You have probably seen reports today about the Minister’s Working Group recommendations on 3 Waters governance. They change nothing relevant to our court case.
We’re surprised by some of the headlines. The proposed changes are cosmetic only. They would not put “ownership back in community hands” nor has a “compromise emerged on water reforms”.
Instead they double down on Maori ‘co-governance’ and make the expropriation of ratepayer property even more blatant. If the shares to be issued to Councils were covered by the law governing listed companies, the Financial Markets Authority should be calling in the Governance Working Group for a stiff warning about deceitful promotion of securities. Shares that convey no rights to dividend, to control, and no rights of disposal are not ownership. To describe them as retained ownership is insulting.
The one bright spot in the report was Mayor Phil Goff’s dissent, and his warnings against Maori control.
One of our legal team has summarised the recommendations below, but to boil it down they urge three things:
From the lawyers –
The Group recommended that councils own fake shares in their local entity.
Councils would receive one “share” per 50,000n people in their area, with allocations being reset every 5 years for population changes. “Share” is a false description. They give no rights to financial returns, no compensation when they are taken in a reset, no voting rights in governance or operational decisions, except for the decision to sell, privatise or merge their entity. This decision must be unanimous so small councils will retain an effective veto right against sale or merger. The number of shares a council holds has no practical consequence.
Most of the Group’s report focuses on the central importance of Te Mana o te Wai to the Three Waters Scheme, along with stewardship and kaitiakitanga, and co-governance.
The Group recommended that Te Mana o te Wai underpin the entire scheme and that the health and wellbeing of water be adopted as an overriding objective to the reforms. Without any connecting analysis or explanation we are supposed to think this is connected with funding the delivery of safe drinking water, the ostensible reason for the scheme. It is more likely to be driven by an intention to deliver a stream of payments to iwi leaders, for consultations and consents and blessings.
To insert Te Mana o te Wai considerations from direct mana whenua representation at operational level the Group recommends sub-regional representative groups.
As well as developing Te Mana o te Wai Statements, these mini-talkfest groups are to get a greater role in strategic priority setting and overseeing their entity. They can impose additional criteria for appointment of to the board of an entity over and above those specified in the Bill. RRGs are seen as performing the role of shareholders in a company, for local communities, mana whenua and any sub-RRGs.
All decisions of the RRG should be made by consensus, or where consensus can’t be achieved, through a 75% majority vote. There will be an expectation that RRG membership will be made up of 50% council representatives (including rural, provincial and urban councils) and 50% iwi/hapū representatives (including various whakapapa connections in accordance with tikanga). It is unclear whether this expectation will be embedded in the statute, however an entity will have the ability to specify the composition and appointment of RRG members in its constitution. The exception is Entity A, which will be proscribed in the Act to have 4 Auckland and 3 Northland representatives for council and 4 Tāmaki Makaurau and 3 Te Tai Tokerau representatives.
The RRGs and sub-RRGs should have co-chairs – one for councils and one for iwi/hapū.
The Group recommend the creation of a Water Services Ombudsman to have jurisdiction over all public-facing activities of each entity using a tikanga-based dispute resolution process. The report doesn’t say so, but the Water Services Ombudsman’s decisions would likely be guided by Te Mana o te Wai as well.
As the keepers of Te Mana o te Wai statements, Maori will effectively have the power to set strategy and priorities for each entity. The focus of Te Mana o te Wai statements is on the health and wellbeing of water, not the health and wellbeing and economic success and resilience of users, or infrastructure assets. The report doesn’t explain how bodies of water will be affected by these reforms and how a focus on the bodies of water is meant to deliver the goal of funding and providing high quality drinking water, waste water and stormwater infrastructure.
The Group decided the Crown should engage better with the public to help promote a general understanding and acceptance of the meaning and significance of Te Mana o te Wai, which the Group has learned through its work. Councils and iwi should receive funding to help deliver this.