The Insight team interviews Jon Dronfield of "Forever Beech", Mike Slater of DOC, Peter Lusk of F&B, and other West Coasters. A very good article.

Insight, National Radio New Zealand, 12/8/2004.

The West Coast 5 years after the Labour government canned sustainable forest management in Crown-owned forests.

Host broadcaster Chris Laidlaw begins.

"West Coasters are determined to keep their timber industry alive despite Labour's pledge five years ago to end all native logging on Crown land. The move delighted conservationists, but as Katie Gossett reports, logging stalwarts have faced testing times to maintain an industry they believe will always be a big part of the Coast's economy."

Sound-over close-up of the sound of machinery - could be a tracklaying tractor, or sawmilling equipment.

Katie Gossett begins ...

"Logging has long played a role on the West Coast. "

Sound-over; male voice yelling "Timberrrrrr" and a tree crashes to the forest floor.

"And in 1986 Labour signed a West Coast Accord which allowed sustainable harvesting of native species. But the industry took a distinct change of direction in September 1999 when the Labour party made an election pledge to stop cutting indigenous species on Crown land - a move that the Deputy Leader, Michael Cullen said would ultimately benefit the region."

Cullen. " would at last get away from endless argument about the rest of New Zealand wanting to stop the logging of Crown-owned native forests, West Coasters wanting some control over their own resources, we're going to end up, I think, with a sensible package at the end of the day which will actually give more jobs to the West Coast and more local control over their resources."

Gossett. "But the move drew criticism from within Labour's own ranks. Jim Sutton resigned as the party's forestry spokesperson, and the West Coast - Tasman MP, Damien O'Connor described the decision as a bad one that reflected the ignorance and arrogance of Urban New Zealand.

O'Connor. "The lack of understanding of the forests in our region and their ability to regenerate has ultimately cost us this decision."

Gossett. "Labour subsequently came to power in late 1999 and ended beech logging on the government's estate, known as Timberlands, with rimu production ceasing in March 2002. One hundred thousand hectares of land were then transferred from Timberlands to the Department of Conservation. But, did that spell the end for logging on the Coast?

(Soundover of timber-moving chains and belts inside a sawmill).

Today, seven sawmills have survived, most now processing pine, but even beech logging continues with a new firm "Forever Beech" harvesting small quantities on privately owned land. Here's the manager, Jon Dronfield.

Dronfield. " This business was formed by a group of people after the government decision decided that what we were doing was worthwhile. We all passionately believe in what we are doing in managing forests for production - you know - having a production base in New Zealand still, and we got on with it. And we pursued our vision really, and we put together a forest resource and processing facilities. And here we are, four years later. We've had some hard times but we are still in business, and we aim to continue."

Gossett. "But, Labour's decision did cause widespread changes to the logging industry. Peter Anisy of the West Coast Timber Association estimates that out of about 900 logging jobs, up to a third were lost and he's aware of seven mills that went out of business.'

Anisy. "I said at the time that there'd be job losses, and I said that sawmills would close, when the industry was going to be forced into radiata. The worst part from my point of view, for my members was that there was no exit clause. There was no exit clause for those who couldn't afford to restructure to process radiata - that is, put in debarkers, chippers and kilns. Consequently we've seen the closing of several mills."

Gossett, "And he believes most of the remaining West Coast sawmillers are having difficulties."

Anisy. "They have a lot of money and effort invested and they are doing their very best to protect their equity and the jobs they have created. You've got to cut a lot more radiata pine to make the same kind of financial realisations in that radiata is grown in every province in New Zealand and for us to sell it we've really got to get it off the Coast and that's twenty-five dollars a cubic metre to get it to where there's population, like Nelson or Canterbury. And so you are that much further on the back foot.

Gossett. "Mr Anisy says the strength of the New Zealand dollar has also caused problems."

Anisy. "At the moment it is fairly tight out there - the US dollar. And the strength of the New Zealand currency has been a big factor in people dealing in Australia there. It's around 91 cents at the moment, and there's talk of the Australian dollar being 95 by the end of the year; and that is a huge impact on the returns to the sawmillers that are exporting to Australia, so .. I think quite a few have pulled back from the Australian marketplace. Also the cost of shipping. Shipping has become very, very expensive, out of New Zealand. And - it is just a case of hanging in there, because this is what we do."

Gossett. "One mill that has survived is WestCo Lagan at Ruatapu, south of Hokitika."

(Sound-over of sawmilling machinery.)

Gossett. " A director, Grant Carruthers, said the company was the largest processor of rimu on the Coast, but switched to pine. This meant a complete change of products and customers, and a shift from the domestic to a predominantly export market. He says while he is resigned to the changes, it has affected both the work-force and the bottom line."

Carruthers. "Financially, I guess we are probably slightly worse off. But not fundamentally so. What has happened though, is that we employ quite a lot less people, than we did in the rimu days. With the rimu timber there was a lot more processing of the product. We employed quite a lot more people to do that sort of work. With pine, we have streamlined our product range. We've reduced the number of people employed. I guess that instead of employing a hundred and twenty-odd people in total throughout the company, we probably employ now about seventy-five.

Gossett. "Mr Carruthers says although his firm is now processing about 50,000 cubic metres of pine logs compared with 30,000 in the rimu days, there's not enough pine on the Coast to meet the demand from local sawmills, and that means getting wood in from other regions like Marlborough.'

Carruthers. "We've concentrated on the higher grade pruned logs which are consistent with the rimu logs we were processing previously, but there aren't enough of those logs on the West Coast to sustain the industry. And we have a situation where we are bringing in substantial volumes off the Coast, and by doing away with the native logging on the West Coast, the government has exacerbated an already difficult situation."

Gossett. "And, Grant Carruthers predicts that lack of pine resource will see more mills closing further down the track."

Carruthers. "Yeah, I think with rationalisation, ultimately that means that there won't be as many operations on the West Coast as there currently are. At the moment there's six sawmills, one plywood operation; in the future there may be three or four sawmills and the plywood operation. So some of the existing participants will inevitably go out of existence at some stage in the future.

Gossett. "Timberlands has also seen challenges since losing the indigenous part of its operation. The Chief Executive Nigel O'Rourke says Timberlands still plays a significant role in the Coast's industry. But he says that over the past five years the company's permanent staff has dropped from forty to nineteen, the number of contractors from 170 to 140, and profits have also fallen."

O'Rourke. "Yes, net profit has reduced over the last four years and that directly reflects the market that we have been operating in for those products. The end market product determines very much our profitability when you are on a commodity product that we are with radiata, and we don't earn the prices that used to with natives."

Gossett. "Nigel O'Rourke says that Timberlands has a total harvesting stock of 27 thousand hectares of which 95 percent is radiata. But he says, the company is also diversifying into acacia, cypress and douglas-fir and he is hopeful that the business will begin to show better profits.

O'Rourke. "I don't think there's many bright signs on the horizon for the radiata market. As with anything, when you enter a new market, you go through the teething problems of getting used to that market and dealing in that market, and I think jointly with our sawmill customers we can see ourselves a bright and sustainable future."

(Soundover - crunch-crunch-crunch of footsteps on a gravel roadway)

Gossett. "I'm walking up a track in the Charleston Forest, until recently part of the Timberlands Estate. Around me I can see regenerating rimu, lancewood, and I'm hearing bellbirds and even the occasional robin. But Peter Lusk of the Buller Conservation Group says just five years ago the sounds were instead of chainsaws and the logging helicopter.

Lusk. "Well, we are here in the Nile Valley, one of the logging areas, where the forest battle was fought out, really; in the last ten years; in the shadow of the Paparoa Range, snowy peaks all around us, and just in front of us there's a logging skid site which is a flat area of ground about a quarter of a hectare, and that's where the big logging helicopter used to bring in the logs. The bushmen would fell them in the bush and the big logging helicopter would clamp onto them, haul them up, and bring them here. And they were stockpiled up until a truck could take them to a mill.

Gossett. "Peter Lusk hopes the forest will regenerate and become a global treasure for future generations."

Lusk. "This whole area, because we've got a big view here, it was very, very heavily logged over many, many years and it was finally finished about four years ago - and now it's growing back (in a tone of surprise -Ed). And it is wonderful to be able to stand here and think that this whole forest area is now in the Department of Conservation's public conservation estate and it is growing back."

Gossett. "Peter Lusk who is also a member of Forest and Bird, says the campaign to end native logging brought a wide range of conservationists together."

Lusk. "Well, right here is the site of where we had a road blockade in the logging struggle, and all the groups got together here - Forest and Bird, Native Forest Action, Buller Conservation Group; and we put our banners across the road, and we had about thirty people I think, and blocked the loggers from going to work. So they called the cops, the cops came down, and eventually about half a dozen of us got arrested and carted off to the Police Station. But I think it was quite a significant event - it was towards the end of the campaign and it really helped get us national publicity, and it showed Timberlands that the end was coming."

Gossett. "But, further down the Coast at Hokitika, a former pest control contractor for Timberlands, Barry Nicolle, showed me photos of a very different protest."

Nicolle. "Michael Cullen was sort-of stood up on top of a log truck as you see there, and spoke to the people, and the mood of the crowd got quite angry and agitated in regard to some of the comments he had made. This sort of followed after a meeting we had with him; he sort of got pelted with eggs; and there was eggs - was eggs sort of flying all over the place. And at the end of the meeting, unfortunately, things got out of hand with one or two people and they sort of shook his car about and sort of rocked the car to the stage where the police had to intervene, and sort of whacked some of them with their sticks which was totally uncalled for. But it was a day that the West Coasters showed their frustration."

Gossett. "Some of that anger is still there. Of the locals canvassed in the Coast's main centres, the majority opposed Labour's moves."

Male, voice 1. "Oh, it was wrong, I think. I don't think they really considered it fully really, especially from the Coast's point of view."

Female, voice 2. "I didn't agree with it, I mean it's a lot of local income."

Male, voice 3. "I think it was an absolutely shocking decision."

Female, voice 4. "To be honest it didn't bother me. Yeah. It didn't matter to me really."

Male, voice 5. "I didn't think much of it actually at the time. I actually worked in the sawmills and was one of the ones made redundant."

Female, voice 6. "I'm not for it at all because I was born and bred here and our grandparents logged this, and they did selective logging then. That's why the West Coast still has their forests."

Gossett. "Barry Nicolle says he doesn't agree with the way the Charleston forest was logged. But he has always maintained that the Timberlands operation in Westland's Okarito and Saltwater forests was sustainable. And he believes the pest control programme operated in those forests during the Timberlands era increased bird-life by 22 percent; gains he claims, have been lost under DOC management."

Nicolle. "Today, if you go back to those forests, and there's nothing been done. Those bait stations are laying there, in those forests, they're overgrown with grass, they've got cobwebs. Now, that birdlife, that gain we made, through that operation for five years, it's just sort of turned to custard; I mean it's just been an absolute bloody waste of time."

Gossett. "But, the Department of Conservation says it has an extensive pest control programme in place that covers larger areas, than the former Timberlands arrangement. The West Coast Conservator, Mike Slater, says there are also many variables that can affect bird populations.

Slater. "In regard to the work that Mr Nicolle was undertaking in North Okarito, I think we would want to see some greater analysis of the effect of the predator control programme that he had, in relation to the forest response that he talks about, because certainly in terms of the work that we have undertaken, on our land, which suggests that a much more intensive programme of work would be required to provide a sustainable increase in growth in the bird populations. So, yeah, we would seek to have that analysis undertaken, but what I would want to reaffirm is that we have now undertaken an increased programme of pest control work across those lands that were formerly managed by Timberlands and we are confident that the health of those forest ecosystems are now in good hands."

Gossett. "Mike Slater also cites a report from the Minister of Conservation which he says indicates that the use of the West Coast conservation land for activities such as tourism, grazing, and sphagnum moss collection, has benefitted the local economy."

Slater. "What it demonstrated, I guess, is that there is a substantial return by protecting our forest areas, in economic terms, and the economy of the West Coast has benefitted substantially from having those lands protected. And so where much of the argument at the time was that this would be to the detriment of the local economy, I think this report demonstrates that there is a strong economic driver that flows from wise management and the protection of those forest lands. "

(Long sound-over - car tyres roaring along a road)

Gossett. "Certainly, tourism has grown, with many visitors keen to explore the Blowholes and Pancake Rocks at Punakaiki, Fox and Franz-Joseph glaciers, and other attractions along one of New Zealand's wildest coastlines."

(Soundover - moo-ing cow. Dog barks sharply at nothing in particular.)

Gossett. "Other key growth areas are mining and dairy farming. John Clayton is the Chairperson of the West Coast Regional Council and a dairy farmer. (Dog still barks) He says the West Coast Co-operative Dairy Company's decision to remain outside of Fonterra, and the rise of tourism, have given the region its major industries. (Cow and dog still vocalising)."

Clayton. " I'm not sure if there's much else to match those two; they do stand out as the two big industries, and dairying is certainly continuing to grow, with a lot of our poorer draining soils being contoured to improve the draining - using the humping and hollowing technique. The dairy industry is expanding quite markedly, and that is all good for the long term sustainability of the job that we have got."

Gossett. "Also observing the Coast's progress is Peter Townsend, of the Canterbury Employers' Chamber of Commerce. His interest in the region began in 1971, when he was involved in a local possum skin and whitebait industry. While some locals say the region's biggest export is it's young people, who leave in search of jobs, Mr Townsend says the Coast is now doing well economically, and needs people to fill positions.

Townsend. " A completely different environment over there now. I mean, the natural environment is still there, obviously, but the social environment, the economic environment, have changed very, very significantly. And right now, the Coast is enjoying a greater buoyancy than I've seen since the 70's. The single biggest issue on the Coast, right at this moment, is skills shortage, and that is something that none of us would have ever dreamt of ten or fifteen years ago."

(Sharp sound of a break at a pool table)

Gossett. "While some young people do leave the Coast, others have come to enjoy job opportunities and the unique life-style. (Sound of pub bar radio). Ben Shearer works for a local bank and is a member of the West Coast Young Professionals group, which formed recently to help young people to make friends, and network."

Shearer. "Quite interesting, really; surprised that this Young Professionals ad - they responded to that. You know, we thought that we might get twenty or thirty people - but - we've had ninety responses. We have ninety people in the database who, you know, are all really positive and energetic, and really keen to get out there and, you know, have a good time. Really. Enjoy the place. So, from a lifestyle perspective, you know, I don't think you could do any better."

Gossett. "Creating an environment that would attract people was one of the aims of the government's adjustment package. Labour negotiated with the West Coast District and Regional Councils to reach a deal worth a hundred and twenty million dollars. The four Councils each received seven million dollars, and the balance, ninety-two million, went to the West Coast Development Trust, set up in 2001 to promote sustainable economic development in the region. Damien O'Connor says, while he opposed the decision to end native logging, he believes establishing the Trust was a positive move."

O'Connor. "We have, in the Labour Government, added huge value to the region by setting up this Trust, and that will be there for a long time into the future. And I'm very proud of what has happened. You know, we .. While it was a difficult call at the time, not one that I agreed with, in the end the decision was made and we have to get on with it now. And that's exactly what the Trust has done, that's what I'm trying to do, and I think for the most part, what the West Coast is trying to do."

Gossett. "The Councils have had mixed success with their funds. The Westland District put five hundred and twenty thousand dollars towards a much-publicised plastics factory that never eventuated, and the Council is currently trying to recoup the lost money. The Buller District put four hundred and fifty thousand towards the sock factory that folded two and a half years later. However, the local mayors say at the time the Government money, and the projects themselves, were important in kick-starting an economic revival and boosting positivity. Both Councils have also made loans to other projects, including Reefton's "Coast Pine" operation and Jackie Grant's "Eco-world" at Hokitika. The Buller District and Regional Councils are also using some of their money to off-set rates, whilst the Westland and Grey Districts are retaining some funds for infra-structure such as a new sewage system for the Greymouth area. Meanwhile, the Trust has increased it's investment to more than a hundred and ten million dollars and approved investment applications totalling 23.3 million dollars. Damien O'Connor says the Trust deserves praise for it's performance."

O'Connor. "They haven't thrown it away, there's been criticism that it's maybe a bit slow in coming through, but far better to do that, than to throw money away and then be running around trying to justify it's ongoing existence. I think they've earned an A+ so far, they've protected and secured probably about a hundred jobs on the West Coast that otherwise might not be there, and, you know, next year for example, if people come up with enough good ideas, they can distribute eighteen million dollars. It is a huge amount of capital for a region like ours."

Gossett. "The Trust's Chief Executive, Mike Tresselow, says most investments have been in the high risk area."

Tresselow. "To date all of the applications we have supported only a small proportion would have been bankable easily, so we have been working in probably the mezzanine finance area of higher risk proposals.

Gossett. "Some of the Trust's largest investments have included 4.6 million dollars in a private coal-mining project, Roa Mining; 2.5 million in Franz Josef Developments for a commercial and residential property development; and what has proved a contentious three million dollar investment in "Forever Beech". Peter Lusk of Forest and Bird says he's happy for pine logging to continue on the Coast, but he's less keen on the Trust's decision to invest in a beech logging scheme."

Lusk. "Well it would have been nice to think that that logging compensation money was used for purposes other than felling native trees. Because, I mean, we had a lot to do with getting that money; it was our idea, and we agitated with the Labour Government to get it, and we didn't expect it would be used for felling more native trees - this time on private land."

Gossett. "Mike Tresselow concedes that some might see an irony in the investment but he says "Forever Beech" is a sustainable operation on private land, and he says the property owners can do what they want with their resource. And, he denies any suggestion the Trust was trying to put one over the government."

Tresselow. "Each of our investments is vetted first by an advisory body that is completely independent; none of them reside on the Coast; they are a mix of top-level financial, accounting, entrepreneurial people and they make the decision to recommend a new investment, and that was made purely on a financial and commercial basis. There was absolutely no deliberate nature of cocking a snoot or anything like that. And as I say, the structure we that use with an advisory body prevents any local bias coming into any investments."

Gossett. "Peter Townsend of the Canterbury Employers Chamber of Commerce says the Trust has adopted a very responsible approach to economic development, but he says he's concerned that the smaller private forests may be more ecologically sensitive than the larger government-owned ones."

Townsend. "I would be cautious about the whole concept of stopping the sustainable logging of beech in large tracts of DOC estate, and compensating for that by going into private-held areas which may be much more environmentally sensitive. I'm not sure that makes sense."

(Sound-over of a helicopter hovering)

Gossett. "However the manager of "Forever Beech", Jon Dronfield , says the operation is carefully managed, with minimal quantities of logs extracted by helicopter."

Dronfield . "We take out very low yields of timber with aerial extraction, which, I mean; it's very, very expensive to start off with, it's not the ideal system. But it means there's minimal impact on the forest, Now, any time we walk away from these forests - I'd hate to think that - it means they remain basically as they were. They've got the capacity to regenerate to what they were before we touched them.

Now we are getting plaudits from all around the world for this. I still get people through, and, you know, it is recognised that what we are trying to do is pretty good, and it always was.

Even with the SOE it was recognised that it was a leading example.

Gossett. "But, he says the business faces testing times, with tough environmental regulations and the unique challenges that go with harvesting beech.

Dronfield . "I think the biggest challenge you've got is the drying time involved with the beech. It's a hardwood timber, it takes a long time to dry - and you can't rush it. With most woods you can log them, mill them, and dry them, and have them in the market-place relatively quickly, and you've got good turn-over. With a hardwood timber you have to sit on it for a long time. So you pay all you costs up front, and then it can be eight months before I can put this timber into the market-place. So, you need a lot of capital in your business.

Just in this shed, we've got about a hundred cube of timber, probably, that everything's been paid for - and you notice we are cutting it a lot thinner. We are aiming for markets where we can put in paneling - and we are cutting the timber a lot thinner - we are trying to bring the drying time down a lot. There are ways around it - you just have to be smarter."

Gossett, "About how much money is actually tied up in this shed?"

Dronfield . "Oh; there could be eighty thousand dollars worth of timber in here. Roughly."

Gossett. "Jon Dronfield says another problem is having to compete with imported timbers which may be cheaper but which don't necessarily come from sustainable operations."

Dronfield . "I don't think we can truly have a sustainable industry in this country until some of these unfairnesses are addressed. It's not a level playing field. People have a right to have a choice in the market-place, but to just bring in container-loads of clear-felled timber ... That's a consumer education issue. At the end of the day, my opinion is that the consumer couldn't care less where their timber comes from as long as the price is right, and that's really the defining point."

Gossett. "Mike Tresselow says the Trust has already invested in two other timber operations, and has high hopes for "Forever Beech"."

Tresselow. "We hope to grow that industry, and the radiata forestry industry has expanded as well in the region, and when people made that transition, they've had some good times and they've had some hard times. So the forestry industry is alive and well, over here."

(Sound-over of car tyres roaring over tarsealed roadway.)

Gossett. "Up the Grey valley in Stillwater, Peter Anisy of the West Coast Timber Association would agree with the first part of that statement, that the business is alive; he's just hoping that in time, the health of the industry will also be proved."

Anisy. "Well as you can see the sawmilling is still going on, the processing is still going on, it's just that there's not a great deal of money in it right now. And - we're forever optimistic , of course, that's why we are in this game. Just hope for better times, all the time. Got to keep on hoping !

(Sound-over of log-moving and turning machinery inside a sawmill.)

Chris Laidlaw. "That Insight was presented and produced by Katie Gossett and produced by Sue Ingram. It will be replayed tomorrow night after the nine o'clock news.


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