Write Stuff

Mike Smith, address to Rotorua Writers Group, 5 November 2011

2011-11-06T20:07:00.000-08:00

Mike Smith address to Rotorua Writers Group, 5 November 2011

Hi, thanks very much for that introduction.

I am excited about meeting the writers’ group today. I am also a little nervous so I asked Marj if I could use a whiteboard so I can chuck up some headings to assist us.

The first heading is Background and I will write up the names of my companies. We have two companies:

• Business Media Services Limited
and
• Trade and Media Services Limited

I will go into some more background on the companies and why there are two of them in a moment.

First, some background about me which I hope will help to put this into some context for you.

Somebody once asked me: “What would do if you couldn’t write, Mike?”

My reply was: “If I couldn’t write, I couldn’t breathe.”

What I really wanted to say was that if I couldn’t write, I would die, but I thought that was a little too dramatic.

I guess I wanted to convey that writing is what I do, how I live and who I am.

Funnily enough, though, writing is a bit like breathing isn’t it? There is good breathing and poor breathing.

Experts tell us that shallow breathing, just using the top of your lungs, is actually unhealthy and deeper breathing using your diaphragm is much better for you.

So it is with writing. That is why I commend the work being done by Marj and the team here.
I grew up in Auckland, in a place called Point England and for primary school went to Saint Pius the Tenth Convent, in Glen Innes, and then to Sacred Heart College.

I guess I was what you might call a clever kid but life wasn’t always straight forward, as this note I wrote when I was 10 suggests. We must have been told to keep a diary for a month; February 1962 goes like this – it starts at February 1 and ends for some reason at 21. [Note: I have left in some of the spelling etc.]

“February
5 – Back at school. We are sent into room 5. Everyone working hard.
6 – Had a fight with Chris Dudley and got thirty lines.
7 – School is settling down.
8 – I was playing on the jungle jims and fell off and almost broke my neck.
9 – Found out we had to bring book money in. Not much of a day. End of a tiring week.
12 – Had a great surprise. Found out I was going into a new classroom by myself and a few girls from Room 6, and Paul Andrews class.
13 – Got the first whack of the year.
14- - First time we had home work in the year.
16 – Played releasey and got caught twice but got freed.
19 – I helped bring in new desks for our new classroom.
20 – Settling down in new classroom.
21 – Not much of a day. I did lots of silly things.”

I read my old reports from Sacred Heart College the other day and the overwhelming comment seems to have been “Michael must try harder” – that is in all except English.

After school I started and stopped a number of careers and jobs until one day at this place I was working I teamed up with a young school leaver whose father, Allen Brown, happened to be the racing editor for the New Zealand Herald. Because he knew I liked racing and writing, he suggested I go and see his father for a job where I could combine both talents. When I did, Allen Brown said they no longer hired people off the street and I should go to get a Journalism Diploma if I wanted to pursue this career.

So I did that and ended up working at the Waikato Times in Hamilton, where I met my wife, Sue Wilkie. We came to Rotorua so Sue could take up a position as chief reporter at the RNZ radio station here. When I approached the Daily Post for a job, the then editor told me he wouldn’t employ me because my wife was the radio station chief reporter.

So I set up a freelance news agency doing what was then described as photo-journalism – basically taking photos and writing stories on contract to various national and international publications. Eventually, I was picked up by the National Business Review and worked full-time for them from Rotorua between 1984 and 1991. By that time, we had a couple of kiddies and I knew I had to upskill to go further, so instead of spending money we couldn’t afford, I took a job in Singapore and the family lived there for a couple of years.

Returning to Rotorua in 1993, I set up Business Media Services Limited and a year or so later, Trade and Media Services Limited.

BMS AND TMS
BMS is much as the name says – it is a business that provides media services, such as contract writing, editing and publishing – to clients, be they companies or individuals.

TMS grew out of the work I had done in the forestry area, including visiting and writing what are called multi-client studies on forestry in New Zealand, in post-apartheid South Africa and in Latin America. As such, TMS provides an information and news service on forestry in countries such as Argentina, Australia, Brazil, Chile, New Zealand, South Africa and Uruguay.

Although these two companies are quite separate – one providing services to clients and the other building up our own publications – they have had one thing in common…and that is facing the challenge of digital publishing.

For TMS, the Internet and now digital publishing has been a boon. Most of our subscribers, I would say a good 90-plus per cent are international. Most want information and news “now”, so the Internet delivery of information and digital publishing’s flexibility really suit this work.

It is through BMS that I offer a number of services of most interest to people like yourselves. Companies or individuals contact me if they need help in putting a publication together – this can mean me writing stories for them, me editing their work, or me taking the work right through to publication. Sometimes it is all three.

For individuals, typically it works like this:

• Sometimes, people have an idea for a publication, and I am happy to give them some direction if that is all they require. Naturally, this is on the understanding that if they pursue the idea, it would be a good idea for them to come back to me on completion.
• Sometimes, people come to me with completed manuscripts and I can assist them with that – more on that in a moment. And
• Sometimes, people come to me with books they have published themselves and ask me what to do next.

IDEAS
It is fair to say that I am quite encouraging when people come to me with an idea. It is often in the execution of the idea that we trip up, isn’t it?

An example was the local chap who was going to take a couple of months off work to do a book on high country run owners in the South Island. The idea was that he would drive around the South Island and bowl up to these run owners; take photos of them and their grand estates, and put them into a book. Not a bad idea when you think about it.

I tried to convince him to do some groundwork first – like getting a list of run owners and contacting them first…as they may not be too keen on a bloke from Rotorua landing on their doorsteps asking to look around the homestead. But this would take too much time and he was determined to do this during his holiday…so I gave him some advice on the best way to approach the job.

COMPLETED MANUSCRIPTS
For somebody like me, completed manuscripts are really quite exciting. I am interested in people, although I should stress that this doesn’t necessarily make me a “people person”. There are two main ways in which a completed manuscript can be handled:

1. I can – on a paid contract basis - read the manuscript and provide the writer with an assessment of the best way forward, or
2. I can be convinced this work will turn into a book quite nicely and proceed from there.

Whether your work falls into one or two is based on experience and feel. I can give you a couple of examples.

Assessment - One of your members recently came to me with a completed manuscript, looking for some advice on whether it was worth taking forward and what he should do with it. I am currently reading the work. So this is a paid service, which will result in the production of a written assessment of the manuscript, including advice on not only the writing but also suggestions for proceeding. In assessments, one thing common for most writers, is the matter of “voice”…by which I mean the sound and feel of the voices you use when writing.

Book – if the manuscript is ready to go, I can decide whether it might be something we would publish ourselves or provide what is essentially a literary agency service. Publishing can involve either writers paying us to publish to book on their behalf; or we publish and give the writer a percentage of each sale. A young woman, who lives with her dairy farmer husband in Waikite Valley, came to me with the manuscript of a science fiction-fantasy novel she had written. It was about 320 pages long and the first of a series of three. I was quite excited by this book, because it had a start, a middle, and an end. It still took us a year to get it up to what we could say was a publishable state, before approaching publishers or agents.

Why this process took a year of going backwards and forwards tells us something of the way the publishing world is working today and brings us to a discussion about how to best get published in a digital world. So I will now address this aspect.

THE DIGITAL PUBLISHING CHALLENGE
Publishing is a bit of a numbers game. And the numbers have been quite interesting recently. In this section I will use a number of terms, such as e-books, which means a book published as a file of some sort, either live online or delivered as a file to the reader’s computer or uses new reading devices like Kindle or Apple’s iPad.

The Economist newspaper reported recently that in the first five months of this year sales of consumer e-books in America overtook those from adult hardback books. Just a year earlier, hardbacks had been worth more than three times as much as e-books, according the Association of American Publishers

Amazon, the US online shopping giant, now sells more copies of e-books than paper books.

The drift to digital versions of publications is predicted to speed up as bookshops close down. Sue recently found a Borders gift card I had been given for Christmas. Quite worthless now, yet only a few years ago, who would have thought it?
As writers we love to have hard copies of our books in our hands and in the hands of our readers. Who can blame us – there is nothing nicer is there? However, the scope for having your book published in hard copy form is surely and steadily reducing.

This is because the rise in digital publishing has combined with the global financial crisis, or the GFC. The combination of these two factors (or DP + GFC) has led to a huge squeeze on publishers…and writers.

Today, more and more publishers are more and more downsizing their staff in an effort to cut production costs. This means, in-house editing goes and the editing of your manuscript is contacted to an outside editor.

For writers, this means that your work must be increasingly “ready to publish” before it is even presented to a publisher for consideration. Publishers will, for example, only see additional editing costs. So it is advised that you should have your manuscripts edited first, so there is a minimum of costs involved for the publisher.

Okay, you could say this is a bit of a plug for my work but I am a founding member of the NZ Digital Publishing Forum and this is the message we get from larger, established publishers.

Publishers have less money available for large production runs of books in the hope they will sell. I was told recently by a publisher that really the New Zealand market is mostly focused on gardening and cookbooks.

That is one of the reasons we have gone international in a bid to get Sarah’s fantasy book published. It just wouldn’t be published locally. So our first effort is to try to secure her the services of a North American literary agent and a publisher.

This is where the Internet becomes useful. Before digital publishing came digital marketing, and I have experience in this aspect through my work with Trade and Media Services Ltd, our southern hemisphere forestry information service, which you might recall has almost all its subscribers offshore.

Using Internet tools such as web sites and Youtube, we are able to establish a presence for writers and their books which can help them rise above the pack. So agents and publishers can see from the start whether the person behind the book is marketable or the genuine article.

We can also use digital publishing tools to our advantage, making available a sample of the book for prospective agents and publishers to scrutinise. In Sarah’s case, we converted her book for downloading from the Amazon.com web site – there it can be purchased for US ninety nine cents to download as an e-book; or purchased for US nineteen dollars and ninety five cents as a hard copy book.

This is a proof copy of Sarah’s book we produced via Amazon. I should say that we did all this work here in Rotorua and had the book produced in the USA. But before you rush out and say “Oh, I can do that…” remember that

• On the advice from editorial assessment, the manuscript was edited and re-edited;
• the book was placed into a pre-publication format for digital printing;
• the design was done to a professional standard; and
• above all else, it was part of a wider marketing plan.

You could do that yourself to a certain extent but this is where assessment and editing comes into the picture. I believe this is a vital step in this new world of digital publishing.

To go back to my analogy at the start of writing and breathing – loading an unedited story to the Internet and/or sending it off to a publisher in today’s economic climate is akin to shallow breathing. It is fair to say that the sounds of strangulated huffing and puffing have risen to a cacophony on the Internet. So my plea to you today, is before you jump into action to send your manuscript off – whether it is to a publisher or even a competition, spend a little time and a little money on editing. You may then breathe easier and give your story the oxygen it deserves.

Thanks very much for listening to me today.

Forest Expo business "exceeds" expectations

2011-09-14T16:58:00.001-07:00

A forest industry expo in New Zealand has exceeded expectations, according to the event’s business project manager.
Forest Industries Expo 2011 was held in Rotorua between 5 and 7 September as an international showcase of forestry and forest industries.
Included in the event were a series of tech clinics and a conference. As well, the event was started with the launch of a forestry and wood processing strategy for the Bay of Plenty, a key industry region nationally.
Sandra Kai Fong although finalised figures were not yet available, the level of machines sold and the number of people through the gates had exceeded expectations.
However, it was not only about the numbers but also the quality of visitors and sales inquiries.
“From the exhibitors I spoke to, they were getting good quality visitors.”
She said the expo had had a bit of a hiatus where it did not proceed two years ago, when forestry had gone through a dip.
The economy is not exactly on a high, although log exports are much higher with sales to China being strong, so what is the difference?
Sandra Kai Fong said this time the expo was tied in as part of the Rugby World Cup event being held in New Zealand from 9 September which in part was showcasing New Zealand business.
As well as the heavy duty harvesting and pruning equipment, the organisers wanted to make sure to show the full range of services the sector could offer.
Sandra Kai Fong now turned her attention to helping local business to capitalise on the Rugby World Cup.

Overseas Investment Office closely follows Canadian investigation into Sino-Forest

2011-09-04T20:37:00.001-07:00

New Zealand’s Overseas Investment Office (OIO) says it is “closely following” an Ontario Securities Commission investigation Sino-Forest Corp.
The Toronto-listed Sino-Forest Corp is at the centre of investigations over allegations that it falsely ramped up valuations on forest assets in China and elsewhere in order to gain millions in investment capital.
The investigations follow a damning report by the independent North American research company Muddy Waters.
The Toronto Stock Exchange (TSX) has halted trading in Sino-Forest Corp shares and its chairman, chief executive officer and director Allen Chan has resigned and three employees were placed on “administrative leave”.
The Toronto Stock Exchange (TSX) has halted trading in Sino-Forest Corp shares and its chairman, chief executive officer and director Allen Chan has resigned and three employees were placed on "administrative leave".
As reported earlier. the New Zealand forestry assets came into the mix earlier this year when Sino-Forest shovelled them into an offshoot, the Hong Kong-listed Greenheart Group Ltd, combining them with that company’s 312,000 hectares of tropical forest logging concessions in Suriname.
Sino-Forest received Overseas Investment Office (OIO) approval for the initial purchase of the Dargaville forest assets in October 2010 and the follow-up transaction involving Greenheart in February 2011.
Although the transactions were cleared by the OIO on the grounds of providing jobs, increasing exports and adding investment for development purposes, Greenheart's involvement in logging tropical forests in Suriname would seem to be at direct odds with the New Zealand Government's policies regarding tropical timber.
In addition, the allegations of fraud also raise questions over whether the OIO sufficiently examined Sino-Corp's background in view of stipulations around directors under the Overseas Investment Act.
A request was made under the Official Information Act for more information on the OIO’s reasons for approving the deal, and questions were asked about with the OIO was aware of the allegations surrounding Sino-Forest and had taken any subsequent action to review the New Zealand transactions.
The OIO issued the following statement to the reporter, saying: "The Overseas Investment Office is aware of the fraud allegations by Muddy Waters. The OIO is also aware that the Ontario Securities Commission has commenced an investigation into the alleged fraud. The OIO continues to closely follow the Ontario Securities Commission's investigation into Sino-Forest Corporation. Once this investigation has been completed, and the findings are released, the OIO will decide what next steps to take, if any."
One aspect of the New Zealand deal is that the 13,000 hectares of land, including 11,000 hectares of plantation forests, have been placed into a bundle the Hong Kong-based subsidiary, Greenheart, together with the Suriname tropical forest logging concessions.
Greenheart said in its first half year report it was planning to gain accreditation to operate the concessions in a sustainable manner under the Forest Certification Scheme (FCS) process.
However, approval for the sale/transfer of Sino-Forest’s New Zealand forests to Greenheart would seem at odds with the government’s policies regarding tropical forest logging and associated climate change policies.
Currently, Sino-Forest has concessions covering 312,000 hectares in Suriname, one of the most corrupt countries, in South America.
Forestry Minister David Carter issued a statement on 14 April this year congratulating the NZ Imported Tropical Timber Group members who had committed to stopping imports of illegally sourced timber from Indonesia.
“Illegal logging is a serious problem in countries where it is carried out, resulting in economic, environmental and social losses,” the statement said.
“The National-led Government called for voluntary industry initiatives to address illegal logging, rather than regulation.”
Details of Sino-Forest’s tropical logging concessions in Suriname and nature of the transfer of the New Zealand assets are in the Greenheart financial report from the six months ended 30 June 2011. The transaction involved “the acquisition of 13,000 hectares of freehold land, including 11,000 hectares of softwood radiata pine plantation in New Zealand from a subsidiary of Sino-Forest Corporation.”
In explaining the technicalities of the deal, the report said: “Given the New Zealand Plantation continues to be controlled by Sino-Forest, the ultimate controlling shareholder of the Company, before and after the New Zealand Acquisition (through its majority shareholding in the Company), the financial statements of the Group for the Period have been prepared using merger accounting principles as if the New Zealand Acquisition had occurred on the date when the combining entities first came under common control by Sino-Forest.”
The Suriname operations are outlined as “Engaging in hardwood log harvesting, timber processing, marketing and sale of logs and timber products”.
The New Zealand operations are described as “Engaging in softwood log harvesting, marketing and sale of logs and timber products”.
It was noted that one of the company’s major subsidiaries in Suriname is currently enjoying a local income tax exemption for an original period of nine years from 2007 to 2016. This could be extended for a further period at expiry.
However, it was the New Zealand log exports which contributed mostly to the reported revenue of HK$124.1 million and gross profit of HS$63.2 million during the six-month period, said to be a 15 times increase compared to the same period the year before.

Forest extravaganza at odds with troubled Chinese corp’s log export reality

2011-09-01T05:25:00.000-07:00

Revelations regarding the free ride given by the New Zealand Government to an embattled Chinese forestry group have highlighted the incongruity of a forestry extravaganza being held in Rotorua between 5 and 7 September.

Sino-Forest Corp, giant Chinese forestry corporation, is estimated to have booked a profit of NZ$64 million moving around New Zealand forestry assets to tie them up with tropical logging operations in Suriname.

The Toronto-listed Sino-Forest Corp is at the centre of investigations over allegations that it falsely ramped up valuations on forest assets in China and elsewhere in order to gain millions in investment capital. The investigations follow a damning report by the independent North American research company Muddy Waters.

Subsequently, the Toronto Stock Exchange (TSX) has halted trading in Sino-Forest Corp shares and its chairman, chief executive officer and director Allen Chan has resigned and three employees were placed on "administrative leave".

Forest Industries 2011, said to be the largest forest and wood processing event ever held in New Zealand, is being held next week. The Minister of Forestry, David Carter, will launch the expo and a new Bay of Plenty Forestry Strategy.

The expo and the strategy launch come at a time when more than half of all the logs harvested in New Zealand are exported directly overseas for processing into products.

Overseas Investment Office (OIO) approvals for Sino-Forest's New Zealand dealings only serve to highlight the enormous task facing the country in adding value to its ever-growing wood resources.

As reported earlier, the New Zealand forestry assets came into the mix earlier this year when Sino-Forest shovelled them into an offshoot, the Hong Kong-listed Greenheart Group Ltd, combining them with that company's 312,000 hectares of tropical forest logging concessions in Suriname.

Sino-Forest received Overseas Investment Office (OIO) approval for the initial purchase of the Dargaville forest assets in October 2010 and the follow-up transaction involving Greenheart in February 2011.

Although cleared by the OIO on the grounds of providing jobs, increasing exports and adding investment for development purposes, Greenheart's involvement in logging tropical forests in Suriname would seem to be at direct odds with the New Zealand Government's policies regarding tropical timber.

In addition, the allegations of fraud also raise questions over whether the OIO sufficiently examined Sino-Corp's background in view of stipulations around directors under the Overseas Investment Act.

Subsequent to publication, the OIO issued the following statement: "The Overseas Investment Office is aware of the fraud allegations by Muddy Waters. The OIO is also aware that the Ontario Securities Commission has commenced an investigation into the alleged fraud. The OIO continues to closely follow the Ontario Securities Commission's investigation into Sino-Forest Corporation. Once this investigation has been completed, and the findings are released, the OIO will decide what next steps to take, if any."

The tropical logging link to government policies comes after Forestry Minister David Carter issued a statement on 14 April this year congratulating the NZ Imported Tropical Timber Group members who had committed to stopping imports of illegally sourced timber from Indonesia.

“Illegal logging is a serious problem in countries where it is carried out, resulting in economic, environmental and social losses,” the statement said.

“The National-led Government called for voluntary industry initiatives to address illegal logging, rather than regulation.”

Details of Sino-Forest’s tropical logging concessions in Suriname and nature of the transfer of the New Zealand assets are in the Greenheart financial report from the six months ended 30 June 2011. The transaction involved “the acquisition of 13,000 hectares of freehold land, including 11,000 hectares of softwood radiata pine plantation in New Zealand from a subsidiary of Sino-Forest Corporation.”

In explaining the technicalities of the deal, the report said: “Given the New Zealand Plantation continues to be controlled by Sino-Forest, the ultimate controlling shareholder of the Company, before and after the New Zealand Acquisition (through its majority shareholding in the Company), the financial statements of the Group for the Period have been prepared using merger accounting principles as if the New Zealand Acquisition had occurred on the date when the combining entities first came under common control by Sino-Forest.”

The Suriname operations are outlined as “Engaging in hardwood log harvesting, timber processing, marketing and sale of logs and timber products”.

The New Zealand operations are described as “Engaging in softwood log harvesting, marketing and sale of logs and timber products”.

It was noted that one of the company’s major subsidiaries in Suriname is currently enjoying a local income tax exemption for an original period of nine years from 2007 to 2016. This could be extended for a further period at expiry.

However, it was the New Zealand log exports which contributed mostly to the reported revenue of HK$124.1 million and gross profit of HS$63.2 million during the six-month period, said to be a 15 times increase compared to the same period the year before.

It should be noted that nowhere in this part of the statement does the company actually mention the development of processing facilities in New Zealand, instead focusing on log exports where the Suriname operations include processing plans.

“This [half-year] growth, as expected, is attributable primarily to the sale of our radiata pine logs to China [from the New Zealand plantations]. Contribution from our Suriname hardwood concessions was modest during the period, also as expected. We continue to construct our two wood processing facilities, one in our forest concession in eastern Suriname and the other in the west.”

The two “world-class” wood processing facilities in Suriname were at that stage expected to come on stream in late 2011 and early 2012.

“In New Zealand, we continue to increase our level of production driven by China’s strong demand for softwood logs supported by our experienced operational, harvesting and management team and increasingly robust infrastructure. Year-to-date we have sold approximately 123,000 cubic metres of radiata pine logs compared to zero sales in the same period last year.”

As well as feeding the increasing demand from China, the report said Greenheart/Sino-Forest was developing new customer relationships in countries such as Japan, India, Taiwan and Korea “who have demonstrated a strong appetite for our radiata pine resource and when appropriate, expand our plantation footprint in New Zealand through acquisitions.”

The report said the prospects in Suriname were “very exciting for all of us at Greenheart”, with the focus keenly on a strategy of building a leading tropical hardwood business, marketing high value sawn timber and other products “hewn from responsibly and sustainably harvest and processed tropical hardwoods.”

The Forestry Minister David Carter’s office was approached for comment and referred inquiries to the OIO.

Crawling our way to Spring

2011-08-30T14:47:00.001-07:00

I'm excited! Ok, I am a little excited.

Bar a cold snap this week, the scent of spring is in the air in the southern hemisphere.

This winter has been wet, wet, wet and more recently a cold one, with snow in unusual places throughout the southern hemisphere.

Historic snowfalls in Auckland, NZ, and Santiago, Chile.

If weather patterns are believed, this very wet winter should see a very dry summer.

Prize for optimism must go to BIS Sharpnel, the consulting firm has released a report urging Australia to plan for the end of the mining boom.

It must be something in the air.

NZ rich-lister's big punt in shaky Chinese forestry corp

2011-08-17T21:55:00.000-07:00

Richard Chandler, one of the two richest men in New Zealand, has taken a stake in a Chinese company under siege over allegations surrounding forestry valuations.

Although Sino-Forest Corporation has been involved in a NZ$77 million deal in New Zealand in which forests have changed hands in an intra-company deal, investigations have focussed on dealings involving a publicly listed Canadian subsidiary and prices reported for forestland purchases in China.

The furore surrounds how Sino-Forest valued forest assets it purchased in China and then re-packaged as part of a Toronto-listed offshoot.

In the New Zealand deal, Sino-Forest purchase 12,587 hectares of forestland near Dargaville from GTI 6 Mangakahia Holding Co. Ltd for an undisclosed sum in October 2010. In late February, Sino-Forest announced it was selling the forest assets to Greenheart Group Ltd for NZ$77 million – Greenheart is 58.58% owned by Sino-Forest.

However, in recent weeks, Sino-Forest has been the centre of attention of stock exchanges in Toronto and Singapore.

This follows allegations first raised by Carson Taylor, the founder of a niche business research agency called Muddy Waters LLC. Details of the research, including the 39-page report, are available at www.muddywatersresearch.com.

Sino-Forest and the international consultancy firm it uses, Poyry Group, have strenuously denied the claims, which centred on “inconsistencies” in the valuation of the company’s holdings in China’s Yunan province. Sino-Forest claims to own 800,000 hectares of forests in various lots in China, as well as the New Zealand assets and forests in Suriname, Latin America.

Shares in the Toronto Stock Exchange-listed Sino-Forest Corp have plummeted in the wake of the controversy, going from C$25.85 per share in late March to C$1.29 in mid-June.

Enter the Singapore-based Richard Chandler, who came in at number two in the 2011 NBR Rich List with an estimated fortune of NZ$5.8 billion, behind Graeme Hart’s NZ$6 billion. A Singapore resident these days, his assets make him the island nation’s richest man.

In late July, Richard Chandler Corp, built up a stake in Sino-Forest to more than 15%, initially buying 11.5% of the shares for C$3.20 a share and later topped this up with shares bought at an average cost of C$7.36 a share.

Temasek, the Singapore Government’s massive superannuation fund, purchased a 15.52% in Sin-Forest in 2007 at C$9.15 a share, according to a Temasek release.

On the back of the Muddy Waters Research report, the Toronto Globe and Mail has carried out an investigation and Sino-Forest subsequently posted its own response the newspaper’s report at www.sinoforest.com. In essence, the company says Muddy Waters and the newspaper have got it wrong.

Basic details of the New Zealand deal were provided in the decisions by the Overseas Investment Office. The February 2011 decision said the move was part of Sino-Forests wish to progress the group’s expansion in areas outside of China.

Greenheart, the subsidiary which now held the properties, was considered to be “the appropriate international expansion vehicle, given that it already has overseas interests in Suriname. Sino-Forest will focus on forestry investments and product distribution in China.”

Suriname is widely regarded as having wide-spread corruption, the rigging of rainforest logging rights and a reluctance to recognise indigenous people’s land rights.

See

http://news.mongabay.com/news-index/suriname1.html

http://www.state.gov/e/eeb/rls/othr/ics/2011/157362.htm
In preparing this article I sent the following queries to the OIO and have not yet received a response:

In light of the controversy surrounding the valuations of forests bought and sold by Sino-Forest Corporation and its subsidiaries, has the Overseas Investment Office had any cause to reconsider its decisions?

Whether the OIO has reviewed this evidence?

Was the OIO aware of this research?

A News of the World rat Down Under

2011-07-17T15:31:00.000-07:00

Why is it that rats are easier to see than pussycats? I ask this question because it is easy to see the rats jumping the News Corp ship now that the News of the World has gone under, yet the evidence is clear the pussycats have been cuddling up to the media for years. For some reason, however, the corrupting influence of the relationship between government-media-politicos was relatively free from recriminations.

"Rats" are what we used to call stories written off-the-clock for publications other than the one throwing the peanuts your owners were throwing at you. Being a full-time freelancer in the early 1980s, you could say I did a few "rats" in my time.

I do have a News of the World story. In the early 1980s, in the early years of my freelance career in Rotorua, I was contacted out of the blue by the news editor from the paper in London. Apparently a mate of a mate who worked there knew about me and he wanted to see if I could do a story for him. This was – shock, horror, probe – about the English chap who was on a cruise in New Zealand waters and was on the sea between Auckland and Tauranga. The thing was this chap – again shock, horror, probe – had Aids. It is difficult to imagine this now but I had to find out how this situation was being handled and duly reported by collect call to London a story saying the chap had been placed in quarantine in order to prevent the spread of the disease to other travelers.

A while later, a story arose about a New Zealander from Kawerau who had been made the Lord Edgecumbe. There was a bare bones article stating the facts in the Granny Herald so I called my new friend on the news desk at the News of the World. He was into it like a robber’s dog. I rang the newly crowned Lord and got quite a good interview, which I again rang through to London.

It was quite exciting to dictate stories down the phone to London – not quite the same to send an email. Even more exciting was the later receive the clippings and the cheque. The amount of money paid was way out of proportion to what I was being paid per word by New Zealand publishers at that time, and even now I imagine. It was something like one pound a word. So, even though the Aids story was tiny, the money was good, and even better for the Lord Edgecumbe scoop.

It is quite true that there is a fair amount of self-disgust involved in pursuing the innocent for crimes of no more than being seriously ill. Money was no doubt a great motivator but it was quite easy to rationalise that people wanted to read this stuff. So we all suppported the lowest common denominator (LCD) ethos epitomised by the News of the World every time we purchased a colour publication with a "shock, horror, probe!" front page. It was just that the News Corp was better, and more disgusting, at it.

Not long after my News of the World experience, I was picked up as a full-time reporter for the National Business Review on the back of the 1980s share market boom. The money was good, so the rats were killed off.

Of quakes, tsunamis AND coincidence

2011-03-14T01:21:00.000-07:00

What is coincidence? I send out a fortnightly news headlines service for the southern hemisphere forest industry, called Southem Online.
It goes out to 20,000-plus recipients. The last edition was sent on on Friday 11 March 2011 (NZT)at about 4pm.
About three or so hours later, Sue called out to me that there'd been an earthquake in Japan - had I seen anything?
Thinking she meant another recent earthquake, and continued to finish up what I was doing. When I did finish up what I was doing and went to look at the TV, I realised this was not just "another" earthquake.
Why is this a coincidence and what has this got to do with Southem Online?
The thing is that the slug line for that edition was "Southem Online 261: Of quakes and tsunamis".
The main stories highlighted the response to the earthquake in Christchurch on 22 February, focusing on government and industry, as well as a new report from government agencies in Chile regarding the use of forests/vegetation in reducing the impact of tsunamis (as occurred there a year earlier).
As happens with the Interweb, not all messages are instantaneous, so some readers questioned a forest could have stopped the devastation and horror in Japan that struck on Friday evening (our time).
The quick answer is no. But...
The "but" is that recent research has found planting trees can at the very least mitigate the damage. Again, as is often the case with these things, there's another "but".
Go back to 26 December 2004, when, as the National Georgraphic reported: "The earthquake that generated the great Indian Ocean tsunami of 2004 is estimated to have released the energy of 23000 Hiroshima-type atomic bombs..."
However, after this tsunami the United Nations Food and Agriculture Organisation (UN FAO) conducted a study into what role forests could play in mitigating (underline mitigate) in impact of tsunamis.
"Forests" in this case includes mangroves (which fishing and development had stripped away in many places) as well as tree-based "bioshields".
The outcome of the study was quite interesting. It found that random trees (not quite the words) can actually become a liability, with branches and trunks launched like missiles. Also, where development made gaps in beach forests, water poured through at a greater force. The conclusion was:
"While it is not feasible to establish a coastal forest “biosheild”– unbroken and of sufficient width and density – along the entire length of every coastline prone to tsunami, they can play a major role in protecting coastlines in Asia and the Pacific. Given their low cost of establishment and maintenance relative to other protective structures such as rock and cement seawalls and other ‘hard’ barriers, and their potential for generating other economic and environmental benefits, these ‘soft’ structures may justifiably become more widely utilized."
This is what the folk in Chile have been looking at.
BTW you can see the full report at the FAO web site. We followed it up with a report of our own in the Southern Hemisphere Forest Industry Journal.
One of things I did today was to go to google earth and look at the coastline near Sendai. It is interesting to see how close the development is to the beach.
See the FAO report at:
http://www.fao.org/docrep/010/ai389e/ai389e08.htm

To finish, a personal story: My colleague Mary's daughter married a Japanese chap early last year, and later in 2010 they had a little daughter. They live in Sendai. It was just a matter of coincidence that mother and daughter were back in New Zealand visiting family last week and her husband was in another part of the country on business.
Oh, I forgot: On Thursday Mary left New Zealand to go with her brother and his family to live in Kalgoorlie, Western Australia. But that's another story, and another coincidence.

'Peak wood' future fears for forest industry

2010-12-19T19:55:00.001-08:00

Mike Smith

New Zealand faces the prospect of “peak wood” supplies if new forest planting continues to at the current low levels, according the latest edition of the Southern Hemisphere Forest Industry Journal.
The Journal examines how “peak wood” will impact the forestry and forest industries sectors of New Zealand, its main market, Australia, and its main competitor, Chile.
“Peak wood” is a term now being used to describe an expected worldwide shortage of the resource. Like “peak oil”, it describes a concurrence of events in which supplies of the wood resource will shorten up just at a time when demand increased.
Like “peak oil” the “peak wood” scenario is expected to include a real spike in the price of wood and wood-based products.
Industry commentators expect this will be a boost for investors in forestland in the future. But the outlook is much less rosy for industry.
This is already being highlighted in New Zealand where at least 50% of the logs about 20 million cubic metres of roundwood produced from forests are exported overseas in raw form.
The downscaling of the sawmilling industry, with a number of pre-Christmas layoffs announced and a planned mill mothballed, was put on a combination of the high New Zealand dollar and the high cost of logs from forest owners.
The roundwood available from New Zealand forests is expected to grow to about 30 million cubic metres annually by 2020, which means on current form at least, about 15 million cubic metres of wood will be exported annually.
The Journal makes the point that this level of export is fine as long as the local forest industry is kept at a moderate level and does not develop much further.
However, the level of availability from 2020 onwards begins to grow a little hazy for two key reasons – lower planting levels and more diverse (small) ownership of a larger chunk of the expanded estate.
For one thing, from 1992 to 1998, new planting rates averaged 69,000 hectares per year. However, in 2008, it was estimated 1,900 hectares of new forests were established. Provisional figures put the planting level at 7,000 hectares in 2009, still much lower than even base scenario levels from the Ministry of Agriculture and Forestry (MAF).
Of the 15,123 forest owners in New Zealand, about 15,00 old less than 1,000 hectares each but together they own 30 per cent of the plantation forest estate – 13,000 of these owners hold less than 40 hectares.
MAF has noted it may be uneconomic to harvest some forests in steep hill country, if logging and harvesting costs are higher than the market value for the wood. At the same time, potential offshore investors in new wood processing faced the prospect of securing a large and ongoing wood supply from a diversified ownership, a seemingly insurmountable task.
The East Coast region, where the Prime sawmill has been mothballed in Gisborne, is cited as a case where the challenge remains too big. The region is expected to have wood available totalling 1.7 million cubic metres by 2015, based on large-scale owners’ intentions but the Prime mothballing illustrates the problem facing processors, with Gisborne now being an important shipping point for export logs.
The Journal concludes that while log exports on the scale being undertaken in New Zealand are manageable as long as the resource is expanding, it remains a risky strategy long-term when supplies begin to tighten.
Australia and Chile face similar but different problems. In Australia’s case, the development of new planted forests has been hit by a crash in forestry investment, driven by taxation arrangements for agribusiness schemes. In Chile, the government has moved its focus from large-scale planting initiatives to social equity issues surrounding rural poverty.

OECD highlights insurance risk to NZ agriculture

2010-12-02T19:57:00.000-08:00

The government’s $25 million handout to help compensate the New Zealand kiwifruit industry for losses resulting from the damaging PSA virus highlight a potentially damaging, and costly, flaw in the country’s agribusiness sector.

The flaw is highlighted in a new report from an OECD working party on agricultural policies and markets (APM) review of risk management in OECD countries.

The 68-page “Thematic Review on Risk Management: New Zealand” was declassified and presented at the 52nd Session of the APM in Rome on 15-17 November 2010.

The working paper is generally appreciative of New Zealand’s approach of “no policy interventions” in markets but does raise concerns about an anomaly in the country’s management of risks.

A particular area of concern is insurance, which the OECD suggests is relatively limited with the burden falling instead on taxpayers.

New Zealand’s farming sector was confronted with pressures to remain a competitive export-oriented business and at the same time to meet growing demands from society for sustainability.

“The pressure for competitiveness implies intensified use of natural resources and practices associated with high production, financial and market risks.”

The pressure for sustainability implied constraints on the ways resources could be exploited and increasing internalisation of the resource use costs into farming costs.

“The key challenge for the farm risk management system in New Zealand is to develop strategies that would reconcile these competing pressures.”

The situation in New Zealand is unique, the OECD said, because there are no apparent political claims for the provisions of [financial] transfers to support the farming business.

That is, apart from the issue of insurance. “The insurance market in New Zealand operates in a subsidy-free environment and is relatively limited. Farmers see little advantage in insuring crops, animals and pasture.”

Typically there was no coverage available against key natural perils that affect crops and animals, such as drought and floods. Incomplete information on risks and their quantified impacts on farming were seen as an important factor that may be preventing the development of some types of insurance markets.

In the wake of the PSA outbreak, the government plans a $25 million package for the kiwifruit industry with another $25 million coming from the industry. Biosecurity and Agriculture Minister David Carter has said the losses could total as much as $75 million.

The OECD noted there was no formal definition of an “adverse event” in New Zealand based on an assessment of the likelihood of events occurring or other tools.
“Biosecurity risks are regarded as potential catastrophic risks and protection against such risks is the main agriculture-related policy of the central government.”
However, it noted: “No insurance is available in New Zealand against damage from exotic disease to livestock or crops, or for variations in farm income due to market conditions.”

Insurance was available to cover a broad range of disasters that could affect farm buildings, equipment and vehicles, however.

A number of attempts had been made either through the private sector or industry groups to establish markets for risk insurance, usually funded by self-imposed farmers’ levies. Today, most of these schemes had ceased to exist, as farmers considered the moral hazard risks to be too high – too many were paying for the few who had no appropriate risk management strategies in place for their agribusinesses.

Farmers interviewed by the OECD officials who visited New Zealand said that apart from insuring structures or machinery, they had little “incentive” to take up other types of policies.

The situation with crop and livestock insurance indicated that insurers were confronted with the problems of insufficient risk pools and risk premium levels.
As a result, when events occurred they fell on a band of central and local government risk-related programmes. In 1999, the total amount of expenditure on “risk-related” programmes was $80.8 million. In 2009, this figure was $240.7 million.

The “adverse risk” process is managed through the government, but the OECD implies this could be actually deterring farmers from looking for insurance. For example, when an event is assessed as large-scale, a Special Recovery Measure (SRM) can be triggered.

“In this case, the government undertakes to partially cover the costs of restoration of on-farm infrastructure, but on the condition no commercial insurance is offered (this is called ‘non-insurable infrastructure in the programme). SRM also provides for partial compensation of costs to re-establish “non-insurable” pasture, crops and forestry.”

However, in the special case of a possible large scale biological incursion that would be categorised as a “large event”, SRM would not be implemented, meaning that even if livestock or plants could not be insured there would be no compensation for loss related to infected animals or plants.

“According to MAF, such compensation would reduce the incentive to quickly notify authorities of an exotic disease.”

Among a number of measures to overcome the difficulties, the OECD recommended that consultations needed to be started with insurers and other stakeholders with a view to identifying areas where information on risks could be improved, in particular those theoretically “insurable” but for which insurance markets had hardly developed or failed.

Petrobras less than spotless on the enviornment and indigenous rights

2010-06-28T03:44:00.000-07:00

Petrobras, the Brazilian petrochemical giant which the New Zealand Government has done a deal with to explore deep off the country’s North Island East Coast, has a less than spotless environmental record.

At about the same time as the Brazilian state-controlled company was sewing up New Zealand’s first petroleum exploration permit over the Raukumara Basin, Petrobras was announcing that it had successfully controlled an oil leak at an offshore platform in the Campos Basin.

The P-47 platform leaked an estimated 1500 litres (396 gallons) of oil at Marlin field during preparations to transfer oil to a ship, Petrobras said in an emailed statement reported by upstreammeidaonline.com.

A helicopter and four boats assisted with clean up efforts, it reported the company as saying, and the spill was immediately controlled. Campos Basin comprises 7015 sq km and is located offshore the states of Rio de Janeiro, Espírito Sant, according to Brazilian Government information.

While this spill was relatively small, Petrobras has been on the radar of environmental watchdogs for a number years following a series of incidents dating as far back as 1984, according to Crocodyl, a collaboration between non-profit organizations such as Center for Corporate Policy, CorpWatch, Corporate Research Project, other contributing organisations and individual contributors from around the world.” See http://www.crocodyl.org/

New Zealand Energy and Resources Minister Gerry Brownlee may not have known about the Campos basin incident when he announced on 2 June 2010 that the government had awarded New Zealand's first petroleum exploration permit over the Raukumara Basin off the North Island's East Coast to Petrobras International Braspetro B.V.

"Petrobras is an international giant in this industry and a world leader in development of offshore drilling technology and production. Given Petrobras's expertise, and financial and technical pedigree, this is an exciting step into areas of New Zealand until now unexplored," Mr Brownlee said at the time.

He also noted that the announcement represented a major step forward in the relationship between New Zealand and Brazil.

"Petrobras's investment will add a substantial new dimension to the economic relationship between New Zealand and Brazil. This is a very welcome development," Mr Brownlee said in his statement.

However, it would appear that his officials must have overlooked a number of other incidents which have raised concerns.

For example, Crocodyl in a chronology of Petrobras problems notes that the company owned the largest floating oil platform in the world, called the "P36", until it sunk in 2001, after several explosions killed eleven workers. The estimated loss was $350 Million in USD to the company.

However, incidents involving loss of life go back even further, the Crocodyl chronology noted as follows (see quoted items below):

* In August 1984, 36 workers drowned and 17 were injured in an explosion and fire on a Petrobras oil-drilling platform in the Campos Basin off Brazil.
* In November, 1995 one person died and five were wounded in a Petrobras pipeline fire in Sao Paulo.
* In December, 1998 a fire at Petrobras's Gabriel Passos Refinery in Minas Gerais killed three workers.
* In January, 2001 two workers died from a fire on a Petrobras offshore natural gas platform in Campos Basin.
* In March, 2001 11 people were killed after explosions rocked the world's biggest offshore oil platform. Days later, the platform sank.

Environment and product safety:
* In 2000, a broken Petrobras pipeline resulted in the biggest oil spill in 25 years -- four million liters (1 million gallons), spilled in the Iguacu River. The government fined the company $100 million -- less than two days revenues.
* Just months before, a ruptured pipeline at a Petrobras refinery in Rio de Janeiro's scenic Guanabara Bay resulted in a 350,000 gallon (1.3 million litre) oil spill into the bay, killing hundreds of fish, birds and plants.
* Six months after the Iguacu River spill, a Petrobras refinery near Curitiba in the southern state of Parana resulted in another oil leak, the company's sixth environmental accident in 2000.
* On March 15, 2001, Petrobras' biggest offshore platform, P-36, suffered two major explosions and sank ten days later. The incident resulted in 11 deaths.”

More recently, Crocodyl noted, in 2004,Petrobras reported finding an oil leak on the sea floor in Marlin Sul.

“In 2006, after losing a court dispute it had initiated, Petrobras announced it would abandon plans to build a road into an environmentally sensitive region of the Amazon - Yasuni National Park. “The company had already built a road through a buffer zone right up to the edge of the park and the company asserted that it has not given up on oil development within the park, saying it will employ helicopters to access the site.”

Brian Keane of Land is Life, a Cambridge, Massachusetts-based indigenous rights group is quoted as saying: “Allowing Petrobras to drill in Yasuni would be a gross violation of the rights of the Huaorani and Taromenane peoples.” See http://www.landislife.org/

Petrobras has invested heavily in the development of biofuels. Biodiesel is available at more than 500 Petrobras stations in Brazil.

It should be noted that biofuels in Brazil have been become extremely politically sensitive over the replacement of tropical forests with feedstock crops, depriving indigenous peoples of land rights.

The issues surround Petrobras and indigenous rights are of increasing interest in New Zealand, where the Ngati Porou tribe on the North Island’s East Coast has questioned the licence.

So the bottom line here is: What was the New Zealand Government thinking, what will be the ultimate cost to the New Zealand taxpayer, and how does this fit in with the country’s increasingly besmirched “clean, green” image?

2010-06-14T17:16:00.000-07:00

Be careful what you wish for. It's an old saying but not without an element of truth. In this case, the New Zealand media has had a windfall of documents from the Ministerial credit card "scandal" they could hardly have wished for.

Indeed, this wish has come true to such affect that not only have three senior Labour Party MPs have been demoted but the media are struggling with the minute detail contained in the eight boxes of documents.

Pictures abounded of newsrooms awash with documents. It was interesting to note how some carefully compartmentalised the papers.

Now, the Fairfax-owned web site, stuff.co.nz , has gone a step further and started placing the documents online and asking for the public's help to decipher the details.

Very good in theory but it does point up at least one concern: will the details be unearthed by a "disinterested" public? Or will this be another opportunities for political party and other interested parties to explore potential scandals? So, once again, will we see a race to the bottom, so to speak?

So, the bottomline here is that while the media might wish for such a massive info windfall, the reality is that the resources are not necessarily available to provide the public what it needs: a disintereste, in-depth review of the material involved.