N.Z. Tribunal Says Maori Have Claims on Genesis Energy Asset

New Zealand’s Waitangi Tribunal said Maori tribes retain rights over rivers and lakes utilized by a North Island hydro power scheme that is part of the government’s asset-sales program.

The tribes never relinquished ownership and control of waterways associated with the Tongariro power scheme, and they retain residual proprietary rights over them, the tribunal said in a statement on its website today. The canals, lakes and generators are owned and operated by state-owned power company Genesis Energy Ltd., which the government plans to sell up to 49 percent of in an initial public offering next year.

While the tribunal’s ruling isn’t binding, it may give Maori tribes scope to mount a legal challenge to the Genesis share sale, similar to a court case in 2012 that delayed the government’s offer of Mighty River Power Ltd. shares. Finance Minister Bill English said the tribunal’s finding won’t change the government’s plans.

The planned Genesis IPO is the third in a series of asset sales that Prime Minister John Key is conducting to build new infrastructure and reduce debt.

The tribunal is a commission that makes recommendations on claims of breaches of the Treaty of Waitangi, New Zealand’s founding document that gave Maori rights to their land and natural resources.

‘Significant Compensation’

When the government was planning the Tongariro project in the 1970s, it denied local Maori any commercial benefits and hasn’t provided any subsequent compensation for the detrimental impacts of the scheme on water quality, food and fish, the tribunal said. That amounts to a breach of the treaty, and the government should make “significant compensation to remedy these breaches,” it concluded.

“We have the prospect of more court action or large compensation payouts hanging over the Genesis sale,” Clayton Cosgrove, state-owned enterprises spokesman for the opposition Labour Party, said in an e-mailed statement.

Last year, Maori tribes claimed rights over the Waikato River on which Mighty River has several plants. The government delayed its planned offer to consult before recommitting to its original plan. Subsequently, the court ruled that the partial share sale didn’t invalidate the Maori claims, and allowed the sale to proceed.

“The Crown’s position is pretty clear, no one owns the water,” English told reporters today, according to TV3. “This won’t have an impact on the Genesis sale.”

The government aims to raise about NZ$5 billion ($4.1 billion) from the asset-sales program and has so far generated NZ$3.7 billion from the divestment of 48 percent of Mighty River and 49 percent of Meridian Energy Ltd. It also plans to reduce its stake in Air New Zealand Ltd. to 51 percent from 73 percent.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Matthew Brockett at mbrockett1@bloomberg.net

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