KEY POINTS:
Some key members of the New Zealand Business Council for Sustainable Development are steamed up about yesterday's "special report" to MPs promoting a multibillion-dollar bonanza for New Zealand if the emissions trading legislation is passed.
At issue is why the council's executive did not let all its members
know it had commissioned special research, did not make copies of its report available to members when asked, and issued media claims that are not fully supported by the underlying analysis.
"We've been blindsided" was one of the more printable comments flying around the traps yesterday as companies ranging from Holcim to Fonterra considered their formal responses in relation to the report.
Like many membership-based organisations, the council advocates positions that are not supported by all its members. But the companies believe that as a matter of good governance they should have known what was about to go into the public domain. Not have to wait until reading it was about to be released in news media reports on Monday.
The council's "special report" promotes a $12.3 billion investment benefit available to New Zealand if the emissions trading legislation is passed quickly and warns of major costs if its passage is delayed beyond this year's election.
The report, which is entitled "The economic opportunities arising from emissions trading: The major cost of delay", was clearly timed to add urgency at a juncture when the Government is desperately engaged in stitching up support from the Greens and NZ First to get the legislation voted into law.
The report is predominantly based on new research commissioned from consultants Sinclair Knight Merz called a "High level review of business opportunities arising from an ETS".
But it also warns against a range of potential costs to New Zealand if the legislation is delayed. These include losses of tourism jobs (up to 2715) and primary sector jobs (up to 7600) if the country's international reputation takes a hit from any delays to the scheme. Other concerns are stalled investment, energy security issues, and problems in international agriculture negotiations.
But before MPs rush to endorse the council's headline claim that $12.3 billion in investment and more than 9600 new jobs will be prompted by emissions trading, they should look at the disclaimers within Sinclair Knight Merz's underlying report. Particularly the statement that it accepts "no liability or responsibility whatsoever for, or, in respect of any use or reliance upon this report by any third party".
This report was cobbled together in a mere seven days (an "extremely short timeframe", according to SKM) which the consultancy says precluded any "robust analysis or even comprehensive review of available information".
The report notes it was intended to highlight areas for more detailed analysis and should not be taken as a detailed or highly accurate portrayal of the opportunities identified.
But unfortunately for SKM's own credibility, the council's press release claims firm outcomes where the consultancy attaches caveats, instead of representing the research in a more measured way.
The council's media release was embargoed until 2pm yesterday (the same time as it held a press briefing in Wellington). A website which is majority owned by the council's communications contractor had carried a media advisory at 9am.*
This simply rubbed further salt in the wound of council members whose ability to obtain copies of the report was foiled as their chairman, Nick Main, and CEO, Peter Neilson, were ensconced at the latest meeting of the Government's Climate Change Leadership forum in Wellington.
Some members - like Shell - did not even obtain their copy of the report until around 2.30pm.
It's worth reflecting that if the broader membership had seen the report and associated statements, they might have cautioned against over-stating the claims.
The report is in sharp contrast to the sophisticated analysis that the Business Council submitted to the parliamentary select committee which studied the Government's emissions trading bill and is seen as a benchmark by members for considered policy development.
There is much in SKM's report to suggest further investigation is warranted in line with its suggestion that there would be benefit in undertaking a more comprehensive review of opportunities and benefits associated with the cost of carbon.
But if SKM wants to be treated seriously, it needs to do the hard yards first, consult affected sectors to ascertain if its claims are really on the mark and put its results in a broader context.
A factor jumped on yesterday by Business New Zealand chief executive Phil O'Reilly, who notes that logic suggests that if New Zealand was to get so much investment as a result of passing the bill this year, then passing a better bill next year - having fixed the cost problems identified by actual businesses - would "get us even more money".
The SKM report has been underwritten by the council's special project fund and two of its members - Mighty River Power and Meridian Energy.
The two state-owned power generators are in the vanguard of the drive to increase New Zealand's move towards generating electricity from renewable sources.
Both companies are leaders in their fields and will be major winners from the emissions trading scheme: Meridian - which advised the select committee its valuation will increase by $750 million - is promoting electric cars to bring about the move to greater dependence on renewable electricity sources.
The lobbying over the legislation will get more fraught as the business sector renews calls (these could emerge as early as today) for the legislation to be sent back to the select committee with a supplementary order paper containing the main changes that the Government wants Parliament to consider.
Finance and expenditure committee chairman Charles Chauvel should then call for further submissions and ensure that much more time is allowed than the mere16 hours of deliberations first time round.
This would also enable the council to ensure that more detailed analysis by SKM could be taken into account instead of the rather desperate tactics being played out this week.
* An earlier version of this story incorrectly said the press release was carried on the website at 9am.