Contract systems leave forest contractors out on a limb

UNFAIR CONTRACTUAL conditions such as no minimum quotas are taking their toll on an already depressed forest contracting workforce, according to Ferdie Kroon, Tasmanian Forest Contractors Association (TCFA) chief executive officer.
“We have heard in the past few weeks that at least two separate finance applications were refused on the basis of the relevant contract providing absolutely no guarantees.
“Effectively, forest contractors working for two of the major principals are being asked to obtain finance using contractual arrangements that provide no guarantee of the income required to service the debt,” Kroon said.
He said that requests for contract amendments were being met with ‘take it or leave it’ from some principals which was hardly a satisfactory outcome for many businesses whose debt levels were high due to a combination of low rates, multiple small contract extensions, wood supply transitions and the global financial crisis.
“While TFCA will continue its lobbying for the legislative amendments that will benefit all members and the industry as a whole, we urgently seek State Government support for an independent review of the legislation that will hopefully include an analysis of similar Victorian legislation. We can no longer afford to stand by and allow these types of unfair arrangements to continue, especially when we run the ever increasing risk of losing support from the financial sector.
‘What is helping the sector at present is that some of the contractual provisions are reasonable and risk-sharing is evident, but this must occur with all contracting scenarios,” Kroon said.
“A case in point about the effects of the above conditions are the recent redundancies in the small town of Swansea on the East coast. Five employees with a gross wages bill of in excess of $300,000 were recently made redundant due to stalled contract negotiations and a refusal by the principal to provide for a new and fairer contract,” he said.
“Further cases in point are reports about credit problems from many businesses that provide services and equipment to forest contractors.
“All this means we can’t invest in the equipment, personnel and processes required to effectively move the industry from reliance on native forest to regrowth and plantation.
“Many rural communities as well as the Tasmanian economy generally will suffer as a result.
‘If the all- important pulp mill goes ahead and other downstream processing initiatives are benefitting from existing wood supply arrangements, then why should contractors be penalised with short-term arrangements and no minimum quotas,” Kroon said.