The Government will be mightily relieved at the Supreme Court's ruling yesterday. It can proceed with the sale of shares in Mighty River Power in good faith that the rights and role of Maori in the administration of New Zealand's fresh and geothermal water will be settled in other forums.
The decision is an admirable balance of principle and realism. Without diminishing the underlying claims to the water, the court has concluded those claims would not be damaged by a change in the ownership of assets that generate electricity. The court has noted there are already two substantial power-generating companies in private ownership, Contact Energy and Trust Power.
"Any proposal to impose royalties (for water use) would be likely to attract opposition from [their] shareholders as well as the Crown and the public at large," it says. "The introduction of private shareholders in mixed-ownership companies would thus not have a material effect on the level of opposition."
While the court agrees that the transfer of water permits to Maori could not be contemplated after privatisation, since it would expropriate value in the company from private shareholders, the court finds it "implausible" that water would be withheld from an electricity generating plant in any event.
The judges have taken particular note of Treaty settlements that give Maori a voice in the management and care of water flowing through their tribal territory, and of the Government's undertaking to recognise Maori interests in a more general reform of the ways that water rights might be awarded and traded in future.