Greenpeace's Norman lobbies ACC not to invest in Ruataniwha

Former Green Party co-leader and now Greenpeace New Zealand director Russel Norman has appealed to ACC investment manager Nicholas Bagnall not to commit the state-owned accident insurer's funds to the Ruataniwha Dam project.

ACC has declined to comment on rumours it is the institutional investor who has conducted due diligence on the $275 million project, which would create a 93 million cubic metre reservoir to store water in the upper Makaroro river to improve river flows for agricultural use in the Tukituki River catchment.

Infratil-controlled Trustpower pulled the plug on its involvement in early 2014, followed by its other private backer, South Island iwi Ngai Tahu's investment arm.

Hawke's Bay Regional Investment Co, the Hawke's Bay Regional Council-owned developer and sponsor of Ruataniwha, has said the project will be funded with a mix of equity and debt, and is likely to result in a secondary market for water contracts. The council is putting up $80 million for an equity stake in a yet-to-be-formed irrigation company and expects a contribution from the government's Crown Irrigation Investments.

Greenpeace has been running an ongoing campaign against the irrigation scheme and Mr Norman also fought against it while in the Parliament with the Greens. Today he called the scheme "a lemon" that didn't stack up economically and linked the outbreak of a gastro illness outbreak that sickened more than 2000 people in Havelock North to the increase in intensive farming in Hawke's Bay and the deterioration of waterways.

"It makes no sense for an organisation dedicated to returning New Zealanders to good health to invest in something that puts public health at risk," Mr Norman says in a letter to Mr Bagnall that was released publicly. "Nor is it consistent with the fiduciary duty of the ACC board."

"The Ruataniwha dam decision has ramifications for the future security of clean water across New Zealand" and the progress of several more irrigation schemes were waiting behind it, he says.

"The proponents of those schemes are looking to the Ruataniwha dam to get the green light. Institutions involved in giving that green light risk leaving a national legacy of freshwater pollution that will impact generations to come."

In April, ACC declined an Official Information Act request from Radio New Zealand on information about a possible investment in the scheme, saying its position would be prejudiced if it disclosed whether the information asked for even existed.

As at June 2016, ACC's investment fund had about $35 billion of funds under management, with the income streams used to meet the costs on injury claims on the scheme. As a result, it is one of the biggest investors on the NZX and its brief is wide enough that it is considering buying a stake in Kiwibank in a deal that would provide capital for its cash-strapped owner, New Zealand Post. Its investment objectives include having to consider the ethical implications of its investments.

In June, the NZ Law Society's ACC committee convenor Don Rennie wrote that potential ACC investments in Kiwibank and Ruataniwha raised "interesting legal questions about the nature and purpose of ACC, how the scheme is being administered and whether the investment of surplus levies is justified."

The scheme has divided opinion because it will allow farmers in the often parched central Hawke's Bay to ramp up production but also poses risks to the region's waterways that are already under pressure from agricultural and industrial runoff.

Last month, the Royal Forest & Bird Protection Society won a Court of Appeal challenge to a proposed land swap by the Department of Conservation which would have allowed 22 hectares of Ruahine Forest Park to be flooded as part of the Ruataniwha Water Storage Scheme, in exchange for 170 ha of private land.

(BusinessDesk)

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