HAWKE’S BAY REGIONAL COUNCIL
Maori
Committee
Tuesday 26 June 2012
SUBJECT: Wairoa Affco Consent Appeal
Reason for Report
1. This paper is to inform
the Maori Committee of progress that has been made on the settlement of the
appeal on the resource consent conditions of AFFCo Wairoa’s discharge permit.
Background
2. A hearing was held on
22 and 23 June 2009 in relation to two resource consent applications to
discharge wastewater and stormwater into the Wairoa River from the AFFCo
Meatworks and fellmongery. These applications replaced existing resource
consents held by AFFCo. Staff recommendations to the hearing panel, which was comprised of two councillors and Mr Morry Black, were to grant the applications with conditions, including those
relating to effluent quantity and quality, ecological and health risk
assessment monitoring, and reporting.
3. After hearing all of the evidence, the hearing panel agreed with the
staffs’ recommendations and granted the applications for a term expiring on 31
May 2025, with similar conditions to those recommended by staff.
4. AFFCo Limited appealed the conditions of the resource consent
authorising the discharge of wastewater to the Wairoa River. The appeal
objected to four conditions of the resource consent, specifically conditions
10, 17 (c), 20 and 28. The relief sought by AFFCO
related to annual reporting of wastewater discharge records, a relaxing of the
ammonia concentration limit, and the deletion of conditions 20 and 28 which
related to the faecal coliform concentration of the discharge.
5. Two parties joined the
appeal as s 274 parties, being the Department of Conservation, and Mr David
Renouf.
Wairoa Taiwhenua involvement in process
6. The Wairoa Taiwhenua
were one of nine parties that made submissions on the applications, which were
publicly notified. Six of the submitters opposed the application to discharge
wastewater to the Wairoa River. Two submissions were in support of the
application, and one was neutral.
7. The Wairoa Taiwhenua
submission opposed the application citing concerns about the impact of the
discharge on the marine environment and ecology of the Wairoa River. The
submission requested a study be undertaken on the impact of the discharge on
the river; more consultation with river users in advance of future resource
consent applications; and discharge of wastewater to land (rather than the
river) during summer months when the river is used for recreational purposes.
8. A number of the
Taiwhenua’s concerns were addressed by conditions that were included in the
consent granted by the hearing panel. Conditions 24, 25 and 27 required AFFCo
to undertake a number of studies into the effects of the discharge on the
Wairoa River. Specifically these studies were to examine the effects of the
discharge on dissolved oxygen concentrations in the river when the river bar is
closed, a quantitative and qualitative assessment of the effect of the discharge
on fish, and also an assessment of the effect of the nutrient concentration of
the discharge on algae growth in the Wairoa River estuary.
9. Condition 32 of the new
consent requires the consent holder to establish a liaison group which is to
include representatives from the Wairoa Taiwhenua (amongst other parties) and
meet at least once every 12 months. Condition 33 of the consent also requires
the consent holder to invite liaison group representative(s) from the Taiwhenua
to pre-arranged audit sampling undertaken by Regional Council staff.
10. These conditions should
help ensure that the Wairoa Taiwhenua remains involved with AFFCo and regularly
engages with representatives from the company.
11. Regarding the proposed
discharge to land issue, AFFCo had investigated this option but were unable to
acquire suitable land in proximity to the plant to make this a viable option
for them.
12. The Wairoa Taiwhenua did
not appeal the hearing panel decision, nor did they join the appeal as a s 274
party.
Settlement of the appeal
13. The following changes
have been made to the consent conditions to address the points raised by AFFCo
in their appeal:
13.1. Condition 10: The
condition has been changed to require information to be provided by AFFCo
monthly if there is an exceedence of any of the parameters set in the consent,
or at any other time upon request. This change ensures that any exceedences
are still reported, but decreases the additional work this condition requires
when the discharge is occurring in accordance with the conditions of the
consent.
13.2. Condition 17(c): The
effluent standard has been deleted, and a series of conditions (conditions
17A-17C) included which set an in-river total ammonia-nitrogen standard in the
interim, and require AFFCo to carry out sampling to gather data that will allow
an appropriate effluent standard to be identified for total ammonia-nitrogen
that can be measured at the point of discharge. A specific review condition
has been included in the consent that allows an effluent standard for total
ammonia-nitrogen to be inserted into the consent.
13.3. Condition 20: This
condition has been deleted. AFFCo has now undertaken a quantitative microbial
risk assessment (QMRA) which has quantified the potential health impact of the
AFFCo discharge into the Wairoa River. The QMRA found that the risk of illness
as a result of the discharge was generally low but may occasionally be
appreciable (such as when swimming occurs late on a summer day when the
concentration of effluent is high). The study found that Campylobacter
is the pathogen of greatest potential concern in the discharge, and that it
would be useful to quantify the magnitude of high concentrations of Campylobacter
in the effluent, and feed this data into a re-run of the QMRA. Conditions 16A
and 26 now require this.
13.4. Condition 28: This
condition has now been deleted, as a consequence of condition 20 also being
deleted. Conditions 20 and 28 were originally included in the consent because
AFFCo had not provided any site specific information about the potential health
risk that the discharge presented. The faecal coliform limit was based on the
guideline from the Regional Resource Management Plan which applies to all
surface water bodies across the region. In instances where site specific
information is provided by an applicant, the broad guidance in the RRMP has
effectively been superseded.
14. There have been a number
of other changes made which were either necessary to ensure consistency
throughout the document, and/or were consequential changes required as a result
of changes to other aspects of the consent. None of the conditions that
address concerns raised by the Wairoa Taiwhenua, or directly involve them, have
been amended as part of the mediation that has been ongoing since the appeal by
AFFCo was lodged.
15. Agreement was reached
between the four parties to the appeal (HBRC, AFFCo, the Department of
Conservation and Mr David Renouf), and their respective technical experts, on a
set of conditions. On 5 June 2012 this set of revised conditions were lodged
with the Environment Court. Subject to being satisfied, the Environment Court
Judge will then make an order in accordance with section 279 of the Resource
Management Act that amends the conditions of AFFCo’s consent (DP070670W) in
accordance with the changes that have been agreed between the parties to the
appeal. The appeal will then be dismissed, and AFFCo will be required to
comply with the conditions of the new resource consent. Until that date AFFCo
are required to comply with the conditions of their existing consent,
DP960067W.
DECISION MAKING
PROCESS
16. Council is required to
make a decision in accordance with Part 6 Sub-Part 1, of the Local Government
Act 2002 (the Act). Staff have assessed the requirements contained within this
section of the Act in relation to this item and have concluded that, as this
report is for information only and no decision is to be made, the decision
making provisions of the Local Government Act 2002 do not apply.
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RECOMMENDATION
1. That the
Maori Committee receives the report titled “Wairoa AFFCO consent appeal”.
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|
Charlotte Drury
Senior
Consents Officer
|
Iain Maxwell
Group
Manager
Resource
Management
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Attachment/s
There are no
attachments for this report.
HAWKE’S BAY REGIONAL COUNCIL
Maori
Committee
Tuesday 26 June 2012
SUBJECT: Afforestation
REASON FOR REPORT:
1. To provide Maori Committee members with an overview of the proposed
regional afforestation investment in the Long Term Plan (LTP).
INTRODUCTION/CONTEXT
2. Pastoral farming occurs over approximately
750,000 hectares of Hawke’s Bay hill country land. Approximately 150,000
hectares of this is steep and highly erodible. The economic health of the
primary productive sector is vitally important to the Hawke’s Bay economy.
2.1. Nationally,
agricultural activities are responsible for about 34% of all soil loss. The
remaining bulk of the erosion is due to natural ecological and geological
conditions. 64% of the region’s rural land is classed as erodible-to-highly-erodible
hill country. Approximately one third of this land is under a land use that is
likely to exceed the sustainable capacity of the soil. It follows that soil
erosion is a key issue for Hawke’s Bay. Extract from HBRC’s Land, River Us
3. Since the middle
of the 20th century (Soil conservation and Rivers Control Act 1941)
HBRC and its predecessor organisation the Hawke’s Bay Catchment Board have
recognised the need for soil conservation to minimise the loss of soil and to
prevent it entering waterways.
4. In 1995 HBRC
established the Regional Landcare Scheme to subsidise land owners with soil
conservation and environmental enhancement work on their land. Many farmers
recognise the benefit of trees in reducing soil erosion on their land, and have
done excellent work which has improved the resilience of their farm to storm
events and reduced the amount of sediment leaving their land and entering the
region’s waterways .
4.1. The scale of
the region’s hill country erosion is significant and our current approach
through the regional landcare scheme (alone) is not making a big enough
difference quickly enough, having only delivered some 10,000ha of forest and/or
space planted tree cover since 1995. We estimate that approximately 150,000ha
of class VIIe (highly erodible) land in the region could benefit from some form
of forest cover. This indicates the scale of the challenge. Work undertaken
suggests that a more integrated mix of land use within the extensive hill
country can offer both improved returns for landowners as well as benefits for
the environment. Extract from HBRC Strategic Plan
The question
is: are we making a difference fast enough?
5. Impact of 1938
storm.
6. Impact of 2011
storm
7. Another way
The photography is better in the second photo. The
result (in terms of erosion post storm event) is very similar.
8. The challenge for
HBRC is to provide significantly greater influence in leading this change. The
right debate chapter of the HBRC draft 10 year plan sets out the following
proposal for HBRC to play an active role to encourage afforestation integrated
into pastoral farming:
8.1. Hawke’s Bay Regional Council (HBRC) proposes to
work in partnership with landowners with highly erodible land to promote
afforestation of the steepest and least productive portion of their land in
return for a share of carbon credit revenue. Afforestation of steep, highly
erodible hill country in Hawke’s Bay is seen as an important tool in protecting
our most vulnerable landscapes. Water quality in our rivers is likely to be
greatly improved as a result of reduced sediment from erosion.
8.2. Forests also soak up greenhouse gas emissions,
providing an opportunity to support world-wide efforts to reduce their
environmental effects. Trading in greenhouse gas emission carbon credits
assigned to forest plantings has been developed internationally. The amount of
greenhouse gas emissions soaked up can be calculated as carbon units, which can
be traded under the New Zealand Emissions Trading Scheme (ETS). This provides
an opportunity for an alternative income for landowners.
8.3. Carbon is subject to significant price
volatility, however expectations are that as a consequence of the Durban
Climate Change Meeting in December 2011, a second Kyoto Protocol-type
commitment period will be achieved and a globally binding agreement will apply
to developed and developing countries by 2020. Hence the prognosis is that
carbon prices are here to stay. The risks around the volatility of the price
will need to be managed.
8.4. Through this afforestation proposal HBRC wants to
reduce the amount of soil eroding from our most vulnerable landscapes and
therefore the amount of sedimentation of our waterways. This proposal is seen
as an important tool in restoring and enhancing Hawke’s Bay’s vital ecology as
well as providing sustainable and profitable land use.
8.5. The proposal is subject to final approval by
Councillors. This will only be given once they are satisfied with a detailed
operating plan for the project implementation, and a carbon trading strategy
and protocol. In addition, Council will require an annual review of the project
including forecasts of costs and potential returns.
9. The Strategy and implementation plan will be finalised for Council adoption
once Council has considered submissions on the Draft LTP and confirmed the
inclusion of the project in the final 2012/22 LTP.
Trees on
Farms Project
10. Trees on Farms is
the brand coined for the proposal set out in the LTP. There has been considerable
work done to investigate and develop this proposal. The work has shown that
the project is feasible and has the potential to provide benefit to individual
landowners and well as to the regional community, while providing HBRC with a
commercial return on investment.
Outcomes of
the Trees on farms project
11. For the farmer
11.1. Economic -
Trees on farms individual farm economic scenarios show stronger farm cashflow
and environmental resilience longer term.
11.2. Less
erosion, more resources for productivity on higher quality land.
12. For the regional
community:
12.1. Reduced
Erosion and better water quality within target catchments due to lower sediment
levels in streams.
12.2. Increased
biodiversity. Both directly in the areas with trees established and at a landscape
scale by connecting a wider network of tree fragments in the broader landscape.
12.3. Increased
regional economic benefits through direct inputs from the forest establishment
programme and secondary support activities.
12.4. Increased
regional infrastructure resilience to severe rainfall events.
12.5. Long term
increased regional resilience to downturns in pastoral commodity cycles.
13. As part of the
overall due diligence process a number of reports and financial models have
been commissioned by HBRC. A brief overview of each of these is below:
On Farm
Economic returns
14. Financial modeling
shows that this proposal has the potential to improve farm income and in the
longer term cashflow as well as to meet the criteria for HBRC investment. (ie a
7% return on funds invested).
15. Broad scenarios
showing the impact on farm returns have been assessed by Mike Knobloch
(accountant and farmer).
HBRC Forest business proposition – Hardwood Management
16. This report provided
an overview of the conceptual use of forestry in effecting land use change in
the hill country and reviewed other forestry based land use change schemes in
NZ. It modeled broad options for investment and likely returns from both land
user and HBRC perspective. It concluded that the AGS option was the most
beneficial to both parties with annualized returns from forestry of $280-360
per ha being possible.
Risk management for carbon
assets under the Emissions Trading Scheme – Charles Rau BDO Spicers
17. This report
focused on ETS related risks, where possible identified risk mitigation
options, and made high level recommendations for risk management. The report
highlighted the need for a carbon policy of which a carbon trading strategy is
a significant element. It noted that there are risks for the landowner that
need to be well managed including those to liability for carbon credits
received by the HBRC. It recommended spreading risk by adopting a balanced
portfolio approach that did not place reliance solely on an AGS option.
FINANCIAL
RETURN ANALYSIS PASTORAL HAWKE'S BAY HILL COUNTRY - Morice property valuers and
advisors
18. This report
reviewed the effective farm surplus (EFS) and land rental returns from pastoral
farming on the harder hill country that is proposed to be targeted by the
regional afforestation programme. It used a sizeable database of farms to
indicate that returns per hectare ranged from approximately $40 -$190/ha EFS
for very steep to medium contour land. Land rentals ranged from $30 - $140.
Project
framework - Operating/implementation Plan
19. There is a range
of key areas currently being progressed as part of the development of the
operational plan. The proposed project framework includes:
19.1. the annual
investment review process,
19.2. legal
documentation for AGS or lease style investments,
19.3. operational
process implementation from site selection to post tree establishment work,
19.4. financial
management and reporting systems,
19.5. communications
strategy and communications process,
19.6. on farm
economic benefit analysis,
19.7. stakeholder
engagement.
20. An important
aspect of the operational implementation is ensuring that the Regional Landcare
Scheme investment and implementation supports and is aligned well to the
proposed afforestation investment. This alignment is what will deliver the
whole of farm sustainable land management solution.
Carbon
Trading Strategy
21. Staff have
commissioned a report to assist with the development of a carbon trading
strategy. The carbon trading strategy sits within and is a significant part of
the carbon policy recommended by BDO spicers risk management report. Subject to
the project proceeding the additional elements of the full carbon policy such
as insurance against risks like fire, the role of carbon pooling (if any) and
trading beyond the safe carbon will be presented to council for discussion and
agreement.
22. Bruce Miller of
Carbon Farming New Zealand is the author of the report. The report states that
:
22.1. although
current carbon prices have been at record low levels in New Zealand, the
market fundamentals both domestically and internationally paint a positive picture
for the medium to long term outlook for carbon.
22.2. The highest
risk period for trading carbon is in the short term, through until at least
2015, with the short term outcomes being heavily influenced by the continuing
financial turmoil created by the European financial crisis.
23. The
graph below highlights the of carbon yield for a 10 year planting programming
beginning in the winter of 2013 with planting ceasing after the winter of 2022.
While a small amount of carbon is sequestered by forest growth as early as
2017/18 reasonable volumes of carbon credits are not being generated for 7-8 years
ie 2019-2020. This highlights the need to take a forward view of the carbon
market and carbon as a means to making a return on investment.
24. The
report details four different strategic approaches that HBRC can consider for
its carbon trading strategy, namely:
1. A regional
Afforestation Grant Scheme (AGS)
2. A joint venture or
partnership model (JV)
3. In-house estate
management (Estate)
4. Third party
management (Lease) contract
25. The
features, benefits and risks of each of these options are assessed in the table
below. The report highlights that the highest risk period for carbon is in the
short term – through to at least 2015-16, and suggests that a conservative
approach be taken by HBRC over this period.
26. The
fourth option (Lease) would therefore offer in the short term while the carbon
market is weak as a result of global economic conditions, the greatest
flexibility coupled with the lowest risk, complexity and required involvement.
27. The
rates of return for the lease option are set out in the report and indicate
that a 15-20 year initial lease commitment for early forests established will
provide cashflows that meet a 7% IRR investment return.
28. The
lease option would operate with HBRC and the landuser entering into an AGS
agreement for forest establishment. HBRCs carbon would then be leased to a
third party that provides the defined cashflows and takes the price risk for
carbon.
29. Any
strategy should be reviewed annually for the next 3 years.
The role of
tree species in the forestry portfolio
30. The report also
indicates that tree species composition for the portfolio is important. In the
early years of the afforestation programme staff believe a greater proportion
of the forestry portfolio should be planted in Pinus radiata. There is an
existing harvest market for this species with existing wood processing
infrastructure within the region.
31. Over time as the
carbon market matures a greater proportion of the portfolio could be planted in
other species such as eucalyptus that sequester more carbon more rapidly than
P. radiata, and/or other slower growing species. Staff believe an initial
species composition split of 80% Radiata and 20% other species to be prudent in
the early years.
32. Having a
significant proportion of the initial planting programme established in a
species that is likely to have a profitable harvest option also gives HBRC the
opportunity to share in a proportion of the harvest proceeds. This option will
be looked at closely.
Communications
and early stakeholder engagement
33. The afforestation
proposal was introduced to the Mana Whenua Forestry and Land Development Hui in
December 2011, the Farm Forestry Association field day at Wallingford, McRae
Trust, and the Wairoa Hill Country Erosion field day. The proposal has been
well received at each of these events with generally positive feedback and
interest.
34. Specific enquiries
have been responded to from Maori trusts, farmers, consultants and Landcorp.
Awareness of the advantages offered by Trees on Farms is acute after April 2011
storms and more recent events.
35. A comprehensive
communications plan will be developed if the project proceeds, including field
testing the implementation process with farmers, bankers, farm advisors and
professionals.
36. Future process:
36.1. Confirm provision for ToF through LTP process, with final go ahead
subject to:
36.2. A draft operational plan outlining establishment process and
investment options
36.3. Agreed economic and environmental outcomes and indicators in
alignment with the land and water strategy and Long Term Plan community
outcomes,
36.4. Council final approval by 30 August 2012 and order sufficient
seedlings to Plant 500 ha in the winter of 2013
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RECOMMENDATION
1. That the
Maori Committee receives this report.
|
|
James Powrie
Forestry
planner
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Mike Adye
Group
Manager
Asset
Management
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Attachment/s
There are no
attachments for this report.
