24 Apr 2015

Swift response sought from port company

4:26 pm on 24 April 2015

Auckland councillors and senior legal advisors will meet on Tuesday, in the latest twist in a standoff with its port company.

Ports of Auckland

Ports of Auckland Photo: RNZ

This follows a Radio New Zealand interview in which the Ports of Auckland chair Graeme Hawkins said the company was standing by its intention to extend two wharves into the harbour.

Mayor Len Brown plans to convey his disappointment to Mr Hawkins about the comments.

The council has been waiting for nearly a month, for a formal response to its request to halt the extensions until a wider port study is carried out.

The mayor said he had now asked for that response by Tuesday, when there would be a closed door meeting involving councillors and senior legal and governance advisors.

Mr Hawkins said the board had seven or eight legal opinions, showing the directors were obliged to act in the best interests of the port company, rather than the best interests of the owner.

Mr Hawkins said it would be his legal duty to resign rather than pause controversial wharf extensions.

He said a formal response could be a week away and politicians were close to crossing a line meant to keep them out of commercial business decisions.

Mr Hawkins said the board had seven or eight legal opinions, showing the directors were obligated to act in the best interests of the port company, rather than the best interests of the owner.

The port company has been considering a council request to halt the $22 million project, to extend two arms of Bledisloe Wharf, for nearly four weeks.

The mayor said he had now asked for that response by Tuesday, when there would be a closed door meeting involving councillors and senior legal and governance advisors.

Mr Hawkins said the board was finalising a detailed business case to quantify the commercial risk of not having the extensions, and of not being able to accommodate increasingly large ships.

However, all of that detail may not be shown to the politicians, whose relationship with the port company is via the council investment agency ACIL.

"The structure we work under is to keep politicians separate from our responsibilities as commercial directors. When we start to mix those two, that's when the problems in the past have occurred," he told Radio New Zealand.

"We're very very close to that edge at the moment."

"It's not an easy issue, but this will send a shudder through other structures around the country, port companies or the like, that depend on a separation between commercial expertise, and the owner."

Ports of Auckland chair Graeme Hawkins.

Ports of Auckland chair Graeme Hawkins. Photo: RNZ / Todd Niall

Mr Hawkins said while the council might own Ports of Auckland, the directors did not have to do what the owner wanted.

"One would be stupid not to listen to what a shareholder is saying, but if you look at the nature of the letters [from the council and ACIL], they are requests, not instructions."

"The law as it stands at the moment - most of my board are now experts, because everyone's lawyered-up, and we have about seven or eight opinions that say the same thing - directors' responsibilities are to the interests of the company, not the shareholder."

He said that would still be the case if the council moved to formally direct that the work be halted.

"We'd have to listen to it, but it puts directors in quite a difficult position about what they believe. They might believe it's in the interests of the company, in which case you'd be smart to say yes. If you thought it was not in the interests of the company, you'd say no."

The council wants the work halted while a year-long study into the future of the port is carried out.

The two sides of the Bledisloe Terminal (foreground) will be built 98 metres further into the harbour, with the port later hoping to reclaim the space between them.

The two sides of the Bledisloe Terminal (foreground) would be built 98 metres further into the harbour. Photo: SUPPLIED / Ports of Auckland

Mr Hawkins repeated the company's offer that it would remove the extensions, due to be finished late next year, if the council study found they were not justified.

A protest group called Stop Stealing Our Harbour, supported by prominent Aucklanders such as Sir Stephen Tindall, wants the expansion halted permanently.

A lobby group Urban Auckland is scheduled in June to argue before the High Court that resource consents for the project are invalid, as they were not opened to public submissions.

Mr Hawkins said the port was surprised at the strength of the reaction when it became known publicly in February that the consents had been issued and that work was imminent.

"But we've got some quite long-standing, well-organised minority groups who are against anything to do with the port, and see any expansion or any movement at all being a negative outcome, and will fight very hard to stop it," he said.

Ports of Auckland has carried out a public opinion survey on the issue, and expects to release the results next week. It is a move which suggests the survey backs the port company.

Mr Hawkins didn't rule out that the final response to the council might introduce some new ideas, but that these would be as well as the extensions, not instead of them.

At least one councillor is becoming impatient at the time being taken by Ports of Auckland.

"Friday at noon is my self-imposed deadline for a reply," said Chris Darby, in an email to the mayor's office and the council chief executive Stephen Town.

"If by then the council has not received a formal reply, or a reply of substance, I recommend we discuss it under extraordinary business at next week's Governing Body meeting, or call an extraordinary meeting sooner than that."

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