Ministers reject Greens environmental argument and approve gold mine expansion
By Richard Harman (author)
In many ways, Land Information Minister Eugenie Sage is lucky that her decision to block the expansion of the Martha mine has been overturned.
It could have been worse.
Shortly after her decision in May to block the decision, there were calls from some Ministers for her to lose the portfolio.
At the same time, Ministers encouraged the mine's owner, Oceana Gold to reapply, and as was evident with the announcement yesterday, the Cabinet took no chances and used the legislation to keep Sage out of the decision-making loop.
Instead, Finance Minister Grant Robertson replaced her along with Associate Finance Minister, David Parker.
In the process, they have not only forced her into a humiliating defeat but also raised questions about the criteria she was proposing to use to determine overseas investment applications for land.
Clark, who usually joins with Sage to consider overseas investors requests for approval to buy land supported the original Oceana application but Sage rejected it.
What makes the decision to replace her more pointed is that as recently as a fortnight ago, she and Clark turned down an application by an overseas company to buy 500 ha of Marlborough and Hawkes Bay vineyards.
It would seem that the decision to replace her was so that the Oceana application could be approved.
Oceana Gold describes itself as a “ mid-tier, low-cost, multinational gold producer with assets located in the Philippines, New Zealand and the United States OGC and is listed on the Toronto stock exchange and the Australian stock exchange.”
It submitted a new application on August 12.
The company wants to extend the life of its Martha open-pit gold mine in Waihi by 11 years and then add on another five years (“Project Quattro”) after that, but the extension is dependent on the company being able to purchase some adjacent farmland on which to dump the tailings from processing the ore.
In its application, the company says the existing Waihi Mines tailing storage facilities will not have sufficient capacity for Project Quattro.
A new tailings storage facility and are required for Project Quattro and are proposed.
The tailings facility would be a pond into which the processed ore would be suspended in a water stream and pumped in.
“The Applicant estimates that its current tailings storage capacity will be exhausted within approximately eight years," says the application.
“Without additional tailings storage capacity, all mining at Waihi will cease at that time.
“If this were to happen, the Waihi mine would likely cease to operate or suspend operations for a period of months, or more likely, years which would have significant consequences for the Applicant, Waihi, the Hauraki District and the wider Waikato regional economy. “
A significant number of jobs are at stake; 330 full-time employees plus another 120 contractors.
In her original decision in May, Sage was sceptical about many of the arguments put forward by the company, but she particularly focussed on the possibility that the tailings pond could fail.
“There could be serious negative effects on nearby productive land, the Ohinemuri and Waihoi Rivers, and the Firth of Thames,” she said.
“It could have a flow-on effect to reduce tourism in the Waihi, Karangahake, and Thames areas, which are attractive to tourists for their natural beauty and conservation values.
“It could also to do damage to New Zealand's international reputation as an environmentally sustainable country, which underpins not only our tourism revenue but also the value of our food exports.”
Sage was supported by the long-time anti-mining lobby group, Coromandel Watchdog, who said she was on very firm ground.
“It is clear the decision is robust - this proposal offered no new jobs, and only very short term economic gain in return for longterm environmental degradation,” they said in a statement.
Coromandel Watchdog has been synonymous with the Greens since the 1970s and the former Green MP, Catherine Delahunty is a long-standing member and former Green leader Jeanette Fitzsimons has been a frequent attendee at their protests.
Yesterday Delahunty said the decision to overturn Sage’s original rejection was “disgusting”.
In her original statement announcing her rejection, Sage also suggested that future Overseas Investment Office applications could need to take their impact on carbon emissions into account.
In Parliament on May 10, she was asked by National MP, David Bennett, whether when she concluded that the acquisition of the land would enable more mining and therefore more emissions, which could encumber New Zealand's transition to a net-zero emissions economy, would this new test be applied to other applications to the Overseas Investment Office?
Sage: “The test is one of substantial and identifiable benefit to New Zealand.
“I considered that in the context of what is a sustainable economic benefit.
“So, yes, potentially, whether it contributes to carbon emissions and our net-zero target could be considered. “
That statement set alarm bells ringing both among Labour Ministers New Zealand First and also within E Tu, the Labour affiliated trade union.
Its senior industrial officer, Paul Tolich said it was very disappointed in the rejection because it put at risk the continuation, the long-term viability of the mine which had been there for decades, had very well-paying jobs in a provincial area, did not involve matters relating to amelioration because of the effects of climate change.
"They are some of the best-paid jobs in the town of Waihī and the surrounding areas,” he said.
“You would think that this is the sort of place you would want to encourage work."
Regional Economic Development Minister Shane Jones was also believed to be opposed to her decision.
He told The Herald that Eugenie Sage understood what his priorities were as the regional champion.
And he gave a hint that her decision would not be the last word.
“At the end of the day it is her statutory decision, and we should bear in mind that all statutory decisions are reviewable," he said.
Jones was overseas on holiday yesterday but NZ First Leader, Winston Peters told POLITIK that he agreed with the decision to reverse Sage’s original rejection.
The carefully worded statement from Parker and Robertson announcing the overturning of the original decision said In that the August application from OceanaGold was to buy parcels of farmland totalling approximately 180 hectares near its current Waihi mines.
“In respect of the new applications the ministerial decision making roles were transferred to Ministers Robertson and Parker, who have policy responsibilities under the Overseas Investment Act, to ensure a fresh analysis of the application,” the statement said.
“The OIO considered the new applications under the benefit to New Zealand pathway of the Overseas Investment Act and recommended to Ministers the applications be approved.”
The Ministers repeatedly referred to the Act in their statement.
Its criteria for approving an overseas application centres on a “benefit to New Zealand” test which include a definition that directly applicable to Oceana; “the creation of new job opportunities in New Zealand or the retention of existing jobs in New Zealand that would or might otherwise be lost.”
It does include environmental protection; whether there are or will be adequate mechanisms in place for protecting or enhancing existing areas of significant indigenous vegetation and significant habitats of indigenous fauna.
But the Act does not include any reference to long term environmental sustainability or carbon emissions.
Thus in what appears to be a direct response to Sage’s emphasis on environmental issues in making her earlier decision, the two Ministers yesterday said they had “carefully considered the application and were satisfied the investment would result in a substantial and identifiable benefit to New Zealand.
They continued: “The Ministers noted that they are required to assess only the benefits described in the Overseas Investment Act when making their decision.”
This decision will be a blow to the Greens since it strikes at the heart of their whole reason for being in politics.
That will not worry New Zealand First though.