Christchurch City Council Quietly Scraps Its Progressive Foreign Investment Policy
- by Murray Horton
Not so many years ago, when the Christchurch City Council was justly proud of the title “The People’s Republic of Christchurch” bestowed on it by the Business Round Table, it adopted a number of progressive policies on foreign investment and free trade agreements. In the late 1990s, there was a successful international campaign to stop the Multilateral Agreement on Investment (MAI) which was intended as an omnibus global agreement on foreign investment, a determined attempt to throw open the world’s economies to the transnational corporations in one king hit. It had major implications for not just central governments but all local governments. Local government became an important battleground in the global campaign, in countries such as Canada and here in New Zealand. I’ll quote from the “Think Globally, Act Local Governmentally” section of my cover story, “MAI Down But Not Out: The Struggle Continues”, in Watchdog 87, June 1998, pages 7 & 8, online at http://www.converge.org.nz/watchdog/8191/87.pdf.
“In Christchurch, CAFCA made the local government angle our speciality. In December 1997, Bill Rosenberg and GATT Watchdog’s Leigh Cookson appeared before a joint Christchurch City Council/Canterbury Regional Council committee to point out the MAI’s implications. In April 1998, Bill Rosenberg and myself appeared before the City Council’s strategy and resources committee. This is a particularly influential committee. Chaired by David Close, it includes the retiring Mayor, Vicki Buck, and the two leading mayoral candidates, Margaret Murray and Garry Moore (who went on to be Christchurch’s Mayor from 1998-2007). Bill had done excellent work by writing a briefing paper for the committee, spelling out the Christchurch implications of the MAI…
“It wasn’t just CAFCA which expressed concerns to the committee. Chris Pickrill, the chief executive of the Canterbury Development Corporation, wrote a paper outlining his concerns about the MAI (loss of sovereignty; loss of local control; secrecy and unaccountability). He came up with a list of recommendations that weren’t far short of CAFCA’s. All of this had an impact – the councillors had read and digested the material. Mayor Buck declared herself in support of foreign investment but found the MAI scary. She correctly pointed out that if the MAI had been in force when the City Council awarded the city’s rubbish collection contract to French transnational corporation Onyx, the Council could not have insisted on any conditions, such as retaining the Council dustmen (mind you, the City Council shouldn’t have awarded the contract to a TNC, full stop). Councillor Alister James, chairman of Christchurch City Holdings (the Council holding company which owns the city’s trading assets) thanked CAFCA for bringing the MAI’s implications to his attention.
Unanimous Vote Of Opposition & To Urge Other Councils To Do The Same
“CAFCA recommended that the committee come out against the MAI or, if couldn’t do that, urge the Government to add all New Zealand local government to its list of reservations. The committee recommended to the full Council that the MAI be further researched; that its signing be deferred until all interested parties have a chance to make submissions to a Parliamentary select committee; that the City Council develop its own list of reservations to protect its current social, environmental, and economic policies; and that Government add local government to its reservations. This committee, representing the local wings of Labour and National, passed these recommendations unanimously.
“The committee had also recommended that other major city councils be advised of Christchurch’s decision and the MAI’s implications for local governments. The full Council watered this down a bit, to one of supporting the position of Local Government New Zealand, as expressed in its March 1998 letter to the Prime Minister. ‘We are particularly concerned that local government has not been informed and consulted about the proposed Agreement, if it is in fact true that participation in the Agreement would impose obligations and potential liabilities on sub-national governments…It seems wholly inappropriate that these jurisdictions should be constrained by an Agreement to which local government was not a party and which has not been debated or sanctioned by Parliament…’ (LGNZ letter to PM, 30/3/98). The recommendation on further researching the MAI was changed to one of keeping a watching brief on it and other similar projects…
“This was a very valuable exercise from our point of view. CAFCA had directly approached the country’s second biggest local body and was instrumental in persuading it to, if not declare Christchurch an MAI free zone, then to exress opposition to it and take specific steps to blunt its impact on local government. None of this was reported by the Press, which has tried hard to avoid mentioning the MAI at all (except to editorially support it, of course). The report of the committee meeting was spiked; by the time it got to the full Council, the Press, in its wisdom, had decided that the MAI was a dead duck and not worth reporting at all. It was left to the Christchurch Mail, glorified junkmail, to cover it…”
Nor was this a one-off by the Council. It took a consistently progressive policy on the various free trade and investment agreements that the Government, whether National or Labour, kept signing us up to or negotiating to do so. It came out against the Agreement with Singapore (which has been in place since 2001) and the proposed one with Hong Kong (negotiations on this stalled back in 2002 and have only been restarted in 2009, so this proposed Agreement and the Christchurch City Council’s opposition to it is a very current issue. See “Hong Kong Free Trade And Investment Agreement: Deal Not Done Yet”, by Bill Rosenberg, in Watchdog 97, August 2001, online at http://www.converge.org.nz/watchdog/97/4.htm).
A Backward Step
So far so very commendable. This policy remained the status quo for more than a decade, although you’d have to say that the Council didn’t pay much attention to it in 2006 when it tried very hard to flog off the Lyttelton Port Company to a Hong Kong transnational (unsuccessfully, and CAFCA played its part in defeating that reprehensible move). Bearing that in mind, maybe it wasn’t a surprise that the writing was on the wall. That 1998 resolution about the MAI and foreign investment was quietly revoked, without any publicity, at a May 2009 City Council meeting, on the grounds that it is “obsolete”.
The resolution was in five parts. To quote two of them: “That the Christchurch City Council reaffirms a commitment to the encouragement of controlled and managed foreign investment in the city that is consistent with broader local government social, environmental and economic development policies” and: “That a watching brief be kept on the implications of the effects of the MAI or similar projects in NZ and Christchurch City”. What is “obsolete” about any of that? It sounds pretty current and necessary to CAFCA.
The Councillors who voted 11 to 2 to revoke it in 2009 could be forgiven for not recognising the negative significance of what they were doing. “Foreign Investment” was buried as number 11 in a list of 25 “obsolete” policies to be revoked by a single vote. Officials put the list of completely unrelated and unexplained policies in front of Councillors in one indigestible lump and they were all duly revoked under a motion headed: “That the Council remove by revocation from the Policy Register the 25 items in the list contained in Appendix A of the agenda on page 37”. That’s as clear as mud, now isn’t it? This was drawn to CAFCA’s attention, we put out a press release but, as when the policy was first adopted in 1998, its quiet abandonment by the Council attracted no media coverage.
The Council is undoing all the good work that its predecessors have done on this issue, work which deservedly gave Christchurch the national reputation as having the most progressive local government in the country. These free trade and foreign investment agreements have major consequences at the local government level, where the transnationals eagerly anticipate rich pickings, in the areas like water, roads and the whole range of local government services. Is the Council laying the ground for a sell off of public assets under the guise of revoking “obsolete” policies?
Central Plains Water
The implications of this became clearer a couple of months later, in July, when the Council sat quietly with its arms folded while a deal was done between dairy company Synlait (22.5% owned by Japanese transnational Mitsui – not far short of the 25% legal definition of a foreign-owned company) and Central Plains Water Ltd. The Council has a major involvement in the Central Plains Water Trust, a major, and highly controversial, Canterbury irrigation project. Is it coincidence that shortly after dumping its foreign investment policy as “obsolete” the Council acquiesces in the likelihood of Canterbury’s precious water resources falling into the hands of a largely foreign-owned dairy company (one with our old mate Ruth Richardson on its Board)? I don’t think so. The Council is on a slippery slope (or maybe that should be a water slide) on the subject of foreign investment. The people of Christchurch are entitled to an answer from our elected representatives.
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