The Coalition’s Wood First Policy when introduced under the current proposal tilts the level playing field for industry innovation.
Adding value to our New Zealand grown trees through local business and high value jobs makes lots of sense. As does using government procurement as lead user innovation.
But not when it effectively picks winners likely to cost the New Zealand tax payer more than equally sustainable alternative job creating opportunities.
How did we get here?
In September last year, Labour indicated they wanted to introduce a wood first approach to Government procurement procedures:
“… is to see fewer logs being shipped offshore when they can be processed here in New Zealand and be used to build New Zealand homes and New Zealand products.” Their plan is for all new government building projects – including Kiwibuild, classrooms and ministries – to be required to use New Zealand wood or present a “compelling” business case as to why they might need to use a different material.
This approach is also likely to be supported by NZ First.
While it seems details of the approach haven’t been released, it’s our understanding that the intended approach is to:
- Require all government-funded project proposals for new buildings up to 10 stories high have a build-in-wood option at the initial concept / request-for-proposals stage (with indicative sketches and price estimates); and
- When a tenant of the private sector, give preference to new buildings that are constructed out of wood.
We also understand this approach can possibly be implemented as an internal procedure and therefore wouldn’t require public consultation or notification before being implemented. A wood first approach has already been implemented by Rotoroa District Council.
As expected, ‘Wood First’ concerns us
It’s a re-hash of a previously abandoned initiative due to industry concerns (~2008). HERA, via our Director Emeritus Dr Wolfgang Scholz, played a key role in raising those concerns and worked with key stakeholders to convey them to Government.
Our position is that Government procurement shouldn’t favour any one material, rather it should articulate required performance criteria and then allow industry to compete and innovate to meet those requirements.
Specifically our concerns are that:
- Government may be proposing measures in relation to timber design of buildings that haven’t been fully considered and without robust analysis into the relative merits of different building systems or their comparative performance.
- It‘s crucial all potential cost considerations are taken into account.
- Instead of specifying any one construction system such as timber are “compulsory “ design option for its buildings, that the Government instead establishes specific performance measures it seeks for any particular building to ensure it achieves its objectives.
- A procurement process that specifically defines a timber option won’t result in a fair and balanced appraisal of alternative solutions. The tender process needs to be approached on a performance-based appraisal in respect of the desired specified outcomes.
- This approach hasn’t included adequate industry consultation and may be anti-competitive.
Our plan of attack
We’ve initiated discussions with SCNZ, Metals NZ, the CIC, BIF, Business NZ, and the Manufacturing Network to determine next steps for response. With Metals NZ taking the lead to develop an industry-wide response.
We believe Government regulating via their government procurement process, shouldn’t specify preferences for particular building material types or industry’s. Rather, regulations and guidelines should be outcome/performance based. Putting the onus for compliance directly on to manufacturers and suppliers of different building materials and allowing all industries and sectors to compete on the basis of well-articulated product performance criteria such as whole life cost and sustainability.
If on the other hand, Government isn’t concerned by product performance, but rather ensuring value-add of local timber product and prevention of exporting raw timber logs, it should seek other ways to support these initiatives. This proposed approach isn’t fair because the consequence of implementation is to give timber an immediate advantage over other building materials. This doesn’t make sense in terms of maintaining inter-material competition or ensuring buildings are designed using the most affordable, sustainable and best performing products. It also neglects the fact the local economy also benefits from value-adding other raw materials, for example locally produced steel!
The Wood First approach needs a re-think
And, we’re working with our counter-parts and stakeholders to address this.
As an industry, we need to ensure that Government procurement policy isn’t preferring one material over the other.
This means we need more thinking and work with government and our stakeholders to ensure creating local business opportunities such as Wood First are benefiting building and construction overall – and not pre-determining performance outcomes based on biased material preferences.
