2 Sept 2008
Forest owners say the decision of Ngai Tahu to apply to have its Treaty of Waitangi settlement reconsidered, highlights the huge losses sustained by owners of pre-1990 forests under the government’s emissions trading scheme (ETS).
“The treatment of pre-1990 forestry has been a problem for the industry since the ETS was first proposed, and it remains the key problem,” says NZ Forest Owners Association chief executive David Rhodes.
Citing a legal opinion prepared for the Federation of Maori Authorities, Mr Rhodes says the effects of the ETS on iwi who have already settled their grievances with the Crown has been twofold.
“First, the forested lands transferred to them as part of their settlements have been de-valued, and second, if they were considering deforestation in order to switch to a more profitable land use, the costs of doing so are considerably higher than they were before the ETS, because even relocating forests is penalised.
“Several iwi are understood to be in this position, not just Ngai Tahu.”
He says all owners of pre-1990 forests are effectively locked into their existing land use in perpetuity, regardless of the best use of the land, unless they agree to pay a deforestation tax likely to be between $20,000 and $50,000 a hectare. The prospect of paying this tax has stripped about $3 billion from the value of the pre-1990 forests that make up about 65% of the country’s plantation forest estate.
“Iwi are fortunate to have the Waitangi Tribunal open to them as a means of getting redress for this unfair treatment. This channel is not available to other forest owners, including Maori who own forests that are not associated with a treaty claim.”
Regardless of this we expect any treatment of forest owners to be equitable and consistent across the board.
David Parker is correct when he says that government and industry do not agree on what is a fair level of compensation for the loss of value to pre-1990 forest. Government has increased the limited 5% level of compensation offered to around 7.5% of the deforestation liability, but only for those who purchased before 2002 and this has created yet another arbitrary and unwelcome division within the industry.
“We agree that the ETS should compensate pre-1990 forest owners more adequately for their loss of equity and allow transferability – the right to replant milled forests on another site without penalty.
“New Zealand needs more forests for a host of reasons, many of them environmental. Treatment of forest owners today is going to determine what level of interest there is in forestry tomorrow."
For more information, please ring David Rhodes, tel 0274 955 525