Forest Service under attack
The second planting boom came to an end in the mid-1980s. At that time, the Forest Service was being severely criticised by environmentalists for its management of native forests, and by economic analysts and businesspeople who were disappointed with returns from exotic wood sales. These attacks came during a period of economic and social change following the election of a Labour government in 1984. Labour supported both environmental concerns and deregulation.
In 1987 the Forest Service was disestablished. Its regulatory, non-commercial functions were taken over by a small Ministry of Forestry, while virtually all publicly-owned native forests became the responsibility of the new Department of Conservation. The government’s plantation forests passed to a new state-owned enterprise, the Forestry Corporation of New Zealand.
Forest fire danger
Over 3,000 Forest Service employees lost their jobs when the department was abolished in 1987. The bitterness was intense. In some places, angry forest workers actually threatened to set the plantations alight.
Forest Corp, as the Forestry Corporation became known, operated as a commercial log-seller domestically and overseas. It inherited 550,000 hectares of exotic forest planted by the Forest Service and a further 50,000 hectares on leased Māori land. Another 556,000 hectares of forest was privately owned, largely by New Zealand companies.
By 1989, the government decided to sell the plantation forests, though not the land they were on, and the first sales began in 1990. That year 22 forests, totalling 135,622 hectares, were sold for $588.6 billion. New Zealand firms bought the majority of the forests, with much of the rest purchased by companies from Japan, Hong Kong, Singapore and China.
In 1992 a further 97,000 hectares were sold, mainly to the local subsidiary of US firm ITT Rayonier. The major forests of the central North Island were sold in 1996 to the Central North Island Forest Partnership, comprising Fletcher Challenge Forests and (until 1999) Brierley Investments.
The timber towns, which were particularly vulnerable to downturns in wood prices, bore the brunt of both state-sector and private restructuring from the late 1980s to mid-1990s. The loss of jobs after the disestablishment of the Forest Service had a serious impact on towns such as Murupara, where the population declined from more than 3,000 in 1981 to 1,959 in 2001.