Govt blocks U.S. access to documents

Press, 18 July 1980, Page 1

Govt blocks U.S. access to documents

By

PHILIP WORTHINGTON

A United States antitrust probe into the conference shipping lines, seven . companies, which carry 98 per cent of the New Zealand-United States, seaborne cargo, forced the Government to introduce emergency legislation last evening. Shipping . companies have been served -with demands by the United States Department of Justice to produce all relevant documents to the conference agreement. These include agreements between New Zealand producer boards and conference lines. - The deadline for the 'production of the docu- - •ments' is Monday and the ■officers of the companies --could be subject to imprisonment if they fail-to supply the documents. Accordingly, the Government, with the cooperation of the Opposition, interrupted the Budget Debate to introduce the Evidence Amendment (No. 2) Bill, which will go before a special meeting of the -'Statutes Revision Committee at 8 a.m. today before being reported back to the House for a second and third reading. Whether Parliament will take urgency bn the bill today will depend on information the Government hopes to receive overnight. The bill aims to ensure that evidence held in New Zealand, cannot be produced in courts, tribunals, and inquiries in foreign countries. when to do so would be prejudicial to the interests of New Zealand. Describing the United States action as “an unjustified invasion of sovereignty,” the Attorney- , General and Minister of Justice (Mr McLay) said that a rigid application of the United' States antitrust laws would rule out any co-ordinated approach to' the export and sale of New Zealand produce. -“Previous investigations of this kind have resulted in judgments by United States courts imposing extremely heavy fines and 'imposing enormous penal damages, running on some occasions into billions of dollars,” he said. The enforcement of these penal damages judgments — which cbuld cause. irreparable harm to the companies concerned and to the national interest of countries to whose economies theycontributed — had been objected to by all the Western countries whose companies have been involved. * • '■ • ; ’ “Many of them have

taken steps to reclude the enforcement of these judgments within their jurisdiction,” Mr McLay said. Canada, Britain, Australia, and many European countries had put forward legislation similar to that being introduced in New Zealand. VCt The bill required early passage because the American officers of the companies concerned were required to comply with demands for evidence served on them by not later than next Monday. The penalties for non-compliance included fines, or imprisonment, or both, he said. “Unless New Zealand .is ■ able to prohibit the removal of documents from New Zealand, the New Zealand officers of the shipping companies have no option but- to comply with orders to forward any relevant documents in their possession for handing over to the United States Department of Justice. “In the Government’s view,' the ’ removal of any such documents from New Zealand could be prejudicial to our national interest,” Mr McLay said. The assertion by one State that its laws could have extra-territorial application and could over rule the law of other countries was an assumption of power that was not in accord with the established • principles of international law. “That is the claim being asserted in this case by the United States authorities, in that they have the jurisdiction to compel evidence located in New Zealand to be produced for an investigation being conj ducted in the United States into agreements ~ made and consummated in New . Zealand concerning the transport of our produce to the United States,” he said. Successive governments of different persuasions had approved these arrangements as best overcoming the problems of New Zealand’s isolation as as trading nation. “The imposition and enforcement of liability for the infringement of United States trade practices laws upon foreign nationals outside the United States territory has for many years been a bone of contention bn the international scene. “I stress to the House that the measure proposed does not indicate an in- ■>. tention to provide a general protection for multinational cartels from legislation in the various countries which regulate the trade practices which

are of concern and which span international boundaries,” he said. “We support wholeheartedly competition based on efficiency to provide consumers with goods at the lowest price justified by efficient business operation and to allow busines-ses-to compete bn their own merit.

"However, we will not concede the right of foreign courts to impose restrictions on the manner in which New Zealand citizens or residents conduct their business in New Zealand,” Mr McKay said. The Deputy Leader of the Opposition (Mr Lange) said that the Opposition was concerned for the interests of New Zealand as a sovereign State. , “We have here a bit of legislation which is needed in the economic interests of New Zealand;” he said.

“What we have is a threat from a United States power within their Justice Department to take anti-trust procedures against those companies which serve the New Zealand export market to the United States.”

The Opposition’s view of the conference lines arrangement was clear, he said.

“The conference arrangements need to be looked at, but the Opposition will fight in this House to the last ditch to reserve for this Parliament and this Government the right to, bust the conference and we are not disposed to surrender to ' the United States or any other foreign power that particular right,” he said. ’ < Opposition speakers criticised the eleventhhour nature of the legislation. Australia had applied urgency to the passage of its Foreign Proceedings (Prohibition of Certain Evidence) Act, passing it in its entirity in three hours, but that had been four, years ago. The demand for information from the shipping companies' had been known for some months. Mr G. W. R. Palmer (Lab., Christchurch Central)' said that it was wrong .for American antitrust laws to invade the sovereignty of New Zealand, but he questioned whether the bill would prevent that occurring since the conference shipping lines had the United States as one terminal and all the businesses importing goods to the United States through the conference lines were, subject to the American laws.