Far North Holdings: A Force For Good?
The case for modifying Far North Holdings' Statement of Intent
Far North Holdings Limited is our company; its only shareholder is the Far North District Council. To become a force for good simply requires our District’s Mayor and Councillors revise the scope of the operating instructions of this company on behalf of the stakeholders, us the people of the Far North.
In its current Long Term Plan the District Council instructs Far North Holdings Limited “As the Far North District Council's commercial vehicle, FNHL will facilitate and create commercial and infrastructure assets in the Far North District with the aim of maximising profit for its shareholder – Council, and operate as a commercial profit oriented feature.” This has been the Council instruction since 2012.
Each year, Far North Holdings prepares a Statement of Intent that is approved by the District Council. Since at least 2015, Far North Holdings has adopted an objective that differs from that set out in the Long Term Plan, and just commits to the aim of creating profits and shareholder value.
The District Council has not raised concerns about Far North Holdings adopting an objective that is different to the instruction the Council has set out in the Long Term Plan.
Far North Holdings' operations cover maintaining and managing public infrastructure and recreation facilities such as wharves, jetties and boat ramps, the Opua Marina, airports at Kerikeri and Kaitaia; and a whole lot of commercial ventures covering residential subdivision, commercial buildings and business parks, a dairy farm, tourist attractions and more. As of 31 December 2019, Far North Holdings had $82.7 million of “investment properties”, making up 71% of its total assets of $116.7 million.
There are many issues arising with this profit maximising/creating profits approach that are inconsistent with the District Council's purpose of promoting social, economic, environmental, and cultural well-being of our communities, including
- a fundamental ethical issue arising with the Council requiring profit maximisation from public and recreational infrastructure, including the many non-commercial assets managed by Far North Holdings Limited;
- property speculation not community development;
- using commercial power against small local businesses;
- poor design and construction standards to save money;
- significantly deferred maintenance;
- shifting costs to the Council and to the public; and
- loss of public access to, and use of, public areas.
It was not always like this. In 2006, the District Council's instructions to Far North Holdings Limited included managing recreational maritime facilities as cost efficiently as possible for the long-term benefit of the community, to have regard to the interests and aspirations of the communities it operates within, and to operate in an environmentally sensitive manner.
It is time for Far North Holdings to become a force for good, to end its property speculation, for the District Council to give it new operating instructions that include:
- a general purpose of helping make the Far North a better place,
- recognition that many of the facilities it manages are public infrastructure and/or reserves, not commercial assets,
- not profit maximising, but generally required to cover costs,
- being community oriented, fitting in with communities,
- working with Te Tiriti partners,
- ensuring public access and use of facilities,
- showcasing good design, the Far North, and good environmental practices.
Author, Andrew Riddell, is a long term term resident of the Bay of Islands (from Opua).