One of Taranaki's largest private investment projects has gone horribly wrong, losing close to $20 million in a series of high-risk financial ventures.
The loss means Taranaki's most northern iwi, Ngati Tama, has shed all of a $14.5m Treaty of Waitangi payout it received in 2003.
Shocked iwi members learned of the financial disaster at a hui at Pukearuhe Marae this weekend.
Where, one should ask in the wake of this stuff-up, does the government’s obligations end. Treaty settlements are full and final. However, I don’t think - and I’m open to correction on this point - that the Waitangi Tribunal, Crown Law or Cabinet have ever interpreted full and final to mean that the government’s obligations end once settlement legislation is passed. Indeed, if the government knew a tribe’s settlement was close to collapsing, and did nothing, then the government would be liable for a contemporary breach of the Treaty under the partnership and active protection principles. So, despite the full and final aspect of settlements, the government retains on-going obligations under the principles of the Treaty. The full and final notion relates to, I believe, the redress component. It does not nullify other obligations the government has towards Maori.
With this in mind, does the government owe Ngati Tama compensation? Personally, I don’t think so, but I know other Maori think compensation is appropriate. From what information is in the public domain, the government had no idea of the situation and no hand in it. Ngati Tama’s loss came as a result of poor management. However, if the government can guarantee risky finance companies and, when they go bust, pay out sums well in excess of all treaty settlements combined, why can’t the government guarantee treaty settlements? A valid question and one I can’t find a compelling answer against.
It is negligent, on the government’s part, to absolve itself of responsibilities once treaty settlements are passed. After all, the government is in a sense making an investment. Therefore, the government should ensure appropriate mechanisms are in place to manage the settlement. Before a settlement can be transferred, a tribal organisation must be in place, but it is not a requirement that an adequate corporate arm is in place. This is inadequate.
Once settlement legislation is passed, it is on iwi to make what they will of the settlement. However, many of the smaller iwi, have no experience, expertise or knowledge in and of commercial matters. The larger iwi tend to do okay, for example Ngai Tahu and Ngati Awa, but the smaller iwi often do not have expert tribe members to draw on. This isn’t universally true, I should add, Tainui came close to bankruptcy a few years ago.
I agree with Richard Jones who says that “an extra layer of due diligence is necessary when planned investments are outside the traditional areas such as the primary sector and property”. Maori tend to do very well in primary industries and property, yet no so well in the sort of investments Ngati Tama made. In fact, I think it is almost unprecedented for an iwi to invest heavily in an overseas company, and a software company too.
Ultimately, Ngati Tama had too much exposure to what were a handful of very, very risky investments. I can understand the desire to make something of a miserly settlement, but I don’t think Ngati Tama’s leaders kept in mind that management of treaty settlements should be conservative. The settlements are meant to be sustainable and intergenerational; it’s not for current generations to milk it for all it’s worth with risky investments. Having said that, I shouldn’t speculate on what was motivating Ngati Tama leaders and what, I suppose, really happened.
I think the CEO of Ngati Tama, Greg White, and the Board owe the people of Ngati Tama an apology.