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Cover image for Oct 10, 2007

As the Hawai’i Superferry navigates the Islands’ choppy judicial waters, some of the core issues surrounding its operations have been submerged in a rising debate over the vessel’s pros and cons.

Rep. Hermina Morita (D-14th) is trying to dredge them up again with a formal complaint asking the state Public Utilities Commission (PUC) to suspend the Superferry’s certificate to operate in Hawai’i’s waters. ‘People are so emotional over this issue they’re missing the most important thing that is happening in our communities, and this is a lack of confidence in government,’ she said.

Morita thinks that loss of faith is grounded in actions taken by Gov. Linda Lingle and her administration to first usher the Superferry through the permitting process without an environmental review–and then to keep the boat running after the Hawai’i Supreme Court ruled those actions were in error.

‘We have an administration that is so keen on pushing something through they’re missing what the courts are saying,’ Morita said. ‘All they can say is the courts are wrong.’

Russell Pang, the governor’s spokesman, did not return a call seeking comment.

Besides Morita’s complaint to the PUC, the administration’s actions have prompted several lawsuits and two large protests on Kaua’i that resulted in 14 arrests and international media coverage of surfers and kayakers blocking Nawiliwili Harbor to keep the Superferry out until the court-ordered Environmental Assessment (EA) is in.

Lingle responded to the protests by creating an unprecedented ‘unified command’ of state, county and federal law enforcement agencies to control demonstrators through a federal ‘security zone’ at the harbor.

‘It’s so political,’ said Morita, whose district includes Kaua’i’s North Shore and Kapa’a. ‘You’re using military force, police force, to enforce strictly a political decision, and that’s when government is really scary.’

Morita’s complaint, filed Sept. 26 by Kaua’i attorney Harold Bronstein, asks the PUC to suspend the Superferry’s operating certificate until it completes the environmental reviews mandated by state law, its harbors operating agreement and its PUC permit.

The PUC issued an order Oct. 4 stating it would serve the Superferry with the complaint and gave the company 20 days to respond. Superferry attorney Lisa Munger did not return a call seeking comment.

In the 21-page complaint, Bronstein cites public documents in laying out the chronology of the ferry’s approval process as it relates to environmental concerns.

The documents cited show that government agencies initially determined that a $143 million federally guaranteed loan to the Superferry, and its operations in the Islands, triggered the need for environmental studies.

Yet those same state and federal agencies later allowed the Superferry to proceed without conducting any review of how ferry services might affect both the environment and local communities after the Lingle administration determined no review was needed.

A rocky course

‘One of the reasons why we did this complaint was to try and get everyone educated about the timetable and what was being said and done about the environmental review,’ said Morita, ‘We want to get the timeline straight.’

That timeline is key to Morita’s contention that the Superferry enjoyed special treatment from the Lingle administration. And that political favoritism, she said, is leading the state along a rocky course that threatens to taint Hawai’i’s business climate, weaken its ‘progressive’ environmental laws, jeopardize its citizens and undermine the neutrality of a regulatory agency.

‘We’re making such important policy decisions that I don’t want to see our communities being bullied,’ Morita said in explaining why she filed the complaint. ‘I don’t think I would be so bold without Harold [Bronstein]. It’s like, can you protect my back?’

Morita and Bronstein previously teamed up to challenge Na Pali Coast tour boats operating in Hanalei Bay, and Bronstein recently won a state Supreme Court decision in a public interest case related to shoreline setbacks.

It took Bronstein nearly two weeks to sift through documents filed with various agencies, including the PUC, the federal Maritime Administration (MARAD) and the state Department of Transportation (DOT), and write the complaint.

The complaint shows that the DOT’s decision to exempt $40 million in Superferry-related harbor projects from environmental review influenced both MARAD and the PUC to take a similarly lenient approach.

‘It was kind of like a house of cards,’ Morita said, because DOT’s decision was later invalidated by the state’s highest court in an August ruling.

The DOT has since agreed to conduct a statewide EA, which could lead to the need for a broader Environmental Impact Statement (EIS). Lingle is pushing to keep the ferry operating while that process is under way–an issue that is the subject of a Maui Circuit Court hearing now in its fifth week.

Morita’s complaint contends the ferry cannot operate while the EA is conducted because state law requires that environmental studies be completed and accepted prior to implementing an action.

PUC records cited in Morita’s complaint indicate the agency recognized that ‘issues were raised by some at the public hearings about the impact of the proposed ferry system on the environment,’ and that some had suggested that an ‘environmental assessment be done on the proposed ferry services’ effect on the surrounding environment.’

The Hawai’i Superferry remains docked
in Honolulu for now.

The PUC also found that the environmental concerns raised by the public were ‘important issues that should be addressed.’ However, the agency stated the issues ‘need not be addressed in this particular decision and order, since the determination of whether the proposed ferry service and its effect on the harbors and surrounding areas require an environmental assessment is currently being reviewed and addressed by the DOT,’ the complaint states.

‘The PUC punted to the DOT, but the PUC really had the responsibility of conducting the environmental review,’ Morita said. ‘Because if they (Superferry) didn’t have a license, they wouldn’t need (DOT-funded) harbor improvements. If anything, I hope this opens up that the PUC had the responsibility of conducting this environmental review.’

Morita said the PUC’s deference to the DOT also raises the question of ‘who is providing oversight of state agencies if regulatory agencies don’t require applicants to follow the law? Where are your checks and balances? This is what really upsets me, the political influence over a regulatory body that is supposed to be neutral. That stinks.’

Although the PUC did not require Superferry to conduct an EA, it did impose conditions when granting the company a Certificate of Public Convenience and Necessity (CPCN) on Dec. 30, 2004.

‘We find it necessary, however, to condition our authorization in this docket upon Applicant’s showing, to the satisfaction of the commission, that Applicant has complied with all applicable federal and state laws, rules and regulationsÖto the extent applicable to ensure that all such requirements are appropriately addressed,’ according to PUC records cited in the complaint.

While the Superferry was moving through the PUC process, it also had applied to MARAD for loan guarantees to construct two high-speed ferries. In its December 2004 environmental review of the Superferry’s application, MARAD determined that because 78.5 percent of the project would be funded through $143 million in Title XI loan guarantees ‘the proposed action is considered ‘Major’,’ according to the complaint.

Under the National Environmental Protection Act (NEPA), ‘major actions’ that are undertaken by federal agencies or use federal funds typically require an EA and often an EIS as well.

On Feb. 23, 2005, the DOT issued its exemption determination. A month later, MARAD followed the state’s lead and excluded the Superferry from NEPA requirements. In its March 28, 2005 record of that exclusion, MARAD states that during its December 2004 review of the application ‘there appeared to have been very little, if any, NEPA or state environmental work performed related to the proposed ferry service that would be adequate for MARAD’s responsibilities under NEPA.

‘However, since that time,’ the record continues, ‘the State of Hawai’i Department of Transportation completed a review of the proposed actionÖand determined that the proposed action is exempt from further review.’ Based on the state’s decision, ‘the NEPA program manager has determined that the proposed action is categorically excluded from further NEPA review.’

The NEPA exemption was granted even though the National Marine Fisheries Services and Marine Mammal Commission raised concerns in 2005 about the high-speed ferry’s potential impacts on marine mammals, including the likelihood of collisions with humpback whales, according to an Oct. 4 article in the Honolulu Advertiser.

In a Jan. 25, 2005 letter to MARAD, commission director David Cottingham noted that any federal agency taking action on behalf of the Superferry ‘has an obligation to conduct appropriate environmental analyses…because a ‘may affect’ situation is obvious,’ the Advertiser reported. The commission’s current head, Tim Ragen, also reportedly told the Advertiser that he disagrees with the exemption and the agency was surprised MARAD did not seek a consultation on the project.

A MARAD official testified during the current Maui court hearing that the exemption was warranted because the agency was not providing a direct loan or financing to the Superferry.

Despite the NEPA exemption, MARAD did recommend that the loan guarantee contract include the requirement that the Superferry ‘comply with all applicable environmental rules and regulations,’ according to Morita’s complaint.

Superferry officials have repeatedly asserted that the loan guarantees were contingent upon the state exempting the project from environmental review. But MARAD records cited in the complaint indicate the NEPA exemption was tied to the state’s decision, not the actual loan guarantees.

It’s all lip service

The complaint goes on to report that on or about Sept. 7, 2005, the DOT and Hawai’i Superferry entered into a harbors operating agreement. One provision of the agreement states: ‘In the event a governmental authority or a court of law determines that an environmental assessment or environmental impact statement is required regarding HSF’s operations, HSF will comply with all applicable environmental laws, statutes, rules, regulations, ordinances, orders, directives and guidelines,’ including NEPA and the Hawai’i Environmental Protection Act, (HEPA) also known as HRS chapter 343.

On Aug. 27 of this year, following the Supreme Court ruling that invalidated the DOT’s exemption, the PUC asked Superferry to address the court order. Hawai’i Superferry replied: ‘HSF is in compliance with all applicable laws, rules and regulations, and the August 23, 2007 order does not change that status,’ according to the complaint.

On Aug. 31, the Supreme Court released its full opinion on the case and concluded: ‘Contrary to the expressly stated purpose and intent of HEPA, the public was prevented from participating in an environmental review process for the Superferry project by DOT’s grant of an exemption from HRS chapter 343.

‘The exemption was erroneously granted as DOT considered only the physical improvements to Kahului harbor in isolation and did not consider the secondary impacts of the environment that may result from the use of the Hawai’i Superferry in conjunction with the harbor improvements.

‘All parties involved and society as a whole would have benefited had the public been allowed to participate in the review process of the Superferry project, as was envisioned by the Legislature when it enacted the Hawai’i Environmental Protection Act.’

Following the Supreme Court’s decision, a Maui judge approved a temporary restraining order to keep the boat from servicing that island. But Superferry did travel to Nawiliwili Harbor on Aug. 26 and 27, an action that Morita’s complaint contends was ‘in willful violation’ of HEPA, the harbors operating agreement and the conditions imposed under its PUC certificate.

Following public demonstrations at Nawiliwili Harbor, which prevented the boat from docking on Aug. 27, Superferry voluntarily suspended its service to the island.

Lingle chastised the demonstrators, saying their actions were giving the state ‘a very bad reputation.’ Rep. Fred Hemmings (R-25th) said the protests gave Hawai’i ‘a black eye’ and reinforced the perception that the Islands are a bad place to do business.

Morita disagrees. ‘We do far more damage to our business climate when we send out the message you have to rely on political favors to get things approved, and that’s what this reeks of.’

Two weeks after the protests, Lingle announced she had decided the ferry could return to Kaua’i on Sept. 26. She went on to say she had formed a ‘unified command’ of state, local and federal law enforcement agencies to ensure that demonstrators would not again prevent the Superferry from entering Nawiliwili Harbor.

Andy Bushnell, a retired Kaua’i Community College history professor, said he could recall nothing similar to such a command in Hawai’i’s past–except when martial law was imposed after the Japanese bombed Pearl Harbor. But in that case, he said, the unified command was led by the military and opposed by civilian authorities, who eventually reclaimed their power to govern the Islands.

As part of a plan devised by the ‘unified command,’ the Coast Guard used an emergency rule to create a ‘security zone’ that makes most of Nawiliwili Harbor off-limits to everyone, including fishing boats and canoe clubs, for one hour prior to the ferry’s arrival until 10 minutes after it leaves port. The rule also restricts public demonstrations to Kalapaki Beach, which fronts the Kaua’i Marriott. Big Island attorney Lanny Sinkin is seeking a restraining order against the security zone in federal court.

On Sept. 20, Lingle visited Kaua’i to advise residents of the penalties associated with violating the security zone, including state and federal charges and fines, property seizures and investigations by Child Protective Services. More than 1,200 persons came to the meeting, expecting to discuss the ferry’s return. The crowd responded with boos and catcalls when it learned Lingle was firm in her decision to let the ferry run.

The following day, however, the Hawai’i Superferry announced it had decided on its own, without consulting the governor, to indefinitely suspend service to Kaua’i. Lingle later agreed it would be prudent to wait for the Maui court decision. But she also began meeting with key lawmakers to discuss calling a special session specifically to help out the Superferry if the court rules it cannot operate until the environmental review is done.

Many lawmakers have supported such a session, but Morita sees it as further politicizing the issue. ‘The only thing the Legislature could do without gutting the law (HEPA) is to exempt the Superferry from the process,’ she said.

And that, Morita said, threatens to undermine Hawai’i’s environmental laws, which were considered ‘groundbreaking’ when adopted.

‘We were such a progressive state and now we’re regressing,’ she said. ‘We all agree the environment is our economy, but we do nothing to protect it. It’s all lip service.’