Crystal ball required to help SoE share decision for some iwi

Proposals enabling some iwi to buy-into the partial privatisation of State Owned Enterprises may not be all they seem and should be treated with caution.

That's according to Baden Vertongen, a Senior Associate at Kensington Swan and specialist in Treaty of Waitangi settlement negotiations and post-settlement issues for Maori.

The Government has proposed that iwi currently in negotiations over historic Treaty claims will have the option of taking some of the value of their future settlement early as shares in one or more of the State Owned Enterprises.

Baden Vertongen says the proposals leave many questions unanswered, and will need a detailed assessment by individual iwi.

"These proposals do not apply to all iwi, such as those which have settled or have not started negotiations.

"Is this offer instead of, or additional to, the normal account payments that are part of Treaty settlements? And how does it stack up against other assets that may be ‘on the table’ for iwi?"

"As some of these issues may not have even been raised, let alone agreed, when a decision to invest is needed, this becomes crystal ball-gazing and could impact the wider structure of a settlement," he says.
Mr Vertongen says it appears things such as the level of investment available, and what you can invest in, could change over time as iwi progress through negotiations.

"This is complicated by the fact that the next General Election is due in 2014, potentially putting the entire process in question, and making planning very difficult."

To take advantage of this offer also requires iwi to establish a Post Settlement Governance Entity earlier than normal.

"There are risks in doing this too quickly, especially if key decisions such how the claimant group will be defined have not been finalised.

"A costly restructuring process could result if the entity holding on-account shares ends up not being the one that should hold the final settlement," he says.

The Government’s proposals include funding so individual iwi can seek specialist advice.

Baden Vertongen says, because of the complexities of the proposals, he urges iwi to take up that offer.

www.kensingtonswan.com

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