(Pattrick Smellie, Stuff BusinessDesk) – The New Zealand Maori Council’s case to stop the partial privatisation of MightyRiverPower while tribal claims to water rights are outstanding has failed at the High Court and is now almost certainly heading for appeal.
The key question now is whether it will go to the Court of Appeal, or whether grounds may be found to take it straight to the Supreme Court, thus improving the government’s chances of floating a minority shareholding in MRP on the NZX before June 30, its latest deadline for a sale to occur.
Justice Ronald Young’s judgment finds there are no legal grounds to review three crucial Cabinet decisions relating to decision to sell up to 49 percent of MRP: “the commencement decision; the amendment to the constitution of MRP decision; and the sale of MRP shares decision.”
“I am satisfied that the three proposed decisions of the Crown are not reviewable decisions,” said Young, who was aggressive in his questioning of the lawyers representing not only the Maori Council, but also two litigants connected to the Tainui iwi, who live along the Waikato River, harnessed by MRP for hydro-electricity.
The Maori Council and other parties were seeking judicial review to overturn Cabinet decision-making, an area well-tested in existing case law relating to the Treaty of Waitangi and Maori proprietary rights. If successful, the action could stop the government’s unpopular asset sales programme.
Young also found no grounds for review of decisions relating to not only Section 9 of the State-Owned Enterprises Act, preserving rights to redress for claims under the Treaty of Waitangi, but also to provisions of the Public Finance Act relating to the decision to sell.
“Parliament has decided the four SOEs (including MRP) should be removed from the SOE Act to become MOM (mixed ownership model or partially privatised) companies to facilitate the sale of up to 49 per cent of the shares in the four companies.”
The issues traversed had been dealt with by the courts in the past, in challenges to earlier sales of radio assets.
“No review of Parliament by the Courts is permitted in law,” said Justice Young, who was also satisfied there was no breach of the legally binding settlement between the Crown and Tainui over compensation for raupatu lands confiscated in the 19th century.
“The sale of shares was not a sale that required the Crown to engage with Waikato-Tainui.”
The Maori Council issued a short statement saying it was working on an appeal.
“The matter has been determined on a narrow legal issue. The moral issue has still to be addressed in public debate,” the council said.
The MRP sale is intended by June 30, allowing potential for the partial sale of either or both the two other state-owned electricity generators, Meridian Energy and Genesis Energy, before the 2014 election.
The asset sales are being sold politically as a key part of the government’s capital expenditure programme. Without the proceeds of asset sales, investments in KiwiRail and irrigation schemes, among other priorities yet to be announced, either won’t go ahead or will require unwelcome new government borrowing.
Justice Young also rejected the Waitangi Tribunal’s suggestion in its interim report on the claim lodged for water rights recognition that issuing shares created a “nexus” in the process of claim settlement that meant Maori interests should be offered a “shares-plus” arrangement, involving elements of non-commercial co-governance as well as a shareholding in the SOE for claimant groups.
“I am satisfied there is no nexus or connection between the sale of shares in MRP and the need to provide for Maori claims to proprietary interest in water.”
The government has argued that, as majority shareholder, its obligations under the Treaty are not extinguished in the event of a successful claim, and any costs as the result of a Maori grievance settlement would be fully borne by the government as the Crown and Treaty of Waitangi partner, rather than as a shareholder in the company.
“I am satisfied that the Crown when proposing to make each of the three decisions will not act inconsistently with the principles of the Treaty,” said Young.
Consultation on the issue, which the government undertook urgently to ensure it was complying with its Treaty and legal obligations, had been adequate, the judge ruled.
Finance and SOE Ministers Bill English and Tony Ryall welcomed the judgment.
“The Government remains committed to an initial public offering of MRP shares in the first half of 2013,” said Ryall. “If the High Court decision is appealed, we hope this can be heard as soon as possible.