It's a plot with all the drama of a Hollywood script. Derek Cheng goes There and Back Again...


Scene 1: A boycott is born

Following meetings, the International Federation of Actors (FIA) passes a resolution for their members to refuse to sign contracts on

The Hobbit

until the film producers enter into a "collective bargaining agreement" with the Australian-based Media Entertainment and Arts Alliance (MEAA), of which NZ Actors' Equity is a branch.


In an August 17 letter to Warner Bros production company 3 Foot 7, copied to director Sir Peter Jackson, the FIA asks 3 Foot 7 to meet with MEAA to find an agreement to cover all actors in the production.

MEAA had tried to target local productions before, including

Outrageous Fortune

, but for

The Hobbit

it managed to enlist some hefty overseas muscle. A second letter is sent signed days later by seven international actors' unions - including the US-based Screen Actors' Guild - in support of the FIA position, followed by a third letter by the head of the MEAA, Simon Whipp.

Scene 2: A stand-off

Warner Bros declines to meet the MEAA. It intends to hire actors as independent contractors, which is common practice. Under New Zealand law it is illegal to collectively bargain with independent contractors in the film industry.


The boycott begins to bite and Warner Bros starts to get itchy feet. The Hollywood company re-examines a somewhat related issue: are film workers - including actors - employees or independent contractors?

Under New Zealand law the status is determined by the nature of the role and the employment relationship, regardless of what the contract says. Independent contractors can claim back expenses and argue their own work conditions.

Employees, on the other hand, have protections against unjustified dismissal, plus statutory requirements such as lunch breaks, holiday pay and Kiwisaver options. They can also legally collectively bargain with Warner Bros.

If workers on

The Hobbit

wanted to argue that they were employees, they could seek that status through the courts. If they won, they could then strike, claim personal grievance cases, or even demand collective bargaining, and Warner Bros could not hide behind the claim that it was illegal. If this happened - or even an initial court case - in the middle of production, it could cost Warner Bros millions.

However, if all the workers were independent contractors, Warner Bros could replace anyone who wasn't working out without having to worry about personal grievance cases.

With a $670m investment and four-year project on the table, they start getting nervous. And still decline the offer to meet.

Scene 3: Business as usual

Meanwhile pre-production at Wellington's Weta Workshop is full steam ahead. Hobbiton is being spruced up. Costumes and sets are being built. It seems there is no question that the films are going to be made in New Zealand, even though Warner Bros has yet to formally give the green light.

Pre-production work has been going for a couple of years, even though the exchange rate has seen the value of the New Zealand dollar climb from US50c to about US75c in that time. Warner Bros starts to consider another issue: money.


Scene 1: Jackson breaks silence

On September 26, six weeks after the actors wrote to Warners, Jackson calls the MEAA an "Australian bully boy" that is threatening the whole project in a way that could create "a long, dry, big-budget movie drought in this country."

Kiwi actor Karl Urban comes out in support of the union stance, while others say that a lot of film work is short-term and should be done on independent contracts.

Sensing an opening, other countries, including Britain and Australia, start lobbying furiously for

The Hobbit


Scene 2: Government intervenes

Attorney-General Chris Finlayson, under Crown Law advice, writes to the parties involved to say it would be illegal for Warner Bros to enter "into a union-negotiated agreement with performers who are independent contractors".

Unions seek their own legal advice challenging this, but with the country's highest legal authority on its side, Warner Bros now has a golden ticket justifying its refusal to meet.

Scene 3: Mediation

Economic Development Minister Gerry Brownlee chairs a meeting on October 14 with Whipp, Equity actors Robyn Malcolm and Tandi Wright, and representatives of the NZ Screen Production and Development Association. Council of Trade Unions president Helen Kelly is brought in to help.

The meeting is not about

The Hobbit

, per se, but general concerns about the standards and conditions in the New Zealand industry.

Equity and Spada agree to discuss over the next six months the Pink Book, the non-binding code of practice for actors.

They had previously been in an 18-month stand-off because neither party could agree on the starting point for discussions.

On the same day the MEAA, under fire for being a foreign union "holding a gun" to the New Zealand industry, registers as a New Zealand union.

Two days later Equity, "for a variety of reasons", recommends that the overseas unions should lift the boycott.

Unions - including SAG and MEAA - and Warner Bros begin exchanging emails about the wording of media releases announcing the boycott is over.

Warner Bros announces the official green light for

The Hobbit

, planning releases for Dec 2012 and Dec 2013.

In its release, there is no mention of a location.


Scene 1: Film workers rally

Sir Richard Taylor sends an email out to film technicians on October 20 calling a meeting to let them air their views. Within a couple of hours, up to 1500 people have gathered, spilling out the doors. They plan to march to an Equity meeting, but the meeting is cancelled, so they march to Parliament chanting "Save the Hobbit" and "Lift the Boycott".

Helen Kelly meets them but is shouted down when she tries to say that tax incentives - not union action - is the only reason Warner Bros would move production overseas.

Scene 2: Whipp in Wellington

Whipp arrives for Equity meetings, but they are cancelled and he instead goes to dinner that night with Robyn Malcolm and Frances Walsh, Equity's industrial organiser. When they leave, a small group of film workers are waiting for them.

One asks Whipp repeatedly, "Why are you targeting

The Hobbit

?" as he walks silently on. They follow them for almost four minutes, and Whipp remains silent throughout. At one point, Malcolm steps in and calls it harassment, and someone responds: "This is our livelihoods."

Scene 3: The public spat

The following morning Sir Peter releases a statement saying Warner Bros people are coming to Wellington to make arrangements to move production offshore. He had earlier been told to stop hiring New Zealand actors. He calls Equity gutless and self-centred.

In television interviews, he is visibly upset and looks like he hasn't slept in days. Kelly and Equity actors Malcolm and Wright take up the publicity fight. Kelly calls Sir Peter a "spoilt brat" - she later apologises - and Sir Peter retorts that Kelly is "clueless".

The unions release statements saying the industrial dispute is over, that no future action will be taken against

The Hobbit

, and that the boycott has in fact already been lifted, but they had not released any statements earlier due to disagreements over wording.

Emails show Warner Bros and Equity had drafted statements about the end of the boycott up to five days earlier. The documents suggest that it was Sir Peter who was unhappy with the wording of Equity's statement because of the words "the spirit of good faith", and that had delayed release.

Warner Bros later puts out a statement saying it was not aware the boycott had been lifted, and confirming it is looking at offshore locations for

The Hobbit

. It says again it will continue to refuse to meet parties to discuss something that would be illegal.

Scene 4: A country on its knees rallies together

The vitriol gets increasingly intense. John Barnett, head of South Pacific Pictures, says Malcolm and Equity president Jennifer Ward-Lealand have been tainted and will struggle to find work, especially if the films are ultimately lost.

The unions claim Warner Bros is just after more money, and using the frenzy to squeeze Prime Minister John Key for all he's got. Sir Peter and Government ministers say Warner Bros has not mentioned money, but industrial relations. In the middle of the war of words and finger-pointing, Warner releases its casting decisions, including three New Zealand actors, and with British actor Martin Freeman as Bilbo.

Nationwide rallies take place on Monday as Warner Bros executives arrive in the country. About 2000 turn out in Wellington and cheer on an optimistic Sir Richard Taylor, who later confirms that not only location-shooting, but also post-production work is up in the air.

He reads out a statement from Sir Peter, who continues to criticise Whipp and the MEAA, a "destructive organisation" that carried "the very real risk of destroying the great big heart that beats inside our films".


Scene 1: Premier House Tuesday October 26

Crown limo after Crown limo arrive at Key's Wellington residence. About a dozen people - movie executives, lawyers, advisers, senior ministers including Key, Brownlee, Chris Finlayson and Steven Joyce - gather around the dining table.

Money is an issue, predictably. The exchange rate has made it more of an issue. But the crux is labour laws: 3 Foot 7 must have certainty that the workers they hire as independent contractors cannot later claim to be employees. If not, Warner Bros is Britain-bound.

They don't specifically ask for a law change, but it's implicit that it's the only way the Government can give them that certainty.

Key, Brownlee and Joyce - why is the Transport Minister there? - front the media that evening.

"I can confirm there are no transport issues," Joyce says in response to questions. "No one has made any requests for light rail."

Negotiations continue.

The dining room has smaller adjacent rooms which the teams use for private discussions. The sides to and fro.

As it emerges that the labour laws are likely to be resolved, discussions turn to money. At one stage Warner Bros presents two cases: the estimated costs of making the movies here versus making them in Britain, where the massive studio space the Harry Potter films were made in has been vacated. The difference is tens of millions of dollars.

The Government is not interested. It won't bridge that gap. It talks up the unique value of our creative industries and scenery.

Scene 2: Wednesday October 27 , Wellington Airport:

Key addresses media after opening The Rock, Wellington's new international passenger terminal that resembles a large copper molehill. Priorities are shifting. "It's fair to say both sides are playing a bit of financial hardball."

Labour law issues are looking good. Now they want money. "Lots, and we're not offering lots."

Will the final decision come down to money? "It may do."

Scene 3: Back at Premiere House that afternoon:

Key re-enters the fray. This is clearly the sharp end. If Key wants to finalise a deal and announce it triumphantly on the news before a captivated country, he needs a breakthrough. Now. The country is desperate. He's leaving for Vietnam early in the morning. He is friendly, but firm. He puts an offer on the table, as far as he'll budge.

Scene 4: Beehive theatrette, 7.20pm:

Key steps to the podium. He's missed the 6pm news bulletins but caught the last of the current affairs shows. Everyone is tuned in. He's smiling. The news is clear before he utters the first words, "I'm pleased to announce...".

The price? Up to $34 million in tax breaks and concessions, including a $13.4 million gift to go towards marketing costs for the films. The total cost, including the original tax rebate estimates, comes to just under $100 million. But Key has scored a gem: Sir Peter will create material to promote New Zealand as a tourism destination that will be on every DVD and all digital media to do with the movies.

Sir Peter, Sir Richard, Robyn Malcolm, Equity, Spada all breathe sighs of relief. The movies will bring 3000 jobs and help enhance the future of the $2.8 billion film industry. A universal cheer erupts in support of keeping the films here.

Labour laws will also be changed: film workers will be independent contractors by default, though they can be hired as employees too, but their status is set in stone at the time of hiring.

Labour, the Greens and the unions decry the process - kowtowing to the demands of a foreign company and selling out our sovereignty. Labour MP Jacinda Ardern reports that the phrase "bend over for Warners" is not unparliamentary.

Key dismisses criticism. If he didn't push the law changes, the films would have been lost and the future of the industry in jeopardy. The final irony is that without the union-initiated boycott, the law changes - which weaken workers' rights - would probably never have happened.