Darfield Dumped On

Watchdog 91 reported, in great detail, the sorry saga of the joint venture between Canterbury local bodies (spearheaded by the Christchurch City Council) and two garbage transnationals, to build, own and operate a regional landfill, a super dump to take the waste of the South Island's biggest populated area. One of these companies is, of course, Waste Management of the US, the world's biggest and most controversial garbage TNC. Much of 1999 was spent by the joint venture in selecting a site and, in the process, stirring up unprecedented opposition in two rural Canterbury communities, namely Omihi and Darfield.

October 1999 was specified as the deadline for the announcement of the site - this was one contest in which the involuntary contestants were all quite happy to come second. But the selection was duly announced - the Malvern Hills, near Darfield, out on the central Canterbury Plains. Indeed it appears that the joint venture had settled on this site months previously. The public face of the joint venture, Canterbury Waste Joint Committee chairman (the pugnacious Christchurch City Councillor, Denis O'Rourke), said that "the scientific evaluation of the 25 proposed sites had been robust and more thorough than any other process he had known in his many years as a councillor" (Press, 13/10/99). Up to three years has been allowed for the resource consents and appeals process; the landfill will be built to the highest US environmental standards, as New Zealand has no appropriate standards.

None of which mollified Dump the Dump, the 5,000 strong group of Selwyn district ratepayers totally opposed to the landfill. The strength of opposition can be gauged from the fact that a July 1999 public meeting to express opposition attracted over 1,000 people, the biggest meeting in Darfield's history. Spokeswoman Gillie Deans said: "We will devote all of our resources to condemn this proposal because we violently oppose it. We will hound it in the courts and at any other forum. We will make the attempt to create a megadump potentially the most expensive ever process" (Press, ibid). Dump the Dump is particularly bitter about its own Selwyn District Council (SDC), which is part of the joint venture and which, like the other councils, has waived its right to object. Dump the Dump has urged the SDC to respect ratepayers' wishes and fund its fight against the proposal. The SDC has described local opposition as childish; confined itself to calling for a policy of zero waste to landfill by 2015 and taken the fight to the locals, by ordering the immediate removal of 50 Dump the Dump signs around the district.

Pat Morrison, Dump the Dump chairman, responded that the SDC "can expect civil disobedience on a scale they have never seen before" (Press, 17/9/99). The signs remain up and the SDC has agreed to help ratepayers meet the costs of compiling reports. Morrison is unmollified, saying that his elected representatives had allowed "a bunch of cowboys" to run roughshod over the locals (Christchurch Star, 15/10/99).

Formidable Opposition: The PM

Dump the Dump has some heavyweight politicians supporting it. The local National MP for Rakaia is none other than the Prime Minister, Jenny Shipley. When Malvern Hills was first named as a likely site, Shipley had waded in with an extraordinary boots and all attack on the proposal, using her Prime Ministerial position for maximum leverage and drawing on her own expertise acquired as a former local councillor in the district (see Watchdog 91 for full details of Shipley's intervention. That issue mistakenly referred to her as the MP for Selwyn. That was the former name of the Rakaia electorate. Ed.). Her concern was that a landfill in the Malvern Hills could leach into the aquifers that supply the agriculturally vital Canterbury Plains and the city of Christchurch.

When the site was announced, Shipley denounced it as "foolhardy" and did not accept claims that a clay base would prevent leaching: "They give themselves away in the design of the landfill when they put two monitoring wells either side of it, conceding that leaching is a risk" (Press, 15/10/99). O'Rourke described Shipley's comments as "political and irrelevant" (ibid). "Cr O'Rourke said he expected a war with the Malvern community but said it would be short, once people looked at the facts. Malvern residents laughed at his claim that the landfill would enhance the environment. Cr O'Rourke said he would have the last laugh" (Press, ibid).

Shipley's involvement has added a dimension to the row, namely that of central government versus local government. Christchurch Mayor, Garry Moore, said that he was amazed at the Government's lack of interest in waste, and that he'd heard nothing from Shipley about it until her "not in my backyard" opposition to the landfill (Press, ibid). The other councils in the joint venture - Ashburton, Selwyn, Banks Peninsula, Waimakariri and Hurunui - declared that they were right behind Denis O'Rourke. Green Party co-leader, Rod Donald, (who has been consistently against the landfill from the outset, for environmental reasons) made a telling point. The Government's proposed amendments to the Resource Management Act (a prime target of National's Big Business backers) could bar her, the local MP, from making an objection, on the grounds that she wasn't directly affected by the landfill.

The same could apply to anyone else wanting to object on the wider issue of waste minimisation. Belying the accusation that landfill opponents are nimbies (not in my backyard), the Hurunui Landfill Research Association, which headed opposition to the landfill being sited at Omihi (North Canterbury), declared its support for Dump the Dump and its anger at the whole process and local councils' involvement. The Omihi community recognised that if the lengthy hearings result in the Malvern Hills site being rejected, then Omihi could very well find itself as Plan B. But, for the time being, Omihi's most famous landfill opponent, rugby legend Grizz Wyllie, does not have to contemplate the prospect of having a rubbish dump for a next door neighbour.

Kim Ellis, managing director of Waste Management NZ, says that the Malvern Hills site is ideal: "I would be very surprised if this site was not consented" (Press, 18/10/99). Nonetheless, Ellis said that Waste Management will hold on to Cattle Peaks, the Omihi farm it bought as a potential dump site. The Overseas Investment Commission (OIC) approved the purchase of Cattle Peaks, back in 1995, but suppressed the decision, only releasing it when CAFCA specifically asked for it, in 1999.

The Press editorialised (14/10/99; "Rubbishing the landfill"): "Certainly the decision seems not to have taken account of aesthetics. The Malvern Hills are one of Canterbury's most beautiful landscapes. To site a dump there will do nothing but add an eyesore...Economic benefit, however, is not worth it if the landfill proves environmentally hazardous... (Mrs Shipley) added local councils supporting the decision were out of step with their ratepayers. It is hard to disagree with that view. An alternative option favoured by Mrs Shipley is waste incineration. According to...Denis O'Rourke, that is not viable. He claims it would cost hundreds of millions of dollars compared with the $20 million for the regional landfill...Despite that, incineration remains popular with the public. Another Christchurch City councillor, David Close, says people do not understand its economics. Yet he concedes that incineration plants in large European cities are apparently very successful. Why, then, can New Zealand not develop a national waste strategy and have much of its rubbish incinerated?...Proponents of any site - whether at Malvern Hills or elsewhere - must understand the need properly to justify their selection. Given the present divide, that explanation is essential if ratepayers are to be confident that their councils have not let them down".

There is an intriguing theological aspect to all this. The media and public were recently agog at the revelation of the fundamentalist Christian beliefs of Christchurch's City Manager, Mike Richardson. He wrote (in an internal church paper, leaked to the media) that the City Council's large and expensive infrastructure projects - Cathedral Square, the Entertainment Centre, Jade Stadium, swimming pools, etc, etc - were all actually fulfilling a vital role connected with the imminent Second Coming of Christ. What's more, any problems that these projects were encountering was the work of that old bugger, Satan. The question: according to the City Manager's cosmological view, is the landfill part of God's plan or that of Satan? A clue can be gleaned from the fact that his one public utterance recently has been a letter to the Press, on behalf of the On Fire For Jesus Ministries. Obviously therefore he, and presumably God, supports incineration.

Burke Goes Public; Sconedoer Goes Berko

Immediately before the site was announced, opposition to the whole deal came from a most unexpected quarter - Canterbury Regional Councillor, Sir Kerry Burke. "The business interests of multinational waste disposal companies have intruded into the consideration by local government of the best environmental and economic interests of citizens" (Press, 11/10/99; "Burke claim on landfill lifts hackles"). He described the site selection as "the conclusion of an opaque, rushed and grossly deficient decision-making process..." (ibid). He called for the process to be halted, as the waste committee did not have sufficient information. "There's no need to panic and rush into this. While it is not perfect, we could keep using the Burwood landfill for another 20 to 30 years" (Press, 18/10/99). He then proceeded to hit the Christchurch City Council's rawest nerve with a hammer: "He said the City Council had applied four years ago for resource consent to continue using Burwood. When Waste Management Ltd lodged an objection, the Council did a deal with it, requiring withdrawal of the consent application, forgoing competitive tendering, and setting up a `hybrid' company of Canterbury local authorities and private firms, Waste Management Ltd and Envirowaste Services Ltd" (Press, 11/10/99). Which is exactly what CAFCA has been saying all along.

Sir Kerry Burke has a rather more high flying background than your average regional councillor. An MP in two electorates (Rangiora and the West Coast) during Labour governments of the 1970s and 80s, he rose to Speaker of Parliament and a knighthood during the later of them. He has spent most of the 1990s working for international agencies in Vienna (which he describes as having Europe's finest and most efficient rubbish incinerator. He wants incineration to be given more serious consideration for Christchurch's rubbish). He returned to Christchurch in 1998 to (unsuccessfully) seek nomination to be Christchurch 2021's Mayoral candidate, and then run for the Regional Council. All of this gives his opinions some weight - the Press gave his first statement the front page lead, even pulling a photo of Jonah Lomu in full cry at the World Cup to make way for it. And the paper editorialised: "Sir Kerry's claim that the interests of multinational waste-disposal companies intrude on the decision-making has not been adequately countered. He implies that local government's consideration of what environmental and economic outcome best serves the public is compromised. Many people will agree" (14/10/99: "Rubbishing the landfill").

Such sentiments coming from Burke were unexpected. Throughout 1998 and into 1999 CAFCA had lobbied City Councillors and candidates for the Council at the 1998 local body elections. Apart from the new Mayor, Garry Moore, no Councillors replied (see Watchdog 91's coverage of Waste Management for Moore's letter to us. Ed.). We concentrated on the City Council because the landfill is its project. The Regional Council will only get involved at the resource consents stage. So we only lobbied a couple of regional councillors - Sir Kerry Burke wasn't one of them. Which made his very public opposition to the whole project so welcome.

Well, Burke made Cr O'Rourke go berko (despite the fact that they're both Labour/Christchurch 2021 councillors). "The implication that we did a deal (with Waste Management) because of their appeal against the consent is absolute rubbish. The implication of blackmail is absolutely wrong. If they had not come out on top, they would not have been chosen" (Press, 11/10/99). Furthermore, O'Rourke said that Burke's claims were "`totally wrong' and were further evidence that the Regional Council should be abolished" (ibid). Burke was unfazed and reiterated all his claims, including that the City Council had been "heavied" by Waste Management. A city councillor calling for the abolition of the Regional Council because one of its members opposes the city councillor's pet project has major constitutional implications, and also tells us rather a lot about the city councillor. For our part, CAFCA publicly backed Sir Kerry:

"He hit the nail on the head by saying that Waste Management "heavied" the Christchurch City Council in 1995 by legally objecting to the extension of the Burwood landfill and subsequently securing an agreement that it would be part of a joint venture to run the new landfill. Four years ago, leading City Councillors very emphatically rejected this clumsy approach. Cr David Close said then it was "inappropriate for a private investor to be `making the running' over the city's future landfill needs" (Press, 16/3/95). The now Mayor, Cr Garry Moore said: "I believe that we are being subjected to the threat of litigation to get a commercial advantage. Anyone who threatens a city council with that should be told to go to hell" (Christchurch Star, 22/3/95). What happened to change their minds?

"Waste Management's American parent company has a spectacular record of transgressions in the US. As recently as July 1999, leading executives and directors were the subject of allegations of insider trading and securities fraud. Between 1980 and 1992, it paid more than $US80 million in fines, penalties and settlements in criminal and civil cases in the US. In a more recent court case (December 1996) a federal judge in Tennessee ordered it to pay more than $US90 million. He said: "...fraud, misrepresentation and dishonesty apparently became part of the operating culture of the Defendant company". American local governments are very wary of it: in 1992 the San Diego District Attorney concluded: "...the company's history requires extreme caution by the San Diego County Board of Supervisors or any other governmental entity contemplating any contractual or business relationship with Waste Management..." It has fallen foul of the "Good Character" laws of some American states, giving them the right to refuse licences and permits to companies that have a history of violating the law. When Indiana refused a permit to a subsidiary, a legal official remarked that the state "would have to grant a permit to Satan before they could grant a permit to this outfit" (Indianapolis Star, 14/6/97).

"Sir Kerry Burke has performed an invaluable public service by raising major concerns about the relationship between the City Council and Waste Management. CAFCA urges the Council, and other Canterbury local bodies, to cut all ties with this disreputable transnational before it is too late" (18/10/99; press release; "Dump Waste Management").

OIC Satisfied As To Waste Management's "Good Character"

In the US, the greed of Waste Management executives and directors has sparked allegations of insider share trading. The New York Times (10/7/99) reported:

"Executives of Waste Management Inc. sold $US57.6 million of company stock in May, eight weeks before the company said it would miss earnings forecasts, setting off a 37% decline in its share price. Rodney Proto, Waste Management's president and chief operating officer, sold stock worth $US16.6 million, according to the Washington Service, which tracks executive buying and selling. 14 other executives, including the chief financial officer, Earl Defrates, also either sold or filed to sell shares in May.

"Executives sold most of their shares at prices between $US54 and $US56. After the market closed on Tuesday, the company said an unexpected $US250 million sales shortfall would cause it to miss earnings expectations for the second quarter and for 1999. The stock sank to $US34 on Wednesday in its biggest one-day drop ever..."

This, in turn, has sparked a securities fraud class action lawsuit, filed in Houston, Texas, on behalf of all purchasers of all Waste Management securities between 31/3/99 and 6/7/99. "This lawsuit alleges that, during the Class Period, certain officers and directors of WMI issued false statements which caused the price of Waste Management common stock to trade at artificially inflated prices...." Further, the lawsuit alleges that senior named officers and/or directors of WMI sold shares of their stock before the revelations of July 6, 1999 occurred and Waste Management stock collapsed.

"After these sales were made, however, WMI issued a press release revealing that sales in the June/99 revenues would be $US250,000,000 below forecast and the growth in future quarters would be much lower than previously forecast. This lawsuit has been filed by lawyers with substantial experience in representing investors in securities fraud class action lawsuits such as this..." (Whittington, von Sternberg, Emerson & Wilsher, press release, Business Wire, 8/7/99).

Following recent amendments to foreign investment legislation, about the only legal criterion left now for possibly (and we emphasise that word) declining an application from a foreign investor is that the persons owning it or exercising control over it are not of "good character". So we wrote to the Overseas Investment Commission (OIC), in July 1999, enclosing the above material:

"Waste Management of the USA is the parent of Waste Management NZ. The American parent has run up a most impressive record in all manner of legal jurisdictions across the entire US. That is the company as a corporate body. But it is instructive to consider that, in a December 1996 ruling, a Tennessee federal judge ordered it to pay more than $US90 million in damages and said: "...fraud, misrepresentation and dishonesty apparently became part of the operating culture of the Defendant company". This gives some idea of the American judiciary's view of Waste Management, the corporation, and this must reflect directly on the character of those who head it.

"We draw your attention to the enclosed material. It is current; it comes from impeccable US sources (including the New York Times); it involves named individuals - very senior current executives and directors - who are demonstrably owning and/or controlling Waste Management (and hence WMNZ); and it involves them being accused of very serious matters, namely insider trading and/or securities fraud. The material from the law firm shows that the matter is being taken very seriously indeed.

"That being the case, we believe the Commission is obliged to reconsider its acceptance that those exercising control over Waste Management are of "good character", which is a necessary condition of this transnational corporation being allowed to acquire assets in New Zealand..."

But the OIC was having none of it. Stephen Dawe, Secretary and Chief Executive Officer, replied: "I believe it does not raise any reasons for the OIC to reconsider our acceptance that the persons exercising control over WMNZ are of good character. The material forwarded contains nothing but allegations and a request for parties to join taking civil action against Waste Management in the USA. These `greenmail' civil actions are common in the USA. They involve a law firm inviting people to become plaintiffs against companies - with the most likely beneficiary of the legal action being the law firm, who is normally on a percentage retainer.

"Accordingly, we will not be taking the matter any further at this stage. However, if you can provide us with more definitive evidence of matters relating to the good character of the persons exercising control over WMNZ we would be willing to look at that material" (e-mail; 6/9/99).

We thought the Press might be interested in this, and passed on the material. A story was duly written but never published - because of concerns about defamation. The fact that the source was the capitalist Bible, the New York Times, cut no ice. A pity - it was a good story. For the record, here is an extract from that unpublished story: "WMNZ managing director, Kim Ellis, said the New Zealand subsidiary was fortunate to be the only partially owned entity in the WMI group and remained `fiercely independent' of its US parent, with which it had only limited dealings. `If there has been insider trading, then it would be embarrassing to be associated with any shareholders indicted in the courts, but that's not yet the case', Mr Ellis said. Mr Ellis, who has a `modest number of options' in WMI, said he did not take CAFCA's calls seriously. `We see CAFCA as adding a bit of a light touch to the industry', he said. `We are always entertained by their utterances'". Pleased that we can be of service.

Those dealings between WMNZ and its American parent may become even more limited in future, as it was announced, in August 1999, that the parent may sell part or all of its international assets (specifically "non-strategic and underperforming" ones). So there is a possibility that WMNZ, which made a $5.4 million profit in the June 1999 half year, will be flicked on to some other garbage TNC.

That remains only in the realm of possibility. The reality is that the world's biggest garbage TNC and certainly one of the world's nastiest TNCs, bar none, is becoming more and entrenched throughout New Zealand as local bodies succumb to the ideological and corporate pressure to hand over their assets and utilities to TNCs, or go into partnership with them. But the heartening thing is that everywhere Waste Management goes local people rise up against it. This TNC is the one destined for the dump.

We have two videos on Waste Management: "Titans Of Trash", the excellent 1991 Australian TV documentary ; and the May 1999 TVNZ Assignment programme, "A Dirty Business", about landfills and Waste Management. Both are available for hire. Each costs $10, including postage, for one week. Make cheques to CAFCA.