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Mackenzie divisions as wide as ever

The businessman behind a huge dairy operation being created in the Mackenzie Basin is firing barbs at an Environment Court judge and a green group. David Williams reports.

Dunedin accountant Murray Valentine has been methodical and meticulous in planning for a $100-million-plus dairy conversion in the Mackenzie Basin.

Valentine, the owner of Simons Pass Station – 9700 hectares of land, some of it Crown-owned, bounded by the Pukaki and Tekapo Rivers and Lake Pukaki – says he’s secured or sought nearly 80 consents and pre-approvals from various public bodies for an intensive, irrigated dairy farm operation.

Work has started. By the time the farm’s fully developed, there’ll be about 5500 cows, and 10,000 other stock animals, on 4500ha of irrigated land. Almost 4000 hectares is earmarked for conservation, some through the controversial tenure review process.

But after 15 years of preparation, and millions of dollars spent on various consent applications, expert witness evidence, legal fees and court appeals, Valentine’s frustration is bubbling to the surface.

Following a recent Environment Court decision about when tighter development rules in the Mackenzie district take effect, Valentine tells Newsroom that Judge Jon Jackson is conflicted. He’s conflicted, Valentine says, as a former president of lobby group Forest & Bird, and, after deciding the Mackenzie development rules, going on to rule on when they took effect.

On the latter situation, Valentine says: “They should have got another judge to hear that. That’s not hard – we’ve got plenty of bloody Environment Court judges sitting around doing nothing. That was just blatantly wrong.”

On Jackson’s former role with Forest & Bird, between 1994 and 1996, Valentine says: “We just know that we’re not going to win anything.”

He adds: “We’re just on the back foot all the time.”

Jackson is one of the South Island’s most influential judges for development rule-setting. His official profile doesn’t mention his former post at Forest & Bird – ties he cut when he became a judge in September 1996.

In 2012, The Timaru Herald reported Jackson stood down from appeals over water consent decisions in the upper Waitaki district – after complaints by Simons Pass Station. At the time, Jackson called the link “fairly tenuous”, but stepped down because, he said, a lay person could potentially detect bias in the Simons Pass appeal, being taken by Forest & Bird.

Environmental cabal

While he’s handing out criticism, Valentine accuses the environmental lobby of effectively organising a cabal to oppose his plans. In 2016, Simons Pass settled a long-running Environment Court battle with Forest & Bird, Mackenzie Guardians, and others, over water consent conditions. Now, it’s the Environmental Defence Society (EDS) – “their mates”, Valentine calls them – leading legal action over development in the Mackenzie.

“Why have we got some Auckland outfit telling us what we should be doing?” Valentine asks. “It just gets you.”

He says if limits were imposed on the amount of extra land that could be irrigated in the Mackenzie there’d be no debate. If that had happened, the land proposed to be irrigated through the Mackenzie Irrigation Company, of which Valentine is chairman, would have gone through already.

“The whole of the Mackenzie is not going to be covered in irrigators. And I agree that they shouldn’t be beside the road; I agree they should be appropriately planned.

“But I don’t agree that you should try to stop someone who’s three-quarters of the way through what they’re doing.”

What has Valentine spent on his plans to date, since he bought Simons Pass in 2003?

“I’m not game to tell you, because you’ll think I’m just such a clown. You’d think ‘No one could do that’."

Vast sums? In the millions of dollars? “Good money after bad? We’re way past that.”

EDS executive director Gary Taylor, however, says he doesn’t think Judge Jackson is conflicted – and Valentine’s “just whinging”.

“The person who’s best able to address the technical issue of when the rules should take effect would be the judge who dealt with the substantive case. That’s the way the Environment Court works.”

Jackson’s links to Forest & Bird are a long bow to draw, Taylor says. Simons Pass had plenty of opportunity to raise the matter at court hearings, and, he adds, “to the best of my knowledge, never did”.

“All judges have past lives and it’s a small country.”

Focus on the merits

Is EDS colluding with other environmental groups? Taylor replies: “There’s no impropriety anywhere in any of this.

“He’s [Valentine] having a swipe at us, he’s having two swipes at the judge – he needs to focus on the merits of whether it’s environmentally acceptable to introduce intensive dairying on Simons Pass, which is Crown pastoral lease land.”

EDS is a national environmental group, Taylor says, so the fact it’s based in Auckland is irrelevant.

“We base what we do and say on expert evidence and good law.”

There’s some irony in Valentine playing the victim.

(“We’ve got everything against us,” Valentine says. “There are probably 30 stations in the Mackenzie. We haven’t got the resource to attack these guys, we’ve just got to let them go.”)

He’s a wealthy businessman. He has a chartered accountancy practice in Dunedin, farming interests in two intensively irrigated farms in North Otago, he’s a part-owner of Mainland Poultry and has an interest in a Christchurch property subdivision. Beyond his farm and irrigation interests, he’s also a director of five large South Island companies, including Queenstown’s Trojan Holdings Ltd and Whale Watch Kaikoura Ltd.

And while debate about greening the Mackenzie has made national headlines, much of it has been about so-called cubicle farming of dairy cows, the Environment Court declaring the basin an outstanding natural landscape (another Judge Jackson decision) and, most recently, a Hong Kong businessman's plans to build a private lodge just 40 metres from Lake Pukaki.

That’s left Valentine quietly gathering approvals. Now, it seems he – and wife Barbara, a fellow director of Simons Pass Station – are holding most of the cards in this high-stakes environmental game.

The roughly 80 approvals sought by Simons Pass for more intensive farming include: discretionary consents from the Commissioner of Crown Lands for irrigation and spraying out large areas; water-take and dairy-discharge consents from the Canterbury Regional Council (ECan); and certificates of compliance from the Mackenzie District Council for the placement of pivot irrigators, some of them creating circles 1.3 kilometres in diameter.

Of the proposed 4500-hectare irrigation area, 800 hectares is already intensively dryland farmed – with small paddocks direct-drilled with seeds, for pastures such as rye corn, triticale and lucerne, to feed stock.

Valentine: “If you looked at it in the spring it would be as green as it will be when we’ve got irrigation on.”

(Taylor points out Simons Pass has discharge consents, granted in 2013 by ECan without public notification, for up to 15,000 cows. “The reality is, notwithstanding what he says his present intentions are, it’s the scope of the consents that determine what can happen on that land,” Taylor says. “He could sell it tomorrow and a new landowner could come in and the number of cows would be the number that the consents allow.”)

“That’s all they’re pushing us to – we’ll run the place by drones and driverless vehicles.” – Murray Valentine

Under the court settlement with Forest & Bird and Mackenzie Guardians, Simons Pass has agreed to set aside 2550 hectares and not farm it. Under tenure review, a further 1350 hectares will go to the Crown. In total, that’s an area almost the size of 24 Hagley Parks – Christchurch’s sprawling central-city park.

But tenure review – a controversial process through which lessees and the Government split a former farm station into a freehold portion and conservation land – isn’t a done deal.

On one hand, Valentine says: “For me it’s all part of one package. You can’t have one without the other.”

But he also points out LINZ has granted discretionary consents to irrigate Simons Pass. It’s yet another ace up Valentine’s sleeve.

“If the tenure review doesn’t go through, that doesn’t mean the development won’t go through,” Valentine says. “But what it does mean is the land that I was giving over to the Crown, won’t go to the Crown, either. And I’ll just keep grazing it – which is probably the best thing for it, anyway.”

(Taylor throws this back at Valentine as a “fundamental conflict”: that Simons Pass’s Crown pastoral lease land is in tenure review yet he’s “racing ahead as if he owns the property already, getting consents for intensive dairying”. Valentine says “we actually used the rules that were then operative”. Taylor agrees nothing illegal has been done. He says Simons Pass has exploited loopholes in the law and planning framework, gaps between agencies and inadequacies by the council and Land Information New Zealand.)

Under so-called plan change 13, the Environment Court-mandated development rules for the Mackenzie district, farmers will have to justify new buildings to the council, instead of being allowed to build certain things as of right. Even fencing will require a resource consent. Valentine says the council could call expert witnesses and it’ll be open for other people to give evidence.

If Simons Pass can’t build a house for its dairy operation, because it’s no longer permitted, it’ll find another way, he says. It might bus its farm workers from nearby Twizel or buy robotic milking systems.

“And that’s all they’re pushing us to – we’ll run the place by drones and driverless vehicles,” he says. “Some of the things that we said would benefit in our original resource consent won’t happen, because we said we’d have 120 staff.”

Fighting the current

It’s been a long battle for farmers upstream of the Waitaki Dam to take water. Firstly, electricity generator Meridian Energy, later joined by Genesis Energy, agreed to allow 150 million cubic metres of water to be taken for new irrigation from is hydro canals. That would allow water to be applied to an extra 25,000 hectares of farmland. The following flurry of water-take applications was then called in by the Government.

A water allocation plan was established and the called in applications were considered, once again, from 2007. Environment Canterbury held hearings in 2009 and 2010, with decisions issued in 2010 and, in the cases of Simons Pass and Simons Hill, 2012.

An appeal by Forest & Bird, joined by Mackenzie Guardians and Fish and Game, opposed conditions of the water permits issued to the two stations. Settlement was confirmed by Environment Court Judge Jane Borthwick in October 2016.

In tandem, years were spent debating something called the Mackenzie Agreement. Launched publicly in 2013, it was an agreed blueprint for the Mackenzie, allowing a balance of intensive development and land locked up for conservation.

Of the 269,000 hectares of “flat and easy country” in the Mackenzie, the agreement recommended 100,000 hectares be protected – including 26,000 hectares already in Department of Conservation protection or earmarked for it. And 24,600 hectares could be developed, including 9600 hectares “proposed for large-scale, intensive livestock farming on five properties”.

Under the Mackenzie Accord, as Valentine calls it, “we agreed that as long as land was set aside for conservation, there would need to be land intensified”.

“Read the thing – that’s what it says. You can’t do one without the other. That was the whole agreement. Now they’re resiling from that.”

Valentine’s keen to be seen as a non-aggressive deal-maker. The settlement with Forest & Bird and Mackenzie Guardians was in line with a collaborative approach, he says. “The collaborative approach didn’t mention that you would try to stop the people doing the development, that you said could go ahead in the collaborative approach. And they [EDS] won’t talk to us.”

EDS points out that while Mackenzie Irrigation Company and the Upper Waitaki Water Applicants Group were signatories to the Mackenzie Agreement, Valentine didn’t personally sign it.

(Valentine also wants to control the message. Worried there’ll be protests, he doesn’t want Newsroom to print when the water will be turned on at Simons Pass.)

Heiracium-covered

An important environmental consideration is the baseline at Simons Pass. What is its condition; its environmental value?

Valentine: “We’re trying to convert a piece of land that is completely covered in heiracium, over 40 percent of it.

“There may be two percent of native plants over an area of 40 square miles,” he says with a laugh. “And that’s a relatively small part of the whole Mackenzie Basin.”

In part, it seems Valentine’s right. A conservation resources report completed in October 2007 as part of Simons Pass’s tenure review, says mouse-eared hawkweed, more properly known as hieracium pilosella, is present throughout the property, “most common on the outwash channels and plains, where it can be present to 80 percent cover” and it “comprises locally to 40 percent cover in open areas”.

The same report notes “patchy” areas of native shrubland, which can be “locally dense in places”. Some tussocks have been oversown and top-dressed, but can achieve up to 30-40 percent cover, the report says. Eighteen threatened plants were found at Simons Pass, alongside 39 exotic species, four threatened bird species, including the nationally critical black stilt, and four “notable” invertebrate species.

Valentine: “We will impact some native plants, there’s no question of that. We’ve always said that. But there’s no community of plants. There’s no area that we’re going to wipe out that’s got thousands and thousands of native plants in a relatively small area. They’re dotted – you go 10 metres from one to the next one and the next one.

“If you’re an ecologist and you count them up, you’ll say probably on our property there’s more than a million native plants that we’ll destroy. And that’s probably right.

“But there’s more than 50 million in the Mackenzie, and we’re keeping half of our land, we’re setting [it] aside, to retain that.”

Naturally, Taylor disagrees. The EDS ecological assessment of Simons Pass says the entire property has significant inherent ecological and landscape values – and, therefore, isn’t suitable for intensification.

As for the Mackenzie Agreement, Taylor says the primary thing environmental groups want is a large, contiguous drylands park. “And, yes, there will be areas that will be suitable for irrigation and intensive land use – but they have to be properly identified.”

Further, Taylor says none of the Mackenzie Basin is suited to intensive dairying. That’s because of its altitude, dryness, coldness and the fact that you’ve got to ship animals out in the winter.

“If you wanted to think of somewhere that was most unsuitable for dairying in New Zealand then the Mackenzie Basin, particularly the higher altitude bits, would be it.”

Moving feast

What might happen at Simons Pass is changing.

ECan’s discharge and land-use consents granted in 2013 relate to milking 15,000 cows using seven dairy sheds. But farm environment plans submitted to the Environment Court last year suggest 10,300 dairy cows could be spread over areas known as Pukaki Flats South and Pukaki Flats North, plus thousands of beef cattle and sheep.

The current plan, Valentine says, is for 5550 dairy cows – three sheds with 1850 cows each. Then it’ll run 8000 beef cattle in the various ages, 1500 calves bred to become milking cows, and 3000 merino ewes.

Even now that plan’s evolving – to the point where there might be a factory, at some stage.

Valentine: “We don’t want to be beholden to the market until we get to the end, and then at the end we want to get long-term contracts. And in the end, I’d like that milk to be processed, to some extent, on the farm, or nearby.”

Modern factories are enormous, he says, and 5550 cows is “just nothing”.

“But we could make a cheese or ice cream or something. But it would have to be very special, very expensive. That’s what we would try to do.”

There could be other departures from the staples of dairy, beef and sheep.

“I’m presently looking at a proposition to put a deer unit in there as well,” Valentine says. “That would just pull back some of the other stock numbers. It’s that flexibility that we have at the moment because we’re developing this farm over a seven-year period.”

A closed shop

Valentine’s ethic is the farm should be self-contained.

He doesn’t want to buy stock. It’ll fatten beef calves and take them through to finishing, and breed its own dairy replacements. All the stock feed will be produced on the farm.

“Yeah, we’re getting some quite interesting propositions on different sheep breeds, different deer,” he says. “Overall there’ll be a balance. The balance will be determined by the feed we can produce on the farm.”

Another thing the farm will need is investors – eventually. Valentine says he’s funding the development at present. But, once finished, the probable cost is in excess of $100 million. He won’t say when external investment might be needed – or how much.

It’d be pretty hard to get someone to do due diligence on the development now, Valentine says – and even if they did invest they probably wouldn’t pay the right price.

 “It seems to me that we should exercise the consents we have and give a potential investor the confidence that we can go ahead and do what we are going to do.”

Valentine agrees the Mackenzie landscape is special. That’s why new development at Simons Pass will be hard to see from public places.

“We’ve tried to do that as best we can,” Valentine says. “There’s a bit you can see, but you’d have to be very astute to see it – I mean, you’d have to be looking for it to see it.”

Valentine returns to the topic of land protection – and the idea, enshrined in the Mackenzie Agreement, of a balance of future uses in the district. He says Simons Pass is giving up land for conservation – but in order to do that it has to develop the balance.

“And, yes, we will destroy some native plants and some native lizards and stuff. And, yeah, the habitat of birds will have to shift to other places. And I don’t disagree with anyone who says that.

“But also, no one seems to realise that on the farm that we’ve got, we’ve got one stock unit per hectare. And you just can’t do anything with that.”

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