Cattle cool down and drink water at a man-made reservoir in the mountains near Ignacio, Colorado June 11, 2014. The land where the cattle graze is leased from the Forest Service by third-generation rancher Steve Pargin. Several times a year, he and a crew
IN PHOTO: Cattle cool down and drink water at a man-made reservoir in the mountains near Ignacio, Colorado June 11, 2014. The land where the cattle graze is leased from the Forest Service by third-generation rancher Steve Pargin. Several times a year, he and a crew led by his head cowboy, David Thompson, spend a week or more herding cattle from mountain range to mountain range to prevent them from causing damage to fragile ecosystems by staying in a single area too long. Picture taken June 11, 2014. Reuters/Lucas Jackson

New Zealand's Labour Party has alleged that over 500,000 hectares of New Zealand forests have been sold to overseas interests, in the last three years. Labour Party's Forestry spokesperson Stuart Nash told media that despite approval by the Overseas Investment Office, the sight of ever-increasing volume of unprocessed logs heading overseas from foreign-owned forests without a cent of value addition is causing concern.

Nash called up the National government to strictly enforce the norms in the Overseas Investment Act to ensure adequate value addition to the commodities under the forest land ownership of New Zealand, reported Scoop News. He said section 17 of The Overseas Investment Act 2005 is very clear on the desired criteria that the government must follow in approving an application for the purchase of 'sensitive land.' These include the overseas investor requiring to create new jobs, introduce new technology and innovate the processing of primary products.

Down Stream

The Labour spokesman noted that his party is of the view that Foreign direct investment is vital in driving the growth of the timber processing industry, but what is happening now is, investment in downstream processing is getting ignored. Downstream investment is very essential in the growth of timber industry. As of now, this is very minimal from the foreign investors and needs strict adherence to the norms of the Overseas Investment Act in letter and spirit.

Labour listed out the foreign countries who achieved ownership of forest land in the last three years. They included Malaysia, United States, Switzerland, China, Germany, Japan, Austria, Canada, Liechtenstein, UK, Italy and South Korea. Nash pointed out that the single largest investment in downstream processing was undertaken by a wholly-owned New Zealand company at the Red Stag mill outside Rotorua. Similar investment by overseas investors is a must in bringing value addition to the industry. "This is vital in provincial areas, which are struggling yet have a large forestry resource, like the East Coast of the North Island, " he said.

Finished Products

The Green Party also echoed similar views with regard to downstream processing. Green's forestry spokesperson Steffan Browning had stated recently that instead of sending huge volumes of low value raw logs overseas, New Zealand must develop the infrastructure to process the logs into finished products such as structural timber. Such products have the ability to control carbon emissions and bring the desired value to log exports. Such a policy can also create more jobs and local wealth. But the National Party's policies have reduced New Zealand to be a low value commodity producer with ownership in foreign hands, the Green Spokesperson noted.