Question 1 – The powers of various parties involved in the dispute

Actors
New Zealand (NZ) actors were virtually powerless during the Hobbit dispute. Many had worked under non-union contracts for years in local productions and the Lord of the Rings trilogy, which was inferior in comparison to many unionised actors overseas. This would be repeated in the Hobbit production whereby actors would work as independent contractors and not employees. Thus, the Hobbit producers would have absolute control over NZ workers who would not have the protection of minimum wage or working conditions that they could under a collective employment contract. To address these issues for the Hobbit project, some NZ actors sought to negotiate better conditions through their union. However, they were shut out as Hobbit producers refused to engage in bargaining and deemed it illegal for them to have a collective agreement with independent contractors (Bridgeman & McLaughlin 2011, p.3).

Unions
Media Entertainment and Arts Alliance (MEAA) is an Australian union which the NZ Actors Equity joined in 2006. MEAA was no match against a formidable opponent in Warner Brothers in both power and strategy. A global conglomerate such as Warner Brothers had little to fear against a union organisation with a few hundred NZ actors. McAndrew & Risak (2011, p.72) infer that it was a naive strategy for an Australian union to challenge such a powerful organisation with an aggressive yet ineffective boycott of Hobbit contracts. This played into Warner Brother’s hands as they were able to response with a series of assaults casting the unions as villains. The NZ Prime Minister John Key and Gerry Brownlee (Economic Development Minister) also expressed the view that the situation was created by the unions. These personal and organisational attacks further weakened MEAA’s position as they helped sway public perception that unions were threatening the Hobbit production in NZ (McAndrew & Risak, 2012).

Warner Brothers
Warner Brothers had overwhelming power during the Hobbit dispute. They had significant economic power, resources and media access to produce movies in NZ. They were in a very strong position to demand and extract conditions from the NZ government to provide them with the best chance of maximising profits. Warner Brothers demonstrated visible power in a national context by having a prominent global icon in Peter Jackson actively lobbying on their behalf. Peter Jackson played a variety of roles as a provider of jobs, builder of the NZ film industry while undermining the MEAA. He commanded considerable influence by assembling crowds, addressing the media and promoting anti-union action. Warner Brothers also displayed visible power when their executives were transported directly in limousines to the Prime Minister’s office for crisis talks with John Key (Bridgeman & McLaughlin, 2011).

NZ Government
The NZ government had the power to pass legislation and to change its employment and tax laws. However, they were pressured by a powerful entertainment conglomerate in Warner Brothers to pass these laws. The Hobbit films are estimated as being a NZ$670million project which is expected to bring millions of dollars worth of activity into the NZ economy, generate thousands of jobs indirectly and promote NZ’s tourist industry (Bridgman & McLaughlin, 2011, p.1). Faced with the prospect of the Hobbit moving offshore, Warner Brothers was able to satisfy their needs by constraining the NZ government into giving generous taxation concessions and introduce legislation under urgency to change its labour laws. In this case, the power of Warner Brothers has allowed capital to alter the balance of power between the confined interests of business and the wider interests of the NZ public.

Question 2 – How Beck’s article is relevant

Beck’s article on reframing power in the globalized world is very relevant to the Hobbit dispute as it sheds light on some of the power games that are played out between global businesses and nation states. According to Beck (2008, p. 795), the world economy can be a metapower in relation to a state as it can change the international and national rules. Multi-National Corporations (MNC’s) have the advantage of capital mobility as well as a global outlook. They are not loyal to any state and like a game of chess, they can weaken countries by playing them off against each other in a race to the bottom. The global economic power that large MNC’s can place over a country is the threat of not investing and the possibility of going elsewhere to another country to invest. This is precisely what the Hobbit producers did when they nurtured the fear of moving the Hobbit production offshore in response to the call for a boycott by the unions. Peter Jackson continued with this theme throughout the Hobbit dispute and suggested that the movies could be made in Eastern Europe. John Key and Gerry Brownlee picked up on the possibility of the Hobbit films moving overseas and they highlighted the potential implications to the NZ economy and film industry if this occurred.

Beck suggests that under the global power game, MNC’s can strategically transform politics with legal changes being the order of the day. Also, governments are tailoring the demands of MNC’s to attract and maintain investment. Despite the unions taking steps to lift the boycott, Peter Jackson played out the tension that NZ production of the Hobbit was still in danger, that Warner Brothers had lost confidence in NZ and that executives would be coming to NZ to move production offshore. John Key was forced to play the game to get investment and potentially secure the future of the country’s big budget film industry when he met the Warner Brothers executives in an apparent final bid to keep the Hobbit. Warner Brothers were now in a prime position to squeeze as much as they could out of the NZ government. As such, they were able to extract further tax subsidies and additional marketing costs as well drive changes to employment laws which were traded off by John Key against the potential risk of losing the films overseas and the possible loss of national pride as a result (Bridgeman & McLaughlin 2011).

Beck states that nationalism can play into the hands of MNC’s as national rivalries can prevent leaders from realising the potential of co-operation between states. Peter Jackson cleverly played the patriotic card as defender against an invading Australian union. He appealed to nationalist sentiments by accusing the MEAA of bullying NZ actor’s plight to strengthen their own power while undermining NZ’s status as an attractive venue for Hollywood filmmakers (Bridgeman & McLaughlin 2011).

Beck reasons that having an inclusive cosmopolitan outlook can help a state break away from the insularity of a national consciousness and recognise the prospective productiveness of global co-operation. The NZ government signalled its intentions of going beyond the national context by having a meaningful affiliation with Warner Brothers for production of the Hobbit movies and possible future films. This partnership could potentially have long-term benefits for the NZ economy as well as generate employment and tourism opportunities. The NZ government’s interaction with Warner Brother’s also signalled its flexibility and openness in a global economy to other potential overseas investors.

Question 3 – NZ’s decision to change its labour laws

The decision by the NZ government to change its labour laws in order to attract investment was the wrong decision to make. Under a critical perspective, NZ has taken a big step backwards to trade-off the demands of Warner Brothers who were offering foreign investment and jobs at the expense of extinguishing the fundamental rights of all NZ workers engaged in film productions of the legal protections that all NZ employees have under labour laws. This includes minimum wages, unfair dismissal, sick leave and the right to collectively bargain. This implies that the NZ government did not view workplace protection and rights as being basic human rights that were non-negotiable. Instead they were viewed as a commodity that could be traded for economic gain and to appease a powerful MNC in Warner Brothers.

The apparent lack of a social and political consensus for the basic rights of NZ film workers represents an example where the NZ government raced to the bottom in a global sense to secure the Hobbit films. This was reinforced by Gerry Brownlee who commented “we did whatever it took” (Chapman & Hartevelt, 2012).
It was these conditions that created the opportunity for Warner Brothers to effectively exploit the NZ government by pressuring them into controversially changing its employment laws without regard for NZ’s long-term interests. Chapman & Hartevelt (2012) suggest that there was a possible political motive for the NZ government to cave into Warner Brother’s requests as it presented an opportunity for the government to score points with the NZ public by actively being seen as brokering a solution to the dispute.

Warner Brothers has a reasonable foothold in NZ having already extracted changes in the country’s labour laws for the filming of the Hobbit movies. The stronger the foothold it has, the more opportunity there is for Warner’s to obtain further law changes. This occurred recently with the loosening of immigration laws allowing overseas actors to work in NZ for a certain period without union scrutiny. This change has no benefit to NZ and it will further disadvantage local actors as there will potentially be limited opportunities with more competition (Chapman & Hartevelt, 2012).

When NZ altered its labour laws at the behest of Warner Brothers, it was ranked near the top of Transparency International’s least corrupt table of nations in 2010 (Barrett, 2011). The negotiation of employment laws with a foreign MNC in private does not amount to corruption. However, it nevertheless intimates corruptibility. There is a possibility that this taint in the country’s reputation could have implications in the long- term as the compromise of worker’s rights and values has been accepted as the admissions price to participate in a global economy.