The hidden agenda behind asset sales will hurt Maori | Rawiri Taonui


Foreign investment is not inherently bad, but it cannot be used as an excuse for the Government to evade its Treaty of Waitangi obligations. Reciprocal investment is a fact of modern economics. We invest in other countries, they invest in us – China wishes to buy the Crafar farms, Fonterra has purchased three farms in China.

However, questions must be asked when foreign investment controls too much of our wealth or when our Government loses transparency and misleads its citizens.

The Government’s move to expunge or change section 9 of the State Owned Enterprises Act, before floating shares in Meridian, Genesis, Solid Energy and Mighty River is one such case.

Finance Minister Bill English says consultation with Maori will meet the standard courts require.

However, the process being followed reflects an indecent haste reminiscent of the SOE Act consultation in 1986, when Labour gave Maori just six weeks to research and lodge all historical Treaty claims.

There has been an astounding lack of consultation with parliamentary partner, the Maori Party.

National’s release of the consultation document just before Waitangi Day when Maori were gearing up to either celebrate or protest gave just one day afterwards to digest the document, organise and frame arguments for consultation hui ending on Wednesday.

There is just one further week to make written submissions.

The terms of consultation also bar Maori from raising Treaty claims to fresh water, geothermal energy and enhanced opportunities either to have shares granted in a Sealord-type settlement or to buy a portion of reserved shares as with the electromagnetic spectrum.

The Crown is guilty of much double-talk. Prime Minister John Key’s claim that s9 is symbolic and never used has been rightly condemned.

Obviously, if it is never used why get rid of it? And, far from being just symbolic, s9 has shaped positive progress on race relations over more than two decades.

Mr Key’s claim that s9 should only bind the Crown and not private-sector shareholders in a mixed ownership model is equally tendentious. Indeed, s9 already only precludes the “Crown” acting in a manner inconsistent with the principles of the Treaty.

The draft consultation document, inadvertently released by Treasury, stated that s9 would deter investors.

That is doubtful. New Zealanders are already familiar with the Treaty.

As for possible foreign investor China, the New Zealand China Free Trade Agreement already includes a Treaty article, which has not put them off buying record numbers of Government Bonds.

As commentators have already noted, private investors buying a minority stake in a state-owned company accept Government obligations as a trade-off on the security of a state-backed asset.

National also says they will retain section 27, which empowers the Waitangi Tribunal to order the return of SOE land to Maori. On paper that has more consequences for private investors than s9 – so why the double standard?

One reason is simple window dressing. The Government knows s27 has only been invoked once, in the Ngati Rangitukia claim in 1997. The then Treaty settlements minister Douglas Graham, publicly threatened to “restructure” the tribunal. Section 27 has never been pursued again.

The second is that National wishes to avoid possible post-sale difficulties if China makes a bid, a scenario that seems more certain than day following night.

Mr Key and Chinese Premier Wen Jiabao wish to double two-way trade under the new “Opening Doors for China” strategy by 2015. The China Investment Corporation, which holds more than US$330 billion (NZ$398b), has reportedly reserved US$6b for investment in New Zealand. Particular interest has been expressed in “infrastructure”.

The Crown’s problem, previously highlighted by Greens co-leader Russell Norman, comes from guarantees under Chapter 11 and Annex 13 of free-trade agreement which mean our Government may be required to compensate Chinese investors for any post- sale measures that lowers the value of their investments.

Future settlements on Maori claims regarding fresh water and geothermal power, now before the tribunal, might have that effect.

Some commentators claim China is applying pressure on the Government over s9.

More likely, National is seeking relief by ditching the Treaty clause which has the effect of negating Maori claims in advance. Three of the four companies have water generation plants; Mighty River Power operates two geothermal stations.

The Government also appears to be overcompensating on investment issues around the free-trade deal.

Trade has grown under the ground-breaking first free-trade agreement between an OECD country and China. However, Chinese investment stock in New Zealand is just $1.87b compared with $100b in Australia. Kiwi investment in stock in China is a paltry $541m million compared with $36b in Australia.

China has expressed concern that New Zealand treats Chinese investment applications differently than those from other countries.

For example it questioned delays over the Shangai-Penxing bid for the Crafar farms. Trade Minister Tim Groser was dispatched to Beijing to explain those delays.

The eight-member private-sector China Beachhead Advisory Board resigned last year claiming Government mismanagement of investment in China.

Land Information Minister Maurice Williamson’s claim that raising questions about Chinese investment was racist is a distraction from the real intent.

The reality is, the Government is using the excuse of minority private shareholdership to absolve itself of obligations to Maori.

The first un-transparent mixed ownership model was in 1840; 146 years of turmoil followed until an elegant solution was found in s9.

Rawiri Taonui is Adjunct Professor of Indigenous Studies at AUT.


  1. When Geoffrey Palmer repealed the 1852 UK constitution in 1986….he did not have the power to do so….It did not take away Section 71 contained in the NZ Constitution Act1846 sub section 10. This section applies to the role of the Governor General which says….”you must not govern over maori , you are to govern over tauiwi..Maori govern themselves under the Declaration of Independence dated October 28th 1835, under Article 2 and they continue after the Treaty of Waitangi to govern themselves under section 10 of the Constitution Act 1846……need we say anymore… is just that no one has actually known of this section to the Constitution Act 1846…interesting WHAT????

  2. If you approached the Judiciary branch of Government you would probably find that the legislation once passed by government also holds the government to account which means it is probably acting illegally in trying to do away with section 9 as it was actually put into place by the government. one of those checks and balances of power maybe? Any sales of crown owned land well its a sovereign government and acts on behalf of the Crown but also needs to meet its Treaty Obligations satisfactorally.

  3. There is a wider scenario to the worlds problems at the moment but for me I am concerned that this Government has no Constitution at the moment..Geoff Palmer dissolved the last one…in 1987 I think

    No Government, President or Monarch, no Institution of Law or Enforcement should be created or allowed to exist and to function without a Constitution. No one should have power over others unless and until that power and conditions of it’s use, have been strictly defined. Government without a Constitution is Power without Right

    Why has no one challenged the Government on this very real issue….in my view to allow them to sell off our land without the power to do so is tantamount to a treasonable act,

    These are my views regarding the sale of our assets/

    Bill English has also stated publicly that he is only guessing at the advantages from the sale of the SOE’s…how irresponsible is that….so there has to be another agenda….so it is even more imperative that the people rise up and object…..forcibly if they have to.

    • I couldn’t agree more Moyra. Time for some changes before it is too late and time for the Government to be held accountable for breaking the law.


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