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This is what corporate dictatorship looks like

Written By: - Date published: 12:45 pm, May 14th, 2013 - 28 comments
Categories: accountability, activism, capitalism, democracy under attack, greens, john key, Metiria Turei, overseas investment, same old national, slippery, Steven Joyce, trade - Tags: ,

Since Joyce’s and Key’s announcement yesterday of the dirty SkyCity deal, there have been  some well informed responses, indicating just how un-ethical and anti-democratic the deal is.  There have also been responses from people with law backgrounds that support the Green’s position that a future government can legislate to remove the proposed dodgy compensation legislation that is part of the deal.

Laila Harré posted on the Daily Blog today, providing clear statistical evidence of the damage that will result from SkyCity’s increase in pokies and gambling tables.  She quotes evidence that shows pokies are the most damaging form of gambling addiction, followed by casino table and card gambling.  Harré applies this evidence to the Sky City deal, which will entrench the gambling harm for 35 years:

Goldman Sachs estimates the extra gambling opportunities promised under yesterday’s deal will generate an extra $42 million profit for Sky City a year – a 30% increase on last year’s $142 million.  …

Sky City’s owners are looking at a 10%+ return on the new investment (the capital costs of the convention centre are set at $402 million under the heads of agreement). My back of the envelope calculation says 2012 profits based on current market capitalization equal 5.4%. No wonder investors boosted the share price by 3.4% yesterday.

Yesterday, law professor Andrew Geddis made the point on the Pundit Blog, that the laws of the market are not the same as those of politics:

However, if you want Parliament to be sovereign enough to (say) turn Christchurch into Gerry Brownlee’s playground, then can you really complain when it starts messing about with deals Governments have made in the past? Furthermore, since when did Parliament acting in breach of individual rights really matter all that much? Finally, if investors want to make money off something as morally controversial as gambling, then don’t they need to accept that there’s an extra degree of risk attached to it; and anyway, isn’t there something faintly ironic about a gambling company complaining about the House of Representatives fixing the odds in its own favour?

Yesterday evening on RNZ’s Checkpoint, constitutional lawyer, Mai Chen said that the legal position is,

that parliament is sovereign, and therefore if you pass a piece of legislation that says that there will be compensation if a future government changes – the promises that have been made to SkyCity – that a future Parliament can change that law back  to saying that there will be no compensation.

She goes on to refer to the fact that “statute over rides contract” as part of the “doctrine of Parliamentary sovereignty”.  Chen says that SkyCity is taking a big risk with this deal.

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Chen refers to Jane Kelsey’s statement about the fact that the TPP could result in a potential liability for the government.  However, Chen stresses that the TPPA is not signed yet.

Jane Kelsey does warn that the TPPA would make it easier for offshore investors to sue the NZ government over such compensation deals:

Professor Kelsey warned that foreign investors could also sue the government of the day for breaching New Zealand’s international investment obligations, if a new law significantly reduced the profitability of the casino or the value of its shares.

That case would be heard before a private offshore tribunal under an increasingly discredited arbitration system that is costly and notoriously pro-investor.

Worse, the cap on liability would not apply because the claim is for breach of the investor’s rights under the agreement, not under the contract.

This makes it all the more urgent that the shonkey, secretive, pro-corporate, US government led TPPA be continually opposed and exposed.

At the moment, the NZ parliament does have some rights of sovereignty.  But, with the SkyCity deal, plus the government support of the TPPA,  Key is moving towards enabling the rights of exploitative, anti-democratic international corporates to over-ride NZ sovereignty.

This makes it all the more crucial to oppose both the Sky city deal, plus the TPPA. I’m with Metiria Turei when she says:

Turei said the details released yesterday were worse than she expected and SkyCity were now in a position to decide gambling laws for the next 35 years.

They will legislate to repeal the changes if they come into power in 2014.

“The Skycity deal gives them compensation for any legislation that will affect their profits for the next 35 years so we don’t believe that can be at all justified.”

Turei has also announced that the Greens are launching a petition,

 calling on the deal to be rejected and for the Select Committee to call on the Government to release any forecasted social costs.

“We know the Government has got advice about the future costs of the social harms but they’re refusing to release it.

“They won’t allow that information to be made public…we think it should be.”

I’m not sure about the wisdom of opposition via petition.  However, relevant information should not be suppressed.

28 comments on “This is what corporate dictatorship looks like”

  1. One Anonymous Knucklehead 1

    Key is moving towards enabling the rights of exploitative, anti-democratic international corporates to over-ride NZ sovereignty.

    I’m not sure that anything Key does will (or can) overturn the long established precedent that Mai Chen is talking about. “Statute overrides contract” means exactly what it says. Key can sign the government up to as many contractual obligations as he likes, and any and all of them are subject to future statute, period.

    What are these corporations going to do? Invade? How many tank divisions do they have?

    Or are they going to come to the realisation that dodgy back-room deals with the National Party aren’t worth the brown paper bag the money came in?

    • karol 1.1

      Looking at that quote from my post, on reflection, I’m not sure “rights” is the appropriate word to explain what Key is enabling corporates to do.

      I don’t know on the powers that TPPA will enable, OAK. But I’m guided by the statement by Kelsey who is a law professor.

      • One Anonymous Knucklehead 1.1.1

        The TPPA is still being negotiated. Is there a chance The National Party could sign it before the next election?

        • karol 1.1.1.1

          According to Kelsey, it’s not a forgone conclusion that the TPPA will ever be finally signed, because it has become so complex, with a load of countries trying to participate, it may stall indefinitely. This is what Kelsey said in her last post on the Daily Blog, yesterday.:

          The pressure to conclude the TPPA will intensify as the talks resume in Lima, Peru next week and when the political leaders meet in Bali in October. However, as I have written previously, the growing number of players and the supersized ambitions of the US and its corporations (not to mention our own government) could well see the TPPA itself become Doha’d. Groser has said that must not happen. But at the same time he says Japan’s entry into the talks prove bigger for New Zealand than a deal with the US. He knows the two goals are contradictory. There will be no quick deal with Japan at the table; nor will there be a gold standard that goes further than any previous agreement has done.

          Logic aside, Groser’s considerable energies will now be focused on pulling off such a deal, and will require even greater vigilance from those of us who believe it would be a disaster for New Zealand and the people of the other eleven countries currently involved.

          As I explain in my new short ebook entitled Hidden Agendas: Explaining the Trans-Pacific Partnership Agreement (published this week by Bridget Williams Books and available at bwbooks.co.nz), this is not a rational process. But it is one that has high stakes for us all.

          • One Anonymous Knucklehead 1.1.1.1.1

            In any case that rather misses the point. A contract for the sale of goods and services is one thing, but a contract for the sale of a regulatory environment?

      • Tim 1.1.2

        @Karol – if and when you feel like it – see my comment on “Prwopwerty Rwights”, 13 May @ 3.1.4.1 and give me an opinion.
        …. in brief, I think what we’re seeing is the fascist “Corporate Nation”. It’s one where we see the rights of corporate interests transcend those of ‘the state’ and its citizenry.

        • karol 1.1.2.1

          I wouldn’t call it “corporate nation”, but it is the sort of thing discussed with reference to (economic) “globalisation” and corporatism, and also with reference to neocolonisation. The way they are developing they are strongly anti-democratic.

          Marx and Engels also predicted the global expansion of capitalism in the interests of capitalists.

          • Tim 1.1.2.1.1

            mmmm, maybe – except that for most of what I describe as the corporate nation’s disciples have an economic well-being and self interest that transcends all else.
            And if it continues, I’m about to move to India (plans underway)

            • karol 1.1.2.1.1.1

              My view is based on the definition of “nation”. It usually refers to a group of people sharing a culture, language, ethnicity, history and descent.

              I think there are already words that better suit what is happening with globalised corporates.

              • Tim

                Yep – agree. What I’m suggesting (among other things) though is that what’s been happening is effectively a corruption of that definition. But yep – you’re right

                • karol

                  I can see where you are coming from, Tim. The powerful international corporates are undermining nation state governments, and taking over some functions of governance/regulation. Nations aren’t necessarily states. The corporates are undermining state functions.

                  Ah, sorry, I have studied and taught on topics that include “nationalism”, and I have the definitions of “nation”, “nation state”, “state” etc, etched on my consciousness..

            • ghostrider888 1.1.2.1.1.2

              need a valet?

    • Draco T Bastard 1.2

      How many tank divisions do they have?

      Probably quite a few.

  2. Of course we should oppose both the Skycity and TPP deals.
    But if we lose, that does not mean we can’t at some point in the future exercise ‘sovereignty’ to reverse them.
    National sovereignty is nothing more than the ability of a nation to assert its power over other nations.
    It all depends on whether there is the popular will to fight for and win popular sovereignty.
    In 1917 when the Bolsheviks took power, they repudiated debts to foreign powers, meaning that pre-existing contracts between corporations and states were declared null and void and that the power of the Russian people took precedence over such contracts with foreign capitalists.
    Of course the result was that the national states whose corporate contracts had been broken mounted military expeditions to smash to new Workers State. They failed in the short term, but the cost was the devastation of Soviet Russia and its isolation and quarantining which ultimately lead to its defeat.
    Since rust never sleeps one consequence of the demise of the Soviet Union was Western bankers claiming payment for cancelled debts going back to 1917.
    The moral is that when the people claim popular sovereignty over capitalist rule they have to do more than win national sovereignty, but become internationally sovereign.

    • Wayne 2.1

      Well there you have it. Is Labour really going to use the Soviets as their precedent. I think not.

      As for TPPA, well Janes views are well known. However, she may have a point that with so many countries involved it is going to a challenge to get a consensus on what I would regard as a comprehensive agreement. It has become something of a strategic initiative for the US, and President Obama has put TPPA front and centre in his tilt to Asia, so he now has a lot riding on it.

      If it is done in 2013 or 2014 the Nats will pass it into law. But as I have noted here before I think Labour will do the same. Would the Greens make no TPPA a bottom line, and would Labour care if they did. After all if the centre left have a majority, Labour could form a minority govt, so the Greens need to think about the risk of being left out, if they have too many difficult bottom lines.

      • One Anonymous Knucklehead 2.1.1

        I doubt they’ll use the Soviets as their precedent, but they could always use the fact that selling pieces of legislation to your campaign donors in back-room deals is considered corruption in civilised countries.

        Parliament is not going to be bound by John Key’s insider deals. Get used to it.

        Come on Dr. Mapp, what is your justification for the way the other interested parties were treated? What about their property rights?

        • Wayne 2.1.1.1

          They did not have any property rights, an expression of interest is not really an enforceable property right.

          Jane is of course right about the international law principle of state responsibility. This was the point I made a couple of days ago. That is why repealing the law doesn’t actually absolve the govt of the duty to compensate the overseas shareholders. But I might add the threshold to get compensation is high. A much tougher harm minimisation regime would be ok. As are higher taxes, and I presume that could mean higher gambling taxes.

          Anyway I was more interested in the TPPA issues being discussed here, and the implications for Lab/Green.

          • One Anonymous Knucklehead 2.1.1.1.1

            Ok, I’ll spell it out. They had a right to expect that the government would deal with them in good faith, because that’s kind of a basic pre-requisite, without which property rights are irrelevant because the way to get ahead is to donate laundered money to the National Party.

            I agree that Parliament has a responsibility to bargain in good faith, but this hasn’t happened in this case as the AG’s report made clear.

  3. Tim 3

    “But if we lose, that does not mean we can’t at some point in the future exercise ‘sovereignty’ to reverse them.”
    Exactly!
    When last I looked, corporations had not yet been given the vote (though there’d be a Farrar or O’Rielly or two) that think they should.
    And although they might wish for that, perhaps they should reflect on history, as well as democratic principles. There’s some fairly basic mathematical circumstances that will eventually put them at a disadvantage. The question is really – just how violent they want their demise to be.
    Unfortuantely, given the Kiwi psyche and the attitude of politicians, I’ll probably not be around to see the next phase.

  4. Tamati 4

    Mai Chen raises a good point. The sovereignty of Parliament cannot be compromised under our current constitutional system. Som IF Key and Groser did sign the TPP before the 2014 election., the succeeding Parliament could simply unilaterally leave the TPP and legislate to avoid and litigation from foreign corporates or governments.

    • Mai Chen’s position reflects the ideology that sovereignty in law is also sovereignty in practice. Historically law is the legitimation of power. When the bourgeois had their revolution they put their private property rights at the centre of their constitution. Hence sovereignty is based on the sovereign individual property owner. From that flows the rights of the individual citizen and the rights of citizens to representation in the bourgeois state. This is what gives the bourgeois constitution the appearance of representing all property owning citizens. This became ‘universal’ when workers gained the right to have their ‘property’, i.e. their labour power, recognised.

      On the surface then individuals are all equal in the market places as buyers and sellers. However, the reality is different. Sovereignty is in reality a mask that masks the inequality of relations of production. Owners of private property who use that as means of production buy workers ‘property’ – their labour power – and are able to extract an added or surplus value as profit. Hence the bourgeois constitution hiding behind individual equality actually reproduces unequal social relations based on the expropriation of surplus (added) value by the owners of the means of production.

      As capitalism has developed over the centuries, the wealth the the capitalist class based on systematic expropriation of the property of workers has accumulated dramatically and is now concentrated in giant monopolies. The market has been superceded by monopoly capitalism. The only competition that exists today is between the big powers promoting their own monopolies. The bourgeois state continues to promote the constitution of equal rights but this comes into increasing contradiction to the lived experience of the masses whose livelihoods are being squandered and whose lives are risked in more wars.

      What appears as the corrupt, self-interested policies of the NACTs hand in glove with the corporates using the law to protect superprofits for generations, is how capitalism operates today. That is what TBTF means. Without the state propping them up the banks and monopoly capital firms would collapse. Global capitalism today that cannot survive its global crisis without massive expropriations by sovereign capitalist states acting openly, blatantly and increasingly desperately to grab what is left of the Earth’s resources at the expense of destroying the majority of humanity and of nature itself.

      • xtasy 4.1.1

        “Hence sovereignty is based on the sovereign individual property owner.” In a constitutional law sense that is not quite correct, as we all have a vote these days, not dependent on having any property.

        While I struggle to equate the “labour” of workers to “property” in a legal and wider sense, I agree about the absurdity of how the legal system is supposed to be “equal” to all of us. That certainly applies to the law of contract, which is just part of the law we have.

        The simple day to day kind of “standard”, widely accepted forms of “contracts”, entered into day in and day out by almost all of us, are not “negotiated” in an informed, conscious, fair or equitable manner at all. The “freedom” of contract argument raised by people like David Farrar on his blog yesterday, is non existent in most cases.

        Take for instance boarding a bus to take a ride, or buying a product at the supermarket. Most contracts are on a “take it or leave it”, or “sign at the dotted line” basis, and negotiation is not even considered by the stronger party offering the terms.

        Hence the richer, the more powerful, the more dominant any “party” to a contract is, the less chance the other party or parties has/have to “negotiate”, change and agree on terms of it.

        So you raise a valid point, as most common consumers, citizens, workers are not even aware of basic contractual freedom and rights based on it. They are not even informed of – or offered any chance – to freely “negotiate” on a contract on equal terms.

        It has become the standard that contracts are simply offered by a dominant offering party, and accepted by the other (by the one needing a product or service), without questions asked. And hence we have this society, where this government simply applies the same, to pretend to represent us, but enters in a contract we were not even informed about in detail, and force it upon us.

        People have needs for products and services, including accommodation, food, water, fuel or electricity, transport and more. Corporations that are in so many cases offering the services consumed today simply dictate “contracts” to the end user on their terms, which has allowed them to grow so powerful and amass so much revenue and profit for their owners and shareholders.

        Strictly speaking, what the National led government is doing is kind of legally questionable if not illegal, as they were not voted in to enter into an agreement with a casino operator, to grant it an extension of a licence for nearly 35 years, to print money and build a convention centre that few if any of us will have any benefit of.

        So due that alone, the voter not having been asked, and likely going to be ignored again, as select committee usually wipes aside submissions, that gives any future government a RIGHT to change the law and tell Sky City to go and get stuffed.

        But as we already have defacto “corporate dictatorship” worldwide, any government doing that will run the risk of facing an economic embargo of the likes that Cuba faced since the US imposed it on the socialist state.

      • Tamati 4.1.2

        Not sure how that related to my post, but always interesting to hear a Marxist perspective.

  5. fambo 5

    There’s nothing as beautiful as a glimmer of hope

  6. Tracey 6

    Joyce, unchallenged by any media outlets yesterday, embarked on a deliberate obfuscation (sp) of the issue to make it seem as thought his actions are democratic and Greens are not. I am glad to see some lawyers commenting today because I too believe that legislation overrides a contract and we can legislate away Sky City’s compensation package, and I suspect, it’s ridiculously long license. Next Joyce will tell us that employers who have a employment contracts which state no paternity leave would survive a law change stating 14 weeks is minimum entitlement. He’s being deliberately misleading… kind of like Gilmore but with no consequences.

  7. vto 7

    this is part of the final thrashing around of the neoliberal corporate free private uss enterprise market model from the model shop flying off to the final frontier in their blind wisdom not realising the rest of us are just sitting here shaking our heads and eating our potatoes.

    next.

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