Contact won’t appeal $162k spill fine
Company apologises to Ma¯ori after stream, river suffer consequences when plans go ‘spectacularly wrong’
Contact Energy says it won’t be appealing the $162,500 fine it has been ordered to pay after a massive spill into the Waikato River in 2019. The company failed to take heed of its own warning alarms, which led to the spill into the Waipouwerawera Stream and Waikato River on February 19, 2019.
Chief Environment Court Judge David Kirkpatrick last week released his decision on the sentencing of Contact Energy, which was convicted under the Resource Management Act with unlawfully discharging a contaminant on to land in circumstances that may have resulted in the contaminant entering water. The prosecution was taken by the Waikato Regional Council and the sentencing hearing was held in the Taupo¯ District Court on October 30.
Contact is New Zealand’s secondlargest electricity generator and operates four geothermal power stations on the greater Waira¯kei geothermal field near Taupo¯.
The volume of the spill was enough to overflow the Waipouwerawera Stream and turn the upper Waikato River and Huka Falls brown. The sediment from the discharge primarily settled in Lake Ohakuri, with minimal flow further down the river.
Taupo¯ District Council had to shut off one of its municipal water intakes and Nga¯ti Tu¯wharetoa, the iwi with legal ownership and mana whenua over that portion of the river, said the spill caused great physical and cultural damage and impacted its ability as kaitiaki to safeguard the spiritual wellbeing of its taonga.
Contact apologised to the Tu¯wharetoa Ma¯ori Trust Board and Nga¯ Kaiahutu o te Awa o Waikato for the spill and the damage caused and has since been working through a restorative justice process with
Tu¯wharetoa.
The judge’s decision says that on February 13, 2019, Contact staff shut down pumps for maintenance, which allowed pressure to develop at a wellhead, causing a non-return valve to close. Fluid was ultimately redirected into a soakage pond which had not been built for such a high volume of fluid. Automatic switches which would have turned off the pumps when the flow was detected had not been installed, and instead the system relied on the control-room staff noticing alarms and acting accordingly.
Between February 13 and February 16, 11 alarms were sent to the control room and acknowledged, but no further steps were taken. The soakage pond received approximately 44,000 tonnes of fluid over six days. On February 19, the pond’s wall and bank collapsed, sending 15,000 cubic metres of soil laden with geothermal fluid across nearby farmland before cascading over a gully and into the Waipouwerawera Stream, causing part of the gully wall of the stream to collapse as well.
The soil and fluid then travelled along the stream for nearly 1km and into the Waikato River, turning the river dark brown for about 13km before it began to clear. The river’s discolouration lasted for about two days.
The discharge also affected the Taupo¯ District Council’s water intake at its Centennial treatment plant.
Contact Energy made extensive repairs to the pond, farmland, stream flow and stream culverts. It has engaged in a restorative justice process with the Waikato Regional Council as well as the Tu¯wharetoa Ma¯ori Trust Board.
The sentencing decision says the investigation concluded that several factors had contributed to Contact staff not taking action in response to the alarms and notifications received
in the control room. Staff in the control room had a lesser understanding about what the alarms on the steam field meant, the alarms had occurred previously during pump restarts and were therefore seen as normal system behaviour, the alarms did not present as being urgent, and there were no clear procedures in place for staff to follow when the alarms were activated.
While Contact’s counsel had submitted that a conviction and discharge or a fine with substantial discount would be appropriate, the judge disagreed, saying although actions following the discharge were responsible and commendable, Contact’s failure to respond to its own alarm system meant that the gravity of the offending and its culpability was “very high”.
The judge took $250,000 as a starting point for a fine and gave a discount for Contact’s prompt guilty plea, noted there were no material aggravating factors and no previous convictions for similar offending, and also took into account Contact’s remorseful attitude, its acceptance of responsibility and provisions for the interests of victims, in this case Nga¯ti Tu¯wharetoa as kaitiaki of the river and the Taupo¯ District Council.
He also noted that Nga¯ti Tu¯wharetoa had requested that the fine be directed towards the river and its kaitiaki. While the judge said he could not direct the Waikato Regional Council, which will receive 90 per cent of the fine, to do so, it was appropriate to record the wish of the iwi, which was consistent with the regional council’s role of protecting the wellbeing of the region’s waters.
Contact’s chief generation officer Jacqui Nelson said the company accepted responsibility for the unlawful discharge and would not be appealing the sentence.
“We are very sorry that this happened. We have a longstanding connection with the tangata whenua that we value and want to strengthen. We also have a deep connection to the Taupo¯ community and the Waikato River and we were devastated to have caused this damage,” she said in a statement.
“Although we can’t undo the incident, we have put a lot of effort and resources (including more than $2.5m) into putting things right as best we can.
“We have been 100 per cent committed to the restorative justice process, and been working collaboratively with local authorities, iwi and the local community to address their concerns.
“In particular we have been working alongside Nga¯ti Tu¯wharetoa to understand the deep-seated and wide-ranging impact of the incident on the stream and river, their cultural connections to these taonga, and their community.”
Waikato Regional Council regional compliance manager Patrick Lynch said the spill had been a particularly significant environmental incident.
“Contact is a highly compliant company with very high standards. However, this incident reflects that an enterprise of this scale, operating in such a sensitive and valued environment, has to have absolutely foolproof systems that are checked and re-checked regularly.
“This incident shows that when things go wrong in an operation of this size, they go spectacularly wrong,” Mr Lynch said.