Jane Kelsey: Shane Jones’ AirNZ demands would breach the TPPA

Written By: - Date published: 6:05 am, March 25th, 2018 - 94 comments
Categories: capitalism, Economy, Free Trade, Shane Jones - Tags: , , , ,

Press release from scoop.co.nz

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Friday, 23 March 2018, 9:59 am Press Release: Professor Jane Kelsey

Shane Jones’ AirNZ demands would breach the TPPA, which he supports

‘Shane Jones has been an ardent supporter of the Trans-Pacific Partnership Agreement (TPPA). His latest interventions on Air New Zealand confirm my suspicions that he has no idea what restrictions it places on what New Zealand governments can do’, says Auckland University law professor Jane Kelsey.

The State-owned Enterprises Chapter applies to enterprises, such as Air New Zealand, in which the government owns a majority of shares or can appoint a majority of directors or exercise more than 50 percent of voting rights, potentially including a ‘golden share’.

That chapter is unchanged in the TPPA-11, or CPTPP.

Article 17.4 says the government must ensure that SOEs like Air New Zealand act solely in accordance with commercial considerations, unless there is an explicit public service mandate for services that operate purely within the country. There is no such mandate for Air New Zealand.

Neither National nor Labour sought to exempt Air New Zealand from that obligation in the annex to the SOE chapter.

Professor Kelsey notes that the same constraints, and more, apply to almost all existing and future state-owned enterprises, and potentially foreclose the government’s ability to adopt a different model of state enterprises that serves multiple commercial and non-commercial objectives.

‘This is a wake-up call for Shane Jones and New Zealand First’, says Jane Kelsey.

‘The TPPA-11 imposes exactly the kind of restraints on the sovereignty of governments, at central and local government levels, that Winston Peters has railed against all his political career.’

‘If Shane Jones wants to ensure that government-owned entities serve the needs of the provinces, he and NZ First need to withdraw their support for the TPPA before it is embedded in New Zealand law’.

ends

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94 comments on “Jane Kelsey: Shane Jones’ AirNZ demands would breach the TPPA ”

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  1. Ad 1
    25 March 2018 at 7:45 am

    Key portion being: “…unless there is an explicit public service mandate for services that operate purely within the country.”

    Winston Peters as Minister of State Owned Enterprises is in the right position to propose precisely such a thing.

    Instead his own Minister Jones does his standard bloviating, achieves nothing, shows he has no desire to do the actual policy and executive and indeed coalition work that would have enabled him to do something about it, and achieves nothing except a few cheap and temporary points from a couple of forgettable tinpot Mayors.

    None of which has anything to do with the CPTPP.

    All of which has to do with simply lazy politics.

    • cleangreen 1.1
      25 March 2018 at 9:55 am

      Ad, RE SOE – Air NZ and SOE act.

      “Key portion being: “…unless there is an explicit public service mandate for services that operate purely within the country.”

      Ed; – That is what our NGO has called for the Minister of SOE (Hon’ Winston Peters” to make the changes to our regional Rail services under the SOE act to provide rail services that are considered as “essential services as a “social benefit” like General Manager of NZ Rail Trevor Haywood’s plan to use rail for “social benefit” again as he proposed in 1971.

      http://www.kiwirail.co.nz/about-us/history-of-kiwirail/150yearsofrail/stories/road-transport-regulation.html

      Read below, History of rail.
      In 1971, the Government commissioned United States consultancy firm Wilbur Smith & Associates to look at Railways. It also recommended that road transport meet the “resource costs” incurred and social costs such as accidents, pollution and the loss of utility caused by heavy vehicles.

      We must use these considerations also when restoring Gisborne’s rail freight again.

      Our justification is;

      As we say it is justified that rail services must resume, because Gisborne is the most isolated community of its size in NZ without a rail service; – ministers please note.

    • Carolyn_Nth 1.2
      25 March 2018 at 10:06 am

      So, are you suggesting that AirNZ operate solely within NZ? Cease all flights on overseas routes?

      • cleangreen 1.2.1
        25 March 2018 at 10:41 am

        Carolyn,

        AIR NZ is firstly a “National “partly owned” carrier for our citizens as shareholders and we expect them to conform/comply to the charter of the SOE Act.

        Any other services ‘provided outside any NZ based centres as has been a internally board planned event/s have other levels of compliance such as global air passenger services agreements.

        We are all discussing how our national air carrier in the case of AIR NZ should operate under the charter of the SOE act.

        • Carolyn_Nth 1.2.1.1
          25 March 2018 at 10:46 am

          But we are also discussing whether the TPPA-11 will be in conflict with that act.

          I can’t see how AirNZ fits in with the TPPA exemption for

          services that operate purely within the country.

          My bold.

          • veutoviper 1.2.1.1.1
            25 March 2018 at 12:40 pm

            That can also be read in a different way whereby the exception applies only to the proportion of their overall services which operate only within the country – ie their domestic services; but not their international services.

            • Carolyn_Nth 1.2.1.1.1.1
              25 March 2018 at 12:48 pm

              In practice, is it even possible to separate the two?

              • veutoviper …
                25 March 2018 at 1:17 pm

                It certainly used to be when I worked in the govt side of international aviation. Airlines have to have extremely complex accounting systems as they need to keep really detailed monetary and non-monetary records, including breakdowns by domestic vs international:

                – for internal airline accounting purposes;

                – for the proportioning of fares paid for multileg journeys to domestic airlines and all international airlines providing travel over the various legs of the journey (all done through a very complex worldwide accounting system which has to reconcile fares paid in the full range of currencies used throughout the world);

                – legal purposes eg different compensation rules (death, loss of luggage etc) apply to domestic air travel (by country) vs international air travel;

                – for a whole range of other reasons covered by government bilateral and multilateral aviation agreements and conventions; and by airline bilateral and multilateral agreements and conventions.

                The latter cover everything from airspace rights, overflying, routes, provision of air traffic control, airport facilities and charges, right down to agreements on baggage handling and interchange, supply of inflight meals and charging one another for these etc.

            • Graeme 1.2.1.1.1.2
              25 March 2018 at 1:21 pm

              “ensure that SOEs like Air New Zealand act solely in accordance with commercial considerations”

              In the aviation industry you could drive the whole NZ bovine heard through the phrase “commercial considerations” The price you pay for an individual ticket bears very little relationship to the actual cost of the service provided by that ticket. “Commercial considerations” also includes below cost pricing to establish a route, or drive a competitor off a route, both things Air New Zealand is more than happy to do in the domestic and international markets.

              • veutoviper …
                25 March 2018 at 2:03 pm

                That phase is a well used phrase in many contexts, and has a lot of legal interpretations and precedences associated with it – including in the context of international aviation.

                Re your second paragraph, yes the price you pay bears little relationship to the cost in a lot of circumstance etc. The reality is that the only time you are likely to be paying the same price for the same journey is when you and the people next or around you on the same plane and on the same journey, booked and paid for the flight(s) at the same time and place as you did.

                But realise that Air NZ is operatiing in one of the most complex and competitive businesses in the world. All airlines do these things and you would not survive as an airline if you didn’t. That is the world of international aviation that has developed worldwide over the last 70 years of so.

                I am not saying that I condone or oppose it. It is simply an enormous behemoth – and the task of changing or making it less competitive would be enormous.

                As mentioned in my comment at 1.17pm, I worked in the govt side of aviation (international and domestic) for almost 25 years in the first half of my career before taking a different route for the second half.

        • Ad 1.2.1.2
          25 March 2018 at 2:16 pm

          Air New Zealand is not a state enterprise.
          Look it up on the interweb.

      • Ad 1.2.2
        25 March 2018 at 2:17 pm

        Nope.
        Are you?

    • weka 1.3
      25 March 2018 at 10:53 am

      “…unless there is an explicit public service mandate for services that operate purely within the country.”

      I wasn’t sure what that bit meant. Does she mean no international flights?

      But if not that, is there a formal process for an explicitly public service mandate? What would that look like? Would Air NZ have to stop being an SOE? Fully nationalised?

      Agree about Jones though.

      • cleangreen 1.3.1
        25 March 2018 at 11:29 am

        weka; – yes it is a sticky wicket for sure.

        Under TPP you can bet there will be a raft of legal challenges begin to end up on Government’s desk, the day that toxic agreement takes affect as it will cease all Government plans, for fear of the chilling affect of expensive court hearings and litigation.

        I prefer saveNZ plan on (3) that we need a referendum on this toxic corporate plan firstly and lets all have this ‘agreement go through the proper “due diligence” policy assessment firstly and tell the public what wee will loose if we agree to TPP 11.

      • Ad 1.3.2
        25 March 2018 at 2:23 pm

        Air New Zealand is a really good example for this government of Shit or Get Off The Pot.

        The government has a 52% holding.

        It can appoint a bare majority of Board members, but they are purely commercial people, and generally it’s at the agreement of the Chair.

        Air New Zealand gets plenty of Commerce Commission oversight, but it’s nowhere near a monopoly that would require really close watching.

        The government doesn’t do anything influential with Air New Zealand.
        52% is a nowhere position, other than making money.

        It should either own it all, or sell it all off.

      • tracey 1.3.3
        25 March 2018 at 2:25 pm

        I guess as long as they run routes no competitor is on and it does not gain commercially from doingvso then it would be fine.

        But as I wrote elsewhere a subsidy would mean the airline is getting a commercial rate and that can be seen as a breach.

    • paul andersen 1.4
      25 March 2018 at 9:45 pm

      cant be bothered wading through the bullshit on here. but did read chester burrows column in the herald this week. check it out. he basically backs jones ,and points out that air NZ puts old dungas on these regional flights that are guaraunteed to put off 50% of the paying public. for drones that whinge on about jones, grow up and look past the man and listen to what he says…

  2. Tony Veitch (not etc) 2
    25 March 2018 at 7:47 am

    Great work Jane!

    Isn’t this just too deliciously ironic!

    • Wayne 2.1
      25 March 2018 at 10:17 am

      Except on this issue, Jane is wrong.

      There is no prohibition within CPTPP to prevent government subsides to regional flights, no more than there is nothing to prevent subsidies for passenger buses and trains in Auckland and Wellington, as currently occurs.

      It is not the company in general (ANZ is not an SOE or even a MOM) that is being subsidised it is specific services within New Zealand (assuming that the government actually wants to provide such a subsidy).

      • cleangreen 2.1.1
        25 March 2018 at 10:44 am

        Wayne 2.1
        25 March 2018 at 10:17 am
        “Except on this issue, Jane is wrong.”
        Wayne Mapp = all others are wrong says he/she.

        • savenz 2.1.1.1
          25 March 2018 at 11:13 am

          I’d prefer the opinion by Kelsey whose expertise is international law, than Wayne’s. She is more qualified to judge it.

          And like in the Philip Morris case, it’s not being right, it is the threat of being sued and the costs of that for a small country by big business that is not acceptable.

          They don’t need ISDS in there. If anyone disagrees they just leave… you know like modern business.. there are risks involved in business, so not sure why business need these ‘money pit safeguards’ if things don’t go their way.

          Times change and progressive business should be changing with it, not suing to keep status quo.

          • Dazzer 2.1.1.1.1
            25 March 2018 at 11:47 am

            Except in this instance, Wayne is 100% correct. Air NZ is NOT an SOE so the directors have a legal obligation to act in the best interests of their shareholders. It just happens that the Govt is the majority shareholder.

            I suppose the Govt could choose to nationalise it and turn it into an SOE. But the Govt/s appear to be quite happy to take the dividends which have covered the bailout.

          • Babayaga 2.1.1.1.2
            25 March 2018 at 12:28 pm

            Jane Kelsey is wrong, and this is not the first time.

            • Tracey 2.1.1.1.2.1
              25 March 2018 at 12:59 pm

              Except it turns out she is right on this statement and so is Wayne

              I went and read the chapter she referenced. Why didnt you? Or Wayne?

              • Babayaga …
                25 March 2018 at 7:34 pm

                They can’t both be right. And how do you know Wayne or I didn’t read the chapter? The part Jane has wrong is ‘There is no such mandate for Air New Zealand.’ There doesn’t need to be.

                • tracey …
                  25 March 2018 at 7:37 pm

                  They can both be right until a court determines the correct interpretation.

                  Kelsey was not saying tgey were under the NZ SOE Act she was referring to the Chapter from CCTTPPTCCTTPCTTP which has criteria for being an SOE.

                  Tell the truth Babayaga you saw some validate Wayne and you quickly typed your sneer. You didnt actually read the chapter she was referencing?

                  And under the definition of SOE in the chapter there does need to be.

                  • Babayaga …
                    25 March 2018 at 7:46 pm

                    Yes, I read it. And I know both Jane and Wayne’s credentials, and Jane has been wrong before. Well wrong.

            • dukeofurl 2.1.1.1.2.2
              25 March 2018 at 1:08 pm

              No shes not.

              Sure Air NZ isnt technically an SOE but the TPPA provisions extend to ‘commercial business which are majority owned by the state.’

              In a way the existing arrangements that such ‘semi SOEs’ act commercially is in line with existing arrnagements

              https://www.tpp.mfat.govt.nz/assets/docs/TPP_factsheet_SOEs.pdf

              • Ad …
                25 March 2018 at 2:33 pm

                The relevant exception within the TPPA noted in your MFAT link is:

                “New commitments for SOEs and monopolies at the sub-central level of government (i.e. local government in New Zealand), though the Parties have agreed to negotiate within five years on whether the chapter’s rules should be extended to sub-central entities.”

                From this carve-out, if Shane Jones wanted to do some actual political work, he could use specific subsidies with local governments to for example subsidize landing charges to smaller airports. This would be attractive to any airline.

          • dukeofurl 2.1.1.1.3
            25 March 2018 at 1:11 pm

            Mapp has a PhD in an international law and like Kelsey is, was previously a law professor.
            In this case hes wrong that SOE provisions dont extend to public companies which are majority owned by State.

          • Wayne 2.1.1.1.4
            25 March 2018 at 2:05 pm

            Save NZ

            Actually Jane and I co-taught International Trade Law at Auckland Law School, so this is an area of law (how trade agreements are interpreted) is an area of law in which I am quite knowledgeable. It was my course, but I asked Jane to co-teach it since I considered important that the students had a wide perspective.

            I appreciate that the provision may be interpreted the way Jane says, but in my view it is highly unlikely.

            Jane’s legal view on this point would also be contested by the legal experts in MFAT for whom these kinds of issues are the basics of their job.

            The issue is less about whether Air NZ is an SOE and more about whether a government can subsidise particular flights for domestic regional purposes. Provided it can be clearly seen that the benefit is for the passengers and not the airline then there is no real issue.

            • tracey 2.1.1.1.4.1
              25 March 2018 at 2:11 pm

              If the govt pays an amount to AIRNZ to enable them to lower the cost to passengers, that is both a benefit to the passengers and the airline isnt it?

              The airline gets their commercial rate and thereby gets passengers it otherwise would not which amounts to a commercial benefit to the airline?

              As a lawyer though you will know that having an arguable case can be enough to enter legal wrangling, associated costs and potential settlement/compromise resulting in a govt policy watered down by the threat of application of a clause?

              You did muddy the waters with your airnz is a company not an soe which sent some of us off on a tangent, of sorts 😉

              • Ad …
                25 March 2018 at 2:39 pm

                By subsidizing flights you are sliding down the slippery slope of turning air flights into public transport.

                As you will be aware, just taking a train from Swanson to Downtown has about $4.00 of taxpayer subsidy for every ticket. That racks up seriously tens of millions of dollars per year, just for the western line.

                So transfer that subsidy to flights.

                Call it $200 per person as a direct subsidy to go from Whakatane to Auckland.

                Or, get in your car, speed down that multi-billion-dollar taxpayer funded motorway from Auckland to Whakatane at the cost of an extra hour, where you pay your own way.

                Exactly why are we proposing to subsidize people to fly to small regions again?

                • McFlock …
                  25 March 2018 at 3:37 pm

                  Same reason we subsidise people to take the bus – there’s a public good. It makes the movement of people and goods around the country quicker.

                  It’s all very well if everyone lives in Auckland. What if a specialist from Dunedin needs to get to Whakatane? Fly to Auckland, rent a car, drive through Auckland, drive another hour. Or fly to Auck, connect to Whak. All booked at the same time.

                  • Ad …
                    25 March 2018 at 4:03 pm

                    Go ahead and make the case for subsided flights to smaller regions.

                    – How much $$ subsidy per flight? $1? $100? $1,000?

                    – To which centres, and which ones not to?

                    – Just Air New Zealand, or all carriers?

                    – Turboprop, Jet, or both?

                    – What kind of specialists? Drainlayers? Running shoe designers?

                    – What isn’t already covered by the Air Ambulance and Air Chopper?

                    – Why not subsidized air freight as well?

                    – Why not subsidizing tourists as well?

                    – Why taxpayer money into this, as against putting it into say disabled school student subsidies?

                    – Does the $$ come from transport fuel tax, or from airports, or from airlines, or general taxes?

                    – And what, after all, is the point of doing it? Is there evidence that MP’s or businesspeople or tourists can’t afford it at the moment?

                    • McFlock …
                      25 March 2018 at 4:17 pm

                      Obviously they can’t afford it because the services are being cancelled. But like that, the rest of your questions apply equally well to public bus or train transport (tweaking the terminology appropriately). Why should we subsidise those?

                    • Ad …
                      25 March 2018 at 5:09 pm

                      You see, all of these are the kind of questions that go in to an actual policy, for any kind of subsidy for anything, rather than Minister Jones having a nice long angry arm-wave that achieves nothing.

                      The policy arguments for subsidizing land public transport are pretty well rehearsed – you can see them in any of the Council LTP’s and Council SOI’s, as well as the Government transport GPS – due out this week. Failing that, pop over to the http://www.greaterauckland.org.nz site and you can chew it over there with Matt and Patrick. And none of that has anything to do with CPTPP either.

                    • McFlock …
                      25 March 2018 at 5:35 pm

                      The thing is, though, Jones is doing his job as an elected representative, like any city councillor who criticises bus routes or tries to get bus stops changed.

                      The fact is that Jones is expressing his communities’ need for regional air transport. It’s up to the policy analysts to develope a framework and legally-compliant mechanism to meet that need, but without Jones doing his job the communities would lose their air transport.

                      I agree it’s not really a TPP issue – from reading the discussion, Kelsey seems to be concerned that the TPP stops the government doing what is already illegal under the Companies Act.

                      And the easy solution is exactly what my local council does for busses – tenders out the subsidised routes to whatever company wants to do them, as well as tying popular ones into less profitable bus routes (like cable tv packaging channels together). If Jetstar outbid for the Kapiti service, good luck to them.

                    • Tracey …
                      25 March 2018 at 5:39 pm

                      Mcflock

                      There must be a reason why Jetstar only does limited routes?

                      Ad seems to have a point about any “help” being directed through local government but I thought local govt is also caught by CCTTPTCCTPCCTPP

                    • McFlock …
                      25 March 2018 at 5:59 pm

                      At a wild guess, Jetstar is incrementally coming into the market, whereas AirNZ/MtCook are re-evaluating existing routes that might be decades old.

                    • Tracey …
                      25 March 2018 at 7:14 pm

                      Mcflock

                      Jetstar has been here since 2009.

                    • McFlock …
                      25 March 2018 at 10:45 pm

                      I know that.
                      But I suspect introducing a new route takes more of a risk than keeping an existing one going. Leasing counter space when you only have projections on what you’ll sell, rather than last year’s actual figures, sort of thing

                    • Monty …
                      26 March 2018 at 12:49 am

                      One of the big cost is landing fees and fuel. Then you have cost of the planes, staff and infrastructure required including the cost of house doing sifficient fuel at source and the storage cost.

                      The landing fee, terminal use fee and storage cost come from the council unless the airport is privately run.

                      These have to spread across the new bed of passengers on the lanes.

                      So to spread the fixed costs across a maximum of stay 20 pax versus 60.

                      What is going to be cheap or more economical.

                      Cargo is a huge equaliser and a bigger plane can carry more it can be preload in units a small turbo prop in most cases struggles to carry any additional cargo unless the plane is not full and then it is bulk loaded.

                      So the cargo doesn’t help reduce cost or make it more economic in regional services.

                      So should I pay for half full flight out of stay kapiti that is less than 50km from Wellington with trains or my sister that lives orewa who is roughly the same distance to Auckland airport and no train service. So by this argument orewa should have a regional airport.

                    • McFlock …
                      26 March 2018 at 10:52 am

                      Why shouldn’t it have a small airport? Costs of establishing a new one would be prohibitive, but if it had been already there why close it?

                      Yes, some costs remain fixed. But I doubt landing a cessna at Alex or Kaikoura incurs the same fees as landing a 737 at Christchurch.

                  • Babayaga …
                    25 March 2018 at 8:00 pm

                    “Same reason we subsidise people to take the bus – there’s a public good.”

                    Indeed. But this is where Jones is being spiteful. Or ignorant. If he genuinely wants Air NZ to support the provincial routes, he should be lobbying for more subsidies or for the government to buy back the remaining shares and run in with a different commercial imperative. Attacking the Board for doing their job is just stupid.

                    • McFlock …
                      25 March 2018 at 10:51 pm

                      Really? We’re talking not just about regional services, but the problem with all those harmless partial asset sales from the previous government. Even you are raising the concept of renationalisation.

                      Seems useful to me.

                    • Babayaga …
                      26 March 2018 at 5:09 pm

                      “We’re talking not just about regional services, but the problem with all those harmless partial asset sales from the previous government.”
                      They aren’t a problem. They were the right thing to do, and the government signalled them before an election and were returned with a substantial mandate. As a country we do very well out of the corporate model for partial owned enterprises, far better than if those assets are nationalised (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11508152)

                      “Even you are raising the concept of renationalisation.”
                      Ahgggg no! Air NZ has been a massively successful company under its current model. What I’m saying is that Jones is being dishonest. If he really wants more provincial services, lobby to increase government funding….perhaps use some of the dividend the government receives!

                    • McFlock …
                      26 March 2018 at 5:21 pm

                      Hey, you brought it up.

                      Sure, you’re a tory who thinks it’s a bad idea, but you still raised it in response to my comment. I didn’t. If the government wanted the government airline to work in the interests of the public good rather than the shareholders, under the companies act it would have to be the sole shareholder. This was raised at the time of the asset sales. Now we see it in reality.

                      As you point out, one of the few ways around that is renationalisation. Simple fact. Don’t back away from it now. Be happy that I agree with one of your statements for once. If he genuinely wants Air NZ to support the provincial routes, he should indeed be lobbying for more subsidies or for the government to buy back the remaining shares and run in with a different commercial imperative.

                    • Babayaga …
                      26 March 2018 at 5:39 pm

                      .”If the government wanted the government airline to work in the interests of the public good rather than the shareholders, under the companies act it would have to be the sole shareholder. “

                      Not so. The government could simply contract uneconomic routes from Air NZ as a commercial subsidy.

                      The issue of nationalisation is a very real option. It isn’t a sensible one, but that wouldn’t preclude Jones advocating for it. But attacking individuals who are just doing their job is about as stupid as JAG’s ageist, racist and sexist attacks on other Board members.

                    • McFlock …
                      26 March 2018 at 6:03 pm

                      And yet if he hadn’t we wouldn’t have had such a wide-ranging discussion.

                      Not all bad.

                • tracey …
                  25 March 2018 at 5:11 pm

                  I dont get it either. It stinks of Mr Jones pandering to a particular audience and misleading tgem to think he can provide an air service for them

                  • Babayaga …
                    25 March 2018 at 7:52 pm

                    To say nothing of the disgusting attacks on Board members, who most likely are unable to respond. Jones simply has no idea.

                    • Zorb6 …
                      25 March 2018 at 8:42 pm

                      Luxon has unwisely responded to Jones attacks.There is as much a case for regional air services as there is for accomodation subsidies and bus service operators.Cheap efficient transport,people and freight should be a core economic priority.

                    • Babayaga …
                      26 March 2018 at 5:02 pm

                      “There is as much a case for regional air services as there is for accomodation subsidies and bus service operators.“

                      You’re missing my point. If Jones wants to make that case, then make it. But the Air NZ Board currently operate under a set of criteria that places the onus for funding uneconomic services on the government. Jones should be lobbying his own government, not attacking the Board.

            • savenz 2.1.1.1.4.2
              25 March 2018 at 4:21 pm

              highly unlikely is not “not possible”.

              I think people want to see more provisions that are NOT possible in trade agreements not highly unlikely.

      • tracey 2.1.2
        25 March 2018 at 12:17 pm

        My understanding is the same as Wayne’s. That AirNZ comes under companies act not soe.

        I do think that public companies ought to have an additional ogligation to its overriding one to provide returns to shareholders. There should be a social contract element too. This would take SOME drafting but would mean Directors have to look at more than just the financial bottom line.

        I have digressed

      • tracey 2.1.3
        25 March 2018 at 1:11 pm

        Under the CCPTTPCCTP an SOE is not defined as being under our SOE Act it has its own criteria

        Air NZ certainly appears to meet the CCPTTPCCTP criteria fotr SOE

        “A state-owned enterprise is defined as an enterprise that meets three criteria:
        (i) The government owns more than 50% share capital in an enterprise or can appoint
        a majority of members of the board or equivalent management body or controls
        the exercise of more than 50% of voting rights.
        Comment: SOEs in which government controls a minority share or appointments
        are not covered A SOE in which the government controls voting rights over
        certain key decisions through a golden share is not explicitly addressed. The
        transparency obligations include disclosure of such shares, which implies that
        they are seen as a form of ‘control’, but that is debatable. 15
        and
        (ii) Such an enterprise must principally engage in ‘commercial activities’,
        16 which are
        defined as activities that are undertaken with an ‘orientation to profit-making’.
        Comment: The chapter applies to entities that perform a mixture of commercial and non-
        commercial functions. ‘Orientation’ is not a familiar term in international trade law.
        Dictionary definitions are unhelpful – they suggest an expectation that the principal
        activities of the SOE should look to make a profit. The SOE doesn’t need to actually make
        a profit, provided that is its orientation. Where a mixed-purpose SOE has profit making
        as an explicit statutory obligation or directive it will clearly be covered. Where it is not
        explicit, the status of the enterprise may be contested.
        There is an important clarification in footnote 1 that ‘orientation to profit-making’
        does not include an enterprise that operates on a not-for-profit or on a cost-
        recovery basis.
        Comment: This footnote refers to the entire enterprise, not to selected activities. If it is
        deemed to have an overall orientation to profit making but has some non-profit activities,
        it is appears to be covered by the chapter. The meaning of ‘cost-recovery’ is also
        debatable. The government may require a SOE to achieve surpluses as a buffer to future
        downturns. Many entities also recover more than immediate costs and retain earnings
        for contingencies against shifts in government funding. Some enterprises may earn profits
        from certain activities to make up for shortfalls in government funding of other activities;
        if they comprise a growing proportion of income as government support declines, there
        will be questions about which activities are its ‘principal’ function. Retained earnings to on future borrowings might also be challenged, raising arguments about standard
        accounting practices.
        and
        (iii) The commercial activities of the enterprise involve the production of goods or
        services that are sold to a consumer and the enterprise determines how much it
        produces and the price.
        Comments: This means an enterprise where government sets the prices or production
        levels of its activities is not treated as an SOE, but will be a state enterprise or designated
        monopoly.”

        fund future infrastructure and expansion or make provision for depreciation and interest

        15 Article 17.10.3(b). 16 Article 17.1.

        https://www.google.com/url?sa=t&source=web&rct=j&url=https://tpplegal.files.wordpress.com/2015/12/soe-chapter-analysis.pdf&ved=2ahUKEwiKy93hlYbaAhUDnpQKHUwjA4YQFjAAegQICBAB&usg=AOvVaw1DS4_p8DTbJm-E8AF7HDM2

        • dukeofurl 2.1.3.1
          25 March 2018 at 1:17 pm

          MFAT factsheet specifically mentions Air NZ as covered by SOE regs
          https://www.tpp.mfat.govt.nz/assets/docs/TPP_factsheet_SOEs.pdf

          • RedBaronCV 2.1.3.1.1
            25 March 2018 at 1:28 pm

            Well we are already at Stage 1.
            Wasting time and resource over having to an argument over whether or not this is covered by TPPA –
            stage 2 – some one can sue the country to find out & we taxpayers put dollars into it. And this is supposed to BE GOOD FOR US?? I’d hate to see some thing that was deemed bad for us.

            • Tony Veitch (not etc) 2.1.3.1.1.1
              25 March 2018 at 1:50 pm

              Quite right Red Baron. Whether or not AirNZ comes within the SOE category or not, the CHILLING effect of a potential law suit will still apply – reference the Philip Morris case against Australia delayed our introduction of plain packaging by months!

          • Tracey 2.1.3.1.2
            25 March 2018 at 2:02 pm

            So does the CCTPPTPCCTPPCCTP Chapter on SOEs.

            2 separate issues here.

            Wayne is right that AirNZ is not an SOE under our SOE Act.

            Kelsey is right that Air NZ meets the 3 criteria of an SOE under the relevant Chapter.

            I can only assume Wayne, lije me, hadnt read the relevant chapter Kelsey was referring to

          • cleangreen 2.1.3.1.3
            25 March 2018 at 2:08 pm

            Thanks for this dukeofurl.

            https://www.tpp.mfat.govt.nz/assets/docs/TPP_factsheet_SOEs.pdf

            “MFAT factsheet specifically mentions Air NZ as covered by SOE regs”

            AIR NZ now are covered under the SOE act then they must “act in the best interests of all it’s shareholders” and that includes us NZ citizens who own half the company so they could now be challenged to operate real provincial air passenger services as many share holders live there requiring air services.

          • tracey 2.1.3.1.4
            25 March 2018 at 2:19 pm

            I dont see AIRNZ specifically mentioned in that fact sheet but it does meet the criteria of the chapter wording. Perhaps I coukdnt see for looking?

            • Incognito 2.1.3.1.4.1
              25 March 2018 at 8:04 pm

              The SOEs provisions apply with respect to large and commercially focused SOEs: those with an orientation towards profit, rather than those which operate on a not-for-profit or cost-recovery basis. For New Zealand this includes companies subject to the New Zealand StateOwned Enterprises Act 1986 and other commercially focused companies in which the Government owns a majority share, including Air New Zealand. [my bold]

          • Monty 2.1.3.1.5
            26 March 2018 at 2:49 am

            Wrong

  3. savenz 3
    25 March 2018 at 8:04 am

    The reality is a bunch of politicians who don’t even understand what they are signing should not be allowed to screw up an entire country and place governance on practically everything from environment to ecommerce, in an international business kangaroo court run by a handful of lawyers in an agreement they haven’t read and don’t understand.

    Surely the revelations of Cambridge Analytica should be a wake up call. Increasingly ‘somehow’ decision making is being narrowed and people’s perceptions skewed by billionaires who want a new social order and norm. This seems to be based on changing perception to deregulation of human and national rights down to theform of money and rights for international corporation that somehow sits above governments and people who pay taxes in it.

    Essentially Labour and NZ First were against TPPA prior to the election.

    TPPA-11 is exactly the same agreement with a few pages added that do little to void the toxicity in the original agreement. So what changed post election? Clearly a group think at work and with 75% of NZ public wanting independent analysis of any risks (because their appear to be little to be gained and only those with money for items like vineyards and everything to lose for everyone else and with the risks massive).

    Something that big, should have a referendum at least. You know democracy???

    • cleangreen 3.1
      25 March 2018 at 10:07 am

      Yes we need a referendum on this as this TPP agreement now as it will affect our lives and that of our children for decades from that time because our power to change for “our benefits” will be lost entirely and the power is handed sorely to big global Corporations to run this country only in “their benefit” and not ours as taxpayers.

  4. savenz 4
    25 March 2018 at 8:11 am

    Noticed this comment by a person on the TPPA site which sums it up.

    “David Parker said to me at the MFAT meeting “we have never been sued” I replied “Using that theory, I have never had a car accident so I don’t need to worry about wearing a seat belt or insurance” “You have a point” he said. Labour is now using the same arguments that the Natz were spouting off 4 years ago.”

    • savenz 4.1
      25 March 2018 at 8:20 am

      Of course we have never been sued, NZ politicians are only too keen to lower wages, all standards, environment and award overseas and local business what ever they desire.

      The point is, that’s not really sustainable long term. And already major cracks are appearing in every sector post NZ desire to take the Rogernomics and Globalism approach because for whatever bizarre reason, Kiwis are selling these ideas overseas and are the ones driving the TPPA type deals.

      Pike river shows we are already at rock bottom when it comes to safety standards and compensation and ways for corporates to avoid responsibility.

      The legacy of NZ Rogernomics followed by Globalism, iis taxes are down but social service spending is up. Surprise, surprise as people get paid less wages, and have to spend more and more cash on things like power and goods that the profits go offshore, there are less taxes coming in. The competition model and privatisation model is lowing educational standards as well as productivity and pretty much giving away resources like water for anyone who wants a permit and can spin a good story for the councils or be networking with government. We are creating a precariat society with increasingly mental illness and physical sickness that comes with that approach.

      The banks are having a bonanza so that’s all good. Plenty more people with cash to come to NZ and keep the Ponzi scheme afloat and pretend it’s all working well.

      But more money is needed for the amount of people who need more and more government support from wage top ups to health to super to accomodation supplements to more roads, schools and hospitals being built.

      Adding more and more low wage people or people being encouraged to speculate and buy up NZ businesses so taxes are going overseas, is only making things worse!

      • cleangreen 4.1.1
        25 March 2018 at 11:35 am

        save NZ

        Your comments make perfect sense in a corporate generated world of mindless dribble.

        Corporates win by dumbing down the consumer and media to advantage their own agenda to rape & pillage us all without our knowledge, that’s the grand plan they have waiting for us inside the TPP 11.

      • tracey 4.1.2
        25 March 2018 at 1:14 pm

        The other danger is that a corporation sends a letter to a govt to oppose a policy it is proposing and states that under the TPP it can sue the govt. The cost of that litigation must be considered by that govt in its cost benefit analysis??

        • cleangreen 4.1.2.1
          25 March 2018 at 2:13 pm

          Yes tracey,

          tracey 4.1.2
          25 March 2018 at 1:14 pm
          “The other danger is that a corporation sends a letter to a govt to oppose a policy it is proposing and states that under the TPP it can sue the govt. The cost of that litigation must be considered by that govt in its cost benefit analysis??”

          My response; –

          That was what is termed as “The chilling effect” countries are afraid of now.

          Canada has already faced the most challenges this way during NAFTA agreement between Canada/US and mexico.

          Hence then Canadians then fought hard to protect their position at TPP whereas NZ did not.

    • Ad 4.2
      25 March 2018 at 2:44 pm

      We got pretty close the last time we had a full command-and-control government i.e. when Muldoon proposed putting an aluminum smelter on the Aramoana peninsula.

  5. CHCOff 5
    25 March 2018 at 4:56 pm

    Build the free community public sports clubs with subsidized sports tv and the community voices will rise and sing as one:

    New Zealand! New Zealand! New Zealand! New Zealand! New Zealand!

  6. Monty 6
    26 March 2018 at 2:48 am

    Airnz is not an SOE. It’s a listed company. Mr and Mrs Kapiti can take the train or Uber home from Wellington or Palmerston North Airport. Focus on the real issue, those who live in Whangaparoa; 72 k from Auckland airport. Those are the real ‘victims’.

  7. RedLogix 7
    26 March 2018 at 5:20 am

    Chris Hitchens interviews very well on the Skripal episode:

    https://www.youtube.com/watch?v=BFdGogalR3s

  8. Ross 8
    26 March 2018 at 6:17 am

    With respect to Jane Kelsey, I think she is missing the point.

    As Tracy Watkins says:

    The images of Obama teeing up at some of the world’s most exclusive and beautiful golf clubs might play well in the overseas markets that Air New Zealand targets. But back home the overall impression of the trip read like something out of lifestyles of the rich and famous as Obama and a coterie of rich men were choppered in and out of luxury resorts, out of the range of prying eyes.
    …
    The contrast between the glossy publicity shots and the airline’s cutbacks in regional New Zealand – ironically, including Northland, where Obama was flown by helicopter for his golf round – was stark. Jones’ assault on the airline for corporate arrogance and abandoning the “real” New Zealand couldn’t have been timed better.

    https://www.stuff.co.nz/national/politics/opinion/102544218/barack-obamas-nz-trip-may-have-backfired-for-airline

    I’m not sure it’s in the “best interests of the company” to bring Obama and his hangers-on to NZ to wine and dine while ignoring potential fare-paying customers.

    Air New Zealand, of course, sponsors the All Blacks…and wines. Again, I’m not sure how this is in the best interests of the company. It does beg the question: if the company can subsidise the rich and famous, the All Blacks and wineries (among others), might it also be able to subsidise flights to the regions?

    https://www.airnewzealand.co.nz/sponsorship

  9. Ross 9
    26 March 2018 at 6:32 am

    Another point is that the Government presumably receives dividends from Air NZ. I’m not aware that the CPTPP prevents the Government from using those dividends to subsidise regional flights. Is Air NZ competing with a foreign airline on domestic routes? Not that I’m aware of. In other words, CPTPP is irrelevant in this context as no foreign companies are involved. If foreign companies were being disadvantaged by Government policy, that of course would be a different story.

  10. Ross 10
    26 March 2018 at 6:49 am

    On a slightly separate note, I took an Air NZ flight recently from Wellington and was amazed by the (large) number of people who flew to Palmerston North. The flight was delayed by at least 20 minutes and by the time we landed it had taken about an hour from the scheduled departure time. Driving there wouldn’t have been much slower. 🙂 I note that there was no explanation for the late departure and arrival.

  11. Delia 11
    26 March 2018 at 12:27 pm

    Just support your local airline who filled the breach, if you live in the provinces..I gave AirNZ the bird when they abandoned Westport.

  12. Sparky 12
    26 March 2018 at 4:31 pm

    In Canada NAFTA is being used to stifle attempts to place health labels on junk food like candy bars…..

    The fact any govt that claims to be on the left is pushing for this tells us plainly they are in fact right wing neo libs and no amount of acolyte fawning will change that fact……

    • tracey 12.1
      26 March 2018 at 6:14 pm

      Why anyone thinks provisions would be fought for with no intention to be used is beyond me. Unless tgeir mere presence is designed to deter govts from even entertaining anything that might be construed as a breach. Win win for those who want the clause

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