Issue 204

6581

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issue 204 | 16.01.12 | Page 1

Arauco blaze won’t faze Chile’s exports

Happy New Year!

Brazil and other mills ready to fill a gap in supply of structural plywood

and operations at pulp and milling plants at the same complex were suspended as a precaution.

Arauco is evaluating the damage – on-the-spot observers reckon it’s around $300 million - and is unable as yet to quantify the full effects from the fire.

By JIM BOWDEN

LIKE bees working around a damaged hive, engineers at Arauco’s Nueva Aldea structural plywood mill in Chile are figuring the economics of rebuilding a burnt-out plant that produced 450,000 cub m a year, equal to Australia’s entire manufacturing capacity.

A forest fire in Chile’s Bio Bio region on New Year’s Eve destroyed the plywood mill and devastated about 4000 ha of Arauco’s plantation forests.

Other production facilities within the complex were undamaged.

About 250 people were evacuated before the fire hit

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issue 204 | 16.01.12 | Page 1

industry news

Smoke rises from several fires in the Torres del Paine national park in Chile. Chile had 48 fires nationwide over the New Year holidays, of which 20 were under control at the end of last week.

Chile determined to maintain share of export markets From Page 1

The plant is fully insured.

But although the blaze has interrupted Arauco’s production capacity, the plywood industry in Australia and New Zealand can expect little respite from Chile’s dogged intentions to divert much of its structural plywood exports Down Under, driven by an attractive Aussie dollar rate and the slow recovery in the US housing market.

Arauco is the leading producer of plywood panels in Latin America and before the Bio Bio fire had a combined annual production capacity of 850,000 cub m between its facilities at Arauco and Nueva Aldea.

To retain its market share, Arauco will have to source plywood elsewhere. A lot of so-called Arauco plywood is manufactured under contract by independently owned mills.

Speaking from Concordia, Argentina, this week, forest industry consultant Evan Shield said he visited one of these mills, Angol, last year. “Arauco delivers logs at the front door and carries away plywood from

Page 2 | issue 204 | 16.01.12

the back door,” he said “It may be that Arauco has the capacity to draw compensatory plywood supplies from such mills.”

[Mr Shield is returning to Chile this week to write some grading rules for E. nitens lumber and will provide an update on the damaged plywood mill].

Trade visitors to Chilean forestry operations have found them quite feudal with Arauco and CMPC working to dominate trading conditions.

To retain its market share, Arauco will have to source plywood elsewhere CMPC is a Chilean integrated forest industry which operates as a holding company through five business centres – forestry, pulp, paper, tissue and paper products. Each of these areas can function independently, being in the holding company for overall coordination and financial management of these businesses.

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: edown@forestworks.com.au BRISBANE PO Box 2014 Fortitude Valley 4006 Tel: (07)3358 5169 Email: bharle@forestworks.com.au SOUTH AUSTRALIA Unit 2 / 191 Melbourne Street, North Adelaide SA 5006 Tel: 08 8219 9028 Email: michelle@forestworks.com.au

Cont Page 7

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INDUSTRY NEWS

Critical year for timber importers as new goals are set for housing THE reality that imported timber products will continue to be an increasingly critical ingredient of Australia’s housing construction industry this year and in the foreseeable future has sharpened the focus on the importance of a strong timber importing sector to enable the country to deal with its housing goals.

The Australian Timber Importers Federation’s technical manager John Halkett says 2012 will be a critical year for timber importers.

“With the prospect of the Illegal Logging Prohibition Bill passing through federal parliament and the detailed work on regulations ramping up, timber importers will need to ensure that their now strategic position in supporting building and construction industries and related employment is not compromised,” Mr Halkett said.

He said that based on ABARES data, consumption trends for timber and wood-based products for 2009-10 confirm that the value of timber imports increased by 6% to almost $430 million and that volume increased by 13% to about 750,000 cub m, in line with increased domestic demand for timber products.

Mr Halkett noted that ATIF had worked constructively with the federal government and the Opposition on all aspects of the illegal logging bill and related matters.

“This included participating in both hearings of the Senate Transport and Rural Affairs Committee inquiry into the draft bill and numerous meetings with officials,” he said.

“ATIF also had to shoulder the bulk of the responsibility throughout 2011 for briefing timber product exporters to Australia and sometimes

Hot Chile dinner talk ... ProChile’s Director-General Félix de Vicente (left) discusses timber export issues with ATIF’s John Halkett.

government officials in supplier countries because of a perceived lack of engagement in this activity by the government.”

Mr Halkett said this effort, funded by timber importers, included briefings “sometimes on-the-ground” to suppliers in New Zealand, Papua New Guinea, Indonesia, Malaysia, Canada, the US and Chile.

“As the draft legislation becomes a reality we are most anxious for the federal Forestry Minister [Senator Joe Ludwig] and his department to be much more proactive in terms of an outreach program both within the Australian domestic timber

supply chain and with supplier countries so that there is a much improved understanding about the legislation and its implications for the timber trade.”

Mr Halkett indicated that ATIF was willing to work with the government on such an essential outreach program, but expected the Canberra to meet some of the costs of such activities.

“And that’s something that hasn’t happened to date,” he added.

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issue 204 | 16.01.12 | Page 3

INDUSTRY NEWS

Plan to boost hardwood supply

Greater resource security for Victorian industry VICTORIAN native timber processors will be given greater resource security through longterm contracts of up to 20 years under the state government’s timber industry plan, launched in December.

The policy will allow VicForests, the state government’s commercial forestry arm, to sell timber in a more flexible way other than by auction.

Victoria will continue to auction timber, but will urge the other states to end administered pricing and open up log pricing to the market.

This would ensure that Victorian producers were not disadvantaged ‘’through competing with businesses provided with logs at comparatively low administered prices’’, the plan says.

Peter Walsh .. compensation for changes in government policy.

State Agriculture Minister Peter Walsh said the policy changes were also designed to compensate VicForests’ customers if future changes in government policy affected timber supply.

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Lisa Marty .. ensures a sustainable future for productive forestry.

The action plan includes planning amendments that will allow plantations greater than 40 ha to be planted in farming and rural activity zones without a permit. A farm forestry plan will also be developed to help boost hardwood timber supplies.

The chief executive of the Victorian Association of Forest Industries Lisa Marty said the plan would help ensure a sustainable future for productive forestry in the state by providing the forest and wood products industry with better regulation and greater levels of resource security.

“The plan builds on the 2009 Timber Industry Strategy and provides a commitment for more ambitious actions to ensure the forest and wood products industry has access to wood from well‐managed State and privately‐owned forests,” Ms Marty said.

“Longer‐term wood supply contracts, more flexible sales arrangements and mechanisms to compensate VicForests’ customers for impacts on their contracts from changes in state government policy will provide a basis for improved business confidence, investment and innovation.”

Ms Marty said a clear and effective regulatory framework for responsible forest management and wood supply was essential to ensuring the industry could continue to provide economically and environmentally sustainable jobs in rural and regional Victoria.

“This plan supports skills development, training and research which are crucial to the future competitiveness, productivity and development of the industry,” she said.

The Timber Industry Action Plan also recognises plantations as an as‐of‐right crop and supports farm forestry; helping to diversify Victoria’s timber and forest products supply.

‘This plan supports skills development, training and research which are crucial to the future competitiveness, productivity and development of the industry – Lisa Marty Ms Marty said the TIAP actions were essential if Australia — the seventh most forested nation in the world — were to reduce its $1.9 billion trade deficit in wood and paper products.

The chief executive of the Australian Furniture Association South West Rohan Wright welcomed the emphasis on resource security. ‘’Without that, our manufacturers will struggle,’’ he said. ‘’The policy will support jobs in downstream processing in industries like furniture.’’

Under the plan, VicForests will become solely responsible for calculating the amount of timber that can be harvested sustainably from the state’s native forests. It will determine the location and timing of logging.

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events

WHAT’S ON? JANUARY 2012 19: Inaugural meeting Lateral Thinkers Club (Queensland Chapter). Gathering of timber preservation industry alumini.

Starts 11.30 am Hamilton Hotel, Racecourse Road, Hamilton.

Contact: Robin Dowding. Tel: 0408 660 434

MARCH Engineered Wood Products Association of Australasia.

Conference, dinner, award presentations. (Date to be advised) 6-7: Outlook 2012, Canberra.

The leading conference for Australia’s primary industries and economic outlook. Understand your industry’scritical issues and direction, hear from leading inernational and national speakers and forge nedw professional networks. Find the fullOutlook 2012 progam and register on line at daff.gov.au/abares/outlook.

Contact ABARES on +61 2 6272 2303 or +61 2 6272 3051.

Email: conferences@daff.gov.au

13-14: Future Forestry Finance: Investment, Growth and Strategic Outlook. Sydney. www. forestryfinanceevents.com 21: ForestWood 2012. Museum of New Zealand Te Papa Tongarewa in Wellington. A pan-industry conference jointly hosted by the Forest Owners Association, Wood Processors Association, Pine Manufacturers Association, Forest Industry Contractors Association.

Supported by Woodco, NZ Farm Forestry Association and Frame & Truss Manufacturers Association.

This is the second time that the four organisations have held a joint conference which builds on the successes of previous individual and combined industry events/conferences which have attracted world class speakers and presenters. Fantastic opportunity for organisations and individuals, with a keen interest in forestry, to engage with decision makers and professional specialists from the forestry industry. Visit www. forestwood.org.nz 22-24: WoodEX for Africa.

Johannesburg South Africa: An exhibition for wood and woodworking professionals. As a ‘firs’ for Africa, WoodEX will showcase what the continent has to offer in terms of the export and manufacturing of eco-friendly timber products, while creating a platform for business to showcase new technology for the timber industry. The exhibits will comprise forestry industry and technology; wood materials, machinery and veneer production; furniture machinery and production; solid wood working, machinery and production; industrial surface and preservative treatment technologies; timber construction; wooden arts and crafts; and related service in the timber industry. Visit: www. woodexforafrica.com

Australia’s forest, wood, pulp and paper products industry now has a stronger voice in dealings with government, the community and in key negotiations on the industry’s future, as two peak associations have merged to form a single national association.

The Australian Forest Products Association (AFPA) has been formed through the merger of the Australian Plantations Products and Paper Industry Council (A3P) and the National Association of Forest Industries (NAFI).

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

july 11-14: AWISA 2012. Sydney Convention and Exhibition Centre.

Contact: Contact Exhibitions Pty Ltd, PO Box 925, Avalon NSW 2107.

Tel: 612 9918 3661 Email: info@awisa.com

AFPA was established to cover all aspects of Australia’s forest industry:

Boom year for wood fibre trade THE year 2011 was a tumultuous one for the wood fibre trade, post the Japanese earthquake, according to speakers at the 5th International Woodfibre Resources and Trade Conference in Singapore.

Announcements about further rationalisation (shrinking) of the Japanese paper industry were countered by a number of major new Chinese pulp mills coming

on-stream in 2011-2013, with an expected sharply increased woodchip import demand.

Imports are already up a massive 250% from 2009 to 2011 (January to June). In addition there is a growing sense of a rapidly increasing woody biomass demand in North America, Europe and Asia -- and even in Latin America.

Of special interest to many

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Australians is news of the first shipment of E. globulus woodchips from Latin America to a Chinese pulp mill and in August, a full vessel of E. globulus biomass woodchips was shipped to a Latin America electricity plant.

The conference suggested this flagged the start of demand for bluegum woodchips to a wider Asian / international market.

- Forest growing; - Harvest and haulage; - Sawmilling and other wood processing; - Pulp and paper processing; and - Forest product exporting.

For more information on the Australian Forest Products Association (AFPA) or to enquire about membership , please call (02) 6285 3833.

issue 204 | 16.01.12 | Page 5

INDUSTRY NEWS

FWPA scholarship applications close end of this month FOREST and Wood Products Australia is offering a number of opportunities to students to support their studies in the forest and wood products sector in 2012.

These programs have been developed as part of FWPA’s commitment to building skills capacity to promote careers in the forest and wood products industry.

Applications are closing on January 31.

Managing director Ric Sinclair says it is critical that the industry continues to attract and retain its workforce to ensure it has the capacity to meet future demand.

“FWPA believes supporting education and ongoing skills development will help us do this,” he said.

There are a number of scholarships and awards now open accepting applications including: • Two FWPA Indigenous scholarships worth $5000 each, eligible to indigenous Australian students who are completing a Certificate IV, Diploma or Degree in subjects that relate to the forest and wood products sector.

• The prestigious Denis Cullity Fellowship designed to support the on-going professional development of leading Australian forest and wood

Ric Sinclair .. attracting and retaining workforce critical.

product scientists.

• The Russell Grimwade prize worth $40,000 designed to encourages the advancement of forest science in Australia.

Past recipients have benefited greatly from the support provided to undertake additional study.

Last year’s indigenous scholarship recipient Kerry Wharley says: “The FWPA Indigenous Scholarship has given me a fantastic opportunity to excel in my career at Boral, by giving me the financial support I needed to up-skill.”

Those wishing to apply or have employees looking to further their career in the forest and wood products industry should visit www.fwpa.com. au/scholarships-and-prizes for details and application guidelines.

Fire, safety warning as harvest begins JANUARY marks the commencement of new contracts for harvest and haulage of plantation wood in the southeast NSW region of Bombala and a key part of these agreements includes the provision of fire safety equipment, and safety planning for haulage routes.

Forests NSW regional manager

Page 6 | issue 204 | 16.01.12

Mark Chaplin said the harvesting and haulage of plantation timber recommences at full strength during early January, and he reminded the community to take care on forest roads.

The region produces more than 620,000 tonnes of plantation wood each year.

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INDUSTRY NEWS

Issues over forest stewardship in Brazil From Page 2

The company has operations in Chile, Argentina, Brazil, Peru, Colombia and Uruguay and today is the fifth largest producer of pulp, behind only Fibria, Brazil, Arauco, Chile, APRIL, Indonesia and Södra in Sweden.

Meanwhile, Arauco and other mills are turning to Brazil to ‘top up’ supplies of manufactured wood for export.

The Chilean forests that provide timber for Arauco’s structural plywood are certified as compliant with CERTFOR, the country’s strict national standard for sustainable forest management.

However, Brazil’s forest stewardship credentials are far from robust and the quality of its manufactured wood could be best described as like a curate’s egg. A mere 5% of timber volume in the Amazon is FSC certified to date.

All logging in the Amazon requires a permit and a management plan, obtained through the Brazilian Environmental Institute.

In 1998, IBAMA received 2806 requests for management plans and authorised about 930 of these. Legitimate traders question whether those who did not receive authorisation gave up, or logged without a permit. And did those who received authorisation follow sustainable forest management guidelines?

Brazil is the largest country in South America and 27% its total area of 8.5 million sq km

is considered “frontier” forest.

Brazil’s frontier forests comprise 17% of the world’s remaining frontiers, making it the third highest ranked country in terms of remaining frontier forest.

But Brazil has lost more than 570,000 sq km of its Amazonian forest – an area the size of France. In 1994 and 1995, deforestation rates nearly reached a high of 29,000 sq km a year.

Much of the clearing is done for grazing cattle, cropland and commercial logging. The rapid pace of deforestation can be attributed to a 10-fold increase in population since the 1960s, industrial logging, mining and

Only a small percentage of Brazilian forests are under FSC certification.

expansion of road networks – allowing colonists to move into frontier forests, increasing fires that occur with greater frequency.

The Brazilian Amazon provides more timber than any other tropical forest on the planet.

More than 28 million cub m a year comes principally from Pará, Mato Grosso and Rondônia states. The majority of the wood stays in Brazil (86%), and 20% of that supplies the markets in São Paulo state.

Experts estimate that up to 80% of the timber harvested in the Brazilian Amazon is done so illegally.

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issue 204 | 16.01.12 | Page 7

passages

Kevin Kelly a ‘first’ in so many ways Timber industry icon was first Aussie HHI president

By JIM BOWDEN

THERE could only have been one “first” and Kevin Kelly was it – the first Australian elected president of Hoo-Hoo International, a timber service organisation with thousands of members world wide.

Kevin Kelly (l-75940J) accepted his robes of honour, aged 53, at the famous HHI convention in Melbourne in September 1982 – the first held outside America – watched by more than 420 approving delegates from 11 US states, Canada, six Australian states, New Zealand and Singapore.

He succeeded big Dan Brown, a logging contractor from Klamath Falls, Oregon, and immediately booked the next international board meeting in Gurdon, Arkansas, the birthplace of Hoo-Hoo (1892).

Kevin Francis Kelly died in Melbourne on December 30, aged 80, after a long illness.

More than 200 friends gathered at the St Mary Magdalen Catholic Church in Trentham to say Céad slán, farewell, to the Irish-blooded industry icon who became one of the most loved, respected and travelled ambassadors for the Australian timber industry and Hoo-Hoo. He was described by one friend as a gentleman with a wicked sense of humour and a passion

Kevin Kelly, first Australian world president of Hoo-Hoo International (centre) meets up with Bill Philip, then Brisbane Hoo-Hoo Club 218 president, and Doug Howick, Melbourne Hoo-Hoo Club 217 and then J1V, president at the 1983 J1V Hoo-Hoo Convention in Bright Vic.

for Collingwood Football Club and timber – in that order.

“Race, religious belief, culture or gender were no barriers to his instant welcome although this ready acceptance was a bit slower if you happened to be a Carlton supporter,” Kevin’s son Peter recalled.

A third generation Australian, Kevin Kelly’s life had grown from the soil. The son of a farming family whose Irish descendants settled at Trentham in 1877, he said he entered the timber game “by accident”.

In the early fifties he met and

married Margaret, eventually celebrating 57 years of marriage. Their first years were spent share farming in Newbury at the Waterwheel Farm, then moving back into Trentham itself and settling at a former convent located across the road from St Mary Magdalen Church.

Kevin established his timber import business, K.F. Kelly and Sons, at Springvale in 1972 after working 17 years with Duncan-Innes at its Trentham mill then moving to manage the company’s Melbourne office in

the early 1960s.

K.F. Kelly and Sons began as a one-man business and eventually employed up to six people.

Son Peter said at the service: “Allied to his sense of belonging was dad’s enormous capacity for welcome and hospitality.

He was possibly the most gregarious man on the planet, and I know he could often infuriate mum by arriving home to announce that a new person he had met had been invited for dinner or lunch.

“It really didn’t matter to dad who you were or what your background was. He was sure you could become a friend if you just sat and had a yarn.

Race, religious belief, culture or gender were no barriers to his instant welcome.”

Kevin’s passion for learning and reading – his bookshelves were filled with compendiums of modern fiction and the classics – extended to art. He set about purchasing art, particularly Australian art, to grace the walls of the family home.

He was definite about what he liked and had a broad taste in art and so his family benefitted from exposure to a range of artistic forms as they grew up.

And, as always he was eager Cont Page 9

Big Timber Boys .. a friend’s fond recollection MANY of us met the leader of ‘The Big Timber Boys’ at the foundation meeting of the Northeast NSW Hoo-Hoo Club (Grafton 1979). Meeting Kevin was one of the great privileges I have enjoyed in my life.

I left that meeting with a pair of underdaks emblazoned with The Big Timber Boys in an appropriate place that still amazes me – even if it didn’t

Page 8 | issue 204 | 16.01.12

seem to worry Charlie Henry, Tim Evans, Errol Wildman, Noel Griffith, Stuart St Clair, and Peter Duncan and goodness knows who else!

Discretion prevents me mentioning which females proudly bore the Big Timber Boy’s badge of honour.

As history records, Kevin went on to become the first ever Aussie Snark of the Universe,

and I happily tagged along with him to the foundation meetings of Hoo-Hoo St Vanimo (PNG), Suva (Fiji), Cairns, Townsville, and eight international conventions.

(There was never any hard evidence that Kevin, Ted Simms and Worrall McCarthy established a club at Bloomfield River but I believe the facts were just that!)

Bert Newton may nearly have

copped a thick lip by a similar remark to Mohammed Ali, but I am proud to say about Kevin Kelly .. I loved the boy!

Kevin enjoyed Health for quite a while. He spread Happiness wherever he went. And his Life was longer than most – to draw on the Hoo-Hoo motto: Health, Happiness and Long Life.

Vale, Kevin. And God bless you.

– BILL PHILIP (L-84008).

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OPINION

Colbeck: Tear up Tasmania’s sham forest deal THE current debate over who should be doing what, if anything, in 430,000 ha of possible ‘high conservation value’ Tasmanian forest actually highlights a much more serious issue with the Tasmanian forests agreements – it’s a sham deal and it should be torn up.

That’s the opinion of Coalition forestry spokesman Senator Richard Colbeck.

“As much as it might pain me to say so, Bob Brown is correct when he says the intergovernmental agreement (IGA) for Tasmania’s forests states the 430,000 ha claimed by environment groups (ENGOs) as HCV will be immediately put into interim reserves while it is assessed to determine whether in fact the HCV exists and if will be protected in the longer term,” Senator Colbeck said.

“The IGA goes on to say that if it is not possible to meet contracted supply from outside those areas then companies will be compensated financially from the adjustment package rather than receive logs.

“In effect, the state and commonwealth governments

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Richard Colbeck .. more pain in a few years’ time and certainly no peace.

are in breach of their own IGA. “This demonstrates yet again the federal government’s incapacity to implement any policy without stuffing it up.

“What Senator Brown will no doubt dispute with me, is that the very presence of this 11th hour clause in the agreement confirms what a sham the process has been right from the start.

“The federal Coalition, however, will not be dissuaded from this view.”

Cont Page 11

Kevin had passion for learning and reading From Page 8

and insistent in engaging in conversation about his choices and what his family and friends thought of them.

Kevin Kelly is survived by his wife Margaret, six children, Peter, Christopher, Paul, Brendan, Fiona and Bernadette, six grandchildren and one great grandson.

Editor’s note: I was at the 1982 convention in Melbourne to report on Kevin’s election as HHI president and took the photo of Kevin and Bill Philip (then Brisbane Hoo-Hoo Club 218 president) and Doug Howick (then incoming J1V president) at the Bright J1V convention in northeast Victoria the following year which still holds happy memories for me.

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HEAD OFFICE Custom Publishing Group Unit 2- 3986 Pacific Highway Loganholme 4129 Qld, Australia PUBLISHER Dennis Macready admin@industryenews.com.au CONSULTING EDITOR Jim Bowden Tel: +61 7 3266 1429 Mob: 0401 312 087 cancon@bigpond.net.au ADVERTISING Tel: +61 7 3266 1429 cancon@bigpond.net.au PRODUCTION MANAGER Leigh Macready production@industryenews.com.au

Opinions expressed on Timber & Forestry e news are not necessarily the opinions of the editor, publisher or staff. We do not accept responsibility for any damage resulting from inaccuracies in editorial or advertising.

The Publisher is therefore indemnified against all actions, suits, claims or damages resulting from content on this e news. Content cannot be reproduced without the prior consent of the Publisher- Custom Publishing Group.

issue 204 | 16.01.12 | Page 9

INDUSTRY NEWS

Forestry Tasmania shows interest in leasing Triabunna woodchip mill FORESTRY Tasmania has lodged an expression of interest to lease and operate the Triabunna woodchip mill on the state’s east coast.

This is in the event that the mill’s owners are unable to reach commercial terms with other interested parties.

The sale of the woodchip mill in July last year by Gunns Ltd to two pro-conservation entrepreneurs was met with mixed reactions across Tasmania. The mill was sold for $10 million to Kathmandu clothing founder Jan Cameron and Wotif founder Graeme Wood.

Managing director of Gunns Greg L’Estrange says the sale of the mill to a tourism consortium was made because a rival forest industry deal was

InSurAnce..

It’S All In the SelectIon

negotiations.

Meanwhile, Prime Minister Julia Gillard was in Tasmania at the weekend for talks with the state government after Greens leader Bob Brown threatened to cancel his regular meetings with her over logging in the island’s old growth forests.

Bob Gordon .. “no doubt about our intentions.”

Bob Brown .. threats over oldgrowth forests.

unable to secure finance.

The mill is critical to the future of the forest industry in Tasmania, and its importance is acknowledged in Clause 32 of the Tasmanian Forest Intergovernmental Agreement:

“The governments expect that the Triabunna mill will reopen and be operated in accordance with the statement of principles. If this does not occur, either government may request a review of the terms of this agreement, with a review to occur only if both governments agree”.

Forestry Tasmania lodged an expression of interest after being approached by the local council and the Australian Manufacturing Workers Union, who were concerned the mill’s owner Triabunna Investments might not be able to identify a suitable lessee through its expression of interest deadline.

These concerns were highlighted in recent media coverage, which indicated the owners had received fewer than 10 applicants, and only one or two were considered to be serious contenders.

Forestry Tasmania managing director Bob Gordon said he decided to make public FT’s expression of interest so that there could be “no doubt about our intentions”.

It has been lodged on the basis that other applicants would first be considered, but in the event the owners could not conclude commercial arrangements, FT would be prepared to enter into

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Page 10 | issue 204 | 16.01.12

Senator Brown gave the warning last Wednesday while accusing Ms Gillard of going back on a promise to protect a large tract of native forest under a $276 million agreement with Tasmania funded by the federal government.

Ms Gillard has denied there has been a breach, saying the exact part of the forest to be preserved was not specified in the agreement.

The deal, signed in August with Tasmanian Premier Lara Giddings, was made to protect Tasmania’s forests and support workers after timber group Gunns exited the native forestry industry.

It required Tasmania to “immediately” place 430,000 ha of native forest into informal reserve, ahead of a verification of their conservation value and full conservation protection.

Senator Brown said that since August more than 10 sq km of the forest had been “flattened”

by Forestry Tasmania and Malaysian logger Ta Ann, and another 10 sq km was on the chopping block.

Ms Gillard has defended the forest agreement, saying the government had stepped in “to support workers, to support contractors who are exiting the industry” after Gunns decided to pull the plug.

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INDUSTRY NEWS

‘ENGOs use IGA as a weapon against industry’ From Page 9

Senator Colbeck said the clause was inserted after industry representatives read what they thought was the final draft of the IGA. It was inserted at the urging of the Greens and ENGOs, and it was based on an assessment drafted by former Wilderness Society national director Professor Jonathon West.

“All of the available data at the time contradicted West’s assessment, and this has subsequently been confirmed more than once by the Independent Schedulers Reports that has subsequently been conducted within the IGA process,” Senator Colbeck said.

“So as not to expose its incompetence in relying on West’s poor report, the federal government continues to refuse to release the Independent Schedulers Reports.

“It is, frankly, ridiculous to suggest that compensation instead of supply is an option.

No business can operate with such uncertainty. Supply must be maintained.

“Certainty for business has never been a consideration for the Greens but I do question why the two Labor governments would agree to insert the clause at such a critical time in the negotiations.

“This display of incompetence further reinforces why the Coalition has been opposed to this IGA deal from the outset. It was once heralded as a ‘peace deal’ but it has never been a genuine negotiation.

“For the ENGOs, it has never been about reaching common ground and finding compromise.

It has always been about locking up our valuable, renewable timber resources.

“The ENGO agenda has been greatly assisted by the pair of inept Labor governments that are more concerned about keeping sweet with their Greens minority partners than securing a long-term viable future for Tasmania’s forest industry.

“In fact, the ENGOs are now using the IGA as a weapon against industry in local and global markets.”

Senator Colbeck continued: “If there was any doubt about the lock up objective, just look at the makeup of the IGA assessment panel – four of six members are either directly involved or have close links to the Wilderness Society. What chance a fair outcome for industry amidst that bias?

“The really perverse irony is that the catalyst for this whole process – the decision by Gunns Ltd to exit native forests as part of its strategy to progress the pulp mill project – actually provided the opportunity for a better outcome for all sides of the argument.

“Instead the sham process will leave the Tasmanian forest industry even less sustainable and under more pressure.

“Gunns Ltd’s exit from native forests provided an opportunity to reduce the intensity of harvest across the state, giving better environmental, forestry and economic outcomes but the Greens, Labor and the environment groups could not accept that.

“The Greens, Labor and the environment groups are instead intent of squeezing what is left of the industry into an ever smaller area. This will most likely result in higher harvest intensity, bringing us more pain in a few years’ time and certainly no peace.”

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issue 204 | 16.01.12 | Page 11

OBSERVATIONS

Beware of the dragon

China’s appetite for wood takes a heavy toll MORE than half of the timber now shipped globally is destined for China. But unscrupulous Chinese companies are importing huge amounts of illegally harvested wood, prompting conservation groups to step up boycotts against rapacious timber interests.

This is the Year of the Dragon and In Chinese folklore a dragon symbolises strength.

It is an apt icon for a nation whose rise as an economic superpower has been nothing short of meteoric.

While China’s stunning economic advances have come at significant environmental cost, the boom has been a ‘plus’ in a few realms. The country is investing avidly in green technologies, such as solar energy and hightech car batteries. It has also undertaken an ambitious national reforestation program, while cracking down on illegal forest clearing and logging inside its borders.

The the rise of the Chinese dragon has a darker side – as much as half of the timber consumed is imported, primarily from tropical nations or nearby Siberia According to the UN Food and Agricultural Organisation, forest cover in China, including large areas of timber plantations, increased from 157 million ha in 1990 to 197 million ha in 2005.

Counter-intuitively, the expansion of Chinese forests has occurred at the same time the country has been developing an immense export industry for in its wood and paper products.

China is now the “wood workshop for the world,”

Page 12 | issue 204 | 16.01.12

according to Forest Trends, a Washington DC-based think tank, consuming more than 400 million cub m of timber annually to feed both its burgeoning exports and growing domestic demands. Production of paper products has also grown dramatically in China, doubling from 2002 to 2007.

But the rise of the Chinese dragon has a darker side. As much as half of the timber and much of the paper pulp consumed by China is imported, primarily from tropical nations or nearby Siberia.

In and of itself, there is nothing wrong with this – China has every right to grow economically and seek the kind of prosperity that industrial nations have long enjoyed. However, in its fervour to secure timber, minerals and other natural resources, China is increasingly seen as a predator China is now overwhelmingly the biggest global consumer of tropical timber, importing around 40 to 45 million cub m of timber annually on the world’s forests.

China is now overwhelmingly the biggest global consumer

By

WILLIAM LAURANCE of tropical timber, importing around 40 to 45 million cub m of timber annually. Today, more than half of all timber shipped anywhere in the world is destined for China. Many nations in the Asia-Pacific region and Africa export the lion’s share of their timber to China.

China faces three criticisms by those worried about the health and biodiversity of the world’s forests.

First, the country and its hundreds of wood-products corporations and middlemen have been remarkably

aggressive in pursuing timber supplies globally, while generally being little concerned with social equity or environmental sustainability. For instance, China has helped fund and promote an array of ambitious new road or rail projects that are opening up remote forested regions in the Amazon, Congo Basin, and Asia-Pacific to exploitation.

Such frontier roads can unleash a Pandora’s Box of activities – including illegal colonisation, hunting, mining and land speculation – that are often highly destructive to forests.

Second, China, in its relentless pursuit of timber, almost exclusively seeks raw logs. Raw logs are the least economically beneficial way for developing nations to exploit their timber resources, as they provide only limited royalties and little employment, workforce training, and industrial development. As a result, most of the profits from logging are realised by foreign timber-cutters, shippers and wood-products manufacturers.

A cubic metre of the valuable timber merbau (Intsia bijuga), for instance, yields only around $11 to local communities in Indonesian Papua but around $240 when delivered as raw logs to wood-products manufacturers in China, who profit further by converting it into prized wood flooring.

Finally, China has done little to combat the scourge of illegal logging, which is an enormous problem in many developing nations.

A 2011 report on illegal logging

by Interpol and the World Bank concluded that among 15 of the major timber-producing countries in the tropics, two-

Cont Page 13

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OBSERVATIONS

Sales of eco-certified timber products reaching $7.4 billion in the US alone last decade.

However, China still has no national action plan or legislation to prevent the import of illegally sourced timber, and no formal trade arrangements with major timber-producing countries designed to improve enforcement.

Despite dominating the global timber market, Chinese wood products corporations feel little pressure from buyers to improve the legality of their timber products. The bottom line: China’s efforts to limit the environmental impacts of its burgeoning timber imports are still mostly lip-service, with little practical impact.

Check the labels when you shop for any wood or paper products. If it says, “Made in China,” be wary of the dragon, and think twice before buying.

From Page 12

thirds had half or more of their timber harvested illegally.

Globally, economic losses and tax and royalty evasion from illegal logging are thought to cost around $15 billion annually – a large economic burden for developing nations.

A UK report concluded that China imports 16 to 24 million cub m of illegal timber each year – an incredible figure and twice the total amount imported annually by leading industrial nations.

Around a third of Chinese timber imports are ultimately exported, as furniture, plywood, flooring, disposable chopsticks, and other wood products. European countries, the US, and Japan are the biggest importers, with consumers there often unaware of the illicit origin of many wood products from China.

When it comes to illegal or predatory logging, it has not been easy to get China’s attention. Stories about illegal logging rarely penetrate the Chinese news media. Outside China, the story is different; awareness of the rapacious nature of Chinese timber Despite dominating the global timber market, Chinese wood products corporations feel little pressure from buyers to improve the legality of their timber products interests is growing.

This is a dangerous situation for Chinese businesses and exporters. Boycotts initiated by green groups can have a major influence on consumer preferences and have forced some of the largest retail chains in North America and Europe, such as Walmart and Ikea, to limit products sourced from

Around a third of Chinese timber imports are ultimately exported, as furniture, plywood, flooring, disposable chopsticks, and other wood products

old-growth forests.

Meanwhile, eco-certified timber products accounted for $7.4 billion in sales in the US alone in 2005, and were expected to grow to $38 billion there by 2010.

At some point, Chinese companies will buck the trend toward sustainable logging at their peril.

Adding teeth to such consumer actions are tougher laws and initiatives in industrial nations.

In particular, new provisions to the Lacey Act in the US, and the European Union Timber Action Plan in Europe are increasingly holding corporations that import illicit timber products responsible for their actions.

One senses that efforts to combat illicit timber imports are finally beginning to gain some traction in China. The relevant government agencies are now engaged, and the country has commissioned an analysis of its role as an importer of illegal timber and released

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draft guidelines to improve sustainability of its timberimporting corporations. It also recently hosted the Asia Forest Partnership Dialogue 2011, in Beijing, designed to assess progress in efforts to combat illegal logging in Asia over the

* William Laurance is a distinguished research professor and an Australian Laureate at Queensland’s James Cook University. His research on the impacts of intense land use on tropical forests and species has ranged from the Amazon to Africa to tropical Australia.

A NEW threat to Tasmania’s biosecurity has sparked more questions about the capacity of the state’s downgraded quarantine regime to keep disease out.

While the state government is standing firm in its opposition to the importation of New Zealand apples because of fire-blight concerns, another disease could decimate the forest and nursery industries if it crosses Bass Strait.

Myrtle rust, a fungal disease that can kill native and introduced

trees, has been found in Victoria.

The state Opposition says the government needs to reassure the public it can manage the myrtle rust threat on a reduced quarantine budget.

It also wants money used to fund the Fox Taskforce to be redirected into a new biosecurity division.

A lobby group called Friends of Quarantine claims that more than half of the sea containers entering Tasmania are not being checked.

Quarantine fears on forest disease in Tas

issue 204 | 16.01.12 | Page 13

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