Rio Tinto Blackmail Tactics
I don't know how many times I have heard about the imminent demise of the Tiwai Point smelter and it generally occurs at the time that their power agreement needs to be renegotiated or the ETS threatens profits. Even our local MP Eric Roy has questioned the sincerity of their claims that their profitability is under threat and suggests that it is "a case of brinkmanship from the multinational commodities giant".
One of the roles of government is to protect our country from exploitation by powerful multinationals and ensure we maintain sovereignty over our resources. While such companies provide useful capital and employment we must always make sure the cost of the relationship does not outweigh the benefits. When one considers the resources that we have made available to the smelter and the supporting infrastructure that we continue to maintain (at tax payer cost), do we really get a good return from our ongoing investment?
The smelter has averaged around $1 billion a year in export income and given the quality of the aluminum being produced and the efficiency of the plant, any downturn has generally been followed by a strong recovery. When Rio Tinto suggests it is considering withdrawing its $200,000 support to the Kakapo Recovery Programme it is stooping to an appalling level of manipulation to gain public sympathy.
Jeanette Fitzsimons has some experience of the way Rio Tinto operates and her Herald opinion piece provides some alternatives if the government is prepared to stand its ground.
Comments
"The smelter has averaged around $1 billion a year in export profits"
you ought to let them and their accountants know, I am sure the smelter will be delighted to hear of their silly mistake that only you seem to have discovered.
bsprout - "The smelter has averaged around $1 billion a year in export profits....."
Rio Tinto - "Export revenue is around $1 billion each year."
The other is a multinational capitalist polluter.
Clear winner for "difference" is Roger Guyford. Wins the "life long gratitude award for perceptive creative thinking in the deep south, and related fora."
bsprout wins the Greg Boyed Supreme Journalistic Award for "predetermined conclusions despite the facts changing materially".
Shane Pleasance for "outstanding prescience in predicting the answers before the exam questions have been set". This award recognises all the smarmy unctuous behaviour normally attributed to independent thought in an alien setting.
http://www.stuff.co.nz/business/money/7549236/Half-NZs-super-rich-dodge-tax
For instance, if you were to buy shares in AirNZ, or one of the upcoming SOE's, you would pay one third of any return back to the Government in personal taxation.
I read the link that you thoughtfully provided. The final sentence said this:
"Revenue Minister Peter Dunne said the figures did not include tax that may have been paid on income from trusts and dividends."
Still chuckling.
I know many people who work at the smelter, and as yet have not heard a bad word said about how they treat their staff, so from a culture pespective, 'treating their workers so badly' would be completely out of character.
If their is ever an incentive for private enterprise to never act benevolently (and there are many), you have just provided it Dave.
Perhaps you would wish they had NEVER 'supported the kakapo"?
You are right about it being good business to push for a good deal, I am only questioning their tactics. From their past record of negotiation there have generally been threats of closure, layoffs etc, then after the deal has been made the threats turned out to be hollow. Given the parent company has made strong profits despite the economic downturn, do they have an obligation to absorb some of the ups and downs to provide secure jobs and certainty for their workforce (as long as the business remains viable), or should workers be treated like commodities?
The $200,000 they provide for the Kakapo Project is substantial for the kakapo but chicken feed for Rio Tinto. I am not ungrateful for their support but think it's appalling to use it to lever public sympathy.
We really have no way of knowing how bad things really are for the smelter so I guess if they are still going strong in a years time my concerns will be vindicated and if they turn belly up, I guess others will be gloating in future comments. Who really knows?
As a grey unionist man, one suggests you will make the argument that they are not.
You may well be correct.
You often appear really trusting that those in positions of power will generally do the right thing. While many probably do, just as many (if not more) probably don't in reality.
A tobacco executive was asked this question by an MP in a select committee:
"Do you consider what you do moral or ethical?"
The reply:
"It's legal."
I know you are a black and white guy, Shane,
How do you know that?
but I would have thought there should be some consideration given to the workforce..
You don't know that it isn't.
It is interesting to note that the productivity of workers tends to increase well above the rate of wage increases.
Where do we note this rule of thumb?
And "well above" demonstrated across the board in every instance where?
How ethical is it to continually minimize wage costs to maximize profits?
Where is this happening? At Rio Tinto?
Should the human costs of this never be considered?
How do you know they are never considered?
1. He told me, himself!
2. This goes both ways, what do you think their priorities are?
3. http://www.nzae.org.nz/wp-content/uploads/2012/06/Tipper-productivity-real-wages-and-workforce-age-structure-final.pdf
And the fact that productivity has increased by 52% since 1989 and wages (adjusted for inflation) have only increased by 16% http://www.stuff.co.nz/dominion-post/comment/5824465/New-Zealanders-get-low-wages
4. It was a general question and Shane answered it be saying "greed is good"
5. They probably are but I was suggesting the weight given to it isn't as great as it should be.
I appear to have been mistaken as to what you meant by that. I read that to mean that with every wage increase workers increased productivity well beyond the dollar value of the increase.
Whereas I take this
And the fact that productivity has increased by 52% since 1989 and wages (adjusted for inflation) have only increased by 16%....
to mean that productivity increases have outstripped any ensuing increase in wages.
My conclusion is that you have assumed that all productivity increases are due solely to an increase in the output of workers, who are working increasingly swiftly.
http://www.victoria.ac.nz/vms/industrial-relations-centre/irc-events/lew-conference-welcome/lew-papers/M11_Rosenberg_LEW_final_2_.pdf
http://www.poal.co.nz/about_us/performance.htm