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New Zealand

Public inquiry into secret payment -- Meridian deal under spotlight

Meridian Energy's 630 MW Project Hayes wind farm, which will see 176 turbines go up in the South Island's Central Otago region, is embroiled in more controversy. Last year the NZ$2 billion (EUR 850 million) project was hauled before the environment court by rival firm Contact Energy. Now the New Zealand government, in office since November, has ordered an investigation into a NZ$175,000 (EUR 74,700) payment made in relation to the project by Meridian in May 2007 to the Department of Conservation (DoC).

While such payments are standard practice in New Zealand to help cover fact finding costs, politicians, environmentalists and the public have accused Meridian of bribing the department to take a neutral stance on the project's resource consent process. The payment, instead of being publicly declared, came to light recently in a leaked letter from David Benson-Pope, the environment minister at the time, to then conservation minister Chris Carter. In the ensuing press furore about the secret nature of the deal, a distinction has been drawn between standard side agreements between companies and government departments that help towards mitigating environmental concerns, as allowed under the Resource Management Act, and "hush money."

Critics have lambasted the deal, labelling it a "disgrace" and accusing the DoC of having "prostituted expertise." On National Radio, former parliamentary commissioner for the environment, Morgan Williams, said it was a matter of the then government, which supported the project, attempting to avoid the embarrassment of going head-to-head with its own department. With a strong push for expansion of renewable energy production and equally strong opposition to further hydro development, large wind farm developments in New Zealand have been encouraged in recent years. Designating wind developments as a nationally important priority has enabled local objections to be effectively sidelined.

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