MÃ„Âori Enterprise and the New Zealand Capital ... - Te Puni Kokiri

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The position of iwi organisations in the post-settlement environment is an important change in the Mäori enterprise landscape. There is a sense in which the role of iwi organisations is undergoing change. Iwi play an important role in relation to local and regional resource management and have formal standing under legislation such as the Resource Management Act (1991). Thus they have assumed a quasi-governmental role in relation to resource management, planning and development. An expectation of iwi involvement in infrastructure development has the potential to expand their role in the commercial sphere in the provision of such assets. Thus iwi are likely to become over time an important conduit between government (at both central and territorial levels) and the private sector because of their established relationship networks. This will make iwi organisations valuable partners to private firms seeking to supply services to government. The difficulty that is evident is few iwi have the capital available to participate meaningfully alongside such private firms. Some Treaty settlements have offered successful claimants deferred purchase rights and a first right of refusal in relation to Crown-owned assets. The assets involved cover a broad range including state housing and farm properties. Moreover, settlements have occurred which nonetheless reserved the position of claimants with respect to important resources such as water, geothermal and certain minerals. There is potential, therefore, for the future transfer of property rights in respect of such resources with a concomitant requirement for capital to complete the transfer and for development. Developments in industry The picture becomes further knotted when trends in industrial structure in industries in which Mäori enterprises are represented are considered: • Consolidation of agribusiness activities is occurring. Both primary producers and processors are seeking to control the vertical supply chain in order to reduce risk, improve service quality to customers, improve product quality, and respond to market imperatives relating to the traceability of product. The upshot is a consolidation of ownership of breeding and finishing properties. Mäori trusts and incorporations that own small- to medium-sized pastoral farms are at risk of missing the boat, meaning that the profitability of their farming operations will be less than the norm. • Owners of pre-1990 forestland face special challenges brought about by the introduction of the Emissions Trading Scheme (ETS) by the Climate Change Response Act (2002). Owners face a liability of roughly $20,000 per hectare if such land is permanently deforested. The cash cost of avoiding such liability by planting or replanting in radiata pine is approximately $8,000 per hectare. Such funds are generally unable to be borrowed because the asset generates no cash flow until the trees reach maturity. Without the ability to access such sums, landowners will be in a weak position vis a vis their tenants. • In the wet fish sector, partial fragmentation of quota ownership has resulted from the fisheries settlement and the future addition of new species to the quota 56
management system with a reserve allocation for Mäori. Consolidation of quota will allow more economic harvesting, especially for species which involve heavy investment and boats in processing equipment. • Lifting of the moratorium on aquaculture will potentially produce an upswing in demand for investment in production, with a concomitant requirement for investment capital and finance. Conclusion The project seeks to define the market within which Mäori capital users and Mäori capital providers operate. What emerges is that Mäori enterprises have ownership limitations, which restrict their ability to access equity investment. Joint ventures are a means of addressing this limitation. Mäori enterprises are also active as capital providers to a range of start-up, early stage and property-related development. Mäori enterprises have material asset holdings in a range of key primary sector industries (agribusiness, forestry, fishing) and tourism. Mäori enterprises also have contingent assets in the form of deferred purchase, first refusal and settlement top-up. Mäori enterprises have standing with the Crown which makes them important conduits for private sector organisations that seek to do business with the government. The development potential of the Mäori economic asset base has been highlighted. In some areas such as fishing and forestry there has been remarkable progress. In other areas such as agribusiness there is less discernable progress, and the issues being discussed a decade ago are still the ones that surface. The scoping study is intended to draw out the potential range of issues affecting the demand and supply of capital to Mäori enterprises, with a focus on Mäori enterprises that hold and control collectively-owned assets. In the following section, we report on interviews with sector stakeholders including members of the reference group and people involved directly and indirectly with Mäori enterprises. 57
Page 1:
MÄORI ENTERPRISE AND THE NEW ZEALA
Page 4 and 5:
Executive Summary Introduction This
Page 6 and 7:
growth. Mobilising resources relies
Page 8 and 9: Importance of perceptions A key que
Page 10 and 11: Mäori enterprises are also an impo
Page 12 and 13: What do they mean by governance We
Page 14 and 15: Conclusion Many Mäori enterprises
Page 16 and 17: providers can point to transactions
Page 18 and 19: Gaining acceptance of the need to c
Page 20 and 21: • Investigating alternatives to o
Page 22 and 23: Alternatives to over-the-counter ma
Page 24 and 25: Recommendation: 1. The priority for
Page 26 and 27: Appendix A Case studies Introductio
Page 28 and 29: Table 1 Comparative Governance Arra
Page 30 and 31: Comparative Governance Arrangements
Page 33: REFERENCE GROUP, INTERVIEWS AND CAS
Page 36 and 37: 1. Introduction 1.1 Purpose This re
Page 38 and 39: participation among Mäori enterpri
Page 40 and 41: • The Mäori economy is more prof
Page 42 and 43: Members are invited to join the ref
Page 44 and 45: The reference group also identified
Page 46 and 47: 5.2 List of interviews A list of in
Page 48 and 49: References Annesley, B. (2005). The
Page 51: FEEDBACK AND INTERVIEWS 1 July 2010
Page 54 and 55: 1. Introduction The Mäori Investme
Page 56 and 57: - Artistic expressions that find ou
Page 60 and 61: 3. Interviews In this section, we r
Page 62 and 63: “Who knows how to value incorpora
Page 64 and 65: “Why would I lend money to a Mäo
Page 66 and 67: Banks Banks are not confident they
Page 68 and 69: • The current mission of most Mä
Page 70 and 71: interpersonal roles can create inte
Page 72 and 73: Mäori enterprise characteristics T
Page 74 and 75: Even more difficult is to identify
Page 76 and 77: Appendix A Research summaries This
Page 78 and 79: in Mäori trusts and incorporations
Page 80 and 81: Mäori Land Development Report prep
Page 82 and 83: The economic emergence of India and
Page 84: Contact the Taskforce Chair of the
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