Meridian misjudged millions on the Mokihinui hydro dam

Gareth Hughes blogs that energy company Meridian's persistent advocacy for Mokihinui River hydro dam proposal, including obtaining resource consents, has now been proven to be a waste of 18 million dollars now that Meridian has withdrawn the proposal and the consents.

Gareth is bang on to describe the Mokihinui Dam proposal as ‘far-fetched’ and ‘unconsentable’. It’s the Conservation Act not the the Resource Management Act that makes the dam proposal ‘unpermit-able’ (if thats even a word!).

The Mokihinui River is conservation land. The Minister of Conservation can’t just give away conservation areas for non-conservation purposes.

The case law is a 1995 High Court declaration Buller Electricity Ltd v Attorney-General [1995] 3 NZLR 344 that said that the Minister of Conservation was correct to decline to give away the Ngakawau River for a hydro dam as it wasn’t a conservation purpose.

Meridian and its advisors have only themselves to blame for the $18m dead-loss (and also DOC’s costs). When they initially scoped out the feasibility of the proposal, they should have realised that the Buller Electricity precedent was a very high hurdle to cross.

I can only presume that their initial scoping suffered from ‘optimism bias’. It was also their choice to pursue resource consents before receiving formal access to the conservation land from the Minister of Conservation.

Mokihinui Madness

Claire Browning has done another thoughtful post on the Pundit blog about the roles of Meridian and Solid Energy in seeking permission to respectively dam the Mohikinui River Gorge and remove the habitat of Powelliphanta augusta for the Cypress open cast coal mine

I agree with her conclusion - it is bad government to let an SOE push the envelope of 'balancing the environment and the economy' as far as Meridian has in obtaining resource consents for a dam on a large undammed river within 337 ha of conservation 'stewardship' land.

Claire Browning asks "how does it serve the taxpayer exactly, for Meridian to battle on with Mokihinui consents, in the face of quite clear signals that they would not get the DOC dispensations that they need?"

Yes, having DOC and Meridian funding lawyers and expert witnesses at both the council resource consent hearings and the Environment Court is obviously a waste of money. Particularly, when DOC, as the agent of the landowner, the Crown, has not approved the use of the Mokihinui River Gorge.

I have been wondering for some time (actually since Easter 2003 when I tramped from the Buller River via Lyell to the south Branch of the Mokihinui River and out the gorge, great tramp actually) why DOC has even been bothering to participate in the resource consent process when DOC has a right of veto over the permission to use conservation land for a non-conservation purpose.

So when I read of DOC's intention to appeal the grant of resource consents, I thought I would just ring up the direct dial number of the "Comms" person given on the press release, and ask. To protect his identity, I have made up the name "Mr Spin".

Our conversation went like this.
1. Is DOC appealing the grant of the consent or just the consent conditions?
"Both. DOC does oppose the substance of decision to grant. I can email you the notice of appeal."
2. What is status of Meridian's application for a concession for the dam?
"It is "on hold" at Meridian's request therefore DOC cannot decide it."
3. Does the Conservation Act 1987 provide for applications for concessions to be placed "on hold"?
"Um as far as I am aware yes, DOC cannot process it, its the same as if there were no application."
4. If DOC opposes the proposal, why does it not simply decline application for concession?
"It is my understanding that the department cannot act on the application for concession if the applicant has requested a delay in processing."
5. Do you realise that the Department is being gamed by Meridian?
"Ah ha ha ha. The department has to follow due process in these matters and Meridian is able to choose how it proceeds with its proposal so the department has to proceed via the Environment Court".

"Mr Spin" had completely recovered from appearing slightly wrong footed by my third question, which after brief hesitation he fudged admirably. With his "Ah ha ha" he was now talking in a very superior tone of "you may say that, I couldn't possibly". The DOC Glenorchy staff I worked with as hut warden in the mid 1990s would no doubt regard "Mr Spin" as a "head office shiny-pantsed seat-warmer".

The RMA clearly provides in section 37A for applicants for consents to request a delay in processing. But the Conservation Act 1987, which deals with concessions in sections 17O through to 17ZJ, has no such provisions. The Conservation Act 1987 does not provide for applications for concessions to be placed "on hold".

"Mr Spin" was reflecting the party line, however incorrect it may be. In September 2009, the Hon Tim Groser informed Parliament: "Meridian Energy has requested that part of the application, with respect to the proposed dam footprint and inundation area, be put on hold while the Department of Conservation processes a land exchange application over the same area"

A land swap! Are they joking? If you follow the case law in Buller Electricity Ltd vs the Attorney General High Court case , DOC cannot dispose of or swap land for a non-conservation purpose. There is no chance that Meridian could find a large river equivalent to the Mokihinui River Gorge outside the conservation estate. Wasn't that the point of the allegedly suppressed Landcare report?

Back to Mr Groser. As at October 2009, DOC are still considering Meridian's land swap application .

I am gobsmacked that DOC is allowing Meridian to dictate the timing of the processing of concession application and also it appears the land swap proposal. DOC has let itself be fooled into wasting time and money opposing the Mokihinui dam in a decision-making forum dominated by 'weak sustainability' when it had at all times the statutory decision making power to decline a concession application or a land swap on due to inconsistence with conservation purposes.

Buller Electricity Ltd v Attorney-General

I have just added a copy of the 1995 High Court case Buller Electricity Ltd v Attorney-General 1995 3 NZLR 344 to www.scribd.com. Its an important case which should be relevant to the current issue of Meridian's proposed hydro-electric dam on the Mokihinui River which will be within conservation land.

Buller Electricity Ltd v Attorney-General 1995 3 NZLR 344

Canterbury water conservation orders

A commenter asks Claire Browning at the Pundit blog:
"Does the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010) mean that the new ECan can bypass the process so that rights to access water in the Hurunui can be granted regardless of anyone else's needs or concerns?"

No the special legislation doesn't bypass the process, it completely rewrites the process!

Specifically, it inverts the old decision making criteria so that development of water resources is more important in the decison on a WCO than preserving rivers in their natural state.

In a tribunal decision on a WCO (under Section 207 of the RMA) environmental criteria ("outstanding amenity or intrinsic values which are afforded by waters in their natural state" s 199 RMA) have predominance over resource development criteria, which were still a matter the tribunal "shall also have regard to" (S 207(b)).

The Hurunui River WCO application, even though it was applied for and had it's tribunal stage prior to the Ecan Act, is now to be decided by the new Ecan/Dame Margaret. See Section 46 of "the Ecan Act".

Dame Margaret/Ecan's decision on the Hurunui WCO is to guided by Section 50 of "the Ecan Act"

The decision must have particular regard to the vision and principles of the Canterbury Water Managment Strategy (S 50(2)(a)(ii). The "vision" is now Schedule 1 to the Ecan Act.

I am afraid when I see the "vision and principles of the CWMS", it just seems a rehash of "resource management" apple pie matters, just like sections 5, 6 and 7 of the RMA.

The decision must also have particular regard to the old WCO criteria; "outstanding amenity or intrinsic values that are afforded by waters in their natural state" (S 50(2)(a)(i) and S 50(3)(a)).

But the decision must be made foremostly "subject to Part 2 of the RMA" (S 50(2)). That wording is from s 104 of the RMA (the section about how to consider the granting of resource consents). It means that ultimately the decision on a WCO should 'promote sustainable management' of resources as defined by court interpretations of Section 5 of the RMA. Just like a consent decision.

The MfE and Court-approved interpretation of "sustainable management" is the "broad overall judgment" weighing all matters. In other words, it is a balancing exercise. So what will this sort of decision look like in practice?

I suggest it will look exactly like the recent decision to grant consents to dam the Mokihinui River within a conservation area. See the article Watchdogs explain giving dam go-ahead, 8 April 2010 in the Herald.

The three-person hearing panel made a split 2 vs 1 decision to grant the consents. The civil engineer and the west coast councillor outvoted the specialist freshwater ecologist, who considered the dam should not go ahead due to significant adverse effects on freshwater ecosystems.

We may ask "how did the Hearing Panel "have regard to" the adverse effects of the dam on freshwater ecosystems?". The answer is that one of the three panel members recognised and documented the importance of the freshwater ecology in their decision and the other two considered the instream values worth sacrificing for the power.

To me that is a perfect example of what is wrong with the "broad overall judgment" approach to sustainable management It is "weak sustainability" writ large.

The definitions section of the Ecan Act also defines the term 'WCO application' to include an application to revoke or vary an existing WCO. Applying to revoke or vary a WCO is provided for in S 216 of the RMA. But there is a high threshhold as it's still the same S 207 decision-making criteria "outstanding amenity or intrinsic values" of water in it's natural state".

The Majac Trust (the Talley family) tried to vary the Buller River WCO to allow hydro dam on the Gowan River. That application was declined.

The Ecan Act now means that Canterbury's WCOs, which were established against criteria of "outstanding intrinsic values", can now be varied or revoked by appications that will be considered against a criteria of fairly weak sustainability.

It is no wonder Chris Hutchings of the NBR decribes the Ecan Act as a major victory for the irrigators.