Forestry Minister Shane Jones has introduced a Bill to Parliament that he says will "force more transparency, integrity and respect" for the domestic wood-processing sector through the registration of log traders and practice standards.

The Forests (Regulation of Log Traders and Forestry Advisers) Amendment Bill had its first reading in Parliament on Thursday night, and will now go to the Environment Select Committee.

"The Covid-19 crisis showed us how an over-reliance on log exports to a small number of markets makes our forestry industry less resilient and more susceptible to global forces," Jones told the Northland Age.

"An enhanced domestic wood processing sector will play an important part of the recovery for our regional economies, helping create new export products, new jobs for Kiwis and a renewed sense of ownership of our forests.

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The New Zealand First MP said he and leader Winston Peters aimed to stop "unscrupulous traders" from stripping the north of pine trees and sending them overseas while "local sawmills were being undermined".

"Thousands of Kiwis send their husbands, sons and occasionally daughters to work in these manufacturing sites, and we're no longer going to tolerate them being undermined just so a tiny group of log traders can profit with a cellphone and a four-wheel drive."

The Forest Owners' Association, however, said the Bill raised the spectre of an "unacceptable and pointless" bureaucratic cost to the industry.

"[They seem to think that giving a certificate to someone who buys and sells logs is going to lead to more logs being processed in New Zealand and not exported," president Phil Taylor said.

"That means, for instance, that the Government appears to have no confidence in its own $5 billion spending for new housing units. We hope the government will make sure timber is used extensively for this. Labour promised a wood preference policy in the last election.

"That's how to build demand for timber. You can't make processors buy more logs without someone to sell their processed timber too. Someone with a clipboard register isn't going to work.

"Either the new law is going to be a pointless system of adding costs and inefficiencies into the timber supply pipeline, or there is some other hidden intent further down the track in regulations under the new law, which is meant to tie trees in red tape and direct timber growing, harvesting and processing. Either way, it's a disincentive for anyone to invest if it goes through. Just when we have planting picking up again, mostly driven by small-scale New Zealand investors and farmers, the government is trying to restrict it.

"If ethical behaviour is the problem, then there's plenty of contract and criminal law to deal to that. If bad advice about planting and selling is the problem, then let the government agency, Te Uru Rākau, step up and provide good advice to forest owners, not persecution."

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Taylor wondered if the government was going to target other primary industries to force more domestic processing.

"Sometimes the raw material is the best thing - look at apples and kiwifruit," he said.

"Is the government going to force the wool industry to process more than the current 5 per cent of the national clip in New Zealand carpet mills? We currently process 42 per cent of our wood harvest right here in New Zealand, more than eight times the ratio of the wool industry.

"The government obviously has fantasies of employing more processors with no market to sell to. It's been fundamentally misinformed. Let's have a proper investigation into how the system works, with plenty of good data, and how it can be properly reformed, to provide more than employment just to people who are issuing registration certificates."

"We have the capacity to provide thousands of jobs, in the forests, in transport and in construction. Jobs are vital in the Covid-19 recovery. We are keen to work with the government. This scheme is a step backwards, not forwards."