The Government also campaigned on this policy so they can claim to already have a mandate.
Litigation won't work as the opponents are up against the ultimate public law tool here, which is law reform. Parliament is supreme in law-making and the courts cannot in general stop bills. And The Waitangi Tribunal process takes time, even if the claimants are granted an urgent hearing, which is rare.
The Mom Bill is complicated, but, given the difficulty of finding a "king hit" tool, anyone wanting changes in the short term needs to make a submission. Those supporting the bill need to work against a critical mass of public opposition, and to keep the bill as introduced intact through the process in Parliament to retain majority support by voting MPs.
Despite or probably because of the concern around foreign ownership, the bill makes no reference to the Overseas Investment Act.
A Mom company could become an overseas person (thus required to get consent before buying land) if more than 25 per cent of its shares were sold to overseas persons.
The bill addresses only the four energy SOEs, and further legislation would be required to bring other SOEs in. The bill is drafted so each of the four companies can be moved from the SOE model to the Mom one at a time by order-in-council. This regulation can be made without going through Parliament, providing Government better control over timing.
The bill establishes a legislative framework for the mixed-ownership model. Its key features include:
* New section 45Q of the Public Finance Act will provide that nothing permits the Crown to act inconsistently with the Treaty of Waitangi. This binds the Crown, but not the company or other shareholders.
* New section 45R of the Public Finance Act, which prohibits the shareholding minister(s) from selling shares in a mixed-ownership company or permitting share issues by a Mom company to reduce or dilute the Crown's control of a mixed-ownership company to less than 51 per cent.
* New sections 45S and 45T of the Public Finance Act will prohibit a person other than the Crown from holding a "relevant interest" in more than 10 per cent of the securities of a Mom company. "Relevant interest" is defined in sections 5 to 6 of the Securities Markets Act.
* New sections 45U and 45V will allow trustee and nominee companies to own more than 10 per cent of the securities of a mixed-ownership company, subject to the right of the FMA to revoke that exemption if it is abused.
* New section 45X provides that various provisions continue to apply to a Mom company, including the transfer of assets from the Crown to companies, the obligation to offer back land acquired for public works purposes if it is no longer required, and the Crown's power to resume land transferred to the company from the Crown on the recommendation of the Waitangi Tribunal.
* There are also amendments to many statutes, including likely amendments to Treaty settlement law to deal with issues such as iwi rights to first option on Crown land for sale.
Removing these companies from the Schedules to the SOE Act removes obligations on the four energy SOEs to:
* Act with a sense of social responsibility, be a good employer, or produce a statement of corporate intent;
* Follow the direction of the shareholding minister as to the dividend paid; and
* Provide information to ministers for presentation to Parliament.
Some obligations may still apply, in effect, like dividend payment, through the ministers' majority control of a mixed-ownership company. But they would be at the majority shareholders' discretion. Mom companies are not subject to the Ombudsmen Act or the Official Information Act. Nor are they subject to the Public Records Act.
The bill does not prescribe the contents of the Mom company constitutions, nor does it prescribe the mechanism by which shares in Mom companies will be offered to the public, nor whether New Zealanders will get priority.
Mai Chen is partner in Chen Palmer and author of Public Law Toolbox, published today.
