Energy (renewable) and MaoriKo te whenua te waiu mo nga uri i whakatipuranga(The land will provide sustenance for our future generations)

International Indigenous Energy SummitVancouver, British Columbia, Canada

January 28th 2014

Chris Karamea Insley | Managing Director

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January 28th, 2014

Kia ora,

From the Maori people of New Zealand, we are pleased at the

opportunity to have one of ‘our own’ address the first nations people

of Canada and the United States and indeed, all other indigenous

people of the world here today on the important issue of energy and

wider related issues of sustainability of the environment and natural

resources, and changing global climate.

These changes will have an enduring impact on ‘our families for

generations to come’.

I would hope that from this discussion, there will arise opportunities

for us to collaborate practically together where we have shared

interests and, that at some point we may host you in our country, ‘on

our lands’ to advance the discussion we have started together, today.

Yours sincerely

Dr. Apirana MahuikaChairman – Tribal (Iwi) leadership Group of New Zealand (Climate Change)Chairman – Te Runanganui O Ngati Porou

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Kia ora (I greet you) …..

• What is it like being Maori in New Zealand?– Maori sustainability (kaitiakitanga) values framework– Maori economy– Current New Zealand political (policy) climate and energy settings

• Two Maori led Renewable energy case studies– Tuwharetoa ki Kawerau (Maori Geothermal energy)– Kaitiakitanga (Maori community-owned renewable energy)

• Our message and lessons to indigenous people of the world

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Our commonalities and differences• Canada and New Zealand have:

– Strong and long-standing relationship’s to Britain and the British monarchy;– Similar Parliamentary and democratic government systems;– Similar Westminster-based legal systems;– Similar financial and accounting systems and conventions;– Share a number of common markets;– Are both metric (unlike across the border);– English is the common language; and– And, are becoming very multi-cultural.

• But, we have in New Zealand, our differences as indigenous people;– The Treaty of Waitangi – a formal relationship signed in 1840 between the Crown and

the Maori people of New Zealand– Has been (and still is today) a source of tension between Maori people and the Queen’s

representative (s) – the Government.

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Some quick comparative metricsMetrics New Zealand Maori Variance

Population 4,242,048 526,281 12.4%

Median age 38 22 58%

Percent adults with formal qualification 79.1% 20.0% 59%

Median income $28,500 $22,500 21%

Unemployment 7.1% 15.6% 54.5%

Source: 2013 New Zealand census.

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Contrasting Maori/Western (Sustainability) Values Frameworks

Western Values Framework Maori Values Framework

Economic Strong over-riding driver of decisions (NPV, IRR, Profitability Index, Payback period etc.)

Strong(NPV, IRR, Profitability Index, Payback period but may accept lower Return)

Profits Owned individually and often lost offshore

Owned communally (reinvested back into whanau, communities, regions and the Nation)

+ Social Very low (only what is prescribed in law)

Very strong(What is prescribed in law is bare minimum, whanau jobs, education, health and well-being)

++ Environment Very low(only what is prescribed in law)

Very strong(What is prescribed in law is bare minimum, preservation of Papatuanuki)

+++ Culture Nil Very strong(Preservation of Te Reo, culture, tikanga – our identity).

Planning horizon 1- 5 years Intergenerational (100 years plus)

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Contrasting Maori/Western (Sustainability) Values Frameworks

Western Values Framework Maori Values Framework

Economic Strong over-riding driver of decisions (NPV, IRR, Profitability Index, Payback period etc.)

Strong(NPV, IRR, Profitability Index, Payback period but may accept lower Return)

Profits Owned individually and often lost offshore

Owned communally (reinvested back into whanau, communities, regions and the Nation)

+ Social Very low (only what is prescribed in law)

Very strong(What is prescribed in law is bare minimum, whanau jobs, education, health and well-being)

++ Environment Very low(only what is prescribed in law)

Very strong(What is prescribed in law is bare minimum, preservation of Papatuanuki)

+++ Culture Nil Very strong(Preservation of Te Reo, culture, tikanga – our identity).

Planning horizon 1- 5 years Intergenerational (100 years plus)

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The Maori economy(2010 NZ millions)

Source: BERL 2010

Base Maori economy

Diversified Maorieconomy

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Comparative historic GDP Growth

2001 2006 2010$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

$160.0

$180.0

$200.0

$9.4 $16.5$36.9

$108.6

$144.5

$151.1

Maori GDP Non- Maori GDP

NZ$ billions

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Comparative forecast GDP Growth

2010 2015 2020 2025 2030$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

$700.0

$800.0

$900.0

$36.9$78.9

$168.5

$360.0

$769.3

$151.1$181.7

$217.9$261.3

$313.3

Maori Non-Maori

NZ$ billions

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Current New Zealand climate policy a disgrace

• Withdrawn from Kyoto Protocol• No NZ strategy to meet medium term

international emission reduction targets

• Knowingly allowed the carbon price to collapse costing NZ tribes $NZ600 million

• Perverse incentives rewarding polluters $NZ100’s millions

• No incentives towards renewable energy

• But, there is a NZ election this year• Opposition parties have strong

emission reduction policies and support renewables

• A major National and International issue for Maori tribes in 2014 Source: New Zealand Herald – December 19,2013.

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Tuwharetoa ki KawerauChris Karamea InsleyIndependent Board Director

Case-study ONEOnly 100% tribal-owned Geothermal energy company – a large (and growing) established company

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Ko wai tatou? (Who are we?)

Our Maori (tribal) uniqueness• Only 100% tribally owned

geothermal business in New Zealand• Only geothermal business

predominantly supplying process heat;

• Largest geothermal process heat supplying business in the world;

• Support local industry by providing geothermal energy:– for process drying, and– for electricity

• for over 50 years

Our wood-processing customers

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Award winning Excellence in Innovation and Engineering

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Our performance and growth plans

2005 2006 2007 2008 2009 2010 2011 20120

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10

15

20

25

30

35

7 Year Asset Growth(2005 to 2012)

NTST Investment

Valu

e ($

NZ

mill

ion)

• Treaty Settlement of $NZ10 million

• Current net asset book value $NZ35m

• Market value $NZ70m+• 20% compound annual

growth rate (CAGR)• Resource consent to

double take from steam field

• Strategic plan to continue growth through diversification

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Our diversification growth-strategyOrmat Geothermal Energy Wageningen Greenhouse

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Kaitiakitanga | Caring for our Lands & ForeshoreChris Karamea InsleyChairman and Project Leader

Case-study TWOFlagship Maori community-owned Renewable energy – a start-up project

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Guiding project principles and goalsGuiding principles:

• Project leadership comes from the community (not negotiable)• Never do anything that put’s our land at risk (mortgages)• Find and use the best New Zealand and international experts• All project intellectual property (IP) remains owned by the community

Project goals: • Cheap power for the whanau (family) through an energy company owned by the

community• Energy security and a new revenue stream for the community• New and real jobs• Model project management approaches• To pilot the project towards sharing across 1,300 New Zealand marae community

(estimated $NZ500 million annual electricity bill)• Is real by the end of 2014.

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Student Engineer Team

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Winning engineering concept design

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Top Commercial and Engineering teams

Legal/Commercial (Chapman Tripp)• Owned by marae (community)• Flexible to enable growth (new entities and

other marae)• Tax efficient• Dividends back to charitable Trust for

distribution to marae• Interface with New Zealand Maori Land law (Te

Ture Whenua Maori Land Act)

Expert Engineering Advisory Panel• Provide independent expert engineering advice

(two years)• New Zealand and International expertise in

Renewables• Finalizing the business-case at the moment

– Short term house-hold projects by end of 2014

– Major capital investment projects (2 to 5 years)

Possible Commercial Structure

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Our Partnership StrategyInvestment (4)• The Hikurangi Foundation• Tyndall Foundation• Todd Foundations• BanksEngineering (4)• Engineers Without Borders• Institute of Professional Engineers of New

Zealand• AECOM international• Sinclair, Knight & MerzResearch (5)• Auckland University• Auckland Institute of Technology• Canterbury University• Scion Forest Research• Motu Research

Legal (2)• Chapman Tripp (Law)• Maori Land CourtGovernment (3)• Ministry for Energy• Environment Bay of Plenty• Opotiki District CouncilIndustry Associations (2)• New Zealand Wind Energy Association• New Zealand Bio-energy AssociationIndustry (2)• TransPower (energy)• Hancock Forest Management (forestry)Maori (multiple)• Other marae (communities)• Other tribes• Other indigenous people?

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Energy (renewable) and Maori Summary

Bringing it all together .....

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But, biggest oil discovery in 50 Years?

$20 trillion shale oil find surrounding Coober-Pedy ‘can fuel Australia’ ….

Source: Linc Energy: Released two reports in January 2013 with estimates ranging between 3.5 to 233 billion barrels. Linc aims to drill six horizontal wells (A$150-300m) to confirm its figures.

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Some takeaways ..• Climate change, international policy response and growing consumer

pressure will force a shift away from fossil fuels ..

• Climate change is getting worse. The problem is not going away ..

• The the cost of renewable energy technologies is falling ..

• Renewable energy is a valid and legitimate long term investment option for indigenous people ..

• Related clean-technology investment opportunity ..

• Scale investment with like-minded indigenous people of the world ..

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So what have we learned?• Own your own projects – leadership (not negotiable) …• Never compromise on your values – (not negotiable) this is your identity …• Take a long term (intergenerational) view – (not negotiable) avoid the so-

called experts who promote short-termism …• Remember governments will come and go – avoid becoming dependent …• Find the best experts in the world to help – but you lead and manage

them …• Grow your own people – education, education, education …• Strategic partnerships with those who share your values …• Reach out and collaborate with other indigenous people of the world …

– Collaboration on International policy (law-making) to United Nations and other forum,– Joint and shared energy (and other) project-investment,– International Research and knowledge sharing,– Joint marketing and indigenous branding, and– Technology and Innovation.

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Call anytime …Chris Karamea Insley

Principal and Managing Director37 Degrees South limited | the strategy thought leadersNew ZealandInternational phone: +64 21 972 782Email: ckinsley@37ds.comSkype: chris.karamea.insleyWebsite: www.37ds.comLinkedIn: Chris Karamea Insley (send me a connect request)Twitter: Chris Karamea Insley (follow me on twitter)Facebook: Chris Karamea Insley (send me a friend request)