Request for Ministerial Review of QLDC governance of Queenstown Airport Corporation

We Love Wakatipu Inc commentary, 13 July, 2021

We Love Wakatipu Inc has asked Local Government Minister Nanaia Mahuta to review our council’s governance of Queenstown Airport Corporation.  This comes after three years of pointing out fundamental mistruths in executive team agenda items and resultant flaws in Council’s decision-making process that subvert democracy and community well-being – QLDC’s two legally mandated purposes.

We appended to our letter our official letter of complaint to council CEO Mike Theelen and consequent email communications with our councillors. Plus the email sent to councillors to remind them that legally – quoting senior counsel for both QLDC and QAC speaking in High Court last November – they have “total control” of QAC through the statement of intent.

Unfortunately, to date, they have not been willing to use this to do what nine of the 11 promised on the election hustings – to oppose the expansion of Queenstown Airport’s air noise boundaries.


July 13, 2021.

Kia ora Minister,

I write regarding an official complaint I made recently about Queenstown Lakes District Council’s continued misleading statements as to the purpose of local government in agenda items regarding Queenstown Airport Corporation’s statement of intent (SOI).  I request a ministerial review of the council’s poor governance of its CCTO, which subverts the legislation’s intent, community well-being and our rights to democratic decision-making and actions.

Appended you will find my complaint and the responses of council CEO Mike Theelen and two councillors.

You will note that Mr Theelen acknowledged this mistake this year (a first) but responded that this did not really matter because the argument still stood.  In his mind, it seems, the purpose of providing cost-effective infrastructure (to meet airline demands) translates directly into promoting well-being and enabling democracy.

An official complaint has also separately been made about Mr Theelen’s repeated claim that the council must agree to the SOI for QAC to be compliant. This is also untrue – QAC is compliant as long as the SOI is delivered by June 30. Which it was.

These two false claims (and others, but these are the two most egregious) have been repeated in Mr Theelen’s SOI agenda items since the change in purpose under the Local Government Act in May 2019, despite this being pointed out each time by myself and others.

Together, these two mistruths enable the executive team to falsely tell councillors they must agree under pressure to the SOI (the council meeting is held 1 to 2 days prior to the supposed July 1 deadline) and that growth of dividend, shareholders’ value and capacity to meet airline demand are the purposes they must meet. 

None of these purposes is a mandated purpose of QLDC, nor of the CCTO it purportedly controls, under the LGA or any other legislation.

This false narrative encourages councillors to ignore their two actual purposes under the LGA. Democracy is not enabled nor well-being promoted by the statements of intent thus passed.  The air noise boundary (ANB) expansion that each SOI has enabled planning of has been strongly and consistently opposed by the community since it was mooted in 2018. This has been ignored by our elected representatives each time, despite election season promises to the contrary.

I also append an email sent to councillors late last year, in the wake of arguments given by both their and QAC legal counsel to the High Court judge (who subsequently overturned QLDC’s illegal lease of Wanaka Airport to QAC) that the council has “total control” over QAC through its SOI.  This LGA mandate has been denied both in agenda items and verbally by Mayor Jim Boult and his executive team for the past three years and was again given no credence this year.

Briefly, other incursions of the proper process with regard to QLDC governance of QAC include:

  • Prior to the 2019 mayoral election, four Chamber of Commerce members warned Mr Boult he would lose the election unless he responded to the community’s opposition to the expansion of Queenstown Airport’s ANB. At the start of the council meeting several days later, he unilaterally announced council would commission an independent socio-economic impact report of different airport growth scenarios. Councillors were informed of this announcement by email the night before; no opportunity for input was given. He assured the voting public that councillors’ decisions would be guided post-election by the report’s findings.
  • However, full council has never discussed the resultant MartinJenkins report nor agreed on how their decisions should reflect it. Nor have SOI agenda items.
  • The report itself was fundamentally flawed. Many of these flaws seemed designed to skew the results in favour of ANB expansion. These included the banning of discussion about potential closure of ZQN in favour of a new airport elsewhere and alternate urban use of this land, or the opportunity cost of not doing so.
  • Despite these flaws, the MartinJenkins report repeated the strong public feedback of the initial 2018 QAC consultation, in which 92.5% of over 1500 responses opposed ANB expansion. Despite not being allowed to discuss potential benefits of a Tarrras area airport freeing up Queenstown Airport land, a third international airport in this location was the preferred option.
  • Bullying and silencing of councillors who dare to question or speak up against the leadership team’s narrative about the need for untrammelled airport growth and dismissal of community concerns about the downstream ramifications of this. (E.G. the executive team tells councillors 92.5% opposition is just 3% of the population.)
  • Over the past three years, there has not been one meeting or workshop of councillors to discuss and agree on the strategic objectives QAC, a council-controlled trading organisation, must achieve through their statement of intent.  Meeting such objectives – both financial and non-financial – is the purpose of a CCTO under the LGA.
  • The Wanaka Airport lease to QAC was overturned as illegal by High Court judge Gerard van Bohemen because of poor process and inadequate consultation. Defending council’s actions in court cost ratepayers over $300,000. The case was taken by Wanaka Stakeholders Group, at their own cost.
  • This lease was unanimously signed off by councillors last term, despite the fact only the negotiating team of the mayor, two councillors and CEO had seen it. This lease included passing responsibility and cost for moving Project Pure, Council’s sewage treatment scheme, to Council should QAC want to expand the airport over this land. When this raised controversy, council quietly moved it to the 10-year plan as a council project to future-proof the airport, despite questions over its necessity now.
  • A joint QAC/QLDC steering group was formed last year to guide and supposedly better inform the SOI process. The resultant effect was that councillors outside this small group lost visibility of the process and had little input to SOI’s over the past two years.
  • This steering group did not even meet after the High Court overturned the Wanaka Airport lease. This obviously had a significant impact on the SOI, previously based on QAC’s “dual airport” strategy, as Wanaka airport is no longer their asset to control.
  • This year’s Statement of Expectation for the SOI was written by CEO Mike Theelen, with no sign off by councillors, who were not unanimous in their acceptance of it.
  • Under the new SOI, QAC’s strategic 10-year plan will be guided by the Spatial Plan and Frankton master plan. Again, discussion of any alternative use of the airport land was forbidden during the community consultation phase of these plans.  Both plans were explicitly based on the fundamental premise of continued and expanded use of Wakatipu’s flattest, largest, most geotechnically stable and developable block of land by New Zealand’s most dangerous airport, in the middle of a hostile community.
  • This new SOI has also largely locked councillors out of both the strategic plan and QAC master plan.  Both will be developed behind boardroom doors, out of visibility of both council and community.  This retracts the council sign off of the masterplan won during the last SOI process. (I append relevant High Court judge comments.)
  • This year’s SOI also gave QAC freedom to rewrite their own constitution, with no defined process and no guaranteed council input or strategic direction. The last time the Constitution was rewritten was in the wake of QAC secretly selling 24.99% of ZQN to Auckland International Airport, a fact they announced to councillors (apart from the Mayor, Deputy Mayor and CEO, who knew but had been sworn to secrecy) one hour prior to their public announcement. The 2012 constitution rewrite was done at the behest of and by Council in response.
  • Christchurch International Airport Limited’s Tarras proposal was used to justify greater secrecy through the SOI in the name of commercial sensitivity – including many of the moves above. 
  • Rather than look at possible opportunities for collaboration, more efficient airport infrastructure network, climate change mitigation and use of the ZQN land that might benefit both profit and community well-being, QLDC has agreed to an SOI that looks at this proposal only from the perspective of commercial risk.

This is not an exhaustive list, but it hopefully gives a flavour of the council’s blinkered, improper and inadequate approach to QAC governance.

The repeated and ongoing misstatements in the SOI agenda items suggest incompetence and/or a deliberate attempt to corral councillors into a pro-growth SOI, against the consistent and strong opposition of the community, whose well-being is their mandated responsibility.

How does this happen? Because there is a largely compliant core of councillors led by a dominant and conflicted mayor, who silences, dismisses and puts down councillors and community members who dare to question or dissent.

Mr Boult was CEO of Christchurch International Airport Limited for six years and chair or acting chair for five years, earning just under $3 million in these roles. So you can understand that most councillors might believe they can trust his authoritative statements on airport matters and legislation. Wrongly so.  

It is notable that the mayor of QLDC is also chair of the South Island’s largest tourism company, Wayfare Group. When challenged that this was a conflict-of-interest on votes that would either enable or rein in airport growth, a councillor subcommittee decided it was not because his chairmanship fee was only a small part of his income.

However, they did not address the other two planks of conflict of interest – whether a person has an interest greater than a general member of the public in the outcome of a decision, and whether the public would perceive this to be so. On both these counts, Mayor Boult is strongly conflicted. He is the dominant voice in continuing to allow QAC to plan for ANB expansion through the SOI. And he always supports the mistruths described above.

I raised this conflict-of-interest issue in public forum at a 2019 council meeting. Within half an hour, while the meeting was still ongoing, the council’s PR man had put out a press release denying any such conflict existed. He described the absence of Mr Boult’s Wayfare Group chairmanship on the council’s registry of interests as an administrative slipup.

Mr Boult made the same “administrative slip up” in an interview with Newsroom’s David Williams just prior to the last election. When asked directly about the conflict-of-interest his chairmanship of Real Journeys presented, he said he had resigned from that position. He omitted to mention he was appointed chair of the holding company that includes Real Journeys, Go Orange, Treble Cone, Cardrona and other tourism businesses that same day.

On the basis of the above factors, I urge you to please undertake a ministerial review of QLDC’s governance of Queenstown Airport Corporation. Their practices subvert both the intent of the LGA and the interests of the community, in favour of big tourism business.

You will also no doubt know that Christchurch International Airport Ltd has bought land in Tarras for a new international airport.  We are now confronted with the prospect of three international airports within 75 km of each other – with decisions being made by two siloed CCTO’s with no overall strategic framework in terms of climate change mitigation, cost/carbon efficient nationwide air travel network, best use of valuable land or social licence for tourism.

I have also submitted to the Infrastructure Commission suggesting that there should be nationwide coordination of transport infrastructure, and particularly airports, along the lines of Waka Kotahi/NZTA, to better meet the challenges mentioned above. I urge you to support this. Tauranga and Kapiti airports are other examples of this need.

The issues I have raised above clearly show that wise decisions on New Zealand’s airport infrastructure network are beyond the capacity, capability and vision of councillors acting in competitive silos. Nor do they have responsibility, accountability or knowledge for ensuring the most efficient, cost-effective and climate change minimising nationwide network.

In terms of my background, I have been a journalist and community advocate covering issues and politics in Queenstown since 1995. I was a QLDC councillor for nine years, until stepping down four years ago, and an independent RMA Commissioner.

I am chair of We Love Wakatipu Inc, formed to support the community’s fight against the expansion of Queenstown Airport’s air noise boundary, and Catalyst Trust, a group set up to bring informed community debate of public issues and mental stimulation to the Wakatipu. For more depth on the issues described above, please visit the Protect Queenstown/We Love Wakatipu Inc website (see especially ‘latest news’ column) and Facebook pages. Or feel free to contact me directly.

Ngā mihi nui

Cath Gilmour

(Appendix 1 on next page)

Appendix 1

From the High Court judgement of Judge Gerard van Bohemen, in the Wanaka Stakeholders Group case against QLDC on the illegal lease of Wanaka Airport to QAC

(229)  It is clear from the purpose and the provisions of the LGA that major decisions taken by a local authority with respect to its strategic assets must be taken only after a process in which the community has been consulted openly and transparently in accordance with the LGA. QLDC has failed to meet that essential requirement. If the lease is not set aside, the public’s ability to have a say in the future use of the airport over the next 100 plus years will be limited.

(230) While QAC has said it would consult the public as part of the master planning process, it is clear from Mr Keel’s description of that process that the public consultation envisaged is an opportunity to provide feedback on the draft master plan, after the technical work and consideration of options have been completed and a draft masterplan, including preferred options, has been prepared. While it is understandable that QAC would want to consult at the point that it has developed its preferred options, it is also likely that the scope for influencing the proposed decision will be limited, given the investment of time and money that will have already been made in developing the preferred options. Such a consultation will also be at QAC’s discretion and outside of the LGA’s process. I do not consider that to be an appropriate result following a failure by QLDC to comply with the LGA.

ENDS

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