Council conflict of interest

Unexpectedly, the Otago Regional Council yesterday cleared the way to consider contributing capital of up to $3.5 million - and potential charges over five years totalling about $2 million - to a large Tarras irrigation scheme.

After about 90 minutes debate, it overturned the recommendation of its hearings panel and agreed its long-term plan could be amended to allow for this council ''investment''.

The arguments for regional council support are significant, and the proposal gained traction before being rejected by the hearings panel. Irrigation is vital to production in Otago and essential for wider wellbeing and the income of this country. The Lindis River would benefit from reduced pressure, and farmers would have secured water for when the Lindis scheme expires in eight years. Regional council support seemed vital for the proposed scheme's viability, and such investment seems closer to the land and council core business than funding, for example, for Forsyth Barr Stadium.

But what really swung the day appears to have been an emotional plea from some Tarras farmers that the regional council backing was essential and that without the scheme the region would die. There was also one view that the council had already committed itself to backing the scheme morally, if not in fact, and scheme proposals had been developed on that basis.

The case against a council contribution, however, is strong. Crucial is potential conflict of interest. The fundamental regional council role is its oversight of the environment: the land, the water and the air. It grants consents and water use and water pollution are two of its most challenging and contentious areas. Irrigation is at the heart of this, affecting river health and beauty, fishing and other recreation. Yet, the regional council, the regulator, would also be a major investor in an irrigation scheme. Even if councillors and council staff could completely divorce council financial interest in the scheme from regulatory decisions, and even if the integrity of those on hearings panel is impeccable, the perception of conflict remains. Public confidence in the council would be dented.

While the council has a fine record of avoiding conflict between its 100% interest in Port Otago Ltd and harbour environmental regulation, this investment was inherited, rather than made, and the port has operated as an altogether separate business. It should not provide a reason to extend council investments into sensitive areas.

There is also the matter of a public body investing in private enterprise, of the regional council using public money for private gain, which distinguishes it further from the port company holding. Sometimes, positive private spin-offs will arise from council environmental work, notably in flood protection. But there is, surely, a difference between protecting land from deluge and damage and promoting productivity through irrigation. Such projects often run over budget, and their outcome is never predictable, putting any council investment at risk.

The idea that farmers would, as time went on, take up the regional council's portion is also inherently a gamble. The council proposal to ''invest'' at Tarras could have been immediately stymied because of changes to the Local Government Act, as the Government endeavoured to restrict the scope of local authorities. A council legal opinion, however, says the investment was still within the purpose of the Act because it supported good quality infrastructure.

The council yesterday - despite the conflict of interest, the promotion of private interests and the financial risks - left the door open to part-fund the 6000ha scheme by amending its long-term plan. It can now go ahead and consider whether to ''invest'' in the Tarras Water scheme. That door should have been closed, and the regional council should stick, wherever possible, to its core regulatory and strategic roles.

And another thing
Apparently, according to chairman Lyndon Weggery, the Dunedin Ratepayers and Householders' Association, which has but a handful of members, represents all city ratepayers, unless individuals write to the association to opt out. Really?