The fact that the Waitangi Tribunal's recommendations may be "ignored", as Prime Minister John Key bluntly reminded us this week, is indirectly one of the reasons it is held in such high regard by Maori.

The fact that it is non-binding has given it greater latitude over the years to make findings and recommendations to address historical breaches of the Treaty of Waitangi without needing to worry about its impact on others.

That's the Government's headache. And the current one has the potential to be binding.

The stakes in the claim before the tribunal to delay the partial sale of state-owned enterprises are high because so much Government credibility is vested in the outcome.


It involves National's flagship policy of partial privatisation of SOEs and very possibly its ability to hold together a Government.

Key is adamant no one owns the water but he may be forced by courts to a position where he must negotiate a settlement with iwi over water.

Keeping his own supporters on side in that eventuality would be a test for the ultimate deal-maker.

In the short term, the intertwining of the SOE sales and the ownership of water will be doing Key no harm in the general constituency.

The strong backing for his view that nobody owns water may be further diluting the opposition to the sales, which has been soft anyway in the sense that it did not damage National's vote.

Winston Peters and New Zealand First have the simplest position: oppose the sales, oppose the Maori Council claim to the tribunal. He has long opposed the "Treaty industry".

The connection between the SOE sale and the ownership of water is that it's making life complicated for the Greens and especially for Labour in their opposition to the sales.

Labour has exactly the same position as National - nobody owns the water - and if there were an adverse finding of the Waitangi Tribunal would not necessarily follow them.


Yet leader David Shearer is unable to articulate it strongly for fear of sounding like National and for fear of offending the party's Maori constituency.

Instead, he joined Mana's Hone Harawira this week in calling for the Maori Party to end its support agreement with the National Government.

The time for the Maori Party to abandon Government is if and when National either ignores or legislates against a High Court decision on the ownership of water, not when the Prime Minister unintentionally offends Maori.

However, there's a lot of water to pass under the bridge before that happens.

And here's a guess at what will happen next.

In all likelihood, the tribunal sitting at present will find that Maori have a proprietary interest in water.

It may find the Government breached the Treaty of Waitangi in 1967 when it nationalised all water development rights under the Water and Soil Conservation Act, such as building hydro-electric dams, without consulting Maori - the permitting system on behalf of the Crown was passed to regional councils under the Resource Management Act 1991.

The tribunal won't define what the Maori proprietary interests are, and it will recommend that the SOE sales process be delayed so the issue of what interest Maori have in water can be explored.

The Government will consider the report and decide that what its lawyers are telling the tribunal this week still holds.

Their position is that nobody owns the water, and that iwi are an integral part of the land and water forum which is developing a new water use regime.

The Crown's position is that even if it was established that Maori had water and geothermal rights under the Treaty of Waitangi, and then it was found that the Crown had breached those rights, there would still be insufficient link between the sale of 49 per cent of the shares and the Crown's ability to remedy any breach to justify stalling the sale.

That is, selling the shares would not preclude it from reaching a settlement with Maori.

After that, the Maori Council claimants at the tribunal and/or specific iwi would apply to the High Court for an injunction to stop the first sale - of Mighty River Power shares - pending a substantive hearing on the water rights issue.

This is where delay to National's plans could be a real possibility, simply by procedure.

The plan has been to start the selling process in September and to have them listed on the stock exchange by the end of October or November.

The Government is expecting all this and is preparing to put up as strong a case as possible at any hearing for an interim injunction.

Given the unwavering stance of Key - it's a long-held position of the New Zealand Government, not just a personal view - that nobody owns the water, it is unthinkable that the Crown would simply enter negotiations for a settlement without an adverse finding from a court, and probably the Supreme Court.

A delay going into next year is not improbable and that could see it run uncomfortably close to a citizens-initiated referendum on SOE sales if the requisite petition signatures are gathered this year, well ahead of the May 3 deadline.

There is no inevitability about a finding on water. But given the Court of Appeal's Ngati Apa decision about the foreshore and seabed, and the recent Supreme Court "Paki" decision on paving the way for Maori to seek ownership of a section of the Waikato riverbed at Pouakani, it could hardly surprise the Crown to get a finding adverse to its case.

So could the Government have foreseen the Maori Council tribunal case and done something to prevent it? Yes, it could have foreseen it and no, it could not have prevented it.

The SOE sales precipitated a claim that would most likely have been made eventually, even without them.

The Government has been aware for a long time that Maori have asserted ownership rights in water. In specific settlements, it has come to co-management arrangements with neither the Crown nor iwi surrendering their respective positions on ownership.

The Government's preferred vehicle of consultation - iwi leaders as opposed to the Maori Council - has for several years been deeply involved at ground level in developing a new water management regime, yet to be finalised. Contrary to perception, it has long realised it's an issue that cannot be ignored.