Before we can receive settlement assets, a legal structure must be in place to receive them. The Crown requires us to establish a settlement trust to hold and manage the settlement assets on behalf of Hineuru. This panui is to introduce the Hineuru entity that will hold our settlement assets and will be the representative body for Hineuru.
Earlier this year we sought comments on the development of the settlement trust. We thank everyone for their contributions in answering our questionnaire. We have taken those answers into consideration in the development of the settlement trust and wanted to provide an update on recent developments in this area.
What are the Crown’s requirements?
The Crown has a number of requirements for establishing a settlement body. These requirements are contained in a Crown booklet, which lists the matters that all iwi must adhere to when establishing their settlement framework. The Crown refers to this as the post-settlement governance entity (PSGE).
The trust structure must go through a rigorous process in order to be approved by the Crown. The Crown will not approve the transfer of our settlement assets if their requirements are not fulfilled.
The settlement trust will be responsible for receiving and managing settlement assets on behalf of Hineuru iwi. The PSGE must manage the assets for the benefit of Hineuru members. In general, a PSGE must:
- adequately represent all members of Hineuru;
- is accountable to those members of Hineuru;
- have transparent decision-making and dispute resolution procedures.
These requirements are strict, and Hineuru cannot receive our Treaty settlement assets if we do not
comply with them.
What kind of settlement body will the Crown allow?
The Crown will only allow what is called a ‘private trust’ to act as the settlement body. This is usually an unincorporated common law trust, which means that the assets are held by trustees on trust to be managed in the best interests of the members of Hineuru.
The Crown requires this trust to be established by a detailed trust deed which form the rules by which the settlement trust are legally obliged to operate. The deed must contain a wide range of obligations and provisions. Many of these rules are prescriptive (that is, must be complied with precisely) and include the following:
- requirements on how trustees are elected and what their role is;
- the holding general meetings;
- the remuneration of trustees;
- auditing of accounts;
- plans and reporting, including making annual plans and five year plans.
The Crown has now developed a template of a trust deed document that it provides to settling groups and which it prefers they adopt, with some appropriate adjustments to reflect the particular group. It is also used as a standard against which a trust document provided by the settling group will be
assessed. To save time it is generally easier to adopt the Crown template and make adjustments. However these adjustments cannot be significant or the trust deed will not be approved.
For example, it has taken over six months of negotiation with the Crown to agree to minor provisions in the trust deed template that will be of benefit to Hineuru in post-settlement. It is important to note that the Crown will not transfer any assets to Hineuru unless we comply with these governance requirements and adhere to the Crown’s template.
The template deed can be found on the Office of Treaty Settlements website: www.ots.govt.nz
For more information about what the Crown requires for PSGEs, click on this link: http://www.nz01.2day.terabyte.co.nz/ots/DocumentLibrary%5CPost-settlementgovernanceentities-aguide.pdf
What kinds of settlement body will not be approved?
The Crown will not approve the following entities to be a settlement body:
- a charitable trust;
- a company established under the Companies Act 1993;
- an Incorporated Society under the Incorporated Societies Act 1908;
- or a Māori Trust Board established under the Māori Trust Boards Act 1955.
As Ngati Hineuru Iwi Inc is an incorporated society, it cannot act as the settlement body. Just as always intended, once the settlement body is established, Ngati Hineuru Iwi Inc will be wound up as its job has been done.
So what will the Hineuru PSGE look like?
This structure is what has become the standard model for a settlement body. This consists of the settlement trust which receives the settlement assets and two ‘arms” – commercial and charitable legal entities. This is the model which has been adopted by nearly all iwi who have settled so far.
Most often the settlement trust transfers some or all of the commercial assets to the commercial arm and the cultural assets to the cultural arm. The settlement trust provides strategic oversight for all issues but the day to day management of those assets will sit with those two respective legal entities.
The Hineuru settlement trust
Over the past eight months, we have been working hard to comply with the Crown’s requirements and to ensure that we have a settlement trust deed which meets the Crown’s requirements but also reflects the particular Hineuru context.
The NHII Board, has proposed the name ‘Te Kōpere o te iwi o Hineuru Trust’, to be the name of our settlement trust. The kōpere or rainbow is a very special tohu for our people, representing peace and the rising of the sun after the rain. This name is to reflect the next period for Hineuru, from mourning and grievance, to a new world and the dawn of a new beginning for our whānau of Hineuru.
As part of the Hineuru settlement, it is proposed that a custodian management company is established under the Trust to actively manage the settlement assets. The Trustees would appoint the Directors to the company as well as putting in place a management agreement to ensure that the Directors act in the best interests of Hineuru and in accordance with the iwi approved Strategic Plan and investment policy.
These directors will include independent directors with extensive knowledge and experience in making investment decisions. The people appointed will be required to have the necessary skills and qualifications to look after settlement assets of up to $50 million. Their role will be to invest and generate income from the settlement assets for and on behalf of Hineuru. This will ensure that properly skilled and informed people are managing the commercial assets.
Once the settlement trust has been ratified we will be seeking nominations for people with the requisite knowledge and skills to prudently manage our assets as well as advertising for applicants.
A charitable arm will be established to provide for the cultural, social and environmental needs of the iwi. This charitable arm will be in the form of a charitable trust which is accountable back to the settlement trust. The charitable trust will have people appointed to the trustee positions and their role will be to meet the social, environmental and cultural needs of Hineuru.
More information on this structure and what other iwi have done will be provided in due course through another panui and discussed in more detail during ratification.
The transition period until Settlement Date
‘Settlement Date’ is when the settlement legislation has been passed by parliament and when most of the redress is given effect to or transferred. It can take up to 18 to 24 months for this to happen after the Deed of Settlement is signed.
During this transition period (between signing Deed and Settlement Date) it is important that the settlement trust and other bodies are readied for their future role and duties.
The initial trustees, who are only appointed for this transition period, will be tasked with working with the iwi to prepare, among other things, a Strategic Plan and to prepare a Statement of Investment Policy Objectives (SIPO). These interim trustees will have to consult with the iwi in the development of the Strategic Plan and will have to work with expert investment advisers on the SIPO. The Strategic Plan will be circulated to the iwi for feedback and for approval.
As is standard practice for post-settlement groups, and to ensure there is consistency during the transition period, the existing Board of Ngāti Hineuru Iwi Inc will act as interim trustees on the settlement trust for this transition period.
At the end of this period, which cannot be longer than 18 months, (and will be before Settlement date) the first election for new trustees to take the settlement group into the future will take place. This process is the normal approach and is Crown approved.
Closing down Ngati Hineuru Iwi Inc
Once the Deed of Settlement and the settlement trust is ratified by Hineuru, the settlement trust will act as the representative entity for Hineuru. It will be unnecessary for Ngati Hineuru Iwi Inc to continue in existence as it will no longer have a role to perform and so it will be immediately wound up. This is the usual process that is followed by claimant groups after their settlement body is established.
Under the Ngati Hineuru Iwi Inc Rules the society must hold two consecutive Special General Meetings at which a resolution must be passed to wind the society up. Under the Ratification Plan finalised with Office of Treaty Settlements we are working towards having the results of the ratification available for the AGM. It is proposed that following approval of the settlement trust the first of the resolutions for winding up could be put at the AGM which is to be held later this year. This will save costs for the society and the iwi.
Normally two of the Board members are due to be stood down at an AGM and new nominations are called for, with successful candidates confirmed at the AGM. However as the society is about to be wound up at the direction of members, it is thought that this process would be unnessesary for the society to complete at this time. This would be a poor use of society funds to go through an expensive election process when the society will no longer have a function and was about to be wound up.Further notice about the timing of these processes will be notified on this website as soon as they are confirmed with the Crown.
Where to from here?
There are a number of steps in order to create our settlement group structure. Firstly, during the ratification of our Deed of Settlement, we will also seek approval of the settlement trust deed which has been approved by the Crown. There will be further information provided to you about what the proposed trust structure will look like, and how it will operate. You will then be able tohave your say by voting on whether to approve the settlement trust to receive the settlement assets.
Secondly, sometime after the Deed of Settlement is signed we will be seeking suitable candidates to be appointed to the commercial and charitable entities. If you have, or know of anyone who has, the passion, drive and expertise to make decisions for the benefit of Hineuru, we will be encouraging you to apply!
We are not far from finalising the settlement package for Hineuru. We thank you for your continued support.