In a sweeping ruling issued yesterday in the appeal from the Commission on Water Resource Management’s decision allocating water from the Waiähole Ditch, the Hawai’i Supreme Court, while acknowledging the Commission’s efforts at water conservation, went far beyond them to ensure that Hawai’i’s streams receive the protection to which they are entitled under the law. In a landmark 163-page opinion, the Court vacated permits the Commission had issued to leeward interests and directed that the Commission reevaluate the level of flow that must remain in windward streams.

Small family farmers and Native Hawaiians, through the Waiähole-Waikäne Community Association, Hakipu`u `Ohana, and Kä Lahui Hawai’i, sought to restore streams that had been diverted for eighty years by central O`ahu sugar plantations. Healthy stream flow is needed for “instream uses” — to restore native stream life, such as `o`opu and hïhïwai; protect traditional and customary Native Hawaiian gathering rights; support the productivity of the Käne`ohe Bay estuary; and preserve traditional small family farming, including taro farming. When O`ahu Sugar announced in 1993 that it would close operations, stream restoration finally was possible, but leeward business interests — Campbell Estate, Robinson Estate, Kamehameha Schools, Dole/Castle & Cooke, and others, joined by the State — pressed to have the flow of windward stream water continue to their lands to reduce the cost of golf course irrigation, short-term corporate agriculture, and housing development. While the windward residents petitioned to amend upward the interim instream flow standard — the amount of water that must remain in the streams — to include the water that had been diverted through the ditch system, the leeward business interests applied for permits to continue to use the water in central O`ahu.

After a seven-month hearing, the Commission allocated 15.61 million gallons per day (“mgd”) to leeward offstream uses and waste from the leaky ditch system, and viewed another 5.39 mgd as a so-called “buffer” that was available for future offstream uses. The Commission added only the remaining 6 mgd (out of an annual average flow in the ditch system of 27 mgd) to the interim instream flow standard, which would remain in windward streams.

The Supreme Court concluded that much of the Commission’s decision was not supported by the evidence and failed to comply with the State Water Code. It directed the Commission to reevaluate the amount of water that windward streams require to support instream uses, vacated permits the Commission had issued to leeward interests, and ordered the Commission to make a new decision on the permits that followed logically from the evidence. The Court strongly reaffirmed that Hawai’i law recognizes the “public trust doctrine,” which says that all the waters of the state are held by the State in trust for all of the State’s citizens. The doctrine requires that requests by private interests to use such public resources for private gain be closely scrutinized to ensure that the public interest in the resource is fully protected, and that alternative water sources be considered. The Court noted that this doctrine is so important that even the legislature cannot abolish it.

Waiähole farmer Charlie Reppun commented: “Our very survival depends on understanding, maintaining, and enhancing the island ecology we are part of. This is a huge and important step towards making resource allocations with that in mind. The Supreme Court affirmed the Commission’s finding that the higher the volume of flow, the greater the support for the stream ecosystem, and put to rest the notion that water allowed to flow naturally to the ocean is ‘waste.'”

Highlights of the Supreme Court’s decision include:

The Court rejected the Commission’s setting aside more than 5 mgd as a “buffer” that would presumptively be available for future offstream use: “At best . . . a buffer is superfluous; at worst, it is a violation of the public trust and an end run around the instream use protection provisions. Since it serves no legitimate purpose, we refuse to let it stand.”

The Court criticized the former attorney general for creating a conflict of interest by personally representing the Department of Land and Natural Resources and Department of Agriculture, which had aligned themselves with leeward interests, while her deputy also represented the Commission. The Court said, “it is safe to say that the conduct of the public officials in this case did nothing to improve public confidence in government and the administration of justice in our state.”

The Court vacated the permit issued to Campbell Estate, noting that the Commission had not adequately addressed the fact that Campbell retained unused permits to pump 35 mgd from beneath its own lands while Campbell receives windward stream water for irrigating those lands. It also found that permits were improperly issued to Campbell for hundreds of acres for which no projected use had been established.

It vacated the permit issued to Pu`u Makakilo (“PMI”), a private golf course developer: “The grant of PMI’s requested allocation without any reasoned discussion of the practicability of using ground water stands at odds” with the Commission’s own conclusion that golf course irrigation is not a reasonable use of stream water where alternatives are available.

The Court found that the Commission had allocated water to all agricultural users at a rate that the evidence suggested was far greater than needed for diversified agriculture, and vacated all of those allocations.

It vacated the provision of the Commission’s decision allowing leeward users to average their uses over the entire year, which allowed them to use large amounts of water during the summer at the expense of windward streams, which need to maintain base flows at all times.

The Court rejected Kamehameha Schools’ contention that it has special “ali`i” rights to pump ground water from beneath its land in Waiawa. The Court held that KS must meet the requirements of the State Water Code for a permit like all other applicants, and that this did not amount to a “taking” of any of KS’s property rights.

The Court noted that the Water Commission had ignored its duty to consider restoring water to Waikäne Stream, and instructed it to do so, and also to reassess whether allowing 2 mgd of water to leak from the ditch was a proper use of water originating from Kahana Stream.

The Court observed that the Commission, as the “primary guardian of rights under the trust . . . must not relegate itself to the role of a mere ‘umpire passively calling balls and strikes for adversaries appearing before it,’ but instead must take the initiative in considering, protecting, and advancing public rights in the resource at every stage of the planning and decisionmaking process.” It concluded by emphasizing that our demand for water will soon outgrow our supply, and that there is an “urgent need for planning and preparation by the Commission and the counties before more serious complications develop. . . . [M]uch more work lies in the critical years ahead if the Commission is to realize its constitutionally and statutorily mandated purpose.”

Earthjustice attorney Paul Achitoff, who represented the windward parties in the case, said: “This decision vindicates the public interest in our water resources, and reaffirms the State’s duty to protect that public interest even in the face of intense political pressure. The Court has sent a strong message that all of us must work to preserve our resources for future generations — and that time is running out.”