News
Taking water during a ban leads to an expensive lesson
First published in New Zealand Winegrower magazine, June/July 2010 (vol 13 issue 6).
Morton Estate Wines Ltd were recently imposed a hefty fine of $50,000 for taking water at a volume which breached conditions of its resource consent and for taking water during a period where the Hawkes Bay Regional Council had imposed a water take ban because the Ngaruroro River was less than a specified flow (Hawkes Bay Regional Council v Morton Estate Wines Ltd, DC, Hastings, March 2010). Councils can impose such bans when there is a serious temporary shortage of water in its region but they cannot last for more than 14 days, and may then be renewed.
This is a timely reminder that vineyards should make provision for dealing with dry periods by storing water. This example also serves as a warning to others that in times of scarce water resources that the Court may impose significant fines and the risk should not be underestimated. The most a company can be fined under the Resource Management Act is $600,000 or up to $10,000 per day for a continuing offence.
There are several matters which are relevant to determining the severity of a sentence in these circumstances. It depends on the nature of the environment affected, the extent of the damage, the deliberateness of the offence, the extent of the attempt to comply and the profits realised from the offending activity.
In relation to the breaches by Morton Estate the Court noted that the main aggravating factor was that the company deliberately and consciously breached the ban and conditions of consent. The breach did not arise out of carelessness or the failure of systems. The respective managers had been expressly informed that the ban was in place and had requested a dispensation from the Council as the young vines were vulnerable to stress from lack of water. This request was denied by the Council as they do not have the power to provide a dispensation for compliance with the Act. Despite this the managers continued to take water and took the risk that a sanction would be imposed. The Court emphasised that the penalty imposed should have a significant deterrent quality.
Other factors which favoured imposing a large fine included the need to protect the river and aquatic environment from unauthorised takes. It was also important to protect those who legitimately took water from the river for agricultural and horticultural purposes. The Court noted there had been no attempts to comply with the requirements and that the company had been motivated by profit. One mitigating factor was the fact the company had pleaded guilty and accepted responsibility for its actions. This resulted in a 33% reduction in the fine.
The case serves as a reminder that despite water shortages and difficulties in meeting compliance with conditions of consent, the Courts will treat any breach seriously.
