Copeland Gordon: Debate on Crown Entities Public Organisations and State Enterprises 
Text is incorporated into the Bound Volume 
Copeland Gordon: Debate on Crown Entities Public Organisations and State Enterprises 
[Sitting date: 10 June 2003. Volume:609;Page:6110. Text is incorporated into the Bound Volume.] 
GORDON COPELAND (United Future) 
: 
 I assumed the role of spokesman on energy on behalf of the United Future party in January of this year primarily because of my 14-year-long background in the New Zealand and international oil industry. However the thing that has occupied a great deal of my time since then of course has been the crisis that has emerged in relation to the generation and distribution of electricity within New Zealand. 
The first thing that strikes a newcomer to the portfolio is that the industry continues to be dominated by State-owned enterprises. On the generation side there is Genesis Power Meridian Energy and Mighty River Power. On the transmission side Transpower New Zealand constructs owns operates and regulates the national grid whilst the residual regulatory planning functions lie with the Electricity Corporation of New Zealand. Accordingly it follows that the ultimate responsibility in relation to the electricity crisis that we have been facing in New Zealand this year—which in terms of cold homes and cold showers has perhaps been narrowly averted because of the unusually mild weather conditions we have experienced—must automatically bring into question the performance of the State-owned electricity enterprises. I think that conclusion is almost inescapable. Had the electricity industry’s State-owned enterprises been working constructively and cooperatively through strategic planning and well-constructed forward-forecasting models then New Zealand might be in a very much better situation than it is at the moment. 
Furthermore as I have mentioned previously in the House because it takes time to bring new generating capacity on stream I believe it is likely that we will have insufficient supply of electricity as well in 2004 and 2005 to meet the steadily growing demand. Both Treasury and the Reserve Bank forecast the halving of our gross domestic product growth during the next financial year and large question marks also remain about how our economy will perform in the year to 30 June 2005. 
Given those realities it would be wrong for this House I believe to sit idly by without demanding a full and complete explanation from the State-owned enterprises about how things were allowed to go so badly wrong. One cannot help but notice that many many questions have been raised in the media but that comparatively few answers have been forthcoming. For example did Genesis Power know towards the end of last year that the Maui gas reserves were rapidly declining and react immediately by stockpiling coal? If so did it receive full cooperation from Solid Energy New Zealand another State-owned enterprise in that regard? Rumour has it for example that in the interests of hard-nosed business—and I hasten to add that I am in no position to apportion blame—the two State-owned enterprises failed to cooperate with the net result that Genesis is now having to import coal from overseas. 
This raises in my mind some wider questions about the accountability of State-owned enterprises to the public. Treasury of course has the Crown Company Monitoring Advisory Unit which is charged very specifically with the role of the supervision and oversight of our State-owned enterprises. Probably at some point the select committees of this House will want with its assistance to probe a little further into some of the issues I am raising in the House today—probably as part of the financial reviews that are to be undertaken in a few months’ time. 
In the meantime I recommend that the Government look again at the reporting lines in relation to State-owned enterprises. We are endeavouring to operate them as if they were commercial businesses but if that were in fact the case then like companies owned in the private sector the board and management of our State-owned enterprises would be subject to an annual general meeting with open scrutiny from their stakeholders and from the media. I think that if that annual general meeting process of accountability is good enough for publicly listed private companies then it is something we should also consider in respect of our own State-owned enterprises. 
It would be good to have some representatives of the shareholders in these State-owned enterprises—perhaps a mix of consumer and other interests—who together with the media in open session would be able to probe our State-owned enterprises exactly as if they were publicly listed companies. The procedures whereby shareholders of publicly listed companies hold them accountable would then have a parallel within the State sector because after all it is the citizens and the families of New Zealand who are the ultimate shareholders of these important State-owned commercial enterprises.