Opinion: Business dilemma and democratic challenge


David Mayhew is a Kelvin Peninsula resident who lives within Queenstown Airport’s proposed new noise boundaries

The community’s overwhelming (92 per cent) rejection of the Queenstown Airport Corporation’s (QAC) plans to increase aircraft noise boundaries to accommodate forecast growth in demand poses a real dilemma for QAC, as well as a major challenge for the Queenstown Lakes District Council (QLDC) as the airport’s 75 per cent shareholder.

While QAC has postponed its noise change proposal, both the dilemma and the challenge arise immediately in the context of, not a regulatory planning process, but one of local governance.

Each year QAC must publicly state its strategic priorities in its Statement of Intent (SOI); and the council as shareholder has to agree that statement. Central to QAC’s strategic priorities has been growth of aircraft movements (passenger numbers).

So, for example, in the SOI 2019-2021, the first objective of QAC’s operating strategy is: “Work with our airline and airport stakeholders to deliver passenger growth and share the rewards.”

This is against the background of our airport having evolved into the country’s “fourth busiest airport by passenger number … a strategic national asset and a key driver of the region’s tourism industry and broader economy … the direct domestic and international entry point to the lower South Island…” Moreover, QAC also recorded its demand forecasts, the related noise boundaries issue and the intention to engage in public consultation.

All of this the council agreed to earlier this year.

Hands up the residents (and ratepayers) who voted for that!

Such question arises because QAC’s business model underpinning its strategy is one in which Queenstown is not simply a place to visit, but is the gateway to stunning southern NZ (the greeting on the airport’s website).

Not only does that necessarily increase the number of visitors who choose Queenstown as their entry point into the region, it also brings in train significant infrastructure consequences, e.g. given one in three visitors rents a vehicle on arrival.

The democratic element is tied to the fact that QAC is a council-controlled trading organisation, to use the jargon of the local government legislation.

While it is run in accordance with sound business practice, it is required explicitly to have regard to the interests of the community (making it different to SOEs, for example). QLDC retains certain powers and responsibilities in relation to QAC’s activities which give it the opportunity to influence the direction of QAC.

The dilemma for QAC is whether to modify its strategic objective of continuous growth in its next SOI when that objective clashes with its own measurement of success: A local community that is proud of and engaged with its growing airports.

The community’s response to the noise boundaries consultation makes that clash loud and clear.

In turn, the challenge for the council is whether, in light of the community’s response, it can agree to the QAC having a continuing growth objective in its SOI. To ignore the community’s response would clearly be undemocratic and may not meet the test of adequate discharge of its responsibility under the Local Government Act.

The timetable for this is: the QAC’s board must deliver the draft SOI to its shareholders by March 1, 2019. The council has two months to consider and make comments on the draft. The board must then consider those comments and deliver the completed SOI to shareholders by June 30.

That is not, however, the end of the process.

Once it receives the completed version, the council must agree to the SOI, or if it does not agree, take steps to require it to be modified. The latter would involve consultation with the QAC board, but ultimately the council as shareholder can pass a resolution which the board would have to comply with.

Typically, decisions around commenting on and agreeing to a SOI would not be something which council would expect to put out to consultation. However, under its consultation policy, the council can choose to undertake community engagement on differing scales, depending on the issue.

The community’s rejection of the QAC’s proposed changes to noise boundaries in July/August this year ramps that process up the scales, raising significant questions for the council in terms of decision-making, on which the community should have an opportunity to contribute in one form or another.

To “walk” from 92 per cent opposition without seeking some input does not fall within the spirit of good-faith decision-making.

Given the relatively-tight timetable, planning for such consultation would have to be made ahead of March 1.

Local democracy, if it means anything at all beyond election day, surely means the council listens to its community and engages in an open and meaningful way on this major, multi-faceted issue.