The Environment Minister warns that a good corporate citizen should take responsibility and budget for the remediation of contamination of its site
Mira Norris remembers those times out around Marsden Point, camping on the headland, collecting cockles, scallops and pipi with her grandparents; the smell of the salt water and kai moana and fried bread, and steamed pudding cooking.
The 68-year-old Te Parawhau ki Tai kuia takes her own great-grandchildren out collecting tuatua, nearby, but says the pipi taste like petrol. They can't go around Marsden Point to collect shellfish any more – not since a rahui was imposed on the headland. And with Northland Regional Council having signed off a resource consent for another 35 years, there's little chance she'll ever camp there again.
This year, Channel Infrastructure mothballed its Marsden Point refinery, but it is still using some of the site as an import terminal, where the oil tankers can berth and unload hundreds of thousands of barrels of refined oil. It's then transferred to trucks, or sent down the pipeline to Wiri in south Auckland – but locals fear some of the residues of years of refining have leached into the land and groundwater.
Norris says the sand on nearby beaches has been getting steadily more grey, over the past few decades, though Channel Infrastructure and the local councils deny it's polluted. What they do acknowledge is legacy groundwater contamination – some of it from non-compliant firefighting foam that was used on the site last year – which they are working to reduce.
Mira and Selwyn Norris were among only a few people to make submissions on Northland Regional Council officials' 2020 decision to grant Refining NZ (as it was then) a new resource consent to continue operating on the headland, with no obligation to plan and budget for the land's remediation.
Council officials didn't hold hearings; councillors weren't involved in the decision-making. Few people other than the refinery's immediate neighbours even knew the decision was happening. The September 2020 report shows six locals filed submissions supporting the resource consent; seven opposed it.
With so little scrutiny, there were few people who read the passing mention in a new report attached to the application: it says the company estimated the remediation of the site would cost $300 million if the consent was refused.
Another consultant report, by NZIER in 2017, says: "If the refinery were to close imminently, Refining NZ may be liable for site remediation costs. This report does not make substantive comment on contamination at the site, recognises the historical land use as a refinery and is likely to require remediation of the site. The site remediation cost could be in the order of $300 million, but the present value of that cost declines the further into the future it is deferred."
And in yet another report, consultant Peter Clough says the site remediation costs are estimated at $300m. "Retaining the operation of the Refinery by improving access in the channel could defer these costs for up to 35 years (being the term of the consent sought)."
Mira and Selwyn Norris did read that $300m number. “The bigger picture,” they said in their written submission, “is who pays for future site remediation costs at the refinery? That should be answered before a 35-year consent renewal.”
They asked regional council officials to direct the company to prepare a low-carbon transition strategy and a full harbour restoration plan for Marsden Point oil refinery.
They were unsuccessful. The consent approval only requires the site’s owner to "address" issues including a site remediation plan to ensure site discharges are adequately managed or ceased – in the event that refining, import and distribution activities cease on the site during the term of consent.
These issues include the impact of the groundwater taken on overall aquifer allocation; reducing non-aqueous contaminants in the groundwater, and setting appropriate thresholds for contaminant discharges. But there's little it has to do this year, or next year, or any time in the foreseeable future.
This week Stuart Savill, the council's consents manager, stands by the decision to provide only limited notification under s95 of the Resource Management Act; he says there wasn't sufficient impact on the community to require full notification.
And so too the decision to not require Channel Infrastructure to prepare a site remediation plan and budget. He says Channel is there to stay. "It's never intended to end – they're a publicly listed company with a good reputation. We don't see a risk of them moving on – the terminal's going to be there for a long time, until fossil fuels cease to be of use.
"It's not like Tiwai Point or something."
In April, Channel shut down the refinery – but the oil tankers are still docking at its three jetties; the big tanker trucks are still turning out on to State Highway 1. So the NZX-listed company argues there's not yet any obligation to even make plans to clean up the site.
Who’s liable for the clean-up?
The Government has already been burnt by pump-and-run fuel companies, shutting down and leaving the taxpayer to carry the can for the clean-up.
Australian oil and gas company AWE sold the rights to extract the remaining oil from Taranaki's near-drained Tui fields to a Malaysian-owned company, Tamarind, in 2017. But Tamarind Taranaki ran into debts when a drilling campaign went over budget. It was put into liquidation, its directors returned to Kuala Lumpur and Queensland – and the Government was left to pick up the $400m remediation bill. “This is a situation we never want to be in again,” Energy Minister Megan Woods told a select committee inquiry this year.
The Government has also been in negotiations with Rio Tinto over remediating the Tiwai Point aluminium smelter site, near Bluff. Rio Tinto agreed last year to take over $4m of taxpayer and council costs for getting rid of tonnes of toxic aluminium dross and ouvea premix from Mataura and other sites around Southland. That still leaves uncertainty around a $200m-plus clean-up of more toxic spent cell liner waste.
Environment Minister David Parker also announced nearly $400,000 in last year's Budget to support the clean-up of the contaminated Puhipuhi Mercury Mine site in Northland, the tar well area of the former Gasworks site in Dunedin, and the landfill at the Little Tahiti site in Fiordland.
But there are many more contaminated sites. In Ruakākā, right next door to Marsden Point, locals still bridle at being left to pay for the clean-up of a site where about 800,000 litres of chemicals and 400,000 litres of bund water are stored.
Local councils and the Government have been forced to share the $3m-plus cost, after the site operators failed to comply with an Environment Court order to clean up the site. Sustainable Solvents Group Ltd has now been wound up, though two associated companies remain registered.
"Ratepayers are now financing the cleaning up," says Norris. "We just look at it, and we don't think the refinery is going to do this, but you've got to be prepared, don't you? That's the way that we look at it."
So, should good corporate citizens make plans, and set aside budgets, for eventual land remediation? Parker has a one-word answer to Newsroom's question: "Yes."
He adds: "As the polluter of this site, Channel NZ should take responsibility for the remediation of the contamination on the Marsden point site.
"Under the Resource Management Act, and it replacement, central government can assist with, and push for, resolution – as we are at Tiwai Point."
Parker is shepherding through new laws, and says these should improve the way contaminated land is managed. The Natural and Built Environments Act will contain a polluter-pays principle. This liability will initially sit with land owners. But land owners will be able to recover actual and reasonable costs from polluters.
"The responsibility for oversight of consents will remain with local government," he says. "Councils will have strengthened compliance, monitoring and enforcement mechanisms and will be able to require bonds and minimum insurance cover.
"A civil remedy regime will be put in place to allow any issues to be resolved outside court – for example, who is responsible for contamination and the cost of cleaning it up."
Channel won’t budget for ‘hypothetical’ costs
Naomi James is chief executive of Channel Infrastructure; since taking the job in April 2020, she's persuaded the council to extend the site's consent for 35 more years, then shut down the refinery, laid off about 400 workers, rebranded, transformed the business into an import terminal – and published the company's first sustainability report.
It was that report that inadvertently drew attention to the question of site remediation – by its complete failure to even mention any remediation plan, or budget. All it said was: "Our environmental management systems include monitoring of our discharges to air and water, soil and groundwater management, awareness and permit to work controls, as well as cleaning and remediation of all leaks or spillage."
James says the company has a good understanding of the condition of its site, through the consenting process, and through extensive preparations for converting from refinery to terminal operations.
Under the consent conditions, she tells Newsroom, Channel does have plans to actively monitor the site to ensure there is no contamination that poses a risk, and to manage and remediate the known legacy contamination that exists. That's the contaminated groundwater she's talking about.
"All of this is funded within our balance sheet and as part of our ongoing costs of operation, and is in addition to our conversion project costs."
But the company says the $300m figure that it submitted with its resource consent application, just two years ago, is out of date. So what's the updated number? The company says it doesn't have one. It's not vacating the site, so it won't discuss "hypotheticals".
Channel Infrastructure’s annual accounts have not provisioned for any remediation of the land involving removal of toxins – it's just meeting its consent condition to mitigate the flow of contaminants into surrounding groundwaters and the sea.
It has provisioned $69m for the refinery plant's demolition and restoration, 10 years into the future, but it's unclear what exactly restoration covers – certainly, it doesn't come close to site “remediation”. It has also provisioned for the plant's $83 m for shutdown and decommissioning.
"We are currently undertaking work to permanently decommission the refinery to make it safe and ready for demolition and removal at a future date, which is also provided for in our balance sheet," James says. "Following the closure of the refinery and as our ongoing groundwater remediation work continues in coming years, we expect legacy groundwater contamination will reduce significantly. "Our Marsden Point site is zoned for industrial use, and like the sites surrounding us such as Northport, is heavy industrial. All of our activities on site are consistent with the terms and conditions of our resource consent and we have consents in place for the future development of our Maranga Ra solar project on adjacent land.
"We are committed to operating at Marsden Point long-term, and as future plans for the site develop, including future fuels opportunities such as biofuels and hydrogen, we will continue to assess our environment management plans and work with regional authorities and our iwi partners, to ensure we continue to operate in an environmentally responsible manner."
