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Foreign investment in Aotearoa/New Zealand
Overseas Investment Office - June 2022 Decision
Blanketing The Countryside With Trees For Carbon Credits
I'm a lapsed Protestant and a historian, so I know something of the history of Protestantism. Martin Luther, the father of Protestantism, was deeply outraged by the practice of the medieval Catholic Church in selling indulgences to the faithful - an indulgence bought in this life would sweeten the deal for you or your relatives in the next one. It was a pretty good racket.
What's this got to do with the Overseas Investment Office? Well, an awful lot of its work is now spent rubber stamping approvals for the modern, secular world's equivalent of indulgences - namely, carbon credits. Big businesses which emit the carbon which is causing climate change can either choose to reduce their carbon emissions at source. Or, they can offset those emissions by buying carbon credits, under the Emissions Trading Scheme (ETS). The preferred means of doing the latter is by planting trees - an awful lot of trees - to act as a carbon sink.
June is a good example. Of the eight Decisions, fully six are for forestry approvals, from three companies. One of those companies features in four of the approvals - Drylandcarbon One Limited Partnership. For an excellent overall analysis of the whole carbon/forestry industry, I refer you to Sarah Hall's "You Have Now Entered Carbon Country", in the June 2022 North & South. It details the multitude of problems arising from this reliance on plantation forestry to win NZ climate change brownie points (indulgences?).
"In 2018 the Government introduced a 'special forestry test' allowing overseas buyers to purchase sensitive farmland without having to prove it will benefit New Zealand - a requirement when buying sensitive land for other purposes. By the end of 2021, according to figures provided to RNZ, 212,346 hectares had been sold to foreign buyers".
"An Austrian countess snapped up a station near Masterton to convert to pine. Swedish multinational furniture manufacturer Ikea secured a 5500-hectare sheep and beef farm in the remote Catlins, while German insurance giant Munich Re bought large parcels of land near Gisborne and Southland. In the year after the changes were introduced, the price of North Island forestry land doubled".
One fear is "that the ETS won't lead to actual emissions reductions - that large emitters will simply plant more trees to meet their ETS obligations instead of reducing their reliance on fossil fuels. Already some of the country's biggest emitters - Air New Zealand, Contact Energy, Genesis Energy and Z Energy - have formed a company called Dryland Carbon which plans to acquire 20,000 hectares to plant in forest over five years. In 2020 it got approval to plant a permanent pine forest of one million trees south of Gisborne".
And this is what is showing up in the OIO Decisions. Let's take just one of those four Drylandcarbon One Limited Partnership's approvals in June 2022. The OIO said: "At the time of application in April 2022 (its ownership was) New Zealand 64.9%, Australia 11%, North America 8.9%, United Kingdom 7.1% and Various Regions 8.1%" (meaning that its foreign ownership exceeded the 24.9% threshold which the Overseas Investment Act defines as being foreign-owned and/or controlled).
The OIO approved its "acquisition of approximately 947 hectares of sensitive land located at 270 & 855 Okahukura Saddle Road, Matiere, Taumaranui", for a withheld price. The vendors were: Samuel Werder, Laura Jean Werder and Werder Family Trustee Company Limited as to a half share and Laura Jean Werder, Samuel Werder and Downs Family Trustee Company Limited as to a half share (New Zealand, 100%).
The OIO said: "The Applicant is an investment entity established for the purposes of developing a large and geographically diverse forestry portfolio. The Land is currently being used as a hill breeding farm for both sheep and cattle. The Applicant intends to convert the Land to forestry, establishing and maintaining plantation forest (predominantly Pinus Radiata) over parts of the Land assessed as being best suited to forestry".
"The Applicant has estimates new planting of approximately 577 hectares of the Land which is best suited to planting after allowing for infrastructure (3 ha), native plantings (163 ha), unplantable (11 ha), and various setbacks (80 ha). The Applicant proposes to subdivide and sell a total area of approximately 113 hectares including farm land and two dwellings".
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