Finland's Sustainable Indigenous Forest Management and Economy.

Sunday 21 May 2000.

Press Release published in The West Coast Times, Monday 22 May 2000

Finland's Sustainable Indigenous Forest Management and Economy

Graham Whyte

Both the current Deputy Prime Minister and Minister of Finance in the New Zealand coalition government expressed admiration for the economies of Finland and Ireland in the lead up to the last election and suggested that New Zealand could well model itself on either one. Ireland's booming economy is heavily dependent on huge inflows of investment capital from the European Union (EU), a source of funding which New Zealand is ineligible to receive. Anyway, this country tried massive borrowing to finance the so-called "think big" projects, and that did not achieve all the wonderful benefits its citizens were promised. So let's look at Finland, a country of similar area, population and rural outlook and one that is renowned for its scenic beauty. It became a member of the EU only in 1995 and the investment on which its economic success has been achieved derives from wise use of its native forest resources and not from the EU.

Finland's economy has been heavily reliant over the last 40 years on forest industries for creating wealth and downstream employment. In the last 10 years, the wealth that was so generated has been transferred into several other industrial sectors. But how could this have eventuated, when the wood Finland relies on is obtained from sustainable timber harvests of indigenous forest ecosystems? The Labour, Alliance and Green parties and other environmental zealots tell the New Zealand public that there can be no such thing as sustainable indigenous forest management if it involves timber harvesting. On the other hand, substantial numbers of foresters, forest ecologists and other resource managers in New Zealand and overseas have no doubt that sustainable harvests of New Zealand's beech forests, for example, are perfectly feasible. The Labour, Alliance and Green parties, however, either dismiss this possibility on ideological grounds or will not allow proposals to be heard in the Environment Court. Why then have Mr Anderton and Dr. Cullen suggested that New Zealand should model its economy on Finland, where sustainable harvests have been demonstrably achieved for centuries, and why should they offer instead a derisory handout of $120 million to develop industries in the West Coast region not dependent on indigenous forests or mining? It is not certainly not compensation for the killing of the beech proposal nor phasing out rimu sustainable harvests, as the region would be much better off economically with sustainable wood harvests.

First let's look at Finland's resource statistics (corresponding figures for NZ are given in brackets). The land area is 30.5 Mha (27.0 for NZ). There are 20.0 Mha of indigenous forest in production ( now less than 0.1 Mha in NZ) out of 26.3 Mha of forest and protected indigenous vegetation. Finland's population is 5.5 million ( 3.8 M in NZ), so that there are 3.64 ha of indigenous timber production forest per capita in Finland (0.02 in NZ). The total wood volume in Finland's production forest is around 2000 million cubic metres, growing at a rate of 80 million cubic metres (m3) per year. Annual harvests have grown from about 40 Mm3 in 1950 to around 60 Mm3 in the mid-1990's. In 1996, the value of Finland's forest products exports exceeded US$12,000 million (or 30 % of all Finnish exports).

There is no corresponding information about indigenous forests in New Zealand since the NZ Forest Service was dis-established in 1987. The Department of Conservation has not even checked the areas of indigenous forest it inherited in 1987, far less the composition, structure and biomass of New Zealand's indigenous forest ecosystems. But more about that later.

As Finland's forest capital is still increasing, because the harvests are well below their average annual growth of 80 Mm3 overall, Finnish forests are being sustainably managed for wood production. Records of annual growth and drain (removals + mortality) have been collected for many years and so the trends have been very well documented for more than 2 centuries.

People in New Zealand who will not accept that forests can be managed sustainably might well say. "Ah ha, but these Finnish forests are not being managed to sustain a reasonable quality of water, soil, air, non-wood products, biodiversity, and other such goods and services". But again, they are wrong. Official Finnish Society of Forest Science publications report more than just areas of forest types, their productivity, growth, harvests and mortality: the data gathered and the information provided in periodic reports refer also to ecosystem health, biodiversity, water quality, soil characteristics and air pollutant deposits.

There are many forest owners in Finland. Each one is required to monitor and report the state and condition of forest resources in all respects. There are also comprehensive, multi-resource national inventories carried out continuously by State authorities to check collectively on individual owners' data within a region, as well as to assess the state of non-commercial forests. The Finns have few problems, therefore, in complying with the UNCED sustainability requirements set out in the Helsinki Process to which Finland and other European nations are signatory. The criteria refer to maintenance or enhancement of forest: (1) composition and structure, (2) health and vitality, (3) wood and non-wood production, (4) biological diversity, (5) soil, water and other protective functions, and (6) socio-economic conditions. Each criterion has a number of indicators that are required to be surveyed and reported at least every 5 years. If individual owners appear from surveyed evidence not to be managing sustainably, they are made to remedy their management and, if specified revisions are not carried out, the State takes over the management until satisfactory forest conditions are regained.

As a conservationist-minded person who wishes to strive for sustainable forest ecosystems, I would welcome the adoption of this Finnish forestry model in New Zealand. The UNCED protocol for Asia-Pacific temperate countries, including Australia, USA and Canada as well as New Zealand, is called the Montreal Process. It is similar to, but more detailed than the Helsinki Process, having seven instead of six criteria and more specific indicators for each criterion. The additional criterion covers legal, institutional and economic frameworks.

In an earlier feature in NBR (19 November, 1999; page 51), I alluded to the lack of funding in New Zealand for monitoring forest resources over time in order to evaluate whether or not they are being sustainably managed. A definite pronouncement on sustainable outcomes can never be guaranteed, but the Finns have monitored intensively since the 1920's (in only broad terms before then) and their forest resources have been shown to be managed sustainably in all facets since then. There was a period in the early 1960's when overcutting of private forests during the Second World War was detected through the State monitoring programme. The necessary adjustments were made and now in the new millenium, there has never been as high a level of indigenous forest capital in Finland.

The Finnish national stock-taking and monitoring programmes require considerable financial annual outlays, however. There are good records of the direct costs of national surveys and of silvicultural treatments in response to the trends revealed, but it is not easy to ascertain the indirect and other overhead costs, especially for the hundreds of thousands of community or individual private owners. Based upon many publications and personal discussions and observations in Finland, the total costs of implementing sustainable forest management could be at least US$48 per hectare a year. But the Finns can afford this high cost, given that their annual export earnings for forest products is more than US$435 per hectare (whether productive or not) a year.

Contrast that with the miserly amount spent and the little achieved since DoC was established in protecting New Zealand's State indigenous forests. The trouble arose in 1987 when commercial plantation forestry was separated from the so-called "conservation estate" because Treasury was led to believe that a lock-up philosophy for indigenous forestry meant that there was little or no funding required to administer them. The evidence from Finland, other Scandinavian and Central European countries, where sustainable forest management involving harvests has been successfully conducted for centuries is that monitoring and controlling forest ecosystem outcomes is essential for all forests, whether or not harvests are removed in order to determine if the path to sustainability is to be achieved. If we take Finland as our model, then we would need a DoC budget of NZ$500 million a year for monitoring and protecting just its indigenous forest estate of about 5 Mha. That budget excludes consideration of the 4 Mha of DoC's estate in other land use and also the 1.4 Mha of indigenous forest in other ownership. At present, DoC's budget for managing its forest resources is around NZ$25 million.

Only if we monitor, control and audit all our forestry resources in ways similar to the Finns, will we be able to comply with the Montreal Process protocol to which we are signatory. That is going to cost the taxpayer, because we don't have income from timber harvests from our indigenous forests. But I hope that Mr Anderton and Dr Cullen seriously examine the Finnish economy model, as if adopted, it could be the basis for saving our forest heritage. If we don't and persist in believing that locking up the forests and letting them run on ecological purity, they are doomed.

The recent handout of $120 million to develop new industry on the West Coast is indeed derisory, despite Mr Anderton's recent comment to Coasters to "get real" and be grateful for what they are getting. I think that advice should have been directed rather at himself and the government. The land on which plantation forest areas of 30 000 ha together with16 000 ha of infertile scrub is now owned by Ngai Tahu. Where could there be any land for plantation forest expansion when 2.1 Mha out of the 2.3 Mha on the West Coast are now locked up for preservation purposes, 190 000 ha are in pastoral agriculture, and 42 000 ha are in rivers, lakes, urban? These figures, incidentally, can be confirmed from updates of the New Zealand Land Resource Inventory. What is of even greater concern is that plantations of exotic species on the West Coast could have been converted back into beech and podocarp forests after harvesting, but this is now an impracticality with the political decision to stop the beech scheme and the offer of only $120 million to develop new industries other than from land resources. Conversion back to native species was an option, moreover, that Ngai Tahu was considering, but not any longer.

Given that a business poll conducted periodically over the last 3 years here has never recorded more than 12 % opposition to timber harvesting of indigenous forests, I wonder if that small percentage would be even smaller should exotic species be replaced with native forest ecosystems managed for sustainable timber harvests. What we do know is that the proposed level of beech harvest would have generated at least $30 million a year to the West Coast regional economy, to which must be added the infra-structural, processing and manufacturing flow-on effects.

Given the lack of shipping out of that elongated region and the limited capital on offer, there are very few industrial development options for the Coast except those based on utilising natural resources with a high added value potential. The West Coast had within its grasp a real opportunity to generate sustainable wealth, as Finland has done with its indigenous forestry, but Coasters have been deprived once again, this time through irrational political ideology that makes neither ecological nor socio-economic sense.

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