Forwood's sentencing: Who ultimately pays for forestry offending?

Forwood Forest Management Limited admitted it allowed multiple machines in the Mangaoai Stream during harvesting — a breach of a resource consent issued in 2019, which only permitted one machine in the stream and imposed strict conditions. The tracking of the machines and the hauling of logs by the butt ends through the streambed created significant water pollution. One machine got stuck and had to be pulled out by two others. The company admitted multiple Resource Management Act breaches and was fined in Gisborne District Court. Picture supplied

Most of the $73,500 fine a forestry company has been ordered by a court to pay Gisborne District Council for environmental offending will be gobbled up by the cost of the prosecution itself - an estimated $50,000.

Forwood Forest Management Limited was sentenced last Friday for its poor practices and poor management of harvesting in Papakorokoro Forest, a 287-hectare plantation forest largely red-zoned as being on highly erodible land about 30 kilometres north of Gisborne.

The council normally gets all but 10 percent of any fine imposed in these types of cases. The lesser part goes into a Crown account.

Under the Resource Management Act (RMA), which applied until August this year, company fines can be met by their insurers. Many offending companies don’t actually shoulder the cost of their offending directly — especially not for first-time offending as Forwood’s was in this case.

That has changed with the introduction of the Natural and Built Environment Act (NBEA), which replaced the RMA.

Any offending committed while this new legislation is in force will have to be met by companies themselves. Insurers are prohibited from helping out.

Council internal partnerships and protection director James Baty said he could not comment on the insurance cover available to Forwood but said in many other cases fines for RMA offending were fully covered by insurance.

If the NBEA remains in force — the new Government has signalled it will repeal it — offending companies will face much tougher fines.

The maximum fine for a company in a prosecution under the NBEA is $10 million, which is more than 16 times higher than the current maximum penalty available under the RMA.

The starting point in the Forwood case was $105,000, which is 17 percent of the maximum penalty available under the RMA.

Mr Baty said it had cost the Council roughly $50,000 to prosecute Forwood. Notwithstanding the fact the penalties under the RMA sometimes neared prosecution costs - , it was still important for the council to pursue legal action against environmental offenders.

The stigma of a prosecution and a bad public reputation was effective in itself and there could also be ramifications for the defendant’s insurance coverage and commercial operations.

“In the absence of such prosecutions, poor harvesting practices and poor environmental compliance will likely continue or worsen in the forests in Te Tairāwhiti.”

And because the council recognised there was “a deficit between the fines imposed for this type of offending and the avoided costs of compliance”, it would be “strengthening its approach in other areas of compliance and enforcement for forestry harvesting, including setting more stringent consent conditions for forestry harvesting activities and applying for enforcement orders to require removal of slash, logs and felled trees from forests,” Mr Baty said.

Forwood pleaded guilty to 11 offences under the RMA brought by the council following an investigation of the region’s active forestry companies after environmental damage caused by forestry waste and sediment in two successive storms last March.

Forwood operations manager Matthew Strijbosch had already been warned about the company’s non-compliance with its consents and best forest practices four times during 2021 and the council’s concerns continued even after the storms.

He initially faced the same charges as Forwood but those were dropped when the company entered its guilty pleas. 

Between the two storms the company had constructed an unpermitted stream crossing in a red zone where it wasn’t allowed. It was given until March this year to remove it but the crossing was washed away in February’s Cyclone Gabrielle.

During May last year, an agent from the Forest Owners Association reported seeing as many as three machines in the Mangaoai Stream, which feeds directly into the Waiapaoa River.

The tracking of the machines was disturbing the streambed and contaminating the water quality, not only in the immediate vicinity but downstream too. Logs were being hauled by the butt ends through the watercourse.

While a resource consent issued for harvesting operations in 2019 allowed one machine to operate in the stream, it was with strict conditions and didn’t allow multiple machines.

During the council’s initial investigation of the site following the storms last year, officials also discovered roads and a skid site that were poorly constructed and were contributing to erosion and pollution in waterways.

The offending not only breached resource consents but National Environmental Standards for Plantation Forestry (NES-PF).

When sentencing Forwood, Judge David Kirkpatrick said while he appreciated the inherent complexity of the difficult activity of harvesting in Papakorokoro, “operators are required by plan rules and national environmental standards, as well as the guidelines of their own association, to exercise high levels of care and attention and must be held to account for that otherwise the benefits of the harvest will be offset, possibly to a great extent, by the damage harvesting can do to the environment”.

The resource consent scheme was not just to manage the direct effects caused by offending but also the way it could contribute to cumulative adverse effects of discharging contaminants generally.

“In this case, as with others on the East Coast, one must reflect that planting done to recover from damage caused by a significant event some 30 years ago is a potential source of damage from significant events occurring now,” the judge said.

Forwood took over the forest’s management in late 2020 and was ultimately responsible for all contracting work in the forest and ensuring compliance with regulatory requirements.