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Development of the levy and work of the Establishment Board

The Forest Owners' Association and the Farm Forestry Association, in sponsoring the seeking of a levy order, were aware that the Commodity Levies Act requires the involvement of an Industry organisation. The job of the Industry Organisation is two-fold. First, to prepare the application to the Minister for a Levy Order. This includes consulting with industry, conducting a referendum and determining the parameters for the proposed levy, e.g. commodity, rate, collection method, uses etc. Secondly, on the granting of a Levy Order, to be the body which receives and applies the levy funds for the purposes as determined.

With neither of the existing bodies being entirely suitable to be the Industry organisation, the Forest Growers Levy Trust Inc. has been set up for this purpose. It has been incorporated with a small initial membership to meet the requirements of the Incorporated Societies Act, broadly representative of the forest growing industry. The members have a statutory role only and no involvement in the operation of the Board. An initial Board, being known as the Referendum Board, again broadly representative of the forest growing industry, was selected by the two Associations and has been getting on with the first task. The initial constitution, which is an interim one only, focuses on that first task. In parallel with this the Referendum Board is charged with looking forward to the second role of the Trust in the expectation of the granting of a Levy Order. This has included the development of Levy Trust Principles which will be reflected in either the Levy Order or in an amended constitution for the Forest Growers' Levy Trust Inc. to fit the new role.

The Levy Order itself will specify such things as the commodity to be levied, the collection method, the uses to which the levy funds may be put and the Act itself requires accountability and reporting to levy payers. The Levy Trust Principles go further in committing to a new constitution and policies which will include replacing the Referendum Board with a Trust Board of seven persons comprising two elected by forest growers with less than 1,000 hectares of forest, four elected by forest growers with more than 1,000 hectares of forest and with the seventh appointed by the six elected members, all being elected for a two year term. All forest owners, as defined for the referendum, will be eligible to vote for members of the Trust Board. There will be transitional provisions to ensure an efficient and effective transfer from the Referendum Board to the Trust Board.

The Trust Board will be a trustee to collect, hold and apply the levy funds on behalf of levy payers. It is not seen as an industry peak body with an activist role. By and large, industry activities will remain with the various groupings and agencies currently operating in the industry or arising in the future. Whilst the Trust Board will be primarily accountable to its constituency, being the current or potential levy payers, it will have a responsibility to consider the interests of the forest growing industry as a whole in determining the use of levy funds. In general terms, those uses will encompass industry good activities aimed at advancing the forest growing industry and enhancing profitability through asset protection, training, input to central and local government, industry standards and communications, and particularly through research from pre-planting right through to harvesting and markets.

The Levy Trust Principles will also require the Trust Board to put in place a programme and procedures to determine the use and disbursement of levy funds. This will undoubtedly involve consultation with the industry as the Trust Board charts its role as Trustee for the industry.
The whole governance strategy has been planned on the basis of an initial organisation with an interim constitution to seek a Levy Order and then, in the event of success in that regard, "re-inventing" as a Trustee holding the levy funds and listening to its constituency as to their best use in the interests of the forest growing industry.

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