Committee head denies that forestry law threatens trade rules
Claims that proposed forestry legislation could breach New Zealand’s World Trade Organisation obligations are meritless and not rational or factual, says the chairman of the select committee which dealt with Shane Jones’ controversial Bill.
Labour MP Dr Duncan Webb’s response to this suggestion by the Forest Owners Association and some port chief executives, comes as Weekend Herald inquiries also cast doubt on a National Party claim that Government members “blocked” Ministry of Foreign Affairs and Trade officials from briefing the select committee.
Trade Minister David Parker’s office said the ministry had not been approached to appear before the committee. Webb said the request for Mfat advice was made by National Party members at the end of the select committee process, too late to have any impact on the bill’s content.
National’s claim was in the environmental select committee’s report on Forestry Minister Jones’ Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill, now at second reading stage in Parliament. National, a minority on the committee, did not support the bill.
Jones has said the bill aims to support a continuous and long-term supply of logs and timber for New Zealand wood processors, a sector that has seen more than 1000 recent job losses through mill closures — before Covid-19. About 80 per cent of this country’s plantation logs are exported, mostly to China.
Since the committee hearing the Forest Owners Association has commissioned a second NZIER report on the bill’s trade implications. The first was presented in oral hearings.
And the Ports CEO Group, which strongly opposed the Bill in its submission, is still promoting its concerns about the implications for trade agreements.
Its spokesman, lobbyist and former trade negotiator Charles Finny, said the bill could be read so that controls could be placed on the quantity of logs for export.
This would have implications for New Zealand’s obligations under Gatt (General Agreement on Tariffs and Trade) and “potentially some of our free trade agreements”.
“We submitted that it was very important to get this right and seek advice from Mfat which is the only government entity that is competent to comment on international trade. And according to the National minority [report] they didn’t follow up.”
But committee chairman Webb, who has a doctorate of law, told the Weekend Herald the suggestion that the bill breaches WTO obligations was “meritless”.
“It does no such thing and no one has yet been able to point to a provision in the revised bill that breaches any identified WTO obligation. While I appreciate that some stakeholders oppose the bill on grounds that are rational and relate to actual facts, those who oppose the bill on the basis of an alleged WTO breach are not among them.”
The bill would require compulsory registration of forestry advisers and log traders, and establish a Forestry Authority regulator which would have rule-making powers to set forestry practice standards and a code of ethics.
What has spooked forest owners and managers is that it provides for later regulations on registration entitlement, exemptions and obligations on participants.
They fear it could lead to pricesetting and an obligation on forest growers to sell a certain amount of their harvest to local sawmillers, when they could get better prices overseas.
The bill attracted more than 650 submissions, and there are mixed sector views on the select committee’s treatment of the legislation.
Opponents approached by the Weekend Herald are relieved, saying it has been “neutered” and tightened, with some of its more draconian aspects such as the suggestion for price controls set aside.
One supporter, the Wood Processors and Manufacturers Association, is happy the bill is “still largely intact”. Chief executive Jon Tanner said there had been nothing in the proposed legislation suggesting price-setting controls.
Jones said the select committee had clarified some of the provisions which had caused angst and introduced some positive requirements. In particular he was pleased with the recommendation to amend one purpose of the bill — to support supply of timber to the domestic sector — “to include supporting equity of access to timber for domestic processing and export”.
Finny said a concern of export ports was that they would have been classed as log traders because the bill’s definition had been so broad. They were pleased the select committee recommended exempting ports. They were also pleased that the bill’s language now suggested pricing would not be subject to regulation.