Spying in New Zealand

Spy access to NZ used as bargaining tool

The ability for US intelligence agencies to access internet data was used as a bargaining tool by a Telecom-owned company trying to keep down the cost of the undersea cable from New Zealand.

NZ Herald

10 August, 2013

Lawyers acting for Southern Cross Cable quoted a former CIA and NSA director who urged the Senate to "exploit" access to data for an intelligence edge.

The value of intercepted communications to the US was raised during negotiations last year which could increase internet costs 15 per cent.

Documents on the Federal Communications Commission website show the issue was raised by lawyers acting for "undersea cable operators", including Southern Cross Cables, half-owned by Telecom and owner of the 28,900km cable which links New Zealand to the internet.

Lawyers acting for the cable operators told the FCC there were benefits to their clients not having to pay for their cables to land on US soil.

The FCC was told the number of internet connections passing through the US was dropping.

"There has long been speculation that US surveillance following implementation of the Patriot Act could push internet content and information storage outside the United States-to the detriment of the United States."

The legal team footnoted the statement with a 2006 quote from former CIA director and National Security Agency director General Michael Hayden, who set up domestic wiretapping and widespread internet snooping during his terms as an intelligence chief.

He was quoted as saying: "Because of the nature of global telecommunications, we are playing with a tremendous home-field advantage, and we need to exploit that edge.

"We also need to protect that edge, and we need to protect those who provide it to us."

In other documents, Southern Cross Cables raised the possibility of submarine cables coming to land in Canada or Mexico.

Southern Cross Cables lawyer Nikki Shone said the company was legally obliged to co-operate with US laws and it was in relation to those obligations that "it noted that the FCC's proposed universal services charges could harm US security interests by encouraging infrastructure to bypass the United States".

She said Southern Cross Cable was "wholly unaware of recently disclosed US surveillance programmes".

A Telecom spokesman cited the company's contract with residential customers, which tells them it will pass on their information without permission if it believes it is legally required to do so or if it is necessary "to help maintain the law".

Telecom Users Association chief executive Paul Brislen said revelations about US interception of internet traffic meant "we have to assume that all our communications are intercepted".

He said internet and telecoms companies had to comply with US rules or be shut out of lucrative contracts.

Mr Brislen believed the cable from Auckland to Los Angeles was secure but said intelligence agencies would access information beyond the landing stations.

Tech Liberty director Thomas Beagle said any use of American services and networks exposed data to being captured by the US.

But shifting to other countries "will just expose you to surveillance from their national governments".

"It seems that we now have the choice between taking the time to understand and implement secure encryption or choosing services based on which governments we don't mind spying on us."

Telecom to slash jobs

Telecom to slash 1500 jobs: Labour

Telecom is set to slash up to 1500 jobs, Labour communications spokeswoman Clare Curran said in a statement today

Stuff,

21 March, 2013

Curran said in February that job losses were on the cards at Telecom, and put the figure between 400 and 1500 positions. The move would send an economic shock through the country, she said today.

"The ICT sector is strategically important to our economy and is essential to a high-growth, high-wage nation. I have been informed that instead of growth, what we will see is an economic shock with hundreds, perhaps up to 1500, highly skilled workers being put out of a job.

"Losing this number of jobs from a single employer is the biggest job loss ever in New Zealand from a single company. It's unprecedented."

Telecom did not scotch Curran's statement. Spokesman Andrew Pirie said no numbers had been set yet.

However, Telecom chief executive Simon Moutter announced in February that the company would axe "hundreds of jobs" this year and did not rule out more than 1000 jobs going.

He said the across-the-board cuts would come on top of the net loss of 373 permanent positions at the company this year.

At the time of the announcement Telecom employed 7603 full-time equivalents.

This month Tim Miles, boss of the company's Gen-i technology division, said Gen-i Australia would shed 120 of its 180 jobs in Australia.

The statement issued by Curran did not give her source for the job loss number.

Pirie said Telecom would make a statement when it settled on a figure, which he expected would be weeks rather than months away.

Body blows to the NZ economy

Here are some pretty solid blows in the New Zealand economy This follows the collapse of the country's third-largest construction company.

It is clear, despite the propaganda, which way things are moving.

Govt 'asleep at wheel' on Solid Energy

The Government and Treasury missed the chance to step in and force change at troubled state-owned coal company Solid Energy when problems became apparent to officials and ministers about 18 months ago, the Opposition says.

Mechanical fitter Ross Vernon says Huntly mining workers were "sold a dream" which never eventuated. Photo / Christine Cornege

NZ Herald,

23 February, 2013

Solid Energy is currently in crisis talks with Treasury and its bankers over ballooning debts now totalling $389 million.

It blames its woes on low international coal prices, weak demand and the poor performance of its investment in alternative energy assets.

Just a few months after 450 job cuts last year, the company's remaining 1,200-strong workforce are staring down the barrel of further redundancies once a restructuring package is agreed.

Finance Minister Bill English has not ruled out a taxpayer-funded bailout.

Huntly East miners yesterday said they felt betrayed by former Solid Energy chief executive Don Elder, whom they hold responsible for the crisis.

Third generation miner and Huntly East mechanical fitter Ross Vernon said only last year 70 workers were employed on the promise of a 25-year future with the state-owned enterprise.

Mr Vernon said it was heartbreaking that most of those workers were then made redundant in a recent restructure after being "sold a dream" which never eventuated.

"I firmly believe Don Elder has a lot to answer for. He should be ashamed and I wouldn't employ him."

He said Solid Energy should never have spent money on "peripheral" businesses that failed such as converting coal to bio-diesel.

Labour's state-owned enterprises spokesman Clayton Cosgrove savaged SOE Minister Tony Ryall and Mr English for being "asleep at the wheel" as Solid Energy deteriorated over the past 18 months.

Problems at the company first came to light in mid-2011 through a "scoping study" conducted to assess the company's readiness to be partly privatised under the Government's "mixed ownership model".

A few months later, in late 2011, the first public indications of the company's troubles emerged when the Herald highlighted a $1 billion gap between its board's $2.8 billion view of the company's value and a $1.7 billion estimate prepared by a private sector analyst.

Treasury explained that discrepancy as being the result of differing views on the outlook for international coal prices.

Mr Cosgrove said he was "getting very tired of Mr Ryall saying there's nothing he could have done as these were all operational matters".

"He can't tell the board what to do but he can ask questions and demand answers and he can say 'you're sacked'."

Mr Cosgrove said one of those questions in the face of falling coal prices was whether the company had developed adequate contingency plans to cope with them.

Clearly it hadn't, he said, but former chairman John Palmer and former chief executive Don Elder continued in their jobs until recently.

Greens co-leader Russel Norman said the situation at Solid Energy appeared to have "gone to custard without the Government realising what's going on".

"The people who should have had all the information at their fingertips were Treasury's Crown Ownership Monitoring Unit, they're the ones who presumably have had full access to everything inside Solid Energy all the way through.

"The question is why didn't they raise alarm bells about what was going on?"

A Treasury spokeswoman yesterday refused to comment on what action it took after learning of Solid Energy's problems other than to say it had been "very involved".

Dr Elder, who resigned two and a half weeks ago yesterday, told the Weekend Herald he had been "out of contact" since then and was "not up to speed" with the latest developments at the company.

He refused to answer questions about the company or "performance-based payments" or bonuses he had received in recent years.

"I still have commitments to Solid Energy and I'm unable to say anything whatsoever."

Chairman Mark Ford, who took over from Mr Palmer after a board cleanout in November, yesterday said he believed Solid Energy was "a very viable business but only based on our core business - coal production".

Mr Ford said a number of investments made under the previous board and management were done when the New Zealand dollar was lower and prices higher.

They were no longer paying sufficient return, and would all be sold or otherwise "exited".

Unions say redundant Telecom workers may leave country

The Council of Trade Unions says workers soon to be made redundant by Telecom will struggle to find employment in New Zealand.

Radio New Zealand,

23 February, 2013

Telecom on Friday downgraded its profit forecast and announced it would cut hundreds of jobs in the coming months as it made a strategic shift to become a mobile and data orientated service provider.

CTU secretary Peter Conway said the redundant workers will be highly skilled and many will be unable to find equivalent jobs in New Zealand's faltering economy.

He said if there is growth it is highly concentrated in some sectors and is either not leading to extra jobs or, where jobs are created they are not very good ones. "That's the concern and that will keep driving people to Australia."

The Engineering, Printing and Manufacturing Union represents about 40 Telecom workers. National industry organiser Joe Gallagher said those who lose their jobs will probably have to leave the country to find employment.

Telecom's announcement follows recent job losses at Mainzeal, Summit Wool Spinners and Contact Energy.

The Household Labour Force survey for the December 2012 quarter puts the number of unemployed at 163,000 and Mr Conway said 111,000 part-time employees are looking for extra hours.

In Australia, telecommunications firm Telstra announced this week it was cutting jobs and and moving some of them overseas.

The company is axing 648 jobs axed from its ailing advertising and directories arm, Sensis, representing almost 20% of its 3500-strong workforce.

The Australian Manufacturing Workers Union said 400 of those jobs are earmarked to go to workers in the Philippines, AAP reports.

Transpacific cuts 200 jobs

Waste management company Transpacific Industries will axe 200 jobs as it seeks to lower costs amid weakness in its manufacturing and industrial markets

Radio New Zealand,

23 February, 2013

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Affected staff will leave over the next two to three months as jobs are slashed across all parts of the business in Australia and New Zealand, AAP reports.

It follows 1200 job cuts announced earlier by Australian firms Telstra, Iluka and Origin Energy.

Transpacific chief executive Kevin Campbell said the decision to cull the workforce came after a recent review of the company's organisational structure.

He said the number of management layers in the business was being cut from an average of nine to an average of six.

Transpacific is accelerating its cost cutting program, advising the market on Friday it planned to take out $A50 million of costs over the next three financial years to 2014/15.

This was above previous market guidance of $40 million of savings over the same period.

Mr Campbell said the company, like a lot of other firms, had been "suffering from the malaise of the lack of infrastructure projects and general downturn in manufacturing and industrial markets".

He said Transpacific's waste management businesses had been hurt by a drop-off in volumes in landfill and a product mix change in the industrial liquids market that has resulted in lower margins.

Hundreds of job cuts announced in a day

Earlier in the week three major Australian companies announced nearly 1,200 job cuts between them on just one day, as weak earnings force businesses to focus on driving down costs and adapt to changing markets.

Telstra said on Thursday it would cut 648 jobs from its struggling Sensis business - a division that has suffered massive revenue falls as demand for its key White Pages and Yellow Pages directories plummets.

Gas and electricity player Origin Energy announced it will cut an additional 350 jobs, in addition to 500 already flagged, during 2013 as it faces falling profits.

And 200 workers will be sacked from Iluka, a miner of mineral sands used in high-tech metals and paint pigments, after weak market conditions forced a 33 per cent slide in full year profit.

BREAKING NEWS: Telecom to shed staff

Telecom to cut hundreds of jobs

Telecom chief executive Simon Moutter said the company would cut "hundreds" of jobs over the next 10 months, but he would not talk numbers today

Stuff,

22 February, 2013

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Asked whether that meant jobs cuts would be limited to three figures and no more than 1000 jobs were on the line, Moutter said he was "not willing to be any more specific at this point".

More details on the long-expected cuts were likely by May.

The job cuts would result in a "material one-off charge" this financial year, he said.

Moutter said that while he was "not going to share numbers today", he was not going to try to downplay the likely scale of the cuts.

Telecom employs more than 7000 workers. The general mood among staff was "if we are going to do it, let's get on with it", Moutter said.

Telecom shares were up 2.5 cents to $2.23 in early trading as investors took encouragement from the promise that Telecom would move to a lower cost and brushed off an announced earnings downgrade that accompanied its interim result.

It reduced its full year Ebitda forecast to $1.04 billion to $1.06b, saying the broadband market had become more competitive than expected and the outlook for information technology services arm Gen-i had softened.

Telecom announced an interim net profit of $163 million on revenues of $2.14b.

On an "adjusted" basis, profits rose 57.6 per cent to $156m while revenues were down 8.5 per cent.

Earnings before interest, tax, depreciation and amortisation (Ebitda) were $516m, down from $1.6b during the same period in 2011 when Chorus was still part of the business, but Telecom said that on an adjusted basis they were up 3.7 per cent.

The company declared an 8c interim dividend, 75 per cent imputed.

Chairman Mark Verbiest said the business was "changing significantly" as fixed-line calling revenue continued to slide and mobile revenues increased.

Telecom was "fast-tracking" the changes necessary to make it a "more competitive, customer-focused company with a clear focus on the data and mobility future", he said.

Telecom had picked up 103,000 mobile customers since August when it began offering competitively priced $19 pre-pay plans, Moutter said.

It had also halted the slide in its broadband market share after "several years of decline", adding 13,000 customers since improving the value of its broadband plans in September.

Gen-i was experiencing continued "price-based competition" and was focused on "exiting low margin business and delivering cost reduction initiatives", Moutter said, but saw opportunities in cloud computing.

Moutter said the new earnings guidance excluded "any one-off costs associated with implementing the strategy which we anticipate recognising in the second half".

That could write-downs as well as redundancy payments.

"We have a highly complex business and our operating costs are higher than our industry peers," he said.

"We believe it is imperative that we move quickly to execute the new strategy and we must have a competitive cost base to succeed in a fast-changing marketplace."

Moutter appeared to rule out compensating customers for the recent malware attacks on its outsourced YahooXtra email service. While frustrating for customers, "it is not really a compensation issue," he said.