Fran O'Sullivan: Minister faces hidden perils in race-based forestry deal

Maori Party co-leaders Tariana Turia and Pita Sharples claim to represent all Maoridom.

But the preferential rort they have screwed for powerful iwi, as the Maori Party's price for supporting National's emissions trading legislation, calls into question just who calls the shots and who the party really represents.

Next week - possibly as early as Monday - Cabinet Minister Nick Smith will unveil the secret deal he has been negotiating with the Maori Party for Ngai Tahu and its four iwi co-venturers. In essence the five iwi will lease Department of Conservation land at zero rental for limited periods to plant forests.

The upshot is the five iwi will reap hefty financial rewards through selling carbon credits earned from the forests. These are expected to be a mixture of permanent "carbon sink" forests and harvestable forest crops.

Harvesting the trees will create a contingent liability under Kyoto Protocol rules. But Smith is adamant the liability will rest with iwi, not the Crown, contrary to arguments by lobbyists working for other owners of pre-1990 forests.

He points out that only 10 per cent of the 450,000ha of pre-1990 forests in Maori ownership will be part of the compensatory deal.

The driving force behind this preferential deal is Ngai Tahu and the broader Iwi Leadership Group, which has been making the bullets for the Maori Party to fire on this score.

Ngai Tahu basically claims the Crown did the dirty on them by not disclosing at the time of its Waitangi Treaty negotiations an intention to evolve an emissions trading scheme that would ultimately devalue the forests it secured as part of its settlement.

The problem is, legal advice tendered to the previous Labour Government does not support the notion that Ngai Tahu was deliberately done down by the Crown.

Litigation threats have been made behind the scenes. But instead of standing its legal ground the National Government has caved in.

In reality, if Ngai Tahu was done down by some Crown conspiracy then so, too, were other forest owners who must surely be able to argue they also were not given advance warning that the value of their holdings would change as a result of future Government policies.

But the National-led Government is not offering them special compensation. Nor is it about to embed a clause within upcoming legislation that will require it to take their interests into consideration when making any subsequent changes to the greenhouse gas emissions policy.

It's a tribute to the innate cunning of Turia and Sharples that their dealing on behalf of the powerful Ngai Tahu and four other iwi has not caused huge uproar within the National Party.

Consider: Only months ago, the Maori Party was decrying National's proposed amendments to Labour's existing emissions trading scheme as inadequate. The scheme did not go far enough to satisfy New Zealand's self-proclaimed planet protectors that it would reduce our overall carbon emissions. Smith has a ready rationale for his preferential dealing. He points to the concessions Labour made to its political partners to get its own emissions trading scheme over the line. But it's hard to square away Winston Peters' gold card travel concessions for superannuitants, or Jeanette Fitzsimons' insulation scheme with the racially based deal the Maori Party has screwed.

Smith is in a difficult position. He contends that the Maori Party is not simply a bog-standard political party but a "group representing iwi".

The Cabinet Minister is grateful the party supported his amendments to the Resource Management Act and believes it will play a big role in the upcoming biodiversity and water reforms. The question is if Maori interests increasingly become the Crown's preferred partner in New Zealand's economic development, will other competing interests be squeezed out? And if so, what does that do to National's broader business backing.

The climate change portfolio is a political widow-maker. David Parker found out who really called the shots in the Labour Cabinet when he trod on the toes of influential vested interests.

It wasn't long before those interests bypassed Parker to talk turkey with Michael Cullen, who was Labour's real climate tsar.

Competing forestry interests are now attempting their own end run by lobbying Prime Minister John Key directly to abandon next week's deal and go back to the drawing board.

These interests - including Graeme Hart - propose that a Kiwiforest state-owned enterprise be established to plant forests on marginal land creating new carbon sinks. Smith prefers a wait-and-see approach. Instead he is allowing himself to be "brownmailed".