Government looking into Northland council-controlled trading organisation Far North Holdings

Protesters voice concerns over Far North Holdings' Ōpua Puketiti land sale

The Government is looking into Far North District Council's handling of its commercial trading and asset management arm Far North Holdings.

The investigation comes after calls for Government intervention from a Bay of Islands-based community group over the governance of Far North Holdings Ltd (FNHL), a Far North District Council (FNDC) council controlled trading organisation (CCTO).

The community group is made up of communities affected by some FNHL developments.

It has complained to Local Government Minister Nanaia Mahuta seeking intervention in what it claims is persistent FNDC "mismanagement" of the governance and intent of FNHL.

Jane Banfield, Paihia-based group spokeswoman, said the FNDC-appointed FNHL board of directors was paying attention to financial returns in its developments at the expense of the environment, social and cultural considerations.

The group's July FNHL governance complaint letter to Mahuta included documentation around what it said were more than 30 examples in support of its claim.

FNDC is the sole FNHL shareholder and appoints its directors, FNHL's website said.

FNDC was approached on October 19 for comment in response to the group's FNHL governance complaints. However, an FNDC spokesman said the council would be able to respond by November 5.

"We are committed to providing you with answers, however to provide appropriate responses we will need more time to do so. Unfortunately this week and next week (a short week) are both heavily booked," the FNDC spokesman said.

"We would be able to provide our answers to you by Friday, November 5, although I will attempt to get them to you before then if possible."

Jane Banfield.

He said the council was not aware of any formal DIA investigation being conducted into FNHL.

Banfield claimed FNHL's focus on financial returns meant it was not meeting Local Government Act (LGA) requirements to also give consideration to environmental, social and cultural aspects.

This played out in ongoing issues with FNHL development such as at Ōpua, Paihia, Russell and Rangitane, she said.

The situation was becoming increasingly concerning as wharves, land sales, marina expansion and more proceeded without what she said was adequate attention to a sustainable development approach, as required under the LGA.

Far North Holdings Paihia seawall development seeks to address impacts such as this as a result of gale-force winds driving waves over the road at the waterfront at Paihia in 2014.

"As we see it, the 'mismanagement' by our current Council FNDC, is ongoing in relation to Far North Holdings Ltd, and (we) feel desperately sad and fearful about how it is dividing and destabilising our communities," Banfield said.

A spokesperson for Mahuta said Department of Internal Affairs (DIA) officials were now reviewing information provided by the community group.

A DIA spokesperson would not comment on whether a review authority or other government intervention would follow.

"It would be inappropriate for us to comment on the focus of our work with these groups, or on any expected outcomes, until the work is complete," the DIA spokesperson said.

DIA communication to the community group in a September letter indicated the government department was talking to the Office of the Auditor General, the Ombudsman and others to further investigate its complaints.

The spokesperson said local government legislation meant councils were accountable to their communities for their actions and decisions -- rather than to government ministers.

"... It is the (Local Government) Minister's expectation that elected representatives will work with their council controlled trading organisation (Far North Holdings Limited) on resolving the communities' concerns," the spokesperson said.

The DIA spokesperson said there was a high threshold for central government intervention in the local government sector.

Locals' sentiment about Far North Holdings' Ōpua oyster barge development. This mature pohutukawa will be felled to make way for the barge dock.

"Local community members express dissatisfaction with their local council in a variety of ways, including asking DIA to review a council or writing in to the (Local Government) Minister to that effect, however the actual undertaking of a ministerial intervention is not common," the DIA spokesperson said.

"Councils are responsible to their communities rather than to central government and DIA expects that these communities will hold them to account through local elections."

In a July letter signed by 40 local community members, the group wrote to Mahuta, seeking intervention in the CCTO's governance.

Banfield said the group had escalated its FNHL governance concerns to Mahuta after being unable to get anywhere with having them addressed by FNDC.

She said it had come after trying everything else to, importantly, work with rather than
become adversaries of FNDC. Banfield said the group now wanted Mahuta to appoint a review authority to look into FNDC's FNHL governance.

The FNHL website said the CCTO reports to FNDC quarterly at meetings ratepayers were free to attend.

Far North Holdings' Paihia seawall development opponents Brad Windust and petition organiser Margaret Taituha hand their petition against the seawall to Far North District councillor Kelly Stratford

"FNHL is required to operate responsibly and profitably and return 50% of its annual net profit to the FNDC which it uses to supplement rates. The remaining 50% of annual net profit is reinvested by FNHL in infrastructure or new business opportunities," the FNHL website said.

"FNDC estimates that without income generated by Far North Holdings, general rates would have been about four percent higher each year."