Investors rattled by effects of oil spill on port

Port of Tauranga shares traded down yesterday as investors became nervous about the effects of the environmental disaster releasing heavy diesel into the sea and on to beaches.

Container ship Rena tilted further yesterday, shedding containers which then floated off.

Shipping had been diverted away from Port of Tauranga, the country's busiest port, while the clean-up continued. The most likely destination for the diverted cargo was Ports of Auckland.

Bay of Plenty residents were being warned to be prepared for the worst.

Craigs Investment Partners broker Chris Timms said the impact on the company's shares would depend on the extent of the disaster.

"There will be an immediate short-term effect but it should not have a lasting effect on the business of the company. It is a major environmental disaster for the region, and the port will struggle while they sort all of this out."

Analysts would be watching for signs that the disaster could not be contained in the short-term and would start considering longer-term implications for the port company, he said.

The more pressing problems involved the effects on the Bay of Plenty economy, with tourism likely to be immediately affected, Mr Timms said.

Port of Tauranga shares closed last night at $9.24, down 36c, or 3.75%.

Massey University brand expert Malcolm Wright said the oil disaster did not yet pose a threat to the "clean green" image of New Zealand, but warned that authorities needed to act quickly or perceptions might change.

Coverage of the spill from the diaster could reinforce international understanding of New Zealand's pristine environment.

Images of oil spilling into the usually clear blue waters of Mt Maunganui and washing up on white sandy beaches sparked dismay around the globe, he said.

When the Exxon Valdez disaster happened, people saw the dreadful oil spill but remembered the pristine Alaskan wilderness in which it had occurred. There could be a similar effect here.

"It will make people think of New Zealand and the image of a spectacular environment that we project to the world. It is precisely because New Zealand has such wonderful beaches, wildlife and unique ecosystems that the oil spill is a tragedy."

Without authorities' quick action, it could be reputationally damaging, he said.

In other similar disasters, oil companies have been involved quickly because their brand was at risk and there was huge interest in handling the issue well.

"Here we have a Greek-owned Liberian freighter. There is no money pouring in, no corporate brand at stake.

"In the absence of an interested multinational, someone needs to seize the initiative to manage the situation and the Government hasn't."

If the issued dragged on, there was a risk of New Zealand being associated with environmental disaster, he said.

With the bad run of earthquakes, a mine explosion and dirty dairying issues, New Zealand needed authorities to demonstrate the country's brand was also about responsible environmental management, Prof Wright said.