WELLINGTON, March 7 (Reuters) - New Zealand said on Wednesday it would expand investment restrictions in the country’s lucrative forestry sector that would require foreign investors to gain regulatory approval before receiving the rights to harvest trees.
Associate Finance Minister David Parker said in an emailed statement that investors seeking harvesting rights in forestry - the country’s third largest export-earner - would have to be screened by the Overseas Investment Office and that a new “streamlined approval path” would be set up to accommodate them.
Parker said the changes would need to be made before the Comprehensive and Progressive Agreement for Trans Pacific Partnership came into force this year so that the New Zealand government did not permanently lose the rights to police forestry rights.
“Making this change now will preserve policy options for future governments in relation to forests,” Parker said.
The Labour-led coalition government, has introduced a number of restrictions on inbound investment, in line with its election promises, since taking the helm in October.
Overseas firms have invested heavily in the sector since it was opened up to private investment in the early 1990s, with analysts estimating around 70 percent of forest land is foreign owned.
In November, the government directed the OIO to subject foreign purchases of farmland and forest to additional scrutiny and in December announced plans to ban most foreign buyers of residential property.
Exports of forest products totalled around NZ$4.75 billion ($3.36 billion) in 2015, with China the top destination, according to the Forest Owners Association.
The latest rules will not apply to investors purchasing less then 1,000 hectares of forestry right a year or to forestry rights that will last for less than three years, Parker said. (Reporting by Charlotte Greenfield; Editing by Sam Holmes)