ema business plus

Issue 95 - August 2012Publ ished by the Employers & Manufacturers Associat ion Inc

Business Plusn e w s , a d v i c e , l e a r n i n g a n d n e t w o r k i n g

In this issue:

More smart government interventions wanted

Marketing a new kiwifruit juice

The costs of personal grievances

• Having an affair at work?• Suspending employees risky• CHINA THOUGHTS...• More changes coming to RMA

Commercialising IP: What the experts advise

Contents 1

Our Vision. Your Success

Business Plus is published by : The Employers and Manufacturers Association (Northern) Inc

159 Khyber Pass Rd, Grafton, Private Bag 92066, Victoria Street West, Auckland 1142Ph: 09 367 0909 or 0800 800 362 Email: [email protected] Website: www.ema.co.nz

Chief Executive: Kim CampbellAdvocacy Manager: Bruce GoldsworthyManager, Employment: David LoweManager EMA Learning: David FoleyManager EMA Membership & Marketing: Mauro Barsi

Whangarei Louise Morrison 09 459 1501 mob 027 6870604

WaikatoDenis Quigan 07 823 9311 mob 027 203 0694 Russell Drake 07 838 0018 mob 021 686 621 Max McGowan 09 570 1289 mob 027 241 4608

Bay of PlentyTerry Arnold 07 575 8401 mob 021 662 656 Patrick Brus 07 542 2295 mob 021 758 714

Rotorua / Taupo / South Waikato / WhakataneClive Thomson 07 348 0334 mob 0274 372 808

Business Plus

Editor Gilbert Peterson Ph: 09 367 0916 [email protected]

Writer Mary MacKinven [email protected]

Published by Mediaweb

Project Manager Anthony Stead 021 215 9632

Advertising Sales Colin Gestro (09) 444 9158 [email protected]

ISSN No. 1176-4953

04 EMA AdviceLine ‘fantastic service’ survey

05 Navigating through the social media revolution

06 Personal grievance cases fall 22%: employers and workers ‘batten down the hatches’

11 Assurances given on TPP

15 New era for minerals exploration

18 Who revived the electric car? Kiwis!

21 China thoughts...

22 Exporters accentuate the positive: 2012 Survey

23 - A juicy story about kiwifruit

- Nightside re-energises aircraft engine turbines

02 EMA: advocacy at work

03 More smart interventions vital By EMA CEO Kim Campbell

12 Good governance is for everyone from Phil O’Reilly CEO BusinessNZ

14 Changes signaled for resource management law, again

08 Having an affair at work, and what can I do about all these absences? Employment Chat

10 Suspending an employee very risky

10 Should an employer help with financial literacy at work?

16 Navigating the Value Gap

Here we have the marketing department at Elliotts King of Kiwi. Marley is the son of a friend of the founder Glenn Elliott and a big fan of the kiwifruit drink. He really wanted to help… and let his sister Iris in on the action too.For more go to page 23

On the cover...

News

Advocacy

Advice 23

18

0223

2425

mailto:[email protected]

http://www.ema.co.nz




Business Plus – Exclusive news, advice, learning and networking

Advocacy2

New Zealand faring better than most

Dr Oliver Hartwich, the new executive director of the New Zealand Initiative, addressed EMA’s Policy

Forum on amongst other things, housing affordability, the positioning of New Zealand in the world economy, the EU, Australia’s outlook and growth worldwide.

He suggested “New Zealand is doing as well as, if not better than, many countries.”

He said the Euro was never going to work and Australia is not the most appropriate benchmark for New Zealand.

Jury still out on mayoral powers

EMA strongly recommends current draft changes to the local government legislation not include executive

powers for other New Zealand mayors until the Auckland experiment has had more time to prove its worth.

This was one comment in EMA’s submission on the Local Government Act 2002 Amendment Bill seeking to clarify the purpose of local government, governance issues, financial prudence and streamlining council re-organisation procedures.

While EMA advocated for an Executive Mayor for Auckland, we also wanted counterbalancing mechanisms.

The jury is still out on whether the Auckland model of an Executive Mayor is a success. For instance, mayoral control in Auckland seems responsible for the rationing of information to Auckland’s councillors which should often be available to them as it allows for the proper testing of decisions and part of accountability.

EMA supports the Bill’s aim to improve local government’s delivery of public services through effective planning and consenting processes, minimising the rates burden on business (as prescribed in the Shand Report), limiting excessive debt consistent with providing intergenerational equity, and providing good quality infrastructure.

CEO talks to Waikato University on business links

EMA CEO Kim Campbell shared views last month on closing the gap between the education and

business sectors. The occasion in Hamilton celebrated Waikato University’s unique internship programme for placing students from the Management School into businesses for work experience.

Forty students across a range of business disciplines have been placed locally.

Ambassador to Riyadh and MFAT officials visit.

Trade opportunities for NZ business with Saudi Arabia, including investment and

export, were on the agenda when New Zealand’s new Ambassador to Saudi Arabia visited.

Viet Nam Food Forum

Vietnam’s Vice Minister for Agriculture and Rural

Development, Diep Kinh Tan, was key speaker at a business matching workshop for Kiwis and Vietnamese in Auckland. Vietnam is keen to promote the large range of food-related products they have available. The New Zealand response was from AssureQuality Oritain and Plant and Food Research promoting Kiwi food science expertise.

EMA contributes to international workplace health and safety standards

EMA’s manager of Occupational Health and Safety (OH&S), Paul

Jarvie, has just returned from the International Network of Safety and Health Practitioners Organisations (INSHPO) in Moscow.

The international organisation met to discuss draft standards to apply to the qualifications and professional development of OH&S practitioners around the world.

Heatley on minerals exploration

At a lunch meeting on August 7th Energy Minister Phil Heatley covered off three

new Bills coming up that will change miner-als exploration law, and more on the plans for future oil and gas drilling. Details are on page 15.

EMA: advocacy at work

(l-r) Garth Wyllie [EMA], Warwick Hawker [Ministry of Foreign Affairs and Trade (MFAT)], Graham Kearns [NZ China Trade Association], Rodney Harris [Ambassador of NZ to Riyadh, Saudi Arabia], Kim Campbell [EMA] and Pita Cammock (Middle East and Africa Division of MFAT]

Paul Jarvie

Diep Kinh Tan

Phil Heatley


3 Advocacy

Our economy has not made the sort of progress most of us hoped it could. Our real GDP per capita in 2010 ranked us 24th of 34 countries; in 1990 we were on a par with Ireland and Singapore but a decade later both had vastly surpassed us; in 1960 we were amongst the top five wealthiest countries.

The decline explains why our education, health and welfare are under siege. It

means that while our standard of living and lifestyle is still attractive, in terms of our income per head we have been going backwards. What can be done to stop the slide?

We have been listening to Professor Goran Roos, an internationally renowned Swedish expert in manufacturing. He said we should set about creating more jobs in manufacturing. He pointed out that manufacturing jobs are the highest value, and we should set our sights on achieving many more of them.

For every job created in manufacturing from two to five further jobs are created elsewhere in the economy, requiring logistics, accounting, design, advertising, and so on.

We also know from work by Sir Paul Callaghan and others that a job in New Zealand manufacturing generates revenue averaging over $400,000 whereas a job in tourism generates just over $80,000.

High value and capital intensive manufacturing jobs such as those in Fisher & Paykel Healthcare and Fonterra respectively deliver revenues over $800,000 per employee.

We asked the professor: How can a small economy like ours add more value, for instance, to the ship loads of logs and other commodities leaving our shores every day?

I found the answer telling and insightful. The goods we export as undifferentiated commodities represent the legacy of our colonial past. The business model set up for

our economy was to provide the UK with raw materials so their workers would have resources to add value to, and either consume there or sell back to us, and others, in the form of textiles, clothing, and other branded, high value manufactured goods.

It’s little different today. We have failed to shake off our colonial past. Except now we sell the bulk of our commodities to China, Korea, Japan and other countries where they add the most value then sell it into prized markets such as the US and Europe where a small part of our product output must compete with them.

This backward business model seems to have gotten into our DNA. We need to overhaul it, and to do that we need the government to introduce more smart interventions.

Classical neo liberal economics would have us believe any intervention is heresy. For two decades we were told the market would sort it out, given time.

That hasn’t worked out so well. The finance sector is a recent painful example. Another is our slow-to-arrive ultra fast broadband. Our rail network clearly needed government intervention.

Which interventions, and how much should New Zealand invest to attract more high value manufacturing activity to rebuild our economic growth?

As Professor Roos remarked, constructive intervention is likely to be more desirable and important the smaller an economy is. So if it’s good for an economy the size of the US, how much more so for ours?

In the US President Obama outlined the sort of interventions being planned in his State of the Nation speech on January 24th this year. The premise he set was that manufacturing is the main means by which innovation and productivity keep America on the cutting edge, hence his blueprint for manufacturing would deliver higher paying

jobs and many spillover benefits to the rest of the economy.

Its interventions will, amongst other things, cut the company tax rate for manufacturers to 25 per cent, and less for high tech firms, extend and simplify their R&D tax credits system, invest heavily in skills training, and build a string of manufacturing

institutes across the nation.Professor Roos added that in New

Zealand an intervention to address the processing of our commodities, which doesn’t fall foul of WTO trade rules, could be a form of export tax. That is, placing a duty on a commodity that is reduced in proportion to the value added, and which is notified in advance and introduced over time.

The axe wielding forester and tractor brigade, and other interests will no doubt send up a huge cry of outrage, even though such an intervention would make them and the country better off. It would cut in half the number of trees harvested, employ more people, impact the roads far less, and generate higher margins.

Similar objections could be addressed for other agricultural products where the highest value is earned from them, not in New Zealand, but offshore by those distributing and retailing them.

Herein lies the dilemma: How to manage the transition to appease those who benefit from the current, sub optimal situation?

However the purpose of this article is not to come up with quick answers but raise the debate.

Under what circumstances and by how much could we reduce the company tax rate as in the US to stimulate investment in manufacturing and/or exporting? Would an export tax be a useful way to stimulate investment in New Zealand?

If neither, how will we stop the rot? What genuine and serious action is acceptable for New Zealand to become a vibrant economy once again?

More smart interventions vital

By Kim Campbell, Chief Executive, EMA

Kim Campbell

(First published in NBR, July 27th, 2012)

4


News

A new website (www.resilientbusiness.co.nz) has been developed to

support New Zealand businesses to stay open after the unexpected happens.

Auckland Council has supported the duser-friendly website presenting case studies, tips, articles and basic templates for business continuity planning.

Businesses are also asked to complete a short survey tool to gauge their own

ability to ‘stay open’. The information is organised for

varying sizes of business to add to its relevance, from sole traders and entrepreneurs to large businesses and organisations.

“It is very important for the New Zealand business community to be resilient,and have continuity plans in place in the event of an unexpected

disruption,” says Clive Manley of Auckland Council.

“Businesses provide goods and services and employment, so building resilience into them is critical to making our New Zealand overall more sustainable.”

It’s important from the beginning to ensure the website is supported by business and worked for them, he said.

Planning to stay open should a disaster strike

The employment advice offered freely to members through EMA’s AdviceLine has been rated highly in every respect by callers.

The phone service, open from 8am to 8pm weekdays except for public

holidays, is also accessed by email.Each year EMA surveys more than 1000

members who have used the service in recent months.

We know in business that time is money, and no one wants to wait when they have urgent or stressful employment issues to discuss. So EMA is pleased that when it comes to the promptness of advisers answering the calls, 99% of callers rated them ‘excellent’, ‘very good’ or ‘good’.

Once connected with an AdviceLine adviser, callers continued to be impressed. They found the attention given professional, friendly and empathetic. 98% rated the advisers handling their call as ‘excellent’, ‘very good’ or ‘good’ in these respects.

The quality of the advice given was also found to be ‘excellent’, ‘very good’ or ‘good’ for 95% of callers.

Overall, the EMA AdviceLine service was rated ‘excellent’, ‘very good’ or ‘good’ by 98% of callers.

On each measure, the service rated ‘excellent’ or ‘very good’ for more than 80% of callers.

For the online employment advice

available at www.ema.co.nz just 65% rated it ‘excellent’ or ‘very good’. We are planning to look at that, as there may be room to improve.

Online resources include templates and guidelines on specific employment issues covering topics from absenteeism to work-life balance and which members can download for free.

Following is a selection of comments from survey participants:• The team do a fantastic job, the advice is

much appreciated. Keep up the great work!• Fantastic service and worth being a

member of EMA for. Have recommended to other companies as it is superb.

• We are Australia-based and it is excellent.

• The AdviceLine is a great place to call to review issues and ideas/approaches to tackle these. All staff are always happy to ‘chew the fat’ on the tricky issues, while providing informed advice.

• Your service has always been excellent, people very knowledgeable and helpful.

• It’s a fabulous resource. The email survey this year was from 284 respondents (a 21.5% response rate) from the 1300 invited to take part.

To join the Employers and Manufacturers Association (EMA) and take advantage of our highly rated, immediate help line, plus many other services, contact [email protected]

EMA AdviceLine ‘fantastic service’: survey

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Q1

Q2

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Excellent Very Good Good Fair Poor

Adviceline rated top class

http://www.resilientbusiness.co.nz

http://www.resilientbusiness.co.nz



5


News

While corporations watched and wondered at the sudden empowerment of their customers, Christopher Barger was leading General Motors social media to build and enhance brand loyalty. Because, like it or not we are in the midst of a digital revolution changing the game for businesses worldwide.

Christopher will be sharing his experience and insights at The Project

[R]evolution Conference at AUT University on August 30 and 31.

He was director of global social media for GM on a range of initiatives including online training, governance and crisis communication to offline advocacy work through events like SxSW, BlogHer and CES.

Before GM, Christopher managed social media initiatives and corporate communications for IBM where some of the company’s earliest efforts around influencer marketing, podcasting and blogging took place.

He is author of The Social Media Strategist: Build a Successful Program from the Inside Out, where he describes his experiences and provides insights for others in similar situations.

At The Project [R]evolution Christopher will join a powerful line up of speakers covering all aspects of the social and digital media revolution – from legal issues through to brand management, to government and education. Keynotes include: • Alec Ross, innovation advisor to US

Secretary of State Hillary Clinton and the man behind President Obama’s highly successful social media strategy during his victorious election campaign; • Emily Banks, associate editor

of digital news site Mashable;• Google chief technology

advocate Michael T Jones, former chief technology officer of Keyhold Technologies which became Google earth; and

• ReadWriteWeb founder Richard MacManus. Local experience includes BBR’s Julian

Smith talking about brand storytelling, and commercial lawyer Corin Maberly advising on outsourcing social media management.

For more information or to register visit www.the-project.co.nz

Navigating through the social media revolution

Partners: Key support from:

"Join the [R]evolution now - as it will not be televised but will be tweeted!"The Project Revolution Digital and Social Media Conference offers a unique opportunity for business, government and media managers to glean insights, ask questions and mix with some of the leading players in the field.

Places are limited, so register now.

JOIN:Alec Ross (US State Dept.)Emily Banks (Mashable)Mike T. Jones (Google)And many more...EARLY BIRD TICKET PRICE EXTENDED and GROUP DEALS AVAILABLE

AUT UNIVERSITY, CONFERENCE CENTRE,AUCKLAND, 30 - 31 AUG 2012

Christopher Barger

http://www.the-project.co.nz

6


News

The number of personal grievance

cases fell by 22% in 2011

compared to 2010, a sign of the

times for both businesses and their

employees that the labour market

is proving quite difficult for both

businesses and people looking for

jobs.

Job opportunities seem to be limited but employers are reporting they are finding

it hard to find a good calibre of skilled candidates.

So employees are finding it tough to find a job or change jobs, and employers recognise it will be hard to locate good calibre replacements should someone leave.

The upshot is both employers and employees are battening down the hatches,

not rocking the boat. The scenario is reflected in the personal grievance statistics.

There was a 53% reduction in cases involving employees with less than 90 days service compared to 2010, which reflected the extension of the trial employment period law on 1 April 2011 from small businesses to all businesses.

But the introduction of the 90 day grievance-free trial period is not the sole reason for the reduction in personal grievance cases. Cases involving employees with three to six years’ service went down by 43% and those involving people with six or more years’ service reduced by 22%.

The national average award for hurt feelings was $4,976, lower than the 2010 average of $5,140. The Wellington region was the most consistent changing only

-1% to $5,115. The average hurt feelings payment in Auckland was $4,424 and in Christchurch $6091.

Winning and losing finely balanced

The chances of winning a personal grievance are now finely balanced with 45% of

employers winning their cases. Being an EMA member boosts an

employer’s chances since 61% of EMA employers successfully defend their actions. Getting advice and getting it from the EMA pays off!

Reinstatement has never been a popular remedy. In 2010 when it was the primary remedy, 20 claims were made and reinstatement ordered 12 times.

But on 1 April 2011 reinstatement became just one of the remedies available.

Personal grievance cases fall 22%: employers and workers ‘batten down the hatches’

By David Lowe, EMA’s Manager of Employment Services

Personal Grievance Awards Analysis 2011

BY SUCCESSfUL CLAIMS

Number of claims compared to 2010 2011 2010 2009 2008

Auckland -34% -20% 111 in favour of employees out of 201 claims (55% 59%)

166 in favour of employees out of 309 claims (54%)



Wellington -28% -16% 38 in favour of employees out of 75 claims (51% 56%)




Christchurch -47% -27% 52 in favour of employees out of 95 claims (55% 65%)




National -37% -22% 201 in favour of employees out of 371 claims (54% 60%)




BY HURT & HUMILIATION 2011 2010 2009 2008 2007

Auckland $4,424 (-27%) $4,579 (-24%) $6,028 (+27%) $4,888 (+1%) $4,851 (-12%) $5,526 (-4.4%)

Wellington $5,115 (-1%)$5,077 (-2%) $5,161 (-22%) $6,593 (+2%) $6,474 (-24%) $8,536 (+22%)

Christchurch $6,091 (+24%)$6,381 (+30%) $4,918 (-5%) $5,100 (+4%) $4,896 (-26%) $6,630 (+16%)

National $4,976 (-10%)$5,140 (-7%) $5,543 (+8%) $5,204 (+3%) $5,067 (-26%) $6,804 (+10%)

NOTE: There has been a change in the methodology used to analyse the cases. To enable a comparison with previous years, the results using the previous methodology are noted in smaller font italics.

REdUNdANCY In favour of Employee Lost Wages Hurt & Humiliation Lost Benefits Penalties Reinstatement

Auckland 29 out of 40 (72%) 31 out of 42 (74%) $5,594 $4,403 n/a $3,167 0 out of 1 (0%)

Wellington 6 out of 11 (55%) 6 out of 11 (55%) - $4,750 n/a n/a 0 out of 0 (0%)

Christchurch 20 out of 26 (77%) 20 out of 27 (74%) $4,555 $5,447 $15,786* n/a 0 out of 0 (0%)

National 55 out of 77 (71%) 57 out of 80 (71%) $5,166 $4,812 $15,786* $3,167 0 out of 1 (0%)

David Lowe

7


News

Personal grievance cases fall 22%: employers and workers ‘batten down the hatches’ It lost its status as the primary remedy and only 11 claims were made in 2011 with three successful.

Cost of winningThe total cost of winning and losing

continues to climb largely due to increasing legal fees. For both employers and employees, a lot of money is now at stake.

But employers who use EMA Legal’s reduced member-fee services have a lesser amount at risk. For example, the Employment Relations Authority commented: “It is commendable that the Employers’ and Manufacturers Association is able to provide a professional legal service at this level of cost. A level that should embarrass if not shame some practitioners…”

The Christchurch factorAn interesting area is the big

increase in wage arrears cases taken in Christchurch. Whereas about 25 of the national personal grievance claims are heard in Christchurch, the hearings there accounted for 40% of wage arrears claims. Employers may have had some difficulty meeting their obligations after the tragedy of the earthquakes.

Law changesWith the personal grievance law

changing on 1 April 2011 the vast majority of cases for the period that these statistics cover (the 2011 calendar year) were residual matters dealt with under the old law.

MISCONdUCT/POOR PERfORMANCE In favour of Employee Lost Wages Hurt & Humiliation Lost Benefits Penalties Reinstatement

Auckland 49 out of 93 (53%) 54 out of 100 (54%)

$5,804 $7,937

$4,652 $5,269

$ 540* $ 540*

$2,250 $2,250

1 out of 1 (100%) 2 out of 2 (100%)

Wellington 22 out of 33 (67%) 22 out of 33 (67%)

$8,866 $8,866

$5,390 $5,390 - $3,000*

$3,000*0 out of 2 (0%)

0 out of 2 (0%)

Christchurch 23 out of 45 (51%) 26 out of 48 (54%)

$7,354 $11,017

$6,400 $7,133

$16,800** $14,212

$1,667 $1,667

1 out of 2 (50%) 1 out of 2 (50%)

National 94 out of 171 (55%) 102 out of 181 (56%)

$6,970 $8,763

$5,237 $5,764

$11,380 $10,795

$2,150 $2,150

2 out of 5 (40%) 3 out of 6 (50%)

* Only one decision ** Only two decisions including one of $31K

CONSTRUCTIVE dISMISSAL In favour of Employee Lost Wages Hurt & Humiliation Lost Benefits Penalties Reinstatement

Auckland 10 out of 27 (37%)11 out of 29 (38%)

$10,817 $10,817

$5,550 $5,773

- $ 546*

- 0 out of 0 (0%) 0 out of 0 (0%)

Wellington 2 out of 11 (18%)2 out of 11 (18%)

$7,280* $7,280*

$12,500** $12,500**

$18,860* $18,860*

$2,000* $2,000*

0 out of 0 (0%) 0 out of 0 (0%)

Christchurch 4 out of 13 (31%) 4 out of 13 (31%)

$4,541 $4,541

$7,000 $7,000 - - 0 out of 0 (0%)

0 out of 0 (0%)

National 16 out of 51 (31%) 17 out of 53 (32%)

$8,784 $8,784

$6,781$6,853

$18,860* $9,703**

$2,000* $2,000*

0 out of 0 (0%) 0 out of 0 (0%)

* Only one decision ** Only two decisions

Employer To Win To Lose

Hurt feelings $0 Hurt feelings ($4,976)

Lost wages $0 Lost wages ($12,749*)

Legal fees ($16,050) Legal fees ($16,050)

Costs award $4,695 Costs award ($2,850)

TOTAL ($11,355) TOTAL ($36,625)

Employee To Win To Lose

Hurt feelings $4,976 Hurt feelings $0

Lost wages $12,749* Lost wages $0

Legal fees ($9,200) Legal fees ($9,200)

Costs award $2,850 Costs award ($4,695)

TOTAL $11,375 TOTAL ($13,895)

The costs

*Average hourly rate from Quarterly Employment Survey (Dec 2011). Average lost wages is three months.

TOTAL AVERAGE COSTS Costs award against employer

Employee’s Actual Costs Percentage

Costs award against

employee

Employer’s Actual Costs Percentage

Auckland $3,065$3,197

$10,286$9,871

30%32%

$5,530$6,165

$17,595$18,130

31%34%

Wellington $2,912$2,471

$6,250$8,890

47%28%

$3,026$3,026

$12,957$12,957

23%23%

Christchurch $2,309$4,390

$7,278$10,101

32%43%

$3,856$3,527

$12,653$12,653

30%28%

National $2,850$3,368

$9,200 $9,988

31%34%

$4,695 $5.043

$16,050 $216,522

29%31%

8


EMPLOYMENT CHAT

Q. Two of my managers are having a relationship outside work, I’m sure of it – they behave differently now, especially around each other of course. I believe the effect on staff is bad. Is it reasonable to ask them outright…. and what can I do if they are? – Paul

Dear PaulOf course relationships are private

matters and it is no one’s business if they are having it off at home, even at lunchtimes. (Lunchtime is unpaid private time.)

If it matters to you why not try a casual approach saying you have noticed a relationship seems to exist, and you have no problem with that as long as it doesn’t impact on their work. Impacts include job performance, attitude, demeanour and the managers’ management styles.

If you have some figures or complaints that indicate reduced job performance, you could try talking informally with them in private and individually, or with the one you know best. Politely ask the question outright. Justify it by saying you have noticed a change in their interaction which may have the effect of embarrassing others or disfavouring them, or makes each of them less available to their immediate reports… or whatever the actual problem is.

Ask that they be more discreet at work, for example, by not talking openly about their social life together. Say you will also talk to the other party the same way.

This alone will probably be enough to sort things out. If not, or if matters get serious, you need to get into the usual performance management process as for any underperformance requirements as laid out in the Employment Agreement and the company policies referred to in it.

Q. This one employee of mine is always sick, especially on Mondays and Fridays it seems. She is a lovely person – when she is here. But it is really inconvenient not being able to rely on her. What can I do? – Sally

Dear SallyI could almost trot out a prepared

script for this oh-so-common scenario. Except of course, every situation has its own nuances.

We have an A-Z Guide called Absenteeism which covers the issues involved in identifying and managing regular absences. You can find it at www.ema.co.nz using your EMA member password.

Your case seems to be more about frequent absences rather than a long period of time off. Both cause problems in getting the job done. After all, you employ her to do a job and if her role wasn’t needed, you’d have a temp, or no one!

However, intermittent absences can sometimes be harder to address than one, single, ongoing period.

Her absences might be intermittent because of a single medical condition or injury that keeps re-emerging (eg, asthma or a back injury) or any number of unrelated medical issues or injuries.

Where a medical condition results in absence from work you may still review her ongoing employment where the absences are affecting the operational requirements of your business.

You should consider, and ideally have, up-to-date medical information about her condition, and how it will affect

Having an affair at work...?

“...why not try a casual approach saying you have

noticed a relationship seems to exist, and you have no problem

with that as long as it doesn’t impact on their work.”


9


WHAT EMPLOYERS ARE ASKING AdVICELINE THIS MONTH

And what can I do about all these absences?her ongoing ability to attend work full time. Can you accommodate those absences? Can others cover for her? Does she really want to work part time and would that suit your business?

If her intermittent absences are not due to a medical condition, and very often they aren’t, they could be for all sorts of reasons. It is important you give the employee the opportunity to put forward an explanation. You need to consider any relevant reasons for the absences and manage them appropriately. But you do need to actively manage the situation and ensure the employee is aware of your concerns and expectations.

You must remember in handling this type of absence you need to be fair and act in good faith. Be open in your communication and consult with the person. Get current and specialist opinion where relevant, and give notice of any intentions you may have to hold a meeting and investi gate the absences.

At the end of the process weigh up all the considerations so that any decisions are made after a full and fair inquiry given what a fair and reasonable employer could have done in the circumstances.

Q. I believe my firm is sacking me by making me redundant. I believe they don’t

want me as CEO because they want an executive chairman and general manager for personal/ego reasons that will be disastrous for the company. I can’t bear to go home and tell my wife. I don’t believe the firm is struggling or they have grounds. Will you help me take a personal grievance? – Steve

Dear SteveWe are able to offer you as CEO all the

advice you need to manage staff. But I’m sorry to say we act for employers only. So in this case, we cannot take on your case against your employer.

I suggest you find a specialist employment lawyer to help you sort out whether you are being constructively dismissed or genuinely made redundant.

Alternatively if you decide to walk away, I suggest you take some time out to deal with this nasty side of life… and ensure you have support systems that may or may not include counselling (perhaps through your GP).

By the EMA Advocacy team in consul-tation with EMA Advice, and based on real calls to EMA’s AdviceLine.

The information in this article is a guide only and not to be used as business advice without further consultation. EMA members can start with our Ad-viceLine team at phone 09-367 0909 or 0800 800 362 (within New Zealand),

and 1800 300 362 (from Australia), 8am-8pm weekdays. Alternatively, email [email protected] or read or print information such as the A-Z of Employ-ing – a manager’s guide on more than 100 specific employment topics, at www.ema.co.nz

To inquire about becoming a member to gain access to this free AdviceLine service, please contact EMA Member-ship at the numbers above or through EMA.co.nz.

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Advice10

By Diana Crossan, Retirement CommissionerShould an employer help with financial literacy at work?

Many employers may find it hard to see the relevance of personal

financial education in their workplace yet its relevance includes helping stressed employees trying to manage their personal debt, and helping with preparing for retirement. Some employers have found it improves productivity and profitability.

A consequence is we encourage employers to offer personal financial education to their staff though, understandably, they often resist given the other pressures on their time.

However, those that have offered financial education report their staff are less stressed and more productive as a result.

As one employer put it, “I thought it was a waste of time initially. But then I realised people don’t know how to do budgeting and they don’t know how to save. The biggest impact is on how people work and how much they produce. If they’re worrying about money it envelops them, they can’t see a way out and they can’t focus on their work.”

Staff in financial strife may have their ability to contribute as a productive team member affected; at worse it could lead to dishonesty and theft. These people need help – they may benefit from one-to-one support from an organisation like Family Budgeting Services (free, confidential budgeting help on 0508 283 438).

There will be staff who need to think about KiwiSaver and whether they should join. Many life events occur when people need to reconsider their finances: having a baby, buying a house, separation or the death of a partner – all moments when people need to think carefully about how they will manage financially.

The chances are members of your staff will at some point be reaching out for this information.

Money Week is being held from 2-8 September. It’s a week of financial education activities. We have free Sorted

seminars that you could run during Money Week, and free Sorted booklets you can order – all on a range of money topics from budgeting and managing debt to KiwiSaver and investing: sorted.org.nz/partners/seminars-booklets-ordering.

Why not use Money Week as the time to encourage your staff to learn more about everyday money, how to manage their money better and where to find information on how they can do this.

The Commission for Financial Literacy & Retirement Income, an autonomous Crown entity, provides free, independent and impartial information about money matters. Our vision is for all New Zealanders to be financially sorted.

When allegations are put to an employee and disciplinary proceedings commenced, it is almost a given you will have one unhappy worker on your hands for a number of weeks, if not months.

So employers can often wonder whether suspension would be the

easiest way to temporarily remove this potential hotbed of disgruntlement and dissatisfaction from the workplace.

However, suspension can be a bit of a bear trap even where the employment agreement expressly allows for it and the suspension is on full pay.

The problem is that a suspension must be justified, both substantively and procedurally, and the threshold for that

justification is very high. In a nutshell, suspension may be justified only in cases where the risk of industrial sabotage is high (not merely a possibility), the risk of intimidation and safety of other employees/witnesses is likely, or where allegations relate to an employee’s negligence or inability to perform safety-sensitive work and there are no other duties available for the employee to perform.

A further conundrum is that an employee still needs to be consulted about suspension prior to any final decision to suspend, and this requires that the person be given full information on the proposal, time to consider it and respond, and should ideally allow them to have a support person there when the proposal

is discussed. This can all take some time.

But failure to follow this procedure may render the suspension unjustified, even if allowing sufficient time to follow the procedure weakens the employer’s argument that the employee needs to be suspended due to some imminent danger with

them remaining in the work place.Suspension really is a time when

legal advice is needed, as the facts and peculiarities of each case are almost limitless, and the risks of ‘getting it wrong’ are high.

Erin Burke is a senior solicitor with EMA based in Hamilton. She has lectured in employment law at the Department of Law, University of Waikato and can be contacted at: [email protected]

Suspending an employee very risky

By Erin Burke, Senior Solicitor, EMA Legal

Erin Burke

(First published in Waikato Times)

Diana Crossan


11


News

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Chief negotiator on the Trans

Pacific Partnership (TPP), David

Walker, gave an EMA meeting

an assurance this month that

the TPP agreement would not be

signed unless there was at the

least a balance of advantage for

New Zealand, and the right of

sovereign countries to introduce

regulations which are in the

public interest will be protected.

Mr Walker said the 14th round of the TPP negotiations coming up early

September in Virginia would include the two countries that have agreed to join the talks; Canada and Mexico.

He outlined the history of the TPP beginning with the rationale for its establishment in the original P4 agreement between Singapore, Chile, Brunei and New Zealand and for which he was responsible.

Mr Walker said the Honolulu round last November laid out the ambition for the negotiations that all parties signed up to. The documents covering all of it are at www.mfat.govt.nz.

This ambition covered several points including that the agreement is to be comprehensive, regional, for the 21st century, and for it to be a living document, which means more countries can join and that it can be added to and evolved.

There’s no room for new countries joining to stop or back up the processes already underway – ‘they merge from an onramp to a moving stream of traffic

onto the TPP highway.’ The big sticking issues in getting the

agreement signed off are as previously reported, notably in trade access for products that are politically sensitive, for example in New Zealand’s case access offshore for dairy products, and around the highly complex areas of intellectual property.

Chief negotiator gives assurance over TPP

David Walker

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12


We tend to think of governance

mostly in terms of public

companies listed on stock

exchange - where directors have

legislated duties, and there’s a

formal separation of powers of

between shareholders, directors

and managers.

But all types of enterprise need good governance

Most of New Zealand’s enterprises are small or medium sized companies that are both privately held and closely held, where the shareholders are also the directors. Governance is just as important to small firms as to large, listed companies. In fact, many small companies fail to grow because of a lack of governance – the governance gap keeps them small.

Community organisations – school boards, for example - also need good governance. Here, the practice of governance helps build successful communities.

So good governance is for everyone.But the conduct of public companies

in particular is very much in the public eye at the moment, given the losses incurred by shareholders over recent months following the collapse of a number of finance companies.

Good governance of public companies is important for the economy, allowing for trust by investors. Here in New Zealand we have a unique situation with a very small number of listed companies – the smallest exchange in the OECD. Instead of listed companies we’ve tended to choose cooperatives and SOEs.

NZ has perhaps the highest level of cooperatives in the world - Fonterra and other dairy cooperatives like Westland and Tatua), Silver Fern Farms,

Foodstuffs, Alliance Group, Ballance, Ravensdown, Paper Plus, Mitre 10, Southern Cross, Plumbing World and others.

Our economy also has a large preponderance of state owned enterprises.

In the past this has suited our circumstances, but these models do have their limitations.

The debate about Fonterra’s Trading Among Farmers has highlighted the limitations of cooperatives – shares aren’t very liquid, and it’s hard to obtain

capital investment to grow them.SOEs likewise find it hard to get

enough capital to invest to grow. Also, the dominance of SOEs in the economy has effect of squeezing out private sector businesses, holding back our prospects for growth.

Our challenge is to get more listed companies. We need a deeper pool in which investments can be made,

so companies can grow and employ more people.

Our ‘shallow pool’ of listed companies was a part of the problem in the failure of finance companies both after the 1987 crash & more recently following the global financial crisis. In both

instances would-be investors didn’t have a great deal of choice apart from finance companies - there weren’t many other companies to invest in.

The situation was even worse in 1987 when inflation was around 18% - there was a positive incentive for people to actively seek higher returns than they could get from banks, and finance companies were a logical choice.

After the fact, we hear criticism of people being silly to put their money into a finance company, but in fact there weren’t a lot of other options.

We need more listed companies. At the same time, we also need to regain our confidence and trust in sharemarkets. So the new Financial Markets Conduct legislation will help.

One way it will help is in better distinguishing between a director A who has wilfully or recklessly or fraudulently destroyed shareholder value, and director B who may have been caught out because the risk profile around the company changed.

Under current securities law, director A and director B are both liable for criminal charges and imprisonment.

We have seen in recent court appearances some directors who undoubtedly undertook criminal acts and who deserve imprisonment. The amount of damage and loss caused by criminal actions by certain directors has been appalling.

But we also have a number of directors who committed no fraud or wilful or reckless acts, but who got caught because the global financial crisis left their companies and their

Good governance is for everyone

“...we hear criticism of people being silly to put their money

into a finance company, but in fact there weren’t a lot of

other options..”

Phil O’Reilly

13


By Business NZ’s CEO Phil O’Reilly

risk profiles exposed. While their governance was compromised and they clearly performed poorly, with savage results for investors, I wonder if this is on a par with those who committed deliberate fraudulent acts.

A law that doesn’t distinguish between deliberate evil wrong doing and poor performance will make it hard to get good directors. You would tend to think twice about becoming a director if you think that you will be deemed criminal for actions where there was no criminal intent.

The new legislation will address this by making a clearer demarcation between criminal and civil liability. Also it will be easier to enforce, with a more graduated range of civil offences, with a wider range of sanctions than

we have now, both more and less severe, and with significantly higher penalties at the upper range.

There has been much criticism that our existing legislation in the past hasn’t been enforced. Often our response to a crisis is to make penalties tougher, but not enforce them. Enforcement is essential.

We need more listed companies, not less. We need more directors and more diversity among our directors - not less. For everyone to get the best out of it, including shareholders and our communities, we need good governance.

Phil O’Reilly is Chief Executive BusinessNZwww.businessnz.org.nz

“A law that doesn’t distinguish between

deliberate evil wrong doing and poor performance will

make it hard to get good directors. You would tend to

think twice about becoming a director if you think that you will be deemed criminal for actions where there was no

criminal intent. ”

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Advocacy14

The current round of recommended changes to the Resource Management Act (RMA) puts the focus on how current and emerging resource management issues should be addressed while reflecting contemporary values and priorities, as it is 20 years after the original Act was passed.

The proposals are from the independent Technical Advisory Group (TAG)

appointed by the Government to review the RMA’s sections 6 and 7. These deal with the “Purpose and Principles” sections of the Act.

The TAG’s recommendations form part of the second tranche of the overhaul of the Act promised by the National Government when it came to power in 2008. The first overhaul enacted a new Environmental Protection Authority and allowed consent applicants to approach it and the Environment Court directly, among its effects in 2009.

Section 6 deals with “matters of national importance” and section 7 with “other matters” that have a substantial role in shaping and directing how the RMA’s purpose is given effect through local authorities’ planning and decision-making.

The TAG was also charged with addressing perceived gaps in managing natural hazards identified as a result of the Canterbury earthquakes.

The latest proposals, in the TAG’s Report of the Minister for the Environment’s Resource Management Act 1991 Principles, are only a series of “recommendations”, not Government policy. However the group’s first report in 2008 resulted in significant amendments to the Act in 2009 and these recently released recommendations are likely to follow the same route.

The Minister for the Environment does

not intend to formally consult on the report though there is a window of opportunity for feedback.

Key proposed changes include the amalgamation of sections 6 and 7, with the addition of several new clauses focusing on natural hazards, the built environment, and infrastructure. Other existing clauses have been redrafted to improve the functioning of the section.

Of note is the proposal to focus on the “actual attributes” of landscapes to ensure specific outstanding landscapes or natural features are identified in an operative Regional Policy Statement within five years before they can be said to apply to a particular piece of land.

The change, coupled with the removal of reference to “amenity values” as an issue to which decision makers must have regard, will assist rural landowners, many of whom for years have been uncertain about the status of their land and how they might develop it.

The changes to section 6 also seek to address the perceived disconnect between developing case law (which has adopted an overall broad judgment approach to matters), and the “environmental bottom lines” language of the Act.

Focus on claritySection 7 is completely rewritten

to focus on process issues, an attempt to direct best practice as a principle. It requires decision makers to: • Achieve timely, efficient and cost-

effective resource management processes;

• Limit policy statements and plans to RMA matters;

• Use concise and plain language while avoiding repetition;

• Have regard to any voluntary form of environmental compensation, off-setting or similar measures;

• Promote collaboration between local authorities; and

• Achieve an appropriate balance between public and private interests in the use of land.

EMA members will no doubt support the clear articulation of all of these process principles, particularly TAG’s intention to require council decision makers

to better recognise private property rights.The TAG is at pains to note the balance

between private and public benefit is not new; the same clause was originally part of the Resource Management Bill when drafted in the early 1990s.

New definitions are also proposed for sections 6 and 7 including for the terms “outstanding natural landscapes and features”, “mitigation”, “natural character”, “areas of significant indigenous biodiversity”, “terrestrial habitats” and “aquatic habitats”.

There are also a myriad of recommendations associated with the management of natural hazards such as earthquakes and floods, including aligning definitions across multiple pieces of legislation, mandating better information sharing and developing a single natural hazards plan for all regions and districts. A National Environmental Standard or National Policy Statement is also contemplated, as is a comprehensive review of all flood related legislation at some point in the future.

A copy of the TAG Report can be found at mfe.govt.nz under “Publications – resource management” and businesses can provide their responses directly to the TAG.

Gill Chappell is an Auckland barrister. [email protected]

Note: EMA plans to provide feedback on the TAG recommendations on behalf of our members. Anyone wanting to contribute should contact Peter Atkinson at: [email protected]

By Gill Chappell

Changes signaled for resource management law, again

Gill Chappell


15


News

Mining for oil, gas and minerals in New Zealand is to be facilitated with the Government’s re-write of three laws in particular, says the Minister of Energy and Resources, Phil Heatley.

Mr Heatley covered the value that oil and gas mining in New Zealand

was delivering – oil is our fourth largest export earner - and how we can make better use of our minerals estate in future. The occasion was an EMA lunch early August on “Responsible Development of New Zealand’s Energy Resources.”

Under review currently are the Crown Minerals Act 1991, and the Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations.

A new law before Parliament now is the Exclusive Economic Zone Continental Shelf (Environmental

Effects) Bill designed to manage environmental impacts beyond our present 12 mile offshore limit, which is the first time environmental rules have been developed to apply within the New Zealand EEZ.

Key changes to be made are:• Amend the purpose of the

Bill to incorporate the concept of sustainable management to reflect the Resource Management Act.

• Increase the maximum penalty for companies that breach marine consents from $600,000 to $10 million.

• Clarify that a transitional period for planned petroleum activities will cover the 2013/14 drilling season; and

• Provide a maximum statutory timeframe of six months for a marine consent process. Mr Heatley says the law will provide

better protection for the marine

environment and certainty for industry on the regulatory processes affecting investment.

The minister also reported on the annual oil and gas exploration regime to apply. Two months ago 23 onshore and offshore blocks of territory available for competitive

tender were made available for oil and gas exploration covering over 40,000 km sq of seabed and 3,300 km sq of land in Waikato, Taranaki, Tasman, the West Coast and Southland regions.

Exploration permits will be awarded by the end of the year.

Mr Heatley said the Government would release blocks for exploration every year at the same time so international investors knew when to present their proposals, rather than on a first in, first served basis.

EMA congratulated the minister on his approach.

New era for minerals anticipated

Phil Heatley


Advice16 By Justin Ensor and Simon Wilkins

Navigating the Value Gap

KPMG research shows that 45%

of NZX listed companies are

trading below the book value in

their accounts, in some cases

significantly so.

The implication is that the market considers just under half the companies

trading on the NZX are valued less than their balance sheets would suggest. Historically the market has largely disregarded balance sheets as relevant to value as they represent an historical ‘point in time’ view of a company’s financial position. However with fair value now firmly entrenched in financial reporting standards, more insight is available on the true value of certain assets. Moreover, accounting standards require company management to test book values of assets for impairment on a regular basis. Boards of directors have become increasingly familiar with impairment analysis over the last few years and many companies have recorded impairments to asset values.

So what are the causes of this ‘Value Gap’ and what does it mean for directors and company executives and how they retain and attract investors?

In our view, while most apparent where P/BV is less than 1, all companies need to develop their own internal view of value and should be alert to differences between internal and external viewpoints. Steps should be taken to understand the drivers for such differences and focus given to closing the gap where possible. So what are the opportunities and challenges a Value Gap represents?

The lack of liquidity in the NZ market is often identified as a key reason for stock prices trailing internal value assessments. The consensus view is that many NZ stocks simply do not trade frequently enough to provide meaningful insight into value though comparison with a more liquid ASX indicates this may be overplayed.

There are some other factors in play that can contribute to a Value Gap.

The price of some stocks can be influenced by shareholder configuration such as the presence of a cornerstone shareholder with its own strategic agenda. This may cause uncertainty and speculation on the future direction of a company and the impact on smaller minority shareholders. This translates to how the stock is priced in the market.

The impact of the Global Financial Crisis can’t be ignored as the equivalent data in 2007 showed only 21% of NZX companies with a P/BV of less than 1. The Global Financial Crisis (GFC) has demonstrated the global inter-connectivity of different markets and different industry sectors. What happens in Greece, impacts values in New Zealand.

In response, the analyst community regularly evaluates companies by reference not only to an understanding of industry fundamentals but also to perceptions of how well company management is addressing and responding to uncertainty.

Some companies are choosing to be proactive and upping their game in their market communications beyond standard investor relations management. They are achieving this by improving analytical tools (including internal valuation models) to understand how shocks to the economic environment will impact both their financial performance and business strategy while developing a robust framework for assessing future investment.

Taking this approach allows companies to react quickly to market dynamics and get on the ‘front foot’ in engaging with investors about fast changing external and internal developments. Indeed such an approach will dovetail with forthcoming financial reporting requirements (IFRS 13) where additional disclosure will put

key fair value assumptions under the spotlight. Alternatively, companies may review portfolios and look to dispose of non-core or under-performing operations. By communicating this approach to the market they demonstrate active balance sheet management and the drive to increase shareholder returns.

Communicating key drivers of value to the market will provide critical information and insight to the analyst community, and so create a more open dialogue with investors. If Boards and executives are really committed

to enhancing shareholder value in a relative sense this is a ‘quick win’ when compared to other challenges. Done well appropriate communications can make substantial inroads in bridging the Value Gap between internal and external value perceptions.

While understanding liquidity and enhancing investor communications may help bridge the Value Gap, Boards should also consider the other side of the coin. Perhaps company management is too bullish on internal valuations and without sufficient regard to market indicators. The result may mean more robust impairment analysis is required.

While 2011 saw an increase in the total value of impairment to $896m, it will be interesting to see how 2012 plays out. A greater regard to external indicators could see a rise in impairments as more companies reflect the realities of an extended period of uncertainty and little or no growth. This could play a significant role in diminishing the Value Gap.

Justin Ensor, Partner, Corporate Finance T: +64 (09) 367 5934 E: [email protected] Wilkins, Partner, Corporate Finance T: +64 (09) 363 3480 E: [email protected]

Simon Wilkins

Justin Ensor



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18


For a decade the Business

Intelligence series of content-rich

workshops has been designed for

busy executives, owners, directors,

managers, and their advisers by

Lowndes Associate lawyers and

now partner EMA. The topic in

July was “Effective International Commercialisation of Intellectual Property”.

Every technology or technical improvement began as an idea, and

as someone’s intellectual property (IP), said EverEdgeIP® chief executive and founder Paul Adams at the latest Business Intelligence breakfast workshop.

Adams gave examples of new thinking: alternating current devised by Nikola Tesla 126 years ago; Google created by Larry Page and Sergey Brin 14 years ago.

“But many don’t realise the IP or its value,” he said. “Or they think IP only refers to patents.”

IP classes reflect areas of innovation, and in order of popularity and value these are: • trade secrets/confidential information, • copyright,• unregistered and registered trademarks, • patents,• domain names,• approval rights, • design rights, • plant variety rights, and• integrated circuit layouts.A patent is no silver bullet but it’s possible to patent just about anything: “It’s just about paying enough and instructing your patent attorney properly so he can draft an application. But it must be commercially useful, ie, broad and therefore more defendable.”

When applying for a patent weigh up the risk of appropriation (theft), and the impact of telling everyone about it, alternatives, the degree of protection the company can afford, and the likelihood of the product

innovation being detected and the patent infringed.

“Patents can waste time and money and even damage the business. They are just a business tool.”

Adams recommends matching each function of a business with the relevant IP class, eg, patent some aspects, trademark others and copyright another – even of the same product.

Logically if a business has weak IP protection and a good product, it will be copied “but there is no point in having ‘strong IP’ and a poor product because no one will copy you anyway”.

Turning IP into cashAs MC and director of Lowndes, Mark

Lowndes said, New Zealand companies tend to be strong innovators, but turning innovation into hard cash and international growth can be challenging.

“Why aren’t we rich?” The solution, he suggested, was to commercialise intellectual property (IP) and being niche and different, as a small country like New Zealand can be.

To leverage innovation, there are four drivers, said Adams. These are to create new revenue, followed by objective assessment of the technology and IP, building a sustainable competitive advantage, then reducing risk and liability.

Three models to commercialise any IP are: deploy the IP, ie, design it into a product

or service then manufacture, market and sell the product yourself; license a third party to deploy IP in return for a royalty; or sell your IP to a third party who then licenses or deploys it.

Licensing and selling options often suit New Zealanders who are distant from markets and lack investment capital.

Protecting world-first innovationA commercialisation strategy was

illustrated by a local design of a wireless battery charging system for electric cars presented by Dr Peter Lee, chief executive of Auckland UniServices Limited.

UniServices is wholly owned by the University of Auckland to manage its commercial research, consultancy partnerships and new business ventures based on research, and developing the university’s IP.

Dr Lee said in 2008 the prototype wireless battery charging system was launched, whereby cars are charged on the move. It aims to reinvigorate the electric car industry that had stalled due to plugging and unplugging problems, including worries about overload on the grid.

In 2009 the first public demonstration met incredulity… and two years later the first copycat products emerged. This led to positioning the system, based on induction power technology, as best in class.

News - IP Update

Who revived the electric car? Kiwis!

Paul Adams, Dr Peter Lee and Trent Smith

19


News

The battery designers, ArcActive of Christchurch which develops high-performance, carbon-based batteries for hybrid electric vehicles, won the award for Excellence in the Field of Environmental Technology Research at the world’s leading emerging clean tech conference, Clean Equity 2011.

This led to a joint venture, and financial investment. Large multinational purchasers emerged. Qualcomm which provides wireless technology and services now protects the IP and imposes standards. The battery designer licenses it to manufacturers.

Dr Lee said, “You need big friends… rather than spend your wealth on lawyers and getting on to standards committees and fighting.” In summary he said: • Know the areas where you are world-

class, and focus. • Build partnerships: co-creation is

important for international markets. • Basic science results in breakthroughs

when the market is savvy. • Inventions based upon the voice of

market become innovations. • Business development is a creative process. • IP development synchronises with

business development. As Mark Lowndes noted, if you have

unlimited wealth and the best lawyers you will still lose a patent case half the time so you still need a wider business and IP strategy to protect your IP.

PatentingPatents are the main tool of Trent Smith,

manager of IP at SMART Technologies, a NASDAQ-listed interactive display technology provider and the world leader in interactive whiteboards.

The company holds some 850 patents and patent applications in markets around the globe.

A business needs to ensure its protection efforts align with its business objectives and to know how it will use its IP protection – defensively or on the offensive.

He said you need to understand the IP system, including the classes of protection, filing options and costs.

Timelines for each IP protection type are important. The IPONZ website shows patents have to be renewed after four years and at three-yearly intervals, copyright every 16-50 years, and trademarks every 10 years. For example, the timing of the application processing and publishing of a product’s IP affects the owner’s ability to license and sell.

The company needs to understand the

competition, identify threats early, and know how to counteract.

A strategy could be to use the provisional patent filing system to defer a filing decision and costs. Publish a patent to block others from filing. Negotiate filing costs.

“Focus on your core products. Budget costs for two to three years or even 20 years – it’s easy [because the filing costs are clear].

“Challenge your competitors’ patents and pending applications – we take a very aggressive approach because we are a technology leader.” But on the other hand, consider being first to market instead of filing.

Be clear whether IP is even enforceable, eg, in Japan it takes seven years to register a patent and by then the technology has often moved on. Does the country have a mature legal system and how much do people pursue protection? – They do in the US!

In emerging markets strong IP allows a brand to command a premium price which can be an intangible benefit, Smith said.

The next workshops in the series are:

Driving Human Performance – Does Money Matter? September 12 The Big Debate – That You’d Be Mad to Be a Company Director. October 31

To find out more and register to attend, please visit business-intelligence.co.nz

“...You need big friends… rather than spend your wealth

on lawyers and getting on to standards committees”

21


News

“Western commentators are

concerned that economic

problems and political

indecisiveness in Europe will

weaken the Chinese economy

this year and even push it into

recession.

This assumption is based on an old but enduring fallacy that China is

an export-dependent economy that has succeeded primarily by dumping goods in Western markets. But the value of exports retained in China is far less than the price of goods landed in the West would indicate. Apple takes 58.5% of the profit from its Chinese-assembled iPhones, while China retains a mere 1.8%. The Logitech mouse provides its Chinese manufacturers with a margin of only 7.5%. The recent European Commission ruling has rejected recent dumping claims.

“China is not an export-dependent nation. Foreign-invested companies are responsible for almost 50% of all Chinese exports and therefore suffer considerably when exports decline. Procrastination and further softening of demand in Europe — combined with the economic distractions and distortions that characterise election years in the United States — will contribute to the Chinese economy slowing, but the impact will not be great, for the Chinese Government has the means to sustain steady growth.

“If current trends prevail, China will achieve an annualised GDP growth rate of 8% while keeping inflation below 3%.

“China’s current share of international investment is still slight. It contributed a mere 5.2% in 2010, dropping to 4.3% in 2011, and experienced a virtual slump in the first two quarters of 2012. Although contributing 33% to Asian GDP, China contributes no more than 10% to global GDP. China may be the world’s second largest economy, but the majority of its

population are still farmers or, more accurately, gardeners of small plots averaging 0.6 of a hectare.

“Many in China’s coastal cities are wealthy and the middle class is growing quickly, but with nominal GDP per capita of USD 5,430, China ranks only 91st in the world. If purchasing-power parity (the buying power of local currency) is taken into account, China lies between Ecuador and Jamaica in 94th place.

“In June, to support growth, the People’s Bank of China cut interest rates to 3.25%, and again in July to 3.0%. A further interest rate cut is likely this year. In both February and May bank reserve ratios were reduced by 0.5%, and are likely to be reduced again before the end of the year.

MisperceptionThere is a misperception that serious

instability exists in the senior ranks of the Chinese Communist Party.

As a result of their lack of transparency, the Chinese Government and Communist Party invite conspiracy theories and fuel public distrust. The Bo Xilai scandal has been a major challenge to the party’s ability to undertake damage control and manage public and international perceptions.

“Faith in the party is waning. Since economic reform began, even through the toughest times, Chinese people had a degree of confidence in their leaders. Now officials are too busy getting rich at our expense and attempting to disguise the fact by manipulating the media. Today, thanks to a more open media and social networks, we can find the truth about most things.”- Beijing restaurant owner

“My friends and I do not mind that some people get rich, but it’s how they become rich that matters.” - Shenyang office workerIn recent generations their capacity for endurance has carried a beleaguered population through wars, revolutions,

famines, natural disasters and the shocks of economic and social reform. Poorer Chinese, who make up the majority, are nevertheless beginning to feel that this capacity for endurance is now being taken for granted and even abused by the government. As each year passes, it is clear that the party is getting further out of touch with its own grassroots. Party Secretaries who were once farmers’ and factory workers’ sons and daughters are now the sons and daughters of party officials, and have often lived such privileged lives that they find it hard to relate to the people for whom they are supposed to be responsible.

“The recent deluge in Beijing was a shock. It showed us that, although new infrastructure has been built over the last ten years, crucial details such as drainage have been neglected. Last week I spent hours parked on a bridge as the streets below me became rivers. The hardest thing for us to accept is that the government seems to have lied to us about the number killed. First we were told that it was 37 and now, after public outcry over such an absurdly low number, the government has just raised the number to 77 dead! We doubt that number as well. Why lie to us about a disaster that in even the best of circumstances they could not have foreseen? We seldom trust what we are told anymore.” - Beijing secretary

David Mahon is Managing Director of Mahon China Investment Management Ltd. www.mahonchina.com

David Mahon will be addressing an Export New Zealand Go Global breakfast in Auckland on September 22nd. www.exportnz.co.nz

China thoughts...

By David Mahon, from his China Watch Summer newsletter

http://www.mahonchina.com

http://www.exportnz.co.nz

http://www.exportnz.co.nz

22


Making it LeanBy Barry Nolan

Normally $39.90

TO ORDER EMAIL: [email protected]

$20.00 incl P&P and GST

August only!“It’s a good and relevant read. I would recommend it to anyone

intent on maximising returns for their business”

– Peter Townsend, CEO, Canterbury Employers' Chamber

of Commerce

It shows you how Lean is the way to go to achieve greater productivity and reduce costs.

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Export New Zealand’s 2012

Survey shows the majority of

exporters are still in a positive

frame of mind despite exchange

rate challenges and the lack lustre

growth affecting some parts of the

world economy.

Just over half the respondents (51.8%) expected their profitability to improve

in the next 12 months with 20% expecting their orders to rise substantially, said Catherine Beard, Executive Director of ExportNZ.

When asked about the main obstacles to

exporting or exporting more, the top four issues were:1. Demand offshore 2. Exchange rate volatility 3. Funding for developing export markets 4. Price competitiveness of their products.

Obstacles to export growth in New Zealand were captured in the following comment:

“The regulations imposed by the NZ Food Safety Authority (NZFSA) are at times excessive and well beyond those imposed on our competitors in overseas markets.”

The overseas barriers to trade were identified mainly around tariffs, product registration, bureaucracy and non-tariff barriers.

On access to Australia: “AQIS (Australian Quarantines Inspec-tion Service) inspection and fees delay product getting to market and often feel like a non-tariff barrier.”

“The Australian costs of entry compliance are crippling.”

Another issue raised by several exporters highlighted the con-

stant changes and complexity of paper work for exports going to China.

When asked if the Government was doing enough to support exporting 61.3% said no (down from 65% last year. Where as 24% of respondents said capital was no constraint at all while for 32% said it is a real constraint.

“There is a significant list non-tariff barriers that exporters are battling and ExportNZ is keen to work with government officials to tackle them,” said Catherine Beard.

Exporters accentuate the positive: 2012 Survey

“I have been in the IT ERP space for over 30 years and this is the best book that I have seen on Lean. After reading the book I have a better understanding of Lean that I had developed over all the past years. The book presents the concepts and application of Lean very concisely and clearly.” - Michael Ligudzinski, Minneapolis, Minnesota USA

SPecIaL Offer! To celebrate 3rd reprint!



Air New Zealand Gas Turbines (ANZGT) which specialises in the

overhaul and repair of multi-million dollar aircraft engines, had to replace the machines used to do a key part of the work recently and they called on Nightside Test Design. (www.nightside.co.nz).

Each turbine is disassembled and each component inspected, measured, tested and cleaned before reassembly. If the slightest misalignment were to occur on any of the turbine’s 700 blades on 7 disks, with the rotor spinning at 10,600 revolutions a minute, large vibrations would add wear and tear or worse, cause a catastrophic failure.

ANZGT called in Nightside to build a replacement a system for their aging rotab measuring machines.

“We need incredible accuracy – the ability to measure down to a hundredth of a thousandth of an inch – and we needed an expert partner who could build the system around it,” said Brian Manning, Production Leader at ANZGT. Nightside designed and quickly built a replacement system.

Not only was it vast improvement but ANZGT estimate they’ve achieved an additional 30% time savings; the new system will pay for itself within two years.

After a year of exporting its

kiwifruit and feijoa juice drinks,

Auckland company Elliotts King

of Kiwi is about to enter the New

Zealand market!

The company showcased its kiwifruit and feijoa drinks at the annual Food

Show Auckland earlier this month just as BusinessPlus was going to print.

Formerly a documentary maker and now the company president, Glenn Elliot started Elliotts King of Kiwi in 2009. One hot summer’s day he had an overwhelming urge for a flavoursome but most importantly, healthy drink. Struck by the lack of good tasting healthy kiwifruit-based drinks available, he decided to create the world’s best kiwi juice.

Two years of tests, recipe improvements, product design and lots of tasting later, Elliotts launched in Hong Kong with two flavours: Green Kiwi and Gold Kiwi.

The Elliotts range has no preservatives and no added sugar or water, just pear juice to soften the strong taste of pure kiwifruit. The juice is also processed in a way that retains as much of the fruit’s beneficial components as possible: it

is pasteurised using a system with far less impact on the nutrients and flavour than flash heating and cooling.

The kiwifruit are selected from Te Puke orchards by staff experienced at growing, buying and processing kiwifruit. The fruit is then graded at Elliotts’ nearby packhouse where only premium fruit are selected for outsourced processing and bottling using state of the art technology to ensure “maximum flavour and goodness are in the bottle, not in the storage tanks,” says Elliott.

The company’s website www.elliotts.me is in English and Chinese. According to the owners of the domain name, the suffix, Me is ‘useful, meaningful and memorable, but most importantly …you want your online presence personalized ASAP.’

A change of distributor enabled the push into China, and before the first container of Green Kiwi and Gold Kiwi arrived in China, the buyer had ordered another.

The juice is also sold in a high-end supermarket chain in Japan. Other countries are showing interest. Packaging and distribution arrangements are ready for online sales.

Glenn says, “It’s been a really hard slog,

what with massive hassles from suppliers, and the PSA disease threatening to collapse the kiwifruit industry in New Zealand.

“Mum mortgaged her house to help me see my dream through.

“We think it’s so important New Zealanders are more aware of the sugar-filled fruit drinks that saturate the market. We want to give them a far healthier option.”

He says research shows kiwifruit is the most nutrient-rich of 27 most commonly consumed fruits. For instance, one kiwifruit has almost twice the vitamin C of an orange, and more potassium than a banana.

23 IN OUR REGULAR SNAPSHOTS OF EMA MEMBER COMPANIES WE

DESCRIBE THE BUSINESS OF ELLIOTTS KING BASED AUCKLAND.By Mary MacKinven

A juicy story about kiwifruit

Glenn Elliott

Nightside re-energises aircraft engine turbines

http://www.nightside.co.nz

http://www.elliotts.me

http://www.elliotts.me

Out & About

1

| 1 Dick Coetzee & Steve Burrows [Aeromotive Oceania Group] & Ross Wilson [International Certi� cation] | 2 Dave Chadwick & Walter Tuakana [Inex] | 3 Kerry Watson [Waipa Networks] | 4 Falguni Shah [Stainless Steel Design] | 5 Matt & Sean Stacey [Unicus] | 6 Paul Henare & Simon Jordan [NZ Food Industries] | 7 Mike Van Der Hoek & Geo� Foster [Thomsons Timber Supplies] | 8 Christina McGuire [Veterinary Enterprises]

| 1 Tanya Carey, Diane Hurford, Glenn Hawes, Nicole Hielkema, Christina Bilkey [Brolly Sheets] | 2 Scott Kington [Madeblunt] & Brent Carter [TNT Express] | 3 Mike Kayes [QBE Insurance] | 4 Derek Bartosh [Canary Enterprises] | 5 Jo & Paul Martin [TNT Express] | 6 Elizabeth Marvelly [Singer] | 7 Ian McCrae [Orion Health] & Mike Riley [Endace] | 8 PM John Key & Sir Ken Stevens [Glidepath Group] | 9 Chris Komatas [Endace]

Eco Smart Business workshop in Hamilton

Air New Zealand Cargo ExportNZ Awards Auckland 2012

1 2 3

4 5 6

7 8

1 2 3

4 5 6 7

8 9

EMA Alert

www.ema.co.nz | [email protected]

AUG

UST

Conference ContactsKaren Joe | 09 367 0959 | [email protected]

Training ContactsLotta Bryant | 07 839 2710 | [email protected]

Kevin Chambers | 09 367 0958 | [email protected]

Craig Garner | 09 367 0907 | [email protected]

Deborah Law-Carruthers | 09 367 0947 [email protected]

Did you know, EMA Tailored Training can deliver a wide range of workshops fully

customized to re� ect your workplace… at your workplace?

Contact Rhonda [email protected]

Mobile 021 664 321

Health & Safety Representative Training (Workplace) Stage 2

Review and build upon the skills, knowledge and competencies developed in Stage 1 and the role of the representative. Focus on speci� c hazard identi� cation and control including the use of Approved Codes of Practice.

Auckland | Contact Craig

22-23

SEPT

EMBE

R

Disaster & Business Recovery Series: HR Policies, Employment Issues & Payroll

23

Business interruption can come in a whole host of guises, from power outages to natural disasters. EMA has put together a cost e� ective series focused on the practical steps you need to prepare your business for any type of business disaster or interruption.

Auckland | Contact Karen

Time Management – Personal E� ectiveness

27

Concentrate on results, not on being busy. You will learn how to identify your time management problems and ways to � x them and the di� erence between productive and non-productive time.

Hamilton | Contact Deborah

ManagingCustomer Complaints

29

Complaints happen. We will show you how to deal with these di� cult situations and di� use them with less stress and how you can use complaints to improve your customer service.

Auckland | Contact Deborah

16th Annual Managers & Team Leaders Conference

30Learn to Fly... A rare opportunity to explore and discuss ideas, problems and solutions with experienced supervisors and � rst line managers. How do other managers and supervisors communicate, assign tasks, deal with con� ict, motivate employees and enhance the overall performance of their teams? Learn proven techniques and essential skills.

Auckland | Contact Karen

Dealing with Workplace Bullying & Harassment

31

Bullying and harassment can have a highly detrimental impact on workplace performance. By allowing it to occur, there is a risk of costly and time-consuming legal claims.


First Line Management – An Introduction

3-4

This course is the � rst two days of the National Certi� cate in Business (First Line Management) Level 3. It is a great way to gain an introduction to FLM without completing the entire National Certi� cate.


Personal Image & Professionalism in the Workplace

5

Do you want to convey an image that is ‘professional, committed, organised, friendly, approachable’? Your course leader has a diploma in fashion design and tailoring and was the founder of Total Image.


EssentialSelling Skills

6

Previously known as Sales Dynamics - This workshop covers all required facets of professional selling through the sales process from initial prospecting through to securing the sale.


InductionProgramme Design

10It is important to make new employees feel vital to your organisation, and safe. Learn to plan and implement their development programme.


Bullying and harassment

workplace performance.

Deborah

guises, from power outages

need to prepare your business for any type of business disaster or interruption.

results, not on being busy. You will learn how to identify your time management problems and ways to � x them and the di� erence between productive and non-productive time.

Business (First Line

great way to gain an introduction to FLM

in the Workplace

Do you want to convey an image that is ‘professional, committed, organised, friendly, approachable’? Your course leader has a diploma in fashion design and tailoring

the skills, knowledge and competencies developed

control including the use of Approved Codes of Practice.

Business interruption can come in a whole host of guises, from power outages to natural disasters. EMA has put together a cost e� ective series focused on the practical steps you need to prepare your business for any type of business disaster or interruption.

Kevin ChambersKevin Chambers

Programme Design

& Team Leaders Conference

communicate, assign tasks, deal with con� ict, motivate

Workplace Bullying & Harassment

Bullying and harassment can have a highly detrimental impact on workplace performance. By allowing it to occur, there is a risk of costly and time-consuming

Do you want to convey an image that is ‘professional,

Deborah

time management problems and ways to � x them and the di� erence between productive and non-productive time.

Previously known as - This

all required facets

prospecting through to securing the sale.

It is important to make new employees feel vital to your organisation, and safe. Learn to plan and implement their development programme.

Auckland | Contact

Out & About

1

| 1 Dick Coetzee & Steve Burrows [Aeromotive Oceania Group] & Ross Wilson [International Certi� cation] | 2 Dave Chadwick & Walter Tuakana [Inex] | 3 Kerry Watson [Waipa Networks] | 4 Falguni Shah [Stainless Steel Design] | 5 Matt & Sean Stacey [Unicus] | 6 Paul Henare & Simon Jordan [NZ Food Industries] | 7 Mike Van Der Hoek & Geo� Foster [Thomsons Timber Supplies] | 8 Christina McGuire [Veterinary Enterprises]

| 1 Tanya Carey, Diane Hurford, Glenn Hawes, Nicole Hielkema, Christina Bilkey [Brolly Sheets] | 2 Scott Kington [Madeblunt] & Brent Carter [TNT Express] | 3 Mike Kayes [QBE Insurance] | 4 Derek Bartosh [Canary Enterprises] | 5 Jo & Paul Martin [TNT Express] | 6 Elizabeth Marvelly [Singer] | 7 Ian McCrae [Orion Health] & Mike Riley [Endace] | 8 PM John Key & Sir Ken Stevens [Glidepath Group] | 9 Chris Komatas [Endace]

Eco Smart Business workshop in Hamilton

Air New Zealand Cargo ExportNZ Awards Auckland 2012

1 2 3

4 5 6

7 8

1 2 3

4 5 6 7

8 9









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