Treaty has no business in company ownership

It is a measure of the power of the Treaty of Waitangi that the Government enters the new year still waiting for court permission to proceed with a policy it submitted to a general election more than a year ago. The Maori Council's water claim is probably not the only thing holding up the float of Mighty River Power. The world economy and the cloud it has cast over aluminium smelting at Bluff raise the possibility of a huge over-supply of electricity in the next few years. But either impediment alone was reason to delay.

The Prime Minister was never more wrong last year than when he declared the Government could ignore a recommendation of the Waitangi Tribunal.

Law gives the courts power to see that a tribunal view is given due consideration. But the Treaty's place in judicial esteem does not mean every claim must succeed. The Maori Council has failed to persuade a High Court judge that a partial sale of a power company would prejudice iwi claims to river water and a geothermal resource. This claim now goes to the Supreme Court where a final determination should be made in time for the Government to proceed with the float in a few months.

It needs to be remembered that the case is not about who owns water. It is about whether the ownership of dams and power stations will make it harder for iwi to be compensated if they ever convince a government they own the water. By putting the cart before the horse the case has forced the Crown to assume the water claim has succeeded and to argue that the Government would be able to require a private power company to pay a royalty or some other form of compensation.


The Waitangi Tribunal accepted the Crown's argument, though it suggested one form of compensation - a category of shares carrying additional powers - that should not fairly be forced on other shareholders after a float. The "shares-plus" arrangement was immediately ruled out by the Government as contrary to commercial law and compromising the main purpose of asset sales: accountability to the share market.

The Maori Council and co-claimants could not convince High Court judge Ronald Young that shares-plus had merit. He reasoned that since Mighty River Power did not own the water that it had been given a right to use, a shareholding in the company would not give the iwi the recognition they sought, customary ownership of the water.

The claimants are aggrieved that Judge Young barely referred to the Treaty, and they hope for a more sympathetic ruling from the Supreme Court. But treaties have two sides. Waitangi enshrines rights of government as well as the rights to retain tribal possessions. Lord Cooke, author of the guiding judgment on the Treaty's application, said it required each party to act "reasonably and in good faith within their respective spheres".

Assets that generate hydro or geothermal electricity are unquestionably in the government sphere. Privatisation, whether full or partial, is a debate between different views of the public interest. It is not a Treaty issue. Iwi and hapu that can establish customary rights to part of a river or a geothermal reservoir may deserve recompense from users of the resource, but those rights would apply whether the users are private companies, state-owned enterprise or the hybrid now proposed.

Government under the Treaty can surely decide what to do with assets it has built. A year of discussion has been enough.