Land Board Set to Hear Arguments In Dispute Over A&B’s Water Lease

posted in: June 2016 | 0

Cry me a river.

That’s basically what attorneys with the Native Hawaiian Legal Corporation had to say about arguments made last month by Alexander & Baldwin, Inc.’s attorneys that it would cost too much — “several million dollars” — for it to install water meters at every stream diversion on state land that feeds into its East Maui Irrigation System.

Those meters, which the NHLC wants the state Board of Land and Natural Resources to require A&B to employ, would provide the data necessary for the board and the state Commission on Water Resource Management (CWRM) to determine how much water is taken from each stream, thereby enabling them to determine more accurately how much should remain in the streams to protect public trust purposes. Currently, the company provides the state only with information on an estimated aggregate amount of water it diverts to Maui County and to the company’s agriculture fields in Central Maui.

In addition to arguing that the meters are “cost-prohibitive” and “physically challenging” to install, A&B’s attorneys have called the NHLC’s request excessive and unnecessary, noting in a filing with the Land Board last month that CWRM “is already tasked with setting interim instream flow standards (IIFS) to satisfy the public trust.” But in a May 20 response, the NHLC challenged A&B’s claims of financial hardship, noting that the company is a two billion dollar corporation that has recently spent “millions and millions of dollars” buying real estate in Kailua, Kahala, and Manoa on O`ahu. What’s more, the NLHC argues, the company has for decades been paying the state about a quarter of a penny per 1,000 gallons of diverted water and charging the county 24 times that amount to meet the domestic needs of Upcountry Maui. In the meantime, the NHLC’s client, Na Moku Aupuni o Ko`olau Hui, has argued that its members lack sufficient water for their taro farms in East Maui and that flows remaining in the diverted streams are inadequate to provide sufficient habitat for culturally important stream organisms.

“[A&B] has been allowed to plunder public waters for over a century, but has never been required to measure how much water it hauls from each stream daily. Neither the BLNR nor the CWRM can make prudent decisions about the use of public streams without basic information as to how much water is being taken,” the NHLC stated, adding that Board of Water Supply customers statewide must install meters before any water is supplied.

On June 24, as part of the contested case over A&B’s 2001 request for a long-term license to continue diverting East Maui streams, the Land Board will hear arguments from both sides about the meters, as well as Na Moku’s other recent requests that the board do the following:

  1. halt A&B’s diversions except for those necessary to provide up to 8.4 million gallons of water a day needed by the Maui Department of Water Supply,
  2. deny A&B’s “incomplete” application because it lacks any environmental assessment or impact statement, and
  3. order A&B to identify by June 30 its current and future water needs and alternative water sources.

Filings to the Land Board last month from A&B and Na Moku suggest the hearing will be lively, to say the least.

Halting the Water

In January, the 1st Circuit Court ruled that the four permits governing A&B’s water diversions were invalid, prompting the state Legislature to pass House Bill 2501 to circumvent the court’s ruling to keep the water flowing in A&B’s ditches while its subsidiary Hawaiian Commercial & Sugar completes its final sugarcane harvest and it prepares to transition its fields into diversified agriculture. The bill would allow A&B to obtain a “holdover” of its diversions until a final decision is made on its lease application, so long as the Land Board determines the holdover is consistent with the public trust doctrine. Gov. David Ige had not signed the bill by press time.

Whether the bill becomes law or not, the Land Board must decide whether A&B’s continued diversions comply with the public trust doctrine, which calls for the protection of instream uses and the provision of water to meet traditional and customary practices, among other things. As the NHLC pointed out in its May 20 filing, the Hawai`i Supreme Court’s December 2015 ruling in the legal challenge to the Conservation District permit allowing construction of the Thirty Meter Telescope states, “[I]t is manifest that a government body is precluded from allowing an applicant’s proposed use to impact the public trust in the absence of an affirmative showing that the use does not conflict with those principles and purposes.”

In arguing for the continuation of the status quo, A&B’s attorneys noted that the integrated nature of the East Maui Irrigation system makes it impossible to isolate the sections that provide water to the county while “shutting down everything else.” The attorneys added that the company also needs to be able to access the permit areas to maintain those portions of the ditch system that serve the county.

“If [East Maui Irrigation Co., A&B’s subsidiary] were to stop maintaining the access roads to such portions of the system … they would become impassable due to overgrowth within just a few months. Reopening the roads after an extended period of non-maintenance will then again take several months and would end up being more costly than simply continuing to maintain them,” the attorneys wrote.

Altering the irrigation system to completely restore stream flow would take years and cost millions of dollars, and would cost millions more to reverse should diversions be allowed to resume in the future, they continued. They also raised a new argument not mentioned during any legislative hearings: Requiring diversions to cease would be inconsistent with a March 18, 1938, agreement between the Territory of Hawai`i and A&B, which gives the company the “right to access and operate diversions on state land.”

A&B’s attorneys pointed out that the company plans to permanently restore water to all streams important to East Maui taro farmers and that it supports a recommendation from the hearing officer in a contested case before the Water Commission on East Maui IIFS that some 18 mgd be immediately released into several East Maui streams while the commission decides on revised flow standards that reflect A&B’s change in current and future water needs.

The Maui DWS joined A&B’s memo in opposition to the NHLC’s proposals.


In its response to A&B, the NHLC attorneys disputed each and every one of the company’s arguments against halting the diversions. For one thing, they note, the Circuit Court’s decision invalidated the company’s permits to divert the water. They also argued that the 1938 easement agreement does not give A&B the right to divert East Maui streams and they questioned the company’s claims that it is incapable of limiting ditch flow to meet only the county’s needs.

“There is no legal basis for A&B to be diverting any water within the areas covered by revocable permits [S7263-7266] except for those diversions needed to provide up to 8.4 million gallons of water daily to the Maui County Board of Water Supply, as ordered by the court,” they wrote. “Furthermore, all the evidence before the BLNR demonstrates that A&B has no current use for any of the water taken from East Maui.”

They cited a number of state Supreme Court decisions that require water applicants to, among other things, demonstrate their actual needs and the absence of practicable alternative sources. The NHLC noted that A&B has the ability to pump some 70 mgd of groundwater. (The hearing officer in the Water Commission’s contested case hearing estimated the company could safely pump more than 80 mgd from its brackish well.)

A&B’s claims that it has moved to permanently restore certain streams and that it supports the interim release of 18 mgd are unsupported, they continued.

“Without any evidence — and without any numbers — A&B claims that ‘significant amounts of water have been returned to East Maui streams.’ How much water has been returned to each stream?” they asked.

With regard to the interim release, they wrote, “A&B’s agreement comes with a plethora of vague caveats, making its promises unenforceable. Actual implementation of the interim releases is subject to its unilateral concerns regarding ‘weather conditions’ (no releases if there is a drought?) and operational considerations (A&B wants to continue diverting water for its operations?) … In any case, the hearing officer’s recommendation provides far less water than the streams require.”

“A&B’s reasons to deny the halting of diversions boil down to one word: delay. A&B wishes to delay its day of reckoning as long as possible,” they wrote.

Should the Land Board decide not to halt the diversions or reject A&B’s application, the board should at least require the company to install the meters, they argued.

“As a public trustee, the board must demand all information necessary to safeguard the resource. … If A&B does not provide that information, it should not be permitted to take water from the streams,” they wrote.

“If A&B reacts petulantly to the terms of use that the BLNR imposes, then restore East Maui streams and let A&B cry itself a river of its own making,” the NHLC concluded.

— Teresa Dawson

Volume 26, Number 12 June 2016

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