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    Essential Information on an Essential Issue

    Letter No.64
    7 August, 1997
  • TRENDS
    GATT Watchdog spokesman Aziz Choudry looks at the Multilateral Agreement on Investment (MAI).

  • MULTILATERAL AGREEMENT ON INVESTMENT
    It has taken some time, but the implications of the Multilateral Agreement on Investment (MAI) are starting to become a hot talking-point amongst community groups and opposition political parties. Depending on the final wording, and the list of reservations lodged by the NZ government, the MAI would reduce the capacity of national and sub-national governments to limit the extent and nature of foreign investment or regulate its activities. The secrecy surrounding the content of this treaty is astounding, considering the implications it will have on all local and national economic development initiatives.

  • The New Zealand government has been involved in negotiating the MAI agreement at the OECD (Organisation for Economic Cooperation and Development) in Paris, since 1995. The provisions of the agreement have not been widely known because the negotiations have been conducted in a shroud of secrecy. In January this year, a draft of the MAI was leaked to a Canadian non-governmental organisation. From there the information has filtered out to a large network of public citizen's networks, especially through the internet.

  • Apart from a few paragraphs in Winston Peter's Budget speech (supporting the MAI) there has been little unsolicited official acknowledgment by the Coalition Government of its commitment to the treaty.

    Our Media Watch reports that the debate in NZ has been sparked by research by academics Aziz Choudry and Jane Kelsey, and journalists such as Bob Edlin (The Independent), the NZ Herald and Chris Trotter (NZ Political Review). Trotter describes the MAI as "the most serious threat to Aotearoa/ New Zealand's sovereignty since Captain Hobson sailed into Waitangi." Trotter: "It will strip away from NZ'ers and their representative institutions any chance of reshaping the economy in their own interests... "

  • How will the MAI effect jobs? The concern of employment activists is that the MAI will severely curtail the ability of local and national governments to tie investment opportunities to employment outcomes. Any pro-active strategies for job-creation to be led by the new regional Employment Commissioners will necessarily be influenced by the new MAI framework.

    Under this agreement, investors could be free of any and all performance requirements of job creation, purchase of domestic goods, import/export reciprocation, and technology or knowledge transfer to the host society. The MAI could also make it `illegal' to have any national standards of human rights, labour rights or environmental protection on goods produced in and imported from other regions or nations.

  • According to Gatt Watchdog, some activities which may be subject to challenge under the MAI include:
    -- programmes earmarking economic development funds, loans or subsidies targeted to local businesses, women, Maori or Pacific Islanders;
    -- share allocations to local residents or consumers, with special ownership restrictions on local government enterprises or activities which are privatised or contracted out;
    -- preference to local companies to run roads, rubbish, buses, etc;
    -- allocation of contracts without full competitive international tender;
    -- cancelling proposals to contract out activities (eg due to local pressure not to go ahead with a privatisation) unless compensation is paid to potential overseas investors for costs already incurred and lost opportunities;
    -- imposing new regulations on prices or shareholdings because of the exploitative behaviour of a foreign investor. (This would be seen as a taking or expropriation and full compensation would be required.)

  • Internet bookmarks: The OECD have a MAI FAQ (Frequently Asked Questions) site on the internet at http://www.oecd.org/daf/cmis/mai/faqmai.htm.

    Public Citizen is a US public issues lobby group, and backgrounds its research on the MAI agreement at http://www.citizen.org/gtw/maibg.htm.

    Sources Gatt Watchdog open letter to District and Regional Councils, "Re: Local Authorities and the Multilateral Agreement on Investment" 14 July 1997; New Zealand Herald 21 May 1997 "Foreign deal for cabinet eye only" by Bernard Orsman; New Zealand Herald 9 May 1997 "Secret plottings on foreign investment" by Jane Kelsey; The Independent 30 May 1997 "Why the Peters party doesn't need to know about MAI" by Bob Edlin; Futurework email conference 25 June 1997 "The Multilateral Agreement on Investment: The Plan to replace democratically responsible government" by John McMurtry; The Public Citizen MAI internet site "MAI: A Bill of Rights for Investors", "Public Citizen's Global Trade Watch Backgrounder", and "Summary of the MAI Text" at http://www.citizen.org/gtw/4pgr.htm

  • VOICES : ON THE MULTILATERAL AGREEMENT ON INVESTMENT (MAI)
    "The enormous transformation, now being described as globalisation, is promoted by its proponents as providing unrivaled economic opportunities. Its critics argue that the current globalisation process actually threatens economic and social stability and the environment. However, all agree that globalisation presents profound new issues for governments seeking to promote balanced economic growth and enhance social well-being..."
    -- Public Citizen, US public issues lobby group, from their Global trade Watch backgrounder

    "Investment is the key to strong economic growth. Strong growth requires high levels of investment. It is a simple fact that NZ does not have an adequate savings record to fund that investment.
    "That's why we support the development of the Multilateral Agreement on Investment in the OECD. That agreement will oblige countries to be quite clear about any limits they impose on foreign investment and also oblige them to treat fairly any investment within those limits. [...]
    "The Government will be working in the OECD to ensure that it produces a world-class agreement that improves the climate for international investment, while protecting the national interest of members ..."
    -- Winston Peters, from his Budget Speech of 26 June 1997

    "Remember how Winston Peters railed against those who were selling off NZ and promised, if elected, to put New Zealand(ers) First? It is hard to explain why government officials at a meeting of the OECD, presumably with a mandate from the coalition cabinet, are secretly negotiating a binding agreement to remove virtually all barriers to foreign investors for at least 20 years..."
    -- Professor Jane Kelsey, writing in the New Zealand Herald 9 May 1997

    ".... consultation on the issues raised in this paper with the National Party caucus, the New Zealand First caucus, other parliamentary parties, and other interested groups is not required."
    -- a cabinet document released under the Official Information Act, dated 13 March 1997, summarising NZ's involvement with the MAI, and signed by the Minister for International Trade, Lockwood Smith

    "This agreement is shocking, sinister and totally undemocratic ..."
    -- Jim Anderton, Alliance leader

    "What we have put on the table, what we are confident others have put on the table, we do not see this as a threat to New Zealand sovereignty. "
    -- Don McKinnon, Minister of Foreign Affairs.

    "Its not that the negotiations are so hush-hush no-one will talk about the proposed agreement. If you know enough to ask a question you will get an answer. But not a copy of the draft treaty. Its a top secret document until it has been signed.
    "One official involved in these doings has said there can be no going back. Once the treaty has been signed, it will be hard for future governments to wriggle out. The only changes allowed will be to further liberalise global investment flows ..."
    -- Bob Edlin, writing in The Independent, 30 May 1997

    "The MAI seeks to control the future by excluding certain acts from the democratic repertoire of nation states. The people behind the MAI OECD economists, international bankers, trade diplomats, politicians justify themselves by invoking the amoral imperatives of the marketplace.
    "Investors, they insist will not commit their resources to nation states unable or unwilling to guarantee the security of their funds. Democracy is risky. Electorates are volatile and prone to excess. Legislators who depend upon the voice of the poor and exploited cannot be relied upon to withstand the temptations of populism.
    "Acknowledging these facts, nation states in need of foreign investment must be prepared to limit the scope of their politics. In short, they must be willing to tell their people that, for the present, the future is out of bounds ..."
    -- Chris Trotter, NZ Political review July/August 1997

    "This is not the development of a world system which respects life. It is the forging of a global absolutism of special-interest rule which has-no place for individual, community or environmental life in its regulatory framework. All that is recognised is the protection of corporate investor rights to other societies' wealth... "
    -- John McMurtry, Toronto 7 June 1997 "The MAI Plan to Replace Democratically Responsible Government"

  • UNEMPLOYMENT HIGHEST FOR THREE YEARS
    The latest official unemployment rate is up for the June quarter to 6.7% or 122,000 people, the highest number in nearly three years. People under 35yrs have had the largest increases in unemployment, along with Maori (at 16%) and Pacific Islanders (15%), and youth (under 19yrs, at 16%).

    Our regular feature "Statistics That Matter" will appear in the next issue of the Jobs Letter.

    The increase in the official unemployment figures is in part from a shifting of people from the "jobless" tally, to the "official unemployed" numbers. This could be reflecting government measures to tie welfare benefits to stricter work tests. The numbers of people on the "jobless" figures (defined as "those without a job and wanting one", a much looser definition than the "official unemployment" definition) has fallen from 201,000 to 186,300 people from March to June 1997.

  • OVER 600 LAY-OFFS
    More than 600 jobs are to end around the country after announcements of redundancies and lay-offs in the past three weeks:
    -- 95 jobs are to be axed at the Huntly power station;
    -- about 100 contract forestry workers in Rotorua are to be laid off by Fletcher Challenge;
    -- NZ Refining Company is to cut 65 jobs from the Marsden Pt Refinery;
    -- More than 200 Telecom workers will be made redundant throughout NZ if staff cuts planned for Sept 1st take effect;
    -- 33 Conservation Department staff have been made redundant in different regions;
    -- 30 jobs will go as Dominion Breweries announces it will shut down its breweries in Mangatainoka and Timaru, moving the operations to Auckland;
    -- about 35 Patent Office staff have been handed redundancy notices;
    -- about 50 jobs are to be lost at Land Information nationally, in a restructuring of the department;
    -- Rotorua timber processing plant Pana Home Innosho has made 21 workers redundant.
    Source The Dominion 24 July 1997 "300 jobs now on the line"

  • LAMPEN FINDS SKILL SHORTAGES
    Skill Shortages: The 12th annual Lampen survey of salaries and employment trends in NZ finds that two out of three employers are having trouble attracting staff because of skill shortages. The survey finds there are skill shortages in areas which require specialisations or qualifications, such as accounting, sales and customer service, and technical and engineering roles. 10% of the survey respondents found that secretarial, receptionist and support roles were also difficult to recruit. The skills shortages are helping to boost salaries in these fields, as employers pursue the people they need.

  • Lampen says the search for skilled people is part of the latest new recruitment trend which they describe as "churning". Churning is the simultaneous hiring and firing of people in order to get the skills needed in the business.
    Source The Independent 25 July 1997 "Skill shortage boosts wages for some" by Maria Slade

  • COMMUNITY-OWNED BUSINESS CONFERENCE
    "Community-Owned Business" is the theme of the latest COMMACT Aotearoa conference to be held at the Portland Towers Hotel in Wellington 21-23 August. It will focus on comparing British, South African and NZ experiences in developing community economic development projects. Contact Commact Aotearoa, P.O.Box 7592, Sydenham, Christchurch phone 03-384-0220 fax 03 366-9971 email kjprocom@chch.planet.org.nz.

  • DISABILITIES AND EMPLOYMENT CONFERENCE
    "Beyond Unemployment for People with Disabilities: Rights, Needs and Services" is the title of the conference for "supported" employment consumers, providers, policy-makers and researchers. It will be held at the University of Waikato, 27-28 November. Contact ASENZ Conference, P.O.Box 1905, Palmerston North phone 06-354-2088 fax 06-354-2588.

  • TELECOMMUTING UP
    A recent American survey shows that more than 11m Americans are now telecommuting to the office on a regular basis, up 30% from a couple of years ago. This number is expected to reach more than 14m by the year 2000.

    The report, compiled by the market researcher FIND/SVP, finds that growing use of information technology, coupled with a healthy US economy, has made more companies and workers open to the idea of telecommuting. Among the benefits are reduced real-estate costs and higher productivity, plus improved morale among employees who no longer feel shackled to their desks.

    But the report says that most companies prefer to see real people working in the office. Their thinking is that an unsupervised worker is an unproductive worker prone to watching daytime TV at home rather than scrutinising spreadsheets. And many telecommuters report that working from home requires great discipline and personal initiative.

    Gail Martin, executive director of the International Telework Association says that teleworking doesn't have to be an all-or-nothing proposition. It can be just one or two days a week. Martin: "Many workers feel cut off from their corporate culture when working from home, missing out on the latest office gossip. On the other hand, its easier to get work done at home amid fewer interruptions..."

    The report says that one in four Fortune 1000 companies now have employees who telecommute regularly, either full or part-time. Currently up to 25,000 US Federal workers or about 1.5% of the federal workforce telecommute, and the US government is aiming to have 15% working from home by 2002.

    In the recent NZ Lampen employers survey, forty percent of Wellington employers had staff working from home or telecommuting, though few employers said they had developed formal policies to cover this form of work.

    Source Reuters 7 July 1997 "Ranks of Telecommuters Soaring, survey says" by David Lazarus; and Associated Press "Workers feeling at home with Telecommuting Idea"

  • GROUP THERAPY FOR JOBLESS EFFECTIVE
    Group therapy sessions are sometimes more effective in helping the long-term unemployed find jobs than sessions intended to train job seekers in search strategies. This is the conclusion of a report published in a recent edition of medical journal The Lancet. Psychologists say their research supports the expectation that therapy sessions can help halt or reverse the "downward spiral" that can result in depression, including lowered expectations, that can greatly reduce a job seeker's effectiveness and prospects of success.
    Source BraveNewWorkWorld internet site 12 July 1997 "Psychotherapy and the job search process "

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