For five years, Hawai'i's Senator Daniel Akaka has been shepherding the Akaka Bill through the US Congress – legislation that will formally recognize Hawaiians as an indigenous people. In August 2005, the bill was put before the full US Senate for debate, even though many Kanaka Maoli (native Hawaiians) remain firmly opposed to the legislation.

Critics of the Akaka Bill say the legislation will make the US Department of the Interior the lead agency responsible for Hawaiian rights, that it enshrines a racial definition of indigenous Hawaiians based on blood, and that it ignores questions of international law about the overthrow of the Kingdom of Hawai'i in 1893. Hawaiian sovereignty groups like Ka Pakaukau see the Akaka Bill as a way to foreclose their right to self-determination under international law. There is also concern that the bill will open the way for a Land Claims Settlement Act to access the Hawaiian homelands, which are currently protected from foreign ownership.

The legislation was developed after the 2000 court case Rice v. Cayetano, when the US Supreme Court decided that voting for the Office of Hawaiian Affairs (OHA) by Kanaka Maoli alone – rather than all residents of the state – breached the US Constitution. This court ruling opened the way for other cases challenging affirmative action programmes for Kanaka Maoli, including the existence of the OHA and the Department of Hawaiian Homelands.

In July 2005, a US federal appeals court struck down the Kamehameha schools' policy of prioritizing education for Kanaka Maoli, saying it amounts to unlawful racial discrimination. Overturning a lower court, the 9th Circuit Federal Court ruled that the policy of allowing only Hawaiians to attend Kamehameha schools violates the 14th amendment to the US Constitution, which outlaws discrimination on the basis of race.

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