November 20, 2013 1:00pm by David Farrar

Cunliffe says he would force Pike shareholders to pay compo

Labour leader David Cunliffe has marked the third anniversary of the Pike River mine disaster with a promise to pay the full court-ordered compensation to the families.

“Under the Labour Government I lead, the Government will pay the full $3.4 million court-ordered compensation to the families of the dead miners,” he said today.

There are two things to note here.

The first is that we have ACC which Labour introduced as a no faults compensation system. All families have received large amounts of money from ACC.

The $3.4 million court order is for unlawful acts by Pike River Coal. It was Pike River Coal that was charged and found guilty. It was not the Government.

Now of course the Government can agree to pay fines on behalf of private companies. But should it? If there is a bus crash killing 20 people and an inquiry finds the Ministry of Transport needs better regulations on bus safety, would you want the Government paying the fine on behalf of the bus owner?

Cunliffe said he would be surprised if legal avenues were needed, but he left open that option as well as a legislative change as a last resort to force payment.

“The companies’ shareholders and directors have two choices. One is the easy way, the other is the hard way.”

As prime minister he would use the authority of the office, including perhaps a private dinner with the chairs of the relevant companies “where they see good sense and decide to take something back to their boards or a range of other tools at the prime minister’s disposal”.

That is quite extra-ordinary. It is close to blackmail. Pay the Government some money or else we will legislate to take it from you. The precedent is beyond terrible.

It is not as if Pike River shareholders have got off with paying nothing. Basically every shareholder in Pike River has lost 100% of their investment. There were many small share-holders in Pike River. They lost every cent. Now of course their financial loss is nothing compared to the tragedy of loss of life, but reporting often glosses over this fact – some readers may think Pike shareholders have got off with losing nothing. They lost every cent invested. And some like NZOG put in an extra $25 million off memory on a voluntary basis.