This weekend’s HB Today puts a spotlight on one of the lesser-known provisions of the Water User Agreement (WUA) governing any purchases of stored water from the proposed Ruataniwha Dam.

The provision – which the WUA euphemistically calls a “No Objection” covenant – is nothing short of a ‘gag rule’. It forbids anyone signing up for water from challenging or objecting, as they otherwise could under the Resource Management Act, to any future changes or extensions HBRIC seeks to its overall consents to operate the dam.

Moreover, the water user is also forbidden from abetting, in any way, any other party who would object to such HBRIC proposals.

In other words, if the scheme turns to custard – and who would better know that than existing water users – the existing water users’ lips are sealed so long as their WUA is in effect (i.e, for 35 years).

That’s outrageous, precluding those in the know from protecting their interests, or supporting anyone who might care enough to act on their behalf.

HBRIC’s chief executive Andrew Newman simply replies (as quoted by HB Today): “The Water User Agreement is a substantial document and we have encouraged farmers to seek independent professional advice before signing it.”

In short, ‘buyer beware’.

However, a farmer uncomfortable with the gag rule has no real choice … the terms of the WUA are not negotiable on a clause-by-clause basis. It’s ‘take it or leave it’ if you want water from HBRIC.

Or in other words …

‘Sign up and shut up!’

Tom Belford

P.S. Here’s the exact provision from the Water User Agreement:

20. No Objection

20.1 Consenting
The Water User agrees not to lodge any objection under the Resource Management Act 1991 to any consent application undertaken by or on behalf of HBRIC Ltd in respect of any amendment to or extension or re-granting of all or any of the RWS Consents.

20.2 Non-hindrance
Without limiting the generality of paragraph 20.1, the Water User will not, and shall ensure
that no persons under its control, either directly or indirectly:
(a) object to, oppose or impede any application made by HBRIC Ltd for the grant,
renewal, variation or continuation of the RWS Consents or any consent, authority or permit, or appeal any current or future consent, authority or permit for any operations and activities to be undertaken by HBRIC Ltd; and/or

(b) fund, facilitate, assist or promote any other person, entity or group to take any action
that would be in breach of this paragraph 20.2 if done by the Water User.

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14 Comments

  1. And all this is being done using public/ratepayer money. Someone needs to stop this now and there may be a case for a public inquiry to establish just what has been going on here and just what some of the players have been doing. Originally they thought they could slip this through without anyone noticing using public money for the start up process. Bear in mind once a dam is started it has absolutely no use until it is finished. There is no way back so immense pressure could be applied to central and local government for additional money if private sector investors were not forthcoming. This confounded dam smells like one giant rort to me. I would like to see the plug pulled on it now and the major players pursued for compensation (of ratepayer money).

  2. I haven’t been following the developments in RMA legislation or case law since the mid-1990s, but I’d be interested to know what the legal boundaries are for this kind of provision. Are there any precedents, and have any similar provisions been tested in court? I’m also interested to know what kinds of applications HBRIC anticipates making in future, that they might be concerned about facing landowner objections to. Maybe HBRIC’s underlying objective is to take all the remaining available aquifer water in Central Hawke’s Bay for their own schemes, to forestall any competition? Any thoughts from current users of aquifer water, either in Central Hawke’s Bay or Heretaunga, or regional councillors who claim to represent them?

  3. This is total and utter bullshit! Although, this is how bullies and controlling factions seem to function. Let,s try this and see how it flies. Hmm, not alot of opposition, seems we have managed to baffle them with bullshit. Let’s try something else, since that seemed to work so well. “Crikey we’re on a roll”! We’re the important one’s here anyway. The electorate are just too stupid to make any ‘real’ decisions. Best left to us, even though there are a few holes and it hasn’t really been thought through very well. Gotta get that economic ball rolling! What seems to get lost in all this, is that, ‘we the people’ are not stupid. We have been tilling the land and taking care of our precious assets for many years, and really don’t like important decisions like this taken away from us. We actually care about our environment and those who share our communities rather than the the almighty dollar and those egotistical, exploitive individuals who would take away our rights! One really pissed off Granny in Te Awanga!

  4. Sign Up and Shut Up… Really what happened to ‘Freedom of Speech.
    Excuse me… big people on HBRC but water flowing in an unregulated environment is more important than dairy farmers adding to the already debt loaded rural economy!

  5. IF!!! We all put a public notice in the paper, advising the whole community, that we {An individual} will not be responsible for any debts incurred in our names without our prior written consent, will that stop the Councils or in this case the HBRCI company, from dumping any debts on us as individuals?? I/we are very concerned, that just like the Kaipara council did to it’s rate payers, and levied them for many thousands of Dollars.
    So many ratepayers are completely is the dark over this whole scenario, this whole fiasco over this Dam has been horrific, and so many in the community are completely unaware it is mind boggling.

  6. Mad as hell that the HBRIC and HBRC have been allowed to elevate themselves to such profit-driven anti-democratic heights. We the ratepayers have no say in the of the decisions being made by a handful of people who have lost their commitment to working for those who actually fund their employment. So easy to spend our money – and tell us lies. We know this bloody dam should be funded by those who will benefit.

  7. The Local Government Act prevents Councils from making by laws contrary to the Bill of Rights Act which states that

    Everyone has the right to freedom of expression, including the freedom to seek, receive, and impart information and opinions of any kind in any form.

    Does the proposed agreement by HBRC contravene the Local Government Act since it is intended to restrict the freedom of expression of those who enter into the agreement?

    What legal advice has HBRC received on this matter?

  8. I have often wondered at the legalities of this whole exercise too, John. I think this has to be challenged. Also, I wonder about the environmental implications. Is it okay to consider building this dam, and not first explore other options, and to have fully looked at the ramifications of storing water, to provide water for the dairy industry, (I’m pretty sure they will be the main beneficiaries), without looking at cleaning up our waterways which sound like they are in a lot of trouble. I truly believe, as well, that we should be decreasing our bovine numbers, not increasing them. Don’t get me wrong, I love cows, but, there must be some halts placed on too much. We only have finite resources and must use them wisely.
    So, I would like this question answered also, “What legal advice has HBRC received on this matter?”

  9. The whole section is rubbish. Any competent lawyer would blow it apart. However, note the bit about failure to agree on a FEMP. That allows both parties to walk away without penalty. In other words, the list of signatories acquired to meet the condition precedent could decrease to below the “break-even” point before the dam is completed.

  10. FEMP = Farm Environmental Management Plan ( I had to look it up)

    Presumably WUA contract is with HBRIC not HBRC. Therefore provisions of Local Govt Act re Bill of Rights Act would not apply.
    HBRC and HBRIC seem to have deep pockets.
    Or should that read a deep pocket.

    It would be interesting to read comment from ‘any competent lawyer’……….please.

    Don’t forget, by the way, your rates are due by by 29th Jan.

  11. The Water User Agreement was discussed by the Council and its legal advisors on 17.12.2014. There is no mention in that discussion of the so-called “gagging clauses”. May we take it from that, Tom, that those clauses were not in the document that was put before the Regional Council and its legal advisors? If so, when were they inserted into the WUA and was the Regional Council ever made aware that they had been inserted? This is important.

  12. Ian,
    Unfortunately, when we finally squeezed the WUA out of HBRIC, our attention was focused elsewhere — the water pricing regime, the linkage to mitigating environmental impact, and the presence of any ‘out clauses’ for farmers that might undermine the durability of the WUAs once signed.
    So, frankly and regrettably, we overlooked Section 20 — ‘No Objection’ — at the time … but don’t intend to let the matter die now.
    Tom

  13. The fact that not one Regional Councillor raised any objection to section 20 was disgraceful. How common is that sort of bullying in commercial contracts? It reeks of North Korean-style management and should have no place in NZ Local Government, which is funded by ratepayers. What can we now expect from the Regional Council, instructions on what sort of house we can live in? what types of vehicle we are allowed to drive? no more “public consultation”, just dictates? The whole Council needs to be cleaned out and so do the Directors and Management of HBRIC.

  14. I note the comment about the agreement being with HBRIC not Hawkes Bay Regional Council and the Local Government Act not being applicable.

    I would have thought that the intention of the Local Government Act was that it be applicable to all activities of local governments including their wholly owned companies.

    Even if the Act formally does not require HBRIC to comply I think that for The Regional Council to act in good faith it should explicitly require HBRIC to act in accordance with the requirements of the local Government Act since it is wholly owned by Hawkes Bay Regional Council and indirectly by Hawkes Bay Ratepayers and Ratepayers expect all activities of Hawkes Bay Regional Council and its companies to be carried out in compliance with the Act

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