Willis overrules advice on waste-to-energy facility

In February, Finance Minister Nicola Willis had to decide if a majority Chinese-owned company’s acquisition of 15 hectares of South Island farmland was contrary to the national interest.
The land at Glenavy, in South Canterbury, about 30km north-east of Ōamaru, is where South Island Resource Recovery Ltd wants to build New Zealand’s first large-scale waste-to-energy facility – a huge furnace which burns rubbish and construction waste as an alternative to landfills.
Officials from the Overseas Investment Office sent a report to Willis on February 16. Nine days later, the minister decided the property purchase, to be subdivided from a dairy farm, wasn’t contrary to the national interest.
Opponents of the $350 million waste-to-energy facility are critical of the finance minister for over-riding advice that it be mandated “feedstock” for the facility come only from the South Island.
“Special condition 7 only not special condition 6,” Willis wrote on the decision document. (Condition 7 is if the facility ceases to operate, the land must be “repaired”.)
Robert Ireland is a spokesperson for opposition group Why Waste Waimate, named after a town about a 15-minute drive from Glenavy. He says from his reading of the report the finance minister scrubbed the condition – “I can’t understand why”.
Newsroom asked Willis’ office: Why did she veto the condition? Was it because of lobbying from the company? If not, what other advice led to that decision?
Willis responded: “Having read the assessment report, I formed my own view which was that the Environment Court was better placed to assess any impacts through the resource management consent process. I do not recall having been lobbied on this matter.”
Paragraph 82 of the Overseas Investment Office report said the waste-to-energy facility presented risks to government policies, targets or goals, and the minister was able to impose conditions to manage them. A specific concern was waste might be trucked from the North Island or imported from overseas.
In the margin, Willis wrote: “Enviro court better place to do this.”
Ashburton farmer Paul Taylor, a director of South Island Resource Recovery, said its application had been thoroughly considered, and the company responded to questions and for more information as requested. 
“We were pleased with the outcome, and now look forward to continuing Project Kea’s resource consent process.”
Last year, the then-Environment Minister David Parker called in South Island Resource Recovery’s consents, and directed they be considered by the Environment Court.
Following Willis’ endorsement in February, the property sale was approved by Associate Finance Minister David Seymour and Land Information Minister Chris Penk.
Newsroom asked Taylor if the company had bought the land but he didn’t respond.
South Island Resource Recovery is 40 percent owned by New Zealand company Renew Energy Ltd, and 60 percent owned by Chinese listed company China Tianying Incorporated, and its Belgian subsidiary Europe ChongYing BV.
The waste-to-energy project is known as Project Kea. Previous plans to build in the West Coast towns of Westport and Hokitika drew local opposition and were dropped.
South Island Resource Recovery is also investigating building a $730m facility in Kaipara, Northland.
It’s proposed the Glenavy facility would process up to 365,000 tonnes of municipal and construction waste a year – the equivalent of a fifth of the South Island’s landfill waste – and generate up to 30 megawatts of electricity.
But waste-to-energy factories are controversial. Overseas there are concerns about harmful byproducts, such as ash, dioxins, and carbon dioxide emissions. Another issue is the facilities’ reliance on a constant stream of rubbish.
Overseas Investment Office officials advised Willis the project likely had clear positives but it was of “medium” risk of being contrary to the national interest.
“While the investment offers the potential to realise regional economic benefits to New Zealand in terms of capital investment and employment, it also carries a degree of economic and social impact risk that may conflict with Government objectives and is the subject of significant public resistance.”
The Investment Office report was prepared with advice from Ministry for the Environment, the Security Intelligence Service, Ministry of Foreign Affairs and Trade, and Health NZ.
Why Waste Waimate’s Ireland, an impressionist landscape painter, says there seems a big disconnect between the advice provided and Willis’ determination.
“There’s quite a few examples throughout the report where they’ve said it’s medium risk to New Zealand’s national interest.”
Concerns raised by the report included “a negative impact on the waste sector”.
Burning waste may undermine waste minimisation policies – particularly “reduce, re-use, recycle” – and the facility may struggle to find sufficient feedstock, locally. A third of the materials proposed to be burnt were recyclable, the Ministry for the Environment advised.
“Ultimately, the greenhouse gas emissions impact will be considered in the Environment Court as part of the resource management consent process,” the OIO report said. “However, it is sufficient to note that the degree of emissions reduction that the investment is likely to achieve appears to be unsettled.”
Willis drew a rectangle around that passage, and marked it with circled asterisks on either side.
Historical character concerns were also highlighted.
Last year, Renew Energy’s founder Gerard Gallagher, who remained a paid contractor for SIRRL until late 2022, was convicted for the corrupt use of official information.
The Overseas Investment Office report also said a former China Tianying Inc shareholder and executive was associated with firms sanctioned by the United States. While the executive wasn’t named, a piece in the The Wire China mentions tech investor Wang Dong, a former China Tianying president – who was at the centre of a Chinese programme which sent a spy balloon over the US in 2022.
The waste-to-energy facility could reduce methane emissions from landfills, the OIO report said. But it would still produce ash, of about a quarter of the original waste volume, and increase New Zealand’s carbon emissions.
Health NZ is expected to make submissions to the Environment Court about the potential public health impacts, and whether they’ve been adequately identified and addressed. Emissions were “a significant element in terms of local opposition”.
Taylor, of South Island Resource Recovery, says the company is a firm believer in the need to first reduce, re-use and recycle waste. “We are committed to Project Kea and its world-leading energy-from-waste technology as an effective and safe alternative for the use of residual waste bound for landfill.”
Ireland remains unconvinced. “We still think that this is not a good proposal. There’s a whole lot of questions that need to be answered.”