Bill Removes Investors' Faith In Govt
Bill Removes Investors' Faith In Commitments By Gov't
Federated Farmers presented its submission on the Forests (West Coast Accord) Bill to the Local Government and Environment Select Committee this morning. The federation strongly opposed the Bill on two grounds.
The Bill, if enacted, will stop sustainable harvesting of the Timberlands' beech resource on the West Coast and would terminate Timberlands' rimu supply contracts.
"Firstly, this Bill strikes at a fundamental principle: that the Crown will honour its obligations. It weakens public confidence in the Government, particularly the confidence of the investing community," said Federated Farmers Vice President Tom Lambie.
The Crown created a legitimate expectation that its indigenous forests would be available for sustainable harvest when it originally agreed to the West Coast Forest Accord. Based on this expectation private investment decisions were made. The Bill defeats this expectation and frustrates those investment decisions, made in good faith and in an economically depressed region.
"In short, the Government is acting contrary to the principles of good government. Its actions undermine public confidence in the Crown's commitment to honour its obligations."
The second ground is the significant adverse effect on the property rights of private indigenous forest owners following the end of Timberlands' sustainable beech harvesting.
The Forest Amendment Act 1992 significantly limited the rights of privately owned indigenous forest owners to mill their forests, by limiting the right to mill on the basis of sustainable harvest.
Much of the private indigenous forest is beech, for which no viable market exists. Private forest owners have no ability to create a market. However, Timberlands does, and was working to do so with its sustainable beech harvesting initiative. The Bill ends the initiative.
"By ending development of a market for beech, the punitive effect of the 1992 legislation on the private indigenous forest owner has been compounded," said Mr Lambie.