Forestry corporation looks less attractive

Press, 30 April 1982, Page 12

Forestry corporation looks less attractive

By

OLIVER RIDDELL

a in Wellington

One casualty of the report of the international consultants S. S. Colker and Associates on Air New Zealand, may be the deeply held belief of many members of the Government caucus that to be successful those government agencies which trade or run commercial activities ought to be set up as corporations.

It was this belief which was largely responsible for the transformation of the Railways Department into the Railways Corporation this year, with a board of directors as in a private company. Another prime candidate for such a transformation is the Forest Service, for which it has been suggested that the commercial operations ought to be separated from the non-commercial and given to an Exotic Forestry Corporation. A holding operation by the Forest Service, which sees such a move as a retrograde step back to the position of 60 years ago, has delayed this so far. The consultants’ report on Air New Zealand will discourage Government members who are keen to see an Exotic Forestry Corporation. Attention was first given to the structure of the Forest Service and its effectiveness to do the tasks given it following the 1978 annual report of the Auditor-General (Mr A. C. Shailes). This found that the methods of accounting used by the Forest Service were inappropriate for the scale and nature of its operations, and tended to act to frustrate commercial success.

This led the Government to set up a special caucus subcommittee, chaired by Mr I. McLean (Nat., Tarawera). His committee had a quick look at the operations of the Forest Service, influenced by the philosophical beliefs of the membership of the committee. They believed that the splitting of commercial and noncommercial operations was in-

herently desirable in any organisation, because if they ran together the commercial effectiveness of the organisation would be fudged and compromised. Their report reflected this belief; the committee wanted an Exotic Forestry Corporation established, with non-commer-cial work undertaken by the present Forest Service to be either discontinued or given over to other, more appropriate, government agencies. The then Minister of Forests (Mr V. S. Young), got the approval of his Government colleagues to set up a special committee of officials and experts to look at the question. This committee comprised people with forestry, management and commercial expertise, and was administered by the State Services Commission.

The report of . this committee took nearly two years to complete. It is now being looked at by a Government caucus committee. It does not make a single recommendation, but of the possibilities it-offers, really only one has its blessing. The present Forest Service is a mature agency today dealing with all aspects of forestry. It was originally set up only to deal in an orderly manner with the milling of native timbers and replanting with exotic timbers. Today it does much more than that.

Its maturity is based on the belief of its managers over the decades that all aspects of forestry, and not just the commercial, benefit from contact and inter-facing with each other and that the community benefits from an integrating of commercial, environmental, research, training, native and exotic timbers, wildlife, recreation and other aspects of forestry.

The report now being considered by the caucus committee represents a compromise between the two extreme viewpoints of the Mclean com-

mittee and the Forest Service. It does not recommend splitting the Forest Service and establishing an Exotic Forestry Corporation. But it does recommend a structure which would give the commercial operations more autonomy within the over-all Forest Service structure.

Until the release of the Colker report on Air New Zealand, it was expected that the caucus committee would take a recommendation to the Government caucus that was closer to the philosophy of the McLean committee than the experts committee. But caucus members are so appalled at what the Colker report has revealed about Air New Zealand that their belief in corporations has been shaken. Government caucus members are also privy to the reports which the consultants received before making their report. These (particularly the one from the Treasury) are understood to be even more critical, and in stronger language than the consultants employed. The prospects for a separate forestry trading corporation are now considerably dimmer.