John Armstrong: David Carter remains in the firing line

Had David Carter breached Cabinet rules which require ministers to ensure there is no conflict of interest between their portfolio responsibilities and their personal business affairs?

The spotlight has been on Carter being reimbursed - courtesy of the taxpayer - for legal fees he incurred as a National MP in a defamation case. However, a fuss involving his position as Minister of Agriculture has been bubbling away in the background.

This centres on a planned irrigation scheme which would draw water from the Hurunui River in North Canterbury, the location of one of two farms that Carter owns.

Things came to a head last week with the passage through Parliament of highly contentious legislation replacing elected councillors on Environment Canterbury with Government-appointed commissioners.

The question is whether Carter should have taken part in Cabinet discussions on the legislation and included himself in National's party vote in the House. The reason? Carter's farm draws water from the Hurunui and the new law includes specific provisions covering irrigation projects on that river.

Carter begs to differ. For starters, his farm is outside the area that would be irrigated by the new scheme.

However, Greens co-leader Russel Norman claims there is a clear conflict of interest because the minister still stands to benefit financially from the project.

Norman says Carter's resource consent to take water from the river has a rider enabling Environment Canterbury to stop his farm from doing so if river flows fall below a minimum level.

The new irrigation scheme is expected to follow the practice of guaranteeing the water rights of those farmers, like Carter, who are downstream from the dam that will be built.

That means the flows will never fall below minimum levels, thus potentially increasing the farms' productivity and value.

Given the Government's intention "to remove particular regulatory roadblocks to water storage and irrigation in Canterbury", Norman argues that the commissioners are likely to give the nod to the scheme.

In Norman's view, Carter should have absented himself from the Cabinet discussion and the vote in Parliament.

Carter disagrees. He points out that the resource consent was granted in 2000, six years before he bought the farm. The consent applies to 40 hectares that is irrigated to provide summer feed for lambs. The rest of the 1700ha property is hill country that is impossible to irrigate.

As for water flows, he says they have not dropped below minimum levels in the 10 years since the consent was approved. Carter says he stands to gain no benefit from the new scheme.

Norman is drawing a long bow in claiming a bona fide conflict of interest. Too long, in fact, to have Carter in real trouble.

However, Cabinet rules stipulate that ministers have the responsibility of ensuring "no conflict exists or appears to exist". On the latter score, the combination of Carter's owning a farm, its North Canterbury location, its proximity to an irrigation scheme, Government policy on irrigation and the passage of pro-irrigation legislation has - rightly or wrongly - allowed such a perception of a conflict of interest to take hold.

It is a million kilometres from being a sackable offence. But it is another distraction, even if a minor one, which John Key could do without.