Chops and chips hard to swallow for some Libs

James Campbell

Heraldsun, August 14, 2014

EARLIER this month VicForests, the state government-owned entity that manages logging in the state’s native forests, celebrated its 10th birthday with a party.

On the face of it the foresters had a lot to celebrate. In its first eight years, despite taking in hundreds of millions in revenue, VicForests made a profit of only $12.3 million and it hasn’t paid a dividend to its owners — the taxpayers — since 2007. Lately, however, the business seems to have turned the corner. In the financial year 2012-13 it made a profit of $802,000 on $106.3 million in revenue.

Not great, but a profit is a profit. And according to government sources, when the next annual report is released, we can expect to see a doubling of VicForests profits to about $2 million.

But according to informed government sources, that is the last good news the taxpayers can expect from VicForests for a long time. This year, they say, it will be lucky to break even. And after that it is likely to be all downhill.

The reason is that in May, South East Fibre Exports, which operates out of Eden in southern NSW, announced it would not renew its contract to take product from VicForests when it expires at the end of this year. SEFE currently takes about 200,000 cubic metres of timber from East Gippsland, which it exports as woodchips.

Even with the SEFE contract, the VicForests operation in East Gippsland is said to be losing between $5 million and $6 million a year. When that revenue goes, the losses will skyrocket. But VicForests is refusing to concede it’s curtains for native forest logging in the east of the state.

“The challenge in front of us now is to build a different future for the timber industry in East Gippsland, which continues to provide jobs and economic benefits to the region but may not include export woodchips,” VicForests CEO Robert Green said in May.

Fighting words from Mr Green, but the question needs to be asked, exactly how many jobs are at stake if logging were to cease in the region. According to an internal government document from 2013: “Over the last 10 years in East Gippsland, timber harvesting contractors have declined from over 80 employees working for 25 companies to around 45 employees working for the remaining 12 contractors.”

Of course, in addition to the contractors who extract and haul the stuff, there will be people employed at sawmills — but it’s not exactly Holden, is it?

Turning away from East Gippsland to the profitable bit of VicForests, the Central Highlands, the picture is a little rosier. No one is denying that logging in the Central Highlands is profitable. And, unlike East Gippsland, there are a lot of jobs dependent on it — namely at the Maryvale paper mill, which employees 900 people.

How wedded Australian Paper, which operates Maryvale, is to VicForests’ product is an open question, however. In the past it has been reported the company would like to transition out of native forest timber. But there isn’t enough plantation wood at the moment to replace native wood.

Actually, there probably is enough timber, but it’s in the wrong place — the Green triangle in the state’s far west. The problem is that getting it to the Maryvale mill is too expensive. Were the Government to offer a subsidy to transport plantation product, the company would probably jump at the chance to use it.

How likely are we to see a change in government policy on native forestry before the next election? While there’s no doubt that Agriculture Minister Peter Walsh is a firm friend of VicForests, his views are not shared by a number of Liberals in the Government. The Liberals’ dislike of the organisation is partly environmental and partly economic — that is to say a suspicion of loss-making government enterprises. They can also see that a commitment to ending native forest logging would be handy in Melbourne going into November’s state election.

That will be a space to watch in the next few months.

James Campbell is state politics editor

Study finds logging increased intensity of Black Saturday fires

James Campbell

Heraldsun, August 03, 2014

A study has found logging in the decades prior to Black Saturday made the deadly blaze much more ­extreme.

THE heat and severity of Kinglake and Marysville fires that killed 159 people on Black Saturday was significantly increased by clear-fell logging of forests, scientists believe.

In a landmark two-year study of the Kilmore East and Murrindindi Mill fires, which destroyed Marysville and ­severely damaged Kinglake, scientists from Melbourne University and the ANU examined satellite images of hundreds of thousands of trees burnt on Black Saturday.

The scientists say the study showed conclusively that logging in the decades prior to Black Saturday made the deadly blaze much more ­extreme.

They also warn that increased fire danger in forests lasts for up to 70 years after an area is logged, with the risk peaking between 10 and 50 years.

The findings of the study will have implications for the bushfire risk to towns such as Warburton and Healesville, which are close to logging operations.

Professor David Lindenmayer, Australia’s leading scientist of forest ecology, who headed the study said it showed conclusively that clear fell logging increased the danger from bushfire.

“Our findings show the severity of the fires on Black Saturday was significantly higher in the areas that had been logged,” he said.

Professor Lindenmayer said preliminary estimates suggested the fire was 25 per cent more severe in forest that had been logged than in old-growth forest.

“This added severity is sufficient to kill people and add significantly to property and forest damage,” he said.

Prof Lindenmayer said the increased fire risk had strong implications for towns close to forestry operations such as Healesville, Powelltown, Warburton and Noojee as well as towns such as Woodend that were close to areas logged in earlier decades.

“Industrial clear felling of ash forests should not take place close to any human settlement,” he said.

The scientists believe the increased fire risk in logged areas is due to several factors.

Regrowth forests have more trees packed more closely together and contain large amounts of flash fuels allowing fire to build in severity, the study found.

Old-growth forests usually have wet rainforest under­storey canopies, which do not burn as well as the drier understorey canopies of regrowth forests.

In the past 50 years, more than 47,000 ha of wet forest have been logged with 17,600 ha to be logged in the next five years.

The Kilmore East and Murrindindi fires, which later merged, were the most deadly on Black Saturday, collectively killing 159 people , destroying 1780 homes and burning 168,542 ha.

VicForests in middle of battle over possums and timber

James Campbell

Herald Sun, 23 February 2014

IN the next few weeks the State Government will make a decision which is likely to seal the fates of leadbeater’s possums and Victoria’s native forest timber industry.

The possum, a cute critter and since 1968 Victoria’s faunal emblem, is in a bad way. No one is sure how many of them managed to survive the Black Saturday bushfires, which, according to official estimates, burned 45 per cent of the area kept for its protection and 34 per cent of its potential habitat. The State Government puts its numbers between 3750 and 11,250, which sounds dire, but is better than the earlier official estimate, which until its rediscovery in 1961 was zero.

Unfortunately for the possum, it shares its habitat with another endangered species, the native forest timber industry. Again, relying on official estimates, VicForests, the government-owned entity which manages the logging of the state’s native forests, sources 70 per cent of its annual ash timber supply from within the range of the leadbeater’s possum. More importantly, some say this area is the most — indeed some would argue only — profitable part of VicForests’ logging activities.

In other words, saving the possum is unlikely to be compatible with saving the native forest timber industry. Like the possum, the native forestry numbers have been in steep decline too.

According to Australian Bureau of Agricultural and Resource Economics and Sciences data, in the decade to 2012, annual native sawlog production fell by 45 per cent and pulp wood — the stuff that ends up in the chipper — by 30 per cent.

As for VicForests financial statements, the best that can be said for them is that they are not as bad as they used to be.

According to its latest annual report, last year it took in $104.5 million from the sales of forest products, with other income taking its revenue to $106.3m.

Alas, its expenses came to $105.3 million, meaning all up, its net profit was only $802,000 — which, while pretty dismal, is still better than the $96,000 it lost the year before.

VicForests hasn’t paid a dividend to the Victorian Treasury, i.e. the taxpayers, since 2007.

Indeed, it has only managed to pay a dividend twice since it was established in 2004. Across its eight years of existence it has reported an after-tax profit of only $12.3 million. But even that you can take with a grain of salt, as over the same period it has received government grants of $24.7 million.

Keep in mind too that VicForests can borrow money at subsidised rates from the Treasury Corporation of Victoria, whereas its private competitors, who grow trees on plantations, cannot. (Incidentally, its private competitors also have to pay for the land they grow trees on — and the council rates on that land — whereas VicForests does not.)

But as bad as these numbers are, the fact is they probably don’t reflect the true losses to the taxpayer of continuing to log native forests. For starters it doesn’t include the cost of fixing roads that logging trucks damage, nor the loss of water that disappears from dams and irrigation systems into regenerating forests after logging. Or more controversially, the cost of fighting the fires loggers sometimes start — something I predict we are likely to hear more about after this summer’s events.

Getting back to the possums, Cabinet will soon consider a report from an advisory group which includes such possum-friendly folk as the boss of the Victorian Association of Forest Industries and representatives of VicForests, established to consider ways it can be saved “while maintaining a sustainable timber industry”. The report has gone to Environment Minister Ryan Smith and Agriculture Minister Peter Walsh. What it says, we’ll have to wait and see.

Government sources say that the two men take a different view of what should be done. Smith is believed to support the creation of a Central Highlands National Park to save the possum, while Walsh is prepared to accept a small area be set aside to save the timber industry. His line of argument with his colleagues is expected to be that this is a jobs issue, which in an election year should trump other considerations. The Government claims the industry employs 2300 people, but it is unclear how many of those jobs depend entirely on native forestry, rather than a mixture of native and plantation timber. The largest employer, with 900 jobs, is the Maryvale paper plant, which has indicated in the past it would be happy to shift to chips from plantations. VicForests itself only employs 114 people.

Normally, the smart money would be on “Walshie” to get his way. The Agriculture Minister has earned a reputation for winning internal battles. In a Smith vs. Walsh fight it would be no contest. The wildcard, though, is Treasurer Michael O’Brien and his department. O’Brien is unlikely to be impressed with an industry whose subsidies are retarding the growth of the private enterprise plantation industry. The possum may yet triumph over the loggers.

james.campbell@news.com.au

Council gags on Reflex vow

Anne Wright
Herald Sun,  May 21, 2011

A COUNCIL has been warned to lift its ban on a brand of paper or risk losing 45 new jobs.

The State Government said a proposal to move the VicForests corporate offices into the Yarra Range Council's area would be "off the table", unless it started using Reflex paper.

A letter from Agriculture Minister Peter Walsh to Yarra Ranges Council chief executive Glenn Patterson, seen by the Herald Sun, commended the proposal for the VicForests corporate office to move, which would create 45 jobs.

Mr Walsh then says the proposal will be "off the table" unless the council stopped its Reflex boycott.

The threat originated from the council's signing an environmental pledge to stop using the brand because it is made from native forest, which is against the council's policy.

But Mr Walsh said Reflex was a product of Australian Paper, an "important client" of VicForests, and any council signing the "so-called ethical paper pledge" from the Wilderness Society would miss out on the move of the VicForest jobs.

"In my view, council has been hypocritical in seeking to attract VicForests while actively campaigning against a product that forms part of its core business," he said.

But Yarra Ranges mayor Terry Avery said the council joined the Wilderness Society's pledge to not use Reflex paper, and opted for an Australian product line also manufactured by the Australian Paper.

"We feel strongly that the pledge is an accurate reflection of our commitment to sustainability, protection of the environment, corporate social responsibility and local community needs," Cr Avery said.

He said the council would not back down.

"We are disappointed that Minister Walsh has chosen to establish a direct link between the two unrelated issues," he said.

Opposition resources spokesman John Lenders said the Government was threatening jobs in the local community.

wrighta@heraldsun.com.au

LETTERS: Green logging solution gets the chop

David Hall, Brunswick East
The Heraldsun (letter), 18/4/06

Your article on Ron the “lumberjack” (“Ron vows to go out swinging”, April 8) brought up the important point that the environment movement is not about no logging, it’s about sustainable logging that makes sense.

Woodchipping old-growth forest in 2006 doesn’t make sense on any level. It isn’t boosting the economy. It isn’t creating jobs. And this isn’t wasteland.
The area being clear-felled in East Gippsland is a national treasure. Its destruction is so sad.

I applaud Ron for his comments, and I applaud the unlikely alliance between loggers who do have a vision for the future with greenies who always have.

Bracks would win my vote and that of many of my friends and family if he was brave enough to stop woodchipping of old-growth forests.


Colin Smith, St Kilda
The Heraldsun (letter), 18/4/06

Your story about the small timber cutter in Bruthen (“Ron vows to go out swinging”, April 8) shows up the hypocrisy of the State Government about forestry. It denies him any logs and sends them aji to the chip-mill instead. This makes a nonsense of its claim to be interested in value-adding. Instead, it promotes clearfelling, which is value-destruction.


Peter Quinn, Lome
The Heraldsun (letter), 18/4/06

Park Victoria and the Bracks Government sadly are on a hat-trick of tourism decimation. After last year’s Wi!sons Promontory burn fiasco and this year’s Grampians inferno, Parks Victoria next summer could well be responsible for the Colac/Otways bushfire that is coming because an ecological burn is well overdue.

Parks Victoria and Bracks Government are pandering to inner-Melbourne greens. Parks Victoria’s pest management is also a disgrace in the Great Otways National Park.

So enjoy your visit to the Colac-Otways while you can. Parks Victoria's incompetence could well mean a charred Great Ocean Road landscape.