940 hectares of slash just ended the era of director immunity

The shield just cracked

Directors have spent decades treating the company structure as a firewall between them and their firm’s liabilities. A mid-2026 High Court judgment out of Gisborne has just shown how thin that wall really is when environmental compliance goes wrong.

The case centres on the 940-hectare Waingaromia Forest near Gisborne, harvested between 2015 and 2022 with no resource consents authorising the discharge of contaminants into water. Samnic Forest Management and Forest Management Solutions pleaded guilty in 2024 to representative RMA charges. When Gisborne District Council sought enforcement orders extending liability to the individuals behind the companies, four directors appealed on nine grounds. The High Court rejected all nine.

Pay peanuts, owe everything

The directors argued they had been paid ‘very limited’ fees and should not personally carry the cost. Justice Becroft was unmoved. As the Institute of Directors records, the judgment held that “whether the directors were paid minimally or handsomely, they had a responsibility to ensure that the company complied with the Resource Management Act 1991.” More bluntly, the court found “there is nothing especially unreasonable about imposing personal liability on them.”

Justice Becroft acknowledged that “the human dimension of this decision for them was palpable” but held firm on the principle. The Institute of Directors summed up the warning for every board in the country: “a company structure will not always shield directors from personal liability.”

The detail that should worry every board

The Chancery Green legal analysis pins down why this matters beyond one forest. The RMA allows enforcement orders against ‘any person,’ and that plainly includes directors. Crucially, the court upheld the orders on a joint and several liability basis, meaning any single director can be pursued for the full remediation cost, not just their proportional share.

The court did note the directors could “mount a civil claim against those who were employed to do the front-line work”. Cold comfort when the cleanup bill lands first and the litigation runs for years.

Rural advisory firm Gifford Devine put the practical implication plainly in July 2026: directors “must take notice of the work completed on site and actively take steps to avoid issues” and “cannot avoid liability by relying on corporate structures alone.”

The council is already moving on the next batch

This is not a one-off. Gisborne District Council is now pursuing iwi forestry companies and their directors among the next tranche of targets. That drags a specific governance problem into view. Iwi commercial boards, often populated with directors appointed through Treaty settlement development structures, now have to price personal environmental liability into who they put on those boards and how those directors oversee operations.

The regulatory bar has moved at the same time. The new National Environmental Standards for Commercial Forestry came into force in June 2026, requiring a Slash Mobilisation Risk Assessment on higher-risk land and putting most red zone activity behind a consent requirement. It does nothing to resolve historical liability, but it creates a clearer documented standard against which future failure will be measured. For directors, that means the evidence trail for demonstrating active oversight just became formal.

Not a Gisborne problem, a governance one

The crisis has a long history. Lincoln University research published in August 2025 analysed five RMA convictions arising from the 2018 Tairawahiti storms and found that even absolute compliance with consent conditions leaves a large residual risk of slash and sediment discharge on erosion-prone land. In January 2026, Newsroom and RNZ documented the industry lobbying to have the government reduce accountability for slash in extreme weather. That campaign looks a good deal weaker now.

The lesson runs well past forestry. Any director on a board whose operations carry material environmental compliance risk should read the Samnic judgment as a direct message. Remuneration is irrelevant to liability, delegation to contractors does not extinguish responsibility, and a single director can be chased for the full bill. For lenders and insurers with steepland forestry exposure, the sector’s risk profile has shifted. For everyone else in the boardroom, environmental compliance just stopped being a management delegation and became a standing agenda item.

Sources

• Iwi forestry companies and directors among those in council’s crosshairs (2026-09-09)
• Samnic Forest Management directors’ appeal against costs rejected by High Court (2026-07-03)
• Over the fence – Gifford Devine (2026-07-30)
• Forestry slash and directors’ duties: when environmental risk becomes personal (2026-09-03)
• National Environmental Standards for Commercial Forestry (2026-06-25)
• Storms make forestry slash inevitable, so who’s legally responsible? (2026-01-27)
• Storms, forestry slash: Where does legal responsibility lie? (2026-01-27)