Insults fly in Shane Jones forestry 'cronyism' spat

Friday, 29 May 2020

Forestry Minister Shane Jones is at loggerheads with a major forestry investment broker over a new forestry law.

Jones says it will help domestic sawmills, by reducing the number of raw logs sold overseas for processing.

But Roger Dickie, a broker for forestry investment, threatened to quit the New Zealand Institute of Forestry (NZIF), an industry group, after it expressed its support for Jones's bill.

In an email to NZIF obtained by Stuff, Dickie said the bill was “unashamedly produced to enhance the so called Minister of Forestry's electoral chances in Northland [sic]”. He described the bill as “political cronyism at its worst,” and believed it would damage the reputation as a relatively corruption-free country.

The Minister shot back at the allegations. “On forestry reform, there is no Roger Dickie-ing me,” Jones said.

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Dickie claimed the bill was all about Jones winning the crucial seat of Northland for NZ First. “It’s all about him getting Northland,” Dickie said.

He alleged the Wood Producers & Manufacturers Association (WPMA), one of the bill's most vocal backers, had promised to support Jones in Northland if Jones backed the bill.

Brian Stanley, chair of the WPMA strongly rejected that allegation. “Absolute crap” Stanley said of the claim. “Absolute, total bulls…” he said.

Domestic processors say they're being undercut by foreign buyers.

Stanley said he was a paying member of the ACT party.

Dickie has since reconsidered his email and would not leave the NZIF. Its president, David Evison said the support for the bill didn’t take a position on the dispute between growers and processors. NZIF was supportive of the fact the bill would mean there would be better quality advice given to people in the sector.

Dickie is himself no stranger to controversy. In 2018, he brokered a sale of land to an Austrian countess, who was found to have breached New Zealand's overseas investment rules while buying an iconic farm station to convert to pine trees.

Countess Veronika Leeb-Goess-Saurau bought Hadleigh Station in 2018, paying $13.4 for 1727 hectares of sensitive land, 15 minutes drive from Masterton, in a sale brokered by Dickie.

“The Government’s policy is to develop our nation, not export to foreign owners, like Mr Dickie’s Austrian countess, jobs and economic security,” Jones said.

The bill that sparked the brouhaha, the Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill, would require forestry advisers, log traders and exporters to join a register and agree to work on nationally agreed standards.

It’s meant to reduce the number of logs being exported raw and to direct more towards New Zealand sawmills. This would boost employment at those mills and ideally mean the products exported would be higher up the value chain.

Maurice Davis of the Amalgamated Workers Union said keeping processing in New Zealand would establish a secure supply chain, allowing them to grow their operations creating more work at better pay rates.

“I’m not saying all logs going overseas have to stop but some have to be set aside for the supply chain here,” he said.

Proponents of the bill argue that domestic log producers have been unfairly undercut by foreign buyers of New Zealand logs.

Stanley said that the bill was essentially a workaround to a trade dispute between New Zealand processors and those overseas.

“The trade dispute is about the subsidies paid by countries to their wood processing groups which means they have a lot of money, they can come to New Zealand and buy logs at inflated prices,” he said.

The subsidies paid to foreign processors meant they could always out-compete New Zealand mills, he said.

“We’ve been pushing for something domestic to mitigate it domestically,” he said.

“We’re quite happy to pay the global price for logs, but only if there’s an even playing field across the world,” he said.

Dickie rejected the claim that the log market was unfair to domestic processors.

He said domestic processors were undercapitalised, meaning they couldn’t make the investments in machinery needed to process the logs to the standard required overseas.

This meant logs needed to be sent overseas.

“These mills are small, they’re undercapitalised and they’re inefficient,” Dickie said.

He said the argument against the bill was about property rights. People had invested in these logs, and they had a right to sell them to whomever they chose.

Jones said the bill was not the last reform he’d make of the forestry sector, hinting at a big shake-up of the way forestry land is treated.

“I am currently getting some work done as to whether the Overseas Investment Criteria for the forestry sector as requested by Federated Farmers needs to be reviewed and given the same rules as agricultural land.