Saturday, September 15, 2012

Michael Coote: National underestimates tribal ambitions for racial superiority

Potential investors have been rightly dismayed by the racial water rights fiasco that has engulfed and contaminated proposed partial sales of Mighty River Power, Genesis Energy and Meridian Energy. The supposedly slick, market-savvy National minority government of prime minister John Key has been left looking feckless, outflanked and amateurish in the process.

It will be remembered that the three publicly-owned electricity generators, along with ailing Solid Energy, were touted as partial equity selldowns by National without any serious thought given at the time to Treaty of Waitangi contingencies embedded in the State-owned Enterprises Act. It was the beginning of the end when National was subsequently cornered into putting a Treaty clause into the enabling legislation for the mixed ownership model (MOM) of SOE partial privatisation.

Once that was done, the door was opened to legalised looting by Maori tribal commercial interests, of which the Maori Council’s complaint to the Waitangi Tribunal was but one manifestation.

One has to go back to the predecessor Clark Labour government’s hamfisted destruction of attempts to sell controlling interests in Auckland International Airport to foreign investors to find anything so bad for the reputation of New Zealand’s share market.

Maori tribal water rights claims over MOM SOEs have since metastasized into something far bigger than perhaps even the Maori Council realised it would achieve in its Tribunal action.

With its MOM proposal, National irretrievably conceded that publicly-owned water rights could be privatized for the commercial benefit of self-interested minorities, be they shareholders of the 49% of SOE equity to be sold down, or opportunistic Maori tribes.

Maori tribal commercial interests and their often taxpayer-funded lawyers were not slow to see that such a concession meant that all water rights in New Zealand could potentially be privatised into tribal ownership.

Lucrative race-based rights of veto, danegeld extraction, and perpetual royalty streams would ineluctably follow.

One of the fictions to be dismissed in this water rights gold rush is that allegedly ancestral, spiritual and Treaty-hallowed Maori tribal interests in water rights are something holier than ordinary private property claims.

The twist with Maori tribes is their race-based demand to enjoy Treaty partnership pre-emption in acquiring private property interests in fresh water ahead of all other competing private interests.
It’s not as if National wasn’t told that it was putting the necks of all New Zealanders in the strangulating Maori tribal water rights noose.

In early May of this year, Ngati Tuwharetoa chairman Tumu te Heuheu warned Parliament's finance and expenditure committee that there was going to be a major stoush if MOM went ahead.

“Our concern as legal owners is that the mixed ownership model will privatise electricity generation operations on our waterways without us being given any say in the matter,” he said.

“'We are not prepared to stand by and watch private commercial interests generating private profits from lakes and rivers that we own.”

“The trust board has previously not opposed the use of the Taupo waters for electricity generation on the basis that it involves the use of the Taupo waters for public good, primarily on a cost recovery basis.”

Herein lay the breakdown of the longstanding moral agreement whereby Maori tribes accepted they would not demand commercial benefit from a public good in water rights provided no competing private interests could seek to profit.

Finance minister Bill English promptly stripped off the government’s residual figleaf of integrity in the MOM process by saying of the Ngati Tuwharetoa objections, “As you get down the track there will be some kind of settlement which generally involves some cash, or involves the transfer of some Crown assets to them.”

The message from Mr English was clear – Maori tribes that made a fuss about MOM-related privatisation of formerly publicly-owned water rights could expect a payoff in cash or kind.

In light of that open invitation to go for the jugular, the taxpayer-funded Maori Council can hardly be blamed for doing the logical thing in running off to the Waitangi Tribunal.

Nor can the Tribunal be faulted for trusting its political survival instincts in finding for the Council after Mr Key dismissed its decisions as something to be safely ignored in the headlong rush to list SOE shares.

Now we find that Hawkes Bay’s Ngati Kahungunu have leapfrogged the MOM spat to launch their own tribal private claim over New Zealand’s second largest aquifer through law firm Chen Palmer.

Maori water rights claims have gone viral, and the beginning of an era of a pervasive “Maori tax” inflicted upon the economy via blanket rent-seeking activities imposed on natural resources looms.

All-tactics-and-no-strategy Mr Key faces further corrosion of his tarnished political credibility as New Zealanders find they have increasingly little reason to trust in his hubristic and vainglorious underestimation of limitless and litigious Maori tribal demands for racial superiority.

First published in the National Business Review.

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