Robbing Peter to pay Paul - Timber supply crisis to cost taxpayers millions

Court documents obtained this week confirm conservation group South East Forest Rescues claims that Forests NSW are unable to meet timber commitments and are having to pay out for logs that never existed. In light of these documents SEFR are calling on the State government to end native forest logging.

The court documents show timber giant Boral initiated proceedings in the NSW Supreme Court against Forests NSW in 2010 claiming Forests NSW have been unable to supply them with contracted timber volumes since 2002. Boral own three of the four sawmills on the south coast. The court documents show that Forests NSW were forced to pay Boral half a million dollars in 2006 for undersupply. Since then supply has been declining and Forests NSW now owe Boral almost twice as much again. Bizarrely new wood supply agreements were enacted in 2004. These agreements provide that State Forests must supply logs to purchasers and conversely purchasers must take and pay for the logs.

“There is abundant evidence that Forests NSWs estimates were grossly overstated and unreliable from the beginning,” said Ms Lisa Stone, spokesperson for South East Forest Rescue. ‘Further, the documents provide that FNSW was to supply the north coast with 5,000m3 of timber from our south coast native forests every year from 2008. This is robbing Peter to pay Paul.”

However the court documents show that FNSW have failed to meet that commitment also.

Boral claim FNSW has knowingly, intentionally and recklessly breached the Agreement in that since at least February 2005 FNSW were made aware that they were breaching the Agreement. Further Boral say FNSW has supplied timber to third-parties in excess of FNSW contractual obligations to that purchaser and/or where it was not contractually obliged to do so.

To try to meet shortfalls Forests NSW have had to buy back timber commitments from other sawmillers, they have been over-logging, logging stream buffers, logging trees and areas required to be retained for threatened species and buying timber from private properties.

“The rate of native forest logging has exceeded levels which can be permanently sustained,” said Ms Stone. “It is not enough to merely say native forestry is sustainable, it must be backed up with rigorous scientific data which Forests NSW has failed to provide. It is obvious that there is no long-term future for an industry that isn’t sustainable or lawful, destroys the ecological integrity of the forests and contributes significantly to the catastrophic effects of climate change.”

Dailan Pugh, forest activist with the North East Forest Alliance predicted this timber supply crisis in 1999. SEFR have been saying publicly that the native forest logging industry is not sustainable since 2001.

“These documents show State government lied to the Australian public and the people of NSW when they said logging was sustainable, they lied in 2003 saying there was no cost to the taxpayer coming from the native forest logging sector,” said Ms Stone. “These documents prove the native forest logging industry is unsustainable and only propped up by political will and public subsidies.”

“It is time the NSW Government face up to the fact that native forest logging has had its day,” said Ms Stone. “Choosing to ignore conservationist’s analysis has already cost taxpayers a fortune and it is obvious the native forest logging industry is operating on a fiction and haemorrhaging money.”

FNSW were running at a $14M loss in 2008/09, $16M in 2009/10 and $232M before tax loss in 2010/11.

“The unlawfulness and unsustainability is systemic across NSW,” said Ms Stone. “In fact anywhere there is a Regional Forest Agreement in place. This RFA experiment that has been going on for the last 13 years has failed dismally and been of benefit to only a select few and certainly is not in the public interest.”

State forests are public lands, owned by NSW citizens, but held in trust by the NSW Government for the common benefit and use of the public generally and managed in the public interest. The government cannot alienate public property unless the public benefit from this alienation would more than compensate for the loss of the previous public uses of the area.(1)

The Forestry Act 1916 (NSW) states at s11(1)(a) that as part of the powers and duties of FNSW they shall:

have the control and management of State forests, timber reserves and flora reserves and shall control and manage them in such manner as best serves the public interest.

In Re Sydney Harbour Collieries Co (1895) it was held that:

it is the duty of the Government not only to take the greatest care to protect both present and contingent public interests, but to also obtain the best consideration for the temporary alienation of frontages which, if the Crown could be in law a trustee, it holds in trust for the health, recreation, and enjoyment of an enormous and ever-increasing population.(2)

“Running at such a loss and destroying our forests is not in the public interest," said Ms Stone. “The time has come to follow New Zealand’s lead, honour Australia’s international obligations and end native forest logging altogether. The protection of our native forests is of urgent national and international importance in these times of global climate chaos. It’s time to prove that intelligence is not extinct and put an end to native forest logging, for us and our children's future.”