Forests (Legal Harvest Assurance) Amendment Bill

We come first to the Forests (Legal Harvest Assurance) Amendment Bill. We begin with debate on Part 1.

Point of order, Madam Chair. I move that we hear all parts as one.

“I seek leave for all provisions to be taken as one question.” Leave is sought for that purpose. Is there any objection? There is no objection. The question is that Parts 1 and 2, Schedules 1 and 2, and clauses 1 to 3 stand part.

Thank you, Madam Chair. I’m pleased to be here for the committee stage of the Forests (Legal Harvest Assurance) Amendment Bill. I propose this bill amends the Forests Act to establish a new regulatory system that enables the forestry and wood-processing sector to provide domestic consumers and export markets with greater assurance that the timber products they are purchasing are from legal sources.

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 bill being progressed. It has been the culmination of a lot of work by many groups of people, and I’m grateful to them. Can I acknowledge all members on both sides of the House for engaging constructively with this important piece of legislation. I’d like to reiterate my thanks to the Primary Production Committee for their examination of the bill during the select committee stage, and all submitters for their time and contribution to this bill.

Through the select committee process, several technical changes and several policy changes were recommended to help ensure the new legal harvest system will work well with the new registration systems for forestry advisers and log traders, which were introduced by a 2020 Forests (Regulation of Log Traders and Forestry Advisers) Amendment Act. These changes will reduce regulatory burden and compliance cost for regulated parties.

I’ve tabled a Supplementary Order Paper (SOP) on this bill which makes changes to the bill as reported back from the select committee. The SOP strengthens the bill by making further changes to align the new registration systems for forestry advisers and log traders, with a proposed system for legal harvest, and other technical amendments to improve the efficiency and workability of the new regulatory systems.

I won’t go into the background of the bill as it’s been well-canvased across members here, but I do want to speak just a little bit more—if the Chair will indulge me here—on the SOP. As mentioned, the SOP which has been tabled—most of the changes included in the SOP are to better align the regulatory systems for forestry advisers and log traders, with the proposed regulatory systems for legal harvest. The new registration systems for forestry advisers and log traders are being implemented now. Registration will become mandatory in August of this year. The purpose of the 2020 amendment was to introduce a professional registration system to ensure forest owners receive better advice and there was more transparency in the market. It is important the legal harvest system works well with these new registration systems to save on regulatory burden and administration costs. These changes had to be made via the SOP, as they have become visible during the implementation of the new systems.

There are a couple of other changes that need to be mentioned. One is to allow the regulator to suspend a registered forestry adviser or log trader for non-payment of fees or levies. This will make compliance more efficient and effective. Another is to clarify the meaning of “legally harvested” by moving a reference on right to access the land from one subsection to another. This is a minor change but will make the definition clearer and therefore easier to comply with.

The SOP makes some other technical amendments. Two of these were recommended by a submission by the New Zealand Law Society, which was not considered during the select committee stage due to an administrative error. The chair of the select committee reported to the House on these changes and recommended I consider addressing these issues in an SOP during the committee stage. These are on (1) fixing a duplication in the bill on immunity from liability for assessors, and (2) amending offence provisions to allow for judicial discretion when determining whether a defence is available to a person. There is a further technical amendment which removes a requirement for confirmation of instruments for three levy-making powers.

Although there are a number of changes proposed in the SOP, these are mainly on technical issues and are aligned with original policy intent. These changes are needed to improve the workability of the new legal harvest assurance system and make sure it complements the existing registration systems for log traders and forestry advisers.

In closing for this part of my contribution, I want to reiterate the importance of having a legal harvest assurance system that will shut the door on illegally harvested timber products imported into New Zealand. The harvest assurance system will further provide the international market with confidence in New Zealand’s wood and wood products and show that New Zealand is taking all appropriate measures to combatting illegal harvesting and eradicating the problem. It is absolutely essential that we have a statutory framework for legal harvest. I end my contribution there.

Thank you very much, Madam Chair, and thank you to the Minister of Forestry for that explanation. Minister, I just want to ask you a few questions around the Supplementary Order Paper that has been filed, and I note that the point from the Primary Production Committee has been addressed, which was removing duplication of provisions that protect assessors from personal liability. So that’s good. I’m just wondering—the change here—what the rationale was to remove from the definition of when timber is legally harvested, the phrase indicating the right to harvest timber includes the right to access the place of harvest. If you could just clarify, for those listening, the rationale behind doing that.

I note one of the other points that was raised, and the select committee reported back on this point, was the concern about having a defence—two charges brought, or providing the court with discretion to allow defence to be put. I note that this appears to have been considered here, and new clause 30, I think, replaces section 63ZK of the principal Act, and the new section 63ZK specifies offences relates to the provision of a forestry adviser service only, and I note that it now says, “It is a defence to a charge”—in that section—if the offence is caused by “another person … an accident” or something else “outside the defendant’s control”. The defence in the current section 63ZK(2) is carried over. Either defence is available only if the defendant gives 15 days’ notice of the intention to rely on the defence, or the court otherwise gives leave. If I can ask the Minster if that intention there for the court to otherwise give leave was intended to address that concern raised about defendants being able to potentially raise the defence, and the court having the discretion to hear that defence.

Thank you, Madam Chair. I’ll address the first question and I do apologise as I missed quite a bit of the member’s second question. But, if I can, I’ll address the first one and hope we can have an exchange to clarify for that member the matters he raised in the second question.

The right to access the place of harvest was being asked—what our rationale was. In discussion with the advisers here, taking it out of the primary legislation and placing it into the secondary was about trying to make the system—as I explained in my opening remarks, just to improve the workability of it, to make sure that the new legal harvest assurance system complements the existing registration systems for forestry advisers or log traders in order to make sure that it’s just a bit more streamlined. That’s certainly the advice that’s been given to us, and that’s the rationale that for making sure we take it out of there and put it into the secondary legislation.

Thank you, Madam Chair. It’s lovely, Minister, to finally engage with you in the committee of the whole House about all things forestry. I bring your attention to new section 77, inserted by clause 42. This was well canvassed, I think, with the officials in the Primary Production Committee, which I sit on, as you’re well aware. What I was trying to ascertain—and it seems like this problem has been ameliorated when it came to harvesting timber on what would be lease land. If I can sort of draw your attention to a theory, if you will: in this instance, the landowner owns the land but does not necessarily own the timber therein. Should there be, as a question—and I think you may have addressed it, but I just want some clarity on this. Should a person be accessing that land for the sake of removing that timber, though they are the lessee of the land—the owner of the timber but not of the land itself? Would that then be in contravention of the law—i.e., that timber has been harvested illegally because right of access? There might be some prosecutorial reality between partners, in this instance. By virtue of logic, are they not then in contravention of this bill, which is going to be an Act, by accessing private land?

Thank you, Madam Chair. Minister, in the report back from the Primary Production Committee, there is a recommendation that new section 145, inserted by clause 42, be amended to allow for judicial discretion when determining whether defence is available to a person after the 15-working-day period for notification has elapsed. So I note in this Supplementary Order Paper 349 that “Section 145 is amended to allow a person to rely on defence in new section 145(2) if the court gives them leave”, and “a similar amendment is made to new section 146 in relation to strict liability offences”. Is the Minister satisfied that the issue raised in the report back from the select committee—that section 145 be amended to allow for judicial discretion when determining whether defence is available to a person after a 15-working-day period for notification has elapsed—is addressed adequately by this Supplementary Order Paper?

Kia ora and thank you again, Madam Chair. Just to the point, with respect to the right of access: like most of the arrangements that are held between those who own the land and often those who hold the lease on the trees or the ability to harvest, most often they’re not the same people. So with respect to the right of access, it would be our expectation that that would be held in the agreement between the landowner and those who hold the lease in order to be able to access the trees—whether for harvest or for other purposes. So I hope that addresses the member’s question. If we want to flesh this out a little bit more, of course, that’s our right and that’s why we’re here.

I do apologise to the member Mr Mooney here. Once again, I missed the bulk of his question and so if he doesn’t mind asking it again, that’d be great.

Thank you very much. And thank you, Minister, for engaging with this point. I’m referring to the report back from the Primary Production Committee which raised an issue around new section 145, inserted by clause 42, and recommended that it be amended to allow for judicial discretion when determining whether a defence is available to the person after the 15-working-day period for notification has lapsed. I note, in the Supplementary Order Paper, section 145 has been addressed by that, and I’m just wanting confirmation from the Minister that this is intended for the court to have leave as recommended by the select committee to allow a defence to be available for a person after the 15-working-day period has lapsed if leave is given by the court.

Look, thank you to Mr Mooney for his indulgence here in continuing to raise this question with me. The rationale here is to provide more flexibility for the defendants and to align with other pieces of legislation here. That’s the reason why we’re doing this, to allow that flexibility. With respect to the amount of days, if the member will indulge me here, I might ask the advisers for a bit more clarity on that particular matter, but that’s the rationale for why we’re doing it, and we believe that this bill will allow that flexibility.

Thank you, Madam Chair. Sorry, Minister; I apologise. I may not have been very, very clear, and I appreciate your answer given, and it was very succinct and it made sense to me.

To reiterate, my line of questioning was more in the sphere of should a lessor and lessee be in some, you might say, contractual difficulties, and some prosecutorial reality was potentially in play—that person, the said lessee, was accessing the land to harvest those trees whilst there was an issue over the said harvesting, it may be in contravention of this bill. I was just going to go back to section 77, where you removed it. Was that the reason that was removed, in so much as that someone accessing land where they see that they’ve got a legal obligation to remove the timber, but is still contractually bound and is finding themselves in some sort of prosecutorial reality in terms of who owns what—you might find that there were court proceedings in play or something to that effect that ameliorated the normal function between two partners. If you could just clarify if that was the reason why this was put in there or edited out.

I thank the member Mark Cameron for the clarity in their question. I’m going to try and attempt to do this, and I beg their indulgence here. So if there is a dispute between a landowner and those who are looking towards accessing the trees by way of the lease that they hold, the right to access that land, they would have a legal right and would not be in contravention of any law as it currently stands at the moment, and this bill doesn’t change any existing laws in that respect. Whether or not that answers the member’s question, I’m not too sure there, but I seek their indulgence here.

Thank you, Madam Chair. Minister, I am going to ask a concern that was raised by the New Zealand Law Society in a submission that, unfortunately, made its way late to the Primary Production Committee, but was eventually considered. That was the concern about the protection of persons outside the Public Service in clause 6. I’ll just read it out and just ask how you have addressed this in the Supplementary Order Paper that’s before us today. The New Zealand Law Society—their concern was, they said, that this clause extends 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(A) of the Forests Act “to a forestry industry body or other person outside the Public Service”.

They went on to say that this raises constitutional questions about the use of the Crown protection from liability in tort for the benefit of private actors. The regulatory impact statement does not address this feature of the bill, and the New Zealand Bill of Rights Act 1990 consistency advice does not consider whether doing so is consistent with section 27(3) of the New Zealand Bill of Rights Act. It went on to recommend that the committee consider this.

So I would just ask the Minister for comment on the response to this concern raised by the New Zealand Law Society on this particular feature of delegating powers to a forestry industry body or other person outside the Public Service, therefore extending the protection of Crown officials from personal liability to those other bodies.

Sorry, can I just ask the member for clarification. Which part were you talking about in the Supplementary Order Paper, sorry, that you said at the top of your contribution?

Joseph Mooney: Sorry, from reading this, it looks like it’s clause 6 under “Legal harvest assurance”—there has been an amendment there. I’m just asking if that has been made to address that concern raised by the New Zealand Law Society—or a potential issue raised by the New Zealand Law Society—about extending the protection of Crown officials from personal liability. I note in the Supplementary Order Paper, “Clause 6 is amended to remove assessors from the list of persons protected from personal liability under section 13 of the principal Act. The immunity that new section 117 confers on assessors who are outside the public service is retained. That section is amended to clarify that the immunity applies only when they act as an assessor under new Part 5.” So I’m just asking, has this been to address this concern raised by the New Zealand Law Society?

Hon PEENI HENARE: Can I thank the member again. To clarify: yes, it does. To be rather specific, on the point that the member makes around the Public Service, having protection from liability for assessors outside of the Public Service is in line with similar legislation. They are doing a public function so should be protected as they would under the Public Service Act, which is why this makes it quite clear with respect to how they are providing a public service here, so they should be, by these reckonings, covered under the Public Service Act.

Thank you, Madam Chair. I’m a commentator, not a lawyer, so it’ll take me a while to get to the question. I wanted to refer to an issue that Mark Cameron raised in a slightly different way, in that one of the really interesting submissions that came in on this bill related to legal harvest but not to legal harvest in the term of the bill. It was a very interesting submission—came out of Southland, interestingly, for Joseph Mooney’s benefit—and it related to someone who had, effectively, harvested the timber legally but then didn’t pay for it. It was quite a large submission, and I thought that was quite an interesting interpretation of legal harvest.

I suppose that leads me on to the topic I wanted to really talk about, which is fees. Fees are always of concern in the course of us putting these bills through Parliament, but the interesting thing about the fees in this case is that they, effectively, relate to the sale of wood, and those exporters never get to pay the fee, because the person who pays the fee, inevitably, is the forest grower. So it’s all very well to say that the benefits of harvesting that forest sheet back to the forest grower, but the people who make all the money out of it are the people that harvest it, the people that carve it, the people that transport it and send it overseas, and the people that clip the ticket on the way past. This doesn’t affect them at all.

So I suppose my concern is—and there was quite a bit of concern expressed in the course of the submissions on this bill—related to the fees and the way we set fees. This is a topic that comes up with every one of these bills that we put through Parliament, and there’s some frustration, of course, that those fees are not ever able to be identified prior to the bill passing, because, of course, until the bill’s passed, there’s not the ability to set the fee, which I think’s probably logical, but that’s the logic we use in this Parliament.

So I suppose my question for the Minister of Forestry was: does he have concerns around where these fees might get to and how they’ll be managed? I think, as I said, those fees will always sheet back to the person who grows the trees. It’s not possible to clip the ticket on the way past, because we would’ve just passed the costs straight back to the grower of the trees, and that’s quite a significant problem. It’s quite a significant problem for our whole primary industry in New Zealand, actually, because, at the end of the day, the grower’s always, basically, the price taker, and so we end up with that being quite challenging. I don’t know whether the Minister’s got any comment to make on the fees and the way they might be set, but it’d be really interesting if he did have and I’d be very keen to hear about that.

But I think the bill, from the experience I’ve had of the forestry industry, is a good bill, and it’s logical that we should put it in place. It’s just how we manage those costs that would concern me.

Kia ora, and can I thank Mr McKelvie for that contribution. He always gives very meaningful contributions in this House, alongside good commentary. I understand through the submissions some of those matters that have been raised, and what I want to make clear to that member first off is that I share, like many others in the sector, the concern that a vast chunk of the value of what we’re growing here in this country is being exported offshore. The member will have heard my question in the House today about our desire to process more of that here onshore, which is going to be an important way that we can grow and develop and support the sector into the future. While we want to get more of the value chain out of forestry—I think that’s something that we’ll all agree on—it is important that we do that and that we do that with the sector as a whole. One of the key lines that was raised with me last week when I met with the Wood Processors Association is that if we continue to innovate in silos, all we’ll have is really innovative silos. So I take the member’s point about looking towards making sure that the value actually is shared equally or at least distributed more equitably across the country as we look towards getting more out of that value chain.

When it comes to the fees framework around the processing, my understanding, Mr McKelvie, is that the cost to the owner of the forest is actually the compliance on being clear on exactly what it is that they’re harvesting, making sure that it fits with what’s required in order to report on what is being harvested here. But, look, we also have a part of this particular bill that gives a little bit of time as we let some of these things sink in, and I’m sure at some point in time, when we look towards whether or not the fees framework for those assessors is fit for purpose into the future, I’m certainly, as the Minister of Forestry, keen to make sure that that is, and we’ll continue to look towards making sure that we work with the sector on that.

Thank you, Madam Chair. For the sake of just indulging me, if you would, Minister, I bring your attention, just very quickly, back to new section 77(3B), inserted by clause 42. It says, “In this section, harvest includes any work on the land that is necessary to prepare for the harvest or to stabilise the land after the harvest.” I’m interested in the scope or the length of the time, if you go back to my previous iteration where I offered an example of a lessee and a lessor working as a partnership—how would that play out? What sort of time frame do you think, in terms of, perhaps, stabilisation or remediation work post-harvest? The scope of that is wide open, really, and you could see that potentially being problematic for the landowner, once the lessee has left and harvested the wood. So do you want to give some clarity about the length of time that you think this bill, and its oversight in terms of stabilising the land and in its interpretation with harvest, would be? Thank you.

Thank you, Madam Chair. Again, I’ll follow the honourable member from the Far North, and, I suppose, comment on an issue that’s very topical today with respect to legal harvest. I guess it could not lead to a question, but it’s really interesting when you look at the integrity of our agricultural or food-producing sectors, that a lot of what we do in those sectors adds to the integrity of the product we produce. I suppose you could think about where we’ve got to in the recent weeks or months with the discussions around slash; the integrity of our wood products is probably going to come into question if we don’t manage that in an equitable way.

So I think there’s a whole lot of issues raised by the question that Mark Cameron asked, which, while were never the intention to be part of this bill initially—and still aren’t, of course, but actually are very relevant to the sector and to the issue we’re dealing with. So I think it’s quite interesting how this has moved on, with quite a bit of pace, actually, given the events of the last few months in New Zealand and particularly relating to the New Zealand forestry sector.

So it’s a very interesting topic for us as a country, and the integrity of all of the products we export are dependent on a lot of things, but particularly on the manner in which we either harvest them or, I suppose, in the case of all of our grain and seeds and things like that, harvesting’s a relevant topic, too. So I’d be interested to know whether the Minister had any comment to make on that issue. I know it’s part of a bit of work being done at the moment with respect to the, I guess you could say, integrity of our harvesting methods and how we get on, but it is a very big topic in New Zealand, and one of significant interest to New Zealand.

Thank you, Madam Chair. Just the question with relation to stabilisation, the time frame for stabilisation of land would be a reasonable time to clear the timber and stabilise the land, including allowing ground cover to grow. And I guess the key term here would be “a reasonable time”, as the member will well know when quite often as larger blocks in particular are being harvested there is both things going on at the same time—where harvest continues while stabilising of those blocks continue to go. There is potential in lease agreements to make sure that as you look toward stabilising, that it’s done effectively and it could impact on how further harvest or the harvest might continue.

If we look towards the matter that Mr McKelvie has just raised about, you know, dare I use the term “slash” or wood debris as they look towards the stabilisation of the land that’s just been harvested. So I guess that’s probably a little bit more into the detail of how the lease arrangement might look between the forest owner and the lessor. And, yeah, so “reasonable time” is, essentially, what’s being given there.

But I do want to just touch briefly, before I end my contribution here, to the very important matter that Mr McKelvie did raise, it is topical, it is important—particularly to those flood-affected areas and those cyclone-affected areas, but right across the entire country, as forest is a huge part of our primary sector here in this country. The member is right, there has been an extension simply because of the sheer volume of interest in the matter for that particular panel to consider before they come back to Ministers and this Government on the full report with respect to the slash matter that’s currently plaguing the East Coast.

Thank you, Madam Chair. Minister, just to finish off that questioning I had before, just about the immunity from liability for assessors outside the Public Service—just for the record and for anyone watching, can you just advise where else this is used in other regulation or similar legislation? I note the comment before that it’s not unusual for this provision for liability to be extended from the Public Service to those who are exercising the powers of the Public Service but who are outside of the Public Service. Just for the record, could you just clarify examples of that?

Two examples. The first one was the one I mentioned which is the Public Service Act; that’s rather broad. The other one, though, is—which the advisers have just told me—the Animal Products Act does something very similar and, as I understand it, it’s quite a common feature in a number of bills or legislation that govern the Ministry for Primary Industries and the work that they do in the primary sector.

Thank you, Madam Chair. Now, Minister, I’m just going to turn to your Supplementary Order Paper again, and this is on page 4 of the Minister’s Supplementary Order Paper 349, near the top where it’s just talking about clause 26 replacing section 63Y of the principal Act—it’s on page 4 near the top. It relates to the revocation of a forestry adviser’s registration and it says, “New section 63Y enables the Forestry Authority to revoke registration if the person has failed within a reasonable time to take appropriate corrective action to remedy the deficiency or failure that caused the suspension and the person has not sought a review of the decision to suspend registration.”

Now, I would just be interested to know what definition, if any, there is in terms of guidance around what a reasonable time would be to provide some certainty. It may be in the Supplementary Order Paper and I may not have seen it—with a brief look—and I didn’t notice it. I just think it would be helpful to have some clarification about what is meant by a “reasonable time” in terms of this new section 63Y, because that could be, no doubt, quite an important question for folks who may be facing revocation of their licence.

The other point related to this is: I note that it says “if … the person has not sought a review of the decision to suspend registration.” , and is their time frame in terms of when that decision can be proceeded with to revoke it, if the person has not sought a review? So question one is: what’s the definition of a reasonable time for the person to take appropriate corrective action? And question two is: what is the time frame that’s considered appropriate? So if a person has not sought a review, when the registration can be cancelled or revoked.

I thank the member for the question. The first part: I would like to say that the reason that the term “reasonable” is in there is because it is too arbitrary, depending on the nature of the reason for the revocation of their licence. It could be minor things such as not keeping up with their fees. It could be more serious misconduct that might mean that the use of reasonable time in working with the agency and with the officials on the matter is probably more suited to a bit of a blanket catch on all of these matters, instead of being too specific, given the arbitrary nature, depending on what the offence might be. So I want to just leave that one there, but say, as I did in response to a previous question, that as Minister—and I’m sure the officials will feel the same—we must continue to make sure this is fit for purpose and if we find that there seem to be regular occurrences of a certain offence, then we might start shaping some time frame or the ability to be able to prosecute or to be able to revoke a licence in this particular case to make sure that that particular framework is fit for purpose. But at the moment right now, it is just simply, as the Supplementary Order Paper states, with respect to the time frame around it.

The question is that the Minister’s amendments set out on Supplementary Order Paper 349 be agreed to.

Amendments agreed to.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 to 3 as amended agreed to.

Bill to be reported with amendment.