This paper presents the Green Party's proposals in respect of rimu logging by Timberlands West Coast Ltd.

Recommendations

Note that:

• There are few jobs at risk in ending the rimu logging in the immediate future, as alternative timber supplies are available to millers and manufacturers.

• The three forests being logged have very high ecological values and logging is highly detrimental to those values.
• Timberlands can invoke force majeure clauses in the contracts that allow them to avoid liability for compensation and end the logging to meet Government policy.

AGREE that:

• Timberlands be directed to end the unsustainable logging of Orikaka Forest as soon as the necessary consultation with the Board of Timberlands has occurred, which should happen this week.

• Timberlands be directed to end logging of indigenous forests by 31 August 2000.
• Timberlands be directed not to develop any further roading within North Okarito or Saltwater.
• Timberlands be directed to seek tenders for contracts to mill pine plantations that have reached merchantable standard in order to ensure alternatives are available for West Coast mills.
• Sufficient resources be appropriated to the Ministry of Agriculture to ensure that all applications for sustainable management plans and permits under the Forests Act are able to be processed promptly.

Employment concerns

Very few, if any, West Coast jobs are at risk from an end to rimu logging. If Timberlands is directed to mill pine plantations that have reached merchantable standard this will ensure alternatives are available for West Coast mills. Timberlands pine harvest is currently predicted to increase from 190,000 m3 this year to 230,000 m3 in 2001 and 260,000 m3 in 2002. Westco Lagan, by far the largest rimu processor, say there will be no job losses at their mill.
Outside the West Coast, concern has been expressed about employment in the furniture industry. Jobs in the furniture industry are primarily in the major cities — at the last census 70.8% of full-time wood furniture manufacturing jobs were located in the five main centres.

The key issue in relation to employment currently utilising rimu timber is the availability of alternative supplies. Alternative sources of timber available for a transition include:

• The Ruatapu rimu stockpile of approximately 700 logs, which could help maintain immediate supplies;

• SILNA rimu and beech, available in the short term (although we hope that the Government will find a way to put these areas under the Forests Act soon);
• Beech, rimu and other species from private land managed under Forests Act in the short to medium term (at least 57,178 m3 per annum already approved for harvest, with further applications being processed);
• Plantation and farm forestry pine, macrocarpa, poplar, acacia, eucalyptus and other minor species.

As noted by the Minister responsible for Timberlands West Coast Ltd during oral questions on Thursday, "these timbers collectively are in more than adequate supply."

Transition time is needed only to provide for changing from one timber source to another. No public suggestion has been made that this involves physical refits at the factories, or retraining of staff. Overseas contracts for furniture that may specify rimu have been mentioned, but there has been no evidence produced that they could not be provided for from the stockpile and the rimu available on private land. The furniture industry has provided no evidence for its claims that 40% of furniture jobs are at risk, and has made no case to support a transition period greater than weeks. August 31 would provide for a ten week transition, into spring and the next logging season.

Rimu loggers, millers and end use manufacturers will never move to alternatives while Timberlands is providing cheap rimu. However an end to rimu logging on public land is one of the most predictable changes in government policy in recent years, anticipating this change ought to have been a matter of commercial prudence.

The concern of the furniture industry appears to be largely one of maintaining ready access to cheap timber. The environment should not be used to subsidise the furniture industry.

Settlement precedents

Without continued rimu logging the $120 million package is still exceedingly generous compared with other forest purchases and Treaty settlements.

If the Government only protects the 98,000 hectares of beech forests previously threatened by logging then the cost of achieving this would be $1,200 per hectare. This is twice the price paid for privately-owned West Coast beech forest by the Government-funded Nature Heritage Fund, of $600 per hectare. The Nature Heritage Fund has never had the opportunity to purchase dense rimu forests of the quality of Okarito and Saltwater.

$120 million is comparable to the $170 m Tainui and Ngai Tahu settlements, which were major historical grievances arising from the actual taking of private (Maori) property.

A package that did not end rimu logging in the very near future, but still gave $120 million to the West Coast, could build resentment among Maori and forest owners. It could also create unrealistic expectations in other regions, especially those with higher unemployment and lower average income than the West Coast.

Ecological concerns

The three forests currently being logged have very high ecological values. Timberlands resource consent documents for Orikaka, for example, say "localised populations of great spotted kiwi and kaka are regarded to have national significance due to their relatively high densities."

Timberlands concede that the logging of Orikaka is unsustainable. They are also accelerating the logging to finish early (August). If this logging is not stopped forthwith, the trees will be gone by the time any nominal end date arrives.

Ecological damage from 'sustainable' logging and roading in the North Okarito and Saltwater forests is inevitable if these operations are allowed to continue. We recently received the following message from one of Timberlands' own contract ecologists, who cannot be named to protect his employment position "I was disturbed today to hear that rimu logging may continue for eight more years. This would be more devastating to the environment than 800 years of sustainable beech logging. Rimu are the most important single component of the forest ecosystem to many species of birds and other animals."

Damage from 'sustainable' logging until 31 August could be minimised to some degree by directing Timberlands not to develop any further roading within North Okarito or Saltwater.

Contracts

The rimu contracts have the same force majeure clause as the beech contracts, which Timberlands can invoke if government policy changes. Timberlands' directors clearly felt that their fiduciary duties demanded the inclusion of such a clause, which suggests that government policy to bring an early end to the logging was anticipated at a commercial level. There is no need to break the contracts and no implication or precedent for general government contracts.

International investors are likely to regard action over rimu logging with little concern. ACC legislation extinguishing both contractual rights, and the right to compensation for this extinguishment, has already been passed by this Government. The previous Government directly devalued private shareholders rights during the split of line and energy companies in the electricity sector. Both are far more significant in financial and legal terms than our proposal.

Invoking the force majeure clause is consistent with Government statements such as that by Michael Cullen and Pete Hodgson in a letter to Forest and Bird, 5 November 1999, "It is our intention to stop all logging of indigenous forest on land of significant conservation value as soon as possible." The public expectation is that these statements will be followed through.

To the best of our knowledge, new contracts were clearly signed after the Labour policy was agreed, but before it was announced. This appears to be an obvious attempt to tie the hands of the new Government. As noted by the Prime Minister, "I don't think there can be any commitment — moral, legal or otherwise — to secret contracts which the public was completely unaware of."

Buller overcut

The Buller "overcut" is outside the part of the West Coast Accord that the Courts have determined has legal force. The logging of Orikaka can be ended immediately with no threat of legal action for compensation under the Accord. Therefore, unsustainable logging in Orikaka can be ended through a directive to Timberlands before legislation is passed cancelling the West Coast Accord. Allowing for consultation with Timberlands, such a directive could be issued this week.

Conclusion

Timberlands has been shown to use lobbying and disinformation campaigns in order to turn the media, the West Coast populace, the unions, the furniture and forestry industries, and even their own party members, against Labour and the Alliance. In 1999 Timberlands spent $471,300 on public relations compared to $10,400 on pest control. There are few jobs at risk and the contracts can be exited without legal repercussions. How long is the Government prepared to be dictated to by an SOE?