THE VISION REMAINS INTACT

Following the sale of both the Aupōuri forest and the Kaitāia-based NPL mill in 1990 to Juken New Zealand (JNL), the members of the Northern Federation of Māori Authorities (NORFED) negotiated individual lease reviews with JNL for each of their forests.

By the mid-1990s, NORFED had effectively gone into recess, but the vision remained intact.  In the intervening years, the Aupōuri forest has changed ownership at least once more, and the original mill, built in the 1980s, has been expanded to include other mills which produce other wood panel products besides triboard.

There were a number of factors that influenced the building of those mills in Kaitāia.  The support of local and central government regulators helped, as did the town’s proximity to the neighbouring Aupōuri forest with its nursery and forest school, both since closed. However, in my opinion, these were all secondary to the relationship and agreement between Keith Hunt and the NORFED forest owners.  

Whether you love, hate or are completely indifferent to the original mill, it was built on the shared vision of NORFED and NPL leaders. 

Similarly, in the 1960s and 70s, the Aupōuri forest had been planted on the shared vision of local Iwi and New Zealand Forest Service (NZFS) leaders. But, while Dr Barry Rigby’s 1999 report, A History of the Aupouri State Forest, fully covers the establishment of the Aupōuri forest, there isn’t a similar record about the NORFED forests and the NPL mill; what little there is mentions Keith Hunt only in passing, and NORFED’s leaders not at all.  That is why, in recent weeks, I have serialised this brief history about them.  It is nowhere near complete, but it is a start.

As Pētia Welsh predicted in the 1970s, forestry has become an economic mainstay in the region, and the power players are those who operate across the whole value chain of the industry.  Central to their success are the JNL mills, the 21,283 ha Aupōuri forest and the 12,000 has of forests planted on lands owned by the founding members of NORFED. 

Today’s entrepreneurs may disagree with NORFED’S focus on the monoculture of radiata pine; hei aha (whatever).  Theirs was a wide vision, but it was forged during a time when narrow monoculturalism was the norm across all aspects of society and so their focus, by necessity, was also narrowed.   

Observing the steam issuing daily from the mills and the hundreds of workers and tonnes of logs passing through their gates, I am grateful that today’s entrepreneurs can have a wider vision and focus and are further across the entire value chain of their chosen industries than NORFED was able to get in forestry.

But most of all, I’m grateful to those entrepreneurs who preceded them, including Pētia (Bill) Welsh, Andrew Rollo, John Brown, Matiu Rata, Amy Tatana, Bully Kendall, Gloria Herbert ara ngā mate katoa o NORFED me ta rātou hoa mahi, Keith Hunt.  The vision remains intact.

THE NORTHERN PULP MILL SALE

After the Aupōuri forest was sold in 1990 to Juken New Zealand (JNL), the NORFED forest owners strove to preserve our original vision to be part of the entire value chain, from owning the land in which the trees grew, through to milling, finishing and marketing the timber and other end products.   

Having failed to purchase the Aupōuri forest ourselves, we then considered purchasing the Northern Pulp Ltd (NPL) mill, which had by then moved into full blown receivership and was on the market.  However, after exhausting every avenue, we could not leverage the necessary money to complete the purchase. So, we decided to meet with JNL which was shaping up to be the likely buyer. 

On the night before our first meeting with JNL, Pētia Welsh, the architect of NORFED, called me and my mother to visit him at Kaitāia hospital.  Clearly unwell, he steadily instructed us for hours on what we were to say and do, and specifically told us that no matter what happened with him, we were not to cancel the meeting. 

The primary goal, he emphasised, was to get JNL to use its clout as forest and mill owner in ways that supported our own vision.  If that was not possible, then our fall-back position was to do whatever it took to minimise the impact of the impending changes on our people.  We left around midnight and awoke to the news that in the early hours of the morning, Pētia had passed away.

Although grieving, we honoured his instructions and held the meeting.  Did we succeed in our primary goal?  No.  Did we succeed in our fall-back position?  Partly. 

With regard to the forest, the huge impact had already occurred in 1988 with corporatisation of Aupōuri forest and the catastrophic loss of more than 130 jobs; so, its privatisation in 1990 had not introduced any further significant change, other than ownership. 

However, with regard to the mill, because only the NPL assets (including our leases) and none of its liabilities would transfer to the new JNL owners, we were to lose the opportunity to take up the 15% shareholding in the mill that had been reserved for us, a major body blow to our vision.

That said, Toshio Nakamoto (JNL President) and his 2IC Tommy (Tomio) Inagaki agreed at the meeting to renegotiate aspects of our leases, like changing the management regimes of parts of our forests from low value pulpwood to higher value pruned logs for export to their Japanese markets. 

Most importantly, they would not only keep the mill open, thus avoiding further job losses for our people, they also planned to expand it. On that basis, we gave our support for their bid.

Within a few weeks of our meeting, and with the support of central and local government leaders, JNL received Overseas Investment Commission consent to purchase the mill for $17.7million. 

Next week I will conclude this brief history of NORFED and the JNL mills in Kaitāia.

THE AUPOURI FOREST SALE

The fates of both the NPL/JNL mill in Kaitāia and the Aupōuri forest have always and inevitably been intertwined. In fact, one without the other would drastically diminish the value of both. Also, without a doubt, the loss of either or both of them would be catastrophic for the region’s economy.

That is the case now, and it was the case in 1990 when the Aupōuri forest was put up for sale at the same time that the NPL mill went into statutory management.

For the NORFED forest owners, at stake were not only our lease arrangements with NPL and our 15% share option in the mill, so too was our vision to be part of the entire value chain, from owning the land in which the trees grew, through to milling, finishing and marketing the timber and other end products.  Additionally, the sale of the Aupōuri forest logging operations would have a huge gravitational impact on us, because wherever Aupōuri forest went, so would our forests. 

That is why we strongly resisted the sales of both the mill and the forest.   Initially, we thought we had allies in the New Zealand Māori Council (NZMC) and Federation of Māori Authorities  (FOMA) who were jointly prosecuting the “lands case".  However, the outcomes of that case, while important and wonderful in many ways, ultimately undermined our opposition to the sales, and it became clear that they were going to go ahead regardless.

At that point, we reasoned that if we owned the Aupōuri forest, we would have more chance of saving the mill and all it meant to us. So, between us, the seven NORFED member organisations came up with the $100,000 deposit needed to make a bid of $1million for the Aupōuri forest. 

On the final day, Matiu Rata (as Chair of Muriwhenua Incorporation) and I (as Secretary of Parengarenga B3 Trust) were sent to Wellington by NORFED to file our tender. We arrived at the Forest Corp HQ in time for a cordial cup of tea and chat, before ceremoniously placing our cheque and documents into the slot of the tender box just a few minutes before the 4pm deadline.  Then we were respectfully ushered out to the lifts.

In my heart of hearts, I knew that we had just been given a polite version of the bum’s rush. However, Matiu (God bless his optimistic heart) was positive that we had succeeded.  I so wanted to believe he was right. I wish he had been right. 

On 14^th January 1991, the Aupōuri Crown Forestry License was formally executed between the Crown and Juken Nissho (JNL) who had won the tender and purchased the Aupōuri Forest for $37.7million. 

Having lost the bid to secure the Aupōuri forest, NORFED next turned our attention to the pending NPL mill sale with one question in mind – how could we still fulfil our vision?

More on that next week.

THE VISION UNFOLDS

In 1975, partly to fulfil the vision he shared with the Northern Federation of Māori Trusts & Incorporations [NORFED], Keith Hunt established Northern Pulp Ltd [NPL] which then supported a huge planting programme on NORFED lands stretching from Te Hapua in the north to Mitimiti in the south.  This was followed in the mid-1980s with the building of the NPL Triboard mill at the northern end of Kaitāia; by 1987 it was in production.  

In that same year, Pētia Welsh, the architect of NORFED, asked my employers [Parengarenga Incorporation] to let me work with him, which they did. 

The first thing that Pētia made clear to me was that, because the NORFED forests were not yet ready for production, the JNL mill was totally dependent on timber from the Aupōuri State forest, which was then being run by the Forest Service.  The fates of the mill, the Aupōuri forest and the NORFED forests, he explained, were intrinsically linked.

He also explained that, while the plans of NORFED and NPL had unfolded well with the planting of our forests and the commissioning of the mill, we were seeing the end of what he called the “post-war era of prosperity”, and hard times lay ahead for us all.  I had no idea what he meant but was soon to find out.

Characterised by government spending to stimulate and maintain economic growth, strong union protection of workers’ rights, and artificially low costs of living, the post-war era had survived the 1960s’ counter-culture and the 1970s oil shocks.  But it was now being hit by an economic neoliberalism in which the market had become God, and the ‘trickle-down’ theory held sway. 

What had started in Britain with Thatcherism, emerged in New Zealand as Rogernomics, named after then Minister of Finance, Roger Douglas.  Under Pētia’s tutelage, I learned and understood that, while the policies of Rogernomics were staged, their impact was immediate.

The first stage was corporatisation in which state industries were broken up and replaced by commercial Corporates and non-commercial Departments.  In 1987, the Forest Service was replaced by the Department of Conservation which took over management of native forests, and Forest Corp which took over the exotic forest commercial logging operations.  Overnight, more than 130 local households lost their main source of income.

The second stage was privatisation.  In 1990, all of Forest Corp’s logging operations and some of the lands were sold or leased as Crown Forest licences to private companies.  That included the Aupouri forest which was sold in December 1990 to a Japanese company, now known as Juken New Zealand Ltd (JNL).

At the same time that the government was preparing to privatise its logging operations, news broke that the entire Equiticorp Group, including the NPL mill, had been placed into statutory management.  By 1991, the mill had also been sold to JNL and the NORFED vision was unravelling.

Next week I will write more about NORFED’s response to the forest and mill sales.

HOW AND WHY THE JNL MILLS CAME TO BE IN KAITAIA

Every day, hundreds of workers clock in and out of the JNL mills here in Kaitāia as they operate around the clock.  Have you ever wondered how and why those mills came to be here?  Pull up a chair and let me tell you what I know.

In 1970, Petia (Bill) Welsh of Tao Maui (Te Rarawa) and Te Uri o Tai (Rarawa / Aupouri) hapū retired from a long career in the forestry industry.

He had started before World War II as a trainee saw doctor at Kaitāia Timber Mill working under the management of Garth Beatson and others. Forty years later, he completed his career as a senior manager and the Pacific troubleshooter for Fletchers International.

When he retired, Petia came home with a simple clear message which he shared with Māori land owners mai Te Rerenga Wairua ki Hokianga Hakapau Karakia – i.e. If not THE economic mainstay of Te Hiku o Te Ika in the future, forestry is going to be a major player, and there is money to be made by Māori from it – BUT NOT IN SIMPLY LEASING LAND IN EXHANGE FOR AN ANNUAL PEPPERCORN RENTAL AND A LOW STUMPAGE AT THE END OF THE LEASE.

INSTEAD, he said, THE REAL REVENUE IS TO BE FOUND IN BEING PART OF THE VALUE CHAIN, RIGHT FROM OWNING THE LAND IN WHICH THE TREES GROW, THROUGH TO MILLING, FINISHING AND SELLING THE TIMBER AND OTHER END PRODUCTS THAT COME FROM THE TREES.

To that end, Petia convinced the Trustees and owners of six of the largest Māori landholdings in Te Hiku o Te Ika to set up the Northland Federation of Māori Land Trusts and Incorporations [NORFED for short].

The original members were Te Puna Toopu o Hokianga Trust in Mitimiti, Panguru-Motuti Forest Trust, Tapuwae Incorporation, Epikauri Forest Trust at Herekino, Parengarenga B3 Trust in Te Kao, and Te Hapua 42 Incorporation (later to become Muriwhenua Incorporation).

These NORFED members then agreed to advertise their combined land holdings as being open for tender to those who met the following conditions:

• A fair annual rental for use of the lands, to be divided on a pro rata basis amongst the land owners.
• A commitment to build a manufacturing plant in the region capable of producing a range of wood products from the timber grown on NORFED members’ lands.
• A commitment to reserve a 15% shareholding in the plant for NORFED members to take up within a set period.
• A commitment to train and employ a local workforce from amongst NORFED’s people.

It was a bold and visionary plan, and when the tender process was completed, NORFED had found an equally bold and visionary partner in the shape of Keith Hunt and the recently invented product, Triboard.

Next week I will share how the vision unfolded.