Davis KelvinTE TURE WHENUA MĀORI BILLIn CommitteeDebate resumed from 4 July.Part 6 Operation of governance bodies (continued)KELVIN DAVIS (Labour—Te Tai Tokerau): We are deliberating Part 6 and I would like to start off talking about clause 202 Powers duties and responsibilities of governance bodies". I will start off with clause 202(1)(aa) which has been inserted just so that people understand what the powers duties and responsibilities of the governance bodies are to be. Clause 202(1)(a) says: "manage the asset base in accordance with the objects of the body as stated in the governance agreement;". Of course that makes total sense in that every organisation should have objects or objectives that they work to meet. Then 202(1)(aa) says: "hold and manage an asset base for the benefit of the owners of the Māori freehold land managed under the governance agreement;".I just want to clarify there too whom we are talking about when we speak about owners because according to clause 156(1) "A governance body is the legal owner of the asset base that it manages …" but 156(2) says: "An owner of Māori freehold land managed under a governance agreement—(a) retains beneficial ownership but not legal ownership". So the governance body is the legal owner but the people who own the land—the asset—themselves they are the beneficial owners. I think we just have to keep reminding people of that so that there is no confusion around who the beneficial owners are compared with who the legal owners are who happen to be the governance body.Clause 202(1)(b) says it must "operate in a manner that is consistent with the governance agreement;". Clause 202(1)(c) says: "operate in a manner that does not and is not likely to create a substantial risk of serious loss to—(i) the owners;". Now this is very very important because this is where we would be concerned that those beneficial owners who have put their faith into a governance body—we do not want that faith to be misplaced if the governance body does not actually manage or operate the governance body in the way it should. So this clause 202 is just talking about the powers and duties of the governance body. It is very important.For example clause 202(1)(d) says it must "be satisfied before incurring an obligation or a liability that there is a reasonable prospect of the governance body being able to meet the obligation or liability …". So in other words it is saying that this governance body cannot enter into any sort of work or go purchasing anything or set up any sort of liability without first knowing that it can meet the liability. Again this is because the beneficial owners are putting their faith into these governance bodies to make sure that they actually grow the asset and grow the wealth of the organisation.In the submissions groups have said that this is a positive step towards more owner groups ensuring suitably qualified people are appointed to manage their land assets. In other words the people who are appointed must be able to fulfil these very functions that I have been talking about such as being able to run an organisation making sure that when they enter into any sort of business transaction they know what the potential liabilities and obligations are and that as clause 202(2) says: "For the purpose of performing its role a governance body" i.e. the people on that governance body "has—(a) full capacity to carry on or undertake any activity or business do any act or enter into any transaction; and (b) for the purpose of paragraph (a) full rights powers and privileges." It is really important that landowners understand that the governance bodies have full rights powers and privileges.Clause 203 talks about the "Duties and responsibilities of kaitiaki". As we talked about last night a kaitiaki—although the Māori translation means like a caregiver for the purposes of this bill a kaitiaki is somebody who has the powers basically of a director of a company. In their role a kaitiaki of a governance body must act honestly and in good faith. That is most important and they must "act for a proper purpose;"—this is clause 203(ab). It is very important that the kaitiaki of any board or any governance body is acting for the right reasons. Again a submitter says: "It is not clear to us if any distinction is intended between the duties and responsibilities for kaitiaki of different types of governing bodies for example for kaitiaki governing a body corporate compared to kaitiaki governing a trust."I will just carry on. There is a concern that the new Act may not fit with other legislation—when I say "fit" for example the duties and liabilities for directors under the Companies Act of 1993 and how they apply to kaitiaki governing a company under this bill that we are debating.Also it was raised that the fiduciary obligations of kaitiaki are not clear—for example to act in the best interests of the governing body and/or the landowners. The bill says it must "act honestly and in good faith" but it is not clear whether they must act in the best interests of the governing body or the landowners. There was concern that there was no obligation placed on kaitiaki to act in the best interests of the beneficial owners. So it is just not quite explicit in here and that is a concern I guess. By looking at the duties and responsibilities we would assume that that is the case although as I say it is not actually explicit.There is immunity for kaitiaki from personal liability. This is clause 204: "A kaitiaki of a governance body is not by reason only of being a kaitiaki personally liable for—(a) any obligation of the governance body; or (b) any act done or not done by the governance body in good faith in the performance or intended performance of the duties and responsibilities of the governance body."I guess that is in there because if kaitiaki were actually liable for deeds done in good faith that actually might be a disincentive for good people to want to become kaitiaki. In terms of immunity it is good. I just hope—and obviously this goes for any sort of organisation—that those people in those positions of responsibility do actually do things in good faith but also make sure as I said earlier on that they have the full capacity to carry on or undertake business activities and that they know before they make decisions about incurring obligations or liabilities that they actually have the prospect of the governance bodies being able to meet those obligations or liabilities.So with that I will end there. There is plenty more for our members to talk about just here on Part 6. It would be lovely to see members from the Government—this is a substantial piece of legislation affecting Māori land. It would be lovely to hear the points of view the questions and the incisive insights of members on the other side of the House since it does affect all our Māori land. So I will leave it there for now."