work (and it has admitted that Hutchison made the first approach). It will set off a stampede for port “restructuring and rationalisation” around the country, a process that progressed as far as corporatisation during the 1980s’ Rogernomics pandemic (other maritime “reforms” in the 1980s and 90s included killing off the NZ Shipping Corporation and throwing open coastal shipping to foreign shipping companies and crews). And it looks like there will more to come – the Council has removed both its Red Bus Company and contracting business, City Care, from the list of strategic assets to be protected. The Mayor, Garry Moore, has swung around from being the proud Chairman of the People’s Republic to being Chairman of the Board of Christchurch Inc. It would now appear that his policy on publicly owned city assets is that less is definitely Moore. If allowed to proceed, it sets a dangerous precedent.

In short, it’s all so very 90s and we’re now on a slippery slope indeed. Doubtless we’ll hear a lot about “why does the City Council need to own a port?” Followed by “why does the Council need to own an airport, water, parks, libraries, roads, etc, etc?”. Two cautionary examples will suffice – Tranz Rail and Air New Zealand. Weren’t they glittering showcases for public assets flogged off overseas? Or, how about Telecom? In fact, mention of the forced sale of Southpower reminds us what a success story the retail energy sector has been. Not.

The award for starry eyed naivete goes to City Holdings Chair, Bob Lineham, who said that the deal is timely as NZ is negotiating a free trade agreement with China. Does he seriously think that having our port owned by a Hong Kong transnational corporation will make any difference to that? There’s been an American military base at Christchurch Airport for more than 50 years but that doesn’t seem to have to have done NZ any good in terms of getting a free trade deal with the US. It’s a sad day for Christchurch. And all for an announced net gain of $41 million. The question must be asked: is the Council so strapped for cash that it has to flog off a major public asset for bugger all return? The piddly amount simply adds insult to injury. Goodbye People’s Republic, hello Christchurch Inc., run, by for and of, Big Business.

Nobody has any fond illusions about the present Lyttelton Port Company. It is a total bastard, both in the way it has treated its workers (which reached its nadir with the death of Christine Clarke on a Lyttelton picket line in the final hours of the 20 th Century) and the local community – for example, it has closed the wharves to the public and that whole area looks like a prison. But this is no excuse to chuck out the baby with the seawater. Instead of improving this publicly-owned company, the Council wants to sell it to a Hong Kong transnational corporation. The ownership of ports is a hot political item internationally, most recently in America, where the sale of six major ports to a Dubai company has just been abandoned due to widespread opposition, nowhere more so than in the ruling Republican Party (much to the embarrassment of President Bush). Americans recognise that not only are ports vital infrastructure, they are a strategic asset, in every sense of the word “strategic”.

Hutchison Beats A Tactical, Temporary Retreat

This is a story with many twists and turns, and the outcome is by no means clear at the time of writing. In March, Port of Otago, in a surprise share raid, bought 10.1% of the Lyttelton Port Company, at a price noticeably higher than what Christchurch City Council was offering. That stake gave Otago just the legal minimum shareholding to prevent the proposed takeover going ahead without its agreement (the taker over has to acquire 90% of the taken over’s shares before it can compulsorily acquire the rest). Otago has not spelled out its motives for doing so, whether it actually wanted to block the sale or whether it wants to make a killing for itself by re-selling its vital stake at a higher price. But it is hardly surprising that other ports are not sitting idly by while one of their major competitors is sold overseas to a massive TNC.

At the end of March came another big twist, in direct response to Otago’s still unexplained move. The City Council, via City Holdings, increased its offer by 10c per share (still well below what Otago paid for its shares) and announced that while it is proceeding with the wholly commendable goal of restoring the Lyttelton Port Company to 100% public ownership, the original deal could not go ahead as planned. Hutchison then stood aside, leaving Christchurch to go it alone.

But don’t break out the champagne just yet. This is only a tactical retreat, not an admission of defeat, and certainly not a reversal of the Council’s newly discovered craze for privatisation. In the same breath, it said that if it is successful in securing 100% of the shares, it ”may” approach Hutchison again with exactly the same sort of deal. In short, the Council has found that the kitchen has got too hot and it wants to let things cool down before having another go at cooking up another deal.

“Anti-Privatisation” Government Conspicuously Silent

One party has been conspicuously silent in all this – the Government. Labour came to power in 1999 promising no more privatisations of public assets and by and large it has stuck to that (even in the tenuous “coalition” that it finds itself in as a result of the 2005 election). But one of the “reforms” of the last decade was to allow local governments to run their own affairs without the same degree of central government control as in the past. Laws have been changed to this effect and to ensure that local governments are run on a “businesslike” footing. So the Government is staying mum because this is seen as a local government matter, regardless of the impact that it has on the national interest and the economy. This hands-off approach by central government has seen the shipping TNCs ruthlessly play off one port after another, driving down port charges and the wages and conditions of port workers. The buzzword is “hubbing” – that is, goods are moved through one hub, to suit the shipping company or companies, rather than through the nearest local port to suit that community and the customers. Why are the bold leaders of Christchurch Inc. not challenging this situation and cooperating with the other South Island ports to negotiate from a collective position of strength?

Not only has the Government been silent but, thus far, not one single Labour MP, from Christchurch, Canterbury or anywhere else, has said anything on the subject. This has been thrown into glaring contrast by National’s Deputy Leader, Gerry Brownlee (the only National MP in Christchurch) having publicly opposed the lack of democratic process in the proposed deal (it is too much to expect National to oppose privatisation per se, it’s their baby). Peter Brown, Deputy Leader of New Zealand First, Labour’s allies of convenience in the ramshackle arrangement that allows them to govern, has also expressed reservations about the whole deal.

Wideranging Opposition

Opposition to this surprise announcement wasn’t slow in coming. Rightwingers and anti-Communist racists started writing to the Press suggesting that Li Ka-shing’s close ties to the Chinese government would see the Peoples Liberation Army come marching through the Lyttelton Road Tunnel. It seems clear that these same people would not have been writing if the proposed buyer was an American, British or Australian TNC.

Only a year ago the Mayor was quoted (Press, 14/3/05) as saying: “It is good news for ratepayers because the money the Council gets from Christchurch City Holdings Ltd means rates are up to 18% lower than they would be. It shows the Council was right not to sell the assets when people like the Business Roundtable called us the People’s Republic of Christchurch”. But now he is enthusiastically driving the sale proposal. Why has he changed his mind? The Council has absolutely no mandate for this. It was certainly never mentioned by any of the sitting Councillors in their 2004 campaign. Why has there been no public consultation – as required by law - about the proposed sale? It would appear that this is not the People’s Democratic Republic of Christchurch. The Mayor now argues (Press, 16/3/06, “Strong partnership”) that the best way to make the “family silver sparkle” again is by selling it. Which is one from “the operation was a success but the patient died” school of comedy. We can only hope that the Council is going through a phase that it will grow out of. Failing that, those responsible for flogging off the city’s hard earned public assets will reap the electoral whirlwind at the 2007 local body elections.

Christchurch 2021, which, until it fell apart in the lead-up to the 2004 local body elections, had long been the dominant group on the Christchurch City Council (Mayor Garry Moore was its highest profile member) pointed out this obvious lack of any mandate or democratic process. 2021’s Website still boasts that the port remains in public ownership. So it launched a petition calling for no sale to proceed without consultation with the people of Christchurch and surrounds (consultation can be very much a double edged sword, and the past 20 years have seen many sham examples of it, but the 2021 petition provided a useful starting point).

The port unions could see obvious dangers to their members’ pay and conditions, not to mention their very jobs. Lyttelton has been branded, rightly or wrongly, as the “problem” port in relation to its industrial relations (which basically means that its unions and workers didn’t roll over and play dead, which was what was expected of workers in the 90s). There have been a number of high profile industrial battles there in recent years (including the one which led to the tragic picketline death of Christine Clarke). The unions’ fears seemed well-founded when Brent Layton, the hitman former boss of the Port Company (he was ousted in 2002 because the City Council wouldn’t let him carry on his union-busting crusade) said that, to him, it is obvious that the sole motivation of the proposed sale is to “sort out” labour “problems” (Press, 8/3/06, “Layton backs plan for port”, David King). Overseas unions, in Hong Kong and elsewhere, provided their local counterparts with plenty of examples of Hutchison’s anti-union, anti-worker behaviour. And the port unions certainly took notice when CAFCA pointed out to them that provisions of the General Agreement on Trade in Services (GATS), currently being negotiated in Geneva (with New Zealand playing a leading ideological role as a “free trader”), could see Hutchison being allowed to import Chinese workers if the sale proceeds.

Stand By To Repel Boarders

CAFCA played a leading role in calling together a range of groups and individuals opposing the sale. The local Greens took the initiative to host weekly meetings of the freshly minted coalition Keep Our Port Public (KOPP – I’ve always wanted to be one of those, even if only of the Keystone variety). This encompasses CAFCA, the Greens, the Alliance, Christchurch 2021, the Rail and Maritime Transport Union and Maritime Union of NZ, members of community boards from both Christchurch and Banks Peninsula, and individuals ranging from retired union officials to a concerned Fendaltonite (who provided invaluable expertise on all the legal angles). At the time of writing, the campaign to stop the sale was in full swing, with leaflets being written and distributed, a second, stronger, petition being launched (this can be accessed online at, and a range of speakers agreeing to speak at a public meeting in the Christchurch Town Hall.

By an ironic coincidence, this was held on April 10 th, the anniversary of another great maritime disaster that put a nail in the coffin of Lyttelton, namely the 1968 fatal sinking of the inter-island ferry Wahine (its loss meant the end, a few years later, of that inter-island passenger service to and from Lyttelton, which hastened the running down of the port). The pirates are moving in to pillage the good ship Lyttelton. We must stand by to repel the boarders and ensure that the skull and crossbones of the Jolly Roger do not fly over our port.

It takes a lot of work to compile and write the material presented on these pages - if you value the information, please send a donation to the address below to help us continue the work.

Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. December 2005.

Return to Watchdog 111 Index