Job losses in the Eastern Bay of Plenty

Noske Skog (NS), the main tenant at the Tasman Mill, will halve production resulting in the loss of over 100 jobs. Small job losses have occurred across the Mill for several years. The last significant lay-off occurred in the 1990s.

What the media, and politicians for that matter, have failed to grasp is the flow-on effect the cuts will have. Support industries in Kawerau and the Eastern Bay of Plenty will have to downsize significantly. There are several engineering and construction firms in the region who rely on the health of NS and the other tenants at the Tasman Mill. With this in mind, the job losses will be well in excess of the 120 set to go at NS.

Carter Holt Harvey (CHH), who also operate at the Tasman Mill, supply NS with pulp for the manufacture of newsprint. With the downsizing at NS, demand for pulp from CHH will fall 20%, at the moment NS constitutes 40% of CHH’s demand. As a result, CHH will be forced to downsize as well. This will push job losses higher still.

The Tasman Mill is the second largest industrial power user in New Zealand. The Mill is supplied by an on-site geothermal power station. With a decline in production at NS and CHH there will be reduced demand for power. This may result in job losses at the power station (which is owned and operated by Mighty River Power by the way). Again, this would push job losses higher still.

These job losses will cut a gash in the Eastern Bay of Plenty economy. The Mill is the largest single employer in the region and the source of many of the regions middle-income jobs.

Those affected by the downsizing, and the region as a whole, are crying out for government support. However, as of today, the government has failed to respond with anything substantive other than “everything will sort itself out” and "Biofuels! Biofuels!", despite his government cancelling biofuel requirements. This response fits well with the government’s non-existent strategy for the manufacturing sector and their apathy towards provincial economies. Oh, and I’m sure their response has nothing to do with the Mill workforce been entirely unionised and nothing to do with their 50 year history of union activism.

David Cunliffe spoke to Morning Report on the issue and, in contrast with the government, discussed solutions including easing volatility in the exchange rate, thus making conditions more favourable for export. The contrast between Cunliffe and the government (and Cunliffe and his colleagues) could not be more stark.    At least the people of Kawerau and the Eastern Bay of Plenty know where to place their vote in 2014.  

Maori lose - again

I sympathise with the Ngati Rangitihi people of Matata. They have, as a collective, appealed against some terms of the resource consent granted to Carter Holt Harvey and Noske Skog – the two companies that operate the Tasman Mill in Kawerau. Specifically the length of the consent (25 years) and the amount of waste that can be discharged into the Tarawera river. The appeal was dismissed by the Environment Court and on further appeal the High Court. Ngati Rangitihi has now expressed intention to appeal to the Court of Appeal.

Realistically, they have slim hope of a favourable ruling. An appeal can only be made on points of law so Ngati Rangithi must prove that the hearing commissioners or previous Courts erred in the application of the law. I do not think they did. The High Court judgement is, in my opinion, reasonable given the special circumstances. However, I think the Court and the hearing commissioners strayed in relation to Maori viewpoints. Adequate weight was not given to the views and concerns of tangata whenua. Lip service was paid but the decision did not reflect the deeply held concerns of the Maori communities affected by the decision. This situation is not uncommon in local government and judicial decisions largely because the decision makers have little understanding of Te Ao Maori or any sympathy for and connection to Maori communities. Indifference usually characterises high level decision making as well. People become units, the whenua becomes a resource and taonga becomes an opportunity cost.

Unfortunately further Court action poses a risk to the Mill and the 500+ jobs it sustains. Carter Holt Harvey must upgrade its recovery boiler by March 21 and they will not do so unless they have long term operational certainty. If Carter Holt Harvey closed then Noske Skog would in all probability follow suit consequently the sawmill would suffer a huge drop in domestic demand and theoretically SCA (tissue manufacturers who operate at the Mill) would have no reason to operate from an isolated, empty mill. This would be a huge blow to Kawerau and the Eastern Bay. The Mill keeps household rates in Kawerau comparatively low, sponsors community events and provides jobs for the Eastern Bay of Plenty (most Mill workers live outside of Kawerau in lifestyle towns like Ohope). The Mill is also a triumph of unionism – wages are high thanks to strong union action over the past 50 years. The Eastern Bay economy would be nothing without the companies that operate from the Mill.

Therefore, I think the Judge was correct in dismissing the appeal on those grounds, however I still do not like the content of his ruling. The term should have been reduced by five years, allowing for long term operational certainty yet giving effect to the concerns of tangata whenua, and discharge restrictions should have been further tightened over time. I feel sorry for Ngati Rangitihi, they are only acting as kaitiaki yet they do so with little chance of success and sadly some ignorant people in the community see them as trouble makers rather than caretakers.