East Maui Taro Farmers May Receive Interim Relief From Water Diversion

posted in: December 2005, Water | 0

“We’re talking about at most five or six streams out of the 110 that they’re diverting right now,” Moses Haia explained to contested case hearing officer E. John McConnell.

For years, Haia and his fellow attorneys at the Native Hawaiian Legal Corporation have tried to get the conglomerate Alexander & Baldwin, and its subsidiary East Maui Irrigation Co., to return a portion of the water it diverts from East Maui so that native Hawaiians and farmers in Wailuanui and Ke`anae can exercise their constitutional rights to grow taro and gather from the streams there.

“[I]f we can address those needs in the next few days, weeks, then I think that that would be, at least for the interim, something that would be logical, practical, as you say, and something that is designed to restore some sense of logic to this whole –”

“– comedy of errors,” said Isaac Hall, finishing Haia’s thought for him at a contested case hearing held in January hearing.

Hall, like Haia, is an attorney in a four-year-old contested case hearing. At issue is what they and their clients argue is the state’s backwards – and illegal – approach to the granting of water leases and permits in East Maui. Despite past decisions by the Board of Land and Natural Resources that were unfavorable to their clients, the attorneys, who represent Maui Tomorrow and several native Hawaiian farmers, respectively, have succeeded in Circuit Court: Two years ago, Circuit Judge Eden Hifo ruled that the Land Board must conduct an environmental assessment or impact statement and must address native Hawaiian, appurtenant and riparian rights before it auctions off any long-term leases to divert water out of East Maui.

With that issue resolved, the battle shifted to whether those same requirements apply to short-term or holdover permits, and if, so, whether those permits, which have maintained the status quo for the last 20 or so years, are legal.

Maui Tomorrow and several East Maui farmers have argued that they are not. A&B/EMI and other entities that rely on the diversion or represent those who do – A&B’s sugar company HC&S, Maui County, Maui Land and Pineapple, and the Hawai`i Farm Bureau Federation – insist that they are. What’s more, they argue that any ruling to the contrary would have a devastating effect on businesses, large and small, as well as thousands of people.

The government, starting with King David Kalakaua, has allowed EMI/A&B to divert on average 160 million gallons of water a day (and more than 400 mgd in the wet season) from East Maui for some 120 years. And today, the diversion is needed to support the island’s pineapple and sugarcane industries (the latter of which provides power to the Maui Electric Company), and to provide water to thousands of upcountry Maui residents, farmers and businesses.

But while these industries and residents have come to rely on the diversion, Hall and NHLC believe the legal mechanisms allowing it to continue without addressing the rights and needs of East Maui residents (not to mention stream organisms) have run their course.

“It’s been four years on holdover status,” Haia told Environment Hawai`i.

“This is environmental degradation and ripping off of native Hawaiians on the highest levels and highest degree. And this has got to stop,” Hall told McConnell in a January hearing. Two months later, McConnell concurred, to a degree. In a March 13 order, he found that an interim hearing should be held to establish some interim flow standards pending the outcome of the contested case.

Over the past several months, as the interim hearing progressed, Maui Tomorrow and NHLC’s clients presented evidence to support the release of more water, A&B/EMI claimed there was more than enough water in the streams to satisfy the needs of native Hawaiians and other legal claimants, and the rest of the parties testified as to how they believed any diminishment of the diversion would harm their operations.

McConnell is expected to issue a recommendation to the Land Board on interim flows early next year.

They Told You So
In 1876, King Kalakaua issued the first water license to EMI to divert water from East Maui for sugarcane fields in Central Maui. Some years later, when the king moved to issue a similar license to millionaire Claus Spreckels, Ke`anae residents objected.

“[I]f any of the water rights of the above-described Crown Lands are disposed of, then the king’s subjects, living on said lands, will be in trouble. Because, what the millionaire has done with the waters of other lands is well known, and on account of this trouble which is known, that is why we make this application,” they wrote in an 1881 letter to their government.

Despite the concerns, Spreckels won the lease. His company, Hawaiian Commercial & Sugar, was later absorbed into what became Alexander & Baldwin.

Opposition spiked again in 1902, when the government proposed auctioning a lease to divert water from East Maui. Nahiku residents petitioned then-Governor Sanford B. Dole to stop the auction, stating that they had worked hard to cultivate their land and were concerned that the lease would give “the highest bidder the control of all the water which should belong to this district.”

Again, despite the protest, a lease was awarded to the successful bidder, Henry P. Baldwin.

In 1939, an agreement between the then-Territory of Hawai`i and A&B/EMI giving both parties shared use of the ditch, established four license areas: Nahiku, Huelo, Honomanu, and Ke`anae. And over the next 40 or so years, the waters of East Maui streams were diverted with little apparent controversy.

As those licenses began to expire in the 1970s and 1980s, however, protest arose again. This time, legal changes made in the 1960s requiring water leases to be sold at public auction and month-to-month permits to be limited to a maximum term of one year became the focus of contention.

In July 1976, the local environmental and community activist group Life of the Land protested a Department of Land and Natural Resources recommendation that the Land Board grant A&B a one-year holdover tenancy on its Nahiku lease, which had expired a month earlier.

The Ke`anae lease had expired in 1972, but EMI was continuing to divert water under a revocable permit from the Land Board. While Life of the Land’s objection focused primarily on the difference in the amount A&B paid the state for the water compared to what A&B charged Maui County for that same water (EMI was paying 0.0018 cent per thousand gallons of water but charged the county 6 cents per thousand gallons), the group also questioned the legality of awarding a revocable permit, year after year, to the same party.

“In light of the fact that [Hawai`i Revised Statutes] §171-58 limits a permit upon expiration of the lease to one year, the present permit is illegal. A public auction of a new lease is long overdue. We request that an immediate pubic auction of these waters be held,” Life of the Land wrote in a letter to the board.

When the DLNR asked the state attorney general for advice on the subject of the proposed holdover tenancy, deputy attorney general Eric Y. Marn determined that state law did allow a holdover for the Nahiku license for up to one year.

The Huelo license expired in 1982, and the one for Honomanu in 1986. From that time until a few years ago, the Land Board issued Alexander & Baldwin and EMI month-to-month revocable permits to continue the diversions. To get around the statute limiting the term of a permit to the same entity to one year, the Land Board simply alternated the names on the RPs each year – giving them to A&B one year and EMI the next.

As long as the charade continued, attorneys for the Native Hawaiian Legal Corporation put their objections on the record. Every year, when the Land Board “renewed” the permits to A&B/EMI, the NHLC attorneys would testify that swapping the permits to different faces of the same entity was not only illegal, it gave A&B/EMI the benefit of uninterrupted use of the water without having to address the diversion’s impacts on native Hawaiian rights, the public trust, and the environment – all of which would have to be done in the event of a long-term license. In 1986, NHLC asked for a contested case hearing on the matter, but the issue has never been completely resolved.

For years, A&B/EMI acted as though they had a long-term lease to divert the streams: In 1973, A&B/EMI entered into a 20-year agreement with the Maui County to provide Nahiku residents with 6,000 gallons of water a day, and to provide the county with up to 12 million gallons of water a day. In 1991, A&B/EMI entered into an agreement, which expires around 2010, with Maui Land and Pineapple to sell well water and excess East Maui stream water to MLP and allow the pineapple grower to use portions of its ditch system.

The county’s agreement expired in 2000. Since then, the county has continued to receive water from EMI under a Memorandum of Understanding Concerning Settlement of Water and Related Issues – “a rather sketchy document,” according to Maui Department of Water Supply director George Tengan. The agreement allows the county to receive 12 million gallons a day (with an optional additional 4 mgd). During low flow periods, the county, as well as A&B’s sugar company Hawaiian Commercial & Sugar, may receive as little as 8.2 mgd under the agreement.

Contested Case Request
On May 25, 2001, A&B/EMI requested that the Land Board approve the sale of a 30-year lease at public auction of the entire watershed of East Maui. At the Land Board’s meeting on Maui that day, A&B vice president Meredith Ching said her company, which makes most of its money from shipping and land development, needed a secure, long-term source of water to do any kind of long-range planning.

A&B/EMI also sought that day to “renew” their interim revocable permits, and dozens of their employees filled the meeting room to show their support for the continued diversion. Several members of the public, however, argued that an environmental assessment was required before a license could be granted. Then-NHLC attorney Carl Christensen and Isaac Hall requested a contested case hearing on both the revocable permits and the long-term lease.

The Land Board then voted to defer the item, and grant a month-to-month holdover permit to continue the diversions while the contested case proceeded.

NHLC’s clients include a group of East Maui taro farmers known as Na Moku `Aupuni O Ko`olau Hui, as well as cousins Beatrice Kekahuna and Marjorie Wallett. All of them live and farm in East Maui. Hall, representing Maui Tomorrow, and NHLC, on behalf of Na Moku and the others, filed their petitions in early June of that year.

In their petition, Na Moku, Kekahuna and Wallett note that the Hawaiian Homes Commission Act and Section 5(f) of the Hawai`i Admission Act calls out native Hawaiians as beneficiaries of the public and ceded land trusts. And so, their petition states, they have a right to expect the Land Board to charge reasonable rent for use of public lands – something, they state, that the Land Board has failed to do. (The Land Board has struggled for years with how to assign a dollar value to the water from East Maui. A&B/EMI pay the state less than half a cent per thousand gallons, compared to 40 cents per thousand gallons paid by users of Waiahole Ditch water on O`ahu, and $1.88 per thousand gallons that some Big Island farmers pay.)

In addition, the Na Moku parties state that the diversion violates their traditional and customary native Hawaiian rights (such as the gathering of snails, shrimp and fish), as well as their riparian and/or appurtenant rights (water rights assigned to taro lands during the Mahele, the land division of the mid-1800s).

Maui Tomorrow’s petition makes similar arguments with regard to water rights, and adds that the state must consider the biological needs of streams before the Land Board disposes of the water in any way.

On May 24, 2002, the Land Board took up the issue of the holdover permit. It had been a year since the board first granted the permit, and Hall and NHLC’s Alan Murakami questioned whether there was a legal basis for the recommendation of the DLNR’s Land Division staff that the board reissue interim revocable permits to A&B and EMI. Attorney Alan Oshima, representing EMI, argued that the Land Board had the authority to maintain the status quo “since it is part of the contested case,” minutes of the meeting state.

Murakami and Hall requested a contested case on the interim/holdover permit issue. After an executive session, the board voted to grant a “holdover of the existing revocable permit on a month-to-month basis pending the results of the contested case,” the minutes state.

Bounced Back
During the contested case, attorneys for EMI argued that an EA or EIS was not required because the proposed use – to divert water for agriculture – would not change the status quo. They also argued that because water allocations come under the jurisdiction of the state Commission on Water Resource Management (CWRM), the Land Board should not concern itself with who gets what.

After hearing final arguments in November, the Land Board issued its decision on the contested case in January 2003. In sum, the board chose to proceed with the lease and leave all issues regarding environmental impacts and native Hawaiian, appurtenant and riparian rights to the state Commission on Water Resource Management and the courts.

The board’s final order states that it is “in the best interest of the state” to issue the lease to A&B/EMI, “provided that all diversions of stream water shall remain subject to the Interim Instream Flow Standards set by CWRM, and to any judgment of a court of competent jurisdiction establishing appurtenant or riparian rights in favor of downstream users…

“So long as the proposed disposition of water by the BLNR is made subject to the [flow standards] set by the CWRM, the BLNR has no duty to perform its own parallel investigation with regard to the minimum, instream flow standards necessary to protect, to the extent feasible, traditional and customary practices of native Hawaiians.”

(The Water Commission, which is administratively attached to the Department of Land and Natural Resources, implements the state Water Code, which requires that all perennial streams be assigned an instream flow standard, or the minimum amount of flow needed to support stream organisms and to protect various beneficial stream uses. The commission, however, has never set such a standard. More than a decade ago, it fixed interim flow standards based on the status quo. While the Native Hawaiian Legal Corporation has petitioned CWRM to amend the interim instream flow standards for 27 streams in East Maui, the commission is still years away from adopting such standards.)

Na Moku and Maui Tomorrow appealed the decision in First Circuit Court, and on October 10, 2003, Judge Hifo reversed many of the Land Board’s findings.

In her decision, Hifo wrote that a 1982 water case known as Robinson v. Ariyoshi allowed the transfer of water out of the watershed of origin “only when it can be demonstrated that to do so would not be injurious to others with rights to water.” She added that the Land Board’s decision to lease excess stream water without having any idea of what constituted “excess” was “fatally flawed,” regardless of whether the lease served the state’s best interest.

In addition, Hifo ruled that the Land Board could not proceed to enter into a lease without knowing how the lease would affect traditional and customary rights, whether that information came from CWRM or from the Land Board’s own investigation.

“If the BLNR believes it does not have the requisite expertise to investigate, then it should wait until the CWRM has acted or make its own application to establish instream flows reflecting the diversion it proposes to make, before authorizing the diversion,” she wrote.

In any case, an environmental assessment or environmental impact statement would be required before any lease is issued, she ruled.

Hifo’s decision dealt only with the Land Board’s decision to auction a long-term lease and did not address the Land Board’s practice of granting holdover permits or alternating revocable permits to A&B/EMI, a matter she left to be resolved in the ongoing contested case.

No Status Quo
Compared to its transportation and real estate profits, which together total more than a hundred million dollars annually, profits from Alexander & Baldwin’s agriculture divisions, including HC&S, hover at around $5 million a year.

This has raised the questions: If agriculture isn’t a big money maker, does A&B/EMI really need all that water to feed it fields? Or can it spare some for farmers in East Maui?

NHLC thinks it can. Haia notes that EMI’s 1991 agreement to sell a few million gallons of excess water to MLP is “an implied admission they don’t need the water.”

In the months following Hifo’s decision, attorneys for A&B/EMI, Maui Tomorrow, and Na Moku agreed to postpone the contested case hearing while they tried to work out issues on their own.

In early March 2004, EMI agreed, among other things, to make sure 100,000 gallons of water a day was made available to Beatrice Kekahuna’s diversion dam on Honopou Stream. EMI planned to install a 4-inch wide pipe in its Haiku Ditch to supplement two existing pipes there.

By March 11, EMI president Garrett Hew estimated that about 300,000 gallons of water a day were flowing in Kekahuna’s `auwai, or taro irrigation canal.

Despite the additional water, the informal mediation eventually fell apart and the issue of setting interim flow standards to meet the needs of NHLC’s clients fell to contested case hearing officer McConnell.

In a November 2004 memorandum to McConnell, NLHC complained, “[T]he BLNR has not even pretended to ascertain whether the permit ‘best serves the interest of the state’ in making this disposition by revocable and/or ‘holdover’ permit…[B]y providing no mechanism for downstream users to redress harm they suffer from excessive diversions by A&B/EMI, the BLNR has ensured the exact opposite result, i.e., to give A&B/EMI carte blanche power to divert without regard for what best serves the interest of the state.”

Acknowledging at a January 2005 hearing that it was going to take years “to do it right,” McConnell said, “That doesn’t mean we have the status quo for years. And we may, if the parties can’t negotiate something, have to have a hearing … to establish some interim flow standards.

And since his March decision to hold such a hearing, parties to the case have been flooding McConnell with expert testimony and evidence regarding just how much water, if any, needs to be returned to East Maui. In a nutshell, A&B and EMI don’t think they should release anything. Na Moku and its allies are looking at something around 5 or 10 percent of the total diversion.

Dueling Experts
“Over the years, I’ve learned that taro crops could fail for a number of reasons, but the primary reason is lack of water,” says Waiahole taro farmer and NHLC expert witness Paul Reppun in testimony given to McConnell last October.

Reppun has grown taro for 31 years and has a history of successes in fighting for water for taro on O`ahu. In 1974, he was involved in a suit against to Board of Water Supply, in which he sought to retain enough stream flow to grow taro. He was also on the victorious side of the landmark public trust doctrine case that led to the return of water to windward O`ahu streams after a century of diversion by sugarcane plantations in Central O`ahu.

By most accounts, Reppun says in testimony, 77 degrees is the optimum water temperature required for a successful taro crop. But while temperature is of little dispute, the amount of water needed to maintain it ranges widely, depending on the expert.

Studies used in a Kaua`i sugar plantation case suggest that taro needs 70,000 gallons per acre per day. A 1960s report for the O`ahu Board of Water Supply by Leslie Watson states that taro can require as much as 200,000 gallons per acre per day, but on average needs only 30,000. And a 1983 study by Ramon de la Pena (EMI’s taro expert) and F.M. Melchor found that watering taro with anywhere from 30,000 gallons a day to 105,000 didn’t affect yield.

“Although I cannot offer ‘scientific’ proof that the quantity recommended by Mr. de la Pena is too little, based on my visits to all the major taro growing areas in Hawai`i and to many minor ones, I can say that I have never seen lo`i [taro patch] with inflows approaching this small quantity of water by choice of the farmer,” Reppun says.

In his experience, taro lo`i need 100,000 to 300,000 gallons a day of what he calls “new” water, or water that has not been warmed up by previous use.

Within East Maui’s Wailuanui Valley, where most of Na Moku’s membership comes from, 56.355 acres were in taro at the time of the Mahele, according to testimony by NHLC paralegal Teresa Gomes. Assuming that at any given time about 10 percent of that would have lain fallow, one could say that about 51 acres of taro would have required a steady flow of cool water. Using Reppun’s estimate of the amount of water needed for taro, those fields would have required 5.1 to 15.3 million gallons of water a day (or 3 to 9 percent of the water that EMI diverts).

Retired University of Hawai`i agronomist de la Pena, however, disputes Reppun’s assertions. In his testimony, de la Pena says his experiments show that taro needs no more than 30,000 gallons per acre per day to grow successfully. “Problems with taro crop failures are most often the result of allowing irrigation water to become still or stagnant,” he wrote. “When that happens, not only will the water and soil temperatures rise, the water will also become depleted of oxygen which will cause the taro to ‘drown.’…Constantly moving flow-through water does not become ‘used up,’ as stated by Mr. Reppun, and can be used to irrigate plots downstream of plots that have already been irrigated.”

He adds that the temperature of the water flowing through the lo`i can exceed 80 degrees without harming the crop so long as the soil temperature remains at or below 80 degrees.

Using de la Pena’s estimate, taro farms in Wailuanui would need only 1.53 mgd, an amount that A&B/EMI claims is already flowing into the area.

In motions to McConnell, David Schulmeister and Elijah Yip, attorneys representing A&B and EMI, note that aside from Na Moku president Edward Wendt, “not a single person has come forward identifying himself as a member of Na Moku…” And when McConnell forced Na Moku to give EMI a list of members, it contained only 28 individuals, far less than the 500-plus members Wendt claimed, they wrote.

Regardless of how many people actually need an immediate release of water, they argue, EMI’s measurements indicate that there is between 3.57 and 3.8 million gallons a day flowing in Waiokamilo Stream, one of several streams in the valley – sufficient to irrigate 100 acres of taro – “yet there is only a fraction of this amount of taro actually being cultivated.”

In his testimony, EMI’s Garret Hew suggests that the reason so few acres of taro are cultivated in Wailuanui has more to do with the aging and passing of taro farmers than with any lack of water. His testimony also pointed out that despite efforts by his company to clear water blockages and pipe more water to some farmers, very few seemed to be taking advantage of the water being made available to them.

For a few days in October and November, McConnell convened the parties to take additional expert testimony and to visit the farms of Beatrice Kekahuna and Maui Tomorrow members Neola Caveny and Ernest Schupp, and the streams and diversions involved.

Schupp’s testimony in October challenged the idea that attrition due to age was why so little acreage was in taro. It had more to do with frustration with the problems stemming from insufficient water.

“Well, after you do it for years and years you get sick of watching your crop die due to root rot, crayfish digging around them, water being too warm, and your not getting the corm size with the cooler water; you end up with rotten taro,” he said.

(During the hearing, Haia objected strongly when attorneys for EMI/A&B asked Na Moku’s witnesses to identify `auwais and other parts of their water delivery system. NHLC has long argued that court decisions in 1904 (HC&S v. Wailuku Sugar Co.) and the McBryde case found that the burden of proving the diversions are not injurous to its clients rests on the diverter, in this case, EMI/A&B and the state. A&B/EMI’s attorneys dispute this, and have argued that NHLC’s refusal to provide details on who has appurtenant and riparian rights flips that burden back to NHLC’s clients. McConnell has sided consistently with A&B/EMI on this matter.)

The interim hearing concluded on November 12. Parties have until January 13 to file their recommendations with McConnell, who must then issue his own recommendation to the Land Board.

After the interim flows are agreed upon, Murakami says, the contested case on the short term/holdover permits will resume.

‘Down The Road’
It’s been two years since Judge Hifo informed the Land Board that an EA or EIS needed to be done if it wishes to auction a long-term lease for East Maui water.

However, given NHLC’s petition before the Water Commission to amend the interim instream flow standards, and the U.S. Geological Survey’s studies on a few East Maui streams that have grown out of that petition, the DLNR has chosen to wait until the commission sets new flow standards for those streams, rather than proceed with its own environmental assessment/impact statement, says deputy attorney general Linda Chow.

In her decision, Judge Hifo noted that the Land Board can use any information used by the Water Commission in establishing instream flow standards for East Maui.

“Once the IIFS is done, [the information used] can be dumped into an EIS,” Chow says, adding that “a decision on whether to auction a lease is several years down the road.” While some have suggested that the state must do the EA/EIS, “there’s been no decision on who will do the EA,” she says.

When Environment Hawai`i asked A&B how the continued lack of a long-term water commitment from the state has affected its ability to do long-range planning, HC&S general manager Stephen Holaday, answering for A&B, responded by email that “a long-term water lease and the certainty it would afford would be necessary to move forward with any significant investments in the business. For example, one of HC&S’s current initiatives is to evaluate the feasibility of transforming itself into a company more focused on energy production – to utilize cane trash in addition to bagasse, molasses and sugar for ethanol or other energy production, and thereby create sustainable and renewable sources of fuel and energy for our state. The implementation of this type of initiative, however, would require a huge capital investment with a very long payback period. Obviously, A&B will not be in a position to undertake this type of investment without the certainty of the water with which to grow the crop that is the basis for the energy production.”

— Teresa Dawson

Volume 16, Number 6 December 2005

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