The Department of Conservation (DoC) has confirmed that it is negotiating with a foreign company to plant trees on public conservation land and collect a share of the carbon credits.
Climate Change Minister Nick Smith revealed last week that talks were under way but has since gone quiet on the issue.
DoC says it has been talking with several foreign investors, but is now dealing with only one company, one with Australian connections. It says several parcels of land are being discussed, but won't say where they are.
The department adds, however, that those negotiations are now on hold until the Government's Emissions Trading Scheme is finalised.
DoC's aim is to regenerate indigenous vegetation, but it says the planting of exotic species may be permitted if it promoted native growth.
It says the foreign investor is likely to fund the regeneration programme and contribute toward another conservation project, and the parties would share the carbon credits.
The negotiations follow a two-year tender process.
Why hand over gains?, Labour asks
The Labour Party is questioning why the Government would hand over potential gains from the trees to overseas interests.
Climate change spokesperson Charles Chauvel says any such use of conservation land, in particular, should benefit New Zealanders.
"In principle, you'd want it to be planting by New Zealanders so that the profit from any harvesting comes back to New Zealanders and the credits go to New Zealanders. That would seem to me to be the overriding policy concern."
But Mr Smith told Morning Report on Monday that such planting presents opportunities for New Zealand.
"Foreign companies are already in agreements to carbon-farm on those lands, providing it doesn't compromise the conservation objectives," he said. "And, in fact, in planting trees in any of these areas there's conservation gain."
Foreign involvement 'reprehensible'
Campaign Against Foreign Control of Aotearoa spokesperson Murray Horton says it's reprehensible to let overseas interests carbon-farm on Crown land.
"I don't see why our conservation estate should be used for planting trees for the exclusive benefit of transnational forestry companies," says Mr Horton.
"We've flogged off enough of the state forests, the exotic forests in this country that were established to set up a forestry industry for New Zealand."
Green Party co-leader Russel Norman says it would take a "very strong case" to justify why a foreign company should be brought in instead of DoC handling it themselves.