RIO TINTO: Clean up your own Bluff Smelter mess

And Bugger Off

 For as long as the Campaign Against Foreign Control of Aotearoa (CAFCA) has existed – more than 45 years now – we have called for the closure of the Bluff aluminium smelter, owned by giant transnational corporation, Rio Tinto. There are numerous grounds for doing so, all of which amount to the smelter not being in New Zealand’s national interest. The corporate welfare power price deal (the price is still secret) by itself qualifies the smelter as the country’s biggest bludger. Once again Rio Tinto is pulling the same old party trick of threatening to close down and leave the country unless it gets an even better deal than what it currently enjoys.

The conventional analysis used to be that the smelter is bad for the country but good for Southland. Not so more, in light of very recent events. Last week’s huge floods throughout Southland ran the very real risk of setting an environmental catastrophe (not to mention a major threat to life) if the water had got into huge quantities of toxic waste stored in Mataura, which would have released ammonia gas. Fortunately, that did not happen. But neither the toxic waste nor the threat have gone away.

What is this toxic waste? Some (but by no means all) media reports correctly identified it as the poetically named dross, the toxic waste product of the smelter. And why is it being stored in a closed down former papermill building right next to a river in Mataura (along with other places dotted across Southland)? Because Rio Tinto got sick of storing it onsite at Bluff and decided to outsource its disposal to a third-party company, which took it off Rio Tinto’s hands in 2014 and then promptly went bust in 2016. Leaving the people of Mataura, and elsewhere in Southland, stuck with the problem.

Following last week’s flood, the Gore District Council made a verbal deal with the smelter management to have the dross removed. That deal was overruled by Rio Tinto’s Board. As Gore’s CEO said: “We had a deal sealed with a good old-fashioned Southland handshake, but Rio Tinto’s bosses have reneged”. At which point the “transformative” Government started to wake from its stupor. Environment Minister David Parker said it was “disgraceful” and “I’ve had enough” and threatened to look at suing Rio Tinto.

Good luck with that one, Minister. That would involve Labour facing up to the 2003 and 04 indemnities signed by Michael Cullen, Labour's Minister of Finance at the time, accepting that the taxpayer, and not the smelter owners, would be liable for the cost of cleaning up toxic waste produced by the smelting process. That liability was renewed as recently as 2016, by the Key government.

Yes, that’s right. Rio Tinto has outsourced the liability for cleaning up its mess onto the New Zealand taxpayer. And supine governments, both Labour and National, have gone along with that. It’s a textbook example of a transnational corporation privatising the profits and socialising the costs.

CAFCA suggests that the Government makes Rio Tinto clean up its own mess, at its own expense.  And that the Government cuts short Rio Tinto’s decades-long tiresome threatening to close down and assist them to do so. With a “good old-fashioned” boot up the arse.

Murray Horton

The best explanation of the whole question of the smelter’s toxic waste and who is responsible for cleaning it up is in the below extract from the Judges’ Report for the 2013 Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand. . Rio Tinto won the Roger Award that year. Despite having been written several years ago, this is still very timely. Once again, the transnational was threatening to close the smelter and leave the country, unless the (Key) government gave it a multi-million-dollar subsidy. Guess what happened?

Toxic Waste Liability Dumped On Taxpayers

“Aluminium smelting is known to be environmentally damaging, and for many years the waste product from smelting has been dumped in a landfill at Tiwai Point. Rio Tinto’s Financial Reports have long included an amount calculated to provide the environmental restoration necessary when it finishes its activities there”.

“In its analysis of the economics of the NZ aluminium smelter, the Treasury had commented on the limited public information about the smelter’s ‘obligations to remediate the site at Tiwai Point’, noting that the closure plan to ‘cover, shape and revegetate the not a public document’. Treasury also noted there was a provision in New Zealand Aluminium Smelters’ Financial Reports, but that ‘the provision is not backed by a cash reserve and only the assets of NZAS (mostly plant) support it’.

“It is interesting to note that in 2012, the Government’s Financial Reports disclosed for the first time a Government indemnity (emphasis added) issued to the ‘New Zealand Aluminium Smelters and Comalco. The indemnity relates to costs incurred in removing aluminium dross and disposing of it at another site if required to do by an appropriate authority. The Minister of Finance signed the indemnity on 24 November 2003. In February 2004 a similar indemnity was signed in respect of aluminium dross currently stored at another site in Invercargill’”.

“It is difficult to know what to make of this new information, other than that it implies yet more taxpayer funding of Rio Tinto’s activities. Does the indemnity relate to all waste dumped in the Tiwai Point landfill over the 40 years of Rio Tinto’s activities in New Zealand or does it relate only to some? Rio Tinto’s Sustainability Report for 2003 makes the following comment:

“‘In December 2003, Environment Southland granted resource consent for NZAS to dispose of dross, a waste product from the aluminium production process; that had been stored in a Bluff warehouse for many years. The material originally belonged to NZAS, but was sold to a recycling company that closed suddenly in 1991”.

“The Ministry for the Environment, P&O (the owners of the warehouse) and NZAS have worked together to facilitate the movement of the dross to the NZAS landfill. NZAS has provided the landfill facility. P&O has paid for the transport and the Ministry has provided an indemnity in the unlikely event that the dross material ever has to be removed from the Tiwai landfill’ (emphasis added)”.

“Even as it prepares to depart New Zealand, it appears that Rio Tinto is leaving a legacy of thousands of tonnes of aluminium dross deposited in the Tiwai Point landfill that it will cover and plant over but, should this turn out to be toxic and require removal, the liability to remove it has, it seems, been transferred to New Zealand’s taxpayers”.

National Interest Test Excellent First Step

Now Make Transnationals Re-Sit Their Licences

Campaign Against Foreign Control (CAFCA) congratulates the Government for adding to the foreign investment rules a national interest test for asset sales, and for including water bottling and media companies within its scope.

This is a result of the Government's stage 2 review of the Overseas Investment Act. CAFCA was involved in that and our submission can be read on the Submissions page of our website

 CAFCA has long recommended a national interest test. But it should not be confined only to large foreign investments, but should be a blanket requirement for all foreign investment applications.

And there is a glaring loophole in the Government's announcement - it will only apply to new applications from foreign applicants, not to the transnational corporations already deeply embedded into. and dominatiing, the New Zealand economy. To use a good old phrase, they are grandfathered.


How come they don't get subjected to a national interest test?

How can it be in the national interest for the transnational owners of the Bluff smelter to get the biggest single chunk of electricity in the country at a secret, mates' rate price, yet still keep blackmailing the Govenrment for more taxpayers' subsidies or they'll leave the country?

How can it be in the national interest to have a cabal of four Australian banks totalliy dominate banking in NZ, extracting and exporting record profits every year, whilst behaving in a way more suited to the Wild West (case in point - ANZ, headed by John Key)?

How can it be in the national interest to have transnational fishing companies treating their workers like modern slaves in NZ's waters? Or transnational forestry companies whose sub-contracted workers are among those most at risk of death or injury while at work?

How can it be in the national interest to allow the likes of SkyCity to operate here, with its (quite literal) casino capitalism deal of getting more pokies in return for the Auckland convention deal and then expecting its staff to carry on working despite large numbers of them falling ill from smoke inhalation from the recent major fire there?

These are only a few examples. The list goes on and on.

CAFCA recommends that the Government takes the same legal approach to transnational corporations already in place here as it does to all people who hold a driver's licence and/or own a vehicle.

Vehicles have to be regularly inspected and pass a warrant of fitness. Because that is in the national interest.

There are also legal provisions for drivers to have to re-sit their licences, in certain circumstances. Drivers are also subject to constant scrutiny via the road rules. Because that is in the national interest.

So, let's do the same with the transnational corporations already here - apply the national interest test to them.

Make them re-sit their licences and warrants of fitness. CAFCA predicts that plenty of them would fail the test.

Government's "Nuclear Free Moment" Response

Contract It Out To Forestry Transnational Corporations

There have been a couple of disturbing recent revelations by Radio NZ.

Firstly, that six of the ten biggest private landowners in NZ are foreign-owned forestry companies (the forestry sector is nearly 75% foreign-owned).

Secondly, that since the Coalition government came to office in 2017, the Overseas Investment Office (OIO) has approved more than $2.3 billion of forestry-related land sales.

Even this is not enough for the Government - it has just been made public that Ministers Eugenie Sage and David Clark have given Japanese forestry transnational giant Pan Pac Forest Products an exemption from having to apply to the OIO to buy land until 2022.

This sets a very dangerous precedent.

The whole forestry shemozzle is a perfect example of Rogernomics coming back to bite Labour on the bum.

Jacinda wants NZ to plant a billion trees (to create a carbon sink as NZ's major response to climate change).

This is reinventing the wheel because, until the 1984-90 Rogernomics government (and the 1990-99 National government), NZ had a massive, world-leading, State-owned forestry estate which had been built up over generations.

All gone, flogged off to transnational corporations and other foreign owners as part of the privatisation mania of that era (error, more accurately).

If that short-sighted, smash and grab ideology had not prevailed, Jacinda would have inherited her billion publicly-owned trees on Day One.

Forestry (specifically pinus radiata plantation monoculture) was all the rage in the 90s. Remember the Wall of Wood? It was another boom and bust story, with no processing to speak of, simply the bulk export of unprocessed logs for the profit of foreign owners.

And in its wake, the newly-privatised forestry sector garnered the reputation as the most dangerous sector for its sub-contracted workers, with deaths and injuries far too common. Not to mention the damage caused by clearfelling. All a legacy of a race to the bottom mentality.

Once that boom was over some forests were ripped out to be replaced by dairy farms (which became the next goldrush). Now the process is being reversed, as an increasing amount of farm land is being bought up and replaced by forests, causing a growing rural backlash in the process.

There's something missing from this whole story - any glimmer of a State-owned, publicly-owned, forestry industry.

If climate change is our "nuclear free moment", as Jacinda has labelled it, and trees are going to her Government's Big Idea to fix it, why is that vital response being contracted out to foreign-owned forestry transnational corporations (some of whom have very dodgy records) and their pinus radiata plantation monoculture?

Where is the evidence of any kind of planning (other than hoping that the foreign owners will take care of it)?

Where is the evidence of a large scale processing industry to take advantage of all this timber?

Where is the evidence of any kind of tree species diversity in these forests? Pinus radiata monoculture was the poster boy of the 90s' boom. What lessons have been learned from that?

We had our own huge and well-established forestry industry once. It was given away by the ideologically blind for the benefit of private and foreign profit.

The State needs to play a much more hands on role in this industry that has suddenly been thrust front and centre into the limelight.

All it is doing is relying on the tried and failed nostrum of The Market (aided by a goodly dose of corporate welfare to sweeten the deal for the forestry transnationals).

Let The "Too Big To Fail" Smelter Fail

"Too big to fail" was the mantra of the robber banks and other transnational financial sharks during the Global Financial Crisis a decade ago. This left the victims to pay for the costs of the crime, while the corporate criminals walked away scot free and kept their loot..

In this country, Rio Tinto's Bluff smelter was decades ahead of the fashion. Every time that Rio Tinto feels that its charmed existence in New Zealand is going to become less cushy, it threatens to pull the plug, close the smelter and walk away. It does so in the knowledge that it has always been deemed "too big to fail" by the succession of Governments, both National and Labour, that it has effortlessly outmanoeuvred for nearly 50 years. It is doing so again now.

Campaign Against Foreign Control of Aotearoa (CAFCA) calls Rio Tinto's bluff (pun intended). Stop crying wolf, stop using your New Zealand workers as disposable pawns in your cynical game, stop holding Southland and the country to ransom. Go ahead and close the smelter and bugger off. See if we care, the country will be much better off without you. The smelter is the country's single biggest user of electricity, consuming nearly one sixth of the total, 24/7 for nearly 50 years. It pays a top secret super cheap price that is not available for any other user and all it does is export electricity from NZ in the form of alumina, while being subsidised by all other electricity users. The smelter is the textbook example of corporate welfare in New Zealand. It is the biggest bludger in the country.

Once again it is looking for Government "help".. Presumably, this is in addition to the massive taxpayer subsidy it has been receiving continuously for nearly 50 years, in the form of the Manapouri power station built with public money for its exclusive use (and let's never forget that men died building that); and the cheapest and most secret power price rate in the country bar none. Not good enough apparently, it still wants more.

In short, it is a liability to New Zealand, not an asset.

Indisputably, the smelter closing would have a negative impact on Invercargill and Southland.  As a plus, the city will be able to shake off its unhealthily dependent situation as a company town with its local government at the beck and call of this transnational bludger.

The tobacco industry used to employ a lot of people here, but that was deemed to be no longer in the public interest. Lacing lollywater with booze and selling it to kids supports a lot of jobs too but there's plenty of public demand to get rid of that particular industry as well. The methamphetamine industry provides an income for thousands of people too, but we don't hear any demand for that insidious trade to be kept going to keep them in a job. History is full of examples of horrible industries that kept people in jobs (such as the slave trade) but which were banned and/or abolished for the greater good.

This smelter constitutes a crime against the people of New Zealand and has done for its entire existence.
In the national interest, it must be closed and the sooner the better.

It would be a great bonus to have nearly one sixth of the country's electricity suddenly available and no longer committed to one smelter. There would no excuse for the moneygrabbing power companies not to cut their prices (we've been falsely promised lower power prices since the "electricity reforms" of the 1990s).
Memo to Jacinda -seeing that the smelter's transnational owners are threatening to go (again), hold the door open for them and help them load their suitcases into the airport shuttle. And make sure that they (those recipients of corporate welfare par excellence), and not the NZ taxpayer, foot the bill for cleaning up their mess.

That would involve Labour facing up to the 2003 and 04 indemnities signed by Michael Cullen, Labour's Minister of Finance at the time, accepting that the taxpayer, and not the smelter owners, would be liable for the cost of cleaning up toxic waste produced by the smelting process. That liability was renewed as recently as 2016, by the Key government.

ANZ Shenanigans Reinforce Need For Inquiry Into Banks

The Campaign Against Foreign Control of Aotearoa (CAFCA) joins the growing chorus of those calling for an inquiry into the banks, particularly the Gang of Four big Australian-owned banks that completely dominate the sector (and do very nicely out of it in the process).

CAFCA has been calling for such an inquiry for some time (see the lead article in Foreign Control Watchdog 150, April 2019).

The current revelations about ANZ - criticism that it has defied Reserve Bank instructions to set aside enough spare money to see it through another financial crisis, and the sudden resignation of its CEO because of his questionable approach to expenses (with a very laissez faire "oversight" by the bank's NZ Board, headed by Sir John Key, the master of doing nothing when it involves the interests and profits of Big Business) - only reinforce the need for such an inquiry.

laissez faire "oversight" reinforces  need for  inquiry
Sir John Phillip Key 

ANZ is well known to CAFCA. Twice (2009 & 2014) it won the Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand (the respective Judges' Reports are here  and here).

But an inquiry needs to look at more than just one of the banks. It needs to look at all of them. Just like the recent Australian Royal Commission of Inquiry into banks and insurance companies. It revealed a horrifying picture of systemic corporate malpractice right across the sector - involving the same banks that own the Gang of Four in NZ.

Funnily enough, the banks here see no need for an equivalent inquiry. The NZ Bankers' Association had a novel explanation for why - according to them - things are hunky dory on this side of the Tasman. Antony Buick-Constable, the acting CEO, said: "We think, importantly, it comes down to the smaller size of our country and the smaller size of our banks. We're more connected - we're talking to our customers on the sidelines of footy matches on a Saturday. We think this is an important difference from the Australian landscape. We are very connected to customers" ( Press, 20/9/18, "Banks' Size Crucial To Conduct", Hamish Rutherford).

Oh, really. Well, the current ANZ situation puts the lie to that.

But the Government is also resisting calls for an inquiry. Yet, when it was in Opposition, back in 2009, Labour was happy to take part in the Parliamentary Banking Inquiry, held by the then Opposition Parties in the wake of the 2008 Global Financial Crisis.

So, come on, Labour, you've done it once, when you were in Opposition. Do it again now that you're in Government, with all the resources of the State at your disposal. Don't worry about the inevitable cries that it will adversely affect "business confidence" or possibly even "threaten the New Zealand way of life". The Tory government in Aussie went ahead and had one without the sky falling (except, hopefully, onto the heads of those named - individually and corporately - as guilty). To coin a phrase much beloved by Rightwing politicians and their media mouthpieces in another context - if they've got nothing to hide, then they've got nothing to fear. Time for a New Zealand inquiry into the banks.

USAF B52's Wairarapa Flyover:

Winston Peters' Letter to ABC Raises More Questions Than Answers

In late March the Anti-Bases Campaign (ABC) distributed our strong concerns about the (ultimately aborted) planned flyover of the Wings Over Wairarapa Airshow by a  US Air Force B52 bomber. We wrote to the Government about it.

click to read
We have now received a letter from Winston Peters, Minister of Foreign Affairs. To say that Peters' reply surprised us is putting it very mildly indeed. It raises more questions than answers. Here are a couple:

How many previous US aircraft visits were from nuclear capable aircraft?

"New Zealand makes its own determinations regarding military aircraft or vessel visits and does not require any state to make a declaration on nuclear armament". This means that US military planes visiting NZ could carry nuclear weapons and New Zealand would not know. So, where is NZ's nuclear free law in all of this? Peters' letter makes a mockery of it, indeed it renders that law null and void. 

Murray Horton