Chatham Rock Phosphate says EPA charges unreasonable

Monday 27 March 2017 02:44 PM

Chatham Rock Phosphate says EPA charges unreasonable

By Rebecca Howard

March 27 (BusinessDesk) - Chatham Rock Phosphate argued in the High Court that a bill from Environmental Protection Authority for costs incurred during its marine consent hearing in 2015 were unreasonable and should have been partly met by funds available to the Crown entity.

In 2015, an EPA-appointed decision-making committee turned down CRP’s application to mine phosphate nodules - a source of an essential ingredient of manufactured fertiliser - on a remote section of the Chatham Rise in New Zealand’s Exclusive Economic Zone, the vast offshore area that has been subject to an environmental consenting regime only since 2012. Over the course of the process it invoiced Chatham Rock Phosphate for $2.7 million for costs incurred.

The EPA issued monthly invoices, which were paid until December 2014. John Shackleton, representing CRP, told the High Court in Wellington any charges must be lawful and the costs must be "actual and reasonable." He said CRP stopped paying after it questioned the size of some of the invoices and alleged there was a lack of detail. In response to a question from Justice Karen Clark, he said the EPA had provided initial estimates, but in some cases the invoices were double the size of the estimate. Of the total amount, about $800,000 has not yet been paid.

In this latest round to go before the Court, Shackleton said CRP has identified several costs it considered to be "unreasonable," including about $92,000 spent on a half-day hearing in the Chatham Islands. It would have been far cheaper and more efficient to fly the submitters to Wellington, he said.

Shackleton said a review of the EPA's charging decisions had questioned "certain lawfulness" of at least some of the charges. Among other things, he said the charges did not comply with existing regulation, something that must be considered an "error of law."

According to Shackleton, some of the costs should have been met by a parliamentary appropriation, specifically earmarked for marine consent processes in the 2014-15 year, and are therefore unlawful. He said the EPA's argument that Cabinet papers indicate its costs were to be recovered in full from the applicant and that no appropriation was intended to be made by parliament to cover costs incurred in marine consent applications is invalid as the regulation trumps the Cabinet papers and indicates otherwise.

The EPA is expected to make its submission later today or Tuesday. The hearing is expected to be wrapped up late Tuesday.

In March the company announced that Chatham Rock Phosphate Ltd - formally Antipodes Gold - completed the acquisition of the remaining 7 percent of the issued shares of Chatham Rock Phosphate. The “new” Chatham Rock Phosphate is listed in both New Zealand and Canada, with its primary listing being on the TSXV in Canada. According to its website, it last traded at 50 Canadian cents and 55 New Zealand cents.

The company is also still studying the possibility of resubmitting its application to mine phosphate nodules but "there’s still a huge amount to do for a second application" managing director Chris Castle said in a March update to shareholders.

(BusinessDesk)

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