This indicator provides information on the extent to which communities are dependent on forests for their wellbeing, livelihoods, subsistence, quality of life or cultural identity and are able to respond and adapt to social and economic change.
The forestry sector contributes at many levels to the economic and social wellbeing of towns and communities throughout New Zealand. The sector has been described as one of the drivers of regional economic activity, because the industry generates significant downstream employment in transportation, retailing and public administration (principally education and health).
One of the characteristics of the forestry sector is the dispersed nature of employment opportunities. Every district in New Zealand (apart from the Chatham Islands) has positions in forestry, logging or downstream wood product manufacturing and processing. This employment is important for attracting families to communities (particularly younger families), and ensuring that local services and community organisations continue to be well supported. The forestry sector also brings to communities critical skills in management and administration. Management skills are important in smaller communities to guide decision making and foster local leadership.
Forestry and timber processing are normally one of several primary sector activities undertaken in rural communities. Forestry normally sits alongside pastoral production and other primary sector industries, including viticulture, cropping, fishing and mining. This diversity in economic activity provides communities with a more even (and secure) growth trajectory.
The communities with a heavy reliance on forestry and timber processing generally fall into one of three categories:
New Zealand’s indigenous forests historically provided Māori with a range of basic needs. Forests were a source of food, medicinal herbs and materials for handicrafts and weaving. Communities also harvested selected trees for settlement construction and canoes (waka). Customary practices evolved over the centuries to ensure that forest resources were maintained for future generations and not over-utilised.
With European settlement, and the introduction of commercial farming and horticulture, Māori reliance on forests for their subsistence needs diminished. Small quantities of food and medicinal herbs continue to be collected by individuals and families. The hunting of feral deer, goats and pigs by individuals and families remains a social and recreational activity for a section of the Māori population. Hunting and commercial trapping provides a livelihood for a small proportion of the Māori and European population. In recent years, there has been growing commercial interest in a number of the herbs and remedies that were traditionally sourced from New Zealand’s natural forests (see Indicator 2.e).
Māori participation in commercial forestry is significant, through employment, training and land ownership. In a 2012 assessment, the Forest Industries Training and Education Council estimated that 32 percent of the forestry and wood processing labour force was Māori, compared with an average of 12.2 percent across all industries. A similar percentage of Māori were involved in training for forest management, harvesting and timber processing.
The forestry sector has provided an important source of employment for Māori over the past two-to-three generations. The sector has helped to maintain economic activity in rural centres and provided a platform for new Māori enterprises, from silviculture contracting through to harvesting and transport operations.
The availability of forestry employment has also enabled Māori to maintain their association with the land. Māori are playing an increasingly important role in both the ownership of forest land and the management of the forest estate.
In a November 2000 survey, the then Ministry of Agriculture and Forestry estimated that 238 000 hectares of Māori-owned land was in planted forests, but only 10 percent of this estate was directly managed by Māori. Most of these plantings had been developed through lease agreements (with the Crown or private forestry companies) and were being managed by external parties. This situation has been steadily changing, with Māori incorporations and trusts assuming direct responsibility and management as leases expire. This reflects the growing aspirations of Māori owners to more directly manage their assets.
The settlement of historical Treaty of Waitangi claims is continuing to increase Māori involvement in commercial forestry. In total, there are currently around 420,000 hectares of plantation forests on Māori land. By the end of the Treaty claims process this may increase to around 680,000 hectares, or 40 percent of the country’s planted forests.
The number of communities with a moderate-to-high reliance on forestry, logging and timber processing is relatively small. In the February 2013 year, 17 400 people were engaged in forestry and first-stage timber processing. When wood product manufacturing and paperboard production are included, this figure rises to 26 700 people. Nationally, this represents less than 1.4 percent of enterprise employment.
The regional distribution of forestry and timber processing employment is largely aligned to the location of the resource. The Bay of Plenty, Gisborne, Northland, Tasman and Waikato regions all have forestry employment levels 1.5 to 4 times the national average (from 2.3 percent to 6.4 percent of the employee count). The Auckland region has an employment level half the national average (0.7 percent of workers), but in absolute terms it is one of the higher employment areas, particularly in wood and paper product manufacturing.
The level of community reliance upon forestry can be seen by looking at the Bay of Plenty region, in the central North Island. While the region employs around a third of the national workforce for forestry and first- stage timber processing, the industry makes up just 4.1 percent of paid employees in the region. A breakdown of the region, by area unit, reveals that 98 of the 129 area units (76 percent) had less than 5 percent of their employee count in forestry and timber processing. Only nine of the 129 area units had more than 15 percent of employees in these categories, and just three units had over 33 percent. The area units with the highest rates of forestry employment were those with service communities established during the 1950s and 1960s to meet the labour needs of the maturing exotic forests in the central North Island (along with their associated processing facilities).
New Zealand’s forestry communities have faced several economic challenges over the past generation, which they have weathered with varying degrees of success. The main developments in this period have been:
The phasing out of indigenous logging from the Crown estate, and the requirement for private landowners
to harvest on a sustainable basis, has seen the indigenous harvest progressively decline, from just over 1 million cubic metres of roundwood in 1970 to 15 000 cubic metres in the March 2013 year. The decline in indigenous log supplies led to extensive restructuring in this part of industry, from the 1970s through until the turn of the century.
In areas where mills were in close proximity to maturing plantations, there were opportunities to upgrade facilities to process radiata pine. Investors have tended to prefer mill conversions over the development of “greenfield” facilities, as the sites are already designated for industrial activity. This can save considerable time and expense in obtaining planning consents. The move to exotic timber processing has helped to safeguard jobs and, in certain cases, been the springboard for expansion, particularly in the area of further processing.
Where mills have not been able to move into exotic processing or secure sufficient supplies of indigenous timber from sustainably managed blocks, there have been redundancies and mill closures. The response of these communities to plant closures, or to the downsizing of operations, has not been uniform, but there have been several common themes.
The communities, supported by their district councils, have normally undertaken scoping projects to identify alternative employment opportunities for their communities. New enterprises have generally focused on using the historical values of the community and developing tourism activities associated with the natural environment. Communities are also exploring using their forested areas for non-timber products, such as honey production, game trophy hunting and wilderness tours. The adjustment communities go through after the closure of a mill can be difficult for individuals and families. The skills of silviculture and processing workers are not necessarily compatible with the new initiatives being developed. Consequently, younger workers have frequently migrated in search of new positions, while older employees have taken early retirement or accepted lesser-skilled positions.
For the wider community, the loss of forestry revenue (through wages and service purchasing) has normally led to a period of economic uncertainty. This persists while new ventures are explored and developed. In the case of tourism bush walks, the planning and development of a track and supporting facilities can take several years.
Another economic challenge for these communities was the corporatisation of the Government’s plantation estate, which represented 49 percent of all exotic plantings in 1990. In 1984, these holdings were placed on a purely commercial footing, and in 1987, were formed into a corporate entity. This led to many redundancies, with a number of district offices closing, the contracting out of services and key management functions being centralised. The subsequent sale of the Crown’s forestry cutting rights to private investors led to a further rationalisation of management functions.
At a community level, the loss of forestry staff (particularly specialised and highly skilled workers) impacted on leadership roles within these towns and districts. Forestry staff had provided important skill sets for a range of community organisations (for example, accounting and secretarial knowledge). The loss of these skills affected the social and cultural life of these communities (particularly at a sporting and volunteer service level).
In this same period, rural communities were experiencing a loss of services through government corporatisation and private businesses rationalising their business networks (including postal outlets, bank branches and stock and station stores). These developments had significant economic and social ramifications for communities with a heavy reliance on forestry employment. As the forestry and service sector workforce was scaled back, the spending power in these communities declined. Falling disposable incomes had a direct flow-on effect for retail and commercial activity.
The heavy dependence of the forestry and timber processing industries on the international market has created an underlying pressure to improve productivity and performance, to maintain the competitiveness of the New Zealand industry against other Pacific Rim countries. Fluctuations in the New Zealand exchange rate, and periods of low commodity prices for logs, sawn timber and other forestry products, have added to the pressure.
The drive for improved productivity can be seen in both processing and forest management. In the sawmilling sector, larger operators have been steadily moving to higher productivity (and capacity) systems, with scanner optimisation, bin sorters and mechanised stacking processes. The drive for improved efficiency has been seen particularly in the pulp manufacturing industry. The major plants have seen successive rounds of investment over the past 30 years, to achieve production and productivity gains, while lowering unit costs of production. At the harvesting level, improvements in felling and extraction systems have progressively improved the productivity of workers, with a consequential reduction in the labour inputs required.
Managerial restructuring has also been seen, with plantation companies merging districts and centralising marketing, harvest planning and technical functions.
These improvements in productivity are maintaining the competiveness of the industry, but they have generally been reducing the labour requirements for forestry and processing operations. This has affected the immediate communities that service these operations. The communities experience a progressive loss of forestry employment over a number of years or decades. This has been seen in communities such as Kawerau, Tokoroa and Murupara in the central North Island.
This employment trend has been moderated in districts with increasing harvest volumes and where processing companies have added additional capacity or manufacturing activities. As discussed previously, several affected communities (supported by their district councils) have undertaken initiatives to strengthen and diversify their local economies. The initiatives in the central North Island have focused on adding value to timber by further processing or encouraging activities that support the forestry sector.
New Zealand’s forestry and timber processing communities have seen significant change over the past 25 years, with the:
These challenges have seen downward pressure on local employment activity and the loss of key personnel from businesses and districts. Communities have responded by identifying new employment opportunities (often associated with the natural environment, such as tourist tracks) or by putting in place infrastructure to attract new forms of industry. The adjustment process can be a difficult path for communities, with the loss of population and services. Successfully attracting new industry normally involves the community working closely with local and central government agencies.