By Pattrick Smellie
Jan. 31 (BusinessDesk) - New Zealand's highest court has begun hearing the final stage in a challenge by Maori to require settlement of Treaty of Waitangi claims to freshwater before any partial privatisation of state-owned power companies goes ahead.
Colin Carruthers QC opened submissions for the New Zealand Maori Council before a full five judge bench of the Supreme Court, in front of a public gallery packed with Maori, and legal and political observers, who spilled out to watch live replays in the foyer of the court.
Among Carruthers's key arguments is that none of the identified avenues for remedy for Treaty breaches claimed by the Crown is sufficient to ensure recognition of Maori residual proprietary rights in freshwater, which the Waitangi Tribunal has established and the government acknowledges are real.
Even if they were sufficient, he argued that by selling 49 percent of an electricity state-owned enterprise, the Crown would be diluting its capacity to force a compensation for Maori claimants, despite technically maintaining a controlling interest, at 51 percent, in the partially privatised companies.
"The Crown, in going from 100 percent ownership and the ability to effectively control goes to a position of 51 percent and the creation of private rights that 51 percent won't allow the Crown to interfere on," Carruthers argued.
That assertion was challenged by Justice Susan Glazebrook, saying "control doesn't go to private interests, does it?"
Carruthers responded the creation of a 49 percent private shareholding base amounted to a "significant impairment of the Crown's ability to deliver particular results to Maori", such as creation of a resource rental for freshwater used in electricity production or a water body co-management arrangement.
Carruthers faced questions from Justice Robert Chambers when he suggested the Crown could face the need to expropriate private property rights to satisfy an established claim for Treaty breaches involving freshwater.
"Is that really so?" asked Chambers. "That may be true of existing (resource) consents, but they are time-limited are they not?"
Chief Justice Sian Elias was active in questioning, saying at one point: "you really need to explain why, in relation to water, those mechanisms of protection of the Crown's capacity (to remedy) are no longer sufficient if a third party proprietary interest is introduced into the SOE structure."
Carruthers went on to outline what the Maori Council contended were limitations in the three available mechanisms: consultation between government and iwi; current freshwater policy-making initiatives; and the fact of historical Treaty settlements.
Both Justices Chambers and Glazebrook sought more detail about the potential remedies Maori might seek in order to judge how much opportunity might be lost by partial privatisation to protect Maori interests. However, Carruthers said there were numerous possibilities, and cited the emergence in the past of "imaginative solutions" to resolving Treaty claims.
The first partial privatisation is scheduled to occur by mid-year, with MightyRiverPower first cab off the rank. The company controls a string of hydro-electric dams on the Waikato River and geothermal power stations, some of them owned in joint venture with Maori groups.
Delays to the process by court action to date have made this a do-or-die political issue for the government, which is determined to use proceeds of partial privatisations to fund new capital works, including new infrastructure for the transport network and the public health and education systems.
The Supreme Court hearing is set down for two days.