Is John Key being advised by Auckland law graduates?

I suspect the sudden threat by the Maori Party to "reconsider its relationship with National" if partialy-privatised (sorry ... "mixed ownership model") SOEs are exempted from the SOE Act's section 9 prohibition on the Crown "act[ing] in a manner that is inconsistent with the principles of the Treaty of Waitangi" is a bit of sabre rattling that can be compromised away. Whether that compromise really will take the form of an "elegant way through" the issue, as opposed to a tangled nest of worms, is something we'll just have to wait and see. 

But there was one thing that John Key had to say on the issue that caused me to wonder if I'd misheard him or if he'd misread his briefing notes, because it seemed so patently mistaken.

The comment came 1'20" into this clip from TV3, where John Key states: 

"I would point out that section 9 is largely symbolic. It's been the law since it was established in 1986, but the Government can't find an example of where it's been used ... ."

(As a side-note, somehow TVNZ's website turned that statement into this bit of nonsense: "Key said section nine of the SOE legislation was 'largely symbolic' because it had not been enacted since it was drawn up in 1986." What does that even mean?)

Now, it's entirely possible TV3 have edited Key's comment in a way that cut off a qualifying claim, such as "by a court to require the Government return assets to Maori", or the like. Because that technically would be true - if only because the courts have no power to do so under the section. Section 9 of the SOE Act serves as a shield to stop any action by the Crown that would be in breach of Treaty principles. It is not a sword that can be used affirmatively to force the Government to act in some way.

However, saying that s.9 is "largely symbolic" because it hasn't (because it can't) be used in Court to force the Government to do something positive is plain wrong. The potential power it gives to Maori to stop Government plans for SOE's is considerable. Indeed, it's precisely because s.9 has such potential power that the Government wants to remove mixed-ownership model companies (sorry ... "partially privatised assets") from its ambit. After all, if we're just talking symbols, then the problem with its application is ... what exactly?

And if there was no such qualifying claim at the end of Key's broadcast comment, then his statement is so jaw-droppingly false as to make me wonder whether his advisors have played a practical joke on him. Anyone who has studied Public Law in the past 20-some years will recall the New Zealand Maori Council's successful 1987 challenge to the Fourth Labour Government's proposed transfer of land to State Owned Enterprises (the so-called "Lands case"). As a direct result of this litigation, the clawback provisions were inserted into the SOE Act 1986, allowing the Waitangi Tribunal to force the Government to return land owned or sold by a SOE that the Tribunal finds was wrongfully acquired from Maori in breah of Treaty principles.

(Again, this power has never been used in practice - because whenever the Tribunal makes such a finding, the Crown immediately negotiates a settlement with the relevant Iwi or hapu. So it's a power that works as a backstop threat ... if the Crown won't voluntarily fix the problem, the Tribunal will do it instead.) 

And following the Lands case, there was the New Zealand Maori Council's success in the Coal case, it's settlement with the Crown over the forestry assets, as well as the Privy Council decision in the Broadcasting Assets case which, while not an immediate win for Maori, contained obiter comments that helped set the platform for Maori broadcasting policy up to and including Maori TV. 

Actually, rather than cover this in detail here, why not get it straight from the horses mouth: here is (then) Sir Robin Cooke's account of Treaty jurisprudence (under s.9 of the SOE Act and wider) and his role in developing that field of law. If you can finish this and still think that s.9 is "largely symbolic" and has "[not] been used" ... well, you'd probably still get a B- in Auckland's Public Law course.

Comments (7)

by Tim Watkin on January 31, 2012
Tim Watkin

I've hardly slept in the past 24 hours, so I may be just dense. But to be clear, you're saying that the only reason section 9 has never been "used" is that whenever it's been, um, used in court, the government has settled rather than been compelled by the court (under that section)?

by Andrew Geddis on January 31, 2012
Andrew Geddis

Section 9 places a legal duty on the Government not to act in a particular way under the SOE Act - a way that is inconsistent with the principles of the Treaty of Waitangi. In the Lands case, the Court of Appeal ruled that transferring land to SOEs under the SOE Act without a mechanism for protecting Maori claims to that land under the Treaty would be inconsistent with Treaty principles. The Government then responded (with the NZ Maori Council's agreement) by amending the SOE Act to allow land it transferred to SOE's (and that the SOE might then sell to a private owner) to be "clawed back" if a Treaty claim to it was upheld. The Court then accepted this response satisfied the s.9 duty. Subsequent settlements have then taken place under the shadow of that "clawback" power ... which only exists as a response to the Court's ruling on what s.9 meant.

Put it another way ... if s.9 is "largely symbolic" and has never been used, John Key might care to explain where ss.27A-D of the SOE Act 1986 came from?

by mickysavage on February 01, 2012

Speaking as an Auckland law graduate who coincidentially gained a B- in Administrative Law (I had a bad day) can I just say that your charactisation of my colleagues' and my abilities to comprehend the significance of section 9 is, um, not correct.  I suspect that Key is being advised by a graduate in commerce from Otago University ...


; )

by Andrew Geddis on February 01, 2012
Andrew Geddis


You know the only reason I am so rude is because of a deep seated regional and institutional inferiority complex that leads me to overcompensate. If I only had that level of insight myself ... .

But you are probably right about Otago commerce graduates.

by Lynn Prentice on February 02, 2012
Lynn Prentice

Hey, no slagging off of Otago commerce grads. According to one of the things on the wall I am one. Did an MBA there in the 80's.

However even I know that legislation doesn't have to be exercised to act as a deterrent.

I'd suggest that the strange idea came from a Auckland commerce grad (one J Key) and that it was the result of a very hurried look through some briefing papers.

by Graeme Edgeler on February 02, 2012
Graeme Edgeler

If it's just a symbol, why do you care?

I understand the argument is that that symbol would represent to others something that would frighten them and cause investors (or certain categories of investors) to lower the value they place on the businesses being sold, depressing the money that can be made by the government in selling them (i.e. John Key knows it's just a symbol, but other people don't; the perception that it's more than a symbol will lower the likely sale price).

by Petone on February 02, 2012

Would any of law graduates here be able to comment on whether the SOE Act Section 4 (1)(c) ".. an organisation that exhibits a sense of social responsibility by having regard to the interests of the community in which it operates.." is enforceable or even meaningful for a case like the Mokihinui Hydro Project?

For the MHP, Meridian has spent millions ($14 million up to 2009 according to Kevin Hague) plus causing 7 figure costs for DOC and probably also the judiciary for consents for the Mokihinui, prior to obtaining a concession which is not guaranteed and without which all that consent expenditure is a complete waste of the taxpayer's ie the community's money.

Not to mention Solid Energy digging up Southland and via ETS free credits dumping a cost of hundreds of millions.. per year!.. on the taxpayer/community.

Post new comment

You must be logged in to post a comment.