Case study casts doubt over ESG claims of Canadian pension fund PSP’s major agriculture investment on Maui

farmlandgrab.org

Case study casts doubt over ESG claims of Canadian pension fund PSP’s major agriculture investment on Maui, calls for greater scrutiny into the community impact of investments

Responsible Markets today published a case study of an approximately $600 million investment that the $135.59 billion Public Sector Pension Investment Board (PSP) is making in a former sugar plantation in Maui, Hawai’i. The report found evidence that the Montreal, Canada based pension plan, which invests its capital through PSP Investments, is not living up to its own environmental, social responsibility, and corporate governance (ESG) principles, resulting in adverse impacts on Maui’s environment and residents.

The study entitled “From the Mountains to the Sea: When Big Money Moved in on Maui’s Agriculture” takes a comprehensive look at Mahi Pono LLC, capitalized by PSP. Mahi Pono was created in December of 2018 under management of Pomona Farming, a subsidiary of the California based private equity firm Trinitas Partners. It now owns and operates over 41,000 acres of farmland in Maui’s central plains, which it acquired from long-time plantation owner Alexander & Baldwin.

Among Responsible Markets’ findings is that the success of the Mahi Pono investment is dependent on securing water rights at exceptionally low rates, at a direct economic and cultural cost to the indigenous Hawaiian people, and on the continued diversion of water away from East Maui, a practice that undermines Hawaiian farming communities. Rather than creating local food security as the company has promised, the Mahi Pono business plan is dependent on export crops. Additionally, the company operates secretively and with little transparency, and has failed to generate the number of jobs promised.

“Through Mahi Pono, PSP is seeking to profit by exploiting the resources of the Hawaiian people,” said Shay Chan Hodges, a co-organizer of Responsible Markets’ initiative, the Maui ESG Project, and co-author of the report. “This is not an ESG investment; it is merely a new version of the extractive practices of plantation capitalism that have been so damaging to Maui’s culture, environment, and economy for over 100 years.”

“The Mahi Pono case study illustrates the importance of early community engagement and ongoing partnership in land-based investing,” says Delilah Rothenberg Founder and Executive Director of the Predistribution Initiative, a multi-stakeholder effort to improve investment structures to share more wealth and influence with workers and communities, and ultimately address systemic risks including income inequality and climate change.

“With capital flows that are so intermediated, meaningful relationship development is often overlooked by distant investors – even asset owners and allocators who are taking measures to integrate ESG. Yet this lapse jeopardizes investors’ returns and perpetuates legacies of colonialism, with foreign powers undervaluing the risk that locals take and the value they offer with their land, resources, and labor,” concluded Rothenberg.

“Large private market agricultural land acquisitions in Hawai’i are all too familiar – wealthy investors parachuting in, missing a golden opportunity to ‘build back better’ for all impacted community stakeholders,” says Lisa Kleissner, impact investment pioneer and co-founder of Hawaii Investment Ready. “While access to water is the hook in this report, the water issue serves to underscore the lack of alignment between Mahi Pono’s objectives and the community’s needs. This report comes to the rescue by laying out in clear, pragmatic terms how Mahi Pono LLC and, for that matter, any private investor in agriculture can move investor/community discourse to a new, mutually beneficial level. First, ancestral rights must be acknowledged and addressed. And secondly, the business and financial model must demonstrate evidence-based community-aligned economics.”

The report shows how investors use the language of ESG and impact investment to promote, and invest in, economic opportunities that do not necessarily have a net positive ESG benefit. Responsible Markets calls on PSP and its staff to meet directly with community members and other stakeholders on Maui to understand the problems Mahi Pono is causing as well as the missed opportunities for positive transformative investment. True community intelligence is invaluable and cannot be outsourced to investment managers and advisors.

PSP and Trinitas Accused of Greenwashing Hawaiian ESG Investment

Institutional Investor
by Julie Segal –

A Canadian pension fund and its private equity partner come under fire. –

Canada’s PSP Investments, which invests for the Public Sector Pension Investment Board, is under fire for greenwashing a sustainable investment in Hawaii. –

Responsible Markets, a 20-year-old consulting firm in Hawaii focused on the environmental, social, and governance impact of investments, has published a detailed case study arguing that PSP’s $600 million investment through a joint venture called Mahi Pono in a former sugar plantation in Maui, Hawaii is not in accord with PSP’s own ESG standards.

The findings from the year-long research project comes as a critical mass of pensions, endowments, and other institutions publicly commit to investments that meet comprehensive ESG and sustainability goals as well as financial returns. Asset managers, especially those in the U.S, are scrambling to keep up.

The allegations of greenwashing illustrate the complexity of sustainable and ESG investing, particularly when external managers are used.

Mahi Pono, a farming venture between the Public Sector Pension Investment Board and Pomona Farming, a subsidiary of private equity firm Trinitas Partners, purchased the 41,000 acres of farmland in Hawaii in December 2018. At the time, PSP said that, among other things, the deal would ensure that the land would continue to be used for agriculture, that green space would be preserved in Central Maui, and that the acreage would be a long-term source of revenue for the local economy. The project was also intended to create food security for residents and local jobs.

But Responsible Markets argues that Mahi Pono depends on securing water at rates that are exploitative to indigenous Hawaiians and diverts water from local farmland.

“Rather than creating local food security as the company has promised, the Mahi Pono business plan is dependent on export crops,” wrote Shay Chan Hodges, a co-organizer of Responsible Markets’ initiative, the Maui ESG Project, and co-author of the report. “Additionally, the company operates secretively and with little transparency, and has failed to generate the number of jobs promised.”

According to the report, called “From the Mountains to the Sea: When Big Money Moved in on Maui’s Agriculture,” PSP Investments and its external manager use the language of ESG and impact investments, but the results haven’t yielded benefits in line with that narrative.

Ryon Paton, president of Pomona Farming and Executive Chairman of Mahi Pono, said the project is enormously complex and still in its infancy. For example, the project involves investing $30 million to upgrade an old gravity-fed water system that was in disrepair. “The overarching goal is to provide clean foods to the local Hawaiian market and for export,” he said. Paton added that rates paid for water are determined in a public forum and the manager has filed an environmental impact statement. The manager is now in the process of responding to 500 comments it has received from the public. “The long-term lease rationalization process is public and anybody can bid on the right to the water. We don’t negotiate that directly,” he said.

[II Deep Dive: ‘I Will Get Very Serious About ESG — But Not Yet,’ Allocators Claim]

Responsible Markets wants PSP to meet with the community in Maui to understand the problems that the project is causing, as well as what it calls missed opportunities. It also lays part of the blame on PSP’s engagement of an external manager. “True community intelligence is invaluable and cannot be outsourced to investment managers and advisors,” according to the report.

The case study alleges that Trinitas has a history of making questionable sustainable investments, particularly when it comes to water. According to the report, “Trinitas Partners and their affiliates have shown themselves to be masters of sustainable investment rhetoric, [but] the on the ground realities of their agricultural investments show a much more complex picture.” The case study outlines a deal that the partners executed in California, which converted land from vineyards and other crops into almond farms. Almond farming has become a hot button issue in California as these farms use significant amounts of water. Paton stressed that its orchards in California have received the highest level of sustainable certifications.

“Capital markets have become so intermediated that it’s difficult for investment professionals within a large institution to understand what’s happening on the ground,” Delilah Rothenberg, founder of Development Capital Strategies, an advisory firm specializing in sustainable and responsible investment, told II. “A lot of investors do hide behind the excuse of using external managers until there’s enough of a backlash where they have to address the issues,” she added. Rothenberg isn’t familiar with PSP’s Maui investments and couldn’t comment on the case study in particular.

Mahi Pono farmers pivot amid pandemic

Maui News
by Kehaulani Cerizo –

New crops go to market; 3,500 acres of plantings slated this year –

Wind. Drought. Pests. Farming in Central Maui already holds a unique set of challenges. Add a global pandemic and agriculture operations are tested in a whole new way.

So Mahi Pono, the largest agriculture company on Maui, has made key changes to its operations in light of coronavirus.

The pandemic affected everything from shipping costs — a 46 percent increase in Young Brothers rates took effect last year — to in-field work that needed COVID-19 safety protocols. Restaurants and hotels — major markets for local produce — closed, causing the company to look at the type and scale of its crops.

One bright spot of the pandemic is that it emphasized the need for food sustainability, making farming more essential than ever, Mahi Pono officials said.

“We’re an island state that continues to import about 90 percent of all of our food; that makes us vulnerable every time there’s a natural disaster, shipping issues or a global pandemic,” said Shan Tsutsui, Mahi Pono chief operating officer.

During a recent farm tour, Tsutsui and Mahi Pono officials discussed the pandemic’s impact on last year’s farm plan and products made available in 2020, along with adjustments they’ve made to this year’s plan.

They highlighted the Chef’s Corner project, a test plot for new crops; the progress of the company’s community farm, which rents parcels to local farmers; and recent plantings that have done surprisingly well, including watermelon, broccolini, kale and green beans.

Instead of producing a signature crop, Mahi Pono wants to be known for an array of locally grown foods — a big departure from the monocrop of sugar cane that has occupied Central Maui fields for more than a century.

“Transforming former sugar cane fields into diversified agriculture is not an easy task,” Tsutsui said. “It takes time, hard work and financial commitment.”

Watermelon for the people

Chase Stevenson, Mahi Pono Chef’s Corner farm manager, showed off its rows of green, yellow and purple beans, butternut and kabocha squash, red kale, green kale, dinosaur kale, bok choy, green onions and orange sweet potato.

The corner, comprising about 40 acres of organically managed land off Maui Veterans Highway, tests what works best for Mahi Pono farmers and for the market, Stevenson said. From there, farmers scale and grow. Each time the crop is rotated, it improves the soil.

Stevenson, who has about a decade of Maui farming experience at Kula Agriculture Park and in Haliimaile, said farming in the central plains is both challenging and rewarding.

“You never know what you’re going to run into. It is fun even though it doesn’t sound fun — it keeps things interesting,” Stevenson said, laughing.

Some crops, such as watermelon, were a pleasant surprise. Watermelon grown on about a half-acre was consumed almost entirely by the local market with the remainder shipped to the Big Island, Tsutsui said. Because it was a hit, watermelon fields will be expanded with yields scheduled for summer.

Darren Strand, vice president of agricultural outreach and business development, said the company is learning that beans, broccolini and kale do really well, but with COVID-19 causing restaurant and hospitality markets to scale back, it’s hard to move produce that would typically sell easily.

“Anything you grow with a good quality and a consistent supply, you are going to be able to move,” Strand said. “Hopefully things are going to turn around in the next month or so and we will be positioned with this project, and some potatoes, onions and papayas, to be ready to hit that and run.”

Farther south, sweet onions are at various stages of growth, with some ready for April or May harvest. Non-GMO solo and sunrise papaya trees that were sticks last year have shot up and are producing well.

In all, Mahi Pono will plant more than 3,500 new acres of crops this year, according to Grant Nakama, vice president of operations.

Another program, the Mahi Pono community farm, expects tenants to move in by the end of this month. The program provides “farm ready” land, including water, to local growers for $150 per acre a year. Tentative agreements have been reached with 14 farmers and small businesses for an initial 60 acres. A second phase of community farmland will add more acreage, officials said.

Pivoting amid the pandemic

Despite the pandemic, Mahi Pono last year brought its products to market under the Maui Harvest brand. Potatoes were sold at Whole Foods in Kahului, Honolulu and Kailua; watermelon, KTA Market in Hilo; papayas, Takamiya Market in Wailuku; watermelon, potatoes, eggplant, Pukalani Superette; papayas, Target in Kahului; broccolini, Tamuras in Kahului and Lahaina; and watermelon, Times Supermarket in Kihei and Honokowai.

An extra emphasis was placed on row crops after the onset of the pandemic in order to provide more locally grown potatoes, onions and papaya.

“This shift allowed us to donate more than 60,000 pounds of produce to nonprofit organizations like Maui Food Bank, Hawaii Foodbank and Chef Hui that directly helped those in need,” Tsutsui said.

Another area of growth despite the pandemic was Mahi Pono’s staff. The company went from 150 employees at the start of 2020 to about 260 employees at the beginning of this year.

“As an essential business during the pandemic, we were fortunate to be able to continue farming, expand operations and hire more employees,” said Mark Vaught, vice president of farm development.

Vaught, Nakama and Tsutsui were promoted in 2020. Tsutsui succeeded Tim O’Laughlin, who relocated to California to focus on new initiatives for both Mahi Pono and Pomona Farming, a news release said.

When it cames to water in 2020, Nakama said Mahi Pono made “every effort to be efficient.”

In 2020 the company diverted an average of 22.7 million gallons per day from East Maui — below the state interim in-stream flow standards and half the allowable water allocation under the Alexander & Baldwin revocable permit, he added.

“The amount of water was the minimum needed to support our agricultural operations and to meet our obligations to the County of Maui for Upcountry residents and water users,” Nakama said.

Looking forward, he said the company will continue to divert only what is needed to meet crop and Maui County obligations.

For ‘generations to come’

Mahi Pono, a joint venture between a California farming company and a Canadian pension fund, acquired 41,000 acres of former sugar cane land and half of the East Maui Irrigation water delivery system from Alexander & Baldwin in late 2018.

Since the purchase, Mahi Pono officials have said they should be viewed separately from A&B, which has a controversial history of water use and sugar cane operations.

Still, Albert Perez, executive director and co-founder of environmental group Maui Tomorrow Foundation, said the future of the new company remains uncertain because A&B has a hand in its success due to A&B’s control of East Maui water rights.

He added that the foundation is working with regenerative farmers to provide Mahi Pono a list of suggestions that will boost soil fertility, reduce and eliminate the need for pesticides, minimize windblown dust and increase the water retaining capacity of the soil.

“However, we are hopeful that under the leadership of Maui native Shan Tsutsui, sustainable, value-added agriculture that provides local food security will truly be the goal,” said Perez, who recently toured the farm.

Tsutsui, the former Hawaii lieutenant governor, said his life has been dedicated to public service. He said he sees Mahi Pono, which provides student internships and nonprofit programs, as the next chapter of community outreach.

“For me, it has been rewarding to be able to be a part something that’s going to have a major, positive impact on our community for many generations to come,” he said. “Not only are we growing crops for consumption, but we are also ensuring that Central Maui will remain undeveloped and in agriculture well into the future.”

Tsutsui said that in its short time, Mahi Pono has been working tirelessly, especially during a pivotal pandemic year. This includes clearing the land, researching the best crops that would thrive in Central Maui’s soil and climate, investing in modern farming technology and equipment, planting and maintaining fields, and implementing a food processing system and distribution channels.

It also established relationships with distributors, wholesalers and chefs to get Maui Harvest produce into stores, restaurants and homes, he said.

But like all worthy endeavors, changing the course of history will take time, Tsutsui said.

“We still have a long a road ahead,” he said. “We really want the public to be patient and understand that this will take time, but we are committed to delivering quality, Maui-grown produce.”

* Kehaulani Cerizo can be reached at kcerizo@mauinews.com.

_______________

MAHI PONO 2021 FARM PLAN AT A GLANCE

Crops already in the ground:

• Citrus: More than 1,800 acres. Along Haleakala, Maui Veterans and Kuihelani highways and Central Maui interior fields.

• Coffee: More than 150 acres. Right below Pukalani.

• Potato: More than 50 acres. In western fields between Maui Veterans and Kuihelani highways.

• Onions: More than 50 acres. In western fields between Maui Veterans and Kuihelani highways.

• Papaya: More than 20 acres. In Central Maui interior fields.

• Avocado: More than 10 acres. Near Maui Humane Society and Maui Veterans Highway.

Planting this year:

• 3,500 more acres of citrus.

• 150 more acres of coffee.

• Replanting onions and potatoes.

• 20 more acres of papaya.

An additional 20 acres to be planted in the Chef’s Corner project (in western fields between Maui Veterans and Kuihelani highways), which will serve as a test plot for potential new crops.

Can we finally standardize ESG standards?

GreenBiz
By Tim Mohin

Most GreenBiz readers are well aware of the complex sustainability reporting landscape. It seems like every year new reporting standards or frameworks are added to the overstuffed workload of the corporate sustainability professional.

As the former chief executive of the Global Reporting Initiative (GRI), I had a role in the ongoing movement to “standardize the standards” that companies use to report their sustainability results. I also worked on the corporate side (Intel, Apple and AMD) and have a deep appreciation of the work that goes into these reports.

Over the years, there has been more talk than action on reducing confusion and burden in the reporting space. To be fair, some of the burden is self-inflicted by companies that insist on publishing 100-plus page sustainability reports.

As we enter 2021, there are strong signals of meaningful change in the sustainability reporting world. Three main trends are emerging:

Mandatory disclosure: Policymakers are increasingly requiring ESG disclosure around the world. For example, the European Union (EU) will tighten its “Non-Financial Reporting Directive” in 2021, which requires environmental, social and governance (ESG) disclosure from companies with more than 500 employees doing business in the EU. And it’s likely that the incoming U.S. administration will introduce new ESG mandates as well.
Investor demand: There were record inflows to ESG investment funds in 2020 and the total tops $40 trillion — larger than the entire U.S. economy. Major asset managers such as BlackRock are using their ownership stake to pressure companies to improve their ESG disclosures.
Consolidated ESG standards: Recently, four leading ESG standards organizations — GRI, the Sustainability Accounting Standards Board (SASB); CDP (formerly the Carbon Disclosure Project); the Carbon Disclosure Standards Board (CDSB); and the International Integrated Reporting Council (IIRC) — declared their intent to collaborate. While this is a welcome signal, all of this work could be rendered moot by the International Financial Reporting Standards (IFRS) Foundation’s proposal to develop ESG standards. One hundred twenty countries use the IFRS Standards as the foundation for company financial disclosure, making it more than likely that these countries will endorse and require companies to use the new ESG standards.
The IFRS Foundation received more than 500 comment letters on its sustainability standards proposal with many key stakeholders in support. Given the momentum, the IFRS Foundation seems well-positioned to accomplish the elusive goal of a single global ESG standard

I have stated publicly and will reiterate here that I strongly support the IFRS action. A globally accepted ESG standard will improve the quality and comparability of disclosure, unlocking investment and trade that will improve, rather than ignore, the sustainability needs of society.

But there are several key challenges to address:

1. Materiality: The mission of the IFRS Foundation is “to develop standards that bring transparency, accountability and efficiency to financial markets around the world.” The concerns of financial markets are a subset of the broader concerns of sustainability. The IFRS Foundation must adopt a broader view to create transparency for sustainability issues that may not yet be financially material to companies or investors but are very important from a sustainability lens. Many companies already report on ESG matters beyond the scope of financial materiality and, as we saw in the pandemic, the definition of materiality is fluid and dynamic. It’s crucial that the IFRS articulates a strategy to straddle the boundary of “dual materiality,” enabling transparency on issues important for financial reasons and important to people and the planet.

2. Comparability: Many have criticized the lack of comparability in sustainability disclosures. Sustainability, unlike financial matters, includes a vast array of disparate issues that are not easily compared. An example is reporting on gender diversity vs. greenhouse gas emissions: Both are well within the scope of sustainability reporting, but obviously can be neither compared nor offset. As such factors cannot be reasonably merged into a sustainability score, they must be compared within the boundaries of the topic. The IFRS should emphasize the inherent lack of comparability between disparate ESG issues.

To enhance ESG comparability, the IFRS should consider the concepts in the International Business Council/World Economic Forum report: “Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation.” It outlines a series of universal metrics drawn from existing ESG standards. Setting aside the selection of the metrics, universally required disclosures will provide greater consistency of reporting across sectors and thus increase the quality and comparability of reporting.

3. Capabilities: The IFRS’s competency and credibility in the development of globally accepted financial disclosure standards makes them a natural hub for this work. But, because they have little experience with ESG issues, they will need to hire staff with sustainability credentials. And as they develop the standards, the IFRS must engage recognized experts in each respective topic that represent all relevant sectors, geographies and stakeholders. Blending sustainability expertise with the IFRS core competencies will not be easy, but is essential for the success of this proposal.

4. Technology: The sad fact is that the tools for gathering, auditing and reporting sustainability information are poor. The IFRS should incorporate the latest reporting technology into its sustainability standards. Information technology will not only reduce the burden of reporting, it will make it more actionable. Technology also will improve the quality of reporting, thus making it more reliable for investors and stakeholders and thus more effective in driving sustainability benefits.

After 35 years working in this field, it’s rewarding to see the rapid maturation of the sustainability movement. By taking on ESG standards, the IFRS Foundation is forging a path toward a global common language for sustainability. It is also confirming that sustainability has moved into the mainstream of global commerce. In essence, this signals the alignment of capitalism with the needs of people and our planet — and not a moment too soon.

Mahi Pono Promotes Shan Tsutsui to Chief Operating Officer

MauiNow

Mahi Pono LLC has announced the promotion of Maui’s Shan Tsutsui to chief operating officer. Tsutsui succeeds Tim O’Laughlin who will be relocating to California to focus on new initiatives for both Mahi Pono and Pomona Farming.

In his new role, Tsutsui will be responsible for all day-to-day operations for the Maui-based farming company which includes management operations, business strategy, community leadership, government relations and sales and distribution.

Tsutsui joined Mahi Pono in Jan. 2018 as its senior vice president of operations. Prior joining the company, Tsutsui served as Lieutenant Governor for Hawaiʻi, a State Senator representing Maui, business owner and financial advisor.

Mahi Pono is a farming company that owns and operates approximately 41,000 acres of agricultural land in Central Maui. It was created in 2018 in a joint venture between Pomona Farming LLC, a California-based agricultural group, and the Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment managers.

Executives have expressed a commitment to sustainable agriculture, growing food for local consumption and providing agricultural employment in the community.

Mahi Pono to host festival with sales of first fall harvest – All pumpkin sale proceeds to benefit Imua Family Services

The Maui News

Mahi Pono will celebrate its first fall harvest with a drive-thru festival and sales of farm-fresh produce, the company announced.

The event will take place from 9 a.m. to 2 p.m. Oct. 24 at the Yokouchi Family Estate in Wailuku, at the entrance from the lower gate on Koele Street.

“The past seven months have been an extremely challenging time for our community, especially the keiki, and we wanted to create a fun activity for families to participate in fall traditions like picking out a pumpkin to carve and trick-or-treating,” Shan Tsutsui, senior vice president of operations for Mahi Pono, said in a news release. “We also wanted to make this event a benefit for Imua Family Services in recognition of the outstanding work they continue to do each and every day.”

The drive-thru festival will feature the following stops:

• Station 1: Drive-thru trick-or-treat stations. Keiki are encouraged to come dressed in costume and will be able to receive candy directly from their vehicle.

• Station 2: Pickup of preordered pumpkins to take home and carve for Halloween. The first 200 people who purchase pumpkins will receive a free carving kit. Pumpkins will cost $10 with net proceeds benefiting Imua Family Services.

• Station 3: Pickup of preordered product boxes featuring farm-fresh produce. Additional products available at this station will include Maui Cattle Company’s 5-pound ground beef, 5-pound papaya box, potato chips and farm-sourced honey.

Participants are encouraged to order pumpkins, produce, beef and other products online at PulehunuiFarmMarket.com. A limited supply of these items will also be available for purchase at the event.

Net proceeds from all pumpkin sales will benefit Imua Family Services and its community-based program that assists keiki with overcoming developmental learning challenges.

“In difficult times like this when businesses and nonprofits join together, we create a symbiotic relationship that enhances community and cultivates stronger interconnectedness,” said Dean Wong, executive director for Imua Family Services.

For more information on Mahi Pono’s Fall Harvest, pricing and to preorder, visit PulehunuiFarmMarket.com.

What’s Brewing? – Shaka Mamaki Maui Tea

World Tea News
By Aaron Kiel

Shaka Tea Expands Supply Chain to Maui

Shaka Tea – the first line of bottled iced teas on the market brewed with sustainably-grown, Hawaiian mamaki leaves – announced a supply chain expansion to the island of Maui with Mahi Pono, a Maui-based farming company, as an anchor partner. Selling their teas across the islands, the United States and Japan, Shaka Tea is committed to sustainable agriculture and economic abundance by connecting local supply chain to off-island demand, via the burgeoning mamaki industry.

“We are excited to expand our supply chain to Maui, launching with our partners at Mahi Pono, who will be planting mamaki seedlings this year with the goal to see a first harvest in mid 2021,” shared Bella Hughes, co-founder and president of Shaka Tea. “We believe in a resilient, agricultural future for Hawai’i that complements high-value and lightweight export crops, such as mamaki, to be grown alongside food crops for local use. “We appreciate Mahi Pono’s commitment to a vibrant, sustainable future rooted in community.”

Founded in 2016 by O’ahu born Bella Hughes and her husband Harrison Rice, Shaka Tea is an award-winning herbal tea company and the first line of Hawai’i-grown, RTD iced teas on the market brewed with mamaki, an ancient, adaptogenic superleaf that’s only found one place in the world: the Hawaiian archipelago. The company’s supply chain helps restore native ecosystem habitat through the planting of mamaki, which is the host plant for Hawai’i’s native and endangered pollinator butterfly, the Kamehameha Butterfly. Presently, Shaka Tea works with 16 small farms on Hawai’i Island who all handharvest their mamaki, which is then dried and processed at the company’s Hilo HQ.

“Within the next few months, Mahi Pono will start test trials of mamaki and we are very hopeful that it will thrive on the lands we steward in Central Maui,” said Shan Tstusui, Mahi Pono’s senior vice president of operations. “The initial mamaki crops will be grown in a polycrop style in our Chef’s Corner row crop project alongside other non-GMO crops including kale, sweet corn and green beans. We hope this will encourage other local farmers across the state to look at incorporating native and endemic plants, like mamaki, alongside their various food crops.”

By the end of 2020, Shaka Tea will have given away 25,000 mamaki seedlings on Hawai’i Island to get small farmers started and looks forward to giving away 5,000 mamaki seedlings to help small, independent Maui farmers who are part of the Ag Park get started in 2021.

To learn more, visit ShakaTea.com.

Mahi Pono Appoints Tsutsui as Senior VP of Operations

MAUI NOW

Former Hawai‘i Lieutenant Governor Shan Tsutsui will join Mahi Pono, LLC, as its Senior Vice President of Operations and will lead the farming venture on Maui.

“Throughout his years of service, Shan has been a strong advocate and leader in supporting and promoting local food production and sustainable agriculture in Hawai‘i,” said Ann Chin, Mahi Pono president. “As a Maui native, he is sensitive to the needs of the community and embodies our commitment to being responsible stewards of the land and a catalyst for growth.”

As Senior Vice President of Operations, Tsutsui’s responsibilities will include business strategy, management operations, community leadership, and government relations.

“Mahi Pono’s farming venture represents a significant step forward in advancing agricultural opportunities on Maui,” said Tsutsui. “It is an honor to be part of this initiative and be able to continue working toward strengthening agricultural sustainability in Hawai‘i, so that we can make a lasting impact on our keiki (children).”

On Dec. 10, Mahi Pono announced the purchase of approximately 41,000 acres of former Hawaiian Commercial & Sugar Company (HC&S) lands on the island of Maui from Alexander & Baldwin. Mahi Pono is planning a full range of agricultural operations and related uses. There are no plans to convert any of the lands to non-agricultural purposes. Mahi Pono’s plans help ensure the continued use of the former HC&S lands for agriculture, the preservation of green, open space in Central Maui, and a consistent and long-term source of revenue for the local economy.

“We are committed to becoming a positive contributor to the local community. In the coming months, I look forward to working closely with the Maui community to discuss the best ways to support and strengthen local agriculture,” added Tsutsui.

Tsutsui joins Mahi Pono from Strategies 360, a strategic positioning firm, where he will continue to serve as managing partner.

During his terms as the Lieutenant Governor of the State of Hawai‘i, he created and oversaw various programs and initiatives that supported and promoted education, sustainability and sports, including the Resource for Enrichment, Athletics, Culture and Health (R.E.A.C.H.) initiative, ‘Aina Pono Hawai‘i State Farm to School Initiative, Sports Development Initiative, among other programs. Previously, Tsutsui served as a Hawai‘i State Senator and became the first Senate President selected from Maui. He is a former small business owner and financial advisor.

Tsutsui graduated from the University of Hawai‘i at Manoa with a Bachelor of Arts degree in economics, and is a graduate of Maui High School. He resides on Maui with his wife Lyndelle and their three daughters.

Trinitas Partners Brings its Water Hammer to Maui

The Valley Citizen
By Eric Caine

Like any journalist in these days of escalating water prices amid growing scarcity, Deborah Rybak maintains a keen interest in agriculture. So late last December, when she learned 56,000 acres of farmland had changed hands on the island of Maui, her reporter’s radar went on full alert. Rybak writes for Maui Time, the island’s leading news journal.

The selling price alone—$262 million—was enough to pique her interest. Anyone with that kind of money would automatically have plenty of clout and would know, as Rybak knows, that Big Ag and water always intersect at nodes of political power.

She got even more intrigued when she tried learning about the buyers, who called themselves “Mahi Pono.” The loose translation is “to grow responsibly or ethically.” Early on, even the man who facilitated the sale couldn’t tell her much about the buyers. That bothered her, because the middleman was former Lieutenant Governor of Hawaii, Shan Tsutsui.

Even though he’d worked on the sale for six months, Tsutsui said all he knew was the buyer was named Pomona Farming. He couldn’t tell Rybak who the principals were.

By now Rybak was on full alert and it didn’t take her long to learn that Mahi Pono was only about a month old when it bought Alexander and Baldwin’s 56,000 acres. At 21 months, Pomona Farming was older, but its principal owners, Ryan Paton, Kirk Hoiberg and William Hooper, had been buying farmland for a least a decade. They were known to people who follow agriculture in the San Joaquin Valley as Trinitas Partners.

Trinitas came to the small town of Oakdale in 2008 with much of the same fanfare as they’ve generated with their arrival in Maui. Though the three Bay Area partners sold themselves as inspired by scripture and dedicated to enlightened farming practices, it didn’t help their case when most of the acreage Trinitas bought turned out to be former pasture land that was dependent on groundwater, especially after Trinitas planted water-guzzling almonds.

Trinitas had surreptitiously bought up the pasture land at bargain prices, then immediately increased its value by converting it to almond orchards, which were annexed into the Oakdale Irrigation District (OID) in 2013. Even after the annexation, Trinitas had only second tier water rights, and was thus primarily dependent on groundwater. Nonetheless, the land appreciated in value tremendously.

Trinitas took more hits to its reputation when it settled a couple of lawsuits brought by landowners who felt the Bay Area investors had misrepresented their intentions while buying out local farmers and cattle ranchers.

Other local growers who had waited years to be annexed into the district were incensed that Trinitas had skipped to the head of the line. They accused the investment group of favoring speculation over farming and predicted Trinitas would abandon the region when the price was right.

That prediction may or may not have come true recently, when Trinitas sold shares of its Oakdale properties to a Canadian investment firm. Some observers noted that the new buyer hasn’t paid off the annexation fees Trinitas financed at three percent, as required by the original contract with OID.

On the other hand, it’s possible that the new buyer is actually just another arm of the Trinitas empire, which, as Deborah Rybak has learned, features a bewildering array of LLCs and branches. In that case, Trinitas would have sold to itself, or to “Pomona Farming,” as it says in a letter of explanation to OID.

Whatever the case, the real concern for people in Maui, and anywhere else Big Ag gets involved in big sales, is water. More and more exchanges of farmland these days are about acquiring water rights and more and more people are wakening to the reality that whoever controls water rights controls the political process, and vice-versa. It’s a double feedback loop where water rights lead to power and power confers water rights.

And as of June 26, it appeared Trinitas, aka Pomona Farming, aka “Mahi Pono,” had reached an impasse with Maui County’s Board of Water Supply over water rights to its new land holdings. Problems between the board and Mahi Pono date back to ongoing controversies with Alexander and Baldwin (A&B), the original landowners.

The key question for members of the water board, and affected residents in general, is whether Mahi Pono will allow enough water to pass through its farming operation to serve “Upcountry” Maui. Norman Franco, a member on the Board of Water Supply said,

“I think people are tired of getting held hostage by A&B and now Mahi Pono,” when commenting on the impasse.

Franco was incensed because Mahi Pono has gone incommunicado despite requests from the Board of Water Supply and local media to explain its plans for utilizing the A&B water rights which came with the property. The water rights have been subject to controversy, mostly because they’ve been on a permanent “temporary” status which many interested parties believe gives the landowner too much control over the water without enough responsibility to maintain infrastructure for delivery. The water system is managed by East Maui Irrigation, which was part of the A&B buyout.

Mahi Pono went silent after a bill to maintain the status quo on its water rights failed.

Given what seems like inordinate power over water deliveries, Mahi Pono of late seems to be justifying Deborah Rybak’s early concerns about the buyout. Just a few days ago, there were reports that OID water attorney Tim O’Laughlin had become involved in the Mahi Pono controversy. Many Oakdale farmers believe O’Laughlin was a major player in giving Trinitas/Pomona Farming/Mahi Pono what they believe was sweetheart deal when Trinitas was annexed into the district.

At bottom, the Maui land purchase may in fact be a water purchase. As Mark Arax has documented so clearly in The Dreamt Land, Big Ag is also Big Water, and isn’t averse to buying and selling water for profit. The lesson is that if you are in or near a farming community, water is a commodity, it’s for sale, and a buyer is coming soon to a farm near