31 October 2019
One year on from the introduction of a new test to boost overseas investment in forestry, 27 consents have been granted.
In October 2018 the Government introduced a special test for forestry to provide a streamlined consent pathway for overseas investment in New Zealand’s forestry industry.
Between October 2018 and the end of September 2019, 27 special forestry consents were granted. The total consented area is 73,200 hectares. 12 consents (14,300 hectares) involved farm to forestry investments.
It’s important to note, approximately 8,000 hectares of the 14,300 hectares will be new planting. The remainder of the land has other uses, including land that is either already in forestry or indigenous vegetation, will not be planted or will be subdivided and sold.
A one-off consent for the sale of Hikurangi Forest Farms, which owns 17 forests in Gisborne, to New Forests accounted for 41,300 of the 73,200 hectares.
Forestry investments have been mainly in Gisborne, Marlborough, and Hawke’s Bay.
All the consents were granted within the Overseas Investment Office’s (OIO’s) timeframe of 50 working days.
Today the OIO released the decisions made under the Overseas Investment Act in September 2019. This included nine consents under the special forestry test.
Four of the September consents relate to land that is already mostly in existing forestry. And three of the nine consents relate to land already owned by overseas investors.
Also in September, the first standing consent under the special forestry test was granted to Pan Pac Forest Products Limited.
A standing consent allows trusted investors to report to the OIO after settling transactions to acquire forestry assets. The OIO then undertakes due diligence on the transactions and, if it is in breach of the Act, the OIO can require the land to be disposed of.
Standing consents are available under the special forestry test. They are only granted to investors who demonstrate a strong track record of complying with New Zealand’s overseas investment laws.
The OIO vets the investor’s character, business experience, and processes for complying with restrictions on land area and type, and transaction limits.
Another of the consents approved in September was for a forestry joint venture between Rayonier’s Matariki Forests and Hawke’s Bay’s Maungaharuru-Tangitū.
This is the first consent for either forestry rights, or an overseas forestry investment in partnership with Māori, since the new special forestry test was introduced.
The OIO is monitoring trends in forestry investments to inform Government policies. A mandatory review of the forestry changes will be commenced before October 2020.
At the end of each month the OIO publishes decision summaries for applications decided in the preceding month.
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