30 March 2010

Chief Reporter

DON'T BE FOOLED INTO THINKING THAT INFRATIL IS A "NEW ZEALAND" COMPAN Y

The sale of Shell NZ's downstream assets to a joint venture of NZ Superannuation and Infratil has been hailed as returning this chunk of vital infrastructure to New Zealand ownership. It would be a good story if only it were true.

Infratil is actually a foreign-owned company, i.e. it has more than 25% foreign ownership, which is the definition in the Overseas Investment Act. The Overseas Investment Office, for its own purposes, defines Infratil (and several other companies) as being "foreign-owned but New Zealand-controlled" and therefore exempt from the inconvenient fact of being a foreign-owned company. For the list of those companies see http://www.legislation.govt.nz/regulation/public/2005/0220/latest/DLM341980.html?search=ts_regulation_Overseas+Investment+Regulations+2005_resel#DLM341980

As with many other things involving the Overseas Investment Office, CAFCA doesn't buy that distinction. Infratil is a foreign-owned company. And as such it was a finalist in both 2008 and 09 for the Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand, specifically for the misdeeds of its New Zealand Bus subsidiary (in 08, it involved Wellington; 09 was for Auckland). You will find the reason why Infratil was a 2009 finalist on page 12 of the Roger Award Judges' Report , online at http://canterbury.cyberplace.co.nz/community/CAFCA/publications/Roger/Roger2009.pdf

Infratil likes to wrap itself in the flag and all things "New Zealand" - the whole expression of patriotism being the last refuge of the scoundrel springs to mind. A very senior executive contacted some of the judges of the 09 Roger Award, not to dispute any of the reasons why the company had been nominated, but to deny its eligibility for an award for the worst foreign company (the CEO of Rymans Healthcare, another 09 finalist, also did likewise, although in his case he contacted the organisers).

It is worth quoting from the Judges' Statement of the 2009 Roger Award Chief Judge, Dr Christine Dann : "There is a theme to the 2009 Roger Award, and it is the theme of deception and betrayal. It has given rise to the use of metaphors like 'rattlesnakes in the grass 'and 'wolves in sheep's clothing'. The winner of the 2009 Award (ANZ) engaged in deception and betrayal of its customers on a grand scale, and hence richly deserved to win. But at least there could have been no doubt in those customers' minds that they were entrusting their money to a foreign-owned transnational company. Not so, perhaps, with two of the other finalists for the 2009 Award, who personally contacted the judges or organisers and complained - not about being cited for the misdeeds they were accused of - but rather that they were listed as being foreign owned transnational firms. So I would like to assure people that the 2009 Roger Award nominees Rymans and Infratil meet the full criteria of foreign ownership (over 25% foreign owned) and are not New Zealand owned companies. No matter how much they fluff up their Kiwi sheep suits to try and look otherwise".

Appearances can be deceiving. So, in the case of the Shell sale, its NZ assets have gone from being owned by one of the true transnational behemoths of the global economy, one of the oil industry's infamous Seven Sisters, to being owned by a foreign-owned company that likes to peddle the line that is pure dinkum Kiwi, a company that is a New Zealand-based transnational in its own right. We're still waiting for a "New Zealand petrol company".

Murray Horton
Secretary/Organiser