Forestry industry out on a limb

Tom Arup, Environment editor
The Age, August 9, 2014

In its heyday, the town of Cann River in the far east of Victoria was home to seven sawmills. But now just one remains .

Bob Humphreys, 70, has run it for 43 years. As a boy he spent school holidays working at the mill.

In all that time no changes have been as dramatic as those which have buffeted the industry in the past five years.

"Our critical mass has shrunk to such an extent that sooner or later it will no longer be viable. And we're rapidly approaching that point, I reckon," Humphreys says.

Forestry is one of the most disrupted industries in the country. On top of the challenges facing all heavy industry - the high dollar, international competition, falling commodity prices and relatively high cost base - the $7.5 billion timber industry faces specific difficulties at the heart of its business model.

A perpetual and heated environmental contest hangs over native logging, and plantation growers are still dealing with legacies from shambolic tax breaks and collapses. The markets for their products, meanwhile, are in a state of constant change.

The impact is broad, from small mills to the large state government-owned timber companies in NSW, Tasmania and Victoria.

Tasmanian forestry giant Gunns is the most celebrated victim, although, in truth, most of the industry is under stress, or if you are being polite, "in transition". And there is likely more pain to come.

The once-dominant native-forest chip export industry has been the hardest hit. Chips, not sawn timber, has sustained the industry for many decades.

"I can’t argue that there is no decline in the native forest industry," says Peter Mitchell, an experienced timber man and general manager of South East Fibre Exports, a mill and woodchip exporter on the NSW south coast.

"It is not happening because of green pressure. Not because of somebody sitting up a tree. It is happening because of the market."

International competition from plantations in Vietnam, Thailand and South America produce cheaper chips with higher yields. They are crowding Australia out of its traditional and once lucrative markets in Japan.

On the demand side Japanese buyers are less hungry as paper demand has flatlined and they are also confronted with a high Australian dollar. Some Japanese purchasers, mostly paper companies, are also reluctant to take woodchips from Australian native forests because of their contested environmental nature.

That has driven the volume of native hardwood - such as eucalypts - down from 10 million cubic metres to 3.8 million cubic metres. The industry has been cut by more than half in a decade.

The development of domestic hardwood plantations - such as blue gums - has added to competition for native chips.

Companies such as TimberCorp and Great Southern gorged on juicy government tax breaks and planted swathes of forests across southern and western Australia. When they fell over the estates were snapped up at cut price rates and the timber is now being flogged off, meaning production has soared 350 per cent to 5.5 million cubic metres in a decade.

The vast bulk of Australian export woodchips is now plantation-grown; they have replaced native sources in just a handful of years.

Away from chips, the market for higher-quality native sawlogs, which are used in furniture and housing, is also sliding as international competition, alternative products and a quiet global housing market have nibbled on the demand side.

And continued reductions in the amount of wood that can be economically or practically cut out of native forests in a sustainable way have also reduced the supply.

The impact of these reductions can be seen in the NSW government's recent deal to buy out a chunk of a sawlog supply contract with building giant Boral after modelling showed that, next decade, forests in the state's north would be less productive than expected.

In East Gippsland, Bob Humphreys once processed 65,000 cubic metres of native sawlogs a year across four mills in three towns; these mills employed 77 people. Now the remaining mill handles 11,500 cubic metres for sub-floor structures. He has kept the mill in the black through downsizing and a determination to maintain jobs in Cann River, where he employs 17 people. He says Cann River has become a ‘‘welfare town’’.

When a round tree is milled into square planks there is a lot of waste. As is the case with many mills, Humphreys sells the waste for wood chips.

He sells about 5000 tonnes a year to South East Fibre Exports, but in May SEFE announced an end to buying pulp logs or mill waste from East Gippsland from January.

"I am yet to find a market for my residues come the end of the year when SEFE stops taking them. And that may be a precursor to my final demise, I'm not quite sure yet,'' he says.

His experience goes to the heart of the native industry’s economic underpinning. The harvesters who cut down the trees are like millers in that they sell pulp logs - smaller or lower quality logs that cannot be used in saw mills - for chips and are now also facing weakening demand.

"Any forest owner needs a residue market to make things viable," Peter Mitchell says.

"It is like selling the cow and only selling the T-bones; it doesn’t make sense, you have to sell the sausages as well."

VicForests, which is in charge of harvesting native forests, is working to find alternative buyers for its pulp logs from East Gippsland.

The state-owned company sold 200,000 tonnes of pulp log to SEFE in the 2012-13 financial year.

Nathan Trushell, director of strategy at VicForests, says it may not need to replace the entire volume of lost sales. He concedes there will be likely be a hit - though not as large as people suggest -  but he is giving little away about what VicForests might do.

He says there are a range of measures are on the table, from different harvesting techniques to selling logs as firewood.

Trushell says it is a chance to develop a more resilient industry that is domestically focused, and would likely be smaller.

Notwithstanding VicForests' struggles to break even, Victoria’s native sector has actually held up better than that of other states.

Victoria has become the largest harvester of native hardwood forests. But even Victoria has seen production fall by about a third to 1.3 million cubic metres over the last decade.

Crucially, the state's most lucrative logging region – the mountain ash forests region of the Central Highlands – has a stable pulp log customer in Australia Paper, which is owned by Japanese paper giant Nippon.

Australian Paper’s Maryvale mill in the Latrobe Valley uses VicForests residue along with plantation timber to produce Reflex printing paper.

VicForests and Nippon have faced staunch opposition from environmentalists and scientists campaigning to protect endangered species, such as the Leadbeater’s possum, and the mountain ash forests that were ravaged in the 2009 Black Saturday bushfires.

Ten years ago NSW produced roughly the same amount of native timber as Victoria; now it has dropped well below 1 million cubic metres.

The Forestry Corporation of NSW – also state-owned – has posted operating losses from its native timber operations of about $15 million a year since 2010-11.

These losses were easily offset by the returns from their plantation assets – largely softwood species such as pine trees that are used as sawlogs, mostly for housing.

The future of South East Fibre Exports is critical for forestry in the state's south. Long a profitable business, SEFE has struggled to break even in the past three years.

SEFE’s owner is also Nippon as well as Japanese trading company Itochu. Nippon for a long time also bought all SEFE's exported woodchips.

That came to an end when Nippon got access to higher quality chips from other sources. Nippon told SEFE it no longer wanted as much supply. SEFE then had to look to Taiwan and China where prices are lower and competition is no less intense.

SEFE does have a deal to buy Forestry NSW native pulp logs. That has a few years to run but if Nippon decides to shut SEFE when that contract is up then sawmills and native harvesting in southern NSW will face the same problems as their Victorian counterparts.

‘‘Our strength is [that] our customer is our owner. But they can only support us so long. And they can buy cheaper, better quality chips somewhere else; if they don’t it drags their business down,’’ Mitchell says.

While the falls in Victoria and NSW are large, nowhere has the collapse in the native timber industry been more dramatic than in Tasmania.

At its height last decade the state was processing more than 5 million cubic metres of native timber. In 2012-13, as exports to Japan collapsed, a little under 800,000 cubic metres was processed.

That plunged Forestry Tasmania to operating losses of almost $30 million a year. The bleeding has been stemmed courtesy of a government lifeline, but the future of the state’s industry is under another cloud.

The newly elected Hodgman Liberal state government, supported by the Abbott federal government, is in the process of tearing up a peace deal stuck between environmentalists, unions and industry in 2012 to end the forest wars that have plagued the state since the 1970s.

Plantation owners have faced their own issues.

It is true hardwood estates have grabbed the vast majority of the Australian export woodchip market. But they are selling a classic commodity and are also facing the same international competition and pricing pressures as native timbers.

Some plantations established under the MIS tax breaks, introduced under the Howard government, were put on marginal land with unrealistic expectations about what could be produced.

Plantings have now come to a halt and some are even being ripped out of the ground and returned to traditional farming.

In the 2013 financial year less than 2000 hectares of hardwood plantations were established. At the height of the MIS boom 76,000 hectares were planted in 2007 alone.

The large softwood plantation estate has hardly moved in terms of area or volume for about 25 years.

For pessimists wherever one looks forestry is not growing. Optimists, though, see signs of life in the woodchip market driven by emerging Chinese demand.

The consultant Wood Resources International reports that Australian woodchip exports increased in 2013 after falling to a 12-year low the year before. That increase almost exclusively came from plantation.

The first quarter of 2014 saw the largest shipment since 2010 at the same time as exports to China, for the first time, overtook exports to Japan.

The rub, WRI also noted, is that Chinese customers paid almost $30 less per metric ton - or 15 per cent less - than Japanese customers.

David Brand, chief executive of New Forests, runs a company which has snapped up 500,000 hectares of forests and land from the ruins of MIS ventures and Gunns.

His firm forecasts that the volume of the Asian woodchip market will grow by up to 25 per cent in the next two to three years on the back of Chinese, and possibly Indian, demand.

New Forests also expects the Australian hardwood plantation estate to contract by about 40 per cent, with owners, including New Forests, choosing not to replant some areas.

Brand says that, ultimately, the company aims to produce the same amount of wood over a smaller area by increasing the yield of the plantations that remain.

‘‘Effectively for the world to become self-sustaining we’ve got to be able to increase productivity as opposed to try to clear more native ecosystem for production systems,’’ Brand says.

What does that all mean for the future?

Once the post-MIS rationalisation is complete, plantation owners might back themselves to claim an ongoing slice of growth in the Asian markets.

But it is unlikely the woodchip exports markets will return to their former glory for the native harvesters.

‘‘For a resource like the mixed species [forests] in East Gippsland we can’t complete on price and quality against the blue gum plantations. And that’s the reality, and that’s one of the reasons why we are looking at alternatives,’’ Trushell says.

Many in the industry are eyeing off technologies that may chew up large volumes of lower-grade wood and continue to support the harvesting of sawlogs.

Jim Henneberry, who ran Australian Paper until February, points to bioenergy – where pulp is burnt in furnaces to produce energy – and other processes of feeding wood fibre into products such as biofuels, solvets, chemicals and others products as a possible transition point.

He says these new technologies are not going to be dominant, but they can contribute to a much more profitable, sustainable industry.

In that vein the industry is pushing for the burning of native timber for power to be included under Australia’s renewable energy target, which is under review.

Others are hoping that by gaining certain sustainability certification – namely from the Forestry Stewardship Council that is favoured by green groups – they will again secure access to prime international customers, and at least lessen the social and environment conflict around their operations. Both Forestry Tasmania and VicForests are pursuing FSC accreditation to different degrees.

In a sign that the threat to jobs is real the Construction, Forestry, Mining and Energy Union is becoming more vocal in its calls for government to support for the sector.

For example it is pressuring the federal government to use Australian Paper products in government departments over imported paper. CFMEU national secretary Michael O'Connor draws a comparison to other struggling manufacturers.

"The majority of jobs in the forest products industry are in the sawmills and in manufacturing plants. And it therefore faces the same challenges that other parts of manufacturing face, which is high Australia dollar, increased energy costs, increased competition from imports," he says.

Judith Ajani, a senior fellow at the Australian National University's Fenner School of Environment and Society, says talk of transition for native timber is wishful thinking.

A close watcher of the industry for many decades, Ajani says it cannot survive unless it can provide a cheap, high-quality and reliable supply for chips and sawlog products at a commodity scale.

And she says it has proven unprofitable to do so. She says ultimately Australia’s timber industry will be virtually all plantation-grown, bigger and more productive than what has existed under the native-dominated model of past.

Those who believe in the native industry argue it provides benefits from the social value of job creation in rural towns to the benefit of having timber companies as land managers that prevent fires and weeds infiltration.

Another prominent argument is that plantation timber cannot replace so-called appearance products, essentially high-end, authentic furniture and hardwood floors made from native timber.

"There will be need for wood products from native forests - whether that is to offset land costs or whether there are particular products that you can’t get from international (markets) or plantations," says Ric Sinclair, managing director of Forest and Wood Products Australia

Sinclair says he believes the future of the Australia industry will be focused around a handful of highly productive regions, both plantation and native, supplying a mix of high-value, manufactured products and underpinned by meeting smaller domestic needs such as timber for bridges and power poles and eventually the potential new markets of power and bio-products.

To achieve this investor confidence needs to be restored and better use made of the existing resource.

Ajani believes a bigger issue hanging over timber is resolving the social conflict between the environmentalists and industry. That means the transition to plantations.

The role of government is critical, says Ajani. Governments own most of the native-log resource; they will decide if trees are burnt for power.

She argues that with the growth in plantations and the fundamental market restructure, the forestry industry is already enduring, and Australia is more than 80 per cent on the way to a new model. It will fall to policymakers to decide whether the final step is taken.

"It is the government’s role to end conflict in society. And it now has a practical way to do it," she says.

"The question for government is, why would they keep it all going?"

Union chops link to forestry body

Ben Butler
The Age, September 13, 2011

GAPS have widened in the formerly close alliance between the CFMEU and the forestry industry with the resignation of a union official from a key industry body.

In a scathing letter to Australian Forestry Standard chairman Geoff Gorrie, Construction, Forestry, Mining and Energy Union forestry and furnishings policy research officer Travis Wacey said he was resigning from the board of the environmental standards body because ''I do not want to be associated with a company which has such standards as I see it as detrimental to my professional reputation''.

The union's forestry and furnishings division has been a staunch friend to the forestry industry, even to the extent of supporting the timber policy of former prime minister John Howard during the 2004 election campaign.

But late last year the union signalled a move away from its support for logging in native forests, saying it would attempt to secure a plantation timber-based future for its members by talking to the green groups with which it had been locked in conflict.

In his letter to Mr Gorrie, sent on Thursday, Mr Wacey said the process used by the AFS to appoint Richard Stanton, formerly head of plantation timber lobby group A3P as chief executive, was ''potentially or actually compromised'' and said corporate governance at the organisation needed to be overhauled.

It is believed Mr Wacey's concerns about corporate governance relate in part to the dominant position state-owned native logging companies, including VicForests, enjoy on the AFS board.

AFS differs from its rival, the Forest Stewardship Council, by placing more emphasis on the views of industry than those of green and community groups.

Directors appointed by government-owned loggers hold four of nine board seats.

The private forestry sector has three seats, while community organisations and employees have one seat each. Mr Wacey represented employees as the representative of AFS's sole employee sector member, the CFMEU.

While Mr Wacey's letter to Mr Gorrie made it clear he regarded Mr Stanton as a ''quality appointment'', he raised concerns that the position was not advertised.

He said the appointment process ''lacked transparency'' and did not deal with ''serious conflict of interest issues''.

Mr Gorrie said he had received the letter but did not wish to comment

Tasmanian forest industry waits for emergency funds

Sid Maher
The Australian (article), 20 November 2010

An emergency rescue package for the Tasmanian native forest industry promised during the federal election campaign is yet to be delivered.

The delay has sparked fears it could jeopardise an industry restructure that has won the overwhelming support of workers.

A ballot of CFMEU Tasmanian forestry division workers overwhelmingly supported a peace deal between conservationists, the industry and the union, with 97 per cent voting in favour of the industry restructure.

But CFMEU forestry division national president Jane Calvert said concern was growing at the Gillard government's failure to deliver the promised $20 million in emergency assistance to the industry.

Ms Calvert said the funds were to have been earmarked for about 1300 people involved in harvesting and haulage who had been hit hard by the current state of the industry.

She said that, unless the money for the emergency rescue package was delivered shortly, "there will be panic around our industry".

Ms Calvert said the government's procrastination could spark a loss of confidence in the process even though the union ballot vote had delivered a strong mandate for the process to begin.

More than 55 per cent of eligible members voted in the ballot -- about twice the normal turnout -- and 95 per cent endorsed the union's position for a just transition for workers, their families and communities.

On another question, 94 per cent voted for a future ballot on whether to endorse the continued implementation of the restructure.

The overwhelming endorsement of the "statement of principles" struck between environmental organisations, the industry and the union will spur talks on a moratorium on logging in high-conservation areas and, ultimately, a shift away from native forests and into plantation timber.

The CFMEU wants the green lobby and governments to secure the industry's long-term survival around the nation by agreeing to a dramatic expansion of plantation forestry.

Forestry Minister Joe Ludwig said the government would meet its election commitment to help forest contractors and their employees meet the challenges facing the native forest sector in Tasmania. "We recognise that contractors in Tasmania are facing difficulties. I will be making an announcement on the details of this package shortly and offers will be made to successful applicants before Christmas," Senator Ludwig said.

In Eden lies knowledge of trees

Paddy Manning
Sydney Morning Herald, October 30, 2010
Also published in WA Today

''Clearing forests may enrich those who are doing it, but over the long run it impoverishes the planet as a whole.'' That's not tree-hugging blather, but a leader in The Economist a few weeks ago.

The magazine wants governments to ''move fast'' to save the world's forests, describing them as ''purveyors of water, consumers of carbon, treasure-houses of species … ecological miracles''.

''Without a serious effort to solve this problem,'' the leader concluded, ''the risk from climate change will be vastly increased and the planet will lose one of its most valuable, and most beautiful, assets. That would be a tragedy.''

A map of the world, inside the magazine's special report, coloured Australia bright red - one of a handful of countries, including Brazil and Indonesia, losing more than 500,000 hectares of forest a year since 2005.

As climate change accelerates, it makes no sense to be chopping down native forest - the cheapest, largest-scale carbon sequestration available. Land-use change (mostly deforestation) accounts for about 15 to 17 per cent of global greenhouse gas emissions - more than all the world's ships, cars, trains and planes.

Afforestation, reforestation and reduced agricultural emissions could, the magazine reported, sequester 40 parts per million of greenhouse gas from the at osphere by 2050. (We are at 450 ppm and rising; we need to get back to 350 ppm.) Old growth forest may be especially significant in its ability to suck up carbon.

Which is one reason there has been an ecstatic reaction to the peace deal negotiated this month to phase out native forest logging in Tasmania.

A lot of detail needs to be fleshed out, and there is plenty of scope for backsliding, but the immediate focus has switched to the mainland. Can a similar coup be achieved here?

Talks are beginning, but it looks hard. At Eden, on the NSW south coast, the Japanese-owned South East Fibre Export woodchip mill is locked in a 40-year fight for survival against conservationists.

Its chief executive, Peter Mitchell, says that SEFE, unlike Gunns, does not have the option of switching to plantation. Too much nearby forest is protected, or is state forest which cannot be converted to plantation.

Woodchip prices are down. A value-adding pulp mill is not an option - the region does not have enough water and, at roughly a million tonnes a year, throughput is too small to justify the investment needed.

The mill is a major employer in the Eden area, whose economy the federal Labor MP Mike Kelly - also the parliamentary secretary for forestry - describes as tenuous. Parliamentary library research he's done confirms SEFE can't move to a wholly plantation base.

A bright spot for SEFE was a proposal, now before the NSW government, to build a five megawatts biomass plant to burn so-called fines - residues from their own mill, and from nearby sawmills - to generate renewable electricity. At the moment the residues either help power the Bega Cheese factory or are sold as mulch and carted away. Some is wasted.

The plant would power the mill and, if excess power was sold on and renewable energy certificates (RECs) generated, it could be a nice little earner.

SEFE estimates that on top of turnover of about $70 million a year, if the biomass plant generated its forecast 31,000MWh a year, sold on at $80/MWh (based on a REC price of $35 and a wholesale electricity price of 5.5¢/kWh) it would pull in about $2.5 million.

Which is not make-or-break - SEFE will survive if the plant does not get up. A key question is whether the local retailer Country Energy, the only logical buyer, will buy power from a controversial project. Mitchell says Country offered SEFE an indicative price a year ago.

''They'll buy it,'' he says, ''but they wouldn't sell it as Green Power.'' Country dodged the question this week, saying it has all the renewable energy it needs for now.

Conservationists fear the Eden biomass proposal is a test case, the thin end of the wedge, which would provide a vast new market to prop up native forest logging, just as the economic case for traditional woodchip operations is unravelling. It may seem crazy to log native forest for renewable energy now, but if a carbon price is brought in, and it rises as expected, dragging REC prices up with it, what now seems uneconomic could soon become a major industry. It is a deal-breaker for the environment movement if native forest can be burnt to generate ''renewable'' energy.

''It's the number-one conspiracy theory we get thrown at us,'' says Mitchell, adding that the REC regime incorporates a ''high value test'' that prevents logging for the primary purpose of generating energy. NSW environment protection laws prevent use of forest residues for power generation. Mill residues are OK.

Kelly, whose seat of Eden-Monaro takes in both the Snowy Hydro scheme and Infigen's Capital wind farm at Bungendore, wants the region to be Australia's renewable energy flagship and is working with the Clean Energy for Eternity movement, which promotes a ''50/50 by 2020'' emissions reduction target.

Kelly is a cautious supporter of the SEFE project as long as it does not use native forest waste, although he supports native forest logging in the region.

The forestry division national secretary of the Construction Forestry Mining and Energy Union, Michael O'Connor, is equally guarded. The union's position will depend on the outcome of collective agreement negotiations at SEFE. ''We're not going to support any employer … if they don't have good, safe union jobs. It's a bit like someone you live next door to. If they're rude to you, you're less likely to help them out.''

paddy.manning@fairfaxmedia.com.au

No forest quick fix: union

Adam Morton
The Age (article), October 28, 2010

THE forestry workers' union has warned the Brumby government not to make a quick-fix election commitment on native forests to woo the green vote, saying it would kill any chance of a Tasmanian-style peace deal for Victoria.

The Construction Forestry Mining and Energy Union has called for forestry peace talks for Victoria similar to those in Tasmania, where the timber industry and environment groups last week agreed to a framework deal to phase out the majority of native forest logging.

Michael O'Connor - the CFMEU forestry division national secretary who will lead the entire union from January - said Victorian timber companies had already been approached about joining talks on the industry's future.

But he said this did not mean the union supported an end to native forest logging in Victoria, and cautioned against the state government promising a ''five-minute fix'' before the November 27 poll.

It is understood Labor figures have been considering an election forestry commitment, with ending logging in Melbourne's water catchments a likely priority.

Mr O'Connor said: ''My view is, if the government wanted to play around the edges with this issue they probably would kill off instantly any chance of a similar process as Tasmania ever happening.

''People who are advocating certain positions about the forestry issue just because there is an election around the corner, shouldn't let the blood rush to their head.''

Mr O'Connor said the native forest industry was in crisis, and that peace talks were the best way to give security to forestry workers and towns. In the meantime, he called for the forest area available for logging to remain unchanged and timber contracts overhauled to protect workers' rights.

Wilderness Society forests campaigner Luke Chamberlain called on the government to commit to supporting Victorian peace talks. He said they would need to protect native forests and give the logging industry a secure future in plantations.

Victorian Association of Forest Industries chief executive Philip Dalidakis said the association would expect to be involved if talks went ahead, but they would have to be on a different basis to Tasmania's.

Environment Minister Gavin Jennings said the government would talk to all parties before any decisions.

Opposition spokesman Peter Walsh said a Coalition government would give security to the timber industry by guaranteeing ongoing access to forests. It would support peace talks if they had industry backing, but said it was ''very early days''.

CFMEU declares forests war is over

Matthew Franklin, Chief political correspondentThe Australian (article),  October 23, 2010

CFMEU forestry division national secretary Michael O'Connor in parklands in North Melbourne. Picture: Aaron Francis Source: The Australian

The union representing forestry workers has conceded logging in the nation's natural forests must stop.

It has declared an armistice in its 30-year war with the environmental movement.

But the Construction Forestry Mining and Energy Union now wants the green lobby and governments to secure the industry's long-term survival by agreeing to a dramatic expansion of plantation forestry.

The CFMEU also wants a new focus on value-adding through investment in sectors such as pulp and paper, and veneer board. "Our industry is on the verge of collapse," CFMEU forestry division national secretary Michael O'Connor told The Weekend Australian yesterday.

"We've got to come up with a solution. The only way to do that was really to sit down with people we've been opposed to for 30 years and see if we could come up with one."


Mr O'Connor's comments, welcomed by the Australian Conservation Foundation, the Australian Greens and the Gillard government, represent a fundamental shift after years of often physical conflict over logging in native forests, particularly in Tasmania.

They suggest his union will dig in over its support for the proposed Gunns pulp mill in the Tamar Valley, strongly opposed by conservationists.

Last week Tasmanian environmentalists and loggers agreed to begin talks over a moratorium on logging in high-conservation areas and, ultimately, a shift out of all native forests and into plantation timber.

Yesterday, Mr O'Connor broke with employer groups to call for the Tasmanian deal to be treated as a template for nation-wide reform to provide a lifeline for more than 100,000 Australians employed in the timber industry.

"The hard truth is that the native forest industry in every state is in crisis," he said in his first interview about the Tasmanian deal.

Mr O'Connor is well known for his union-first stance and came to prominence in 2004 by making a forestry deal with John Howard to protect jobs.

Yesterday, he said successful activism by the green lobby had "trashed" the Japanese wood chip market and the hardwood sector was in deep trouble. His union had decided the best way to help its members was to secure green backing for an expansion of plantation forestry and encourage investment in value-adding projects.

"If we require a comprehensive plantation strategy that's going to increase the amount of saw logs available to the industry, perhaps the environmental movement will support us in a proposal about that.

"Maybe we can harness their effective political machine for an outcome."

Australian Conservation Foundation executive director Don Henry welcomed the CFMEU's shift and promised to help.

"This is a unique opportunity to lay down our arms and work respectfully together to build a strong and sustainable value-adding industry based on plantations," he said.

"The ACF is a strong supporter of plantation forestry and value-adding at world's best practice."

Greens leader Bob Brown, a veteran of Tasmania's forest wars, was not available yesterday but deputy leader Christine Milne said Mr O'Connor's comments were a cause for celebration because it meant forests would be protected.

"The Greens have always supported an assisted transition for forestry workers out of native forest logging, and we have always been confident that the transition will bring benefits to workers, industry and community," Senator Milne said.

Sustainability Minister Tony Burke said he was not certain other states could mirror the Tasmanian agreement, which was linked to the building of a pulp mill and involved high-value forest areas such as the Styx and the Tarkine.

He said he was pleased the warring parties had found their own agreements rather than having deals imposed by the government, but warned change would not happen overnight.

Mr O'Connor called for an immediate change in the way logging volumes are determined. Under the existing regional forestry agreement process, governments took submissions from employers and unions as well as environmentalists and then acted as umpire.

"It didn't work," Mr O'Connor said. "We are saying why don't we see if we can get an agreed position with the environment movement and take that to government?"

Asked how his members would feel about the sudden change in tactics, Mr O'Connor said his job was to secure the best outcome for his members. "I think we've got a track record showing that we're not scared of a fight," he said.

"But if a better outcome can be achieved by negotiating or having dialogue with people we've traditionally been opposed to, then certainly we take that path.

"This next stage is going to be critical. But really the implementation of anything that comes out of it could be over a 15- or 20-year period. This will probably outlast the rest of my working life."

Mr O'Connor's comments come ahead of a union ballot next month to approve the Tasmanian deal.

Gillard paves way to end Tasmania logging conflict

Tom Arup
The Age (article), July 14, 2010

The Gillard government has offered to finance a potential breakthrough between environmentalists and forestry companies to end the decades-long conflict over native forest logging in Tasmania.

In meetings in Tasmania last week, Forestry Minister Tony Burke is understood to have told negotiating parties some federal money is available for an agreement and he has asked for a deal to be presented to him by early next week.

Over recent months, representatives of the timber industry and the environmental movement have been negotiating an agreement that could end much of the native forest logging in the state.

While any deal could still fall through, the parties are now understood to be getting close. The environment movement - represented in the negotiations by the Wilderness Society, the Australian Conservation Foundation and Environment Tasmania - is understood to want an almost immediate halt to logging of high-conservation-value forests and a phased end, over a number of years, to almost all native logging throughout the state except in rare circumstances.

In return, the struggling Tasmanian timber industry - represented by Timber Communities Australia, the National Association of Forest Industries, and the Construction, Forestry, Mining and Energy Union - wants a restructuring package to help industry move towards certified plantation timber.

The industry is also understood to be asking for financial help for new infrastructure and roads to ensure its long-term survival. It also wants support for Gunns' stalled Bell Bay pulp mill.

Mr Burke is understood to have asked the parties to present a deal to the government by early next week and has told them that while there is not unlimited money to get an agreement, the government would step in if an appropriate agreement were presented.

While refusing to comment on any government offer, Mr Burke told The Age yesterday ''there are genuine efforts being made by people who have spent their lives arguing with each to see if they can reach a settlement''.

''We are not there yet, but it would be a massive change from the conflict that has plagued this issue for generations.''

National Association of Forest Industries chief executive Allan Hansard will meet his Tasmanian member companies today to discuss the agreement.

Green groups have also presented parts of the deal to many of the community-based environment bodies they are representing in the talks.

Logging in Tasmania has been a vexed issue for federal Labor for years. Labor leader Mark Latham's promise to protect large parts of Tasmania's forests during the 2004 election sparked an angry campaign by the CFMEU against the proposal, which is credited with losing Labor the Tasmanian seats of Braddon and Bass at that election.

The Tasmanian timber industry has suffered financially in recent years because of a global glut of wood chips and an increased demand for environmentally friendly plantation timber from key Asian customers.

Source

THE AGE: Tasmania is the key to Labor making up lost ground on forests

Natasha Cica
The Age, Opinion, May 16, 2007

Labor got pounded in 2004. Tact and ticker are need for 2007, writes Natasha Cica.

Inching daily closer to the federal election, Labor should not be dazzled by the beautiful set of polling figures that Maxine McKew just scored in the star seat of Bennelong, nor dwell too long in the mines of Western Australia and big city boardrooms.

Tasmania and its forests tend to be left off mainland maps - but only a fool would do that now. Partly because the northern seats of Bass and Braddon are must-wins for Labor: both were lost on forestry policy as the first falling dominoes in Mark Latham's 2004 election defeat. And partly because a Saulwick poll released last week measured first-preference House of Representatives support for Labor in Tasmania at just 36 per cent, compared with 44.6 per cent in 2004. That poll unhelpfully did not deliver the two-party-preferred picture, and indicated 13 per cent of voters were still undecided, but it's fair to say Labor would prefer a trend in the opposite direction. So would the Coalition, whose lower house primary vote was measured by Saulwick at just 34 per cent, down 9 per cent from 2004.

John Howard's riposte to the Bennelong survey was "that poll didn't tell me anything I didn't know" - words he must also have muttered in response to this sampled snapshot of Tasmanian voting intentions in Bass, Braddon and beyond. No fools, both Howard and Environment Minister Malcolm Turnbull have visited Tasmania in the past fortnight to press flesh and wedge Labor on this front. Hard cop Howard mainly stuck to forestry-dependent communities in Tasmania's north, labelling opponents of Gunns' proposed Tamar Valley pup mill a "noisy minority" (measured by another poll at almost half the local population) and holding the jobs-equals-logs line. This was a calculated attempt to punch a hole through the somewhat greener deal Rudd cut before Labor's April national conference with Tasmania's pro-logging Premier, Paul Lennon, and the powerful CFMEU, who both walked straight into Howard's arms at the last election. The contours of the final policy product remain to be seen, but part of the promised package involves conserving more forests.

Soft cop Turnbull took a different tack. First, he deflected questions about the democratic dimensions of the Federal Government's environmental assessment process for the pulp mill, which requires all public submissions to be sent through Gunns - a corporation notorious for running the "Gunns 20" litigation against environmentalists, and recently hoist (again) on the pointed pen of Tasmanian novelist Richard Flanagan, writing for The Monthly and London's Daily Telegraph.

Turnbull quickly turned to whacking Lennon's Labor for neglecting its environmental responsibilities on Macquarie Island, a world heritage area ravaged by rabbits and rats. "This is a state government that has put $15 million into (Hawthorn) Football Club but is not prepared to put one cent into an island that has been part of Tasmania since 1825," thundered Turnbull, singing from almost the same songsheet as cultural commentator Leo Schofield, now resident in rural Tasmania.

After the bloodletting surrounding Lennon's March fast-tracking of the pulp mill - featuring hardline attacks on the reputations of local objectors, including a former Supreme Court judge, a senior CSIRO scientist, 14 University of Tasmania specialists in ethics, governance and law, an award-winning broadsheet journalist and a dissident state Labor parliamentarian - Schofield mounted his own protest.

He denounced Lennon as an "uberbogan" who brings ridicule to his office, attracting "nothing but scorn and disdain from thinking members of our population", and who "seems to think anyone who admires a tree or who is moved by poetry and beauty is a dickhead or worse".

Apparently appreciating that Tasmania has historically been both Australia's poorest state and home to its boldest environmental activism, Howard and Turnbull have walked and chewed gum at the same time, playing to two different galleries. To beat that, Rudd and environment spokesman Peter Garrett will need to go one better - uniting Tasmanians on forests. Rudd made the wise opening move of drawing Lennon and friends into his consultative tent. Federal Labor must also ensure its forestry policy passes Rudd's own future test, setting young Tasmanians up for working futures in the 21st century, not the 20th or worse. All this will demand enormous reserves of ticker and tact. But if all else fails, Team Rudd can always fall back on Greg Combet's winning line from ABC TV's waterfront epic Bastard Boys: "Change hurts, John."

Natasha Cica is director of management and communications consultancy Periwinkle Projects.

Original article

THE AGE: Bushwhacked by logging industry

Marcus Ward
The Age, March 23, 2007

THE recently announced closure of the Black Forest Timbers (BFT) sawmill at Woodend is far more than just another story about yet another small business shutting its gates. It's the story of the end of a myth that has underpinned the state's logging industry for three decades: the myth of sustainable logging.

Black Forest Timber was established in 1974 at a time when the logging industry was struggling with low profits, dropping demand and a dwindling log supply caused by decades of overlogging and poor forest management. Loggers were being hammered by imports and competition from domestic pine.

Out of this crisis sprang a new industry model. BFT was both a creation of and an ardent practitioner of the then new business model. The new approach changed fundamentally the way state forests have been managed as well as the relationships between government, industry, bureaucracy and the community.

In the 1980s the new logging industry plan gained momentum and was embraced by governments at all levels, by the unions and the bureaucrats. An essential change was the move to intensive logging. Selective logging all but disappeared in favour of clear-felling. At the same time the areas of logging also dramatically increased.

In turn, this required the introduction of export woodchipping as a convenient way to profit from and practically deal with the huge mountain of trees being felled.

Herein lay a troublesome hurdle. Woodchipping has never been accepted by Victorians. Many polls have been carried out over many years. They all register a very high disapproval level. In an effort to sell the new approach to government and the community, a PR campaign was mounted and vigorously maintained, often using government grants.

The plan became more than a plan; it became a dogma. A new vocabulary was consciously developed to distinguish old "unsustainable logging" from the new "sustainable logging". "Logging" became "harvesting". The "logging industry" became the "timber industry". "Woodchips" weren't chipped trees, but rather the "waste from the forest floor that would otherwise be burnt". From dogma to mythology, criticism was incomprehensible to believers.

The industry needed huge subsidies, and they got them; again and again. They sold the idea of "sustainability" at every opportunity. It justified the enormous injection of taxpayer support because it carried with it the notion of building something for the future, something permanent.

In this new era, loggers were not only successful business managers, they were environmental stewards. This was an important part of the message.

There have been many industry restructures and rescue plans over the past 30 years.

As industry target after target failed, new plans substituted for old as quickly they failed. "Value adding" has arguably been used by no industry as successfully as Victoria's hardwood loggers for raiding the public purse. There have been export grants and product development grants. There were grants to "prove up" the viability of kiln-dried beams. There were grants to improve efficiency of kiln drying and steaming. There have been transport subsidies, marketing subsidies and several adjustment packages.

For a small sawmill with limited prospects of expansion, BFT's access to government support has been extraordinary. In just the past four years it has received about $1 million a year in transport subsidies and has also received several $1 million-plus industry development grants. Distributed over the

14 sawmill worker jobs disappearing with the closing of the sawmill, this equates to subsidies and grants of $150,000 a worker a year over the past four years.

The amounts of money thrown at hardwood loggers in recent times is sobering. In 2000, Steve Bracks signed an agreement with the Howard Government that locked in a further 20 years of export woodchipping and clear-felling in western Victoria; $63 million was set aside for more industry adjustments and to ensure this was a final helping hand from government. BFT was overjoyed. Two years later the Bracks Government determined that the local forests upon which BFT depended were logged out and it decided to end all native hardwood logging west of the Hume Highway. It introduced yet another "new plan": Our Forests, Our Future. Bracks threw another $80 million in industry adjustment at the loggers and reduced sawlogging by about 30 per cent but did not reduce the area of state forest being logged. Instead, less went to sawmills and more to woodchips. They continue to believe and invest.

Good myths are potent and often endure against the odds. So it was with the sustainable logging myth. Because Labor and Liberal governments had invested so heavily, they ignored the obvious warning signs of failure. Instead, they became more desperate to "make it work". Clear-felling and woodchipping were rapidly killing the hardwood sawmilling industry. Because failures were always met with new adjustment plans, failures were hidden by the "good news" of new grants and investments.

In 2000 an alternative industry plan was developed by conservation groups and Treasury. It offered a no job loss, no woodchipping, transition into plantations for western Victoria. Initially, the state's peak industry body and some sawmills received it positively.

It was the veto of BFT and the CFMEU forestry division that scuttled any hope of a secure future in plantations. Instead, BFT opted for a continued future in native forests, and hoped for the impossible.

New Zealand, with an economy about the size of Victoria's, and facing the same postwar logging industry structural problems, took another path:

it diversified and eventually completely made the transition into purpose-planted plantations. It ended all logging in public native forests in 2000.

By 2004 the NZ logging industry directly employed 23,000 people and accounted for 4 per cent of gross domestic product. It had annual sales of $5 billion, with $3.5 billion of that earned in export. It was NZ's third-biggest export earner. In Orbost, long viewed as the logging capital of Victoria, the signs along the highway proudly identifying Orbost as Victoria's timber town have recently been removed. Expect another round of industry adjustment packages soon.

Marcus Ward is forestry spokesman for the Victorian Greens

Original article

THE AGE: Pledge to protect forests

Peter Ker and Liz Minchin
The Age, November 18, 2006

Labor would prematurely dismiss an investigation it launched and immediately protect a parcel of Victoria's old-growth forest if re-elected next week.

In a move labelled cowardly by timber industry supporters, Premier Steve Bracks travelled to the far west of Victoria yesterday to announce plans to protect more than 33,000 hectares of old-growth forest, mostly in Eastern Gippsland.

The protected area would include 5000 hectares of old-growth forest known as the Goolengook block, which has several endangered species.

The policy, which Mr Bracks said balanced environmental and logging needs, also included plans to create a national park near Portland, create a forest link between the Errinundra and Snowy River national parks, and deliver about $4.5 million in support to the timber industry.

With many experts tipping the strongest ever result for the Greens at next week's election, Mr Bracks was stressing Labor's environmental credentials. "If you want to vote for the environment, vote for Labor," he said.

Funding for the timber industry included $250,000 for the Construction Forestry Mining and Energy Union. Mr Bracks rejected suggestions the money was an attempt to quell protests.

The CFMEU later released a statement praising the Government for not sacrificing any logging jobs in yesterday's policy.

The move to dismiss the report into Goolengook, which is being carried out by the Victorian Environmental Assessment Council, prompted an angry response from the National Party.

The council was last year asked to investigate the impact that extra forest protection would have on communities.

The report was due in mid-2007, but the Premier promised yesterday that Labor would "immediately wind up the investigation" if re-elected.

Members of the five-person board of the council — who met yesterday to discuss red gums in the Murray River regions — have been told not to comment.

But one member told The Age it was "business as usual" and the Goolengook investigation was still going ahead.

Yesterday's policy also promised to create a red gum national park, but only if recommended by the council.

National Party spokesman Peter Hall said Labor's promise would make a mockery of the Environmental Assessment Council, and said the Premier was a coward for not making the announcement in East Gippsland. "To make this announcement in Portland is one of the most cowardly decisions I have seen," he said.

The Wilderness Society said the policy was a good start, but would protect only a small portion of the estimated 400,000 hectares of old-growth forest in Victoria.

Greens forests spokesman and Western region candidate Marcus Ward said the policy was "underwhelming". "It's vintage Bracks: big headlines and terrible details," he said.

Predicting an electoral backlash over the policy, independent Gippsland East MP Craig Ingram argued the Government should not have extended the state's national parks because existing parkland was poorly managed due to inadequate funding.

Article source

Timber product exports fall far short of imports

Claire Konkes
The Weekend Australian (article), 3/2/2001

AUSTRALIA exported less than half of what it imported in forest products last financial year, according to government analysts.   Imports of timber products were $3.797 billion and exports $1.576 billion, says a report by the Australian Bureau of Agricultural and Resource Economics. ABARE forestry economics manager Peter Grist said in volume terms Australia was importing as much as it was exporting, but in value terms was exporting low-value products such as woodchips and importing value-added products.  The ABARE report shows exports of paper products, including packaging and stationery, totalled $490.63 million and imports $1.9977 billion.

Last financial year Australia produced 381 kilotonnes of newsprint. A further 293 kilotonnes were imported from New Zealand to meet domestic needs.  According to the ABARE report, woodchip exports have doubled to 9395 kilotonnes since the mid-'80s, while consumption of roundwood - as yet unprocessed trees - has remained relatively stable at around 19,000 sq m a year in that time.

Mr Grist said the dramatic increase in structured timber products consumption in the 1999-2000 financial year was due mainly to the housing boom, particularly on the eastern seaboard.

Surplus requirements were met with imports from Canada and New Zealand. ABARE figures show the Australian market consumed $4.791 billion worth of sawnwood timber.  Imports valued at $518.1 million mostly came from the Pacific region. Sawnlog exports were $51.23 million.

Construction, Forestry, Mining and Energy Union (CFMEU) forestry division secretary Craig Smith said Australia was reasonably self- sufficient in terms of timber for construction, but woodchips remained a major export earner. "You sell a tonne of woodchips for about $35 because it's very cheap --you just run it through a chipper - but you buy it back as a tonne of paper for several thousand dollars. So quite rightly we should be processing forest residue onshore," Mr Smith said.  But, he added, "it's pretty damn hard to get Australian- made paper at a goodprice."  Mr Smith said some timber I products were imported from: countries with lower production costs because of cheaper labour, lower environmental controls and easier government regulations.

He said the main concern of the CFMEU was the poor quality imports being into the country. "We have evidence that, particularly in regard to plywood and construction form ply, the quality does not meet: occupational health and safety standards here," he said. "In fact there have been formwork collapses as a result of poor quality imported form ply.