15 May 2000
Timberlands proposal balances conservation, jobs

The proposal to end native timber logging on Crown-managed land by 31 March 2002 would achieve a significant conservation gain while minimising the risk of job losses, the shareholding ministers of Timberlands West Coast Ltd said today.

Finance Minister Michael Cullen and Minister Responsible for Timberlands West Coast Pete Hodgson said the proposed end date would give sawmills and the furniture industry a chance to adjust to the loss of Timberlands rimu.

"Government policy is to end the logging as soon as practicable," Mr Hodgson said. "Allowing it to continue until 2007 would be too long from a conservation point of view. Ending it immediately would give the timber and furniture industries no time to adjust, putting jobs at risk. Our proposal balances those considerations. It would mean job losses need not occur."

The ministers said they would consult carefully and thoroughly with Timberlands' board over the implications of an early end to Timberlands' rimu logging. As the owner of Timberlands, the Crown is able to direct the company to cease rimu logging by way of a ministerial directive under section 13 of the SOE Act. The State-Owned Enterprises Act 1986 requires consultation with the board before a directive is made.

"As shareholding ministers we recognise that an early end to Timberlands' rimu logging could have significant consequences for the company," Mr Hodgson said. "We will be exploring those issues with the board."

Timberlands has three eight-year contracts for rimu supply, extending to 31 December 2007. An early exit from those contracts is possible because they contain a force majeure clause. The clause exempts Timberlands from liability if it is unable to fulfil the contracts because of circumstances beyond its control, including a change in Government policy.

Mr Hodgson said the ministers' consultation with the Timberlands board would begin as soon as possible following the passage of the Forests (West Coast Accord) Bill, which is being introduced to Parliament today. The bill would cancel the 1986 West Coast Accord. It also provides for a mechanism for adding Timberlands native forest to the Conservation estate.

Mr Hodgson is the minister responsible for the bill's progress through the House. He said Parliament should have the opportunity to debate the bill before consultation with Timberlands began.

Dr Cullen said he had informed the West Coast Mayors today of the Government's intentions, as part of ongoing discussions on the proposed $120 million economic development package for the region.

ENDS

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