Friday, February 17, 2012

Ten Things You Should Know About the Government's Proposal to Partially Privatize State Assets

1.              What is the Government proposing?
The Government is planning to partially privatize 4 State Owned Enterprises – 4 energy companies, as well as sell down its shareholding in Air NZ, although Air NZ is a slightly different situation so we’ll leave that to one side.  State Owned Enterprises, or SOEs, are companies that are wholly owned by the Crown with Ministers designated as shareholders.  The Government’s plan is to sell up to 49% of the shares in each of these four energy companies.

2.              What has this got to do with Treaty principles?
At the moment, the legislation governing these companies is the State Owned Enterprises Act, which includes a Treaty principles provision. Section 9 of the State Owned Enterprises Act states

“Nothing in this Act shall permit the Crown to act in a manner that is inconsistent with the principles of the Treaty of Waitangi.”

To give effect to the partial privatization, the Government will take those four energy companies out of the scope of the State Owned Enterprises Act and create new legislation that will regulate these companies.  So, s9 would no longer apply.  The question is what, if any, protection for Treaty principles would be included in the new legislation? The Government consultation document asks whether people want to keep s9, have a new Treaty clause, or have no Treaty clause at all.

3.              Why is section 9 important?
Many people will know that s9 has an important history.  This was the first Treaty principles clause to come before the Court of Appeal and it gave us the landmark New Zealand Maori Council case in 1987, often referred to as the Lands case or the SOE case.  The Treaty of Waitangi itself isn’t directly enforceable in the courts, but the inclusion of a legislative provision such as s9 gives Treaty principles at least some teeth.  In that case, the Court of Appeal found that the Government of the day could not go ahead with the transfer of land to these new State Owned Enterprises, without first setting up some protection mechanism to ensure that Maori claims would not be prejudiced.  That is, if claims that had not been heard at that point were later determined to be well-founded, the Government ought not to be able to just say “Yes, you do have a legitimate right to that land, but we can’t give it back to you because someone else owns it now.”  And this is a consistent theme of the case law, that the Government must ensure that it does not act in a way which will make it impossible for it to fulfill its Treaty obligations. 

4.              How do we know what Treaty principles are?
As I have noted in a previous post, I have seen some comments in the media which seem to suggest that nobody knows what Treaty principles really are.  Now, there is no list of Treaty principles defined in the State Owned Enterprises Act or other legislation, but we have lots of case law and Waitangi Tribunal reports that articulate and elaborate Treaty principles and apply them to particular circumstances so that it is now pretty clear what Treaty principles are and predictable as to how they will apply in any given situation.  In the 1987 NZMC case, the Lands case, the Court of Appeal identified the key principle in the context of s9 of the SOE Act was that of partnership in which the Treaty partners act towards each other reasonably and in good faith.  From this flow other principles, such as active protection and the obligation to provide redress for past breaches.

5.              Is section 9 the only part of the SOE Act that is relevant to Maori rights?
No it isn’t.  Section 9 is important because it sets out the obligation to comply with Treaty principles, but it doesn’t actually provide the mechanism by which Maori land rights and claims to land are protected.  The actual protection mechanism is constructed by sections 27A-27D. These sections provide the Waitangi Tribunal with specific powers to recommend SOE land or former SOE land be bought back by the Crown to be used for Treaty settlements.  I should add that these provisions have almost never been used.

6.              Why aren’t sections 27A-D sufficient to protect Maori rights?
These sections specifically relate to claims to land, but Treaty principles relate to much more than just land.  The Government is planning to transfer these sections into the new legislation, but without an equivalent of s9, there would be no direct legal obligation on the Government to act consistently with the principles of the Treaty of Waitangi with regard to the governance of these companies.

7.              Would section 9 provide sufficient protection for Maori rights in relation to the partially privatized energy companies?
Actually, s9 does not provide sufficient protection.  It places obligations on Government, which may be fine while these companies are still 100% Government owned and controlled, but in selling down its shareholding, the Government is giving up some of its control to third parties who have no Treaty obligations.  In that situation it will clearly be more difficult for the Government to fulfill its own obligations.  That transfer of shares and control should therefore be completed in a way that is consistent with the principles of the Treaty.  Otherwise, the Government could keep selling down its shareholding in the future and s9 would become virtually worthless.  Section 9 is the obligation, but there needs to be some form of protection mechanism set in place before these sales happen.  That has been the consistent message from the courts in these types of situations.  Perhaps one option might be to ensure that the companies themselves take on the Treaty obligation.  But there may be other ways in which Maori rights can be protected and provided for.

8.              What kind of rights are involved?
While there may be rights to land involved, in relation to the operation of these energy companies there are also significant questions around water rights.  Now, the Treaty of course talks about tino rangatiratanga and if we were to translate that into Pakeha rights language, I think, in relation to natural resources such as water it would certainly include rights and obligations to protect, preserve, control, regulate, use and develop those resources.

9.              Hasn’t the Government said nobody owns the water?
Just like they now say that nobody owns the foreshore and seabed.  In the context of the foreshore and seabed, the Attorney-General explained at some length how there are many levels of property interests that might not amount to exclusive ownership and we see that with water too – the Resource Management Act effectively provides for the allocation of private rights in water.  So, I think it is a bit disingenuous to say Maori water rights can’t be discussed because nobody owns the water.  In any case, whatever the position under the common law, when the content of indigenous rights are being determined it is well-established that you need to look at the rights the indigenous people themselves recognised under their own system of law.  Now I haven’t heard anyone arguing that they own all the water in the country but clearly Maori have always recognised specific rights around the use and control of waterways and aquafirs within their own rohe.  That is what needs to be recognised before these sales proceed.

10.          What should people do if they are concerned about the Government’s proposals?
Make a submission.  Maria Bargh and I have put a template submission together, which is available on Victoria University’s Maori Studies web page, and which people can have a look at and use themselves if they wish.  We’ve got two versions – a short one and a longer one which has a bit more explanation of the arguments.  I’m not sure that you can really say that the Government consultation process looks like good faith consultation – it has been pretty rushed, with consultation hui over in a week, no hui in places like Taranaki, Te Tau Ihu, and discussion only focused on a limited part of this whole issue, and I don’t think that it meets the kind of standards that are set out in the UN Declaration on the Rights of Indigenous Peoples, which this Government claims to endorse.  Having said all that, this looks like the only opportunity we’re going to have to be heard on this issue, so I would encourage people to make their voices heard. Submissions close 22 February.