Iwi end fishing's 10-year dispute

By IRENE CHAPPLE

When Shane Jones split the opposition, he struck fast and ruthlessly.

The Treaty of Waitangi Fisheries Commission chairman knew that if he was to end 10 years of infighting and win approval to put Maori fishing assets into New Zealand's largest fishing company, he had to win over some of the tribes opposing the latest proposal.

This month, Jones promised the influential Lakes Tribes of Tuwharetoa and Te Arawa $20 million to help develop freshwater fish.

Tuwharetoa was the first to accept.

The crucial Arawa hui, with the future of the $700 million in Maori fisheries assets riding on the outcome, was called for last Tuesday.

Just after 8pm, at home in Wellington, Jones took a call from Te Arawa Maori Trust Board chairman Arapeta Tahana.

Te Arawa had accepted the deal, splitting from the model's most strident opponents, the Iwi Forum, in favour of the commission's latest allocation model known as Ahu Whakamua.

That promised the end to a fight which, according to one report, was costing Maori up to a $1 million a month in lost returns. During a decade of dissent the commission has spent between $15 million and $17 million on legal fees alone.

It meant the commission could begin to seriously believe in a fishing supercompany called Aotearoa Fisheries Ltd (AFL). AFL would be a linchpin of New Zealand fishing's foreign earnings.

It would create the kind of financial clout not enjoyed by any other such indigenous group anywhere in the world.

AFL, which could be in full operation by next October, will be based in Wellington.

It will be a holding company for $350 million worth of assets currently spread over six companies.

It will represent 39 per cent of the fishing industry's earnings, likely to reach $1.6 billion this year, and is expected to turn a profit of at least $30 million in its first years.

It is a more commercial structure than the model proposed by the Iwi Forum, which would have split control of the company through shares held by all iwi.

AFL will have five directors, appointed on the basis of their commercial experience by the commission's successor, which will use the commission's Maori name, Te Ohu Kai Moana.

That commission model puts Maori, whose tribal politics have always been intertwined with their business, firmly in the commercial realm.

But it does detract from the social nuances of the company's background.

"There is always going to be argument within Maoridom whether we go with a strict commercial model or a localised communal model," says Jones. "That is a burden other business leaders simply don't have to bear."

The debate turns on whether better equity for Maori will be achieved by moving further into the commercial environment and away from ancestral roots, says Jones.

"But," he argues, "unless we grow the country and expand the pie, the ability of Government and iwi to advance the social agenda [of Maori] will not be granted."

AFL will pay out 40 per cent of its income to iwi, retaining the rest to fund expansion.

Jones says that will be enough in the short term, but doesn't rule out capital raising in the future.

AFL may also benefit from a tax bill, due to be reported back to Parliament early next year by the select committee studying it, that puts Maori authorities' tax at 19.5 per cent.

That would ensure that the majority of the authorities' beneficiaries - Maori, most of whom sit in the 19.5 per cent bracket - were taxed fairly.

Because AFL will ultimately be owned by Te Ohu Kai Moana, a Maori authority, it will benefit.

Rob McLeod, a Treaty of Waitangi Fisheries Commissioner and author of the McLeod Tax Review, says the tax treatment will give AFL a one-off advantage, effectively increasing the value of its assets by 20 per cent, or $70 million.

But, he argues, it will not give the company a permanent competitive advantage because the tax treatment will immediately lead to shareholders expecting increased returns.

Jones certainly expects that the new company will face high expectations from its iwi owners.

"Our Maori shareholders will be very vigilant and very severe," he says.

"We have to show that Maori can be credible players and leaders in a global business ... We are going to be in a goldfish bowl.

"People will be watching us very closely and reminding us of our goals in a way that is dissimilar to anyone else."

The companies that will come under AFL's umbrella employ around 3000 staff worldwide, around a quarter of them of Maori descent.

There will be redundancies among inshore and deep-sea fishing staff, a trend already begun by companies such as Moana Pacific.

Jones expects AFL's redundancies to be softened by re-employment in aquaculture interests, where there is a lack of trained staff.

The future of AFL, as he sees it, is in niche markets and highly branded marketing.

Such value-adding tactics are already being adopted by savvy fishing companies in New Zealand.

Jones wants to push AFL subsidiaries' products further into Europe, and says the United States could also be a huge market for Sealord and Moana Pacific.

While some in the fishing industry declined to comment on the likely effect of AFL, others were keen for its implementation.

They say Maori have been solid players in the industry and if they can bury the fighting and focus on the fishing, everyone will win.

Said one smaller operator: "We [the smaller companies] can live off the crumbs that fall off the table.

"And Maori have got the ears of Government in Wellington. With things like high-seas fishing rights and international waters, they will bring a strong voice."

Meanwhile, Jones, the father of seven children aged from five to 23, says he intends to step down after the company is bedded in.

The architect of the new arrangement says he is grateful for the confidence that was put in him by senior figures in Maoridom. He believes he will remain involved for another two to four years, but eventually wants to leave the politics behind and move into private business.

"Wearing a constant face of resoluteness in order to get closure is a very hard job and by and large it is a thankless job," he says. "It requires such a high level of exposure and energy ... You need a hide as thick as a puriri tree."

Jones believes his people will want him to move on, and calls on a Maori saying: "When the hard man has done the hard job the people don't want the hard man any more."

More importantly, says Jones, he wants to make room for others.

"You make your contribution and you move along. I will make way for the younger people."