On March 6 eight West Australian Liberal MPs wrote a letter calling on Prime Minister John Howard to block the imminent $10 billion takeover of Australia's 12th largest company, Woodside Petroleum, by the Anglo-Dutch oil giant Royal Dutch/Shell. Shell plans to increase its shareholding in Woodside from 34% to 56% and swap assets for shares.
Woodside operates the North West Shelf liquefied natural gas fields on behalf of itself and five other owners. The other owners are Shell, BHP, BP, Chevron and Mi-Mi (a joint venture of Mitsubishi and Mitsui). Major investment decisions by any of these companies in the North West Shelf project require the unanimous agreement of all six parties.
Shell wants control of Woodside in the hope that this will put it in the box seat to compete with other oil and gas corporate giants Exxon-Mobil and BP for control of the Asia-Pacific gas market.
The takeover bid is being investigated by the Foreign Investment Review Board (FIRB) to assess whether it is in the "national interest". Treasurer Peter Costello is empowered under legislation to either block or approve the bid on "national interest" grounds.
Prior to the WA election, it was expected that Costello would grant approval, subject to some conditions being imposed on Shell to address public perceptions of the "national interest". Now, pressure is building for the government to reject the bid on the grounds of preventing "foreigners" from taking over "our" resources.
In addition to pressure from his backbench, One Nation leader Pauline Hanson has called on Howard to "just say no" to a Shell takeover.
A majority of Woodside board members are also opposed to the bid. Woodside executives argued in their report to the FIRB that "Australia's national interest is not served by having its natural gas resources controlled by companies that [have] multiple competing interests elsewhere in the Asia-Pacific region". Shell has interests in other oil and gas fields in the region.
The government may have been saved from making a decision on the bid now that two Australian-owned companies, BHP and Santos, have come forward with separate offers for Woodside.
Opponents of Shell's takeover bid imply that keeping Woodside in Australian ownership gives the Australian people some control over the gas resources in the North West Shelf. But that argument is utterly false.
Australian ownership of Woodside does not give the Australian people the right to control the rate of exploitation of the resource, how the gas is distributed or the price at which it is sold to Australian consumers. Nor will it ensure safe methods of extracting the gas, that the gas is extracted in an environmentally benign way or that an adequate number of workers are employed extract the resource with adequate wages, safe working conditions and secure jobs.
The Australian people should have a right to democratically control all of these decisions regarding essential resources. But to achieve this would require removal of corporate ownership of essential resources such as gas and oil reserves and forests by taking them into public ownership.
This solution is opposed by the likes of Pauline Hanson, Coalition backbenchers and Woodside executives. When they call for North West Shelf gas to remain in "Australian hands", they don't mean the public's hands. They mean the hands of a tiny elite of super-rich capitalist families, the controlling owners of corporations like Woodside, BHP and Santos.
Will the Australian people be any better off if BHP rather than Shell ends up taking over Woodside?
BHP has billions of dollars of investments all over the world. In Papua New Guinea, the operations of its Ok Tedi mine have destroyed an entire river system and its Lihir goldmine has destroyed a section of seabed.
In Australia, contrary to the faulty memory of ACTU leaders, BHP has never been a "union-friendly" company. It slashed thousands of jobs through the 1980s and 1990s despite having been the recipient of millions of dollars of government subsidies. It maintained a discriminatory policy against women workers until the victory of the Jobs for Women campaign. BHP has also been guilty of poisoning thousands of steel workers and residents living near its plants by ignoring environmental standards.
So long as essential resources remain in corporate — Australian or not — hands, any decisions regarding the resource will be based on the need to maximise corporate profits, which inevitably runs counter to the needs of workers and environmental sustainability.