Sold Down the River: Whatís Going On With the ORC?

Sold Down the River: Whatís Going On With the ORC?

Air quality breaching national standards, in towns where coal is still commonly burned in houses; a rabbit plague “as bad as it has ever been” after years of no rabbit control; an understaffed public transportation system, mired by reduced bus timetables and no-shows. The Otago Regional Council has a lot on its plate. But this story is not about rabbits, buses, or coal. It is about two sagas, connected by the river system they both concern and the council that failed to solve them, both of which demonstrate the mess the ORC finds itself in. 

Drama, conflicts of interest, and internal strife – much of it linked to the Manuherekia River conflict and the Clutha River incident – continue to overshadow serious issues the council needs to tackle, and hard questions it needs to answer.

The Manuherekia River, an 85-kilometre tributary of the Clutha River, is not the largest or most famous river in the region, but it is arguably one of the most important – and almost certainly both the most studied and the most controversial river in Otago. It runs southwest through Central Otago until it hits Alexandra, and has a long history of ecological and economic importance in the driest part of the entire country, first for Māori, then for miners during the gold rush of the 1860s.

When communities around Central Otago shifted to being centred around beef, lamb and dairy farming, so too did water usage. But laws dating back to gold mining times meant that there were little regulations on water usage for many years. Outside of Otago, most rivers in Aotearoa have minimum flow limits, meaning that on average only 25% of the water can usually be taken for use. In the Manuherekia, on the other hand, 75% of the water is taken. 97% of the water taken is used for pasture irrigation. Stuff reported earlier this year that the council’s current water plan suggests the Manuherekia should have a take limit of 3,200l/s, but current water consents allow nearly 26,000l/s to be syphoned off.

When the Resource Management Act was enacted in 1991, it set a 30-year limit on all the consents at the time, meaning they were set to expire in October of 2021. The ORC was meant to have a plan in place by then for what would replace them. It was clear by 2019 that the council was not on track, and the Minister for the Environment David Parker commissioned a review that year into the council's preparedness on the issue, which found the council was critically behind. 

The review came out right before council elections, where newly-elected councillor Marian Hobbs was voted chairperson of the ORC. Marian Hobbs was a former Minister for the Environment under Prime Minister Helen Clark, and quickly set to work on the very long to-do list the ORC was behind on. She didn’t get very far. 

Hobbs faced pushback from other councillors, and criticism for being too sympathetic to the Labour government and for rushing public consultation policies, particularly for the council’s land and water plan. In June it was revealed that she had written to David Parker and asked if Parker would consider replacing the council with a group of commissioners if disarray continued, similar to what happened to the Canterbury Regional Council (ECan) in 2010, and Tauranga City Council in 2020. This didn’t happen (or hasn’t happened yet), but the revelation of the letter Hobbs had sent infuriated other councillors. A clash with Federated Farmers also didn’t seem to help her popularity within the ORC.
That July, less than a year into her role, Hobbs was ousted as chairperson in what she described as a “coup”, with discussion being opened by deputy chairperson Michael Laws, and the motion to remove Hobbs moved by councillor Hilary Calvert. The meeting was tense. Environmental protestors were present to oppose Hobbs’ removal, and Laws left his chair to address the protestors before being told by fellow councillors to return to his seat and to “calm down”, “otherwise you’ll lose, it mate”. Eventually, the council voted to elect farmer and second-term councillor Andrew Noone as chairperson with Michael Laws remaining deputy until June of this year – but more on that later. 

Those who voted for Hobbs’ removal cited her inability to work with other councillors as the reason for the vote, with one saying it was a matter of "personalities, not policies". Others, including Hobbs herself, placed the blame squarely on her water conservation efforts. "I was too effective in pushing the water reforms. [...] Of course this was all about water. Farmers are really important people but they can't just claim to own all of the water and use it however they like", Hobbs said. Councillor Bryan Scott, who voted against Hobbs’ removal, said "our chair called a spade a spade and, frankly, some people didn't like it.”

A year later, with the October 2021 deadline looming, disorder within the ORC did not appear to have improved. A meeting was set for August 2021 to decide once and for all what the minimum flow limit for the aforementioned Manuherekia river would be. After six years, $4.4m, and 26,587 staff hours of research, a Technical Advisory Group presented a number of options for minimum flows. Their recommendation was starting with a minimum flow of 1,200 L/s by 2023, slowly increasing it to 2,500 L/s by 2044.

The resulting Zoom meeting lasted for four hours, full of councillors raising their voices at one another and struggling to work their computers, and in the end, the council decided to do… nothing. Councillors voted 6:4 to delay the decision, ostensibly to get more scientific work done before a decision was made. For the councillors opposed, and environmentalists in the region, this was the last straw. 

“Your arguments all focus on delay, grasping at straws to defend an indefensible position, and I can only assume this delay is to find something that might support the continued economic exploitation of this river,” councillor Alexa Forbes said during the meeting. 

Forbes, alongside fellow councillors Marian Hobbs, Bryan Scott, and Gretchen Robertson signed a letter to David Parker communicating their frustration with the council's inability to carry out its duties, asking him to intervene. Local iwi, Forest & Bird, and Fish & Game all expressed their exasperation. The Central Otago Environmental Society (COES) published a petition to David Parker to sack the ORC, arguing local groups “have now lost faith in the will of Council to implement change, and are calling on the Minister for the Environment to intervene in order to implement a framework for this to happen under the National Policy Statement on Freshwater Management (2020).” 

Former chairperson Hobbs announced in the months following the meeting and subsequent fallout that if David Parker didn’t replace the ORC with commissioners she would quit anyways. She lasted another two months.

The conflict surrounding the Manuherekia river, and the internal strife within the ORC, is often framed as a difference of priorities. At a low minimum flow limit, the ecology of the river would stay degraded and there would be little life, other than frequent algal blooms. But irrigation reliability would remain, farms could continue as usual, and no one would lose their jobs. At a higher minimum flow limit, irrigation would be much less reliable, and many farmers relying on the river would suffer financially and quite possibly lose their jobs. But the river would become “a productive freshwater ecosystem” with plenty of life, and an important catchment for surrounding ecosystems. 

For many years, this debate between prioritising short-term economy or long-term ecology dominated regional councils. In September 2020, however, the government essentially made the decision for them. The new National Policy Statement for Freshwater Management (NPSFW) came into effect, laying out a number of principles councils must follow when making decisions about freshwater management. Te Mana o Te Wai is the central principle, meaning that the health of the water must be prioritised first, then the health of people, then the social, economic and cultural well-being of communities. 

The ORC doesn’t have a choice here – they have to follow this policy. This apparent failure to comply with the NPSFW was the main reason behind the petition to replace the ORC, and remains unresolved today. Earlier this year, David Parker announced another investigation into the ORC, which began in May and is currently ongoing.

Often blamed for internal disputes and obstruction of progress within the council are the widespread conflicts of interest of councillors, something also brought up in the letter from four councillors to David Parker. Critic Te Arohi found that of the eleven current councillors, seven are financially involved in an agriculture, forestry, or coal business (either directly, or in a few cases, through a spouse). Combined, these industries account for around 13% of the GDP of Otago. None of these industries are in the top five industries for employment in the region, but their greatly disproportionate role in regional politics comes as little surprise to anyone familiar with the cultural zeitgeist of rural Otago. The rate of industry representation on the council far outweighs the actual demographics of the people it stands for. And it’s critical that those connections are made clear.

Andrew Noone, the councillor voted in to replace Hobbs as chairperson in 2020, is a sheep and beef farmer who is also a partner in a forestry company. Noone is also a shareholder of CP Wool, Silver Fern Farms, and controversial fertiliser company Ravensdown. 

Councillor Carmen Hope runs a sheep and beef farm with her husband. Her family members are dairy farmers with water consents from Otago rivers, including her brother-in-law who is part of the Manuherekia water scheme, and minimum flow limits for the river would have major financial impacts for him.

Councillor Hilary Calvert’s spouse, according to public records, directs a water supply company. Calvert has not declared this as an interest, but said that "It is the provider of the public water supply in Oturehua, and everyone in the township has an equal interest in this water supply".* 

Councillor Gary Kelliher is a sheep farmer and the director of two water supply companies. Kelliher has water permits for the Manuherekia river and thus had a “direct financial interest” in the matter according to the Office of the Auditor General, who ruled that he couldn’t be involved in related decisions. Despite this, Otago Fish & Game chief executive Ian Hadland wrote a letter to the Minister for Local Government Nanaia Mahuta and the Department of Internal Affairs at the start of this year detailing “evidence of a continuing conflict of interest by Cr Gary Kelliher'' and accusing him of working behind the scenes to influence minimum flow decisions, evidenced through 900 pages of emails. The Office of the Auditor General declined to investigate the matter, saying it was not their jurisdiction, but Fish & Game are adamant that Kelliher “is attempting to work around public interest safeguards and use his position of power as a councillor to influence how water resources may be allocated in future.” Kelliher has denied any wrongdoing.

These and more conflicts of interest likely bolstered the perception that council is run by farming interests rather than for the greater good of the region, and that for many councillors, delaying progress by not doing their job is exactly their goal. “It’s been the fox looking after the henhouse,” says Phil Murray, chairman of COES, the environmental group that created the petition to replace the ORC. “The farming industry has totally dominated the decisions around the allocation of a public resource in favour of a very narrow, small part of the community.”

Another key problem in the ORC is communication, which is evidenced in the council’s handling of a waste-dumping saga last year. 20 truckloads of contaminated demolition waste was dumped in the Clutha river in March 2021, after an ORC staff member had advised the company it would be allowed. After public outcry, the Environmental Protection Agency gave the council a warning saying “The ORC, through the actions of its employees, is considered to have contravened sections of the Resource Management Act by permitting [the demolition company] to deposit any substance on the bed of the river when not expressly allowed by a national environmental standard".

The hazardous material remained in the river for 95 days while the council tried to figure out what had happened. An independent inquiry into councils handling of the matter was held, and found that the “communication void and absence of transparency that occurred in relation to the Clutha River incident was significant” and “difficult to fathom”.

Of particular interest was the relationship between the Chief Executive of the ORC, Sarah Gardner, and the councillors, as it was revealed that it wasn’t until July that councillors were told all of the relevant details. The report said that the saga was not simply a mistake, but evidence that the relationship between the CE and councillors was “unwell, if not broken”. “Action is needed in relation to communication and transparency. Unfortunately, the problems exposed in July 2021 in relation to the Clutha River incident are not unique.”

As recorded in subsequent council meetings, comments about council staff prompted the CE to file a Code of Conduct complaint against councillor Michael Laws. The complaint was not upheld, but the lawyers investigating it found that the Code of Conduct itself was not “up to scratch”. “The problem with things like a Code of Conduct is that they are not really looked at until something goes wrong,” one of the high-profile lawyers told the ODT.

In May 2022, as the Ministry for the Environment began its second investigation into the ORC, Chief Executive Gardner resigned. A few weeks later, the council adopted a new Code of Conduct, with only Michael Laws voting against it. In the same meeting, councillor Kevin Malcolm was appointed deputy chairperson, after Laws had stepped down in April.

Environmentalists like Phil Murray of COES argue that the interests of the majority of councillors don’t align with the interests of the region. Conflicts of interest, and failures in communication and transparency, have been pointed to by the Clutha River incident inquiry and the letter to Minister Parker as reasons for the ORC's troubles. 

It is possible that the second investigation by David Parker and the Ministry for the Environment will lead to the Otago Regional Council being replaced by commissioners, but it is certainly not guaranteed. A more likely scenario is that Parker may intervene in some small way, but the future of the council will ultimately be decided by the local elections happening in October this year. Historically, students and working young people have not voted in great numbers in regional council elections, and their representation on these councils has been minimal. Perhaps this is why, despite concerns raised by other councillors about diversity, the chairperson, deputy chairperson, and acting Chief Executive of the ORC are now all older white men. 

As a first-past-the-post election, a relatively small number of votes could dramatically shift the balance of power in council, leading to a council more representative of young people, one willing to take bold action on decisions about the future. This, however, would require students and young people across the region to care about the Otago Regional Council – a desire seemingly absent from all of them, save for the few people who have managed to read to this point.


*This article has been edited to include Cr Calvert's correction (5 Aug).

**Since publishing, the author Elliot Weir has made the decision to run for Otago Regional Council.

This article first appeared in Issue 17, 2022.
Posted 1:55pm Sunday 31st July 2022 by Elliot Weir.