Its Scotland's oil

Why are the English so desperate to keep hold of Scotland? It's the oil, stupid. An estimated 90% of the UK's share of North Sea oil lies in Scottish waters, and would transfer to Scotland on independence (assuming maritime boundaries were assigned according to the normal rules). As a result, an independent Scotland would be rich - and the rump UK a lot poorer (in fact, this would be the case even under "devolution max", in which Scotland would set its own taxes and be independent in everything but foreign policy).

Which is why the English are trying to scare the oil industry into opposing independence, talking up "uncertainty" if the Scots get to run their own country. Its pure colonial rhetoric, used to oppose self-determination everywhere the English Empire stamped its boot. Fortunately, in this case, it doesn't seem to be working - yet.

Compare and contrast

John Key, to 3 News, 31 January 2012 [video]:

I would point out that section 9 is largely symbolic. It's been the law since it was established in 1986, but the Government can't find an example of where it's been used.

New Zealand Treasury, Extension of the Mixed Ownership Model: A proposal to change legislation in relation to: Genesis Power, Meridian Energy, Mighty River Power, Solid Energy New Zealand: Consultation with Māori, 1 February 2012 [PDF]:

The Government recognises the historic significance of section 9 of the SOE Act and the role it has played in the development of the place of the Treaty in modern New Zealand and the relationship between the Crown and Māori. Litigation brought under section 9 in the Lands case, led to the articulation of Treaty principles by the Court of Appeal. The same case led to the section 27A-D memorials regime that protects specific Māori interests in land transferred by the Crown to SOEs. These provisions require the Crown to resume ownership of the land where the Waitangi Tribunal has recommended its return to Māori ownership. They also enable the Governor-General, by order in council, to require the Crown to resume ownership of land that is wāhi tapu.

Conclusion: Key hadn't bothered to read his own discussion document. What a lightweight.

Pure cronyism

That is the only way to describe ACT MP John Banks' decision to select Catherine Isaac to head the charter schools implementation committee. Isaac is a former ACT Party President, and was a list candidate for the party at the last election. She has no relevant skills and no experience in the education sector. Despite that, she'll be overseeing the infliction of charter schools on the children of Christchurch and South Auckland (ACT being unwilling to subject their own precious offspring to such madness), and getting a fat government payment into the bargain.

But apart from the "jobs for the girls" aspect, there's another disturbing element to this case as well. Overseeing and assessing the outcome of an educational experiment should be done by neutral experts, not by ideological cronies. The fact that Isaac has been appointed makes it clear that the government isn't actually interested in the evidence on whether charter schools work (if they were, they would never have imposed them in the first place), but rather in imposing its ideological views regardless of that evidence. Its a strapped chicken, with other people's kids as the victims.

Ignorant

On the face of it, John Key's claim that s9 of the State-Owned Enterprises Act is "largely symbolic" and that the government "could not find a single instance in which it had been used" has to go down as one of the most ignorant political statements in recent memory. Section 9, and the subsequent court challenge to the then-government's plans to privatise away land and assets seized in violation of the Treaty, didn't just force the government to amend the law to ensure that claims could be remedied; it is where modern Treaty of Waitangi jurisprudence began. New Zealand Māori Council v. Attorney-General gave us a formal judicial interpretation of the principles of the Treaty, including the concept of the Treaty as a partnership (with obligations to consult and act on good faith), a duty to remedy past breaches and to actively protect against future ones. And those principles, refined and formalised, have guided the courts and government ever since.

For the Prime Minister to be able to make such a statement tells us two things. Firstly, he is profoundly personally ignorant of our constitution and the role of the Treaty. Secondly, he does not pay attention to his advice (because it is unthinkable that that advice would not have included such information). OK, there's a third option: that he's obeying his spindoctors and trying to downplay the issue and paint the Māori Party as freaking over nothing - but if so, he's not fooling anyone, and just comes across as stupid; see points one or two.

As for the issue, it matters. While land is protected, the SOEs the government is planning to privatise control other assets subject to Treaty claims - namely water and minerals - which are not protected. The sale of those SOEs may prevent those claims from being remedied. The principle of redress and the duty of active protection mean that the government needs to protect the rights of claimants to their remedy. This need not involve a general-purpose Treaty clause in the sale legislation, but it is going to mean caveating assets in the same way that SOE land has been. The problem for the government is that this will lower the sale price, making their already marginal privatisation project into a complete disaster. And while they can just bull on regardless, using John Banks' vote, that would come at the cost of a permanent break with the Māori Party, making them highly vulnerable to ACT boat-rocking or backbench dissatisfaction. But I guess in that case, Key will just blame MMP, rather than accept responsibility for his own inability to manage a coalition.

The problem with Christchurch

Writing in The Press, Will Harvie puts his finger on the problem with Christchurch:

Voting rights of Cantabrians have been trampled in recent years.

In 2010, the elected leaders of Environment Canterbury were overthrown by Parliament.

In 2011, the elected leaders of Christchurch City Council lost control of our central business district, first to satan [sic], then to Civil Defence and now to the Canterbury Earthquake Recovery Authority.

Something has to control the rebuilding of Christchurch, but that doesn't mean Cantabrians must quietly accept decisions made by these temporary masters.

And that's it in a nutshell: the people of Christchurch want a say in the future of their city. And that is being denied to them, both by CERA and by an increasingly authoritarian Mayor and council CEO (AKA the "Bob and Tony show"). The answer, as always, is more democracy: a mayor that listens, a council that responds, a CERA which serves the people of Christchurch, rather than politicians in Wellington. And if they don't get that, people will - and should - protest until they do.

High stakes

And right on cue, the Māori Party are threatening to walk away from National over the exclusion of Treaty clauses in National's privatisation programme:

The Maori Party says it may quit its support of John Key's government over its asset sale plan.

Tariana Turia and Pita Sharples say plans by the government to have no treaty clause in the SOE sale legislation is a deal breaker.

The pair say maori are already contemplating a hikoi over the issue - and Mrs Turia has raised concerns that the issue may flare up at Waitangi celebrations this weekend.

There will be a deal over this. National needs the Māori Party to protect it from mid-term departures and disgruntled backbenchers. And the Māori Party need to be seen to stand up for their people. So there will be Treaty protections in the sale legislation.

But its a bad way to start the relationship for the term, and it shows how vulnerable National is if the Māori Party wants to throw its weight around. ACT and Dunne have much less leverage by comparison, at least if the Māori Party stays in the picture. If they walk, then John Banks will have a veto on all policy - a position National will not want to end up in.

What is it about local government?

Whanganui District Council has rejected a switch to an attendance-component to their salary. Because making sure that councillors actually do the job we are paying them to do would be a Bad Thing, apparently.

The arrogance on display here is appalling. Here we have a local body basically saying that they should be paid whether or not they actually do their jobs. They wouldn't accept that logic as employers, and neither should we.

One of the opponents did have a point in saying that not all work takes place around the council table, but that's why its an attendance component. They'd get paid for their representative role, and they'd get paid for their formal, legislative one. The problem here is that some councillors are shirking on the latter - and shortchanging voters in the process.

Privatising away Treaty rights

The government has revealed that its plans for asset sales do not include carrying over existing protection of rights guaranteed under the Treaty of Waitangi. The State-Owned Enterprises Act has a Treaty clause, which has been decisive in major cases protecting Treaty rights. In the interpretation of the courts, it requires the government to be mindful of outstanding Treaty claims (or potential claims) when selling those assets, and to protect the rights of potential claimants. In the case of land, this has meant permanent caveats on SOE land, making it subject to return to its original owners on order of the Waitangi Tribunal (though IIRC this power has never been exercised). But its not just about land. There are outstanding claims or potential claims over control of water and subsurface minerals. Failing to include the Treaty clause in sale legislation would prejudice those claims, and prevent just settlements.

Which makes this an explosive issue for the Māori Party - and for the government as well. The Māori Party's support agreement with National [PDF] does not commit them to supporting privatisation, but its a bigger problem than that. It is simply politically untenable for the party to prop up a government which undermines the Treaty in this manner. If National proceeds with this plan (and they have the votes to do it regardless of what the Māori Party think), then they will be putting the Māori Party in a position where it must either renounce its confidence and supply deal, or be crucified by its own supporters.

(As an aside, I wonder if National told them about this when they were negotiating that agreement? If not, then it would seem that they have been less than full and frank, and negotiated under false pretences).

National does not need the Māori Party's support; it has a bare majority with ACT and Peter Dunne. But it needs them as cover to protect against any mid-term departure. The Māori Party should use this leverage. They've been betrayed, so they're entitled to threaten confidence and supply, and they should do so to protect the rights of their people.

Time to change the Overseas Investment Act

John Key's excuse for the Crafar farms sale? His hands were tied. But he's promising to change the law if we make enough noise about it:

''Obviously that's a sovereign right that we have.

''We can change the law but at this point I would have thought it would be a bit of a knee-jerk reaction.

''We should look at it, if the flow of sales starts to accelerate and people really become very concerned.''

I think we should take Key at his word, and start expressing that concern. Either he'll be forced to keep his promise, or he'll be exposed as a two-faced liar who will say anything to try and get an issue to go away. Either way, we help create the conditions for a law-change to restrict these sorts of damaging asset-sales, which can only be a Good Thing in the long term.

Another good reason for the Scots to vote for independence

Scotland looks set to have a referendum on independence in 2014, to coincide with the 700th anniversary of the battle of Bannockburn. There are many good reasons for the Scots to vote for independence - being able to run their own country as they wish, rather than being dictated to by Tory toffs in London being the best - but the Guardian today points out another: they'd get to kick out English nukes:

Asked during the referendum debate in the Scottish parliament last week whether the government of an independent Scotland would do a deal to keep Trident, the first minister Alex Salmond replied: "It is inconceivable that an independent nation of 5.25m people would tolerate the continued presence of weapons of mass destruction on its soil."

His comments seemed to be directed at senior British defence officials figures who have suggested that they could negotiate a treaty allowing the Trident missiles, warheads, and submarines, to remain in Scotland.

While this won't matter to the Scots, once kicked out, said nukes would have nowhere else to go - there are no viable alternative bases. England would have to give up its ruinously expensive and utterly pointless nuclear deterrent, whose only purpose is to preserve defence policymaker's ego against the US and the French. They'd be doing England - and the world - a tremendous service.

New Fisk

The present stands no chance against the past

Undeserved

When Christchurch City Council CEO Tony Marryatt received a $68,000 pay rise in December, he was quick to claim that it was recognition for his performance. It turns out that he lied:

Documents released by the council under the Official Information Act show that Marryatt's performance reviews have gone gradually downhill since 2009.

His overall performance, excluding self-assessment, decreased from 4.3 out of 5 in 2009 to 3.9 in 2011.

Marryatt's ratings declined in six out of seven categories over his three performance reviews, based on anonymous reviews from councillors and senior management.

I think this confirms what we already knew: Marryatt's pay rise was utterly undeserved, an exercise in cronyism by Bob Parker and his faction of the council. And now that its been exposed, his position is utterly untenable. He has lied to us. He has tried to blackmail the council, making return of that undeserved money contingent on their obeying him (a complete reversal of the democratic relationship). He needs to go. There is no place for greedy narcissistic psychopaths in our public service.

There's no need to be religious about it

Alain de Botton wants to build an "atheist temple" in London. All I can ask is why? The whole point about atheism is not caring about religion, not wasting your time believing in imaginary gods. But if you don't believe in imaginary gods, why would you want to waste your time not believing in them either? If the idea is irrelevant, a sad delusion resulting from flaws in our neural architecture, then why waste any time on it at all?

Which makes the idea of building a special building where people can congregate and contemplate their mutual lack of faith extremely puzzling. Its caring far too much, being almost... religious about it. Which seems to really be missing the point entirely.

The PREFU SNAFU

So, the government has announced that it may not be able to reach its fiscal target of returning to surplus by 2015. On the one hand, this isn't really surprising: the global economic crisis has got worse, and you'd expect us to be affected by it. On the other hand, Treasury was forecasting a 2015 surplus just three months ago, and dismissed any suggestion that its forecasts were too optimistic. For them to reverse themselves so suddenly suggests that they got it seriously wrong, in the process making both our major parties (who made campaign policy on the basis of those projections) into liars. The question now is whether anyone will be held to account for that. Sadly, I think the answer will be "no".

But this also raises a bigger problem. Back in the 90's, we amended the Public Finance Act to require pre-election disclosure to protect us from governments who shuffled big economic problems under the carpet and left them for their replacements to deal with. But while that may protect us from lying politicians, it doesn't protect us from Treasury - who in the past have demonstrated a definite political agenda, and may not be above stacking their projections to advance it (in particular by crying "crisis!" so as to apply the shock doctrine). Which makes it all the more important that this "error" is investigated and those responsible held to account.

Selling out New Zealand

As expected, the government has agreed to sell Crafar Farms to the Chinese. Reading through the Overseas Investment Office Advice [PDF], the case for this is extraordinarily weak: the sale may create five to seven jobs; the "new investment" is small compared to the value of the asset (and reading other sections, largely deferred maintenance); the "environmental benefits" are all things they should have been doing anyway (such as excluding stock from waterways), and no account is taken of the significant environmental costs of their plans to ramp up production. Meanwhile, the supposed "benefit" of increased export earnings will be offset by the fact that the profits will be taken offshore. So what we're left with is a farm school, which is really just a way of them getting cheap, government subsidised labour for their workforce, and which doesn't require the purchase of ten farms to operate.

This is not a strong case. But the OIO is a rubberstamp, and the government wants to "send the right signals", both to China and to farmers (who would see any restriction as an attack on their property values, and hence their business model), so we end up with a strategic asset and a significant chunk of our dairy production falling into foreign hands. What this shows is that we need a significant tightening of our overseas investment regime, along with a change in mindset at OIO so we have people willing to actually enforce it, rather than just rubberstamping every decision with "approved". As for National, they've sold out New Zealand - again. And they'll do the same with our power companies too.

An overreaction

That's the only way to describe yesterday's extraordinary extraction of Australian Prime Minsiter Julia Gillard from an Australian Invasion Day protest yesterday. Protestors yelling and waving placards and banging on things? Better treat it like an assassination attempt! And so now we have a lovely photo sequence of Gillard being dragged away like a sack of potatoes by her security detail, lest she have to actually face her people and listen to their concerns. Because obviously, a leader in a democracy can't possibly do that, can they?

Fallow on privatization

Writing in the Herald, Brian Fallow calls National's privatization programme "a solution in search of a problem". Treasury analysis of our state-owned energy companies shows that they are well-run and profitable. The dividends are about the same as the interest on money the government would have to otherwise borrow (and certainly "within the margin of error" given the uncertainties involved). Which makes the entire exercise pointless:

True, the policy would reduce the Government's gross debt compared with what it would otherwise be, releasing capital for higher priority spending while avoiding the need to approach skittish offshore funding markets.

But there is an opportunity cost to that. The private sector money has to come from somewhere.

If "Mum and Dad" investors reduce their bank deposits, for example, to invest in the SOEs then, all else being equal, the banks will have to increase their offshore borrowing.

Alternatively there may be switch out of other forms of saving, including Government stock.

It is only if the privatisation process increases national savings that it will lessen the country's, as distinct from the Government's, reliance on offshore lenders.

Fallow calls this "a lot of trouble just to ensure some New Zealanders own more of these enterprises, while the rest own less". And it is. But for National, that is the point. This was never about "improving efficiency", "reducing debt" or (and this one is truly awful) "giving (rich) kiwis something to invest in". It is about wealth transfer: about taking those assets away from us, and giving them (and their monopoly dividend-streams) to their rich mates, while letting other rich mates clip the ticket on the way through. It is about looting the state for their own profit. Everything else is just excuses and spin.

This shouldn't be surprising. It is, after all, what National exists as a party to do. But at the same time, its not acceptable. Those companies are ours. And we should not let them be stolen by a new generation of elite thieves in the style of Fay and Richwhite.

New Fisk

We've been here before – and it suits Israel that we never forget 'Nuclear Iran'

The enemy of my enemy is not my friend

During the election campaign, Labour came out heavily against foreign asset sales. So its entirely natural that they'd oppose the Chinese bid for Crafar Farms. Unfortunately, they're supporting its competitor, Michael Fay, instead.

Think about that. Fay - a former tax exile - is one of the worst villains of the 90's. Here's what Wikipedia has to say about him:

Michael Fay and David Richwhite are best known for gaining wealth in a series of loosely regulated privatization and asset swapping transactions that occurred between 1986 and 1993 - involving their companies European Pacific, Capital Markets and Fay Richwhite and the former state owned operations Bank of New Zealand, Tranz Rail and Telecom New Zealand, and the pension accounts associated to them.

Deals were done in which Fay and Richwhite personally gained over half a billion dollars (2.2% of NZ's 1985 GDP) from a country on the verge of bankruptcy, while their minority shareholders lost $277 million, by in part imitating the offshore financial practices outlawed in Europe and America 30 years prior.

One notable transaction among these actions was their role as advisors to the government on the sale of New Zealand Rail Limited to overseas interests; a deal in which Fay and Richwhite later brought 31.8 per cent of the shares, and were subsequently investigated for insider trading by NZ authorities.

This is a man who specialises in using political influence to gain strategic assets, then loads them with debt, pays himself an enormous "special dividend", and flicks them off. And he is likely to do exactly the same thing to Crafar Farms. The net result is that we'll be having this same debate about Chinese ownership in a year or two, while Fay laughs all the way to Switzerland. Supporting any business deal by such a man is a mistake. The only thing any Labour politician should be talking about with Fay is how we can get our money back from him.

Leaked

The infamous "teapot tape" has been leaked online. I'm currently seeking legal advice on whether I can link to it here; in the meantime the link is going around Twitter and other social media.

The Dotcom bail decision

Megaupload founder Kim Dotcom has been denied bail. The NBR has the full decision (in four parts) here. Reading through it, it basically came down to perceived flight risk: the US talked this up, the police told the judge horror stories of people absconding, and how they could abscond if they set their mind to it, and the latter especially seems to have been decisive. Troublingly, that evidence was heard in closed court, and the affidavit returned to the prosecutor to prevent it from being accessed from the court file, so the core evidence here is effectively secret. While able to be contested by the defence, we are not allowed to view it and decide whether it stacks up (and hence whether the judge's decision was correct, or whether he was misled). Also troublingly, all conditions (including 24 hour curfew, electronic monitoring, and a ban on using or communicating by computer, internet, or even telephone - basically an electronic death sentence) were refused. So much for the BORA requirement that those charged

shall be released on reasonable terms and conditions unless there is just cause for continued detention.

So, we're going to lock a guy in jail for a month or two, in the process undermining his defence in a serious criminal case, on the basis of secret evidence which may be no more than a police fantasy. Which is beginning to sound like Ahmed Zaoui territory again.

There is ample grounds for appeal here, and I expect Dotcom will take it.

No justice for Haditha II

So, what's the penalty in the US Marine Corps for ordering your soldiers to massacre 24 Iraqi civilians, including seven children?

Nothing:

A US marine who admitted charges linked to the killing of 24 unarmed Iraqi civilians in 2005 should face no time in detention, a judge has recommended.

Again, the message is clear: "we matter. You don't. You can be killed with impunity, because you are not American". Justice for all? Only if you're American, it seems. And this is why Iraq is longer willing to play host to American soldiers: because the US will not hold those soldiers to account, even when they commit war crimes. It is time for the international courts to step in, and provide the justice America is clearly unwilling to.

Pure greed

Another day, another excessive local body payrise, this time for Kapiti Coast District Council CEO Pat Dougherty, who scores himself an extra $44,000 a year, an increase of 18%. As with the business sector, this excessive payrise isn't driven by any improvement in performance; under Dogherty KCDC has faced large blowouts on major projects, and is looking at a 12% rate rise to fund those shortfalls. Instead, its just pure greed, a way of keeping score. And at a time when ordinary people are looking at nil or sub-inflation wage rises, and so falling behind, it is simply unacceptable.

This greed on the part of local body management, this belief that their salaries should be compared to the private sector, has to stop. They are public servants, not corporate warlords. More generally, the culture of high executive pay needs to end. The total disconnect between pay and performance makes it clear that these people don't earn their inflated salaries. Neither are they "compensation" for higher risk; its not CEOs who are on 90-day trial periods, subjected to random restructurings, and sacked because their boss comes in hung-over in the morning. Instead, its just pure greed, a way of keeping score. In the process, they boost inequality, distort perceptions of worth and value, and fleece their shareholders of returns. Over in the Guardian, George Monbiot proposes a maximum wage, which can be trivially enforced by setting a 100% marginal tax rate above a certain level. And that is beginning to look like a very good idea.

Part of the democratic process

What is it with the right and democracy? In response to tensions in the Christchurch City Council, which have seen councillors criticise the Chief Executive's lavish pay increase and autocratic style, DPF demands that "some or all" of them "must go". Because obviously, the last thing you can possibly have in an elected body is disagreement. No, we should shut it down, sack them all, appoint a dictator.

The fact of the matter is that these councillors are elected. They are there to represent their constituents, some of whom are not exactly happy with their council or its CEO. In other words, they are doing exactly the job we expect elected representatives in a democracy to do. The idea that this justifies the imposition of another dictatorship is as obscene as it is laughable.

What next? DPF will advocate the unseating of MPs who disagree with the government and criticise the public service? Because that is essentially the "problem" here. But in Parliament, we recognise that is part of the democratic process, part of how government is kept responsible to us and held to account. It would be nice if he (and Christchurch’s autocratic primadonna mayor) understood that that applies to local government too.

Shorter National MP

"Children must starve to teach parents responsibility". Yes, really:

Northland National MP Mike Sabin, who chaired the meeting, warned that if schools provided lunches then mothers and fathers would never have to do it.

"But they are not doing that anyway," Mr Reid responded. "You can walk around every pub in Kaitaia and mums and dads are investing in the poker machines."

Mr Sabin retorted: "We have to investigate that, otherwise we'll have 50,000 more parents who are not feeding their children."

What a wanker. But oh so typical of the National Party's mindset that poverty is an individual failing rather than a structural problem in our society. And their "solution" - cut school lunches and make kids starve - effectively sacrifices children's life-chances to that cruel ideology.

But hey, they're just poor kids - no-one National cares about.

No justice for Haditha

On November 19, 2005, US Marines massacred 24 Iraqi civilians in the town of Haditha. The killings were initially covered up as "collateral damage" from a roadside bomb, and many of the victims - who included seven children - were labelled "insurgents". But media investigations revealed what had really happened: after one of their number had been killed by a bomb, the US soldiers went house to house, with guns and grenades, murdering indiscriminately.

Eventually, in the face of public pressure, the US charged eight marines with a variety of crimes, including murder, manslaughter, and obstruction of justice. And then, one by one, those charges were quietly dropped. Today, the last of the accused, Sgt Frank Wuterich, who had been facing murder charges, plead guilty to dereliction of duty as part of a plea bargain:

He faces a maximum of three months confinement, two-thirds forfeiture of pay and a demotion to the rank of private.

Given the prior record of US military courts in these sorts of cases, the bus ticket he will be slapped with won't even be soggy.

And this is what the US calls "justice". But there's no justice here - just a military refusing to hold its own to account, and in the process sending a message to the world: we can murder you with impunity, because your lives count for nothing. And then they wonder why people support or join terrorist groups...

New Fisk

Fragments of history rescued from oblivion
In the line of fire: Tom Hurndall

Places to go, people to be

There are things I'd like to be blogging about today: the final death of Project Hayes (not heartbroken; it was environmentally marginal, and there are plenty of other large wind projects in the pipeline); Auckland's efforts to leverage its local prostitution ban into a nationwide one; the arrest and expected extradition of Megaupload founder Kim Dotcom in Auckland (which, because our own media are so obsessed with themselves, we had to read about on BBC) and its parallels with the UK TVShack case; or the fact that our extradition agreement with the USA not only includes abortion, but also sodomy, which hasn't been a crime here since 1986. But sadly, I'm busy. I'm off to attend New Zealand's largest roleplaying convention, and my brain is full of other Things (some of them squamous, formless and shifting, and waiting to eat you).

Normal bloggage will resume on Tuesday.