‘Heretaunga te Haaro o te Kaahu ki Tuawhakarere’

A hundred pathways, life giving waters and beauty that can only be seen through the eye of a hawk.
Hawke’s Bay Māori whakatauki (or proverb)

Keith Newman asks whether the vision from the eye of the hawk is strong enough to pull Māori and mainstream economies together for the good of Hawke’s Bay.

The ability to delivery tangible benefits from the latent potential of Hawke’s Bay’s Māori economy will depend on strong leadership, improved management of existing resources, wise investment of Treaty of Waitangi settlements and a commitment to tackle the youth unemployment crisis.

The estimated billion dollars of Hawke’s Bay Māori assets; including ongoing treaty settlements, is a pittance compared with the national Māori economy, which more than doubled between 2007 and 2011 to $36.9 billion, according to Business and Economic Research Limited (BERL).

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Hawke’s Bay Treaty settlements will have far less impact than other regions; nine iwi (tribes) and hapu (sub-tribes) will each receive around $25-$30 million from the overall payment capped at $170 million.

Former Hawke’s Bay Māori Business Network (HBMBN) chairman Jason Fox says, failure to go with a single investment entity prevents local Māori from having sufficient clout to make a real difference.
While local authorities are looking at collaboration to avoid duplication of resources, Fox says fragmented Treaty settlements will see Hawke’s Bay Māori heading toward patch protection.

“If they don’t nail it down early, the Māori community will suffer because decisions that have a stronger community influence can’t be made….What is needed is good leadership.”

Fox says the Hawke’s Bay economy is dominated by up to 20 large businesses who will continue to do what they’ve always done and Treaty-based investments of around $30 million, returning perhaps $1-$2 million a year, won’t make much difference.

Ngati Kahungunu, set for one of the larger settlements, sees its payout as foundational to the tribe’s economic revival, planning investments in traditional fisheries and farming enterprises, technology and new business opportunities.

The third largest iwi in the country is already in entrepreneurial mode, developing a $7-$10 million innovation centre at Ahuriri for technology and business, r&d and Mãori culture.

Other groups will go for a mix of land or sea-based assets and cash, and associated management plans to deliver the best return for their people.

Preparing to prosper

Henry Heke, Hawke’s Bay regional account manager for Te Puni Kokiri, the Ministry of Māori Development, believes the Māori economy in Hawke’s Bay could be worth up to $1.2 billion including existing assets, investments, businesses and treaty settlements.

He personally knows of at least six Māori-owned SMEs valued at between $850,000 to a million dollars, employing up to a dozen people, and is aware of another three in that range.

They’re mainly tradespeople in services, installation and construction, including utility companies with their own fleet of trucks and plant, engaged in laying fibre optic cable or power lines or in the decorating or insulation business.

TPK is assisting a number of Māori businesses achieve growth so that when the economy recovers in 3-4 years they’ll have quality staff, good systems and competitive products and services.

Heke says, business owners have to realise it’s not a charity and they can’t employ family members and look after the nephews and nieces and remain sustainable. “If you ask these guys what it takes to get from a one man band to turning over $160,000 – $500,000 and on to a million, they’ll tell you it requires good systems and processes.”

It’s estimated there are up to 1000 Māori-owned businesses operating in Hawke’s Bay, mostly small one to five person operations, plus several medium and large organisations and trusts that own significant farming and forestry blocks.

Havelock North-based company director and iwi economic advisor, Karl Wixon, says the best way to describe the local Māori economy is “a bunch of latent potential yet to be realised”.

He’s been working with the Government’s Māori Economic Development Panel on regional solutions to Māori business growth; while there’s no shortage of ideas, he says there is “a shortage of people with commitment to do something about them”.

Wixon says any talk of a Māori economy has to take into account household income, which is closely linked to education and employment, where Māori have problem statistics. Ironically, the biggest employers of Māori are in education, as well as health and social services.

He warns changing demographics should be a wake-up call for the region. By 2050 the workforce will comprise mainly Māori and Pacific Islanders with a growing number of Asians.

“If you look at current levels of achievement, education and employment and project that forward it’s not a good look.”

He says there needs to be a lift in achievement if the region is to have a qualified, productive and more employable workforce, although there seems to be little effort in tackling this problem.

While there’s increasing pressure at tertiary and secondary school level to prove relevance, Wixon says we’re not good at connecting this with the local economy. Consequently there are dire shortages at both the top and the bottom of the labour market.

“At the top end, Māori businesses are often deficient in governance and management to help them grow. At the other end we struggle finding a qualified workforce including those who can operate machines or drive vehicles — we’re not proactively addressing this.”

Wixon suggests the missing ingredient is enterprise; preparing Māori to think for themselves, so they can generate work and business. That means doing a better job of exposing them to the opportunities and what is going on in the region.

Taiwhenua o Heretaunga, one of the region’s biggest employers of Māori with about 160 staff and a current annual turnover of $11 million, began with government-funded health, education and social services contracts and is now investing in property and housing.

Chief executive Alayna Watene encourages Māori businesses to take a more positive stance to the challenges they face. She says individuals and boards need to operate in an environment of confidence if they’re to take calculated risk and build a strong entrepreneurial work ethic.

Watene says the global economic crisis is forcing the Government to explore public-private partnerships with organisations that can deliver better services than it can, and creating “lots of opportunities for well educated and experienced Māori”.

She says, the large number of young people “not engaged productively” in Hawke’s Bay – 50% of Māori youth are unemployed – can be seen negatively or as a resource to be managed with “vision, strategy and effort”.

The need for social, cultural, educational and up-skilling should Present an opportunity for certain types of organisations to invest in the future. “Work out what you have to offer that will give confidence so they can apply themselves educationally or in practical terms.”

Watene says great leaders emerge in times of change, suggesting Māori businesses take a history lesson from Watties, Fletchers or Carters who “cut their gums on services or products that were required in their time”.

They looked at what services or commodities were required, made good choices, gained momentum, built capacity and capability and then went national and international. “Māori businesses are no different.”

Reviving wastelands

If the Māori economy is to make a difference in Hawke’s Bay, Karl Wixon says management bodies need to take a good hard look at their vast non-productive land assets.

In the Hastings district alone, he says, 8% of the land is collectively owned under Māori Land Court title as part of the Te Ture Whenua Act, of which only 30% is managed by functioning administrative bodies.

Karl Wixon

Wixon is concerned some land owners expect very little from their investment, charging cheap leases simply to cover rates or; where the land is unused, applying for a rates waiver.

Barriers to action can include a lack of management skills or the fact there are so many absentee ‘owners’ it seems impossible to do anything without everyone’s consent.

Wixon says managers of Māori-owned land should learn from profitable enterprises around the country. He cites Parininihi Ki Waitotara (PKW) which aggregated 15 Māori farms, has dairy interests in Taranaki and Australia, and is the largest regional supplier to Fonterra.

Meanwhile Ngati Porou Whanui runs 42 forestry blocks, about 6000 hectares, around Gisborne and sources indicate Ngati Kahungungu interests are considering a similar plan near Napier.

Wixon, however, suggests a reality check might be in order if jobs are an expected outcome from land and sea-based investments which tend to be low employers.

Tom Manaena from Poutama Trust agrees land can mean ongoing investments for a low return. “The government’s not going to give you the good stuff so you have to invest a couple of million to bring those properties up to a productive level and then manage them.”

Even then he says you might only get 2% return after five years. “You might be better off investing in bonds at 6% return. There’s no point in having land if all you can do is stand on it and look at it.”

TPK’s Henry Heke has been assisting 290 Māori forestry block owners get up to speed with carbon trading, but says around 1000 others ignored the 2011 deadline for payments or exemptions and therefore “missed the waka”.

Across the three iwi boundaries he’s responsible for, he says, there’s a Māori capital investment of about $85 million in forestry. “Some have said, ‘carbon you can’t touch it, you can’t feel it’ but when I tell them it could be worth $10m to your trust they change their attitude immediately.”

The ‘P’ principal

Eyebrows raise when Heke says “P is the new in-word” but relax again when he explains, “you don’t smoke it; it’s protein, protein, protein and people, that’s what New Zealand is going to be exporting – beef, lamb, dairy, fish and people with skills.”

He insists there’s no such thing as marginal Māori land. “Hold on to the land, ensure it’s used properly. If you’ve got hill country it may be outstanding for forestry or tourism purposes or producing manuka honey.”

Heke says Māori have to get smarter in “how we design our countryside” to keep in line with what the world needs. “We produce the cheapest protein in the world. It rains, grass grows and everything eats it, except for the fish, and we’re pumping out people even faster than some of these other commodities.”

As China’s population increases by a billion people, he asks who’s going to feed them? “They’re moving from rice to t-bone steaks and we produce the cheapest.”

The demand for exporting Kiwi skills is also increasing and while Māori may lack in some areas of qualification, they make up for that in commitment, if they feel embraced and motivated.

Heke says a lot of skilled Māori could easily head to Christchurch to help the rebuild there or pack up the family and head across the Tasman for better job prospects and dollars, but quality of life and family in Hawke’s Bay are overriding factors.

If Māori are paid what they think they’re worth as contractors, suppliers or workers and know people value and respect their services, that makes for a happier community, he says.

“If you live in Flaxmere Henare O’Keefe values you regardless; if you are in business he values you even more because you create jobs and opportunity.”

Network or notwork?

The Hawke’s Bay Māori Business Network (HBMBN) may be a kind of litmus test on how mainstream business and those engaged in the Māori economy can bridge cross-cultural misunderstandings.

HBMBN was established in 2008, bringing about 50 members under the umbrella of the Hawke’s Bay Chamber of Commerce, to network with each other and the wider business community.

However, former chairman Jason Fox wonders whether the Chamber fully understood the opportunities to develop a strategy around Māori unemployment and a Māori business incubator. “We never really crossed that bridge with any conviction”.

Fox, a lawyer and director of several companies who’s just been poached away to manage Ngati Whatua ki Te Kaipara’s $60 million settlement, says his role was “to keep jabbing the puku of the Chamber, the board and influential people”.

He says Māori wealth creation, and business and investment philosophies, must be based around a strong sense of community wellbeing — a ‘paradigm of sharing’ that is often not understood by non-Māori business.

“Everyone needs help with being entrepreneurial.” say Alayna Watene

You can’t have meaningful honest conversations about helping each other if you operate in silos and don’t build trust and friendship. “Many in the Chamber weren’t interested in projects unless it was good for their business — that’s a very narrow way of looking at how our community works.”

He says the real influence will occur when Māori businesses are able to employ 10-15% of the 40,000 strong Māori Hawke’s Bay population.

Meantime, examples of businesses who are doing it right, according to HBMBN, include Waimarama Māori Tourism, which runs tours and corporate team-building events on a property that includes a plant nursery and farm; Mesa Fibre Mill in Hastings, which processes alpaca fibre, garments and meat; European Gourmet, which produce stocks, sauce and heat and eat foods; Cultureflow, which creates Māori language courses; Smart, outsourcing for accounting and call centre operations; East Coast Packaging, producing industrial and horticultural packaging in Hastings; and forestry management group Forest Resources Ltd in Porangahau.

Karl Wixon, another HBMBN founder, is also concerned the HBMBN failed to achieve wider connections and is hopeful Ngati Kahungunu plans for a Māori business incubator can help meet the need.

Part of the problem he suggests is ‘the employment threshold’ which means small Māori businesses aren’t gearing for growth. Poutama Trust commercial manager Tom Manaena, agrees, suggesting information and resources aren’t getting through to Māori business owners.

While the HB Chamber, the HBMN and BusinessHB offer great opportunities, Manaena says Māori aren’t comfortable in that environment and need mentors and Māori entrepreneurs to lead the way.
“I went to the launch of Business Hawke’s Bay but it was like ‘spot the Māori’ — there were only two or three of us there. Many are whakama or a bit shy. We’re a tribal people but I think we need to make more of an effort to step up out of our comfort zone.”

Poutama Trust invests about a million annually, $100,000 in Hawke’s Bay, to give small Māori businesses a leg up. The pan-tribal group want’s businesses to have “some skin in the game” by going 50-50 in investments that promise incremental changes in turnover.

That might be a web site, a marketing plan, developing a new product, taking on a business advisor or mentor or looking at export. The trouble is many of these micro-businesses seem to be running on the spot.

“They’re on a treadmill, they get up, go to work and its routine; they’re either not thinking strategically or are too comfortable where they are.”

Overall Manaena sees few entrepreneurial Māori businesses in Hawke’s Bay that look like they’re able to get beyond the gate to national expansion or export level. Finding working capital and adding staff can create its own issues. “That’s where they need advice or mentoring and they often don’t know where to find those resources.”

Taiwhenua o Heretaunga CEO Alayna Watene, says the Chamber and the Employers and manufacturers Association (EMA) are there for a purpose “and provide good networks, advice, direction and advocacy.” She says it’s not just Māori who feel a little daunted in these organisations but anyone who’s a “fledgling”.

She suggests persevering, as “everyone needs help with being entrepreneurial.”

Changing old habits

TPK’s Henry Heke, says Hawke’s Bay Māori seem to have forgotten their entrepreneurial heritage.

“The Māori economy is not new – we provided services to the pioneers. Prominent Hawke’s Bay chief Renata Kawepo had flax mills at Omahu, ran flour mills, gardens and farms and gave 5000 sheep to a Whanganui chief to start a business for his tribe.”

“We need to be owners again; to drive our own economy, to be investors and add value through services that are in demand.”

He points to Marcus Pohio as an inspirational Māori businessman. After a couple of decades of flipping burgers he worked his way up the ranks to take over the Hastings McDonald’s franchise, then added Taradale and is about to make it three with Havelock North.

Should Māori consider buying shares in the Port of Napier? Yes, he says. Or perhaps the Hawke’s Bay Regional Council ought to be approaching Māori to engage in joint ventures in forestry on Māori land?

“They could join with Māori for a sustainable 5000 hectare pine forest, invest in the Māori staff to manage that, offset it against carbon emissions and share the return on timber and carbon credits. Let’s have that conversation?” says Heke.

And there’s huge potential in the Wairoa microclimate. “You could harvest apples three weeks before Hastings and sell them for $38 a box before they slip down to $18 three weeks later in the main season.”

So is that just a good idea? “No it’s happening now as part of the Māori economy,” says Heke.

He continues to talk up the Māori economy saying, the time for hui is over — it’s action time. “Māori businesses don’t want another strategic plan, they want an implementation plan.”

In the end he says, everyone needs to be reminded that when the client weighs up products or services, they’re not going to buy something because it’s Māori, but because it’s the best value for money.

Only then will the fact it’s produced and branded in Hawke’s Bay by Māori become the regional and indigenous differentiator.

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