So Woodside, Rio and Boral have responded to the Australian Conservation Foundation and Australian Climate Justice Program complaint to the ACCC about the yawning gap between the shrillness of public emoting and disclosures to the investment community, which increased even as the emos won greater concessions at each stage of the process. The EITEs have won some $16.4bn of public money in concessions at last count. That is an extraordinary amount of public money being handed over to pad their profitability: about 19 000 new buses, to take the Rooze’s benchmark, or 455 time-wasting, subjectively measured ‘energy savings’ schemes.
Rio Tinto’s response, that they’re not ‘battling’ a global emissions trading scheme, is laughable. How do they honestly expect a national – let alone global – scheme to gain traction if everyone keeps undercutting it? Business commentary, from the most hackneyed pining for a fanciful, counterfactual world free of political machinations (Carbontaxalia?) to more orthodox defences of industry have questioned the EITE concessions. eg. Electricity Supply Industry Apparatchik Keith Orchison has noted that, “… firms are hardly going to play up the negatives to the investment community, particularly as the legislation is still a moving playing field. However, as the analysts all read the papers, surely they must be asking these companies about their public utterances – how one wonders does the rest of that conversation go?”
One does indeed. The cut and thrust of the complaint is that with such a thoroughly impotent carbon price now firmly on the table, companies have an obligation under s52 of the Trade Practices Act to, well, make ‘the rest of that conservation’ redundant. The key issue for the ACCC will be whether the Statements ‘were made in trade or commerce’ or bear such a character. The complaint alleges that the statements were absolutely core to these businesses. Indeed, they were instrumental in delaying the scheme, increasing compensation etc.
The accompanying opinion piece in the AFR is punchy
If the law requires honesty in how companies communicate to investors or consumers, why should we tolerate any lower standard in how companies lobby governments? Surely truth in the democratic process is as valuable as truth in the marketplace… After all, in return for the privilege of limited liability that corporations enjoy, the public is entitled to expect corporations will not seek to corrupt the process of public policy formation.
The shift from the marketplace as site of justice to the site of truth is a distinguishing mark of modernity according to some scholars, though the same could hardly be said of politics. We expect ‘non-core’ promises from our politicians. Government, according to my new preferred metaphor, is a ‘congenitally failing operation’ – a genetically impossible creature always subject to new, feverish techniques of assembly, connection and disassembly (and I’ll blog about the voluntary action workshop I attended recently when I get a chance). The persistent clashes between notions of a free person and one who’s the object of prediction and perfection through various modes of calculation are an essential dynamic to contemporary life. In this sense, political actors, like their theatrical counterparts, require massive infrastructure behind them – it’s not hard to think of the ways in which corporations and NGOs require a backstage, changerooms, crew, props etc. to manage their public image.
However, this shifting between backstage and frontstage needn’t imply some kind of relativism in the pejorative sense of not being able to distinguish any relations. As Mark has remarked, the expansion of the state under the Great Transformation was about ‘disembedding’ existing social relations until the public sector reached a critical mass – until the stage grew too big for the theatre. The neoliberal turn, to the extent that it is identifiable, was about aiding the fracturing of this space and shifting much of the work performed there to the backstage. Thus, whilst the size of government may have actually increased, our collective dreams of freedom have brought forth the multiplication of, often incommensurable, justifications for climate change action – utilitarian, industrial, ecological, etc. etc. The rise of the IPCC as a technocratic, globalizing project amongst a cacophany of others pushes against this tide, which is perhaps why consensus models have proven completely unworkable in the current reason of state.
Revitalisations of an idealised public sphere of yesteryear hardly seem like they’ll cut the mustard in this context, though it’s notable that that’s exactly what Third Way progenitor Anthony Giddens has called for as he saw the Third Way/New Labour project descend into a technocratic morass, reinstating the old divisions it was originally designed to liberate. Instead, Giddens argues, to meet the challenge climate change poses, “what is needed is not just an enabling but an “ensuring” state, a state that can actually deliver outcomes.” The increasingly empty promise of Carbon Pollution Reduction against a mythical ‘baseline’ combined with tawdry political managerialism suggests that we’ll see a lot more judicial machinations picking up the ‘ensuring’ slack.
Excellent post, dk!
Agreed with Mark, this is a wonderfully incisive and illuminating post.
Thanks guys. I’ve got my blogging mojo back since hanging a little photo of Christian Kerr above my coffee machine
There is a basic story here that the ACF and the ACJP have complained to the ACCC, not in an email but in a well-documented 200 page brief, that six companies have lied to the Government crying wolf over the adverse impact on their bottom line, while telling their shareholders that the CPRS is basically a non-event in terms of their profitability.
There are clear penalties under the Trade Practices Act for lying to consumers as well as to shareholders and prospective investors, ie. the market. The companies seem as though they will be well-rewarded for their lies. Analysis by Goldman Sachs JB Were suggest that what the companies have told the market is nearer to the truth.
Whether this can be proven or not under law, and whether it will be found an offence may well turn on whether the statements “were made in trade or commerce” or whether the sphere of politics is a place where lies are an acceptable norm. Legislators have the option, and in this case I think the duty, to make telling lies to legislators illegal.
On a quick read dk.au has done an excellent job of revealing how all this sits in relation hidden currents of power and social relations. I’ll read it three more times when I get home tonight.
I agree, this is a nice post. The lack of critical independent analysis of the likely impact on traded firms’ profitibility, employment and investment has been appalling.
Still working through your links dk. Great post.
And lotsa luck to the ACF and ACJN with their petition to the ACCC – a huge rap over the corporate knuckles is well overdue.
The reality is that governments rarely compensate business or individuals for the impact of government, reserve bank etc. decisions. It would be like expecting banks to offer compensation every time they increase their fees. However, once the government started offering compensation it is hardly surprising that those with enough lobbying resources will have a go at getting free permits or compensation. The perception that the government has no underlying philosophy re who should get what compensation and what circumstances
The problem is made worse by the complexity and uncertainity of CPRS. Nobody knows what permits will end up costing or who in their supply chain will end up getting a free ride. The uncertainity is made all that much urgent given that “putting a price on carbon” requires large, rapid price jumps if it is going to get results.
The other problem for business is that it is that the government is not clear what it expects industries to actually do to reduce their carbon footprint. In many cases the most practical thing to do is whinge loud and long in the hope of compensation and, if this doesnt happen, pass the cost of carbon on and do nothing much to reduce emissions.
The complaint will fail, and fail badly. Telling lies to the Senate or the public at large through the press simply isn’t “in trade or commerce” within the meaning of that term in the TPA. Para 19 of the complaint is essentially an admission that the legal test is not met. Bizarre.
The AFR article is mostly fair enough, but the point about ‘truth in lobbying’ being the price of limited liability is misguided. If a business is structured as a partnership rather than a corporation then are we to expect less of them? They do not enjoy the privilege of an Ltd but should they consider themselves free to corrupt public policymaking?
“Legislators have the option, and in this case I think the duty, to make telling lies to legislators illegal.”
Agreed. But surely this is already an offence?
BBB
To be a little more clear: telling lies to the Senate or to the public at large through the press about the effect of a proposed policy on a company’s business or finances simply isn’t “in trade or commerce” within the meaning of that term in the TPA.
The ACF are bright enough. No doubt so are the lawyers who are advising them. So the ACF is essentially saying: “It is OK for us to waste the ACCC’s time and money for the purposes of getting some publicity.” Obviously they are free to make the case that these companies are being duplicitous (wouldn’t be the first time), but they ought not have the right to use up precious public resources on processes that are doomed to fail (and are known to be so). That’s just immoral.
BBB
Word dk (from Thailand where we are working with those who will ultimately be affected by weak climate policy fuelled by rent-seeking in developed countries).
Au contraire BBB, it’s a democracy and such efforts are fair game. This is how the regulations get tested in the sense of seeing whether the letter meets the spirit. Such efforts (though rarely) do result in change that can be justified in hindsight.
Immoral? Fair dinkum BBB.
“Section 52 of the Trade Practices Act 1974[1] is one of the most heavily litigated statutory provisions in Australian law”…..but apparently environmentalists are immoral if they test whether clearly misleading and deceptive representations made to Parliament and to the public by some of the biggest extractive industry companies on planet purely for commercial gain and /or to stymie, undermine and rent-seeking one of the most important pieces of legislation in respect of all commerce and trade in this country, falls within the Act?
Maybe you could stand outside the Court with a cardboard sign, always a good look
I disagree that the complaint is doomed to fail. How do we know? There appears to be no direct precedent on the issue of whether “telling lies to the Senate”, or lobbying government generally, is “within trade or commerce”.
What is wrong with the ACF testing whether a law extends to circumstances not previosuly considered?
So BBB it’s immoral for one lobby group to cause public resources to be used in investigating a complaint, but not immoral for another lobby group to petition the government for as much compensation (ie public resources) as it can get by “telling lies to the Senate”?
Newsflash.
Well known legal expert Bingo B Boingo of BBBB Lawyers has been sub-contracted by the Attorney Generals Department to administer the interpretation of various pieces of legislation, including the Trade Practices Act.
The Attorney General claims that the system of courts, judges and juries is a waste of time and money when you have someone with the depth of knowledge and expertise of Mr Boingo who can make the necessary decision for a fraction of the cost.
Mr Boingo was unavailable for comment, but is understood to be working on his latest book ‘The Common Law and My Part In Its Downfall’ the successor to ‘Legal Principles – Who Needs Them’.
Great post. Why is it that I can’t imagine the MSM tackling something like this?
But they have Adrian. I heard about this first on ABC’s PM.
OK, must be my lack of imagination, or listening skills!
Was it covered in this much detail though?
This seems like an issue for GetUp to highlight in advertising, maybe?
Adrian@16 and 14, it was given a bit of a run on LNL on the 15th with Laura Tingle (who gets a birth when Christian Kerr is huffless and puffless) talking about the ACF report in glowing terms.
She did mention that the kind of work they did is very time consuming, as she had had a bit of a go at it herself but was constrained for that reason.
http://www.abc.net.au/rn/latenightlive/stories/2009/2598696.htm
I think your point still stands as it has had very little press, considering how important the issue is. It is not done to beat up on large bullshiting companies when there are other more important axes to grind. Like Labor=communist.
Adrian, not quite so much detail but it was pretty good. And it was LNL with Laura Tingle as joe2 says.
The tabloids in Melbourne are way too much concerned with Judy Moran being arrested and Rove getting married to care much about such stuff. The Age is absorbed in state Labor shenanigans to report it either.
Joe2 (who gets a birth when Christian Kerr is huffless and puffless)
A simple typo is enough to make the mind boggle! Love your work
Whoops, ta, Yaz. That one has the “boggle” about it, now that you come to mention it.
Sigmund…..
I think another difficulty for you guys on this is listed companies are well versed at saying one thing to one regulatory body and another thing altogether to another. The classic is the difference between what constitutes an expense for accounting purposes versus a deduction for tax purposes. Every listed company is trying to pick the point where they can claim the largest tax deduction but allocate the smallest number possible as an expense in the Profit and Loss for the exact same outlay. Depreciation for instance, they will claim the highest rate possible for tax purposes and then argue for a much lower one in the PnL. Which figure does an investor believe?
I think also the investment community would in the main be lauding management for achieving the maximum compensation from Govt even if they have indicated to them the damage may not turn out to be so bad. That’s not going to make you guys happy but I think that’s how it’ll play out
I am happy to be corrected by someone but to best of my knowledge the ACF would need to show CONSUMERS were misled for the TPA to apply?
“The Attorney General claims that the system of courts, judges and juries is a waste of time and money when you have someone with the depth of knowledge and expertise of Mr Boingo who can make the necessary decision for a fraction of the cost.”
In this case it is the ACCC who will, or ought to, make ‘the necessary decision for a fraction of the cost’ and marginalise the ‘courts, judges and juries’ who are busy determining real legal controversies, as opposed to borderline abuses of process (I say borderline because asking the ACCC to investigate is different from starting a formal legal process). But I would be happy to make the call in the ACCC’s stead if the pay is sensible.
“Legal Principles – Who Needs Them”
Not the ACF, it would seem. It’s a pity. They’ve got a real point but they’ve ceded the moral high ground through their willingness to engage in this TPA/ACCC nonsense.
Cue ‘ends justifies the means’ comment in 3, 2, 1…
Finally, if you go and read the press on this, not one journalist (as far as I can tell) has bothered to speak to someone about whether this actually makes sense from a legal perspective. It’s not the main story, sure, but you’d think at least one would turn their mind to it.
BBB
“I am happy to be corrected by someone but to best of my knowledge the ACF would need to show CONSUMERS were misled for the TPA to apply?”
No, not true. It has general application. For example, under the TPA Big Company A could sue Big Company B in respect of misleading pre-contractual negotiations.
BBB
Fine, joe2 et al, this is what I think happened. A few weeks ago the AFR ran an article on the issue of companies being two-faced as it were. Not sure it was Tingle herself, but that’s what she was referring to on LNL.
In Monday’s AFR there was an opinion piece on the issue by Charles Berger of the ACF posted on the ACF site. There was also an article in the front part of the paper by Laura Tingle and Alexander Symonds which had some additional information that I used @ 4. That night on LNL Tingle was I think quite unconstrained and said more than was written in the article.
Don Henry hit the airwaves on Breakfast. As often happens this was picked up later in various ABC programs and online.
I suspect that in the partnership ACJP does the heavy legal lifting while what happened on Monday was an ACF orchestrated media blitz.
dk.au certainly did better than the MSM, but was standing on their shoulders, as it were. But the last three paragraphs you’ll never get in the MSM because they don’t employ sociology PhDs which I think is what you’ll find dk.au is when he updates his bio.
It’s their loss, Brian. You may want to remain crude, but sometimes you have to go technical to explain things. dk.au’s article made me think and think hard. “Government as a ‘congenitally failing operation’” – that’s stuck in my mind. May I add my complements to this piece, no matter how belated?
Yes to congenitally failing…when you think of all the times you’ve heard Rudd/Swann talk about ‘getting the balance right’ and then remember that these offending companies have been one side of these mythical scales that the current government applies to its operations … it makes you want to see some courageous decisions made somewhere.
I’ve got a different view of the possibilities of government, in part from my experience of nearly a quarter of century in QEd, where, it was generally acknowledged, we did some world class stuff that would never have been done in private enterprise.
Still we got done in when the ‘social democrats’ (Goss and co.) took over and put the cleaners through the place with eyes that couldn’t see, instituting a new era of downsized, centrist, neoliberal managerialism, which held that the only people with intelligence were those who still had chalk dust under their fingernails and were signed up to an ideology where words meant the opposite of what the dictionary said.
So in the main, dk.au is probably right. Still there are exceptions from time to time. In reading Christopher Clark’s history of Prussia I was quite impressed with some of the rulers, not just benevolent despots like Frederick the Great. In the modern world we have people like Churchill and FDR who made a difference. I can’t see anyone in Australia who is up to the challenge of climate change, given that the people won’t ever elect Prime Minister Christine Milne, and Barack Obama, well, I think it will be a case of tried hard, but didn’t quite make it.
Thanks all.
cf. Global Soc Prof links to this piece by Saskia Sassen on the burgeoning executive branch