2016 ROGER AWARD FINALISTS NAMED – Worst Transnational Corporation Operating in Aotearoa/New Zealand

The six finalists for the 2016 Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand are:

Bathurst Resources
Coca Cola
IAG/State Insurance
Uber
Westpac
Youi

There are two nominations for the Accomplice Award section – Talley’s, in partnership with Bathurst Resources; and the Government, specifically for its cheerleading role in championing the Trans Pacific Partnership Agreement (TPPA). There was also a clever nomination for the Government as corporation in its own right, which we will leave to the judges to rule on.

Bathurst Resources, in partnership with Talley’s, which is a contender for the Accomplice Award. Both these companies are first time Roger Award entrants but highly deserving ones. The Bathurst nominator summarised it thus: “for expanding (in association with Talley’s NZ Ltd) coal mining in NZ in defiance of NZ’s commitment to the Paris Climate Change Accord”. And detailed how the nomination met the criteria:

“Impact On People: In expanding coal mining on the West Coast by taking over Solid Energy’s Stockton mine (and two more in Waikato), as well as the planned Denniston mine, Bathurst claims to be acting in the best interests of West Coasters, whereas in effect they are taking Coasters down the eventual dead end development of a polluting industry. It’s also hardly people-centred to be in partnership with Talley’s, reportedly NZ’s worst employer”.

“Impact On the Environment: As Coal Action Network & Forest & Bird have pointed out, Bathurst is already putting fragile and unique ecosystems at risk through planned open cast escarpment mining on the Denniston Plateau. In addition to adding to environmental pollution by taking over Solid Energy’s Stockton mine, Bathurst plans to apply to mine in an adjacent conservation estate and has been assured by the Crown that ‘Environmental Indemnity Funding’ is available to Bathurst as it was to Solid Energy to enable local authorities to ‘cap any environmental claims at the indemnity level’ (Press, 1/11/16)”.

“Political Interference/Influence: The above reference to ‘Environmental Indemnity Funding’ indicates that intense pressure was brought on the Crown to extend the most favourable terms possible when negotiating the sale of the insolvent Solid Energy mines to Bathurst. The Government was prepared to do this despite widespread concern that it was abrogating its’ commitment to the Paris Climate Change Accord. The partnership with Talley’s will require Overseas Investment Office approval as Bathurst is a Singaporean and Australian-owned company, but such an approval is a foregone conclusion”.

“Economic Dominance: ‘We will not be compromised, nor will we be hidden’ boasted Bathurst Chief Executive Officer, Hamish Bohannan, back in March 2012 at the opening of its’ new corporate offices in Wellington, an event attended also by PM John Key and other MPs. Now with the acquisition of Solid Energy’s Stockton mine, Bathurst will surely become the economic Caesar of the West Coast, subordinating all to their whims and manipulations and in particular taking Westport down a one-way no-exit street of economic non-sustainability and eventual demise. Changing the listing of the company’s shares from the NZ to Australian Stock Exchange also enables Bathurst to be a little more non-transparent to NZ investors and commentators”.

Talley’s. The nominator wrote: “The technical justification for an award to a New Zealand company not itself directly controlled (in terms of the legal definition) by an overseas corporation or government is that it assists such an overseas organisation in penetrating the New Zealand economy and/or polity. Such accomplices are classic examples of comprador capitalism Thus; Talley’s joint venture with the notorious Bathurst mining company… must surely make it a suitable candidate for the Accomplice Award”..

“Increasingly, successful ‘New Zealand’ enterprises seek themselves to behave vis-à-vis other countries exactly like foreign enterprises investing here. If we oppose foreign investment here, how can local investment in other countries be acceptable? In essence, it is capitalist globalisation that needs to be opposed, and attacking its most prominent attribute – foreign control – and its local confederates and accessories is a useful tactic. But no more than that. And it does not absolve us of the responsibility to attack local capitalism equally. Because there is little that is noble or democratic or environmentally preferable or with better labour relations about local capital either. Talley’s is a supreme example of that”. The evidence accompanying Talley’s nomination detailed its appalling record towards its workers, unions, climate change and a whole range of subjects.

Coca Cola had also been a finalist in 2014. This time the nomination was entitled “Taste The Feeling & Take The Money”, and was for Coke’s impact on people “and perhaps economic dominance”. Some extracts: “By persistently peddling high sugar drinks that can be addictive, Coca Cola Amatil is undermining the health of many New Zealanders and contributing to increased costs to the health budget. Money buys good marketing and Coca Cola has once again led the way in a clever combination of funding community events and deals with sports celebrities”.

“Most of its 25 products cause physical harm to people’s health when regularly consumed. The company is actively contributing to rising levels of ill health and the need for increased funding for the treatment of disease like diabetes. To a lesser degree it fits the economic dominance category – along with Frucor (owned by Suntory Group, a leading Japanese food and beverage company) it dominates the NZ beverage market”.

“Coca-Cola may have funded Christmas in the Park, paid for Mahé Drysdale’s gold medal rowing efforts as a Powerade ambassador at the (Rio Olympic) Games and basketballer Steven Adams as another promoter of Powerade, but it does not take away from the facts that it is peddling sugar and ill-health. Earlier this year in a submission on an Advertising Standards Authority review, the Nelson Malborough District Health Board called for an end to sponsorship deals between sports teams and junk food giants”.

“Dr Rob Beaglehole said they were the number one source of sugar in the diets of New Zealand children, contributing to the incidence of tooth decay, obesity and type 2 diabetes as well as other health problems. ‘It make sense for me to turn the sugar tap off in order to save these kids’ teeth’, he said. Beaglehole used anecdotal stories that showed the cultural sway of sports heroes like former All Black captain Richie McCaw who drank Powerade”.

“The nomination seeks to highlight the harmful effect of sugar-sweetened beverages and the increased incidence of obesity related diseases such as diabetes and serious tooth decay including amongst Maori and Pasifika peoples. Seven per cent of New Zealanders have diabetes and one in five adults are at risk of getting it. 10% of Maori and 15% of Pacific people have diabetes. Many people do not realise the potential harm from Coke. One man reported his heart scare to a reporter. Beverage manufacturers have collaborated with supermarkets and others to make these drinks cheap and easily accessible. Something that was once a ‘treat food’ is now a drink that significant numbers of people drink in comparatively large quantities every day”.

“Who is to blame for the overconsumption of unhealthy beverages? An emphasis on individual choice, the use of celebrity sports people as sponsors, a highly successful global brand and lack of Government policy have enabled Coca Cola to increase market share and corresponding profits. The costs of overconsumption are borne by the public. Effectively Coca Cola and other sugar-sweetened beverage manufacturers have increased consumption of cheaper unhealthy products to a level that has raised growing medical concern”.

“When a brand is as strong as Coca Cola, those who are associated with it have immediate recognition. At the global level it has destroyed local drink manufacturers, used up valuable water supplies and created a homogenised culture in most countries. You can taste the feeling – a successful transnational corporation purveying harmful sugar and caffeine but hiding its costs and the damage such activity does”.

IAG/State Insurance is the defending champion, having won the 2015 Roger Award and is a finalist for the fifth consecutive year, which will be no surprise to anyone who has lived in Christchurch since 2010. It was nominated this time for impact on people. “Six years after the Christchurch earthquakes started the insurance transnationals (of which IAG/State is by far the biggest) are still making life hell for a significant number of Christchurch people. IAG/State is far from alone in this but it is the biggest and some of its practices are the worst”.

“In 2016 State has been repeatedly hammered in the Christchurch media for its sheer pigheadedness in one particularly egregious case – that of Sumner’s Cave Rock Apartments. One Press headline (13/8/16) says it all: ‘Elderly Die In Wait For Settlement’. This is a transnational corporation which is literally solving the problem of having to meet its contractual obligations by delaying things until its customers all die. And insulting them in the process – see the Press article (17/8/16) headed: ‘Claimants “Stingy” – IAG Employee’”.

“The evidence is not all about one block of flats (although it is all about Christchurch). There is the case of the couple who took State to court and won amore than $700,000 for the rebuild of their home. There are the people still waiting for their homes to be repaired (‘They treated us like a couple of old fools’ – Press, 21/3/16, ‘Long, Lonely Wait For Quake Repairs Fix’), problems with the quality of work performed by the tradesmen contracted by IAG/State to do the repairs, etc, etc”.

“But this is not a matter of flogging a dead horse. Unfortunately this horse is very much alive and still in need of a damned good flogging. As has been said before in previous Roger Awards, what has happened, and is continuing to happen in Christchurch, sets a very bad precedent for what the rest of the country can expect from IAG/State and the other insurance TNCs in the event of a major disaster. The people of Kaikoura and Wellington need to be very afraid of what the future holds for them (and the huge number of Aucklanders who live in apartment blocks and other multi title units should hope that no natural disaster occurs in their city). The Christchurch experience continues to show that the “cure” of insurance is quite often worse than the sickness of earthquakes”.

Uber is another first time Roger Award entrant but a very worthy one, because it is touted as a prime example of the “new economy”, the “sharing economy” and, to use the cliche du jour, the “disruptive” economy. Actually it’s just the same old capitalist bullshit, only even more efficient in its ruthlessness. The nominator wrote: “Uber Technologies Inc, an American international technology company. Uber BV is owned by the Dutch company, Rasier Pacific VOF. They are the subject of ongoing protests and legal action from taxi drivers, taxi companies, and governments around the world”.

“Uber ‘arrived’ in New Zealand in 2015, planning to bust open New Zealand taxi services and passenger carrier laws. Called share-riding, trips can be booked through an app, on digital devices. Uber is paid directly and ‘pays’ its’ drivers weekly, minus commission, yet drivers are not employees, but self employed (so are required to pay their own taxes, GST, etc) Uber control the pricing and often have 20% reductions without informing drivers. Many drivers have reported making $* per hour after their costs”.

“Since its arrival Uber has made regular appearances in our media, mostly negative. Uber encourages its drivers not to follow the laws other passenger carriers abide by, such as not having a “P” endorsement. Not having commercial insurance; in fact, Uber drivers are told they only need third party insurance. Not correctly vetted. Vehicles are not visually checked to see if they are registered and warranted“. The accompanying evidence was a whole lot of 2016 media articles about Uber thumbing its nose at NZ’s passenger transport laws, ripping of its drivers, being the subject of taxi driver’s protest actions, and dodging taxes. For the details on how Uber dodges taxes, both in NZ and everywhere else, see Deborah Russell’s article elsewhere in this issue (“Tax Avoidance Is A Moral Issue”, specifically the sub-section “Finding Ways Around Tax Laws”).

Westpac is a recidivist Roger Award offender, having been a finalist several times (most recently in 2015), one of three equal runners up in 2011, and the joint winner in 2005 (with BNZ). In 2016 the nominator wrote: “Westpac has withdrawn services in 17* areas imposing loss of jobs on staff. Politically negative and economically threatening” (*it is actually shutting 19 branches). Westpac wasn’t the only Australian bank shutting rural branches in 2016 but it was doing it the most and was the most high profile offender. In the case of several of those South Island small towns, the people weren’t prepared to take it lying down e.g. there were very well attended public meetings and pickets in Fairlie and Ranfurly.

Central Otago’s Mayor, Tony Lepper, summed it up succinctly: “The Council will join the list of people who are disappointed that Westpac, who are making millions of dollars out of rural New Zealand, are abandoning a town 90 km from the nearest bank. We are happy to talk with then about alternatives but the best solution is a branch in Ranfurly” (Press, 23/8/16, “Maniototo Community Rallies To Fight To Retain Town’s Only Bank”, Jo McKenzie-McLean, http://www.stuff.co.nz/the-press/news/83115518/maniototo-community-rallies-to-fight-to-retain-towns-only-bank). Fairlie also stands to lose its only bank (not just its only Westpac branch). This demonstrates the contempt that Westpac displays towards its small town and rural customers, particularly the elderly ones.

Youi is a newie also but a richly deserving Roger Award finalist. The nominator wrote: “I nominate Youi for the 2016 Roger Award, for impact on people. Also for profiteering. And for straight out criminality (namely fraud and theft). It is a novelty for a Roger Award nomination of an insurance transnational (Youi is South African-owned) not to include the words ‘Christchurch’ or ‘earthquakes’. This has got nothing to do with either. There is nothing hard to understand as to why Youi is a richly deserving contender. On the contrary, it is very easy for ordinary people to understand what Youi did wrong. It is purely and simply the systematic defrauding of, and theft from, the public”.

“It’s all in the accompanying evidence. But it can be very easily explained here. Youi, uniquely, does not do business online. Very deliberately, they insist on everything being done over the phone. Once engaged in conversation, their call centre staff insist on being given the caller’s credit card details on purely spurious grounds. Once the company has those details, it starts taking money off the card or out of the caller’s bank account. Despite the caller not being a Youi customer or having taken out a Youi policy (this is the most egregious aspect of this corporate crime). The caller may simply have rung up for a quote for car insurance, decided not to join Youi and stuck with his or her existing insurance company.. But Youi, having got his or her credit card details, proceeds to start taking money out”.

“This scandal has not gone unnoticed or unpunished. Youi has pleaded guilty to 15 representative charges filed by the Commerce Commission (at the time of writing, the penalty has not been announced). Plus it has been fined $100,000 (the maximum possible) by the Insurance Council of NZ, of which it is a member (and has been allowed to remain so). I have included evidence that is from overseas (Australia) and outside the 2016 Roger Award time period (an NZ Herald article from March 2015)”.

“Both provide vital context – the Herald article (‘Insurance Company’s Sales Tactics Shocking, 15/3/15, Diana Clement) alerted the world to what Youi was up to (they took $590 off her Visa card without her permission). The extremely detailed Sydney Morning Herald article (‘Does Youi Owe You? Insurer Accused Of Billing Without Consent’, 28/8/16) cites that 2015 NZ Herald article and makes very clear that Youi operates this scam on a trans-Tasman basis. ‘In fact, the staff defrauding customers across the Tasman were trained in the tactics by Youi’s staff in Australia. The whistleblowers also claim Australia’s call centre actually made many of the illegal phone sales made in NZ’”.

“The reason for this systematic fraud is simple – Youi’s call centre staff are relentlessly pressured by management to make sales. The company practises every underhand trick in the book to extract the maximum amount of money from people, including those who actually are its customers. ‘But that quote is often more expensive than a competitor’s. So sales staff, the whistleblowers say, use every tactic they can to lower the premium and get the sale – including falsifying the policy. The most common trick is car colour. Youi charges more to insure red or black cars; because they are statistically more likely to be in an accident. To lower the premium, sales staff just put the colour in incorrectly’ (Sydney Morning Herald, op cit)”.

“This systematic criminal behaviour is becoming the “new normal” for Big Business globally (i.e. in the First World, not just in the Third World). Currently there is a huge scandal in the US involving Wells Fargo Bank having set up two million fake bank accounts and credit cards and then having charged the unsuspecting holders of these more than $US2 million in fees. The cause was the same as with Youi – relentless top down pressure on staff to make sales”.

“Wells Fargo has incurred $US185 million in civil penalties and its CEO resigned in October 2016. Rana Foroohar wrote in Time (12/10/16, ‘Why The Wells Fargo Scandal Really Matters [Hint: It’s Not Just the Fraud]’, http://time.com/4529054/stumpf-wells-fargo-fraud/?iid=sr-link1): ‘Let me be clear: I didn’t think he’d resign because the behaviour under his watch was egregious – that hasn’t stopped any number of other financial executives from staying in their posts’”.

“’But rather, I thought he would fall because the fraud in this case was just so easy for average people to understand. Spliced and diced derivatives contracts sold across borders to gullible counterparties? Huh? But straight up fraud – taking customers’ personal information and using it without their knowledge or consent – that’s something everybody can understand. And be justifiably outraged by’. So, what Youi did is not a one off, or ‘one bad apple’. It’s the new way of doing business. But it’s got a very old name – crime. And even worse for the spin doctors and bullshit artists of capitalism, a type of crime that ‘everybody can understand. And be justifiably outraged by’”.

The Government For The Accomplice Award. The nominator wrote: “Very specifically, it is for the Government’s role in championing the Trans Pacific Partnership Agreement (TPPA) to a much more extreme degree than any of the other 11 countries that signed up to it. The NZ government was the TPPA’s chief cheerleader for several years. This reached its natural conclusion in February 2016, when Key hosted the formal signing, in Sky City in Auckland. What more appropriate venue!”

“It goes without saying that the TPPA represented a charter for transnational corporate control over a significant percentage of the world’s people. And then, as it became overwhelmingly clear that the TPPA was doomed, that it would never be ratified because both US Presidential election candidates opposed it, the Government blindly pressed on with passing the necessary legislation to implement it in NZ. Even after Trump was elected and pronounced the TPPA dead as far as the US is concerned, the Government pressed on with its meaningless TPPA legislation (which wouldn’t come into law until the TPPA itself had been internationally ratified)”.

“’But Trade Minister Todd McClay said passing the legislation, which would allow the country to join the TPP, would be a sign to the world that New Zealand was a champion of trade liberalisation’ Radio NZ, 11/11/16,“Trade Minister ‘patron saint of lost causes’ on TPP” http://www.radionz.co.nz/news/political/317837/trade-minister-‘patron-saint-of-lost-causes’-on-tpp. That says it all really, doesn’t it? Plucky little New Zealand leading the world on the crusade to the promised land of Freetradia.

“Volunteering to jump off the cliff first while the rest of its ‘mates’ cheerfully look on. ‘We’ll jump first to set an example to the rest of you’. If there was a Roger Award category for political delusions, the Government would win it hands down. ‘The TPPA’s not dead – it’s just having a lie down. We’re right and everyone else is wrong. They’ll come to their senses soon enough’. Hoist with their own petard. Couldn’t have happened to a nicer outfit”.