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Ports of Auckland Ltd – THAT magic 12% figure!

14 March 2012 4 comments

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Much has been made of Port of Auckland Ltd being required to make a 12% return to it’s shareholder and owner, the Auckland City Council.

As recently as last Sunday (11 March), Len Brown confirmed the figure (albeit in a roundabout way), in an interview with Paul Holmes,

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LEN  And by that, I mean that we are the 1.5 million Aucklanders, we own the shares, and as a consequence of that, I’m looking after their interests.  I want that port to be successful.  I certainly want a greater return on our investment-
 
PAUL Let’s talk about that shortly, but I wondered about your position because you have said and I quote you, ‘We deserve a port that’s competitive, a decent return for ratepayers and a settlement that is sustainable.’  That sounds like the port’s position, Mr Mayor.
 
LEN  No, it sounds like our position – our position, the council’s position and the position of any Aucklanders.  Look, my commitment during the campaign was not selling the ports; we will hold the port shares.  Secondly, we wanted the ports to be more commercial and present a much better return for ratepayers.

PAUL And that return, of course, the figure that you’ve come up with is you want an increase from 6.3% I think it is at the moment.

LEN  Yeah.
 
PAUL After tax.

LEN  12% over five years in terms of return on investment.
 
PAUL Where did you get the 12% from?  Pluck it out of the air?
 
LEN  No-

PAUL There’s not a port in Australasia, Mr Brown, making 12%.

LEN  So our view was, though, that the port was not performing as well as it was.  Now, you’ve heard Mr Pearson say it’s an aspirational target.  What we’re saying to the port is this is our view.  We believe as a consequence of the assessments that we’ve done within the  council-
 
PAUL Well, how firm are you on this?  Have you laid down the law on the 12%?

LEN  We have given it to them in our statement of corporate intent.  Right at the start of the year, I went down to the port, met all the workers and the employees and the company directors down there and said, ‘Right, this is what we’re expecting from the port.’  And we had an hour’s Q & A-
 
PAUL This is what we’re expecting.  Is this-?  I mean, were you laying the law about the return you want in five years – 12%?
 
LEN  We were laying down the law in terms of what we expected from the port in terms of its return and in terms of its performance generally.

PAUL Where did you get the 12%?

LEN  So, the 12% was an estimate, a view that certainly I’ve been working on for right through the last sort of 18 months, two years.  It was view that was discussed our own table with the officers, with our own council-
 
PAUL So it’s a guess?  It’s a good guess?

LEN  No, it’s an estimate.
 
PAUL (laughs)
 
LEN  This is what we think we should be aiming to achieve.  And so we went back to the company and said, ‘Okay, this where we think you should be.  What is your advice back to us?’  Their advice was, ‘Give us five years and we believe that we can receive that.’

PAUL Well, excuse me, look at this.  Okay, 12%, that’s your estimate – guesstimate.  Tauranga returns 6.8%, Lyttelton 8.6%, Sydney 6.7%, Melbourne 3.1%, Auckland 6% — 6.3% after tax.

LEN  So not just about return either-
 
PAUL Where’s the 12% being made anywhere?

LEN  It’s about competitiveness against other ports.  So we are losing share against Tauranga.  We are competing flat out against Brisbane, in particular, and Sydney.  It was our desire that we wanted the port to be much much stronger in terms of its-
 
PAUL Do you endorse what Mr Pearson was saying about he cannot believe the waste of resource at the Ports of Auckland?
 
LEN  Look, there’s a whole lots of things that we cannot believe about the performance of the Ports of Auckland, so it just was not about-

PAUL Can I just say to you again-?

LEN  a stronger return on investment.

Source: TVNZ Q+A

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Yet,  at a meeting of the CCO Strategy Review Subcommittee, held on 21 April last year, a motion was passed to the effect;

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PRESENT
Chairperson Mayor Len Brown, JP
Deputy Chairperson Deputy Mayor Penny Hulse
Councillors Cr Ann Hartley, JP
Mr Tony Kake
Cr Richard Northey, ONZM
Cr Sir John Walker, KNZM, CBE
Cr Penny Webster
ALSO PRESENT
Councillors Dr C Casey
C Fletcher
D Morrison
C Penrose
S Stewart  [until 11.25pm, part item 11]
W Walker

12  Shareholder Comments on the draft 2011-2014 Statements of Intent/Statement of
Corporate Intent of Substantive Council Controlled Organisations/Watercare Services
Limited

CCOS/2011/4
MOVED by Mayor Brown, seconded Cr Hulse:

b)

Auckland Council Investments Limited

ii) Replace the proposed shareholder comment on page 135 “Add a series of
performance measures/targets to measure port productivity and profitability.
This should include lifting the rate of return investment (from 6%-12% over
three years)” with
“Immediately following completion of the long-term strategy for POAL add to
ACIL’s statement of intent, a series of performance measures and stretch
targets to measure port productivity and profitability. The targets should
require a significant improvement in the performance of POAL, including the
rate of return on investment.”

CARRIED

Source: Council  Sub-Committee Minutes

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So it seems evident that Auckland City Council no longer demands an outrageously high rate of return from Ports of Auckland. The target now requires  “a significant improvement in the performance of POAL, including the
rate of return on investment” – which could be anything; 7%, 8%, 9%, etc.

I believe that there is evidence (more in a moment on that) that what we’re seeing here is Auckland City Council/Ports of Auckland in a war of competition with other local ports – Tauranga to be specific.  Since corporatisation of New Zealand ports,   there has been a steady drive to increasing profits; returns to shareholders; and “efficiency”.  This involves aggressively attracting new clients to use port facilities.

Considering that there is only a limited number of shipping coming to New Zealand at any given moment, ports can only increase business at the expense of other ports. In essence, they are “cannibalising” each other.

A New Zealand Institute of  Economic Research (NZIER) report entitled “Port Performance and Ownership
An assessment of the evidence Report to the Local Government  Forum 9 August 2010” makes the following observations,

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On the other hand, Maersk undoubtedly extracted significant discounts from Auckland to secure its business. Its standard business practice is to play off competing ports aggressively against one another in terms of price and the facilities they provide, such as fixed berth slots and equipment for loading and unloading. It cannot be criticised for its approach; it is operating in a very competitive market and needs to have as cost competitive a port service as it can find and negotiate. As Figure 8 shows, Port of Tauranga’s net profit after tax for continuing activities has been significantly better than Ports of Auckland’s since the Maersk decision in 2006.”

“…there is some evidence that Ports of Auckland, and possibly Lyttelton Port Company, have in recent times succumbed to local pressures to retain and grow the volume of trade through their port by agreeing to provide international shipping lines with levels of service at charges such that the services may not make a full economic return.”

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This seems to be born out by data, such as presented by the (NZIER),

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The graphs above show that despite having a higher a higher container volumes at Auckland than  Tauranga (1995 to 2009), Port of Auckland’s net profit after tax still dropped.

As NZIER stated,

It is extremely unlikely, therefore, that the commercial realities of the Maersk decision supported any change in the relative values of Tauranga and Auckland to the significant favour of Auckland. Indeed, the evidence suggests the impact was probably exactly opposite to this.”

With this in mind, the ongoing competition between NZ ports to attract business from shipping companies such as Maersk appears to be a self-defeating process; a race to the bottom.

In which case, POAL’s agenda for “greater productivity”  (ie; more profits) is now impacting on port worker’s incomes.  Driving down wages and casualising the workforce has the natural consequence of reducing the wages bill for the company.

This is what it’s all about; aggressive competition between ports.

And Maersk benefits.

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Other Blogsites Views

No Right Turn: Ports and transparency

Bowalley Road: Only People Power Can Save Our Ports

Bowalley Road: A Study In Mauve

Pundit: Solving the Ports of Auckland dispute

Related Issues

Bryan Gould: Our workers being squeezed by the bottom line

Acknowledgement

Cathy Casey, Auckland City Councillor

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Ratbags, Rightwingers, and other assorted Rogues!

12 March 2012 2 comments

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POAL playing monopoly with lives

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This morning, Auckland Mayor Len Brown; Maritime Union National President, Gary Parsloe; and Ports of Auckland chairman, Richard Pearson were interviewed (separately) on TV1’s Q+A.  The following are transcripts of those interviews,

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Q+A: Transcript of Paul Holmes interviews Gary Parsloe and Richard Pearson

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PAUL This week the long-running labour dispute on the Auckland wharves came to a head with the Ports of Auckland making almost 300 workers, mostly stevedores, redundant. The Ports of Auckland claims it has to increase productivity to be competitive and deliver the required returns; only contractors can help them do that and provide exporters and importers with reliable service in an increasingly difficult world. The workers say Auckland’s already a profitable port, for heaven’s sake, and the contract on offer would have meant no guaranteed work each week and no ability to plan family time. And they even made an ad featuring workers’ families to ram the message home. So with me in the studio this morning are the Maritime Union head Gary Parsloe and the Ports of Auckland chairman, Richard Pearson. Now, both men will speak separately. So to you first, Mr Parsloe, what is this- at fundamental bottom, what is this dispute about?

GARY PARSLOE – Maritime Union

The dispute is about we just want a collective employment agreement that covers our members, one with some form of security so that people know when they go to work, when they don’t go to work, know what family time they’ve got.

PAUL Or is it about the amount of wages paid for downtime that the Ports of Auckland are worried about? They say it’s unsustainable; they don’t want to pay people when they’re not working.

GARY Well, they offered us 10% wages, and we declined it for 2.5%, and I don’t think it’s about money. We’ve never claimed money.

PAUL No, but, you see, they say there’s too much downtime and you’re still being paid. They want to pay you for when you work. What is wrong with that, Garry?

GARY Well, we’re quite willing to go through those things. In the mediation, we addressed those things. We gave up 18 points at the last mediation, that were going to address the flexibility, the downtime, we would continue. 18 points were put at the mediation, that’s right.

PAUL Look, I know, I mean, I was studying what the Ports of Auckland have come at you with over the last six months. They do not seem to have been madly ungenerous. I wonder if the strikes were an intelligent strategy. Even Mike Lee says going on strike was a grave error; that the Ports would turn on you, which is what they’ve done, of course.

GARY Well, of course, workers don’t have a lot of things in their power. The only time we can take strike action is in pursuit of a collective, and we waited to do that because we want a collective that covers our members. It gives them some form of job security.

PAUL But you were going to get a collective.

GARY Oh, I don’t know about that.

PAUL Come on, September 7 and 6 last year they came to you. The very first offer they were going to roll over the collective agreement was the 2.5% pay increase every year for three years. Now, why did you reject that?

GARY Because there was the fish hooks in the collective they wanted us to sign – the new one they gave us that took away all of our conditions, our security and was all the flexible hours-

PAUL Took away you having the right to roster, is that right?

GARY No, they took away a lot of things. Took away many many things. And, I mean, at that time you want to talk that they wanted a collective, well, I don’t believe they ever did. We got their strategy paper-

PAUL Why would they offer you a collective if they didn’t want a collective?

GARY We got a strategy paper last August, and in that strategy paper, they had $9 million of people’s money of Auckland. It’s on our website to get rid of the unions and get rid of them.

PAUL So go back to that September 6 and 7 offer – that they were going to roll over the collective agreement, 2.5% increase for three years every year. What were you going to lose exactly?

GARY Would have lost- There was nothing in there that defined times when people would go to work and not go to work and you couldn’t take the kid to the beach, couldn’t take your wife shopping, you had to sit by the phone all day wondering when you were next going to go to work.

PAUL Meaning they were going to do the roster, not the union?

GARY They were going to do the roster. They still do the rostering today. For goodness sake, they ring us up when to come to work.

PAUL Then you’ve been offered 10% wage- Then they came at you with a 10% wage offer, 20% productivity bonus offer, guaranteed 160 hours a month with the rosters sent out two months ahead. What in God’s name is wrong with that?

GARY Well, we tried to get some definitive about the rosters. We said, ‘What would they be? Would you do 160 in one week and get nothing for the next week, next week and next week?’ We wanted some form across the board where people knew what they were doing.

PAUL 160 hours a month. They’re not going to get you to do 160 in a week.

GARY Of course, but they’re packed up into whatever at one time.

PAUL But fours into 160 goes 40.

GARY Yeah, but you don’t get 40. Other ports work like that. You don’t get 40. They work you when they want you, and they leave you want they don’t want you.

PAUL In the end, also the union objects to the company contracting out. This has been a big sore point for the union, right?

GARY Yes.

PAUL I don’t understand this, because in the collective agreement you’ve had for the past few years, the Ports of Auckland can contract out, and they do so. Why are you so adamant they should be denied that?

GARY They can contract out, but the clause in the document doesn’t say they can contract out. The clause in the document talks about what happens when they contract out. It’s all about contingent liability, how they pay out people their redundancy payments and their payments. It’s formula for how it happens if it happens.

PAUL Do you believe this whole thing is about trying to reduce the amount of wages paid to the workers on the Ports of Auckland?

GARY Maybe, maybe not. I’m not sure what they’re after. It’s very hard to know what they’re after.

PAUL Well, for six months you might have found out, mightn’t you?

GARY Well, we’ve been in mediation for all that time trying to find out. And while we’ve been in mediation, they’ve been advertising our jobs in Australia. While we’ve been in mediation, they’re now making our people redundant-

PAUL You’ve been on 12 strikes.

GARY I wouldn’t call that good-faith bargaining.

PAUL Well, Gary, nor perhaps would people call 12 strikes good-faith bargaining either.

GARY The 12 strikes were because we’ve got to protect our members, and that’s what we’re trying to do.

PAUL Okay, but they weren’t going to lay anyone off; they’re just changing the conditions, weren’t they?

GARY Yes, they were changing the conditions for employment.

PAUL You want the mayor- I think you said yesterday you want the mayor of Auckland to get off his jacksie and do a bit more.

GARY Yeah, I would like that.

PAUL Do you think he’s being remiss?

GARY I think, well, the people of Auckland own the port, and the mayor is the mayor looking after the interests of the people of Auckland, and we believe he should do a little bit more than he’s doing. We believe there’s still a deal there, and maybe if people step and be a bit more helpful, there is a deal.

PAUL Thank you, Mr Parsloe. Now, I shall put that to the mayor when he comes along. Now, very quickly, are you expecting is this the- is this all over?

GARY No, this is only the start of it. We had- you said 3000, but there’s about 5000 of the community marching down Queen Street.

PAUL Do you expect international action, international support?

GARY The international have this under the microscope. They most certainly have. And those 5000 people don’t like the way that the people, that the workers of Auckland are being bashed around, and there’s a message in that. Because there’s only 300 of us, and yet 5000 people took to the streets yesterday.

PAUL Mm. Gary Parsloe, president of the Maritime Union of New Zealand, thank you very much for your time. Richard Pearson, you are the chairman of Ports of Auckland. Have you been bashing up the workers?

RICHARD PEARSON – Ports of Auckland Ltd

Absolutely not, Paul.

PAUL Why have you failed to reach an agreement after six months of this?

RICHARD Paul, it’s longer than six months. We started this process at the beginning of last year – all the consultation, all the negotiations that were going on. The collective came to its end in September. We started negotiating the collective in August. We’ve been through a hundred hours plus of negotiation, mediation, and we’ve got absolutely nowhere. The problem is-

PAUL But isn’t-?

RICHARD We just were not delivered the changes that we required, Paul.

PAUL Isn’t it a truism, in a way, of industrial relations that if you’re nowhere in a negotiation after six months, it’s a plague on both your houses?

RICHARD Well, from my perspective, Paul, I came into this situation, and I’ve been 37 years in the container port business and ports all around the world. I have never seen such a waste of resource going on here. I have never seen a situation where you pay someone for 43 hours and they work 26. I’ve never seen a situation where ships wait to come in to start waiting for the start of a shift. You know, that’s like aeroplanes flying around waiting for-

PAUL That average-26-hours business – have you had that audited?

RICHARD Absolutely.

PAUL By who?

RICHARD Ernest & Young.

PAUL Right, Ernst & Young. Do you want that union off the port? Was that the game all along?

RICHARD Not at all. We like unions. We’ve got unions already working on the port. In the outsourced model that we have with the stevedore contractors, they will have unions working for them.

PAUL So can you sit here this morning and say to us that you’ve negotiated in good faith?

RICHARD Absolutely, and I’ll give you good evidence of that-

PAUL Well, Mr Parsloe said you had fish hooks everywhere.

RICHARD No, if we had- if we were not negotiating in good faith, Paul, we would’ve actually introduced the whole outsourcing stevedoring subcontracting model before the end of the collective. During that time, the union would not have been able to strike. In good faith, we waited until the end of the discussions to give them a good chance to, and unfortunately it went over the time of the expiry of the collective. That gave them the right to strike, so I stand absolutely firm when I say to you we have abided by all rules, regulations and fairness.

PAUL Mr Pearson, how do you know that if you contract your stevedoring that’s going to improve productivity? You see, Auckland does no worse than any of the other ports in Australasia. Nowhere is madly more productive than Auckland.

RICHARD Pau l-

PAUL The Australian ports are all contracted out.

RICHARDPaul –

PAUL Melbourne does 3.1% return on equity.

RICHARD Paul, Australasia’s not the benchmark for good container-port operations around the world, with all due respect, okay? As I’ve said to you, I have never seen such a potential asset like we’ve got at Auckland that could actually run better. You know, today we’re running- Now, that port, without the MUNZ union, we’re were the IEAs, which unfortunately people are calling scabs, which I find derogatory – that port is now running at 25% faster than it was before. We have made no other change other than having people that come to work who want to work with the right attitude. That’s what I think people in Auckland want to see.

PAUL And the perception of people in Auckland might be that contracted-out stevedoring could mean worse pay and conditions for the wharfies.

RICHARD Again-

PAUL Otherwise, why would you do it, Mr Pearson?

RICHARD Paul, we’ve got them going. They’re working. 25 years Tauranga’s been working on this model, and it’s been working well. And during that time, we’ve lost 12% of our market to Tauranga. We can’t wait. We have to make this change now, and we have to make it quickly.

PAUL Now, the council wants that 12% return off the ports in five years, yes?

RICHARD That’s correct.

PAUL Is that what’s driving this?

RICHARD Not at all. That is an aspirational target, and you’ve mentioned the fact that it will be over 12 years, and it will be-

PAUL No, five years.

RICHARD Five, yes, correct, and it will be. It’s not a dividend return; it’s an equity return.

PAUL That’s right. Can you do it? Can you do 12%?

RICHARD Yes, we can.

PAUL Right. The unions call you anti-family. Have you had second thoughts about this?

RICHARD Paul, that is absolute nonsense. People talk about waiting by the phone, etc. Ships are on schedules. 90% of all the ships that come into the port are on their schedule, on their slot, within one hour of ETA. We know months ahead. We can actually plan shifts weeks and weeks ahead. It is absolute nonsense to say that, and all I could also say is talk to the people at Tauranga. They’re quite happy. Everything works well.

PAUL Right, a couple of quickies. Is it all over bar the shouting?

RICHARD It is all over. We’ve made the decision. We’re now into implementation. We’ve appointed the contractor, and my wish would be this: get our workers, please, workers that are on strike, come and apply for job. Don’t wait. Don’t let the people that are stopping you, and there’s a sinister little group of people down there – that’s a subject for another Q A at another time – that have been stopping these people applying for jobs. I think it’s wrong, and I think it’s unfair.

PAUL All right, just very quickly – are you worried about the ship in Sydney that the wharfies over there aren’t handling?

RICHARD No, that’ll all be covered by law.

PAUL Mr Richard Pearson, chairman of Ports of Auckland, I thank you. Gary Parsloe, I thank you again.

RICHARD Thank you very much.

Source: TVNZ Q+A

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Analysis?

Firstly, not having seen/heard the actual interview this morning, I can only go by the transcripts.  The interview between Paul Holmes and Gary Parsloe seems to have been held in a completely different manner to that between Holmes and Richard Pearson.

1. In his opening introduction, Holmes starts of with,  “So with me in the studio this morning are the Maritime Union head Gary Parsloe and the Ports of Auckland chairman, Richard Pearson“. Note that Holmes refers to Richard Pearson as the “Ports of Auckland Chairman” – Pearson’s correct title.

2. He does not offer the same courtesy to  Gary Parsloe, and refers to him as “the Maritime Union head” – instead of Parsloe’s correct title; National President. The stage is set for an imbalanced encounter.

3. Interviewing Gary Parsloe involved in-depth questions and numerous follow-up questions, which probed Parsloe’s responses.

4. Interviewing Richard Pearson involved questions such as;

Why have you failed to reach an agreement after six months of this?”

Pearson responds. No follow-up probing.

Isn’t it a truism, in a way, of industrial relations that if you’re nowhere in a negotiation after six months, it’s a plague on both your houses?

Pearson responds. Again, no follow up probing.

That average-26-hours business – have you had that audited?”

Pearson responds with one word; “Absolutely”.

Holmes askes a follow-up question; “By who?”

Pearson answeers, simply, “Ernest & Young

Holmes’ response; “Right, Ernst & Young.

Pardon? Holmes accepts the response with anaffirmation, as if Pearson answered a quizz problem correctly? (The only thing missing was a “Well done, old chap!”!!

Then, next question, “Right, Ernst & Young. Do you want that union off the port? Was that the game all along? ”

Pearson responds with an astonishing, “Not at all. We like unions. We’ve got unions already working on the port. In the outsourced model that we have with the stevedore contractors, they will have unions working for them. ”

Pearson “likes unions”?!  At this stage, Holmes should have followed up with a question seeking clarification as to how Pearson can “like” unions when his Board has failed to come to a negotiated settlement;  sacked 300 workers; and paid tens of thousands of dollars in full-page newspaper advertising.

But Pearson major slip was, “…we have with the stevedore contractors, they will have unions working for them. ” Unions do not “work for” companies or contractors – unions work for their members.

The following exchange also seemed to be little more than “patsy” questions,

PAUL So can you sit here this morning and say to us that you’ve negotiated in good faith?

RICHARD Absolutely, and I’ll give you good evidence of that-

PAUL Well, Mr Parsloe said you had fish hooks everywhere.

Pearson replied with a glib answer stating that “we have abided by all rules, regulations and fairness”.

Again, no follow up question.

At this point, Holmes should have questioned Pearson about the leaked memo from POAL which outlined, months in advance,  POAL’s agenda to oust Union presence on Auckland’s wharves.  Holmes made no reference to that damning document, and instead went off on a tangeant about productivity levels on other ports.

Towards the end of the “interview”,  Pearson again slips up, when he states,

Paul, that is absolute nonsense. People talk about waiting by the phone, etc. Ships are on schedules. 90% of all the ships that come into the port are on their schedule, on their slot, within one hour of ETA. We know months ahead. We can actually plan shifts weeks and weeks ahead. It is absolute nonsense to say that, and all I could also say is talk to the people at Tauranga. They’re quite happy. Everything works well. “

That statement is a flat-out contradiction of Pearson’s earlier assertion, at the beginning of the interview, where he makes the claim that,

Well, from my perspective, Paul, I came into this situation, and I’ve been 37 years in the container port business and ports all around the world. I have never seen such a waste of resource going on here. I have never seen a situation where you pay someone for 43 hours and they work 26. I’ve never seen a situation where ships wait to come in to start waiting for the start of a shift. You know, that’s like aeroplanes flying around waiting for– “

On the one hand, Pearson claims that “I have never seen a situation where you pay someone for 43 hours and they work 26. I’ve never seen a situation where ships wait to come in to start waiting for the start of a shift” – and then goes on to contradict that claim by stating that “Ships are on schedules. 90% of all the ships that come into the port are on their schedule, on their slot, within one hour of ETA. We know months ahead. We can actually plan shifts weeks and weeks ahead“.

5. I think we know where Holmes’ allegiance lies.

Then we had the interview with Auckland Mayor, Len Brown, which seemed to ask more probing questions than with Pearson, and delved deeply into the Mayor’s motivations. Which is ironic really, as Pearson would have had more to do with, and deeper  insights into, the dispute than Brown would have.

Holmes was asking the wrong person the hard questions…

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Q+A: Transcript of Paul Holmes interview with Len Brown

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Auckland Mayor Len Brown

PAUL How much responsibility for these redundancies at the Ports of Auckland lies with the mayor and

the council?  Ports of Auckland is owned by the council via its investment company, Auckland Council Investments Ltd, and the council’s told the port to double its dividend from 6% to 12% over the next five years.  The Maritime Union says the mayor should step in as mediator.  You heard Gary Parsloe say that.  Labour, Mana and the Greens have also called on the mayor to take a stand.  Len Brown, the mayor of Auckland, is with us this morning.  Good morning.

LEN BROWN – Auckland Mayor

Morning, Paul.

PAUL Is it your fault 300 men have been made redundant?

LEN  No, but I certainly can’t be accused of not making a stand.  Over the last eight months, I’ve been working within the framework that I can.  I won’t run the port out of my office, but I have been dealing with both parties during the course of this discussion.

PAUL Well, can I say the perception is you’ve been doing nothing?

LEN  Well, you know, as I say, there are some things that I can do and I will not run the port out of my office.  I will say to you, though, for the last eight months, I have been giving direction, giving my view in terms of where they should be, and I wanted to see the resolution out of a collective.  They have not got there.  I’m not happy with that outcome.  What I am here to say is that-
 
PAUL I heard you say to me- Did you say-?  Could the union have settled earlier, do you believe?
 
LEN  Of course.

PAUL Yeah.

LEN Absolutely.  They could’ve settled on the first offer.

PAUL Yes. 

LEN  And that’s past in history.  What is now possible is my view is I am happy to continue to be in the position of providing mediation if both parties agree.
 
PAUL Well, it hasn’t worked so far, has it?
 
LEN  No, but-

PAUL Why hasn’t it?

LEN  But that offer-
 
PAUL Why hasn’t it?

LEN  Because-
 
PAUL Why hasn’t mediation worked?
 
LEN  Every time they sat down, their view to me- both parties’ view is we’re really close.  In fact, Gary was saying to me, ‘On Thursday we think that we are going to deal with this and finish it.’  So every step of the way, the indication had been was that they were going to resolve.

PAUL Whose side are you on?

LEN  I’m on Auckland’s side.
 
PAUL Yes, but-

LEN  And by that, I mean that we are the 1.5 million Aucklanders, we own the shares, and as a consequence of that, I’m looking after their interests.  I want that port to be successful.  I certainly want a greater return on our investment-
 
PAUL Let’s talk about that shortly, but I wondered about your position because you have said and I quote you, ‘We deserve a port that’s competitive, a decent return for ratepayers and a settlement that is sustainable.’  That sounds like the port’s position, Mr Mayor.
 
LEN  No, it sounds like our position – our position, the council’s position and the position of any Aucklanders.  Look, my commitment during the campaign was not selling the ports; we will hold the port shares.  Secondly, we wanted the ports to be more commercial and present a much better return for ratepayers.

PAUL And that return, of course, the figure that you’ve come up with is you want an increase from 6.3% I think it is at the moment.

LEN  Yeah.
 
PAUL After tax.

LEN  12% over five years in terms of return on investment.
 
PAUL Where did you get the 12% from?  Pluck it out of the air?
 
LEN  No-

PAUL There’s not a port in Australasia, Mr Brown, making 12%.

LEN  So our view was, though, that the port was not performing as well as it was.  Now, you’ve heard Mr Pearson say it’s an aspirational target.  What we’re saying to the port is this is our view.  We believe as a consequence of the assessments that we’ve done within the  council-
 
PAUL Well, how firm are you on this?  Have you laid down the law on the 12%?

LEN  We have given it to them in our statement of corporate intent.  Right at the start of the year, I went down to the port, met all the workers and the employees and the company directors down there and said, ‘Right, this is what we’re expecting from the port.’  And we had an hour’s Q & A-
 
PAUL This is what we’re expecting.  Is this-?  I mean, were you laying the law about the return you want in five years – 12%?
 
LEN  We were laying down the law in terms of what we expected from the port in terms of its return and in terms of its performance generally.

PAUL Where did you get the 12%?

LEN  So, the 12% was an estimate, a view that certainly I’ve been working on for right through the last sort of 18 months, two years.  It was view that was discussed our own table with the officers, with our own council-
 
PAUL So it’s a guess?  It’s a good guess?

LEN  No, it’s an estimate.
 
PAUL (laughs)
 
LEN  This is what we think we should be aiming to achieve.  And so we went back to the company and said, ‘Okay, this where we think you should be.  What is your advice back to us?’  Their advice was, ‘Give us five years and we believe that we can receive that.’

PAUL Well, excuse me, look at this.  Okay, 12%, that’s your estimate – guesstimate.  Tauranga returns 6.8%, Lyttelton 8.6%, Sydney 6.7%, Melbourne 3.1%, Auckland 6% — 6.3% after tax.

LEN  So not just about return either-
 
PAUL Where’s the 12% being made anywhere?

LEN  It’s about competitiveness against other ports.  So we are losing share against Tauranga.  We are competing flat out against Brisbane, in particular, and Sydney.  It was our desire that we wanted the port to be much much stronger in terms of its-
 
PAUL Do you endorse what Mr Pearson was saying about he cannot believe the waste of resource at the Ports of Auckland?
 
LEN  Look, there’s a whole lots of things that we cannot believe about the performance of the Ports of Auckland, so it just was not about-

PAUL Can I just say to you again-?

LEN  a stronger return on investment.
 
PAUL Can I just say to you again there is a perception that you’ve abnegated leadership, that you’ve been a do-nothing mayor?  For God’s sake, you are the mayor of Auckland, Ports of Auckland is owned by the people of Auckland, you are the boss.  Harry Truman – you might remember the story – had a little thing on his desk that said ‘the buck stops here’.  Why don’t it stop with you?

LEN  The buck does stop here, but I’m also the mayor of the city.  I’m not the prime minister.  I don’t have sovereign power, so I’m operating within a statutory framework, and I’m doing the very best that I can within that statutory framework.
 
PAUL And very quick, Mr Mayor, is it all over bar the shouting?
 
LEN  No.  What I’ve said to you today is that my offer today is that I’m happy to sit with both parties in agreement in a mediator process if they are prepared to continue to meet and deal with the-

PAUL He says it’s all over bar the shouting – Mr Pearson.

LEN  Mr Pearson is the chair of the board; this is my offer right here in front of you.
 
PAUL Mr Len Brown, mayor of Auckland, thank you very much for your time.

LEN  A pleasure speaking to you today.

Source: TVNZ Q+A

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The Maritime Union has welcomed Len Brown’s offer of mediation, as stated on ‘Scoop‘,

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The Maritime Union has warmly welcomed an offer of mediation from the Mayor of Auckland Len Brown, and the Anglican and Roman Catholic bishops, made publicly over the last two days.

Today on current affairs programme Q+A the Mayor said he wanted to step in to the dispute between the parties to find a solution.

“The Mayor’s offer in particular is extremely important as the Council is the owner of the Ports, and we believe it is now being wrecked by the Ports board,” said Garry Parsloe, Maritime Union of New Zealand National President.

“We will meet any time any day with any decent offer to get this issue resolved”.

On Friday Anglican and Roman Catholic bishops in Auckland offered their leadership in a spirit of reconciliation to help resolve the dispute.

The bishops said they were concerned for the welfare of workers and their families, and for the future of the waterfront industry, and that they were willing also to work with city leaders to find a solution.

Garry Parsloe said the bishops’ offer was a generous one.

“We’ll warmly welcome the help of the Anglican and Roman Catholic bishops,” he said.

“They have demonstrated they understand that at its core, this dispute is about people and their lives.”

“Our deep concern during these negotiations has been the impact the proposed changes from Ports management would have on our members’ job security and their ability to prioritise time with their families and other commitments outside work.”

“It is in the interests of everyone in Auckland to resolve this dispute in a way that protects secure jobs and ensures a sustainable and successful Ports of Auckland.”

“We hope Ports management will take kindly to the offer also, and respect the role of the Council as the owners of the Ports and the importance of the offer from the Mayor,” Garry Parsloe said.

Source: Scoop.co.nz

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Unfortunately, the Board of POAL – which now seems to be a rogue entity and a power unto itself, has flat out rejected Brown’s offer of mediation,

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But Ports of Auckland chairperson Richard Pearson says it is too late for that.

He says the decision to outsource the stevedoring contractors has already been made and implemented.

“They are already appointed and we cannot go back on that, that is irrevocable”, he says.

Mr Pearson says he would like the mayor instead to persuade the workers to apply for the new roles.

Source: Radio NZ

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WTF?!?! What did we just hear???

Did Richard Pearson just tell his boss, Len Brown, “No, I’m not doing it”?!

This in a bizarre state of affairs; the Chairman of the Board of POAL has just told the Mayor of Auckland – which owns POAL – to naff off !!!

As I have maintained in previous blogposts, POAL is out of control.

I think we now have the proof we need.

Auckland City Council must take firm action at an upcoming meeting on Thursday,  which I am informed by someone closely connected to events – will have a decisive outcome to events.

Crunchtime: 15 March.

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Additional

Ports of Auckland Labour Strategy (leaked memo)

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Unfortunate Outrage?

9 November 2011 13 comments

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It seems that practically any criticism of our Dear Leader, these days, elicits a critical response from certain quarters. Robyn Malcolm’s remarks at the opening of the Greens’ campaign have been described by the NZ Herald, as “vitriolic”,

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Full Story

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The NZ Herald article carries on with similar comments,

But fronting the campaign opening in Wellington, Malcolm savaged Mr Key’s performance.” – Ibid

Robyn Malcolm’s comments consisted of the following,

“”We have a leader who seems to be more interested in talking about his cats on the radio, being seen at the rugby and getting on the cover of the Woman’s Weekly. I thought that was my job…”

“We ended up voting in a Government who’ve revealed their total lack of interest in leading us into the 21st century with any innovation, courage, or social integrity, despite what a nice guy he [Mr Key] seems to be…”

“An unshakeable and abiding love of fossil fuels … and an inability to follow through on promises of any kind, but will make anything up for a Hollywood mogul should they happen to come down this way…” ” – Ibid

Ms Malcolm’s comments are critical, certainly. Hard-hitting, probably.

But “vitriolic“? And “savaging“?

These are subjective interpretations – opinion – not impartial reporting. To some people, Ms Malcolm’s remarks would be harsh. To others, they would be fair comment. The determination of how we,   the public, might feel about her statements should be left up to us to determine – not prompted by a media report.

Gordon McLauchlan, on Jim Mora’s Radio NZ afternoon panel, made precisely the same pertinent observations and criticised  the Herald’s slanted reporting of this event.

One wonders how it came to pass in this country, that an ordinary citizen can be vilified in such a manner by the press, for daring to criticise our elected representatives. This sort of thing was more common in my parents’ country-of-birth, prior to the collapse of the Soviet empire.

As an aside; I heard most of Ms Malcolm’s speech on the radio.  I was driving at the time, so wasn’t paying much attention. What I can recall is that she was certainly critical of John Key and his love-affair with photo-opportunities – but certainly did not sound anywhere near “vitiriolic”. Quite the opposite, I considered her words and tone to be quite measured and reasonable.

If anyone has been “savaged” – it is Robyn Malcolm by the unreasonable editorialising in the Herald’s article. The tone and wording of that article is truly, vitriolic.

What is just as bad, is the outrageous hypocrisy shown by Auckland City Councillor, Cameron Brewer, who joined in the hysterical condemnation of Ms Malcolm. Brewer was reported in the same newspaper (NZ Herald) as saying,

Given Robyn Malcolm is clearly so anti the Government and the Prime Minister, she is far too partisan to front this all-important public consultation and plan . Her personal politics will really colour this council and the plan itself. It is just not appropriate in local government to employ someone whose politics are so pointed to be fronting a public consultation campaign.” Source

Brewer has demanded that Ms Malcolm be replaced because of her perceived partisanship, saying,

The mayor now needs to urgently reconsider whether she is the best ambassador to launch the plan.” – Ibid

Is this the same Cameron Brewer who recently considered seeking the  candidacy for the National Party in the Tamaki electorate?

Why yes, I believe it is.

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Source

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So, let’s be quite clear about what Cameron Brewer is saying;

  • Voicing comments that are anti-government and  critical of John Key makes it  “inappropriate” for Robyn Malcolm to be connected with an Auckland City Council project because she could be seen as “partisan”,  is not acceptable.
  • Supporting the current government and intending to stand as one of their candidates, whilst being a member of the same Auckland City Council, is not partisan and  is acceptable.

My parents came from an Eastern European country that, prior to 1989, had been ruled by the local Communist Party. The power and influence of the Party reached into all areas of public life.

For example, if, as a teenager, you wanted to go to University then you had to be a member of the youth wing of the Party, the “Young Communists”. If you wanted a good job, you had to be a full member, in good standing, of the Communist Party.

I think we know where I’m coming from on this issue.

In essence, for Brewer to accept Robyn Malcolm as the representative of Auckland’s Waste Management and Minimisation Plan, she must be a card-carrying, Key-cuddling, member of the National Party.

Thank you, Comrade Brewer, for showing us how little you value political diversity of opinion.

Will you be following up with a One-Party state and Gulag prisons for dissidents such as Ms Malcolm?

And me next, I suppose?

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What killed Rugby?

11 August 2011 26 comments

We all know the saying about killing geese that lay eggs made of precious metals… But the the lesson seems to have firmly evaded those who organise rugby in this country, and indeed, worldwide.

It seems that huge truckloads of cash has severely blinded the IRB and NZRU to what this game should be about;  enjoying rugby.

Instead, it has became an exercise in marketing, ticket sales, squashing anyone who wants to sell pizza, and branding. It’s all about money, money, and more money.

Firstly, common sense has eluded the mind of Rugby World Cup minister Murray McCully, who okayed the use of cans at all rugby venues.

Up till now, beer had been served in featureless, light, disposable plastic cups. This was to prevent cans and bottles being used as unguided missiles by intoxicated rugby fans.

But Heineken is a major sponsor, and they want their brand prominent at all 13 games. That means selling cans, with the brand-name ‘Heineken’ clearly visible, instead of the safer, unbranded, plastic cups.

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So what Heineken wants, Heineken gets: cans.

Never mind if  someone is injured by drunken hoons tossing cans. That evidently doesn’t matter. Evidently what matters is branding. Heineken wants you to know that the can that flew across the bleachers and concussed you was a Heineken – and not one of their competitors. This is important – so please remember to tell the medics when they arrive to treat you.

Money speaks with a very loud voice.

Then, in April, we heard the unbelievable situation that RWC fans will only be able to use cash, or mastercard (another sponsor) eftpos terminals at the games’ stadia.

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Evidently a third form of payment will be available; “Tap & Go” cards. But these are not re-chargeable and fans will have to pay $5 to $10 for each new card.

So expect your method of payment to be controlled.

Though I’m surprised the WRC organisors haven’t tapped John Key on the shoulder and asked for a law change. At present, cash is the legal tender of this country. Imagine if the IRD/NZRU could deny fans the right to use cash.

Though I guess the government could always re-print our currency, with an WRC sponsor’s name on each bill. Why not? They’ve already shown a willingness to change our laws for other corporations.

Perhaps the worst example of greed is local bodies charging extortionate amounts for local businesses to amend their hours to cater for the influx of rugby fans.

For example, “to open later on game days, Papa’s Pizza and nearby businesses will have to pay between $7500 and $12,800 to a special Rugby World Cup “enabling” authority to hurry up the usual resource consent process.”

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“Enabling Authority”? More like a local protection racket! But all quite legal according to the Rugby World Cup 2011 (Empowering) Act 2010, Part 3.

What a money-extorting piece of legislative bureacracy this is!!

And all enacted by a National Government that constantly harps on about how bureacratic “red tape” is strangling entrepreneurial business in this country.

So what gives with the Rugby World Cup 2011 (Empowering) Act?!

If this isn’t political interference in little business – then someone tell me what is?!?!

Auckland Council licensing and compliance manager Carole Todd admitted that costs to applicants for Part 3 approvals were “fairly high”, and said that,

“However these charges are set down in regulations and cannot be modified.”

The Ministry of Economic Development administers the Act.  Ministry senior solicitor Robert Rendle said,

“There are going to be a lot more people in Auckland who are going to be frequenting bars so it might be financially beneficial to pay the cost.”

In other words – pay up, schmuck! Or Luigi over there will put the heat on ya, reallll good.

Perhaps that is not as cheeky as Heineken/DB Breweries secretly reducing the size of their beer  glasses from 425ml to 400ml – whilst keeping the price of each pour the same. So 25ml less beer – for the same price. DB has also increased keg, Heineken, Export, Tui, Monteiths and DB Draught tap prices.

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It seems that milk drinkers aren’t the only ones being milked in this country. Although the irony here also hasn’t escaped me; we were expecting to “swindle” overseas visitors with high accomodation charges – not be rorted ourselves.

In answer to media questioning, DB Breweries’ hospitality general manager Andrew Campbell said,

“In light of events in Christchurch, and in recognition of the challenges many operators are facing in this recessionary environment, we decided to delay our price increase [from April 1] until June.”

They’re blaming price rises and furtive reduction in glass sizes on the earthquakes in Christchuurch???

WTF???

Well, I guess that makes a change from blaming sunspots, I guess.

And of course, there will be special “Sponsor Police” roaming the country, looking for anyone daring to “cash in” on the WRC without “authorisation”, or to prevent “ambush marketting”.

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Economic Development Ministry solicitor Rob Rendle said there were no plans to set up special courts in New Zealand, to catch and prosecute unauthorised business activity although it could be appropriate to have judges on call to consider urgent matters that came up. “It’s just a possibility at this stage.”

Special courts? Oh, perish the though, Rob. Just summary execution out the back of the Stadium.

There.

Sorted.

Are we having fun yet, peeps?

In case not, even those offering free, humanitarian assistance are being targetted by the vengeful alien fiends that currently pose as human beings running the WRC.

I refer to the St Johns ambulance service (the humanitarian assistance – not the vengeful aliens).

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Yes, my fellow kiwis, the WRC organisors have “leaned” hard on St Johns – forcing them to cover up the sponsors of their ambulances, equipment, and clothing that may have been sponsored by community groups or business organisations in this country.

St Johns is a charity that relies on the generosity of businesses (such as the ASB) so they can go out and save lives.

St Johns is not a business itself.

St Johns has not charged a blimmin cent (that I know of) to the WRC for their services.

In return, to show their gratitude, the WRC have demanded that St Johns cover up the ASB logos of their sponsor. That’s pretty damned low.

If I’d been St Johns, I would have politely told the WRC to go take a flying leap into White Island, and hire their own medics and ambulances. Let the NZRU pay for emergency services if they’re going to be so miserly.  At the very least, I expect NZRU to make a very generous donation to St Johns for all this carry-on.

And when I say “generous”, I’m talking six figures, minimum.

What are the chances? Well, judging by the common sense and generosity of spirit shown by the WRC and sponsors… Nil.

Contemptible.

Perhaps the most bizarre of all this naked greed; shameless price gouging; and merciless strong-arm tactics is this,

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To quote the NZ Herald, to show I’m not making up this farce;

“Heineken is keeping a close watch on Lion Nathan after its Steinlager “white can” advertising campaign inched near to breaching its Rugby World Cup rights.

And the brewer – represented by DB Breweries in this country – is confident World Cup rights managers IMG will blow the whistle if its future ads go too far.

Heineken is an official sponsor of the tournament at a global level, while Steinlager is a sponsor of the All Blacks team. This means it can use its association as the All Blacks’ official beer, but it can’t claim any association with the Rugby World Cup.”

Both Breweries are sponsors – but they sponsor slightly different aspects of the event. I can’t even begin to tell you how utterly absurd this situation is.

Not content with harassing fans or small businesses, even the sponsors are beginning to cannibalise and consume each other?

Which brings us to the present, and current debacle,

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Perhaps someone from On High can explain to me, and to 4.4 million other New Zealanders; how did we get to this?

How did we get to a situation where a foreign corporation now owns the clothing rights to a  “brand” that is one of our  most cherished institutions (the All Blacks – in case you had forgotten what this was all about – and I bet you had!) and can sell goods back to us with that “brand”, at exorbitantly high prices?!?!

Of course, I guess this was inevitable, really. We’ve been busily selling off our state assets, businesses, and farms to all and sundry – and then buying back the products/services that we once produced ourselves.

I bet it was only a matter of time before it happened to one of our most iconic institutions.

How did it get to this?

The answer is idiotically simple. We allowed it to happen. Because, truth to tell, my fellow New Zealanders – sometimes we are none-to-bright when it comes to dealing with big companies apparently offering us truckloads of money.

Oh, for the simple days, when rugby was rugby, and sponsorship consisted of a few plastic-corflute boards placed around a playing field.

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We have well and truly given away our innocence. That, folks, is what killed rugby.

Are we having fun yet?

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+++ UPDATE: More RWC Silliness +++

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Full story

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Copy of sign seen in Greater Wellington Region, erected by supermarket. Clever buggers! (Sign’s corporate colours and company name have been redacted. This blog has no wish to assist RWC “sponsorship police”.) Note the blackened-out rectangle – what could that possibly signify?

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Further Reading

Tew threatens to pull out of next World Cup

NZRU boss Steve Tew lobs a grenade at the IRB

Aussies back NZRU over World Cup complaint

NZ must reap what it has sown over World Cup

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