Analysis by Dr Bryce Edwards.
Political Roundup: The Horrific damage caused by forestry slash and vested interests
“Capitalists always want to privatise their profits and socialise their losses” – that’s the traditional socialist critique of how businesses are big fans of state intervention when it suits their interests. There seems to be a lot of that going around at the moment – many industries want government to help them be super-profitable, largely by reducing industry regulation and taxation, despite any damage they might cause.
However, there’s increasingly a public mood against the special pleading of such vested interests. This is evidenced in the criticisms now coming from across the political spectrum about the huge costs that New Zealand forestry businesses have been imposing on society, particularly with the multi-billion-dollar cost of “slash” debris that exacerbated or caused flood damage when Cyclone Gabrielle hit this month.
Even National’s leader Christopher Luxon echoed the socialist critique, when speaking about forestry last week in Parliament, describing it as “the only sector I know that gets to internalise the benefit and to socialise the cost”. He then talked about the need for further penalties and prosecutions of forestry businesses who fail to look after their own mess.
Although the timber industry isn’t unique in this regard, Luxon is quite correct to single them out. Forestry has become something of a case study in how vested interests have come to dominate the policymaking process, producing rules that favour the industry at the cost of society in general.
The role of slash in worsening the effects of the cyclone
The weather events of January and February have caused a horrific toll, yet much of it was avoidable. The destruction caused by the storms was made much worse by the way forestry operations have changed the land in places on the East Coast of the North Island.
One of the biggest problems is the litter foresters leave behind when they harvest pine trees. The industry terms the branches and debris left to rot on the hillsides as “slash”, and in large storms this litter is prone to be washed down rivers, causing mayhem. The debris forms dams and diverts the flow of water, flooding towns and farms, and knocking out bridges and roads. In Cyclone Gabrielle the impact of slash was enormous.
Illustrating this, a New Zealand Herald editorial complained on Friday that the word slash “is too gentle for the power and heft of avalanches of logs and branches that have again hurtled down hillsides on flood water, scouring out land and riverbeds, smashing bridges, roads and private property, endangering lives, cutting off communities and wrecking infrastructure.”
The Herald’s Fran O’Sullivan wrote in the weekend about the logging problem, concluding “what we have observed over the past fortnight simply puts New Zealand in the Third World category.” This is because in other developed countries, the slash problem is better regulated or even banned. It’s a problem that has been known about for many years, and yet in New Zealand the politicians have done virtually nothing about it, leaving society to pay for the damage caused by it.
The fact that the forestry companies can cause such great damage without being held accountable for the cost has astounded many. After all, citizens can be fined up to $5,000 under the Litter Act 1979, and if the litter endangers anyone, the fine increases and can include imprisonment.
Professor Anne Salmond likens it to deliberate vandalism: “If you were an individual and you took a bulldozer onto a property and destroyed their crops, knocked down their house and put lives at risk, you’d be in jail. And this is happening to hundreds of people, maybe thousands. This is not an Act of God, it’s an act of companies that put profit before environmental responsibility.”
Labour finally agrees to a ministerial inquiry, but will it do much?
Minister of Forestry Stuart Nash, has so far been highly supportive of the forestry industry, and has previously gone on record opposing a review of the slash problem. He suggested it is unnecessary, and that the forestry industry is best placed to self-regulate on this issue in conjunction with other stakeholders.
This stance has become untenable, and Prime Minister Chris Hipkins has overruled Nash, announcing a ministerial inquiry on Thursday. It will be headed by former National Party minister Hekia Parata, and also involves forestry engineer Matthew McCloy and former Ecan chief executive Bill Bayfield.
The Government’s inquiry is already getting a lot of criticism. One Tolaga Bay farmer has labelled it a “Clayton’s enquiry” because it’s so limited. Clive Bibby says the review is unlikely to get to the truth of the matter “given the parameters surrounding the terms of reference and the limited time for submissions. This version can best be described as a Clayton’s enquiry – the one you have when you’re not having an enquiry”.
Bibby suggests the inquiry has been deliberately designed to avoid too much being revealed, as the Government itself could be blamed: “Nash will know that any enquiry worth its salt will implicate Government ideologically driven policy as one of the main culprits when apportioning blame. That is why he has done his best to limit the opportunity for this one to get to the bottom of what really happened”. He argues that “successive governments have supported the expansion of an industry that has unfortunately consumed everything in its path”.
Another local resident, Professor Anne Salmond, has also expressed her reservations about the independence of inquiry, saying: “It shouldn’t be run by the Minister of Forestry because there are vested interests in there. The minister is accountable to the people of New Zealand, not the forestry companies.” She says the inquiry needs to be able cross-examine expert witnesses.
Fran O’Sullivan argues Labour has made a mistake ordering “the quick turnaround of the Hekia Parata-chaired ministerial inquiry, when a more full-scale “Commission of Inquiry with all the powers attendant with that” better matches the scale of the disaster. She suggests there might be public suspicion about the independence and transparency of the review.
And, in fact, Stuart Nash emphasised yesterday that his Government won’t be bound by the recommendations of the inquiry.
How has the forestry industry become so dominant in the political process?
Professor Anne Salmond has called New Zealand’s regulation of forestry “third world”. And in the weekend, political commentator Max Rashbrooke argued that “The regulations governing their activities, and the penalties for their misbehaviour, have both been weak.”
It seems that forestry businesses have successfully sheltered themselves from the application of tough rules for their sector. This is perhaps unsurprising since they constitute a $7 billion industry – and are therefore one of New Zealand’s true “big businesses”. And the industry is in a significant growth phrase. Newshub revealed last night that the rise in new forestry area had gone from 695 hectares in 2013 to more than 18,000 hectares in 2022.
With this economic size, they naturally have a lot of political clout. In arguing aginst further regulation of their sector, forestry points out new rules would reduce their productivity and profitability. And in their pleas against further regulation they also make a great appeal to how reliant the New Zealand economy is on forestry earnings and employment.
The lobbying power of forestry is therefore huge. As the Herald’s editorial said on Friday, “Critics suggest the sector, much of it foreign-owned, has got away with it for so long because it works ‘out of sight, out of mind’ and because it has deep pockets to lobby the Beehive and local authority politicians.”
One of those critics, Anne Salmond, has been reported as believing “Forestry has formidable lobbying power and deep pockets”. And last week, Herald agriculture journalist Andrea Fox argued that the “powerful forestry lobby was marshalling its forces” to prevent any sort of significant inquiry into their operations.
The politicians themselves are often very close to the forestry operators, too. For instance, the Minister of Forestry himself used to work in the industry, and is now in charge of regulating what his former colleagues do. In 2020, when he was appointed, Nash was able to boast of an “extensive network of contacts in the forestry sector”.
Stuart Nash also carries out much of his election fundraising in this sector. In the last three elections he declared large donations totalling $99,000, $27,500, and $49,504. In 2020 about half of it came from forestry and timber companies. One timber businessman explained his financial backing for Nash, saying “It is important to the economy that government has politicians who understand industry.”
Being a Minister of Forestry who has been bankrolled by the sector he regulates does not mean he has broken any rules or done anything wrong. But it does raise questions about conflicts of interest, and about whether Nash’s funding has fostered a highly-favourable orientation towards the sector his donors come from. The public might well suspect that he has become too close to this vested interest.
The public and media are now putting Nash under pressure for his pro-forestry business orientation. In fact, a Herald editorial on Friday celebrated the increased pressure on Nash, saying “it’s about time”.
Nash answered these criticisms yesterday on TVNZ’s Q+A, claiming, “I’m not an apologist for the forest sector.” But as the human misery and billions of dollars of damage mount from unregulated forestry practices, the public are starting to push back on the free ride that the sector is still receiving. And it won’t just be socialists on the left and Christopher Luxon on the right demanding that vested interests pay their way, but a wider public that is increasingly angry with how such unfairness contributes to human disasters.
Further reading on forestry
1News Q + A: ‘I’m not an apologist for the forestry sector’ – Nash on slash
Newshub Nation: Forestry Minister Stuart Nash says Government won’t be bound by recommendations from inquiry into slash
Zane Small (Newshub): The amount of farmland converted into forestry revealed
Esther Taunton (Stuff): ‘All was calm, then came the clear-fell harvest’: Experts weigh in on the scourge of forestry slash
Max Rashbrooke (Stuff): Forestry slash a perfect emblem of modern capitalism’s failings
Tess McClure (Guardian): ‘Like a tsunami’: the role of forestry waste in New Zealand’s cyclone devastation
Hamish Bidwell (Herald): Forestry Minister Stuart Nash rejects criticism of slash inquiry
Other items of interest and importance today
Jamie Morton (Herald): Analysis: Has this extreme summer really changed how Kiwis feel about climate change? (paywalled)
Jamie Morton (Herald): Explained: What is ‘managed retreat’ and how may it be used in NZ?
Rod Oram (Newsroom): The next election should be a referendum on climate
Liam Dann (Herald): Before we pay the price of climate change we need to agree on the bill (paywalled)
Gareth Hughes (Stuff): How prepared are our political parties for a climate election?
Steven Cowan: Climate Adaptation is climate barbarism
Martyn Bradbury (Daily Blog): NZ Climate Change Polluters now cry adaptation rather than mitigation
Rod Oram (Newsroom): Why NZ must integrate nature and urban design
Jack Santa Barbara (Newsroom): Redesign before the rebuild: Dealing with the storms’ aftermath
John Morgan and Nicolas Lewis (Newsroom): Is this the end of the Auckland dream?
Aurora Garner-Randolph (Newsroom): We need adults to support us for the School Strike for Climate
CYCLONE GABRIELLE, INFRASTRUCTURE
Andrea Vance (Stuff): It’s time for politicians to let go of infrastructure decisions
Stuff: After the storm, how can New Zealand bounce back?
Herald Editorial: A focus on funds for cyclone recovery fixes (paywalled)
Herald Editorial: Cyclone Gabrielle editorial: Our flimsy communication network exposed (paywalled)
Jane Patterson (RNZ): Cyclone makes Robertson’s Budget balancing act perilous
Luke Malpass (Stuff): Grant Robertson outlines how cyclone business support package will be spent
Alison Mau (Stuff): When Kiwi spirit shines, but bureaucracy fails the test of human kindness
RNZ: Flood recovery: $25m in initial grants to be locally led – Robertson
Martyn Bradbury (Daily Blog): Come on NZ, we need a new Ministry of Works and you know it!
Katie Kenny (Stuff): Cracking the code of catastrophic floods in New Zealand
Terry Baucher (Interest): Te wiki o te tāke; Facing up to some very big short and long term challenges
Rob Stock (Stuff): Bank emergency overdrafts should not be ‘default’ option for cash-strapped cyclone victims, mentors say
Jonathan Milne (Newsroom): Crackdown: Pawnbrokers and payday lenders target cyclone victims
Susan Botting (Local Democracy Reporting): Prime Minister Chris Hipkins says building post-cyclone State Highway 1 resilience will potentially take years
Imran Ali (Northern Advocate): At least $120m needed to fix Northland roads damaged by cyclone; Mangawhai sees 350mm of rain in 24 hours
Andrew Bevin (Newsroom): Bulk of Hawkes Bay fruit growers’ crops uninsured
Claire Trevett (Herald): National’s counter policy to Labour’s Three Waters carries big question marks (paywalled)
Thomas Coughlan (Herlad): National unveils Three Waters policy: No co-governance, but no big cost savings
Bernard Hickey: National chooses to think just as magically as Labour on water infrastructure, taxes and debt
Luke Malpass (Stuff): National begins the big Three Waters sales pitch
RNZ: National pledges to scrap Three Waters and ‘deliver local water well’
1News: Luxon: National will scrap Three Waters, set strict water rules
Adam Hollingworth (Newshub): National will scrap ‘undemocratic and unworkable’ Three Waters if elected
Brent Edwards (NBR): National’s plan for investing in three waters infrastructure (paywalled)
Lois Williams (Newsroom): Councils say Three Waters erodes flood response
Martyn Bradbury (Daily Blog): 3 Water fish hooks – The Dragon and the Taniwha redux
Richard Harman (Politik): Nats turn green (paywalled)
Thomas Coughlan (Herlad): Todd Muller on his journey back to the frontline (paywalled)
Jem Traylen (BusinessDesk): National party reiterates head office downsizing will help pay for tax cuts (paywalled)
Shane Te Pou (Herald): Public servants deserve thanks for their mahi (paywalled)
Peter Wilson (RNZ): Week in Politics: Luxon’s ‘low energy’ speech and the first head-to-head
Claire Trevett (Herald): Beehive Diaries: Chris Hipkins joins Maureen Pugh in the reading room after blunder, and what happened to Jacinda Ardern’s whisky stash (paywalled)
Herald: Chris v Chris: Who won the week? Hipkins or Luxon? (paywalled)
Jacqui Van Der Kaay (Democracy Project): Scandal and stretching the truth
Phil Smith (RNZ): Democracy on the cheap: Skint Parliament to turn off the radio
Herald: Former MP Chester Borrows battling terminal cancer, family called to bedside
Victor Billot (Newsroom): An Ode for .. the new Prime Minister
Hayden Donnell (RNZ): Climate minimisation still has a foothold in media
Colin Peacock (RNZ): Claims and counter-claims on post-cyclone crime spike
Karl du Fresne: A few more thoughts on Luxon, Pugh and the media – oh, and press secretaries too
Herald: Ask Me Anything: Barry Soper talks to Paula Bennett about politics and being a new dad
Dita De Boni (NBR): Power steering TVNZ through macro-economic thicket (paywalled)
RNZ: TVNZ’s profit drops as advertising revenue falls, costs rise
Damien Grant (Stuff): Why we need to stand up for the Maureen Pughs of the world
Steve Braunias (Herald): The secret crucible of Maureen Pugh (paywalled)
Andrew Gunn (Stuff): ‘Who knew that talking about the weather could get you in trouble!’
Dick Bellamy (Herald): Housing intensification plan for Auckland should be dumped due to flood risks
Janine Starks (Stuff): Why ‘insurance retreat’ will drive our housing market away from flood risk
Gareth Vaughan (Interest): Doug Fairgray on the Labour-National push to enable greater housing density across our five biggest cities
Brendon Harre (Interest): Deceit, speculation, and mistrust has long characterised New Zealand’s approach to land-use
Brian Easton (Pundit): Minsky And The Housing Market
Greg Ninness (Interest): Number of first home buyers getting into a home of their own at an eight year low
Miriam Bell (Stuff): First home buyers dream of snapping up houses, not apartments
Brent Melville (BusinessDesk): Affordable housing levy sparks fear and loathing in Queenstown (paywalled)
Federico Magrin (Stuff): National MP calls for use of Tekapo military camp to solve worker accommodation shortage
Carmen Hall (Herald): Meet the landlords who say owning residential rentals is ‘almost unviable’ (paywalled)
Devika Dhir (Newsroom): A move to shred our social fabric
Dale Husband (E-Tangata); Mayor Moko: ‘Do you think you’re old enough to be doing this?’
Tommy de Silva (Spinoff): Beautiful karakia tradition continues at Kaipara council
Paul McBeth (BusinessDesk): Christchurch settles with Aon over $320m quake claim (paywalled)
Oscar Jackson (Today FM): Nania Mahuta’s secret mission: Prepare for a China/Indo-Pacific diplomatic minefield
David Farrar: We should help Ukraine more
Benjamin Plummer (Herald): Kiwi held hostage in Papua New Guinea safely released
Thomas Manch (Stuff): Defence Minister Andrew Little says military ‘under pressure’ as Pacific becomes contested
Thomas Coughlan (Herald): Andrew Little on spooks, working with Australia, and speeding up the review of Defence (paywalled)
Sasha Borissenko (Herald): Is the Employment Relations Act fit for purpose? (paywalled)
Katie Harris (Herald): Would men take more parental leave if offered it? One Kiwi employer found out
Jenée Tibshraeny (Herald): Reserve Bank Deputy Governor: ‘You sort of live with a knot in your stomach’ (paywalled)
Thomas Coughlan (Herald): On the Tiles: Deputy Reserve Bank Governor Christian Hawkesby on the tight balancing act in fighting inflation
David Chaston (Interest): Did our banks get Orr’s message?
Hillmarè Schulze (NBR): Complex relationship between minimum wage and inflation (paywalled)
Warren Couillault (NBR): How long will the Reserve Bank’s economic squeeze last? (paywalled)