Forests Amendment Bill

I rise to debate this legislation, with passion. I note that this bill was introduced when the House was in urgency in 1999, and now in 2004 we are just getting to the Committee stage. I would hate to see what the Government would consider to be putting something on the slow track, if that is an example of “urgency”. This bill deals essentially with private property rights versus sustainable management. There is a huge contradiction on the part of this Government: it has closed down sustainably well-managed forests on the West Coast but allowed SILNA landowners to clear-fell their forests, and this bill will enable that to continue. That is just another example of the two standards of citizenship this Government fosters. I am not supporting this Government—unlike Dail Jones from New Zealand First. I forgot for a moment where he comes from—I am used to him supporting the Government; that is the problem. Mr Dail Jones, in referring to me, said that I had a seat somewhere in the South Island. Well, I can tell the Committee that Dail Jones does not have a seat anywhere. That is the difference between us, I suppose—and he should not look forward to getting one, because that will not happen.

Notwithstanding some significant concerns I have regarding this bill, its general thrust is supported. The voluntary mechanism for SILNA landowners to abide by the Forestry Act—that is, to come under the sustainable management regime—is appropriate. My concern, though, is that it should not be voluntary but compulsory. Notwithstanding that, having got some of those owners to come under that regime voluntarily, the Government has then turned round and done something stupid: it has introduced export controls, as per clause 4. That is important, and I want to read from page 6 of the commentary on the bill, where it states: “It affects those SILNA owners who choose the sustainable forest management option under the SILNA forest policy. Many submitters are concerned about the loss of export markets, especially from non-sawlog hardwood, which has previously been exported as chipwood. Others saw the re-imposition of export controls as counter to the principle of unrestricted economic benefit from SILNA land.” That seems to be the crux of the problem.

I notice that United Future’s Mr Copeland is claiming some victory with regard to mānuka and kānuka wood-chips on behalf of some of the owners, and I agree with him that it is progress. But I wonder why he stopped there, because this issue is depriving Māori of legitimate income from their assets, and we should be concerned about that. There can be no doubt that it is having a significant impact on land values. That is why I said it was an issue regarding private property rights and sustainable management. It simply does not make sense. Forests are either sustainably managed or they are not. Why introduce restrictions? Why interfere with private enterprise? The West Coast forestry owners argued that, but did they get support from the Prime Minister? No, they did not. She abandoned them, and when this Prime Minister is put under pressure her true colours come out. Do members remember the insults—that Coasters are inbred and feral, all because they had the courage to stand up and fight for what they believed in? I am looking forward to Damian O’Connor taking the opportunity to get on his feet and rekindle the fight on behalf of his constituents. The latest insults from the Prime Minister were the expressions “haters” and “wreckers”. It certainly does not pay to cross her.

While this Government is steadfastly putting in place export controls, Jim Sutton—the Minister of Agriculture, who is also the Minister for Trade Negotiations—is swanning around the world trying to sign free-trade agreements. There is an inherent contradiction in saying it is OK to have trade deals overseas, but we cannot have free enterprise here in this country. Jim Sutton is the “Minister of do as I say, not as I do”.

Clause 4 has another contradiction in it. Last year New Zealand—and we are a very rich country, in terms of our forestry resources—imported a huge amount of indigenous forest products. I wonder whether anyone would like to hazard a guess at how much, in dollar value, that was worth to this country. How much did we spend on bringing indigenous forest products into this country? It is too hard, I admit. The answer is that $140 million dollars of indigenous forest timber products were imported into this country, when we have sustainably managed indigenous forests of our own. That seems like a stupid, stupid thing to have done. It is one of the worst types of contradictions I can think of. We got those imports from countries like Indonesia and Malaysia. One could bet one’s bottom dollar that the forests in the two countries I have mentioned are not managed on a sustainable basis. I will not use the big word that starts with “h” because I know it is unparliamentary, but it must come into other members’ heads, as well as mine.

This is a head-in-the-sand approach. We have limited natural resources in this country, but the one we do have in abundance is our forestry resource. Yet here we are, even though those forests are being managed sustainably, spending money on importing forest products. We do not have so many natural resources that we can take that type of approach. We have good soils, a good climate, and abundant water, coal, and forest products, but the do-gooders in the Government are saying that we cannot use our resources in a sensible way. We can drive folk from high-country farms and we can pay inflated prices for stations, but we cannot use our own sustainably managed forests to produce forest products. It is no wonder that New Zealand is going backwards in terms of any kind of growth measure one could care to mention.

We agree with the central thrust of the legislation, which is that all indigenous forestry should be managed on a sustainable basis. What we object to very strongly—and we send this as a very clear message to the Minister in the chair, Pete Hodgson—is having two sets of rules. Why can some forest owners in this country not manage their forests on a sustainable basis and clear-fell—and that is what is happening—and why do others have to abide by the Forests Act? This is the contradiction that I am having trouble rationalising. The Government will simply have to attend to that issue. The Minister in the chair may want to take a call and explain that inherent contradiction. Why are two standards of citizenship being applied around this specific issue? The general public of this country simply will not tolerate that. The export controls provided for under clause 4 will deprive legitimate owners who are engaged in legitimate enterprises of getting the true rewards from their assets. That is an interference in private property rights.

I hope that Dail Jones will get on his feet and take a call on the issue of the export controls, because it is significant and one that the New Zealand First Party should be taking very seriously. I note in the commentary on the bill that New Zealand First is not going to support the bill—or New Zealand First stated in its minority report it would not support it. However, knowing New Zealand First, it can change its mind. It has been known to change its mind before on these sorts of issues, even when it has stated its position in the commentary on a bill. This is an issue of significant importance, and I hope that the member will take a call, because the issue is driving the owners of the forests down south to distraction—and I do not blame them; this is a significant issue. As this debate progresses I hope that Stephen Franks, who is a very cogent and an able debater, will explain why he thinks this bill is an interference in private property rights.

With those few words said, I look forward to taking a further call in the debate on this bill as it progresses, but I am very mindful that those are the key issues that have been canvassed.

New Zealand First took the position in both the first and second reading, and does so again at this point in the Committee stage, that this bill should not be passed. This bill does not allow SILNA owners to implement, harvest, mill, or sell their indigenous timber, including sawn timber, logs, and wood-chips. Contrary to the last speaker, who talked about two different sets of circumstances, I contend that in this unique case there is one circumstance founded in an Act of Parliament in 1906. In the whole discussion that backs into Part 1, there has been considerable discussion over the years on what that Act meant and on its implications. Whether the land given in 1906 was compensation is one of the major issues that has been discussed and teased out. One thing is certain, if we ask whether the land given in 1906 was given with great economic advantage to the owners. The answer is yes. In 2004 those lands are of considerable economic advantage. As we know, the wasteland of 1906 has now become a profitable resource in the export and domestic timber market at the present time.

However, the premise on which we stand in support of the SILNA owners—as in Part 1, with regard to that part where the Crown is bound—is the honouring of the Act of 1906. When we advance further to a debate on the title, I shall go back to the historical basis of why the Crown should be bound with regard to the SILNA lands. It is not a matter of Māori nor of two peoples, or two different kinds of decisions, as was adverted to by the last speaker. It is simply a case of SILNA owners in Southland and Otago being able to do exactly as we said in our minority report—that is, to be able to use their grant and their land with the full recognition of the current value, in terms of economic benefit, those landowners could enjoy. That is the assumption we have made throughout the debate on this bill.

The whole of Part 1 reflects the fact that it was believed in 1999—and it was a very rushed decision by the then Government,—that the owners would, with little preparation, accept sustainable management as a method of resolving some of the issues about indigenous timber. In fact, the whole passage that has now become Part 1 is marked, first, by a serious lack of consultation in 1998-99, and, second, by an attempt by the then Minister, the Hon Nick Smith, to assuage the feeling of people in Christchurch by saying that he was sorry, but that was the way it had to be done, because of the domestic circumstances following the court case. Following that there has been no real, clear understanding that I can gain from this House, and in the minds of those who prepared this bill, of the still intense feeling of SILNA owners with regard to their lands.

I shall quickly go through why the options in Part 1 have been rejected. They were firmly rejected by submitters at the time. Last year, one after another, the submitters talked about the adverse economic impact of that part upon SILNA forest owners. They opposed the removal of the overall exemption for SILNA lands, and opposed the export controls. They talked about the loss of economic opportunity from their forests and the lack of equity, in their minds, with regard to what had been a historical recognition of their rights. They talked about the loss of property rights, as alluded to by the last speaker, that allowed them to enjoy and maintain the full economic benefit of their lands. They were not averse to the concept of economic management. However, they did say—and one particular submitter said this last year—that if so, there must be a recognition that sustainable management, as advanced in Part 1, was a costly method of extracting timber from their lands—and it is. Anyone who does forestry knows that if one goes down the sustainable management path, as opposed to clear-felling, there will not be the benefit of the return that could be. The forest owners felt intensely—and they still do in some cases, and as recently as last night—that if we are to go down a sustainable management path for the benefit of this country, another issue has to be addressed, and I will come back to that in the debate on Part 2. Some owners were also concerned about the lack of flexibility that sustainable forest management has, with regard to their schemes, and so on.

In summary, New Zealand First opposes this bill. We find it very, very strange—although understandable, as the Hon Ken Shirley said last night—that both major parties had made a mess of this bill. The issue it addresses has been a long-outstanding matter, and it should have been resolved in 1999. When I look at the record of that day, I see it is a pity that it was not resolved then, but sits here in residue. In conclusion, I say this bill is unique. In fact, the only other circumstance that is likely to stand where I could look at anything like it is the recognition that was given to Chinese labourers in the South Island. This is a similar situation, in that it is a unique, one-off situation. Part 2 has a solution for the Government to look at, particularly with regard to clauses 25 and 26.

The Forests Amendment Bill is a matter of shame to the two major parties. Essentially, as the New Zealand First member who has just resumed his seat said, this bill will cement in place a disgraceful set of transactions—namely, expropriation of property rights.

I was not on the select committee and the detail of the bill is likely to be beyond me, but I can look at Part 1. What underlies this legislation is a view that if one’s property has something on it that others in the community like, they can simply decide to expropriate it for their use and pleasure without compensation. It is as simple as that. Although the SILNA owners had been given that land as compensation for earlier losses, the community suddenly decided that it liked having native timber on the land, it did not want it cut down, so it would expropriate it, along of course, with the value of the forest held by so many others.

What does that really do? It does not protect native forest. In the short term it may. But there is a scenario that is being repeated all over this country of refusing to allow native forest on one’s land.

I know a person who had 10 acres of land in an area of very high scenic value. He had been gathering native plants for some time to recreate an environment suitable for birds. It was pointed out to him that if he allowed that forest to grow, at some stage the local authority, or the Department of Conservation, or someone else, would say: “You can’t cut it down.”, and he would effectively be sterilising his 10 acres. He had no intention whatsoever of creating an eyesore. He would probably have put one or two dwellings in the midst of his new forest. What did he do? He ordered hundreds of eucalypts and planted those instead.

That pattern is being repeated across this country, because the idiots who think that expropriation does not matter do not take into account that humans react when they are treated unfairly. They will not tolerate it. Sometimes they even do things that are not in their own interests because of resentment. One of the resentments that a law like this—simple prohibition and expropriation of value—is creating is that, instead of seeing native plants on one’s land as a blessing and something to be proud of, they are seen as an asset that the Government might suddenly expropriate. Planting them becomes something to be avoided.

It is a little bit like archaeological sites. What is the best thing to do if one finds an archaeological site? Run through it with a bulldozer and bury it, or destroy it, so that, hopefully, no one can find it! Why is that the best thing? Because the community is busy saying it has value to them, but that they will not pay for it. That is exactly what this bill is cementing in place. It is a laughable idea that we can prohibit the milling of indigenous timber without full compensation or, indeed, any sort of adequate compensation, and come to a very complex set of deals that involve tax benefits over a long period of time, without changing people’s attitudes substantially as to whether they can trust the Government.

This bill is another breach of the West Coast Accord. This was an opportunity for the Labour Party to look at what the National Party did in the early 1990s and say that even if National did not have principles then, it had 10 years on them and would apply some principle now. This was an opportunity for the Government—especially given the gay abandon with which it will pay $10 million for an island, or $40 or $50 million to look after a bunch of rich yacht owners—to say that it will use some of the surplus to restore respect for property rights and show Māori and other New Zealanders that if the community is going to regard people’s assets as being of public benefit, it will not make them privately carry the full cost. That is what this Committee should be recommending—that the Government actually shows that it respects principle, and that it respects common sense.

First, I want to speak specifically on clause 4(1), which adds new paragraph (g) in section 67C(1), and is to do with the question of planted indigenous forests. Let me say straight away that I am delighted that the Government has seen fit in this bill to extend the opportunity to export indigenous timber to include that which is harvested from a planted indigenous forest.

I think that, if my experience is anything to go by, there is an enormous amount of ignorance surrounding the state of indigenous forests in New Zealand. I say that because in the early 1980s, in my consulting days, I worked on a major project on the West Coast of the South Island that was looking to put beech timber, beech wood, through a process—which was actually developed by Sir William Pickering and the Jet Propulsion Laboratory in California—to create a biomass fuel, which we were looking to export to Japan. That project did not go ahead, but in the course of it I learnt some very interesting things about beech trees, which are growing in our virgin forests in New Zealand. One of the things I learnt is that only about one in five beech trees in our forests, if cut down, is suitable to be converted into timber. One does not actually know that until one cuts the tree down, puts it through a mill, and saws it down the middle. Very often, when the log flops open it is found to have rotted right down the middle. The reason is that those trees are way, way past their optimum maturity date for harvesting.

Therefore, I think the Government really needs to give great encouragement now—with all that has happened with the West Coast Accord and all the other history, which is well known in this House—to New Zealanders to begin to plant indigenous forests by way of plantation. I refer for a moment to the speech that was just made by Stephen Franks. I think the answer to his friend’s problem would have been to create an indigenous tree plantation on his 10 hectares of land, and then he would have in fact had an asset that he would be free to mill and export. That probably would have made a huge difference to the circumstance the member outlined.

💬 Stephen Franks: If we trust them to do what this says in the future—that is the problem.

Let us for the moment accept the fact that the bill does open up that opportunity. For the first time, it makes that clear. I think we should be prepared to pay a bit of credit when something positive like that has been done that leads people in the right direction.

The second part of clause 4 that I want to talk about is subsection (3), in subclause (2). There is a little bit in brackets. Subsection (3) states: “No indigenous timber (other than personal effects and any finished or manufactured indigenous timber products) may be exported …”. So the ban on the export of indigenous timber products from New Zealand actually has two exclusions. One of them is for personal effects, and I assume that means souvenir-type products that we buy in souvenir shops and take out of the country in our luggage to give as wedding presents and the like to people overseas, who are fascinated by our range of indigenous woods.

But also—and this is very important—in working through the issue of the export of mānuka and kānuka products for smoking food, the officials were good enough to give some legal interpretation of what the words “any finished or manufactured indigenous timber products” actually include. They defined that exclusion as having three component parts to it. The first is that the products must have been manufactured—that is, that one used machinery or something actually to change the essential aspect of the original wood into something else. Of course, wood-chips come into that category.

The second requirement is that the product has to have been put into its final shape and form. “Final shape and form” is a term I have some difficulty with, from this point of view: although it is a very, very neat answer to the problem of exporting mānuka and kānuka based products for smoking food, it does not seem to me to be very good when it comes to furniture, for example, for this reason. It seems to me—and the Minister in the chair, Mr Hodgson, may like to take a call on this issue; it is quite important—that if we were to use, say, beech to make furniture, then to export it in its component parts to be put together again at the other end, at the export destination, that should be acceptable. But that furniture can hardly be said to be in its final shape and form. If one were to export chairs, for example, in their final shape and form, then the cost of doing that would be prohibitive, whereas if one exported them as component parts to be reassembled at the other end, I think that would make a great deal more sense. Maybe that is something the Government should continue to look at, because law should never just stay in one state; it should evolve. I think it would be useful for us to apply our minds to how to allow furniture products made of indigenous timber to be exported even though they are not in their final shape and form but are in the process of reaching that.

The third condition is linked inextricably to that, because it says the product has to be ready to be used for its intended purpose. Again, that would exclude furniture exports in component form.

So I suggest to the Government that it continue to think about that issue, and maybe bring in a further amendment to the Forests Act at some suitable time to allow those exports to happen, because I know, and I am sure that the Minister in the chair and his officials are also aware, that companies in this country are beginning to manufacture some quite superb furniture products out of beech. It looks good, it is a hardwood, it is a fabulous product, and it is a very, very high-value product. That is exactly the kind of thing that New Zealand should be doing; it should be using its indigenous resources to produce high-value products. But it seems to me that the law as written still prohibits the export of furniture components, and I think that is a problem that the Government should address.

The question was put that the amendment set out on Supplementary Order Paper 211 in the name of the Hon Pete Hodgson to Part 1 be agreed to.

Amendment agreed to.