The Privatisation Two-Step: Is Three Waters A Masterpiece Of Misdirection?

Profit Uber Alles: The sort of people who see nothing objectionable in taking over another country’s water resources are unlikely to be put off by the objections of its citizens. Where there’s a will, there’s a way – all the investors have to do is find it.

IF CABINET FAILS to scrap Three Waters and start again, New Zealand may very quickly come to resemble Bolivia. Not the Bolivia of today, where a socialist government elected by a huge majority holds sway, but the Bolivia of 1997. That Bolivia had been ordered by the World Bank to privatise its water – on pain of being refused the loans it so desperately needed to keep its economy afloat. Taken over by French and American corporations, Bolivia’s water resources were very quickly priced beyond the reach of its poorest – that is to say, its indigenous – citizens.

Unsurprisingly, the Bolivian Government soon found itself in the grip of a massive popular uprising. In 2005, after five years of unrelenting struggle, the indigenous Bolivians forced their government to terminate the concessions granted to the French and the Americans.

In place of these foreign-owned private corporations, a publicly-owned water utility, the Empresa Pública Social de Agua y Saneamiento (EPSAS) was established. A strong case can be made that the popular struggle to reclaim Bolivia’s privatised water resources laid the groundwork for the nation’s sharp political turn to the Left. Indigenous interests in water, and socialism, it would seem, go hand-in-hand.

That being the case, one can easily imagine that a foreign investor, or group of investors, anxious to get their hands on New Zealand’s abundant water resources, would be particularly sensitive to the likely response of its indigenous citizens. As the sole possessors of Aotearoa for half-a-millennium, the Māori are linked to its lands, forests and fisheries by immensely strong bonds of lineage and tradition. Any attempt to place those resources in the hands of foreigners would provoke resistance every bit as strong as the indigenous Bolivians’.

Nor would the Māori stand alone. New Zealanders’ experience of the neoliberal privatisations of the 1980s and 1990s – and the partial privatisation of energy generators in the 2010s – has left a sizeable portion of the population implacably hostile to the privatisation process. The idea that something as basic to human existence as water might be handed over to private, profit-seeking interests has become a very hard sell.

But, the sort of people who see nothing objectionable in taking over another country’s water resources are unlikely to be put off by the objections of its citizens. Where there’s a will, there’s a way – all the investors have to do is find it.

Investors making a close study of New Zealand will quickly realise that Māori are the key interest group to neutralise. If the privatisation of water could be disguised as the indigenisation of water, then not only would the potentially unrelenting opposition of Māori be finessed away, but also the opposition of those Pakeha concerned to restore self-determination to Māori after nearly two centuries of colonisation. All the foreign investors need to identify is an appropriate vector through which their two-step process – indigenisation to privatisation – can be realised. (Interestingly, exactly the same two-step process was employed by the Fourth Labour Government to finesse the first wave of privatisations back in the 1980s: corporatisation to privatisation.)

The most obvious vectoral candidate is the National Iwi Chairs Forum. This is an outgrowth of the Treaty Settlement Process – the New Zealand state’s inspired mechanism for de-radicalising Māori nationalism by setting-up a series of neo-tribal capitalist buffers between the traditional/professional Māori elites and the urbanised, poorly-educated and culturally unmoored Māori working-class. The leaders of these tribal corporations are already more than half-way into the deracinated world of global capitalism – a fact they keep well-hidden from their own people behind swirling veils of Māori mysticism.

Enlist the support of these commercial rangatira, and the journey towards the privatisation of water will be underway long before the nation realises. And if an iwi already seething with bitter historical resentments steps forward to lead the process of detaching New Zealand’s water resources from the state, then so much the better. What’s more, any politician willing to front this iwi power grab is bound to become a lightning-rod for all manner of racially-charged criticism and abuse. Cui bono from this cynical exercise in political misdirection? Who else but the true instigators of the project: the always silent, always patient, foreign investor/s.

That this exercise might be all-too-real is attested to by the involvement of those front-of-house facilitators of foreign direct investment – the international credit-rating agencies. Advising the Sixth Labour Government (represented primarily by Local Government Minister Nanaia Mahuta) on what was now being called “Three Waters” was Standard & Poor’s (S&P Global Ratings). It’s advice was unequivocal: make sure the entities charged with the management of New Zealand’s drinking, storm and waste water are hermetically-sealed from democratic interference. Above all, keep their books and the State’s books entirely separate.

Had political journalists not been so distracted by the so-called “co-governance” arrangements built into the Three Waters proposal, the credit-rating agency’s stipulations would have pointed clearly to the project’s ultimate goal. What could be easier to privatise than a stand-alone, financially “independent” entity, slowly sinking beneath an insupportable burden of foreign debt?

Before that point could be reached, however, the whole process had to be turned into a hot mess of White Supremacists versus De-Colonisers. In this regard, the Three Waters legislation’s author, Nanaia Mahuta, could hardly have performed more obligingly. The deeper the project’s critics dug into the details of the legislation, the more evidence they found for the argument that Three Waters was all about the indigenisation of Aotearoa-New Zealand’s water. Not the least important feature of the legislation in this regard were the “Te Mana o Te Wai” statements – directives relating to both the public and private use of water that have the force of law, and that only Māori can issue!

Among the most vocal critics of Three Waters has been the radically neoliberal Act Party. Its active participation in the debate raises an intriguing (and potentially worrying) question. Is Act just another dupe of the foreign investors’ bait-and-switch operation, or is it surreptitiously giving them a helping hand? Act has always been a strong advocate of privatisation – an objective that would be made considerably easier by thoroughly discrediting the option of indigenisation and, along with it, the whole idea of public ownership.

In an ironic twist to this story, the first person to realise the long-term privatisation agenda built-in to the Three Waters project may well have been Nanaia Mahuta herself. Certainly, it would explain the Minister’s panic-stricken, last-minute attempts (in collusion with the Greens) to entrench anti-privatisation provisions in her legislation. If this is what happened, then it is difficult to avoid feeling sorry for the Minister. She could not adequately explain why her drastic (and arguably unconstitutional) amendments were necessary, because to have done so would have been to acknowledge her stalking-horse role in a project most New Zealanders would have condemned as unconscionable.

One crucial outcome of the entrenchment debacle, however, is that Mahuta’s fellow ministers were no longer content to rely upon her assurances that Three Waters was a sound and necessary project. Accordingly, they took a much closer look at the legislation. In doing so, they could hardly avoid the alarming question: “Is there anything in this legislation to prevent Iwi corporations from entering into agreements that could ultimately facilitate the privatisation of one or more of the four Three Waters entities?”

The answer to that question will be indicated by just how decisively Prime Minister Hipkins rejects Three Waters. Getting rid of the co-governance provisions will not be enough. If the legislation continues to empower the four entities to take on debt that is ultimately redeemable out of the pockets of New Zealand’s ratepayers, then the momentum towards their ultimate sale to foreign investors will not be slowed. If that is Hipkins’ decision, however, then either he, or his successors, will eventually be confronted with the same sort of popular uprising that convulsed Bolivia.

And in that battle, Māori and Pakeha will be fighting shoulder-to-shoulder. Proof that caring for and managing the waters of Aotearoa-New Zealand is the responsibility of all its peoples – and theirs alone.

This essay was originally posted on The Daily Blog of Friday, 17 February 2023.

Blowing Off The Froth: Why Chris Hipkins Must Ditch Three Waters.

Time To Call A Halt: Chris Hipkins knows that iwi leaders possess the means to make life very difficult for his government. Notwithstanding their objections, however, the Prime Minister’s direction of travel – already clearly signalled by his very public demotion of Nanaia Mahuta – must be confirmed by an emphatic and unequivocal pledge to repeal the Three Waters legislation and start again.

THERE’S FROTH, AND THERE’S BEER. What we see happening on the Waitangi Treaty Grounds every 6 February, not to mention the political performance-art on the lower marae, is froth. The beer of Māori-Pakeha relations is to be found in the private meeting rooms of Waitangi’s Copthorne Hotel & Resort, where the National Iwi Chairs Forum (NICF) deliberates in secret upon Maoridom’s next moves. It is there, in the days leading up to Waitangi Day, that New Zealand’s new Prime Minister, Chris Hipkins, will either face down the men and women driving the stake of co-governance into the heart of the Settler State – or see Labour spiral slowly to defeat.

The designation “Iwi Chairs” seems so innocuous. It conjures up the image of a roomful of corporate bureaucrats working their way through a very boring agenda, and breaking-off every now and then to listen to equally boring presentations from bankers, accountants and the occasional politician. In reality, the NICF represents the High Command of Maoridom: the strategic hub of the campaign to take back control of Aotearoa from its Pakeha conquerors. Those gathering at the Copthorne are not a bit like the rag-tag groups of Māori nationalist activists that came together in the 1970s and 80s. If tino rangatiratanga means “the power of the chiefs”, then these are the chiefs who wield it.

Thanks to thirty years of Treaty Settlements, the NICF is both well-positioned and well-resourced to flex its muscles. Between them, the iwi represented at the Forum command assets valued in the billions. That buys them all the big law firms and all the big lawyers they need. It buys them top-of-the-line lobbyists and public relations experts. It buys them influence in the news media and the universities. It means that, when the NICF whistles, serious politicians from all the major parties tend to come running – up to and including prime ministers.

In short, the NICF is what you get when you don’t want hundreds-of-thousands of working-class Māori demanding their fair share of the national cake. An uprising of marginalised urban Māori (the primary focus of Māori political agitation in the 1980s) could hardly avoid inspiring an even larger number of marginalised Pakeha. Such a potent socio-economic alliance would be extremely harmful to capitalism and other exploitative creatures. Hence the Crown’s inspired prophylactic against the further radicalisation of the Māori working-class – the Treaty Settlement Process. Make a handful of Māori aristocrats and other assorted high-flyers rich and powerful, and not only can they then be relied upon to keep the urban Māori poor quiet, but also to co-opt anyone of a mind to stir them up.

For a while.

The great risk of re-establishing a well-resourced and powerful indigenous elite is that, a generation or two later, those responsible will be faced with confident, highly educated young Māori who can think of no good reason why they – the privileged beneficiaries of the Treaty Settlement Process – should continue to provide a buffer between the heirs of their colonial conquerors and the tens-of-thousands of Māori families made poor, and kept poor, by colonisation.

What’s more, this generation will evince no interest in constructing a Māori-Pakeha working-class alliance against either Pakeha Capitalism or the Neo-Tribal Capitalist sub-system brought into being by the Treaty Settlement Process. The generation raised under this ethnically-charged neoliberal regime will not be socialists, they will be ethno-nationalists. If wealth is to be redistributed, it will not be from the rich to the poor, but from the descendants of the Pakeha colonisers to the descendants of the colonised Māori. It will be a revolution driven by race, not class.

There could be no better example of the policies generated by the iwi elites and their political representatives than the project known as Three Waters. Putting Private Members Bills to one side, it is rare to encounter a piece of legislation so closely associated with and shaped by a single member of Cabinet – in this case, the then Local Government Minister, Nanaia Mahuta. Nor is it common to see a legislative project preceded by an advertising campaign subsequently condemned as both misleading and inaccurate. The Labour Government’s decision to reverse its earlier affirmation that local authorities would be free to opt-out of the scheme only compounded the ethical problems besetting Mahuta’s project.

At the forefront of these was the legislation’s commitment to “co-governance”. In the midst of structures specifically designed to protect the relevant “entities” from all forms of democratic accountability, the legislation located a body split 50/50 between members supposedly chosen to represent the interests of local consumers, and those indisputably chosen to represent the interests of local iwi.

NZ First’s Shane Jones’s description of Mahuta’s Three Waters Project was typically robust:

What was initially an attempt to fix some drinking water has turned into a highly divisive and pulverising social experiment that has got nothing to do with poo pipes and infrastructure. Now it’s got everything to do with whether or not tribes should have a superior right [over water].

Jones also argued that Jacinda Ardern’s government had “lost control” of Mahuta’s project:

She was unable to control Nanaia Mahuta, who has proven to be one of New Zealand’s most divisive politicians that God ever put breath into.

Nowhere was Ardern’s loss of control more evident that in the parliamentary debacle which followed the last-minute, constitutionally-dubious, attempt to entrench “anti-privatisation” clauses in the legislation setting up the Three Waters project as it neared the end of its passage, under urgency, through the House of Representatives.

If ever a project needed to be abandoned completely, and the rebuilding of New Zealand’s drinking, storm and wastewater infrastructure reconceptualised in ways that keep it both affordable and accountable, then that project is Three Waters.

Not that the Iwi Chairs gathered at the Copthorne Hotel are likely to see it that way. Mahuta’s project had brought them closer to Jones’s “superior right” over water than any of her predecessors. Their message to Chris Hipkins is likely to be blunt: repeal Mahuta’s legislation at your peril.

New Zealand’s new Prime Minister knows that the National Iwi Chairs Forum has the means to make life very difficult for his government. Notwithstanding their objections, however, Hipkins direction of travel – already clearly signalled by his very public demotion of Mahuta – must be confirmed by an emphatic and unequivocal pledge to repeal the Three Waters legislation and start again.

If Labour is to secure a third term, then Hipkins must make it clear to all New Zealanders – Māori and Pakeha – that his government is not about fulfilling the agendas of corporate/tribal elites. It is about making sure that every New Zealander in need of a job, a living wage, and a warm, dry house, gets one. That their family’s right to publicly-provided, quality health care and education is not denied. And that the promise of equality, enshrined in Article Three of the Treaty of Waitangi, is kept. Because that’s the only beer that’s electorally fit for Labour to drink: the beer of class – not race.

Everything else is froth.

This essay was originally posted on The Daily Blog of Thursday, 2 February 2023.