Keeping the Airport honest is as hard as catching tadpoles with your bare hands

We need to state upfront that we do appreciate that the Wellington International Airport Limited (WIAL) is a corporation, one run by its majority shareholder Infratil, and as such has specific mandates to fulfil for its shareholders. Corporate law dictates corporate purpose – which is to make money for its shareholders. It basically says that the people who run corporations (i.e. the Board of Directors) have a legal duty to shareholders, and that duty is to make money. That is of course a problem when one of the Directors is the Mayor of the City who declares a ‘conflict of interest’ when asked to meet with severely affected residents – as her primary legal duty is now to the airport, not the city’s residents anymore, it seems.

When you are dealing with a corporation whose primary motive and mandate is to make money at all cost, which is 1/3 owned by the City of Wellington and has its Mayor as a Director, you find yourself in a bit of a conundrum as a lowly citizen-led initiative. There is the obvious issue that they have a massive pool of resources to draw from which is exacerbated by the City gifting them millions of dollars of our money (50% of the resource consent money is paid by the City, even though its shareholding is only 33%). We do not have the PR machine, self-serving research organisations that will say exactly what the airport wants without doing any actual proper analysis, and definitely not the access to lawyers that the airport has (they plan to use another $2,500,000 to get resource consent). This is why the airport wants to push this runway extension proposal through a fast-track process with the EPA, rather than going through a protracted resource consent process or the Environment Court (but remember what the Save the Basin campaign managed to do against all odds!). This is why they are pushing for getting a resource consent without providing a business case first. They know that a proper, independently reviewed business case that meets the Treasury’s Better Business Case Framework will never stack up. Should the City spend millions of dollars on a resource consent application, if all the necessary work on a business case that withstands independent review hasn’t been undertaken first?

We are also concerned when various media reports are one-sided and lazily repeat airport claims without thorough fact checking. Some examples:

  • WIAL have claimed that at least 80% of Wellington’s 3000-odd strong business community (the ones that are members of the Chamber of Commerce) support the runway extension and sees it as the top priority to stimulate economic growth. If you actually look at the surveys quoted by them, you can see that the number is closer to just over 1%! That is a big spin getting from 36 businesses¹, 47 businesses² and 50 businesses³ that mentioned the airport extension to saying that at least 2400 businesses support it. Especially when you take into account that there are actually almost 26,000 businesses in Wellington. When you look at the whole business sector we go from “At least 80% of Wellington’s businesses say they need this” to more like ‘Less than 0.002% of Wellington’s businesses actually bothered to name the runway extension as important to their business’.
CSNielsen survey airport

2013 and 2014 Nielsen survey for WCC

From Infratil's September 2014 newsletter
Chamber of Commerce survey
  • WIAL is listening to its critics, it seems, as they have been releasing information as part of surveys to a select few trying to discredit them and have finally provided their first progress update to the Council (two years after having signed a contract with WCC specifying 3-monthly progress updates). Sometimes, their dispelling of ‘myths’ such as the one ‘created’ by Air NZ’s CEO on Radio New Zealand, has rather hilarious unintended consequences:
From WIAL presentation to WCC

From WIAL presentation to WCC

  • And sometimes, WIAL is outright mischievous, for example when it stalled a Dom Post article on their long-standing, serious lack of consultation with affected residents for weeks in order to wait until after a board meeting that signed off a compensation package (something they initially claimed to have never even considered) so they could dispute the article’s main points. The affected residents are really concerned about WIAL portraying itself as ‘working closely with Moa Point Rd residents’, and even saying “We’ve made a huge effort to have these meetings and to make sure that dialogue goes both ways.” The residents dispute this – they have been asking for meetings, not the other way around and when they met it wasn’t in the spirit of neighbourly partnership. Instead, WIAL merely informed the residents about the work they had undertaken so far and that the extension was practically ‘a done deal’. So, instead of real engagement it was just corporate PR. Next thing the residents heard (instead of the meeting minutes and copy of the presentation that were promised and asked for) was that there would be a ‘compensation package’.

There are many examples where the airport simply has the upper hand pushing its one-sided spin and this dubious extension proposal way further than it ever should have gone. The runway extension proposal has been studied, several times, in detail over the last 4 decades and was always discarded as too difficult/expensive/unnecessary. The airport itself does not want to pay for it as it admits it isn’t economic, yet it does what it can to fulfil its legal mandate to its shareholders which is to get the public to pay for this proposal which will increase their asset base and enable them to charge more (and sell the airport when it’s finished?). As the New Zealand Airline Pilot’s Association’s (NZALPA) – who are currently suing the airport for safety concerns in the High Court – technical director David Reynolds so aptly says:

The airport essentially is building the runway to make more money.

In summary, we are very unhappy about our Council gifting the airport our money to undertake what has so far been a one-sided, economic impact statement which credible commentators have raised serious concerns about (and which cost $75,000). We need the Council to insist on WIAL completing a comprehensive, robust business case including a credible cost-benefit analysis first. We want to know why Councillors are attacking critics in the media rather than assessing the legitimate questions they raise and why are they insisting that the ‘numbers are sound’ when they clearly aren’t? Why do we have a Mayor on the Board of Directors who has no problem going to residents’ meetings expounding the dubious benefits of this proposal but refuses to meet with her affected residents who are seeking to be properly involved in the process, citing a ‘conflict of interest’?

In the end, the natural result is that corporate bottom line goes up, and the state of the public good goes down. This is called privatizing the gain and externalizing the cost.

This system design helps explain why the war against corporate abuse is being lost, despite decades of effort by thousands of organizations. Until now, tactics used to confront corporations have focused on where and how much companies should be allowed to damage the public interest, rather than eliminating the reason they do it. When public interest groups protest a new power plant, mercury poisoning, or a new box store [or runway extension], the groups don’t examine the corporations’ motives. They only seek to limit where damage is created (not in our back yard) and how much damage is created (a little less, please)Robert C Hinkley, former corporate securities attorney

It does feel a lot like David vs Goliath, or even more aptly: Daryl Kerrigan from the Australian film the Castle, trying to keep the airport and especially the Council honest. It is worth reminding ourselves that at least the Council’s mandate must continue to lie in protecting its ratepayers, citizens and special places, not in ensuring that a major corporate makes more money at all cost. We are going to continue to do this, and hope to engage as many residents as possible in this uneven fight. Please contact us at guardiansofthebays@gmail.com and subscribe to this blog.

  1. Chamber of Commerce survey shown in Infratil Sept 2014 newsletter
  2. 2013 Nielsen survey
  3. 2014 Nielsen survey


 

Share this post: Facebooktwittergoogle_plusredditlinkedinmailFacebooktwittergoogle_plusredditlinkedinmail

7 thoughts on “Keeping the Airport honest is as hard as catching tadpoles with your bare hands

  1. Can we get this fantastic article to the media or is this still a bridge to far so proud of G O the Bay’s standing up to Goliath.

  2. Is our Mayor aware of negotiations with the Chinese when resource consent is granted Infratil will sell off shares in the Airport like it is selling shares in Christchurch,we are charged as ratepayers to assist Infratil in fattening their assets.

  3. Hey, don’t overlook the fact that the vibrancy of our dynamic city will be boosted by all this expenditure! After all residential rates will increase as will those of the Business sector. The business sector of course can raise their charge outs to their customers. As for residential ratepayers, Council no doubt considers this affordable as they have an insight to our household budgets. Once all this is over there’s nothing to stop Infratil from selling off the runway to boost the lining in the pockets of its shareholders.

Leave a Reply

Your email address will not be published. Required fields are marked *