Iwi to get their fish after 14 years of infighting

By IRENE CHAPPLE


For two hours every weekday morning Radio Ngati Porou's Heni Tawhiwhirangi hosts a talkback show that leaves her mind spinning. Her shoulders have slouched by the time she winds up calls at midday.

"You can go through six different topics," she sighs. "You get almost braindead doing this show."

There's the foreshore and seabed debate, aquaculture rights and, about once a week, Maori fisheries allocation.

Within a fortnight, the Maori Fisheries Bill will be law. That means the 70-odd iwi around the country will finally, after 14 years of infighting, receive their share of $700 million worth of cash, fish quota and shares - assets from the so-called Sealord settlement of 1992.

The act will create the country's largest fishing group, Aotearoa Fisheries, which will have an interest in more than a third of the $1.2 billion export industry.

It will be an umbrella group that will control companies previously held by the Treaty of Waitangi Fisheries Commission, pending agreement on distribution.

Its Maori shareholders will receive dividends from its profits.

This is a monster whose creation, after a settlement with indigenous people, is believed to be unprecedented.

There is much riding on its success.

Its arrival and the allocation of the assets will trigger huge opportunities for iwi - and some rather curious commercial interplays in the fishing industry.

For the moment, Tawhiwhirangi is busy trying to explain to her callers this allocation is not the same as an electricity company dividend.

The iwi's receipt of cash and quota, which has been leased from the commission pending allocation, will be a financial leg-up that will, if it is well managed, offer long-term economic sustenance.

Radio Ngati Porou's offices overlook Ruatoria's drab main street. "I don't," says Tawhiwhirangi, "want to see this picture in two or three years' time."

She hopes the allocation will bring an economic flush to the area. But right now, "There is confusion over whether there's going to be a cheque in the mail ... there is a lot of misinformation".

Indeed confusion - or at least, a need for more time to understand the model - is not uncommon among those who have a stake.

The mechanism by which iwi will take ownership of their assets is complex and the commercial intricacies it will create are gradually surfacing.

Words such as "bidding war" for quota are being bounced around.

Here's why: Aotearoa Fisheries will own several subsidiary companies and have a half stake in Nelson-based fishing giant Sealord, with Japanese company Nissui.

Aotearoa Fisheries, like any smart-minded business, will want to build up economically viable access to quota. As does Sealord, as does the industry's other big player, listed fishing company Sanford.

Iwi previously leased their share of quota, now they own it.

Some already have commercial arrangements in place from their years of leasing quota. But ownership puts a long-term commercial slant on proceedings.

Which puts iwi in a rather nice position. Fishing quota, in an industry that is struggling and is awaiting a hefty slash in the allowable catch of valuable hoki, is precious.

In some species, curiously, Aotearoa Fisheries may end up bidding for iwi quota head to head with its own investment company, Sealord.

The chief executive of Sealord, Doug McKay, isn't concerned. He says crossover will be minimal because the companies chase different species. Sealord and Sanford are more natural competitors.

But Treaty of Waitangi Fisheries Commission chairman Shane Jones, architect of the allocation plan, admits it's an unusual situation.

He suggests Aotearoa Fisheries and Sealord may work together.

But he is well aware iwi will want the best possible price for their quota.

"We are in a dilemma ... iwi are expecting from Aotearoa Fisheries and Sealord ongoing superior performance and, at the same time, iwi are expecting a handsome flow of quota revenue.

"It will be fascinating to see where the price [of quota] settles."

Sanford managing director Eric Barratt says the fishing industry is unusual in that the quota system limits catch and forces it to be a "New Zealand Inc" when operating in export markets.

"The whole industry attempts to work together at least with sharing information," he says.

Even so, pending negotiations with iwi over access to quota will "certainly create some competitive tension".

The challenge for Aotearoa Fisheries is to convince iwi to sign up as partners. To bulk up its asset base, Aotearoa Fisheries must prove to iwi it offers the best long-term financial prospects.

It must show it can survive and prosper in an industry constantly struggling against unknowns such as the weather, fluctuations of the dollar and fuel prices.

Its Maori ownership does not guarantee it access to Maori-owned quota.

Listen to Ngati Porou chairman Api Mahuika on whom his iwi would favour in negotiations: "Whoever gives us the best money. This is about commerce ... we want to make money for Ngati Porou and if Aotearoa Fisheries [doesn't offer enough] we will go somewhere else."

Others point out it's not just money that talks - opportunities of employment are also important - but views similar to Mahuika's are no doubt being echoed through New Zealand.

And there is still concern around Aotearoa Fisheries' governance structure, which came under attack during the select committee hearings, completed last month.

Richard Meade, a Victoria University lecturer on corporate governance, principal of Cognitus Advisory Services, and adviser to the allocation model dissenters the Iwi Forum, believes the structure is deeply flawed.

Meade, like South Island iwi Ngai Tahu, remains strongly opposed to the multi-layered corporate governance structure.

In his submission, he said a "glaring feature" of the model was "the extent to which control over the fishing company assets held by the commission on behalf of iwi is separated from the hands of iwi".

A vote by the iwi groupings at grassroots chugs through five layers of governance before it has any influence on the appointments of Aotearoa Fisheries' directors.

Meade compares this to a normal corporate structure: a board of directors, company shareholders. "The point I made to the select committee was there can be problems if there is one layer of management ... this is off the scale."

The select committee's report has failed to dilute such fears, despite recommending review procedures be more regular than originally suggested. The company will now be subject to operational audits every four years and a full governance review in 11 years.

The committee's chairman, Labour MP Russell Fairbrother, told the Business Herald it only wanted to tinker with the bill, given the delicate negotiations that had got it to the table.

Jones responds to Meade's criticisms carefully.

"He has established credentials but I find lurking beneath his analysis the [right-wing political party] Act ideology and I don't care for that at all."

As for the reference to companies like Telecom. "Telecom shares are held by fund managers and there are a host of entities behind those so I think he is being very simplistic."

And Maori governance is simply not at the stage whereby a purely commercial model will suit.

"The reality is we have 70-odd iwi who are shareholders, many of whom have institutional arrangements which are yet to be fully tested and which are responsible for goodness knows how many hapu."

Anyway, says Jones, the governance review will be no holds barred. If the structure can be streamlined, so be it.

For now, iwi must put such concerns to bed while other decisions - whether to set up an iwi-based fishing company, whether to work with established companies - are made.

It is up to executives such as Robin Hapi, newly appointed chief executive of Aotearoa Fisheries, to convince iwi his company will be a commercial thoroughbred.

The set-Up

* Aotearoa Fisheries will have three arms: inshore fisheries, abalone and aquaculture.

* Sealord sits outside the company's immediate structure and is regarded purely as an investment.

* There is scope in the bill for the company to invest in other sectors such as property.

* Two boards of subsidiary companies - Moana Pacific and Chatham Processing - were dismantled during the year. That will save Aotearoa Fisheries about $1.5 million a year.

* More redundancies are expected as Aotearoa Fisheries streamlines its operations further, but numbers are not yet known.