Warner Bros' New Line unit is warning an Ombudsman's ruling that the Government needs to release Hobbit-related documents jeopardises future film-making in New Zealand.
The Ombudsman has ordered the Government to release documents about the deal it struck to ensure the Hobbit movies were made in this country.
Applications for the documents under the Official Information Act were refused by ministers on the grounds they were commercially sensitive.
In late 2010 Radio NZ and NZ Council of Trade Unions president Helen Kelly sought a review of the decision and yesterday Ombudsman David McGee ruled that 18 documents, including emails between Hobbit director Sir Peter Jackson and Government officials, must be released.
The Government secured the three movies by changing employment laws and beefing up the tax rebates for the productions.
Unions fought the law changes and the Labour Party accused the Government of chequebook legislation.
In his 29-page ruling McGee noted opposition to the documents being released from New Line and Jackson's Wingnut Films.
The ruling quoted New Line saying: "If the Government is not willing to adequately protect this sensitive information from disclosure, this will operate as a major disincentive to motion picture studios – as well as local and foreign talent – to utilize New Zealand as a location for future productions."
Studios held delicate production information and negotiations, along with budget and cost data, in the strictest confidence as their trade secrets.
"When it comes to The Hobbit, two of the most expensive movies that will ever be made, this is especially true," New Line said.
"Disclosing our negotiations and innermost thinking, including certain strategic decisions, legal and personal opinions, offers from third party governments and other private information, could damage business relationships we have with others (including those third-party governments that offered us special incentives), as well as impair our ability to effectively negotiate with certain third parties in the future, including the relevant unions."
Wingnut was quoted saying: "In short, the disclosure of the Wingnut information to a wider audience would unreasonably prejudice Wingnut's commercial position when dealing with both the local and international film community."
Wingnut said emails it sent the Government were a free and frank discussion between key participants in the film industry and ministers.
"Public release will undoubtedly prejudice the supply of any further such information between the film industry (especially from Wingnut Films) and the Government," Wingnut said.
"I can categorically assure you that if the above information was released and a similar situation occur in the future, neither myself nor Wingnut Films would be inclined to help the Government again with such a candid level of advice and opinion."
The ruling did not indicate whether "I" referred to Jackson.
But McGee said the information supplied to ministers was not likely to unreasonably prejudice the commercial position of the person who supplied the information, or who was the subject of the information.
He accepted some of the information "may not be helpful to business relationships".
In his opinion advice from third parties during the industrial dispute took public knowledge of commercial concerns no further than information released publicly at the time by New Line and the Government.
Submissions and comments made by New Line and Wingnut were made in their own direct interests with a view to persuading the Government to a policy stance that was to their advantage, McGee said.
"There is nothing improper in this and it has not been suggested that there was," he said.
"But I do not accept that persons who have a commercial interest in making submissions to ministers would be likely to be deterred from doing so by the prospect of a release."
Gerry Brownlee, who was Economic Development Minister at the time of The Hobbit dispute in 2010, was quoted in the ruling as saying that if the information was released then without a doubt the Government's ability to acquire such information in future would be seriously compromised.
Release of the information would affect the willingness of other business leaders to provide their views and information to the Government.
The Ombudsman did decline to order the release of a 2010 Crown Law opinion which formed the legal justification for the Government's decision to weigh in on the side of the studio and Jackson, and against the union, New Zealand Actors Equity, which was trying to organise local actors on The Hobbit.
Ministers must hand over the documents on or before March 1 unless the Cabinet overrules McGee by using a veto which was introduced in 1987 but has never been used.