Recent CNI Forestry Agreement Highlights Value Of Forestry Assets

In a recent settlement with Central North Island (CNI) Iwi, the Government transferred $195.7 million worth of Crown forest land to the CNI Iwi Collective.  In addition, the Collective will receive the rentals that have accumulated on the land since 1989, which are worth approximately $223 million, and an annual income stream of about $13 million.

Crown exotic forest land is often seen as one of the most valuable items included in a settlement, because of the value of the accumulated rentals and potential income from the land. For this reason, it is worthwhile for groups who are considering settling their Treaty of Waitangi claims to take a look at the Crown forest land in their rohe and how it may be used in a future settlement.

Crown exotic forest land forms part of the commercial category of settlement redress, reflecting the arrangements between the Crown and Maori in the Crown Forest Assets Act 1989 (CFAA).  Under the CFAA, the Crown can transfer the trees and the right to use the land to cut them to third parties, who receive Crown forest licences.  The Crown retains ownership of the land.

Claimant groups may use the financial redress amount in a settlement to purchase forest lands.  If the Crown and claimant groups agree that licensed Crown forest land will form part of the settlement redress, the following points apply:

• The Crown own the land not the trees, so only the land is available for use in settlement.
• Land is transferred subject to existing Crown forestry licences, and the claimant group becomes the licensor instead of the Crown.
• On settlement, the Crown issues termination notices to the licence holder(s).  The termination period will be a maximum of 35 years.
• As the last crop of trees is harvested on each area, the licence on that block terminates.  This enables the claimant group owners to use the land as it becomes available.
• The claimant group can receive the accumulated rentals held by the Crown Forestry Rental Trust.  This is in addition to the amount of financial redress under the settlement package.
• After transfer, the claimant group receives the future rentals from the licensee until the licence is extinguished when the last crop is harvested.

Other matters to be considered on settlement are whether any easements (such as rights of way) are required to allow public access to the land.  Where licensed Crown forest land is transferred and may contain sites of importance to other claimant groups, settlement legislation can provide for access to sites that are registered as wahi tapu with the NZ Historic Places Trust.

If you would like to find out more about current forest rentals held in trust in your district, you can view the Forest Rental Proceeds section of the Crown Forestry Rental Trust’s Report to Appointers online at http://www.cfrt.org.nz/doclibrary/public/thestorehouse/rta2005-2006/RentalProceeds0506.pdf/