Tonga forestry deal with North Island iwi causes growing concern

Concern is mounting over a multi-million dollar forest deal in Tonga between the Kingdom's Government and a central North Island iwi.

As Pacific Correspondent Barbara Dreaver reports now even the PM is questioning the deal. Source: 1 NEWS

Tonga's state-owned forestry business has been debt ridden for years until Tahu Whaoa signed a deal to bail it out last month.

It has already covered the Government's debts of over $NZ2.6 million and has agreed to pay a further $NZ3.5 million in return for the control and management of the forest company for 50 years. 

Roger Pikia who heads Tahu Whaoa, a small but wealthy iwi, has promised a quick turnaround to the 700-hectare forestry business based on Eua Island.

"We will adopt a very aggressive replanting programme in Eua and I have spoken to the Minister from Eua and asked him to ensure that everyone who is employable on Eua will come to work for the company to replant the island. So we intend to do that within the first three months," he said at the signing last month.

But Mr Pikia, who is instrumental in the deal, is himself under the spotlight.

Three years ago, a High Court judge found he had taken his grandmother's land in actions that could be described as a fraudulent breach of trust.

Now he faces pressure from unhappy iwi leaders pushing for an investigation into financial management of a Te Arawa Trust he chairs.

ONE News has also discovered that, unusually, the company which owns the Tongan forest shares, Ngati Tahu Ngati Whaoa Runanga Ltd, is registered in Vanuatu, a well-known tax haven.

Mr Pikia did not return ONE News calls.

Tongan Prime Minister Akilisi Pohiva, currently in New Zealand, says he is disappointed more due diligence wasn't done by his Government before the deal was signed.

He will be discussing the matter with his cabinet when he returns home.