Key desperate to stay out of court
The Prime Minister clearly backs himself to achieve yet another of his “elegant solutions”, this time over the water-rights issue and the sale of minority stakes in Mighty River Power followed by either Genesis or Meridian.
This is despite there being no link between the water-rights claim and the proposed share floats. If there were, then the Waitangi Tribunal – if it wanted to be consistent – would have recommended the nationalisation of Contact Energy in order to settle any water-rights’ claim by Ngai Tahu for the water flowing through the Clutha River and the Clyde Dam.
It didn’t, of course, because the truth is that the Crown can settle any water-rights claim regardless of whether the power companies are 100% privately owned like Contact, 100% state-owned like the current SOEs, or anything in between.
The connection between the issues has been manufactured by left-wing Maori elements to try to prevent the share issues and supported by right-leaning Maori elements in order to get some discounted shares. (Of course, as a PR person and lobbyist myself, I can’t really criticise them for having so many people fall for it.)
Mr Key knows, though, that the rights and wrongs of that particular point are now irrelevant. The tribunal has said there is a link and, coming from a quasi-judicial body claiming to have particular expertise on such matters, the courts must give serious weight to that view. What’s more, as I alluded to in my satirical look at the issue over the weekend, the smart money would be on the courts ultimately agreeing with the Maori Council and tribunal view. If the issue makes it to court, the Crown will probably lose.
It is not just Mr Key who knows this. So too do the Maori claimants. Through the lands case, the fisheries case, the spectrum case and of course the foreshore and seabed issue, it has been the judiciary rather than the executive that has initially been more supportive of Maori property claims. The Maori Council and others want the issue before the courts as soon as possible and were planning to sue as soon as today. They will be there soon enough.
In the short term, though, Mr Key has out-manoeuvred them. He says he is even prepared to consider the tribunal’s “shares plus” proposal which, according to Mr Key’s media statement, “refers to the idea that certain Maori interests would be given particular rights and powers in relation to the company, above and beyond the rights of other shareholders”.
The government says it doesn’t agree with “shares plus” but says discussing it with iwi is “the prudent thing to do”.
What the government is trying to do is establish evidence that it has acted in good faith for presentation to the courts later this year or early next year.
When it later decides not to go with “shares plus” but proceed with the share issues anyway, it hopes to be able to show the courts – when the inevitable application for an injunction is heard – that it seriously considered the idea, and had an open mind before rejecting it. The courts, it hopes, will then say: “Well, the issues aren’t linked anyway and the Crown did do the proper thing holding talks and all, so let’s deny the injunction.”
It’s a long shot, but, if Mr Key’s move works, then he will be established as the greatest political tactician in living memory.
My bet is that he will fail.
To avoid litigation, Mr Key will need to reach some sort of agreement with Tuwharetoa, Te Arawa, Raukawa, Tainui, Maniapoto plus any other iwi that claims an interest in the Waikato River where Mighty River Power generates its hydroelectric power.
For such an elegant solution to be legally safe, Mr Key will need to be sure there are no splinter-group hapu within these iwi who may be able to make a convincing argument to the courts that Mr Key has failed to adequately deal with them.
He will also need to hope there is no other aspect of Mighty River Power’s business where an iwi, hapu or whanau could make a claim to have an interest in water or any other matter.
Then he will need to hope there is no risk of litigation by so-called urban Maori as there was – admittedly in a different context – over fisheries quota. That held up final resolution of that matter for more than a decade.
If just one of these ducks aren’t lined up, then someone will go to court the moment Mr Key announces any deal to allow the share issues to proceed. Past performance suggests the courts will at least issue an interim injunction until they address the matter.
The government’s new timeline of March to June 2013 for the Mighty River Power share issue is therefore at best optimistic and at worst fanciful.
The odds of getting Genesis or Meridian done are even worse.
Even if he achieves two share issues, the reality is that, after 2014, Mr Key will be governing, if at all, with Winston Peters’ NZ First and Colin Craig’s Conservative Party. Both oppose his mixed ownership model policy.
Sadly, it is now impossible for Mr Key’s election promise to free up capital in Mighty River Power, Genesis, Meridian, Solid Energy and Air New Zealand to be honoured in full.