Asset sales delay: initial thoughts

In politics, it’s better to bend a little than to break. With that in mind, the government has decided to delay the sale of Mighty River Power until 2013. Today the Prime Minister announced the delay and signalled the government’s intention to consult “relevant iwi”, read the Iwi Leaders Group.

As I outlined last week, this was the cleanest option. Even if the government backed themselves in Court, an injunction preventing the sale of MRP would operate until the issue was settled. So, no matter what option was taken, a delay was inevitable. The government has played the best of a bad hand.

Depending on your perspective, this can be a win or a loss. A win in the sense that the government is preparing to recognise Maori water rights, or at least that appears to be so. A loss in the sense that asset sales will be delayed not derailed.

Note that there is still potential for litigation. However, litigation at this point would be an epic strategic mistake. The consultation period, even if it is not the consultation process the Tribunal envisaged, must be allowed to take its course. After all, Maori are in a strong position. The legal position is weighted in our favour. Even if the law favoured the Crown, Maori need only show an arguable case for an injunction to be granted. As mentioned, an injunction that operates beyond 2013 would derail asset sales entirely. Litigation also pushes the government closer to their fall-back position – legislation – in any world that’s a bad outcome.

The Maori Party are now more important than ever. The party must act as an intermediary between iwi and the government. They cannot fall-back on acting as a conduit for the Iwi Leaders Group. The government prefers to deal with the Iwi Leaders, but they represent the commercial interests of our richest iwi rather than the cultural and commercial interests of all iwi, especially pre-settlement iwi. The Maori Party must ensure that the Iwi Leaders don’t have a monopoly on the consultation process. More to come tomorrow.