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1. STATE COMMISSION ON WATER RESOURCE MANAGEMENT (CWRM)
The Honorable Suzanne D. Case, Chairperson
Commissioner William D. Balfour, Jr.
Commissioner Kamana Beamer
Commissioner Michael G. Buck
Commissioner Neil Hannahs
Commissioner Milton D. Pavao
Commissioner Virginia Pressler
Re: Alexander & Baldwin – Water License
Dear Chairwoman Case, Commissioner Balfour, Commissioner Beamer, Commissioner Buck,
Commissioner Hannahs, Commissioner Pavao and Commissioner Pressler,
The water licenses held by Alexander & Baldwin expired in 1986. Having expired, any
actions taken to “renew”, “extend” said licenses, including and not limited to Act 1 HB2501
HD2 SD2 CD11 and action by the State of Hawaii Board of Land and Natural Resources to keep
said water licenses in on a holdover status have no legal basis in law.
“The Court has found no analogous statute in Hawaii Revised Statutes,
nor an analogous theory in Hawaii case law, whereby contract rights
continue to exist after expiration.” [Emphasis Supplied]
Source: University of Hawaii Professional Assembly v. Cayetano. United
States District Court – District of Hawaii. 125. F. Supp. 2d. (D. Haw. 2000).
The Honorable Judge Alan C. Kay, Presiding.
Furthermore, the water licenses granted to Alexander & Baldwin were not “for land, nor
... for an absolute sale or grant of the waters ... [but] for a license; the license to take and use
water, conveying the same in part over several government lands.” Alexander & Baldwin was
granted “permission to take water from several streams, in Koolau Maui, to be carried to their
respective sugar plantations, for purposes of irrigation.” Please refer to reference below. [Emphasis Supplied]
1 HB2501 HD2 SD2 CD1. Measure Title: RELATING TO WATER RIGHTS. Report Title: Water Rights;
Holdover. Description: Requires that where an application has been made for a lease to continue a
previously authorized disposition of water rights, a holdover may be authorized annually until the
pending application for the disposition of water rights is finally resolved or for a total of three
consecutive one-year holdovers, whichever occurs sooner. (HB2501 CD1). Companion: SB3001.
Source: Hawaii State Legislature http://www.capitol.hawaii.gov/Archives/measure_indiv_Archives.aspx?billtype=HB&billnumber=2501&year=2016
Web Accessed: January 15, 2017

2. Alexander & Baldwin Annual Report and Form 10K filed with the United States
Securities and Exchange Commission on February 29, 2016 states: “On December 31, 2015, the
Company determined that it would cease its sugar operations at HC&S (the "Cessation"). In
January 2016, the Company announced that it would be transitioning out of farming sugar and
instead pursue a diversified agricultural model.” Please refer to reference below.
By the terms and conditions of the water licenses any entitlement or grant to Alexander
& Baldwin for water terminated by cessation of sugar operations.
The Application now before the Commission is to be treated as a new Application for
water. Data and statistics of water usage by Alexander & Baldwin / Hawaiian Commercial &
Sugar Company (HC&S) for cultivation of sugar cane have historical relevance. The weight,
materiality and significance of this historical information is of little or no probable value in
determining Alexander & Baldwin, HC&S’s water needs for its diversified agriculture model.
Burden of Proof
In re Contested Case Hearing on Water Use Permit Application Filed by Kukui
(Molokai), Inc., 116 Hawai`i 481, 174 P.3d 320 (2007).
“Under the Code and the public trust, it is the applicant's burden to
demonstrate that the use requested is "reasonable-beneficial," meaning "the
use of water in such quantity as is necessary for economic and efficient
utilization, for a purpose, and in a manner which is both reasonable and
consistent with the state and county land use plans and the public interest."
HRS § 174C-3.” [Emphasis Supplied]
“This court has stated that "the Commission 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." Waiahole II, 105 Hawai`i at 16, 93 P.3d at 658 (quoting
Waiahole I, 94 Hawai‘i at 143, 9 P.3d at 455) (block format omitted). In this
regard, the Commission must "prescribe a higher level of scrutiny for private
commercial uses . . . . In practical terms, this means that the burden ultimately
lies with those seeking or approving such uses to justify them in light of the
purposes protected by the [public] trust." Waiahole I, 94 Hawai`i at 142, 9 P.3d
at 454 (footnote, citations, and quotation marks omitted).” [Emphasis Supplied]

3. “Moreover, the public trust compels the state duly to consider the cumulative
impact of existing and proposed diversions on trust purposes and to implement
reasonable measures to mitigate this impact, including using alternative sources.
. . . In sum, the state may compromise public rights in the resource pursuant only
to a decision made with a level of openness, diligence, and foresight
commensurate with the high priority these rights command under the laws of
our state. Waiahole II, 105 Hawai`i at 16, 93 P.3d at 658 (quoting Waiahole I, 94
Hawai`i at 143, 9 P.3d at 455) (emphasis in original).”
Additionally,
“In cases where Native Hawaiian rights figure in an agency’s public trust
balancing, the burden is not on parties of Native Hawaiian ancestry to prove that
the proposed use would harm traditional and customary Native Hawaiian
rights; rather, the permit applicants and the agency are the parties obligated to
justify the proposed use and the approval thereof in light of the trust purpose of
protecting Native Hawaiian rights.” Mauna Kea Anaina Hou v. Board of Land
and Natural Resources. SCAP-14-0000873. December 2, 2015. Footnote 8. Citing
In re Contested Case Hearing On Water Use Permit Application Filed by Kukui
(Molokai),Inc. http://www.courts.state.hi.us/docs/opin_ord/sct/2015/December/SCAP-14-0000873conada.pdf
Web Accessed: January 15, 2017 [Emphasis Supplied]
References:
University of Hawaii Professional Assembly v. Cayetano. United States District Court – District
of Hawaii. 125. F. Supp. 2d. (D. Haw. 2000) The Honorable Judge Alan C. Kay, Presiding.
“The Court has found no analogous statute in Hawaii Revised Statutes, nor an
analogous theory in Hawaii case law, whereby contract rights continue to exist
after expiration.” [Emphasis Supplied]
_____________________
ALEXANDER & BALDWIN, INC. U.S. Securities and Exchange FORM 10-K Annual Report for
the Fiscal Year Ended December 31, 2015. Filed: February 29, 2016. Web Accessed: January 15, 2017.
http://phx.corporate-ir.net/phoenix.zhtml?c=85663&p=irol-sec

4. “On December 31, 2015, the Company determined that it would cease its sugar operations at
HC&S. [Page 15] In January 2016, the Company announced that it would be transitioning out
of farming sugar and instead pursue a diversified agricultural model.” [Page 1] [Emphasis Supplied]
Description of Business and Properties - Business Segments
D. Agribusiness
(3) Land Designations and Water (Pages 15 -16)
“A&B holds rights to an irrigation system in West Maui, which provided
approximately 13 percent of the irrigation water used by HC&S over the last ten
years. A&B also owns 16,000 acres of watershed lands in East Maui, which
supply a portion of the irrigation water used by HC&S.”
“A&B also held four water licenses to another 30,000 acres owned by the State of
Hawaii in East Maui, which over the last ten years have supplied approximately
56 percent of the irrigation water used by HC&S. The last of these water license
agreements expired in 1986, and all four agreements were then extended as
revocable permits that were renewed annually. In 2001, a request was made to
the State Board of Land and Natural Resources (the “BLNR”) to replace these
revocable permits with a long-term water lease. Pending the conclusion by the
BLNR of this contested case hearing on the request for the long-term lease, the
BLNR has renewed the existing permits on a holdover basis, which has been the
subject of litigation. In January 2016, the state court ruled that the BLNR lacked
legal authority to keep the revocable permits in holdover status beyond one year.
The court has allowed for an immediate appeal of this ruling. For information
regarding legal proceedings involving A&B’s irrigation systems, see “Legal
Proceedings” below.” [Emphasis Supplied]
____________________
ITEM 3. LEGAL PROCEEDINGS (Page 30)
“Legal Proceedings and Other Contingencies: A&B owns 16,000 acres of
watershed lands in East Maui that supply a significant portion of the irrigation
water used by Hawaiian Commercial & Sugar Company ("HC&S"), a division of
A&B that produces raw sugar. A&B also held four water licenses to another
30,000 acres owned by the State of Hawaii in East Maui which, over the last ten
years, have supplied approximately 56 percent of the irrigation water used by
HC&S.”

5. “The last of these water license agreements expired in 1986, and all four
agreements were then extended as revocable permits that were renewed
annually. In 2001, a request was made to the State Board of Land and Natural
Resources (the "BLNR") to replace these revocable permits with a long-term
water lease. Pending the conclusion by the BLNR of this contested case hearing
on the request for the long-term lease, the BLNR has kept the existing permits on
a holdover basis. Three parties filed a lawsuit on April 10, 2015 (the “4/10/15
Lawsuit”) alleging that the BLNR has been renewing the revocable permits
annually rather than keeping them in holdover status. The lawsuit asks the court
to void the revocable permits and to declare that the renewals were illegally
issued without preparation of an environmental assessment (“EA”). In December
2015, the BLNR decided to re-affirm its prior decisions to keep the permits in
holdover status. This decision by the BLNR is being challenged by the three
parties.” [Emphasis Supplied]
“In January 2016, the court in the 4/10/15 Lawsuit ruled that the renewals were
not subject to the EA requirement but that the BLNR lacked legal authority to
keep the revocable permits in holdover status beyond one year. The court has
allowed the parties to take an immediate appeal of this ruling.”
_____________________
Letter from Attorney General William R. Castle to His Excellency Wm. L. Moehonua,
Minister of the Interior, dated 7 September 1876. [Extract, Emphasis Supplied]
“ Sir: The application of Messers Castle and Cooke, representing the Haiku Sugar
Company, Alexander and Baldwin, James M. Alexander, the Grove Ranch Plantation
and Capt. Thos H. Hobron, dated August 21, has been placed before me. The
application requests permission to take water from several streams, in Koolau Maui,
to be carried to their respective sugar plantations, for purposes of irrigation.
I am sir most respectfully yours,
Wm R. Castle Attorney General “
[Emphasis Supplied]
Source: Carol Wilcox. Sugar water: Hawaii’s plantation ditches. Honolulu: University of
Hawai`i Press, 1997. Appendix 1: Letter from the Attorney General. (1876) Print.
____________________

6. The intent of Attorney General Castle as stated by the Hawaii Section of American
Society of Engineers,
“The Attorney General's opinion addressed an application by "Messrs Castle and Cooke,
representing the Haiku Sugar Company, Alexander and Baldwin, James M. Alexander,
the Grove Ranch Plantation and Capt. Thos H. Hobron ... to take water from several
streams, in Koolau Maui, to be carried to their respective sugar plantations, for
purposes of irrigation."
“His understanding was that the application was not "for land, nor ... for an
absolute sale or grant of the waters... [but] for a license; the license to take and
use water, conveying the same in part over several government lands."
“AG Castle justified granting the license to private parties because unlike “the case in
some of the European nations, “the Hawaiian Government was “not prepared to engage
in any such development of internal resources” and that “[u]ntil the government is
ready to undertake such work - no obstacle should be thrown in the way of others, who
are able and ready to commence such work.””
[Emphasis Supplied]
Source: ASCE Hawaii Section. http://www.ascehawaii.org/2002.html
Web Accessed: January 15, 2017
Thank you very much
Respectfully submitted,
- Signed –
Clifton M. Hasegawa
President and CEO
Clifton M. Hasegawa & Associates, LLC
1322 Lower Main Street A5
Wailuku, Hawaii 96793
Telephone: (808) 244-5425
Email: clifhasegawa@gmail.com
LinkedIn: https://www.linkedin.com/in/cliftonhasegawa
- January 15, 2017 -