Crown Forestry Group
Description
Crown Forestry administers the Crown’s interest in forestry leases on Māori land, residual Crown forest and other forestry assets. Specifically, Crown Forestry manages the Crown's interest in:
- 25 forests geographically spread throughout New Zealand’s North Island. The total planted area of these forests as at February 2008 is 33,887 hectares with harvesting activity producing a projected annual cut of 1.3 million cubic metres in 2007/08 and 1.1 million cubic metres in 2008/09. This level of harvest will increase as other forests reach maturity, rising to almost 1.5 million cubic metres per annum by the year 2011/12. Of the forests, 16 are forests planted on land leased from Māori landowners with the remaining forests planted on Crown land.
- 13 afforestation leases where Crown forest land has been leased to other parties for forestry purposes
- Haparangi Trust
- A portfolio of Forestry Encouragement Loans established under the Forestry Encouragement Loan Regulations (1967). This portfolio has a value of $25.3M as at 30 June 2007.
Day to day operational management of the majority of the forest estate is currently contracted to six forest management companies. Business and strategic planning, audit and administrative functions are carried out by Crown Forestry staff in Wellington (4) and Rotorua (2) with a total FTE staffing of 5.5.
In respect of the forests planted on land leased from Māori landowners, the Crown has a policy of being prepared to sell its interest in the leases to individual lessor groups where lessors are keen to do this. A number of forests have already been sold or have had the leases significantly shortened. Negotiations to effect similar lease variations are underway with several other lessor groups.
For the non-lease forests and afforestation leases, Crown Forestry’s role is to manage the forests and the leases to best effect pending the resolution of outstanding Treaty of Waitangi claims and other issues. To this end, Crown Forestry works with other Crown agencies such as the Office of Treaty Settlements.
Crown Forestry is responsible for managing a commercial forestry business that will deliver projected revenues of $103M with a projected expenditure of $77M during 2007/08. Assuming no major changes, these sums will remain steady until 2014/15. As a direct and significant participant in the New Zealand forest industry, Crown Forestry stands apart from the fundamental policy, regulatory and service delivery roles of MAF.
History
Crown Forestry is unusual within Government departments in that it has a significant commercial function. Crown Forestry arose from a desire of Maori lessors to retain direct links with the Minister when the Government proposed assigning the leases to the then newly-formed Forestry Corporation in the late 1980s. Other Crown forestry assets were subsequently added to Crown Forestry in 2001 when the residual business of the Forestry Corporation was wound up; and in 2002 when Crown Forestry entered into a Memorandum of Understanding with the Commissioner of Crown Lands and the Ministry of Tourism to manage forestry operations at Wairakei Forest.
The Exit Policy
Government’s policy is to exit from commercial forestry where there is no reason for continued involvement and where an exit can achieve a sale price that is equivalent to the revenue that would arise from ongoing Crown involvement. This policy assumes that the forestry assets will make their best contribution to sector growth if they are in the private sector allowing better commercial decisions related to risk and investment to be made. Although the motivation for the exit from forest ownership is primarily driven by the Crown’s desire to exit from commercial activities, a byproduct is the contribution made to Māori economic development. This is achieved by selling the Crown’s interest in the leases back to the Māori lessors, or by shortening the terms of the leases with a progressive transfer back to the lessors, and by being involved in the transfer of forestry assets to claimant groups in Treaty of Waitangi settlements.
Crown Forestry’s Purpose
Crown Forestry prudently manages and administers a portfolio of commercial forestry assets to achieve the best return for stakeholders whilst meeting contractual and other legal obligations. Consistent with Government policy, Crown Forestry also seeks opportunities for the Crown to sell its interest in these assets and works with other agencies to resolve Treaty of Waitangi claims over the Crown forestry assets it administers.
Contact for Enquiries
Sheridan Yardley
Executive Officer
Crown Forestry Group
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
Tel: +64 4 894 0392
Fax: +64 4 894 0379
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