Forests Amendment Bill — Consideration of Report of Local Government and Environment Committee 
Forests Amendment Bill — Consideration of Report of Local Government and Environment Committee 
[Volume:617;Page:12606] 
Forests Amendment Bill 
Consideration of Report of Local Government and Environment Committee 
Hon RICK BARKER (Minister for Courts) 
 on behalf of the 
 Hon Pete Hodgson minister in charge of the bill 
: I move  
That the House take note of the report of the 
 Local Government and Environment Committee on the Forests Amendment Bill. 
 This bill amends Part IIIA of the Forests Act 1949 which relates to indigenous forests and was inserted into the Forests Act in 1993. The bill was introduced to the House in July 1999 by the then National Government. The current Government has confirmed modified and added provisions. 
Over the past two decades stopping the destruction of indigenous forest in New Zealand has been a major environmental objective. This Government’s indigenous forest policy focuses on enhancing and maintaining our remaining natural indigenous forest through protection or sustainable management. All publicly managed indigenous forest is now protected thanks to this Government. Much privately owned indigenous forest is also under protection. For those privately owned forests where harvest of limited quantities of timber is possible ensuring that there are sound provisions for sustainable management is a key aspect of Government policy. Part IIIA of the Forests Act promotes the sustainable management of New Zealand’s remaining natural indigenous forests by placing controls on forest management milling and exports of indigenous timber. 
The main purpose of this bill is to implement Government policy on South Island Landless Natives Act land which was allocated to Maori under the South Island Landless Natives Act 1906. About 57000 hectares of land throughout the South Island was allocated to Maori who were identified as having insufficient land to support themselves. Of the land still under South Island Landless Natives Act ownership about 17300 hectares are forested. About 8300 hectares of that land are unlogged and the remaining 9000 hectares have been logged to a varying degree. 
South Island Landless Natives Act land was exempted from the 1993 amendment to the Forests Act because the Government of the day had not determined its policy on South Island Landless Natives Act lands. The current Government has addressed the issues and announced its South Island Landless Natives Act policy package in May 2002. The package provides for $19.7 million over 7 years for conservation covenants sustainable forest management plans and improved application of the Resource Management Act. It also funds moratorium payments for South Island Landless Natives Act owners in exchange for forest protection giving South Island Landless Natives Act landowners some income while they consider the options for the future of their forests. 
Most South Island Landless Natives Act forests are in the lower South Island. A block at the Heaphy River near Karamea and two blocks on Stewart Island are not covered by the Government’s policy as they are subject to the processes set out in the NgaiTahu Claims Settlement Act. Areas of South Island Landless Natives Act forest at Waitutu and Lords River are also excluded as they have been dealt with under separate conservation agreements and legislation. 
South Island Landless Natives Act landowners have a very firm view on their ownership rights—a review reinforced by the approach that Governments have taken to the South Island Landless Natives Act issue over a number of years. Considerable consultation and discussion with South Island Landless Natives Act landowners have made it clear that they would not accept any legislative measures that made no distinction between South Island Landless Natives Act forests and other indigenous forests. This bill therefore makes such a distinction. On the domestic timber market South Island Landless Natives Act owners will be exempt from the sustainable forest management requirements of the Forests Act that apply to all other Maori and non-Maori forest owners. However South Island Landless Natives Act landowners can voluntarily place their forests under those provisions and receive Government assistance to develop sustainable management plans. 
This domestic timber market exception does not extend to exports of timber from South Island Landless Natives Act lands. The bill reimposes controls on timber exports from South Island Landless Natives Act land so that the same conditions will apply as for other exporters. Such controls applied to South Island Landless Natives Act forests through customs regulations from 1989 but in 1999 the High Court found the regulations to be ultra vires and struck them down. The bill remedies the situation by bringing South Island Landless Natives Act forests under the existing statutory controls applying to other indigenous timber exports. 
Consistent with the 1993 amendment Act which precluded compensation to all other forest owners this bill precludes compensation to South Island Landless Natives Act landowners for the impact of the changes on them. This impact is expected to be insignificant however as the only relevant change is the reapplication of export controls and there is little or no foreseeable export market for the hardwood chips exported from the South Island Landless Natives Act forests in the past. 
The bill does provide a mechanism for assistance with financial loss if export contracts signed before the bill’s introduction are frustrated by its enactment. Few if any such claims are expected. 
To the benefit of South Island Landless Natives Act landowners provisions have been added to the bill to ensure that payments made to them for conservation covenants will be tax exempt. The bill also clarifies that the $18.5 million Waitutu Forest settlement in 1997 is tax exempt as was intended at the time. 
The bill as introduced contained considerable liberalisation of export controls in order to allow export of all sustainably produced indigenous timber products. However consistent with an election promise the Government has decided to retain the existing controls on the export of indigenous timber. These prohibit the export of woodchips and logs but allow the export of some items including sustainably produced sawn beech or rimu finished or manufactured products and personal effects. The existing export controls have been in the Forests Act since 1993 and are a publicly acceptable compromise on an issue that historically has been highly controversial. Indigenous timber is regarded as a heritage material which should not be exported in low-value-added form. The Government considers that indigenous timber production should be a low-volume high-value business with an emphasis on domestic use but with opportunities for exporting finished products of high value. The existing export controls serve this purpose and the bill streamlines administrative requirements for finished or manufactured products by removing the need for the Ministry of Agriculture and Forestry to approve each export consignment. 
The Government has confirmed some technical amendments proposed in the original bill and has added others to improve administration of the Forests Act. The transitional provisions in the bill relating to the West Coast indigenous production forests have been dropped because these former Timberlands-managed forests are now as a result of this Government’s policy part of public conservation land. 
On introduction in 1999 the bill was referred to the Transport and Environment Committee. It was subsequently referred to the Local Government and Environment Committee of the last Parliament and this Parliament. On behalf of the Minister I want to thank members of the committees for their diligent work on this bill. I also want to thank those who made submissions on the bill in 1999 and again last year. I commend this bill to the House. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 This bill speaks volumes about the mess in resource policy under this Government. I want to highlight the absolute anomalies and ridiculousness of what is going on in respect of indigenous forestry. We need look no further than the beautiful timbers in this Parliament to recognise the wonderful resource we have if we manage it properly. 
Let us look at what has happened under the Government’s policy. The very first thing that this Government did was to shut down sustainable forestry on the West Coast despite the fact that it was world-leading technology—that we were able to sustainably manage the forests on the West Coast and enjoy all the wonderful timber products that came from it. The lunacy is that at the same time we have turned a blind eye to huge clear-felling of indigenous forests in Southland—not sustainably managed; just bowled over. I tell members opposite that this is a classic case of two standards of citizenship. If a group of people on the West Coast is trying to make a living out of properly managing a forest it is shut down by this Government but if one happens to be Maori in Southland it turns a blind eye. I tell members opposite that that is a disgrace. 
But it is even worse than that. Let me give members the figures. What has happened over the last 5 years of this Government is that the amount of timber imported into this country has increased tenfold. This country imports $150 million a year of indigenous timber products. How many of those forests do we think are managed sustainably? The timber comes from Indonesia and it comes come from Malaysia. The so-called environmentalists on the other side of the House turn a blind eye to the importing of timber exported from Indonesia Malaysia and all sorts of countries where standards are pathetic but still they claim hand on chest: “Oh but we saved the forests on the West Coast.” It is a con. It is joke. It is an embarrassment. 
Let us look at the changes that are made in this bill. What is proposed is to put on an export ban even if timber is taken from a sustainable forest. What is the logic for that? 
Hon Ken Shirley 
: There’s no logic there. 
Hon Dr NICK SMITH 
: My colleague Ken Shirley a previous Minister of Forestry and someone who has worked in the industry and been part of international negotiations thinks it is a joke. There is no intellectual rigour to this policy at all. 
Hon Ken Shirley 
: We are the laughing stock of the world. 
Hon Dr NICK SMITH 
: The member is right; it makes us a laughing stock internationally. I was with Marian Hobbs at the Earth Summit in Johannesburg only 18 months ago. All the people there were arguing that we need to have consistent sustainable forest rules. Well hello! What this bill says is that even if forests are managed sustainably the Government will put export bans in place. This is the Government whose Minister of Forestry Jim Sutton only a few days ago was signing free-trade agreements. So why for goodness’ sake are we having legislation that introduces export bans? It really is something to believe that we are taking ourselves back in that regard. I am looking forward to hearing Damien O’Connor or Jim Sutton get on their feet as Ministers in this Government and justify the reintroduction of export bans to our forest regulations. It makes absolutely no sense. 
The real tragedy is that there are hard-working New Zealand citizens out there trying to make a sustainable forestry business through the permit system—the very detailed rules—of the Ministry of Agriculture and Forestry; they are trying to make a viable business out of indigenous forestry and doing it right and the tragedy is they are going broke. They are being driven out of the market because clear-felling of indigenous forests is going on in respect of South Island Landless Natives Act land. How can we expect people to helicopter-harvest their trees to go to extreme expense to protect the biodiversity of those forests—which is the rule for one group of New Zealanders—while down in Southland people can clear-fell take down the forest sell it on to the market and knock those other people out of business? There are good business people who are trying to do the right thing economically and environmentally and they are being knocked out of business because of the Government’s tardiness on this issue. 
When was this bill introduced? It was introduced in July of 1999 by myself and David Carter. What was Labour’s policy when it was elected to Government in 1999? It said it would deal with this issue urgently. What is the date? It is May of 2004. If it is urgent and it takes the Government 5 years to deal with it I would hate to see how long the Government would take to deal with an issue that it considered was not urgent! I say to members opposite that their tardiness on this issue is costing jobs and is costing the environment. We have a political mess because there are two different sets of rules for people based on ethnicity. We have an economic mess because businesses are going out of existence because we do not have consistent rules. Those who can clear-fell are able to bowl out those in the marketplace who are trying to do the right thing. And we have an environmental mess because forests in Southland continue to be clear-felled. Is it not interesting that Helen Clark the Prime Minister made a huge deal of stopping sustainable forestry on the West Coast but have we heard a whimper about the clear-felling of thousands of hectares of indigenous forests in Southland? There is an “h” word to describe it; I will not use it but I will say there is a double standard. 
Hon Ken Shirley 
: It’s hypocrisy. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Order! 
Hon Dr NICK SMITH 
: Mr Shirley uses a word that I am not going to say but it is my view that there is a double standard. It is absolute environmental lunacy. I want to know from Minister Rick Barker or from the Minister of Conservation—where is the Minister of Conservation? What has he been doing for 5 years as thousands of hectares of forests in areas like the Catlins areas on the south coast and areas all the way down through the lower South Island are being clear-felled? Where is this Government’s consistency in environmental policy? It makes absolutely no sense. 
There are some sensible provisions in this law. There are some sensible provisions that were introduced by National in July of 1999. They provide for a voluntary agreement system by which we can get the South Island Landless Natives Act forests under the provisions of the Forests Act. But they will not work without money. What this Government has failed to do is put any serious money into resolving the issue in respect of the South Island Landless Natives Act 1906 forests. That is a serious issue. The Government can pour money into buying up farms all over the South Island but it is not prepared to spend money to resolve this outstanding issue. I say again that that is a disgrace. Why does a country blessed with so many forests have to import $150 million worth of indigenous timbers from throughout the world? Why are we not sustainably managing our own resource? We are not doing that because of this Government’s warped policy and this bill represents a minor step forward and a big step backwards. I would love to hear from a Government member who can defend its disgraceful record in the management of indigenous forests. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I take this opportunity to support this bill. As a member of the Local Government and Environment Committee I have had a good opportunity to look at this bill. I am delighted that this Government has introduced this bill and I fully support it. 
JIM PETERS (NZ First) 
: 
 If there are any South Island Landless Natives Act forest owners hearing the debate tonight I am not sure that they will be any the wiser. First of all we heard the Minister read from a prepared statement that had little to do with the issues as I understand them. I admit that I have come to this issue very very recently. Then I heard the Hon Nick Smith whose name appears over the latter part of the 1990s also making comments about the issues that he had not managed to wrought an understanding about and completion of in his day. 
I want to keep it in mind that in this bill there is not a fair and reasonable solution to the problems of those South Island Landless Natives Act forest owners in Southland. In order to do so I wish to briefly recap the facts of history as I understand them and recent actions in relation to the people their land and their forests. In order to do that we need to go right back to 1853 when first was set in motion the concept that reserves needed to be added in view of the land sales in the South Island. Then we come forward to 1888 when for the first time it was recognised that there was an issue with regard to landless natives in the South Island and in 1893 a commission was established which finally reached its findings in 1905. 
I want to read from that time because New Zealand First’s stance is based on its historical understanding of the South Island Landless Natives Act of 1906. When the Hon Mr Carroll spoke in September 1906 he said: “Generations have passed away with promises unfulfilled but we have reached the stage now when I think these matters should be settled.” He went on to say: “The natives of the South Island have great and just claims—that can be of no question.” And finally towards the end of his speech in the House he said: “But I do say that in view of the absolute necessity of bringing these matters to a conclusion and in view also of the fact that it has been a blot on our colonial reputation to allow these claims to remain unsettled and undetermined for so many years the best solution we can obtain at the present day no matter whether or not we reach the utmost bounds of what is just so long as it is considered fair and reasonable should be hailed with satisfaction.” 
Then the premier of the day Sir Joseph Ward said in this House on 17 October: “This means Maori in the South Island who are not in possession of sufficient land to provide for their support and maintenance.” I will say it again: “to provide for their support and maintenance.” 
 It is a rather sorry tale that in 2004 almost 100 years later the issue goes on. In fact it reminds me of my English II studies of the book  
Bleak House 
 Professor John Reid the  
Jarndyce v Jarndyce 
 case where decade after decade the same issues went on and on and were not solved. Is this therefore a time when we will come to a solution? I suggest not. In fact today if one went to meet with the thousands of South Island Landless Natives Act forest owners one would find no satisfaction in what the Minister has stated and no satisfaction with the Government’s policy. In fact there is a deep-seated fear about what the Government really intends. 
So firstly we have the situation that in the year 1906 what was largely wasteland allocated to landless natives becomes in 2004 a land that is now regarded as a scarce ecological and cultural heritage and therefore in the minds of this Government is suitable for impressed public benefaction on the part of the owners. It has become that because this bill does not answer all the numerous concerns that the owners have had over the past decades. 
Secondly when New Zealand First went into coalition with the National Government in December 1996 this was one of the issues that was expressly covered in the coalition agreement. Again I can say that at that time—and I will quote the language because it is quite important—it was specifically mentioned that there would be a need to negotiate to end clear-felling by consultation with South Island Landless Natives Act forest owners and to consult—and this is the issue I want to raise later on—on compensation arising out of the prevention of clear-felling of indigenous forest. The fiscal cost to South Island Landless Natives Act forest owners was clearly recognised was quoted by Doug McPhail in his notes and was a cost factor that weighed on the Government of the day. I am very pleased to say that a parliamentary colleague of New Zealand First in 1999—namely Tu Wylie—stated very very firmly to the Government of the day that following the second conference of South Island Landless Natives Act forest owners at Rehua in Christchurch he stood firmly by their demands. That meant that when this bill went in the transition period from Government to Government the issues were largely unresolved. 
So what are some of the issues there? The first one that appeared and was mentioned by the Minister is that the Minister skirted over the fact that that Government arrived in 2000 with a clear intention as expressed to the people of the South Island Landless Natives Act lands and it reneged. It reneged on the clear understanding that those people had with regard to the clear-felling of their forest. 
Secondly there has been no real attempt by the present Government to go to the owners to try to come to an understanding and an accommodation. I am suggesting that this issue is similar to that of the West Coast. In fact the Minister of Conservation recognised that in his piecemeal three attempts to take out of existence blocks of land already owned by South Island Landless Natives Act owners. He said expressly last year that there was no further money and that was the end of the matter. I suggest on behalf of New Zealand First that if there is to be this considerable and wholesome restriction on the owners with regard to their ability to manage their resources then that should be an issue as it was regarded on the West Coast for funding and the land would remain in a semi-used state because much of the timber had been milled already. 
For that reason as far as New Zealand First is concerned we believe that this bill should cease and have no further passage beyond the second reading. Despite all the fine words from the Minister this bill does not allow the owners of the land to harvest mill and sell on the international market indigenous timber products including sawn timber logs and woodchips as they would wish. It does not allow that and there is no sound reason why with management practices such as are practised today with regard to sustainable logging that should not be so. 
I mention expressly the fact that National New Zealand First ACT and United Future believe that export controls were not needed given that there are standards in existing legislation that now apply to promote sustainable forest management as well as the international recognition of a move towards third party forests certification. If recognised by those who should know that would have meant there was no need for the compliance that the Government is now attempting to force upon South Island Landless Natives Act owners. 
We agree with those submitters particularly those who came to Christchurch last year who were concerned that this bill would result in the loss of commercial opportunity. It certainly gives no recognition either from the Minister or I would say from the Hon Nick Smith of the current value of economic benefit that this bill if passed will deprive the owners of after all these years. 
The South Island Landless Natives Act is a unique Act. It is not a Treaty of Waitangi claim. It is a unique Act of this House and it needs to be honoured in this House. The Hon James Carroll said in September 1906: “We are coming now to a point where we have to settle. Generations have passed away with promises unfulfilled.” That is exactly what he meant. That is perhaps not the view of the Crown Law Office in its second opinion with regard to the Southland District Council case but that was to its disparagement. In fact the time has come when unlike  
Jarndyce and Jarndyce 
 unlike the  
Bleak House 
 of English literature the people of the South Island Landless Natives Act lands need justice and the promises that were made to this House with regard to their historical issues need to be honoured. This bill does not do that. New Zealand First strongly supports that there be no further passage of the bill. 
Hon KEN SHIRLEY (Deputy Leader—ACT) 
: 
 The ACT Party will certainly be opposing this legislation the Forests Amendment Bill. The policy for the management of our indigenous forests in this country has been a mess and a fiasco for about 15 years. Successive Governments have failed to get on top of it. This Government in particular is driven by meaningless mantras rather than intellectual rigour. I guess we can understand why it is not driven by intellectual rigour. However its policies with regard to indigenous forestry are a disgrace. As the Hon Nick Smith said New Zealand is a laughing stock when it comes to those policies. 
In the mid-1990s I was privileged to chair and convene an international committee that developed global sustainable forest management policies and those codes persist to this day. Various groups came to New Zealand at that time and our proposals to manage sustainably our West Coast beech forests were regarded as a model for the world. The Forest Stewardship Council that came here recognised that our proposals were a model for the world. 
One of the first actions of this Labour Government on being elected in 1999 was to renege on the West Coast Accord. I remind people that the West Coast Accord was signed by a Labour Government—by the Hon Phil Goff in 1986 as the Minister for the Environment. It was a negotiated accord that was to persist in perpetuity for the sustainable management and utilisation of our indigenous forests. This Labour Government reneged on that accord and the real problem we have is this: with regard to the South Island Landless Natives Act forests and to Maori ownership it is saying: “Because you have this 1906 piece of legislation you’ve effectively got a free hand. You can clear-fell your forests”—and in many areas they have—“but in the West Coast and elsewhere around New Zealand—nothing. You can’t do anything.” It is bizarre. What is the logic of that? 
If we look at what was proposed for the West Coast forests it was talking about helicopter extraction with one tree per hectare on a 15-year rotation. That is considerably fewer than the wind blows down. The wind blows down more trees than that per hectare per year let alone in a 15-year rotation but because of the mantras of this Government it said: “No; zero; nothing.”—unless one is Maori of course living in part of the landless native forests principally in Southland. Then Maori can clear-fell. What is the logic of having that sort of dual race-based policy? That is another example of the race-based policy this Labour Government has persistently developed in this country. 
But it gets more interesting still. The Maori owners of the forests covered by the South Island Landless Natives Act also hate this legislation and with absolutely good cause. This Government is saying: “While you can still clear-fell your forests when it comes to exporting we’re going to be prescriptive and have export controls. So we’re saying that because we want to see low volume high value you can’t export wood chips and you can’t export sawdust. It has to be in a sawn product.” That might be superficially seductive at first glance but with any sense of intellectual rigour one would look at it and think: once the tree has been cut down does it really matter in what form it is exported in terms of its impact on the forest? Of course not. 
The goal should be sustainable management of the forest. The standard can be set but to have export controls is counterproductive because there are thinnings prunings and wood shavings. If we are going to maximise the value then wood shavings prunings thinnings and the chip from those can be very valuable in composite products and in all sorts of developments that modern technology allows us to have. But the mantra of this Government is to say: “No you can’t do that. It has to be buried or wasted.” That emits carbon dioxide or methane then in its decomposition so the policy that this Government is bringing to the House is just utter foolishness. 
Certainly there are many beautiful timbers. We are surrounded by native rimu. In recent times we have refurbished the whole of this old Parliament Building. It has been done in solid rimu solid wood. It is not veneer; it is solid wood. But it gets better. Members will remember that just after this Government came to power it renovated the Beehive. It put up New Zealand native tawa in the Beehive foyer. Then when the Government realised it had used New Zealand native tawa it ripped it all down dumped it and imported an imitation tawa at a cost of hundreds of thousands of dollars. It was actually North American ash but the Government felt good because it was not using native timbers from New Zealand any more. The Government tore them down and dumped them pretended the trees had never been cut down in the first place and imported imitation tawa—North American ash. That is the sort of thing these loony Labour nutters do. That is a classic example and this policy epitomises that sort of foolishness. 
It just goes on and on. Can members guess whom I met on the tarmac at Tauranga Airport on my way to Parliament at the start of this week? It was Kit Richards. Do members remember Kit Richards? He was the champion of sustainable forestry a top scientist and a good friend. He is the person whom Prime Minister Helen Clark harangued mercilessly because he had the temerity to point out the foolishness of this Labour Government’s policy. In fact all the scientists I know who are associated with sustainable forestry emailed each other saying: “We don’t believe it. These are nutcases in Government.” That was back in 1999. How right they have been proven. But because Kit Richards had the temerity to say so he lost his job. He was harangued by the Prime Minister in a very vicious and vindictive way. But who was right? Kit Richards was right. And who was wrong? Helen Clark and this Labour Government were wrong. 
We have seen the dual double standard of their race-based policy on the one hand where if one is Maori because of a commitment in 1906 one can clear-fell but if one is a West Coaster and not Maori the Government will tear up the agreement and the pledges made just as recently as 1986 and one cannot clear-fell at all. By the way even if Maori are cutting down and harvesting forests under the South Island Landless Natives Act the Government will restrict control and prescribe the form they export it in. That is very foolish policy. I agree that I would like to see high value low volume but the market determines that. By allowing the various mixes the operators in a commercial world are smart enough to get the best value for products. But oh alas this Labour Government is driven by its mantras and its rhetoric and the outcome is appalling. 
GORDON COPELAND (United Future) 
: 
 It is a pleasure for me to speak tonight on the Forests Amendment Bill for reasons that will shortly become obvious. In October last year in connection with this bill I was contacted by a man called John Brosnahan. He is a man who farms in the Eastern Bay of Plenty who has dedicated the last two decades of his life to putting forward some very innovative ways of using manuka and kanuka for wood fuel to smoke food and to be used on domestic barbecues. John has not just manufactured these products he has also designed and made the machines that are used to bring these products into existence. He rang me in a high degree of frustration in relation to this bill. He had appeared before the select committee that considered this bill prior to the last election as mentioned by the Minister and bridged the two Parliaments. He had come down and explained to the select committee that New Zealand was on the verge of developing a massive export market in manuka and kanuka products. 
I want to give this potential export market some dimension for members tonight. John estimates that this export market could be worth as much as US$1 billion to the New Zealand economy. If he is right we are talking potentially about an industry that is bigger than the wine industry and the kiwifruit industry and almost as big as the coal industry. John was frustrated that in spite of the fact he was getting unsolicited requests from overseas to supply this product he was unable to do so because he was being blocked by the Forests Act and by the interpretation placed on that Act by Ministry of Agriculture and Forestry officials. To say the least he was given the run-around from pillar to post. He did manage to export a couple of products. 
I want to show members exactly what I am talking about. I have here a bag of barbecue fuel. It is called Manuka Gold. As members can see it is a woodchip from an indigenous species. This is the fuel used to smoke food. We all know that manuka smoke creates a unique flavour—unique to this whole planet. It is that flavour and the manuka that can be used to produce it that has this huge potential for the New Zealand economy. 
When John explained all this to me I could see immediately that it was crazy for New Zealand to turn down such an amazing opportunity that had been developed over more than two decades of hard work. Why on earth would we do such a thing? I concluded that probably it was not deliberate but had been done in ignorance. After all the purpose of this bill is to prevent the export of woodchips from indigenous species. Manuka is an indigenous species and these are certainly woodchips in this bag so “no go”. I took up the matter immediately with the Government. I was very disappointed when in early November last year the Government wrote back to me and continued to say: “No go.” But I decided that the matter should not rest there. I could have come to this Parliament to make a speech tonight saying what a crazy thing it was but I decided that I would quite determinedly go back to the Government and say that I was going to bring in a Supplementary Order Paper that would alter this bill to allow exports to happen. I believe that when the New Zealand public hear the story I have to tell them they will be scandalised. 
I said to the Government: “You say you have a growth and innovation framework. This is innovation; this is growth. You say you are friendly to exporters but this is a massive potential export market that we are stupidly turning down. That is how stupid we have been. We are exporting manuka seed to Australia and other nations so that they can grow manuka to make these products to sell to Asian markets. How stupid can we possibly be?” 
 Now I must say that the response from the Government eventually was that it decided to engage with me and I am very very glad it did. I have worked from then until last week on this matter with the Government. I am delighted to tell the House that last week I received a letter from the Hon Pete Hodgson saying that the Government had looked at the matter very very carefully and had decided on the basis of a legal interpretation of the law that these exports can now proceed. So I am very delighted to be able to say now that not only can they proceed but they can basically proceed without any export controls. 
How has that happened? That has happened because there is an exemption in this bill for manufactured products and it has been decided that this is a product that is manufactured which is logical because it is produced from machinery. It has also been decided that this product is manufactured to be used in its finished form. If one thinks about it that is nothing like the chipping of a beech tree. Chipping of beech trees meant we exported chips to make pulp to make paper. By contrast this product goes straight into a smokehouse in Asia and is used to give that beautiful manuka flavour to the food people eat. It is not used only in Asia; but is also in demand in Australia in the United States and in other markets. 
The process has now been certified by the Government and officials and these exports can therefore commence and continue on into the future. I think that is tremendously good news for the thousands of New Zealand farmers who have some manuka and kanuka growing on their properties. It is not just grown in forests; of course it is also grown in wood lots on many many farms up and down the country. I am very pleased indeed that because of that legal opinion on the force of the Act those exports will now be able to go ahead. 
Hon Ken Shirley 
: Why restrict them in the first place? 
GORDON COPELAND 
: I say to Ken Shirley that that is another debate for another day and another hour but the good news at this point in time is that we will now see this particular export industry go ahead. 
I believe that we will see the manuka plant itself now flourish in our country. After all when one thinks about it one really should want to continue the existence of an indigenous species. And I should also say that the Government has now recognised this by allowing exports of indigenous trees to occur provided they are grown in plantations. That at least illustrates the principle that any nation would be crazy to kill the goose that lays the golden egg. As long as we have a thriving export market for manuka products we can rest assured that plenty of manuka will not only be preserved in this country but will in fact be planted because of the commercial opportunities it opens up for people to make a living and to support their families. 
I am delighted that this has happened because John Brosnahan who has developed all this said to me in his final despair about not getting anywhere on this whole issue that he had decided to move offshore and take his technology with him. That will now not happen I am pleased to say. 
I want to add one further thing which is to say that although United Future was part of the minority view on this bill and signalled to the Government it would be voting against it we have now changed our stance and will tonight be voting in favour of the bill. [ 
Interruption 
] If members listen for a moment I will tell them why we have changed our decision. We have done so because we have received—and I believe other parties have as well—a letter from the Waimumu Trust. The trust is the owner of 4400 hectares of South Island Landless Natives Act forest and represents 7000 Maori beneficiaries. It has written to us asking us to pass this bill as urgently as possible. It has written— 
Jim Peters 
: Rubbish! Sheer nonsense. 
GORDON COPELAND 
: I have the letter right here I say to Mr Peters and it is not rubbish. What I am saying is truthful. Waimumu has lodged a claim with the Waitangi Tribunal. It expects a claim for compensation for the actions of this bill and it has written to us—and I believe to other parties as well and others may know that they have received the same letter—saying: “Please pass the legislation so that the Waitangi Tribunal can hear our claim.” I think that that is a just way to settle the dispute that has now arisen between the Government and the owners of the South Island Landless Natives Act forests. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 This bill has taken an extraordinarily long time to pass through the House. The Local Government and Environment Committee was constantly asked to defer action while the policy was further developed and we are glad to see the bill finally progress. The resolution of the South Island Landless Maori Act forests issue is long overdue. It has been a blot on our environmental record ever since the 1993 amendment to the Forests Act. There is so little lowland indigenous forest left and what there is has been very greatly modified. 
New Zealand has taken a number of steps in recent years. We now have three kinds of indigenous forest in New Zealand. Our public forests are recognised—because there is now so little of them—as heritage icons that should not be interfered with for industrial purposes at all. That is the will of the people and is what they clearly voted for. Our privately owned native forests must be sustainably managed under the Forests Act and logged only at the rate that they re-grow. The conditions for sustainable forest management plans could be better but by and large that is a huge improvement over clear-felling. 
A third category of forests—the South Island Landless Maori Act forests—is still being clear-felled and that is an anomaly. It is both an environmental disaster because it is a loss of important biodiversity and an economic disaster because the cheap flooding of the market with clear-felled rimu and beech depresses the prices that are received for sawn timber that has been sustainably managed. 
One other point on which I agree with Nick Smith is that the whole system falls over when there are no restrictions on the import of unsustainably managed clear-felled hardwoods from South-east Asia and the Pacific. The only way we could claim environmental benefits from the New Zealand policy would be to impose a ban on the import of hardwoods coming from Sarawak the Solomon Islands South-east Asia and the Pacific which are most definitely not being sustainably logged and where the indigenous people are being deprived of the value of their forests by multinational companies that are simply clear-felling them and selling them cheaply. 
This bill has been a balancing act: a balance between environmental protection and consistency with other landowners on the one hand and on the other hand not legislating away yet again further Maori land rights—given that we have a bit of a bad history of doing that as a country. It is therefore a compromise and perhaps that is why nobody likes it very much. I believe it is probably the best compromise we can get in the current situation and that is why the Greens support it. It does not ensure that all clear-felling will stop but it does provide very strong encouragements. It does not allow the current owners to do whatever they like with their forests but it does leave them a number of reasonable options. 
In fact it leaves them with 3½ options. The first is that if they have high value forests for conservation purposes substantial funding is now available through the Nature Heritage Fund to agree to conservation covenants on the land while retaining the current ownership of that land. By protecting the land from logging the owners can get a funded stream of benefits without losing their title to it. That option will be most profitable for those groups that have never logged their land at all. There is a certain justice in that. If groups have had some income in the past from partly logging their land then it will be of less value now to the Nature Heritage Fund and there is less likelihood of groups being able to negotiate a covenant. 
The second option is for forests to come under the sustainable management provisions of the Forests Act. Contrary to what most speakers have said this does allow exports of sawn rimu and beech timber and of manufactured products from those timbers. What it does not allow is exports of whole logs or of chip and in that respect the South Island Landless Natives Act owners will be in exactly the same situation as all other private owners of forests. But they still have a third option. There is nothing in this bill that prevents them from clear-felling their forests and converting to pasture or pines if they choose to do that. But if they take that choice they cannot export any of the products from that clear-felling. 
The fourth option or the third-and-a-half option if one likes is that they have another 3 years to decide. The moratorium that actually pays them an annual rate not to log while they think about it continues for a little longer so that they can develop their sustainable management plans if that is what they want to do. Owners could get their forests valued and take the other steps that would help them make the right choice. So this is a bill that encourages rather than forces sustainability but $19.7 million of funding to encourage good environmental decisions is likely to move the whole system much closer to sustainability. 
Obviously the Nature Heritage Fund is currently seeking the best blocks—the ones that have not been previously logged and have the best biodiversity—but eventually with the money left they may move to some less desirable ones as well and those owners will benefit too. 
Maori submitters to the select committee which I chaired still believe that they suffer significant losses through this bill. I do not agree with them. I have looked into it very carefully and I simply do not believe that those losses are real. They say they are suffering losses because they will no longer be allowed to export chip. From 1993 onwards chip exports were stopped and then because of a loophole in the law that was overturned. But actually the exports never started again. It is a long time since anybody exported any chip from New Zealand. In fact chip exports need high volume. The little bit of waste made from sustainably harvested forests with selected trees does not produce enough chip to be worth exporting. The hulls of those huge ships need to be filled in order to export chip so it is not a very serious option. 
We investigated whether it would be more consistent to allow the export of chip from sustainably managed forests but not from clear-felled forests and we found that there were intractable practical problems with doing that. First of all it is possible these days to make logs traceable—to label them and to determine which logs come from a sustainably managed block and which do not. It is simply not possible with chip. There is no way a distinction can be ensured right through the value chain of chip from one kind of forest rather than another kind of forest. 
But there is now no market for chip from New Zealand indigenous timbers. The market is being flooded overseas with eucalypts which are being produced in larger and larger volumes—nobody particularly wants New Zealand native timber chip. The price if anything can be got for it at all is extraordinarily low and that is unlikely to change because more and more eucalypts are coming on stream. There is however a domestic market for waste wood in a lot of parts of the country particularly near urban areas and that is for firewood. So we believe that that is a better option for the owners of these forests. 
This whole policy package has actually handed a significant financial advantage to the owners of forests with millable timber because the price of rimu has risen a lot since the 1993 Act and the price of beech has risen somewhat and is likely to continue rising. In my view that ought to balance out any losses that the owners have sustained as a result of the export ban. 
I was fascinated by Gordon Copeland’s performance just now. It reminded me of a Christchurch television show some years ago called  
Susan Sells 
 where people used to come on and advertise their products. Or maybe it was a little bit like a Tupperware party. I do wonder how he proposes to distinguish between manuka sawdust from a sustainably managed forest or from a clear-felled forest or is there no intention to make that distinction at all? If there is no intention at all what we are doing is encouraging farmers everywhere to denude their manuka and kanuku areas for sawdust exports with serious damage to our farmland and our biodiversity. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 It is with great pleasure that I rise to support what I believe is a very good bill. I compliment the Local Government and Environment Committee and acknowledge the work its members have done. I also want to acknowledge Gordon Copeland. I will differ slightly from Jeanette Fitzsimons in terms of my view of his contribution although I did enjoy her  
Susan Sells  
allusion. I thought she did very well and maybe there is a career there for her in terms of television. 
Hon Ken Shirley 
: After the next election. 
MARTIN GALLAGHER 
: Well I would put my money more on Gordon Copeland than on the party that that interjector represents—if I were a betting man which I am actually not. 
Hon Ken Shirley 
: How much? 
MARTIN GALLAGHER 
: I am not a betting man. I thought that Gordon Copeland’s contribution was very interesting and certainly I compliment United Future on its ability to work through some issues and to negotiate. That is again what this Parliament in an environment of MMP should be all about. I compliment the United Future party’s members accordingly. 
One of my pleasures I guess—and it certainly was a great education—in the previous Parliament was to be involved with the Primary Production Committee in looking at the report that was published in 2002:  
A Sustainable Future for our Indigenous Forests 
. I also want to acknowledge to our New Zealand First friend over there on the Opposition benches that Doug Woolerton was a very very useful and valuable member of that committee. I found that exercise to be extremely interesting and extremely valuable. Certainly we were focusing on the sustainable production if one likes of indigenous timber on privately owned land and on trying to get a balance with the key word being sustainability. I note in particular that one of the features to stress in this bill is ensuring that the relevant export controls apply equally to all indigenous forest owners. Obviously that will also provide a mechanism to help South Island Landless Natives Act forest owners to opt into sustainable forest management. I think that that is a very very good thing indeed. 
Finally I again commend the Local Government and Environment Committee which has worked a long time on this bill. I compliment very much the chair and deputy chair of the committee. They have done a good job and by and large reported a good and constructive bill back to this Parliament. 
SANDRA GOUDIE (National—Coromandel) 
: 
 Such are the extraordinary activities of this Government that way back in 1999 its members actually voted against this bill yet here they are promoting it through the House. Is that not absolutely extraordinary? We had the Hon Mr Sutton calling my colleagues Nick Smith and David Carter “twerps” as they spoke in support of this bill and in support of the sustainable management of logging so I find it extraordinary that the Labour members are now supporting the passage of this bill through the House. I have to take issue with Gordon Copeland with regard to supporting his friend’s exemption for a woodchip product. It looked pretty much like woodchip to me yet he has an exemption so he is OK. Here we are having a ban on the export of chips justified by the Greens. They are saying that there is no market for that product so the ban is OK. Well that is an absolute nonsense. We should let the market decide if that is the case. We do not need the ban. The honourable Gordon Copeland—well not even honourable— 
Darren Hughes 
: All members are honourable. 
SANDRA GOUDIE 
: Absolutely—and United Future may like to rethink their position and support National in trying to ensure that the export ban is removed. Everybody else would therefore have the same level playing field that is enjoyed by that member’s friend Mr John Brosnahan in his export of product. 
Debate interrupted.