The Waitangi Tribunal was forced to call time out after temperatures rose over comments by Prime Minister John Key suggesting the Government would ignore any recommendation in favour of Maori owning water.
Chief Judge Wilson Isaac called a 20-minute break after iwi taking part in an urgent water claim hearing warned that the Prime Minister's comments risked "a race war".
Key's comments have also sparked a furious reaction from Government allies the Maori Party - who drew parallels with the 2004 foreshore and seabed row that split Maoridom and sparked a 40,000-strong march on Parliament.
In a statement, Maori party co-leaders Tariana Turia and Pita Sharples warned that they viewed his dismissal of the Waitangi Tribunal "very seriously" after Key said the Government could choose to "ignore what findings they might have".
"To make such comments is an insult to all of us. We believe that the Government is required in good faith to consider the recommendations of the tribunal."
They warned that they viewed Key's comments as throwing into question "the very spirit of the Treaty of Waitangi Act", and said they would not tolerate any suggestion that the mana of the tribunal could be undermined.
Earlier, the Tribunal was told that Key may have tried to influence judicial proceedings.
The urgent tribunal hearing was underway after the Maori Council lodged a claim testing the rights of Maori over water. The hearing was being fast-tracked because of the National-led government's programme to partially sell the SOEs.
This morning on TV3's Firstline programme, Key said the council's claim about water rights was about money.
Lawyer Kathy Ertel, who represents Ngati Ruapani, said they were working hard to avoid the issue becoming a race war.
The Prime Minister's comments were divisive, she said.
"This is a sub judice issue and the Prime Minister's out there saying 'doesn't matter what the Tribunal says we're going to ignore it'."
The Crown had exempted itself from a clause of the Securities Act which allowed it to now talk up the assets it was trying to sell, she said.
However, Ertel said Key should not be making any comments about the issue while the tribunal's hearing was ongoing.
Tribunal member Timothy Castle said it was extremly important the tribunal be clear what the Prime Minister had said.
"Counsel should address the issue of ... attempts to influence this Tribunal and this inquiry," he told the Crown lawyers.
Crown lawyer Paul Radich said he believed the TV3 interview had covered a range of issues.
"However your point is noted well and it will be addressed."
A 20-minute afternoon tea break was called to allow everyone to cool down after a flury of debate.
The Crown lawyers will respond to the allegations in writing by 5pm Monday.
The issue of Maori ownership of water must be sorted out before the SOEs are partially sold, an expert said earlier today.
If the ownership issue was not sorted, the Government would be unlikely to get the maximum price for shares, energy consultant Brian Cox told the tribunal.
Questions over Maori water rights would create uncertainty that would affect how much people were willing to pay, he said.
"The more uncertainty you have with regard to sale of the assets then the lower the price will be for the Crown... buying electricity companies there's always a lot of uncertainty, but the more uncertainty the lower the price."
However, if Maori ownership was established it would not negatively impact the sale, he said.
"If it was a royalty scheme that was brought in then it would be no different to the Emissions Trading Scheme which has recently been brought in. It has had an effect, which would be probably in my view very similar, but we've adjusted for that quite happily."
If the matter was not sorted it must be listed as a risk in the prospectus, he said.
Under cross-examination by Crown lawyers, Cox said he did not believe Maori ownership, and the possibility of having to pay royalties, would push companies to use other power generation sources.
It was the first time the Crown had raised any questions since proceedings began yesterday morning.
Crown submissions were expected to begin later this week.
'INTERFERENCE WITH JUSTICE'
Veteran activist Titewhai Harawira accused John Key of interfering with the justice system by saying Maori water ownership claims were just about money.
Harawira, who was at the tribunal's hearing in Lower Hutt, said it was a legal process recognised by the Government.
"This is about the mana of our people and for him to dismiss the tribunal and its potential outcomes is a blatant interference with justice," she said.
The council would take the matter to the High Court if needed, and Key was trying to influence the outcome.
"Why does he think he has a right to do this to Maori and dismiss Maori?"
Maori had already argued their rights for fisheries, language, and the airwaves.
"You hear our people yet again talking about the reasons why they have a Treaty right to make the claims for these issues."
It was sad that they were being dismissed, she said.
The hearing continued this morning with submissions from Ngati Te Ata and historian David Alexander.
Earlier Roimata Minhinnick, of Ngati Te Ata, said Key only cared about one side of the negotiations.
"He wishes to see people get angry with these claims, that's political statements."
The Maori Council and iwi appearing at the hearing were offering the Crown a solution, he said.
"We are indicating that we don't agree with their proposals. The treasure must be returned."
There were overlapping iwi interests on certain bodies of water and they could be negotiated later, he said
'NO WATER OWNERSHIP CHANGE'
Key today argued selling up to 49 per cent of Might River Power would not change the ownership of the water it relied on to generate electricity.
Key this morning reiterated the Government's view that no one owned water.
"In the same way we don't think anyone owns the sea and we don't think anyone owns air," he told TV3's Firstline programme.
"And that has been a long-standing position of successive New Zealand governments."
The Maori Council was entitled to believe Maori own water, Key said.
"As (chairman) Maanu Paul said last night, the reason is they want you all to pay for that. He said you need to pay for their water."
The change of ownership from the Government owning 100 per cent to owning 51 per cent of Might River Power didn't change the ownership of water, he said.
"It just says Mighty River Power would have to pay someone else for that water right that they are currently not paying for. I don't agree with that."
The Maori Council didn't represent all Maori, he said.
The next course of action it was "likely" to take would be in the High Court. "They may well try to injunct the Government to halt the (sales)."
Labour's state-owned enterprises spokesman Clayton Cosgrove said Key was trying to 'muddy the waters" over water rights.
"This is silliness to cover a totally botched process."
There was no difference between owning water or water rights, he said.
"Ownership is the key. These assets own and control water rights."
Central North Island iwi Ngati Tuwharetoa told Parliament it had gifted back water assets to the Crown during its settlement process because profits generated from those assets would go towards the public good, Cosgrove said.
"If you flog off part of those assets the private sector then gains a percentage of the profits of those assets, that wasn't the deal."
Greens co-leader Russel Norman said the Maori Council had gone to the Tribunal to establish the nature of those rights.
"Key has come out and said basically he won't take any notice of what they say which is actually a real affront. It's a long time since we've had a prime minister who says 'I don't care what the Waitangi Tribunal says'."
The Government was in for a long court battle because the Maori Council had a strong case, he said.
The Tribunal will consider whether Treaty claimants are being denied a future stake in the state-owned power companies and the broader questions of Maori water and geothermal rights.
The Government could buy back shares at market rates to settle Treaty claims.
- © Fairfax NZ News
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