New Zealand Poised to Repeal Anti-Union 'Hobbit Law'

The 2010 law, passed at Warner Bros.' insistence, bars unionization of the NZ film industry. A new Labour government has targeted it for repeal and now it's "goneburger," says one guild leader.

New Zealand’s controversial “Hobbit law,” which prevents workers in that country’s film industry from unionizing, will likely be on its way out in the next hundred days, according to a senior government minister interviewed by The Hollywood Reporter and local media reports, which first highlighted the matter. The country’s new Labour-led coalition government has promised to repeal the law, which was introduced in 2010 under pressure from Hobbit producer Warner Bros. and flew through Parliament on a party-line vote under the previous, center-right National Party administration.

But achieving that repeal will require cooperation from Labour’s two coalition partners, one of whose position is unknown.

Prohibiting film workers from organizing and collectively bargaining “is a breach of International Labour Organization Convention 98 which New Zealand has ratified and must therefore adhere to,” said Labour’s incoming Workplace Relations Minister, Iain Lees-Galloway, in an email to THR. “We expect to introduce the necessary [repeal] legislation within 100 days.”

After that, the Parliamentary process would “probably [be] within around six months,” he added — far longer than the two days it took to originally pass the law under “urgency” procedures.

The statute, more formally the Employment Relations (Film Production Work) Amendment Act 2010, had its genesis when the Burbank studio threatened to pull the US $500 million Hobbit project and move it to England or elsewhere in response to unionization attempts.

It was a potent threat against a tiny island nation of then-around 4 million people, particularly in light of the tourist boom sparked by the earlier Lord of the Rings films and expected from the Hobbit prequels — and the law dovetailed with the Kiwi government’s pro-business tilt under the then-prime minister, former Merrill Lynch executive John Key.

Undoing the legislation has since been a priority for Labour, said Lees-Galloway. The party placed second behind National in New Zealand’s elections a month ago, but ultimately formed a government in coalition with the nationalist New Zealand First Party — whose leader, Winston Peters, acted as kingmaker — and via a looser arrangement, called a “confidence and supply agreement,” with the Greens. The new prime minister, Labour’s 37-year-old Jacinda Ardern, was sworn in last Thursday and the government held initial meetings and briefings Monday (Sunday, Los Angeles time).

The Greens opposed the “Hobbit law” seven years ago, but NZ First’s position is unknown. THR has reached out to leaders of both parties, as election results suggest that the support of both will be needed for Labour to achieve repeal.

“This is a law that is deeply unfair for workers, so it is wonderful to see our new Government make its repeal a priority,” said Equity New Zealand president Jennifer Ward-Lealand in a statement on the performer union’s website. “We look forward to working with Prime Minister Ardern and her team to create a thriving arts and entertainment industry that still manages to treat its workers with dignity and respect.”

Ward-Lealand was a key participant in a six-week, high-profile fight in 2010 that saw Key and other ministers appearing in the media on a daily basis. An unrequited demand for residuals and a union contract had led to a strike notice by the International Federation of Actors — actually, a federation of actors unions, including Equity NZ, SAG and AFTRA (now SAG-AFTRA) and others — and that led to Warners’ threat to pull the project from the country.

The latter threat sparked New Zealand’s “Hobbit crisis,” as street protests erupted in cities up and down the country seeking to keep the films in-country, picketers marched on Parliament and the nation’s currency briefly fell on the possibility of losing the lucrative project. Warners deployed location scouts around the world to magnify its threat, with England’s Leavesden Studios, site of the Harry Potter shoots, emerging as a supposed alternative to director-producer Peter Jackson’s Wellington facilities.

Jackson vowed to “fight like hell” to keep the production in-country, then slammed the New Zealand union for its ties to an Australian media union, apparently bypassing the irony that Warners was a foreign stakeholder too. Ultimately, studio lawyers and executives, including now-CEO Kevin Tsujihara, flew into the country and, shuttled around in limousines paid for by the government, met with Key and other top officials.

They departed a day or so later, and the government introduced the “Hobbit law” in Parliament, emphasizing the financial benefit of retaining the Hobbit production and describing the legislation as a “clarification” of existing law. The statute passed before the weekend arrived, even as Labour charged angrily that the move “reduced New Zealand to a client state of a U.S. movie studio.”

In addition to effectively dictating — and perhaps even drafting — legislation, the Burbank studio also managed to extract an additional US $25 million in government concessions above and beyond the approximately US $75 million tax incentives that had already been agreed on, leading one MP to decry the affair as a “shakedown.”

Warner Bros. and Equity NZ declined to comment for this story.

The first of the Hobbit trilogy premiered in Wellington two years thereafter, but less than two months later a government ombudsman’s ruling resulted in the disclosure of emails supporting an earlier THR report that the unions had withdrawn the strike threat before Warners even arrived, which raised questions as to why the legislation was needed at all.

Also, the studio’s threat to move the project to avoid union terms and conditions was belied by the fact that every other English-speaking film industry in the world was already unionized. Would executives really have ripped Jackson and his sets, props, miniatures, cast and crew from their “Wellywood” home in order to avoid an actors union, only to deposit them in already unionized England instead?

Still, the unions had been outmaneuvered by the studio and government working in concert, leaving a bitter taste for many on New Zealand’s left.

The matter also sparked about two dozen academic papers and a book (full disclosure: written by this reporter) that highlighted the incident as an unusually dramatic example of corporate leverage exerted against a nation-state and its workers. Now, with the change in government, it appears that the Hobbit affair is unexpectedly coming full-circle.

“The Hobbit Law [is] goneburger,” said NZ Directors and Editors Guild executive director Tui Ruwhiu in a recent blog post, adding “It’s up to the guilds to make sure that happens.”