Roger Award 2001:

Statement From The Judges

Michael Gilchrist, Prue Hyman and Glenn and Sukhi Turner, 25.2.2002

The judges for the Roger Award for the Worst Transnational Corporation operating in 2001 in Aotearoa/New Zealand had a difficult task. Several other companies could almost as appropriately have made the shortlist of six, while a strong case could be made for each of the six to win the award - with their poor records spanning some or all of the criteria. These cover areas such as unemployment, abuse of workers, profiteering, political interference, cultural imperialism, and negative impacts on some or all of tangata whenua, women, and the environment.

The finalists this year were Tranz Rail, Monsanto, British American Tobacco, Carter Holt Harvey, Mobil, and United Water. We will discuss each of the six here, working up to the “winner”. We should note with displeasure that the first three on this list were also on the shortlist last year: Tranz Rail has achieved this dubious distinction each year since the Award was started in 1997 and won the Award for the second time in 2000, narrowly beating British American Tobacco. Monsanto is also a past winner for 1998. It is appalling that these recidivists fail to improve their records or take account of bad past publicity and justified public reaction to their behaviour.

Tranz Rail would, sadly, be a worthy winner in any year, as the input of the public to this Award testifies. It received the most public nominations and the judges were sorely tempted to complete their hat trick. However, its bad behaviour is well known, more so than some of the other finalists, so in the end we decided that condemnation rather than another Award was appropriate. Its record in 2001 was no improvement on past behaviour, with disregard of the health and safety of passengers and the few workers who have not been downsized out of the company an ongoing scandal (4,000 left of 24,000 employed in the early 1980s). Cost cutting staff reductions contribute to the lack of safety of DC locomotives, with 19 of 68 audited engines being found to require repairs, of level crossings where few have been upgraded after collisions, and from unfixed track, with breaches of guidelines continuing. Tranz Rail continues to thumb its nose at environmental concerns, speeding through the Marlborough Sounds and opposing lower limits with pressure tactics. Its single minded pursuit of the bottom line, unconcerned with any resulting withdrawal of basic passenger services to a large proportion of New Zealanders, has led to narrow specialisation in only the most profitable freight and mainline passenger services. Provincial New Zealand, Marlborough Sound residents, and other victims of what one nomination called its “callous disregard for social and economic outcomes” make Tranz Rail an inevitable finalist for the Roger Award.

Monsanto was slightly quieter in New Zealand in 2001 than in some years, with the Report of the Royal Commission of Inquiry into Genetic Engineering (GE) and Government reaction perhaps making it seek a low profile. This is not so overseas, where pressure on farmers over Terminator seeds has intensified, with threats of lawsuits and jail turning into reality. A Canadian farmer was forced to pay $85,000 when a court ruled that he had stolen Monsanto genetic material despite his contention that GM plants resulted from pollen contamination from neighbours. In New Zealand, Monsanto continues to promote GE and manufacture herbicides while being active in the pressure group, the NZ Life Sciences Network. This organisation pretends to an objective scientific stance but is in fact a lobby group for abandoning controls over GE.

British American Tobacco is a finalist largely because the whole tobacco industry richly deserves opprobrium for its attempts to recruit young people, especially Maori, to smoke an addictive and harmful drug while continuing to downplay its harmful effects. BAT is singled out because of its near monopoly position following the international merger with Rothmans.

Special “Egg On Face” award: United Water, Assisted by Papakura DC (Past Councils)

The judges deliberated hard about this award. United Water’s New Zealand impact is for the moment confined to Papakura. Further, its major impact came with its winning the contract to supply Papakura with water back in 1997, and the District Council could be said to have been complicit or at least a major player in that decision - hence the ‘’egg on face’ award covers them too. However, United Water’s ongoing policies under the contract, oblivious to popular unrest about its actions, the Audit Report on the management and monitoring of the franchise agreement, and its successful pressure on the Council to reverse a tiny $500 grant to the Papakura Water Pressure Group in 2001 make it a worthy recipient of this special award.

A postcard poll in 2001 with 1160 returns showed that 96.7% were opposed to the franchise, which grants United Water the right to run water services for 30 years, plus a 20 year extension option with no extra fees. Water charges are unaffordable to many, yet some United Water staff intimidate and threaten customers and cut off supply of this essential commodity to those behind with payments. Varied options for charging have been resisted or made unaffordable - charges are unfair to those who use much of their supply for gardening, which makes an assumed 80% of wastewater unreasonable, but a second meter to assess this has been priced way beyond cost. Monopoly power has allowed such exploitation, as well as over pricing to commercial customers. The lessons that must be learned from privatising such an essential commodity have led the judges to make this special award to United Water. It comes at an important time, when sensible legislation to learn from this episode and make water and wastewater services core council activities, not to be privatised, is under consideration.

Runner Up - Mobil

Mobil, like British American Tobacco, is a representative of an industry in which all firms have questionable practices. The oil industry is highly concentrated, with cost- plus pricing and competition through market share rather than price leading to suspicions of profiteering. The area of greatest current concern is the almost total disregard of environmental damage done by many of the industry’s policies, here and overseas, with lobbying for policies to continue this through ever greater use of motor vehicles. However, Mobil and its parent Exxon in the US stand out in 2001 with its resistance to actions in New Zealand to reduce the proportion of sulphur in diesel. Exxon has also been the company pushing President Bush hardest to resist the Kyoto Protocol, showing a callous disregard of the effects of global warming.

The lobbying activities of the whole oil industry, and Mobil in particular, to force governments to avoid actions detrimental to its interests are well known, with 91% of its political donations, the biggest by any oil company, going to the Republicans. Denying the links between its business and global warming, dismissing the issue as exaggerated, and downplaying renewable energy options, Mobil seeks access to ever more remote and beautiful areas to look for oil, including the Arctic National Wildlife Refuge. Mobil in New Zealand held out against the proposals for Auckland’s low sulphur diesel, when the other three big companies had agreed. All this makes Mobil’s runner up award richly deserved.

Winner - Carter Holt Harvey (CHH)

This is Carter Holt Harvey’s second appearance on the short list for the Roger Award. The range of negative impacts on New Zealanders for which it is responsible makes the forestry giant deserved winners. It has unashamedly over many years acted to subdue its workforce and damage their conditions, bringing in scab labour, and destroying the social and economic fabric of small towns dependent on their enterprise. In 2001 its attempts to casualise stevedoring was centred on Nelson, bringing in Mainland Stevedoring workers from Tauranga. Nelson employment was further eroded when the local tree maintenance contractor was replaced by a North Island firm. Maybe North Islanders do not know of CHH’s poor safety practices: CHH Wood Products was fined $6,000 in October following serious injury to a worker who fell onto a concrete pad while working over six metres up without protection. He had not been warned or given fall arrest protection. But it’s not only South Island employees who are affected by CHH practices: 2001 saw industrial disputes at Kinleith and Tokoroa over labour practices possibly illegal and certainly anti-worker.

Its plan to save labour costs at the expense of workers is necessitated largely by CHH’s own inefficiencies. CHH instituted a strategy for monopolising the market in logs in order to inflate the price. When this failed, it was left with major problems including rotting trees and reduced profits.

Damage to the environment, physical and social, is also a feature of many of CHH’s activities - from driving logging trucks through residential areas, through erosion and silting up of fishing grounds, to continued use of dioxin producing chlorine bleaching processes. Alternatives are available, and the only pulp and papers mills left in New Zealand using this process are CHH owned. Not suprising when parent company International Paper is known as one of the top polluters in the US. The whole forestry industry is lobbying against New Zealand leadership on Kyoto, arguing that reducing greenhouse gas emissions to reduce the impacts of global warming will be economically costly to the industry and to New Zealand in general, using doubtful models.

CHH’s other unwelcome activities include participation in growing genetically modified pine trees. Arborgen is a joint venture company with Westvaco, another US based TNC forestry company, and Auckland based biotechnology company, Genesis, to fund and undertake research in this area - also involving Monsanto to try to build resistance to Round Up into such trees. The impacts are quite unknown on cross pollination, the insect population, the lignin content that gives trees the rigidity they need to withstand environmental stress, and tree longevity. Some benefits might even result - but the venture is to serve the interests of those involved, and the usual intellectual property ownership issues arise. Finally, CHH’s lack of care for public amenities is shown by its withdrawal of Hanmer’s public forest reserve, a popular local walking area. They are indeed worthy winners of the 2001 Roger award.