Forests (Legal Harvest Assurance) Amendment Bill

I present a legislative statement on the Forests (Legal Harvest Assurance) Amendment Bill.

ASSISTANT SPEAKER (Hon Jenny Salesa): That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Forests (Legal Harvest Assurance) Amendment Bill be now read a second time.

The question of how New Zealand responds to the issue of illegally harvested timber has been debated in this House for the last 10 years, and it’s good to see this being progressed. It has been the culmination of a lot of work by many groups of people, and I am grateful to them. I particularly acknowledge the members of the Primary Production Committee and the chair, Jo Luxton, who were steadfast and diligent in their approach to scrutinising this bill to ensure its robustness. I thank the individuals and groups that made written submissions and those that appeared in person before the select committee. Finally, I thank the Parliamentary Counsel Office and the Ministry for Primary Industries officials that contributed to this bill.

Under this bill, New Zealand is committing to trading only in legally harvested timber. The introduction of a legal harvest assurance system for timber products is a tangible step New Zealand can take to support the international efforts to curb the trade in illegally harvested timber products, and at the same time it provides importers and our domestic processors and exporters with a Government assurance framework to support their businesses that will demonstrate that they have completed due diligence on the legal harvest of the timber products that they are trading.

The bill is also important because New Zealand exporters need to demonstrate timber legality in an increasing number of export markets. This bill will bring us in line with several of our trading partners in APEC economies, including Australia, the United States, Indonesia, the Republic of Korea, Japan, Vietnam, and China, who have implemented or are developing their own legislation to prevent the import, export, or shipment of illegally harvested timber. We export nearly 85 percent of our timber products to these countries, and with this bill we can continue to do so with integrity.

Twenty-two written submissions were received on the bill from individuals, environmental non-governmental organisations, industry associations, and forestry companies. Eight submitters presented their views in person. Most submitters supported the bill’s intent to assist in preventing the global trade in illegally harvested timber while increasing the certainty of continued market access for New Zealand timber products.

Some concerns were raised through the submission process, and I believe officials did a great job of taking these on board. A total of 35 changes were recommended by officials, and all were accepted by the select committee. Some of these were minor, technical changes, but there were also some more substantive changes that I believe will strengthen and improve the bill. For example, there is now an improved alignment between this bill and the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill. In 2020, under my predecessor, the Hon Shane Jones, the Forests Act was amended to introduce a new professional registration system for forestry advisers and log traders. As log traders will also need to register for legal harvest, this bill has improvements to better align the legal harvest system, with the registration system being implemented for log traders. The purpose of the 2020 amendment Act was to ensure forest owners received better advice and there was more transparency in the market. The bill complements the amendment Act by strengthening the resilience of supply chain and the reputation of the New Zealand forest industry.

Through the select committee process, several technical changes and several policy changes were recommended to help ensure the new regulatory systems work well together and to reduce regulatory burden and compliance costs for regulated parties. We recognise that not all submitters were happy with the bill and that the environmental NGOs thought the scope and approach of the bill were too narrow—especially in comparison to the new deforestation regulations for the European Union. Regulation for sustainability is an emerging issue internationally, and it is broader than forestry products and the scope of this bill. Officials are working on these matters in order to best address these wider issues for New Zealand.

This bill will create a system that will shut the door on illegally harvested timber products and will show the global community that New Zealand is committed to eradicating this problem. Our primary processors, importers, and exporters will need to use their due-diligence systems to assess and reduce the risk of dealing with illegally harvested timber. They need to use information provided by the grower, or person they bought the timber from, to assess whether it has been illegally harvested. This due-diligence system may be streamlined through using an approved template or by being a member of an existing private forest certification scheme, such as the Forest Stewardship Council or the Programme for the Endorsement of Forest Certification. This is intended to alleviate the burden of a new regulatory system and, at the same time, maintain the integrity of our New Zealand Government assurance.

It is important for New Zealand’s reputation and economy and the New Zealand forestry and wood-processing sector for this bill to maintain momentum and keep progressing through the House this term. As I’ve previously said, it is great to see this bill get to this stage and in this form, and I look forward to debating the bill in more detail during the committee of the whole House. I commend the bill to the House.

The question is that the motion be agreed to.

Thank you very much, Madam Speaker. I rise to speak in respect of the Forests (Legal Harvest Assurance) Amendment Bill at its second reading. This amendment will help to address illegal forestry by ensuring that wood harvesters will have to verify as legally harvested and therefore ensure that imported timber is not illegally sourced.

I should say that forestry is a key contributor to the New Zealand economy, generating $6.3 billion for the year ending June 2021. It employs around 35,000 people and accounts for roughly 1.6 percent of New Zealand’s gross domestic product. So it’s a really important part of the New Zealand economy and also provides significant employment. This bill is intended to help reinforce the integrity of New Zealand timber as legally sourced, on the international export market. National does support legislation aimed at preventing illegal forestry activities and also advocates for an effective assurance system to this end.

The bill was the outcome of a 2019 Cabinet direction on developing a national definition for wood legality. At the same time, Cabinet directed the Ministry for Primary Industries to introduce a compulsory registration scheme of log traders, and possibly forestry advisers, and this bill is a second bill to amend an Act which came into force in 2020 with a strong focus on alignment of regulatory systems.

There is one point I do need to raise: unfortunately, the select committee did not have before it a submission from the New Zealand Law Society, which did identify a clause which the New Zealand Law Society said raised some potential constitutional questions regarding clause 6—protection of persons outside the Public Service. This clause, they said, would extend the protection of Crown officials from personal liability to those outside the Public Service as a result of section 63D of the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Act 2020, which delegates any or all of the forestry authority’s functions or powers under Part 2 of the Forests Act to a forestry industry body or other person outside the Public Service.

The Law Society was concerned that the clause raised constitutional questions about the use of the Crown protection from liability and tort for the benefit of private actors. Because the select committee did not have that before it, the regulatory impact statement does not address this feature of the bill, and therefore the select committee will actually be looking at this matter tomorrow. Ideally, we would have had that considered before this bill was before the House. Nevertheless, I do have confidence that this issue will be addressed. We will be getting advice on that tomorrow, and if any issues should arise from that, I’m sure we can address that at the committee of the whole House stage.

So, with that caveat, the National Party is supporting this bill. It is a positive step, we believe. It does balance a number of considerations, and we do think it is a step in the right direction. Hopefully, we’ll be able to address that specific point tomorrow, and ensure that we are passing a good piece of law that will be longstanding. So, with that, as I say, the National Party supports this bill at its second reading.

Thank you, Madam Speaker. It’s a pleasure to take a quick call on this Forests (Legal Harvest Assurance) Amendment Bill. As the previous chair of the Primary Production Committee, can I acknowledge other members of the select committee, the submitters, and all those involved with getting this piece of legislation to the point that it is here in the House tonight.

This piece of legislation is specifically about ensuring that we are only trading in legally harvested timber. As the Minister has mentioned in his speech, it simply brings us in line, also, with several of our trading partners who have implemented, themselves, or are in the process of implementing their own legislation to prevent the import or an export of illegally harvested timber. It is a sensible piece of legislation and I commend it to the House.

Thank you, Madam Speaker. I didn’t really expect to get to speak on this very good piece of legislation tonight, but I will. I thought we might have delayed it a little longer.

The Forests (Legal Harvest Assurance) Amendment Bill has been around for a little while and been before the Primary Production Committee, and has now come back to the House. Of course, we’re making our way through the second reading. As my colleague Joseph Mooney pointed out, there’s an issue that has arisen, which will go back to the select committee and, no doubt, if there’s changes required as a result of that, it will come back to the House in the form of a Supplementary Order Paper at committee stage.

This bill is a piece of legislation that we need to have in place, and the Minister, the Hon Stuart Nash, outlined it pretty well. We need to have it in place to ensure that we can access, I guess, a lot of our market places around the world. But we also need to have it in place to protect those people in New Zealand. There’s been a very recent case in New Zealand where timber has come into New Zealand under, I suppose, somewhat dubious circumstances, and it’s a very good example of why this bill is required, both from an exporters’ perspective in New Zealand and from an importer’s perspective, because it also protects them. If you’re buying timber in the international market, or any form of wood product in the international market, you really want to know that when you do that, you’re buying something that’s legally harvested and that you’re not going to be questioned about its origin when you get it. And the same thing applies in reverse.

So it’s really important to the New Zealand industry, which is a very big industry in New Zealand now, the total wood industry. Of course, we export, I think, in excess of 80 percent of our wood products. Of course, very topical, I suppose, for the last few years, is the number of logs going out of New Zealand in one piece. There’s a very good reason why those logs go out of New Zealand in one piece, of course, because our timber industry in New Zealand is only capable of dealing with so much wood, and it’s only capable of dealing with some forms of wood as well. So there are some grades of logs which we don’t have a great deal of use for in New Zealand. And the interesting thing about harvesting a forest is you get every grade of timber, whether you like it or not. So you can’t harvest a forest and just take your P grade logs or your pulp grade logs. You’ve got to take the whole lot, and so we’ve got to find a market for those logs. Otherwise, it becomes very uneconomic for the tree grower to actually grow a tree at all.

So that’s the reason why we see so many logs going out through these ports, and for those of us who drive up and down the State Highway 1 and go to Tauranga, or even Napier or, in fact, even New Plymouth—if you can get to New Plymouth because the road is so rough going up there now, with all those tankers, logging trucks, etc., going up the road. But that’s why we see so many of them going out over the port. It’s simply because the industry in New Zealand can’t deal with all of those pieces of wood, or I suppose you’d call them big pieces of wood, of course. So the issue for New Zealand is that we need to protect that industry. We need to ensure that we protect the markets around the world that we want to supply, and to do that we need to have this bill in place.

There are a couple of other issues about this bill which I think the select committee will also be considering. There’s some doubt around the terms as to what is legally harvested, and I think the intention of this bill is to preserve the integrity of the product. It’s not necessarily the integrity of the ownership structures behind it or anything like that, but certainly it’s to preserve the integrity of the product, the manner in which it’s harvested, and the manner, I guess, to ensure the sustainability of it.

So there are quite a few issues involved in the background to this bill, but the bill is a good one, and I think the concern the select committee had at one stage—or that was expressed at the select committee—was around the reasonably significant cost it might impose on the industry. I don’t think that’s the case, although—as I said when I spoke earlier in the night—that will depend on the manner in which the regulations are put together, and, of course, the subsequent costs that are imposed as a result of the enforcement of those regulations. One would only hope that it’s not too significant, because the bill doesn’t require a significant amount of policing to get it to work and get it served. So, Madam Speaker, I commend the bill to the House and I thank you for the opportunity to speak on it.

This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow. Pō mārie.

Debate interrupted.

The House adjourned at 9.59 p.m.