The Government faces a complex matrix of issues in deciding whether or not to delay the sale of Mighty River Power until the Waitangi Tribunal issues its report on whether the partial sale proceeding will prevent the Crown from settling any issues of water rights on the rivers where SOEs have hydro-dams.
My initial reaction was that of course the Government should delay the float until it receives the Tribunal's report, due in September. This might be a delay of a few weeks only, and what does a few weeks matter.
It seems the timing is more sensitive than one may initially think. The rules around issuing shares in a company require the most up to date set of financial accounts. If the flat is held too long after the annual accounts have been finalised, then the company has to prepare a special more recent set of accounts. This is no minor job and can take a month or two.
Preparing the accounts can't really be done over the summer break, as too many suppliers and the like close down, so what this means is that if Mighty River Power is not listed by perhaps October, then the delay would have to be until March or April next year. So a delay of a few weeks may be a delay of six months or so. This is undesirable for the Government because they want the five partial sales done well before the 2014 election.
So the challenge for the Government is how do they minimise the chances of a delay? The Maori Council may go to the High Court to seek an injunction. Even if they do not gain an injunction, they could well get an interim injunction while they appeal that decision to the Court of Appeal and inevitably the Supreme Court.
The best outcome would be for the Maori Council to never go to court. That would suggest that the Government should wait for the Waitangi Tribunal report, and hope that it doesn't recommend the partial sales be halted.
However there is a view by some in Government that the Maori Council is acting in bad faith. The Government has been negotiating with Iwi leaders on issues around water rights for some time, and they are committed to resolving those issues. They do not believe the number of shares they hold in an SOE is relevant to their ability to resolve those issues. This is why there has been little support from Iwi for the claim by the Maori Council. There is also some anger at the fact that the Maori Council waited until the last possible moment to go to the Waitangi Tribunal, considering the policy was announced 18 months ago.
What this leads to is the alternate view that the Maori Council are going to eventually go to court regardless of what the Waitangi Tribunal says. Hence, if that is your belief, then the sensible thing is to get them into court as quickly as possible. Therefore saying you will not wait for the Waitangi Tribunal report could be a way of achieving that. It is like demanding your competitor in poker show their hand. Getting the matter into court will at least mean you are on the way to getting a final
Complicated this decision is the relationship with the Maori Party. If the Government doesn't wait for the Waitangi Tribunal report, then that puts pressure on the Maori Party from the Mana Party and its other opponents.
So there is no easy answer for the Government. Whatever decision they make has significant risks associated with it. They have to balance up the risks of delay, the risks of putting the Maori Party in a difficult position, and also the public view which while not in favour of the partial sales, would be even less in favour of having the Crown say Maori own the water. It will be an interesting test of the Government, to see how they proceed, and if their decision proves to be the right one.By David Farrar Email David