Quantifying the Economic Loss from Indigenous Land Takings

The Situation

The background to this case goes back to European settlement in New Zealand in the 19th century, when the Crown purchased land from indigenous Maori landowners under a degree of coercion and at a discounted price. Fast-forward to the late 20th century, and the Waitangi Tribunal was established as a commission of inquiry to assess whether such acts by the Crown amounted to a historic breach of the Treaty of Waitangi, a treaty between the Crown and Maori in 1840. 

While numerous treaty claims have been assessed over the years, this particular case relates to a claim regarding land sold under coercion to the Crown, starting around 1854, by Ngāi Tūmapūhia, a hapu (subtribe) from the lower North Island of New Zealand. The Tribunal previously found that the abandonment of good purchasing practice by the Crown with respect to these land sales amounted to a breach of the treaty. The next question the Tribunal had to consider—the question that relates to this case—was the economic loss to Ngāi Tūmapūhia as a result of this treaty breach, and the level of compensation the tribe should receive.

NERA's Role

NERA was engaged by Ngāi Tūmapūhia. Managing Director James Mellsop, with support from Associate Director Kevin Counsell, provided expert economic evidence before the Waitangi Tribunal regarding the economic loss. Mr. Mellsop and Mr. Counsell compared the economic position of Ngāi Tūmapūhia against their position had the breach not occurred. This involved determining what rental income would have been earned from the land had it remained in Ngāi Tūmapūhia ownership from 1854 onwards, as well as estimating the present-day value of the land. The analysis adopted conservative assumptions, and with compounding foregone cash flows over 150-plus years to present-day values, estimated that Ngāi Tūmapūhia suffered a material economic loss as a result of the Crown’s treaty breach.

The Result

The Waitangi Tribunal has yet to release its judgement with respect to these proceedings.