Author: au_common_admin

Introduction

The National Government is currently conducting “The Constitution Conversation”; a review of New Zealand’s constitutional arrangements (“review”). The review originates from the 2008 Confidence and Supply Agreement between the Māori Party and the National Government. This review is significant as it calls for public submissions on how we want our country to be run, and includes an inquiry into the role of the Treaty of Waitangi in our constitutional arrangements. However, there are concerns with the scope of the review and whether there is an intention on the part of the Government for the review to give rise to meaningful constitutional change.

New Zealand’s current constitutional arrangements

A constitution is the rules that determine who exercises power and how they exercise it. Within a constitution there are rules about the powers of Parliament, the powers of the Courts and the Executive, as well as safeguards to prevent the abuse of those powers.¹  “=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn1″>Put simply, a constitution is about relationships between the Government, the Courts and it is about the rights of citizens.²

Most countries have a written constitution contained in a single written document. New Zealand does not. Unlike most countries, New Zealand has an unwritten constitution, meaning that the rules that determine who exercises power and how they exercise it are to be found in a collection of statutes like the Constitution Act 1986, the Bill of Rights Act 1990 and the Electoral Act 1993, among others. As well as various statutes, New Zealand’s constitution is also made up of the Magna Carta, Court decisions, doctrines, conventions and long standing practices of Parliament.  not. Unlike most countries, New Zealand has an unwritten constitution, meaning that the rules that determine who exercises power and how they exercise it are to be found in a collection of statutes like the Constitution Act 1986, the Bill of Rights Act 1990 and the Electoral Act 1993, among others. As well as various statutes, New Zealand’s constitution is also made up of the Magna Carta, Court decisions, doctrines, conventions and long standing practices of Parliament.³

It is now generally accepted that Treaty of Waitangi is also part of New Zealand’s unwritten constitution. This is because the Treaty of Waitangi is the document upon which the New Zealand Parliament claims legitimacy or the sovereign right to make laws in New Zealand.

Professor Burrows states that, someone wanting to find the New Zealand constitution would need to piece it together and then try to understand it.⁴”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn4″>  Burrows also provides that a constitution has to fit the culture and character of a country and, if this is so, our constitutional arrangements are seriously outdated and in need of change given that New Zealand now has more international relationships, the relationship between local and central government is changing and the population demographics are shifting rapidly.⁵”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn5″>

Constitutional advisory panel and scope of review

The review will be conducted in consultation with a reference group of members of Parliament from across the house. In addition, an independent Constitution Advisory Panel (Advisory Panel) comprising of a cross-section of the public was elected to carry out the public consultation and engagement programme. Members of the Advisory Panel include Emeritus Professor Burrows (Co-Chair), Sir Tipene O’Regan (Co-Chair), Deborah Coddington, Peter Chin, Sir Michael Cullen, Hon John Luxton, Bernice Mene, Dr Leonie Pihama, Hinurewa Poutu, Professor Linda Tuhiwai Smith, Peter Tennent and Dr Ranginui Walker.

The review seeks opinions from the public on what is important about how New Zealand is run, in particular:

• The pros and cons of having our constitution written down in a single document;
• The role of the Bill of Rights Act 1990 in our constitution;
• The role of the Treaty of Waitangi in our constitution;
• How Māori views should be represented in national and local government;
• Electoral issues such as the size of Parliament and the length of its term.

Opinions on the review

There are differing opinions on the review itself.

On the review, Deputy Prime Minister Bill English said, “We believe our constitutional arrangements work pretty well and there would need to be a pretty broad consensus for change, and this group has the opportunity to see if that consensus exists”.⁶”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn6″>

Commentators at the Te Papa o Tongarewa Treaty Debates themed “Constitutional Review” said that New Zealand is in a constitutional coma, and there is a general apathy because New Zealand has free democratic elections and a generally stable government. It was also noted that stimulating public engagement and building trust in the review will be a difficult task for those leading the review.⁷”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn7″>

In addition, the fact that the current constitutional review or “The Constitution Conversation” originates from the 2008 Relationship and Confidence and Supply Agreement between the Māori Party and the National Party is a concern for some who believe that the review, having its origins in a political compact, means there is no genuine motivation from the National Government for constitutional change.⁸”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn8″>

The Iwi Working Group on Constitutional Transformation came together in 2012 and is led by Professor Margaret Mutu and Moana Jackson. The purpose of the group is to engage with Maori and to work on developing a model constitution for our country based on Maori kawa and tikanga, He Whakaputanga o te Rangatiratanga o Niu Tireni and Te Tiriti o Waitangi.⁹ “=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn9″>Jackson’s view is that any constitutional review should proceed “with time”, preferring to look at it as “constitutional transformation” rather than constitutional change or reform:¹⁰”=”” data-toggle=”tooltip” data-placement=”top” data-original-title=””>kaupapa-nui-te-kaupapa-ture#_ftn10″>

Background

Early last year, the Māori Council filed an urgent claim with the Waitangi Tribunal seeking a recommendation that the Crown not proceed with the proposed partial sale of state-owned enterprises (SOEs). After the hearing had been split into two parts, one urgent stage and one second stage full review of Māori interests in water, the Tribunal’s urgent response in August 2012 concluded that Māori have interests in water in the nature of ownership.

The application

As a result of the Tribunal recommendations, the Crown undertook some (rather limited) consultation with Māori on the proposed “shares plus” concept. After a couple of hui held around the country, the Crown concluded that its capacity to recognise Māori rights to water and to provide redress in relation to the same would not be impaired by the proposed sale.

In response, the Māori Council filed an application for judicial review in the High Court seeking declarations that the Crown’s proposed Order in Council to convert the SOEs to Mixed Ownership Model companies (MOMs), whose shares can be owned by persons other than the Crown. In essence, the Council submitted that the selling of shares to an MOM would breach the principles of the Treaty because it would prejudice Māori claims to water (in that it would be contrary to s 9 of the State owned Enterprises Act 1986 and s 45Q of the Public Finance Act 1989, which protect “the principles of the Treaty” in relation to Crown actions).

High Court decision

The Council and the additional applicants were unsuccessful in the High Court, where Ronald Young J held in December 2012 that because the sale of shares will be achieved by primary legislation, it could not be questioned/investigated by a High Court in relation to whether the action complies with the principles of the Treaty.

Supreme Court decision

The case went straight to the Supreme Court which held that the proposed sale of the shares was in fact reviewable by the Court and that the Court should ensure that the proposed sale is consistent with the principles of the Treaty (therefore disagreeing with Ronald Young J). The Supreme Court further held that in spite of the decision being reviewable, the partial privatisation of Mighty River Power would not impair to a material extent the Crown’s ability to remedy any Treaty breach in respect of Māori interests in the River. The main reasons for this were:

• Partial privatisation of Might River Power is, in the Supreme Court’s opinion, not equivalent to a “disposal of property or interests” in the river held by the Crown. Rather, the rights will continue to be held by the Crown as the Crown will continue to be a majority shareholder in the company;
• Whilst the Waitangi Tribunal describes the ownership interest guaranteed by the Treaty in terms of use and control, the Supreme Court believes that this may be more easily achieved through regulation of “water use” which is currently being reviewed by the Crown. In addition, various settlements between the Crown and certain iwi have indicated a willingness of the Crown to consider extending Māori authority in connection with specific waters (if the iwi/hapū can show an interest/connection). In summary, the Supreme Court held that the significance of “ownership interest” in waters needs to be assessed against any opportunities currently under consideration for real and actual authority by Māori in relation to waters of significance;
• The Supreme Court also relied on the Crown’s claims that if required to settle claims by offering shares that had already been sold, it would be able to do so by buying them back. As such, the Supreme Court held that the Crown will retain an appropriate level of capacity to offer Māori shares (which brings with it a certain level of influence); and
• Whilst the Supreme Court was willing to accept that the privatisation may limit the scope of the Crown to provide some forms of redress which may be theoretically possible, when assessing whether this amounts to “a material impairment” and when taken into account the relevant factors (refer below), the Supreme Court was not persuaded that such an impairment would arise from the proposed sale of shares.

In terms of the relevant factors to assess, the Supreme Court in particular looked at and took into account the following:

• The assurances given by the Crown that it would not seek to rely on the changed status of the power companies to suggest any diminution in the claimed rights of Māori but rather, would continue to exercise its Treaty obligations and ensure that future legislation dealing with the status change includes a provision reflecting the concepts of Section 9 of the State Owned Enterprises Act 1986 (which upholds the principles of the Treaty);
• The extent to which theoretical redress-options are likely to be plausible;
• The capacity of the Crown to provide equivalent and meaningful redress even if shares are sold; and
• The proven willingness and ability of the Crown to provide such redress (particularly relying on previous settlements with Māori in relation to specific waters).

What does it mean for Māori?

The Government has now launched its plans to sell Mighty River Power and shares of other SOEs are due to follow in due course. So what does this loss mean for Māori, and was it in fact a “loss”?

Lawyers have argued that some of the Supreme Court’s comments have opened a few doors for Māori to make further claims. For instance, the Court noted that a case might be brought on the basis that subsisting customary rights may be affected by partial privatisation which justifies a halt to the asset sales (bearing in mind that the applicants would be faced with the same difficulty in showing that the such a sale would amount to a “material impairment” in spite of the undertakings/assurances from the Crown noted above).

Further, the fact that the Crown made certain assurances and undertakings in relation to the changed status will, according to existing case law, create a legitimate expectation that the Crown will act in accordance with those assurances (and failing to do so could give rise to a successful challenge in Court).

In summary, while the Māori Council failed to stop the sale of Mighty River Power shares, they did in fact succeed on a point of principle, namely that the Crown is bound to comply with the principles of the Treaty before deciding to sell the shares. When seen in light of the assurances given by the Crown (which due to the Supreme Court’s reliance on the same effectively puts the Crown “on notice” of the need to stand by its word) it is clear that while the Crown may have won the battle, the war is very much still “on track” for Māori. The Government is no longer free to implement the asset sales freely and without consideration for Māori rights to water but rather has to abide by the “concessions” made in the Supreme Court.

If you would like further information please contact Renika Siciliano on 07 958 7429.