Pigheaded Christchurch Council Unrepentant
On Thwarted Lyttelton Port Sale

- by by Murray Horton

Watchdog 112 (August 2006) ran a very detailed cover story on the successful campaign to stop the Christchurch City Council from selling off the Lyttelton Port Company (LPC) to Hutchison Port Holdings of Hong Kong (“Lyttelton Port Company Sale Dead In The Water: We’ve Won The Battle, But Not Yet The War To Keep Our Port Public”, by Murray Horton, which can be read online at http://www.converge.org.nz/watchdog/12/01.htm. Ed.). I’m pleased to report that the proposed sell off is dead in the water, with even its most gungho proponents having finally faced that reality.

But that doesn’t mean that either the Council or Christchurch City Holdings Limited (CCHL, the holding company for the Council’s assets) are prepared to admit that they were wrong, let alone abandon plans (dreams?) of selling the Port Company. In July 2006, the Keep Our Port Public coalition (KOPP, of which CAFCA was a founder and key member) presented the Council with a 2,888* signature petition calling upon it not to allow any sales of any shares it owns directly or indirectly in LPC to Hutchison or any other overseas or NZ company, and calling upon the Council to commit to keeping LPC in 100% public ownership. *A few more signatures came in after the petition had been presented. The Mayor, Garry Moore, refused KOPP permission to present it to a full Council meeting, so it was handed over in a committee room to two sympathetic Councillors, one of whom presented it to a full Council meeting. The Mayor also refused her permission to speak to the petition when she presented it.

To demonstrate its contempt for democracy, the Council then sent our petition to CCHL (the Mayor had originally suggested that we present it to LPC). It was addressed to the elected Council, not to the unelected CCHL (or to the equally unelected LPC, for that matter). Nonetheless, CCHL rejected it, recommending that the Council take no further action. The reasons given were:

“The Council has never owned 100% of LPC so it cannot commit to keeping something it does not have; the Council should not commit itself to a course of action that could work against the public good in the long run; further circumstances might make a change of ownership for LPC an imperative to ensuring that Lyttelton can continue to be an active port serving the local economy; it is difficult to anticipate what the future might bring in a rapidly changing port and shipping industry and it would be unwise to make a philosophical commitment to an ownership regime which could work against the main reason that the Council is involved with the port ownership – to ensure that there is a viable and effective port facility for the region; there are safeguards in the Council’s list of strategic assets which prevent loss of control of LPC without public consultation; any future proposals for changed ownership of LPC should be judged on their merits” (Christchurch City Holdings Ltd, Christchurch City Council agenda, 7/9/06). These grounds are palpable nonsense and in the case of the one about public consultation, an outright lie (see the Watchdog 112 cover story for details of how the Council and CCHL oh so cleverly and very deliberately structured the sell off deal so as to avoid the need for any public consultation. That was good enough for the Auditor-General who, in December 2006, pronounced himself satisfied with the Council’s behaviour in the entire matter, including public “consultation’, and rejected KOPP’s very detailed complaint).

Christchurch was stymied in its attempt to flog off the LPC, thanks to the Port of Otago which bought a blocking stake of shares to prevent the sale. This meant that, after months of publicly badmouthing Otago, Christchurch had to go behind closed doors to talk to Otago about the future of the port company whose ownership they now share, with a merger being one possibility. Hopefully, sense will prevail and Christchurch’s born again privatisation zealots will actually decide that the best future of the LPC lies in cooperating with its fellow South Island ports, not being used as pawns by giant port and shipping transnationals to play off one against the other.

But we have no reason to trust either the Council or CCHL - in March 2007 the Council approved CCHL’s proposal to create five new shelf companies. Why? Because that is the quick and easy way to flog something off. Transfer its ownership to the shelf company and wave it goodbye. A 2006 paper, aimed at potential foreign investors, entitled “Doing Business In New Zealand” by major law firm Simpson Grierson puts it most succinctly: “Where speed is of the essence, a shelf company will normally be acquired”. Exactly.

Kowtowing To The Shipping Companies

The original justification for this whole tragic-comic exercise was that the shipping companies hold too much power and that LPC needed to be flogged off in order to put it on a better footing with them (there is an obvious contradiction that the Council doesn’t seem to grasp – how can selling your publicly owned asset to one huge transnational make it any better off in its dealings with other huge transnationals?). The power of the shipping companies is very real and not to be sneezed at. All port companies held their breath in mid 2006 when Maersk of Denmark, the world’s biggest container shipping line, announced that it would review its relationship with every NZ port. It was widely predicted that this would lead to hubbing i.e. that Maersk would announce that it would deal with only one port in each island and that all cargo would have to be transported to and from that hub, with the rejected ports withering and dying. In November 2006 Maersk announced that it wasn’t adopting hubbing as such but it did decree that Auckland would henceforth be its main North Island port, to the great chagrin of Tauranga (whose sharemarket value immediately slumped $65 million). Lyttelton becomes part of a feeder service to and from Auckland, Tauranga, Nelson and Wellington. In April 2007 Maersk went further and announced that it is interested in buying port terminals in NZ.

This is a reminder that, due to stupid past political decisions such as killing off NZ’s own shipping line and allowing foreign shippers to work NZ’s domestic waters, the transnational shipping companies have been allowed to amass huge power over the vital trade lines of an isolated island nation, the power to decree commercial life or death to each and every port in the country. Port companies, local councils and the Government need to work together in the national interest to keep New Zealand’s ports alive and thriving, serving the best interests of their local communities and the nation.

Making Opposition To Asset Sales A Council Election Issue

As far as Christchurch is concerned, this issue and the previously undisclosed privatisation agenda need to feature prominently at the October 2007 local body elections. We need a Mayor and Council that are committed to public ownership of vital local assets. Two key figures behind that agenda have already announced their resignations – the Council’s Chief Executive Officer, Lesley McTurk, has “moved forward” (to use the current business cliché) to Wellington to bring her particular brand of restructuring to central government, having left a pile of human wreckage behind at the local government level, and Mayor Garry Moore has announced that he won’t be running again. That leaves the race for the Mayoralty wide open for the first time since Moore was originally elected, in 1998. Christchurch voters need to ensure that the city and region gets elected representatives that actually serve their interests, not those of a transnational corporate agenda of privatisation and flogging off our assets.

Rest assured that CAFCA is not sitting idly by during the 2007 Christchurch City Council election. In July, three of the committee (Bill Rosenberg, Jeremy Agar and myself) gave a well received briefing to several Christchurch 2021 candidates, including Megan Woods, their Mayoral hopeful. We told them that the people of Christchurch didn’t want any more ambushes like the bombshell attempt to sell the Lyttelton Port Company in 2006. We reminded them that no candidates campaigned on a “vote for me and I’ll flog off the port company to Hong Kong” platform at the 2004 election (where the most exciting issue was whether the Council should supply 26 or 52 free rubbish bags annually to each household). We asked those 2021 candidates present, and their colleagues, to publicly commit themselves to continued public ownership of City Council assets and to oppose any attempt to privatise or flog them off overseas (and to avoid the siren call of “private public partnerships” as they are the first step in this process). Those present were happy to do so and to commit 2021 to such a policy, which they assured us had always been the case (the past adherence to it being a different story).

Now, Christchurch 2021 is nothing like the dominant force that it once was on the City Council (it imploded from infighting in the lead up to the 2004 election) and the Council is currently made up of a singularly unimpressive bunch of “independents” (mediocrities most of them) who are led by the nose by management ideologues and bedazzled by “business speak”. We don’t kid ourselves that having Christchurch 2021 on the same side as us is the answer to all our problems, but it’s certainly a start (particularly when you consider that outgoing Mayor Garry Moore, the shieldbearer for the Port Company sale, remained, nominally at least, a 2021 councillor throughout his three terms in office). Bearing that in mind, there’s nowhere to go but up.

Keep Our Port Public (KOPP) may be in hibernation but its Website is very much alive and up to the minute on all NZ and international port developments, courtesy of the energetic Webmaster, Victor Billot. Check it out at www.keepourportpublic.org. Ed.

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. August 2007.

Email cafca@chch.planet.org.nz

Return to Watchdog 115 Index