Russell McVeagh's troubled intern programme; Adams wins day one; Coal burning until 2030

In today's email we report on Newsroom's investigation into complaints of harassment and inappropriate workplace behaviour at one of New Zealand's leading law firms, and we detail yesterday's developments in National's leadership contest.

1. Russell McVeagh's #metoo moment

This morning Newsroom leads with a report of sexually inappropriate behaviour involving older male lawyers at blue chip law firm Russell McVeagh and female law students from Victoria University during a summer intern programme.

The incidents led to a police investigation and complaints to Russell McVeagh's HR department by the students. Victoria University also took up the issue at the Vice Chancellors' committee. The Law Society and student groups have since rejected sponsorship offers from the law firm over the issue.

Newsroom understands two older male lawyers who were the subject of law clerk and university concern are now working in different roles, but one has at times continued on with Russell McVeagh work in his area of expertise.

Newsroom has learned of a pattern of sexually inappropriate behaviour towards the female students that saw Victoria and Otago universities intervene, at least one report made to the police and a later reform of the clerk programme, including a ban on alcohol and the launch of a helpline for them to seek support.

The matter went before the New Zealand Vice-Chancellors' Committee and the New Zealand Law Deans, who oversee the law schools sending graduates to Russell McVeagh and other workplaces.

Victoria University said yesterday its staff were "extremely disappointed that the incidents occurred" but found Russell McVeagh senior staff "genuinely concerned" for the welfare of those involved and determined to ensure the safety of future clerks.

Newsroom has not named the clerks or specified the dates of their programme to protect their privacy, or - for now - the identities of the lawyers involved. But in a multi-month investigation, Newsroom has confirmed details from within the law and academia and has documents about the incidents and their ramifications.

The complaints from the summer programme are similar to the revelations of harassment and inappropriate workplace behaviour which have propelled the global #Metoo movement.

Radio NZ is also leading with the story this morning on Kathryn Ryan's Nine to Noon programme.

2. Amy Adams wins first day

Judith Collins, Simon Bridges and Amy Adams launched their bids for the National Party leadership in different ways yesterday, with Adams the clear winner on day one with a well-staged announcement and an immediate show of support from MPs in different parts of the caucus.

Collins was the first to put her hat in the ring with announcements via Twitter and Facebook yesterday morning, followed by one-on-one media interviews. Bridges then held a strangely subdued solo stand-up news conference inside Parliament.

Adams' stage craft and news conference was a much more impressive affair. She was backed by four caucus colleagues, Chris Bishop, Tim McIndoe, Nikki Kaye and Maggie Barry, and held her stand-up news conference out in the sun in front of the Parliamentary Library and beside a rose garden in full bloom.

Adams gave more detail on her personal story, including how she was raised by a single mum in straightened circumstances, and portrayed herself as a natural successor to Bill English -- a policy wonk with a heart.

Adams was English's right-hand woman as Social Investment Minister and held complex senior portfolios in the last Government. Her challenge will be to lift her public profile and break through any initial impressions that her links to big dairy farms in the South Island (she married into a dairy farming family) and her very proper Auckland corporate lawyer manner make her inaccessible to a broad swathe of voters.

English was able to break out of the dry Finance Minister mould in the election campaign with his simpler Southland sheep farmer style and his big new idea of social investment. Adams will have to allow the public in under her thick carapace of policy wonkery to connect more deeply if she is to race away with the contest.

Bridges is better known, but also has some barriers to jump over his loose style of speaking and his John Key-like lack of a fixed political philosophy. His social conservatism is also not well known with the public and could block his appeal to a broader swathe of middle New Zealand. His referral to himself in the third person yesterday wasn't a good start.

Judith Collins is a known and polarising figure for the public and the caucus, which knows she appeals strongly to a cohort of voters that is smaller than the 50 percent National needs, given its lack of partners currently. Collins also appeals less to potential coalition partners than other candidates.

Maggie Barry spoke for many in National's caucus with this summary of the line-up: "I think Paula’s done a very good job. I think Amy’s very capable. Nikki Kaye is extraordinary. Judith Collins is Judith Collins."

The real contest at this point is between Bridges and Adams, with Steven Joyce, Mark Mitchell and Jonathan Coleman yet to declare their hands. On the first day's showing, Adams was the clear winner. If I was a betting man, I'd put my money on her at this stage, but there is almost two weeks of campaigning to go. I got a feeling the TAB won't be offering odds yet.

3. The ABCs of replacing English

Newsroom's Sam Sachdeva covered yesterday's announcement in a series of live updates on Newsroom Pro and wrote this summary last night that was published first on Newsroom Pro.

He points to Adams' attempts to bring together the different wings of the caucus.

The MPs she brought with her were a shrewd mix of various factions: liberal “wets” Nikki Kaye and Chris Bishop with conservative “drys” Maggie Barry and Tim Macindoe, while Bishop represented the backbenchers and Kaye the political veterans, representatives from North Island and South.

Sam also reports she made the best impression of the three candidates, talking about her blend of experience both as a commercial lawyer and the wife of a Canterbury sheep farmer - “Happy Valentine’s Day Don, this wasn’t how I’d planned it,’ she quipped - while also sharing a small snippet of her childhood.

“I grew up with a solo mother, we didn’t have a lot of money but she instilled in me the understanding of hard work and the necessity to get on and provide and get a good education and build a life for yourself.”

It helped that the MPs with her looked on adoringly as she spoke and gushed about her: she was “an extraordinary New Zealander”, Kaye said, “one of the most talented people I’ve ever worked with”, Macindoe added.

There are still questions about whether she can succeed with the retail politics now deemed necessary, and if she can satisfactorily raise her public profile, Sam wrote.

"But as first days go Adams’ was the one to beat, although as all the candidates are keen to point out, it’s a marathon and not a sprint," he wrote in this piece.

4. NZ may burn coal until 2030

Newsroom's Thomas Coughlan covered the announcement yesterday by Genesis Energy that an improvement in electricity demand meant it would have to keep burning coal at Huntly until at least 2025 with normal market conditions, and possibly until 2030.

The announcement is the opening salvo in a wider debate about how the electricity generation industry can be nudged or agree to start building the 3GW of renewable projects that are already consented, rather than keep burning coal and gas.

The issue is also causing tension between Green activists and politicians, with Green Co-Leader James Shaw seeing coal burning until 2030 as compatible with the Government's target of 100 percent renewable generation by 2035, while fellow Green MP Gareth Hughes and Greenpeace were more critical of Genesis.

Here's Thomas' story in full, which was published first on Newsroom Pro yesterday.

The picture above is of fireballs set off by then Prime Minister Helen Clark at Genesis' Huntly plant in 2005 to celebrate its conversion from a coal-only plant to one fueled by both coal and gas.

5. Fletcher's balance sheet hole

Anyone who has looked into the big hole in the ground opposite SkyCity will know it is a big and expensive project that was announced and agreed quickly. Too quickly and too expensive, as it turns out for the shareholders of New Zealand's biggest and most iconic building company.

Fletcher Building forecast its Building and Interiors division would make a $660 million loss this financial year after it systemically bid too aggressively for commercial building contracts such as the Justice Precinct in Christchurch and the Sky City Convention Centre and Hotel in Auckland (pictured above). Fletcher made fixed price design-and-build bids that meant the construction company bore the losses if constructions costs ballooned beyond its estimates, which they did as the construction sector boomed through 2014-2017. Fletcher blamed inexperienced and poor managers in the division.

It reported $410 million in losses for the Convention Centre project on its own. There were questions at the time about the speed with which Fletcher won the contract and the lack of an open tender. John Key's dinner deal with SkyCity CEO Nigel Morrison to agree on the creation of the Convention Centre project in exchange for gambling rule concessions is looking to be the most expensive meeting in the history of Fletcher Building.

Ralph Norris resigned as Chairman and new CEO Ross Taylor announced Fletcher Building would stop bidding for new 'vertical construction' contracts, which include big commercial tower blocks and convention centres. Fletcher Building received a waiver from its banks over a breach of debt covenants and will have to renegotiate deals with private borrowers.

Economic Development Minister David Parker said Fletcher's move to focus on other areas such as horizontal infrastructure and residential construction could help with the Government's ambitions to ramp up its Kiwibuild and urban infrastructure investments such as light rail.

6. Briefly in the political economy...

NZ expectations up - The Reserve Bank reported its Nielsen survey of business managers and professionals found expectations of inflation two years out nudged up to 2.11 percent in the March quarter from 2.02 percent in the December quarter. However expectations may dip later in the year along with headline inflation, causing ASB to shift its view of the first OCR hike out to August 2019 from February 2019. The Reserve Bank itself forecast last week it would not need to hike rates until late 2019. Most other economists see a late 2018 or early 2019 start to the hikes.

He's gone - South Africa's President Jacob Zuma resigned this morning after members of his African National Congress party threatened a vote of no confidence in Parliament over corruption allegations against Zuma. (Reuters)

US inflation ticks up - US core consumer price inflation rose to a one-year high of 0.3 percent in January from 0.2 percent in December, although annual core inflation was unchanged at 1.8 percent. The rise was more than expected and nudged US market interest rates up in the expectation the US Federal Reserve may have to tighten monetary policy slightly faster and more than previously expected. (Reuters)

7. One fun thing...

This completely non-political tweet from You only had one job took my fancy this morning:

"So how I’m I supposed to get it out of the packaging?

8. Today's political links

These are available with the morning subscriber email.