Dam plan sparks fears

By Geoff Cumming

Tukituki Valley, central Hawkes Bay. Photo / Duncan Brown
Tukituki Valley, central Hawkes Bay. Photo / Duncan Brown

A scheme promising riches and protection from droughts for a struggling rural community has inspired fierce resistance - but critics say their concerns risk being drowned in a rushed process. Geoff Cumming investigates.

Flashback to March 2013 and the country is gasping from the worst drought in a generation. From his hill country farm overlooking the Ruataniwha plains, central Hawkes Bay Mayor Peter Butler surveys a desert-brown landscape - save the odd green square where farms have irrigation. The lambs have gone; the only thing stirring is dust.

More droughts are forecast but a dam in the Ruahine Ranges behind his farm could turn central Hawkes Bay into "an oasis in the North Island", says Butler - just as irrigation has transformed the Canterbury Plains. The struggling towns of Waipukurau and Waipawa could be like Ashburton, where "every second person's a millionaire". Sure, the intensive farming that irrigation will bring could have dire consequences for the region's lifeline, the already struggling Tukituki River. But that's for the regulators to sort out.

Today, on the eve of the specially-constituted Board of Inquiry hearing into the $600 million Ruataniwha water storage and irrigation proposal, the news coming out of Ashburton is not quite so alluring. In fact, much of Canterbury is reeling from the medical officer of health's warning that nitrogen levels in groundwater - the result of more intensive farming which irrigation has allowed - are "a ticking timebomb". After Environment Canterbury's annual survey found nitrate levels exceeded safe drinking water standards in more than 10 per cent of wells tested, Dr Alistair Humphrey rounded on cow cockies, warning that nitrates can cause potentially fatal blue baby syndrome (methaemaglobinaemia). "The overall picture is one of an emerging problem ... We are polluting our water and it will get worse. We know that clean farming is possible but clearly it is not happening."

Uproar ensued.

The Hawkes Bay Regional Council's proposed irrigation scheme has created a similar divide over the fate of the Tukituki and the regional council's tightrope-walking act as both scheme promoter and environmental regulator. Economic benefits will flow from farms to towns to the Port of Napier, the council's consultants say. But the council's application acknowledges nitrate levels are likely to exceed drinking water standards in places at times.

Nitrogen and phosphorus from farming and sewerage are the prime culprits in the alarming degradation of New Zealand's rivers and streams. Worse than the threat of toxic levels in drinking water (which can be treated) is their impact on stream ecology: the nutrients promote algal growth that depletes aquatic species and can reach toxic levels. They can ruin rivers for fishing and swimming.

It's a pollution timebomb, which runs smack up against the Government formula for increased rural prosperity: irrigation allowing more intensive farming and productivity gains. "We don't have a shortage of water or rainfall in this country," Primary Industries Minister Nathan Guy told the Weekend Herald. "We just don't have the capacity to store and use that water in dry times."

The Government has $35 million available for groups to investigate water storage and irrigation schemes and has earmarked up to $400 million from its sell-down of state assets to invest in projects. Hawkes Bay is at the head of the queue for the Government's pot of gold, and has passed the test for fast-track consenting by a ministerial board of inquiry as a "project of national significance". Other water storage projects are being worked up in the Wairarapa and Nelson as well as yet more diversion schemes in Canterbury, raising fears of increased stream degradation from conversion to intensive dairy farming.

The Government promises that environmental impacts can be minimised through its new, improved freshwater management regime - asking councils to set limits on discharges and ensure better on-farm practices. But when details of the new regime emerged this week, prominent freshwater scientists pointed to critical gaps, including a lack of key health indicators or maximum limits for nitrogen and phosphorus.

The Ruataniwha hearing, which begins in Hastings on Monday, will therefore see a collision of local and national concerns. The inquiry will focus not only on resource consents to create a lake that will displace endangered species; it will consider the regional council's proposed new catchment management plan for the Tukituki, Plan Change 6. This is the regime which will dictate whether more intensive farming can be managed without further damaging the river. But a key plank of the draft plan has polarised scientific opinion: it relies on a "single-nutrient" management approach aimed at phosphorus run-off while allowing nitrogen levels to rise potentially to toxic levels.

Critics say the availability of water will lead to a transformation in land use with social as well as environmental effects, as farmers who can't afford to invest give way to "corporate farming".

The inquiry is scheduled to last two months. The applicant's evidence alone amounts to 5500 pages. It has attracted around 400 submissions, 83 wanting to be heard; 129 expert witnesses will give evidence. Opponents include Fish and Game, Forest and Bird, the Environmental Defence Society and local environmental umbrella group Te Taiao. On water issues, the council has Niwa's chief freshwater scientist Kit Rutherford and the Cawthron Institute in its corner. Opponents have lined up Massey University freshwater experts Dr Mike Joy and Associate Professor Russell Death and other water ecologists.

They portray it as a David vs Goliath struggle against an applicant with access to Government and ratepayer funding, and a cavalry of lawyers representing the likes of Fonterra, Dairy NZ, Mr Apple and the Fertiliser Association.

More than a fight over a river, this looms as a trial of Government policy and a test of the fast-track board of inquiry process introduced in 2011 by a Government sympathetic to big business frustration over drawn-out resource consent processes for major projects.

It is the 12th board of inquiry since the Environmental Protection Authority was set up to handle proposals of national significance. Of 8 decisions so far, 7 were approved in their entirety and one was approved in part. None has been this contentious.

EDS chairman Gary Taylor isn't holding fire: "This is the most vexing case that I've been involved in since I began managing litigation in 1979. It's the one case where you feel that there's an accumulation of things so stacked against you that you're not going to get a fair hearing and that the outcome is pretty well pre-determined."

Democratic process

The months before the council applied for board of inquiry call-in were dogged by argument over consultation: opponents claiming that locals knew little of the fine-print before the council committed $80 million of ratepayer funds. Now there's concern that the catchment management plan issues will be buried by the weight of dam consents. Critics argue the plan change is not a matter of national significance and should be subjected to local hearings and Environment Court appeal processes.

In September, it emerged that a 32-page draft DoC submission had been reduced to two paragraphs and interference by Conservation Minister Nick Smith was alleged, a charge he rejects. The draft was wary of the council's "untested" single-nutrient management approach.

Green Party water spokeswoman Eugenie Sage says the lack of independent scrutiny by DoC and other state agencies places too much onus on non-government agencies. She says the plan change should be considered ahead of the dam consents. "It's typical of the approach of this Government - pushing through big projects in haste so they don't get scrutiny."

Last week, Environment Minister Amy Adams' role in selecting the board of five emerged in papers released under the Official Information Act. To chair the inquiry, the Environmental Protection Authority put forward a choice of two former Environment Court judges, Gordon Whiting and Jeff Smith. Adams asked that High Court Judge Lester Chisholm be added to the shortlist and then chose him. The five-member panel has also been criticised for lacking a specialist freshwater scientist. Adams says she aimed to "appoint what I believe will be the best mix of people".

Under the fast-track timeframe, the board must reach a decision by late April. Environmental groups' requests to lengthen the inquiry, to attach an independent science expert to the panel and to allow longer than 15 minutes speaking time for expert witnesses have all come to nought. "It's become more important to have a quick hearing than a fair hearing," says Taylor.

EPA applications manager Sarah Gardner says the process has been working well and the board has sufficient independence and experience. She says experts will have more time to speak during cross-examination.

Water

Scientific opinion is split over the council's proposed "single nutrient" management approach to safeguard the Tukituki - the council believes phosphorus rather than nitrogen is the driver of harmful algal growth in the river. Its catchment management plan change requires better on-farm management practices and would force the Central Hawkes Bay District Council to clean up the wastewater treatment plants for Waipukurau and Waipawa. The plan change excludes stock from waterways and requires farmers to meet good practice standards, including phosphorus management plans, with targets to be met by 2030, and nutrient budgeting. Limits on groundwater and surface water takes are also strengthened. Minimum river flows are increased.

But nitrogen loadings will be allowed to rise to up to five times current levels in places. The council believes "flushing flows" from the dam during summer lows will deal with periphyton and other algal growth. But the risk with nitrogen is the lag effect - it can take 20 years for nitrogen to leach from groundwater into a river, so toxic levels may be reached long before they are monitored.

Economic impacts

The council-commissioned economic impact assessment identifies direct and indirect benefits ranging as high as 2250 jobs and a boost to regional household incomes of $110 million per year. But in Parliament last week, Green Party co-leader Russel Norman grilled Prime Minister John Key about a 2010 Treasury report which was highly critical of the claimed economic benefits of irrigation schemes. Based on NZIER modelling, Treasury found most long-term gains arose from the stimulatory effect of construction. The modelling suggested that "at the farm gate the costs exceed the benefits", although individual schemes may bring positive returns. Treasury also criticised the quality of business case analysis of individual schemes. Ruataniwha, then in early stages of investigation, was among the schemes surveyed.

Nathan Guy says the report is well out of date - another NZIER study identified the potential to irrigate 420,000 ha nationwide, boosting exports by $4 billion a year by 2026, Guy told the Weekend Herald.

"I was down in North Otago a few weeks ago and saw what a difference irrigation is making. There are many new jobs, school rolls are growing and communities are excited about regional economic growth."

Thinking big

Ruataniwha water storage

• 90 million cu m dam on Makaroro River, flooding 4.5sq km area.

• Dam face: 83m high by 510m wide.

• 6.3 megawatt power station.

• Downstream: irrigation canal and pipes supplying water to 25,000 ha, including 6000 ha already with irrigation.

Costings

• Dam, headrace and piping to farm gate: $250 million.

• Funding sources: Hawkes Bay Regional Council ($80 million), Government ("reluctant investor"), others (Ngai Tahu and Trustpower have expressed interest).

• BOOT (build, own, operate and transfer) model proposed.

Costs to farmers

• On-farm infrastructure and conversion: $356 million (est. with 100 per cent take-up).

• Annual water bills: est $3500 per ha.

- NZ Herald

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