Maori Battle Bankers by New Zealands Mount Doom

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(Chris Bourke – Jakarta Globe). A bus full of bankers from Goldman Sachs and other financiers bounces down a dirt track on New Zealands North Island to survey sites that are dividing the nation, pitting John Keys government against Maori who have lived here for centuries.

Near the volcano that film director Peter Jackson chose as Mount Doom in his Lord of the Rings trilogy, the bankers view a drilling rig shipped from Iceland that has bored 1,100 meters of a geothermal-power well for state-owned Mighty River Power.

The company plans to sell shares this year in the first of four initial public offerings Key says will help raise as much as 7 billion New Zealand dollars ($5.7 billion), the nations biggest asset sale in two decades.

Some Maori say the sales violate the 172-year-old Treaty of Waitangi, New Zealands controversial founding document that gave the indigenous people rights to their land and resources. They are mounting a legal challenge to the IPOs that Key says will raise money for schools and roads after the country lost its top credit rating because of growing debt.

Overseas investors just really want to understand what it is theyre buying into, said Mai Chen, who founded Wellington-based law firm Chen Palmer with ex-prime minister Geoffrey Palmer. What they dont understand is this black box called the Treaty of Waitangi.

Maori want to stop their taonga, or treasures, from being controlled by private investors who the government says wont be liable for any unresolved treaty claims. The companies make power from resources including rivers and underground steam in areas of scenic beauty. Most of the nations 4.4 million people oppose the sales, with Maori opponents saying they turn a sacred life force, water, into a commodity.

The government plans to sell as much as 49 percent of Mighty River in the third quarter on the New Zealand stock exchange and replicate that with Meridian Energy, Solid Energy New Zealand and Genesis Power during the next five years. It will also reduce its 73 percent stake in Air New Zealand to as low as 51 percent. The timing and order of the other IPOs have not been decided.

Goldman, Credit Suisse Group and Macquarie Group are among the banks that stand to gain fees from the sales. All three declined to comment.

To damp public opposition, Key said 85 percent to 90 percent of the companies would be owned by New Zealanders on completion of the IPOs. Overseas investors can build bigger stakes by buying shares in the market after that, State Owned Enterprise Minister Tony Ryall said in a telephone interview.

Once those resources become commodified and put on to the financial marketplace, they are raped and pillaged to maximize profit for the shareholder, said Hone Hariwira, leader of the one-seat Mana Party. Theres no holding back in that world, and thats not something that indigenous people see as being an intelligent future.

New Zealands land and resource ownership has fueled wars and racial tension since James Cook claimed the islands for Britain in 1769. The 1840 Treaty of Waitangi promised the Maori undisturbed ownership of their land, forests and fisheries in return for becoming British subjects. Alleged breaches of the treaty have split national opinion since the 1970s when Maori, now 15 percent of the population and with almost triple the white unemployment rate, began seeking redress.

The New Zealand Maori Council filed two claims in February with the Waitangi Tribunal, an independent panel. The council argues that Maori rights to water and geothermal resources have been denied and the IPOs should be stopped. While the tribunal can only recommend actions to the government, it has helped return about 1.2 billion New Zealand dollars of cash and property to Maori complainants since the early 1990s.

Nobody owns the nations water, the New Zealand Herald reported Key as saying in February. A 2009 cabinet paper said Maori water rights remain undefined and unresolved.

Theres no doubt that it needs to be resolved, Chen said. The tribunal has granted the claims urgent hearings, which are likely to be heard before the IPO of Mighty River, she said.

The dispute follows a public outcry over the governments January approval of the sale of 16 dairy farms to China-based Shanghai Pengxin Group. Opponents including the three-seat Maori Party said parts of New Zealand were being sold off to the highest bidder.

That deal is being reviewed after a rival bidding group of local dairy farmers led by businessman Michael Fay successfully appealed in court.

Keys sale program is New Zealands biggest since the government raised about 10 billion New Zealand dollars between 1988 and 1990, including the sale of Telecom Corp. of New Zealand to US phone companies, government figures show.

Mighty River, which sells electricity to more than 370,000 customers, has been showing bankers and lawyers around its power stations, workers said during a site visit. The company operates hydroelectric and geothermal stations near Lake Taupo, New Zealands biggest lake, where tourists jet-boat through river rapids or take winter skiing holidays on Mount Ruapehu, Jacksons setting for the fiery Mount Doom.

Maori groups are seeking a substantial shareholding interest in the IPOs as one form of compensation should the sale go ahead, the Waitangi Tribunal said. Some Maori oppose the indigenous councils claims after already settling with the government and forming successful joint ventures with companies such as Mighty River for years.

Harawira last month wrote an open letter to overseas investors, warning them to steer clear of any share offers or they may be caught up in legal battles and direct action from citizens determined to protect their own interests.

Finance Minister Bill English, Ryall and other officials spent two weeks in February talking to chiefs of Maori tribes and their families about the sales in a series of hui Maori community meetings across the country.

The assets involve natural resources and to us, those are taonga and belong to the inhabitants of this place, said Pita Sharples, co-leader of the Maori Party, which is also in coalition with the government. Its part of our cultural and spiritual identity the water and the mountains and the forest.

Bloomberg

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2 COMMENTS

  1. Hopfully NZers will buy the majority of the shares, but even so, they are having to buy something they already own.

  2. According to the New Zealand Herald, in February John Key said that ‘Nobody owns the nations water’. So, what makes him think he has the right to sell it off then – you are a hypocrite Mr Key…

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