Oji Fibre Solutions has purchased land, buildings and other assets from Norske Skog for $11 million, after the departed paper mill operator left behind industrial landfills and wastewater discharges
Ngāti Rangitihi's Leith Comer lived his early years in in the small mill town of Kawerau, near the Tarawera River. His father Te Purei Fraser had died not long after his return from the Māori Battalion, when Comer was still young; his mother Maude remarried a carpenter, Stan Comer, who got a job at the new mill.
"We were lucky enough to go to Kawerau and live for about five years in a mill house and and benefit from the economic contribution the mill made to that community," he recalls. "Regrettably, their environmental standards in those days weren't of the level that they should be – and that continues a little bit today."
After serving as one of New Zealand's senior public service chief executives, Comer returned home to Kawerau when he is now chair of Te Mana o Ngāti Rangitihi Trust, responsible for managing the iwi's Treaty settlement – and that includes sharing responsibility for the ecology of the brutalised Tarawera River.
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Ever since Fletchers and the Government started building the world's biggest pulp and paper mill in 1953, successive owners have pumped their waste into a once pristine river. Locals call it "the black drain".
Next month the iwi will announces its detailed plans to clean up the river, return it to its original course and restore the stagnant lagoon at the river's mouth at Matatā – and Comer expects Oji Fibre and the local councils to support the project.
Overseas Investment Office approves purchase
Norwegian forestry and paper company Norske Skog pulled out of the paper mill in 2021, at a cost to the small Kawerau community of 160 jobs and a million dollars a year in lost rates revenue.
When Newsroom reported in April that Norske was in talks to sell some of its Kawerau paper mill remaining assets to Oji Fibre, which operates the adjoining pulp mill, the Norwegian company's public affairs vice-president Carsten Dybevig accused Newsroom of reporting "fake news".
But the April report was confirmed in investor releases from the two overseas-listed companies, late on Tuesday.
The deal is worth NZ$10.9 million, says Norske president and chief executive Geir Drangsland. As of today, Norske Skog's only remaining New Zealand holdings are some rural land areas, and industrial landfills and water treatment facilities where there are ongoing processes to complete the required closure steps, before these too will be sold.
"We are pleased to finally have concluded this sales agreement with Oji after lengthy process of negotiations and obtaining all required regulatory approvals for the sale," Drangsland adds. "The sale of the Tasman industrial site to Oji is a material steps towards concluding Norske Skog’s long-term business commitment in New Zealand."
"The river became the most polluted river in New Zealand. And Te Awa o te Atua harbour was desecrated by them cutting the rivers straight out to sea." – Leith Comer, Ngāti Rangitihi
Despite Norske's previous denial, Oji Fibre Solutions chief executive Jon Ryder confirms the two companies have been working on the purchase deal for three years. "Many people have worked hard and shown a lot of patience, including our friends at Norske, so I am very pleased to be at this point."
He says the acquisition is good news because it allows Oji to retain essential equipment and services for its Tasman pulp mill.
Oji's pulp mill and Norske Skog's paper mill, once part of an integrated facility, sat side by side on the big industrial site on the outskirts of Kawerau, with much of their infrastructure shared.
The deal for Oji to purchase certain Norske Skog land, buildings and other assets has now been approved by the Overseas Investment Office, and Oji took ownership on Tuesday.
While much of the important electricity equipment, piping, water intake and treatment facilities and other infrastructure were owned by Norske Skog, these assets are also critical to Oji. Dr Ryder says the assets can't be easily separated or replaced, so the best course was to purchase the relevant land and infrastructure.
While there are no plans to resume paper production at the Tasman mill, about half a dozen former Norske Skog transport, security and maintenance staff maintained a skeleton operation at the paper mill after it closed. In total, 27 Norske employees and contractors have now transferred to work for Oji.
Kawerau District mayor Faylene Tunui and chief executive Russell George were unavailable to talk about the purchase, but it's understood both the council and iwi hope that new cleaner manufacturing and warehousing uses will be found for the site, which has industrial and discharge consents in place for another 12 to 15 years.
"Norske was in a bad way. So this is good for the community. It's good for Norske that their time has come to an end. It's good that we know who owns that land now, and I'm sure Oji will be talking to other industries around around the area." – Tane Phillips, Pulp and Paper Union
Tane Phillips, the secretary of the Pulp and Paper Union in Kawerau, says the acquisition is good news for the community, though for those laid off, it's unlikely to mean any more jobs in the short-term.
He's talked with representatives of the Japanese-owned company. "Oji is really thinking about how best to use some of the assets," Phillips says. "The consents are still there and also the railway line, so there's a possibility of warehousing and stuff like that. But nothing concrete just yet.
"It's very hard to set up a whole new industrial park now in New Zealand it's not that easy because of the environment. But they've got consents and also geothermal power production on their site, so that's very useful."
"Norske was in a bad way," he adds. "So this is good for the community. It's good for Norske that their time has come to an end. It's good that we know who owns that land now, and I'm sure Oji will be talking to other industries around around the area."
Leith Comer says the iwi would welcome any economic development in the eastern Bay of Plenty. "That's where our people live, that's where they need jobs. But I just hope that when we do bring in industries, those industries operate in a way that doesn't denigrate the mauri of the Tarawera River or Te Awa o te Atua harbour. And I think we can achieve both."
Landfills and wastewater discharges
Oji Fibre will also lease the existing wastewater treatment ponds from Norske Skog and take over their operation to continue to treat wastewater from the pulp mill and other facilities at Kawerau. This means it will also take full responsibility for the consent to discharge water into the Tarawera River, Ryder says.
"We will operate on a business-as-usual basis and continue to strive to improve," he tells Newsroom. "You may be aware there were significant reductions in discharges in recent years, mostly notably when Oji invested to transform the Tasman pulp mill to manufacture unbleached pulp. Discharges also improved slightly when the Norske paper machine closed in 2021."
It has not, however, purchased the industrial landfills to the north of the mill. These will remain in Norske Skog ownership unless they're sold to another entity.
Ryder says Oji has never used these landfills and responsibility for their closure is with Norske Skog and Carter Holt Harvey, a previous user. "We will, however, continue to keep a close eye on landfill closures because our name remains on the relevant landfill consent for now," he says.
Bay of Plenty Regional Council chair Doug Leeder says that with the Government's National Policy Statement for Freshwater Management coming into force, and an imminent regional council plan change, it will become more difficult to get new discharge consents.
That makes existing consents enormously valuable to heavy industry, he says. "I think it's fair to say that the hurdles that will apply to discharges for industrial wastewater schemes can only increase in terms of the height of the threshold to be met."
The council's regulatory services general manager Reuben Fraser says the industrial consents for the pulp and paper mill, including water discharges, go through to 2035. The landfill consents don't come up for renewal until 2038.
"It is tougher to get such consents now, but consent to continue to discharge to the river does include a whole lot of continuous improvement, which we've seen over the years, and we'll expect to see continue." – Reuben Fraser, Bay of Plenty Regional Council
At a time when it's increasingly difficult to get new environmental consents for industrial pollution, the value of the consents will have been priced into the $10.9m purchase price and accompanying lease agreement.
Fraser adds: "It's fair to say that it is tougher to get such consents now, but consent to continue to discharge to the river does include a whole lot of continuous improvement, which we've seen over the years, and we'll expect to see continue."
Contained in the existing consents are also requirements for monitoring of the environmental impact of the landfills and wastewater treatment ponds, on the other side of the Tarawera River from the mill, and the water quality discharged into the river.
Fraser acknowledges iwi concerns about the potential for the wastewater ponds to breach the bunds separating them from the river, with disastrous consequences. But he says the regional council has been closely monitoring them, and is confident they remain structurally secure.
Leith Comer says the iwi is about to publish its aspirations for the river, in early November, and he expects Oji to support that work.
"I don't want to dwell on the past, because the past is the settlement that we got with the Crown. But if you look at the the history of the Crown and the commercial companies that were involved in building the mill in the 1950s, and operating it up until relatively recently, they used the river as a dumping ground for just about anything that they wanted to," he says.
"The river became the most polluted river in New Zealand."
Then there's Te Awa o te Atua, the harbour at Matatā where two of the first waka Te Arawa and Mātaatua landed on their route to New Zealand, and later was a safe anchor for schooners: "That was desecrated by them cutting the rivers straight out to sea."
"One of our aspirations is that we want to be working with the commercial operators of the mill [to] ultimately stop any contamination or pollution that goes into the river." – Leith Comer
The Kawerau, Whakatāne and Rotorua Lakes district councils all have wastewater systems that are not fit for purpose, he says, and need to work with iwi and big local commercial ratepayers to stop waste going from their systems into the waters.
"I could spend all of this time talking to you about the dreadful things that happened. But I'd prefer to talk to the opportunity that we have of working with all of the stakeholders along the river and Te Awa o te Atua, about restoring the mauri. And we are more than hopeful that we can form a coalition of the willing to make sure that that happens."
He says better environmental monitoring is needed, he is concerned about the potential for industrial wastewater to escape the ponds, and riverside property owners like foresters, farmers and Oji need to improve their land use.
"We are looking to work with Oji, for them to be active alongside all of the stakeholders along the river, to restore the mauri of the Tarawera awa," Comer says.
"One of our aspirations is that we want to be working with the commercial operators of the mill, the foresters upstream from Kawerau and the farmers downstream, with a view that over time we could significantly reduce, and then then ultimately stop, any contamination or pollution that goes into the river."
