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EPA rejects claims its charges to Chatham Rock Phosphate were unreasonable

Tuesday 28th March 2017

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The Environmental Protection Authority rejected claims by Chatham Rock Phosphate that costs incurred during a 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. On Monday, 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. Of the total amount, about $800,000 has not yet been paid. 
 
 
Andrew Beck, representing the EPA, today told the court that the EPA had already reviewed the costs at the request of CRP and had issued a credit note for several items that had not been appropriately charged. Among other things, he made reference to an erroneous $10,000 goods and services tax charge. 
 
 
Regarding other specific charges that CRP has objected to such as around $92,000 spent on a half-day hearing in the Chatham Islands, Beck said it is important to bear in mind that the judicial review is concerned with the lawfulness of the charges rather than the merits of the decision that led to those charges being incurred.
 
 
"The onus rests on CRP to establish they were unlawful," he said and disputed the claim that the costs incurred in that hearing or in other areas such as rental vehicles, furniture rental or staff billing were unlawful. 
 
 
In terms of CRP's view that some of the costs should have been met by a parliamentary appropriation, specifically earmarked for marine consent processes in the 2014/15 year, Beck said the argument is "fundamentally flawed" as any appropriation is for activities that are of "public benefit" and "there is never any intention to seek an appropriation for a private benefit." He also noted that while there may have been $10 million in funds available, the funds are for a range of EPA functions, not just for marine consents. 
 
 
The judge-alone hearing before Justice Karen Clark is expected to be wrapped up late Tuesday. 

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