'Streamlined' forestry sales to foreign buyers boost Govt's billion trees target

Tuesday, 9 April 2019

Self-styled 'champion of the regions' Regional Development Minister Shane Jones, who has promoted the 1 billion trees planting programme.

Changes to overseas investment rules have made it harder for foreigners to buy houses - while fast-tracking multi-million dollar forestry deals.

The first streamlined Overseas Investment Office (OIO) forestry deal was approved for Japanese-owned Oji Fibre Solutions (NZ) to buy a forest at Te Kuiti.

For fast-track approval, overseas buyers must promise to plant a new crop of trees, in line with the Labour-led coalition Government's aim of planting 1 billion trees by 2028.

Spokesman Murray Horton of lobby group Campaign Against Foreign Control in Aotearoa said that in 2018 the OIO approved foreign investment totalling $12.5 billion, which compared with the annual average of the previous decade of $8.2b.

One of New Zealand's largest forestry deals was the sale of Nelson Forests to OneFortyOne for US$815m. The photo shows participants in a sedimentation workshop near Tapawera.

* Forestry company addresses industry practices

* Australian forestry company gets nod to buy Nelson Forests**

'It's business as usual, despite this Government saying it would take steps to deal with what it claims to recognise as the problem of foreign control. Actions speak louder than words.

'The Government is conducting the second stage of the Overseas Investment Act this year. Let's see some action,' Horton said.

When measured by hectares, there were approvals for 137,834ha, an increase over 2017 when the sale of 25,696ha was approved, the lowest since 2003 compared with the annual average of 135,157ha over the past decade.

The Oji Fibre approval in February was to buy the 188ha mature pine Stoneleigh Forest in Te Kuiti from Australian company PF Olsen Tisa for $4.3 million.

It is buying Stoneleigh Forest to secure timber for its Kinleith and Tasman plants - it owns three pulp and paper mills in New Zealand and 10 packaging manufacturing plants in New Zealand and Australia.

Oji Fibre plans to harvest the existing crop and replant it.

In January the OIO gave approval for Australian forestry company, OneFortyOne and Nelson Forests to buy approximately 2411ha of land at Manuka Island Forest, in Marlborough for $46m from a US investment group.

It followed the September 2018 US$815m purchase by OneFortyOne of Nelson Forests, owner of more than 25,000ha of sensitive forestry land, and the Kaituna Sawmill, plus Crown Forestry Licences for about 51,000ha.

The stated benefits included increased domestic timber processing, the 1 billion programme, protection for native vegetation, control of wilding trees, more public access, a new graduate programme and a fund for sedimentation research, the OIO said.

There are three main tests for forestry deals with the application fees varying from $34,000 to $50,000.

The most streamlined is the land will be used nearly exclusively for forestry, replanting, and maintaining public access, biodiversity protection, Forestry Stewardship Council certification, and local iwi access.

A second test is when investors say they cannot maintain existing arrangements for such things as public access.

The most complex test is when an overseas buyer wants to use the land for forestry and other farming, and must address 21 benefit factors based on economic and recreational benefits.

The tests are based on a forest land directive introduced by Finance Minister Grant Robertson including assessment of how the forestry deal advances the billion trees planting programme.