Water Problems Adding Up for MPL

Ranch permit dead in the water

By Jennifer Smith

Water continues to be an unresolved issue for Molokai Properties Limited (MPL).

A Dec. 26 ruling by the Hawaii Supreme Court struck down the MPL-owned Kukui Molokai Inc.’s (KMI) application for a water use permit.  

The court’s decision multiplies the Singapore-based company’s water woes as they are now denied access to water and the ability to transfer it.

“The bottom line is that (MPL) cannot go around assuring people that it has permission to use 1.018 million gallons per day from the Kualapu`u aquifer now with this decision,” Alan Murakami, a Native Hawaiian Legal Corporation Attorney representing two of the plaintiffs in the case said.

Water Use Permit Background

MPL, also known as Molokai Ranch, acquired KMI in 2001. At the time of the purchase, KMI included the closed Kaluakoi hotel, golf course, and several potential condominium projects and home sites.

In addition to their west end land holdings, MPL also acquired a contentious water use permit granting access to a little more than one million gallons of water a day.

The Supreme Court’s ruling invalidated the 2001 Commission on Water Resource Management decision to grant KMI a water use permit.

With the original application dead in the water, MPL will have to reapply for a new use permit, regardless of previous usage. The new user classification will make it more difficult for the company to receive a permit, as existing users are given preference by the law.

The plaintiffs in the case included the Department of Hawaiian Home Lands (DHHL), Office of Hawaiian Affairs (OHA), and Homesteaders Judy Caparida and Georgina Kuahuia. In 18 points of error they cited, “multiple violations of the Commission’s public trust duties under the Hawaii Constitution, the State Water Code, and the public trust doctrine,” according to the Supreme Court ruling. 

Supreme Court Ruling

The Supreme Court found several improprieties in the Commission’s actions:

• The Commission did not adequately examine KMI’s appeal to redirect water.

• The burden to prove harm was incorrectly shifted to native Hawaiians claiming a right to exercise traditional and customary practices

• The burden of proof was incorrectly shifted to DHHL to demonstrate the harm to DHHL water needs from pumping at the nearby KMI well.

• KMI’s late application in 1993 made existing uses null and therefore KMI must apply for water as a new user. 

• A lack of consideration was given to the closure of the Kaluakoi hotel and the closure and reopening of the golf course when evaluating existing water usage.

“The above lessons apply to all water uses of (MPL), whether for the golf course, the hotel, or La`au Point, and they apply to both groundwater sources or surface water streams being tapped,” Murakami said.  

Ironically, the court did not find error in the Commission’s consideration for the precautionary principle, an argument that the burden of proof be placed on the entity whose actions have the potential for harm.

The court also ruled against OHA’s contention that Attorney Yvonne Y. Izu’s representation of the Commission presented a conflict of interest.

Izu was the deputy attorney general for the Commission during their 2001 decision. She currently represents MPL in their efforts to obtain an EIS for their proposed La`au Point Development. 

Access to the Molokai Irrigation System (MIS)

In August, an opinion from the state Department of the Attorney General ruled that MPL must stop using the state-owned irrigation system until a new contract can be awarded, according to an article in the Maui News.

However, a contract cannot be renewed without an environmental impact statement, which has yet to be completed.

What’s Next

“Just because you have made long, and uncertain, use of water for commercial purposes, a developer/landowner cannot overlook the legal protections inherent in statutes and the public trust doctrine on that basis alone,” said Murakami.

MPL will need to apply for a new water use permit, taking into account several of the changes since the 1993 application was filed, such as the closing of Kaluakoi and the reopening of the golf course.

Likewise, they will also need to conduct an environmental impact statement before applying for a new contract to use the MIS.

“(MPL) must start from scratch and justify all of its uses under the rigorous tests outlined for new uses in the water code. In essence, the water planning it must do to support its land use plans must start over,” said Murakami.