Native Hawaiians have always understood the value of water. In the Hawaiian language, the word for fresh water is “wai”—and the word for wealth is “waiwai.” An essential asset, water was a resource Hawaiians shared, and they made sure to return what they didn’t use back to the stream.

But the 19th-century sugar barons who diverted water to irrigate their plantations did not share those traditions. On Maui, the most important was Alexander & Baldwin, founded in 1870 by the sons of missionaries, which wielded great political and economic power for more than a century. At its height, it sustained its operations by draining plentiful streams of 165 million gallons a day to irrigate its plantation in Maui’s central plain, moving it through 70 miles of tunnels, ditches, flumes, and reservoirs. As stream levels dropped and taro patches dried up, Native Hawaiians, unable to grow their own food, were forced to move.

The network became a subsidiary company—East Maui Irrigation—which still controls this water diversion system. Today, EMI is jointly owned by Alexander & Baldwin and agribusiness company Mahi Pono.

EMI has been the source of long-running legal battles on Maui, as farmers and environmental groups seek to stop it from sucking up fresh water from the island’s streams. “For more than two decades, Native Hawaiians and the environmental community have been using legal avenues to try to restore at least some flow to these streams,” says Sierra Club attorney David Frankel. “At every turn, A&B and [the Board of Land and Natural Resources] have worked hand-in-hand to thwart those efforts.”  

An A&B spokesperson disputes this. “There are laws and statutes in Hawaii that govern the flow of water in streams and these legal processes were followed by the BLNR, A&B, and the Native Hawaiian and environmental communities,” the spokesperson says. “Significant amounts of water have been restored to East Maui streams. A number of priority streams…have been permanently and fully restored and will not be diverted in the future.”

The battle over Maui’s water supply intensified last August, when wildfires tore through the island and devastated the community of Lahaina. Earlier that summer, EMI’s legal opponents had scored a victory when a state court reduced the amount it could suck up from Maui’s streams by a quarter. But a day after the historic town was all but wiped out, the state of Hawaii petitioned its Supreme Court to stop the court order and increase the amount of water diverted, ostensibly for the purpose of fighting fires in Upcountry Maui.

The state’s petition seemed like a backdoor way to reverse the earlier ruling against EMI, especially when it soon became clear there was more than enough water available to fight the Upcountry fires. And it raised local suspicions that the state was doing the bidding of corporations.

Frankel called the effort a “brazen attempt to capitalize on tragedy to subvert the judicial process.” The state Supreme Court ultimately denied the petition. But a year after the Maui fires, the fight at the heart of that case—over who controls the island’s water supply, public or private interests—remains as fierce as ever.

Hawaii’s sugar plantations started closing one by one in the 1950s, as production moved to countries where costs were lower. The last of them, A&B’s Central Maui sugar operation, shut down in 2016. The company is now in the commercial real estate and development business, with a portfolio spanning 39 properties and 3,500 acres across Hawaii.

On Maui, A&B’s legacy remains complicated. For some it is an extractive force that has denied Native farmers their cultural lifestyle. For others, it is a benevolent presence that provided jobs, medical care, housing, and scholarships for students. “A&B was a major employer on Maui for over a century,” says Lucienne de Naie, the chairperson of Sierra Club Maui Group. “There were people who were very grateful to A&B. They gave immigrants a chance to work in the fields.” But cross the company, de Naie says, and “you were blackballed. It was hard to get any kind of job on Maui.”

Because of its history on the island, any issue having to do with A&B, including water, has deeply divided the island community. “While we can’t speak for our predecessors, we are encouraged by the re-emergence of taro cultivation as a cultural practice and important food source in East Maui,” says an A&B spokesperson.

De Naie lives in Huelo, a small town in northeastern Maui, where there is no public water supply. Residents retrieve water from streams or through water catchment. If those sources are dry, they have to purchase water. “We live in an area where our water is taken for other people to use, but we have to buy water from people that come in trucks and deliver it,” de Naie says.

Hawaii’s constitution declares that water is a public trust for the benefit of all citizens, and the state government is the only entity that can administer this resource. But there’s a loophole: Businesses, such as A&B, can control and sell the use of their water diversion systems.

“The operators of the diversion system end up having a significant amount of leverage over who gets how much water,” says Jonathan Scheuer, co-author of the book Water and Power in West Maui. “This is partly because of the amount of information they have available on how the system operates. Other players have to trust them often when they say this is how much water is available.”

The state leases water rights to EMI and other companies. For decades, EMI has received one-year revocable permits from BLNR to divert water from Maui’s streams. In exchange for the use of water for its own purposes, EMI must deliver water to rural residents in Upcountry Maui, for which it is paid 6 cents per thousand gallons by the Maui Department of Water Supply.

In 2018, the newly incorporated company Mahi Pono bought 41,000 acres of former plantation lands from A&B for $262 million, making it Maui’s largest landowner. The deal also included a 50 percent interest in EMI for $2.7 million.

The company currently employs 350 Maui residents. By the end of 2024, it projects it will complete planting 14,830 acres with a variety of crops, including citrus, coffee, macadamia nut, watermelon, and onions.

Though Mahi Pono’s name is Hawaiian—it means “to grow responsibly”—the company is not. It is majority owned by Canada’s Public Sector Pension Investment Board (PSP), which manages approximately $200 billion in assets and has been buying up water rights worldwide as long-term investments.

“It makes perfect sense for them to invest in water,” says Shay Chan Hodges. She served as vice chair of the Maui County Board of Water Supply from 2018 to 2019, and chair from 2019 to 2021. “Obviously there’s value to 40,000 acres of land, but the real value is the water attached to that land.”

That’s something A&B and Mahi Pono evidently agree on, too. Per their sales contract, if A&B is unable to secure water leases with the state of at least 30 million gallons per day or if it’s unable to secure a long-term water lease of 30 years, it must pay Mahi Pono rebates of up to $62 million. Indeed, Mahi Pono’s allocation had been cut below that contractual threshold shortly before the state and A&B petitioned to increase the water usage of the East Maui Irrigation System last August in the wake of the Lahaina blaze.

“If Mahi Pono can obtain a 30-year lease from the state allowing for tens of millions of gallons a day (upwards of 90 mgd), the lease itself is an asset that can be monetized and potentially transferred or sold. This adds significant value to Mahi Pono’s holdings,” says Hodges.

After the Mahi Pono deal, A&B moved quickly to pursue a 30-year lease to divert up to 92 million gallons per day from Maui’s streams, with 85 mgd earmarked for Mahi Pono’s agricultural holdings. As part of its lease application, EMI filed an environmental impact statement that made plain the Faustian bargain at the heart of Maui’s water system. If it was not granted water rights, its water deliveries “would terminate,” a prospect that would leave tens of thousands of Maui residents without access to fresh water.

This language predictably caused local alarm, and the Maui County Board Department of Water Supply created a Temporary Investigative Group in 2019 to research the feasibility of purchasing and maintaining the EMI system.

“The Temporary Investigative Group believed that public ownership of the system was necessary for protecting the public health,” says Hodges, who was part of the group. “Because why are we being held hostage? The basic message was, ‘if you don’t do what we say, you won’t get any water.’”

Hodges and her colleagues recommended either purchasing or condemning the EMI system, or for the mayor to step in to acquire the long-term leases and give control back to the government, but nothing came of it.

For years, A&B and Mahi Pono have sought to influence local politics. “These corporations’ executives have held a number of influential positions in both the state and county governments,” says Keani Rawlins-Fernandez, a member of the Maui County Council. “A&B and Mahi Pono have long donated tremendous amounts to elected officials’ campaigns.”

Hannibal Tavares, one of Maui’s former mayors, was a veteran of the sugar industry and an employee of A&B prior to winning office in 1979. The current vice president of A&B also served on the state’s Commission on Water Resource Management (the arm that decides how much water companies can divert) from 2002 to 2005 while working for A&B. Another sugar industry leader twice served on the commission.

Since 2006, A&B and its top executives have given hundreds of thousands of dollars to state and county politicians. They’ve donated more than $10,000 to Gov. Josh Green in the past two years. Mahi Pono’s executives began donating to political campaigns in 2020. Thousands of those contributions flowed to Green, too.

“This is a case of our elected leaders choosing to be beholden to a private entity,” Hodges says.

Even before last year’s wildfires reinvigorated the fight over Maui’s water supply, activists had begun to gain some ground in their effort to wrest control from A&B and Mahi Pono.

Since the former and present mayor didn’t step in, in 2022, voters approved the creation of the East Maui Community Board water authority, which gives the people the power to negotiate water leases with the state. Hodges says she was surprised there was no pushback from corporations when it was put on the ballot, but there was some controversy with the appointment of its 11-member board. After the deadline to apply had closed, the county council received requests to open the process up again.

When the county did so, new applicants included a former Mahi Pono executive and former Mayor Alan Arakawa, who had opposed the water authority and said it would “kill Mahi Pono.” (When the 11-member board was eventually approved, it included Arakawa, taro farmers and several water resource experts, including Scheuer, who became the chair.)

Delayed by the fire, the water board began holding bimonthly meetings in February, and the director seat will soon be filled. But whether the community water authority and board successfully take East Maui water leases out of the hands of A&B and Mahi Pono, or if more challenges emerge, remains to be seen. If successful, it would be the first time in more than 100 years that the people of East Maui, and not a private corporation, will determine how its water is divided and shared. It could prove to be a model for the rest of the island, where other corporations hold its own separate systems.

Currently, EMI has a one-year lease from the state covering 2024, allowing 31.25 million gallons per day to be diverted from East Maui’s streams to Mahi Pono’s land—and the Sierra Club Maui is keeping a sharp eye as its legal battles continue. It’s fighting to stop the issuance of one-year leases, which avoids the rigorous review afforded to long-term leases.

De Naie says these court battles will make a difference for the future. “Eventually…we will see a standard set for trusteeship of public resources that should have been in place in the first place.”