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Friday 31 July 2020
Fonterra’s challenging year
Main picture: A Fonterra tanker at the Takaka factory. Inset: Fonterra manager Victor Gahamadze unveils the company’s new strategy. Photo: Alistair Hughes. ALISTAIR HUGHES
Last week’s Fonterra community meeting, at its Takaka factory, saw representatives from a range of the company’s operations provide an overview of recent developments. Victor Gahamadze, Fonterra area manager for Top of the South, opened the meeting by unveiling the company’s new strategy, formulated in response to environmental pressures and global market changes. “We’ve moved from a volume-based model to something which we hope will resonate more with you, something a bit more humble, honest and achievable,” he explained. “We came to the realisation that we needed to focus primarily on our precious New Zealand milk, and how to get the most value out of that when we sell it to the world.” The aim, he said, is to create greater return for farmers with a focus on collaboration and environmental health. Brightwater Fonterra site manager Chris Win outlined the company’s Covid-19 response, and the unusual challenges met across the company. Fonterra’s May production of 60 tonnes of specialised protein product, charter-
flown to the US for urgent use in hospital care, was singled out as an example. Next to speak was Emily MacDonald, Fonterra’s environmental manager for the Upper South Island. She described Fonterra’s targets for reducing greenhouse gas emissions and energy usage. Provoking the most interest was the Brightwater site’s partial conversion to wood chip fuel, a successful pilot scheme to reduce coal burning across the country. No new coal boilers will be installed by the company. In the more immediate Takaka environment, Fonterra has donated $14,000 towards the restoration of the Motupipi River. Environmental advisor Caitlyn Poole announced Fonterra’s commitment to zero landfill waste by 2025. This involves recycling and converting used plastics and packaging for new purposes such as insulation for building products and underground cables. Gary Harwood, the utilities manager for Takaka, recounted discussions about assisting local young people. These led to apprenticeships for mechanical, engineering and electrical students. The Fonterra plant
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has also taken part in the Golden Bay High School’s Gateway programme to provide work experience and skills development. Victor then opened the floor to questions and invited stakeholders to rate Fonterra’s performance. This led to an honest and robust exchange of views. Also shared was a frank forecast of what to expect from this very difficult year. The meeting closed with some words from sustainable dairy advisor Mirka Langford. She described her role as working with Fonterra’s dairy providers in the Top of the South Island to help improve their environmental performance. An important part of this is preparing a detailed Farm Environment Plan, which she hopes every supplier will have by the end of next season. In addition to the information presented during the evening, attendees also had plenty to say. “It runs up and down, but on a whole it’s a very positive co-op to be involved in,” said one shareholder. “Fonterra does a lot for the community, and on a whole I’m proud to be a part owner.”
Local board debate JO RICHARDS
With the consultation on the option of a local board for Golden Bay well underway, governance costs, rather than democratic benefits, has become the key issue. The Local Government Commission (LGC) estimates the additional direct costs associated with a local board will be $240,000pa, plus a further $42,000pa in additional remuneration costs, which if recovered through a targeted rate for Golden Bay, would result in an additional charge of $75pa per rateable property. Tasman District Council has yet to finalise its submission, but a draft document seen by The GB Weekly shows it coming out strongly against a local board. In what is essentially an update of the CEO’s letter of 10 June 2019 to the LGC, TDC’s costs of providing support are inflated well above the LGC’s estimate while allocation of responsibility is strongly discouraged. Golden Bay Local Board Working Group secretary Tony Lawton says it is important to consider both costs and responsibilities. “The governance costs for a local board will depend to some extent on the responsibilities delegated to it by the governing body.” More delegations, he says, could mean higher governance costs, but will allow increased local decision-making. Although the LGC’s process is focused on Golden Bay, interest is growing in other wards. If this leads to the establishment of local boards across the district, Tony believes a harmonised system of devolved governance could be supported by a central service centre, similar to that used by Auckland City Council to support its 21 local boards. Such an arrangement could reduce overhead costs and spread them over the entire ratepayer base. Tony describes a scenario of four local boards established across Tasman district with similar operating costs to Waikehe Island’s board ($900,000pa), and allocated most of TDC’s non-regulatory activities. “A total of $3.6m would be required to fund a central local board service centre. TDC’s current governance costs for 2019 are stated at $4.5m in their 2019 accounts. If 50 per cent ($2.25m) of this cost was transferred to support a local board service centre, in view of local boards undertaking many of the responsibilities currently performed by TDC centrally, the $3.6m drops to $1.35million ‘incremental cost, or around $60pa per rateable property across the Tasman district. This would provide community-centric local government, with its significant benefits to Tasman’s communities.”
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to Tracey Brignole and her team for 12 years of colouring our town with Mariposa. Wish you all the best.
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Inside:
Whanau meetings
THE GB WEEKLY, FRIDAY 31 JULY 2020
Gardening
Movie review
Nature diary
ISSN (PRINT) 2538-0923 ISSN (ONLINE) 2538-0931
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