New rules see increase in forestry investment in New Zealand
New Zealand,overseas investment,Gisborne,Marlborough,Hawke's Bay
One year on from the introduction of a new test to boost overseas investment in New Zealand’s forestry industry, 27 consents have been granted.
In October 2018, the New Zealand (NZ) Government introduced a special test for forestry to provide a streamlined consent pathway for overseas investment in New Zealand’s forestry industry.
Between October 2018 and the end of September 2019, 27 special forestry consents were granted. The total consented area is 73,200 hectares and less than 20 per cent of the land area involved farm to forestry investments (14,300 hectares).
80 per cent of consented land (58,900 hectares) is existing forestry land. Forestry investments have been mainly in Gisborne, Marlborough, and Hawke’s Bay.
A one-off consent for the sale of Hikurangi Forest Farms, which owns 17 forests in Gisborne, to New Forests accounted for 41,300 of the 73,200 hectares.
Today, the OIO released the decisions made under the Overseas Investment Act in September 2019. This included nine consents under the special forestry test.
Four of the September consents are from companies which are already mostly in existing forestry. And three of the nine consents relate to land already owned by overseas investors.
Also in September, the first standing consent under the special forestry test was granted to Pan Pac Forest Products Limited.
A standing consent allows trusted investors to report to the OIO after settling transactions to acquire forestry assets. The OIO then undertakes due diligence on the transactions and, if it is in breach of the Act, the OIO can require the land to be disposed of.
Standing consents are available under the special forestry test. They are only granted to investors who demonstrate a strong track record of complying with New Zealand’s overseas investment laws.
The OIO vets the investor’s character, business experience, and processes for complying with restrictions on land area and type, and transaction limits.
Another of the consents approved in September was for a forestry joint venture between Rayonier’s Matariki Forests and Hawke’s Bay’s Maungaharuru-TangitÅ«.