The Privatisation of Solid Energy

by Jeanette Fitzsimons

When Solid Energy went belly up with huge debts and failed businesses like its briquetting plant in Southland, the Government was forced to drop it off the list for privatisation because it was no longer fit for sale. Right?

Wrong. Solid Energy has been 46% privatised under our noses without most people realising what was going on.

There was considerable public anger that taxpayers’ money was used to bail out the failed company so it could try to trade its way out of its difficulties. However, part of that deal was persuading the banks who owned much of its debt to write off $75m of that debt in exchange for equity – shares in Solid.

Coal Action Network activist at the now mothballed Mataura briquetting plant - supposed to provide local jobs, but didn't.

Coal Action Network activist at the now mothballed Mataura briquetting plant – supposed to provide local jobs, but didn’t.

The banks were very reluctant. It wasn’t their idea of a good investment. There is no sign they had any moral qualms about fossil fuels and the future of the planet, nor that they were concerned about the carbon bubble making coal a risky investment. But they should have been.

Both of these factors have caused investment funds overseas, including churches and university pension funds, to divest. Rather, the banks were concerned that the company was a basket case and converting their loans into shares meant they might never see any of it again. They may well be proved right.

Tokyo Bank challenged the debt restructure in the High Court, backed by the other banks, and lost:

TSB subsequently wrote off the value of its new shareholding, $13.8m, reducing its profit this year by 5.9%:

This much has been reported. However, the net effect on Solid’s ownership is less well known. The effect was to reduce the Crown’s ownership of this former SOE from 100% to 53% – almost exactly what was intended in the initial privatisation plans. The rest, 46%, is owned by the banks, all of them apart from TSB overseas owned. The current shareholding is:

NZ Govt/taxpayer 53.38%
BNZ 10.13%
The Bank of Tokyo – Mitsubishi UFJ Ltd 10.13%
TSB Bank Limited 8.55%
Westpac New Zealand Limited 7.03%
Commonwealth Bank of Australia 5.70%
ANZ Bank New Zealand Limited 5.07%

Why would this matter? Aren’t we better off without a poorly performing coal company that pays no dividends and will eventually have stranded assets? Well, maybe it’s not that simple.

We are in a transition, whether Solid and the Government recognise it or not, from fossil fuels to renewable energy. That transition could be smoother or more bumpy, depending on how Solid Energy is managed.

As long as ministers have the power, as they do for an SOE, to give directions to the board, they can influence that transition in the public interest. (The fact that no government has so far showed any interest in doing so doesn’t take away from the hope that one day they might actually recognise climate change as a problem that requires serious action).

For example, Solid could have been instructed to open no further mines, to manage its existing mines well and pay down its debt, and to put its considerable inventiveness into developing transport fuels based on waste wood rather than lignite – possibly in partnership with Crown-owned Scion. That opportunity has now gone – a 53% majority could not impose that on the rest of the shareholders.

As it happened Solid Energy’s small ventures that would have been in the public interest had they been well managed, and would have helped smooth the transition to a low carbon future – Biodiesel NZ (biogold biodiesel) and Nature’s Flame (wood pellets) – were often conveniently blamed for the SOE’s demise. Two former SE managers now own Biodiesel NZ and are confident of making a profit.

“We are very confident that Green Fuels can provide very competitive pricing in comparison to mineral diesel. Using Biogold™ enables companies and organisations to do the right thing for our environment. A responsible attitude towards sustainability is becoming an increasingly hot topic especially in the current conversations around building a ‘new’ Christchurch and maintaining a ‘pure’ New Zealand.” (

If Solid succeeds in pulling itself out of its hole, a hole that appears to be getting deeper in the face of continued low coal prices that show no sign of rallying, the banks are likely to sell their holdings as soon as they can. This will not be to NZ Mums and Dads, but more likely to overseas investors.

As we’ve pointed out on this blog before, the Indian steel industry has shown considerable interest in our coal assets:

Handing over a large chunk of these coal assets would create a further vested interest to join other big industries pushing against New Zealand achieving a decent climate policy.

Under modern free trade agreements, and especially under the TPPA if it is signed, foreign investors will have the right to sue our government for any change in policy that impacts on their profits. Goodbye carbon tax, or even a renewed ETS. The TPPA is itself a powerful reason to resist privatisation.

“Privatisation by stealth” is the hackneyed term that comes to mind, but the point here is that we were never told this was the effect of the bailout, but were left to figure it out. More contempt for democracy.

It is hard to see any sensible way forward from here. Coal is a sunset industry and the necessary transition seems likely to be a very bumpy one.

Join The People’s Climate March, Sunday 21 Sept: Auckland and Nelson

… and if you’re in Invercargill, get along to the Spring Eco Festival!

Whatever the outcome of Saturday’s General Election, urgent action will still be needed to halt and reverse the growth in greenhouse gas emissions and sharply reduce the risk of runaway climate change.

As part of a global Day of Action on climate change organised by Avaaz, there will be a People’s Climate March on Sunday 21 September in Auckland and in Nelson. Coal Action Network Aotearoa’s Jeanette Fitzsimons will be among the speakers at the Auckland event. If you can join either of these marches, we encourage you to do so – because the challenge of climate change has to be faced by all of us, including the incoming Government.

People’s Climate March Auckland

All climate change concerned citizens are invited to meet at Britomart on Sunday 21st September at 1pm to march up Queen Street to Aotea Square where there will be inspiring speakers and performers until 4pm including Lucy Lawless, Jeanette Fitzsimons, Laura O’Connell-Rapira, Steve Abel, musician SDJ and DJ Isaac Aesili to name a few!

The march is supported by Avaaz, a 38 million member strong global online civic movement that promotes activism on many pressing issues including climate change.  Auckland’s March is the FIRST of a huge, million people strong global movement of similar marches happening in more than 88 countries around world on the same day. From the photos and footage of these marches, Avaaz will create a presentation to show the UN Climate Change Summit delegates during a 15 minute time slot at the Summit in New York City. The Auckland People’s Climate March will also make it clear to Aotearoa’s own leaders how deeply we care climate change and the impacts of climate change on our Earth.

Please join ‘The People’ on Sunday 21st September to lend your voice to help ‘close the gap between the world we have and the world most people, everywhere, want’ (Avaaz, 2014). Updates via Twitter @climatemarchAKL and please join the Facebook Event here People’s Climate March Auckland. To change everything, it takes everybody.

Please also sign the Global Avaaz Climate Petition that will also be presented to the UN Climate Summit delegates

Our Facebook Event : People’s Climate March Auckland
Our Twitter: @climatemarchAKL

People’s Climate March Nelson

Hit the Nelson streets with us, as we work with in this Historic Global Event – People’s Climate March! Fun filled family afternoon. Face paint, music and dance.

Buxton – Montgomery – Wakatu Car Parks from 12.30pm,
filtering over to Millers Acre Car Park by 1.30pm,…
leaving to begin our march to the Cathedral Steps by 2pm

We are feeding the event with a bit of symbolic drama… by turning up at the registration points, adults dressed in dark clothing and children in bold bright colours. This makes us a part of our children’s backdrop, making it far easier for them to be seen and potentially heard, as this is their climate longer than it will be ours – hopefully.In the car parks the registration areas will be recognisable by a couple of tall flags with a couple of people standing around looking for… people looking for them. Here we will have the option to be painted with a green heart, the worldwide People’s Climate March (PCM) logo

Once you have registered you will be directed towards Millers Acre Car Park, the starting point for this wonderful family event.

Contact Name: Sara Cooper
Contact Phone: 0276633094
Contact Email:
Facebook event:


Spring Eco Festival, Invercargill

Sunday, September 21, 10:00 am- 4pm

Workingmen’s Club Convention room
154 Esk St, Invercargill, 9810, New Zealand

Join in Festival – with emphasis on sustainability at home, reducing energy use, vegetable gardening, energy efficiency. Sign the petition as part of International action to send to MPs, wear a green heart on your sleeve to say you love the earth.Young people especially requested to bring kitchen and laundry labour saving gadgets their granny used to use to show how we can reduce electricity use and conserve energy- so reducing impact on climate change. They can dress in period costume to add to the atmosphere and talk about their gadget to whole audience between 11am and midday.

Event signup link:

National’s Mining Agenda Has Failed

So it’s come to this:

The National-led Government’s ambition to have the mining, and separate oil and gas sector, underpin economic recovery has borne little long term gains in its past two terms.

- from mining industry magazine NZ Resources, 20 August 2014

After two terms of promoting mining, and bending over backwards to accommodate mining, and opening up conservation land and the seabed to mining, and removing legal impediments to mining – National has nothing to show for it, and the nation has nothing to show for it either, unless you count a broken-down briquetting plant in rural Southland that, at last count, employed one person.

But one thing we have learned about this National Government is that its reaction to the failure of its policies is to try even harder to force them through. So, if National is re-elected, expect further attempts to gut resource management law and other impediments to mining. Expect more grandiose claims of jobs that never materialise. And expect another three years wasted while action on climate change is desperately needed.

When even the mining industry’s own publication acknowledges that the Government’s mining policies have failed, you know the scale of failure has been epic indeed.

Jobs After Coal: Full Report, Summary Report, and Presentation Now Available

jac_coverJobs After Coal is Coal Action Network Aotearoa’s report, released in May 2014, that shows how coal mining communities can move beyond dependence on coal jobs – and how we can provide a just transition for workers in the coal industry into other jobs.

You can download:

You can also read about how the report is being received in communities around the country:

Keep up with all the latest news about Jobs After Coal on our Jobs After Coal page.

Jobs After Coal Roadshow Report

jac_coverRosemary Penwarden writes: Coal Action Network Aotearoa’s Jobs After Coal report (PDF, 3Mb) has been a couple of years in the making. Writing it was like one of those relays where you hand the baton to the next person, they go like hell and then pass it on. With Cindy’s eye for media deadlines and Jeanette’s capacity to work harder than anyone I’ve ever seen, we kept on track and have even managed to stay friends. We could not have done it without the constructive feedback from Geoff Bertram, Dave Kennedy, Conor Twyford, Edward Miller, Sam Huggard and Geoff Keey. About 100 people attended the Wellington launch on 22 May. Co-author Tim Jones was able to take a moment out from the depths of his Save the Basin Campaign Board of Inquiry hearing to join us. Most encouraging for me was to see union organisers in the audience, and ongoing discussions since with the unions around one of the report’s main issues – a just transition to a low carbon economy. Jeanette has made Jobs After Coal her winter project roadshow, describing it as a bit like being on the campaign trail (which she does not miss). She presented in Christchurch on 30 June and gave four talks in the Top of The South 25-28 July, well received, with good sized audiences at each venue. Passing the baton to Jeanette Fitzsimons here…

A great weekend with my old and dear friend Debs with whom I worked on the campaign to stop Project Aqua, the diversion of most of the low flow of the Waitaki river. We won that one, and we will win this one too! One of the precious things about this roadshow is reconnecting with friends I’ve worked with – like Mike and Joe and Robina from Mataura in the days of the lignite scare, who drove through to Invercargill.

Debs drove me over the hill to Blenheim (we talked Denniston all weekend) where I presented at the opening of the art exhibition “Oil on Canvas”, a fund raiser for the active campaign aginst deep sea oil drilling, organised by the amazing Verena Maeder.  A ready made audience and companion speakers Rod Morris, whose photos have built love and awe for the Denniston Plateau nation-wide, and entrepreneur Nick Gerritsen, about his latest project to make liqiod fuels from wood waste.

I foresee waste wood from forestry operations becoming the next scarce resource as people realise it  is our lifeline to an economy without fossil fuels. Boiler fuel, home heating,  transport fuel, even coke for steel making, and of course the ultimate finite resource is land, on which it all depends. Even with renewables we can’t keep growing forever.

Beautiful art works, all local, including one of Rod’s images of Denniston which I coveted, but wasn’t feeling rich. One that particularly took my eye was a disturbing painting called 2L8. I know in my head it probably is, but I refuse to believe it and the only way to live is to try to still make a difference.

You learn something every time you stand up to talk to a group. I’ve been singing the praises of NZ innovation LVL, a strengthened timber building material that can substitute for steel and concrete in multi-storeyed buildings – very low carbon, in fact stores carbon for the life of the building. I’ve been lamenting that Christchurch was not rebuilt in this sustainable material, partly because there is no fabricating plant here to cut the stuff to order. A voice from the back row in Takaka called out “not true. Nelson Pine opened one this week”. Turned out to be Piers McLaren, doyen forester with whom I have corresponded but never before met. Led to a useful discussion with the CEO of Nelson Pine the next day.

So Blenheim, Takaka, Motueka and Nelson – lots of great people all working in their own way on a fossil free future.

Then to Dunedin where I met up with Rosemary. We managed our “Two Ronnies” act OK at the university presentation. The Chamber of Commerce wanted a rather different slant – business opportunities in a low carbon economy. They booked quite a small room so it was a good experience for them to find it booked out a day ahead and they were squeezing people in on the night. More general public than business, but some of the latter too and I’ve heard it did make an impression on the Chamber. Back to Rosemary….

I teamed up with Jeanette again for the two Dunedin presentations on 29 and 30 July, to audiences of around 50 at each venue. The following afternoon, armed with cups of tea and sandwiches for non-stop travel, we headed to Invercargill where fellow CANA organising member Jenny Campbell had a precisely timed two days awaiting. A pot luck tea, catch-ups with fellow Southland anti-lignite campaigners and our JAC presentation followed – complete with our very own climate change sceptic in the front row. Neither Jeanette nor I needed to respond as the Invercargill audience deftly dealt with his comments.

Rosemary Penwarden...

Rosemary Penwarden, Nathan Surendran, Joe Nowak…

Rosemary Penwarden...

…Jeanette Fitzsimons and Mike Dumbar in conversation with old friends at the Invercargill event

The following morning we met with Steve Canny and others at Venture Southland for an exchange that lasted the entire morning, with an interlude to pose for the Southland Times and a TV interview with the very patient and charming Cue TV reporter. Thanks to Dave Kennedy for organising the Venture Southland meeting – their work is inspiring. I spied their speedy little electric car being delivered as we left. A couple of spare hours were filled with unexpected discussions with bank staff when Jeanette’s plastic card was swallowed up by the ATM machine, never to be returned. They were so nice. (Jeanette: So they should have been – Bank’s mistake, not mine! ) You just can’t get angry with Southlanders! We kept hearing about the next event on Jenny’s itinerary: the Environment Southland Awards. It’s big, we were told. Southlanders are not known to exaggerate, even so, we were both surprised at the scale of the evening at the Ascot Hotel – live TV, over 500 guests for a full meal and accompaniments, anyone who’s anyone there and, as is always the case down this end of Aotearoa, they all seemed to know each other. The best part of the evening was the very last prize being awarded to Jenny’s group, Southland Forest and Bird, for their remarkable 25 years of restoration and care of the yellow eyed penguin reserve, Te Rere. A very early morning at Invercargill airport completed this leg of the JAC roadshow. We look forward to being invited to other parts of the country to continue the discussion. For me, it’s about more than phasing out coal mining. It is a good place to start the necessary work we must all now participate in – to build and manage a fair and durable shift to a low carbon economy, where workers do not bear the brunt of that shift. From here, our little JAC relay looks like part of an enormous marathon. Change is emerging but we’re racing to a deadline. A just transition to a low carbon economy has to be fair and it has to be swift. We need everyone’s diverse, creative skills to keep that baton moving, run like hell, and pass it on. We have advantages many other countries could only dream about, and we look forward to taking charge of our own futures instead of being at the mercy of unjust market forces and a dying industry. It’s already happening.


I took a picture of the shiny silent mothballed briquette plant on my way home, for old times’ sake. Still think it would make a great whisky distillery

Stern Criticism of Westpac – From A Surprising Quarter

DumpDennistonLogoCoalA recently published article contains a stern critique of Westpac over their continuing financial support of coal miners Bathurst Resources, who have now begun removing “overburden” (i.e. the ecosystem) from the Denniston Plateau in preparation for larger-scale coal mining when and if international coal prices rise. In the article, Kath Dewar says:

By contrast Westpac has been less savvy.  Heralded in 2011 as a leader of sustainability, since November 2013 the bank has been repeatedly embarrassed by media coverage of protests triggered by its lending practices.  Westpac’s loans to Bathurst, the company poised to open-cast mine the Denniston Plateau  conservation area for coal, despite significant environmental opposition, make the bank’s efforts to cut the climate footprint  climate impact of its office operations seem tokenistic. Such ‘green-wash’ is easily seen as hypocritical and 94% of NZers say they “get annoyed when products try to pass themselves off as greener than they really are” (source: Colmar Brunton, 2011).

Right on the point, you might think, but not a new criticism – until you discover that this article appeared in the blog of the Marketing Association of New Zealand. The article Scrubbing up grubby brands and clean slate competition is well worth reading, and it’s very noticeable that Westpac is now being called out for its greenwashing even within the business community.

If you’d like to increase the pressure on Westpac, please sign the CANA/  letter to Westpac CEO Peter Clare and get involved in the campaign for Westpac to divest from Bathurst Resources.

Jobs After Coal South Island Tour July 2014

UPDATE: Change of venue for Dunedin event on 29 July – now in Archway Lecture Theatre 2!

After the excellent reception given to CANA’s report Jobs After Coal at the Wellington launch in May, and a Christchurch event on 30 June which attracted at least 100 people, it’s time to take Jobs After Coal beyond the main centres – and we’re starting in the South Island in the final week of July. Check out the schedule below, get along if you can, and invite your friends and networks to hear Jeanette Fitzsimons explain how we can make a just transition away from coal mining while creating low carbon jobs and sustaining communities.

We’ll be creating Facebook events for each stop on the tour soon and we’ll link them here – watch out for them!

Download a copy of Jobs After Coal

Top of the South, 25-28 July

Blenheim, Friday 25 July: Marlborough Arts Society Gallery, High St, 7pm, contact Verena Maeder,

Facebook event:

Motueka, Saturday 26 July:  St. Thomas Church, High St., Motueka, 7.30pm. Jeanette Fitzsimons speaks on Beyond Fossil Fuels: Transition to a New Economy. Contact Debs Martin,

Facebook event:

Nelson, Sunday 27 July: NMIT Student Lounge, 6pm, contact Debs Martin, – hosted by Forest & Bird.

Facebook event:

Golden Bay: to be confirmed

Dunedin, Tuesday 29 July

(with Jeanette Fitzsimons and Rosemary Penwarden)

1pm, Archway Lecture Theatre 2 (*** note change in venue from Otago University Centre for Sustainability***), contact

Facebook event:

5.30pm, Otago Chamber of Commerce, “Reinvigorating the Economy: CleanTech Jobs and Low Carbon Opportunity”, contact or

Invercargill, Wednesday 30 July, Federated Farmers Meeting Room, 70 Forth St

(with Jeanette Fitzsimons and Rosemary Penwarden)

6.30pm: Potluck tea
7.30pm: Networking
8.00pm: Presentation

Contact Jenny Campbell,

Facebook event: