$30m loss nailed to iwi's support for failed advisers

Ngati Rangiteaorere and Ngati Rangiwewehi claim the 10 per cent of forests set aside for groups which did not enter the Treelords settlement. Photo / Supplied

The biggest funder of the Treaty settlements process faces dropping $30 million into the red this year - the first time in its 20-year history.

The Crown Forestry Rental Trust (CFRT) says it will receive $20.7 million from investments. But it will need to spend $50.7 million to keep pace with targets for the 2014 deadline.

Continual operating deficits are a worrying part of its future, an "unsustainable" scenario blamed in part on the demand for "specialist advisers".

Chief executive Ben Dalton will voice his concerns about the situation at celebrations of the half-billion dollar Treelords settlement in Turangi today.

But some commentators say that if CFRT is worried about costs, it shouldn't be funding those who have been part of failed attempts for large settlements.

Former MP John Tamihere chaired a Maori Affairs select committee inquiry into Treaty funding and the trust in 2003.

He said large firms were as much to blame for past failures as iwi and individuals who had not secured settlements.

"People and firms should be paid for success, not paid for prolonging the pain of the process. What you get is a number of prospects, firms, whose names continue to come up, who have really made the process far more tedious, far more tiresome and hugely costly."

The biggest failure is the three previous attempts at settling the 176,000ha Kaingaroa estate. It has cost $30 million over 19 years for no settlement.

Treaty lawyer Donna Hall led one of the best-known attempts - the Volcanic Interior Plateau project which split apart and ended in court.

Ms Hall is now working for Ngati Rangiteaorere and Ngati Rangiwewehi, which claim the 10 per cent of forests set aside for groups which did not enter the Treelords settlement. Sources say those groups have put in a proposal for more than $1 million of funding from the trust.

Ms Hall would not speak to the Herald yesterday. Chief executive Ben Dalton wouldn't be drawn on waste in the sector but said Treaty climate conditions were hammering the trust's books. It funds the sector by using interest off rentals from Crown forestry land - assets held in trust for Maori until ownership is determined.

Today the trust will hand over $284 million of accumulated rentals to Treelords iwi - about half its asset base.

Earnings off the remaining assets have been slashed because banks are offering rates of around 3 per cent compared with 8-9 per cent last year.

While the funding pool is shrinking, demand isn't.

It's caused in part by the Government's 2014 deadline for settling claims and the sharp increase in iwi demand to fund more "specialist advisers" over the past 18 months.

Last year the trust paid $20 million worth of bills from lawyers, economists, taxmen, valuation and communications advisers and other specialists.

Iwi need to be more "rational" about what advice they need for claims, and the Crown had a responsibility to say what specialist advice might be needed during negotiations, Mr Dalton said.

"We're in the gold-rush part of the settlement [process] and every one has their stake in and we're the general store," he said.

To service this year's deficit, CFRT may have to dip into its $144 million war-chest. It was being saved to deal with smaller iwi at the end of all settlements.

Crown Forestry Rental Trust

* Formed in 1990 to receive rent from Crown Forestry-licensed land
* $284 million worth of accumulated rentals formally goes back to eight Treelords' iwi today
* About the same amount is still held by the trust
* Will spend $50 million this year - $30 million will be 'deficit spending'

$88,000 FOR TWO MONTHS' WORK

Two months of intense Treelords negotiations have resulted in three iwi facilitators being paid partly by the Treasury - a first for the department.

Papers obtained by the Weekend Herald reveal that at the top of the tree is lead negotiator George Asher, who was in line to earn $88,000 during May and June 2008 from Crown Forestry Rental Trust.

Two other iwi facilitators, Matt Te Pou and Graham Pryor, earned $67,500 each over the same period.

The Treasury increased the spending on the deal's iwi facilitators by $90,000, although it refused to confirm each person's cut.

Mr Asher said the negotiations component of the settlement cost about $5 million, including administrative support.

He said the sum should be measured against successfully negotiating the Central North Island Collective (Treelords) settlement, worth roughly $500 million, in five months when others had taken years and been paid multi-millions for no result.

Mr Te Pou said he earned considerably more from consultancy work, although the CNI negotiations meant working seven days a week for months.