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Gordon Campbell on McCully’s latest debacle, and fracking

Gordon Campbell on McCully’s latest debacle, and on a fracking counter-measure

So Nick Smith has fallen on his sword, while dutifully covering for John Key’s leadership inadequacies on this issue as he did so. At the outset, Key had tried to sweep the entire affair under the carpet by describing Smith’s main transgression – the reference letter about his friend that he sent to his own ACC officials on ministerial letterhead – as being only a “minor” matter, no violation of the Cabinet manual, and moreover, the kind of lapse of judgment so common in his government that if he had to sack Smith, Key said, he would have to sack half of his Cabinet.

Right. Only after it became clear that nearly everyone else felt otherwise, Key treated a second, genuinely minor error by Smith (ie, his writing about his friend to fellow MP Pansy Wong without declaring his conflict of interest) as having tipped the balance. Faithfully, Smith has kept repeating the line about his two lapses of judgement, which really is little more than a cover story for Key’s change of tack.

The very lucky player in all this has been Foreign Affairs Minister Murray McCully. Without the Smith affair, McCully’s bungled reforms at MFAT – and his all-too-typical attempts to distance himself any responsibility for them – would have been the front page political story of the week. Briefly, McCully had flagged his reform intentions in a speech last April.

The details of the intended reforms were finally unveiled a month ago. The reforms were expected to save $25 million a year – mainly by cutting 169 MFAT jobs here at home, and 136 locally-hired staff in our foreign outposts. Our embassies in Stockholm and Warsaw would be closed, and MFAT would follow a general policy of outsourcing foreign support jobs to local contractors wherever possible. Some of the perks available to overseas staff would be cut back, and the system of rotation between diplomatic posts (which was originally meant to ensure a stable career path for diplomats and to help retain their experience) would be scrapped, allegedly in order to free up career opportunities for cheaper, younger blood.

The reforms – and the way they have been pushed through – have been met with loud and sustained opposition from MFAT staff and senior diplomats. Judicious leaks to the media have highlighted the potential damage that the reforms pose to New Zealand’s trade and diplomatic interests, and to the security of New Zealand travellers abroad as our consular representation shrinks. Yesterday, McCully responded to the mounting furore not by defending his officials – but by turning on his own top official, the MFAT CEO, John Allen. The gist of the criticism being that Allen had treated the reform process as a general cost cutting exercise – whereas McCully says he had wanted it all along to be an emphasis shifting exercise, of switching our available resources from Europe to Asia.

It now seems that the number of job losses will be halved – from 300 to about 150 – with the bulk of those losses being in Europe and in New Zealand, and not in Asia. Contracting out has also been scaled back in places where this would have been impractical, such as the Pacific Islands.

As RNZ has reported however, the proposals to alter the career path at MFAT will still go ahead:

Mr McCully says, however, that some aspects of his ministry's proposals will remain. They include ending the system of rotating diplomats among posts and instead making them apply for advertised positions

It is also expected that more of our diplomatic posts in Europe – such as our missions in Rome, Madrid, the Hague and Paris – will be closed down or scaled back, in order to shift resources to the likes of Abu Dhabi, India, China and other Asean countries. Increasingly, New Zealand travellers in Europe in particular will be on their own.

Further details on the job cuts will emerge later today, when MFAT managers meet up with public sector union officials. The astonishing sight of McCully launching a public attack on the officials who were trying to enact a policy that he initiated was bad enough – but there is still room for concern about the residue of the reforms that he was still endorsing yesterday. While our trade focus is indeed shifting towards Asia, it seems brutally and stupidly simplistic to send such a clear signal to the European Union that it no longer figures in New Zealand’s diplomatic calculations. This is a region that still accounts for a very large slice of our trade and diplomatic efforts.

Moreover, making diplomats apply for advertised positions when their overseas posting ends seems a typically short sighted Murray McCully idea. It may save money to make diplomacy a fixed term contract job and younger diplomats would certainly be cheaper. But diplomacy is the sort of club where experience counts and where the contacts that go with that experience are all important. All that stands to be lost. Will our young bright fellow fresh from university be able to function effectively in a context where other countries still value seniority? Probably not.

Moreover, by creating a rotating door employment culture at MFAT, we may only briefly stop top talent from being poached by the private sector. That’s because once the new blood realises they’re likely to be thrown to the wolves once their overseas posting ends, the allure of diplomacy to our best and brightest graduates will fade very quickly indeed.

Rather than focussing on creating the contacts and initiatives that will further New Zealand’s interests abroad, the new breed of diplomats may well spend rather more time currying favour with the people back home who are likely to determine their future job prospects. All we may get, in the end, is a different kind of old boys club.

Failure, though, has never stopped McCully before. Why should we think he’d admit any ownership to this, his latest debacle? Right now, the main job likely to be lost is John Allen’s.



Talking of government reforms bound for disaster… a few days ago, I traced the planned local body reforms back to the TABOR tax measures in Colorado. Just in case anyone took this as being an anti-American slur on the Colorado legislature, I’d like to single out one other piece of Colorado state legislation that could be worth dusting off as a private member’s Bill.

Someone in the Greens or Labour should take a close look at SB 12-107, a Bill in the Colorado legislative mix right now that aims to impose meaningful restrictions on the mining practice known as “fracking”. So far, the Greens have proposed a moratorium on fracking – a process whereby hydraulic pressure (and a cocktail of chemicals) is used to blast away oil and gas deposits from shale rock – but SB12-107 would accomplish much the same outcome.

The Colorado Bill sets useful conditions on oil and gas companies engaged in fracking, as this description makes clear:

Oil and gas operators must submit water quantity reports showing projected and actual sources and amounts of water needed for hydraulically fracturing a well. Operators must also submit pre- and post-fracturing water quality reports for all active water wells located within .5 mile of oil and gas wells that will be or have been hydraulically fractured. This information will be posted on the commission’s web site. Operators cannot inject into the ground any chemical compound that would cause cancer. [This is a brake on the lethal BTEX cocktail used in the process, plus any similarly dangerous substitutes.]

In addition to existing financial assurances, each operator that engages in a high-risk hydraulic fracturing treatment must take out an environmental bond that would be forfeited if the operator’s operations cause any damage to water rights.

Subject to listed affirmative defenses, an operator is presumed to be responsible for the pollution of a water supply that is within .5 mile of a line between the well head and the surface projection of the bottom hole location of the well, if the pollution occurred within 6 months after the completion of the hydraulic fracturing of the well. Hydraulic fracturing would be prohibited within .5 mile of any surface water, including a pond, reservoir, or other natural or artificial impoundment or stream, ditch, or other artificial waterway, unless the operator uses a closed-loop system.

Of course, the oil and gas companies would hate these kind of restrictions. But a private members Bill constructed along similar lines here, could be a useful weapon in the battle for responsible industry practices.


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