Media Release
16 May 2009, Auckland
For immediate release

Waiheke angry with council “riding roughshod” over democracy and waste

A vocal Waiheke delegation attended the Auckland City Council’s (ACC) City Development Committee meeting (1) on Thursday to challenge the council’s recommendation to give Waiheke’s waste resources to a multinational company.

The Waiheke community is challenging the recommendation's financial soundness, environmental safety and the tender process for the waste contract. (2)

“Our community has a proud history of waste reduction but ACC is riding roughshod over us by brutally ripping our resource away, giving the profits to an international company and completely ignoring local democracy. It doesn’t make any sense in the current recession to move the profits offshore,” said Sue Connor, spokesperson for lobby group Waiheke Does it Better. “Many local jobs will be lost as will ten years of award-winning local innovation. They are taking away our local democracy.”

This week Waiheke Does It Better requested the Office of the Auditor-General to investigate the council regarding the recommendation of Transpacific Industries (TPI). TPI has been recommended over the incumbent locally owned charitable company Clean Stream Waiheke to manage the island’s waste resource.

“In our research we have found many questionable practices by ACC, especially around inaccurate information in reports from last year,” said Ms Connor. “We believe that while the Auditor-General is investigating the city’s footpath debacle it would be efficient for this to likewise be investigated.”

Unusually, Cr Aaron Bhatnagar took out a full page ad in the Gulf News last week advising residents that council will be deciding whether or not to allow Australian company, Transpacific Industries (TPI), to manage the islands waste resource. He also claimed that the TPI contract would save $6million over the life of the contract. This is the difference between TPI price and councils $29m budget for the waste services.

“The price difference between the TPI and the locally-owned solution is not clear because the council just took a ‘snapshot’ of the beginning of the tender and did not take a long-term approach and compare the two tenders on an even playing field,” said Connor.
“We believe that the TPI tender will not remain the cheapest over the whole of life of the proposed contract. That tender is based on transporting everything to the city, even taking our green waste all the way to the processing facility on Puketutu Island in the Manukau Harbour”, said Connor. “The moment that transport costs rise, the costs of this service will escalate, costing ratepayers more. There is a good reason there is policy to prevent this, but in this case the Council is going against its own policy on this tender.”

A recent Ministry for the Environment funded report states that Councils do not recognise, in tender processes, the local generation of wealth through choosing local businesses over multinationals. Research shows that for every $1 spent on a local community business, $1.13 is generated compared with just $0.78 if a multi-national is chosen. (3)

“Essentially, ACC is losing Auckland's economy $0.35 in every ratepayer's dollar it will spend by choosing a wholly foreign owned company over our own community owned business,” said Connor. “Not only that but Waiheke is outperforming the rest of Auckland city in terms of quality, quantity and price of recycling. There is something about this whole process that does not add up.”

TPI are an Australian-owned company whose parent company have suspended their own shares since February from trading on the Australian stock exchange, triggering questions about TPI's financial situation. (4)

Another of the council’s major Australian waste contractors, Visy, have been fined $A36million for acting as a cartel and are currently being investigated in New Zealand by the Commerce Commission regarding similar allegations. Waiheke Does It Better believes the council has a duty to reassure Auckland's ratepayers that there has been due diligence in choosing contractors.

“Waiheke has had great support on this issue from the Auckland Regional Council, Auckland City Vision councillors and we are delighted that Auckland Central's MP, Nikki Kaye stated this week that this decision is inappropriate and should be deferred due to the local governance issues not being finalised,” said Connor. (5)

NOTES TO THE EDITOR:
(1) The City Development Committee is due to make the decision on the tender on Thursday however City Vision Councillors have requested that the decision be deferred until important questions are answered.

(2) The Waiheke lobby group has complained that the whole tender process is flawed from the beginning when the Council relied on Australian consultants reports with significant errors, while Cr Bhatnagar as recently as today told media that the errors are a matter of opinion.

(3) Valuing Recycle Town, Measuring Which Bucket has the Most Leaks.
Community Recycling Network, Kelk G, February 2009.

(4) Australian parent company Transpacific Industries suspended trading on the ASX in February and is negotiating with its banking syndicate.
http://www.delisted.com.au/Company/10478/TRANSPACIFIC%20SPS%20TRUST

(5) Nikki Kaye stated in Waiheke's Gulf News and Marketplace newspapers; a number of people from Waiheke Island have approached me about a report from Auckland City Council that recommends changing local waste contracts to a different company says Auckland Central MP, Nikki Kaye. “Many islanders are upset at the possibility of losing their local operation.'' “Given the current situation regarding Auckland local governance, I think it’s undesirable for the Council to be awarding a contract at this time worth more than $20 million over 10 years. The report is due to be considered shortly and I think it would be prudent for the Council to delay this decision”.

ENDS

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