KEY POINTS:
When the Prime Minister rolled up to lunch at the Business Council for Sustainable Development on Friday, the mood was congratulatory.
Clark paid tribute to the council's achievement in becoming an "authoritative and influential voice" in the country's business community.
She congratulated members for "walking the talk", showing how sustainability could be a core business value of the 21st century, and thanked them for their leadership.
But in reality, all is not sweetness and light within the PM's favourite business organisation when it comes to assessing the climate change policies the Government introduced this week. The legislation underpins the "all gases, all sectors in" emissions trading regime and imposes a legislative moratorium on new thermal generation.
There is broad agreement among New Zealand business that this country does need to get on to the front foot with climate change, but strong concerns exist over the detail.
Within the council, dissension has been brewing for some time over chief executive Peter Neilson's propensity to act like a Government echo chamber on climate change initiatives instead of consulting members about the impact of policies.
It boiled over on Tuesday when Solid Energy chief executive Don Elder sent a letter to council chairman Nick Main and Neilson, registering his company's concerns over statements about the emissions trading regime, climate change energy polices and legislation.
Elder's letter was copied to all council members. It makes clear that Solid Energy's position is not in any way about the substance or process of the government policies - an important caveat, as Solid Energy, which was a foundation member of the council, is a state-owned enterprise.
Rather, Solid Energy is concerned that:
Recent council statements are seen as vitriolic attacks on the rights and credibility of other business leaders (including some council members) to hold and express views that are not totally aligned with the views of Government and/or the council leadership. "This is not only an abhorrent approach for any person to take in an important public discussion but is particularly inappropriate for an organisation that is expected to represent the best rather than worst of ethical business practice."
Statements have been made with disregard for facts and some knowingly distort the positions of others, apparently in search of a catchy headline.
Positions are being taken that are not the result of reasonable consultation with members or those most affected by the issues discussed. Elder cites the fact that the council's position paper on climate change was developed some years back after extensive discussion by a working group in which the "leadership" did not significantly participate. The council's final paper differed from the working group's suggestions by strongly advocating only one option: emissions trading, which the earlier work did not specifically prioritise. The final paper did identify critical conditions that must be met before an extensive emissions trading system should be implemented, but local and international factors had since changed and the leadership had not consulted before taking "strident public positions".
Main and Neilson had been invited on to Climate Change Minister David Parker's leadership forum on the formation of the emissions trading scheme (ETS). But the council had not consulted members to get their input. This displayed a lack of responsibility and accountability that would not be tolerated in in any of the members' own companies.
Elder said the easiest option for Solid Energy would be to resign but the company preferred to view the current status as an "unfortunate but temporary aberration from long-term good governance practice".
He has proposed two changes: Formal acknowledgement by Main and Neilson that the tone of recent statements was inappropriate and would not be repeated; and an assurance that council positions will be carefully considered in future. If there is a potential for different views, members should be canvassed. If the final position differs from specific positions held by various members, they will be notified in advance of any external council communication.
It would be simple to believe Elder was simply defending Solid Energy's patch - coal-fired power stations, after all, are significant CO2 emitters. But several other members, including Rio Tinto, NZ Steel, Holcim and Fonterra, are understood to have expressed behind-the-scenes concerns.
These companies are clearly emitters. But they have all done considerable work to reduce greenhouse gas emissions and should be properly consulted on the detail of legislation if it is to work in practice.
Elder originally planned to raise his concerns at the council's AGM, where a proposal to make carbon audits mandatory was to be discussed, but the timing of the meeting was abruptly changed to accommodate the Prime Minister's diary. It has since been postponed until February.
But the message may be getting through. When the Government tabled its legislation later on Tuesday, Neilson pledged to examine the real impact on businesses.
Internal dissension began brewing last month after Neilson attacked NZ Institute chief executive David Skilling over his call for New Zealand to adopt a fast-follower approach to climate change.
Subsequent commentary disparaging a Castalia report by economist Alex Sundakov also raised eyebrows.
On the morning of November 7, Elder sent an email to Main (which has since been widely circulated in the business community) saying the council's media releases were absolutely unacceptable.
Many significant and small businesses in New Zealand had valid questions and concerns about the implementation details of the emissions trading scheme and wanted to continue contributing to a reasonable and informed discussion about them, he said. "Reports prepared by reputable and credible organisations such as the NZ Institute and Castalia are important, well thought through, and serious contributions to one of the most important national discussions this country has had for decades."
Whether the council agreed or disagreed with them, those organisations deserved the respect of having their issues discussed properly, he said.
"The statements being issued by Peter on behalf of the council are, and are being widely seen as, nothing more than ideological rants with an apparent objective to stifle democratic discussion by portraying the targets as without virtue or right in these discussions.
"Some serious questions are now being asked about who is driving these and for what self-interest... These discussions are hugely important for NZ. It appears that right now the council line is very simply 'There is nothing to discuss. We are right and others are wrong. You are either for us or against us'."
The message fell on deaf ears: That afternoon the council released another statement: "Majority of business people back emissions trading."
"Those who argue we should tell the world we'll stay right behind them, while also trying to maintain a position where all taxpayers fund any emissions deficit, rather than the emitters and their customers, must already be congratulating themselves on our current position in the field," said Neilson. "It's patently silly to argue, without detailed evidence, that New Zealand will be disadvantaged by cutting emissions early."
Elder fired off another email to Main: "I'm afraid unnecessary comments like the ones in the statement just released only serve to confirm my views as expressed earlier. These read like party political broadcasts not like professional contributions to public discussion.
"I request formally that the [council] acts consistently by releasing immediately the detailed evidence it must clearly hold that cutting emissions early and in exciting new ways like this can only enhance our competitiveness. If the BCSD cannot provide that evidence then I request that it communicate immediately to all its members why, regardless, it considers it is justified to make the statement that other experts in their fields, such as Castalia and the NZ Institute, who clearly have done the work, and have released it publicly, are being 'patently silly' and arguing 'without detailed evidence'."
Elder is not alone: That day Rio Tinto's local CEO Tom Campbell issued a supportive email (again now in wide circulation) saying: "RTA joined the BCSD because we believe in sustainable development (and have the record of actions to prove it). We don't wish to be associated with an increasing tendency to seek to stifle debate.
"There are many points around ETS design which are debatable (and in fact where debate is essential), whether or not we generally support the approach."
The behind-the-scenes furore illustrates business desire for a truly open debate on the detail of the Government's policy, not just a propensity for closed shop discussions with the carefully selected Leadership Forum.
