The Dead Hand of the RMA #2

Case #2 involved a project in shitty, poor farming country. The local farmers were ecstatic when we offered them options over their farms. Two neighbours, who were lifestylers, objected to the development - fair enough. Another party were a group of unemployed maori who were squatting about 10km up the road. We had consulted heavily with the local tribe and got their approval but this mob of squatters refused to accept the tribe's decision. Transit NZ promised to protest unless we paid for major roadworks for us to turn on/off a State Highway to our site. That blackmail cost a few million. Regional Council hearing - yes. Appeals to Environment Court.

Members of the squatter gang turn up at 1st day with kaumatua-like walking sticks in hand and demand to be heard despite not having been involved in 1st hearing. The Chair of the Court calls security and then rules they can be involved as they have special rights due to their 'love' of the land concerned! Anyone else has to have been involved in the Regional Council case to then be allowed to appeal to the Environment Court. Us skinny white boys are relieved as we could see a brawl ensuing if the decision had been otherwise and we only had briefcases to defend ourselves.

Away we go. One of the key witnesses (maori) is an expert in maori history and lore. There are a lot of local kaumatua present to hear this part of the hearing. He presents the evidence about the site. The person speaking for the maori squatters then claims the site is 'waihi tapu' (sacred). Our witness demolishes this completely. The speaker claims he is wrong because she was told by an elderly woman. We ask, "Well where is she?" "Oh she is too ill to travel." "OK," says the judge, "We will take a deposition from her." "Oh she doesn't believe in that sort of thing." The speaker than says to our witness, "Who the hell are you to tell us about our history?" Oh boy was that the wrong thing to do. He promptly reels off his whakapapa. He is related to everyone of importance in maoridom and the local tribe. The local kaumatua are going "Kia ora, kia ora" as he speaks. They recognise his right to speak on the matter and leave satisfied with his testimony. What annoys us is that if we had not had someone of his knowledge and mana, a blatant lie could have stopped our case. No evidence was ever presented to prove 'wahi tapu'.

Months later the Court rules in our favour and later also rules in our favour re costs. One neighbour says "OK you won and here is my cheque for my share of the costs." The other neighbour decides to appeal as do the squatters. We win appeal plus costs. Neighbour falls silent and as she has no financial assets, she ducks for cover. The squatters then want a further appeal. Despite being out of time to file they are allowed to continue. The points of law are laughable and are thrown out at the appeal hearing. They try again to appeal. Finally the courts say enough. Of course we never see a penny in costs.

All up, the court hearings, legal fees, expert witnesses costs etc - $5 million plus a few more million for Transit NZ.

This time we built the project. The impact of the RMA process we had undergone was threefold-

1. We had a virtual monopoly in the region as no one else could afford to build a competing facility; and
2. Our charges were higher than necessary to recover the costs of the consent process; and
3. Because of the costs of getting consents to build a competing facility and because of our level of charges, it encouraged competitors to open illegal facilities without any of the environmental safeguards we had to build in.

What a time wasting joke.

You Want to Know About the Dead Hand of the RMA?

Have heard the Greens and Goof (sorry Goff) wittering on about the proposed RMA changes. I have been involved in 2 big RMA cases and am very cynical about the whole process. It is a process designed to make lawyers rich and to keep inadequate local body planners in work.

Case 1 was a very large infrastructure project in a part of the country screaming out for both the investment and for the work it would bring. There were the usual nut cases (unshaven women in tie dresses), some neighbours with legitimate concerns and the company that would lose out by no longer having a monopoly. The company funded all the objectors to the District Council hearing. We won. They promptly appealed to the Environment Court.

Most people do not realise that cases appealed to the Environment Court are heard 'de novo'. In other words, the whole case has to be presented again as if the District Council hearing had never happened. Witnesses had to be brought from all around the world to re-present their evidence. In most other sorts of legal process, appeals are usually only allowed on points of law, not on the facts. This means that appeals (the actual hearing) are considerably quicker.

The opponent company again funded all the objectors. Their lawyers were told to delay as long as possible as every week's delay was worth over a $1 million in revenue to the opponent company. How do I know, the lawyer boasted to anyone who would listen in the bar at the local hotel and within my earshot. With that sort of encouragement, a hearing set down for 6 weeks took 6 months. And the decision? Exactly the same as the District Council hearing but $2 million later in costs and about $12 million in charges paid to our opponent over and above our proposed solution. But, by then everyone was so exhausted that despite having the consent, the project was canned.

The Shit Hits the Fan

My father was an old-fashioned accountant and he died last year at 91. Up until the last 6 months, he could read a balance sheet and set of accounts better than any one I have ever met or read. At 90 he sent me an analysis he had done on one of his investments and it was stunning. He had picked up on something that no one else in the market had figured out and I was embarrassed that I couldn't have done the same.

I have just gone through the family investments doing a monthly update and have looked at every investment really hard. At least 15% of a very substantial portfolio is now at serious risk with another 10% 'frozen' in a relatively good finance company for 5 years. My father had only lost $5,000 in 70 years of investing (Equiticorp) and has received parts of that back. To lose the amount now likely to go would have finished him off.

He would have also been distraught at the current economic disaster, having been a child in a single parent household through the depression followed by 6 years as a serviceman. Talk about a blighted life through childhood and into his 30s. While I miss him immensely, in many ways I am glad he is not here to see the current economic situation and to see so much of his hard work and thrift 'stolen' by the near-criminal management of finance companies. He would have also been worried for us kids and for my mum.

It Just Gets Worse

Just read Chris Lee's weekly article on his web site http://www.chrislee.co.nz/ Have followed him for many years since his articles began appearing in the local freebie newspaper in Wellington when I lived there. Boy he has been on the mark for so many years.

He has been a great critic of finance companies and he has been proven largely right. This week he is talking about how he had always thought the Scottish, Dutch and Swiss banks were the smartest in the world and unlikely to be ever caught out but here they are now having to bailed out by their governments. My earlier blog about how most bankers did not understand their own risk products strikes me as one of the main reason and of course greed.

I and many like me face the problem of having had our investments ruined, the value of our houses have dropped and will be unsaleable for a number of years and we will not be able to get jobs to make up the difference in income. It is starting to get very scary for a baby boomer.