Bill passed to amend treatment of overseas investment in production forestry
On 11 August 2022, the Overseas Investment (Forestry) Amendment Bill passed its third reading in Parliament.
The Bill strengthens the rules relating to overseas investment that result in the conversion of land to production forestry.
The key change made by the Bill is to remove forestry conversions from the Overseas Investment Act 2005’s ‘special forestry test’, and to instead apply the ‘benefit to New Zealand’ test to these investments. This is to ensure that forestry conversions by overseas investors continue to bring broad benefits to New Zealand. The Bill also made several minor changes and technical clarifications to improve the Act’s existing forestry provisions.
You can read the Bill, as well as the submissions and advice received by the Finance and Expenditure Select Committee, on the Parliament website Overseas Investment (Forestry) Amendment Bill.
At the time the Bill was introduced into Parliament, the Treasury released a factsheet and frequently asked questions to support understanding of the Bill: Factsheet: Changes to how overseas investment in forestry conversions are treated.
Toitū Te Whenua Land Information New Zealand, which administers New Zealand’s overseas investment regime, is also progressing minor and technical operational improvements to the Act’s forestry provisions. This includes working to publish additional guidance on its website to clarify a range of matters relating to the Act’s forestry provisions.
In 2018, the Overseas Investment Amendment Act changed the way overseas investments in forestry are screened under the Act. In recognition of the importance of inward investment to forestry, and in support of the Government’s broader forestry priorities, the changes sought to: facilitate overseas investment in forestry, by streamlining consent pathways for investments, and improve the coherence of the screening regime by ensuring all types of investments in forestry are screened.
The Amendment Act also required a review of the operation and effectiveness of these changes to be initiated within two years of their taking effect.
Work on this review began in 2020 and Cabinet agreed to a Terms of Reference for the Overseas Investment Act Forestry Review in 2021.
Cabinet agreed to an amended Terms of Reference for the Overseas Investment Act 2005: Forestry Review in February 2022. The Associate Minister of Finance Hon David Parker announced a change in focus for the Forestry Review on 24 February 2022 to specifically focus on legislative change to:
- remove forestry conversions from the special forestry test under the Act, and
- improve the operation and effectiveness of the Act’s forestry provisions.
The Treasury has progressively been publicly releasing documents, such as Cabinet papers and advice relating to the Overseas Investment (Forestry) Amendment Bill. These documents can be found here: