KEY POINTS:
Air New Zealand chairman John Palmer has begun briefing senior politicians on an Australian request for the national flag carrier to reapply for contracts to ferry Aussie troops overseas.
The airline's military charter-ferrying business across the Tasman was cancelled by the Australian Liberal Government after erroneous allegations were made that it had covered up an operation to take Iraq-bound troops into a theatre of war.
The resultant furore ended up costing Air New Zealand an estimated $10 million to $15m in lost revenue in annual terms.
But Beehive sources suggest the new Rudd Government has since lifted the ban, clearing the way for the airline to once again compete for contracts. Air New Zealand appears to be leaving nothing to chance by briefing politicians directly this time - rather than relying on the Ministry of Foreign Affairs (MFAT) - thus making sure there is no potential for the Labour-led Government to again publicly chastise the airline's senior personnel for breaking an informal no-surprises policy.
At a time when the airline's finances are under pressure due to rising fuel costs, the potential to win back a contracting business that produces good margins is valuable.
The outcome of the briefings is also important to the continuance of good relations between the Government and the airline. Even though Air New Zealand is a publicly listed company and not a state-owned enterprise (SOE), it has found itself virtually having to second-guess politicians' whims - a feat that defied MFAT's bosses.
Palmer - one of the most courageous chairmen running Government-related boards - stood strongly behind his management when communication lines with ministers became tetchy after the charter matter developed into a political football.
He also backed management at Solid Energy - another SOE under his chairmanship - after it took issue publicly with Energy Minister David Parker on key elements of the emissions trading scheme.
Heated arguments between Parker and Solid Energy CEO Don Elder did not give rise to pressure on the CEO to stand down for having the temerity to challenge aspects of the scheme.
Palmer also ensured he himself had the full support of the Solid Energy board to push for more public debate on the ramifications of the greenhouse gas reduction policy at a time when independent business voices were coming under considerable pressure.
Unfortunately, Palmer's courageous style does not appear to have been replicated by other SOE board chairs when their CEOs have faced criticism from Government.
It has now emerged that Genesis Energy CEO Murray Jackson's contract was not renewed because he was perceived by the Government to be a "thermal advocate".
Jackson has kept his mouth shut since it was announced last year that he would stand down on August 31, the end of his present contract.
But media reports now reveal he used a speech at the Electricity Engineers' Association conference to make it clear he had been pushed out. Leaving after nine years was a "bitter pill to swallow".
"I'm a devoted greenie, but unfortunately this Government believes I'm a thermal advocate," The Press reported. "As a result, my contract is not being renewed on August 31, a bitter pill to swallow, but I wish you well on the challenges going forward."
The unfortunate aspect of Jackson's demise is that much of the advice he has been giving behind the scenes since mid-2007 has proven to be right on the button.
He predicted the fragility of the high-voltage DC link between our two islands would cause problems and that electricity supply would come under pressure.
He still contends New Zealand desperately needs more standby capacity as power plants are subject to failure - along with cables and other machinery.
He also contends there needs to be a lot more information put on the table about the profitability of SOE power generators when the emissions trading scheme goes into effect.
Unfortunately, the Genesis board does not appear to have stood by its chief executive in the fashion the SOE Act was set up to achieve, opting instead to keep peace with Parker.
These two vignettes illustrate the importance of having strong chairmen for the boards of SOEs and Government-related companies.
The Genesis board needs to take a good look at its decision-making. The reality of this year's power shortages calls into question the wisdom of the 10-year ban Parker has insisted is placed on new thermal generation.
By rushing the legislation - and steamrolling over the views of industry experts such as Jackson who has real knowledge to contribute - the Government ended up introducing legislation that will significantly boost its own coffers at the time it plunders those of others. This hits particularly hard on households and smaller businesses.
The failure of the Government to stitch up widespread support before the emissions trading scheme was reported back to the House means that what ultimately gets passed will be nakedly political rather than well-thought out legislation.
If Parker had listened intently to Jackson - and took on board his concerns - rather than trying to squash him, the Energy Minister would be in a stronger position.
Right now it's a mess.
