CRP Update Report 22 August
CRP Update Report 22 August
EPA staff report raises questions
The issuing of a staff report by the Environmental Protection Authority earlier this week was unfortunate and concerning for a number of reasons.
Though it - in the wider context - is most likely to end up being peripheral noise we remain disturbed about the circumstances of how a report of such dubious quality was issued.
While we were aware that the EPA intended to issue a report on 18 August, it was frustrating and inconvenient the report was issued without considering all relevant information and where we also believe it fails to show appropriate balance.
Its negative view on our application is poorly informed, inaccurate and fails to take account of a huge swathe of additional information we have either recently provided, or are in the process of providing.
There are countless errors throughout its 175 pages. One of the more blatant shows a photograph of a dredging mechanism that bears no resemblance to what we have planned to use from the outset. A second more concerning example is where, despite the EPA’s own expert witnesses saying there are no concerns about our proposals in various areas the report still comes down heavily with expressions of supposed “uncertainty”.
It is what we have come to expect from poorly informed critics or those deliberately distorting our proposals. But such efforts are not what we expect, or deserve from objective and professionally trained public servants.
We are concerned the report was not independently peer reviewed and that it was not accompanied by suitable explanations of its role in the marine consent process prior to its unfortunate release.
However all that aside, ultimately it is only one input into the decision-making process and one we believe will be of marginal relevance as we progress because we believe its quality and content speaks for itself.
Report timing another concern
We have also discussed the timing of the release with the EPA. We were aware of the date of the report issue but unhappy about its proposed timing. Unfortunately the EPA was determined to release its report despite this.
We were especially concerned a 175-page report was posted on the EPA website in the middle of NZX trading without any context to explain its relevance to the Marine Consent process and without CRP being given an opportunity to be in a position to advise our shareholders and potential investors.
To its credit the EPA issued a clarification regarding the purpose of the staff report, but unfortunately considerable damage had by then been caused.
It has to be said we remain puzzled about the report’s value as an input into the Decision Making Committee’s process, and why it needed to contain any conclusions or recommendations given that it had not taken account of all of the relevant information.
In addition, the views of staff cannot be tested through the Marine Consent process, because they do not give evidence. Given it is both premature and inaccurate we seriously question how it can serve that purpose and we will encourage the DMC to focus instead on the evidence presented to it.
Share price impact
Not surprisingly, some shareholders were spooked by the report (and the ensuing media coverage which of necessity was produced within a very short time), which resulted in the share price being punished. At one stage it fell to as low as 8c before recovering to around 14c. The price fall was on small volumes and we think it will recover over time.
Marine Consent process
That said, we’ve always expected the Marine Consent process would be a roller coaster in terms of our being in the limelight and people continuing to make uninformed or critical comments about the project, or cherry pick information and take it out of context.
We will keep our shareholders closely informed through these Updates to provide broader context to our regular more formal announcements. Please contact us if you have any questions, concerns, comments or ideas!
With that in mind we thought it would be helpful to provide a bit more detail about how the Marine Consent process works.
The first stage involved submitting the formal application in May after three years of intensive scientific research and widespread consultation with interested parties. After that there was a period of public submissions, completed in July, and three requests from the EPA for further information – answers to the last remaining responses are being finalised next week.
Next month we start caucusing between experts to resolve differing views on scientific evidence. After that there will be up to two months of hearings following which the DMC will form its own view and make a decision before Christmas.
It should be noted DMCs in other EPA projects have chosen not to follow staff “advice”. They are, after all, an independent body, tasked with evaluating evidence, not simply rubber-stamping the incomplete views of staff.
Since June the EPA has asked a total of 62 questions on three separate occasions, some of which have required considerable additional research or consideration. That was why we decided to extend the time frame for this part of the process by a couple of weeks because we consider that this new information is important and will address actual or perceived uncertainties. We expect it will save time later on because it should resolve a number of the concerns raised.
We remain very confident
Our view remains unchanged on our expectations of success in gaining the Marine Consent. All that has happened is that some staff at the EPA have delivered a premature and incomplete report which we encourage everyone to ignore.
Interestingly a number of shareholders have said the actions are the equivalent of the staff in a court of law publicly stating their view on the outcome of a trial before it has begun. The point here is it is of little overall relevance to the outcome, as well as being unhelpful to the process.