Government’s inadequacy to collect and store water is costing shareholders millions in lost returns, but these costs are now being passed on to them as water tax. Are we paying for infrastructure or directors $100,000 plus salaries? Ruta Mave writes.

When I had a leaking roof, I called in a professional to fix it. I paid him and expected my roof to be waterproof. The next time it rained it continued to leak and caused more damage. When I inspected the job, I found holes in the workmanship so I called in the professional and pointed it out. He saw his mistakes and fixed it. I did not pay him the second time because it was his mistake, not mine, which resulted in more work needing repairs.

If we look at Rarotonga as a company, the Members of Parliament are the voted-in directors by the shareholders who are the people – taxpayers, landowners, residents and business owners.

Shareholders are owners. They provide the company financial security and have control over how the directors manage the company by their election into office.  The advantage of being a shareholder lies in the fact they can share in the profits of the company but they are not obliged to shoulder the debts and financial obligations incurred by the company.

They also have the right to sue for wrongful acts. If petitions do not get government attention maybe a class action lawsuit will.

Class actions offer a number of advantages because they combine many individualised claims into one representational lawsuit. When thousands of shareholders of a public company may have losses too small to justify separate lawsuits, a class action can be brought efficiently on behalf of all shareholders.

Even more important than compensation is that class treatment of claims may be the only way to impose the costs of wrongdoing on the wrongdoer thus deterring future wrongdoing.

A director is required to act in good faith and manage all the business affairs of the company to promote not his own interests but to give his best judgement in the interests of the corporation in all matters in which he acts for it. 

Intentionally providing false or misleading information about the company’s finances, operations or projections – ‘The water is free’ ‘We will not charge for water’ – could constitute fraud. Breach of shareholders agreement – unapproved decisions without obtaining the necessary majority vote like using a Chinese contract company or adding chlorine could be deemed reasonable reasons for a class action lawsuit.

When it was determined the water pipes of Rarotonga needed replacing because of deterioration and lower water pressure due to increase in demand, the government decided to bring in Chinese contractors. The people signed a petition supporting a different contractor because of the past poor workmanship of the Chinese displayed in the failing justice, police and stadium builds.

The shareholders said no, but (Prime Minister) Mark Brown said yes. He has been at the forefront of every botched decision and consequence since the start of this project.

Class action involve things like defective or harmful products, environmental or pollution claims. They are cases where a defendant’s conduct affects a large number of people in a similar manner. It is beyond belief that anyone would knowingly and willingly employ inferior contractors to undertake a large and important project as our water system.

The shareholder’s petition was presented to a select committee that never dealt with the complaint. The chairperson was Mark Brown. The shareholders aka owners were not acknowledged by government so in this instance, can they not be held accountable with a class action lawsuit for wrongful loss and damage to the shareholders?

Mark Brown with his Bachelor of Arts degree was head of finance at the time. When qualified engineers said the Chinese workmanship was leaking, Brown said they were wrong. Before completion, the Chinese pipes fell short of desired quality and standards and the shareholders original choice of contractor was brought in, the budget unnecessarily doubled. No admission to his part in this failure, the Ministry of Finance and Economic Management under Mark Brown’s leadership threatened legal action against the Chinese company. Has he done it? No. You don’t bite the hand that feeds.

We, the shareholders of Rarotonga Island Ltd, have in good faith elected Members of Parliament, including seabed mineral mining poster boy Mark Brown, as directors of our company and do hereby declare he/they, whatever pronoun they want to use, are in breach of our agreement which is to ensure the protection of our natural resources, assets to benefit us - the shareholders - in a profitable way.

The government want shareholders to ensure future financial security and operational costs of the water project they have consistently mismanaged from the start without sacrificing from within.

The water is free from the heavens but as it flows down the land of shareholders to the lagoon untapped – it is wastage. Government’s inadequacy to collect and store water is costing shareholders millions in lost returns, but these costs are now being passed on to them as water tax. Are we paying for infrastructure or directors $100,000 plus salaries?