Timber and Forestry E News Issue 327

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ISSUE 327 | July 21, 2014

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Axe to CSIRO jobs 85 years of forest science cut down to meet budget demands

A SECRET communication revealed by DLP Senator John Madigan indicates CSIRO management has reportedly axed the last remaining 33 forest scientists.

Speaking on ABC Lateline, Senator Madigan said: “What concerns me is that today, while everybody’s been consumed with what else is going on here in parliament, there’s been a letter go out from CSIRO saying that they’re going to retrench, get rid of 33 scientists in the timber section.”

The senator added: “Now, on one hand the government talks about opening up, you know, our forests to the timber industry. But on the other hand, here are the

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Pedalling sound forestry message .. AFPA CEO Ross Hampton on his recent timber bike campaign lobbies the CSIRO to reconsider cutting the jobs of forest scientists. – Canberra Times photo

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Cont P 3

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ISSUE 327 | PAGE 1

INDUSTRY NEWS

Legality compliance a $340m cost to industry

Regulations will not achieve the goal: submission

INTRODUCTION of the Illegal Logging Prohibition Act would impose an annual compliance cost of about $340 million on Australia’s wood products, furniture and timber importers, says a joint industry submission to the Parliamentary Standing Committee on the Environment Inquiry.

The submission by the Timber Veneer Association of Australia and the Window and Door Industry Council says the regulations will require more than 17,000 importers of regulated products to have a due diligence system in place to demonstrate and document that all their imports are of low risk of containing illegally logged timber.

The Timber Veneer Association of Australia and the Window and Door Industry Council represent member businesses, mostly small and medium-sized importers of regulated timber products and their customers in the wood products manufacturing and distribution sectors.

“We fully support reducing illegal logging but these regulations will not be effective or efficient at achieving this goal,” the submission said.

forestworks@forestworks.com.au

www.forestworks.com.au

PAGE 2 | ISSUE 327

The costs will exceed the benefits “The high costs of due diligence will flow on to retailers, builders, secondary wood products manufacturers and consumers.”

The submission says the original CIE Regulatory Impact Assessment (RIS) on the Act found that the costs exceeded the benefits. There isn’t any RIS for the regulations nor have they been subject to scrutiny such as senate estimates, parliamentary

Copping the cost .. illegal logging compliance will place heavy financial burden on the wood products industries, such as timber veneer manufacture.

debate (the Bill was passed without its regulations) or a parliamentary inquiry.

In effect, the due diligence requirements could mean that for every different import shipment or parcel, importers may need to ensure and document compliance with foreign national, state and local laws.

They may need to track back through many overseas businesses and manufacturers on every supply chain, to the forest source of all timber, know the regulations that applied in that country and forest, and that harvest by unknown third parties complied with these.

Large amounts of information may need to be sifted through in order to try to detect illegal logging. Records and documentation will need to be kept for five years. All this will be very costly and could be extremely complex and difficult.

The due diligence requirements, says the submission, are ambiguous as to what information is optional and what is compulsory.

The definition of “illegal logging” isn’t clarified either in the regulations or the act.

Ambiguity and uncertainty in law create cost, not just for business but also for governments.

May have to track every supply chain The due diligence requirements contain requirements that are quite unreasonable, such as to determine the prevalence of armed conflict, ensure that the rights of all persons claiming connection with timber/land have been met and to consider any information that may indicate whether the timber was illegally logged,” the submission emphasised.

No other country imposes such unreasonable regulatory requirements on businesses.

The US illegal logging legislation (the Lacey Act) has no due diligence requirements.

Cont P 6

INDUSTRY NEWS

‘While our competitor nations are backing forestry R&D, Australia is seemingly backing out. It makes no sense’: Ross Hampton From P 1

deliver what the government’s claiming they were going to do.

“So why on Earth would you get rid of 33 people from a department that 20 years ago had about 300 staff, that’s down now to the bare bones at 33?”

CSIRO has been conducting research in this area since 1930 increasing knowledge in water management, productivity (rates of tree growth), pest management, biodiversity, new uses for fibre, silviculture, climate science and many other areas.

Disheartened CEO of the Australian Forest Products Association Ross Hampton responded: ‘Scarcely four months ago the Prime Minister called for a renaissance in forestry at an industry dinner for 600 people in the Great Hall of Parliament House.

Timber industry vital part of our economic future “The Prime Minister said, ‘We want the timber industry to be a vital part of Australia’s economic future, not just something that was a relic of our history. That is what this government wants’.”

Mr Hampton said it was unbelievable to the 80,000 people who work in this industry that today the government is standing by in silence as CSIRO management reportedly takes the axe to forestry research, ending 85 years of world leading, productivity-driving breakthroughs.

“Our competitor nations understand that in a carbon constrained global economy, with a global population forecast to grow to 9.5 billion in a few decades, we need to develop new uses for our renewable, recyclable and carbon neutral timber.

John Madigan

Ian Macfarlane

‘While our competitor nations are backing forestry R&D, Australia is seemingly backing out. It makes no sense.”

Senator Madigan said the timber industry employed 24,000 people in his home state of Victoria.

“Across the nation, I think it’s about 77,000-odd people.

It’s 6.7% of our manufacturing input – an output of $22 billion of turnover.

“It’s suggested 200,000 people are employed indirectly as a flow-on from the timber industry. You know, there is no doubt, among all the people I talk to, people who are either sceptical of the carbon-climate change, whatever you’d like to say, but also who firmly hold that view that this is a problem, that everybody agrees that trees consume carbon dioxide.

“Now, I would’ve thought that the government would not be going down this path.”

Senator Madigan told Lateline he had attempted to ring [industry] minister Ian Macfarlane, whose portfolio controls CSIRO. “To this point in time tonight,” he said on Lateline, “I’ve heard absolutely nothing. I rang, then I rang Minister [Greg] Hunt’s office, and at least one of his advisers, his senior advisers came over to discuss my concerns. But he says, you know, it’s Minister Macfarlane’s area. And I said, well how on Earth is Minister Hunt going to deliver Direct Action if we’re getting rid of the people in the timber industry,

Greg Hunt

these scientists?

“It doesn’t make sense.”

Pressed on the source of the communication about CSIRO, Senator Madigan said it was passed on by somebody who was very concerned about what was happening.

“As far as I know, these people were given eight weeks’ notice that their jobs no longer exist.

Asked about the impact of

the job losses, Senator Madigan said: “Well, these people are critical. It’s a bit like at home with the Creswick Forestry School in Victoria just outside Ballarat. These people are world leaders in their field. Now, what I fear is going to happen is that these people are going to go to places like Chile, Vietnam, China, possibly Canada and New Zealand.

These people were given eight weeks’ notice “On the subject of New Zealand, they take forestry very seriously. There are some amazing things going on in the sector of forestry and how we might get alternative fuels out of it.”

ISSUE 327 | PAGE 3

INDUSTRY NEWS

How quickly the worm turns

NZ conference looks at vulnerability of log prices JUST a few months ago, the New Zealand forest-owning sector was basking in a China log demand and price trend which was unprecedented. The consensus was that the trend would continue if the China wood deficit grew ever larger.

Many of New Zealand’s forests are now owned by North American institutional fund managers/owners including HTRG, GFP, GMO RR, RMS and Rayonier. New Zealand is now the largest exporter of logs to China.

Log prices may have peaked in early 2014 However, after the Chinese New Year holiday, which in normal years means a very short slow-down and then a rapid

PAGE 4

| ISSUE 327

down a massive 60%.

There are several reasons for this drop in demand and prices: including high log prices which attracted new suppliers, the end of the $US800 billion Chinese

Profiling the total NZ forestry sector Trade growing .. NZ producers are now the largest exporters of logs to China.

return to business as usual, demand did not pick up in 2014.

Instead, softwood log stocks in Chinese ports grew from a healthy 2 million cub m around Christmas, to over 4 million cub m (and more recently up more than 4.5 million cub m).

Still, New Zealand and other Pacific Rim suppliers continued to pump logs into the market; with January to May 2014

deliveries up 25% in total, including from New Zealand up 20%.

Something had to give – and it did, with both price and demand reductions which continue into mid-year. The New Zealand benchmark delivered log price is reportedly down almost $US45 per JAS per cub m which means that for an average New Zealand plantation forest, stumpage is

government stimulus package and restructuring of the Chinese shadow banking system which has reportedly slashed its lending to property developers by almost 40% so far in 2014, and with interest rates now approaching 10%.

NZ-based DANA Ltd director Dennis Neilson made a ‘bold’ prediction at a conference this month that in real terms the New Zealand log price may Cont P 7

2014 AROUND THE CIRCUIT

JULY

28-30: Australian Timber Trainers Association annual workshop in Tumut. Contact David McElvenny PO Box 1954 Strawberry Hills, NSW, 2012. Mob: 0403 570 673. Email: secretary@ atta.org.au Web: www.atta.org.au

AUGUST 2014

5-6: MobileTECH 2014: Primary Industries Future. Brisbane.

12-13: Auckland, NZ (www.mobiletech2014.com).

These events will profile the latest mobile tools, technologies and innovations driving the future of primary industries (farming, horticulture, forestry, dairy, meat, wool, fisheries and mining).

MobileTECH 2014 will showcase a wide range of mobile technologies and innovations, including smartphones, tablets, mobile apps, satellite mapping and communications, robotics, aerial drones, remote sensors, electronic tagging, intelligent data, M2M, real-time analytics and cloudbased platforms.

6: Furniture Cabinets Joinery Alliance Forum (held during AWISA 2014), Brisbane Convention and Exhibition Centre, Southbank, Brisbane (2pm to 6pm). This is one of a series of industry leaders forums designed to enable the sectors to come together to build on this work and develop strategies that will allow the industry to capitalise on its future and seize opportunities for future growth. Contact Pieter Kreitals on 0412 101 590 or email: peterk@ kreitals.com.au Visit www.awisa. com 6-9: AWISA 2014 exhibition.

Brisbane Convention and exhibition Centre. Displays of panel processing, solid wood and timber machinery, tooling, manufacturing software, plus ancillary products such as dust extraction and materials handling equipment. Opportunity forn the cabinet, kitchen, furniture, joinery, timber, fit-out and panel industries to inspect new equipment.

Inquiries about booking space: email info@awisa.com or call Geoff Holland. Tel: (02) 9918 3661. Fax: (02) 9918 7764. Mob: 0412 361 580.

Email: info@awisa.com

7-8: The Australian Forest and Forest Products Sector: Situation in 2014 and Trends Going Forward.

DANA conference – Bayview Eden Hotel, Melbourne. Presentations on the tree plantation industry and its trading environment, log production and exports, softwood and hardwood woodchip export trends to major markets and the future outlook; the sawn timber industry – production and direction (including import competition), the potential for wood panel expansion, the domestic pulp and paper sectors and global pulp demand outlook, wood pellet potential; and more. This includes 13 speaker from Australia and 10 high-profile specialists in their fields from overseas – two from China, two from Canada, two from the US and one each from Chile, Finland and New Zealand. Shanghai-based RISI forestry specialist Gavin Hao will provide an extended presentation on North Asian and Indian softwood and woodchip markets, where Australia fits into these markets in 2013 and 2014, and predictions about future demand.

Other speakers include Oliver Lansdell, global pulp specialist; Rodrigo Monreal, solid wood products chief of Arauco, Chile; Matthew Wood, CEO Stora Enso Australia; Russ Taylor, president of WOODMarkets; Peter Barynin, lead economist with Boston USA-based RISI; Peter Zed (Australian sawmilling sector); Simon Dories, general manager, Engineered Wood Products Association of Australasia; Ross Hampton, CEO, Forest and Wood Products Australia; Steve Whitley, CEO, Forestry Tasmania.

Full registration details, plus the program, speakers, sponsorship and the online registration can be viewed at prcc.com.au / danamelbourne2014 or contact Pamela Richards at email pam@ prcc.com.au 11-12: DANA conference, Rotorua, NZ. The New Zealand forestry and forest products sector: its situation in 2014 and trends going forward. Novotel Rotorua Hotel, Rotorua. Web: www.prcc.com.au/ danamelbourne2014.

Conference consultant: Pam Richards 61 3 5781 0069.

Email: pam@prcc.com.au

INDUSTRY NEWS

SEPTEMBER

17-18: Wood Innovations 2014: Timber Preservation – Wood Modification – Composite Products – Rotorua, NZ. 23-24: Melbourne. (www.woodinnovations2014.com).

Changes in new wood treatment formulations, processes and systems, standards, legislation with the focus also on wood plastic composites and modified wood products.

19-20: ForestTECH 2014.

Rotorua, NZ. 25-26: Melbourne. (www.foresttech2014.com).

Remote sensing, field Inventory, forest estate planning.

NOVEMBER

13-14: Engineered Wood Products – From Here to the Future. Australian timber industry seminar.

Surfers Paradise Marriott Resort, Gold Coast. Co-hosted by the Engineered Wood Products Association of Australasia and Forest and Wood Products Australia. Australian and international speakers. Contact Eileen Newbury, marketing manager, Forest and Wood Products Australia.Tel +61 (3) 9927 3212. Mob: +61 (0) 41931 3163.

Email: eileen.newbury@fwpa.com. au or visit www.fwpa.com.au for registration and accommodation details.

2015 MARCH

25: ForestWorks annual industry conference and dinner in Canberra.

Flagship event for the forest, wood, paper and timber products industries. Joining with the Australian Forest Products Association to co-host the popular networking industry dinner at Parliament House. Conference will look beyond the innovative technologies in industry and focus on the people, exploring how they can help to bring about innovation.

Further details will be announced in the coming months, including the conference theme, speakers and venue. Contact forestworks@ forestworks.com.au

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ISSUE 327 | PAGE 5

INDUSTRY NEWS

‘Supply-side’ approach much more effective in reducing illegal logging

From P 2

The European act (the EUTR) protects its importers by the EU government establishing bilateral agreements (voluntary partnership agreements or VPAs) with supplier countries.

These VPAs exempt importers from due diligence.

Apart from being more cost effective for business, such a ‘supply-side’ approach is likely to be considerably more effective in reducing illegal logging.

“We understand that a RIS (regulatory impact statement) is a formal requirement for all regulations. Therefore we call for a RIS (including a cost: benefit assessment) to be

problems in the regulations.

Adopting supply-side solutions focused at the source of the problem could cut greentape compliance costs by up to

Pathway to remedying problems

The high costs of due diligence will flow on to retailers, builders, secondary wood products manufacturers and consumers.

conducted on the regulations before they come into force,” the submission stressed.

A properly designed RIS

would help identify where the business compliance costs outweigh benefits, and hence provide a pathway to remedying

$340 million a year. This would have the added benefit of being a more effective solution to illegal logging, motivating trading partners to improve their governance and law enforcement and assisting the development and prosperity of countries by not putting up barriers to legal free trade.

TO THE EDITOR

Mixed and confusing messages on illegal logging Act

WE read with interest your magazine’s coverage (Issue 325, July 7) of the Australian timber industry’s attempts to manage the incoming regulations associated with the Australian illegal logging Act. The article made some good points about the burden on industry, as well as the laudable aims of the new legislation.

We did want to clarify one

PAGE 6

| ISSUE 327

point. On the first page of the article, it states: “Companies can only be fined after an initial 18-month transition period if they ‘‘intentionally, knowingly or recklessly’’ import products from illegal logging.” This is not correct. You can be fined/ imprisoned for ‘‘intentionally, knowingly or recklessly’’ importing illegal timber right now, and this liability will continue through the 18-month

transition period.

And even if this sentence referred to the fines for due diligence and customs declaration offences (sections 12 and 13 of the Act), rather than for recklessly/negligently importing illegal timber (sections 8 and 9), it still would not be correct, as during this “initial 18-month period” you can be fined according to the

Act and regulations, despite DOA’s reassurances that they are concentrating on helping businesses comply, rather than “catching them out”.

This confusion is understandable, and in fact your article demonstrates the mixed and confusing messages being communicated to industry by the department.

– ITS Global, Melbourne.

INDUSTRY NEWS

Piexin Li

Peter Zed

David Anderson David Balfour

Doug Ducker

Robert Busch

Nigel Brunel

Ian Boyd

Australian log exports to China up 70%, 1 million cub m delivered January-May

From P 4

have peaked in early 2014 and may not return for a while.

However, he wants to test this hypothesis at a DANA conference next month. As well as discussing the vital log export situation, the meeting will profile the total New Zealand forestry sector including forest ownership, domestic wood processing, and trends in wood product exports and one of New Zealand’s smartest currency traders will make some predictions about cross rates going forward.

The conference in Rotorua on August 11 and 12 has a line-up of 28 speakers and panellists, including 17 from New Zealand and 11 specialists from overseas.”

A major interactive seminar at the conference will be convened

by Piexin Li, secretary-general of the Shanghai Timber Trading Association, who will discuss recent and future demand for softwood in China. Delegates Wood Protection ®

include a number of managers of companies which are building new wood processing facilities in southern China.

While log export volumes are not as important to the Australian forest owning sector as they are in New Zealand, log exports have rocketed in recent months so what is happening in New Zealand has direct co-relation to the Australian situation.

Log exports have rocketed in recent months Indeed, deliveries of Australian log exports to China in January to May 2014 were up a whopping 70% to more than 1 million cub m.

Australians may also be interested in this New Zealand conference which will cover sawmilling, wood panels and pulp and paper, products which are being exported to Australia.

Speakers include: David Anderson, CEO, Winstone Pulp International Ltd, NZ; David Balfour, MD (ops), Timberlands Ltd, NZ; Peter Barynin lead economist, North American timber, RISI, US; Tom Boon, CEO, Taranakipine, NZ; Ian Boyd, CEO, Te Arawa Group Holdings Ltd, NZ; Rens Bosman, director, NZ Wood Fibre Co. Ltd; Nigel Brunel, director, financial markets, OMFinancial Ltd, NZ; Robert Busch, MD, Arauco Australia; Martyn Craven, head of Telfer Young, Forestry Valuation Division, Rotorua; Steve Chadwick, Mayor of Rotorua; Doug Ducker, MD, Pan Pac Forest Products Ltd, NZ; Brian Frank, president and CEO, TimberWest Forest Corp, Canada; Tim Gallant, director, international sales, COMACT, Canada; Jo Goodhew, NZ Associate Minister for Primary Industries; Bryce Heard, Rotorua; Oliver Lansdell, director, Hawkins Wright, UK; Geoff Manners, international director, CFK Consultants, NZ;

Paul McCreedy, sawmilling specialist, Forme Consultants, NZ; Nick Ping, manager, resource planning Australasia, Hancock Natural Resource Group; Derek Rankin, director, Rankin Treasury Advisory Ltd, NZ; Jon Ryder, CEO, CHH Pulp, Paper and Packaging, NZ; Thomas Song, MD, Oregon Group, NZ; Brian Stanley, chairman, Wood Processors and Manufacturers Association, NZ; Megan Struthers, manager, investment analytics, New Forest Asset Management, NZ; Russ Taylor, president, International Wood Markets Group, Vancouver, Canada; Geoff Thorp, forest manager, Lake Taupo Forest Management Ltd, NZ; John Vaney, forestry consultant; Marcel Vroege, head of forest industry consulting, Indufor Asia Pacific, NZ; Peter Zed , chief, Omega Consulting, Australia.

Full details at http://www. prcc.com.au/danarotorua2014/ or contact Pam Richards at pam@prcc.com.au

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ISSUE 327 | PAGE 7

INDUSTRY NEWS

Title holders adjoining heritage areas not consulted about the implications

THE Coalition has warned that 1030 Tasmanian landowners whose properties now adjoin world heritage listed forests have not been consulted about the implications.

Parliamentary Secretary for Agriculture Senator Richard Colbeck said the title holders shared boundaries with the 74,000 ha of land the Coalition applied to have removed from protection.

Senator Colbeck said they now might not know they have a boundary with world heritage listed land, or how they must now consider those values when managing their land.

He said they were not consulted during the 18-month listing process and he could not warn them now due to privacy laws.

The United Nations World

Richard Colbeck

Jan Davis

Heritage Committee last month rejected the government’s application to reverse protection for the 74,000 ha.

The land was part of 170,000 ha added to world heritage lists last year under Tasmania’s forest peace deal enacted by the former state and federal Labor governments.

The Abbott government argued the 74,000 ha was degraded by previous logging and should be unlocked for the timber industry.

Senator Colbeck said he had information that more than 1100 titles had a boundary with this world heritage area, with 1030 individual owners.

He said the then-Liberal opposition raised concerns at the beginning of the process 18 months ago.

The issue raised a lot of questions in respect of the overall process from a number of perspectives, whether it be from the Australian government at the time, whether it be from the IUCN (International Union for Conservation of Nature) who did some of the assessments, or whether it be the World Heritage Commission themselves, who insisted consultation was an important part of the process.

Tasmanian Farmers and Graziers Association CEO Jan Davis says she had been pressuring state and federal governments to let people know if they have a world heritage park bordering their properties, and what that meant to them.

Ms Davis said she had written on 10 occasions and had had no meaningful response.

In relation to the 74,000 ha, she said she was being told the map provided to the World Heritage Committee was not

info@forestry.org.au | www.forestry.org.au PAGE 8

| ISSUE 327

detailed enough to define an exact boundary and identify affected properties.

“We’ve been told .. that they don’t actually know where the boundary of the world heritage area runs, so they can’t identify who the neighbouring properties are,” she said.

Ms Davis said the problems for land management included the lack of a buffer zone, meaning the listed land ran right up to the boundaries.

Problems now include lack of a buffer zone She said farmers would have to deal with weeds, fire, and animals differently if they bordered a world heritage area without a buffer zone.

The land owners would be unsure about legal liability and fire risks, and there could be significant issues if they entered world heritage areas.

“Either the state or federal governments need to be contacting each of those individual landowners, farmer or not, and giving them clarity as to what the boundary looks like, where it goes, and what their responsibilities are as the world heritage authority land holder, the federal government, and what is expected of the farmers or land owners,” Ms Davis said.

“The state or federal governments have the information necessary to do that.”

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INDUSTRY NEWS

Strong recovery in home building .. all states on board.

New home building surge a big plus for Australian economy THE ABS release of building activity data for the March 2014 quarter confirms a strong recovery for new home building.

Housing Industry Association chief economist Dr Harley Dale says new dwelling commencements grew by a strong 8.7% in the March 2014 quarter, with that result including a 12.8% surge in detached houses.

“All states and territories except South Australia experienced growth in the quarter,” he said.

“The annual level of new dwelling commencements is at its highest since late 2010 and at 176,891 is approaching historical peaks, with further upward momentum to come.

New dwellings are highest since late 2010 “At a time when the economy is generally regarded to be under-performing, new home building is achieving the opposite outcome.”

Dr Dale said given the reach of the sector into parts of the retail, manufacturing, and supply sectors, new housing was providing a crucial economic dividend for the nation.

“The challenge is to harness

this momentum and use it as the platform for enacting real housing policy reform,” he said.

“We need to lock in a structural increase in the number of homes we build in the years ahead if we are to successfully house our growing and ageing population.

Low interest rates and some limited housing supply reforms to date won’t get us to that point.”

Total dwelling commencements increased in all of states and territories, bar South Australia, where commencements fell by 7.8%. The strongest increase was in the ACT (31.6%), followed

by Victoria (15.4%), Western Australia (12.1%), the Northern Territory (5.9%), Tasmania (5.3%), New South Wales (2.5%) and Queensland (1.3%).

“We saw a rise of 0.8 per cent in the value of larger alterations and additions in the March 2014 quarter,” noted Harley Dale.

“The rate of expansion in alterations and additions expenditure, which has occurred over two consecutive quarters now, remains modest, especially in the context of total renovations investment hitting a decade low in 2013.

“It is important we see evidence emerge of a strong recovery in this key segment of the residential construction industry.”

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ISSUE 327 | PAGE 9

INDUSTRY NEWS

Wood manufacturing welcomes government axing of carbon tax

Years of political debate ends with 49-42 senate vote THE federal government’s repeal of the carbon tax, after making concessions with crossbenchers last week, is expected to save sawmillers and wood manufacturers millions of dollars.

After years of political debate, the senate voted to axe the tax, 49-42.

New analysis by the Business Council of Australia showed electricity prices had doubled in the past decade, with the carbon tax accounting for up to 20% of the power bill of a large business.

“Repealing the carbon tax is the first step in reducing power costs and developing a coherent and integrated national energy and climate change policy that maintains our competitiveness

INSURANCE IT’S ALL IN THE SELECTION

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and energy advantages while helping Australia to contribute to global emissions reductions,” BCA president Catherine Livingstone said.

Ms Livingstone said the analysis showed the carbon tax

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PAGE 1 0 | ISSUE 327

and other green energy policies accounted for a total of 40% of the power bill of a large business that did not receive government assistance.

“Australians, businesses and the economy should not be again subjected to an emissions reduction policy development process where critical detail is worked out behind the scenes as part of a political negotiation leading to unworkable policies for businesses and the economy,” she said.

“What we want to see is good policy design and process with any new or amended greenhouse gas reduction legislation subjected to a green paper and white paper process that is fully transparent and consultative.”

“Beyond electricity and gas, most businesses were unable to pass on carbon costs to their customers,” Australian Industry Group CEO Innes Willox said.

“The ACCC should take this into account in its pricemonitoring role, and not expect reductions in prices for those goods and services that never rose in the first place.

“We look forward to further detail around the overall framework for climate and energy policy. In particular, industry needs further clarification on the details of the policies put

in place to achieve the 2020 emissions reduction target and any post-2020 commitments that Australia may make.

“We will work with the government and all sides of politics to ensure sound climate policy.

Our long-standing principles for climate are that Australia’s ambition should be in line with those of other major economies; emissions reductions should be made at least cost; the competitiveness of trade exposed industry should not be eroded; efficient long term investment should be fostered; abatement innovation should be encouraged; and compliance burdens should be minimised.”

Mr Willox said any policy framework should make use of the opportunity for low-cost, high quality abatement through international carbon units. At current prices in the UN Clean Development Mechanism, Australia could guarantee

Tax accounted for 40% of power bill for large business achievement of its 5% target for less than $100 million. Access to such units would make Australian policy more cost effective.

The Carbon Pollution Reduction Scheme (or CPRS) was a cap-and-trade system of emissions trading for greenhouse gases, marked for introduction in Australia in 2010 by the Rudd government as part of its climate change policy.

In February 2011, new Prime Minister Julia Gillard unveiled plans for a carbon tax from July 2012. Opposition leader Tony Abbott described it as a “historic betrayal”, given Ms Gillard’s promise before the election Cont P 11

INDUSTRY NEWS

Carbon tax was a $17m impost on wood panels industry alone

From P 10

that her government would not implement a carbon tax.

In November the same year, the carbon tax passed the senate 36-32.

European businesses were paying between $8 and $13 for a tonne of carbon while Australia’s carbon price started at $23 a tonne.

The carbon tax commenced on July 1, 2012, and raised $3.8 billion in its first six months.

In April-May 2013, the carbon price in Europe collapsed to as low as $3.34 a tonne, due to slowing economic output, compared to the fixed rate of $23 a tonne in Australia. In May, the Treasury said it now expected carbon price revenue to drop by $6 billion over the next four years. As a result, the government deferred $2.8

Simon Dorries

Catherine Livingstone Innes Willox

million in tax cuts it planned for 2015, which were linked to a prediction that the carbon price would rise.

On the return of Kevin Rudd as Prime Minister in July, the government announced it would “terminate” the carbon tax and move to an emissions trading scheme in 2014 – a year earlier than planned. It would remove the fixed carbon price of $24.15 a tonne, replacing it with a floating price of possibly $6-12

a tonne.

The subsequent election became a referendum on the carbon tax.

The Coalition won government in September 2013 and Tony Abbott announced legislation to abolish the carbon tax would be before Parliament within 100 days of his victory. He aid ditching the tax would save households $550 a year.

Speaking from Fiji, the general manger of the Engineered

Wood Products Association of Australasia Simon Dorries said the carbon tax had been costing the wood panels industry alone conservatively more than $17 million a year.

He believed the impact of the CPRS was the largest single factor in determining whether the manufacture of particleboard and MDF would continue.

Particleboard and MDF relies on the availability of low-cost forest residues and sawmill waste products to remain viable.

Under the CPRS, these materials became a carbon pollution tax exempt energy source, which resulted in a dramatic increase in the cost of wood waste products and declining availability as generators of wood waste materials increasingly utilised these materials for their own heat energy production or for co-generation of electricity.

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above safe levels recommended by the federal government’s National Industrial Chemicals Notification and Assessment Scheme (NICNAS).

NICNAS, which is responsible for the assessment and safe use of industrial chemicals, has advised construction workers and wood panel users against the use of products that contain formaldehyde exceeding the low emission limits of E0 and E1.

Engineered Wood Products Association of Australasia Unit 3, 106 Fison Ave West, Eagle Farm 4009 Qld Tel: 61 7 3250 3700 Fax: 61 7 3252 4769 Email: inbox@ewp.asn.au Web: www.ewp.asn.au

ISSUE 327 | PAGE 1 1

INDUSTRY NEWS

AWISA 2014 is the international exhibition for the Australian and New Zealand cabinet, joinery, furniture, timber and panel industries.

New CSIRO book gives biodiversity a business slant

A NEW book from CSIRO aims to provide business, government and the community with practical solutions to managing Australia’s globally unique natural assets.

The book, Biodiversity: Science and Solutions for Australia, was launched in Canberra by federal Environment Minister Greg Hunt.

“The publication is an invaluable resource for anyone managing Australia’s ecosystems,” Mr Hunt said.

“The book provides an important bridge from our scientists to the wider Australian community. Whether it’s a precious cultural symbol, our lifesupport system, or a resource to be used, biodiversity matters to all Australians.

“Yet, despite our sense of its importance as part of our national identity, in many parts of our country biodiversity is in trouble.”

CSIRO’s book draws together the latest science to identify practical solutions to the many challenges that face Australia’s unique biodiversity, which include habitat fragmentation, altered fire regimes, invasive species, harvesting of species,

Greg Hunt

Megan Clark

and species decline.

CSIRO chief executive Dr Megan Clark said the book drew on CSIRO’s 90 years of research into biodiversity, as well as insights from the broader community, including research organisations, industry, all levels of government and the wider community.

The book’s 192 pages provide scientific insights including: • The ancient origins and unique features of Australia’s species, as well as the current status of our biodiversity on land and in rivers, lakes and the sea.

• Tools for management and planning, including Australia’s protected area system.

• Indigenous perspectives on biodiversity.

• How Australia’s biodiversity interacts with agriculture, the resources sector, and cities.

IFA forest management seminar

CAROL Neal, a forest management consultant for private growers and president of the AFG southeast division, will be guest speaker at the annual general meeting of the Queensland division of the Institute of Foresters of Australia at Gympie on August 9.

A group of southeast Queensland farm foresters is working to improve forest management practices and capture markets from their small-scale plantations and forests. They have attained FSC certification under PF Olsen’s TimberSmart Scheme.

Ms Neal facilitated the

PAGE 1 2 | ISSUE 327

formation and FSC certification of the SEQ Rainforest Plantation Growers Group. Also a group member, she has been actively networking on the group’s behalf and using her lifelong marketing skills to develop and market product.

The group is currently processing silver quandong (Elaeocarpus grandis) the dominant species in their plantations. Venue: Gunabul Homestead, Power Road, South Side, Gympie. Time: 10.3 am to 11.45 am. Seminar 12-1.45 pm. Cost: $22 p.p. (tea, coffee, lunch). RSVP August 4 to Tony Willet at orfire@tpg.com.au

Conference WOOD SUPPLY

The New Zealand Forestry & Forest Products Sector Rotorua, New Zealand | 11 & 12 August 2014 Novotel Lakeside Hotel

DANA Conference to debate the New Zealand domestic forest industry sector, and its wider role in the Pacific Rim as an import market and an export supplier.

Sixteen New Zealand and twelve international speakers complete the line up.

A premiere event covering

Topics Include:

an industry which employs

• Timberland investment

• Wood pellets

26,000 people and generates

• Logs - Especially log exports

• Carbon

10% of New Zealand’s merchandise trade.

• Woodchips • Sawmilling

• NZ industry place in the Pacific Rim

• Remanufacturing

• Future wood demand in China

• Wood panels

• NZ Party Forest Policies

• Pulp

• And much more

• Paper

For more info go to: http://www.prcc.com.au/danarotorua2014/ International Forest Industry Advisors

ISSUE 327 | PAGE 1 3

INDUSTRY NEWS

FSC seeks indigenous voices on national forestry standard

$60,000 project launched to engage aboriginal community THE Forest Stewardship Council Australia has launched a $60,000 indigenous engagement project that for the first time will call on indigenous Australians to help shape a new set of forestry industry standards, aimed at protecting and enhancing the rights of aboriginal communities and workers in the forestry industry.

The FSC’s certification scheme has become increasingly important to Australian timber companies looking to compete in a national and international market that demand socially and environmentally responsible forest products.

Throughout the standards setting process, FSC Australia is encouraging feedback from all Australians and is spending $1.3 million to develop the first Australia-specific standards for forestry practices and products, aimed at balancing social, environmental and economic concerns.

“By engaging indigenous stakeholders at all levels of the forestry supply chain, we aim to create the first set of Australian forestry standards that respect the rights and values of all indigenous Australians while also protecting the economic and environmental benefits of forests for current and future generations,” FSC Australia deputy CEO Daniel Mackey said.

Delivering a credible standard for Australia “FSC Australia has recognised for some time that to deliver a credible forestry standard for Australia, the level of engagement with indigenous stakeholders needed targeted focus, expertise and resources.”

PAGE 1 4 | ISSUE 327

Consultation .. Rowan Foley (left) confers with local community members in the Northern Territory.

Mr Mackey said the FSC would work with indigenous consultation experts at the Aboriginal Carbon Fund (AbCF) and had committed $60,000 of funding to the project.

“We are looking for input from all Australians throughout the standards development process, but collaboration with the indigenous community specifically is an integral component of developing the first locally owned Forest Stewardship Standard by the end of 2015,” Mr Mackey said.

“The indigenous stakeholder engagement project will seek perspectives of all indigenous Australians with a connection to our forests and the products that come from them – from forestry workers and local community groups to land owners, retailers and business owners.”

Under the project, the AbCF will establish an indigenous expert panel to provide ongoing advice to FSC Australia throughout the standards development process while also encouraging collaboration from the wider indigenous community through targeted communications and events.

AbCF general Manager Rowan Foley, from the Wondunna clan of the Badtjala

generations. They want access to forests for hunting and gathering and other activities important to the aboriginal way of life.

“Indigenous Australians also have a long history of involvement in forestry operations, from harvest to manufacturing, so the continued economic viability of the forestry industry is an important factor for many aboriginal stakeholders.”

“By leading a targeted consultation process, the FSC has shown recognition of the unique status of indigenous Australians as the original forest owners and an understanding that traditional approaches to consultation are not always effective or culturally appropriate.”

‘We are looking for input from all Australians’ Dan Mackey .. respect the rights and values of all indigenous Australians.

people (traditional owners of Fraser Island), said the AbCF were eager to deliver indigenous Australians the positive social benefits that FSC’s international certification scheme had achieved for communities in New Zealand and Canada.

“We strongly support indigenous people having meaningful involvement in developing a national forestry standard and look forward to helping the FSC shape principles that benefit all indigenous interests,” Mr Foley said.

“Indigenous communities want culturally and environmentally significant forest areas to be protected and preserved for future

Under the guidance of the FSC and the leadership of general manager Rowan Foley, the AbCF expert team is composed of Dr Catherine Robinson (CSIRO), Dr Dave Griggs (Monash University) and Ms Emily Gerrard (Allen’s Lawyers) who have significant experience in indigenous engagement, conservation, land management, environmental policy, native title and land rights legislation.

Rowan Foley comes from the Wondunna clan of the Badtjala people, traditional owners of Fraser Island. He is a ranger by trade and former park manager at Uluru – Kata Tjuta National Park. Mr Rowan has a Bachelor of Applied Science from Charles Sturt University and is a graduate member of the Australian Rural Leadership Foundation.

OPINION

To reserve or not to reserve?

THE GAS ELEPHANT IN THE ROOM

THE sound of whistling you may be hearing is the sound of Australian liquefied natural gas rushing off our shores.

If you can’t quite hear it just wait a bit. Within two years it’s expected that Australia will overtake Qatar as the world’s largest exporter of natural gas.

Yes, great news for the energy companies who have spent billions on exploration and infrastructure. And yes, great news for a nation reliant on overseas capital. And certainly, great news for a federal government shovelling in business tax receipts and shoveling out spending on social services.

Runs the risk of running out of gas altogether!

But that whistle of escaping gas doesn’t sound so great if you run a paper, paperboard, packaging or tissue manufacturing business or any form of paper product

manufacturing operation, on our shores.

We all know the story by now.

Australian gas is fast heading for overseas price parity. Contracts being written for the rest of this decade are starting to look like two or three times the current prices.

Report after report says many businesses just won’t be able to digest such massive changes and will close.

Some 40,000 manufacturing jobs are at risk we are told.

Industry Minister Ian Macfarlane has warned that New South Wales runs the risk of running out of gas altogether!

The answer?

Energy exporters naturally explode at the notion, but most peak industry bodies – including AFPA – argue we must have a domestic reserve scheme or a variation on that theme.

The loudest voice for some years has been Dow Chemical’s CEO Andrew Liveris, hardly a usual champion of market

since 1938.

In Canberra, this sort of thinking is still likely to cause heads to explode in ‘central agencies’ such as Finance and Treasury.

But there is so much at stake.

Cheap energy has underpinned our economy Extracts from a guest editorial in the Pulp & Paper Edge Intelligence Report (July edition) by ROSS HAMPTON, CEO of the Australian Forest Products Association. Mr Hampton was a delegate at the recent Packaging and Industrial Papers Market Outlook Forum in Melbourne. intervention. Liveris says it is madness that Australian policy makers refuse to intervene to ensure local manufacturing survives and points out the US has had energy reserve schemes

Abundant and cheap energy has underpinned our economy.

Clever public policy should support national growth not just economists’ models. Without intervention, which maintains some level of domestically affordable gas, at least for a transition period as other sources such as CSG come on stream, we are truly facing a manufacturing crisis.

If we don’t get this right, that whistling sound we hear will be the unemployed waiting at the doors of the job agencies and that isn’t good for any of us.”

Australia’s largest liquefied natural gas deal signed deal takes the value of binding LNG sales secured by Australian projects in the past year to more than $500 billion.

The agreement for the supply of LNG from BG’s proposed Queensland Curtis LNG project at Gladstone, beginning in 2014, was hailed as the world’s first fully-termed sales and purchase agreement for LNG sourced from coal seam gas.

QUEENSLAND’S emerging coal seam gas industry has received a $60 billion boost from China with the official signing of Australia’s largest liquefied natural gas deal.

Britain’s BG Group and China National Offshore Oil Corp last week sealed a deal announced last May for the supply of 3.6 million tonnes of LNG per annum to CNOOC for 20 years. The

US softwood lumber exports have doubled in five years

EXPORT sales of American softwood lumber nearly doubled in the past five years, reaching $1.1 billion and the highest level in 16 years, the Southern Forest Products Association (SFPA) reports.

Meanwhile, exports of

pressure-treated lumber, a key value-added item promoted by the association, reached an alltime sales record of $79 million in 2013. Exports have jumped sharply to regions targeted by the association’s international market development efforts, and

are continuing to rise this year.

“There’s no doubt that global demand for US softwood lumber is on the rise, and there’s an undeniable link between rising demand and our promotional efforts,” says Richard Kleiner, SFPA’s senior director of

international markets.

For more than 30 years, SFPA has leveraged the US Foreign Agricultural Service to promote southern pine lumber exports.

FAS-administered grants allowed SFPA to reach emerging markets that were untapped until recently.

ISSUE 327 | PAGE 1 5

INDUSTRY NEWS

Join us for eggs, bacon and hash .. as we send off veterans in the bash Brisbane Hoo-Hoo Club 218 and the Variety Club of Queensland invite all sponsors and friends in the timber and forest industries to …

The Grand Variety Bush Bash Breakfast Friday, August 8, 2014 – 6.30 am to 8 am Location: Suncorp Stadium, Brisbane (Northern Concourse Area) * Cost: $25pp * Secured

parking Railway Tce and Gibbs Street (adjacent to Milton railway station)

Come and join in the celebration to send-off of Bribane Hoo-Hoo Car 253 on the 3000 km Brisbane to Sydney Variety Bush Bash that will raise funds for sick and disadvantaged children.

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Delivered weekly to foresters, timbe associatio members of r merchants, sawm natio ns throu illers, wood ghout Austr nal, state and processors trade alia, New Zealand organisations and , and vario us coun tries.

Kings-WOO D on the road for nee dy kids

Hoo-Hoo car 3000 km Var promotes timber ind ustry iety Club Bus h Bash trek on 10-day, for charity

By JIM BOWD

EN

CAMPING overnight 5-below temperaturesin swags in winds, and , gusty cold a radiato by two broken r punctu red fan blades faze the didn’t team driving industry’s the timber Variety Bash entry Club Bush in a ‘virgin big event last week. run’ of the Lead driver Tim Evans, member 69, a of Brisba ne Club 218, which bough Hoo-Hoo Holden t the 1977 Kingswood ago to raise three years funds for charities, children’s and Ferris, 75, team mate Doroth y from Coolum , were Cont P 8

10 years

of successfu

A PROVEN

| July 14, 2014

Click to join our Maili ng List

The NATIONA voice forL • Timber Merchants

Revving it Bush Bashup for industry run to Sydney .. Tim Evans prepares . for

l use mea

PH: (07) 3480 5802 24hrs: 0417 www.tim 749 491 tech.info

ISSUE 326

the Variety

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ns maximum Not only have Peace of houses, Mind treated frame ongoing high intens s performed that Deter ity field in Australian mite’s highly testing contin termite repell ues to confi ent formu rm la is a stand out.

The timber industry club is taking its third run in the event and has so far raised more than $35,000 for needy children. This year in its 25th anniversary run, the Variety Queensland Bush Bash will see a convoy of more than 400 participants head off on August 8 from Suncorp Stadium in Brisbane for the 10-day, 3000 km trek to Sydney.

RSVP (by noon July 23, 2014) and payment arrangements, call Tim Evans on 0417 726 74 or email: tim-evans@bigpond.net.au Donations to Brisbane Hoo-Hoo Club’s Variety Bash charity fund-raiser can be made at: https://2014bash.everydayhero.com/au/tim

PAGE 1 6 | ISSUE 327

INTERNATIONAL FOCUS

Forest carbon investors impatient for global market to suck up offsets ‘Bridge to compliance’ would lift prices and trading volumes

AS United Nation climate talks inch towards creating a government-backed market for forest carbon credits, some private investors say it can’t happen soon enough, as they seek companies and other buyers to suck up their offsets.

“Lack of a (global) market is the problem,” says Jim Procanik, managing director of InfiniteEARTH, the company that started Indonesia’s Rimba Raya Biodiversity Reserve.

“We rely on the voluntary market. We don’t need the price to be high, but right now there aren’t enough buyers.”

So far, it is the only forest conservation project in the southeast Asian nation to sell carbon credits.

Aims to curb greenhouse gas emissions The reserve, covering nearly 65,000 ha of tropical peat swamp forests in the south of Borneo Island, is known as the largest initiative to protect endangered Indonesian species, including orangutans, sun bears, gibbons, clouded leopards and proboscis monkeys. It also aims to curb

be close enough to inclusion (of REDD credits) in a compliance market,” he added.

Signals from governments about the establishment of such a market are still too weak, he noted. “Once speculators believe that government is committed to doing this, they will rush in – it will happen overnight. But it has yet to be seen,” he said.

Few, if any, speculators in the market

Indonesia has approved a rainforest conservation project that sets aside an area roughly the size of Singapore and rewards investors with tradable carbon credits.

greenhouse gas emissions by safeguarding forests that store carbon dioxide, generating credits as a result.

After obtaining its license in 2010, Rimba Raya sold five million tonnes of verified emission reductions (VERs) on the voluntary carbon market in a first tranche (one tonne of avoided carbon emissions earns one credit). It offered a further five million VERs in 2013, of which less than a fifth has been sold so far.

Procanik said more “speculators” were needed, but they would only be tempted by the prospect of a “compliance” market in which forest carbon

credits were traded to help governments meet emissions reduction obligations, like those under the Kyoto Protocol, the international treaty to mitigate climate change.

A few years ago, investors believed a compliance market would emerge that traded credits from projects under a UN initiative for Reducing Emissions from Deforestation and Forest Degradation (REDD) in developing countries – and they supported REDD projects based on that belief, Procanik says.

“The fact that there are few, if any, speculators in the market today shows that we may not

For now, Procanik called for a “bridge to compliance” that would lift prices and trading volumes.

“It could be bonds, it could be government guaranteeing them, but somebody has to create the market.”

Carbon prices for forest credits in the voluntary market currently range from less than $2 to $10 depending on volume.

Indonesian officials, however, aren’t convinced a compliance market for forest carbon credits would meet the needs of private investors.

– Thomson Reuters.

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ISSUE 327 | PAGE 1 7

INTERNATIONAL FOCUS

Chernobyl’s ‘dead’ forests refuse to die

Trees show little signs of decomposition after 30 years

mesh bags containing leaves and other dead brush collected at an uncontaminated site.

After making sure these bags did not contain insects and other small decomposers from the uncontaminated region, the researchers left the bags in various parts of Chernobyl where radiation levels varied.

The results spoke for themselves. After a year, 70 to 90% of the leaves had decomposed into nothing in areas with little-to-no radiation.

In still irradiated areas however, 60% or more of the leaves remained.

According to the researchers, this is worrying; it shows that the radiation affected microbes and fungi severely, and is preventing natural decomposition, even after bush plants and other small trees have begun to grow once more in the region.

ALMOST three decades after the Chernobyl nuclear power plant disaster, dead forests in the immediate radiation zone are still not decaying.

Researchers say that this shows a disturbing facet of long-term radiation exposure that is little considered – how radiation impacts the process of decomposition.

According to a study published in the peer-reviewed journal Oecologia, forest around Chernobyl, particularly the infamous Red Forest, have shown little sign of decay since they first died nearly 30 years ago. This could be due to the fact that microbes and fungi have not recovered well from radiation contamination in the area.

Disturbing facet of long-term radiation contact The researchers involved in this latest study have been conducting analysis on environmental changes in the irradiated area since 1991, and have “noticed a significant accumulation of litter over time” – namely leaves and other dead brush that would normally decay in the course of a few years.

This observation prompted the researchers to launch a more extensive study of

Keeping decay at bay .. radiation has affected microbes and fungi severely in Chernobyl forests.

decomposition rates, especially in the Red Forest – a pine forest that tuned a reddish colour and died almost immediately following the Chernobyl incident.

“Apart from a few ants, the dead tree trunks were largely unscathed when we first encountered them,” lead

author Timothy Mousseau said in a Smithsonian release.

“It was striking, given that in the forests where I live, a fallen tree is mostly sawdust after a decade of lying on the ground.”

To fully measure decomposition rates in Chernobyl forests, the researchers made around 400

Kindling for a catastrophic forest fire?

The result is building dead brush over decades – the potential kindling for a catastrophic forest fire in the future if decomposition rates do not correct themselves.

The study was initially published in the May issue of Oecologia.

Bellissimo! Barilla’s Italian pasta served in PEFC packages

YOU can now enjoy sustainably-packaged pasta as Barilla, one of Italy’s leading food producers, announces that all the cardboard used in its packaging will come from sustainably managed forests.

Barilla purchases more than 30,000 tonnes of cardboard, which from now on will be made from 100% virgin fibre certified according to the international standards of PEFC, the

PAGE 1 8 | ISSUE 327

Program for the Endorsement of Forest Certification.

“We are delighted with this development,” said Antonio Brunori, secretary-general of PEFC Italy.

“As an Italian company operating throughout the world, the impact Barilla can have, not only directly through purchasing certified cardboard, but also by raising awareness of the importance of sustainable

forest management, is huge,” Brunori said.

By choosing PEFC-certified cardboard, Barilla is assured that the fibre comes from forests that are managed according to the highest ecological, social and ethical standards – protecting both the forest environment itself and the people that live and work in them.

ON THE ROAD

Professional Go-Getter Required

Australian Forest Contractors Association Limited (AFCA) is seeking a person with great organizational skills and a passion for representing the interests of members to join our association as General Manager.

The right person will work with the board to convert strategies into actionable campaigns while ensuring each AFCA member’s needs are properly identified and looked after.

Supported by a small team in the national office, the General Manager will also directly engage with the various networks, government departments and other associations that have a direct impact on the long-term viability and welfare of Australian Forest Contractors.

The person we are looking for will be highly organized, experienced in corporate governance, be computer literate and able to work autonomously.

While previous work experience in the forest industry is not necessary, an understanding of the industry and experience in a not-for-profit and/ or professional association would both be highly desirable.

Contact Timber & Forestry Enews Tel: +61 401 312 087 cancon@bigpond.net.au

For a complete position description or to submit your resume, email Ian Reid, Chair of AFCA at ian@afca.asn.au.

Applications close 15 August, 2014

ISSUE 327 | PAGE 1 9

297x210mm Vertical 254x93mm Horizontal 125x190mm Vertical 125x93mm Horizontal 73x190mm Horizontal 73x190mm Vertical 140x44.5mm 110 Vertical 34x44.5mm

297x210mm Vertical 254x93mm Horizontal 125x190mm Vertical 125x93mm Horizontal 51x93mm

Mob: 0401 312 087 PAGE 20 | ISSUE 327