Wellington Scoop
Network

A duty to shareholders, a duty to the city

by Sea Rotmann
We need to state upfront that we do appreciate that Wellington International Airport Limited is a corporation, run by its majority shareholder Infratil, and as such has specific mandates to fulfil for its shareholders.

People who run corporations (i.e. the Board of Directors) have a legal duty to shareholders, and that duty is to make money. That’s of course a problem when one of the Directors is the mayor of the city who declares a ‘conflict of interest’ when asked to meet with severely affected residents – because it seems her primary legal duty is now to the airport, not the city’s residents anymore.

When you are dealing with a corporation whose primary motive and mandate is to make money at all cost, which is 1/3 owned by the City of Wellington and has its mayor as a director, you find yourself in a bit of a conundrum as a lowly citizen-led initiative.

There is the obvious issue that they have a massive pool of resources to draw from, helped by the city gifting them millions of dollars of our money (50% of the resource consent money is paid by the city, though its shareholding is only 33%).

We do not have the PR machine, or self-serving research organisations that will say what the airport wants without doing any proper analysis, and we definitely don’t have access to lawyers as the airport does (they plan to use another $2,500,000 to seek resource consent).

This is how the airport wants to push this runway extension proposal through a fast-track process with the EPA, rather than going through a protracted resource consent process or the Environment Court (but remember what the Save the Basin campaign managed to do against the odds!). This is why they are pushing for a resource consent without first providing a business case. They know that a proper, independently reviewed business case that meets the Treasury’s Better Business Case Framework will never stack up. Should the city spend millions of dollars on a resource consent application, if all the necessary work on a business case that withstands independent review hasn’t been undertaken first?

We are also concerned when various media reports are one-sided and lazily repeat airport claims without thorough fact checking.

WIAL have claimed that at least 80% of Wellington’s 3000-odd strong business community (the ones who are members of the Chamber of Commerce) support the runway extension and see it as the top priority to stimulate economic growth. If you look at the surveys quoted by them, you see that the number is closer to just over 1%. That is a big spin getting from 36 businesses¹, 47 businesses² and 50 businesses³ that mentioned the airport extension to saying that at least 2400 businesses support it. Especially when you take into account that there are almost 26,000 businesses in Wellington.

When you look at the whole business sector, we go from “at least 80% of Wellington’s businesses say they need this” to more like ‘less than 0.002% of Wellington’s businesses actually bothered to name the runway extension as important to their business’.

WIAL is listening to its critics, it seems, as they have been releasing information as part of surveys to a select few, and have provided their first progress update to the council (two years after signing a contract with WCC specifying 3-monthly progress updates).

And sometimes, WIAL is outright mischievous, for example when for weeks it stalled a DomPost article on the long-standing lack of consultation with affected residents, in order to wait until after a board meeting that signed off a compensation package (something they initially claimed to have never considered) so they could dispute the article’s main points. The affected residents are really concerned about WIAL portraying itself as ‘working closely with Moa Point Road residents’, and even saying “we’ve made a huge effort to have these meetings and to make sure that dialogue goes both ways.” The residents dispute this – they have been asking for meetings, not the other way around, and when they met it wasn’t in the spirit of neighbourly partnership. Instead, WIAL informed them about the work they’d undertaken so far and that the extension was practically ‘a done deal’. Instead of real engagement it was just corporate PR. Next thing the residents heard (instead of the meeting minutes and a copy of the presentation that were promised and asked for) was that there would be a ‘compensation package’.

There are many examples where the airport has the upper hand pushing its one-sided spin and this dubious extension proposal way further than it should have gone. The runway extension proposal has been studied, several times, in detail over the last four decades and was always discarded as too difficult/expensive/unnecessary. The airport itself does not want to pay for it as it admits it isn’t economic, yet it does what it can to fulfil its legal mandate to its shareholders, which is to get the public to pay for this proposal which will increase their asset base and enable them to charge more (and sell the airport when it’s finished?). As the New Zealand Airline Pilots’ Association’s – who are suing the airport for safety concerns in the High Court – technical director David Reynolds so aptly said:

“The airport essentially is building the runway to make more money.”

In summary, we are very unhappy about our Council gifting the airport our money to undertake what has so far been a one-sided, economic impact statement which credible commentators have raised serious concerns about (and which cost $75,000). We need the Council to insist on WIAL completing a comprehensive, robust business case including a credible cost-benefit analysis first. We want to know why councillors are attacking critics in the media rather than assessing the legitimate questions they raise. And why are they insisting that the ‘numbers are sound’ when they clearly aren’t? Why do we have a mayor on the Board of Directors who has no problem going to residents’ meetings expounding the dubious benefits of this proposal but refuses to meet residents who are seeking to be properly involved in the process, citing a ‘conflict of interest’?

It does feel a lot like David vs Goliath, but it’s worth reminding ourselves that the council’s mandate must continue to lie in protecting its ratepayers, citizens and special places, not in ensuring that a major corporate makes more money at all cost. We hope to engage as many residents as possible in this uneven fight.

Dr Rotmann is co-chair of the Guardians of the Bays.

1. Chamber of Commerce survey shown in Infratil Sept 2014 newsletter
2. 2013 Nielsen survey
3. 2014 Nielsen survey

2 comments:

  1. Chris, 25. August 2015, 14:54

    The airport is the largest “petrol” station in the area, and a major source of carbon emissions. If the mayor and councilors represented public interest, and young people especially, they would immediately divest the airport shares.

     
  2. colin kelly, 25. August 2015, 15:16

    The insane thing is wanting this to go ahead, when even Christchurch Airport, which has the capacity now (at the end of the Islands for visitors, ie come in Auck, go out Chch)) cannot fill enough long hauls to have any significance. No tourist wants to arrive long haul in the middle of a long country. Businesspeople want several choices a day. International students come from too disperse sources to fill long hauls. Get over this dream, I say! There is no viable business model. This is “cargo cult thinking! ( Excuse the pun) “Build it and they will come” Well the long haul interest may not come, and the airlines keep saying that!