Iwisphere

Iwi are once again emerging as an economic force in Aotearoa. In what seems to be a favourable political climate, those iwi with resource and business acumen are using Māori values to conduct commerce.
Howard Keene reports.

A generation ago, a viable and powerful iwi economy that was driven by Māori values was an aspiration yet to be fulfilled. However the economic and political landscape is changing in Aotearoa, propelling iwi into new realms of economic activity and influence.

Entrepreneurial spirit is a well documented part of Māori culture and history. Hapū and iwi were dynamic traders, both before and after European contact and were enthusiastic exporters during the early contact years with European whalers and sealers. Māori business declined and dissipated with the exponential loss of land and resources during the 19th century, and the urban migration in the 1950s caused other problems including the underutilisation of Māori land and tribal resources.

However, the Māori economy is breaking through again. In September, Te Puni Kōkiri (TPK) revealed new statistics that showed between 2003 and 2006, the Māori contribution to New Zealand's gross domestic product rose from 1.96 per cent to 5.35 per cent. A TPK-commissioned study back in 2006 said New Zealand had the third highest levels of entrepreneurship in the world, and Māori were rated the most entrepreneurial group in the country. According to the study, one in three Māori between 35-44 years of age was a business entrepreneur.

Iwi exist not to make money or make business. Our purpose is to ensure the survival of Māori, of iwi, of language, of a Māori worldview.

Daphne Luke Horowhenua business consultant

Professor Whatarangi Winiata, scholar and president of the Māori Party, Horowhenua business consultant Daphne Luke and Elizabeth Cook of Te Wānanga o Raukawa explored the nature of iwi entrepreneurship in a recent paper.

In it they say Māori entrepreneurs "will seek to maximise the expression of inherited values subject to a financial constraint". In other words, Māori will do business in a way that achieves certain kaupapa or values. The kaupapa identified are: kaitiakitanga (guardianship), whanaungatanga (family), manaakitanga (generosity), rangatiratanga (chieftainship) and whakapapa (geneaology), pūkengatanga (knowledge), ūkaipōtanga (home), kotahitanga (unity), wairuatanga (spirituality) and te reo (language).

They rejected the view that these values were outdated and inhibit Māori commercial success.

Asked what is different about iwi commerce, Luke says it goes back to why iwi exist. "Iwi exist not to make money or make business. Our purpose is to ensure the survival of Māori, of iwi, of language, of a Māori worldview."

She says in the 1800s whānau, hapū and iwi were the driving force for the economic prosperity of the nation and their commercial activities were driven by the desire to express kaupapa. And, that the return for iwi was "group generosity not the individual accumulation of wealth".

In discussing the current global recession, Luke ends the interview with a quote from Albert Einstein, who said: "We can't solve problems by using the same kind of thinking we used when we created them."

She adds that Māori need to "use our own thinking, and our distinctively Māori worldview to solve our own problems and maximise on our opportunities".

The emphasis on whānau and hapū is becoming more evident as the identity of Māori returns to its roots through the identification of whakapapa lines – engendering connection and a collective voice. Burgeoning iwi memberships reflect population growth as well as a growing number of Māori aligning themselves to iwi through ancestral ties. This identification leads them not just back to the iwi, but to their hapū, marae and whānau.

Current Māori Affairs Minister Pita Sharples is keen to stress kaupapa Māori values have to drive commercial activities. "It's totally important. We have a special Māori edge, which is our attitude to each other, the world, the economy, the environment. Our ideology is excellent for working together in business.

"Otherwise we just become people competing with people in the global economy, and that takes away our special characteristics and our special advantage."

He says the best Māori development theories are not just about economic self sufficiency. "They are also powerfully concerned with social equity, with cultural affirmation; indeed with rangatiratanga."

Sharples is part of a significant shift in Aoteaora that has created new opportunities for iwi and the Māori economy. The Māori Party, a political grouping that is only five years young, is in government. Prime Minister John Key and the National Party (with the exception of their refusal to set aside Māori seats at Auckland's proposed Super City Council) recognise the potential role of iwi economies in this country.

In the last year or so, iwi have started giving serious consideration to investing in essential infrastructure around the country, which up to now has been largely the preserve of the government.

"We have a special Māori edge, which is our attitude to each other, the world, the economy, the environment. Our idelogy is excellent for working together in business."

Pita Sharples Māori Affairs Minister

The idea is that iwi, or groupings of iwi, or iwi-private joint ventures will invest in parts of the country's infrastructure, such as hospitals, schools, prisons and roads, through Public-Private Partnerships (PPPs) with the government. This has become more of a reality because the National-led government has made it clear it is more amenable to this type of arrangement than the previous government.

For iwi, this initiative sits comfortably within rangatiratanga because it is most likely PPPs will take place within an iwi's takiwā or region. It would also fulfil aspects of manaakitanga and pūkengatanga. In a sense involvement in infrastructure that is essential to running the country would also represent a degree of restoration of mana for iwi.

Ngāi Tahu kaiwhakahaere Mark Solomon says the infrastructure Ngāi Tahu will invest in depends what the government is willing to put up that is compatible with iwi aspirations. "They've indicated State Owned Enterprises are not on the table, but they will look at other things like schools, hospitals and possibly roads.

"Prime Minister John Key says iwi are long-term investors and have a different perspective to others. "That's a real positive.

"I think in terms of infrastructure because of their long-term perspective they could well be the natural fit for government as we look to develop or redevelop schools or hospitals, or even prisons, and that makes a lot of sense for them.

"The Crown doesn't necessarily want to own all those assets on its balance sheet, and Ngāi Tahu and Māori authorities want good long-term tenants, and they're community focused."

Key says that although it's early days he is optimistic of progress when the new National Infrastructure Unit is set up as part of Treasury to manage and plan the country's future infrastructure needs.

The Prime Minister describes the development of the Māori economy as "patchy". "They are very large players in some areas – fishing, agriculture, forestry, cultural tourism – and there are some very creative companies.

"So I think their reach is quite comprehensive, and the Māori economy is much larger than most New Zealanders recognise."

Māori Affairs Minister Pita Sharples sees PPP involvement as emancipatory and visionary in terms of the traditional concepts of Māori business. "It's like instead of driving the bulldozer why don't we own the damn thing, it's that sort of concept. PPPs could do much to widen the horizons and attitudes both within ourselves and our place in the New Zealand economy."If we're going to get involved in major infrastructure we have to make sure we do our homework and we have Māori involvement all the way through. It's got to go right down to the basic worker and our families who are struggling, as well as upwards to running the show and calling the shots."

He cites the example of the construction of the Auckland Casino 12 years ago where he was a consultant in training staff and employment. At one time there were about 2000 Māori working on the site. "We had a policy of employing Māori first on the grounds that we could show that Māori were hardest hit by unemployment. "It jolly well worked. Iwi or whoever's doing a project (in future) will have to think like that."

In an influential speech to the Wellington Chamber of Commerce in August that was widely reported in the media, Solomon described the developing iwi and wider Māori economy as the "powerhouse of the future".

He says the issue became a particular interest of his last year when the previous government blocked a partial takeover attempt of Auckland Airport by a Canadian pension fund.

At last year's meeting of the Iwi Chairs Forum – an inter-tribal forum developing co-operative relationships between iwi (see sidebar) – he asked representatives of both major political parties why the shareholding had not been offered to Māori.

He recalls asking the politicians: "Aren't we in a sense your perfect partner, in that we'll never leave the country. Everything that we earn will stay in the country, so why don't you work with us?" The new government was quick to respond. "The upshot was we managed to get a meeting with John Key and Bill English the Friday after the election … and they said ‘yes let's have a discussion on PPPs'.

"Key and English met with Solomon, Tukuroirangi Morgan from Tainui, Sonny Tau from Tai Tokerau, Tumu Te Heuheu and Tumanako Wereta from Ngāti Tuwharetoa, Archie Taiaroa from Whanganui, and Api Mahuika from Ngāti Porou.

Key believes his government is taking a different approach. "The big difference between our government and the previous government is that we are quite prepared to entertain the idea of private sector capital, wherever that comes from, for the development of infrastructure. "The previous government effectively rejected that, and so that option wasn't available to various iwi groups or others."

"In terms of infrastructure because of [the iwis'] long-term perspective they could well be the natural fit for government as we look to develop or redevelop schools or hospitals, or even prisons."

John Key Prime Minister

Would a joint Māori bid for Auckland Airport shares have been more acceptable to the wider New Zealand public than the Canadian bid? "Yes, arguably so. One of the issues in New Zealand has been the underdevelopment of our capital markets, and the high reliance on foreign lenders. So anything we can do to increase investment in the productive side of our economy would be welcome."

While Solomon says iwi can succeed commercially on their own as Ngāi Tahu has proven, all iwi can achieve economies of scale and step up as a pillar of the national economy. "Because unlike international shareholders in some of our major corporates, iwi aren't going anywhere. We are the first people of this land, and we're staying.

"It just makes sense if you think about it. Iwi will have the resources, we want our profits to stay in New Zealand, to reinvest for our people and for New Zealand Inc."

For a National-led government in a recession, it also makes sense to partner with organisations who shoulder responsibility for its members with a comprehensive array of health, educational, social, and even savings programmes to address inequities and promote opportunities.

Iwi, with their focus on kaitiakitanga of the environment, have also invested in conservation with financial and human resource that would collectively challenge the government's commitment through an under-resourced Department of Conservation.

Waikato-Tainui chairman Tukuroirangi Morgan also believes Māori are the economic powerhouse of the future. "Absolutely and without a doubt. We are the sleeping giant and the potential, strangely enough, is not known by the wider community."

Ngāi Tahu kaiwhakahaere Mark Solomon and Waikato-Tainui chairman Tukuroirangi Morgan sign a Memorandum of Understanding at Arowhenua Marae in 2007.

For Morgan the secret of iwi enjoying continuing and growing prosperity is "our ability to collectivise our assets and leverage them in smart and intelligent ways".

Waikato-Tainui has so far done little in the way of joint ventures with other iwi. It, jointly with Ngāi Tahu, has a 6.5 per cent shareholding in Ryman Healthcare, but an attempt to develop a Novotel Hotel in Tauranga in partnership with local iwi was unsuccessful. "We'd built a relationship with the local iwi, who were all keen and ready to go, but the terms of the council weren't to our satisfaction."

While Waikato-Tainui and Ngāi Tahu have combined assets now worth over $1 billion, a number of Māori incorporations and trusts have also been achieving significant commercial success over the last decade or so.

These include Taranaki-based Parininihi Ki Waitotara Incorporation with assets of $255m, Tuaropaki Trust an amalgamation of hapū north west of Taupo with assets worth more than $500m, and the pan-Māori Te Huarahi Tika Trust involved in the information and telecommunication sectors. Some of these are covered in sidebars to this story. In Te Waipounamu, the Wakatū (in Nelson) and Mawhera (in Hokitika) incorporations are significant commercial entities.

So what is the total worth of the Māori economy?

Figures are difficult to come by, but a Te Puni Kōkiri estimate put total commercial assets owned by Māori in 2005-06 at $16.5 billion, an increase of $7.5b from 2001.

Solomon believes the figures to be a big underestimation at the time and even more so now. Not only are they outdated, but they did not factor in growth in Ngāi Tahu and Tainui treaty settlements, both of which were valued at $170m. They did not include Māori who have gone into business by themselves and the many who do not promote themselves as specific Māori businesses. They did not include the wealth of Māori tertiary institutions, and the many Māori health and social service providers.

"I think it needs to be addressed properly," Solomon says. "I personally have always argued the Māori contribution is well over $20b, but I can't prove that." Behind the scenes discussions and think tanks are going on to make sure the different elements that make up the Māori economy work together as well as possible."

The Business Round Table, an unlikely but interested ally for iwi, has been monitoring the Māori economic and social progress. Its chairman Rob MacLeod (Ngāti Porou) in the Te Papa Treaty Debates earlier this year compared iwi organisations to trees that must bear fruit for its constituents.

He said within most iwi there are two trees producing two kinds of fruit, one being the commercial tree producing commercial profits and the second being the social tree that produces non-commercial benefits, such as iwi representation.

"The big questions which arise for decision by iwi are (a) the design of appropriate parliamentary, governance and executive structures, (b) what commercial risk to bear on the commercial tree and (c) the extent of annual distributions, (their form cash or kind), and to which constituents."

MacLeod asserts that in regards to the last question iwi "should embrace its future by investing in educational scholarships for its children".

Solomon agrees wholeheartedly and says if Māori and New Zealand as a whole are to reach full potential, it is imperative that the problem of Māori underachievement at school be addressed.

He says in the future Māori and Pasifika young people will make up a large part of the workforce. They will be the taxpayers, the people that keep the health and education systems up to scratch, the people that pay the burgeoning superannuation bill. At the 2006 Census Māori made up 14.6 per cent of the population. Half the Māori population is less than 23 years old, compared with a mean of 36 years for the total NZ population. Fertility rates are also higher for Māori than non-Māori. Statistics New Zealand projects the Māori population will rise to 17 per cent by 2026. While there is no official projection for 2050, Solomon says the Māori population could well be double today's.

Total commercial assets owned by Māori in 2005-06 are $16.5 billion, an increase of $7.5b from 2001.

Te Puni Kōkiri estimate

In 2008 31.5 percent of the total student population was Māori or Pasifika (22 and 9.5 per cent respectively). That figure will only grow."It is entirely possible that there will be more Māori and Pasifika children in our schools than Pākehā well before the middle of this century," Solomon said in his Wellington speech. "And it is shameful that more than half of Māori boys leave school without a basic qualification. "It's going to be rather futile focusing on improving productivity levels when you have a sizeable proportion of tomorrow's workforce leaving school unqualified and unskilled.

"Lifting Māori education performance should be an absolute iwi and government priority. The social fabric of our nation and our economy depends on this depressing situation being corrected."

Treaty Negotiations Minister Chris Finlayson already sees Māori as a major force in the economy, but also spies a lot more potential. "My task is to get as many iwi over the line in the time I'm steward of this portfolio to ensure that people can look forward." Finlayson worked as legal counsel for Ngāi Tahu on a number of issues during claim negotiations period. "I've seen first hand just how effective Treaty settlements are. The settlement Ngāi Tahu received has been well managed by the troops, and it has meant Ngāi Tahu is now a significant force in the South Island economy."

To date 25 groups have completed treaty settlements. About 30 claimant groups are in negotiation with the Crown, or in pre-negotiation discussions, out of an estimated remaining 60 settlements.

Finlayson says there is a great enthusiasm by iwi to enter into negotiations. "We have increased funding for the Office of Treaty Settlements by a significant margin, but there is a backlog and I'm working steadily on it. I'd like to say it's stellar progress, but the previous government did nothing for eight years until Cullen had a bit of a flurry."

Meanwhile Tainui continues with its commercial developments. With an asset value in 2008 of $570m Tainui Group Holdings' investment portfolio covers property, fishing, agriculture, tourism and managed funds.

Morgan says they are concentrating on just two ventures at the moment. "We've gone down from about 12 commercial development options to two in the face of the recession."

One big project is as the lead partner in a joint venture to build a Novotel Hotel at Auckland Airport costing $65m in time for the Rugby World Cup in 2011. The other is the $120m mall development at The Base on the site of the former airforce base at Te Rapa, which was land returned to the tribe in 1995. "It's our premier investment. By the time we've done the whole development it will be one of the biggest developments in the North Island."

Down south, Ngāi Tahu Holdings, the tribe's commercial arm, has a valuation in 2008 of $606m with equity of $473m and employs over 500 people. Its main investments have been in property, fishing, tourism and equities.

[Novotel Hotel at Auckland Airport costing $65m in time for the Rugby World Cup in 2011] is our premier investment. By the time we've done the whole development it will be one of the biggest developments in the North Island.

Tukuroirangi Morgan Waikato-Tainui chairman

Solomon says Ngāi Tahu currently has joint ventures with Te Tau Ihu tribes, and Tainui (Ryman Healthcare). "We're always investigating different things we can have a look at with other iwi."

The tribe already has experience of owning former state assets through its ownership of the Christchurch courthouse, which it purchased under the Ngāi Tahu Settlement's deferred selection process, and the Christchurch, Dunedin and Queenstown police stations, which it purchased under the settlement's first right of refusal provisions on surplus Crown assets.

As well, it is in a 50-50 joint venture with a Christchurch City Council subsidiary company Vbase to develop an existing building into a new HQ for the council. "That is the first PPP we have done with a local body," says Solomon.

The importance of safe investment in public buildings is accentuated in a recession. "No matter how bad a recession is, the courts aren't going to leave their building and the police aren't going to leave their building," says Solomon. So in some ways you are protected. We will have a cash flow from those type of investments all the way through the recession."

"I've seen frst hand just how effective Treaty settlements are. The settlement Ngāi Tahu received has been well managed by the troops, and it has meant Ngāi Tahu is now a signifcant force in the South Island economy."

Chris Finlayson Treaty Negotiations Minister

Earlier this year Minister Sharples established a Māori Economic Taskforce made up of tribal, educational, community and Māori business leaders to look at how Māori could avoid the worst effects of the recession and to strengthen the Māori economy in the long term.

Solomon, Ngāti Kahungunu chairman Ngahiwi Tomoana, Te Pouhere o Te Wānanga o Aotearoa Bentham Ohia, Daphne Luke, Te Whānau o Waipareira's John Tamihere, governance specialist June McCabe and MacLeod were appointed to lead the work for two years.

Sharples says they make up a balanced team with wide networks and diverse interests with the knowledge and experience to deliver results in the face of the huge economic challenges facing the nation. "The key to our success is co-operation, and this team can achieve that for sure."

Areas they are looking at include identifying niche markets for Māori primary produce exports, developing a Māori export brand to promote high-end products, adding value to Māori products in the international market, and trade development opportunities with other indigenous people.

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