WOOD PULP

Evening Post, Volume CXXII, Issue 69, 18 September 1936, Page 6

WOOD PULP

WHAKATANE VENTURE GOVERNMENT SUGGESTION AN INYESTIGATI©N The suggestion that Whakatane Paper Mills Limited should not proceed further in its plan for the manufacture of wood pulp until the Government has carried out an investigation into the utilisation of forest products was made by the' Leader of the Legislative Council (the Hon. M. Fagan) during the second reading debate on the Whakatane Paper Mills Limited Water Supply Empowering Bill yesterday. Mr. Fagan said that the Government would allow the Bill to proceed, but he pointed out that the passing of the legislation did not imply Government approval of the company's activities and proposals. "I desire on behalf of the Government to make a statement setting out: clearly its attitude towards' the proposition which the company which has promoted the Whakatane Paper Mills Limited : Water = Supply Empowering Bill now before the Council has in view," he said. "At the outset I would like to point out that the company is entirely free to'begin its operationswithout the consent of Parliament and regardless of whether or not this Bill becomes law, provided, of course, that it obtains a permit under that portion of" the Health Act relating to offensive trades.

VAt first sight the measure appears to ! be concerned solely with the granting of permission to a public company for the taking of a relatively small quantity of water from the Whakatane: River for its manufacturing purposes,, and it was on this basis that the Bill was first dealt with by the Committee of Selection in another place, which was assisted by representatives of the Departments of Lands and Survey and Internal Affairs, etc. When this Committee reported back, however, the general operations and proposals of the company were subjected to searching criticism, so much so that the Bill was referred further to the Industries and Commerce Committee. Under these circumstances it; was entirely logical that this Committee should investigate the economic and industrial features of the company's activities and proposals. Its recommendation that the Bill should not be allowed to proceed, coupled with the suggestion that a national investigation should be carried out immediately into the physical condition of the q whole of the forests owned by the forestation companies and into the economic possibilities of their utilisation, is an indication that the Committee was not satisfied either with the general possibilities of pulp and paper' manufacture in New Zealand at the present' time or of the prospects of this particular company.

"FAR FROM SATISFIED." "The.Government likewise is far from, satisfied on the same matter, so much so that it would prefer that further operations be stayed until the. Government's investigations into the utilisation of forest products have been completed. The Government desires to stress that the national investigation will be of an entirely constructive character aimed at procuring the best available foresters and sawmill and pulp and paper industrialists to examine the forests and to make specific recommendations both for their man* agement arid the economic utilisation of their grown products. "It has been claimed that Parliament cannot undertake the duty of sitting in judgment upon all company proposals. To a great extent this is correct, but the charge has also been made that both the previous Government and this Government, together with Government departments, have singled out Whakatane Paper Mills Limited for obstructive . treatment. Such is; entirely contrary to fact; Neither this nor any other company has been singled out for aggressive attack, but when a company commences negotiations with the Government and makes proposals which impinge upon the public interest, it becomes the business of the Government and its Departments of State to interest themselves in its activities. . "It is not the desire or the-inten-tion of,the: Government to place any obstacle" in thel way of industrial enterprise; rather it is anxious to assist and encourage such enterprise, but it must be on sound lines, and every action taken or contemplated has been solely for' the purpose: of conserving j "shareholders' rights and moneys. EXTENT OF INTERFERENCE.

"The question now arises as to whether or not the Government should further interfere in this matter.- It has "already drawn attention and does so again to. the very serious doubts which "exist in.the minds of those best qualified to Judge as to the general activities and proposals of the company. Such a view is not arrived at lightly, "and' it is * hoped therefore that the shareholders and directors will agree quite voluntarily to suspend operations until they have the benefits of the national investigation to guide their future activities. The Government proposes, however, to leave this entirely in the hands of the shareholders" and directors, .'and. to allow, the Bill, to proceed, but in'doing this wishes it to be clearly understood that so far are the activities and proposals thought to be from economic .and technical possibilities that it emphasises the following:— (a) That the company must realise that the passing of the legislation does not imply Government approval of their activities and proposals.

.(b). That, pending the results, of fee national investigation, the company Should refrain from asking its own shareholders or the investing public for further capital, but in the event of so doing it should include in all such requests in the form either of letters, sales literature, or prospectuses a notice stating that no action of the Government either in passing enabling, legislation or in granting licences; etc., can be; construed as r implying Government approval of its activities and proposals, (c) That the company must dispose of its effluent to the satisfaction of the Health Department, and avoid any atmospheric pollution. In this connection it is understood that the company has already agreed to this effect.

(d) That the cdmpany cannot expect financial assistance from the Government in the form of tariff protection, etc., claiming as it does that no protection is required and that the industry can be profitably operated; and j (e) That, seeing that it claims to have adequate supplies of pulpwood in its own forests, it cannot rely in any way upon pulpwood supplies from the State exotic forests, realising that these have been established primarily for the supply of saw timber, and that the demand for sawlogs will take precedence over that for pulpwood, and that in no event will pulpwood be sold except at prices remunerative to the State and by public competition. NO OPPOSITION.

"With these views on record, shareholders will embark on any developments with a lull knowledge of the

Government's views on the matter. The Whakatane Paper Mills Ltd. will receive no opposition from any State Department, but the Government is concerned about the physical state of the exotic forests of all companies, and it regards it as a duty to investigate their position from a utilisation point of view. It requires to have definite information both as to rate of growth, etc., and as to what extent local conditions will allow the establishment of a successful pulp and paper industry. "In conclusion, I desire to emphasise that the Royal Commission on Company Promotion presided over by Mr. J. S. Barton investigated only the financial methods oi forestry companies. The subsequent Bondholders' Incorporation Act was confined likewise to the provision of financial and legal machinery for reorganising the companies, in the ultimate analysis, however, the financial stability of the companies is directly dependent upon the state of their forests, their management, and their utilisation, and it is this basic consideration which leads the Government to believe that a national investigation along these lines is of fundamental importance." The Bill was read a second time and referred to a Select Committee.