Ann: GENERAL: CRP: Chatham slams EPA for precipitate action

• Release Date: 03/12/15 08:31
• Summary: GENERAL: CRP: Chatham slams EPA for precipitate action
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					CRP
03/12/2015 08:30
GENERAL
PRICE SENSITIVE
REL: 0830 HRS Chatham Rock Phosphate Limited

GENERAL: CRP: Chatham slams EPA for precipitate action

Chatham Rock Phosphate Limited

Market announcement

3 December 2015

Chatham slams EPA precipitate action

Chatham Rock Phosphate advises it intends to oppose an application for
summary judgment for costs relating to the marine consent hearing process,
surprisingly received last night from the Environmental Protection Authority.
The EPA is seeking payment of just under $800,000 of invoiced but unpaid
costs.

CRP is considering its legal position but, as a consequence of the EPA's
action, is likely to seek a judicial review of all costs incurred by the EPA
and invoiced to CRP during the environmental consenting process, which the
company disputes.

Managing Director Chris Castle said CRP has been clear throughout the process
that it disputes that the charges are both actual and reasonable as required
by regulations, and is astonished the EPA would seek summary judgment when
the company has detailed its concerns on several occasions that a large
proportion of its costs are neither appropriately or lawfully invoiced to
CRP. Our detailed forensic examination of their invoices has revealed, inter
alia, that we have been charged for costs unrelated to our application,
overcharged in respect of numerous matters, and invoiced for costs where no
satisfactory information justifying them has been made available.

"We have strong grounds for a judicial review of all of the EPA's invoiced
costs on the basis the charges are unreasonable and unlawful, and in light of
the EPA's ill-advised actions it appears necessary for this to be laid bare".

Mr Castle said the company had been working with the EPA throughout 2015 to
try and sensibly resolve the situation, and considers it unfortunate for the
EPA to resort to the courts when such significant concerns had been raised by
CRP and had still not been appropriately dealt with by the EPA.

The total quantum of costs invoiced by the EPA is $2.66 million, of which CRP
has paid $1.86 million.

The concerns CRP has relate to several hundred separate cost items that it
believes have been significantly overcharged, are not appropriately
attributable to CRP's consent process, or have never been clearly explained
or justified. In many instances further information requested to resolve
these concerns has not been released.

In addition, the EPA significantly exceeded its forecast budget on the
project, and simply continued to incur excessive and unjustified costs which
it passed on to CRP without any apparent consideration of whether the charges
were appropriate under the regulations.

There are many examples of the EPA charging staff time well above the cost
recovery of their salaries and there is a total lack of transparency and
accountability about charging value for money or about charges to CRP where
there is no evidence of any benefit to the consent process.

"The costs queried include everything from insufficient documentation, to
incorrect amounts from expense claims, hotel charges for contractors that
include alcohol, and costs those that do not appear be reasonable or
justifiable - such as using out of town contractors for roles that should
have been carried out in house or at least with local contractors. The EPA
rented hotel rooms for meetings of the decision making committee rather than
using its own meeting rooms.  Exorbitant taxi use by Wellington-based EPA
staff for travel within the central city was also passed on to CRP without
any further consideration.

"CRP is disputing the full quantum of costs and is not paying the amount
claimed until it is satisfied about the validity of the money invoiced.

"We have a duty of care to our shareholders regarding money spent."

"These costs have not been reviewed independently and we have serious
concerns about the transparency and accountability of EPA processes.  We note
these have also been raised in the proposed amendments to the EEZ Act. The
Bill also seeks to address issues of cost recovery that have been raised by
ourselves and other applicants."

CRP is also reserving its position as to whether it pursues a damages claim
against the EPA relating to the release of a staff report during the consent
process in 2014, which seriously damaged the company's market value, derailed
a London AIM market listing and an associated capital raising.

Chris Castle
CEO - Chatham Rock Phosphate Ltd
+64 (21) 558 185
[email protected]
Skype: phosphateking
End CA:00274545 For:CRP    Type:GENERAL    Time:2015-12-03 08:31:05