Solid Energy's indirect hiring of a student to spy on a group protesting against it was unacceptable behaviour from a state-owned enterprise, Prime Minister Helen Clark said today.
"Clearly the company's frustration has boiled over to the point where it's been prepared to allow things to happen which simply aren't appropriate, and that should stop," she said.
Miss Clark said State-owned Enterprises Minister Trevor Mallard would be taking it up with Solid Energy this week.
"That behaviour is not acceptable from a state-owned enterprise," she said on TV One's Breakfast programme.
"But let's acknowledge that solid Energy has put up with some industrial sabotage, really, from a particular protest group."
The head of the company has rejected calls for his resignation, saying his firm will do whatever is necessary to protect itself.
Solid Energy chief executive Dr Don Elder has come out swinging against the "anarchist" Save Happy Valley Coalition, after it was revealed the student was paid to supply information to a private investigation firm contracted by the company.
The spy, Ryan Paterson-Rouse, admitted being paid $100 a week to provide inside information to Auckland's Thompson and Clark Investigations.
Mr Paterson-Rouse, 25, told the Herald he provided information about numbers at public meetings only because "I wasn't privy to much else".
He thought he was supplying the information to a journalist. He said he believed in what the protesters were doing, and saw the spying as a way to make some easy money. "I'm a poor student, mate."
Peace Action Wellington believes it was also infiltrated by a spy working for Thompson and Clark Investigations.
Save Happy Valley Coalition spokeswoman Frances Mountier said Dr Elder should resign immediately over the episode.
The Green Party has also called for heads to roll at Solid Energy if spying took place.
And the National Party wants a reassurance that taxpayers' money is not being spent on spying.
State Owned Enterprises Minister Trevor Mallard said he would be concerned if an SOE had indirectly hired someone to infiltrate a protest group, and he would discuss it with the company chairman.
Solid Energy would not acknowledge yesterday that a spy was used, but Dr Elder said the company would do whatever it deemed appropriate to protect the business. "None of this should come as any surprise. It's what businesses do."
The coalition has carried out acts to interfere with Solid Energy's activities, which it says damage the environment and native species.
Ms Mountier said Mr Paterson-Rouse admitted to spying when confronted on Thursday. He had been involved in the coalition for seven months.
"The use of an infiltrator into our group meetings represents a serious blow for Solid Energy's credibility," she said. "It is a serious misuse of public funds to send a spy in to collect information on strategy, campaign plans, fundraising and actions.
"It is too late for Don Elder to redeem any legitimacy as the CEO of a state owned company. He must resign immediately."
Dr Elder said the coalition was made up of "anarchists who have stated publicly that they believe they do not need to act within the laws of New Zealand".
"Their actions have repeatedly broken the law, and part of their purpose is to intimidate staff and others associated with our company. Activists have repeatedly harassed our staff. In recent weeks they have also harassed and attacked the home of one of our directors."
Three coalition members were recently arrested and charged after blocking a coal train from the West Coast to Lyttelton.
Dr Elder said businesses gathered a wide range of information to protect themselves against risk.
"We will not discuss any details of our security arrangements. We stand behind Thompson and Clark Investigations Ltd and their work for us. Their activities are legal, moral and ethical."
No one from Thompson and Clark Investigations could be reached for comment yesterday.
- with NZPA