Two Fast Track lists, many questions and a lack of imagination

In the last Brenty’s Two Cents, I suggested that the fast track list information then available obscured as much as it revealed.  We didn’t know how “the list” would track into a future New Zealand. It was more about political management than anything else – about the government wanting to cultivate a “good / bad / meh” atmosphere to defuse criticism and emphasise positives.

About 48 hours after that effort, the government released the full report from its Fast Track Advisory Group, or FTAG.  Others have focussed on the conflicts-of-interest dimensions coming from this, see for example here, and this seemed to be something Hon Chris Bishop was feeling vulnerable about.

The Bill has come through the Parliamentary Select Committee process largely intact in the ways that matter, and as such we can continue to work with the assumption that projects Fast Tracked are all but guaranteed to be consented if they reach an Expert Panel.  The only questions are what detailed conditions the project will get, and when the project’s consent will arrive in the mail. 

In these circumstances it seems right to revisit whether the new list information gives us a solid look at a future New Zealand and relatedly to ask will the Bill deliver on its purposes, or be, as Auckland Professor Nick Lewis memorably put it, “what appears to be a one-off round of rent grabs followed by generations of commodity production”?  

That’s what I’ll do this week.

THE FAST TRACK ADVISORY GROUP (AGAIN)

Before going to that exercise, I want to remind readers about the FTAG, who wrote the newly-released paper.  Recall that the FTAG is a group of appointees who are generally close to the government.  Recall that its job was to “independently assess and provide recommendations to Ministers regarding projects that are suitable for listing in the Bill.”  (see page 19 of 54 here).  This job was not decided until after members were appointed.  When they were, FTAG members were paid up to $1,600 per day for their service (see page 24 of 38 here).  It has since emerged that Chris Bishop arguably misled Parliament about the way the FTAG was selected.

Several questions posed by Andrea Vance about this group, including conflict of interest questions, remain unanswered.  The FTAG themselves have done little to answer these questions:  see p 6 of 110 of the full FTAG PDF, and recall that some FTAG members seem to share connections with New Zealand First or projects in the Fast Track.  The final comment at page 6 seems to reflect that it took advice on the legal tests for bias in New Zealand law. 

Chris Bishop has said that FTAG appointments were “standard”.  A less charitable view is that the government wanted to appoint “friendlies” to tell them “independently” what should be in the law.  The mix was of more serious appointments and those who are closer associates, a just-but-barely-just-credible mix so long as no one looked hard. This way the FTAG could be used to shield the government from possible political consequences if public opposition got too hot.

If there is a skerrick of truth to this account, or if people see it that way, my more “constitutional” questions also remain un-discussed.  Maybe I had the wrong end of the stick with these, maybe not.  There must be a case to consider whether the FTAG process should be added to a list of process indiscretions committed by the current government drawn up by former Prime Minister Rt Hon Sir Geoffrey Palmer (a list one might add to almost daily at present).

This is New Zealand, so it seems a shame not to be able to trust in the FTAG without question.  But the erosion of trust is borne of unusual and too fast processes from Chris Bishop, combined with the now almost-trademark question-marks around a bellicose Shane Jones, and not an unreasonable public.

Unfortunately, there is a problem with dwelling on these procedural shenanigans, unbecoming though they are and doubtless damaging though they will prove in the long term.  The problem is that they keep the focus off what might actually be built through the Fast Track.  And kiwis being almost relentlessly practical, this is almost the only thing most people care about.  Understanding this is another way to see why the government has tried so hard for so long to keep the focus of the Fast Track debate on arcane and perhaps “Wellington” issues of process, and why it is now trying to lend Fast Track processes just enough of a sense of propriety to avoid falling foul of that other key kiwi instinct - the lack of a “fair go”.

Let us then come back to whether “the list” information, now across two documents, tells us much about what might be consented and when, let alone built.

WHAT MIGHT BE CONSENTED OR BUILT, AND WHEN? 
PART 1: KNOTS

Let’s start with the limitations the FTAG held out for its list, and how it prioritised Fast Track “applications”.

On limitations, start with the “risks” section at p 12 of 110 of the full FTAG PDF.  A first key issue is that the FTAG was not tasked with a commerciality assessment.  Given various well-known commercial tactics, then, there must be doubt about whether the Fast Track will deliver, for example, cheaper houses or more renewable energy.  Land developers often consent and on-sell bare land at inflated prices, which are passed on.  And New Zealand electricity generators are well-known to “sit on” renewable energy consents to add market barriers to entry. 

Despite the Bill’s new purpose being more focussed on “delivery”, in this sense the new list detail does not add certainty, either about what a future New Zealand looks like, or that the Bill will deliver on its outcomes. 

A second key issue goes more to when anything at all might be consented, let alone built.  This is Expert Panel capacity (see comments at p 14 of 110 the full FTAG PDF).  If there aren’t enough Expert Panels to consider the “applications”, the Bill will see nothing consented, fast.

One might think that “they can just hire lots of Expert Panels”.  And maybe they can.  But there are several problems with this.  For just two, consider that:

1. Panels need to be convened by former/retired Environment or High Court judges, chaired by suitably qualified lawyer or planners, and include somewhere around 4 people of wide-ranging expertise.  Will these groups “self-select” for their desire or reluctance to become involved in certain projects?  What risks will this introduce?  If the old planning guard is going to be re-appointed, will we get “fast” conditions, or will inertia win out in the way it so often does?  This is, after all, a story at the core of the RMA. (A topic that goes to the misconception that the RMA is not already “based on property rights”.)

2. Lots of decision-makers operating at speed, with or without self-selection issues, introduces the possibility for inconsistency.  But because like cases have to be treated alike, this will increase the possibility (for developers and the public alike) to challenge Fast Track consents.  Not all of this can be legislated away with open discretions.  The only way to head this off may be to slow down in the process of Expert Panel appointments.

Again then the new list information does not lend great certainty about what might happen through the Fast Track or when.

A third key issue is about what order projects might be consented, whether or not they are built.  This is the issue of prioritisation.  Here, the FTAG’s comments can be found at page 10 of 110 of the full PDF.

These comments suggest that the Bill’s differentiation between Schedule 2A (where projects will automatically go to an Expert Panel) and 2B (where projects may or may not get to an Expert Panel) is not clear.  So for Schedule 2A they chose projects “which appear to be more “shovel ready” in a timely manner and based on our judgement, have a stronger chance of delivering the stated outcomes, than 2B listed projects.” 

One initial problem is with the words “appear to be”.  While “applicants” had to certify that their information was true and correct, this was not independently verified, and there are no clear consequences for making inaccurate declarations.  (See page 12 of 110).  But let’s take the charitable assumption that all “applications” reflected their “shovel readiness” more or less truthfully.  How, then, did the FTAG come to an order within Schedules 2A or 2B?   

The FTAG went with a 1 to 5 scale for Schedule 2A, which I’ll call 2A1 to 2A5, and a High to Low within Schedule 2B.  So far so good, but as we find at page 23 of 110, the FTAG did not attempt further prioritisation.  So it is open whether Expert Panels should start with:

• An aquaculture, “housing and land development” (inverted commas denote a junk category mixing houses with timber and steel mills), “infrastructure” (meaning mostly roads), mining and quarrying, or renewable energy project; and

• Having figured that out, which one(s).  Of the 149 projects that the government selected from the 342 Fast Track “applications”,  over 40 projects have attracted FTAG priority 2A1, and similar number in category 2A2.

It’s not conceivable that Expert Panels for all of these 80 projects can be stood up very fast, at least not without raising the legal risks, and therefore decreasing the levels of certainty for builders. 

So once again our new list information offers little certainty about what will be consented or when, let alone what might be built or when. 

WHAT MIGHT BE CONSENTED OR BUILT, AND WHEN? 
PART 2: THE PROJECTS THEMSELVES

Days after the list the list was released, Chris Bishop made a press release in which he produced comment from friendly commentators such as Business New Zealand, Infrastructure New Zealand, and the Employers and Manufacturers Association.  For this we can give Bishop full marks for the POLS101-move of wheeling out a chorus of supportive mates at an opportune moment.

These friends extolled the growth that the Bill “will” bring, but as we have seen above that’s not at all certain.  They also pick up themes of “balance” and highlighting areas where the government might feel they need some political support.  So if Bishop’s friends were wrong on one score, could they be wrong on the others?  Can the list fairly be called “balanced”, or is this just sloganeering?

Because the government only chose 149 of 342 Fast Track “applications”, readers can get sense for this this question, and for the government’s preferences, by comparing the two lists, including seeing what the government selected from lower down the FTAG’s priority list.

Electricity

Let’s pick up with Bridget Abernethy from the Electricity Retailers Association, who said that the fast-tracking of renewable projects will “…help provide confidence to build and deliver affordable clean electricity for our low-emissions future.”  Interested readers can also set this next to FTAG’s “sector narrative” for electricity at page 22 of 110 of its full PDF.  When we go to the actual Fast Track list, we find among many other things that the government has:

• Excluded Mercury Energy’s FTA286 for the construction of a grid scale battery in Waikato, which received FTAG priority 2A3.

• Included FTA153 for previously declined hydro scheme on the Waitaha River in Westland, despite it attracting just FTAG priority 2A4.

• Followed the FTAG’s classification of FTA050 for “Project Kea”, and FTA217 for “Paewira” as “housing and land development” and not “renewable energy”.  Both are waste to energy plants, proposed for Waimate and Te Awamutu respectively, and elsewhere billed by promoters for being renewable.  Both were FTAG priority 2A2.

• Picked up FTA296, a Transpower proposal to replace (and potentially upgrade) the Cook Strait cables.  For the FTAG, this project – surely as nationally critical as it comes – curiously attracted just Priority 2B High.

• Picked up many solar generation projects, which tended to attract lower FTAG priorities. 

Alan McDonald of the Employers and Manufacturers Association commented that “given the recent issues caused by higher energy prices and the demands on generation capacity to further electrify the economy, these new fast-tracked projects have increasing significance”.  But adding in the commerciality issues raised above, it must be anyone’s guess whether the Fast Track’s electricity projects will materially change New Zealand’s electricity situation, let alone significantly or for towards lower emissions.

Primary Industries over Innovation

Other Fast Track selections gesture strongly at the government’s views. 

For example, as to “infrastructure” and the overlapping “housing land development”, one could have imagined the possibilities for using the Fast Track in transformative ways.  Perhaps the government could have solicited “applications” from the kinds of companies it asks New Zealand Trade and Enterprise to take to the world.  It could have sought investment in some sort of aviation or space industries, having recently touted the benefits of innovation in this sector.  It could have sought more “applications” for ecological restoration, like FTA388 for restoration of Lake Ōmāpere. Or it could have solicited “applications” that might genuinely have materially shifted New Zealand away from stationary fossil fuel generation at Huntly, Glenbrook or any of many dairy factories. 

Instead Bishop simply sent a “generic letter” to 200 companies which many mistook as an “invite”. This only became public once some of the more bullish of them publicly outed the Minister, prompting him to publicly deny he was inviting anything.  Many of these 200 recipients were in primary industries.

Next to the potential for lost possibilities above, and next to the FTAG’s broad-ranging sector narratives at pp 16 - 21 of 110 in the full PDF, we find:

• That fully two-thirds of the highest prioritised 2A1 infrastructure projects are for roads – some of which are not even yet determined, as in FTA182 for SH1 upgrades between Wellington City and Airport!

• A commitment to developing present patterns of primary industry “despite the torpedoes”.  For example, we find the previously-declined and now renamed Ruataniwha Dam project, now the “Tukituki Water Security Project”, in FTA207.  Not far away down-catchment, we find a Napier City proposal for FTA243 to secure Napier’s drinking water.  Similarly we find FTA355 to deepen bores for Invercargill water security given the degraded freshwaters of Southland.  And we find FTA286 for major Canterbury water storage, implying a continuation of intensified farming there, but no corresponding supply project for the luckless citizens of Christchurch.

• Similarly, a strong commitment to aquaculture.  Almost solely in this area we come across redactions, some almost-charmingly labelled “out of scope”, as if this made any sense.  Others make redactions reflecting the simple and very common fishing reflex of “protecting one’s spots” rather than any rule of law, despite the plain abuse section 9(2)(b)(ii) of the Official Information Act. All these bear the clear hand of Shane Jones.

• Mining prioritised, led by Taranaki seabed mining in TTRL’s FTA008; an extension at of Oceana’s gold mine at Macraes in FTA101; and a new 150-year commitment to an undefined gold mine at Bendigo near Wanaka in FTA107.  This last project is led by Santana Minerals, who I am informed are regarded in Australia as “third tier” and “cowboys.”

• Something of a commitment to Eden Park over its alternatives in FTA174, be these “having a national stadium” or “not having a national stadium” as the New Zealand Rugby Union would surely prefer.

All this shows that in large part, the Fast Track is no more and no less than a vehicle to deliver the government’s own stated priorities, with a focus on NZTA’s “RONS” and primary production. 

If you believe delivering on these relatively traditional New Zealand priorities will deliver the country prosperity, that means the Fast Track is for you and me.  In precise proportion to how much you think something additional and new is needed on top of this approach, it isn’t. 

In terms of certainty about what will be built, we can’t say much in detail, and only that we’ll get much more of the same, leavened with a few disasters.

I should be up front with readers and give my views on these primary sector commitments.  I’ve written about socialising the costs of farming lots, most recently here.  Of course, FTA286, the MHV pond in Canterbury, is of a piece with recent efforts by senior ECan staff to shift blame for their decades of mismanagement and instead change water laws to prop up the water uses of recent decades. They do this despite incomplete Court proceedings on related issues and forecasts of hundreds of millions in drinking water security coming for Canterbury’s urban dwellers.  These issues are challenging and I have friends on many sides of the issue – Fast Tracking, aka bulldozing, is not the way to a durable solution between these folks.

I’ve offered some views on aquaculture here.  All in all it seems that New Zealand will get a big growth industry, and the current government at least will offer that industry the illusion of very long-run security.  That will stifle innovation, but worse, the certainty will end before time with predictable tears.  A better fisheries future is imaginable.  It will need short term pain, which again will need environmentalists and fishers alike to build trust. Once again, bulldozing is not going to be durable.

I haven’t gotten into mining in Brenty’s Two Cents but it seems to me that the discussion needs:

• To come back often to royalties.  Are the New Zealand public getting enough for the trade-offs we incur when mining? Even if we don’t accept environmental trade-offs, what about the lost opportunity to mine sometime in the future?

• To include a better-informed discussion about stewardship conservation land. (A Brenty’s Two Cents will come on this one day.)

• With regards coal mining, the end-use of coal needs to be in the conversation.  For example, there is a case for mining coal for steel. The case is nil for burning beyond the short term, much as I take pleasure in the very occasional lump in the fire myself.

• With regards Taranaki seabed mining and FTA008, a discussion about finality in proceedings is sorely needed.  TTRL’s inclusion among Fast Track projects is among the very worst example of an industry refusing to accept when “no means no” in public proceedings.  Almost alone among projects, this one could cause the actual near-term extinction of a species – the Maui dolphin. (“Almost” because FTA200 for Pakiri sand mining, also recently decided, could do the same to the New Zealand Fairy Tern.) The decision to Fast Track Taranaki seabed mining seems likely cause the government great damage in Taranaki, as well as damaging both public trust in the mining industry, and in public processes generally. Will it be worth all of this?  

• At places like Bendigo and FTA107, something far better than the Fast Track offers.  Does the public want a tailings dam in the catchment of New Zealand’s largest river, the Clutha River?   A tailings dam up catchment from the two lakes and three large towns for 150 years?  What about the giant hole that will be visible from the left-hand seats of aircraft on approach to Queenstown from any domestic destination. Is this really the shop front we want for our key tourism jewel for 150 years?  If we commit, will the community get any material number of jobs?  What kinds of jobs? What ills might come with those jobs?  And will we require a cash or cash-equivalent bond robust to “cowboys” who might “make like a tree” at any moment?  These kinds of questions must put a new light on comments from the likes of BusinessNZ’s CEO, and former National Party polly Catherine Rich, that imply all economic growth is of the same quality.

Inconsistencies and disjointedness

Some of the government’s selections show plain inconsistencies in their thinking. For example, some major new housing developments appear to be supported with NZTA roads, but others are not:

• FTA185, for a 1,250 dwelling development at Tauriko, Tauranga, seems to be supported by FTA197 for Tauriko Network Connections (ie NZTA roads).  

• Going the other way, FTA231 for 850 houses in rural Ōhoka, Canterbury, will not be supported by SH1 intersection upgrades.

• Finally, FTA063 for a 2,800 dwelling development south of Queenstown is not similarly supported despite well-known traffic woes in the area and a nearby State Highway.  Adding to these woes may be FTA208 for a major increase in capacity to the Remarkable Ski Area, which the FTAG no doubt gave the highest priority 2A1 to give foreign visitors a traffic-woe-free ski.

One might be tempted to say that the government “took the applications it got”.  But of course it didn’t in fact, as shown by Bishop’s “generic letter” or “invite” saga mentioned above. This approach seems all the worse given that the government is often in a position to support housing through NZTA or Kiwirail, but did not solicit “applications” for projects it was in a position to genuinely help make into quality possibilities.  And re-entering lost opportunity territory, why not have encouraged, for example, local electricity grid distribution companies to talk and “apply” to the FTAG together with would-be housing developers, or for that matter Councils?  (Who are supposed to be focussed on doing pipes well! )

Finally along these lines, some of the selections seem to show straight-up disjointed thinking.  For example all three of Northport, Ports of Auckland and Port of Tauranga seem to be in for major Fast Track expansion.  There seems just one question for this, and it is of one word:  what? 

Politicking

Some government’s selections seem to show that the list has been used for political purposes, or otherwise reflects politicking:

• An example, perhaps, is FTA315:  Kiwirail’s Lower North Island Rail Integrated Mobility project.  The FTAG gave that “LNIRIM” just priority 2B Medium, and the government chose almost nothing else this low down the priority list.  This, then, seems like a project able to be named and thrown at the doubters on the other side of New Zealand’s bizarre ongoing rail discussion.  It can then be quietly parked, safe in the knowledge it will be unlikely ever to have time to get before an Expert Panel.  This possibility puts another interesting light on comments from James Smith of the National Road Carriers Association about road/rail balance in the Fast Track.

• The government has backed the Lake Ōmāpere Trust’s FTA388 for restoration of Lake Ōmāpere, near Kaikohe.  This is the only Fast Track project remotely of its kind, and for the FTAG, it attracted a lowly priority 2A3.  Here is a perfect cudgel with which to strike at the Fast Track’s enviro-doubters if necessary.

• In eyebrow-raising inclusions, the government picked up three quarry projects given low priority by the FTAG.  These are FTA308 for Belmont Quarry Development, given FTAG priority 2B High; FTA233 for a quarry extension at Kirwee near Christchurch, given FTAG priority 2B Low; and FTA295 for a quarry extension at Katikati, also given FTAG priority 2B Low.  Not being a betting man, I would be unwilling to place money on a “reverse Kiwirail” trick happening here, with these projects mysteriously finding their ways to Expert Panels somewhat faster than might be expected.  But I would be not be surprised.  Will it emerge that these firms have friends at or near the cabinet table?  Or merely very good lobbyists?

• Finally, it seems that the government has quietly iced two projects that the FTAG had fancied and given priority 2A1.  The first is FTA043 for a waterfront hotel at Oruku Landing, Whangarei.  This sounded like it could have been nice, but what does giving the highest Fast Track priority to a Whangarei waterfront hotel say about the FTAG?  Is this incompetence or something else?  The second is FTA014 for a gold and antimony mine at Reefton, Buller.  What happened here?  If the “applicant” withdrew the project themselves, why? What could the answer say about the integrity of the information for other projects?  What does it say about the possibility of short-term fluctuations in “commerciality”, or possibilities for trade competition abuse of the Fast Track?
  
  (This section is E&OE - some pages of the full PDF are not text-searchable and it was not always easy to follow what happened with projects.)

Once again, and on this final score, the new list information does not really tell us much about what might be consented and when, let alone built.  Just that the FTAG and government seem to have struggled to choose projects even based on the Fast Track’s wide-open parameters, taking things at times into what seems to be naked politicking.

In Summary

In summary, and with selections like the government’s 149 we can say that the Fast Track is more “Think Disjointed” than “Think Big”.  Regrettably the Bill almost guarantees a few major environmental disasters, along perhaps with the odd little developmental bright spot.  But much in keeping with the government's political management of the issue, it gestures at a net practical result of something like “meh” overall, bought at the price of eroding public trust in many ways, with perhaps an extinction thrown in. What will be built is much as Nick Lewis had it - what appears to be a one-off round of rent grabs followed by generations of commodity production.

For all this, readers will remember that the Fast Track is in part a distraction from the real legislative action at the moment.  In recent days still more issues have been shoe-horned into the Resource Management (Freshwater and Other Matters) Amendment Bill, which will make the government the first to weaken core freshwater protections in a generation.

Thanks for your interest in Brenty’s Two Cents.  Get in touch with me if you’d like to discuss anything raised today or another time – I love a yarn.