September 2012 Māori Law Review

Māori rights in water – the Waitangi Tribunal’s interim report

The Interim Report on the National Freshwater and Geothermal Resources Claim

Waitangi Tribunal (Wai 2358, 2012)

Do Māori have commercial proprietary interests in water protected by the Treaty of Waitangi?

If yes, will the sale of up to 49 per cent of shares in State-owned power-generating companies affect the Crown’s ability to recognise those rights and remedy their breach?

These questions have been before the Waitangi Tribunal these past few months.  On 24 August 2012, the Tribunal found that Māori still have residual proprietary rights in water and the Crown will breach the principles of the Treaty of Waitangi if it goes ahead with the intended share sale.

Download the Stage 1 Report on the National Freshwater and Geothermal Resources Claim here (4.8 MB PDF).

Overview and result

Do Māori have commercial proprietary interests in water protected by the Treaty of Waitangi?

If yes, will the sale of up to 49 per cent of shares in State-owned power-generating companies affect the Crown’s ability to recognise those rights and remedy their breach?

These questions have been before the Waitangi Tribunal these past few months.  On 24 August 2012, the Tribunal found that Māori still have residual proprietary rights in water and the Crown will breach the principles of the Treaty of Waitangi if it goes ahead with the intended share sale.

Background

In February 2012, the New Zealand Māori Council along with other hapū co-claimants (and subsequently supported by interested parties) filed two claims with the Waitangi Tribunal in essence arguing that “Māori have unsatisfied or unrecognised proprietary rights in water, which have a commercial aspect, and that they are prejudiced by Crown policies that refuse to recognise those rights or to compensate for the usurpation of those rights for commercial purposes” (at p.1).

The Crown accepts that Māori have legitimate rights and interests in water but asserts no one owns water and therefore the best way forward is not to develop a framework for Māori proprietary rights but to strengthen the role and authority of Māori in resource management processes.

In March 2012, the Waitangi Tribunal agreed to hear the claim but in two stages.  The Tribunal heard under urgency the most pressing part of the claim: the Government’s desire to convert Mighty River Power (a State-owned Enterprise (SOE)) into a Mixed Ownership Model (MOM) company by making available for sale up to 49 per cent of the company’s shares in the third quarter of 2012.

The Interim Report contains the Tribunal’s recommendations for this first stage of the hearing.

The Interim Report, apparently truncated but obviously extensive reaching 200 pages with another 70 pages attached as appendices, is a truly significant report for our country.  The Tribunal hopes that it will be widely read.

The Report is divided into three chapters.  Chapter 1 is an introduction to the claim.  Chapter 2 – entitled ‘What Rights Are Protected by the Treaty of Waitangi?’ – focuses on the claim’s first key issue, the nature of Māori proprietary interests in water.  Chapter 3 concentrates on the principal issue concerning the intended sale of SOE shares. It is entitled ‘Selling Shares Without First Providing for Māori Rights: A Breach?’ Both chapter titles are questions. Both questions the Tribunal answered in favour of the Māori claimants.

This article provides an overview of the Interim Report.

Discussion

Chapter 1 – An introduction to the national freshwater and geothermal inquiry

In chapter 1 the Tribunal provides general information about the claim including who the claimants are and an overview of the arguments.  Chapter 1 addresses two preliminary questions that are worthwhile repeating here.  First, was this an opportunistic claim by Māori fabricated in order to capture financial benefits?  The Tribunal cites evidence including prior Tribunal reports as proof that modern governments since the early 1980s have known of Māori claims to ownership of water bodies and concludes “We cannot accept, therefore, that these are novel or opportunistic claims in 2012” (at p. 15). In fact, the Tribunal agrees with the Māori claimants that “Māori concern [for water ownership] is almost as old as the Treaty itself” (at p. 11).  What then do the Māori claimants want?  The Tribunal stated:

“It was very evident to us that the commercial or profit motive was not the primary motive for bringing this claim.  Māori want their authority over and custodianship of water bodies to be acknowledged and respected.  They want to protect their taonga for present and future generations.  And, perhaps less (though still) important, they want the opportunity to benefit from the use of their property for commercial purposes” (pp. 14-15).

The Tribunal carefully clarified that it was not the Crown’s position that this claim was new or novel. The Tribunal restated the Crown’s position that the essential elements of this claim are longstanding but they are best resolved through other processes such as review of the Resource Management Act 1991 rather than a stake for Māori in the power-generating SOEs (at p. 15).

The second preliminary question was who is affected by this claim?   In beginning to address this, the Tribunal records that the modern dilemma for water is that it is an essential resource for human survival but also human economic prosperity.  As the Tribunal notes, today the competing uses for water even in New Zealand – a country considered water-rich – are beginning to exceed sustainable supply (p. 16).  So, all New Zealanders have the potential to be affected by this claim:

“But the key point here is that non-commercial users of water, or users who do not obtain an income stream directly from their use of water, are highly unlikely to be affected by the commercial dimension of the claim.  All users of particular waters may be affected if Māori gain a greater authority in the use and control of the water bodies that are a taonga to them – and rightly so, as the Crown concedes” (p. 20 original emphasis).

The remaining content in chapter 1 provides the context for this inquiry including why urgency was granted, a discussion of the mixed ownership model policy, new arrangements through Treaty settlements for co-governance and co-management models for water bodies such as the Waikato River, the Fresh Start for Fresh Water Programme and the Iwi Leaders Group.

Chapter 2 – What rights are protected by the Treaty of Waitangi?

The primary question considered in chapter 2 was: what rights and interests (if any) in water and geothermal resources were guaranteed and protected by the Treaty of Waitangi?  This chapter goes to the heart of the water debate where Māori claimants argued they own some pieces of water and the Crown argued that is impossible on the basis that water cannot be owned.

The Claimants’ case

The Māori claimants case was necessarily sourced in the Treaty of Wataingi.  They argued that at 1840 Māori had full, undisturbed, and exclusive possession of all water.  They argued that the closest English cultural equivalent to express this Māori customary authority is ‘ownership’: “Māori have little choice but to claim English-style property rights today as the only realistic way to protect their customary rights and relationships with their taonga” (at p. 38).  The claimants introduced a twelve point ‘indicia of ownership’ framework for establishing customary proof of ownership (see p. 38):

  1. The water resource has been relied upon as a source of food;
  2. The water resource has been relied upon as a source of textiles or other materials;
  3. The water resource has been relied upon for travel or trade;
  4. The water resource has been used in the rituals central to the spiritual life of the hapū;
  5. The water resource has a mauri (life force);
  6. The water resource is celebrated or referred to in waiata;
  7. The water resource is celebrated or referred to in whakatauki;
  8. The people have identified taniwha as residing in the water resource;
  9. The people have exercised kaitiakitanga over the water resource;
  10. The people have exercised mana or rangatiratanga over the water resource;
  11. Whakapapa identifies a cosmological connection with the water resource; and
  12. There is a continuing recognised claim to land or territory in which the resource is situated, and title has been maintained to ‘some, if not all, of the land on (or below) which the water resource sits’.

According to the claimants, many Native Land Court judgments and Waitangi Tribunal reports already recognise Māori proprietary interests in water and provide the template for this developed twelve point ‘indicia of ownership’ framework.

An important component of the claimants’ case involved determining the appropriate relationship between Article 1 and 2 of the Treaty – in fact, a common feature of many Waitangi Tribunal claims.  Here the claimants accepted that Article 1 “gives the Crown kawanatanga rights, including a legitimate role in the management of water resources …  But Article 2 rights are a standing qualification upon the Crown’s sovereignty” (at p. 40).  So, while the claimants were not “implacably opposed” to entering into co-management arrangements with the Crown, these arrangements “must enable Māori as owners of property to have the full use and enjoyment of their property, including the right to develop it and profit from it” (at p. 40).

The claimants accepted that Māori rights to water could be altered legitimately under the Treaty.  First, in regard to the principle of partnership there must be a notion of shared use of water and therefore: “No Treaty breach arises from the non-commercial use of water by settlers” (at p. 41).  Second, in regard to Article 2, it provided an avenue for the alienation of Māori resources and therefore there may have been some Treaty-compliant alienations.

Additional arguments from interested parties in support of the claim

Approximately 100 Māori groups from the North Island asserted an interest in this inquiry.

During the inquiry, Ms Annette Sykes took the role of lead counsel for these interested parties.  They preferred a Kaupapa Māori framework based in highlighting “the interrelationships between whenua … Te Miina o Papatuanuku, manaakitanga, kaitiakitanga, and tangata whenua” (at p. 42) rather than the claimants’ ‘indicia of ownership’ framework because “the rights of indigenous cultures must be judged within their own cultural framework, not that of England, and that this can be accommodated by the common law” (at p. 42).  The interested parties’ had this to say about ownership:

“It is not that English-style property rights are offensive to Māori or unknown to Māori, but rather it is offensive that Māori rights should not be considered to have given rise at the very least to English-style property rights.  This is because the obligations imposed on Māori as part of their reciprocal relationships with their taonga require them to care for those taonga (manakitanga and kaitiakitanga).  And such care cannot take place without rights of access, rights to control the access of others, rights to place conditions on access, and the authority to control how the taonga (water) will be used.  In all of these ways, property rights are essential and the ‘rights of Māori to their waterways are akin to ownership’” (at pp. 43-44).

Moreover, commercial rights are integral to this framework.  The interested parties argued that as Pākehā began to arrive in the country Māori began to control “the use of waters as trade routes and even charging fees for the use of water” (at p. 44).  The interested parties, in a similar manner to the claimants, emphasised

“The Treaty right of development and the choice of Māori to walk in two worlds: to resist assimilation and protect their matauranga Māori and tikanga (knowledge and law) but also to benefit commercially from development” (at p. 44).

The Crown’s case

The Crown’s essential argument repeated that no one can own water. Māori have rights and interests in water but the full nature and extent of those rights and interests have not yet been defined. Even when defined the Crown will still be able to recognise these rights because the rights are not affected by the partial privatisation of power companies (at p. 45).

The Crown accepted the claimants’ framework but as “customary indicia of something other than ownership” (p. 46 original emphasis).  The Crown asserted that “this process of rights definition is best left to collaboration between iwi and the Crown” – something it believes is already happening with the Iwi Leaders Group in the Fresh Start for Fresh Water programme (at p. 46).

The Crown also argued “English-style ownership is not in fact the best English cultural equivalent for Māori rights” and rather the “true and practical expression of Māori rights in respect of environmental matters, including water resources’ is kaitiakitanga (p. 47).  The Crown relied heavily on the Waitangi Tribunal’s own 2011 report for this assertion Ko Aotearoa Tēnei:  A Report into Claims Concerning New Zealand Law and Policy Affecting Māori Culture and Identity (Wai 262, 2011).

In regard to the Treaty, the Crown stressed its own kawanatanga right to manage water as a general right but accepted that Māori kaitiakitanga rights exist in the context of particular water bodies (at p. 47).  The Crown denied that the Treaty right of development applies “if the claimants’ position is that ‘iwi-Māori have a proprietary (or other) right to water and this becomes a right to ownership of energy companies based on a notion of a development right’” (at p 48).

The Tribunal’s findings on the nature of Māori rights

The Tribunal prefaced its findings by stressing that at this stage the Tribunal is simply being asked “to determine the nature of Māori rights at 1840, not who had the rights” (at p. 100, original emphasis).

The Tribunal accepted that the evidence presented demonstrated that water bodies were a taonga (p. 101).

On the issue of ownership, the Tribunal agreed that “te tino rangatiratanga was more than ownership: it encompassed the autonomy of hapū to arrange and manage their own affairs in partnership with the Crown” (at p. 101, original emphasis).

The Tribunal agreed that both Treaty texts support a finding of ownership at 1840 (at p. 102) and tino rangatiratanga was the closest cultural expression of full blown ownership in 1840 (at p. 103).  The Tribunal added that tino rangatiratanga is “a standing qualification of the Crown’s kawanatanga” (at p. 103).

The Tribunal stated that the Treaty changed the relationship of Māori with water in three ways.  First, the Treaty enabled non-Māori to settle in New Zealand and therefore Māori “consented that settlers would have access to and use of New Zealand’s waters” (at p. 103).  Second, the Treaty gave the Crown a right to govern which entails balancing interests of the nation and the environment.  But Māori Treaty rights cannot be balanced out of existence (at p. 105).   Third, the Treaty created a bicultural nation and thus gave “Māori the option of walking in two worlds” meaning that “the Treaty conferred a development right on Māori as part of the quid pro quo for accepting settlement” (at p. 106).

The Tribunal noted that Māori owed the Crown the Treaty duties of reasonableness and cooperation and stressed that the Crown owes to Māori the Treaty duties of active protection and redress.  The redress duty is relevant not just in addressing historical Treaty breaches but also in present day breaches.  The Tribunal stated:

“If the claimants and the interested parties have residual proprietary rights (as the case examples suggest that they do), then the Crown’s Treaty duty is to undertake in partnership with Māori an exercise in rights definition, rights recognition, and rights reconciliation” (at p 107).

The Tribunal concluded its chapter 2 by restating:

“Our generic finding is that Māori had rights and interests in their water bodies for which the closest English equivalent in 1840 was ownership rights, and that such right were confirmed, guaranteed, and protected by the Treaty of Waitangi, save to the extent that there was an expectation in the Treaty that the waters would be shared with the incoming settlers” (at p. 110).

Chapter 3 – Selling shares without first providing for Māori rights: A breach?

Chapter 3 contains the arguments and recommendations for the point of this urgent inquiry: will the Crown be in breach of the Treaty of Waitangi if it goes ahead and sells up to 49 per cent of the shares in the SOE Mighty River Power?

The Claimants’ case

The Māori claimants argued that any framework for rights recognition and reconciliation must recognise Māori ‘ownership rights’ where it is practical.  Māori proprietary rights could include the ability to exclude the public from wahi tapu, or to control or veto uses of water (at p. 113).  If it is not possible to recognise Māori ‘ownership rights’ because the water resource is used by a power-generating SOE, then the power company must pay compensation for ongoing use of the water and compensation for the loss of use by Māori owners (at p. 113).  If it is not possible to recognise Māori ‘ownership rights’ because there is extensive reliance on water by, for example, agriculture or urban drinking supplies, or because the water is so degraded, then Māori still need to be compensated (at p. 113).

Additional arguments from interested parties in support of the claim

The interested parties argued that if the Crown proceeds with the share sales on the assumptions that no one owns water and therefore water has a zero value, the Government would not be able to provide for rights recognition after the share sales.  These assumptions deny the inescapable link that the “’value of the shares come from the use of the water’” (at p. 116).

The Crown’s case

The Crown argued that the sale of minority shares in power-generating SOEs would not compromise the Crown’s capacity to recognise the rights and interests of Māori in water.  The Crown stated that it would be a “’a very serious step’” to halt the planned sale of shares in Mighty River Power (at p. 120).  The Crown argued that the Tribunal must be guided by principles developed in court cases concerning the Treaty, namely the Treaty does not unreasonably restrict the right of kawanatanga, the Crown’s policy agenda can only be halted if there is a direct nexus between the assets and the Crown’s ability to fulfil its Treaty obligations, and if there are a number of Treaty-compliant options available, the Crown is free to choose which option to pursue (at p. 121).  In essence, the Crown argued that shares are not the right remedy but they can be repurchased if that is what Māori ultimately want (at p. 123).

The Tribunal’s findings on options

What are the options for rights recognition or rights reconciliation?  The claimants advanced several options including shares in water-using SOEs, shares plus a shareholders agreement that recognises Māori rights, new institutional arrangements for the governance and allocation of water, and a royalties regime.  The Crown repeated that it is already in negotiation with Māori about rights to water in Treaty settlements and the Fresh Start for Fresh Water programme.  The Crown’s position is that return of title is only contemplated in respect of land, and redress for natural resources is cultural redress not of a commercial nature (at p. 139).  The Tribunal agreed with the claimants that there are options as long as a nexus existed.

The Tribunal’s findings on nexus

As the Crown asserted and the Tribunal accepted, it was important for the Tribunal to consider if there is “a nexus between the ‘asset’ (the shares) and ‘the claim’ (to rights in water)” in order to consider recommending the halt of the minority shares in the power-generating SOEs (at p. 142).  The Crown argued strongly that there was no direct nexus because the planned share sale is about shares in a corporate that does not purport to own water (at p. 143).

At this point the Tribunal considered at some length the leading SOE court cases.  It held that the Lands case (New Zealand Māori Council v Attorney General [1987] NZLR 641) was comparatively straightforward because land was the asset being transferred and the asset being claimed: “But nowhere in any of the judgments of the Court is it laid down that the link or nexus must be as obvious or direct as it happened to be in that case” (at p. 145).  The Tribunal accepted the Crown’s statement that in Te Ika Whenua case (Te Runanga o Te Ika Whenua Inc. Society v Attorney-General [1994] 2 NZLR 20) the Court of Appeal did not find a sufficient nexus between the assets (the dams or incidental rights) and the claim.  But the Tribunal distinguished that case:

“The outcome was, in practical terms, that the Court held in Ika Whenua that no right to generate electricity existed for Māori distinct from that of every other New Zealander. … our view is that Māori do have a Treaty right to develop their properties, the rivers and lakes, and therefore a development right in the use of their properties to generate hydroelectricity.  That does not seem to have been argued or considered in the Ika Whenua case.” (at pp 149-150, original emphasis.)

The Tribunal then considered the Radio Frequency and Broadcasting Assets decisions and went on to consider the facts of this inquiry.  The claimants’ view was that the nexus is “not simply between shares and proprietary rights in water, but in shares that give a significant element of control over the companies that use their waters, without paying” (at p 154).

The Tribunal agreed with the claimants that there was a sufficient nexus because “a shareholders’ agreement between Māori and the Crown, in conjunction with a jointly written or jointly amended company constitution, could potentially provide what they are seeking in partial remedy of their claims” (at p. 161).

The Tribunal’s findings on how rights recognition will be affected

The core question here was to what extent, if any, will the options for rights recognition be affected by partial privatisation?  In other words, is it essential that Māori be offered shares in the new power-generating MOM companies in partial recognition of their rights to water?  And, do Māori need to be offered shares now or could it occur later at a point after privatisation?  The Tribunal decided yes, now.

The Tribunal thought it unlikely that new private investor shareholders would agree to amend their company’s constitution to reflect a Treaty settlement (at p. 168) and thus potential remedies “by way of share issues or transfer of existing shares on terms involving any form of preference as to voting rights, capital or income distributions, pre-emptive rights, or appointment of directors, to name but some possible remedy considerations” (at p. 169) would be lost.  The Tribunal agreed that:

“Partial privatisation will make a crucial difference to the Crown’s ability to act.  Private shareholders will resist the introduction of any kind of levy, charge, resource rental or royalty that impacts on the profitability of the company and (as a result) their income and the value of their shares” (at p. 170).

The Tribunal then focused on a question that will apparently be more extensive in the final full report but still takes up 8 pages of this truncated interim report: will “the Crown be ‘chilled’ from providing commercial recognition of Māori rights by the prospect of expensive litigation on the part of overseas investors who have purchased shares in the MOM companies?” (at p. 177).  The Crown submitted no (at p. 181). The Māori interested parties thought that it was “more than simply a possibility” (at p. 177).  The Tribunal did not ultimately determine this point (at p. 184).

The Tribunal’s findings on breach of the principles of the Treaty of Waitangi

If the Crown proceeds with partial privatisation, will it be in breach of Treaty principles?  The Tribunal decided yes and in doing so clarified for the Crown what it did not previously know – the extent of Māori interests in water.  The Tribunal said:

“We have now found, upon inquiry into the facts (and as other Tribunals have found before us) that Māori have rights for which full ownership was the closest cultural equivalent in 1840.  Today, Māori have residual proprietary rights where that can be established on the facts and – the Crown having stated that it does not claim ownership and that no one else can claim ownership – the Treaty entitles them to the recognition of those rights today” (at p 190).

The Tribunal clearly endorsed the right to development:

“As we see it, a right to develop one’s properties is a right possessed under the law by all New Zealand property owners.  What is unique about this claim is that Māori citizens were guaranteed the property that they possessed in 1840.  That right of property was not constrained by what could be legally owned in England.  Rather it depended on what Māori possessed at the time in custom and in fact.  As we have found, they possessed (and in the English sense owned) their water bodies in 1840.  And inherent in their proprietary interests is the right to develop their properties, and to be compensated for the commercial use of their properties by others.  There is nothing unusual or novel in this finding” (at p 193).

The Tribunal delivered this message for New Zealanders:

“We think that most New Zealanders, if properly informed as to the nature of Māori rights, would not disagree that the owners of property rights should be paid for the commercial use of their property.  Otherwise there would be no landlords and no tenants, no joint ventures, no leases, no commercial property arrangements of any kind.  That seems to us to be absolutely basic to the way in which New Zealand society operates.  We think that the Article 3 rights of Māori entitle them to the same rights and privileges as any other possessors of property rights” (at p. 189).

The Tribunal concluded its Interim Report by recommending that the Crown urgently convene a national hui in conjunction with iwi leaders, the New Zealand Māori Council, and the parties who asserted an interest in this claim, to determine a way forward (at p. 199).

Government’s response

On 3 September, the Government announced that it will delay the sale of shares in Mighty River Power until 2013. In the meantime the Crown will consult with specific iwi on the shares plus concept.  The Government will not hold a national hui and will not negotiate a pan-Māori settlement about water.

Comment

I am going to make a bold sweeping statement: I believe that this Interim Report on the National Freshwater and Geothermal Resources Claim is the most legally significant Waitangi Tribunal report to date, ever.  It grapples with the toughest issues at the heart of our legal system – ownership of property, commercial rights to benefit from that property and inherent rights to development.

Because this claim concerns an asset that every New Zealander has a relationship with: water and is a resource that is inherently different to land, the Tribunal had an opportunity to refine and define Māori property rights as protected by the Treaty of Waitangi and did so with grace.

The Tribunal’s interim report is respectful of both parties – the Crown and Māori. It sought common ground between the parties and acknowledged that the resolution of claims to water goes to the heart of what it means for Aotearoa New Zealand to be a bicultural country.  In fact, the Tribunal hopes that this Report and other Tribunal reports will be “widely read” so that “the history of Māori claims to waters will become better known and understood, and that will in itself be of service to race relations in this country” (at p. 15).

Later this year the Tribunal will release its final Report on stage 1 of its inquiry.  At some stage in the near future, the Tribunal will begin to hear stage two of the claim focusing on current laws and policies that manage water, namely the Resource Management Act, and whether the Fresh Start for Fresh Water programme should wait for the definition of prior Māori rights so as to provide more effectively for their full recognition.

In the meantime, depending on how the Government proceeds with its consultation with iwi on the shares plus concept, there remains the possibility of litigation in the courts that may involve an examination of Māori rights to water within the wider context of the common law doctrine of native title.