‘Bring us in line with the rest of the country’

A challenge has been laid down to the Victorian Government … “bring us in line with the rest of the country by addressing the fundamental flaw in its Forestry Rights legislation”.
That challenge came from Pat Groenhout, general manager of PF Olsen Australia, at the Victorian Association of Forest Industries annual dinner.
And he threw down the gauntlet to the industry to “work as one” to ensure necessary changes were made.
“In 2007 I made a presentation to the Australia and New Zealand Institute of Foresters conference in Coffs Harbour attempting to answer the question: does commercial native forestry have a viable future in Australia. My conclusion was yes, it does, subject to the usual caveats of maintaining scale, availability of markets, alignment of the stars and reading the entrails of sacrificed chickens.
“There were two other important requirements that I identified in my presentation. The first was improved industry alignment and consolidation of advocacy efforts. The second was an appropriate level of explicit Government support and commitment through effective policy settings,” Groenhout said.
“A given in forestry, like many other industries, is that things will change. Certainly, in the 18 months since I made that presentation many things affecting our industry have changed substantially. In particular, carbon trading has moved from being a distinct possibility to becoming a definite future outcome of the Federal Government’s Carbon Pollution Reduction Scheme. Also the global financial crisis has resulted in uncertainty about the short to medium term availability of investment funds, particularly for tax effective investments,” he said.
“In terms of native forestry, the future is not as optimistic as I portrayed 18 months ago. There are many reasons for this, including the challenge of competing in a global commodity market. But, much closer to home, it really boils down to one of the key issues that I raised in that presentation 18 months ago – explicit Government support and appropriate policy settings. Now, its not that Australian Governments are overtly anti native forestry these days, to the extent that they were say ten years ago. In fact, nearly all Australian governments for which it is relevant, have stated that they fully support the continuation of a viable native forest timber industry.
“The issue is that the rhetoric is not borne out by reality and Governments continue to struggle internally to come to terms with meeting their own conflicting objectives. That conflict is often generated not by facts on the ground but by a fundamental misunderstanding of science, evidence and, often, the policies that they themselves are trying to implement.
“That’s all very well for native forests, since there are so many other conflicting stakeholder issues anyway. But what has become apparent more recently is that this is an issue for the entire forest industry, and one which could seriously undermine the ability of Governments to follow through on some of their stated desired objectives of the last couple of years; objectives such as carbon management and trading and ongoing investment.
“I draw to your attention an example which is close to us here in Victoria. As most of you are aware, more than 90% of new forest establishment in Australia in the last ten years, comprising more than 50% of the entire planted forest estate, has occurred through private investment. One consequence of this has been a substantial increase in ownership changes for forests. Also, the relationships between land tenure and tree ownership have become increasingly complex. In recognition of this, all Australian states have legislated frameworks for the establishment of forestry rights – that is, profit a prendre ownership of trees or carbon or any other specified environmental service, independent of land ownership,” he told dinner guests.
“The creation of these rights establishes an environment in which they can be traded independent of real estate interests in the land. This in turn allows the market to facilitate tree ownership under the most effective investment regime, allows effective consolidation of forest estates and supports efficient harvesting and marketing of timber and other forestry services. The real value of a forestry right, therefore, is in its ability to be easily transferred between parties at the point of trade. However, in Victoria the Forestry Rights Act of 1996 does not render itself amenable to this basic principle of a forestry right. This is because, either explicitly or inadvertently, it excludes the ability to transfer a specific forestry right between parties and explicitly excludes the forestry right being an interest in the land on which it sits.
“Now, the Victorian Government is overt about its support for the timber industry. It has made firm commitments about its support for the Carbon Pollution Reduction Scheme and it has a well established record for supporting regional industry investment and job creation.
“So here, we have a clear example where the actions of Government, whether wittingly or unwittingly, are at odds with its rhetoric in relation to its support for the forest industries. If forestry in Victoria is to continue to expand and adapt to the needs of the nascent Emissions Trading Scheme; if it is to respond to the realities of the changing global economy, it must be able to operate in an appropriately regulated market for forestry rights which allows that market to determine the most effective use of those forests. So how does that happen you ask?
“Now I come to my second key issue of 18 months ago – the need for the industry to act in unity in its advocacy efforts.
“For those of you who were involved, you will recall that the forest industries collectively came as close as you can come to stuffing up the role of forests and forest products in the Carbon Pollution Reduction Scheme. There was one simple reason for this – we simply couldn’t work together to come up with a fundamental, consolidated industry position that reflected the needs of all sectors.
“Now this stuff is not rocket science – growing trees and turning them into harvested wood products is the best and probably the only way to effectively sequester carbon. The wood products bit is a tad contentious. The growing trees bit is a complete no-brainer. But we collectively, around the country, nearly let politics, agendas and personalities get in the way of one of the biggest opportunities for our industry that has emerged in the last few decades. To maintain relevance, we simply cannot afford to let that happen again.
“First, I call on the Victorian Government to bring us in line with the rest of the country by addressing the fundamental flaw in its Forestry Rights legislation which prevents the effective trade of forestry rights and may place Victoria in a difficult position with respect to participating in the ETS and building an efficient and sustainable private forest investment base. Secondly I ask that all of us here tonight work collectively to advocate the Government on this issue and other mutually important issues, rather than allowing politics, agendas and personalities to get in the way,” Groenhout said.