When government forests were sold between 1990 and 1996, about 10% passed to overseas companies. This percentage later increased as the former state forests and many privately owned forests were sold into overseas ownership.
Some major New Zealand companies lost their dominance. Central North Island Forest Partnership went into receivership in 2001, and the assets of Fletcher Challenge Forests passed to other companies following restructuring in 2003. Carter Holt Harvey bought the New Zealand Forest Products forests in 1991 but, burdened by debt, came under the control of US company International Paper in 1992.
A forestry sector based on exotic plantations, with a small labour force and very high levels of overseas ownership, is now a distinctive feature of the New Zealand economy.
The situation in 2004
In 2004, the exotic forests totalled 1,822,039 hectares. Of this, 26% was owned by registered public companies, 3% was Crown forest on Māori land, 2% was controlled by state-owned enterprise, and 3% was controlled by local government. The bulk of the area (66%) was owned by private companies.
The majority of the private-company forests were small, largely generated by a small-grower planting boom between 1990 and 2005.
The Kyoto Protocol
Named after the Japanese city where it was signed, the Kyoto Protocol was an attempt to combat global warming and climate change. As a signatory, New Zealand agreed to reduce its greenhouse-gas emissions to 1990 levels by 2012, or take responsibility for failure to achieve this target. One way to offset continuing high emission levels is to plant or maintain forests, which absorb carbon dioxide.
In the early 2000s the government was still involved in forest research, but the focus had changed. The Forestry Research Institute, which in 1992 became one of 10 Crown research institutes, was rebranded as Scion in 2005. One of its major projects was the development of biomaterials, using wood and other fibres combined with synthetics.
In 2008 there were eight pulp and paper mills, all in the North Island, and a number of other wood processing mills. New Zealand exported wood and wood products such as panels, wood pulp, and paper and paper products. While quantities of these exports rose between 2003 and 2005, their value fell slightly.
From forest to farms
A 2007 article reported on the astonishing transformation of New Zealand’s landscape as exotic forests were replaced by more profitable dairy farms. In the Bay of Plenty, for instance, ‘mature trees are being felled and the stumps ground up, younger trees are being pulled out by their roots and chipped … The once-familiar view of the dark, almost foreboding Pinus radiata closing in on the road has been replaced by open vistas of pasture as neat as bowling greens’. 1
Converting forest land to agriculture
In the early 2000s, harvested forest land was being converted to other uses. Carter Holt Harvey sold about 400 hectares of forest land for small lifestyle blocks in Nelson in 2004. In 2006, in response to high land values and low log prices, forestry companies sold 9,000 hectares in Canterbury and 3,000 hectares in the central North Island for dairy farms. It was estimated that this cost the government $650 million in greenhouse-gas emission liabilities under the Kyoto Protocol.
To combat this, in 2007 the government announced a cap on the amount of land that could be converted from forestry to other land uses without financial penalty – a controversial decision.