Issue 155

6485

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issue 155 | 13.12.10 | Page 1

What are you doing at Christmas .. and what are some of the challenges in 2011? Industry leaders respond, Page 4

Opportunity in year of forests

Merry Christmas to all our readers

Much to reflect on and prepare for in 2011 as industry rests over Christmas

By JIM BOWDEN

THE forest and wood industry has faced dramatic challenges and confrontation over the last 12 months, and for those businesses that survived it’s important to get a firm grasp of the waters we now tread and dig for new opportunities in the changing landscape.

“Twenty ten could be described as a year of emerging issues – a year when all things bubbled to

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the top,” NAFI chief executive Allan Hansard said in a preChristmas roundup of industry opinion.

“We’ve got to get the Tasmanian situation bedded down and start rolling nationally on a broad industry strategy,” he said.

“What’s emerging from the Tasmanian situation is very clear to us – it’s time for industry to Cont Page 2

issue 155 | 13.12.10 | Page 1

INTERNATIONAL YEAR OF FORESTS

The Victorian Association of Forest Industries, representing the interests of the Victorian timber Industry

Victorian Association of Forest Industries Level 2, 2 Market Street Melbourne 3000 Tel: +61 3 9611 9000 Fax: +61 3 9611 9011 Email: info@vafi.org.au Web: www.vafi.org.au

Page 2 | issue 155 | 13.12.10

TRUST Industry must work TABMA

Industry handed opportunities in the International Year of Forests

hard to benefit from if you Year of the Forests want ..

Placement of apprentices

From Page 1

sit down and map out its future as a raft of issues confront us in the new year.”

Mr Hansard said the 2011 issues for NAFI included getting a grip on the native forest debate, the availability of plantations – taking into account the MIS impact and softwoods resource – the competitiveness of wood products in the light of the high Australian dollar, and marketing effectiveness.

“Ahead of the festive season, we are working to put together a major industry forum, probably in February, to address the big issue – high conservation value forests.”

Celebrating the central role of people in the sustainable management, development and conservation of the world’s forests Speaking from Auckland, Peter Berg, the president of the NZ Forest Owners Association, said industry had a golden – “green if you like” – opportunity to get out there in 2011 and

Staff recruitment Membership services OH&S audits

Allan Hansard .. time for a national industry strategy.

really promote the benefits of forests and wood products under the aegis of the United Nations International Year of Forests.

“We must all work hard to make sure industry benefits from this special year,” he said.

Mr Berg will be at Auckland airport this week to meet his CEO David Rhodes who is returning from the climate change talks in Cancun, Mexico.

[The talks are a year on from the Copenhagen climate change Cont Page 3

Debtors control and collection

Contact us on Sydney – (02) 9277 3100 Adelaide – 0407 102 244 Perth – 0414 908 465 Brisbane – (07) 3254 3166 Hobart – 0407 102 244

www.tabma.com.au

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INTERNATIONAL YEAR OF FORESTS

Forest products trade worth $327bn globally Livelihood, shelter for millions

From Page 2

forum and are aimed at reaching international agreement on what follows the end of the Kyoto Protocol in 2012. See, Page 12].

Mr Berg said New Zealand forest owners were working with Australian organisations such as A3P to develop a better industry message on climate change.

“The truth is, Australia and New Zealand are doing a good job with it – on Kyoto and the commitment period,” Mr Berg said.

Declaring 2011 as the International Year of Forests,

Peter Berg .. Year of Forests golden opportunity for industry.

the United Nations General Assembly said the year would celebrate the central role of

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people in the sustainable management, development and conservation of the world’s forests.

The UN says the year would focus on some of the multiple values of forests and the need for a 360 deg. perspective: forests provide shelter to people and habitat to biodiversity; are a source of food, medicine and clean water; and play a vital role in maintaining a stable global climate and environment.

“All of these elements taken together reinforce the message that forests and their products are vital to the survival and well being of people everywhere, all 7 billion of us,” the UN emphasised.

Promoting the year of forests, the UN said the livelihoods of more than 1.6 billion people depended on forests. Primary forests accounted for 36% of forest area and trade in forest products was estimated at more than $327 billion in 2004.

According to the World Bank, deforestation accounts for up to 20% of global greenhouse gas emissions that contribute to global warming. FAO data estimates that the world’s forests and forest soil store more than one trillion tonnes of carbon – twice the amount found in the atmosphere.

The Food and Agriculture Organisation of the United Nations, as the chair of the Collaborative Partnership on Forests, has been invited to support the implementation of the Year of International Forests.

The celebration will be launched in New York during the 9th session of the UN forum on forests from January 24 to February 4.

ForestWorks performs a range of industry wide functions acting as the channel between industry, Government and the Australian Vocational Education and Training (VET) system.

Core services: • Skill Standards • Material Development • Networks • Strategic Skills Planning • Project Management • Data Collection • Research • Industry Advice • Career Advice • Adult Learning Expertise

VICTORIA PO Box 612, North Melbourne 3051 Tel: (03)9321 3500 Email: forestworks@forestworks.com.au NEW SOUTH WALES PO Box 486, Parramatta 2124 Tel: (02)8898 6990 Email: smukherjee@forestworks.com.au TASMANIA PO Box 2146, Launceston 7250 Tel: (03)6331 6077 Email: wfoss@forestworks.com.au BRISBANE PO Box 2014 Fortitude Valley 4006 Tel: (07)3358 5169 Email: bharle@forestworks.com.au

issue 155 | 13.12.10 | Page 3

OUTLOOK 2011

RIC SINCLAIR

RICHARD STANTON

ROD McINNES

DR HARRY GREAVES

SIMON DORRIES

Time for rest and preparation as industry leaders enjoy festivities A ROUNDUP of opinions and ‘wish lists’ from industry leaders suggests the Christmas-New Year holiday period will be a time for rest, reflection and preparation as many of them face a return to unresolved issues in the Year of the Rabbit – which hopefully will be the 12 months of luck promised by the Chinese.

Jim Bowden spoke with a crosssection of industry players who responded with a mixture of confidence, hope, concern and some solutions for a sector facing tough times, certainly in the early part of next year.

TDA will be rolling out the new trans-Tasman design awards early next year as a lead-up to the development of an international award in 2012 RIC SINCLAIR, managing director, Forest and Wood Products Australia: “Twenty eleven will be a big year for FWPA as we roll out major programs on consumer promotion, standards and research and development.

“But we face uncertain times for our members and levy payers under pressures from the high Australian dollar and dip in housing starts.”

Holiday plans: “I’ll be in Japan for 12 days with Andrea and our two sons, 18 and 20, before

Page 4 | issue 155 | 13.12.10

spending a white Christmas in Canada with Andrea’s family just south of Vancouver near the US border. It will be a family Christmas-travel holiday with a visit to Whistler.”

ALLAN HANSARD, chief executive of NAFI: “The next year will be one of consolidation and rolling out a national strategy for industry.”

(See comments, Page 1) Holiday plans: I have spent a lot of time in Tasmania on the native forest-plantation transition issue so it will be good to spend more time at home in Canberra enjoying Christmas with my wife, daughter and son. Certainly a nice time to be doing nice things with the kids.”

RICHARD STANTON, chief executive, A3P: “There’ll be a lot on the table next year – carbon trading issues, water policies, renewable energy – all still up in the air. The carbon price issues will depend on the detail – who it applies to and how the costs will be transferred. We did the exercise a few years ago and here we go again.”

Holiday plans: A quiet family Christmas at home in Canberra enjoying the time with our two daughters, aged 7 and 10.”

ROD McINNES, chief executive, Timber Queensland: “I’d like to see a kick-start to housing in the south east with

What can industry expect in Santa’s sack this year?

government support to get the building sector out of the crisis of confidence it is in and back on the job. It’s lean pickings just now. I am also looking forward to working with the new CEO of Forest Plantations Queensland [Brian Farmer] and watching the industry grow.”

In Queensland, 2011 looks like being another hard one for real estate. Interest rates are forecast to rise, but what is likely to have a greater negative impact on the property market is the drop in population growth.

The state’s total population grew by 97,000 new residents over the past 12 months. Two years ago, Queensland’s total growth exceeded 121,000.

Migration has dropped by

close to 50% [that is, 74% in interstate migration and 44% in international migration year-onyear to the first quarter of 2010 - a weighted average of 48%].

Total annual migration to Queensland in 2010 was 44,000 fewer than the 84,000 in 2008.

Holiday plans: “Dividing time between my daughter at Buderim and my son at Lennox Heads. He has a bakery there.

He won’t let me serve out front; I’ve been relegated to the back of the shop so I’ll be covered in flour again.”

DR HARRY GREAVES, timber treatment consultant to TPAA: “Quite simply, the big issue for timber treaters next year will be reaching a decision on the best way to establish a national quality assurance scheme.”

Holiday plans: “Our four boys and their children will be around for Christmas Eve. There will be 14 of us around the Christmas tree. Then Sandra and I will escape to Phillip Island where we have a little holiday place.”

SIMON DORRIES, general manger, Engineered Wood Products Association of Australasia: “The biggest challenge facing industry in the next 12 months is the strong Australian dollar and the impact that is going to have on domestic markets.

The gradual decline in housing Cont Page 6

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events

WHAT’S ON? DECEMBER 2010 14-18: Wood Science Course, University of Melbourne and CSIRO, Melbourne. Contact Silvia Pongracic on 0418 764 954 or visit www.gottsteintrust.org

2011 APRIL

8: South Eastern Australia 2011 Farm Forestry and Firewood Expo, Bendigo, Vic. City of Greater Bendigo’s Huntly plantation, north of Bendigo.

NORTHERN United Forestry Group (NUFG) - a not-for-profit community group with a focus on growing trees for sawlogs and firewood - will host the expo at the Huntly plantation, north of Bendigo.

Some trees (all hardwoods) within the Huntly plantation that need to be thinned will be available for demonstration purposes. Contact: Mal Brown, Northern United Forestry Group. Tel: (03) 54352588.

Mob:: 0419 108 817.

MAY May 21-June 5: Forest biomass four-nation industry study tour.

New Zealand, Austria, Germany and Finland. Includes LIGNA Hannover Wood Fair, Germany.

Email: francip@optusnet.com.au 25: Institute of Foresters of Australia (IFA) and New Zealand Institute of Forestry Conference (ANZIF 2011). Auckland NZ. Theme: ‘Pacific Forestry’. Visit www.anzifconference.co.nz

30-June 3: LIGNA Hannover Wood Fair.

25-June 4: LIGNA industry tour (Germany, Italy, Austria).

SEPTEMBER 5-7: NZ Forest Industries Expo 2011. Venue: Rotorua Energy Events Centre, Rotorua. Forest industry leaders and companies from across the world are booking their tickets to participate in the expo (FI2011) and make the most of the 2011 Rugby World Cup while they’re there. Exhibition sites have already been booked by a number of NZ and Australian companies, and inquiries being received from Canada, China, Vietnam and Austria. The expo will showcase the best that Rotorua, the wider Bay of Plenty region and the rest of New Zealand has to offer when it comes to forestry and wood products. Contact: Dell Bawden.

Tel: +64 73627865. Mob: +64 274745485. Email: office@bawden.co.nz Website site: fi2010.co.nz

October 21-November 2: 5th International Woodfibre Resources and Trade Conference: Woodchips and Biomass for Global Markets.

Grand Copthorne Waterfront Hotel, Singapore. Presented by DANA Ltd, Pike & Co and Wood Resources International, followed by field trip to Cambodia on November 3, 4 and 5.The field trip is an optional extra to the conference registration fee and

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will be limited to 80 participants.

Field trip participants will fly from Singapore to Sihanoukville with an overnight stay. Transfer next day to Siem Reap which will include a visit to world famous UNESCO heritage site Angkor Wat. Return Saturday morning. Who should attend? Plantation and other forest owners, plantation investment fund managers, existing-future biomass producers and users, existingfuture wood pellet producers and users, bankers and investment analysts, woodchip producers, wood fibre trading companies, woodchip end users, federal, state and shire officials dealing with forestry, plantation and wood fibre production, utilisation and exporting sectors, pulp and paper company executives, harvesting contractors, transport contractors, port and shipping companies, CO2-e emitters, timber and carbon forestry players, equipment suppliers, overseas players and observers.

Contact: Conference organiser PR Conference Consultants – Pamela Richards, Bob Flynn, Dennis Neilson and Peter Pike.

Tel: + 61 3 5781 0069. Email: enquiry@prcc.com.au Speakers and field trip details plus the online registration will be available soon from the conference web site www. woodfibreconference.com

2012 MARCH

29-31: AUSTimber. Mount Gambier, SA. Visit: www. austimber2012.com.au

SUSTAINABLE. RESPONSIBLE. The National Association of Forest Industries (NAFI) is striving for an ecologically sustainable Australian society achieved through dynamic, internationally competitive forest industries.

NAFI’s mission is to represent the interests of members by promoting the environmental sustainability and the prosperity of Australian forest industries.

National Association of Forest Industries Ltd (Est. 1987) PO Box 239, Deakin ACT 2600 Tel: (02) 6285 3833.

Fax: (02) 6285 3855 Web: www.nafi.com.au

issue 155 | 13.12.10 | Page 5

OUTLOOK 2011

High dollar and dip in housing 2011 challenges From Page 3

starts says we are in for some difficult times.

“On the positive side, Carter Holt Harvey’s major upgrade of the Myrtleford plywood mill in Victoria is the single biggest capital investment in the industry for 35 years and reflects strong confidence in the engineered wood sector.

“EWPAA has a busy year ahead – the takeover of the A3P certification program, discussions on the establishment of a certification program for treated wood, ongoing growth of chain of custody certification, and upgrading of our Brisbane laboratory facilities after purchasing all the structural testing equipment from NSW State Forests’ defunct timber engineering laboratory.”

Holiday plans: “A quiet Christmas at home with Sonya and our eight children – and as much fishing as I can fit in. I’ll take our little ‘tinnie’ around Hope Island. All the kids like to toss in a line and some of the boys are better fishermen than I am.”

PETER BERG, (Pentarch Forest Products NZ Ltd) president, NZ Forest Owners Association (members own or manage more than 80% of the country’s 1.79 million ha of plantation forests): Some forest owners in New Zealand have been concerned that the failure of world leaders to agree on a replacement for the Kyoto Protocol might mean an end to the ETS and with it, the ability to earn an income from selling carbon credits.

There has been concern also that forest owners might have to refund their credits. ”Statements by environment

Page 6 | issue 155 | 13.12.10

ANDREW DUNN

BOB PEARCE

minister Nick Smith, backed by supporting comments by the prime minister and the minister of forestry, have allayed many of those fears,” Mr Berg said.

Mr Smith emphasised the importance of new forest plantings to New Zealand’s future and he has reassured would-be tree planters about the future of the ETS. “At present land, log and carbon prices, forestry is a sound investment, especially on marginal hill country. But once you’ve planted your trees you have to wait at least 10 election cycles before harvest – that’s a long time when a large part of your income depends Cont Page 7

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OUTLOOK 2011

Hope for building industry recovery

Concern over tumbling immigration figures “The NZ and Australian awards will be made in four categories: residential housing, commercial construction, community and multi-storey. This will be the first year such trans-Tasman awards have been made and we intend it to be the first of many.”

Holiday plans: “Unwinding at Christmas – Sydney is the best place to be over the festive season. My brother and his wife will be over from England

From Page 6

on something as politically charged as carbon pricing,” Mr Berg said.

Holiday plans: “Watching cricket and quivering over the bad fortunes of both the Aussie team and the Kiwis who are getting a hiding in India.

“Glenda and I will be at our property north of Auckland for Christmas with 60 members of the extended family. Our six children will be with us.”

ANDREW DUNN, chief executive, Timber Development Association (NSW): “It will be a quiet Christmas with wife Jaquie – hoping the building industry will make a miraculous comeback in the new year.

“Housing will certainly be the big factor for the timber industry in 2011, both in NSW and nationally.

“Immigration has always been a key indicator of housing starts and Australia’s rate of immigration is tumbling – 100,000 fewer this year than in previous years.”

The latest figures show net migration falling sharply with the number of permanent and long-term arrivals outnumbering departures by only 210,400 in the year to October, well down on the 324,700 a year before.

A rolling annual graph shows the rate continuing to plunge, as increasing numbers of Australians head overseas and fewer immigrants arrive.

In October, just 9370 overseas arrivals settled on Australian shores, the lowest total since March 2004.

“TDA will be rolling out the new trans-Tasman design awards early next year as a leadup to the development of an international award in 2012,” Mr Dunn said.

Kayt Watts

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PHILIP DALIDAKIS

Cont Page 8

issue 155 | 13.12.10 | Page 7

OUTLOOK 2011

‘We’ve got to get the plantation investment model right this time’ From Page 7

for some warmer weather after shivering in minus 3C temperatures.”

BOB PEARCE, chief executive, Forest Industries Federation, WA: “The challenges in Western Australia are economic – the amount of forest we are allowed to access means basically the timber we are getting from the jarrah forests is poor quality and the price is too high.

“Government policy going back over nine years has made jarrah a specialty timber which means it’s a bit more marginal in the market place. You get better prices, but it’s harder to sell.

“And, of course, the global downturn has exacerbated the problem.”

Mr Pearce says FIFWA has been watching the Tasmanian situation but there are no expectations that a similar situation will happen in Western Australia.

‘The challenges in Western Australia are economic – the amount of forest we are allowed to access means basically the timber we are getting from the jarrah forests is poor quality and the price is too high’ – Bob Pearce.

“All our old growth forests have been locked up for decades, and so have most of the high value conservation forests.”

He noted the ‘fake jarrah’ issue which had been a concern this year was no longer an ongoing issue.

“We guard the precious name of jarrah very well and there have been no reports of sales of the so-called ‘Pacific jarrah’, a South American hardwood falsely sold as a type of jarrah.”

Holiday plans: “Staying at

Page 8 | issue 155 | 13.12.10

JIM ADAMS

PETER HUCHISON

BRONWYN FOORD

home with Barbara. Our son will be over for Christmas and I will probably take our yacht for a wander around Rottnest Island.

My wife’s not a keen sailor but our son enjoys it.”

KAYT WATTS, chief executive, Australian Forestry Standard Ltd: A membership drive by AFSL in 2011 will underscore the opportunity for stakeholders to contribute to development and improvement of new standards.

“As a stakeholder members, they can ensure that Australian Forestry Certification Scheme aligns with industry needs and requirements, and/or addresses any environmental and political issues, while helping to maintain a credible and robust Australian standard through the consultation process,” Ms Watts said.

“Forestry, timber and wood products and environmental organisations, associations and government agencies (state and federal) and individuals who have a vested interest in the forestry industry are invited to take up FSL membership.

Stakeholders through their membership fees provide AFSL the funding to continually develop and maintain the AFCS and all its elements.

“This ensures current and

topical issues are addressed and reviewed, R&D projects are established and consultation forums are developed.

Holiday plans: “Christmas with my mum at Yarrawonga on the south bank of the Murray River in Victoria.”

PHILIP DALIDAKIS, chief executive, Victorian Association of Forest Industries: “As we move into 2011, VAFI has welcomed the strong working relationship the timber industry has developed with both Coalition parties.

“The new ministers have supported sustainable forestry and its 24,000 jobs. During the election, both the Liberal and National Party leadership made strong statements supporting the future for forestry in Victoria.

“They have promised to ensure a secure supply of timber, essential for the future of the industry.”

Mr Dalidakis said such support was critical for those communities that relied heavily on forestry for employment opportunities; towns such as Heywood, Orbost and Cann River relied on forest industries for a large proportion of their jobs.

“It’s gratifying to know Victorians have voted for a

government that will implement balanced policies for forestry,” Mr Dalidakis added.

Holiday plans: “A quiet Christmas at home with Debra and our two girls, aged 3 and 5. And a chance to catch up on some paper work.”

JIM ADAMS, chief executive, Timber Communities Australia: “Communities will face a range of issues – RFA renewals (the first due in 2012) and how the Tasmanian process will slot under the RFA framework, the plantation investment model, water and climate change.

“The plantation issue is the big one from the point of view of timber communities. We must make sure we have the right model that doesn’t have the same kind of impact on the communities as the previous model.”

Holiday plans: “Back home to our little place at Bombala in the far southeast corner of New South Wales – and hoping nobody rings me from Tasmania! Marlene and I will be there over Christmas with our three children, two girls, 19 and 16, and a boy, 18.

PETER HUCHISON, president, TABMA Australia: “Interest rates, house Cont Page 9

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OUTLOOK 2011

Helping hand for jobless workers From Page 8

affordability issues and the costs to develop land are looming challenges for the industry next year.

“The government must be more coordinated – we hear on one side that the population is increasing and not enough houses are being built. But they are not cognisant with the fact you can’t just talk about population going up if you don’t manage the supply side.

“There’s plenty of land but not enough service land in a state that is forecast to build 6000 dwellings next year – and that’s less than in South Australia.

“People think that NSW is increasing and will have about 30,000 starts, but what they are forgetting is the increase in multi-res and apartments that have only one roof and this really changes the dynamics of what used to constitute the total industry.

“Then there is the high dollar and the fact that banks are saying they are sitting on stocks of land which a lot of the developers and builders bought in times when things were booming and now prices are easing back.

“So how much of that is going to affect the balance sheets when the land is released back onto the market at lower rates?”

Mr Huchison said overall, if managed well, the timber industry would see better times flowing forward .. “but it will be tough in the early part of the year.”

Holiday plans: “This year has been pretty hectic so a relatively quiet Christmas at home will be welcome. Wife Vicki and I will be staying around Sydney and both our boys will be over for Christmas Eve.” BRONWYN FOORD, general manager, Window and Door Industry Council:

Michael Hartman

“Again, the on-going wish for our members is a resolution to the illegal logging issue and there’s the concern about how they are to cope with any new regulations. We have real worries about the mechanisms of this and we have fears this will be another financial impost on the industry.

“For many this could be the last straw on top of workers compensation, superannuation and all the other paperwork now required for small and medium-sized businesses.

We also want to know about what happens with legallylogged timber. If this needs certification is that going to be a cost for us?

“Government needs to look at the big picture – the impacts and costs associated with timber imports against the diminishing hardwood resource as more and more native forests are closed.

These timbers have been the backbone of our industry for more than a century.”

Holiday plans: “A family Christmas with husband Mark and the children and a visit with friends in Kyogle over New Year. Our son and his partner will be here and my daughter is coming down from Cairns for the celebrations. I have another Cont Page 10

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issue 155 | 13.12.10 | Page 9

OUTLOOK 2011

Forest process: ‘We’re doing it in the name of conservation .. so someone has to pay From Page 9

daughter in England who will be spending Christmas in New York ahead of a new job as national marketing manager for a hotel group in the UK. She never misses calling us on Christmas day.”

MICHAEL HARTMAN, chief executive, ForestWorks: “We will have our hands full next year – helping to find jobs for the hundreds of displaced forest industry workers in Tasmania.

“In the Christmas holiday period last year we were totally involved in helping to get government assistance for more than 400 pulp and paper workers who had lost their jobs. This year, there’s a greater jobs crisis and it’s affected the sawmilling, woodchip and contract harvesting sectors in the state. At least 650 contractors have lost their jobs as a result of contract cancellations by Gunns.

“The low-side estimate of job losses in the Tasmanian industry over the next three to four months is about 1200 people and on the high side it’s around 2000 jobs, so we’re talking about a quarter of the industry’s work force.

terry edwards

“ForestWorks is building programs to hopefully return these people back into the workplace, either within the industry or in other sectors. We will focus on how people’s skills can be used in other industries and what skills training may be needed.

“A lot of these workers believe that because they have been pulling trees all their lives there’s nothing else for them. But they have a whole range of abilities from machinery maintenance and planning to communication skills.

“We are also aware of the emotional side of the issue – for the displaced workers and their families. We are helping to recruit coordinators for home

visits. Their sole focus over the next 18 months will be to help these people get back on their feet.

“We are also working with government-assisted rural health services on programs to provide regional assistance.”

Holiday plans: “I’ll be spending time with my partner Karen’s family in Torquay over Christmas then we’re visiting my family in Adelaide for a reunion with my two brothers and two sisters.

If there’s a chance, we’ll camp along the Murray River north of Wangarratta for a spell.”

TERRY EDWARDS, chief executive, Forest Industries Association of Tasmania: “We’re heading into the festive season and the new year with a lot of uncertainty over the Tasmanian process. That’s if there is a process after the prime minister confirmed the government will not provide an additional cent to forestry workers or businesses impacted upon by any industry restructure or forest lock-up.

“The bottom line is if there is no funding for the process there won’t be a process. We can’t go through a process that’s going to impact adversely on sawmills, chip mills, rotary veneer manufacturers,

contractors and employees without some measure of compensation.

“We’re doing it all in the name of conservation, so someone needs to pay.”

Holiday plans: “A week off leading up to Christmas. Katie and I have taken a beach house down at Verona Sands on the channel so we’ll do some boating and little else. Katie’s family – her parents, sister and brother-in-law – are coming over from the mainland to have Christmas with us and our two sons.”

T&F enews takes a holiday IN line with the traditional industry Christmas-New Year break, Timber & Forestry enews will take a holiday from December 10 to January 14. The next edition – No. 156 – will be delivered on January 17. The editor, management and staff take this opportunity to wish readers a happy festive season and may 2011 treat you all kindly, peacefully and profitably.

Be SURE about INSURANCE Trusted brokers to the timber industry since 1985

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Page 10 | issue 155 | 13.12.10

Contact Alan Jones Email: alan.jones@premier.austbrokers.com (Licence No. 238123)

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industry news

EWPs that tick ALL the boxes Engineered wood products manufactured

by EWPAA member companies top the list

Protest .. forestry supporters gather in Adelaide.

SA forests sell-off threat draws 1000 protestors to city MORE than 1000 protestors against the South Australian Labor government’s forestry privatisation policy climbed the steps of Parliament House in Adelaide last week after leading a convoy of logging trucks through city streets.

Forestry Union spokesman Brad Coates accused the government of selling off wood rights to make a “quick buck”.

He said the government had reneged on a post-election promise to reconnect and listen to the community. He said he had written to the government requesting premier Mike Rann and treasurer Kevin Foley attend the protest to defend their budget.

Neither off them showed up.

The rally was attended by Public Service Association general secretary Jan McMahon and members of the Opposition, including leader Isobel Redmond.

Wattle Range Mayor Peter Gandolfini said the sale must be stopped as the industry accounted for 40% of the

region’s economy.

“This government’s decision is going to hurt everyone in the south east,” he said.

“It will put timber mills out of business and then there will be a flow-on effect for businesses from car dealers to hairdressers. Our social clubs and our sporting clubs are all going to suffer.”

The state government has flagged it will sell off timber harvesting rights in the south east, which has caused outrage among towns reliant on the industry.

The government has stated no decision will be made on the sale until a comprehensive consultation process and regional impact statement is completed.

Mount Gambier Mayor Steve Perryman told reporters that he believes the government has woken a sleeping giant.

“We’re a very patient group of people in the south east; we’ve learned to live with a lack of respect from our government,” he said.

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issue 155 | 13.12.10 | Page 11

industry news

Call for sensible accounting at Cancun the climate talks at Cancun, Mexico.

The National Association of Forest Industries is advocating a robust and transparent

THE Australian forest industry is hopeful that negotiations on accounting for carbon stored in forests and harvested wood products stay on track during

framework for accounting forestry measures that can significantly contribute to carbon mitigation.

“The forest industry has been

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working towards sensible and robust accounting frameworks for forestry measures. These include the role of new tree plantations and sustainably managed natural forests through the enhancement of carbon stocks in forests and harvested wood products,” said deputy CEO Mick Stephens who is representing NAFI at the conference.

These views are consistent with the 4th assessment report of the International Panel on Climate Change (IPCC), acknowledging that: “A sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber, fibre or energy from the forest, will generate the largest sustained mitigation benefit.”

Negotiators at the conference have been discussing changes to the simple rules originally developed under the Kyoto Protocol, that are largely restricted to new planting (afforestation) and deforestation but do not adequately address the enhancement of carbon stocks across vast areas of sustainably managed natural forests.

“There are also problems with the so-called ‘Kyoto-compliant’ planted forests,” Mr Stephens said.

“For example, the current treatment for wood products is instant oxidation (or emissions) after harvest, which is simply not the case.

“A big step forward would be to develop meaningful accounting rules for the carbon stored in forests and harvested wood products, so as to provide appropriate signals to the market of carbon offsets and the use of wood as a renewable and climate friendly material.

“Discussions under the Kyoto Protocol also parallel those occurring on the so called ‘REDD+ mechanism’, which could assist developing Cont Page 13

Page 12 | issue 155 | 13.12.10

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industry news

Biomass study tour gains momentum with information on the sector’s growth, export opportunities in emerging markets and policy updates.

The report is a result of the Renewable Energy and Energy Efficiency Export Initiative, a coordinated effort to promote

renewable energy and energy efficiency exports in the US. Seven federal agencies, including the US Department of Energy and Department of Commerce, are collaborating on the program, which is part of President Obama’s National Export Initiative.

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issue 155 | 13.12.10 | Page 13

INDUSTRY NEWS

Scrooge visits Tasmanian forest workers for Christmas

PM’s cash freeze no joy for contractors as forest process is ‘reduced to tatters’ A COMMITMENT by the federal government to provide emergency aid to Tasmanian forest contractors before Christmas appears to be in tatters.

It is understood the advisory committee formed by the government to review the applications for exit assistance won’t sit until a few days before Christmas Day. This is despite the December 13 closing date for applications and the funding commitment by the government on August 19.

“The Gillard Labor Government is leaving forest contractors and their employees in the lurch over the Christmas period,” Coalition forestry spokesman Senator Richard Colbeck said.

“Even if the advisory committee makes it decisions in the days just before Christmas there will not be time for forest contractors to get necessary financial approvals and have the money put in their banks.

“That could mean the families of forest contractors and their employees don’t have the Christmas they deserve, purely as a result of bureaucratic bungling within the federal government.”

Both state and federal Labor governments continue to provide uncertainty to Tasmania’s forestry industry and the thousands of workers employed in the sector. The prime minister Julia Gillard has confirmed her government will not provide an additional cent to forestry workers or businesses impacted upon by any industry restructure or forest lock-up.

Senator Colbeck said Ms Gillard’s statement completely undermined the negotiation process between the environmental groups and

Page 14 | issue 155 | 13.12.10

industry.

“Both industry players and environmental groups have expressed expectations of funding to support any restructure of the industry,” Senator Colbeck said.

“Even the largest single industry player, Gunns Ltd, has explicitly stated it would not exit native forestry logging without compensation.

“Without any commitment to funding from either the state or federal Labor governments for any form of industry restructure, a question mark hangs over the future of the forestry negotiations.

“That is a disgraceful situation. The Federal Forestry Minister Joe Ludwig must take full responsibility for this unacceptable mess.

“Minister Ludwig failed to take immediate action to have the funding distributed when appointed forestry minister in early September. The terrible results of that are now being borne out.

Senator Colbeck said it was also critical Minister Ludwig announce details of the $5.4 million package for forest contractors who choose to remain in the industry.

“The Government said two weeks ago it would provide details for the program “shortly” but there is still absolutely nothing known about this funding.

“The Gillard Labor Government just doesn’t get it. They are more interested in appeasing their Greens buddies than helping out desperate Tasmanian forestry workers.”

The Forest Industries Association of Tasmania has warned that the October deal between environmentalists and industry players could not work

necessary cash.

Mr Edwards said the cash-strapped Tasmanian government could not provide any of the necessary funding without a severe impact on the state’s health, education and infrastructure budgets.

Julia Gillard .. sorry no more cash.

without a federal aid package of up to $800 million.

Chief executive Terry Edwards says 50 contractors and up to 750 workers were set to lose their jobs by March because of the huge changes demanded by largely city-based public opinion.

[T&F enews has been made aware that up to 300 forest harvesting machines are ‘parked’ in the Tasmanian forests without contracts to operate. Industry observers say banks will soon be asking for back payments on any loans provided for this equipment].

Mr Edwards said the industry’s restructure is allegedly what has been demanded by the broader Australian community, by people who say they don’t want to see logging of Tasmania’s native forests, and who want wedge-tailed eagles and swift parrots protected.

“We say that protection comes at a cost to Tasmania in opportunities lost, so it therefore is a cost that must be borne by the public purse and all Australians.”

Julia Gillard last week repeated her demand for the Tasmanian government to “step up to its responsibilities” and find the

The National Association of Forest Industries says the federal government’s announcement that it will help facilitate negotiations over the future of the Tasmanian forest industry is welcomed.

NAFI was a signatory along with other industry, community, union and environmental groups to the historic principles document for a future Tasmanian forest agreement.

Chief executive Allan Hansard says the government is focusing on developing a more diverse and secure economic base for Tasmania, at the same time as delivering a balanced and sustainable approach to native forest management.

“Now we have the support from the federal government it is time to get on with the job,” Mr Hansard said. “The sooner the process gets moving the sooner the industry, contractors, workers and communities can adjust to a new sustainable future.”

Mr Hansard said NAFI remained committed to the process and looks forward to greater certainty for the industry and the communities it supports.

“We want to see a growing forest industry in Tasmania based on existing processing facilities and new value-added growth opportunities.”

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LATE NEWS

New legislation brings penalties for traders importing illegal wood

Ludwig announcement brings in tough measures PENALTY-loaded legislation against the importation and sale of illegally logged timber will be introduced into parliament next year after public consultation.

The forestry minister Senator Joe Ludwig said the new laws would promote global trade in legally logged timber products and stop unfair competition in Australia between illegal and legal timber suppliers.

Senator Ludwig announced the decision at the Bunnings Warehouse in Perth last Thursday, attended by representatives of the Australian Timber Importers Federation, the Australian Workers Union and Greenpeace. Industry observers expressed surprise that the World Wild Life Fund was not invited. WWF has cooperated with industry on illegal timber issues.

Senator Ludwig said internationally, illegal logging was estimated to cost more than $60 billion a year.

“After widespread industry consultation, the government will introduce legislation that carries penalties for importing illegally logged timber,” he said.

“The legislation is one of many tough measures the government is taking to combat illegal logging.

“Under the legislation, importers will now need to meet a due diligence test to ensure the timber they are sourcing has not been illegally logged.”

The new rules will apply to all timber products including sawn timber, wood panels, pulp, paper, wooden furniture and composite products. The legal origins of these products must be clearly verified according to requirements set out in the legislation.

Tough new rules .. federal forestry minister Senator Joe Ludwig (second from right) announces new laws on illegal wood at Bunnings in Perth. Attending the announcement are Mat Dixon, Australian Workers Union, John Halkett, technical manager, Australian Timber Importers Federation, Melissa Parke, MP Fremantle, and Stephen Campbell, Greenpeace.

“The legislation will encourage investment in the Australian timber industry and give consumers and businesses greater certainty about the timber products they buy,” Senator Ludwig said.

“This initiative will complement a global effort being championed

by Australia, the United States and the European Union, to combat illegal logging and demand importers disclose the legal origins of their wood.”

The timber and wood product importing sector has welcomed the government’s illegal logging policy.

Technical manager of the Australian Timber Importers Federation John Halkett said timber importers strongly support the elimination of illegally logged timber and wood product imports into Australia.

“Such trade damages the very impressive environmental and climate change abatement credentials of wood as the building and manufacturing material of choice,” he said.

Mr Halkett said the government’s reaffirmation

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of its illegal logging policy, including supporting legislation was pleasing and supported by timber importers.

“The industry appreciates critical aspects of the policy, such as transition arrangements and industry support. These provisions are in line with illegal logging policy implementation provisions in the US and the European Union,” he said.

The new rules will apply to all timber products including sawn timber, wood panels, pulp, paper, wooden furniture and composite products

“They will allow the industry to continue to work closely with the government on policy, legislation and implementation details. It is also anticipated that the government will continue to assist and support industry measures directed at the same outcome.”

Mr Halkett endorsed the aspect of the policy that explicitly covered all timber and woodbased products and sources.

“By so doing the policy recognises the research that has demonstrated that some imported woodbased manufactured product categories, including products from Asian countries, present a risk of containing illegally sourced timber.

“Also the policy recognises, as does overseas experience, that if some wood-based product categories were excluded from the policy’s reach such products were likely to be increasingly imported to gain a price advantage in the marketplace.”

Mr Halkett noted that imported timber products continue to be an increasingly critical ingredient in Australia’s house construction industry. He said that ‘flat’ domestic production in categories like structural pine and hardwood boards had sharpened the focus on the importance of a strong timber importing sector to enable the country to work its way out of a substantial housing shortage.

The value of timber imports was reported to have increased by 6% to almost $430 million and the volume increased by 19% to 748 000 cub m in 2009-10.

“This indicates an increase in domestic demand for timber in line with the recovery in housing activity.”

[T&F enews is aware that a leading importer of European sawn timber is doing about $300 million worth of business in Australia at present and has a business plan to triple sales over the next two years. This would represent more than 50% of the Australian market and would put tremendous pressure on local sawmills].

“If Australia is going to deal, Cont Page 16

issue 155 | 13.12.10 | Page 15

LATE NEWS

Illegal logging undermining investment From Page 15

not only with its housing construction backlog, but with new housing starts that are predicted to exceed 180,000 dwellings a year, timber importers will have an increasingly significant role to play,” Mr Halkett said.

“A continuing strong timber importing sector will be vital if Australia is going to meet its existing and future housing needs.”

A3P chief executive Richard Stanton said industry was pleased the government was acting on this important issue.

Illegal logging is one factor undermining investment in plantations, wood and paper manufacturing and job creation in Australia,” he said.

“We are also gratified that the government has listened to and supported our view that the new rules should apply to all timber products including sawn timber, wood panels, pulp, paper, wooden furniture and composite products.

“However, the detail of how the legislation will operate will be fundamental to its success.”

Mr Stanton said there would be a requirement on timber suppliers who first place timber products onto the Australian market to undertake a due diligence process to verify the legal origins of the timber products and to disclose species, country of harvest and any certification. These timber suppliers included timber importers and domestic wood

processing mills.

Industry will be given up to two years following the commencement of legislation to establish their due diligence systems.

These systems will need to be incorporated within an industry developed, commonwealth accredited code of conduct.

Kayt Watts, chief executive of Australian Forestry Standard Ltd said there would be some congestion among available auditors to provide services to organisations as demand to meet the proposed legislation comes into effect.

She said AFS encouraged organisations that have been thinking about certification, and those who have not been aware of its benefits, to start

the certification process now.

“Chain of custody certification covers the due diligence and code of conduct required to meet the new proposed legislation. AS 4707, the Australian standard for wood products chain of custody, is an inventory system ensuring traceability of wood and wood products back to their source – sustainably managed forests.”

Ms Watts expressed concern that the current accredited certification bodies were already under pressure as more and more organisations sought certification.

“If others wait in the belief have time before the two years is up they may find a large backlog of organisations all waiting as well,” she said.

letter to the editor

Australia’s cultural cringe about high value timbers I FIND the NAFI report of the Tasmanian conference (T&F enews #154, P. 10) quite disturbing in what it omits.

It largely only considers the Australia native forest situation from a ‘supplier’ point of view, ie from where certain growers, foresters and maybe some timber producing communities may see the “forest issue”. But surely NAFI can only speak for its members, not the tens of thousands of small businesses, families and communities in the forest industry.

Additionally, there is another side to the picture that demands equal attention but rarely rates a mention in the media or in policy making. That is, the (complex) hardwood demand or market end – that is the tens of thousands of small businesses in the national ‘wood industry community’ customer-end of the supply chain, that depend on Australia’s wide range of native hardwoods, either fully

Page 16 | issue 155 | 13.12.10

or partially. These include joinery shops, cabinet makers, furniture manufacturers, veneering companies, the flooring manufacturers, their timber merchant suppliers etc.

They employ at least 60,000 people in regional areas and in the major cities.

This secondary woodprocessing, kitchen and fitout industry would be one of Australia’s larger small business manufacturing sectors, if not the largest, something always glossed over when we hear of the impacts of “timber industry restructuring”.

Such businesses manufacture the building materials, fitouts and furniture for most of the nation’s leading projects – be it a 40 floor spotted gum office fit-out, the lovely new blackwood dining table, veneers for Parliament House repairs and refurbishments or the $20 million waterfront home with jarrah floors.

Even if plantations can satisfy this market demand for the large range of Australian sustainable hardwood species, from Tasmanian ash to subtropical brush box, (which I doubt), these plantations aren’t even planted yet. And even if someone does plant them, they will take 50+ years to grow into mature commercially viable sawlogs and veneer logs.

And, of course, it will be “green ground hog day” at harvest time, because the green movement will most likely then decide these mature plantations are “old growth” or “high conservation value” and will seek to have them locked up. It has happened many times before.

Why this obsession with limiting our supply of sustainable timber? It will only raise the cost of living for everyone, close down our wood trades businesses and result in more pressure on overseas forests.

Australia’s population is growing; we need more housing and more fit-outs, which means we will need more timber, both plantation softwoods and high value sustainable cabinetry hardwood timbers and veneers.

Market demand and sound ecological and sustainable forestry practices should drive our forest policy, not shortsighted “top-down” green politics. No other country in the developed world closes down their sustainable native hardwood forests, be it the oaks of the US, the maples of Canada, the birches of Finland, or the beeches of France.

Why has Australia got such a cultural cringe about the high value timbers that we grow so well, and so sustainably, right in our own back yard?

– JUEL BRIGGS, Briggs Veneers Pty Ltd.

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issue 155 | 13.12.10 | Page 17

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