Asset sales deadline puts heat on Govt

John Key and his ministers now have just a fortnight to consider whether to proceed with the Mighty River sale before the end of the year or postpone it. Photo / APN

John Key and his ministers have just two weeks to decide whether to continue with plans to partially sell Mighty River Power this year and trigger a court battle over water rights with Maori, or postpone the move until early next year.

Yesterday, the Government was saying little about what it will do, after receiving an unfavourable report on Maori water rights from the Waitangi Tribunal.

In a sternly worded report, the tribunal said Maori did have proprietary or ownership rights over water and the Government should stop the sale process and start talking with them about how those rights were recognised.

The setback to the sales plans comes days after uncertainty about the future of the Bluff aluminium smelter - and therefore wholesale electricity prices - emerged as a threat to the proposals.

Given its self-imposed deadline, the Government now has just a fortnight to consider whether to proceed with the Mighty River sale before the end of the year or postpone it.

Any decision to set aside the tribunal's findings and go ahead with sale would almost certainly trigger a time-consuming court challenge from the Maori Council, which made the claim to the tribunal.

In its interim report, the tribunal's presiding officer, Maori Land Court Chief Judge Wilson Isaac, recommended that Mr Key and his Government delay the sale "in the national interest and the interests of the Crown-Maori relationship" while a solution to the "dilemma" of Maori rights over water was hammered out.

The tribunal called for an "urgent national hui" in conjunction with iwi leaders, the Maori Council, and the more than 100 iwi, hapu and individuals who asserted an interest in the claim "to determine a way forward".

But he offered a thinly veiled rebuke to Mr Key over his comments about the Maori Council's claim, including that it was "opportunistic".

"This is not an opportunistic claim," said Chief Judge Isaac.

"In our view, the recognition of the just rights of Maori in their water bodies can no longer be delayed. The Crown admitted in our hearing that it has known of these claims for many years and has left them unresolved."

Maori Council co-chairman Maanu Paul said the tribunal's recommendation would help force the Government to the negotiating table.

But the other co-chairman, former High Court judge Sir Eddie Durie, said the issue would have to go to the courts if the Government ignored the recommendations.

State Owned Enterprises Minister Tony Ryall said that as previously agreed, the Government would discuss the report with the Maori Party as they developed their respective responses to it.

Maori Party co-leaders Tariana Turia and Pita Sharples said they would not comment until they had discussed the report with claimant groups and the Government.

Labour leader David Shearer said National's self-imposed deadline for the asset sales gave it limited options for dealing with the issue and "the only sensible solution is to stop the asset sales".

Green Party co-leader Russel Norman said the asset-sales plan was "in crisis" and should be scrapped.

Mana Party leader Hone Harawira said the issue threatened National's relationship with the Maori Party.

"Following their late-night crisis meeting last month, Key made it clear that the Government wouldn't legislate against any court decision regarding Maori water rights so long as ownership was not on the table.

"Today, the tribunal have likened Maori proprietary rights in water to ownership."