Wednesday, September 5, 2012

Utmost good faith?

On Monday, John Key announced that the public offering of up to 49 per cent of shares in Mighty River Power will be delayed until early next year.  This will allow consultation to take place with Māori over the ‘shares plus’ concept raised by the Waitangi Tribunal as a possible means of recognizing Māori residual proprietary interests in water bodies.  This might look like the Government is trying to find a way of recognizing those interests, but, judging by the wording of Key’s statement, it seems as though there may be real questions as to whether the Government is engaging in this process in good faith.

First of all, Key’s statement focuses on setting out reasons why the Government opposes the ‘shares plus’ concept (which the Tribunal suggested could be used to recognize Māori residual proprietary interests through shares in the power-generating companies that carried with them a significant degree of control over the operations of the company).  Neither the formal statement nor Key’s responses to questions on Monday suggest that the Government is entering into this process with the aim of finding a way to implement the ‘shares plus’ concept.  Key’s statement that ‘ministers have today decided that taking some time to talk about ‘shares plus’ with relevant iwi is the prudent thing to do’ sounds to me as though the process will be one in which the Government will tell Māori why the ‘shares plus’ concept will not be accepted.  This is reinforced by reports that “Mr Key made it clear yesterday that the consultation period was not likely to see the Government change its mind, but was required to strengthen the Government's legal position”. This sounds like it will be an awful lot like the “consultation” around the inclusion of a Treaty of Waitangi provision in the legislation enabling the partial privatization of the state-owned power generating companies. That process was about Government ministers telling Māori what was going to happen. It was not about listening to Māori who consistently stated that they did not want the partial privatization to proceed without Māori rights being protected.  It is difficult to see how this could be construed as engaging in good faith, as pointed out in the NZ Herald editorial today. It strikes me that a little bit more listening and compromise early on in the process might have enabled the Government to avoid some of the difficulties it is now encountering in this process.

And the reasons for opposing the ‘shares plus’ concept are little more than political spin.  Key’s statement notes “Almost every form of redress to Maori that could be covered by ‘shares plus’ can be achieved in other ways”.  This is true.  But this is not a reason to oppose the ‘shares plus’ option.  Implicit in that statement is that there are some forms of redress that cannot be achieved in other ways.  If the Government wants to push ahead with the partial privatization without first resolving issues relating to Māori rights to water bodies then it ought to ensure it retains the ability to provide all forms of redress that might be required to provide reparation.  Key also says that ‘shares plus’ is unworkable and backs that up with this example:  “if some Maori shareholders had the ability to make decisions on strategic issues, under well-established law, those shareholders must act in the interests of the whole company and not simply as a representative of Maori”.  I am sure that Māori shareholders with enhanced decision-making authority could continue to make decisions in the best interests of the whole company at the same time as ensuring that Māori perspectives are given voice in that decision-making.

Key also stated “Following consultation with iwi earlier this year, a careful and deliberate decision was made to ensure that the Crown’s obligations under the Treaty continue to rest with the Crown, not with the companies.”  This makes it sound as though this was the outcome Māori had sought through the “consultation” process.  This could not be further from the truth.  Māori consistently told the Crown that the Treaty protections would be watered-down if they did not continue to apply to 100 per cent of the company.  The Government’s decision on this issue was made despite what Māori had said during the consultation, not because of what was said. 

The Government has also ignored other key elements of the Waitangi Tribunal’s recommendations.  In particular, the Government is sticking to its line that the partial sale of Mighty River Power will not affect the Crown’s ability to recognize Māori rights and interests in water.  The Tribunal notes that the Crown’s preferred options for rights recognition fall short of the Treaty guarantees because they do not recognize the proprietary element of Māori rights and do not provide for commercial or economic benefits that accrue because of the proprietary character of the rights in question.  The Tribunal found that, as the sole shareholder, the Crown now has flexibility to provide for the ‘shares plus’ option that will be lost once the partial privatization has taken place, noting
That would mean that the ability to negotiate remedy agreements with Māori would be lost if those potential remedies were by way of share issues or the transfer of existing shares on terms involving any form of preference as to voting rights, capital or income distributions, pre-emptive rights, or appointment of directors, to name but some possible remedy considerations.
The Tribunal also recommended that the Crown urgently convene a national hui ‘in conjunction with iwi leaders, the New Zealand Māori Council, and the parties who asserted an interest in this claim’, but the Government has rejected this idea in favour of much more limited discussions with specific iwi.  Furthermore, now that a national hui has been called, under the auspices of the Māori King, Key has made it clear that the Government and National Party MPs will not attend.  Rejecting the forum for consultation recommended by the Tribunal and clearly preferred by no less a figure than King Tuheitia raises yet another question mark over the Government’s claim to be engaging ‘in good faith’.