December 2009 Newsletter
Kia hiwa ra- December 2009
Chief Executive Message
Heoi ano tatou katoa
Nei ra ahau e mihi maoha ake ki a koutou katoa i runga i nga ahuatanga o te wa.
He whakaaro nui ki nga whanau katoa huri noa i te motu
E aku matua, e aku rangatira kei huri te kei o toku waka ki mahi ke atu
No reira nga mihi nui ki a koutou mo ou manakaitanga.
Kia piki te ora, ki runga kia koutou katoa.
My last CFRT Board meeting will be on the 21st December. The next day we will have our traditional fish and chips staff lunch, then I will remove my personal effects and leave the office for the last time as Chief Executive. I know that the organisation I leave behind is vastly different from the one I walked into on September 25th, 2000.
Not long after I began John Tamihere was appointed the chair of the Maori Affairs Select Committee. He immediately served notice that the committee would inquire into the activities of the Trust.
The MASC report was published in late 2003. It was damning of the Trust for a number of reasons. These included a lack of transparency in the manner in which funding decisions were made and a significant departure by the Trust in the manner in which it carried out its activities from the original purpose outlined in the Trust Deed.
In the first 2 years following the MASC Inquiry the Trust made a significant effort to address the transparency issue. Policies were codified and processes developed to provide consistency in the manner in which all claimants are dealt with. While there will always be criticisms of the nature of decisions made around funding requests, these criticisms are now very rarely about inconsistency or lack of transparency. Most complaints now are about timeliness or either the declining of a funding request or the level of funding approved.
The second issue, of departure from the original purposes of the Trust Deed, is more problematic. The premise of critics of the Trust such as the Hon. John Tamihere and the Hon. Winston Peters was that CFRT’s prime purpose was to provide assistance to enable the return of forest assets (accumulated rentals) to their proper owners- either the Crown, or Maori.
However the comprehensive settlement policy initiated in the mid 1990s prevented the pursuit of discrete forest lands settlements. The Waitangi Tribunal's regional hearings approach and the Office of Treaty Settlements Large Natural Grouping format for negotiations both had the effect of forcing CFRT to support in some form much larger numbers of claimants than originally envisaged. This also meant that the process for the return of forest assets was considerably longer than planned and is inextricably linked to the whole settlement framework.
In 2007 the Trust was taken into the confidence of Te Arikinui Dr Tumu Te Heuheu and the Hon. Dr Michael Cullen. We played a major role in the completion of the CNI settlement and this resulted in the return of over $280m in forestry assets to the CNI Iwi Collective. We would not have been able to play this role if we had not addressed the criticisms of the MASC report 4 years earlier and if we had not reorganised our governance and management structures and improved our internal policies and processes.
The challenge for the Trust now post-CNI is how to do more with less. Our capital base has almost halved. Interest rates have fallen and consequently for the rest of the life of the Trust activity funding will be supplemented by drawing on our retained earnings. At the same time the number of eligible claimant groups actively engaged in negotiations with the Crown has increased. The settlement transaction costs are constant regardless of the size of an iwi, the amount of “their” forest accumulated rentals, or their potential settlement quantum.
The settlement process follows the theory of efficient capital markets in the sense that all information will become known. Claimants and their counsel know what other iwi got to pursue their settlement and that becomes the starting point for them. Unfortunately there is a fundamental market failure in the sense that there is currently insufficient reward for the Crown and iwi to settle quickly. There is an expectation from both parties that the Trust will continue to stump up with the transaction costs for iwi regardless of how long the process takes.
For the Crown and iwi the concernabout the prospect of the Trust running out of money is not a high priority. It will only become an issue when that eventuality is imminent. Until then both parties are essentially oblivious to the concerns of the Trust about a diminishing resource being assailed by ever-increasing demand. Unfortunately the trustees do not have that luxury, and it is almost inevitable that at some stage in the not so distant future, decisions will have to be made about the economic rationing of the Trust’s financial resource.
I have hugely enjoyed my time at CFRT. I have worked with great staff, some challenging and supportive trustees, and the full panoply of iwi leadership. The settlement of Treaty of Waitangi claims is for many Maori and an increasing number of Pakeha the most important issue facing race relations in this country. Most of the characters who work in this sector do so out of a sense of mission. We are extremely privileged to have such a worthwhile cause to pursue.
Financial Update
This has been a watershed year for the Trust. At the start of April 2009 Accumulated Rentals held in trust had grown to $518 million and Retained Earnings increased to $144 million. These together generated nearly $50 million in income in the year to 31 March 2009. The Trust uses this income to support and fund claimants to settle their historical Treaty claims.
With the transfer of approximately $289 million in accumulated rentals associated with the now former Crown Forest Licensed Land in the Central North Island from the Trust to claimant groups in early July 2009, the Trust holds in trust a much reduced portfolio of accumulated rentals. That coupled with historically low interest rates means that the limit to the Trust’s capacity to provide funding to all claimants is growing.
Between 2009 and 2014 around 40 claimant groups will require support from the Trust through the Tribunal hearings and settlement negotiations processes.
Expenditure on claimant assistance has almost doubled over the previous two financial years. For this financial year expenditure on claimant assistance is forecast to increase 20% from $31 million to $37 million. For the first time in its history the Trust is forecasting an annual operating deficit of $20 million. The retained earnings will now fund the shortfall hereon until the ownership of the last of the Crown forest lands have been resolved. This is not expected until at least 2015.
Around the Motu
Te Taitokerau
Muriwhenua
Negotiations continue with the Te Hiku Forum (Ngati Kuri, Ngai Takoto, Te Aupouri, Te Rarawa and Ngati Kahu) for the commercial settlement of their claims. The Te Hiku Forum is expected to reach an Agreement in Principle with the Crown in late 2009, with Deeds of Settlement expected to be signed by September 2010.
Te Paparahi o Te Raki
On 17 August 2009 the Waitangi Tribunal convened a judicial conference at Waitangi in order to establish the readiness of Te Paparahi o Te Raki claimants to commence initial hearings in October 2009. Although several groups indicated they were ready the majority stated that they were not and asked for hearings to be deferred. The Tribunal has directed that hearings will now commence in the first half of 2010, and they will obtain monthly updates from all parties as to their preparedness.
Tamaki Makaurau
Collective negotiations activity in the Tamaki Region has intensified with the Crown reporting that it is now meeting with groups fortnightly. It is anticipated that offers will be made to all groups claiming interests in the Kaipara sub-region by December 2009.
Ngati Rehua and Ngati Manuhiri have each submitted Deeds of Mandate to the Crown. Ngai Tai ki Tamaki expect to submit their Deed of Mandate in November 2009.
Waikato
Te Rohe Potae Inquiry
Claimants in Te Rohe Potae continue to prepare research for Waitangi Tribunal hearings. The next District Research Hui to discuss CFRT-commissioned research projects is scheduled for 11-12 November 2009.
CNI
The Trust would like to congratulate Te Runanga o Ngati Whare and Te Runanga o Ngati Manawa for signing their respective Deeds of Settlement in December.
Ngai Tuhoe and the Crown expect to reach an Agreement in Principle in early 2010. Ngati Tuwharetoa has notified the Crown that they would like to commence negotiations in 2009. They are presently awaiting a formal response.
Te Tairawhiti
East Coast Inquiry
The Trust will shortly file a further four research reports with the Waitangi Tribunal. We continue to work with claimants to complete other research projects by the casebook deadline of December 2009.
Turanga Manu Whiriwhiri
Turanga Manu Whiriwhiri and Crown expect to sign a Deed of Settlement in December 2009.
Takitimu
Ngati Pahauwera
Ngati Pahauwera and the Crown continue to work towards signing a Deed of Settlement in early 2010.
Mohaka Waikare
Ngati Hineuru and Maungaharuru Tangitu submitted their respective Deeds of Mandate to the Crown in June 2009. We congratulate Maungaharuru Tangitu on the recognition of their Deed of Mandate.
Te Tai Hauauru
Whanganui Inquiry
The Tribunal heard claimant closing submissions over two weeks in October. The final week of hearings for Crown closing submissions (week 18) is scheduled for December 2009.
Taihape ki Kapiti Inquiry
A second Judicial Conference was held in Palmerston North on 31 August 2009. Discussion focussed on the Tribunal’s proposal to split the Inquiry district into two, parts a Taihape Inquiry district and a Manawatu ki Porirua district. Most claimant opinion supported this proposal and subsequent discussions traversed the appropriate boundary to split the district on a north-south axis and the naming of the respective districts. Other topics included the proposed extension of the Inquiry boundaries to include areas of overlap with other districts.
On 24 September 2009 the Tribunal issued a Direction splitting the Taihape ki Kapiti district into two, creating the Taihape: Rangitikei ki Rangipo (Wai 2180) and Porirua ki Manawatu (Wai 2200) districts. The Tribunal also noted that they were supportive of the Trust's scoping research requirements for the two Inquiry districts.
Ngati Apa
The First Reading of the Ngati Apa Settlement Bill is scheduled for mid-November 2009.
Tanenuiarangi Manawatu Inc
Tanenuiarangi Manawatu Inc presented their settlement proposal to the Crown in September 2009. They expect to sign a Deed of Settlement in 2010.
Te Tau Ihu
The three Te Tau Ihu groups (Kurahaupo, Tainui Taranaki ki Te Tonga, and Ngati Toa Rangatira) continue to work towards signing Deeds of Settlement with the Crown in early 2010.
Ben Dalton
Chief Executive
Crown Forestry Rental Trust
