KEY POINTS:
Here's a conundrum. Just a year ago State Owned Enterprises Minister Trevor Mallard stepped up the pace on SOEs saying he wanted them to be "agents of economic transformation". No more frowzy behaviour please.
The SOEs must invest in new areas and form joint ventures with other companies to drive New Zealand forward.
Mallard seemed to be responding to advice that suggested many foreign-owned companies didn't want their New Zealand subsidiaries to go on the acquisition trail or drive expansion offshore.
The death of Folole Muliaga is forcing a rethink of the Government's remorseless drive towards commercialism by state-owned enterprises.
Even though all the facts have yet to become public, the Prime Minister yesterday indicated heads may roll at Mighty River Power or its Mercury Energy subsidiary. The company might also have to stump up further compensation for the Muliaga family. But neither action will be immediate.
Helen Clark's response to Muliaga's death has a political aspect - she does not like the heartless image of New Zealand that has sped around the world.
But her response is also a reaction to the ruthless campaign against Mighty River Power personnel that is being waged by a "spokesman for the family".
Yesterday the Prime Minister threatened to regulate electricity companies if they didn't fall into line with more explicit rules now being developed. The companies must consult the Government's social agencies before disconnecting any "vulnerable" customers - those who are elderly, ill or families with young children.
Ironically, the State Owned Enterprises Act already allows ministers to direct SOEs to provide social services and refund companies for doing so. Trouble is, since the SOE Act was introduced in 1986 ministers have rarely given directions, and even more rarely stumped up with subsidies to compensate for any loss of revenue.
The electricity industry has since fragmented. Half the retail sector is state-owned, 48 per cent in private hands.
Clark hasn't ruled out using the SOE Act - but the preference is for the Electricity Commission to issue rules affecting the entire sector. It's hard to escape the conclusion that Mighty River Power's executives and directors have been set up as scapegoats for Muliaga's death.
Clark argues the company failed to follow the commission's existing guidelines - which explains why compensation seems inevitable.
Brenden Sheehan - a Public Service Association boss - revealed Muliaga's death in an "exclusive" report to Radio New Zealand's Morning Report. Sheehan - who is related by marriage to the Muliaga family - later tried to exert control over how the story played out following his revelation that Muliaga died after Mercury Energy cut off her electricity, causing her oxygen "life-support" system to fail.
The PSA boss has good "ins" with Radio New Zealand, having represented its journalists in pay negotiations.
Unfortunately Sheehan's willingness to steamroller his version of the story has caused huge damage to the company and New Zealand's offshore brand.
Mercury Energy has been branded as "Murder Energy" or "Mercenary Energy". It is seen by some as a "corporate murderer".
Mercury Energy's position is compounded by Clark's speediness in seizing on comments in a letter to Mallard as evidence of culpability by the contractor. The contractor had seen the nasal tube in Muliaga's nose but still cut the power, the letter said.
Yesterday Mallard's office and the office of the Acting SOE Minister, Clayton Cosgrove, refused to issue copies of later communications with Mighty River Power.
Clark confirmed the company had said that the Muliaga family had numerous warnings over several years that their power would be cut off. She said that gave Mercury ample time to get social agencies involved.
She said she did not know the contractor's name. There is speculation he is an African refugee.
In the absence of more facts, the company continues to be hung out to dry as a corporate criminal.
Sheehan has accused police of racism for wanting to speak to one of Muliaga's sons in English and with a lawyer present. Someone - possibly his PSA bosses - should tell Sheehan some basic facts. If you accuse a company of killing a family member then the company is surely entitled to put its side of the story.
With such allegations flying, it is also necessary that the police carry out an independent investigation to get to the truth, not simply uphold the family's line.
Mighty River Power chairwoman Carole Durbin is fronting the issue. Durbin, like other SOE chairs, holds her position at the Government's pleasure. Unlike some commercial operations where directors elect their own chairman, SOE boards operate within governance parameters that lets the Government exert considerable influence through direct discussions with its person.
At issue is the extent to which this exposes SOE directors to ministerial interference when an issue with political ramifications erupts. Some chairpeople hold the line, as occurred when Craig Boyce kept ministers at bay during the furore over the salaries paid to TVNZ's major stars, only to have a director such as Dame Ann Hercus go behind the board's back and spill the inside story to her old political cronies.
When the proverbial hits the fan, as it does in most commercial operations from time to time, it helps if there is not inordinate tension around the board table. Anyone looking through the list of SOE and Crown Company directors on the Crown Company Monitoring Agency Unit's website would have to wonder how easy it is to focus on operations, given that many boards are weighted down with directors with Labour Party connections or "diversity" mandates.
In Durbin's case she has the industry experience and credentials to chair a major electricity utility.
She consulted her board before making a public apology on Mighty River Power's behalf on Saturday and announcing disconnections were suspended indefinitely.
But the board would have been surprised at her suggestion that at the appropriate time "which is not now ... I should tender my resignation".
That comment, coupled with suggestions that Mighty River Power might pay the Muliaga family compensation, on top of the $10,000 donation made last week, appears rather ill-considered.
For the family's spin-doctor that was good enough. Carole Durbin's job was safe declared Brendan Sheehan - and Clark agreed. But Sheehan says other directors should resign along with management.
This is dirty pool indeed. If the Government wants SOE directors to drive a commercial approach it needs to ensure it takes a considered approach and does not scapegoat them at the first sign of trouble.
