Board Talk: A&B Holdovers, Wind Farm Contested Case, Ag Land Transfers

posted in: January 2017 | 0

Land Board Grants One-Year Holdover Allowing A&B to Divert East Maui Streams

“I think it’s important to keep in mind it’s been ‘just one more year’ for 30 years,” Office of Hawaiian Affairs public policy advocate Wayne Tanaka told the Board of Land and Natural Resources last month, noting that kupuna seeking stream restoration in East Maui have died waiting for it to happen.

Indeed, the contested case initiated by the late Beatrice Kekahuna — one of the original group of native Hawaiian taro farmers who in 2001 challenged Alexander & Baldwin’s (A&B) efforts to continue diverting streams upon which they relied — has dragged on so long that it is now in the hands of a younger generation that includes Kekahuna’s son Sanford and Lurlyn Scott, daughter of another original petitioner, Marjorie Wallett.

At the Land Board’s December meeting, Native Hawaiian Legal Corporation (NHLC) attorneys representing Kekahuna, Scott, Healoha Carmichael, Lezley Jacintho, and the community group Na Moku Aupuni O Ko`olau Hui, argued against a proposal by the Department of Land and Natural Resources’ Land Division to grant A&B and its subsidiary, East Maui Irrigation Co., Ltd. (EMI), a one-year holdover of four revocable permits held — or once held, some say — by the companies.

But after hearing several hours of impassioned public testimony, mainly in opposition, the Land Board voted four to two to grant the holdovers in order to allow A&B to better transition its 35,000 acres in Central Maui from sugarcane to diversified agriculture.

In making his motion to approve the holdovers, Land Board member Chris Yuen responded to the arguments Tanaka, the NHLC, and others made by highlighting the fact that in a separate but related contested case hearing before the Commission on Water Resource Management, the commission in July ordered that all streams identified by the petitioners as important to taro growing to be fully restored. Yuen incorporated that order into his motion and, to better ensure that the needs of organisms in “high-priority” streams are met, required the companies to fully restore another East Maui stream, Honomanu. Yuen also ordered the removal or repair of those portions of EMI’s irrigation system that either continue the diversion of streams that are supposed to be fully restored or prevent those streams from achieving mauka to makai connectivity.

The holdovers, granted under Act 126 of the 2016 legislative session, allow A&B and EMI to divert up to 80 million gallons of water a day (mgd), and perhaps even more, from East Maui streams in the state license areas of Nahiku, Huelo, Honomanu, and Ke`anae. The holdover also allows EMI to maintain control over access to the 33,000 acres included in those license areas.

The companies, some have argued, had been diverting the water without any legal authority since a January 2016 circuit court ruling invalidated their permits to do so. Although A&B has taken the position that it doesn’t really need the permits, the company sought the holdovers just in case the state Intermediate Court of Appeals decides A&B is wrong.

Contested Case Denial

Before the Land Board even began discussing the holdover item, NHLC attorney Camille Kalama submitted a written request for a contested case hearing on behalf of her clients.

First, she wrote in her supporting testimony to the board, “as of today, A&B no longer needs the water from East Maui. A&B simply has no need for any of that water today, tomorrow, or next month.” She pointed out that A&B subsidiary Hawaiian Commercial & Sugar, which closed its sugarcane operations last month, hadn’t needed any water for its last crop for months. Given its vastly reduced water demand, she stated, A&B can and should be relying on its own ample supply of well water, even though pumping costs are something it would rather not pay. She also pointed out that the Hawai`i Supreme Court has ruled that a water applicant’s proposed use “must be denied if the applicant does not show that there is no practicable alternative water source.”

Kalama also jumped on the Land Board’s complete reversal of recent positions taken in other legal proceedings in which her clients have sought to restrict, if not end outright, A&B’s diversions.

In January 2016, 1st Circuit Judge Rhonda Nishimura ruled that four revocable permits to A&B and EMI that the Land Board renewed at its December 2014 meeting were invalid because state law never intended temporary permits to be continuously renewed for more than a decade, which is exactly what the board had been doing. An appeal followed and is still ongoing. In December 2015, aware of Nishimura’s inclinations, the board continued the companies’ diversions by voting to simply reaffirm a holdover it had granted years ago as part of the contested case hearing initiated by Kekahuna, Wallett and others.

Kalama noted that the Land Board has consistently taken the position in the appeal of Nishimura’s decision and the Land Board’s 2015 decision that its votes in 2014 and 2015 “were of no legal significance.”

“You have argued that you gave A&B authority to use this land and water in 2001 and 2002 and that no other legal authority is necessary. Are you willing to repudiate that position?” she asked.

She also took issue with the Land Division’s characterization in its report to the board that Nishimura’s ruling had been stayed pending the outcome of the appeal by A&B, the Land Board, and Maui County.

“It is well-settled law that the mere filing of an appeal from an order or judgment, in the absence of a stay of proceedings, will not disturb the operative effect or validity of such an order during the pendency of the appeal. Thus, the DLNR staff submittal statement that, ‘Although the permits were invalidated by the Circuit Court, the ruling was stayed pending the appeal’ is patently false[with regard to the Land Board, the DLNR and A&B]. Likewise, the DLNR staff’s contention that ‘[t]he Department considers the revocable permits to be in continued holdover status, until the resolution of the pending contested case before the board on the water license’ is a misguided misbelief that invites the DLNR and this Board to be held in civil contempt for their plain-as-day failure to take all reasonable steps within their power to comply with the court’s January 2016 order,” she wrote.

She argued that granting the holdovers requested by A&B/EMI would violate the public trust doctrine, Hawai`i’s environmental review law, obligations to protect native Hawaiian traditional and customary practices, due process rights, and even Act 126, which the Legislature crafted last year specifically to allow for the continuation of water diversions while the processes associated with the issuance of a long-term lease — including legal challenges and the completion of environmental review documents — run their course.

With regard to the latter, Kalama wrote, “By its plain terms, Act 126 applies only to lease applications concerning ‘a previously authorized disposition of water rights.’ The first circuit court has already ruled that the BLNR’s prior disposition was unauthorized. Therefore, Act 126 is inapplicable to A&B for their permits.” What’s more, Act 126 requires the holdovers to be consistent with the public trust doctrine. And as she had already argued, “granting holdover status is inconsistent with the public trust doctrine.”

Anticipating that the board might reject her arguments and approve the holdovers, Kalama asked that it condition them on the following:

  • Explicitly bar A&B from obstructing native Hawaiian access to gather, hike, and “malama the `aina and kahawai” in the license areas;
  • Require A&B to give Na Moku the keys or combinations to locks on any and all gates that may impede access;
  • Require A&B to clean up debris, including metal and PVC pipes, concrete waste and equipment in the license areas;
  • Require A&B to eliminate alien plant species growing within 50 feet of diverted streams; and
  • Require A&B to provide basic information on water amounts diverted daily from the license areas and to install meters at each diversion point.

In discussing the NHLC’s contested case hearing request with attorney David Schulmeister, who represents A&B, Land Board chair Suzanne Case asked his opinion on what effect Act 126 might have on whether the hearing should be granted. In recent decisions regarding telescope development on Haleakala on Maui and Mauna Kea on Hawai`i island, the Hawai`i Supreme Court has ruled that the Land Board must address contested case hearing requests before making a decision on the matter being contested.

After Schulmeister replied that Act 126 does not directly address that issue, the board decided to go into executive session with its deputy attorney general. When it reconvened, Yuen made a motion, which the board agreed with, to deny the NHLC’s request, stating that a contested case hearing was “not available as a matter of law.” He also noted that since the holdovers were only for a year, granting a contested case on them (that could conceivably last even longer than that) “would frustrate the legislative intent of Act 126.”

Disputed Claims

HC&S manager Rick Volner, Jr., told the Land Board that it is currently diverting between 15 mgd and 20 mgd — down from a historical average of about 160 mgd — from East Maui and that the seven taro lo`i-serving streams that it promised last year to permanently restore have been nearly or fully restored. Biofuel crop trials and cattle grazing are already occurring on some of the former sugarcane lands, and there are plans to develop an agricultural park for small farmers, he said. Key to a successful transition to diversified agriculture, especially for the 27,000 acres of its former sugar plantation that have been classified as Important Agricultural Lands, is a secure source of water, he said. State Department of Agriculture director Scott Enright, corporation counsel for Maui County, and representatives from the island’s and state’s farming and ranching organizations also argued for the continued diversion of water by A&B.

Albert Perez, executive director of the Maui Tomorrow Foundation, however, argued that A&B should not be able to divert an unlimited amount of water while it figures out what it’s going to do with it. Citing a letter from the group’s attorney, he said that court rulings require a higher level of scrutiny to be applied to private, commercial uses, and that A&B to show its actual water needs, not it forecasted needs.

“Basically, you can sum it up by saying, ‘show me the farming.’ If they just get a blank check, they have no incentive to really do agriculture,” he said.

In trying to pin down the actual water uses and needs of A&B and its subsidiaries, Land Board members Sam Gon and Keone Downing first asked Volner where all of the water that used to be diverted is going.

“East Maui,” Volner replied. “It stays in the watershed, in the streams.”

Regarding an argument by A&B that it needs to continue diverting stream water, in part, to keep its ditch system operational, Gon then asked how much water that would require.

Volner said that was hard to pinpoint.

EMI president Garrett Hew noted that while his company is not currently diverting any streams in the Nahiku and Ke`anae license areas, it is maintaining the ditch system there in case “any ag ventures require more water.”

To Downing, Hew had just admitted that the ditch doesn’t really need to stay wet to, as Volner explained later, clear debris and remain operational.

“The diversions” — in Ke`anae and Nahiku — “have gone dry?” Downing asked Hew.

“For the most part, yes,” Hew replied.

“So the diversions don’t really need water,” Downing said.

Maui Tomorrow Foundation board member Lucienne De Naie also took issue with A&B’s claims that it needs East Maui water from state land. In addition to its well water, she noted that the company’s ditch system takes water from 51 stream intakes located on its own property.

NHLC attorney David Frankel pressed the issue further.

“Why would you let A&B divert water from East Maui before they take 83 mgd [from its well] first? Additional water comes from A&B’s own land. If they say they’re using 20 mgd and they have access to 112, why let them take it from the public?” he asked.

Both De Naie and Frankel also addressed Volner’s statement that the water HC&S no longer needs is being kept in the East Maui watershed. “It’s being returned to the watershed. The question is how,” she said, arguing that the company was, as Kalama had testified, shifting water from one stream to another, rather than keeping streams undiverted.

“When you’ve been told the taro streams have been dealt with, it’s not true,” she said. She added that she has video showing Hanehoi Stream is still being diverted, despite claims that it’s been restored. Another testifier showed video that Pi`ina`au, another stream that was supposedly restored, is still being diverted due to a hole in the ditch.

“Don’t assume everything is peaches and cream just because you saw a paper from CWRM,” said Frankel, who also pointed out that the Water Commission did not impose in its order any deadlines on A&B’s restoration of streams.

While De Naie conceded that obtaining all of the government approvals required for full restoration may take some time, she asked the board, “Do you think three to four years is too long to wait? That’s the question.”

Frankel accused A&B of dragging its feet in the permitting process, as well as in its efforts to complete the environmental impact statement the Land Board had ordered it to begin.


As the Land Board came closer to making a decision on the holdovers, Frankel reminded the board of the fact that Judge Nishimura’s ruling had not prompted the board or DLNR to stop A&B from continuing to divert East Maui streams. That being the case, “Why would you consider the [holdover] proposal? They’re doing it now. Why do anything?” he asked. (He and Kalama added, however, that they believed that because the Land Board and A&B had not received a stay of Nishimura’s ruling, the diversions — except for those serving the Maui Department of Water Supply — were illegal.)

Board member Stanley Roehrig suggested that perhaps the board had changed its mind, or even made a mistake, regarding the legality of diverting water without the permits.

“I’m not in favor of illegal. Under what lawful authority are they [A&B and EMI] going to do it if we don’t do something?” he asked. “The Legislature gave blood on this bill [House Bill 2501, which became Act 126] … After her ruling, the ledge passed Act 126. We cannot ignore that and pretend only Judge Nishimura made her ruling,” he said.

Rather than focus on past legal arguments, Yuen offered a motion to approve the holdovers, despite the fact that he had wanted the board to refrain from making any serious decisions on the use of East Maui stream water until the Water Commission concluded its contested case hearing on amendments to the interim instream flow standards of about two dozen streams.

“But here we are,” he said.

He started by asking that several documents filed in the Water Commission’s contested case hearing be incorporated into his motion. Those documents, which called for the full restoration of all 14 taro streams, among other things, went a long way toward meeting Act 126’s requirement that holdovers meet the public trust doctrine, he seemed to suggest.

The commission’s order to restore those streams was significant, he argued. “People are so used to hearing bad news they don’t hear the good,” he said.

With regard to protecting stream life and biota, Yuen pointed to a Division of Aquatic Resources study that had identified eight priority streams, six of which are covered by the July 2016 Water Commission order. The two others are diverted high up by the Maui Department of Water Supply. Even so, he ordered the restoration of one of those streams, Honomanu, which had once been identified by DAR as a priority stream but was removed from the list because there were doubts that losing reaches might prevent it from connecting to the sea.

He added conditions that there be no waste or non-beneficial use of diverted water, that a hole in the Pi`ina`au diversion be closed, and that A&B remove sections of the ditch system that erode and cause portions of the streams to be restored to go dry, thus allowing for full connectivity.

Yuen had recommended capping diversions at 80 mgd, but upon a recommendation from Case, revised the condition so that the matter is merely brought back to the board for review if and when diversions come close to 80 mgd.

The 80 mgd amount didn’t appear to be based on any actual need stated by A&B, but Yuen argued that allocating water for potential uses was reasonable. (A&B’s protected agricultural uses, not including ditch system losses, total about 89 mgd.) He said that A&B’s well, according to the Water Commission’s hearings officer, cannot serve even half of company’s lands and requires electricity to pump, whereas water from the ditch system does not. Also, he said, it’s not practical for the company to have water only for a certain set of uses and be required to return to the Land Board whenever it has need for more.

“That’s a chicken and egg thing and we’ll end up with neither the chicken nor the egg without a practical allocation [of water],” he said, adding that the motion he had crafted took care of many of the interests of those seeking stream restoration.

Addressing arguments that commercial agriculture is not protected by the public trust doctrine, Yuen said that contrary determination was made before the state passed its laws requiring the designation and protection of Important Agricultural Lands (IAL). IAL are of constitutional importance, and therefore the water needed to make those lands productive should have constitutional protection, he said.

Board member Gon, however, said he was troubled by the lack of information regarding A&B’s request and that if the board were to deny the holdovers, it would not affect the company.

“I have a feeling I need to vote against this until enough information is available to support the public trust … and justify it if someone came up to me,” he said. Board member Downing agreed.

Downing asked company representatives why the board was being forced to take a stand on something “you knew you had an abundance of? … There’s no data from you folks. How much are you gonna use? What for?”

Roehrig warned the companies that “next time around, I’m going to vote no. … Take that to headquarters.”

With an amendment (recommended by Roehrig) to the motion that representatives from the opposing sides of the issue trade phone numbers so they can perhaps informally work out certain issues among themselves, the board approved the holdovers. Gon and Downing opposed the motion. Yuen, Roehrig, Case, and Kaua`i board member Tommy Oi voted in favor. Maui Land Board member Jimmy Gomes had recused himself from the matter.


* * *

Wind Farm Opponent Secures

A Contested Case Hearing

At its December meeting, the state Board of Land and Natural Resources granted a contested case hearing to the community group Keep the North Shore Country, which opposes the approval of a Habitat Conservation Plan (HCP) and incidental take license (ITL) for Na Pua Makani wind farm on O`ahu’s north shore.

Group president Gil Riviere, who is also the state senator for the area, pointed out to the Land Board that Keep the North Shore Country’s purpose is environmental protection in the region and it has received funds from Turtle Bay Resort to enhance protection of the endangered Hawaiian goose, or nene. Nene are one of several threatened or endangered species that are expected to be harmed or killed by the wind farm’s nine turbines. Riviere also expressed concern about the potential harm to the endangered Hawaiian hoary bat, which is the species most often taken by wind farms in the islands.

With regard to Na Pua Makani’s HCP proposals to fund research or control ungulate damage in the forest as mitigation for bat deaths above a certain number, Riviere called the plan fatally flawed and encouraged the board to send it back to the Endangered Species Recovery Committee, which is made up largely of scientists from various government agencies. The committee must approve all HCPs before they come to the Land Board.

Mike Cutbirth, manager of Na Pua Makani Power Partners, argued that the HCP was, in fact, scientifically sound and that Keep the North Shore Country was merely seeking to delay the project. The state has very high standards when it comes to HCPs, he said, adding that the species covered by the plan and license will be “better off with the project than without” and that the mitigation requirements for his project are higher than those for the five other wind farms throughout the state.

He pointed out that Keep the North Shore Country had ample opportunity — seven public meetings — to comment on the plan and license, but it chose not to.

In October, the Land Board approved a lease for the project and took up the matter of the HCP and ITL at its November meeting. At that meeting, Riviere, on behalf of Keep the North Shore Country, and Kahuku resident Kent Fonoimoana, on behalf of the Kahuku Community Association and another group, requested a contested case hearing. At the Land Board’s December meeting, the board entertained only Riviere’s request.

After the board discussed legal issues in executive session, board member Chris Yuen made a motion to grant Riviere’s group a contested case hearing and determine that it had standing. While his motion passed, it was far from unanimous.

Member Sam Gon, chief scientist for The Nature Conservancy of Hawai`i and a recent former member of the Endangered Species Recovery Committee who was involved in lengthy discussions regarding wind farm interactions with bats, agreed with Cutbirth that Riviere’s group had had ample opportunity to engage in the public process. Gon added that when a habitat conservation plan is developed, it has to pass muster with the state Division of Forestry and Wildlife and the U.S. Fish and Wildlife Service. “The suggestion that the HCP is ‘fatally flawed’ … is problematic in my mind,” he said.

When it came time to vote, Maui member Jimmy Gomes and board chair Suzanne Case joined Gon in his opposition to the motion.



Board Transfers 600 Acres

To Department of Agriculture

More than a decade after the state Legislature passed a law directing the Department of Land and Natural Resources to transfer some of its agricultural lands to the Department of Agriculture, the mission is still not complete. But at the Land Board’s meetings in November and December, it approved the transfer of more than 600 acres on O`ahu, most of which are under leases or permits to about two dozen farmers and ranchers. Nearly 169 acres are unencumbered.

“The [DLNR] has been working with the Department of Agriculture (DOA) in order to expedite additional transfers, in keeping with the Governor’s initiative for the development of sustainable local agricultural production. The set aside of the properties to DOA will allow the properties to be managed more consistently with that initiative,” a staff report states.

— Teresa Dawson

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