ECT declines logging school

COLUMN

In her July 13 column, Kiri Allan stated: “We have double the unemployment rates to the national average and fewer people living in decent homes. We have a growing number of people here saying that they aren’t surviving, let alone thriving, in our current economic environment.”

According to Eastland Community Trust’s website, “Gisborne’s economy has been underperforming for many years. Employment shows the slowest growth rate for all regions, worker productivity is 26 percent behind the New Zealand average and internet connectivity is the lowest of all regions. Youth not in employment, education and training show that Gisborne is the worst performer of all the regions for this measure. Intervention is required to lift Gisborne’s economic performance and accelerate growth.”

ECT was established to assist in the development of a more positive, prosperous and attractive community. Its purpose includes supporting business, community and other initiatives which are likely to encourage or sustain economic growth or may directly or indirectly benefit the people of Gisborne.

In November 2016 Manaia Safety Systems undertook a feasibility study of a logging school concept to address a key economic issue facing our region — a shortage of skilled forestry workers. It concluded that “the establishment of the ManaiaSAFE Logging School in Gisborne is likely to deliver long-term social and economic benefits to the East Coast region by helping to reconcile skills supply and demand imbalance in a sustainable way.” The report recommended that a pilot logging school proceed to test feasibility assumptions.

In January 2017, Train Me Quality Services prepared a pilot management plan that would put 11 logging trainees through a 30-week learning programme. The gross pilot cost was $1.26 million with the possibility $642,000 of that would be recovered through log production revenue. Informed by a post-course completion independent cost-benefit analysis, the “Pilot results report” would seek to quantify the long-run social and economic returns on the pilot.

On April 4, 2017 Train Me submitted an investment proposal to ECT seeking a contribution of $200,000 towards the pilot, with the potential for up to half of that being returned. It outlined support from Mayor Meng Foon, the Eastland Wood Council, Te Runanganui o Ngati Porou, four logging companies and eight supplier businesses. EIT signed a letter of support on April 6, 2017.

Now, according to its website, “One of the key messages ECT received from the community last year in the Key Research survey was that it must take an active leadership role in economic development, with job creation and the attraction of new business the key economic issues facing our region. According to that same data, our community overwhelmingly felt the most important priority for ECT is to undertake projects that create jobs.”

Confirmed by letter on July 6, ECT declined Train Me’s application, believing we need to work in partnership with industry to improve the standard of training for forestry students on a larger scale. In doing so, ECT gave up the opportunity to take active leadership and support Train Me in trying to do something different yet feasible to improve job prospects for locals.

Train Me’s motto is “Keep moving forward”. While we continue to engage with industry and key Ministers, we have begun the process of connecting with Chinese philanthropists who are willing to support a good cause while future-proofing the New Zealand-to-China wood supply chain. (A copy of Train Me’s investment proposal to the ECT can be downloaded from the “news” section at www.trainmeqsl.co.nz)

In her July 13 column, Kiri Allan stated: “We have double the unemployment rates to the national average and fewer people living in decent homes. We have a growing number of people here saying that they aren’t surviving, let alone thriving, in our current economic environment.”

According to Eastland Community Trust’s website, “Gisborne’s economy has been underperforming for many years. Employment shows the slowest growth rate for all regions, worker productivity is 26 percent behind the New Zealand average and internet connectivity is the lowest of all regions. Youth not in employment, education and training show that Gisborne is the worst performer of all the regions for this measure. Intervention is required to lift Gisborne’s economic performance and accelerate growth.”

ECT was established to assist in the development of a more positive, prosperous and attractive community. Its purpose includes supporting business, community and other initiatives which are likely to encourage or sustain economic growth or may directly or indirectly benefit the people of Gisborne.

In November 2016 Manaia Safety Systems undertook a feasibility study of a logging school concept to address a key economic issue facing our region — a shortage of skilled forestry workers. It concluded that “the establishment of the ManaiaSAFE Logging School in Gisborne is likely to deliver long-term social and economic benefits to the East Coast region by helping to reconcile skills supply and demand imbalance in a sustainable way.” The report recommended that a pilot logging school proceed to test feasibility assumptions.

In January 2017, Train Me Quality Services prepared a pilot management plan that would put 11 logging trainees through a 30-week learning programme. The gross pilot cost was $1.26 million with the possibility $642,000 of that would be recovered through log production revenue. Informed by a post-course completion independent cost-benefit analysis, the “Pilot results report” would seek to quantify the long-run social and economic returns on the pilot.

On April 4, 2017 Train Me submitted an investment proposal to ECT seeking a contribution of $200,000 towards the pilot, with the potential for up to half of that being returned. It outlined support from Mayor Meng Foon, the Eastland Wood Council, Te Runanganui o Ngati Porou, four logging companies and eight supplier businesses. EIT signed a letter of support on April 6, 2017.

Now, according to its website, “One of the key messages ECT received from the community last year in the Key Research survey was that it must take an active leadership role in economic development, with job creation and the attraction of new business the key economic issues facing our region. According to that same data, our community overwhelmingly felt the most important priority for ECT is to undertake projects that create jobs.”

Confirmed by letter on July 6, ECT declined Train Me’s application, believing we need to work in partnership with industry to improve the standard of training for forestry students on a larger scale. In doing so, ECT gave up the opportunity to take active leadership and support Train Me in trying to do something different yet feasible to improve job prospects for locals.

Train Me’s motto is “Keep moving forward”. While we continue to engage with industry and key Ministers, we have begun the process of connecting with Chinese philanthropists who are willing to support a good cause while future-proofing the New Zealand-to-China wood supply chain. (A copy of Train Me’s investment proposal to the ECT can be downloaded from the “news” section at www.trainmeqsl.co.nz)

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wiki gerrard - 10 days ago
ECT is showing they are not interested in creating jobs for our Gisborne East Coast people. If they are not going to take a leadership role in our community, they should be disbanded. What is their purpose? Who are they there for?

Di Walters, Hamilton - 10 days ago
It's a shame that ECT don't see the big picture and the difference that could be made not only in Gisborne but putting NZ on the map for innovation.

Ratahi Cross - 10 days ago
I am very disappointed to hear that this project has failed to attract investment by ECT. Just for the safety rationale, and then the improved skill factor. It should have been supported. No wonder there have been whispers in the community about the lack of alignment of ECT to their visions. Interesting.

winston moreton - 9 days ago
Mr Koia is right to feel aggrieved. If Mayor Foon outlined support then the application should have been successful. The Mayor is one of the seven trustees. Perhaps he was an apology, as he was absent from the June meeting of trustees. As an electricity consumer I was in the public gallery as a beneficiary.
Here's the thing. ECT (as trustee owner of the Eastland Group) controls a half-billion dollars on behalf off all electricity consumers and ratepayers. Under trust law the trustees have, in my opinion, failed in their duty since 1996. They have accumulated capital funds at the expense of the income beneficiaries. Any person resident in Gisborne with a power account is an income beneficiary. Distributions should be made immediately to all of us who fund the trust every time we switch on the power. The trustees are contributing to poverty.

wiki gerrard - 9 days ago
Well said Winston. Do ECT trustees want the half billion dollar funds for themselves? Why doesn't the community protest or sign a petition to get this lot voted out and the money flow on to the community that has funded the trust?

Ed Hindmarsh - 9 days ago
I believe this well-posed letter requires a public response from the chair. It is apparent that the trustees are repeatedly failing to fulfil the mandate as it was intended.

Footnote from Ed: It was forwarded to the ECT general manager to see if they wanted to respond. Regarding the mandate of the trust, that's a perspective of your father Winston but not of successive trustees, their advisers, nor one of the framers of the trust deed who I have questioned about original intentions for the trust. The ECT chairman, my father, is on holiday.

Ed - 9 days ago
Thanks for your response on behalf Jeremy. Like Michael, I too am on holiday, in Rome... The mandate, or purpose if you prefer, to which I refer is clearly stated in the deed. My belief is that too much poetic licence has been exercised by the trustees. Mainly the arguably questionable investments rather than 'preservation' of initial capital. The aim appears to be focused on growth of capital which was not the intention - correct me if I am wrong. Cheers, Ed.

Leighton Evans, ECT general manager - 8 days ago
We do not normally comment publicly on the reasons we decline specific applications, however we feel it is important to talk about the impact the Trust is making in regards to economic development and job creation.
It is always a difficult decision to decline an application. Not everyone likes the conclusions we reach, and we are prepared to live with that. Decision-making is a responsibility we take very seriously, and we have to weigh our funding options carefully.
The Trust continues to focus significant energy and effort on economic development. We have already made a substantial investment in the region's key priority areas such as wood processing, tourism and regional economic development with measurable results.
Our work at Prime has generated 20 jobs directly, with a further 80 jobs likely in the coming 12 months. The Trust will create 200 jobs directly in wood processing in the coming years. This success will contribute to the region's improving economic performance.
At Commerce Place, the Trust has entered a lease arrangement with a world leader in the manufacture of surf sports equipment. This local business will expand their existing operation and create four new jobs.
In terms of distributions - we have invested in social enterprise by partnering with the Akina Foundation to help develop locally-led, innovative and sustainable solutions to issues like job creation. We have also funded a range of feasibility studies and economic investigations.
We are currently working alongside a number of local entrepreneurs on a range of projects. They are commercially sensitive but we are excited about what's in the pipeline.

Henry Koia - 8 days ago
Of course, beneficiaries can expect ECT to 'weigh its funding options carefully'. It's all about risk and return.
ECT's biggest investment decision in its history was approving a $7.4 million purchase of the Prime Sawmill, with a view to developing a wood processing cluster that could create as many as 120 jobs and inject up to $7.7 million into the local economy over the next three years. This investment does not come without substantial risk as wood manufacturing is a volatile and highly competitive market.
Current global demand for forestry products is driving up export growth, with China continuing to be a major destination for radiata pine logs. This is good news for our region because the amount of wood harvested here is expected to nearly double over the next five years and to remain at that level for the next 30 years.
According to Activate Tairawhiti's website "a further 600 jobs could be created over the next five years, due to the volume of trees reaching harvest maturity. These jobs will support further employment in management, transport, training and support services."
The bad news is that there's not enough skilled forestry workers to fill the vacant jobs that are literally growing in our back yard despite there being a sizeable pool of available youth labour. According to Gisborne Herald correspondent 'Local Forester' we need another 400 logging workers on the East Coast in the next four years, starting now.
ECT had the option, through Train Me's investment proposal, to invest $200,000 with the potential of getting up to half of that back, into what was essentially a research project of economic significance that had the potential to lead on to the establishment of a national network of forestry schools. Without requiring further investment from ECT, with the network's HQ based in Gisborne and schools on the network located at Gisborne and Ruatoria, these schools could have been the solution to filling those 400 vacant logging jobs; creating further management, transport, training and support services jobs; and mitigating risk to ECT's significant investment into wood processing by addressing market failure further up the wood supply chain - you cannot process wood without wood to process!
So, back to risk and return. Did ECT make the right decision? You weigh it all up.