WHAKATANE MILL PROJECT

Evening Star, Issue 22447, 18 September 1936, Page 5

WHAKATANE MILL PROJECT

GOVERNMENT ATTITUDE REGISTERED DELAY SUGGESTED FORESTRY UTILISATION INQUIRY PENDING [Pek United Press Association.] WELLINGTON, September 17. “I desire, on behalf of the Government, to make a statement settirffe out .clearly its attitude towards the proposition which the company which has promoted the Whakatane Paper Mills Limited Water Supply Empowering JBill, now before the Council, has in .view,” said the Leader of the Legislative Council (the Hon. M. Eagan), jn the Council to-day. “At the outset,” Mr Eagan said, f‘ I would like to point out that the Company is entirely free to begin its operations without the consent of Parliament and regardless of the question iWhether 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 from the Whakatane River for >t« 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 Departments of Lands and Survey and Internal Affairs, etc. “ When this committee reported hack, however,” Mr Eagan continued, 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. Tn 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 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 afforestation 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 with the prospects of this particular company. “ The Government, likewise, is far from satisfied on the same matter,” Mr Eagan said, “ so much so that it would prefer that further operations he 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 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,” Mr Fagan continued. “To a great extent this is correct, but the charge has 'also been made that both the previous Government and this Government, together with the Government departments, have singled out the Whakatane Paper Mills Ltd. for obstructive treatment. Such is entirely contrary to fact. Neither this no r 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 intention of the Government to place any obstacles in the way of industrial enterprise. Rather is it 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 the shareholders’ rights and moneys. “ The question now arises,” said Mr Fagan, “ 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 shareholder and directors will agree quite voluntarily to suspend operations until they have the benefits of a national iiyeiligation to guide their future activities GOVERNMENT PROVISOS. “ The Government proposes, however. to leave this entirely in the hands .of tne 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 company’s activities and proposals thought to be removed from economic and technical possibilities that it emphasises the following points:— (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 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 the enabling legislation or in granting licenses, etc., can be construed ns implying Government approval of its activities and proposals. (o) 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 give effect to this. (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 ran be profitably operated. (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’s exotic forests, realising that these have been established primarily for the supply of saw timber, that the demand for saw logs 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. FORESTRY INVESTIGATION.. tl With these views on record, ” Mr Fagan preceded, “ the shareholders

will embark on any developments with a full knowledge of the Government’s views on the matter. AVhakatane 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 the 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 the rate of growth, etc., and as to what extent local conditions will allow the establishment of a successful pulp and paper industry. “In conclusion,” Mr Fagan added, “ I desire to emphasise that the Royal Commission on company promotion presided over by Mr J. S. Barton, S.M., investigated only the financial methods of forestry companies. The subsequent Bondholders Incorporation Act was confined likewise to the provision of financial ami 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 time.