Iwi have Nats over asset-sale barrel

03:22, Sep 09 2012

In the immortal words, "we won, you lost, eat that".

The Maori Council couched its response to news the Government had delayed its first share float till next year far more politely. However, those words could yet turn out to be the epitaph for National's asset sales programme.

Only weeks ago, Prime Minister John Key was stirring up the base by talking tough about no one owning the water.

He labelled the Maori Council bid to halt asset sales opportunistic. He talked over the top of the claimants to remind everyone the Government was not obliged to do the Waitangi Tribunal's bidding. He made it clear Cabinet would not delay the first state-owned power company share float by choice.

It played well in the polls, but come high noon it was Mr Key, not the Maori Council, who blinked first.

Senior ministers should now be questioning the advice they were receiving before the Waitangi Tribunal hearing that the council claim was not a serious threat to the asset- sales programme. Given all the previous posturing, Monday's delay proved that advice badly wrong.


The increasing reliance on the powerful Iwi Leaders Group as the de facto Treaty partner should also be questioned. Ministers banked their assurances that negotiation, rather than the tribunal, or legal action, was the favoured path forward for Maori. That bolstered their view that the Maori Council had no-one of consequence behind them. Consequently they underestimated the looming threat.

There was apparently robust debate around the Cabinet table before the final decision to push out the first state-owned power company share float till next year. The camp that saw delay as defeat wanted the Government to press on with its original timetable. Others were prepared to take the political hit from delay with the longer game in mind.

After the meeting, one senior member of Cabinet reported feeling bruised and bloodied. No wonder. Asset sales are National's flagship economic policy. Their success or failure will define National's second term, and success is largely dependent on following National's second term strategy of pushing through unpopular policies early in time to show them paying dividends before the election.

Even assuming the first share float hits the new deadline of June next year, that strategy looks to have flown out the window.

Failure means a $5 billon to $7b hole in the books, borrowing more to fund capital spending, a gaping gap in National's economic platform and giving away the high ground on economic management.

Delay might have been the prudent course legally, it may even have been the right thing to do economically. Trying to flog off shares amid uncertainty over the future status of iwi shareholders would potentially have hammered the share price. However, there are no guarantees that the same uncertainty won't still prevail this time next year. That raises the stakes politically.

If the tribunal's report is tested in court - and it is bound to be - progress could be measured in years, rather than weeks. The likelihood of that happening looks even stronger after the Government rejected a pan-Maori approach - though the Government's legal advice clearly takes the opposite view.

Announcing the concession to the Maori Council on Monday, Mr Key could not have been any clearer; his body language screamed that consultation with iwi would be the bare minimum to satisfy the legal test.

Nor did he mince any words that shares-plus, the Waitangi Tribunal's recommended redress for Maori with a proprietary right in water, was off the table as far as the Government was concerned, even though that is ostensibly what the Government will be consulting iwi about.

In a purely legalistic sense, that might be what they call good faith bargaining, even if within Maoridom it may look as if good faith is lacking.

But the reluctant-bride act is largely for the punters. The odds that the Government won't use the next five weeks for some serious bargaining seem low. With so much riding on the next share float deadline being met, iwi claimants who potentially stand in the way have the Government over a barrel. It is notable that one of the more powerful members of the Iwi Leaders Group, Ngati Kahungunu, registered its own claim with the Waitangi Tribunal the same day the Government announced the delay.

They weren't part of the original claim to the tribunal (one of their hapu was). But they saw which way the wind was blowing.

And as their statement of claim showed, far more is at stake than the sale of power company shares. The Ngati Kahungunu claim deals with the country's second-largest aquifer, lakes, rivers and even swamps. It is potentially a sign of things to come. Irrigation, bottled water supplies - anything where water is commodified - is potentially caught in its sweep.

The Government will consult dozens of iwi and hapu in a series of hui over the next few weeks. However, the conga line of claimants is likely to grow.

There is a rising fear the Government's approach will be to ride roughshod over any genuine 'good faith' consultation with iwi and instead adopt the age-old strategy of divide and rule.

Small hapu and iwi, many of which are still years away from having Treaty settlements concluded, worry about the Government going into direct negotiation with others who have overlapping claims.

They fear their interests will be shunted aside so the Government can settle quickly with iwi who stand in the path of the sale of Mighty River Power shares and the other SOEs. They will demand to be heard too.

Legal expert Matthew Palmer suggests the closest analogy to what the Government is facing lies in the 1987 Lands Case, in which the Court of Appeal said the government could not transfer assets from Crown ownership into state-owned enterprise ownership without putting in place a mechanism to safeguard future Maori claims to those assets.

In that case, the government was able to sit down with the Maori Council and thrash out a regime which satisfied both parties within months, not years. The situation may be more complex now - there would be an expectation the Government negotiate a deal with iwi, rather than just the Maori Council - but it shows what can be done.

The national hui called for next week by King Tuheitia is an attempt to thrash out a united Maori front. There is no guarantee it will succeed in that aim. But it could be a fork in the road for the asset-sales programme.

The Dominion Post