Indeed, Ngai Tahu, the South Island’s major tribe, has spelt out that ambition in black and white in its 25 year strategy document: its explicit aim is for Te Runanga o Ngai Tahu to be “recognised as an organisation of excellence and its commercial operations match the best in New Zealand. It is the dominant economic force in Te Waipounamu”.

If you don’t know much about Ngai Tahu, it’s perhaps for good reason. While Tainui was awash with scandal over nepotism and squandering of its 1995 Treaty of Waitangi settlement of $170 million, Ngai Tahu was busy preparing a cautious corporate structure to absorb its own treaty settlement. While the accident prone Maori Television Service and Maori broadcasting agency Te Mangai Paho stumble from one crisis to the next, Ngai Tahu just keeps on, head down and bum up, making money.

It’s a strategy that seems to be working. In late 1998 Ngai Tahu concluded a gruelling 148-year battle with the Crown with a $170 million treaty payout. Now it has equity of $300 million and assets of $396 million. Last month the tribe announced a surplus (before distributions for tribal programmes) of $22.7 million for the 2003 year.

Ngai Tahu is not scared to stand up and be counted as an iwi that is managing its money well, says Kaiwhakahaere (chairman) of Te Runanga o Ngai Tahu, Mark Solomon.
“Everything that any Maori organisation does is under the microscope. Tainui got into trouble financially and they were publicly whipped by the media for 15 months. The directors of Air New Zealand lost over $800 million in the crap deal they did in Australia and they appeared in the paper for four days. There are two sets of rules,” Solomon says.

He’s keen to point out that the tribe is just one of many Maori organisations that is managing its finances for the future. Maybe so, but how it is that Ngai Tahu was able to absorb its $170 million treaty settlement from an asset base of just $30 million in October 1998 without suffering the stresses and speed wobbles that so publicly afflicted Tainui?

The answer, it seems, is old-fashioned corporate planning, discipline,and focus on organisational goals.

Ngai Tahu’s overriding philosophy is “Tino Rangatiratanga — Mo tatou, a, mo ka uri a muri ake hei; Tino Rangatiratanga — For us and our children after us.” This philosophy, with its implied responsibility for the stewardship of assets for future generations, is fundamental to the tribe’s thinking.

It explains why the Ngai Tahu people decided, collectively, to invest the treaty settlement, rather than splitting it among the constituent hapu; why it has a policy of the best person for the job irrespective of whether they are Ngai Tahu; and why it has a policy of making prudent investments for the long term.

Tahu Potiki, chief executive of the tribe’s central body, Te Runanga o Ngai Tahu (TRONT), says it would have been completely irresponsible to split the settlement among tribal members.

“So many of our ancestors fought to get this thing settled and resolved. I think having a centre here that is using its resources and its power to support families and communities will keep things alive. It means there is a greater chance that people will still be speaking a form of South Island Maori in 100 years time and they will still be going onto the marae and burying their dead in the graveyards behind the church,” he says.

One of the key things the tribe did right, Solomon says, was hit the ground running when the long-anticipated settlement came through.

White man for the job
In the year before the settlement the tribe set up systems and structures in anticipation. Members decided, right from the start, to have a policy of employing the best person for the job. As it happens, the best person is often not Ngai Tahu — in 2002, only 40% of TRONT’s 193 staff were Ngai Tahu tribal members.

Ngai Tahu Property Group general manager Tony Sewell is an experienced and hard-nosed Pakeha executive who has been working for Ngai Tahu since 1994.

“Ngai Tahu has never been scared to take advice,” he says. “That’s a huge thing in their favour. They know what they don’t know. They don’t mind going out and seeking advice and hiring somebody who is the best at something to drive the business forward. They put in the best governance structures they could. They got good boards of directors and they’ve got the best staff they can. They have put them with the right gear and the right systems and the right guidance and attitude and mentoring and they just get on and do it.”

The staff of TRONT went from eight to 48 in the year before the settlement. It wasn’t easy, Solomon says. All the cash generated by Ngai Tahu’s fisheries and property was being used to fund the claims process, which cost up to $20 million. The tribe went into debt during that last year, but it had the expertise and structures in place to cope with a $170 million injection without running off the rails.

“Unashamedly we are a corporate structure, there’s no two ways about that,” Solomon says. “What makes us different is the values we have imposed upon the structure. It reminds us that we work for our people.”

Those values are listed as whanaukataka (family); manaakitaka (looking after our people); tohukataka (expertise); kaitakitaka (stewardship); and kaikorkiri (warriorship), rakatirataka (upholding the mana of Ngai Tahu).

“It’s those values that make it different. We are not just a structure that has shareholders. Those shareholders are the actual owners and we are the servants who report to them.”

Ten years ago the 18 runanga, or local councils, that make up TRONT came together as a collective to negotiate the Treaty settlement.

TRONT’s 18 member tribal council is comprised of elected representatives from each rununga.

“We have exposed ourselves to all the frailties of democracy, and that means we have got hundreds and hundreds of people out there who have an opinion,” Potiki says. “I suspect we will never fully realise this perfect democratic process where everybody is happy because we are doing everything right.”

Solomon himself regularly fronts up to his local Kaikoura runanga, of which he is the chairman. “There is no one as blunt as your own family when they want information. When I go home to talk to Kaikoura I stand in front of my uncles, my aunties my cousins, my brothers and sisters,” he says. “Yep, if we make a muck-up here I have to stand in front of them and defend it or explain why it happened. Confrontation only comes up when people don’t have the information. We might have a different view on what the result should be but at least they have the same information and we can have the appropriate debate on the marae on the direction we are going.”

Building the putea
One of the key decisions that was made before the treaty settlement was to split off the business side of TRONT from the social development side. It’s a structure that closely parallels the government’s state-owned enterprises model, with tribe-owned businesses run at arm’s length according to strict commercial disciplines. Ngai Tahu Holdings Corporation makes the money; Ngai Tahu Development Corporation receives a share of the profits made (60% this year) and uses those funds for social development.

Dr Robin Pratt, chief executive of Ngai Tahu Holdings and another Pakeha, says the split was a stroke of genius. It means one group of people can be completely focused and very good at producing profits while the other group can make independent decisions on the best way to achieve growth and development for the tribe.

“That showed a lot of wisdom. If you mix the two together then you would have conflicts — you would have drivers going in different directions,” he says.

Ngai Tahu Holdings’ role is essentially to continue growing the tribal putea (wealth) for future generations. Five years on from settlement it has a diversified portfolio of assets across the fishing, tourism, agriculture and property sectors, as well as investments in listed equities including Ryman Corporation (15%) and Shotover Jet (in which it now has an 88% holding after mounting a controversial takeover attempt last year).

But, while Ngai Tahu Holdings’ cautious approach to diversification and risk management (it has set its maximum debt ratio at 35%) undoubtedly accounts in part for the tribe’s commercial success so far, it has also cannily exploited the opportunities that have come its way as part of the treaty settlement package. In particular, it enjoys an ongoing right of first refusal on all Crown properties put up for sale in its tribal area. This has seen it turn around some sharp deals in which it flicked on former Crown properties to third parties for big profits. In one celebrated instance, Ngai Tahu bought a former Landcorp property for $4 million and immediately onsold it to listed company Southern Capital for $4.5 million (which later sold the land to Canterbury’s local government-owned waste company Transwaste for $6.5 million).

The first right of refusal process has also allowed the tribe to build up an impressive array of prime former government sites, including the former Wigram airbase, and police and justice buildings in Christchurch, Dunedin and Queenstown. The tribe’s property assets alone, worth $192 million in the 2003 year, make it one of the largest private landowners in the South Island.

But if Ngai Tahu’s first right of refusal deal with the government has been its secret weapon over recent years, its seafood business is the quiet achiever. Ngai Tahu Seafoods’ acquisition this year of Cook Strait Seafoods and 50% purchase of fishing fleet Pacific Trawling doubles Ngai Tahu Seafoods’ turnover to $90 million and will take its export earnings from $35 million a year to around $65 million. The two acquisitions give Ngai Tahu 50% ownership of four inshore and deepwater vessels, retail and wholesale outlets in Wellington and Auckland, plus quota. In the past the company could not get enough product to sell in Europe without dropping customers in other markets. The acquisition of Cook Strait gives it the volume to have a good global spread and less exposure to the US dollar, chief executive Gavin Holley says.

The acquisitions are a major milestone for a company that began in 1988 with few skills or assets and has progressively moved up the value chain into processing and exporting. Under the proposed model for allocating Maori fisheries assets, the tribe’s seafood wealth will be boosted a further $69 million.

In the last two years Ngai Tahu Seafoods has undergone a major branding exercise aimed at establishing the company’s image in the market as a serious and substantial player, and leveraging off the tribe’s cultural links with the sea and the notion of sustainability. A range of added-value products including packaged seafood soups was also launched.

The effect of Sars on the Asian seafood market and softening in world prices post September 11 hit Ngai Tahu Seafoods’ profit this year, which dropped from $9.8 million to $5.3 million. But the sense of direction is clear. Holley: “We want to be a supplier of high-quality niche products, and to differentiate ourselves as much as we can from commodity pricing.”

Maori or Pakeha, it seems the business imperatives are very much the same.

“The Ngai Tahu values are so supportive of our business. The concepts aren’t foreign to me as a Pakeha,” Holley says. “There’s a lot of commonality there; stewardship of resources, warriorship and expertise. That is key in terms of commercial success, you have got to be better than your competition. You have got to be smarter.”




Sharing the wealth
Ngai Tahu is making stacks of money, but what do the tribe’s 33,000 beneficiaries get out of it? Howard Keene looks at the social payback

A Ngai Tahu education grant last year enabled Sasha McMeeking to compete overseas with some of the world’s top young legal minds. She’s one of many smart young Ngai Tahu to have received a tangible benefit from the tribe’s Treaty of Waitangi settlement with the Crown.

Now a legal intern with the tribe’s governing body Te Runanga o Ngai Tahu, 25-year-old McMeeking and another Maori law student won the Australasian courtroom competitions, and then went on to compete in the US. This year she also has a tertiary scholarship from Ngai Tahu to complete a masters degree at the University of Canterbury.

Have the grant and scholarship helped further her career? “Absolutely, especially the grant to go to the States. It was an incredible opportunity to be exposed to that level of student.’’

It’s now five years on from Ngai Tahu’s $170-million treaty settlement with the government, which the tribe has deftly turned into assets worth $396 million — but just how much are Ngai Tahu individuals and communities benefiting?

Whatever people expected, individual cash payouts from the settlement were never a goer, although it’s possible that one day there will be a system of direct distributions. Long before the settlement the tribe decided on a structure that keeps the money-generating side of the organisation separate from the social development side.

Ngai Tahu chief executive Tahu Potiki says about 40% of the surplus from the tribe’s business activities is reinvested, while 60% is distributed for social development programmes via Ngai Tahu Development Corporation. About half of that 60% is soaked up with continuing political and legal battles and administration, leaving about $5 million annually for Development Corporation to use for community and individual development.
This money flows back into Ngai Tahu communities through a number of channels, but it’s fair to say that few individuals have received a direct fiscal payback.

The most tangible manifestation of Ngai Tahu’s business success making a difference to individuals is through the approximately $250,000 a year paid out in educational grants and scholarships to the likes of Sasha McMeeking. The aim is to enable more Maori to gain academic skills and develop future leaders.

Education projects manager Janine Kapa says while some tribes are going down the path of managing their own schools, Ngai Tahu has opted to “exert influence through the structures that exist’’.

Out-of-school tuition is provided for tamariki (children) and rangatahi (youth), both for extension and remedial purposes. Three study support centres have been established in Invercargill, Dunedin and Christchurch for Maori students.

Resource kits have just been released to 733 schools throughout the tribal boundaries, and a project is underway looking at increasing Maori representation on school boards of trustees.

Kapa says a review of the education grants programme will take place before they are offered next year. One objective is to see if there are better ways of getting Ngai Tahu scholars to feed their skills back into the tribe. “It’s about growing leadership,’’ she says.

Revitalising the Maori language has been a priority for Development Corporation, and the tribe has planned and produced modern resources that go directly to families.

Development of local rununga has also been a consistent theme. Throughout the South Island meeting houses are looking more spic and span these days, and restorations are underway. New marae have been opened at Bluff and in South Westland. Potiki says those initiatives are not necessarily a direct result of disbursements, but the tribal support has given local communities confidence.

Data collection on the social needs of Ngai Tahu is high on the agenda. “What we’ve tried to do is predict five years out what our needs might be, and based on that produce a shopping list, and it’s fair to say a constrained shopping list, to create stronger communities and individuals,” says Potiki. “Hopefully at the end of the five-year period we will have the information database in place to allow us to make really good policy decisions about funding.’’

Ultimately the aim is to distribute an individual benefit to Ngai Tahu people, but not in the short to medium term. “In the interim we want to be able to provide as much support as possible to ensure government agencies have got the best advice to deliver into Maori communities.”

In the more immediate future, Potiki says the focus is on ways to support things like kaumatua housing, and the possibility of superannuation and health insurance. “Could we ultimately say that no Ngai Tahu will have to wait on a waiting list?’’

Potiki admits there are some in the Ngai Tahu community who are disgruntled they have not seen more benefits of the tribe’s wealth. But like a government satisfying every hand that is held out, largesse is fraught with danger.

“It must be disappointing for some who read about Ngai Tahu success, but see no tangible benefit. We do get feedback. It would be great to be able to do it, but it would destroy everything. The leadership at the time of the claim had enough foresight so that we didn’t rob ourselves blind to be popular.

“It’s clear that it (the settlement) was only a stepping stone on the path to opportunity.’’