Parliament’s Work

Hawke's Bay Tribune, Volume XXVI, Issue 236, 18 September 1936, Page 9

Parliament’s Work

WHAKATANE MILLS Bill Before Legislative • Council GOVERNMENT’S STAND By Telegraph—Press Association. WELLINGTON, September 17. “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 Ltd., Water-Supply Empowering Bill now before the Council has in view. ’ ’ said the Leader of the Legislative Council, the Hon. M. Fagan, in the Legislative Council to-day. “At the outset I would like to point out that the company is entirely free to begin its operations without 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.

“At 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 front the Whakatane river for its manufacturing purposes, and it was on this basis that the Bill was first dealt with .by a committee of selection in the House of Representatives, which was assisted by representatives of the Department of Lands and Survey and Infernal Affairs. When tins committee reported back, however, the general operations and proposals of the company were subjected to searching criticism-—so much so that the Dill was referred further to the industries and Commerce Committee.

11 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 whole of the forests owned by 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. GOVERNMENT NOT SATISFIED. “The Government likewise is far from satisfied on the same matter —so much so that it would prefer that further operations should 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 forests and to make specific recommendations both for their management and for 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, Ltd., 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 intention of the Government to place any obstacle in the way of industrial enterprise; rather, it is anxious to assist and encourage such enterprise; but it must be on sound lines, and every action either taken or contemplated has been solely for the purpose of conserving shareholders ’ rights and' moneys. CONDITIONS MADE.

“The question now arises,” said Mr Fagan, “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 shareholders and directors will agree quite voluntarily to suspend operations until they have the benefits of a 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 it wishes it to be clearly understood that so far as the company’s ac tivities and proposals thought to bo removed from the 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 its activities and proposals. “(b) That, pending the results of a national investigation, the companyshould 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 the enabling legislation or in granting licences etc., can be construed as implying Go vornment approval of its activities and proposals. NO STATE ASSISTANCE. “(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 company 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 cun be profitably operated. “(e) That, seeing it claims to have adequate supplies of pulpwood in its own forests, it cannot rely in any way upon pulpwood supplies from State exotic forests, realising that these have been established primarily for tho supply of saw timber, that tho demand for sawlogs will take precedence over that for pulpwood, and that in no event will pulpwood be sold except at prices remunerath e to the State and by public competition. “With these views on record the shareholders will embark on any developments with full knowledge of the Government’s view on the matter.

“Whakatane Paper Mills, Ltd., will receive no opposition from any State department,” declared Mr Fagan, “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 the utilisation point of view. It requires to have definite information both as to the rate of growth, etc., and as to what extent local conditions will allow the establishment of a successful pulp and paper industry. INVESTIGATION IMPORTANT. “In conclusion, I desire to emphasise that the Royal Commission on Company Promotion presided over by Mr J. S. Barton investigated only the financial methode of forestry companies. Tho subsequent Bondholders Incorporation Act was confined likewise to the provision of financial and legal machinery for reorganising companies.

“In ultimate analysis, however, tho financial stability of 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 the second time.