When, exactly, should an environmental assessment or impact statement be done for a state action?
Regarding the century-long diversion of water from dozens of East Maui streams for sugarcane and now diversified agriculture and municipal uses, Alexander & Baldwin’s efforts in May 2001 to obtain a 30-year lease for the water was what triggered the environmental impact statement that the company released a draft of last September.
But well before A&B’s request for a lease came to the Land Board, native Hawaiians and members of the conservation community opposed the board’s practice — which began in the late 1970s — of annually granting revocable permits (RP) to A&B and its subsidiary, East Maui Irrigation Company, to allow them to continue to divert water from East Maui. Under those permits, the companies diverted so much that streams and taro fields in East Maui were left with insufficient water.
Now, some 40 years after the Land Board first started issuing and renewing those permits, the matter of whether an environmental review of their impacts is required has reached the Hawai`i Supreme Court.
On May 5, the court heard oral arguments from attorneys representing native Hawaiian residents from East Maui, A&B, and the Land Board on whether an environmental impact statement should have been done on the permits.
In 2015, on behalf of Healoha Carmichael and Lezley Jacintho, and the nonprofit group Na Moku Aupuni o Ko`olau Hui, the Native Hawaiian Legal Corporation sued in 1st Circuit Court, arguing that the annual permit approval violated the Hawai`i Environmental Policy Act (HEPA, Chapter 343 of Hawai`i Revised Statutes). The four permits — for the Nakihu, Ke`anae, Huelo, and Honomanu areas — allow the companies to use some 33,000 acres of state land for the diversions, which now average tens of millions of gallons a day (mgd), but which in the past would regularly exceed 100 mgd or more.
The Circuit Court ruled in January 2016 that those permits were invalid — because there were meant to last only a year and not be annually renewed for more than a decade — but it did not find that the Land Board’s annual renewals were actions that required an environmental review under HEPA.
In June 2019, the Intermediate Court of Appeals overturned that decision, finding that the state’s law regulating the disposition of public lands gave the board the flexibility to issue holdover revocable permits. The ICA cited HRS 171-55, which states: “Notwithstanding any other law to the contrary, the [Land Board] may issue permits for the temporary occupancy of state lands …by direct negotiation without public auction, under the conditions and rent which will serve the best interests of the state. … [T]he board may allow the permit to continue on a month-to-month basis for an additional one year period.”
“We conclude that just as this language served to nullify the maximum term of one year prescribed by 171-58 (governing water use permits), it also nullified HRS chapter 343 EA and EIS requirements for temporary permits issued under 171-55,” the ICA wrote in its decision.
During oral arguments before the Supreme Court last month, Associate Justice Mike Wilson asked NHLC attorney Summer Sylva what the boundaries are of the legal exemptions provided by 171-55.
Whenever an RP is issued under 171-55, all other environmental laws no longer apply? he asked.
Sylva replied that she did not think that was the case and that the plain meaning of the “notwithstanding” language was actually quite narrow. It simply meant that the permits were not required to be issued through a public auction, which is normally how public lands are required to be disposed of.
“The legislative history behind this ‘notwithstanding’ clause exposes that this language was urged by the then-chair of the Land Board and the office of the Attorney General [to reflect] that the Land Board’s desire was to exempt it from the public auction mandate. …The Legislature did so by inserting language by allowing permits via direct negotiation,” she argued.
Associate Justice Richard Pollack seemed to agree. “It seems to me that the legislative history and language of the text is quite clear,” he said.
Given that, should an environmental assessment or impact statement have been done on the permits? While the Circuit Court ruled that the permit renewals did not constitute an action subject to HEPA, the Hawai`i Supreme Court ruled more than a year later in Umberger v. Department of Land and Natural Resources that the department’s issuance of aquarium collection permits over the years constituted an action subject to HEPA. The permits were found to be invalid and an environmental review of the collectors’ impacts on fish populations and the environment was required. (See our cover story in this issue for more.)
Sylva cited the Umberger decision in arguing that A&B’s permits should be invalidated and an EIS should be done. In the course of a contested case hearing on the permits, initiated by NHLC’s clients in 2001, an assessment of the impacts of the company’s diversions on some East Maui taro farmers was done to determine how much water should be released to them pending a determination by the state Commission on Water Resource Management of how much water should remain in more than two dozen East Maui streams.
That assessment resulted in the return of some water to only one of those streams, Sylva pointed out. She added that there has been no comprehensive analysis of the diversions’ impact on the 33,000 acres covered by the permits, nor has there been a cultural impact analysis.
“The renewals were legally significant actions. … If the permits expired, so too would A&B’s rights to divert state waters,” she said.
Pollack appeared to agree that that might be enough to counter the arguments by the state and A&B that an EIS need only be done for the proposed lease.
“Isn’t significant effect the determining factor, not how long [the disposition]? Couldn’t a short-term [action] have a significant impact?” he asked.
“You are absolutely correct,” Sylva said. She also pointed out that while the permits in this case may have been short-term dispositions, “this permitting scheme has been the functional equivalent of a lease.”
Deputy attorney general Linda Chow, however, argued that the continuation of the permits was required for the Land Board to fulfill its public trust duties, including providing water necessary for municipal use by the county. She also cited the ICA’s decision regarding the apparent exception provided by HRS 171-55.
Associate Justice Sabrina McKenna suggested that if the court invalidated those permits, the Land Board could immediately issue a permit to the county for that water.
She also pointed out that the ICA’s decision “did not even touch upon this court’s holding in Umberger that HEPA does, in fact, apply to … aquarium permits for extraction of fish. This is extraction of water. All natural resources.” She then asked Chow how she distinguished the issues in the East Maui case from Umberger.
Chow first addressed the issue of a county water permit. She pointed out that the county doesn’t run the diversion system and has already stated that it doesn’t have the expertise to divert the water into the county system.
With regard to the Umberger case, she said the board’s decisions on the East Maui permits were more focused on public trust issues. She said when the Land Board decided to renew the holdover permits in 2014, it heard testimony from 45 people and “had to take into consideration all the conflicting uses.”
To this, Justice Pollack replied, “I thought our law was pretty clear, you can’t rely on public hearings instead of environmental assessments. … You’re not going to get full information. You can’t punt it to the public and rely on that testimony.”
Chow agreed, and said the Land Board knew when it voted to approve the permits that it was going to go into a contested case where further information would be developed.
“In other words, it’s OK for the board to wait 17 or 18 years to get in the information for an EIS. That seems to be the ramification of your response,” Pollack said.
Chow stressed that the board has made “informed decisions along the way that furthered the balancing of the public trust uses.” She also argued that the evidence presented in support of the interim release of water years ago only justified the return of flow to one stream. She suggested that no one had anticipated that it would take the Water Commission so long — more than a decade — to come to a decision on the interim instream flow standards for that stream and the others.
When Justice McKenna asked A&B’s attorney, David Schulmeister, how he distinguished the Umberger case from the East Maui case, he said that the permits issued to the aquarium collectors were new uses, compared to the East Maui water diversions, which were continuing uses.
McKenna said she thought the DLNR had been issuing aquarium collecting permits “for a while.”
Even so, Schulmeister said, preparing an EIS prior to acting on A&B’s water use permits would have been impossible without interrupting its use. “You’re going to have this gap. One day or one month, whatever it is. You’re having this interruption in use,” he said, adding that Umberger didn’t deal with the same statute that has allowed for permit renewals.
Chief Justice Mark Recktenwald then asked if there is a point at which the holdover permit is allowed so many times that an EIS should be done. “If we accept your argument, it shouldn’t be done in year one. If we get up to year five, ten or more … At some point should the board have stopped the annual holdovers and required an EA?” he asked.
Schulmeister asked his own questions in response. What would an EIS on the permits measure? He pointed out that there had been an interim release of water in 2007 and that more water was returned to streams following the Water Commission’s decisions on interim instream flow standards (IIFS) years later.
“How are you going to measure the environmental impacts without knowing what is going to be left in the stream? Everybody recognized that had to occur no matter what,” he said.
Even so, Justice McKenna pointed out, in the years before the Water Commission came to its ultimate decisions on instream flows, A&B was withdrawing about 165 mgd.
The Water Commission’s IIFS decisions were a separate issue from the impact of the diversion, she said. “You keep referring to how petitioners basically … received the water that they needed. Isn’t it true that the role of an EIS is not just to measure the impact on people that request the EIS, but on the entire the environment and people who are not parties to lawsuit requesting an EIS?” she asked.
While many of the questions and comments by the justices suggested that they may agree that an environmental review should be done for the permits, they also voiced concerns about the county’s water supply.
Justice Paula Nakayama said she was struggling with the practicalities that, first of all, A&B owns the ditch system, and second, that the county, even if it did have access to it, does not have the personnel to operate the system to meet its needs.
Pollack said the court could suspend or invalidate the permits in part.
Sylva also suggested that the license area closest to the county plant could meet the county’s needs. In any case, she asked the court to “restore justice long overdue.” She noted earlier in the hearing that a number of the original parties to the 2001 contested case hearing on the permits — Sam Akina, Marjorie Wallet, Beatrice Kekahuna — have passed away.
The court had not issued a ruling by press time.
— Teresa Dawson
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