Paying off objectors

Stuff reports:

Meridian Energy is not revealing the amount it has paid Ngāi Tahu as it seeks to renew resource consents for its Waitaki Hydro Power Scheme.

Last year Meridian signed agreements with Ngā Rūnanga o Waitaki (Arowhenua, Waihao and Moeraki), the Department of Conservation (DOC) and Central South Island Fish & Game which included financial settlements.

The power company has applied to Environment Canterbury (ECan) to renew 18 resource consents to operate its Waitaki Hydro Power Scheme of six stations and 60km of canals for the next 35 years. Submissions opened on July 24 and will close on August 21. The current consents are due to expire next April.

This is what some call Greenmail. Renewing consents for a critical energy supply should be easy and routine. But the RMA isn’t, and so you have to buy off potential objectors.

Under the financial agreements, Meridian had said it would pay DOC $2.01m per annum over 35 years, or $73.5m in total, to maintain and restore the braided river and wetland habitat.

Central South Island Fish and Game would receive $80,000 per annum, or $2.8m over 35 years to support the delivery of programmes relating to the research and enhancement of the sports fishery and game birds in the catchment.

Based on the $180m figure, this would leave Ngāi Tahu receiving about $104m over the 35 years.

Sadly, Meridian, DOC, Fish and Game and Ngai Tahu are acting entirely rational here.

Meredian need a resource consent to continue to operate the Waitaki Power scheme. The Waitaki Power scheme includes 6 dams that were built throughout the twentieth century, from 1928 through to the 1960s. In total, they supply 18% of the countries electricity and, importantly, over three quarters of our hydro storage capacity. While the dams are of course already built, resource consents need to be renewed around every 30 years to allow the continual operation.

Under the RMA, groups like DOC, Fish and Game and Iwi have the ability to hold up a resource consent application for years or decades. Meridian clearly view the cost of such legal challenges and delays can stretch into the hundreds of millions. In such a situation it makes logical sense to pay an organisation to support an application than pay a lawyer to fight them in court.

From the point of view of DOC, Fish and Game and Iwi, they have the power to do major financial damage to a company like Meredian. Clearly it is not realistic for dams producing 18% of New Zealand’s electricity to be torn down, but these organisations can use objections to the scheme to extract environmental and financial concessions. The incentive is not new and economists call it ‘rent seeking’.

If this is the cost of a reconsent, we can just imagine how much it would cost an electricity company looking to build a new power plant. And such a cost means less investment, and higher electricity prices for all Kiwis.

This isn’t a problem with individuals in these organisations but a problem with the RMA. The RMA empowers anyone to stop someone else doing something. It means investment is slow, uncertain and expensive. It means New Zealand is a less productive society. 

The Government needs to desperately prioritise wholesale RMA reform to move New Zealand ahead. The fast-track approach is at best a short-term fix. It helps big business like Meredian, who may now be wishing they had waited 6 months before signing this cheque, but what is unseen is all the little investments that never happen because of the RMA and will never access a fast track.

While Meridian is paying a cheque of over $100 million, this practice isn’t uncommon in the RMA. A farmer looking to increase the size of an effluent spreading area will often be advised to access a letter of support from a local iwi, and the iwi will advise the farmer that the processing cost if somewhere between a few hundred and a few thousand dollars.

It is a regulatory tax that is dragging New Zealand down.

Three policy options fr consideration could be:

• A law requiring any NGO, company or Iwi that receives money from a resource consent applicant to disclose annually how much they received
• Ban payments from resource consent applicants to potential objectors. Allow them to directly fund remedial work that will satisfy the objector, but don’t allow a cash payment just for not objecting.
• Remove the special status some organisations have under the RMA which means they get more weight if they object and hence applicants need to get them on board. Have all decisions based purely on the merits of the environmental issues, not on who is objecting