Threat to asset sales not as strong as it seems

17:00, Jul 23 2012
tdn sale stand
People march against asset sales.

Armchair experts are out in force on the New Zealand Maori Council's claim to fresh water under the Treaty of Waitangi. The apparent consensus is that this could kill the Government's partial privatisation programme and that it has once again muffed its political management.

In the process, there is much confusion and unfocused anger. That is coming not only from Maori who see Prime Minister John Key's statements on the issue as poll-driven, racially divisive insults, but also from the Pakeha brigade, who are fulminating in letters to the editor and blog columns about the so-called Treaty gravy train.

At the eye of the storm, however, the atmosphere might better be likened to The Hurricanes' changing room after their last gasp win against the Chiefs, when a complicated array of outcomes could still have taken the Wellington Super 15 franchise all the way to the finals.

To be fair, that analogy only goes so far.

The Hurricanes knew by the end of the weekend that their slim chance was blown.

For the Government, still hopeful it can get 49 per cent of Mighty River Power sold by September 30, there are still plenty of twists in the road. The train wreck scenario for the asset sales programme exists, but it's a lot less likely than is widely presumed.


For a start, the Maori Council claim to the Waitangi Tribunal, whatever its outcome, is non-binding. Governments typically take notice of tribunal findings, often through subsequent negotiation, but the tribunal cannot bind an administration.

And if the council takes the Government to court, it faces the ultimate hurdle of proving there is a legal issue to be contested. Crown lawyers are confident the Government is fully complying with the deep and established precedents that have flowed ever since the Maori Council's historic win in the Maori lands case of 1987.

Crudely put, the main thing the courts want to see is evidence of the Crown consulting appropriately and operating in "good faith" on Treaty matters.

While opponents portray Key's recent statements on water ownership as bad faith, the record shows substantial good faith negotiation on Treaty-based water claims across a wide front - just not within the asset sales programme.

The Land and Water Forum and direct negotiations that have led to historic co-management agreements between Tainui and the Crown for the clean-up of the Waikato River are among the best examples.

Key is also right that water is not strictly "owned" by anyone. That's why no Opposition politician has been brave enough to suggest otherwise.

Instead, they are confusing the issues of water rights and asset sales in the same way as the Maori Council, perhaps less wittingly, has done.

Then there's the Maori political dimension. Fed by the media tendency to see Maori opinion as monolithic rather than nuanced, there is little public recognition that much of the political noise is from the Mana Party trying to destroy the Maori Party.

Additionally, the Maori Council is a shadow of its former self, with influence shifting to the less publicly visible Iwi Leaders Forum, knocked as a kind of "bro-stocracy" by its critics.

As result, while some may aspire to forcing an issue of power company shares to Maori interests, clear-eyed Maori leaders know there isn't a bolter's show of that happening.

They also know that for the tribunal to find water is "owned" by Maori is highly unlikely. And even then, establishing an ownership right does no more than create the basis either for court action or negotiation.

State-owned hydro-electricity generators would continue using water while the arguments played out.

The likelihood of a legal basis for stalling the asset sales programme on the basis of the water claims is remote.

Of course, it could happen. If the Supreme Court were to rule that Maori water rights had to be settled before asset sales, that would kill the plan for up to four or five years.

But the Government is confident that whatever the tribunal finds, the road to court need be neither as long nor as disruptive as the opponents of privatisation hope it would be.

Shares in MRP might be allocated in the fourth rather than the third quarter of this year, but there's plenty of reason to believe the delay need be no longer than that.

Business Desk

The Dominion Post