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West Coasters Losers Over Logging Contracts

Contracts for milling Timberlands West Coast beech forests were such a sham that a Labour-led government would not need to break them, the party says. National disagrees. Scoop's West Coast correspondent, John Howard, says West Coasters are the losers.

Labour's leader, Helen Clark, and forestry spokesman, Pete Hodgson, both suggested Timberlands contracts were invalid, if indeed they are contracts, in dismissing Government claims that Labour would have to break the contracts if it was to keep its word to end Timberlands logging of beech forests.

Whatever the merits of the political cat-fight between the political parties, West Coast people are now caught between a rock and a hard-place.

Already, Grey District Council mayor, Kevin Brown, said he is aware of at least one funding application by a financial institution which had been approved in principle, but has since been rejected given a perceived risk in the future of the region.

"You will appreciate that aspects like this may well have a chain reaction, resulting in lower property values, even less jobs and a number of other negative impacts," he said.

The political parties are not just playing politics - they are now playing with people's lives.

For the Government's part, it should immediately release the details of the alleged contracts or heads of agreement signed by Timberlands so the voting public of New Zealand can make their own judgment. That would settle the matter quickly and provide some now urgently-needed stability for the West Coast.

A state-owned enterprise, like Timberlands, has shareholding ministers who exercise the Crown's ownership rights over the company. They can decide to sell it. They can also tell it what they want it to do and what they don't want it to do through the mechanism of the statement of corporate intent, which a minister has to accept. A Labour SOE minister can effectively tell Timberlands to withdraw consent applications for the beech scheme, and it says it would do so.

Nevertheless, Labour has a point when it says the "contracts were a political ploy and could not have been negotiated in good faith." It seems they had been signed without any tendering process and without the certainty they could proceed in their present form because there had been no resources consents granted.

Any company which signed an agreement with another company under such uncertain conditions could perhaps be accused of failing to exercise due diligence. Particularly if share holders lost funds and held the directors to account.

West Coast sawmillers had not been given the chance to tender for the contracts and Labour's forestry spokesman says he has spoken to a Christchurch sawmiller who had signed heads of agreement but not full contracts. The agreements were conditional on his relocating to the West Coast.

The Government, therefore, must urgently release the details of the Timberlands deals so that people will have certainty and can plan their lives accordingly. West Coaster's cannot wait any longer given that this political cat-fight is starting to effect their lives in other ways.

ENDS

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