Is profit the ultimate measure of business success?

By Stacey Barr

Many people still believe that the purpose of business is make a profit, that financial success is the ultimate measure of business success. But at what expense?

 
My eyes were opened to consequences beyond animal suffering when I read about the mass-production farming of chickens, in "The Ethics of What We Eat" by Peter Singer and Jim Mason. To maximise profits, these companies maximise the number of birds per square foot of space (in many operations, chickens get about the size of an A4 sheet of paper to live their lives in). Aside from the birds' suffering, there are some very significant costs to local communities and ecologies.

The ammonia from the chickens' waste products makes going outside unbearable when the wind blows in a specific direction. The ammonia causes irritation and health problems to people. When the waste products are flushed from the factory floor, they run off into nearby streams and waterways, and kill the aquatic life. These are the costs that don't make it into the companies' financial statements, costs that communities and the environment pay (now and in the future) to subsidise those profits.

There are still many companies that don't take responsibility for the lifecycle of the products they make. Electronic appliances like toasters and video players and outdated laptop computers often aren't able to be recyclabled. And no-one wants to reuse them when they can buy the latest and greatest for next to nothing. So they become land fill.

Even that habit of calling employees 'our greatest asset' smacks of a company that treats people like equipment or property: maximise the return on investment. Get as much productivity as possible for the least amount of financial reward. Child and slave labour in industries like coffee and diamonds are of course the extremes of this view, but it's still an attitude that many familiar companies and organisations have of the people who contribute their time, skill and effort.

If human endeavours like business don't exist to make the world a better place, can we really judge them as successful? How can people enjoy the rewards of high profits when others have had to suffer to make those profits possible?

We really need to move away from a singular focus and single measures of success. Surely a truly balanced scorecard is one where the perspectives of every stakeholder affected by a company define success, and guide what that company measures, monitors and manages to pursue that success?
My eyes were opened to consequences beyond animal suffering when I read about the mass-production farming of chickens, in "The Ethics of What We Eat" by Peter Singer and Jim Mason. To maximise profits, these companies maximise the number of birds per square foot of space (in many operations, chickens get about the size of an A4 sheet of paper to live their lives in). Aside from the birds' suffering, there are some very significant costs to local communities and ecologies.

There are still many companies that don't take responsibility for the lifecycle of the products they make. Electronic appliances like toasters and video players and outdated laptop computers often aren't able to be recyclabled. And no-one wants to reuse them when they can buy the latest and greatest for next to nothing. So they become land fill.

Even that habit of calling employees 'our greatest asset' smacks of a company that treats people like equipment or property: maximise the return on investment. Get as much productivity as possible for the least amount of financial reward. Child and slave labour in industries like coffee and diamonds are of course the extremes of this view, but it's still an attitude that many familiar companies and organisations have of the people who contribute their time, skill and effort.

If human endeavours like business don't exist to make the world a better place, can we really judge them as successful? How can people enjoy the rewards of high profits when others have had to suffer to make those profits possible?

We really need to move away from a singular focus and single measures of success. Surely a truly balanced scorecard is one where the perspectives of every stakeholder affected by a company define success, and guide what that company measures, monitors and manages to pursue that success?

TAKE ACTION

Is your strategy based on just one or two stakeholders' values? Who or what else is affected by your business? As a starting point, think about shareholders, customers, employees, suppliers or partners, local communities and the environment.

The ammonia from the chickens' waste products makes going outside unbearable when the wind blows in a specific direction. The ammonia causes irritation and health problems to people. When the waste products are flushed from the factory floor, they run off into nearby streams and waterways, and kill the aquatic life. These are the costs that don't make it into the companies' financial statements, costs that communities and the environment pay (now and in the future) to subsidise those profits.

Stacey Barr is a specialist in organisational performance measurement and creator of PuMP, the refreshingly practical, step-by-step performance measurement methodology designed to overcome people’s biggest struggles with KPIs and measures. Sign up for Stacey’s free email tips at www.staceybarr.com/202Tips.html and receive a complimentary copy of her renowned e-book “202 Tips for Performance Measurement”.

Indonesia’s Rule No. 24 likely to embolden other nations to grab more from mining

Indonesia surprised the global mining community last week after a new rule –  Government Regulation No. 24 of 2012 – was quietly announced on the mining ministry’s website.

The country – southeast Asia’s largest economy – will now require all foreign mining companies to sell majority stakes in their mining operations to locals by the tenth year of production.

Indonesia, with a population of 240 million, is the world’s premier thermal coal exporter, a tin powerhouse and is also rich in gold and copper.

Freeport McMoran’s Grasberg mine in the west Papua, a province of Indonesia, is one of the world’s biggest mines. It has the globe’s richest gold deposit and is second in copper.

Grasberg has been the site of violent clashes, sabotage and strikes over many years. Mining makes up roughly 12% of Indonesia economy and Grasberg is the country’s largest taxpayer.

Freeport and other miners operating in Indonesia are currently locked in royalty discussions with the government and some in the industry have speculated that the new regulation is not much more than a ploy to strengthen the government’s hand in negotiations.

An editorial in the Jakarta Post argues that Rule 24 should not have come as a surprise, but nevertheless takes the Indonesian government to task over its timing which “seems to make things even murkier and heightens uncertainty as, over the last few months, the government has been strong-arming foreign miners over contract re-negotiations [...] and [to] submit concrete business plans to build processing plants or smelters as they can no longer export unprocessed minerals after 2014.”

A growing list of nations – and not just radical fringe territories such as Zimbabwe or Venezuela – but stable jurisdictions including Poland, Ghana and Botswana are pushing for greater control and ownership of the resource sector on top of higher taxes and royalties.

South Africa recently stepped back from nationalization, but is nevertheless tightening its grip on the industry. Other countries, including Indonesia are putting a stop to raw exports and requiring domestic processing and beneficiation of mining output.

Last year according to an Ernst & Young survey of the world’s 30 largest miners, resource nationalism jumped to the top of the risk list in 2011 from fourth in 2010, after 25 countries announced their intentions to increase their take of the mining industry’s profits and others contemplate outright nationalization.

The Vancouver Sun reports smaller operators would be hurt much more than major projects and sums up the situation this way: “Cash-rich mining companies, raking in profits from metal prices that are well above historical levels, have emerged as easy targets for governments. Higher taxes and royalties on big miners are often used by politicians as populist moves to help rally the public and serve as platforms ahead of elections.”

MINING.com reported in January as attractive deposits become harder and harder to find in traditional markets, miners – especially those exploring for gold – are pushing the limits of the political risk they are willing to take on.

Research house Maplecroft in its 2012 political risk atlas identifies DR Congo, South Sudan, Myanmar, Turkmenistan, Iran, Guinea, Zimbabwe, Venezuela, Iraq, Bolivia, Russia, Kazakhstan, Angola, Nigeria and Libya as resource nationalism hotspots.

As an indication of how Indonesia’s move has surprised the industry it was missing from Maplecroft’s list released in January of countries that faced “extreme risk” and the researcher actually said investment risk in the country had decreased from the year before.

Also missing was Papua New Guinea which this year heads into elections that many observers have warned is bound to lead to civil unrest. In August last year the country’s leaders introduceda plan to hand state ownership of mineral and energy resources to landowners, a move that may prove disastrous to foreign miners developing massive projects and pushing into new regions of the resource-rich country.

Eurasia Group points out that already the world’s biggest gold mines are in so-called frontier markets:

• Uzbekistan (state-owned Muruntau)
• Papua New Guinea (Lihir, owned by Newcrest Mining and Harmony’s Wafi-Golpu project that has potential to rival Lihir in size)
• Mongolia (Ivanhoe and Rio Tinto’s Oyu Tolgoi, which last year became a state target)

And new mega-mine projects such as Newmont’s $4.8 billion Conga project in Peru, Barrick’s Pascua Lama (straddling Chile and Argentina) face opposition from environmentalists and locals.

Mining Giant Turns to Content Marketing to Attract Quality Candidates

Have you heard about the skill shortage in the resource industry? Regardless of where you live, nearly every country with natural resources is battling to find skilled professionals to fill the roles. Australia, Canada, South Africa and many more countries are courting a small, transient, global workforce of engineers, geologists and metallurgists to keep their mining, oil and gas, and energy operations running. What can these major corporations do to secure the right talent? If you’re Rio Tinto, you turn to content marketing.

Mine for the Future

Late last year I predicted interactive content would be a big player in 2012. I was impressed to learn the Australian office of Rio Tinto is using interactive content to set themselves apart from the many other companies competing for the same talent pool. The ‘Mine for the Future’ initiative is designed to attract candidates into the autonomous haulage project – Rio’s world-first technology using driverless trucks and trains in their Western Australia mines.

Multiple types of content

Mine for the Future uses an interactive globe containing an images gallery, video, a game and a jobs board. Visitors to the site manipulate windows on the globe to enter different regions of the site. The highlight of the content is the Truck Controller game. Designed to pull people onto the site, the game encourages repeat visits by running a leader board. Perhaps more enticing, jobs for the Mine of the Future project are posted on the site. I’m not a miner but I would think this approach is a lot more attractive to qualified candidates than dealing with headhunters and recruiters.

New approach for a new market

So are a game and a jobs board enough to attract the right people? According to the Careers and Industry Guide, it seems so.

“Intent on revolutionising the future of mining, Rio is also looking for a new kind of employee wanting jobs in mining. If you’re young, switched-on, and ready to tackle world-first technology, they want to know about you. Don’t worry about lack of experience. Rio knows being on the bleeding edge of technology means everyone will be blazing trails together.”

Tackling the skill shortage with better content

I love what Rio has done with Mine for the Future. Recognising the need to differentiate themselves in the marketplace, they’ve developed content to drive their recruitment campaign and find employees they may not have considered previously. Nothing can be done to quickly alleviate a challenging labour market. A diverse suite of content designed to hook people into coming back over and over again is going to give them competitive advantage over traditional methods of recruiting.

Have you played the Truck Controller game?

Developers Eager for Land-Sales Upswing after Tough 2011

Busness News, 8 March 2012 - by Mark Pownall

Those investing in creating suburbia are hoping 2012 is a better year than last.

IT has been a brutal year for residential land developers as a prolonged slump in market confidence has made it tough for many to ride out the GFC and keep their bankers at bay.

New Landgate data obtained by private developer Satterley Group shows that, for land sales under 1,000 square metres, most of the key urban growth areas fell in 2011 compared to 2010, which itself was well below the average.

Looking at the key suburbs by land sales volume, where most of the top land developers have concentrated their efforts, the sight is not pretty. The Mandurah-Murray Shire is down more than 30 per cent to 679 lots sold, Baldivis is down 33 per cent to 603, Brighton 45 per cent to 342, and Harrisdale-Piara Waters 37 per cent to 429.

Running against the trend were Ellenbrook, which rose 27 per cent to 306 lots, and Landsdale, which lifted 12 per cent to 219.

Compared to areas with big estate developments on the accompanying map, it appears that most of the major players are diversified across these regions.

Research by WA Business News for its Book of Lists (see attached) has revealed the biggest property developer in terms of estates either under construction or engaged in sales is Satterley Group with 29,435 lots. That includes several joint venture developments with government parties such as LandCorp in which Satterley is the lead partner.

According to this research, the next biggest player in Western Australia is the Danny Murphy-led LWP with 17,883 lots, followed by Stockland (17,011), Peet (16,504) and LandCorp, which has 12,765 lots as lead developer but would be a lot bigger if its partnerships were included.

The remaining players in the top 10 are Ardross Estates with 10,600 lots (primarily at a major long-term project at Jurien Bay), then  Cedar Woods with 6,403 (Editor's note: in the hard copy edition and attached graphics we overlooked Cedar Woods 1,200-lot Rivergums development at Baldivis and several smaller estates as ongoing projects when we compiled this list), PRM Property Group, which has 5,700 lots (some in joint venture with east coast giant Walker Corporation), Mirvac with 4,853 lots, excluding 1,500 at Mindarie which is set to finish as a project, and Aspen with 4,580 lots. Port Bouvard is 11th with 3,217 lots.  

New face

The newest entrant is Lend Lease, which broke into the WA land development market by successfully tendering to be the joint venture partner with state agency LandCorp to lead the development of Alkimos.

That signalled the next phase in competition from major national players, already represented here by Stockland, Australand and Mirvac. All of those existing national players have been rocked by the GFC, as have many of the bigger WA companies, whether they operate on a national or local stage.

Lend Lease’s biggest project, the 224-hectare 2,500-lot Alkimos development, is understood to have been delayed by the need for approvals and is still in the process of obtaining a federal environmental tick, a common complaint among developers.

It also has two other smaller LandCorp projects – redeveloping a series of primary school sites around Coolbellup and, most recently, Kwinana, in what’s being termed the Kwinana Education Precinct.

In Coolbellup, Lend Lease received approval for its local structure plan in October and hopes to start earthworks in the middle of this year.

It’s thought the development of the Kwinana Education Precinct, with 69 lots on 6.2ha, was originally won by Dale Alcock’s ABN Group.

Another newcomer is local player Spatial Property Group, which started business in 2010. It already sits just outside the top 10 players in terms of lots under development in WA. 

Market conditions

Satterley Group chief Nigel Satterley believes new land sales ran at 50 per cent below the traditional underlying demand in 2011 as property buyers warily watched bad news seep out from home and abroad.

Mr Satterley confirmed the views of several property developers that 2012 was looking more promising as land and home packaging discounts, rising rental prices and lower established home stocks brought buyers back to the market – at least to the display villages.

Among his local listed competitors, Cedar Woods Properties appeared to be best positioned according to statements released to the ASX showing half-year results to the end of December.

Cedar Woods said consumer confidence was weak but claimed its development strategy was robust and its finances secure.

Peet was substantially less positive in its half-year statements, saying its strategic response to market conditions had been to preserve capital, reduce costs and be ready to take advantage of any improvement in the market. 

It was also focused on debt reduction to meet a new gearing ratio of 20-30 per cent, compared to 38.8 per cent at December 31.

Port Bouvard has reduced its new land development portfolio to one major parcel, being the 3,000-lot project at Point Grey on the Peel Inlet, but slow sales of a luxury apartment development has made life difficult for management.

In its half-yearly report, Port Bouvard said it was in discussions with its bank, St George, to restructure debt to help it get past a looming working capital issue expected to occur at the end of May. 

The company has a gearing ratio of around 27 per cent but much of its debt is tied up with the Oceanique apartment complex, which has inhibited its flexibility. 

Port Bouvard said it also was examining other capital management strategies, including equity funding.

National property group Mirvac provides a reasonably detached perspective of the local market.

“The Western Australian residential property market remains muted, as the modest recovery in medium density dwelling construction has been offset by weaker construction of detached houses,” Mirvac said in its half-year results.

“Property prices in Perth continue to fall, although the rate of decline is starting to ease.

“Whilst short-term prospects for the residential housing market remain lacklustre, resource related activity is expected to lead to both stronger dwelling demand and prices.”

The search for oil and gas in Australia’s offshore frontiers is set for a major boost with this week’s change in exploration strategy by Woodside

In a move that could substantially extend Western Australia's huge gas export potential, Australia’s biggest offshore explorer announced this week it would broaden its exploration efforts in Australia and overseas from 2013 and “materially” increase its exploration budget over the next two to three years.

BHP Changes Port Hedland Accommodation Plan

BHP has slashed the size of its proposed worker camp at Port Hedland, following state government opposition. The new proposal has yet to unwind but could include significant legacy benefits for the community if some of the concepts pioneered by Brighthouse for residual use of resouce and infrastructure project workers camps are adopted. 

Staff Shortages in the Hospitality and Tourism Industry

Across the whole of Australia, businesses in the hospitality and tourism industry have been suffering from staff shortages for a number of years, and at present, the situation does not seem to be improving. While the problem is being addressed there is still so much more that needs to be done on both a local and national level. So why do we have this problem and what can be done to solve it?

Why the Staff Shortages?

While industries like mining and construction are often blamed for producing the staff shortages in the hospitality and tourism industries this is really only the tip of the iceberg. Yes, high rates of pay in construction and mining are having their effect, but when you analyse all of the reasons it is really a chicken and egg situation – the tourism industry has always been known for having lower rates of pay than many other sectors, so this drives workers to want to find industries where the pay is higher anyway. 

Lower pay is not the only factor causing staff shortages though. A keynote session at the UNWTO International Conference on Tourism Statistics in 2009 highlighted the Tourism Labour Market in the Asia Pacific Region, and eight factors were cited as impacting on supply and demand in Australia. Lower wages was top, while other factors included negative perceptions of the industry, both in terms of the working environment and career progression opportunities, especially amongst young people; High labour mobility within the industry; Strict immigration policy restricting the inflow of labour; and the recent resources boom coupled with low unemployment. So clearly there are many issues that need to be worked on.

What is Being Done?

Policies are being investigated or are being trialed already, for ways to bring more skilled and unskilled workers into Australia to work in the tourism industry; a new template Labour Agreement has just (January 2012) been developed, which it is hoped will improve employment prospects for the tourism industry, by setting a standard set of requirements specifically for businesses planning to recruit from overseas. This agreement would benefit the whole country, while there’s already a scheme in Broome Western Australia being piloted that involves bringing in workers from East Timor. If this pilot scheme is successful it is hoped that this will be expanded to other regions of the country too.

However, with a current shortage of 36,000 jobs in tourism, the industry really needs to work on improving the bad image that it has amongst workers, particularly young workers. Tourism Accommodation Australia will be reviewing the new template and looking at ways in which to improve these perceptions.

The Travel Industry Careers Association is also looking to address this issue as this not-for-profit organisation was set up specifically to help resolve the staff shortage problems.

So, efforts are being made, though a lot really must be done before tourism and hospitality in Australia can be fully back on track.

Sources:

http://statistics.unwto.org/sites/all/files/pdf/queensland_eng.pdf

http://tourismaccommodation.com.au/wp-content/uploads/TAA-MR-Pacific-Workers-191211.pdf

http://www.hospitalitymagazine.com.au/article/New-Labour-Agreement-to-improve-critical-labour-shortage-in-tourism/533247.aspx

http://www.travelindustrycareers.org/about-tica

Australian Tourist Accommodation Shortages – the Problems and Solutions

While Australia’s tourism sector is doing very well from international tourist arrivals, it’s not all good news. There may be an increase in international tourism arrivals each year (of around 2% p.a. since 2001), but there has not been a significant increase in hotel beds. In some parts of the country this is becoming, and has already become, a major problem. 

Queensland, New South Wales, and Western Australia are worst hit by this problem, which is being exacerbated by high accommodation demand, particularly from the mining industry. 

Problems in Perth

Perth is repeatedly in the news because of demand outstripping supply, and as a result the city is losing out on revenue it could be making. Being the capital of Western Australia this is the go-to destination for corporate tourists, conference and business travel; a very strong market that could really boost tourism revenue in the city. The ‘Tourism Industry Facts and Figures At A Glance’ report highlights the potential from this market, as during 2010 travel to attend a conference or convention was up by 19.5%, and business travel was up by 13.7%. But Perth cannot attract this market if there are not enough hotel rooms to cater to these visitors. 

Despite demand being high, and room rates having increased significantly over the past few years, there is still a lack of development in new hotels. The factors contributing to this problem are cited as: high land prices, high construction prices, high labour prices, and labour shortages, but also strong competition from overseas investors, however, if the last factor was a current problem, surely a number of overseas investors would be building hotels in Perth right now. 

What are the Solutions?

The most obvious solution is to build more hotels, but without being able to attract investors this is easier said than done. The WA Government is trying to help, and has offered a number of incentives that will be granted on a project-by-project basis. This includes releasing Crown land; granting longer term Crown leases; concessional lease payments for use of Crown land; and allocating funds to upgrade infrastructure, amongst others.

A solution that will certainly help to ease the problem is to provide alternative accommodation for those people working in mining, and this is already being actioned to a certain extent. At Rio Tinto two contracts have been awarded for accommodation building projects. The same needs to be done elsewhere though, not just in Western Australia.

Looking to other temporary solutions, the number and size of caravan parks could be increased as an option for mining accommodation, however, this poses a problem in itself as there are already staff shortages in caravan parks, and indeed in hotels. This goes to show that the industry is looking at a much larger, intertwined problem that is going to take some years, lots of planning, and a lot of investment to quell.

The Challenges Facing Australia’s Domestic Tourism Sector

The good news for the tourism sector in Australia is that the number of international tourist arrivals to the country has been increasing year on year, by roughly 2% per annum since 2001. International tourists are great for the economy, though often their stays are focused on the major urban and tourism resort areas of the country, so their spending does not always benefit the wider market. This is the gap that domestic tourists have filled in the past by visiting some of the smaller urban centres and resort towns, however, this is now changing.

Domestic tourism has remained fairly static over the past 20 years, but is now showing signs of declining. There are three telling signs of this decline: 

Points 2 and 3 really highlight the change in tourism and consumer behaviour over the past decade. Consumers are spending more money on travelling abroad, and the number of residents who are travelling abroad is increasing too. There are both push and pull factors contributing to this trend.

Pull: Where are Tourists Going?

The main factor that is pulling Australian residents away from domestic tourism is the opening up of more affordable tourism markets. Residents have a greater propensity to travel longer distances because increased competition means that flights are more reasonable. Accommodation is more abundant and hence more reasonable too. The general trend for low cost holidays in places like Bali, and across Asia, has been attracting tourists who may not have had the spending power to consider these in the past.

Push: Why Aren’t the Tourists Staying in Australia?

When combined with the ‘pull’ (the lure of low cost holidays), domestic tourism in Australia is bound to feel less attractive. Perceptions of value have been changed by the opportunity to travel to a more exotic location for a lower cost, where the tourists can enjoy different and new experiences and cultures. The fact that residents perceive Australia to be very homogenous is pushing them away.

What is the Solution?

The problem is that there is no quick and easy solution that will suddenly have residents taking up domestic tourism again. Perceptions need to be changed, allowing residents to take another look at what Australia can offer in terms of natural and cultural diversity, and it has been suggested that a distinct ‘brand’ needs to be established.

The perceived tangible value of a destination or specific attraction needs to convince residents that Australia can offer value for money in terms of the experiences tourists can have. This does not necessarily mean that businesses in the tourism sector have to lower their prices, but one suggestion is to sell packages where numerous elements are included under one price, therefore offering good value for money.

The youth market is also an important sector to target, as it is realised that this generation should be encouraged from an earlier age that Australia offers so much, and by instilling a sense of national pride the youth market may be more prone to travel domestically. 

For regional towns and attractions the answer may be to re-invent caravanning and camping – the affordable holiday. To attract those people with caravans, camper trailers, tents and recreation vehicles, such as motorhomes and campervans, more need to be done than just promoting individual caravan parks and campgrounds or even destinations. Getting there can also be fun.

Targeting key markets with holiday packages that describe and plan touring routes with interesting stopovers on the way to exciting destinations and attractions is a good way of getting people back on the road. Small towns have a host of interesting things that travellers normally just pass by – art centres, museums, local industry, specialty shopping and of course natural attractions.  The journey is half the fun!

Caravan parks and campgrounds need to assess their potential markets and provide products so that everyone can enjoy the camping experience. Budget and luxury cabins, safari tents and backpacker facilities are just a few of the possibilities. Encouraging tour operators to work in conjunction with caravan parks to provide access to interesting places and activities will improve the visitor experience.

Some of these initiatives will need be kick started by government funding for this important tourism sector, but for the small businesses who serve the tourism industry there is a lot you can do to market yourselves and use the benefits of the lifestyle that has been recognised by generations of Australians to get people back to travel within Australia. 

Sources:

1. ‘Through the Looking Glass: the future of domestic tourism in Australia, 2008’
2. ‘Tourism Industry Facts and Figures At A Glance, May 2011’.

The New Zealand Freedom Camping Act: Good or Bad News?

Well, that probably depends on who you ask! The New Zealand Freedom Camping Act that became law in August 2011 is certainly a subject for debate, with many cheering it on, while others feel it will ruin an experience that has become part of the country’s culture. 

As with any new law there is bound to be opposition, but looking at the Freedom Camping Act from both sides of the argument, and bearing in mind the impact it is already having, the act is surely good news for all concerned. 

What is Freedom Camping?

Freedom Camping is defined as camping within 200 metres of a motor vehicle accessible area or the mean low-water line of the sea or a harbour, other than at a designated camping ground. Within the last ten years in particular this form of camping has been growing in popularity in New Zealand, and according to Conservation Minister Kate Wilkinson, the number of freedom campers has doubled over the decade to 150,000.

With the larger number of Freedom Campers come environmental concerns. It could be argued that someone pitching a tent for a night would have little impact on the environment, but if they’re camping where there are no toilet facilities or no sani-dump facilities what are they doing with their waste? This is one of the major concerns that led to the creation of the act. 

What is the New Zealand Freedom Camping Act?

The act was passed in August 2011 with the main aim of limiting or restricting freedom camping, and giving authorities the permission to charge fines for campers who are disobeying the rules. The act does not completely ban freedom camping, and contrary to how it seems, local authorities are not allowed to pass bylaws that completely prohibit freedom camping, to the dismay of some local authorities it seems. However, if someone is camping, or appears to be setting up camp in an area where freedom camping is not allowed they can face an on the spot fine of $200. If they are found to be dumping waste the fine could be as much as $10,000.

Caravan and Camping Consumers

Campers who have enjoyed Freedom Camping in the past may be feeling disgruntled by the new law, however, Freedom Camping has not been completely banned, merely restricted. There are still countless places across the country where campers can camp for free and without worry of being fined.

The Tourism Industry

The tourism industry will benefit in certain respects, though could lose out in others. Where Freedom Camping is being very tightly restricted, campers who would have come to these areas in the past may go elsewhere, and while they would have been camping for free they are still putting money into the economy by using shops and services, and visiting attractions. Some regions could suffer if Freedom Campers go elsewhere.

On the other hand, campers who have been encouraged to use the designated camping and caravan parks will bring money back into the economy. Some camping and caravan parks across the country are already seeing an increase in the number of campers staying there, and it seems the number of people polluting the countryside is on the decrease too. This is great news for the camping grounds as they will benefit from increased revenue, and seeing as many campgrounds offer toilet and waste facilities, campers can dispose of their waste in the proper way, thereby reducing their impact on the environment.

Sources:

• http://www.radionz.co.nz/news/national/95097/freedom-campers-heeding-pollution-message
• http://www.stuff.co.nz/waikato-times/news/6073262/Warning-for-freedom-camping-bludgers
• http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10745787
• http://www.legislation.govt.nz/act/public/2011/0061/latest/whole.html