Farm Forestry New Zealand

The log traders Bill is more than a mouthful

Don Wallace, New Zealand Tree Grower August 2020.

On 14 May 2020, on the day we moved down to Covid-19 alert level two, the Hon Shane Jones, Minister of Forestry, introduced under urgency the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill. There was little advance warning of the Bill or what it would contain and while submissions were being sought, we had only seven days to prepare if we wished to submit.

The proposed actions looked good to small-scale forestry owners – to improve the professionalism of those offering us advice and buying our logs – but we had been warned that, hidden within the Bill, were other measures which might be bad for us. In particular, we had been warned that the part of the bill aimed at ‘supporting the continuous, predictable, and long-term supply of timber for domestic processing’ could be used by the government to force owners of small forests to sell logs at a discount to local mills. The NZFFA has no objection to supplying local mills with logs and supports value-added processing in New Zealand but expects the local sawmillers to pay a reasonable price for our logs.

The submission process

It was quickly decided that this Bill was too important to ignore. We found that, among the Executive and those we work with such as the Forest Owners Association, the NZ Institute of Forestry and the Wood Processors and Manufacturers Association, there were different views on how we should approach the submission including −

• Opposing the bill outright
• Asking for more time to properly consider the proposals
• Trying to improve the Bill

After significant debate, we decided that there was little point in opposing or asking for more time and that the best course of action was to recommend improvements. Therefore, several of those on the Executive provided comments and suggestions on what our submission should contain, and it was my job to try to put these together into a submission which included all of these sometimes opposing ideas.

As an example, there were opposing views over whether there was a need for improving professionalism among log traders.

For

There are many small-scale growers out there who know next to nothing about forestry and could be ripped off by unscrupulous log traders or forestry management companies.

Against

Most log traders or forestry management companies provide a good service to small-scale growers and anyway, they can always get advice from an NZIF registered consultant.

On 21 May a draft submission was circulated to Executive members. It included all these ideas and highlighted the areas where we had different opinions and needed to reach a common position. That evening the Executive got together on Zoom to sort out these issues and the final submission was agreed and sent off by the midnight deadline. We later learned that 674 submission had been made on the Bill, the majority of which opposed some or all of it.

The written submission

Given the time available, we were not in a position to put in a detailed submission covering the entire Bill, so we concentrated on the areas that are of greatest concern to small-scale forestry owners. We started our submission with an executive summary −

• The fundamental need is for a better-informed forestry sector working together rather than regulation
• This Bill may further fragment the sector rather than unite it and we would prefer to see the sector and the government coming together through a regular forestry conference
• There is no need for a separate forestry authority – the New Zealand Institute of Forestry already exists and could, with some changes, do all the jobs described in the Bill
• The current definition of terms such as forestry advisor and log traders will cause confusion and could force good professionals out of the sector.

As you will see, our aim was to avoid direct confrontation and instead suggest ways in which the Bill could be improved. We then provided some background on the NZFFA as an incorporated society focussed on promoting the wise use of trees for profit, amenity, sustainability, and the environment and who we represent. Directly there are 1,500 members and indirectly the 14,500 small-scale forest owners who currently produce 40 per cent of the wood harvested in New Zealand.

We acknowledged the problems outlined and agreed with the drafters that a problem does exist because the majority of the smaller owners have limited experience in marketing and selling forestry blocks. Many small-scale forest owners planted their trees during the log price boom in the 1990s, forestry is typically not their ‘day job’ and the 30 years required to grow trees to maturity mean that most will only see one or two harvests during their lifetime.

We also agreed with the drafters that there is a need to raise standards in the industry and for small-scale forest owners to have access to impartial and professional management advice. We then explained why we thought regulation was not the best way of addressing this lack of experience and that the government should to work with organisations such as the NZFFA and with professional bodies such as the NZ Institute of Forestry to provide better advice for marketing and selling trees.

We also pointed out that the real issue is that most small-scale forest owners do not know that they need advice, do not know the value of such advice and do not know where to find it. To illustrate this, we provided them with some practical examples of how this shortfall could be addressed −

• Provide each grower, free of charge, with access to four hours of advice from a registered adviser
• As part of the sales process, obtain small-scale forest harvest costs and log sales data, analyse it, and put the results in a public database for benchmarking and knowledge building
• Encourage stakeholders to take part in regular, unifying national forestry development planning conferences.

We noted that, if the Bill proceeds, it will need extensive modification to meet the objectives listed in the explanatory note. We listed the areas in which we see the Bill could cause significant problems such as requiring anyone wanting to saw their own timber to be registered as a timber trader.

Submitting in person

The NZFFA asked that we be given a chance to present our submission in person to the Environment Select Committee considering the Bill. Early the following day, Friday 22 May, we received an email advising that they had allocated us a hearing date of 25 May and that by 5.00 pm we had to choose between three options −

• We are unable to appear on the hearing date
• We no longer wish to be heard by the committee
• We would like to arrange a hearing time with the committee on 25 May.

We responded immediately that we would appear on the date suggested. Hamish Levack and I worked over the weekend on our presentation which, in the 10 minutes we had been allotted, had to bring the committee up to speed on who we represented and the main points of our submission.

As with the written submission, the presentation started with background information on the NZFFA, the two of us and the industry and then proceeded to summarise the main points of our submission as shown above. We then outlined why we do not see the need for a separate forestry authority and the areas of the Bill which, if left unchanged, could cause significant problems for small-scale forestry owners. We then were asked questions about our views. Fortunately, we were present for previous submissions so were forewarned of the kinds of questions that we were likely to be asked.

The second and third readings

On 30 June, the Environment Committee reported back on their deliberations and proposed some significant amendments. The next stage is the Committee Stage where the Bill is debated in detail. It is at this stage that the recommendations from the Select Committee are considered and any MP can propose changes. Then comes the Third Reading, a summing-up debate on the Bill in its final form. At the end is the final vote to either pass the Bill or reject it.

The Committee Stage was fourteenth on the provisional order paper for when the Parliament resumed on 22 July with many hours of speeches listed before it. Under normal circumstances this would have meant that it would be some time before Parliament would get to the Bill and it seemed unlikely that it would pass all its stages. However, the government decided to give urgency to this and several other bills. The Committee Stages and Third Reading took place late on 22 July.

Second change

Once the Bill receives Royal Assent, the next stage is for the government to draft and agree regulations to implement the policy in the law. This takes some time and should provide a further opportunity for us to comment on the draft regulations. There is normally also some delay between the regulations being finalised and them coming into force, so it is likely to be some time before we would feel the effects of the legislation.

Don Wallace is a member of the NZFFA Executive.