Bryce Edwards: The Government’s urgency in repealing the “Hobbit law”

Bryce Edwards: The Government’s urgency in repealing the “Hobbit law”

Like any sector in society, those who own and operate businesses have a vested interest in influencing governments to make rules that favour their operations. And not only is the power of business extraordinarily strong, many argue it has increased significantly in recent decades, alongside worsening economic inequality in most countries. This is a point made strongly by French economist Thomas Piketty in his best-selling and highly influential 2014 book, Capital in the Twenty-First Century.

Piketty’s book is currently being made into a film by New Zealand documentary-maker Justin Pemberton – see Steven Zeitchik’s news report on this, Cannes: Thomas Piketty, movie star? The documentary is scheduled for international release next year.

One of the stories being told to illustrate Piketty’s theories about the power of business is the infamous 2010 “Hobbit crisis”, and “Hobbit law” introduced by the National Government to appease Hollywood and Wellington filmmakers. Last week I gave an interview for the documentary about what happened, and explained how through manipulation, a powerful foreign company had obtained huge government payouts and a change to the law to help them make bigger profits.

Why Labour wants to repeal the Hobbit law with urgency

The Hobbit law – or “The Employment Relations (Film Production Work) Amendment Bill” – is also now back in the news here, because the new Labour-led government has promised to repeal National’s legislation in its first 100 days in office.

In her background profile on what happened, Kylie Klein-Nixon says “How it came about is a convoluted tale which changes, as all good tales do, depending on who’s telling it – the filmmakers or the actors. But in a nutshell: the New Zealand actors union, NZ Equity, used the filming of The Hobbit – a high profile, multimillion dollar internationally funded production – to push for the right to bargain collectively, despite most actors being on individual contracts” – see: Hobbit law repeal: How did we get here?

For a much more critical examination of why the Labour Party and the labour movement feel so strongly about repealing the legislation, it’s worth reading an article in the Hollywood Reporter: New Zealand Poised to Repeal Anti-Union ‘Hobbit Law’.

The article is by Jonathan Handel, a Hollywood entertainment and technology lawyer who wrote a book in 2012 titled, The New Zealand Hobbit Crisis: How Warner Bros bent a government to its will and crushed an attempt to unionize The Hobbit. The book highlights how the 2010 industrial dispute is “an unusually dramatic example of corporate leverage exerted against a nation-state and its workers.”

In Handel’s latest article, he explains how the film business was determined in 2010 to reduce the employment rights and conditions of film workers in New Zealand, and threatened to pull the production of The Hobbit out of the country if they didn’t get their way. They came to New Zealand to lobby the National Government for a law change, as well as for additional subsidies.

Handel says: “It was a potent threat against a tiny island nation of then-around 4 million people, particularly in light of the tourist boom sparked by the earlier Lord of the Rings films and expected from the Hobbit prequels — and the law dovetailed with the Kiwi government’s pro-business tilt under the then-prime minister, former Merrill Lynch executive John Key.”

The article celebrates the new coalition government prioritising the repeal of the Hobbit law. New Workplace Relations Minister, Iain Lees-Galloway is quoted explaining that the soon-to-be-repealed law “is a breach of International Labour Organization Convention 98 which New Zealand has ratified and must therefore adhere to”.

And Equity New Zealand president Jennifer Ward-Lealand is reported saying “This is a law that is deeply unfair for workers, so it is wonderful to see our new Government make its repeal a priority”.

The Labour Party and union movement were particularly incensed by the Hobbit crisis because it involved so much duplicity by the film business and the government of the day. This is explained very well by Brent Edwards who points to the fact that the whole crisis was manufactured in order to get the public on side: “That law was rushed through Parliament overnight as the government bowed to the demands of the powerful Hollywood studios. Even worse, the government told the public the Hobbit dispute was unresolved despite knowing that days earlier the actors’ union, Equity, had agreed to lift the international boycott on the film” – see: ‘Hobbit law’ change vindication for late union leader.

Edwards explains that evidence was later released under the Official Information Act, which confirmed all this: “the papers showed the government initially had seen no need to change employment law relating to film and television workers. But Sir Peter and the Hollywood studios continued to pressure the government to do so. So late in October it bowed to those demands and changed the law in a day to make it absolutely clear actors and crew were independent contractors, not employees.”

Gordon Campbell has also written expertly about the latest developments, bemoaning that “one of our leading digital industries of the 21st century continues to labour under 19th century work conditions” – see: On the TPP outcome, and the Hobbit law.

Many on the political left are celebrating the government’s determination to dump the Hobbit law so quickly. On The Standard, Greg Presland declares: “I would like to jump up and down and dance on its grave and remember the victims and curse the villains. And I hope there is a sophisticated analysis by the main stream media of what happened and why repeal is important” – see: The repeal of the Hobbit law. His blog post then goes through in detail what happened.

It might, however, seem a little odd that Labour is giving the repeal of the Hobbit law such a priority. After all it’s a law that affects very few people, and is hardly of immediate concern to voters. Martyn Bradbury explains: “This wasn’t going to make the list of things to do in the first 100 days but the symbolism of telling a multi-national corporation that we won’t write our laws for their benefit was too compelling for NZ First” – see: The Hobbit strikes back! Huge win for NZ Actors & workers.

Industry and political right respond

The National Party hasn’t made much effort to defend the Hobbit law in the wake of the announcement that it’s to be axed. National-aligned blogger David Farrar has blogged to say “This law change will drive productions out of New Zealand, and destroy jobs” – see: Smaug wins, Hobbits lose. Farrar also argues that the film industry is better suited for contract arrangements rather than employing workers, and the repeal of the law is a “huge win for the Australian union that tried to blackmail Peter Jackson with a global boycott.”

According to the Herald, “National has previously criticised Labour’s vow to repeal it, saying that would deter major film companies from coming to New Zealand” – see: Film industry heavy-hitters meet as axe hangs over ‘Hobbit law’.

The same article reports on the thoughts of Lord of the Rings film producer Barrie Osborne, who disputes that National’s law change led to exploitation: “It’s not like you have a big industrial company coming in taking advantage of the workers. I find in fact the wages here in the film industry are higher than they are in Australia which has a very unionised position.”

Similarly, a 1News TV report emphasises that the billion-dollar New Zealand film industry is divided by the proposed repeal of the law – watch: Government reaffirms commitment to scrap ‘Hobbit Law’ which saw an end to collective negotiations for film industry workers.

Back down by Labour?

The Herald article also explains that since the Labour-led Government announced the urgent repeal of the Hobbit law, film business executives have been lobbying Lees-Galloway to do a U-turn. Film boss Barrie Osborne is quoted saying he had made progress with the Minister after initially being alarmed, saying it was “concerning when you read just the bold print” of Labour’s repeal.

Osbourne explains: “We got in to see the minister in his first week in office. So that is encouraging that they are aware of the issues and what is at stake in the industry, and the infusion of dollars some of these big international pictures bring into New Zealand.”

Recently Lees-Galloway has been promoting a somewhat different view of what the government is going to do: “What we are absolutely not going to do is repeal what currently exists and leave a vacuum … [the new framework] will recognise that contracting is the normal way of doing things in the film industry, and most importantly provide certainty to producers and people who plan to invest on making films in New Zealand.” And the newspaper reports that Lees-Galloway “told the Herald a repeal of the Hobbit law may not be needed”.

On Thursday last week, the Government made it clear that a straight repeal was no longer happening. RNZ reported: “Today, workplace relations minister Iain Lees-Galloway announced he was working with a number of industry groups, including the Screen Industry Guild, to consider options for replacing the legislation. He said the film industry brought millions of dollars to New Zealand and a collaborative approach was being taken to ensure the laws affecting them were fair” – see: Working group formed for ‘Hobbit law’ replacement.

According to John Drinnan, Lees-Galloway now says: “A lot of people have said they are really happy with the contracting arrangements. We are fine with that” – see: First ‘The Hobbit’, now for the sequel. And Drinnan cites other businesspeople from the film industry who have been lobbying the government to change their mind.

The most definitive announcement that the promise of repeal within the first 100 days is gone is in Simon Smith’s article, Minister Iain Lees-Galloway says replacing Hobbit law will be ‘a joint solution’. This reports that “Lees-Galloway said it was more important to get new legislation right than to do it in 100 days, and that was what industry and unions wanted.” The minister is quoted explaining, “It would be pointless to stick to a manifesto commitment that didn’t actually get us the result that we were looking for.”

Mike Hosking is using this Hobbit law repeal back-down as an example of how Labour is less reform-minded than might be expected: “The Hobbit law around the movie industry – they were repealing it. Whoops, no they’re not. Those in the industry have told them they’re nuts, and so to their credit, they’ve put the brakes on” – see: This government is specialising in window-dressing, not reform. Hosking then puts forward three explanations for Labour talking radical but acting moderate.

Finally, Helen Kelly’s son, Dylan, now works in the film industry, and has just written about his mother on the anniversary of her death. He also talks about the Hobbit drama, which he says “led to Mum being described as ‘one of the most actively disliked women in the country’ at the time” – see: On a new government, kindness and the (unfinished) legacy of my mother, Helen Kelly. On the repeal of the Hobbit laws, he says, “for those who think this move will kill the film industry… It won’t. Most overseas film industries are heavily unionised. The next 25 Avatar sequels will be just fine”.