***THIS POST HAS BEEN UPDATED ON APRIL 17 TO ACCOUNT FOR NEW INFORMATION RECEIVED***
Niwa has announced that a contract to upgrade the research vessel RVÂ Tangaroa has been let to a Singaporean company rather than a NZ-based consortium. The EPMU and Labour Party have criticised the move, citing the fact that local jobs were at stake and a chance toÂ up-skill NZ workers was lost. And of course, the flow-on effects of employing NZ workers is obvious, because they will spend theirÂ wages a bit on beerÂ but moreÂ on nappies, mortgages, rent and DIY projects. All that is true and reason enough to oppose the Niwa deal, but there is much more to the story. That is because the bottom line boils down to what I shall call a dirty money savings. Here is how it works.
The Niwa chief knob, John Morgan, refused to state what the bids were, but other sourcesÂ have notedÂ that at $9 million the NZ contractor bid was more than double the $4 million Singaporean bid. Sounds like he got his maths right.Â Mr. MorganÂ thenÂ went on to say that the Singaporean contractor had a lot of experience and 3000 staffÂ dedicated to the task as well as many resources to do the upgrade, which he claimed was a complex operation that involved cutting holes in the hull of the ship in order to install a dynamic positioning system (DPS) that holds the ship steady and precise over an undersea target in variable conditions (how he thinks that 3000 people will work on that one job is another question,Â as is the complexity of cutting holes in a boat, but I am just quoting from the NZPA article on the decision).
He defended the decision as a cost-savings bonus for the NZ taxpayer, and the Minister for Research, Science and Technology theÂ vainglorious “Dr” Wayne Mapp (Ph.D.s in Law are not usually addressed as Dr.) pontificated that although he was notÂ involved inÂ the decision he supported it because the NZ consortium was not dependent on that contract (presumably that resource-rich Singaporean outfit was) and, quote, “after all we have an FTA with Singapore.” File that one under “another Mapp moronity.”
Here is why the deal is dirty. Unskilled and semi-skilled Singaporean shipyard workers (e.g. stevedores, drivers, loaders, buildersÂ and roustabouts) Â are paid between SG$10-15 dollars per day. Non-engineer skilled workers (divers, torchmen, pipefitters) may earn double or triple that. They are mostly foreign workers on temporary visas (mainly from Bangladesh, mainland ChinaÂ and India) who cannot bring their families with them and whoÂ are housed in containers and squalid dormitories with occupancies of 20-50 men per room and one toilet amongst them (women are not allowed on the docks). They are not allowed to independently organise or collectively bargain. They work 12 hour days andÂ suffer extremely high rates of industrial accidents–over 50 workers died in 2009 from injuries received on the job, andÂ dozens if not hundredsÂ more were crippled by accidents. In the vast majority of cases, seriously injured foreign workers who are unable to return to work are left dependent for months on private charity until their claims for compensation are resolvedÂ or are deportedÂ once they leave hospital (and often repatriated in any event).
Mr. Morgan is reported as saying that the Singaporean bid, at $30/hour (it is not clear if he is speaking of US, NZ or Singaporean dollars), was half the NZ $60/hour labour costs. But whatever the currency, $30/hour would only apply to supervisory and managerial staff who would not be doing the physical labour involved in installing the DPS system (which would be done by the foreign workers mentioned above). That means that his claims of labour costs savings on which theÂ decision partially rested is either a willful misprepresentationÂ of Â the true Singaporean figures or, worse yet, a sign that Niwa did not undertake due dilligence in ascertaining the veracity of the $30/hour figure. In other words, if the latter is true then Niwa got fleeced by the Singaporean contractor, who then pocketed the difference between its real labour costs and the $30/hour figure. If the former is true, the Mr. Morgan needs to be held to account for his miserepresentation.
There is a bigger picture to consider. Singapore is an authoritarian state in which politicalÂ party competition and elections are rigged, freedom of speech is restricted and foreign workers areÂ not covered by the same labour laws as Singaporean citizens. Instruments for foreign worker redress, compensation and mediation are virtually non-existent. The Singaporean lifestyle, so admired by John Key and other acolytes of the Singaporean regime, is based on the gross exploitation of these foreign workers who, after all, build the buildings Singaporeans live and work in, provide the food, transportÂ and maid services they are accustomed to, construct their highways and polish their cars, and staff the hundreds of foreign MNCs the use the country as an operational hub. Foreign workers comprise a quarter of Singapore’s nearly 5 million population, so the economic debt owed to them is great.
That is why the decision is about dirty money savings. Forget the job-related issues in NZ.Â Niwa’s decision is based onÂ its knowinglyÂ countenancing the human rights abuse of a vulnerable group of people in a foreign country. It violates ILO standards, it violates NZ labour law, and it violates nominal notions of decency in doing so. Mrs. Morgan and Mapp may argue thatÂ Niwa is saving the NZ taxpayer money, and thatÂ it is not responsible for the behavior of foreign contractors, but in doingÂ business with the Singaporean firmÂ it could well wind up with blood on its hands. Put succinctly: the money Niwa saves on the deal comes directly from the sweat and blood of these foreign workers.
None of this would matter if NZ was an authoritarian state unconcerned about human rights and fair labour standards. The problem is, NZ spends a lot of time in international fora banging on about exactly such things. However, this appears to be more a case ofÂ “do as I say, not as I do” because NZ in recent years has seen fit to cozy up to regimes like those ofÂ Singapore, China and a host of Middle Eastern autocracies, in which the very concepts of universal rights and fair labour standards are not only disputed, but rejected out of hand on “cultural difference” grounds. Well, that may be the case because as Lew so nicely put it a while back, “NZ foreign policy is trade,” Â but NZ does not have to contribute to the perpetuation of exploitation in foreign cultural contexts, especially if its reputation depends on its rhetorical championing of human rights. That is a matter of choice, and the choice in this instance is clear.
There is such a thing a trading fairly and doing business in an ethical way in which the bottom line is not just about money, but about human decency as well.Â A restrained rate of profit or reduced savingsÂ on cost are often a better guarantee of long term investment than short term profit maximisation or miserliness,Â and an interest in foreign worker conditions can contribute to the betterment of international business practices. But the choice here has been to save costs rather than stand on principle and improve by example. For a country that prides itself on its international status based upon fairness principles, decisions like this one give the lie to the cheap talk in international confabs.
All of which is to say–shame on both of you,Â Misters Mapp and Morgan. But then again, we would not expect otherwise.