Friday, March 16, 2012

Ports and transparency II

Following up on Wednesday's comments about ports and transparency, I've done some digging into the history and ownership of port companies in New Zealand. When the Fourth Labour Government passed the Port Companies Act in 1988, it was directed at privatisation. Initially, port companies would be required to be at least 51% council-owned (sounds familiar, doesn't it?). As for transparency, they were never added to the schedule of the Local Government Official Information and Meetings Act, and the Port Companies Act explicitly excludes them from the coverage of that Act.

Despite allowing up to 49% private ownership, councils tended not to sell their ports. Even when the National government removed that protection and pushed for a wholesale selloff of local authority assets, they failed. A report on Port Performance and Ownership [PDF] from the New Zealand Institute of Economic Research notes that

Since reform in the 1980s, all commercial ports have remained majority controlled by one or more local authorities. The Port of Tauranga has the largest percentage of private ownership with just under 55% of shares held by the Bay of Plenty Regional Council through Quayside Holdings Ltd. Most of the minor ports have remained 100% local government-controlled since they were established.
Running the stats, eight port companies are 100% public owned. One (Lyttelton) is 93% publicly owned, two more (SouthPort and Tmaru) are more than 70%, NorthPort works out to ~65% once you do the maths, and Tauranga is 55%. Every single one of them would meet the definition of a Council Controlled Organisation if they were not specifically excluded.

So why are they excluded? The law is otherwise happy to impose LGOIMA requirements on companies with private shareholders, provided they are majority public owned. There seems to be absolutely no case for it. We own them. We should be able to tell what they are doing. It is that simple.