Statement of evidence of M F Bedford

In the matter of the Resource Management Act 1991, and in the matter of an application by Kaipara Excavators Limited for a coastal permit to extract sand from deep water.
September 1998.

This legal document has been made available on the Seafriends web site in order to explain the company's position and the sand extraction methods in full detail. It enables students of the Resource Management Act in new Zealand, to explore a complete case study. A contents index has been added for ease of access, but otherwise the wording of the original document has not been altered.

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Contents of this page

1. Introduction

1.1 My name is Michael Francis Bedford. I am a Civil Engineer with over 25 years experience in the construction, quarrying and mining industries. In the last fifteen years I have worked predominantly in the mining sector with particular emphasis on resource identification and development.

Involvement in Deep Water Sand Project
1.2 For the past twelve months I have been a consultant to Kaipara Excavators Limited ('Kaipara') and have been assisting that company to develop its Deep Water Sand Project ('Project'). In my initial role in the Project, I was responsible for reviewing the demand of the construction industry in the Auckland region for construction materials such as sand, analysing the current 'stores' of material available in terms of unused licence amounts and predicting demand for new material over the next 30 to 40 years on the basis of various economic and social factors.

1.3 From this exercise, it became clear that a major new construction resource would need to be obtained or 'opened up' in the short term to insure that demand for material can be met in the long term. After obtaining technical and legal feasibility reports from Kaipara's consultants, the Project was developed and consultation with key stake holders undertaken.

1.4 After incorporating many of the initial reactions to the Project, an application for a coastal permit was lodged in December last year. Since lodgement, I have been primarily involved in consultation and liaising with the various regulatory authorities throughout the consent processing phase.
Scope of evidence
1.5 The purpose of my evidence is to discuss the application lodged by Kaipara for the Project. My evidence:
  1. introduces the Project methodology and summarises the key objectives of the Project;
  2. describes the Project anticipated by the application, how it differs from other sand extraction operations and how it would be implemented in accordance with the proposed conditions;
  3. responds to some of the issues raised in submissions; and
  4. confirms Kaipara's support for the ARC officer's positive recommendations and proposed conditions.

2. Project methodology and objectives

Sand extraction methodology
2.1 Before discussing the key objectives of the Project, it is important to have some idea of what is envisaged by the Project.

2.2 The Project, in essence, involves the extraction of sand from the coastal marine area in the outer Hauraki Gulf, generally in the vicinity of the Pakiri-Mangawhai coastline. Kaipara, in partnership with Milburn New Zealand Limited (its co-owner is Coastal Resources Limited) has developed and presently utilises trailer suction dredging to work the current inshore licence held by Coastal Resources Limited to win sand from the sea floor at Pakiri. This system utilises a trailing pipe with a hydraulically driven pump to provide the suction to lift the sand from the sea floor into a moving self-propelled barge. The system has been referred to as a large vacuum cleaner and leaves a trail approximately 100mm deep and 300-500mm wide on the sea floor. Presently, the trailer suction system is used in water depths of 7-15m.

2.3 To the extent that similar technology would be utilised, albeit with some modifications, the Project is no different in its basic methodology and purpose from this operation and other existing commercial sand extraction licences presently worked in the vicinity of Pakiri. That is, it is envisaged that a trailer suction dredge unit would be used to 'suck' sand from the sea floor into a barge which would then be shipped to the port closest to the desired point of supply.

2.4 However, the Project does differ significantly from existing extraction operations in a number of other ways. Most notably these are its location and minimum extraction depth, the size of the extraction area and the quantity of the resource sought. Before considering those aspects in more detail, it is important to understand how the Project evolved. To do that, it is necessary to consider the key objectives Kaipara had in mind when it first considered developing this Project.
Security and certainty of supply
2.5 As Mrs Kempthorne has noted, Kaipara is an existing sand producer in the auckland region and has been involved in sand extraction operations to supply sand for the regional construction industry for a number of years. In addition to its 50% stake in the offshore licence ant Pakiri, which entitles the joint venture company to extract 45,000m3 of sand per year, Kaipara also has a stake in an on-land sand extraction operation in the vicinity of Lake Tomarata. This licence entitles the extraction of an average 20,000m3 per year. Kaipara and Coastal Resources Ltd (in which Kaipara is a shareholder) are therefore presently able to supply 65,000m3 of sand to the Auckland market.

2.6 It is well known that the growth of the Auckland region is expected to double the region's population over the next 50 years. The ARC and territorial authorities have undertaken extensive work on the growth projections. The demand for sand is directly related to this growth and will need to keep up with it. This, coupled with Kaipara's own knowledge of the construction resource market in the region, has led it to conclude that a significant new construction resource will need to be identified and made available for the use of the region in the short term, if that industry is to meet the commercial and community demand for basic construction resources over the next 30 to 40 years.

2.7 One of the key objectives of the Project, therefore, was to identify and make available for a sufficient duration a significant construction resource. In doing so, this would provide some much needed security and certainty of supply of essential raw materials to meet projected demand for growth over the next 30 year planning period in the Auckland region.
Flexibility of market use
2.8 The construction industry in the Auckland region demands varying grades of construction resources. Apart from its well-known use in concrete production, sand of varying grades and types is also used in reclamations, general construction fill, high specification drainage layers, sand blasting and beach replenishment. From sea floor sampling and technical investigations, it is well-known that varying grades of sand, which are suitable for a number of different end uses, exist on the sea floor in the proposed extraction area.
In the past, however, extraction operations have tended to pinpoint a specific grade and extract that from a specific area. The result, in effect, is that not all markets have been able to be catered for in the Auckland region from resources within that region, and not all viable and efficient uses of resources have been explored.

2.9 Similarly, the quantities of the resource able to be extracted, have generally been limited by prescribing maximum annual limits on extraction licences. While such a limitation is appropriate where unlimited extraction could have potential adverse effects on the environment, for reasons to be discussed in detail by professor Healy, where the chances of adverse environmental effects occurring are minimal because of locational factors, there would appear to be no reasonable need to impose such annual extraction limits and impact the market this way.

2.10 Moreover, not doing so would enable a generally plentiful mineral resource lying on the sea floor to be utilised for large scale projects.

2.11 Ensuring flexibility of supply in terms of grade of resource and quantity has been another key objective of the Project. By having a large area within which material can be extracted 'to order', and no annual extraction limits, Kaipara is confident that its preference of allowing to drive efficiency of resource use, can be achieved, provided of course such use avoids undue adverse environmental effects.

2.12 As an aside, Kaipara considers that adopting such an approach may also lead to consequential positive effects. For example, if the resource is made available on the terms sought, deep sea floor sand  would, for the first time become available as a viable alternative to large scale reclamation fill for such projects as the Fergusson Container Terminal. This is a project which could require up to 1.5 million m3 of fill in a 12 month period. Fifty percent of this fill could be marine sand. Not only would the use of that material mean placing 'like in like'' (I.e. material from the sea floor in the coastal marine area), thus avoiding potentially contaminating the coastal marine area with waste fill from on land, but it would also protect the region's valuable quarry resources from, in essence, being thrown into the sea.

2.13 Avoiding 50% of an estimated 60 truck movements per hour for 10 hours per day, which would be required during the peak of the construction period for the Fergusson project, by providing sand for bulk filling by sea transport, is of obvious potential environmental advantage for that project.
Minimising effects on the environment
2.14 In addition to its 'market' related objectives, Kaipara was always committed to ensuring that any project of the type contemplated had no, or only minor, temporary effects on the environment during its implementation and after its completion. This desire arose in part from the concerns which were raised during the first round of applications for sand extraction permits in 1992-93. 
That sand extraction of large volumes from the near-shore area may possibly lead to erosion of the beach dunes and irreparable damage to the coastal system, which replenishes the sand on the beaches, was well vocalised during that round of applications. This concern was also voiced by the tangata whenua, by the Department of Conservation and by Dr Hilton, a local scientist.

2.15 In order to avoid these concerns and any potential effects on the inshore sand system, Kaipara has over the past years, developed dredging equipment which is able to extract sand in commercial quantities from depths never before worked in New Zealand seas. The application being considered today, therefore, proposes to extract in water depths of no less than 25m. The potential effects of extracting from this depth are discussed in detail by Professor Healy and Dr Cole, suffice to say that the company is satisfied that the Project meets this objective.
Recognising the kaitiaki role of Iwi
2.16 Probably the most interesting aspect of the Project has been meeting the objective of recognising the kaitiaki role of iwi in terms of their status as tangata whenua. It has also been the one objective most fraught with uncertainty for the company and with least guidance from the relevant statutes or regulatory agencies.

2.17 Having said that, however, it is also that aspect of the Project which has been the most memorable. The primary reason for that has been the involvement of Mr Haddon in assisting the company with the development of the Project and consultation with the iwi of Ngatiwai and tangata whenua of the area. A strong relationship between the iwi and Kaipara has been forged over the past year as a result of Mr Haddon's involvement. It is not envisaged that this will wither quickly. Kaipara is committed to involving Ngatiwai in the implementation of the Project at a practical level and enabling that to occur by covering the cost of that involvement. Regular and ongoing consultation on cultural and environmental matters is also a key plank of the memorandum of understanding concluded with Ngatiwai, and the conditions requiring the formation of an Iwi Liaison and Monitoring Group.
Summary of objectives
2.18 By way of summary, Kaipara had four key objectives in mind when it proposed and developed this project. These were:
  1. to open up a sufficient resource for a sufficiently large duration to ensure certainty and security of supply of an essential construction resource to meet the projected growth of the Auckland region over the next 30 to 40 year period;
  2. to look to obtain rights in respect of a large area to enable extraction of varying grades of material with no annual limits, thus allowing that resource to meet the market demands of large projects and different end users;
  3. to ensure potential environmental effects were avoided to the fullest extent possible by extracting at significantly deeper depths;
  4. to recognise the status of tangata whenua and involve them in the development and implementation of the Project.
2.19 I consider that the application under consideration today has achieved all of these objectives to date, and if granted on the basis of the conditions proposed, will continue to meet these objectives in the future.
3. Project description and implementation

3.1 Attached to my evidence as Figure 1 is a map which shows the area from which Kaipara is seeking a permit to extract, over a 35 year period, up to 2,000,000m3 of sea floor sediments of differing grades (e.g. coarse sand, fine sand, shelly gravel lag).

Fig 1. Current area sought

3.2 The area differs somewhat from the area shown in the original application (see Figure 2). As a result of consultation over the past three months with iwi, the University of Auckland and scallop fishers, and further sampling and investigatory work completed in that same period, the area has been modified to avoid Omaha Bay and Little Barrier Island, increase the barrier between the proposed extraction area and the Leigh Marine Reserve, and to include an additional area in deeper water where significant quantities of resource are considered likely to exist.

Fig 2: old area claimed, and changes

3.3 The total area is in the vicinity of 500km2. it is important to bear in mind, however, that Kaipara has no intention of extracting sand from every square metre of sea floor within that area. if that were to occur, it would effectively yield 50,000,000m3 of sand.

3.4 In essence, the extraction of 2,000,000m3 of sand over the term of the permit proposed would only result in dredging activities occurring over about 4% of that total area, or about 20km2.

3.5 The large area has been sought primarily to satisfy the objective of enabling access to the varying grades of resource which are known to exist over the area.

3.6 The extraction methodology has been summarised above. For this specific Project, nothing more complicated than that is envisaged. In essence, the only fundamental difference will be the length of the trailer suction pipe. Details of how the operation would 'look' in practice, are set out by Mr Turner who discusses how the existing licence of Coastal Resources is worked. The fundamental difference between that extraction operation and the one under consideration is that the latter will occur significantly further from the coastline. That is, a minimum of about 2km and potentially out to about 16km (or beyond the horizon and visibility from the shore)

3.7 Bearing in mind the key objectives of the Project, the other fundamental differences between this application and the operations already taking place in the inshore area along the Pakiri coastline are:
Size and location of extraction area
3.8 The area proposed by this application is significantly larger than any area ever sought for sand extraction to date. As discussed above, that is to enable differing grades of sand to be extracted and also to enable flexibility of supply for both Auckland and Northland regions. However, Kaipara has not sought an exclusive occupation permit for that area and, as such, it is not considered that any other users of the coastal marine area will suffer any detrimental effects of the extraction operation.

3.9 In addition, the area is located in deep water, with no extraction proposed in depths less than 25m. Presently, there is no commercial extractor undertaking extraction at the depths proposed by Kaipara (i.e. up to 50m).
Quantity/ duration /limits
3.10 Existing commercial extractors operating in the Pakiri/ Mangawhai coastal area are allowed to take a maximum of 165,000m3 of sand per year from their licensed areas. The term of those permits is 10 years. At their expiry (i.e. 2003), 1.65 million m3 of sand would have been extracted in the near shore area over that 10 year period.

3.11 By comparison, the permit sought by Kaipara envisages the extraction of 2 million m3 of sand spread over up to a 35 year period and across a larger area further out to sea. The fundamental difference, however, is that Kaipara has requested no limit on how much it may extract annually. That is, feasibly it could take 2,000,000m3 of sand in a 12 month period, or as little as 20,000m3 of sand per year. Kaipara believes that catering to the year to year real demands of the actual market is the most efficient way of utilising natural resources, provided environmental and cultural concerns are reasonably catered for in the actual implementation of the Project (i.e. as sand is being extracted). If that is possible, there seems little sense in constraining supply of essential resources, and hence the demand for continued community growth, by placing arbitrary annual limits on resource winning. It is certainly not something which usually occurs in other mining type projects.
Environmental monitoring programme
3.12 The proposed conditions of consent envisage a comprehensive environmental monitoring regime being undertaken by the company throughout the course of the Project. This regime is supported by Kaipara which, like the Regional Council and the Department of Conservation, see significant environmental as well as commercial benefits in investigating the location of resources in the coastal marine area and the effects of activities on these resources. Essentially, the environmental monitoring programme would work as follows:

3.13 The company is confident that the proposed monitoring conditions, linked with the review conditions, etc., will ensure that any adverse effects being caused by the operation are able to be dealt with swiftly. Other key conditions require extraction to cease if any areas of high species diversity are discovered and require the maintenance of differential global positioning sonar on dredging equipment.

3.14 The conditions will, in time, result in the gathering of significant and detailed information about the sea floor in the deep water area and the coastal processes operating therein and this is supported by Kaipara which sees the area bounded by this application as becoming the future resource winning area for the Auckland region.
4. Issues raised by submitters

4.1 Many of the issues raised by submitters have been responded to indirectly by the evidence I have already given, or will be covered by other witnesses. For the sake of thoroughness, however, I propose to respond to some key issues directly.

McCallum Brothers Limited and Sea Tow Limited
4.2 As trade competitors, I understand that it is difficult for the Committee to have regard to the possibility that these companies may also seek licences in the area proposed by Kaipara. As noted, however, Kaipara has not sought an exclusive occupation licence for the area. The Regional Council is at liberty, therefore, to grant permits to other operators at a later date, provided that they too can demonstrate that their proposals will have no undue adverse environmental effects.

Mangawhai Harbour Restoration Society
4.3 The Society has questioned the need for a 35-year term. For reasons discussed above, that term is needed to ensure certainty and security of supply. Large projects may not be won and regular extractions of smaller volumes may occur. Given that there is a maximum extraction limit (2 million m3) with monitoring linked to that limit, there is no valid reason to reduce that term. Upon an earlier extraction of the 2 million m3, the permit will expire.

Northland Regional Council
4.4 Proposed conditions which limit the ability of the Company to extract in exactly the same spot on the sea floor each day should answer concerns by the Regional Council that extraction would be concentrated in any one area.

Scallop fishers
4.5 The scallop fishers who have lodged submissions have essentially been seeking assurances that sand extraction would not interfere with scallop dredging activities and spat collection programmes. Through consultation, amendments have been made to the proposed extraction area and the Company is presently liaising with the scallop fishers to set up a co-operative resource use arrangement whereby each party would consult with the other about proposed fishing and dredging activities in the extraction area. This will enable those activities to be planned so as to avoid each other.

University of Auckland/ Williams Trust
4.6 These two submitters raise a number of technical concerns with the Project and its supporting information which are covered more appropriately by the evidence of Professor Healy and Dr Cole.

4.7 In various discussions with representatives of the University of Auckland, three primary concerns have been advanced, namely: effects on biota, extraction area too close to the Leigh Marine Reserve, and extraction area too close to Pakiri beaches. To address these concerns, it was suggested that Kaipara amend the application area to avoid the Leigh marine Reserve by five kilometres, limit extraction depths to 40 metres along the Pakiri coastline, and implement a comprehensive environmental monitoring programme.

4.8 In response, such a programme has been proposed by the conditions and the Company has requested the Regional Council to amend the extraction area to avoid the Leigh marine Reserve by three kilometres. On the advice of its technical advisors (supported by the Auckland Regional Council officer's report), the likelihood of significantly reducing any further potential effects by moving five kilometres away from the reserve and to the 40 metre depth contour, is extremely small. Making such amendments would also substantially limit the flexibility of the Project to win identified deposits of sediments in those areas with no, or no sufficient offsetting of effects or long term environmental benefits. Accordingly, the Company is reluctant to make these further amendments. Given that scallop dredgers and fish trawlers already operate in that same area with arguably greater effects on the sea floor environment, there seems little scientific basis for the University's position.

4.9 The University is also keen to obtain the results of the extensive monitoring which the Company would undertake. To date, however, it has not accepted the Company's offer of making that information available, or of entering into a more formal written understanding with it.
Greg Mcdonald, P & J Miller
4.10 These submitters raise a number of environmental concerns, which by and large, are not sustainable on the basis of the available scientific evidence. In any event it is considered that the proposed conditions will ensure that any concerns of adverse effects on the beaches and marine life are avoided.
5. Officer's report and proposed conditions

5.1 Kaipara supports the recommendation of the Regional Council staff. That report recommends that consent be granted subject to a comprehensive suite of conditions. All of the proposed technical conditions are acceptable to the Company.

6. Conclusion

6.1 Kaipara is committed to ensuring that its Deep Water Sand Project deals effectively with environmental and cultural concerns while at the same time enabling people and communities of the Auckland region to provide for their future safety and well-being. This permit, if granted, will allow the development of a sustainable sand resource within a reasonable distance of the region's major growth areas. The monitoring conditions proposed will ensure that environmental and cultural concerns are met. In essence it has been to answer these concerns directly that Kaipara has made considerable investment in developing effective technology to dredge  in deep water and devising the Project under consideration today.

M F Bedford
September 1998