Te Ture Whenua Māori Bill

This is debate on clauses 202 to 237 and schedule 3.

Tēnā koe, Mr Chair, kia ora tātau katoa, ngā mihi ki a tātau e wānanga nei i tō tātau kaupapa.

[Thank you, Mr Chair, acknowledgments to us all, and congratulations to us on deliberating our proposal here.]

Part 6 is very much around the operation of governance bodies and, I suppose, talks about the regulations and the operations of how those entities will act. This part, from my perspective, strengthens those protections that have been spoken about by members throughout this session, making sure that we put in place good protections to ensure that Māori land remains in Māori hands by placing a greater emphasis and clearer responsibilities around governance bodies and kaitiaki. It introduces stricter eligibility criteria, more duties, responsibilities, and accountabilities that are actually similar to those that are applied to company directors, and this issue was raised in terms of, I think, the amendment that Mr Henare moved around the thresholds for 10 years, 5 years, and so on about whether a trustee should sit on a board or not, or an entity.

So I think it is very much trying to maintain a similar level of accountability to what is set out in other pieces of legislation. The whole idea is that the trustee’s duties in respect of Māori land should, obviously, be managed by the trust. The Māori Land Court will also have jurisdiction to investigate governance bodies within some parameters. The court’s power includes the new powers to disqualify individual governors—referred to as kaitiaki—from holding such a position on any governance body, and that power can be exercised in specific circumstances, such as some of the issues that were raised by members around the issues of fraud, bad faith, and failure to exercise reasonable care. As I said, it is consistent with other pieces of legislation, and I am told that the Companies Act 1993 is absolutely about the issue of disqualification of company directors.

In addition to the right of owners or governance bodies to initiate the cancellation of a governance entity, the Māori Land Court will be authorised to do so if it is satisfied that the governance body is insolvent, the governance body has failed to comply with statutory duties and obligations, or its continuation would materially prejudice the owners. This part will also ensure that Māori incorporations will be able to continue to maintain their own share register, if they wish. This issue was raised by members earlier as well. I think maintaining their own share register will be one of the factors that the shareholders of an existing Māori incorporation will need to consider when they are deciding whether they want their governance body to become a rangatōpū.

So, to come to the hub of it, while this is a relatively small part of the bigger bill, I think it is a further example of the principle of mana motuhake absolutely being recognised within the bill, because it is about those governance entities being able to make decisions for themselves, not anyone else. I hope that is a good general overview about this part of the bill.

Tēnā koe, Mr Chair. Firstly, thank you to Minister Flavell for his explanation around this part, and I do take his point that a lot of the provisions in this part of the bill are around making the exercise of powers more clear. I would not go so far as to say that it gives them mana motuhake, but it certainly still gives them some room within the letter of the law—both this bill and the other related Acts that governing bodies operate under.

I want to turn the Committee’s attention to clause 207, “Requirements if governance body sells or exchanges parcel of Māori freehold land”, and, in particular, to clause 207(2)(b). I will read it here, and I will explain my thoughts on this. It says: “until the body complies with paragraph (a), do 1 or both of the following: (i) hold the net proceeds in a separate bank account for the benefit of the owners of the land; [or] (ii) invest the net proceeds in 1 or more fixed term deposit products of 1 or more registered banks (as defined by section 2(1) of the Reserve Bank of New Zealand Act 1989) for the benefit of the owners of the land;”.

As I stare at that and as I look at that particular clause, that makes sense, so that the money is not sitting there idly—I get that. I have been part of a Māori land governance body where we actually did have term deposits. I understand that. But my question with regard to this particular part is that it does not set a time frame. It does not set a clear time frame. Are we suggesting that, as clause 207 “Requirements if governance body sells or exchanges parcels of Māori freehold land” says here, in that exchange or sale of the Māori freehold land, then, just as a default, it can put it into a term deposit and, by virtue of the fact that it is a term deposit, it can sit on it for 6 months, 1 year—how long might that term be? And does that perhaps open up too much leeway, if you like, for governing bodies to simply say: “Oh well, we’ll sit on that money and wait for something better.”, when, actually, that flies in contradiction to the requirements of these particular governance bodies in either sales or exchanges of parcels of Māori freehold land, or the requirements for an allocation scheme, as indicated in clause 209?

Like I said, as I stare at that particular clause that makes a bit of sense to me. It reminds me of the failure of a Ngāpuhi settlement to lock away a quantum. If you lock away a quantum you can sit on it and hope that the interest generated will just be of benefit to our people regardless. But that also has a danger, because it does not set a time frame. It does not set a time frame, and I am scared that this particular clause is not clear enough and actually allows governing bodies to say “Oh well, maybe that particular deal did not come through.”, or: “Wow, we were actually hoping that it did not come through, and what we will do is we will take this money and park it into a term deposit, and hope that we can get some interest off it.” We know how term deposits work. Once the money is locked in there, it is locked in there. It is locked in there, or you pay the penalties if you change the terms of that deposit.

I wonder, and I ask the Minister in the chair, Minister Flavell, whether there can be any consideration in this particular clause to actually say that it is a last resort to either park it in a bank account for beneficiaries or to place it in a term deposit—to say that it is a last resort, and that if that course is taken we can actually have a clearer time frame on it. What is stopping the governance bodies simply putting it in a really long term deposit with a bank and sitting on it?

💬 Pita Paraone: What about distributing it to the shareholders?

Or simply distributing it to the shareholders? I am going to get to that very shortly, Mr Paraone. So that is the first question: whether or not we can actually place a bit more restriction or more guidelines on that particular part. Like I said, this makes good commercial sense and decisions to me, and I am not going to rubbish that, but what we will say is to ensure that this does not give, I guess, a backdoor opportunity for governing bodies simply to park it in a term deposit in the hope that they can just make money that way, when actually it is set up differently in that particular clause.

Now to the part that Mr Paraone talks about, in clause 212, “Application of revenues”. Clause 212(2) says “If a governance body decides to pay owners a distribution, the body must keep a record of—” and then it lists there “the name of each owner entitled to receive the distribution”, “the amount to be distributed to each owner”, and “the date on which the distribution will be made”. That makes perfect sense to me. However, I do have one question, and the question is actually around the capacity to get that done—the capacity to get that done. We understand there has been an allocation for the Māori Land Service in the hope that we can tidy up quite a lot of the un-succeeded shares, idle shares, and inactive shareholders and beneficiaries so that we can actually include them. We can hopefully update the database that particular land administration bodies do hold, but I wonder whether in fact this bill and the Minister actually understand the scale of that problem—the actual scale of that problem.

We looked at one particular part on behalf of Ngati Hine Forestry Trust, on a project to update our particular files. Per annum—per annum—that was going to run us just over $100,000 to have a project manager to bring that particular database up to date. That is a serious concern that I have—simply around the capacity—because while I understand we want revenues to be given to our people, little do a lot of beneficiaries understand that for a dollar to be paid out it almost costs that, if not more, in compliance costs on tax and administration. That is something that a lot of beneficiaries actually do not understand. Just because you have $1 million in the bank and you can update your owners distribution list and have it all up to date—if you have $1 million, you actually cannot give out $1 million. You will only be giving, effectively, just under $500,000; the rest goes on tax and administration.

So those are the two questions I have. One is around the capacity, and the other one is around clause 207, “Requirements if governance body sells or exchanges parcel of Māori freehold land”.

House resumed.

Progress reported.

Report adopted.

The House adjourned at 9.56 p.m.