East Coast can’t fell the forest for the trees

Forest harvesting has ground to a halt in some areas of Tairāwhiti as the region grapples with how to deal with thousands of hectares of radiata pine planted on the country’s most erosion-prone land.
Regulations governing forestry have come under the spotlight after the Gisborne district was hit by cyclones Hale and Gabrielle early last year, causing widespread flooding, erosion and environmental devastation from wood debris and soil.
Under new National Environmental Standards for Commercial Forestry that came into effect in November last year, forestry slash longer than two metres and with a large-end diameter of more than 10 centimetres must be removed from erosion-prone land after harvesting.
Further proposed local regulations, known as Land Overlay 3B, would see unstable, steep and dangerous farm and forestry land taken out of production.
Eastland Wood Council Chairman Julian Kohn, a 65-year old forester whose organisation represents more than 80 percent of forestry companies in Tairāwhiti and Wairoa, said the conditions were too onerous for some.
“In many cases, they are deciding that they are not capable of meeting those conditions so they will decide not to harvest some of those areas,” he said. “It’s an economic disaster for those forest owners.”
Plantation forestry covers 155,000 hectares, or 17 percent, of land in Tairāwhiti. Much of it is steep and severely eroding, according to a report by Kereru Consultants for Gisborne District Council. A quarter of that is on the most “risky” land.
Local iwi Ngāti Porou are among those who have stopped harvesting.
Ngāti Porou Forests general manager Daniel Williams confirmed its joint venture forestry partnership with South Korean conglomerate Hansol, formed with 10,000 hectares in 1996, is no longer harvesting.
He declined to comment further.
Ngāti Porou Forests manages the plantations on behalf of landowners with Hansol funding forestry development, mostly through loans from its parent company.
Last year, Hansol’s local unit recorded no harvested timber transferred for sale and booked no harvesting revenue. At December 31, its share of the trees was estimated to be worth $61 million.
Hansol’s Gisborne-based director Daniel Lee declined to comment on the impact of Cyclone Gabrielle, and how the company would get a return from its remaining forestry investment.
Ngāti Porou’s 2023 annual report noted that the cyclones followed other significant rainfall events the previous two years.
“Many are questioning the future of production forestry in the region, what should we do with marginal, erosion-prone land and what is the best land use for our people and environment,” the annual report said. “These are all big questions, and our company is working towards options for our forest assets.”
Ngāti Porou’s investment arm Nati Growth has 11 percent of its $260 million assets in forestry.
Its forestry business is working with Tāne’s Tree Trust to look at the best way to remove exotic trees to allow the native understory to flourish, Williams told the documentary Ngā Rākau Horo/Why Apu?
“The climate is changing, and we need to evolve with that,” he said. “If we’re transitioning away from production forestry in some of these highly sensitive soil areas, then how else can we benefit our shareholders, our landowners, so that they can sustain their existence?”
The forestry crisis on the East Coast is compounded by weak log prices out of China, and Julian Kohn said most companies would not be making any money.
“They’re literally bleeding money,” he told a Gisborne District Council Sustainable Tairāwhiti committee meeting last week.
Kohn estimates 60 to 70 percent of plantation forest north of Tolaga Bay may not be harvested if the new rules and regulations become standard conditions in a harvesting consent.
Any contraction of the local forestry industry is going to hit Gisborne’s port, which Kohn describes as “essentially a forest business”.
While forestry contributes less than 10 percent to regional GDP, it accounts for most of the exports through the port.
In its latest financial year to the end of March, Eastland Port exported 2.4 million tonnes of cargo – over 2.3 million tonnes of that was logs.
That’s down from the heady days of 2018 when it exported a record 3 million tonnes of cargo, 2.98 million tonnes of which were logs.
The port company reached capacity that year and began preparations for its biggest infrastructure upgrade in 100 years as it eyed a future of 5 million tonnes of annual log exports.
Stage one, rebuilding Wharf 7, was completed in August last year and resource consents for Stage two were granted in March this year.
Port chief executive Andrew Gaddum said the completion of Wharf 7 also allowed for the development of new trade from the region.
He didn’t respond to questions on whether he was still expecting 5 million tonnes of logs in the future.
“We are confident in our infrastructural investments,” Gaddum said in a statement.
An Eastland Port presentation on the Wood Council’s website from March this year says the port is “wholly reliant” on the East Coast forest industry.
“Forestry will provide the only products at scale that can support the ongoing operations and maintenance of port infrastructure,” according to the presentation.
Manu Caddie, from environmental group Mana Taiao Tairāwhiti, acknowledged that the new rules and regulations change the economics of the forestry industry in the region.
“It makes it tougher from a business perspective,” he said.
But he said the changes need to happen to reduce risk.
Tairāwhiti has erosion on a scale and severity greater than any other part of New Zealand, and Government subsidies and grants have encouraged the planting of pine trees to help stabilise soils and provide jobs.
Caddie took issue with some of Kohn’s comments to last week’s Sustainable Tairāwhiti meeting about the increased cost and difficulty of harvesting forests hindering investment.
Holding off further investment in forestry at the moment was probably good advice, Caddie said.
“The industry has been privatising profits while externalising the costs of their activities – having a free ride at the expense of the environment, residents, ratepayers and taxpayers,” he said.
“Those days are over and many parts of the industry may simply not be viable in Tairāwhiti which has unique environmental challenges combined with increasingly severe and frequent weather challenges combined with a global downturn in log prices.”
Forestry Minister Todd McClay announced last week that he wants to roll back some aspects of the National Environmental Standards for Commercial Forestry, limiting the ability of councils to introduce their own tougher rules, saying standards need to be consistent across the country.
The “unworkable regulatory burden” had led to confusion and costs, he said, and rules around low-risk slash would also be clarified.
“Forestry’s success is an important part of our plan to rebuild New Zealand’s economy and meet our climate change obligations. The Government is working to ensure that we have the right settings to unlock the industry’s economic potential for growth.”
The Government has already invested about $110m getting wood debris and sediment off beaches and out of rivers. It risks being asked to put its hand deeper into its pocket to help fund a transition out of the pine that it encouraged the region to plant in the first place.