The Government is making a $4 million payment to four West Coast timber mills to settle a long-running grievance with the former Timberlands state-owned enterprise, Economic Development Minister Gerry Brownlee said today.
The ex gratia payment was being made because Timberlands failed to meet its timber harvest forecast from 2000, when indigenous logging stopped, he said.
The Government commissioned an independent report by the company KordaMentha to assess the situation.
"KordaMentha concluded Timberlands may have not acted fairly to the West Coast timber industry over log projections," he said.
"A good faith ex gratia payment has been offered to the mills which made significant investment decisions to process pruned logs based on over-estimated projections." Mr Brownlee said the Government had no legal obligation to compensate the mills but it was making the payment as a full and final settlement over any future claims the mills might make.
"I hope this closes the final chapter on this saga," he said.
The mills are Westco Lagan Ltd and Westimber Ltd, which are still operating, W.E. Whiley and Co Ltd, which went into receivership last year, and Inangahua Sawmilling Ltd, which closed last year.
Mr Brownlee said the mills had agreed between themselves how they would split the payment.
