Fonterra Co-Operative Group Ltd v Manawatu-Wanganui Regional Council

• Jurisdiction: New Zealand
• Judge: B P Dwyer,D J Bunting,I M Buchanan
• Judgment Date: 11 September 2013
• Neutral Citation: [2013] NZEnvC 250
• Docket Number: ENV-2012-WLG-000090
• Court: Environment Court
• Date: 11 September 2013

In The Matter of appeals pursuant to s 120 of the Resource Management Act 1991

Between

Fonterra Co-Operative Group Limited

Applicant/Appellant

and

R W Gillespie

Appellant

and

Mana Watu-Wanganui Regional Council

Respondent

[2013] NZEnvC 250

Court:

Environment Judge B P Dwyer, Environment Commissioner D J Bunting Environment Commissioner I M Buchanan

ENV-2012-WLG-000090

ENV-2012-WLG-000092

BEFORE THE ENVIRONMENT COURT

Appeals in relation to four resource consents granted by Manawatu-Wanganui Regional Council allowing discharge of waste products into the Mangatainoka River — Fonterra also sought continuation of its permit allowing it to discharge condensate into the River via a tributary known as the Mangamutu Stream until such time as a new cooling tower and pipes to enable discharge directly into the River had been completed — common ground that the discharge was causing significant adverse effects on the Stream itself — discharge was prohibited activity but r6 purported to reserve a discretion to the council to decide if any given proposal was exempt — whether rule was ultra vires — whether there was jurisdiction to extend the deadline for cessation of discharge — whether was appropriate that discharge be continued in the short term — whether the resource consents were appropriate.

Counsel/Appearances:

B S Carruthers for Fonterra Co-Operative Group Limited

R W Gillespie in person

N Jessen for Manawatu-Wanganui Regional Council

Decision Issued:

• A: Fonterra appeal as to conditions upheld.

• B: Gillespie appeal against grant of consent declined.

• C: Costs reserved.

DECISION

Introduction

1 On 8 August 2012, Manawatu-Wanganui Regional Council (the Council) granted Fonterra Co-Operative Group Limited (Fonterra) four resource consents allowing the discharge of waste products from Fonterra's Mangamutu milk processing factory near Palliatila.

2 The consents granted were:

These consents allow Fonterra to continue discharges which it has undertaken for a number of years, albeit on a revised and (Fonterra contends) improved basis.

• • Discharge Permit No. 104660: To discharge up to 2,250m ³ /day of milk processing condensate to the Mangamutu Stream (a tributary of the Mangatainoka River) until a pipeline and outfall structure are constructed and, once the pipeline is available, to discharge up to 2,250m ³/day of condensate directly to the Mangatainoka River (for a term expiring on 8 ^th August 2030) subject to conditions;

• • Land Use Consent No. 104661: To place, use and maintain an outfall structure on the bed of the Mangatainoka River (for a term expiring on 8 ^th August 2030) subject to conditions;

• • Discharge Permit No. 106045: To discharge milk processing condensate, by irrigation, onto or into land on properties known as the ‘Tui’, ‘Four Mac's’, ‘Brechin’ and ‘O'Brien Estate’ farms on the Ranfurly, Avery and Pahiatua Roads (for a term expiring on 6 ^th August 2024) subject to conditions; and

• • Discharge Permit No. 106046: To discharge contaminants (aerosols) to air associated with the irrigation of milk processing condensate onto or into land on properties known as the ‘Tui’, ‘Four Mac's’, ‘Brechin’ and ‘O'Brien Estate’ farms on the Ranfurly, Avery and Pahiatua Roads (for a term expiring on 6 ^th August 2024) subject to conditions.

3 Two appeals were filed against the Council decision:

• • R W Gillespie (Mr Gillespie) filed an appeal against the grant of consent;

• • Fonterra filed an appeal against certain of the conditions imposed by the Council's hearings panel on the grant of consent.

4 The Council and the two Appellants were the only parties to the appeal proceedings. In addition to his own appeal, Mr Gillespie filed a s274 notice in respect of the Fonterra appeal.

5 Prior to the appeal hearing, discussions took place between the Council and Fonterra which resolved the appropriate form of conditions insofar as those parties were concerned. These parties provided the Court with a schedule of agreed conditions as between them but Mr Gillespie did not agree to the proposed conditions.

Background

6 Fonterra's processing factory is located approximately 2km west of Pahiatua township. It processes up to 1.4 million litres of milk per day from the Tararua, Wairarapa and Hawkes Bay areas and is the only processing factory on the east side of the lower North Island.

7 The process undertaken at the Pahiatua factory is that of converting milk into whole milk powder. This is undertaken in two process lines (Plant 1 and Plant 2). The site takes milk from early August each year until the end of June the following year, Plant 1 commences operation at the start of each season but ceases operation some time during May each year. Plant 2 comes online approximately one week after Plant 1 and runs until the end of June each year.

8 Conversion of milk into whole milk powder involves two stages of water removal from the milk. First of all, milk solids are concentrated in falling film evaporators to approximately 50% total solids and then a spray dryer is used to remove the remaining moisture. This process condenses the evaporated water to create a product called condensate.

9 Since 1994 Fonterra has held a permit allowing it to discharge condensate into the Mangatainoka River via a tributary known as the Mangamutu Stream 1. This discharge, authorised by Permit 4173, should have expired but remains alive due to operation of s127 RMA pending resolution of these current replacement applications. Fonterra accepts that the discharge of condensate into the Mangamutu Stream has adverse effects on that particular stream which are more than minor and need to be addressed (we will describe those adverse effects in more detail later in this decision).

10 Fonterra proposes to change its operating system for the consents which it now seeks. Those changes involve:

• • The installation of a cooling tower (or equivalent system) to ensure that the condensate temperature does not exceed 35°C at all times;

• • Total removal of the discharge from the Mangamutu Stream;

• • The installation of a new discharge outlet and associated pipeline on the bank of the Mangatainoka River to enable the condensate to be discharged directly to the river;

• • Using existing infrastructure on its nearby farms to irrigate the condensate to land in conjunction with the irrigation of other wastewater produced by the factory. Irrigation will occur primarily during the dry months of January, February and March but also potentially at other times in the year, provided in each case that soil conditions are suitable for such irrigation. We will return to the detail of that further in this decision.

11 Establishing the new processes and systems required to put the above improvements in place requires some time. Accordingly Fonterra seeks continuation of the discharge of up to 2,250m ³ /day of condensate to the Mangamutu Stream until such time as the new cooling tower has been put in place and the structures necessary to enable discharge directly to the Mangatainoka River have been completed. Initially Fonterra sought a 5-year period for this to be undertaken, but during the Council process agreed to a proposed consent condition requiring the outfall to be

constructed no later than 30 April 2014. Due to the uncertainty brought about by these appeals (the Gillespie appeal against consent in particular), Fonterra has been unable to commit to the necessary capital expenditure in sufficient time to enable the 30 April 2014 deadline to be met, but agrees to a new deadline date of 30 November 2014. The Council does not oppose that new deadline

12 In determining the outcome of these appeals we propose to undertake the following process:

• • We will address preliminary legal issues;

• • We will identify and discuss the effects of the existing permitted discharges and the new proposed discharges to water, land and air, having regard to the conditions to which those discharges are subject;

• • We will identify and discuss relevant provisions of various statutory instruments;

• • We will determine whether those parts of the application which require consent as a non-complying activity pass through one the two gateways of sl04D RMA;

• • We will undertake a Part 2 appraisal in conjunction with consideration of ssl04, 105 and 107 RMA.

Preliminary Legal Issues

13 Prior to undertaking our assessment of the merits of the Fonterra proposals we consider the following preliminary legal issues:

• • Prohibited activity Rule 6 of the Manawatu Catchment Water Quality Plan (MCWQ);

• • Whether we have jurisdiction to extend the deadline for cessation of the discharge to Mangamutu Stream from 30 April 2014 to 30 November 2014;

• • Activity status and bundling;

• • The relevance of a local water conservation notice.

Prohibited Activity Rule 6 MCWQ

14 MCWQ is an operative plan in the Region. It is due to be replaced by the posed One Plan (POP) for the Region but that has as yet not occurred although POP is very close to becoming operative. We will address that issue in more detail in our discussion of the relevant statutory instruments. What is important for the purpose of our considerations is that MCWQ contains a rule which is presently operative and which must be addressed in our considerations.

15 The rule in question is MCWQ Rule 6, which relevantly provides as follows:

MCWQ Rule 6 Prohibited discharges to water

Any discharge to surface water in the Manawatu catchment

(c) of any contaminant, or water, which contravenes MCWQ Rule 2, 3, 4 or 5, after 1 January 2009, except discharges granted according to Policy 2 of the Plan

Is a Prohibited Activity

16 It was common ground that the discharge to the Mangamutu Stream would breach the standards referred to in MCWQ Rules 2, 3, 4 or 5 (or at least some of them) and is therefore a prohibited activity on the face of the Rule. It will be seen...