The Maori Council's Waitangi Tribunal water claim has served notice that the "taniwha" of Maori customary ownership has been awakened by the Government's partial asset sales plan.

It's a creature that previous governments have trifled with at their peril, but Prime Minister John Key this week goaded it with comments that have been widely interpreted as marginalising the tribunal and its findings before they have even been produced.

Though the elderly Sir Graham Latimer is not playing an active role in the presentation of the council's case, his presence at Waiwhetu marae in Lower Hutt and his name on court papers as first claimant at the Waitangi Tribunal hearing should serve as a warning. It was Sir Graham who initiated court action over fisheries, in a major lands case, and over radio spectrum.

Key had previously acknowledged that litigation from Maori seeking to assert rights over fresh water could delay his flagship "mixed ownership model" policy.


The council's claim seeking to delay the sale of Mighty River shares until Maori rights are tested is arguably not where the main action is in Government-Maori discussions over water. However Maoridom's peak organisation, the Iwi Leaders' Forum, is watching the claim closely. This week the forum indicated Key's confidence that water issues can be settled after the Mighty River sale by negotiations with it, is misplaced.

Key's stance is that no one owns the water in New Zealand's rivers and lakes.

But the first claimant to make a submission as the hearings opened on Monday challenged that in no uncertain terms.

"As long as my people are standing on the Earth, I'll not accept that," said Taipari Munro, a kaumatua of Whangarei's Te Parawhau.

But though Key may be right that, under current law, nobody owns water, the right to take the valuable commodity is at issue.

Landowners don't pay for water they have rights to draw on, but the presence of those water rights makes that land so much more valuable when they sell it.

Similarly, though the the SOE power companies don't pay for the water or steam that runs through their power stations, they would have little value without the right todraw on those resources.

Council co-chairman Sir Eddie Durie said ownership of the water was not what the council and other claimants were trying to assert.


"But they are saying there are particular streams, lakes, rivers, aquifers and springs that they [claimants] have used, and as a result of that use, have acquired a customary law interest in those things."

Sir Eddie said that before water was effectively allocated to private shareholders through the sale of Mighty River Power and other state assets "we must ask, are there prior interests? And we're saying yes, there are."

Submitters, including Tony Hirapi of Te Arawa sub-tribe Tapuika Tiaki, said his iwi had chosen not to assert those rights when water was used by the Government in a way that benefited the national interest, but "when it seeks to use that water 51 per cent for the nation and 49 per cent for others, we disagree".

Labour list MP and former chair of Waitangi Fisheries Commission Shane Jones, who is well-informed in both Maoritanga and Treaty law, said: "The moment the Government moves to privatise access rights or make those access rights enjoy a character very close to a tradeable property right you wake up the taniwha of Maori ancestral rights."

State-Owned Enterprises Minister Tony Ryall said the Government's position was that the mixed ownership model did not impact on the rights and interests of Maori. Case law supported that view, he said.

However the Government always expected there would be claims and potential legal action.

"That is the general road that one finds in a whole lot of these things"

That was why the Government had held a series of hui with iwi across the country earlier this year to discuss Maori rights and interests in water before introducing its mixed ownership model legislation.

But the more established and long-running consultation is taking place through the Land and Water Forum, which covers 58 groups representing primary industries, environmental and recreational organisations, iwi and others.

The land and water forum's work includes forging "a stronger partnership between Crown and iwi in managing water resources; and the need for effective involvement of iwi at all levels of water management". It also includes giving "greater certainty for investors in activities that require taking or discharging to water".

Its third report is due in September, with advice on allocation of fresh water resources, but that leaves no time for the Government to address Maori concerns before shares in Mighty River Power are sold.

"And that goes to the nub of the action before the Waitangi Tribunal," Ryall acknowledges.

"In terms of the claim that's been made to the tribunal they've already got a clear view that they want to get the issues around water dealt with before the floats, and obviously we think there's a separate process for that."

Ryall said the Government believed allocation issues, including how Maori interests fitted into those, could be dealt with after the sale.

That view was challenged at the tribunal hearings with evidence from expert witness Philip Galloway, an Australian investment banker experienced in energy company privatisations.

Galloway said he saw three possibilities for recognising Maori interests, through a new water rights regime, via royalties for water use, and through the allocation of shares.

All three, however, would be impractical to implement following the sale of shares to private interests, he said.

Wellington-based electricity industry consultant Brian Cox, on the other hand, saw the allocation of shares in the companies to be part-privatised as the best way to recognise Maori rights that may be established.

Finance Minister Bill English has said the Government may buy back shares sold off in the partial privatisations if necessary to settle successful claims and he refused to rule out holding some shares back in the sales process to meet claims.

But that is likely to meet future claims rather than those being heard this week.

Whatever the tribunal decides, as Key says, the Government is not obliged to follow its recommendations.

And though his comments may have been misinterpreted, given Treaty issues have proved to a minefield for previous Governments he should perhaps have chosen his words more carefully, said Jones.

"I'm surprised he never said that when the report comes out he'd deal with it then, if indeed it puts an obstacle in front him."

As things stand, Key's comments have strained relations with the Maori Party, which was itself formed after Tariana Turia walked out on the Labour Government over the foreshore and seabed issue.

Turia says Key's comments have encouraged an outpouring of racism on talkback radio and elsewhere from those hostile to Maori claims over water and other resources.

Arguably that reaction has been nowhere near as intense as that over the foreshore and seabed issue, and that may be due to the strong public opposition to the Government's asset sales programme. But the possibility that Key's comments could be seen as an attempt to influence the Tribunal, as Turia suggested, or that they may constitute a breach of good faith, as the panel itself was concerned about, could be fodder for further legal action.

Key may have unwittingly steered his mixed ownership model into a legal quagmire that will ultimately upset his timetable.

Though the council can't go to the High Court to challenge the substance of the tribunal's findings, it can go there to challenge its process.

It could, for example, argue members of the tribunal were improperly swayed by Key's comments, while at the same time initiating legal action arguing that the Crown should not proceed with the sell-off until a review of the tribunal's findings is completed.

Durie has already indicated that should Key set aside a favourable recommendation from the tribunal, the council may take further court action.

"These things take on a life of their own", says Jones.

"I can guarantee you, that with Eddie Durie there, in terms of legal strategy and tactics, he will match the best of the Crown administrative lawyers on the other side."

Former deputy Prime Minister Sir Michael Cullen, now a Treaty negotiator for Ngati Tuwharetoa, said he doubted the Government would ignore a tribunal finding in favour of the council, "in the true sense of the word ignore".

"The Government I'm sure will go through a proper process of consideration of any recommendations. It would be very unwise not to. It would open itself up to potential legal action and would ignore the fact that sooner or later the Crown would be needing to negotiate on a range of issues relating to water."

Cullen said the issues around fresh water would likely only be resolved by negotiation with relevant iwi, "so from my perspective, the sooner the negotiation process is under way the better".

Tribunal or even court decisions would be of some assistance, "but it's got to come down to discussion and negotiation one way or the other".

The Government sees the way forward over water issues with Maori in negotiations with the Iwi Leaders' Forum - however Key's comments won't have helped that relationship.

Te Runanga-a-Iwi o Ngapuhi chairman Sonny Tau, who also sits on the forum, said it supported the council's right to take the issue to the Waitangi Tribunal.

However, he believed the ultimate solution to the issue would be a political rather than a legal one.

"It's got to be a negotiated outcome where everybody on all sides of the debate has to be cognisant of the rights of everybody else who have use of that water."

Tau said talk of who "owned" water was merely confusing, "because at the end of the day ownership in the Western ideology is not what we seek".

"We seek to be recognised in our role as kaitiaki or guardians of water so that if there's any allocation or allocation of rights to water, then Maori need to be significantly involved."

Like the council, Tau said the forum believed the issue of Maori rights over water had to be settled before the sale of Mighty River.

Negotiations were continuing but had reached a difficult point.

"We've got to work out exactly where this significance, say for kaitiakitanga, has its place and what shape that will take," he said.

"The timeframe's very, very short and we're at it hammer and tongs at the moment trying to get a breakthrough in these areas.

"To be honest, I think the case with the Waitangi Tribunal will shed a lot more light on this and a lot more pressure on the Crown to do what they should have done two or three years ago and finish this issue off," the Ngapuhi kaumatua said.

The forum members wanted the issue settled before Mighty River was partially privatised.

"That's been a concern of ours, where this issue hasn't been settled and they're going ahead with the sale.

"The iwi of Tuwharetoa and Wanganui they're on record as saying they'll go to the High Court to stop the sale if there are no significant avenues or breakthroughs made in terms of the allocation of water.

"The Iwi Leaders' Forum would probably support that."