Farm Forestry New ZealandNewsletter 57 January 2012
Newsletter 57 January 2012
Newsletter archive New Zealand Farm Forestry Association |
NZFFA P.O. Box 1122 Wellington www.nzffa.org.nz
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| January 2012 No. 57 | ||||
Costs of illegal logging Editorial: Focussing on the ETS and forestry Forest Owners Association Needle Cast – November 2011 Update New Zealand Institute of Forestry Annual Conference 2012 Proposed commodity levy on logs National Exotic Forest Description [NEFD] steering committee
President John Dermer john.diny@xtra.co.nz Vice President Ian Jackson ijacko@xtra.co.nz -Ashburton -South Canterbury -North Otago -Sthn High Country (north) Newsletter editor Dean Satchell dsatch@gmail.com National Executive Angus Gordon angusg@xtra.co.nz -Waitomo -Waikato -Taupo & Districts -Middle Districts -Taranaki -Hawkes Bay Neil Cullen cullen@farmside.co.nz -Mid Otago -South Otago -Southland -Men of Trees -Sthn High Country (south) Hamish Levack hlevack@xtra.co.nz -Bay of Plenty -Gisborne East Coast -Wairarapa -Wellington Dean Satchell dsatch@gmail.com -Far North -Mid North -Lower North -South Auckland Advertisement    Resource Management and Environment Law Duncan Cotterill is one of New Zealand's leading commercial law firms. We are substantial enough to have five offices and over 100 lawyers throughout New Zealand and in Sydney - but small enough to know our clients individually. Our geographic spread enables us to focus on understanding the issues clients face and on providing effective, timely, decisive legal advice. The combination of general and multi-specialist legal services ensures our clients receive the very best legal advice available based on in-depth local knowledge with a trans-Tasman perspective. www.duncancotterill.com |
Notices Next NZFFA National Executive Meeting - 23 February 2012 Contact your branch officers or the National Executive member responsible for your area if you have matters you would like raised. Note also that branches may propose notices of motion or agenda items for the meetings at the Balclutha Conference. Nominations for National President and National Executive. Nominations close on 20 January 2012. Nominations are made by branches. Elections will be held at the Council Meeting at the Balclutha Conference. Current President John Dermer is retiring after his 2-year term but will remain on the Executive for a further year as Immediate Past President. Nominees for President must have served at least one year on the National Executive. Two National Executive Members are retiring by rotation but are available for re-election: Neil Cullen (South Island) and Angus Gordon (North Island). A further vacancy is likely to result from the election of President. Remits for the Council Meeting and AGM at the Balclutha Conference. The National Executive is proposing the following remits:
Additional Maori Name for NZFFA We have received only limited feedback on adopting an additional Maori name. To recap - names proposed so far are: Costs of illegal logging Note on meeting with Forestry Stakeholders to discuss the legality of NZ forestry exports by Hamish Levack. Preamble: On 27 October I represented the NZFFA at a meeting in Wellington, chaired by Chris Carson, Director MAF International Policy, on the future ramifications of action against illegal logging. WPA, PMA, NZFOA, TIF, WOODCO, and NZIF were represented also. The meeting was not about proving which imported timber had been illegally obtained, but about proving that timber exported from New Zealand had been legally obtained Definition: Illegal logging is the harvest, transportation, purchase or sale of timber in violation of laws. It results in the loss of billions of dollars of assets and revenue annually, two of the more vulnerable regions being South East Asia and the Russian Federation which happen to be regions that are strong competitors with New Zealand in the provision of logs. Theoretically, if illegal logging could be reduced, substantial gains to New Zealand forest growers and saw-millers should follow. Australian, Chinese, European and USA responses: Currently, an Illegal Logging Prohibitions Bill is going through the Australian parliament. Although this legislation is not specifically aimed at New Zealand, by 2014 it is probable that all exporters of wood and wood products from New Zealand will have to provide evidence that their products have been legally obtained and produced. Australian importers will need to submit an annual report to their Department of Agriculture and Forestry which will need to include information on (a) what they have imported and where it has come from, (b) that they have a due diligence system in place, (c) that they have undertaken risk assessments, and (d) that these systems and assessments have been audited by a third party auditor. This will add costs to the New Zealand grower. MAF believes that China will not be far behind Australia in this regard, because the European Union is negotiating a LBA [legally binding agreement] that will take effect as early as next year. For example, China will have to satisfy the EU that any New Zealand logs that China imports to produce, say, furniture for export to the EU, have been legally obtained. Since 2008 the USA has had an Act in place, called the US Lacey Act, which parallels the one under way in Australia. What this could mean for NZFFA members: MAF says it will explain NZ’s regulatory framework, including the Resource Management Act, and how this contributes to the likely legality of NZ produced timber, to Australian or Chinese importers, but unlike some other countries, NZ does not have legislation covering plantation forestry per se, and the Government does not regulate harvesting or processing either. Ellie Avery, the MAF official who seems to be leading our reaction to this matter, assumed [wrongly] that woodlot owners were well on the way to being FSC certified, and expressed the view that FSC certification may be sufficient evidence of the legality of our exported timber. I expressed doubt. Although it is true that Sustainable Farming Fund money is financing Patrick Milne’s project to research ways of making it economic to FSC-certify woodlots, it is far from clear that the desired objective will be achieved or what it would eventually cost small scale forest owners to participate. Conclusion: If not red, orange warning lights are shining! The NZFFA needs to keep a close watch on this developing issue, with the aim of resisting small scale forest owners being lumbered with undue expenses that outweigh any benefits. (top) Editorial: Focusing on ETS and Forestry Geoff Thompson The recent release of the Emissions Trading Scheme Review by the Minister for Climate Change, Hon. Dr Nick Smith, has generated a great deal of interest from the forestry sector. The Review covers forestry in detail, particularly with recommendations designed to encourage more new forest planting. The National Party has announced its policy for implementation if it is in charge after the General Election. Those owners locked in with Pre-1990 forests are likely to be offered an alternative with the introduction of "off-set" forestry from 2013. Land areas of Pre-1990 forests, which could be put to higher or better use, will be allowed to plant on other land and free up the better existing forest land. Post-1989 foresters are likely to have a range of improvements to the present scheme to relieve long term liability issues and create greater certainty for new investment. The Minister's response to the Review was positive but a Government position on the recommendations was not announced because of insufficient time before the General Election for Cabinet to deal with the detail. Officials are working on those now for submission to the new Cabinet in early 2012 but already a request for urgent action has seen results. Government agreed to a request for urgent consultation on the banning of CERs (international carbon units) based on industrial gases - HFC23 & N2O. These gases are being banned in most markets and if New Zealand doesn't follow suit our carbon market could be swamped and our "green units" from forestry undermined in value. This is a positive response to the Review. Forestry is very important in the wider scheme of New Zealand's response to Green House Gases. Our large areas of exotic plantation forests sequester carbon and moderate the country's GHG emission profile. It is in New Zealand's interest in the medium term to plant more forests and for foresters to gain the benefits of the carbon value of the trees. The current Government is a strong supporter of more forest planting. Foresters slow to address carbon opportunities Most should know by now that forests are classified as Pre- 1990 (exotic) forests which, until "off-setting" is introduced, must stay in trees or Post 1989 forests which from 1 January 2008 can earn carbon credits which can be sold, traded or accumulated. Pre-1990 foresters have been allocated free units as compensation for restrictions on land use. Owners with up to 50 hectares could apply for exemption and use the land as they wished but the final date for those applications passed on 30 September. The final date for applying for allocations is 30 November, but the uptake has been slow, which is hard to understand. The compensation for those who apply is up to 60 units per hectare issued in two tranches - 38% immediately and 62% in 2013. Even at the currently weaker price of $14 per unit (down from $20 in May), this "free money" is worth securing. The process is not difficult and can be done on-line through the Ministry of Agriculture & Fisheries website. We urge pre-1990 owners to register, urgently. The ETS Review recommendations for Post '89 forestry The greater concern of owners of newer forests is how to address the obligation of surrendering units issued for carbon as the trees grow, when the trees are cut down or destroyed. The Panel made a number of recommendations to mitigate this liability. The Scheme is attractive for farmers or forest owners with Post '89 trees because regular issues of units as the trees grow is like harvest returns in advance. There are cash flow advantages and time cost of money advantages. Measurement of carbon will be more sophisticated and claims can be made annually if the forest size justifies the work in claiming. Clearly not all units issued need to be sold so a reserve against surrender obligations could be built up. The Government will look at a system of "averaging" being available, which would allow the tree owner to register to receive regularly the long run average of carbon units sequestered and not follow the carbon curve, which builds up strongly from about year 10. This creates a reserve held by the Government and, if the forest is replanted, there would be no surrender obligations on harvesting the forest. The current hesitancy among Post '89 foresters is that when the forest carbon account is in deficit, units must be surrendered to square off the account. The uncertainty around this obligation is being addressed by the Government. Clearly harvest proceeds could be used to buy credits to be surrendered if the "averaging" scheme is not used, but because the carbon market is relatively unrestricted the price at surrender time could be considerably higher that the wood value taken out of the forest. The Government is also looking at establishing a "pool" for making good losses from catastrophic events, and which are not covered by insurance. This could be developed from skimming off, say, 5% of issued units and the pool is available for surrenders to be made. Warning! Warning! The present and likely future rules for Post'89 forestry are complex and careful analysis and judgement must be applied on a case by case basis. We are coming across many cases where land and forest owners are being pushed into propositions that are not well thought through or where the advice is simply inadequate. Second opinions are recommended and forestry advisers and professionals who really do know what the ETS is about should be used. Getting it wrong could be a costly mistake. Forestry is a long term proposition - is the ETS? Sceptics have suggested that the ETS will not last and that afforestation plans based on its endurance could crumble. The Review Panel studied international developments very closely and noted the number of significant proposals in major countries introducing or planning carbon trading schemes. New Zealand is neither far ahead or behind what is happening internationally in recognising that human behaviour has to change to reduce GHG over the long term and a carbon trading scheme is a sound way of achieving this whether there is a new Kyoto Protocol or not. The present Government is endorsing this policy. There is a firm belief that our ETS is here to stay and that forestry will continue to play a key part in it being effective. Note: Geoff Thompson was a member of the ETS Review Panel. Geoff Thompson Consultant DuncanCotterill LAWYERS www.DuncanCotterill.com Resource Management and Environment Law (top) Forest Owners Association Needle Cast – 7 November 2011 Update Purpose To provide current information on Needle Cast being observed on radiata pine. Note – detailed questions should be referred to the FOA office. Background In autumn 2008 severe needle discolouration and cast was noted in radiata pine on the East Coast of the North Island with later reports from Central North Island and Northland. In severe cases all trees in a stand are affected with extensive needle cast following needle death (and red discolouration) This is being referred to as Red Needle Cast (RNC). This includes planted trees, natural regeneration, pruned and unpruned, thinned and unthinned stands and trees from 1-2 years old through to trees over 20 years old. These widespread symptoms were in part the reason that Scion experts felt this was not the usual expression of known disorders. However, it is also recognised that this is a continuum of what has been observed in NZ radiata pine plantations since 1980, and earlier. Current Situation RNC has occurred to varying degrees around the North Island over the past few years. It is now believed that some red discoloration observed in the CNI as far back as 2006 was RNC (see FH News 166). It is similar in appearance, but also different in several ways, to Cyclaneusma and physiological needle blight (PNB). In some years RNC is widespread throughout the North Island and it is generally most evident at higher elevations associated with misty and colder conditions during late autumn and winter. Invariably higher elevation forests in the Gisborne Region are the first to develop symptoms. To date there has been no mortality directly attributable to RNC and no causal agent has been confirmed. Research is continuing in this area. (top) New Zealand Institute of Forestry Annual Conference 2012 Theme: "Engineering value: Growing & Harvesting Forests for Novel Wood Structures" Dates: Sunday 1 July – Wednesday 4 July 2012 Venue: University of Canterbury -Ilam Campus Description: New Zealand has a well earned reputation as a leader in growing sustainable plantation forests. In an increasingly competitive international market place it is important to take the next step and increase innovation within our timber related industries. Engineering solutions can drive improvements through the value chain from growing, harvesting, and use of timber products. The sector faces predicted growth in harvest volumes, rising demand for structural logs, increasingly steep harvesting terrain, and growing national and international interest in wood buildings. Against this context, the 2012 NZIF Conference will discuss how engineering solutions can add value and improve performance within New Zealand ’s plantation forest, wood processing and building sectors. Website: http://www.nzifconference.co.nz (top) Proposed commodity levy on logs The FOA is developing a proposal for a levy under the Commodity Levies Act 1990 on logs from plantation forests. If approved, it will be on harvested logs of all species, including export logs and logs processed in New Zealand. For plantation forestry to achieve its full potential, the industry needs the FOA to be truly representative of everyone in the sector. Hence the need for a levy paid by all and an organisation answerable to all. An FOA project team is now working on the proposal. If it is supported by the FOA executive committee, forest owners will be consulted, followed by a referendum in mid-2012. To be adopted, the levy must win the support of a majority of owners, both by number and by forested area. Levy payers will then be consulted each year on spending priorities. After six years the levy would need the support of a further referendum before being renewed. The main drivers for the levy are growing demands on FOA resources and the need to make forward financial commitments, especially to fund research. This in turn reflects rapidly increasing log production and the growing expectations society has of land-based industries. The FOA is expected by forest owners, industry stakeholders and government to drive co-operation within the sector and to represent the sector in its interactions with government and the wider community. At the moment the FOA and Farm Forestry Association do this work, but although they are well supported by the subscriptions and levies of those who choose to become members, many non-members also benefit. In addition, the FOA relies heavily on the voluntary input of members via a strong committee structure. The focus now is on developing the draft proposal to form the basis of the referendum. This in part involves meeting – in discussion with MAF – the statutory requirements for a commodity levy, including communications with all potential levy payers. Source, Forest Owners Association New Zealand Forestry Bulletin, 7 December 2011 Invitation to Forest Owners Association Commodity Levy Regional Workshops The proposed Commodity levy will be on all harvested logs from plantation forests that are either exported in log form or processed in NZ. This includes all species and all production that leaves the forest in log or chip form. A referendum to obtain approval for the Commodity Levy from potential payers will commence on the 22nd February 2012. The levy will be administered by New Zealand Forest Owners Association Incorporated with the funds used to address issues affecting plantation forest owners. The reasons for moving to a Commodity Levy, and how levy payers can have their views listened to and incorporated into Association activities will be presented at regional workshops. We want your feedback and views. This is an opportunity that you can’t afford to miss! Come along and be informed, and then tell us what you think. Schedule for workshops: Wellington: Tues Feb 7th 6.00 – 7.00pm, Rutherford House Balclutha: Wed Feb 8th 6.00pm – 7.00pm, Rosebank Lodge Motor Hotel, 265 Rosebank, Balclutha Christchurch: Thurs Feb 9th 6.00pm – 7.00pm, Christchurch Netball Centre, 455 Hagley Ave Nelson: Fri Feb 10th 6.00 – 7.00pm, Tahuna Conference centre, Tahunanui, Nelson Napier: Mon Feb 13th 6.00 – 7.00pm, Napier War Memorial Hall, Marine Parade, Napier Rotorua: Tues Feb 14th 6.00 – 7.00pm, Rimu Room, Scion, 49 Sala St, Rotorua Gisborne: Wed Feb 15th 6.00 – 7.00pm – To be confirmed Auckland: Thurs Feb 16th 6.00 – 7.00 pm Rayonier NZ Boardroom, 32 – 34 Mahuhu Cres, Auckland Whangarei: Fri Feb 17th 6.00 – 7.00pm, NZRC Lounge, Toll Stadium, Okara Dr, Whangarei Please rsvp to Diane Davidson: Diane.davidson@nzfoa.org.nz by 3rd February if you are able to attend. (top) NZFFA on the National Exotic Forest Description [NEFD] steering committee This committee also has representatives from NZFOA, MAF and the Department of Statistics. At our meeting of 30 November in Wellington several points of interest emerged. These were
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