What the Prime Minister's resignation means for Three Waters

February 20, 2023

Yesterday's surprise announcement by the Prime Minister has put almost everything back on the table. A new leader may want to change policies to improve Labour’s election chances. Whether the Parliamentary party will give the new leader enough power to do something as radical as shooting the Three Waters dog may depend on which internal factions come together to elect the leader.

If MPs are determined to keep the decision within the caucus (avoid triggering  the Labour Party constitution requirement to involve the wider party, where a bloc Union vote can dominate) the leader needs support from 2/3rds of the caucus. That could mean a practical veto for the Maori members of the Labour caucus if they are united.

Accordingly we think a new leader is unlikely to get the freedom to throw out three waters completely. Even if they have known for some time that Ms Mahuta sold them a crock – by inflating the alleged problem, and hiding a de facto Maori privatisation of water services under a hugely expensive ‘solution’ that expropriates local assets and local control.

Nevertheless, a major backflip is not out of the question.  The Water Users’ Group committee had decided not to waste resources on detailed submissions on the latest Bills (which includes around 300 amendments to the law passed in December). The prospects of full repeal are so high, and the chances so low of the Select Committee being allowed to respond to concerns (based on what happened to the Bills passed last year) we decided to concentrate instead on improving National and ACT’s replacement, in due course.

We’re still planning to prioritise work on the replacement, but now we’ll need to be ready to fight if Labour offers cosmetic or partial improvements to Three Waters and National or Act government look ready to concede anything material.

There is a lot to get on with in 2023 -

Three Waters Bills awaiting submissions

The end of 2022 saw constant news on 5 Waters. There was even mainstream reporting on its two companion Bills, seen publicly for the first time in December. In the past there was so little coverage of 3 Waters matters that our reports were information you couldn’t get elsewhere. But recently we’ve not needed to double up with specific briefs.

The main 5 waters Bill became the Water Services Entities Act 2022 on 14 December. The two companion Bills are now before Parliament. One is on price regulation (Water Services Economic Efficiency and Consumer Protection Bill) and the other (Water Services Entities Amendment Bill) has over 200 pages of amendments of the brand new Act (don’t ask about this as legislative logic, practice or precedent). Submissions close on those two Bills on 12 February. With the Labour majority they are almost certain to pass early in the year, unless the new Labour leader has both judgment and freedom from control by Labour’s Maori caucus.

RMA replacement also threatens water users

For major water users the RMA “reform” Bill may become just as worrying as the privatization of 5 Waters to mana whenua control. The Natural and Built Environments Bill doubles down on many of the current RMA’s worst features, including by cutting the term of consents to take water.  The Water Users’ Group will report separately on this and the other two new Bills. What used to be called ‘soaking the rich’ (taking their property or targeting them with taxes) seems to be intended for water users generally. But we can’t justify much time in submitting on Bills likely to be repealed if the government loses the next election.

First Court of Appeal hearing on Wednesday 15 February – arguments on privilege for legal advice

We have a date for the first hearing, Wednesday 15 February in Wellington.

We’ll want the Court to accept that we should see the full Crown Law office advice to Minister Mahuta which she mentioned in her Cabinet Paper. She referred to it to justify  co-governance. Our two Kings Counsel say the law on privilege for legal advice is simple – if you tell others part of the advice, you’ve waived privilege for the parts you withhold. We think that is especially important for Crown Law advice if you intend the audience for your partial release to rely on it.  People in government treat Crown Law as conclusive. They tend to ‘obey’ it.

You’ll recall even the PM claiming that co-governance is needed to avoid court claims of Treaty breaches.  Minister Robertson also said they’d have faced litigation. We think they had a straightforward answer to any such threats – “so what?” – the claims would have no justification in the real Treaty.

But we need to see the reasoning in the alleged Crown Law advice. If the Ministers’ claims are true, all New Zealanders need to see the advice, because it is revolutionary – it is saying that our democracy can be trumped by inherited chiefly privilege, holding what could be lifetime appointments giving indirect veto control of user/voter/ratepayer assets, invulnerable to dismissal.

The government’s lawyers (Crown Law) will argue that the High Court got it right in not letting us see the full advice. The High Court ruled in our favour against the Crown application for suppression of references to the advice. Oddly, main stream media did not even report the enormity of that demand – effectively that no one be permitted to see or know about government lawyer views that a Minister had up on public websites for more than a year.

The Court refused to oblige us to cut the references out of our court papers. But the High Court applied a historical case-law view of lawyer/client privilege to hold that Mahuta’s voluntary partial disclosure waiver did not mean we could see the rest of the advice.

Our case for full disclosure rests mainly on an argument that the Evidence Act was intended to be a code on the relevant question of privileged lawyer/client communication, and that earlier cases inconsistent with it are not relevant. Especially when in reality Ministers are not normal ‘clients’ of Crown Law. She used the Crown Law references to squelch questioning and challenge.

The vital role of Crown Law opinion on constitutional matters

The Solicitor General and the Attorney General (who head Crown Law) are the guardians of constitutional propriety within a government. Their advice has such weight that when Ministers seek Crown Law advice they are often effectively asking for rulings. As an un-involved King’s Counsel commented to us, “Crown Law are mostly their own client”. He meant that the lawyers are often the decision-makers, not their nominal government clients.

So New Zealanders and the Courts have a much greater stake in knowing what Crown Law are now saying than in what any Minister thinks about our constitution. If Crown Law is behind the departures from democratic orthodoxy, and citizen equality before the law, that is a critical issue for the courts, and for all New Zealanders.

Knowing the Crown Law opinion could stop the case

In fact, if it became clear that the Minister did not get the advice alleged in the Cabinet Paper,  and the Crown Law advice in its full context was in line with historically orthodox views of the Treaty, we would probably recommend stopping the case. The government and the Minister are now so discredited on 5 Waters (have been shown to be deceitful) that getting a court declaration showing another falsehood would not be worth the cost. We would likely highlight the true position on the Treaty and Maori privilege (that it does not prescribe for co-governance) and waste no more time and money.

But why carry on anyway?

“This is very interesting for lawyers” you may say but what is the practical use of the case now? We know  a Court declaration can’t invalidate an Act. The Court case was supposed to let MPs know they were being lied to on Treaty obligations when considering the Bills. But if the main Bill is now law, and the new Bills will pass, what can the case change? And why carry on if they are all likely to be repealed?”

Those are pertinent questions.

The answers are:

As explained above, if the disclosure we’ll argue for on 15 February shows that Labour Ministers have just been making up their claims for co-governance, and it is not Crown Law’s opinion that drives it, we’d probably recommend folding our tents. That is even though the case could still provide the courts a chance to clear the air, for judges to say, after careful argument, that it is political choice, not Treaty law that may transform us from a democracy under the Rule of Law, into a state in which power is shared with frequently corrupt tribal elites, on the basis of express ethnic privilege. We think the cost of the case to conclusion will be so high that it may not be worth it just to get a result that might be reported only as another biff for a discredited Minister. Whether we carry on could depend on whether we got enough more in donations to keep up the fight against people freely spending taxpayer money;

If the disclosure shows instead that Crown Law is promoting the views attributed to them by Ministers, that is a much more serious problem for New Zealand. We would see it as constitutionally important for the courts to say whether judges share what may be just a Wellington woke view, that Treaty “obligations” previously thought to be confined to the Crown, may now trump ordinary peoples’ democratic rights and property rights and equality before the law.  We would recommend continuing with the case to get the court’s statement. There are risks both ways:

  • If the result is court endorsement of the ‘woke’ view, then New  Zealanders generally would know that they should not look to lawyers and the legal system to preserve their democracy. As one donor said to us –“ At least  we’ll  know the dragon, and that St George is not in the courts”. We’ll know that the outcome will be up to voters, to get a Parliament willing to put lawyers back in their place.
  • If the result is restatement by the courts of the historical view of the Treaty and resuscitation of Rule of Law values, then the case will have cleared the air. Too many people are silent about their worries at the moment, and not just for fear of Ministers’ “racist” gag attacks. Decent people told that co-governance is a legal requirement of the Treaty may fear that if they criticise co-governance and other anti-democratic privileges, they could be undermining the legitimacy of the law and the proper role of the Treaty.

It could remain unclear after the Court of Appeal has decided whether we get the full opinion, just what Crown Law is advising government on co-governance. If so we’ll seek your views on the future of this case.   By then it may be obvious that co-governance is merely a political trade-off. It may be exposed as just partisan zealotry for race privilege that has driven the government,  not clean water infrastructure needs, not cost saving, not requirements of the Treaty.  If bringing our case has helped give courage to the critics, to make the true effects of the law clear, it will have served water users well.

Summary and bizarre factoid
The Government’s lawyers asked the court to order suppression of the Minister’s references to Crown Law’s advice in Cabinet Papers. That extended to asking that we be not allowed to cite the references, despite them having been up on websites for six months (when we filed the case more than a year ago). They told the court that the papers had been purged of those ‘mistaken’ references.

In fact such references were not all purged. They remained up through the entire period in which we were waiting for the High Court decision, and they are still up in some documents. But this bizarre diversion on the road to the main hearing of our request for a declaration of the law, has highlighted the sensitivity of potential Crown Law steering  of current government policy.

Our simple application to see the whole of the advice has turned what would usually be a procedural technicality (an interlocutory application) into an important question – who is running the show, woke unelected lawyers, or elected politicians who can be replaced by voters?

Within the last few months, Minister Robertson has mentioned the risk of court challenges to defend co-governance, as if the government had no choice. A smart new Labour Prime Minister would replace the current Minister for Local Government, with a new Minister to dump the bad law, and ready to challenge the many official fallacies about the Treaty that are now afflicting local government.

Stephen Franks
Board Member

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