“LABOUR’S RECORD OF MUDDLEMENT”

Press, Volume CI, Issue 29866, 5 July 1962, Page 14

“LABOUR’S RECORD OF MUDDLEMENT”

Mr Hanan Condemns Secret Agreements (From Our Parliamentary Reporteri WELLINGTON, July 4. “A record of muddlement and ineptitude rarely equalled in the history of the modern state,” said the Minister of Justice (Mr Hanan) in the Budget debate tonight when he spoke on agreements made by the Labour Government with the Consolidated Zinc Company for operations in Southland and with the Aluminium Company of Canada to make aluminium products in Auckland. “I don’t agree,” interjected the Minister of Lands (Mr Gerard). “They were good horse traders. They sold the same horse twice.”

Mr Hanan said the Government had now amended Cabinet rides for the conduct ot Crown legal business to provide that any agreement granting a total or partial monopoly, financial aid. taritl aid. tarifi or import control protection or other right or privilege, was to be referred, in draft form, bv a minister or permanent head to the Solicitor-General before being brought before a minister for signature.

"The Government is concerned with the practice that has grown up over the years of a minister making agreements. which are. in effect, secret, with commercial firms, giving them monopoly rights to trading in New Zealand." said Mr Hanan He named 10 such agreements. made during the term of the Labour Government—the aluminium fabricating :n. duetry (Alcan), the Pacific S eel Company, the oil refinery. the g.n distillery, steel and brass wood screws, steelwire drawing. steel-wire ropes, telephone cables apd sheet-glass manufacture. Referring to the Pacific C m-any’s scrap steel mill. Mr Hanan said the Tariff and Development Board would have to see if this industry would fit into plans for the development of a basic iron and steel industry in NewZealand. "I hope it will." he added “I’m not suggesting that the secret agreements were all bad What I am suggesting is bad is that the deta.ls were not given to the people "The one most publicised—the mfam.-us cotton mill agreement—will be the subject of a full discussion in this House by reason of the introduction at an early date of the Commonwealth Fabric Corporation BtH. which will have the effect of winding up the project," "Proper" Agreement On the Alca.i agreement and the Manapouri agreement between the Government and Consolidated Zinc. Mr Hanan said that on October 10. 1930. Parliament passed an act validating the agreement with Consolidated Zmc. "This agreement was property made." said Mr Hanan “The conduct of the Minister of Works (Mr Watti at that time was impeccable." said Mr Hanan. The subject was debated by Parliament and the details of the agreement were made public The agreement said Consolidated Zinc would appraise the power potential of Te Arau and Manapouri "with a view to utilising such power for the production of metals or other products for sale within New Zealand and in world markets“ "This agreement was approved by this House." said Mr Hanan “but the House did not know that these rights to manufacture a range of aluminium products in New Zealand had already been granted to a rival overseas concern the immensely wealthy Aluminium, Ltd., of Canada." Mr Gerard: Dreadful. Seven months before the House approved the Consolidated Zinc agreement, tne then Minister of Finance (Mr Nordmeyer). had secretlv given these rights to manufacture aluminium products in New Zealand to the Canadian company, whose subsidiary was Alcan, the Auckland company In many respects the Alcan agreement was a good agreement, said Mr Hanan, but it gave exclusive rights, when at the same time, a bill was passed by Parliment giving the same rights to someone else.

The effect of the agreements. said Mr Hanan, was that for the next 15 years a

ship might bring aluminium ingots from America and unload them at Auckland It would then go to Bluff and load up with aluminium ingots and take them to America

"Can anything be more absurd?" he asked Two letters from Mr Nordmeyer Constituted the agreement between the Government and Alcan They were not sent to the Industries and Commerce Department These conditions were intolerable. he said, and the Government was gravely concerned that this could happen Preventing Recurrence "The Government has taken steps to ensure that as far as possible this sort of thing won’t happen again What I have said tonight shows the evil of making secret igreements.” said Mr Hanan Mr Hanan then read the amendment to the Cabinet rules, which he said the Government had approved, for the conduct of Crown legal business ■ Had this been done with ■he two secret letters written by Mr Nordmeyer he would not be responsible for the extraordinary position that exists today,” he said As Mr Hanan read the amendment. Mr R McDonald (Opposition. Ponsonby' shouted: That will put a legrope cn your friends. Mr Watt said the Opposition would be happy if the letter written by the general manager of the Electricity Department to Consolidated Zinc and the whole subject were referred to the Public Accounts Committee.

People wanted to know, not so much who was going to look at an agreement, but who was going to honour it. said Mr Watt. “The Minister left the impression that the material to be produced by Consolidated Zinc in Southland would be the same material to be produced by Alcan in Auckland." he said “The material we hope will be produced in Southland will be aluminium ingots, at present used by Alcan in Auckland and imported from Canada.” The likely production in Southland was 280.000 tons of aluminium a year, said Mr Watt “The present consumption of aluminium ingots by Alcan is 2500 tons and the present total capacity of the works is 5000 tons. “Mr Hanan said Comalco will not be able to sell its product to Alcan. Where does it say that in the agreement’’ All the letter does is to give an assurance that they will have an adequate supply of raw material to keep the industry going ” Reason For Letter No agreement had been signed to start an aluminium industry in Southland said Mr Watt The Labour Government had been keen to get industry to New Zealand. so Mr Nordmeyer wrote to Alcan assuring them that they would get raw material ' The industry in Southland was just being discussed then Mr Watt said that he agreed that when agreements were entered into they should be perused by the Crown Law Office, but it was wrong to make public details

The Minister of Agriculture (Mr Taiboys) said the letter from Mr Nordmeyer said Alcan was to import its ingots of aluminium. Mr Watt: Rubbish. It says they may be imported. Mr Taiboys: Why on earth then, did Alcan establish itself here if it was not as an outlet for the ingots of the parent firm? That w’as its whole purpose. “This letter says Alcan can import its ingots, which means it shall. If the manager of the company in Auckland said he was not going to import ingots, then he would get the sack the next day,” said Mr Taiboys. "The amazing situation is that there was written into the Consolidated Zinc Agreement an opportunity to manufacture in New Zealand Mr Watt: Why not? Mr Taiboys: But in the Alcan agreement there was a guarantee that the Government would use its powers and influence to ensure nothing happened to render the Alcan enterprise uneconomic. Reprimanded Mr W. W. Freer (Opposition, Mount Albert) -sitting in his bench, sought to ask Mr Taiboys a question, but the acting-Speaker (Mr R. E. Jack! warned Mr Freer that his action bordered on “insolence." He should have risen to address the chair. Resuming Mr Taiboys said: "It would have been easy to produce the letter originally inviting Consolidated Zinc here, if it had not been locked up in the safe of the honourable member for Onehunga.” Mr Taiboys produced a letter dated April 9. 1957, from the then Prime Minister (Mr Holland) to Consolidated Zinc inviting them to send a representative »to New Zealand to discuss aluminium industry plans. Mr W. A. Fox (Opposition. Miramar): It would be better if you would table the whole file.

Mr Watt: Point of order. Mr Speaker. I ask that the Minister of Agriculture lay it on the table of the House. The Minister of Civil Aviation. Mr McAlpine: You had it in. your safe. It should have been tabled years ago. Mr Fox: In view of these discussions and the charges that have been hurled across the floor tonight,, the file should be tabled. Mr Taiboys: [ see no reason on earth why it should no' be laid on the table. Mr Watt: The Minister of Agriculture has just taken part of the letter off the file and given it to the Minister of Justice. Mr Hanan: There are copies of these letters—but not of that from Mr Nordmeyer—on a file in the possession of the Minister of Works. Mr N E Kirk (Opposition. Lyttelton): The whole file should be laid on the table—and not just part ct it. Mr A. E. Allen (Government, Franklin': This is just a red herring. Mr McAlpine: It’s impossible to lay the whole file on the table Mr Nordmeyer has already mislaid a carbon copy. He has removed the carbon copy—or mislaid it. or lost it or never had it. Letter Tabled “We are very pleased to comply with the request to table the letter." said Mr McAlpine Mr Taiboys: That letter from Mr Holland suggested that a man from Consolidated Zinc should be sent to New Zealand The National Government, in fact, invited Consolidated Zinc to New Zealand These were’letters Mr Watt had in his safe Mr Fox: Don’t talk as if ’here's something sinister m it

Mr Taiboys: As a result ot Mr Watt failing to make the letters available the present Minister of Justice .vas suspended from the House in 1960

Opposition voice: Nonsense Tha’ wasn’t the reason "The amazing thing abou’ ■his whole business is tha’ there were two Labour Governments —one run by Mr Nordmeyer and one run by Mr Watt each makfne theiwn tittle agreements." ’aid Mr ratboys “I would say "’ommunications between Labour Ministers had almost broken down . . "