Treaty clause complicates asset sales

State Owned Enterprises Minister Tony Ryall. Photo / APN

Maori political leaders are urging iwi to object strongly to suggestions the Government will not include protection of Treaty of Waitangi rights in planned legislation on partial state asset sales.

Next week, the Government will begin a series of hui about the law changes needed to sell partial stakes in four energy companies. It says it wants to know Maori views before final decisions are made.

A new law is required to allow the Crown to sell up to 49 per cent of the shares in Genesis Energy, Meridian Energy, Mighty River Power and Solid Energy.

Yesterday, Maori Party co-leader Pita Sharples and Mana leader Hone Harawira both called for Maori to oppose suggestions that a clause which protects Treaty of Waitangi rights under the State Owned Enterprises Act would not be included in the new legislation.

That clause prohibits the Crown from acting in a manner inconsistent with the principles of the Treaty of Waitangi and has been the subject of several legal cases to clarify it.

Yesterday, State Owned Enterprises Minister Tony Ryall confirmed the clause might not apply to the companies under the mixed ownership model. He said specific clauses which require the Crown to compulsorily re-acquire land for Treaty settlements would apply, as they did under the State Owned Enterprises Act.

However, the more general Treaty clause was one of the topics the Government wanted to discuss with iwi - indicating the Government was unwilling to include it.

Including the same clause in the new legislation would increase the chances of legal challenges to the partial sales and the potential uncertainty could put investors off.

Dr Sharples said the Government wanted to dump the protection clause so it could get a better price for the power companies.

"If the Government is committed to acting in accordance with Treaty principles and it is to remain the majority shareholder in the SOEs, then why do we need to remove Treaty protections anyway?"

He said the plans for partial sales raised issues such as water rights which were still under discussion between Maori and the Crown.

Mr Harawira said the Government clearly saw that clause as impeding its plans.

"The Treaty is stopping the Government from flogging off the nations assets, so they're going to throw the Treaty out."

He said Maori should go to the hui to defend the Treaty "and join the fight to ensure that no more of our lands and resources are lost to overseas interests".

Mr Ryall said the 1986 State Owned Enterprises Act was "old" and more recent legislation tended to use more specific Treaty clauses. The Treaty clause had not applied following the sales of Contact Energy in 1999 and other SOEs in the late 1980s and 1990s, although the specific land protection clauses had as they would under the mixed ownership models.

The hui will begin on February 8.

KEY ELEMENTS

State Owned Enterprises Act 1986:

* Section 9: Crown cannot act in a manner inconsistent with the principles of the Treaty of Waitangi.
* Section 27 A-D: Land subject to a Treaty claim would have a memorial on its title so Crown can compulsorily re-acquire it.

Proposed legislation for the partial asset sale companies:

* Section 9 up for discussion.
* Section 27 A-D will apply.