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The lights will go out (4 comments)

April 19, 2014

So claims Regional Council chairman Fenton Wilson, lamenting the Board of Inquiry’s decision to require serious environmental protection for the Tukituki catchment.

The Board of Inquiry, to the surprise of the Regional Council, has ordered that HBRC get tough about regulating both nitrogen/nitrates and phosphorus so as to protect waterways in the Tukituki catchment. The plan proposed by HBRC — and opposed by environmentalists and most Maori — was soft on nitrogen, opening the door to further degradation of our waterways.

The Board of Inquiry sided emphatically with the case made by environmentalists, rejecting what it termed the “hands off” approach of the HBRC.

And that’s typically how the environment has been protected in Hawke’s Bay in recent years.

  1. Citizens successfully appealed to the Environment Court to block cliff-side development at Cape Kidnappers.
  2. Citizens undertook the grassroots campaign that thwarted the plan to develop Ocean Beach into a vast residential community.
  3. Two citizens, appealing successfully to the Environment Court, won stringent requirements for CHB to stop pouring its sewage into the Tukituki … over the objections of the CHB District Council and the Regional Council.
  4. And now citizens have won strong protection of the Tukituki overcoming the weak plan of the Regional Council and its hired experts.

In short, a victory won in spite of the Regional Council, who all along has sought to denigrate and marginalise environmental advocates.

The ironies in all this are numerous.

First, the HBRC (and its corporate offspring, HBRIC) basically ‘shopped for a judge’ in choosing to take its case to a Board of Inquiry instead of the Environment Court. They took one look at the Environment Court’s recent tough decisions on freshwater protection and decided a politically-selected Board of Inquiry would be more friendly to development objectives. HBRC persisted in pushing a half-a-loaf environmental mitigation plan that had already been rejected by the Environment Court. But, surprise, the Board of Inquiry wound up on the same page as the Environment Court.

Second, HBRC, having spent $1.5 million on an army of experts and witnesses to present ‘sound science’ to the BOI (and at least $3 million on the overall EPA process), found its ‘sound science’ rebutted by a handful of environmentalist-funded experts supported by a comparatively frugal budget in the $200,000 range.

Third, in requiring specified limits on nitrogen leaching according to soil type, the BOI relied on testimony from Garth Eyles, a former employee of HBRC with nationally-recognised expertise in soil/land management, who has been critical of HBRC’s approach to the Tukituki catchment. And in deciding to require management of both nitrogen and phosphorus, the BOI noted that three of HBRC’s own witnesses, now advocating a one nutrient approach in this case, had previously recommended a dual nutrient approach. The BOI commented: “…the Board found the change in position by these experts difficult to understand. We were not persuaded that it could be explained on the basis that the Tukituki catchment involved different considerations.”

Fourth, the  HBRC, which touts itself as the necessary independent bastion of defence for the environment (and should therefore be left apart from any future amalgamation), is now trash talking the environmental protection decision of the BOI.

And fifth, having eagerly placed HBRC/HBRIC’s plans in the hands of the BOI, Chairman Wilson now accuses the BOI of ruining CHB’s economy.

For its part, the BOI says: “The Board appreciates that such a regime will involve a cost to farmers. Nonetheless, the Board has concluded that the time has been reached where that cost will have to be met if serious efforts are to be made to avoid further degradation and restore the Tukituki waterways to health.”

Further:

“The limits we have adopted will allow high performance farmers to intensify by implementing some or all of the advanced management strategies identified by Andrew Macfarlane of Macfarlane Rural Business (MRB) and Dr Alison Dewes who gave evidence on behalf of Fish and Game. It also recognises that as a discharger of nutrients and contaminants, the primary sector is no different from any other industry. It has the same obligations to operate within limits and internalise effects, or mitigate those effects where absolute internalisation is not possible.”

The BOI notes that HBRC’s favourite consultant Macfarlane (source of all HBRC/HBRIC farm run-off and production projections) “was able to identify many examples of how good farm management practices could be incorporated into a farming regime” so that both environmental goals and land use intensification could be achieved.

In short, the sky isn’t falling, Fenton. The lights won’t go out.

To the contrary, as the BOI evidence makes clear, smart farmers in CHB can do just fine under the BOI-mandated dual nutrient management regime.

Tom Belford

 

 

4 comments »

15 years … or else! (3 comments)

April 14, 2014

The Nobel Prize winning Intergovernmental Panel on Climate Change (IPCC) has just issued the third and final report in its current (Fifth) assessment of the state of scientific knowledge relevant to climate change.

Climate Change 2014: Mitigation of Climate Change deals with the options for mitigating climate change and the urgency for doing so.

The report notes that global greenhouse gas emissions grew more quickly between 2000 and 2010 than in each of the three previous decades.

Climate experts advocate the urgency of limiting the increase in global mean temperature to two degrees Celsius above pre-industrial levels, noting in this report that only “major institutional and technological change will give a better than even chance that global warming will not exceed this threshold.” Beyond that point, catastrophic consequences must be anticipated. One co-chair of the report’s working group comments: “There is a clear message from science: To avoid dangerous interference with the climate system, we need to move away from business as usual.”

The Panel’s media statement says that “to have a likely chance of limiting the increase in global mean temperature to two degrees Celsius, means lowering global greenhouse gas emissions by 40 to 70 percent compared with 2010 by mid-century, and to near-zero by the end of this century.”

This NY Times article provides an excellent overview of the latest report and its implications. From that article:

“Though it remains technically possible to keep planetary warming to a tolerable level, only an intensive push over the next 15 years to bring those emissions under control can achieve the goal, the committee found.

“We cannot afford to lose another decade,” said Ottmar Edenhofer, a German economist and co-chairman of the committee that wrote the report. “If we lose another decade, it becomes extremely costly to achieve climate stabilization.”

For serious students, this latest report, as well as the two previous reports in this series — Climate Change 2014: Impacts, Adaptation and Vulnerability and Climate Change 2013: The Physical Science Basis — can be found on the IPCC website here.

15 years … It’s wake-up time!

Tom Belford

P.S. Or we can close our eyes and click our heels together three times … and hope our children and grandchildren forgive us.

3 comments »

Is this how to make a $600 million decision? (4 comments)

April 13, 2014

This week, at our Wednesday meeting, Regional Councillors will be asked to set in motion a public consultation process regarding ratepayer investment in the CHB dam.

Here’s what we are expected by HBRC management to base our decision on:

1. A so-called ‘business case’ tabled by HBRIC, the holding company team promoting the scheme. What Councillors (and the public) have seen is a ‘business case’ with no supporting numbers regarding cash flows, sensitivity analyses of differing assumptions or risks, or investment returns. Indeed at this point it is not clear if there even are any investors.

When HBRIC presented its case, I offered a motion, which was ruled out of order, that listed the information we Councillors needed to see and review so as to appropriately evaluate any potential ratepayer investment. I’ve attached the failed motion here.

Call me crazy, but don’t you believe this is the kind of information you would expect me and other Councillors to have and weigh? In fact, shouldn’t such information be available to you?

2. The so-called ‘Nimmo-Bell’ report on alternative investments HBRC might consider to advance economic development goals for the region. This report was so hastily prepared, devoid of information, and lacking in analytic rigour that it was ridiculed by some Councillors, while others apologised to the hapless consultant for giving his team an impossible task. I termed it a ‘fool’s errand’. Even at that, the report concluded that the economic benefits of the scheme — jobs, GDP growth, etc — had been over-stated in HBRIC studies by 20%.

3. And now on Wednesday we are scheduled to receive a verbal ‘interim report’ — that’s right, a verbal report — from our other consultants, Deloitte, who have been charged with giving Councillors (and the public) an independent peer review of the HBRIC ‘business case’. In other words, we’re getting a verbal report reviewing a business case Councillors have yet to see in any reasonable detail!

On the basis of our insights from the above, Councillors will be asked on Wednesday to endorse commencement of a public consultation process that, technically, would test public views on HBRC investing up to $80 million in the proposed dam, but effectively will serve as the public test of proceeding with a $600 million, all in, irrigation scheme in Central Hawke’s Bay.

It would seem that HBRIC and our Regional Council chaperones are determined for Councillors to be as uninformed as possible in making this decision. Do we have ‘STUPID’ stamped on our foreheads or what?!

Indeed, this process has all the elements of a brilliant case study for the Auditor General … How NOT to make a $600 million decision!

I know that some Councillors take our fiduciary duty seriously. They believe as firmly as I do that this process is a travesty. We will do our best to ensure that we and the public are far better informed before we make any kind of decision regarding whether this proposal deserves to go forward to public consultation.

Tom Belford

 

4 comments »

Darest not touch the Royal Cloak (7 comments)

April 8, 2014

For weeks now, a torrent of emails have come to me and other Hastings-based Regional Councillors regarding delays in container handling at the Port.

The complaints have come from growers, pack houses and truckers … all desperate to get Hawke’s Bay’s apples through the Port to export customers during peak season. The Port is their lifeline, and its efficiency is crucial to the region’s economic well-being.

But the complaints are about excessive waiting times at the Port, often causing lost shipments and sales and, at the minimum, sharply escalating truck transport expenses that spell the difference in profitability for growers and truckers alike.

On Monday, a number of councillors met with Port Chairman Jim Scotland and CEO Garth Cowie to convey concerns and to better understand what was happening and how/when undeniable problems might get fixed.

It was a ‘full and frank’ discussion, as diplomats say, and occasionally tempers flared.

But the takeaway for me was that some mistakes were acknowledged, that a suite of short-term remedial steps to partially alleviate the situation were being taken, and that other systems and capital improvements were being explored that could enable the Port to better handle seasonal export peaks next year and into the future. In addition, it became clearer that operating efficiencies were also needed on the part of growers and trucking companies.

We were also confronted with the trade-off between making needed service and capacity improvements (some of which involve significant capital investments) and squeezing every last possible dividend out of the Port so as to subsidise HBRC rates … at bottom, a ‘hide the cost-pea under the walnut’ hustle perpetrated by the politicians, not the Port.

That political twist aside, and to that point, a reasonable conclusion was that our Port custodians are neither wrongly motivated nor ignorant.

But then the subject of explaining all this to the public came up.

And that’s when the tone deafness and aversion to public interaction of a council-controlled, but commercial organisation like the Port (so-called CCOs) became apparent.

You see, the chain of public accountability for a CCO like the Port is quite extended and attenuated …

The planners and logistics staff, who might have misjudged the flood of product to be handled, work for the Port CEO, insulated from any external review.

The Port CEO works for the Port Board, and is really overseen by the Port Chairman, so the CEO is also insulated from any external review.

Nowadays, the Port Chairman reports to the HB Regional Investment Company Board (HBRIC).

The HBRIC Board through its Chairman reports to the Regional Council.

And in this feudal scheme, individual Regional Councillors are unwanted interlopers, urged by ancient canons of ‘good governance’ to keep away from mere ‘management’ issues.

However, some Councillors do not subscribe to the ancient canons, and regard the breakdown of a key transmission part in the region’s economic engine at a critical juncture as worthy of their legitimate attention.

For their part, the senior folks at the Port and HBRIC behave a bit like Royals. Mere commoners darest not touch the hems of their cloaks. Even some Councillors genuflect as they pass by.

Our local Royals are out of touch. They simply do not believe they need to front up to the public when things go awry. That’s regarded as a breech of protocol. When pressed, they might be induced begrudgingly to grant an audience to a suitably-ranked emissary of the agrarian estate or tourism rabble. But such encounters are best kept out of sight so that any hint of inter-class mingling  — let alone public accountability — cannot spread.

And surely such encounters cannot become expected practice! What’s a Royal if not distant?

So it came as no real surprise when, only a day after the meeting with Councillors, the two most senior employees of the Port, asked by Hawke’s Bay Today to explain another, different criticism of the Port (this time with respect to cruise ships), declined to comment!

My understanding from our Councillors briefing is that they indeed have a reasonable rebuttal. So why not give it … in public? Why appear unresponsive (which implies arrogant, uncaring, guilty as charged) on the front page of the daily newspaper?

Council controlled entities like the Port are not private fiefdoms. They hold public responsibility and require public trust.

So they need to get accustomed to addressing the public and its concerns (which in a modern democracy means more than issuing an annual report or complying with a Statement of Intent).

While we still welcome Royal heirs to our shore for ceremonial visits, we should no longer tolerate royal airs at our Port … those archaic days are gone.

Tom Belford

 

7 comments »

Dam rescued! (5 comments)

April 7, 2014

Very exciting developments over the weekend for the team at HBRIC.

New funding has been found for the dam!

The Royal Family announced that, in a move designed to quell republican stirrings, it will fully finance the Ruataniwha dam scheme. The entire $300 million cost of dam construction will be paid for in precious gems to be hand delivered by Prince William when he and the royal offspring, Prince George, make a special side trip to Hawke’s Bay later this week.

(Bulletin from the Royal Jet: The Duchess of Cambridge, in a passionate statement of environmental protest, will not visit Hawke’s Bay with her husband and son. “I cannot condone by my presence the building of a dam that will cost the lives of thousands of long-finned eels and result in heaps of slimy slime,” read her statement.)

Sources revealed to BayBuzz that intense negotiations spearheaded by HBRIC chairman Andy Pearce led to the funding breakthrough. Confronted, Pearce reluctantly commented on the record: “I was thinking about Andrew Newman’s remark on Radio NZ. He said: ‘When one door closes, another opens’. That’s the spirit, I thought. Let’s think big … forget Trustpower and the iwi, the hell with the Crown Irrigation Authority, let’s go for the Crown Jewels.”

Pearce used his connections to put a call through to Prince William, already in-flight to New Zealand. “I played the Prince George card and gave him the legacy pitch,” revealed a chuffed Pearce. “I told him that since he was likely never to return to New Zealand, a permanent memorial in honour of his son was the least he could do.” “Imagine,” I said, “One day Prince George could be water skiing on Lake Newman, thinking of you in gratitude.”

Pearce reports that at first Prince William resisted. “Lake Newman?” he asked, “What kind of commoner name is that? Call it Lake George or we have no deal.”

Pearce continues: “I realised … What a sly businessman this Prince Willy is. He’s after the naming rights! ‘Deal!’ I replied.”

“But we must insist on keeping the Andrew Newman Memorial Headrace.”

Pearce admits it was “no easy task” getting HBRIC CEO Andrew Newman to give up his “Lake Newman” appellation for the dam’s reservoir. “In the end, I had to offer him an additional $100,000 raise, a seat on the board of BNZ, and the right to short-sell 500,000 shares of the dam’s water rights. But a small price to pay for an outright gift of $300 million.”

Pearce revealed he was “immensely relieved” that he could discontinue funding talks with un-identified Nigerian financiers. He added that HBRIC would immediately suspend its $50,000 per week purchases of Lotto tickets. “We’ve always acknowledged the dam involved risk,” he said.

Prince William will hand over the $300 million in jewels during a special ceremony at the Irrigation NZ conference being held in Napier this week at the War Memorial Centre. The public is invited.

“Of course, the deal isn’t final until we have the gems appraised,” Pearce noted as he popped the champagne at HBRIC headquarters. “Oh … and of course there’s public consultation.”

Tom Belford

5 comments »

March/April BayBuzz now online (no comments yet)

April 2, 2014

The March/April edition of BayBuzz is now online.

You might notice we delayed making the current mag available online. Frankly, the idea behind that is to get more folks to pay (!!) for our superb content, either by subscribing or buying a copy at one of 30 or so locations around the Bay.

Don’t have a copy yet? Buy your BayBuzz here!

Featured in this edition …

Mystery at the Museum
By Jessica Soutar Barron
Controversy swirls around MTG Hawke’s Bay … are these core issues or growing pains?

Maori Leadership & Divide to Rule
By Tom Belford & Mark Sweet
We look at competing bases of Maori leadership in Hawke’s Bay and show how this plays out in decisions regarding the Tukituki.

Who’s Doing All That Picking and Packing?
By Keith Newman
Could Hawke’s Bay growers manage without imported seasonal workers?

Plus heaps of other articles and fun …

Updates on the dam and amalgamation.

Ants and dairy cows invade Havelock North.

Plus the environment, vegetarianism, sport, technology, education, food, fashion and humour.

All right here for you to enjoy, download, print, share!

Hey, if you haven’t seen the March/April edition yet, you’re missing out on our Pick the First Mayor of Hawke’s Bay straw poll. You can take the poll online here.

Enjoy!

Tom Belford

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Dam cracks (4 comments)

March 28, 2014

By now, everyone knows Trustpower has pulled out as a prospective $50-60 million investor in the CHB dam.

The questions that now need to be addressed are fairly obvious:

1. Will there be a domino effect?

To some degree Ngai Tahu, the south island Maori investment company considering an equivalent size investment, found the involvement of a savvy infrastructure partner like Trustpower reassuring. Will Ngai Tahu’s confidence be fatally shaken? Especially since any investment they might consider will require further consultation with Ngati Kahungunu, our largest iwi in the region, which does not support the dam.

2. How will HBRIC plug a $50 million or so hole in the dam (twice that amount if Ngai Tahu backs out)?

The pullout of knowledgeable investor Trustpower — which has been intimately involved in the details of the proposed venture, indeed paying for some of the development expense — will doubtless have an impact on the assessment of any new potential investor … including far less expert and informed investors, like ‘rich people in Hawke’s Bay’.

3. How does this affect the assessment of the Crown — Crown Irrigation Investment Ltd (CIIL)?

CIIL is on the blackboard for another $100 million or so, as a secured loan. But CIIL has always made clear it would be a ‘last resort’ partner. What is the minimum Council and private investment CIIL would demand to see firmly established before entering the deal? CIIL has also said farmer uptake (firm contracts to buy the water) must be robust, ensuring a strong revenue base, before it would commit funds. But it is precisely the unpredictable and quite possibly slow ramp-up of farmer participation, as assessed by Trustpower, that caused Trustpower to exit.

4. What about those CHB farmers, anyway?

“Expressions of Interest” (EOIs) — which obligate farmers who have signed them to nothing — now total 42% of available water from the dam. HBRIC indicates that 40% of available water must actually be locked up by firm purchase contracts for the scheme to be at all financially viable. If ‘no obligation’ EOIs have peaked at 42%, how realistic is it that nearly all of these would be converted to firm 35-year water purchase contracts? And realistically, how long might that take … for example, how likely by the ‘financial close’ target date of 30 June?

Moreover, HBRIC and HBRC Chairman Fenton Wilson, looking to ‘make a silk purse out of a sow’s ear’, now tout the withdrawal of Trustpower as opening the door to the opportunity for farmers in CHB to invest in the dam themselves. Wait a minute … why didn’t we start there (as in other NZ irrigation schemes)? Precisely because that level of available capital was judged to simply not exist amongst CHB farmers. Indeed, the whole financial structure of the deal has been designed to subsidise approximately 50% of the cost of the water. Why? Because CHB farmers couldn’t otherwise afford it.

The notion that the venture can climb from 42% no-obligation EOIs to 40% firm contracts to farmers filling a $50 million capital gap on top of that seems — to put it generously — ambitious.

5. How quickly can a new investor package be cobbled together?

HBRIC says it is in active talks with new prospects. However, if prospects capable of $50 million high risk, low return investments were readily available, clamouring outside HBRIC CEO Andrew Newman’s office as I write, why weren’t they part of the deal in the first place? The risk would have been more widely spread (including the contingency of one party getting cold feet prior to financial close), and HBRC and CIIL might have been required to put up less ratepayer and taxpayer money. Moreover, it would have been easier to recruit them before the bail-out of a savvy investor like TrustPower.

Seems like it will be tough to meet that 30 June deadline.

These are the questions I have as a Regional Councillor.

But they are questions for every Hawke’s Bay ratepayer … who are as much entitled to a full and compelling response as I am, if this project is to proceed.

Tom Belford

 

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