A balanced approach to offshore development

]The Maritime Union supports the responsible development of the offshore industry, both for oil and gas, and mineral resources.

By Joe Fleet­wood, Nation­al Sec­ret­ary

The Mari­time Uni­on sup­ports the respons­ible devel­op­ment of the off­shore industry, both for oil and gas, and min­er­al resources.

We have a very dif­fer­ent vis­ion of how those resources should be developed, and how the bene­fits are dis­trib­uted, than the cur­rent Gov­ern­ment and their cor­por­ate back­ers.

Debate on the off­shore industry has become polar­ised between hardened pro and anti drilling and min­ing pos­i­tions.

Some of the major issues are being ignored.

On the pro side a num­ber of unreal­ist­ic expect­a­tions being pro­moted.

The bene­fits of devel­op­ing our mari­time resources are numer­ous. Obvi­ously for sea­farers whom we rep­res­ent there are well paid jobs, and the boost to region­al eco­nom­ies can be seen in the case of Tarana­ki.

Yet there are down­sides too, and most import­antly the ques­tion needs to be asked “who bene­fits?”

It’s in the interests of the cur­rent Gov­ern­ment to pump the pro­spects.

The sad fact is we are heav­ily reli­ant on our extract­ive indus­tries to make up the short­fall for the irre­spons­ible tax cuts and a gen­er­a­tion of free mar­ket ideo­logy which has cre­ated a vast social defi­cit.

The New Zea­l­and eco­nomy is doing great we are told, but unfor­tu­nately the people of New Zea­l­and are not doing so well in many cases.

Unem­ploy­ment remains high con­cen­trated in some com­munit­ies and has now become an intergen­er­a­tion­al threat to our soci­ety, along with cas­u­al­iz­a­tion and low wage jobs.

One thing is for sure that the trickle down effect is not the mod­el we want to fol­low when it comes to dis­trib­ut­ing the bene­fits from the off­shore industry.

Look at the United King­dom, where the bene­fits of North Sea oil and gas were squandered in the Thatch­er years.

A recent art­icle in the UK Guard­i­an by Aditya Chakrabortty (13 Janu­ary 2014) described how the North Sea bil­lions were trans­formed into tax cuts for the wealthy, with one eco­nom­ist sug­gest­ing the res­ult­ing boost in dis­pos­able income of the already rich had pushed up house prices. Sound famil­i­ar?

In Aus­tralia, the miners uni­on, the CFMEU, has shown how the bene­fits of the “resources boom” have accrued to a minor­ity in their Novem­ber 2013 report “Shar­ing the Bene­fits.”

CFMEU miners lead­er Andrew Vick­ers told media “We have exper­i­enced a major boom but have rel­at­ively little to show from it, oth­er than that it helped us avoid the worst of the glob­al fin­an­cial crisis …Too much has gone into the pock­ets of share­hold­ers and man­age­ment, mostly based over­seas, and too little to the Aus­trali­an com­munity that owns the resources.”

The bil­lion­aire min­ing heir­ess Gina Rein­hart summed up the atti­tude of this ren­ti­er class in 2012 by com­plain­ing pub­licly that Aus­tralia was becom­ing too expens­ive and too uncom­pet­it­ive for export-ori­ented busi­ness.

“Afric­ans want to work, and its work­ers are will­ing to work for less than $2 per day. Such stat­ist­ics make me worry for this coun­try’s future,” she announced in a video.

Con­trast this bizarre out­look with Nor­way, with its “integ­rated, planned approach that cre­ated long term indus­tries.”

A gen­er­a­tion ago the decision was made to invest North Sea oil and gas pro­ceeds for the long term bene­fit of the Nor­we­gi­an people.

Taxes, license fees and income from the major­ity State-owned pro­du­cer Statoil have built up the largest pen­sion fund in the world. There is plenty of debate about the fund in Nor­way, but it’s the about the kinds of prob­lem you want to have.

For a more rad­ic­al example, the Gov­ern­ment of Venezuela has used the income from their oil resources to trans­form the lives of the poor major­ity, once denied access to the bene­fit of their nation­al resources.

Des­pite the best attempts of destabil­isa­tion from the ves­ted interests, Venezuela has pushed for­ward an ambi­tious social pro­gramme to alle­vi­ate the worst of the poverty that scarred its his­tory.

New Zea­l­and could use our off­shore resources to bene­fit all, but under cur­rent policy we are more likely to see the bene­fits go to a few. That’s the debate we should be hav­ing.

The oppos­i­tion to the off­shore industry is under­stand­able but on closer exam­in­a­tion is illo­gic­al and incon­sist­ent.

Oil and gas cor­por­ates are not a spe­cific­ally evil group of entit­ies, any more than any large cap­it­al­ist cor­por­a­tion.

They are simply profit max­im­ising machines and will do whatever they can to max­im­ize their profits.

Cli­mate change is a real­ity and a threat to human exist­ence.

The danger of oil spills is real too. But the danger of oil spills is not a New Zea­l­and phe­nomen­on.

New Zeal­anders will still use fossil fuels and their byproducts regard­less of wheth­er we drill. So in a sense there is an ele­ment of hypo­crisy at play.

There is a dis­con­nect oper­at­ing here.

The entire New Zea­l­and eco­nomy uses oil and gas. It uses min­er­als. This is not going to change tomor­row or even in ten years time.

We are now plugged into a glob­al­ised inter­na­tion­al eco­nomy and to move to a new sys­tem requires more than mor­al­ist­ic slo­gans.

This is not arguing that the glob­al free mar­ket is a good thing. The Mari­time Uni­on has argued against cor­por­ate glob­al­isa­tion and free trade deals, and the worst excesses of con­tem­por­ary cap­it­al­ism on work­ers and the envir­on­ment.

But we have to work from where we are, not from where we would like to be. To try and sep­ar­ate off from this sys­tem overnight is not going to hap­pen. Organ­ic fruit and veget­ables are not trans­por­ted to inner city shops by don­key and cart.

To simply say, let’s stop it, is not feas­ible.

New Zea­l­and needs a trans­ition plan and the lim­ited use of our off­shore reserves over the next peri­od can help pay for this.

For example, due to the back­ward approach of our Gov­ern­ment, we have seen the rap­id expan­sion of roads and the move­ment of freight by trucks, which object­ively speak­ing is abso­lutely ridicu­lous.

New Zea­l­and is a mari­time nation and our future lies in the vast oceans that sur­round us.

So what is the altern­at­ive?

The Mari­time Uni­on advoc­ates a nation­al strategy to devel­op of off­shore resources, not frit­ter them away in pump­ing up the incomes of the already wealthy through unaf­ford­able tax cuts.

A sov­er­eign fund is one option, but giv­en New Zealand’s des­cent into devel­op­ing world status in some com­munit­ies, an imme­di­ate pro­gramme of rais­ing wages and bene­fits for the poorest sec­tions of the most dis­ad­vant­aged is required.

This must be sup­ple­men­ted with an integ­rated hous­ing, edu­ca­tion and health pro­gramme to ensure that no New Zeal­anders are left behind.

Secondly, acknow­ledging this is not a long term option, off­shore income must be dir­ec­ted to a long term strategy with a focus on mov­ing New Zea­l­and bey­ond a fossil fuel based eco­nomy and devel­op­ing renew­able energy gen­er­a­tion and a trans­port sys­tem based on low impact coastal ship­ping and rail.

Finally we must have a uni­on­ised work­force which can act as a safe­guard to ensure world class health and safety prac­tices.

For example MUNZ sug­ges­ted pri­or to the ground­ing of the Rena the pro­vi­sion of an industry fun­ded fast  response ves­sel to deal with off­shore incid­ents, yet no pro­gress on this has been made by Gov­ern­ment.

In addi­tion we have called for the crew­ing of FPSO ves­sels used in off­shore pro­duc­tion with a mar­ine crew of qual­i­fied sea­farers.

The review of New Zea­l­and health and safety laws fol­low­ing Pike River is import­ant. The hard les­son was that private cor­por­a­tions were allowed through poor reg­u­la­tion and so-called “pro busi­ness” policies, to pri­or­it­ise profit over work­er safety. It must not be allowed to ever hap­pen again.

New Zeal­anders should rightly be con­cerned about the dangers and down­sides of off­shore drilling and min­ing, but used respons­ibly, these resources could be used to build a post-car­bon eco­nomy and over­come poverty and want in New Zea­l­and.

There is a bal­ance to be found, but we can­not allow the bene­fits of our off­shore resources to be squandered.

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