An industrial-grade whiff of incompetence disqualifies Environment Canterbury from making a nationally significant resource management decision on cubicle dairy farming

Environment Canterbury (ECan), the regional council tasked with deciding whether cubicle dairy farming resource consent applications should be granted in the McKenzie Basin, is itself mired in effluent.

Before Christmas, I argued that this is a nationally significant decision, in terms of the government’s own criteria for “calling in” applications, under section 142 of the Resource Management Act 1991. It’s doubtful that calling in the applications for hearing before a board of inquiry would result in significantly fuller consideration of the issues. However, it would recognise the issues’ importance -- it would be a symbolic gesture -- and it now seems possible the government may act.

Another reason for them to do so is that it has become doubtful whether ECan can be seen to deal robustly with even the narrow matters within its purview -- such as water allocation, effluent discharge, and other effects of industrial farming on the McKenzie Basin environment.

ECan has been floundering, performance-wise, for some time, and dogged by controversies. Most recently, there were three developments late last year, each with some bearing on the cubicle dairy farming applications.

First, ECan was put under government investigation. Responsible Ministers Nick Smith and Rodney Hide are not satisfied with the council’s performance: they have initiated an external review, leaving open the possibility that a commissioner might be appointed to take over the council.

Two of the three parts of the investigation are relevant to the cubicle dairy farming applications: the efficient processing of resource consents, and developing a proper framework for managing Canterbury's natural resources under the Resource Management Act. ECan’s resource consent processing performance was the worst out of 84 councils in 2007/2008, processing only 29% of them on time; and more tellingly, Smith says he has “serious concerns about the effectiveness of the council’s broader environmental management” that warrant investigation.

Smith also believes that ECan’s performance has been “holding the Canterbury region back” -- which could mean anything you want. So, whereas I worry that the council might not be environmentally robust enough, Labour and Green party spokespeople allege that the government is responding to the Canterbury farming lobby with this move, and is frustrated by ECan’s lack of progress from a development perspective.

Either way, though, there would be some dissonance in government failure to intervene, given that they publicly opposed the cubicle dairy farming proposal, therefore have an interest in the decision -- while the very council tasked with making the decision is one in whom they lack confidence.

Smith’s release works hard to convey the impression that it is all very difficult, and the government’s options quite limited. “These consents,” he says, “must be processed under the 2005 Act that is more limiting”. One defers, of course, to the quality of his advice but, in fact, it is immaterial as far as I can tell which version of the Act governs these applications. The earlier law gives the government a little longer to decide what to do, but in relevant part, the law is much the same. And in particular, whether the local authority that would otherwise process and decide the decision has the capacity to do so is a relevant factor.

Second, the day after I posted, on 22 December, the Auditor-General reported on her investigation of four ECan councillors, finding that they had a conflict of interest in decision-making on water management.

Water management costs ECan $7.1 million a year. The council had been considering funding sources other than general rates to meet those costs, chiefly, different options for levying resource consent holders -- in other words, user pays. The councillors in question were themselves dairy farmers, who held permits to take water and/or discharge effluent. Their decision resulted in a general rate rise of 10.6%, that would otherwise have been 2.7%.

The decision addressed a specific aspect of water use: who should pay for it, rather than allocation. However, the affected councillors -- Harrow, McKay, Oldfield, and Murray -- whose judgment must to some extent have been called into question (although they will not be prosecuted, and there were some extenuating circumstances, such as conflicting legal advice), all sit on the “water quality, quantity and ecosystems” committee, which is what the cubicle dairy farming applications are about.

Third, evidence from ECan itself raises questions about whether a proposal of the magnitude of the cubicle dairy farms (18,000 cows, discharging 1.7 million litres of effluent daily) should be allowed to proceed in this region. An ECan report shows that it is failing by significant measure to enforce dairy farms’ environmental performance, and yet, the number of such farms in Canterbury rose 23% in the last year. There would seem to be a somewhat deluded degree of confidence by ECan in its own enforcement ability, not borne out by actual performance.

ECan found that more than half of its dairy farms do not fully comply with effluent management rules. Of the 851 farms monitored, 43.2% fully complied in the 2008/2009 season, down from 45.8% the previous season. While some of the breaches may be insignificant -- a Federated Farmers spokesperson cited failure to nail a resource consent to the dairy shed wall as a possible example of trivial non-compliance -- nevertheless, one in five farms “strayed significantly”.

An ECan spokesperson said the council was hopeful of making some difference in the coming years, and was taking a much more proactive approach. However, the compliance pattern has showed “little significant change” over a five-year period. It would be good to know that the council can enforce its existing consents, before it grants any more -- in particular, grants consent to an applicant with “one of the worst compliance records in Southland”.

ECan has been put on notice, about both the substance of its cubicle dairy farming decision, and its processes and personnel. However, an array of relevant aspects of council performance stink. However politically reticent the government may be (or may have seemed, prior to Friday, when Smith made his announcement), it would be a dereliction of duty for them not to intervene. Whatever decision ECan makes now, it’s unlikely to inspire the necessary public confidence.