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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:

2013 and 2014 Nielsen survey for WCC
Chamber of Commerce survey
From WIAL presentation to WCC

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


 

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