Sunday, September 11, 2016

Mike Butler: Forestry trust assets shrink

Crown Forestry Rental Trust funds are diminishing as more forestry land is given to claimant groups is the unsurprising 2016 message of the trust to its appointors -- the New Zealand Maori Council, the Federation of Maori Authorities and the Minister of Finance, Bill English.

The trust was set up under the Crown Forest Assets Act 1989 as a self-funding organisation that is midway between the Crown and Maori to hold Crown forestry land that may be subject to treaty claims and collect rentals paid to the Crown for forests grown on Crown land.

The trust’s 2016 report noted that for the period 1990 to June 2009 there were only five settlements which involved the transfer of approximately $56-million of rental proceeds. Since July 2009 there have been 21 settlements which have involved the transfer of over $470-million of rental proceeds. (1)

The largest of these settlements occurred in July 2009, where the rental proceeds held by The trust were almost halved with the distribution of just under $289-million in accumulated rentals as part of the Central North Island Iwi Collective and Affiliate Te Arawa iwi and hapu settlements, chair Rakihia Tau wrote.

There were two substantial transfers of accumulated rentals to claimants totalling $23.4-million. Funds held in trust stood at $137.5-million on balance date, down from $154.6-million the previous year.

A total of $13-million of funding assistance was provided to approved clients and total Trust expenditure for the year was $16.1-million. A total of 21 clients were engaged in, or completed, the settlement negotiation process and a further 10 approved clients were currently involved in the Waitangi Tribunal process, the report said.

As well as preventing the Crown from selling the land until the Waitangi Tribunal recommends who should be awarded ownership, the Act empowers the trust to sell licences for forestry and to receive forestry rentals, hold them in trust and invest them.

Interest earned was intended to help Maori claimants prepare, present, and negotiate claims that involve or could involve Crown forestland. (2)

If forestry assets form part of the financial redress of a settlement, the claimant would receive, in addition to the licensed forestry land, the rentals earned from that land back to 1990, plus interest on those rentals.

Whatever forestry land remains after settlements have concluded was intended to return to the Crown, along with all the rentals of that land.

As claims progressed, the trust faced accusations of favoritism, waste, and lack of accountability. These accusations prompted an inquiry by the Maori Affairs select committee in 2001, which resulted in the trust vowing to become more transparent and to stick to funding claimants. (3)

The purpose of the Crown Forestry Rental Trust gradually shifted. The 1990 trust deed specified assistance for “claims that could involve Crown forest land” but trust chairman Sir Graham Latimer, who died this year, said, in the 2002-03 report, that the aim was “to expedite the return of Crown forest licensed land”. (4)

A further tilt from the stipulations of the trust deed came in 2007, after two of the trust’s appointors, the Maori Council and the Federation of Maori Authorities, sued the trust and the Crown in order to prevent payment of rentals to either Te Arawa or the Crown.

Justice Warwick Gendall declined to judge against the Crown but noted that the Crown would need either a declaration from the Waitangi Tribunal or the consent of Maori beneficiaries before it could receive accumulated rentals. (5)

Gendall’s judgement in effect altered the Crown’s status on the trust from being a beneficiary as of right to a beneficiary if Maori beneficiaries agreed.

Sharp-eyed readers would have noticed that in the space of 18 years, the entity set up to deal with claims that could involve Crown forest land ended up expediting the transfer of Crown forest licensed land to Maori corporations, even though 19th century governments bought all that land and 20th century governments used taxpayers’ money to develop it into forestry.

1.Crown Forestry Rental Trust Report to Appointors 2015-16.
2. Treaty of Waitangi Settlements Process,
3. Huge discrepancies in Maori trust's decisions, says Tamihere, New Zealand Herald, May 2, 2002.
4. Crown Forestry Rental Trust report 2002-03
5. Crown Forestry Rental Trust report 2006-07 p5

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