At 1.47 million hectares, Māori land makes up approximately 5% of New Zealand’s total land mass and 12% of the North Island. The land value of Māori land is estimated to be $8.8 billion; however, its capital value is of only $12.1 billion.

In 2011, the economist firm BERL released a report which highlighted the inefficiencies affecting the Māori economy and how more effective engagement and alignment with science and innovation efforts and businesses could deliver significant potential benefits to the Māori economy. This report, prepared for the Māori Economic Taskforce and Te Puni Kokiri, found that while the asset base of the Māori economy is substantial and growing, it is underperforming. Some large areas of Māori land are considered marginal, unproductive and/or underperforming. The report emphasised that these blocks of Māori land need to be brought into production and the legislation that governs them needs reviewing.

Following the release of this report the Government initiated the Te Ture Whenua Māori reform process to investigate ways of unlocking the economic potential of Māori land for its beneficial owners. The reforms are being touted as the most significant reforms to Māori land law and administration since the Te Ture Whenua Māori Act 1993 (the Act) was first passed 22 years ago.

Public consultation on the draft Te Ture Whenua Māori Bill (draft Bill) released by the Minister for Māori Development (Minister) earlier this year has commenced. Responses received during the drafting stages of the draft Bill and the recent formal submission period suggest that considerably more work is required to the draft Bill to ensure that it delivers on the outcomes sought.

At the heart of the reforms are four key drivers which the Government considers will better achieve the economic potential of Māori land. These key drivers are:

• More autonomy for Māori land owners over their whenua; and
• Greater ability for Māori land owners to utilise their whenua; and
• Greater simplicity and efficiency working with Māori land; while
• Safeguarding whenua for current and future generations.

The breadth of changes proposed, and the reception that a number of these proposals have received, suggest there will be further opportunities for participation in these reforms. The Ministerial Advisory Group is currently analysing the submissions received and will provide a written report to the Minister. We expect the Minister, once the recent submissions have been analysed, to seek further consultation with Māori land owners. We comment below on some of the key changes proposed by the draft Bill.

One size fits all governance model for Māori land

One change proposed by the draft Bill that has raised concern amongst Māori land owners is the draft Bill’s attempt to enforce a single governance model (called a Rangatōpū) which will apply universally. The draft Bill seeks to align Māori land governance duties with other corporate/governance laws to ensure consistency. This approach will significantly affect the management of Māori land trusts and can be inconsistent with those existing Māori Incorporations that are operating successfully according to current practices. It also seeks to impose significant new obligations on trustees. For example, the draft Bill requires Whenua Trust trustees to “at all times” keep their beneficiaries informed of the affairs of the trust and trust property. This has the potential to be a considerable burden to trustees.

“Participating owners” may deal with Māori land

Another significant change of the draft Bill that has been more positively received is the concept of “participating owners”. This concept recognises that ownership of Māori land is often divided between a considerable number of beneficial owners. Reaching decisions about the utilisation of such land under the current Act is often thwarted by the strict voting thresholds. By recognising participating owners, the draft Bill seeks to enable decisions about land to be made and actioned by those who are actively involved in the management of the land. For example, to grant a long term lease over Māori land requires agreement by 75% of participating owners (however, a decision to sell or exchange Māori land would still require approval from 75% of all owners). The types of decisions that can be made by participating owners, and the thresholds required, will no doubt be a point of interest for Māori land owners.

Māori land intestate will trigger a whanau trust

Succession of Māori land, particularly in situations of intestacy, undergoes considerable change in the draft Bill. Currently, the Act requires that where a Māori land owner dies without a will, an order from the Māori Land Court must be obtained in order to process a transfer of that land. The draft Bill, however, will require that a whanau trust be established where there is more than one eligible beneficiary. Therefore, any person seeking to transfer their Māori land exclusively to a specific whanau member must do so through their will. Succession disputes remain within the jurisdiction of the Māori Land Court.

Other notable changes under the draft Bill

Other major changes proposed by the draft Bill include a limitation of the role of the Māori Land Court, specifically by reducing those matters that require Māori Land Court approval to enable greater autonomy for landowners. The draft Bill also seeks to establish the Māori Land Service which is intended to act as an administrative body for Māori land which will be responsible for maintaining records of Māori land ownership and providing support and information to Māori land owners.

The recent submissions are being considered by the Ministerial Advisory Group who will report back to the Minister for Māori Development. The Minister had hoped to introduce a draft Bill to Parliament by the end of 2015, however this has been extended to 2016. It is possible that further consultation will occur before the draft Bill is introduced into the House. If the Minister approves the draft Bill, and the Bill goes before Parliament, there will nevertheless be a further opportunity to participate during the Select Committee stages.