The state Intermediate Court of Appeals has ruled in favor of the Board of Land and Natural Resources in the contentious issue of the diversion of water from streams in East Maui to Central and Upcountry Maui.

The ICA’s ruling on Friday reversed the Environmental Court of the 1st Circuit’s judgment and ruled in favor of appellant BLNR, Alexander &Baldwin, East Maui Irrigation Co. and the County of Maui regarding the continuation of revocable permits for the stream water diversion, the Department of the Attorney General said in a news release.

The one-year permits allow A&B and East Maui irrigation to take as much as 45 million gallons a day from the northeastern slopes of Haleakala for agricultural and domestic use in Central and Upcountry Maui.

Rather than allowing the streams to flow naturally in East Maui, they have run dry, making it difficult for native aquatic species as well as taro farming to thrive.

The water from windward East Maui has been diverted for more than 150 years, originally to irrigate Central Maui sugar cane fields, but it now mainly goes to Mahi Pono LLC, which bought up 41,000 acres of A&B’s sugar plantation in 2016 for diversified agriculture.

The Land Board has been issuing holdover short-term revocable permits for the diversions, allowing A&B to avoid more rigorous review of a long-term lease.

The Sierra Club requested a contested case hearing during a November 2020 public meeting on the issue of any revocable permits for 2021, but BLNR denied the request and voted to continue the permits subject to terms and conditions.

So the Sierra Club appealed that decision to the Environmental Court, which ordered BLNR to hold a contested case hearing, modify the terms of the permits and reduce the amount of water Alexander &Baldwin and its subsidiary, East Maui Irrigation Co., could divert until the hearing was held and decided.

The ICA ruled that BLNR did not err in denying the Sierra Club’s request for a contested case hearing and that such a hearing was not required as a matter of law.

The ICA also ruled the Environmental Court had no legal authority to modify the terms of the revocable permit.

“The Environmental Court substituted its judgment for that of BLNR, an expert agency dealing with a specialized field,” it said. “In doing so, the court exceeded its authority,” and the Environmental Court is not authorized “to substitute its judgment about the application of public policy to the facts for that of an agency, which is constitutionally delegated that power.”