Written By: - Date published: 10:27 am, May 13th, 2008 - 84 comments
Categories: climate change, economy, Environment -
Tags: capital strike, capitalism vs democracy, Rio Tinto
Multi-national minerals company Rio Tinto is threatening to close its Tiwai Point aluminium smelter in Bluff and move its production offshore if the Emissions Trading Scheme is enacted because they say it will increase power prices.
This is not the first time Rio Tinto has held New Zealand to ransom using the threat of closing this economic powerhouse of Southland. In fact, pretty much every year Rio Tinto threatens to pull the plug over something, whether it be power prices (Tiwai Point uses 13% of New Zealand’s electricity and gets it at a massively discounted secret price) its desire to buy Manapouri power station, (which supplies Tiwai Point with power) or tax rates (the 10% drop in the corporate rate that came on April 1 is already forgotten). Rio Tinto is making record profits as the world price for alumina sours – profits in the last four years total nearly $500 million – but it knows the Government can’t afford to let a factory that, directly and indirectly, employs 3000 people and brings around $500 million to the economy annually to close. So it keeps on demanding more.
This is a greedy, heartless company, that always wants more, and has a record of doing what it takes to get it. In New Zealand, they exploited National’s Employment Contracts Act to break the workers’ union. They are implicated in human rights violations across the globe including the support of apartheid, have illegally mined uranium in Namibia and their “security services” have engaged in mercenary work in support of dictatorships. The company started the Bougainville conflict when it used its political muscle in Australia and Papua New Guinea to get the right to dig the world’s biggest hole, the Panguna copper mine, on Bougainville. Locals objected to the rape of their land by Rio Tinto, others wanted the gold for themselves. A civil war ignited that cost 30,000 lives. Rio Tinto made hundreds of millions and moved on.
What Rio Tinto is trying now over the ETS is a classic example of capital holding democracy over the barrel. Capital is international; it can leave a country if it wants. Democracy is limited to competing nation-states that only have limited cooperation. So, if a country’s people want better wages, or taxes to pay for social services, or to reduce greenhouse gases and big business doesn’t like it, they can threaten that country’s government with a capital strike: ‘play by our rules or we leave, and you lose jobs’.
Well, I say Rio Tinto should fuck off. This is our country and we will make the rules here, not some soulless multi-national that is only out for itself. Rio Tinto can withdraw their capital but there will still be a state of the art smelter and trained workforce in Bluff. The smelter can be brought into public ownership and run by New Zealand, with the profits staying in New Zealand.
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[Tane: Bill, drop the smears and I won't delete your comments]
BB, this blog is funded by lprent (not the Labour Party), as you well know, which makes you a liar. And the number of beneficiaries has fallen significantly under Labour, as you also well know.
Your lies and innuendoes add nothing to this blog. Why don’t you go do something useful with your life? Go water your flowers or something.
Tane – If I madethat kind of smear over at K-blog at davey I would be banned for life. Time for BB to go?
Steve- have they followed through on any similar threats in the past when they didn’t get what they want?
Anyway… while I’d like to keep them, it’s ridiculous for them to hold the country hostage over excess profits- as Steve points out, this is a boom time for aluminium and I seriously doubt they can’t afford the ETS as proposed.
Has anybody mentioned yet that Rio Tinto bought the New Zealand iron ore mining company that had the concession to do the exploration to see if the Seabed mining of the West coast black sands was economically viable and that Rio Tinto is now being the subject of hostile take over bids from the Chinese Government amongst others. These big Corporations; it is all to much power in to few hands. And generally of people who don’t give a toss about local or indigenous people. The Bougainville civil war being a case in point.
What about Nationalising the smelter, it works for the Venezuelans.
Maybe let slip to a few journalists something about forced nationalisation. I dont believe for a second that National\Farrar\The Herald\the Talley brothers ect believe even half of thier propaganda, but it woudl send a strong singnal to the public of New Zealand about where the Government stands on corprate bullying, likely to be a big point of difference from National
They are without doubt bully boys. And have seen Paul Little’s success with the train set. There’s just one option…
call their bluff
killinginthenameof: National has already taken much the same line as Labour in response to Rio Tinto, so that view is unfounded. In fact, consensus appears to be that Rio Tinto overplayed its hand on this one.
L
I’ve crunched some numbers, and we would be $26 million a year better off if Rio Tinto carried through on their threat and pissed off. And that’s using their own figures for economic benefit.
The full petard-hoisting is here.
As I said it works for the Venezuelans
http://rawstory.com/news/afp/Chavez_nationalizes_biggest_steelma_05122008.html
Lew I’d say that’s the consensus now. It wasn’t the consensus from Monday night through Tuesday afternoon.
(Captcha: “blackmailer chant” – yep, that’s Rio Tinto’s submission alright)
The full petard-hoisting is here.
Nice – very nice – and you address the jobs issue too.
Hope you don’t mind Idiot/Savant but I linked your article to my blog.
I liked it and I hope it gets more exposure that way.
> Well, I say Rio Tinto should fuck off.
Strong words from a bishop. I don’t even live in Southland but I hope you don’t get your wish.
With regard to nationalisation I doubt that smelters have quite the same appeal to Dr Cullen as he has shown with his trains. But perhaps Rio Tinto could propose aluminium trains as an energy saving measure. The Audi S8 looked quite cool in aluminium.
After the smelter, I think farms should be next. Those farmers think they own the country, and all that farting isn’t good for the planet. How about it?