Overseas forestry investment
THE FOREST OWNERS ASSOCIATION SAYS STREAMLINING THE application process for overseas investment in New Zealand forests is a major step forward and will make clear to potential investors that New Zealand has a positive forest future.
The Associate Minister of Finance David Parker says that while cutting rights are being brought under the scope of the Overseas Investment Office, the application process will be streamlined and cutting rights for forest land under 1,000 hectares, or for less than three years, will not need to go through the OIO.
Retiring Forest Owners Association President, Peter Clark, says he is reassured that the government intends to make the whole OIO process more straightforward, for both forest land ownership, and cutting rights.
“We have always acknowledged that overseas investment in New Zealand forests is a privilege and not a right,” he says. “But our members have increasingly found that to make a successful application takes a huge amount of time and expense and then they would then have to seek new approvals for each individual transaction.
“David Parker says these unnecessary impediments are to be removed, including the counterfactual test. (This) statement may not be ideal from our point of view, but it is certainly an improvement on the current regime and clarifies the signal that the government is serious about achieving a planting target of a billion trees over ten years.”
Mr Parker says the government decision to include cutting rights in the scope of the OIO was necessary as the Comprehensive and Progressive Agreement for Trans Pacific Partnership came into force.
Mr Clark accepts this has caused a rush to develop policy, but he says the forest industry will be making full use of the brief period of public consultation and reference to a Select Committee, adding: “The forest industry in this country is massive.
“It represents a huge ongoing investment both by New Zealanders and from overseas. We have to make sure that legislation and other rules which are approved are realistic and practicable. That process can’t be rushed.”
The new initiative came after forest owners complained that tortuous proceedings by the Overseas Investment Office make it hard for overseas forestry companies to invest in New Zealand and put in jeopardy the government’s one billion tree programme.
Last November the government issued a new Directive Letter to the Overseas Investment Office that emphasised the forestry sector has the potential to add “significant value” to the overall economy and environment. In particular, it aims to encourage an increase in the value-added processing of raw products and the advancement of its forestry-related strategies.
Mr Parker says changes approved by Cabinet mean a new streamlined approval path will be opened for overseas investors buying forestry rights that will make it easier to gain approval.
A standing consent system will also be developed, so quality forestry investors can make purchases of forestry land and rights without needing to seek prior approval of each individual transaction. This new streamlined approval path will also be available for investments in leasehold and freehold forestry land, which are already screened.