Northland and national forestry leaders have welcomed a government move to make foreign forestry investors commit to processing more wood in New Zealand.

Forestry Minister Shane Jones made the announcement at a meeting of forestry industry leaders in Whangarei yesterday.

Mr Jones said the move was all about creating more jobs and ensuring there was more value added to the country's wood-processing sector. It would also go some way to helping the Government's commitment to plant one billion trees in conjunction with private industry.

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He said overseas investment in forestry that brings genuine benefits to New Zealand's economy and its environment will be welcomed.

The inclusion of a Forestry Directive in the new Ministerial Directive Letter issued to the Overseas Investment Office (OIO), sets out the Government's policy approach to overseas investment in sensitive New Zealand assets.

"The inclusion of a specific directive for forestry recognises the importance of forestry to the New Zealand economy and regional communities.

"As part of the coalition agreement, this Government has committed to an ambitious tree-planting programme that will require a partnership between the Crown and the sector itself. High-quality overseas investment can certainly help us achieve this goal,'' Mr Jones said.

"Forestry, and the processing of forest products, are significant sources of employment in our regions and we want to build on that to get more people into a sustainable workforce.

"We want to encourage value-added wood processing to generate jobs and other benefits for our regions. This directs the OIO to place high importance on increased processing of primary products and the advancement of the Government's policies when assessing applications for consent.''

The minister said about 70 per cent of the Northland's and the country's forestry interests are owned by overseas companies and he has had enough of raw logs being ''scooped up and sent overseas, with no value added to the New Zealand economy''.

Tai Tokerau Maori Forestry Collective leader Pita Tipene said the plans would help to create jobs in Northland, both in planting more trees and in wood processing.


The collective owned about 60,000ha of forestry and Mr Tipene said Ngati Hine, which owned about 5500ha of land, had just submitted a proposal to the Government aimed at getting help to plant about 4000ha in forestry to be harvested and the rest in manuka to set up a manuka honey industry.

''We want to get the trees into the ground as soon as possible. But it will take 30 years to get a return on forestry so we want to get the manuka in so we can start making honey and benefiting our people,'' he said.

Wood Processors and Manufacturers Association chairman Brian Stanley also welcomed the plans, saying this was an exciting time for forestry and wood-processing industries.

''We need foreign investment in forestry and wood processing, but before they make big investments - and a large timber or pulp mill could costs hundreds of millions of dollars - they want to know there's security of supply in terms of timber available,'' he said.

''These [plans] will give that certainty and should lead to far more wood-processing opportunities in New Zealand.

"Both [government plans] should create more jobs in the sectors.''

Also yesterday the Government said overseas investment in rural land blocks larger than 5ha will come under increased scrutiny in a new directive to the OIO.

The directive comes after Associate Finance Minister David Parker said existing criteria was creating uncertainty with discretions in all directions.

From December 15 the existing directive, generally applying to sheep and beef farms over 7146ha or dairy farms more than 1987ha, will be replaced.

Mr Parker said the existing "large farm rule" was too loose and mostly only applied to properties 10 times New Zealand's average farm size.