The government is making a $4 million dollar payment to four West Coast timber mills to settle a long running grievance with the Timberlands West Coast SOE.
Economic Development Minister, Gerry Brownlee, says an ex gratia payment is being made to address the failure of Timberlands to supply its forecast of timber harvest from 2000 when indigenous logging stopped
"The government commissioned an independent assessment by KordaMentha to assess the actions of Timberland. KordaMentha concluded Timberlands may have not acted fairly to the West Coast timber industry over log projections," said Mr Brownlee.
"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," he said.
"The affected mills agreed between themselves how they would split the total payment. This is a good outcome that I am pleased resolves a long-standing grievance," said Mr Brownlee.
The mills are Westco Lagan Ltd and Westimber Ltd, (which are both still operating), W.E. Whiley and Co Ltd (placed in receivership in 2008) and Inangahua Sawmilling Ltd, which closed in 2008.
Mr Brownlee said that while the government had no legal obligation to compensate the mills it was prepared to make the ex gratia 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," said Mr Brownlee.