| โCapitalists always want to privatise their profits and socialise their lossesโ โ thatโs 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 โ many industries want government to help them be super-profitable, largely by reducing industry regulation and taxation, despite any damage they might cause.
However, thereโs 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 โslashโ debris that exacerbated or caused flood damage when Cyclone Gabrielle hit this month.
Even Nationalโs leader Christopher Luxon echoed the socialist critique, when speaking about forestry last week in Parliament, describing it as โthe only sector I know that gets to internalise the benefit and to socialise the costโ. 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 isnโt 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 โslashโ, 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 โis 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.โ
The Heraldโs Fran OโSullivan wrote in the weekend about the logging problem, concluding โwhat we have observed over the past fortnight simply puts New Zealand in the Third World category.โ This is because in other developed countries, the slash problem is better regulated or even banned. Itโs 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: โIf 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, youโd be in jail. And this is happening to hundreds of people, maybe thousands. This is not an Act of God, itโs an act of companies that put profit before environmental responsibility.โ
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 Governmentโs inquiry is already getting a lot of criticism. One Tolaga Bay farmer has labelled it a โClaytonโs enquiryโ because itโs so limited. Clive Bibby says the review is unlikely to get to the truth of the matter โgiven the parameters surrounding the terms of reference and the limited time for submissions. This version can best be described as a Claytonโs enquiry โ the one you have when youโre not having an enquiryโ.
Bibby suggests the inquiry has been deliberately designed to avoid too much being revealed, as the Government itself could be blamed: โNash 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 happenedโ. He argues that โsuccessive governments have supported the expansion of an industry that has unfortunately consumed everything in its pathโ.
Another local resident, Professor Anne Salmond, has also expressed her reservations about the independence of inquiry, saying: โIt shouldnโt 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.โ She says the inquiry needs to be able cross-examine expert witnesses.
Fran OโSullivan argues Labour has made a mistake ordering โthe quick turnaround of the Hekia Parata-chaired ministerial inquiry, when a more full-scale โCommission of Inquiry with all the powers attendant with thatโ 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 Zealandโs regulation of forestry โthird worldโ. And in the weekend, political commentator Max Rashbrooke argued that โThe regulations governing their activities, and the penalties for their misbehaviour, have both been weak.โ
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 โ and are therefore one of New Zealandโs true โbig businessesโ. 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 Heraldโs editorial said on Friday, โCritics suggest the sector, much of it foreign-owned, has got away with it for so long because it works โout of sight, out of mindโ and because it has deep pockets to lobby the Beehive and local authority politicians.โ
One of those critics, Anne Salmond, has been reported as believing โForestry has formidable lobbying power and deep pocketsโ. And last week, Herald agriculture journalist Andrea Fox argued that the โpowerful forestry lobby was marshalling its forcesโ 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 โextensive network of contacts in the forestry sectorโ.
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 โIt is important to the economy that government has politicians who understand industry.โ
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 Nashโs 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 โitโs about timeโ.
Nash answered these criticisms yesterday on TVNZโs Q+A, claiming, โI’m not an apologist for the forest sector.โ 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 wonโt 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. |
Yet another anonymously written article.
C’mon TDB, you can do better than that.
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