Monday, March 5, 2012

One thing you should know about the new Section 9

The Government has announced that the new legislation to allow for the partial privatization of four State Owned Enterprises will include a Treaty clause, but that clause will only apply to the Crown and not other shareholders, or the companies themselves.  In its information sheet on the new legislation, the Government explains the reasoning for this as follows:
The Treaty is an agreement between the Crown and iwi. Therefore, it is not possible to bind non-Crown groups to Treaty provisions. Under the SOE Act, section 9 applies only to the Crown, and not to the SOEs themselves. Similarly, the Treaty clause in the Public Finance Act will apply to the Crown and not to the mixed ownership companies or minority shareholders.
There are quite a few things that are wrong with this statement.
First, nobody was saying that other shareholders were a party to the Treaty, rather the argument is that the Crown has obligations to act consistently with its Treaty obligations. If it is going to divest itself of responsibilities (such as giving up full control of State Owned assets), then it needs to do so in a way that ensures rights under the Treaty are protected.  If this means putting some constraints on third-party rights, then so be it.  It does this already by requiring that memorials be placed on the certificates of title of State Owned Enterprises properties so that any future buyer is aware that such properties may be compulsorily purchased if they are required to be used to settle Treaty claims.  This doesn’t make anybody else a party to the Treaty of Waitangi.  It doesn’t bind non-Crown groups to Treaty provisions.  Third-parties rights are affected by the legislation, not because they have somehow become parties to the Treaty.
This happens with international law all the time.  States, and not individuals or companies, are the subjects of international law.  States are the parties to international agreements.  But that doesn’t mean that states can’t pass laws that ensure that their citizens comply with the standards set out in international conventions.  In fact, usually the key obligation on the parties to international conventions is to enact legislation that does just that.  So, for example, as an individual, I might not be a party to the Convention on International Trade in Endangered Species of Wild Fauna and Flora, but New Zealand is, and I am subject to the Trade in Endangered Species Act 1989.  The Crown is perfectly entitled to prohibit me from trading in endangered species and has done so, at least in part, because it has obligations under the international convention.
And if it was impossible for non-Crown parties to be required to act consistently with Treaty principles, why does the Government think it is necessary to insert a clause that stipulates “for the avoidance of doubt”, the Treaty provision in the new legislation “does not apply to persons other than the Crown”?  Surely, if it is not possible to bind “non-Crown groups” there could be no doubt about the application of that provision in the first place.