by Sarah Joseph
The Whitehaven Hoax: Ratbag act or legitimate protest?
Last Monday, 7 January, environmental activist Jonathan Moylan put out a fake press release purporting to convey a decision by the ANZ bank to withdraw its $1.2 billion loan to Whitehaven Coal for environmental reasons. As a result, shares in Whitehaven plunged by $314 million before recovering to pre-hoax levels. Moylan is now being investigated by the Australian Securities and Investments Commission (“ASIC”) for serious breaches of corporations law, in allegedly engaging in misleading and deceptive conduct which destabilises the stock market. He could face jail time. He has said that his intention was not to cause people to lose money, that he is sorry, and that he is prepared to face the legal consequences.
Moylan explained that he sent out the press release that ANZ “should” have sent. The stunt was meant to highlight ANZ’s “dirty loan” for a project which he believes will unduly harm the environment. Others have supported his actions as highlighting the immorality of financing new coal projects in the face of the dangers of climate change.
Moylan’s actions have attracted a variety of responses from our politicians. The Greens have generally applauded Moylan’s actions. Greens leader Christine Milne noted that Moylan’s actions were part of a “long and proud history of civil disobedience, potentially breaking the law, to highlight something wrong”. Senator Lee Rhiannon tweeted her congratulations. In contrast, former Howard government Minister Peter Reith on ABC’s The Drum called for Moylan to receive the harshest of possible penalties. Joel Fitzgibbon, government whip, tweeted that the law should be interpreted as broadly as possible so as to make an example of Moylan. The federal opposition’s Senator Eric Abetz criticised the Greens’ position as “the epitome of extremism”.
So – whose assessment of Moylan’s actions is “correct”? I try to answer that question, with limited success, below.
Non violent direct action
There is indeed a long and rich tradition of non violent actions which highlight injustices (or perceived injustices) and sometimes play a role in redressing them. Following are a random list of examples from around the world and Australia.
Mahatma Gandhi led peaceful protests against British colonial rules in India. Rosa Parks refused to sit at the back of the bus, signalling the start of the civil rights campaign in the US. Huge crowds in Tahrir Square in early 2011, which were largely non violent, overthrew decades of dictatorial rule in Egypt by Hosni Mubarak. Members of Pussy Riot have been jailed for breaking the law in protesting against President Putin and his cozy relationship with the Russian Orthodox Church. Just this past weekend a group of Palestinians set up a tent village, known as Bab al Shams, to protest against Israel’s plans to build new settlements in the E1 area of the West Bank. In April last year, Trenton Oldfield disrupted the iconic Oxford/Cambridge boat race in protest against entrenched British elitism. Union Green Bans preserved Sydney Harbour’s urban heritage in the early 1970s. And of course non violent environmental activism in Australia has been around for decades: numerous protesters have thwarted logging plans by getting in their way.
The internet has spawned a generation of non violent online activists, such as Julian Assange who created Wikileaks and disrupted government controls over information by providing a safe and untraceable receptacle for leaked information which was then published in its primary form. Anonymous has revolutionised “hacktivism”. The Egyptian revolution was preceded by one in Tunisia, which itself was seeded in a proud tradition of internet activism. Finally, this past weekend we have mourned the passing of 26 year old Aaron Swartz, a zealous advocate of free public online access to information.
Hoaxes are not particularly new either. Indeed they were a staple on Australian FM radio until a 2Day FM’s prank call to the London hospital treating a pregnant Kate Middleton went horribly wrong late last year, when one of the nurses who was “pranked” committed suicide. FM radio style hoaxes are meant to amuse listeners and aren’t political. Those of the Chaser are also meant to make people laugh, but have a political element in embarrassing political figures like arch climate sceptic Lord Monckton or the essential apparatus of the State, as in its infamous APEC stunt which thoroughly embarrassed NSW police.
Moylan himself has analogised his hoax to the actions of the Yes Men. The Yes Men engage in “identity correction”, whereby members will impersonate representatives of entities in order to highlight what they see as those entities’ most egregious actions. The main targets of the Yes Men are corporations and corporate-friendly institutions like the World Trade Organisation.
The most famous Yes Men hoax occurred in 2004, when a “Yes Man” appeared as “Jude Finisterra” on the unsuspecting BBC as a representative of Dow Chemical. Dow bought Union Carbide in 2001: a Union Carbide subsidiary owned the factory which exploded in Bhopal in India in 1984, one of the world’s worst industrial accidents. Thousands of Indians have died or suffered severe illnesses and deformities as a result of the poisonous chemicals released in that explosion. The Union Carbide issue is complex but it is fair to say that the victims have never been properly compensated, and there are good reasons to argue that Dow, having voluntarily taken over Union Carbide’s assets and liabilities, should take responsibility. Hence, Finisterra announced on BBC that Dow was going to take responsibility for the accident and properly compensate the victims. The result was that Dow’s stock price plunged 4.24% in 23 minutes, losing $2 billion of its market value.
It is likely that readers will have different views of all of the actions mentioned above: you will support some and not others. Some of you may even support all but few if any will, I believe, condemn all. Is there any way to differentiate between those non violent actions which are legitimate and “good” and those which are not?
Legality of action
AWU chief Paul Howes (in an article criticising the Greens’ support for Moylan) suggests that one should not engage in acts which are “illegal”. But sometimes the law is unjust and it is moral to challenge it, as was clearly the case for Rosa Parks in her stand against segregation in the south of the US. Howes himself may have different views when trade unions engage in unlawful industrial action, as for example happened during Victoria’s recent nurses’ strike. It is not so long ago that sex between men was illegal in many Australian States: does Howes seriously suggest that gay men should have obeyed that law?
Furthermore, the fact of arrest can be an intended part of the direct action, and arrest is (normally) not possible without behaviour that is unlawful according to the municipal state. For example, the eviction of peaceful Palestinians from Bab Al Shams, located on privately owned land in territory that is not recognised as Israeli, played out in real time on Twitter and on an Al Jazeera live stream. The action exposed Israeli hypocrisy in comparing the swift eviction of the Bab Al Shams outpost with its dawdling in implementing court orders to evict Jewish settler outposts. It was politically embarrassing for Israel, and is doubtlessly and legitimately part of the point of the action.
Democracy and non-democracy
Certainly, more illegal acts may be justified in a non-democratic country like Mubarak’s Egypt, or in a highly flawed democracy like Russia, than in liberal democracies like Australia. There are outlets to campaign for legal change that are available in the latter that are simply not available (and are even dangerous) in the former.
However, such a criterion still assumes a level of justice and fairness within liberal democracies that does not exist. For example, Paul Howes is the head of a very powerful trade union with direct lines to the ruling party in this country. He is an “insider” who can assume the cosy position that the law must be obeyed, as he is in a good position to lobby for legal change with some hope of success, unlike most others. I would also suggest that while he might concede that some Australian laws in the past were unreasonable, he does not think the same is true now. Such an attitude is complacent: there will undoubtedly be mouths agape as future generations contemplate our idiocy, just as we smirk over the baffling laws of the past. Of relevance to Moylan, environmental laws may be an area where future generations look askance at us.
There are blatant imbalances of power in Australia. For example, the major mining companies had the luxury of negotiating their own profits tax with the Gillard government after it had hammered the initial proposals with an advertising campaign that may have been the final nail in the coffin of Kevin Rudd. Yet how much negotiation has gone on with the Australian Council of Social Services in deciding on the appropriate level of the NewStart allowance?
I would argue that it is generally more legitimate to break the law or to otherwise undertake direct non violent political action in order to challenge entrenched power than in order to reinforce it. And that principle holds true in both democracies and non democracies.
Validity of the message
An alternative criterion depends on the validity of the purpose of the protest. However, such a criterion is inherently subjective. Political messages are probably more valid than those motivated by a search for cheeky laughs (a la 2Day FM), greed or attention seeking (as seems to have been the motive behind the Helen Demidenko/Darville hoax). But it is difficult to go further and try to sift through legitimate political messages and illegitimate ones. I can only know which message I find more legitimate than others.
Perhaps one criterion is to assess whether the protest is successful. But how does one measure “success”? The ultimate success for Moylan would have been for ANZ to reconsider its loan and withdraw it. But I’m sure he never thought that would happen, and of course it has not. His main aim of highlighting the issue has in fact been achieved, and he has received far more attention due the brazenness of his act than had he simply resorted to a change.org petition or a Facebook campaign against the loan.
However, there is no doubt that many disapprove of his act. Perhaps he has harmed his cause by being too radical.
Success can only really be measured in hindsight. Even if people feel angrier with environmentalists over Moylan’s “irresponsible” act, it is still possible that they will subconsciously pay more attention to coal investments. They may even subconsciously shy away from them.
A more fundamental point is that “success” is not a particularly good criterion, as the success of an action is hard to predict. Further, many causes are just but doomed. Indeed, catastrophic climate may no longer avoidable, with interminable delays in meaningful global and national action delayed by vested interests, timid politicians, the developing world’s desire to industrialise, and genuine climate scepticism. Yet I would not concede that direct action highlighting climate change then becomes illegitimate.
A relevant criterion in assessing the legitimacy of an action concerns the harm caused by the action. Victimless actions are easier to defend than those which cause harm to somebody. Witnesses in the Pussy Riot case claimed to have suffered spiritual harm from the band’s forty second “punk prayer” in a major cathedral.
“Harm” can be difficult to characterise. The “harm“ that was caused by Oldfield’s actions was to ruin the day for young men who had trained hard for an iconic race, particularly those from the losing boat, Oxford. A hoax perpetrated on the conservative magazine Quadrant and its editor Keith Windschuttle was designed to expose lax standards for publication. Many of the Yes Men pranks, as well as those of The Chaser and Sacha Baron Cohen, involve the mere embarrassment of people by exposing unflattering traits within people. Is “embarrassment” harm?
Both Moylan’s hoax and the Bhopal prank caused financial harm. However, this harm deserves more analysis. Who in fact was harmed? The vast majority of Whitehaven shareholders, including the “mum and dad shareholders” emotively cited by Moylan’s critics, would have only heard about the hoax that night, by which time the value of their investment was basically the same as it had been in the morning.
Furthermore, just as many people may have made money on Whitehaven and Dow as lost, as the stock price recovered quickly. Blogger John Quiggin reports that Morgan Stanley and MacQuarie Bank clients probably gained, while those of Citigroup and UBS lost.
Certainly, the undermining of the integrity of the sharemarket send shivers down spines, especially as most of the country’s collective pensions are invested in shares. However, while overall losses (and gains) to superannuation funds may have been large, the individual losses to fundholders would be miniscule, especially when measured over the long term as superannuation funds must be.
A real question arises as to the lack of due diligence exhibited by many who should have known better. In a scathing article, The Australian’s John Durie wonders why anybody believed a fake press release announcing the withdrawal of a loan by a bank: banks never do that. According to Durie, ASIC and the ASX “have got some work to do to convince the community that the sharemarket is all about investing money and not trading stocks every split second or dumping them on the basis of an obviously ludicrous fake release”. He correctly slams the financial press for gormlessly believing Moylan’s announcement without undertaking simple checks (eg ring ANZ). Similarly, Dow investors should probably have expected the big Bhopal announcement to be preceded by a trading halt, rather than announced impromptu on the BBC. Moylan may have inadvertently done the ASX a favour by exposing its vulnerability to human frailty.
Nevertheless, there is no doubt that innocent investors lost money due to both hoaxes. And my expectations of due diligence by stock market experts clearly cannot fairly apply to the inexpert.
The existence of harm does not mean the relevant action is illegitimate. For example, some people are always harmed in a strike but most people would not accept that all strikes are illegitimate. If one believes the harm suffered is proportionate to the end achieved, then one will likely believe that the relevant act is justified.
To my mind, legitimacy partly depends on the power and public stature of the target; this is one reason why I am often uncomfortable with Baron Cohen even though he generally targets bigots. In contrast, I personally have no problem in a prank targeting the NSW police (the Chaser at APEC), Monckton or Windschuttle and Quadrant (and why I’d probably have to accept a similar prank played on Robert Manne and The Monthly). While Oxford and Cambridge per se may be fair targets, I don’t feel the same way about the actual rowers.
One troubling aspect of the Yes Men’s Bhopal prank was the possible harm caused to the victims of Bhopal. Finnistera’s bogus statement may have raised the hopes of Bhopal survivors, only for them to be quickly shattered. The Yes Men themselves, in the movie The Yes Men Save The World, claim that organisations represent Bhopal victims by and large appreciated the publicity given to their plight and the black eye it gave Dow. Nevertheless, the possibility of raised then shattered hopes shows the dangers of bad unintended consequences … again demonstrated horribly in the 2Day FM prank. Pranksters do have to be prepared to morally wear the consequences of their actions.
For me, it is fair to highlight in spectacular fashion Dow’s links to Bhopal and its continued refusal to compensate victims, as well as Whitehaven’s new coal project and ANZ’s facilitation of it. But what about the investors who lost money in the Whitehaven/Dow pranks? Many would unknowingly have moneys invested in such companies via their superannuation funds. However, as noted, it seems unlikely that any single such investor lost a significant amount of money. And, as noted above, the experts who lost money have in part themselves to blame.
What about those “non-experts” who have deliberately bought such shares? Are they “innocent”? I make the following remarks without answering the question.
Whitehaven investors have invested in coal, an environmentally unsustainable industry. Dow shareholders have invested in a company that refuses to compensate innocent victims horribly harmed in an industrial accident. Indeed some Dow investors clearly expressed dissatisfaction with the idea of compensating Bhopal victims in their panicked “sell”.
Perhaps actions like the Whitehaven/Bhopal hoaxes will indirectly promote a growth in ethical investing. At the least, it might prompt shareholders to take an interest in the ethical profile of a company. Ethical investing is not yet the norm, nor I suspect is knowledge of a company’s ethical profile.
Finally, the outrage exhibited by many of Moylan’s critics over the harm caused by political hoaxes to shareholders (especially “mums and dads”) is not necessarily matched by concern over the harms caused by the targeted companies. The former is perceived as harmful and irresponsible; the latter is all too often dismissed as business as usual.
Consistency on this matter is probably only achievable if one adopts “the Paul Howes position” that illegal actions are out of bounds, at least in liberal democracies. Such a position seems very staid in a country that claims to pride itself on lauding “larrikins”, as well as the Eureka Stockaders and even Ned Kelly. It is a position that can be contentedly adopted by comfortable insiders like Howes, but not by passionate people further away from the mainstream. It seems to indicate that one price for living in a liberal democracy is to accept limited scope for progressive change, which must be incremental and dependent on the political class.
Beyond “the Paul Howes position”, consistency in this area seems impossible, because everyone will have different views on the legitimacy of a protest message and the proportionality of the harm caused compared to the advantage gained.
So what of Moylan? A criminal law designed to preserve the integrity of the information fed to stockholders is needed to combat insider trading and other misinformation designed to generate ill-gotten gains. Shareholders deserve a believable and transparent stock market. So if he is charged, I do not believe it will be under an unjust law. The rule of law also dictates that one cannot be exempted from a law simply because one’s motives are political. In such circumstances, Moylan must be prepared to face legal consequences. It seems that he is.
However, just as Moylan can’t expect exoneration on political grounds, he shouldn’t expect excessive punishment. And I can’t help but marvel at the vehemence with which his critics have reacted. Fitzgibbon’s call for “the broadest possible” interpretation of criminal law to make an example of Moylan seems Orwellian. So too is Reith’s call for the strongest penalties. I do not, for example, recall the same level of outrage when a hoax takeover bid for David Jones, presumably motivated by greed, spooked the market in June last year.
Furthermore, Moylan’s alleged crimes must be put in persepective. John Quiggin’s recent blogpost highlights the damage caused to the integrity of stock indices by “respectable” corporate players which have engaged in systemic criminality, which is far worse than any damage caused by Moylan. Yet those entities are too big to fail, unlike Moylan.
Moylan has allegedly committed a white collar offence. It seems to me that much of the excessive outrage against him is generated by the fact that he doesn’t wear a white collar and he didn’t perform his actions for white collar reasons. In that sense, he poses more of an unacceptable “threat” to the status quo than the “normal” insider trader. Hence the call for an example to be made of him lest other non corporate hippie types get fancy ideas of upsetting the stockmarket citadel.
Hopefully, Moylan will not suffer the fate of other activists around the world of being disproportionately pursued and punished. Witness the excessive sentences for the Pussy Riot girls as well as Trenton Oldfield, the overreaction by the United States (and the Australian government) to Julian Assange, the appalling treatment meted out by the US to alleged Wiki-leaker Bradley Manning, the financial blockade of Wikileaks in the absence of charges against it, and, most poignantly this week, the pursuit of Aaron Swartz by the US Department of Justice over alleged computer offences for which he was apparently facing decades in prison prior to his recent suicide. Overreactions by States to non violent actions create injustice, and turn just laws into unjust ones. Perhaps the exposure of the vindictive capacity of the State is one key factor which legitimises non violent direct actions in the first place.