Swearing-in day at Government House, October 2017. Eugenie Sage is second from the right in the top row. Photo / Mark Mitchell
Eugenie Sage may not be a household name, but after last week she is considered by some to be perhaps the most dangerous minister in Jacinda Ardern's Government, as political editor Audrey Young explains.
Eugenie Sage is a veteran environmental activist who has upset people all her life.
That has
not changed since the Green MP was sworn into Jacinda Ardern's Government in 2017 with three ministerial responsibilities.
Her biggest portfolio is Conservation but she has not made too many waves there. She secured a handsome boost in funding for the department and she has taken a hard line against 1080 extremists.
As Associate Environment Minister she was responsible for banning single-use plastic bags in shops from July 1.
She has caused the greatest upset in her role as Land Information Minister, to such an extent that there is speculation in Wellington that she may be reshuffled out of it.
She may even be willing to have a swap for a portfolio that creates less angst.
As Land Information Minister, she is one of the main two ministers deciding whether applications by foreign investors should be approved or declined. The other is David Clark.
Belonging to a party that has never embraced foreign investment has meant some of her approvals have been a source of anxiety within her party.
Belonging to a Government in which the two other parties, Labour and New Zealand First, are jobs-focused, one of her decisions has also been a source of anxiety.
The two decision-making ministers have varied throughout Governments since the Overseas Investment Act took effect in 2005 but never before have two ministers come up with different decisions, until now, and such wildly differing reasoning.
On May 3 Sage decided to decline OceanaGold's application to buy a couple of farms in Waihī to enable the construction of a tailings storage facility that would extend the life of the mine for a further nine years. Clark approved it.
Because decisions require both ministers' approval, Sage's decision was effectively a veto.
The decision has shocked the miners' union, the Labour-affiliated E Tū union, the Employers and Manufacturers' Association, and Sage's colleagues in Government.
At stake are 350 jobs, about 250 full-time equivalent direct employees and about 100 existing contractors.
Without the new tailings facility, the company's Project Martha could continue until 2028. With it, the new Project Quattro would run from 2028 to 2036.
In the document outlining her decision, Sage said that not only was nine years sufficient time to establish new employment opportunities, she criticised the fact that despite the mine having been in operation for some time the median personal income in the Hauraki District was only $23,000.
"This suggests that the applicant's investment and operation has not necessarily generated substantial and identifiable benefits for the immediately affected community at Waihī."
Kit Wilson, OceanaGold's senior community adviser, says the average wage at the mine is $110,000.
Even at $100,000, over nine additional years for 350 workers that amounts to a $300 million-plus decision by Sage.
OceanaGold bought the mine from Newmont in 2016 and because it was a foreign company buying another foreign-owned company it required consent under the Overseas Investment Act.
Consent was granted on the stipulation that it continue to invest in the company, expand and keep people employed, Wilson said.
"We have done that in good faith and to have this decision now almost seems counter-intuitive.
"A couple of years ago the Overseas Investment Office were saying 'please invest'. And now we are being told no need to."
The company is considering a judicial review of the decision by the High Court – but even a successful judicial review would not mean reversing the decision.
If a review were successful, the court would most likely direct the minister to reconsider the application again and the answer could come back exactly the same.
E Tū shares the company's dismay at the decision, according to Paul Tolich, the union's senior national industrial officer.
"The union is very disappointed in the minister's decision because it puts at risk the continuation, the long-term viability of the mine which has been there for decades, has very well-paying jobs in a provincial area, does not involve matters relating to amelioration because of the effects of climate change.
"They are some of the best-paid jobs in the town of Waihī and the surrounding areas.
"You would think that this is the sort of place you would want to encourage work," said Tolich, who also serves on the Labour Party's ruling New Zealand Council.
"I find it highly unusual that a minister would have approved a water-bottling plant [the expansion of Otakiri in Bay of Plenty] which has a crude form of extraction industry, where no value is added and only a few jobs are involved, compared with a high value-added product like gold which employs far more people and pays far better."
Hauraki District Council mayor John Tregidga has come right out and accused Sage of having a conflict of interest as a Green Party member and says she should have stepped aside from the decision.
"She had her party hat on and she would not have been popular with her party members if she had approved it."
He said it needed to be remembered that the Green Party had very small support across New Zealand – 6.3 per cent last election.
The decision had ramifications not just for the workers at the mine but the whole of Waihī and for New Zealand Inc.
The town had had cross-party support for years for its mining activities "and yet at the flick of a switch we can completely reverse that".
Labour and New Zealand First needed to come and say if that was now the position of the coalition Government "and if it is, we need to know because it has huge influence for planning, for prospecting, for drilling and everything else that goes into this industry".
"It has a huge economic impact for the future of New Zealand in general, a huge economic impact."
Tregidga said he was not completely pro-mining. He had written to Sage last year supporting her stand of no mining on conservation land.
"But Waihī is a mining town. Its infrastructure is based on mining. It has had total support from both Governments for many, many years and people set their lives on it."
He knew of people who had moved from Australia, set up in Waihī, bought houses, got loans, got their family settled because mining was stable in WaihĪ.
Sage herself won't comment on who she consulted before making the decision because the case could well be before courts. But it is known that soon after making her decision her office issued a statement on the Beehive website – which is highly unusual.
Announcements have always been left to the Overseas Investment Office.
The press statement signalled that attempts by Labour and New Zealand to change her mind had been unsuccessful.
The numerous meetings they had had with her had come to nothing.
It means the decision was out before the Budget and the anticipated post-Budget reshuffle.
One surprising aspect of the decision published by the Overseas Investment Office - besides the fact that a Green MP was extolling the virtues of dairy farming - is the degree to which Sage and Clark differed when setting out much weighting they were giving to various factors.
The factors they must consider are set out in the act itself or under the Ministerial Directive Letter of November 2017 setting out five factors that should be of relative high importance for making decisions about rural land.
The OceanaGold application was to buy 178ha so it falls within the rural land considerations.
Clark gave at least five factors a high weighting, including the Jobs, which Sage gave only a moderate weighting.
Clark gave the increase in export receipts a high weighting whereas she gave it a moderate weighting. He gave a high weighting to the company's previous investment, but she gave it a low weighting and he gave a high weighting to economic interests whereas she gave it a negative weighting, lower than low.
Clark cited the fact that the company contributed to the national economy, spending, for example $373 million in New Zealand in 2016.
She pointed to stress from underground vibrations, uncertainty around property vales and effects on mental health.
In the part of the decision where the ministers can cite policy of the Government, they took divergent stand as well.
David Clark: "The associate minister recognises that this investment will occur in a regional economy and is consistent with the Government's policy of enhancing economic development in the regions."
Eugenie Sage: "The acquisition of the land will enable more mining, and therefore more emissions, which could encumber New Zealand's transition to a net-zero emissions economy. The Government has agreed that the transition to a net-zero emissions economy is in New Zealand's interest."
Sage did not accept the company's assurances about risk management of the tailing facility, citing the breach of a tailing dam at Brazil's Corrego do Feijao mine in January in which 200 people were killed. She also had concerns about potential harm to the Ohinemuri River and the Firth of Thames.
She said it was difficult for an economic benefit to be truly substantial if it was not sustainable.
"The nature of the proposed investment in non-renewable resource extraction is inherently unsustainable."
If she maintains that reasoning throughout her ministerial tenure, the fear is that she has set her own precedent and will find no economic benefit in any mining or extractive application.
National leader Simon Bridges says it looked as though Sage was behaving like a Green Party member, rather than a minister, and that was dangerous.
"I think it is a remarkable situation where ministers from different parties are taking very different views.
"It is potentially quite dangerous because Eugenie Sage looks like she is putting her party position above the legal requirements and some pretty nebulous environmental concerns above very clear jobs and economic benefits," said Bridges.
"My worry is the chilling effect this will have on an already uncertain international investment environment. We've seen a lot of pretty random decision-making and remarks from the Government recently."
Comments by New Zealand First leader and Deputy Prime Minister Winston Peters criticising the sale of Tip Top to foreign interests would not help either, Bridges said.
"They might as well put a sign up that says, 'We're not sure if we're open for business'."
NZ First minister Shane Jones was one of those who met with Sage in his capacity as Regional Economic Development Minister and, as he put it, a self-proclaimed supporter of the extractive sector.
"My colleagues know that. I'm also a constant advocate for economic growth in the provinces."
He is unusually restrained in his comments, possibly mindful that the issue is a potential minefield for Jacinda Ardern. He does not usually hide his antipathy for the Green Party's anti-development ethos.
"The reality, however, is that we are in an MMP Government and this is a statutory decision undertaken by my fellow minister under a specific act of Parliament," he said.
"Eugenie Sage understands what my priorities are as the regional champion, but at the end of the day it is her statutory decision and we should bear in mind that all statutory decisions are reviewable."
EUGENIE SAGE
• Grew up in Auckland, based in Christchurch.
• Worked at Forest and Bird for 13 years,
• Degree in law, history and diploma in journalism
• Former Environment Canterbury regional councillor
• Minister of Conservation, Associate Environment, Land Information
• Of 38 overseas investment applications, declined four, three in concert with the other minister.
OWNERSHIP OF OCEANAGOLD
• United States public – 46 per cent
• Britain public – 23 per cent
• Australian public – 10 per cent
• European public - 9 per cent
• Canada public – 9 per cent
• Asian public – 3 per cent
• OceanaGold owns the Martha open-pit mine, and Moonlight, Favona, Trio, Correnso and Slevin underground mines at Waihī.
• Applied in April 2018 to buy 178ha of farm land near its mines. Declined in May 2019.
• ASX-listed
A disregard for authority could be why those attending court are thumbing their noses.