Meridian Energy has been accused of bribing a government department with its own money over a controversial power scheme.
"It's venal, cowardly, and corrupt," Dunedin conservationist Dave Witherow said. "What we are encouraging is a culture of bribery," the Project Hayes objector said.
Witherow was commenting on revelations government-owned Meridian Energy would pay hundreds of thousands of dollars to obtain objectors' silence, including that of the Department of Conservation (DOC).
Prime Minister John Key has ordered a report into the Project Hayes wind farm after the revelations.
DOC yesterday confirmed it was to be paid $175,000 by Meridian after it dropped its objections to the power scheme.
However, it denied it was a secret deal or that it was gagged by the state-owned generator.
The Historic Places Trust also confirmed it was to receive $179,000 from Meridian, after it agreed to drop its objections in return for a range of mitigation measures.
Ngai Tahu was also understood to receive $220,000 from the state power company, in return for dropping its objections to Project Hayes.
The project, which would see 176 turbines installed on hillsides near Ranfurly, Central Otago, sparked significant opposition. It is currently before the Environment Court.
DOC Director-General Al Morrison yesterday rejected any suggestion the department's silence had been bought and denied the negotiations had been secret.
However, the Parliamentary Commissioner for the Environment, Morgan Williams said that was not how it appeared.
"To be blunt, [it] was about buying silence to avoid political embarrassment."
Documents released under the Official Information Act showed DOC was originally among the objectors, but withdrew its concerns after Meridian offered to pay the department $175,000.
Under the agreement DOC signed in May 2007, it agreed that in return for the payment, it would inform the Project Hayes hearing panel and any other court examining the project that its previous concerns about the visual impact of Project Hayes had been resolved.
The money would be spent on maintaining and improving access to the Rock and Pillar Conservation Area and/or to fund research into the decline of the eastern falcon, the agreement stated.
DOC would then withdraw its previous objections to Project Hayes, and put in a new submission on behalf of the director-general that said the department had "no outstanding issues" with the application.
Meridian spokeswoman Claire Shaw said last night that such payments were "common practice" and allowed the company to seek solutions to community objections rather than the costly and time-consuming process of taking it to court.
She said DOC would only be paid should the windfarm go ahead. The Historic Places Trust also said ``no money would be paid unless the project proceeded''.
However, Witherow said the deal with DOC was particularly disappointing, as the department was legally obliged to protect the environment.
Key said yesterday he had asked for a full report on from DOC, and may also ask Meridian to explain its actions.
He said that while he was not opposed in principle to money being offered to offset environmental impacts, "it is not acceptable for a government department to accept hush money".
The DOC deal was signed under the watch of former conservation minister Chris Carter.
However, Labour yesterday refused to take responsibility for the arrangement. Carter said that to the best of his recollection, he knew nothing of either the $175,000 payment to DOC or the confidentiality agreement.
"It is possible that it was in the weekly briefing notes I received from DOC but I can't recollect it. And I'm sure I would have noted with surprise a confidentiality agreement and asked why. And I didn't do that."
However, a letter from former environment minister David Benson-Pope to Carter, made public yesterday, shows the minister instructed his colleague that a "whole-of-government" approach was being taken to Project Hayes.
Benson-Pope asked that all government departments limit their submissions to issues of national importance "which we see as renewable energy, wind power, and transmission issues".
Evidence tabled in the Environment Court by a member of the Otago Conservation Board, Garry Nixon, makes it plain that the board thought DOC had been directed by the Government to drop its concerns.
"It was decided the submission would not mention the adverse effects on the landscape of the project area or seek any relief with respect to those effects," Dixon's submission said.
"DOC could not conceive of any relief that would address those effects, short of seeking that consent for the majority of the project be declined. It was considered this would be inconsistent with the Crown submission."
Fish & Game New Zealand, which opposed Project Hayes, wrote to Key yesterday seeking assurances DOC would not be "fettered" under his leadership.
Chief executive Bryce Johnson said the issue of government advocacy for conservation was an ongoing concern.
"A concern we've had for many years is the statutory bodies that hold the primary responsibilities ... are not really fronting up, and it's left to NGOs (non-government organisations) like us, Forest and Bird, the canoeists, jet boaters ... to run the case for the public interest in conservation issues."
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