Forestry registration rights to be brought into Overseas Investment screening regime
Cabinet has agreed to changes to the treatment of overseas investments in forestry rights that will see them brought into the Overseas Investment Act screening regime.
At the same time a new streamlined approval path will be opened for overseas investors buying forestry rights that will make it easier to gain approval.
Associate Finance Minister David Parker said that in recognition of the importance of quality overseas investment in forestry, this new streamlined approval path will also be available for investments in leasehold and freehold forestry land, which are already screened.
“It is important to note that Māori hold a large percentage of forestry interests in New Zealand. It is not anticipated that this change will prejudice interests that Iwi have secured through the settlement process or fundamentally change the rights and interests of Māori in relation to their lands.” Mr Parker says.
Mr Parker said the change needed to be made before the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) came into force. Mr Parker heads to Chile later this week to sign the CPTPP.
“Making this change now will preserve policy options for future governments in relation to forests,” Mr Parker says.
“Not making this change would mean future governments could not screen overseas purchases of our forests because there is little difference in effect between a long term lease and a long term forestry registration right. Both confer effective control of the forest and land.”
Overseas investors will be able to purchase up to 1,000 hectares of forestry rights per annum, or any forestry right of less than three years duration, without OIA approval.
A standing consent system will also be developed, so quality forestry investors can make purchases of forestry land and rights without needing to seek prior approval of each individual transaction.
The counterfactual test, which has complicated forest purchases, is removed. Any existing commitments to provide logs to domestic customers are maintained.
Ministers are finalising the details of the proposal and it will then be referred to Select Committee. There will be a short period for public consideration.