AFTER THE DEED

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THE ROLE OF MAORI TRIBAL FISHERIES IN A POST TREATY SETTLEMENT WORLD

Robin Hapi

Chief Executive Officer, Treaty of Waitangi Fisheries Commission Wellington, New Zealand

At Maui Pacific Center October 12-16, 1998

1. MIHI - GREETING

Ko Takitimu te waka Ko Kahungunu te Iwi Ko Poukawa te moana Ko Kahuranaki te marae Ko Te Hapuku te tangata

E nga raurangatira, nga mana, nga reo, nga karangarangatanga maha, tena koutou, tena koutou, tena koutou katoa.

Greetings to you all. I am sure many of you will have a feeling for what I have just said in Maori, but for those who are unsure, I began by saying "Takitimu is my waka - my canoe - and Ngati Kahungunu is my tribe." I am talking of my ancestral canoe, the canoe which brought the ancestors of my Ngati Kahungunu tribe to Aotearoa from Hawaiki so many centuries ago. Many of you may have been raised on these types of traditions, for they are part of your history too. It is heartening that recent scientific breakthroughs in New Zealand are proving beyond dispute that our migration stories are much closer to fact than the "myth and legend" status that colonial cultures have relegated them to.

It gives me great pleasure to greet you; my whanaunga - my relations - at this forum. (We Polynesians are very keen on clutching to blood ties, however tenuous.)

2. INTRODUCTION

The focus of my presentation today will be on the development of Maori tribal participation in the business of fishing since the Fisheries Settlement between Maori and the Crown in 1992, with particular attention to the role of my organisation, The Treaty of Waitangi Fisheries Commission (Te Ohu Kai Moana).

To begin it is appropriate that we consider the origins of Maori claims to the fisheries resource in Aotearoa (New Zealand). The attached chart shows the geneological links acknowledged by Maori between the descendants of Tane (humankind) and the descendants of Tangaroa (Sealife). The bonds of whanaungatanga (relationships) establish reciprocal obligations in Maori custom. This custom and the fishing practices that developed among Maori led to the Treaty of Waitangi between the Crown and Maori guaranteeing for Maori the full, exclusive and undisturbed possession of their fisheries.

In 1986 the Crown introduced a new management system for fisheries in our country. It did not make allowance for the rights of Maori and as a result Litigation was initiated resulting eventually in a full and final settlement for all Maori commercial fishing claims between the Crown and Maori. This has resulted in Maori through the Commission that I represent being the single largest participant in the New Zealand fishing industry.

There is a well known phrase in the Maori language - Te ao hurihuri which means the ever-changing world. Two decades ago the role of Maori, in any substantive way, in the commercial fishing world would have made for a very short paper indeed, and most of that participation would have been Maori individuals competing in a business environment totally indifferent to ethnicity. Tribally owned business was a very minor player.

Now, as we move into a post-Treaty of Waitangi settlement phase in our country, Maori tribal resources account for billions of dollars worth of business, for example:

Maori in Business

Self-employed [mainly agriculture] $2,000 million

Maori freehold land - capital value [1.5 million ha] $1,700 million

Major Maori corporate enterprises $500 million

Te Ohu Kai Moana [fishing] $500 million

Maori Trust Boards fixed assets $47 million

The point to note is that the corporates and fishing are the two areas of rapid growth, and the figures are probably conservative. For example, there are now over 50 tribal companies actively engaged in fisheries.

3. THE MAORI DEVELOPMENT MODEL

The following chart provides an insight into an approach for Maori development. While survival and growth is a basic tenet of most business Maori ethics and tikanga(custom) bring into play a range of additional considerations. These considerations call upon the integration of cultural and material strengths in order to achieve well being and ensure survival.

4. THE NEW ZEALAND SEAFOOD INDUSTRY

Now for the business and activity of fishing. Although we are small on a world scale our industry is a significant employer and exporter, with potential to create real economic opportunities for Maori.

The Seafood Industry: 1995

Production: 654,000 tons Less than 1% of world total $1.36 billion

Employment 10,000 catching 48.5%; processing 51.1%

Vessels 1,766 [322 over 15m]

Exports $1.24 billion

Domestic $0.12 billion

Recent Trends Increases in processing employment Leveling of wild fish catches and fleet size Rapid growth in aquaculture production "New Zealandisation" of wild fish catch.

As you can see, in the context of the New Zealand economy, fishing is a substantial industry. The primary role of my organisation is to see that Maori, based on their Treaty of Waitangi rights, form a significant part of this industry.

5. HISTORICAL BACKGROUND

It is a matter of simple historical record that most Maori lived on the edge of the sea. The coastal zone was as much the source of their protein as was the land, and our ancestors customarily undertook fishing expeditions far out to sea, not infrequently beyond the horizon. Those voyages were generally for species which were better able to be preserved, with large bulk catches. The activity justified the major collective community effort represented by the expedition both in catching and processing. Yes! We did know how to harness economies of scale, and Captain Cook's voyages note the derision that Maori held for some of their "small" seine nets, compared to Maori nets hundreds of metres long. The great source of kaimoana (seafood), though, for everyday life and virtually all year round was the littoral zone and slightly beyond.

Unfortunately Maori never had the chance to carry their resource management knowledge into the colonial commercial world of fisheries. Our tribal resources, including almost all of our marine interests were wrongfully alienated by the Crown. Maori, crowded to the economic margins of the new nation, could but observe the development of a fishing industry on a resource which they considered still belonged to them.

The fact that breaches of the 1840 Treaty of Waitangi occurred, and that the Crown - belatedly - acknowledged its role, is the very genesis of Te Ohu Kai Moana, the Treaty of Waitangi Fisheries Commission, formed by Act of Parliament in 1989. Te Ohu Kai Moana is a breach-birth baby, born of a 150 year gestation.

6. THE ROLE OF TE OHU KAI MOANA

This statutory body, variously loved and loathed by factions in both Maori and non-Maori society has the responsibility for facilitating the entry of Maori into, and the development by Maori of, the business and activity of fishing. The Fisheries Settlement process has resulted in over $500 million of fisheries assets being earmarked for return to Maori tribes in the Pre-Settlement Allocation (PRESA) and Post-Settlement Allocation (POSA) processes. You will note that the assets are not being "given" to Maori, they are being returned and I emphasise that Maori are not "getting something for nothing". Although some citizens of Aotearoa will always rant against it, resolution of Treaty issues is a permanent feature of our political landscape.

At the moment management of the Maori fisheries resource lies primarily in Te Ohu Kai Moana and its subsidiary companies, including Sealord Group, Moana Pacific Fisheries, and Prepared Foods.

Key Te Ohu Kai Moana Statistics: 1997 Bookvalue.

TOKM Consolidated

Total Assets $348m $574m Net Assets $346m $305m

Quota Volume 66k mt 222k mt ITQ Quota Book Value $99.2m $320

Total Income $13.7m $307.4m

PRESA Value (est.mkt) $250m+ POSA Value (est.mkt) $150m+

Tribes have been locked in often litigious debate as to how they are to share this settlement on a tribal basis, although I believe we are close to resolving this issue, when assets will finally be returned to tribes to own and manage in their own right.

Meanwhile the Commission has been leasing fisheries quota on an annual discounted basis to tribes so that they can obtain an immediate short-term benefit from the Settlement.

As well as determining the optimum method of allocation to tribes our role also implies striving to be at the forefront of new developments in the fishing industry. Increasingly we are looking to ensure that Maori are well placed to participate in the rapid-growth areas, including aquaculture. Our medium term strategy is three-fold:

6.1 EDUCATION

Education lies at the base of the knowledge-based workforce that has evolved so rapidly in the last decade or so. In general, sheer muscle alone cannot provide to individuals the guarantee of gainful employment as it did 30 years ago. Although there will always be a place for unskilled labor, that place continues to shrink as a fraction of the total workforce. This has had a devastating impact upon Maori who, for various historical reasons, not dissimilar to those for other indigenous peoples, have been disproportionately placed at the unskilled end of the labor market.

If Maori want to be more than the muscle conveyor belt of the fishing industry then they must - as individuals and tribes - ensure they acquire the skills to fill positions at all levels, and the Commission would be less than responsible if it did not focus upon this key issue. To that effect we operate a training and scholarship scheme focused on Maori entry into the fishing industry at all levels. Since 1995 we have invested $1 million annually in this programme as part of a five year strategy to develop human capital. The programme follows three streams of training and study:

Tertiary Level

We support Maori students to gain professional and scientific qualifications recognised by the fishing industry, from undergraduate through to doctorate level in applied science and resource management fields. At the apex of our tertiary scholarships we have six Maori students studying fisheries or aquaculture at the University of Tasmania. These students, we are confident, are the fore-runners of a stream of skilled graduates into aquaculture. You might ask, "Why Tasmania?" Simply because their offering is the best available in our region, and we cannot afford to aim for less than the best. Qualifications being completed range from, applied science in aquaculture, fisheries management, fisheries research, marine science and resource management to food technology and seafood technology.

Management Training

This programme co-sponsored with tribal organizations is designed for those working within and managing Iwi commercial fisheries resources. Our policy is to ensure that students supported by Te Ohu Kai Moana in tertiary management studies or training are also valued by tribes, who we ask to put their money, as well as their faith, in the students.

We match Iwi contributions on a dollar for dollar basis up to a maximum of $5,000, and students with Iwi support are completing a range of management disciplines, including: MBA, (Masters in Business Administration), BBS, (Bachelor of Business Studies), BMS, (Business Management Studies), BCA, (Bachelor of Commerce and Administration) to the Diploma in Maori and Management, the Masters in Maori and Management and Institute of Directors courses.

Technical Training

Technical training focuses on seafood processing, deep-sea fishing and statutory marine qualifications. These courses are excellent examples of pre-industry training leading towards guaranteed employment.

Seafood-Processing Course -Timaru and Gisborne

This 15 week course provides trainees with the skills and qualifications required to process fish in factories on land and at sea. Graduates are awarded with a quality fish handling certificate and high employment prospects. The success of this program has led to the development and implementation of a pilot programme aimed for positions of supervisors and factory managers.

The Aoraki Polytechnic is also working with the Te Tini a Tangaroa tribal consortium in the delivery of the successful seafood-processing course in Gisborne. The Co-ordinators of the Gisborne programme are both ex-Te Ohu Kai Moana scholarship students.

Deep-sea Fishing Course - Westport

This provides students with an excellent foundation for deep-sea fishing and factory processing. Graduates leave the programme with a quality fish-handling certificate. It also teaches a range of skills from safety and hygiene to the order of St Johns Standard First Aid Certificate, basic navigational skills and deck hand skills. Physical fitness is also part of the programme with every class day commencing with a supervised gym workout, and the course is strongly focused on building and maintaining teams.

Statutory Marine Courses - Nation-wide

The Statutory Marine scholarships provide financial assistance to gain qualifications such as: qualified fishing deckhand; restricted radar; watch keeping/commercial launchmaster; New Zealand coastal master; mate or skipper- deep sea fishing boat.

Scholarship Statistics 1995 to1998

Since 1995, we have provided 761 scholarships to Maori men and women to pursue qualifications in the three streams of training.

The 761 scholarships have been allocated in the following manner:

The age range of students is from 16 to 52 years of age.

60.5 percent of the scholarships awarded have gone to urban dwelling Maori.

Guaranteed employment outcomes are achieved in our technical programs for all Maori graduates.

6.2 RESEARCH

The second component of our strategy, is vital in any industry. Many breakthroughs in marine, and particularly in land-based aquaculture, lie ahead of us, and Te Ohu Kai Moana wants to be there when they happen. Consequently we support research programmes which might benefit Maori participation in aquaculture.

For example at present we are jointly providing research funding for development of surf clam farming, from incubation to on-growing. If this project succeeds it will be a first in New Zealand.

As well, some Iwi companies are directly involved in leading edge research projects on both paua (Abalone) and crayfish aquaculture. Others are working on research projects in both the processing and marketing of aquacultural products. We realize that, as for other facets of aquaculture, we do not have enough skilled Maori to fill possible positions, including research, and support any research agency that can contribute their expertise. This will not deter our objective of being near the leading edge of technological breakthroughs. Our policy is to provide research funding to projects that have the potential to aid Maori development, especially in aquaculture.

6.3 STRATEGIC ACQUISITION OF AQUACULTURAL ENTERPRISES

As part of the overall fisheries settlement process the Commission holds a 50% share of Sealord, a company with substantial aquacultural processing and marketing potential. In particular, vertically integrated mussel production, from farm to container is in excess of 20,000 tonnes per year. Scallops and paua (Abalone) are also processed by Sealord, we also own the largest paua exporter and we confidently anticipate increases in production and market penetration with this very important fishery.

The Commission also holds quota and substantial cash reserves on behalf of Maori. We have used some of that money for strategic acquisitions, and now have the majority holdings in Moana Pacific, New Zealand's biggest inshore fishing company, which processes and markets mussels, oysters and scallops. Again, we expect to develop a closer working relationship between Maori aquaculturalists and the company.

Recently we drew Pacific Marine Farms Limited into the fold. We now hold 98.5 hectares of oyster on-growing capacity of which 56 percent is developed. Between them these existing farms will produce about 700,000 dozen oysters this year. This business is also vertically integrated, from the spat-catching in Kaipara Harbour to markets in Australia and Hong Kong. About 95 percent of production from our Coromandel processing plant is destined for foreign markets.

Our purpose with this oyster farming business, and with our other activities previously mentioned, is to place Maori in a strategic position for further development of aquaculture. Employment opportunities in these businesses provides a wide base for the on-job training of Maori in all aspects of aquaculture. I should emphasize that all of these businesses are run on strictly commercial lines. The only jobs available are jobs which contribute to productivity and profit. We have absolutely no intention of creating huge work-subsidy schemes to the ultimate detriment of Maori and the industry at large. These are not state employment schemes. Those days are behind us all.

Tribal Commercial Fisheries: A Formula for Success?

The fisheries settlement differs from other Treaty settlements in New Zealand because it returns an asset ultimately for the benefit of all Maori via their tribal organizations. Our view - although it is being sorely tested in the Courts - is that all Maori have access to their fisheries rights through their tribes, since by definition if you are Maori you must have a tribe or iwi.

It follows that if Iwi own assets then political stability within the Iwi is of prime importance. How can Iwi commercial managers be responsive to their members if the representative body itself is not accountable? If the tribal house is in disarray then it would be unrealistic to expect successful integration of Iwi with their businesses. Consequently the Commission is implementing a rigorous mandate policy for tribal representative organizations. No tribe will receive its assets until the Commission is assured that proper representation and accountability mechanisms are constitutionally in place.

The Iwi will own the fisheries assets, and ownership would probably be vested in the political organization on behalf of members. The Commission is of the firm view that the ownership and management functions must be clearly separated. It is not in a tribe's interest for a situation to arise where the democratically elected leaders of an Iwi organization, who may not have the appropriate business skills, can interfere with the running of an Iwi business.

Management of the assets need to be carried out by competent managers, who may, or may not, be Iwi members. This may be a bitter pill to swallow for some Iwi but every Iwi organization must be honest and consider whether their existing pool of management talent is of sufficient quality to run their business. It may be a painful process for an Iwi to recognize that their elected representatives are not the ones with the appropriate skill to manage their commercial assets. There is no room for second-best. It follows that in many cases the Iwi will contract an outsider, Maori or non-Maori, to manage their business until their own people obtain the requisite skills.

In our view, management must always be the best available. Skilled people must manage the asset.

The Purpose of Iwi Business

A major issue for many Iwi will be to decide upon the purpose of an Iwi business. It cannot serve all functions. Wiser counsel may say that an Iwi business must be run to generate a profit and to generate a wider asset base. In other words the resource is strengthened, rather than diminished.

But other pressures will be exerted. Expectations will abound that an Iwi business is a bottomless job provider. The reality in this post-subsidy world is that the only job worth creating is a job which is productive. A worker who earns $500 per week must produce a good or service worth $500 + per week. We have examples of Iwi organizations who attempted, at their cost, to run a business enterprise as a subsidized work scheme. The sad result was inevitable.

There will also be constant pressure to draw off an unrealistic amount of profit as a dividend to be returned to the political organization for social spending. The directors and managers of Iwi businesses must be left to make the decision as to what the dividend policy will be each year. There may well be years when all profits are ploughed back into the business. Normally these investment decisions would be open and transparent and carried out after strategic planning between the business managers and the directors, in consultation with the Iwi representatives.

The cultural, political and commercial relationships within an Iwi might be summarised as follows:

IWI AS A KIN GROUP

IWI REPRESENTATIVE

Social Spending ORGANISATION Dividend

(Owns assets)

IWI BUSINESS Profit

(Manages assets)

Reinvestment

This diagram is simplified but shows the key principles of which I have been talking.

For many Iwi their assets will be much more than fisheries, and the interface between the Iwi assets and the Iwi organization may well be filled by a portfolio manager whose prime responsibility would be to protect, and monitor the performance of, the Iwi assets.

IWI REPRESENTATIVE

ORGANIZATION

(Owns assets)

Portfolio Manager

IWI ASSETS HOLDING

COMPANY

FISH FORESTS FARMING OTHER

With a range of assets the Iwi may vest them into a holding company and the business managers, portfolio manager and directors plan the dividend policy at the beginning of the year; assuming a relationship not unlike that of any public company with its shareholders.

Tribal Long Term Survival and Growth

Return of substantial fisheries resources to tribes implies the need for a long term view of tribal asset management. Tribal leaders will look to, and beyond, the three to five year horizon, in many cases recognizing that for the next decade Iwi businesses are going to be resource-rich but under-endowed in skills, capital and appropriate technologies.

Many of these Iwi assets will not be locked into stand-alone ventures, because commercial imperatives will see many Iwi businesses become joint venture partners with companies from national and inter-national horizons.

Joint ventures could eventuate for a number of reasons, but primarily to harness the extra capital and expertise that the other partner might be able to bring to the Iwi. Iwi can form partnerships with foreign interests without jeopardizing the asset base, and we would be the first to advise against any JV which threatened Iwi resources.

I have discussed the issue of Maori political representation within Iwi because it is the institutional rock upon which collective Maori economic development must be built. In the modern world, Iwi as viable entities have a hierarchy of internal form and function.

First, is the Iwi as a cultural focus, the model I proposed at the beginning is important; take away Iwi identity, each with its own history and traditions and what you have left are assimilated New Zealanders. As a culture we would - by my definition - cease to exist. It has often been claimed that a people with no past are a people with no future. Fortunately Iwi culture is alive and well. Without Iwi culture my mihi, or greeting, to you - in which I signaled my origins and thus allowed you to pencil me in to a mental

map of the Maori world - could not have occurred. "No hea koe?" - "Where are you from?" - implies tribal origin rather than the town you were born in.

Second, we must be able to identify who has the authority to speak on behalf of wider Iwi membership; in other words the "Iwi Parliament". I believe it will take at least a decade before appropriate and stable forms of Iwi governance, with clearly understood behavioral characteristics, have evolved across the country. These "Iwi parliaments" may take many legitimate forms but they must have the accountability mechanisms of which I have been talking. Some Iwi are well down that track but in terms of the evolution of Iwi representative structures, with capacity to manage large economic initiatives in a commercially competitive environment, many of us are pioneers in a rocky and sometimes treacherous landscape.

Third, is the economic dimension; the establishment and management of Iwi-owned businesses, based upon Iwi resources and mindful of Iwi tikanga and taonga. We are talking hundreds of millions, if not billions of dollars worth of Iwi businesses. If they are to prosper then their management will require as much skill and expertise as any other major company in this country.

Aquaculture: A New Future

Things have changed in the fishing industry. The last decades have witnessed a massive world-wide increase in the wild fish catch, but maximum sustainable levels appear to have peaked. Aquaculture now accounts for 20 million of the 100 million tons of world annual fisheries production. These raw figures disguise the fact that aquaculture accounts for a greater percentage by value of annual world production - as much as 40 percent has been suggested - and aquaculture will probably continue to take an increasing proportion of the total harvest from both marine and fresh water.

Most pundits predict this trend to continue - aquaculture is the game to be in, or at least one of the key games to be in. We all know that much of it has a high level of risk - markets, environment, disease - and we know, equally well, that risk is something that should be spread. Until recently Maori have been minor players in the aquaculture industry, but at individual, hapu and Iwi level intend to be a significant part of this rapidly expanding activity. The Commission's role is to ensure that it happens.

Towards 2000

So where are Maori now in terms of generic business skills? I have to be honest. For many Maori the answer is "Not close enough to the cutting edge". It wasn't always so. In early colonial times we were good traders, with many Maori ships plying their trade with Australia and the first Maori "capitalists" supplying products for the Old World. But the influx of European settlers soon displaced Maori from their land by a variety of methods. This is a familiar story. They were choked off from their economic lifeblood and condemned to eking out an existence on the economic and geographic margins of society as a cheap source of labor. Maori fishing as a viable economic activity was soon obliterated. We are only just re-establishing our commercial capacity, with much effort still focused on social and political objectives.

7. CONCLUSION

If we wish to put substance to the oft-repeated statement that we want to build for our mokopuna - grandchildren - then our horizon must extend way beyond the three to five year horizon. We must ask ourselves, "Where do we want to be in 2025? In 2050? We are past dogma.

There seems little doubt that a Maori corporate presence in business is here to stay, and to prosper. Few would argue with the statement that the Maori business skills base is under-resourced but as I hope I have demonstrated huge steps are being taken to redress that imbalance.

Once Iwi assume management responsibility for their assets they will be on the same level playing field as everybody else. Their future will be in their hands.

Robin Hapi

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