Senate Rural and Regional Affairs and Transport Legislation Committee : Dissenting report

REPORT ON THE PROVISIONS OF THE REGIONAL FOREST AGREEMENTS BILL 1998

Senate Rural and Regional Affairs and Transport Legislation Committee : Dissenting report

Senator John Woodley and Senator Andrew Bartlett on behalf of the Australian Democrats

Introduction

The Australian Democrats have submitted this dissenting report to the Senate Rural and Regional Affairs and Transport Legislation Committee on the Regional Forests Agreement Bill.

We have decided we cannot agree with the committee report because it recommends that the legislation be passed unamended. This legislation has far reaching effects and is an unsatisfactory response to an issue which has divided the Australian community for many years.

Indeed, the legislation as it stands risks legitimating, for an extraordinary period and with extraordinary protection from review or challenge, the claims of one set of sectional interests to the detriment of other sections of the industry, the government's employment and regional development objectives, Australia's international obligations and the broader interests of the community.

Since the committee examination has been through the narrow legislative committee process, it was not possible to make sufficient time to consider all aspects of often complex submission, take as much evidence as was offered and properly evaluate competing issues of resource security, economically and ecologically sustainable development, and wilderness and biodiversity protection.

We believe this is an unsatisfactory response to those many people who have actively participated in good faith in the Senate process. The Democrats would support a full enquiry into forests in a references committee and view Senator Murphy's terms of reference as a good starting point for negotiations on a more appropriate committee process.

The Democrats particular concerns with the Regional Forests Agreements process and legislation can be summarised as follows:

  1. The RFA process fails to resolve one of the most long running and contentious issues to face the nation
  2. The RFA process fails to deliver on jobs for impoverished and vulnerable rural areas
  3. The RFA process unfairly discriminates against the plantation industry
  4. The RFA process will destroy many areas of native forests including old growth areas and fails to protect Australia's biodiversity contrary to an international agreement
  5. The RFA process discriminates unfairly against other important cultural values and social and economic benefits provided for by native forest areas
  6. The RFA process will be mostly controlled by State governments who have vested or financial short term interests in the outcomes thereby leading to positions of conflict of interest.
  7. The RFA process raises constitutional issues and poses potential legal and financial difficulties on the Commonwealth and the taxpayer

The following, brief report provides some detail in these areas but due to time and space limitations it cannot provide an exhaustive account of the abundant information that was made available to the committee. We would like to acknowledge and thank the many people who participated genuinely in this process and spent so much time preparing such comprehensive information. We would also like to acknowledge that much of this report writing time and indeed many years worth of work before hand has been given by individuals and groups freely and in the public interest and we would like to commend those people.

1. The RFA process fails to resolve one of the most long running and contentious issues to face the nation

The future of Australia's forests has unfortunately become a contentious and highly divisive issue. Hundreds of thousands of people have marched in the streets, written letters or directly participated in public interest or industry organised groups about the issue.

There have been blockades and sometimes violent confrontations in forests in several states; even a blockade of the Federal parliament. Successive governments, both State and Federal, have tried a variety of means to satisfy competing interests and Australia's national obligations under international treaties.

The Regional Forest Agreement process was supposed to bring an end to the divisiveness and conflict. The evidence before this committee patently demonstrates that this has not occurred; indeed a number of witnesses detailed how a flawed process has added to conflict.

This Senate committee received more than 360 submissions, a very considerable number when viewed in the context of the very short time frames allowed for submissions. It has itself become another example of the flawed process of dealing with forest issues in this country, with inadequate time for consideration of submissions, rushed and inadequate hearings and a report that can not do justice to the range of views heard.

The committee has heard allegations that agreements have been reached on highly unscientific grounds in bureaucratic secrecy without equal opportunity for all stakeholders to be represented, how lobbying has changed reserve areas that were supposedly set in stone, and of how biodiversity and conservation needs have been met with “loggers' scraps and slivers”. [1]

Even if only some of these allegations are true the bill will set such flawed agreements in place for a considerable period of time and place them extraordinarily beyond challenge or amendment. It is hard to see how this will reduce conflict over Australia's forests.

The motivation behind the bill seems to be to for the Commonwealth to abdicate its responsibilities to the States. The bill removes hard fought for community and environmental safeguards, favour the declining sector of the industry at the expense of the growing sector of the industry and offer selective compensation as a means to put the schemes beyond the reach of further consideration or challenge.

The Democrats are concerned that the perception that one interest has achieved an officially sanctioned game, set and match with this legislation will exacerbate rather than resolve community conflict. Indeed, the implied lack of productive outlets for expressing widespread community disquiet over woodchipping operations in old growth forests in particular may mean that protest assumes a more extreme and confrontational aspect.

Indeed, the question of the RFA's is so vexed, even Australia's major political parties cannot come anywhere near to consensus on the issue. The National, Liberal and Labor parties have all had public stoushes between branches, state and federal bodies on the issue with the brawls sometimes becoming major news.

Should the legislation be voted on in the Senate it will be interesting to view the careful speeches and delicate positioning of individuals who are going to have to justify themselves before their caucus, their state, their factions, their branches and their electorates. Of course the final vote is what counts and it is clear some individuals would prefer the legislation to be started again and others do not agree with particular aspects of RFA's and will be voting against their own judgement.

It has also become obvious that politicians are so confused over the massive amount of sometimes quite emotive information coming from either side, and the passionate nature of the issue that they have taken the easy option of believing you can't win on forests. That there is no outcome which will satisfy any party and that the only way to deal with the `f' word is to hush it up and weld in legislation that will push the issue aside for many years.

It was clear from the submissions that the range of people unhappy with the RFA's will not give up and will keep making this an issue. It is astounding to believe that with 30,000 people participating in a public process in WA, most in opposition to the anticipated outcome of increased old growth logging, that the issue will simply go away when the RFA is signed.

Indeed the Democrats can predict that the issue will remain a bleeding sore for major parties and individuals in those parties while ever the industry is unsustainable, people are not offered meaningful and continuing work and native forests are logged for woodchip. The RFAs lock in those concerns and so it is logical to assume the community will continue to be unhappy with their elected and aspiring representatives.

The Democrats feel that the only basis for greater community consensus on this issue lies with an open process based on more equal inputs from stakeholders, undistorted scientific and economic assessment and community education. Compensation may well be part of a long term solution to the vexed question of access to Australian forests. However it should be focussed on assistance to affected communities rather than being – as the RFA's seem to imply – a handout to companies, a porkbarrel for some electorates or a threatened big stick to ward off any community efforts to fiddle with agreements.

If the reason the Regional Forest legislation has been put before the Senate is to provide a `resolution' to forest issues, it is clear this process has failed that test and voting for that legislation will continue such conflict in the Australian community.

2. The RFA process fails to deliver on jobs for impoverished and vulnerable rural areas

The Committee heard evidence from a number of witnesses about the break down in the social fabric of communities which are heavily dependent on the timber industry. In particular the Forest Protection Society (FPS) gave evidence about this and are to provide the documentation of the research which underpins their evidence.

In his answer to a question from Senator Woodley, Chris Althaus indicated that this research had been conducted by the `social assessment unit that has been working as part of the Department of Agriculture, Forestry and Fisheries”.

The Democrats are deeply concerned about the decline in employment and population in many of Australia's rural and regional areas. The submission of the Forest Protection Society states in graphic language the situation:

The Democrats recognise the loss of jobs in the timber industry which has occurred over many years although some witnesses gave evidence of slight improvement in some areas. However the Democrats reject the simplistic notion that job losses are primarily a result of attempts at environmental protection of old growth forests. There are complex reasons for the loss of jobs in the timber industry, some of which parallel the loss of jobs in many areas of rural and remote Australia generally.

Reasons unrelated to environmental activism and, it would seem, of far greater employment significance, include increasing mechanisation, corporate consolidation and rationalisation of mill operations and decreasing areas of easy source material. They also include the take over of pulping and woodchipping as being the primary focus in many forest areas. This deters or deleteriously affects downstream or value added investment.

Problems arise when plantation industry products, which are a greater employer, are undercut to such an extent by lower employment generating pulp and woodchip products.

The Democrats believe that the only way in which long term job security can be assured is through proper value adding to forest products and basing the industry in sustainable and existing plantations. It was demonstrated by a number of witnesses such as Judy Clark and Francis Grey that the economics of native forest logging are simply not sustainable.

The West Australian branch of the Australian Workers Union is part of the way there:

There is no doubt that should this be the only exploitative use for those forests the issue would not be as contentious. But since the majority use becomes focussed around the voracious needs of the woodchip industry, smaller sawmillers are disadvantaged considerably.

Senator Shayne Murphy in his evidence to the inquiry argued that North Forest Products, one of the main woodchippers in Tasmania, are controlling the supply of logs for woodchips to the detriment of small sawmillers and that many logs are being sent to be chipped or even burnt when they could be processed to higher quality uses.

He pointed out that saw logs and timber for quality furniture are being lost to the industry as a result. He showed the committee photos of a salvage operation after woodchip harvest where myrtle species suitable for sawlog use were being taken away to be burnt.

Although some witnesses said the absence of completed RFAs was holding back investment, the actual evidence linking RFAs to employment outcomes was much less tangible. Some basic figures were not available to the committee, including the exact number of jobs in the plantation sectors and the number of jobs in the native forest sectors overall.

Senators certainly pursued a common line of inquiry in search of evidence that resource security will actually generate investment and jobs. There was no substantial evidence presented that it would. Even with RFAs substantially in place the industry have not made the commitment it will invest in the downstream processing that is the only possible source of major new employment in the native forest products sector.

Indeed evidence was given that the Burnie pulp mill closed with the imminent signing of an RFA with the loss of many jobs. The reality is that jobs in the native forest industry will continue to decline because the native forest industry is relying more and more heavily on woodchip, despite the fact that the woodchip industry needs considerable propping up from the public purse and is unsustainable.

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If the Government was serious about long term jobs and security then it should focus on the most commercially viable part of the industry, the plantation sector (see above chart) [6]. Within that sector investment must be encouraged in processing and plantation wood, particularly at this time as we have larger and larger areas of plantation coming on stream.

The big employment generators are in further processing of plantation sawn timber and wood panels into products like furniture, joinery , roof trusses. This way the plantation industry further processes most of the timber it harvests creating more jobs. The native forest industry does not even get into the first hurdle of processing as they export most of their products overseas as chips. It does not provide the raw product for further processing and so it is nonsensical to put money, legislative backing and time into the native forest industry while failing to capture and increase jobs in the plantation sector.

The irony of course is that most of those jobs are in regional Australia so it would match the Government's rhetoric perfectly should they chose to deliver in this area.

Evidence was given that about 60% of wood logged from native forest is chipped and exported [7] and that is increasing and will continue to do so under the RFAs. Evidence was also given that this process is heavily subsidised and the community receives a grossly inadequate return on the use of its resource.

The majority of Australia's processed wood needs are in fact being met by the plantation sector and this process will continue despite the continuing heavy subsidy of the native forests sector. [8]

The overall effect of the evidence, particularly that of economic consultants, was that jobs would continue to be lost in the native forests sector covered by the RFAs and generated in the plantation sector, which has been ignored by the RFAs.

With indirect jobs, the position only gets worse. With the increasing dominance of woodchipping in native forest logging, indirect employment in this area will continue to decline. It is apparent that government subsidies to increase downstream processing have had an insignificant effect.

By contrast, in the plantation sector, not only is the employment multiplier greater, it will continue to improve regardless of the relative lack of government assistance.

If the government was to match its regional employment and development rhetoric with positive action it would be addressing a number of issues holding the plantation sector back – not continuing to prop up a native forest sector ever more in thrall to woodchipping interests which appear, from the evidence to have the lowest levels of employment and the most minimal multipliers.

It is unfortunate but true that the plantation industry is at a crossroads where there will be losses of potential downstream jobs as a result of the RFA's. Prices of native forest logs are now so low that there are starting to be stockpiles of sawlogs and export of unprocessed plantation sawlogs.

The Burnie pulp mill closed despite the imminent signing of the Tasmanian RFA meaning hundreds of jobs disappeared in an area that could ill afford to lose them. If the RFA were truly about guaranteeing jobs this would not have happened. It would also not have happened if the industry in the area were sustainable. If the industry were based in plantations they may have stood a chance as there is little doubt a Japanese decision to source all chips from plantation areas within a decade had asignificant impact on the decision.

This bill which potentially exposes the Commonwealth to huge compensation pay outs has no guarantee about investment or jobs. If it is before the Senate in order to help increase employment in rural and regional areas it will have the effect of suppressing employment in a growing sector and presiding over its dwindling in a declining sector.

3. The RFA process unfairly discriminates against the plantation industry

The National Forest Policy Statement (NFPS) [9] is claimed to be the impetus for the Regional Forest Agreement legislation. In the explanatory memorandum for the Bill it states that the bill gives legislative support to the RFA process `as part of the implementation of the National Forest Policy Statement' [10].

The NFPS is fundamentally based on the transition from old growth forests to regrowth and plantation timber forests. However the regional forests agreement process and legislation not only appears to ignore the plantation sector, provides no information from that sector and also significantly disadvantages it.

With the information that has been made available to this committee it is difficult to believe that that the Commonwealth and states have accidentally overlooked both the trends in the timber industry, the goals of the NFPS and the considerable propping up given to the native forest sector at the expense of the plantation industry.

The forests issue has long been portrayed in Parliament and in the media largely as a stoush between loggers and environmentalists. This is a storyline which might have better pictures attached to it and one which suits the emotive requirements of lobby groups, but the truth is rather more complex.

In her submission and evidence, Judy Clark compellingly established that the Australian forest industry is now more a plantation than a native forest industry (see below chart) [11] and that this will become more and more so as time goes on. However, as she also compellingly pointed out, an observer would not learn this from listening to those who profess to represent the forest sector or forest communities or glean such an understanding from consideration of the RFAs or the RFA legislation.

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Possibly nothing so much emphasises the flawed nature of the RFA process and legislation as its failure to consider the largest forest resource, the only increasing forest resource, the largest sector of the industry and the generator of the most employment and the best prospective employment outcomes.

Evidence to the committee from a number of witnesses certainly gives rise to the suspicion that the native forest tail may be continuing to wag the forest industry dog because many of the major companies involved have interests in both sectors. Their political imperative has been to protect a highly subsidised and privileged access to a public resource – the native forests – ahead of using relatively unsubsidised or more directly or appropriately costed plantation resources.

The Democrats understand that it is natural for interests with extensive subsidies in possession to resist any measures which threaten to reduce them. But on this issue the Democrats would prefer to see applied the level playing field rhetoric so often heard from the government. This alone would do much to preserve native forests, protect biodiversity and reduce social conflict – and it is likely to do so while boosting employment, contributing to gross national product and fostering regional development.

Instead, the Australian community is being treated to a prime example of doublespeak. The stated goal of the process is to develop internationally competitive forest based industries and the explanatory memorandum of the legislation says it is intended to implement a national forest policy statement which has as its stated goal a transition from native forest exploitation to plantation harvesting.

However, the only options considered in the RFAs are disposal of the native forest resource, ignoring the fact that fully 75 percent of Australia's sawn timber, woodpanels and paper needs come from plantations and recycling.

The reality of the process is to perpetuate for as long as possible the most uneconomically unproductive sector of the industry and to frustrate for as long as possible the promised move to plantations. This is at best illogical and at worst an indefensible position for a responsible Senate to enshrine.

The process of subsidy deserves examination in greater detail. In every single piece of information on the pricing of native forest logs and public plantation logs the native forest logs of similar grade are always priced less – often much less - than plantation logs even though the two parts of the industry compete in the same final market.

Since one suspects that the accountants have done a better job of incorporating costs and returns into the price of the public plantation log, the clear implication is that the equally public resource of the native forest log is virtually being given away. That is a direct subsidy to the native forest industry, and indeed – in 60 percent of cases – a direct subsidy to the lowest productivity use of the log, a direct subsidy to the woodchipping company and presumably, if the woodchipper takes only a normal rate of profit, a direct subsidy to the usually foreign consumer of chipboard, cardboard and paper.

Australian governments have been prone to get very testy with other governments slipping subsidies to their primary product exporters but the point here is that it is Australia's plantation industry and Australian employment that suffers as a result. There is an argument that should be mounted that the desirable change should be helped to make sure pricing policy is consistent with industry policy direction.

Another subsidy is the hundreds of millions of dollars in compensation to the states for the RFA outcome which in some places defies logic. For example, Tasmania is slated to receive $70 million in compensation directly related to RFAs even though the area available for native forest logging has significantly increased! [12] Tasmania will also reap additional funds from the Natural Heritage Trust fund.

Another example is at Eden where the RFA the NSW government are presently negotiating will pay $6 million to build a new sawmill at Eden. The company who are the beneficiary will close two existing mills in Bombala and Cooma and put only $2million of its own money into the new mill. The plantation sector does not enjoy this sort of largesse but is in the same market.

The taxpayer also faces an opportunity cost in putting good money after bad propping up an industry sector which is in decline in any case. Every dollar to prop up the native forest industry is undermining the more competitive plantation sector. Another less economically tangible opportunity cost is the monopolisation of bureaucratic and legislative time and resources by the least productive sector.

The response to this evidence of discrimination from some other Senators was a suggestion that yet another committee examine the plantation sector. The Democrats do not support this – if the RFA bill is passed, the dubious privileges of the native forest sector will have been locked in and all the Senate will have to offer the plantation industry will be an empty gesture or intellectual exercise. It could only be of assistance if there was a possibility the RFA's could be changed as a result.

In conclusion, it is clear that the plantation industry is significantly disadvantaged by the Regional Forest Agreement process and that it will become more so in the near future. The RFA bill is fundamentally flawed and cannot come anywhere near meeting its stated objectives of fostering internationally competitive forest based industries and assisting in the move to a plantation based industry. It is ludicrous to for the Senate to perpetuate such a patent untruth.

4. The RFA process will destroy many areas of native forests including old growth areas and fails to protect Australia's biodiversity contrary to an international agreement

It is extremely worrying that a fundamental part of the RFA's seems to have gone so awry. Indeed there was strong evidence that basic scientific criteria agreed upon had been corrupted by industry and bureaucrats involved in the process to the detriment of natural areas and the gain of the chipping industry.

Peter Robinson of the WA Forest Alliance told the committee that:

Well respected forest biologist, Professor Harry Recher starts his submission to the inquiry with the strong statement “The Regional Forest Agreement process is a political exercise with the primary intent of guaranteeing resource security to the timber industry. The establishment of a comprehensive, adequate and representative system of forest reserves, the protection of old growth forest and wilderness and the conservation of Australia's rich forest biodiversity are secondary considerations. Despite this, science has been used to validate the process and create a public image of balance and conservation”. [14]

The Blue Mountains Conservation Society in their submission claims that the RFA's in NSW will cause the regional extinction of over 25 fauna species and 100 plants due to inadequate reserves and their vulnerability to logging. They also point out that there are `major problems with reserve design and the lack of wildlife corridors both north-south and east-west. The Janis criteria and targets for ecosystem and species survival have been ignored' [15]

It is claimed that scientists involved in the original establishment of the JANIS and indeed the comprehensive, adequate and representative criteria believe it is defective. Indeed Professor Harry Recher said: “The group of scientists appointed by the Keating Government to develop criteria on which to base a CAR system were no doubt well intentioned. However, they failed to follow fundamental scientific protocols and were exploited by the political system to validate the granting of resource security to the timber industry after the Keating government had failed to pass the resource security legislation in Parliament”. [16]

A perusal of the evidence submitted demonstrates it is at best open to interpretation whether the criteria have been followed in a professional way by the bureaucrats and at worst deliberately made to be defective.

The international convention on biodiversity is also at risk with many rare and endangered species and ecosystems endangered from the RFA's. This seem to be little understood by the Federal government who appear surprisingly unconcerned. It is also astonishing that in a separate piece of legislation under consideration by the Senate the Environment Protection and Biodiversity Conservation Bill, all areas included in an RFA are excluded.

Since the RFA's will deleteriously affect biodiversity, breach our international agreements and are based on incorrect information, it is gravely concerning that another piece of commonwealth legislation, allegedly the prime one to protect Australia's biodiversity, would lock out our forest areas.

Ironically this means the industry is not based on its stated goal of ecological sustainability which will eventually be to the detriment of the industry and the workers in it. However it is not responsible to simply wait until the total collapse of the forest industry to prove the point. There are enough indicators so far to trigger a precautionary approach to forest management, but this other international goal seems to be anathema to State and federal officials and some industry representatives.

Senators are now being asked, in the face of much independent evidence to the contrary, to take it on good faith that the promise of JANIS criteria and comprehensive, representative and adequate reserve systems will be met with the RFA process.

While the rhetoric is of a world class reserve system and ecologically sustainable forest management practices developed and faithfully implemented “There are sufficient scientific data and other objective data to demonstrate that this assumption is false for all of the regions in which the RFA process has been completed” [18]

Even if the overwhelming evidence to the contrary were wrong, even if you take in good faith the promises the states make over the science of the RFA, there are significant indicators that something is amiss when you look at the milestones that have been glibly promised to be met in the scientific area.

Taking Tasmania as a case study, we are told that a number of important milestones have been bypassed in the short term and may, in the nature of many such promises, never, ever happen in the long term. Promised world heritage assessment has still not been done under the signed Tasmanian RFA.

The submission from the Tasmanian Conservation Trust also lists the following concerns:

Perhaps the states with their vested interests could be excused for failing to meet promised standards and deadlines if there were a strong regulatory back up, however the Commonwealth has shown little if any inclination to force the states to meet the deadlines.

Environmental issues may also be compromised where there is fear of compensation. Professor Norton points out that where new information comes to light, that for example there maybe a previously unknown population of a rare and endangered species or a management practice may undermine key environmental goals, a decision to reallocate land use may be avoided for fear of compensation penalties.

In conclusion the RFA's have failed dismally to protect high quality conservation areas, are unsustainable and based on rejected science. It exposes the commonwealth to potential uncapped compensation and we will lose many areas of ecosystem biodiversity and many irreplaceable native forest areas. At least one state has not met basic conservation requirements under the RFA.

The RFA legislation cannot be passed with any exemptions from commonwealth legislation to protect the environment as it is clear the assumption the environment is protected by the RFA's is totally incorrect.

The Democrats recommend that should the bill be debated all exemptions from environmental legislation be omitted. We further recommend that the Senate in its consideration of the Environment Protection and Biodiversity bill omit the recommendation that the RFA's be excluded from the provisions of that bill.

5. The RFA process discriminates unfairly against other important cultural values and social and economic benefits provided for by native forest areas

The Deloraine Aboriginal Cultural Association has concerns arising from their experience of trying to protect historical and cultural sites near to where logging has taken place. Indeed they have major concerns about the whole RFA process.

Their complaints about lack of consultation have been echoed by the Aboriginal Legal Service of Western Australia who were also concerned with the section of the RFA bill that removes Commonwealth Heritage Protection under the Australian Heritage Commission Act and Environment Protection laws from RFA areas. [21]

The removal of laws designed to protect heritage and the environment, to the detriment of the environment and cultural and natural heritage remains one of the major sticking points in the bill. [22]

It was strongly argued by a number of groups that the commonwealth laws relating to environment and heritage protection remain in force in the RFA areas and the Democrats agree with this recommendation.

There are other uses for forest areas that will be affected by this legislation. Sunrise industries in Australia include tourism growth in natural areas. Forest areas account for an increasing amount of tourist dollars and as new market areas are developed more areas open up and more value adding to tourism experiences is developed.

Not only is the tourism industry a significant growth industry in native forest areas, it has better multiplier effects than the woodchip industry and its services are delivered on site, in the landscape, rather than exported as a basic product.

It is hard to imagine an Australia without some of our most significant natural areas, so inculcated have they been into our psyche after they have been protected. You would no more log Fraser Island now than the Wet Tropics and these places now account for hundreds of millions of tourist dollars. Yet the RFA's have the potential to destroy infant and prospective tourist areas for a short term (and disgracefully underpriced) return. Particularly in terms of opportunity costs, the Democrats predict that the tourism industry will be one of the biggest losers in the RFA process.

There was evidence that in Western Australia “the tourism industry has been ignored by the WA RFA process as well and their concerns about the RFA are well catalogued” [23] while another witness suggested, not unreasonably, that the tourism industry could equally argue for compensation under the RFA's for the opportunity cost of areas that would be logged and mined. [24]

Briefly in terms of other forest uses, the Wombat Forest Society presented evidence that beekeepers would be significantly disadvantaged. They also pointed out that a large number of people rely on high quality water through that forest region which will be detrimentally affected by logging and that irrigators downstream will be negatively affected.

It is not clear that compensation has been ruled out to those groups and again perhaps there is the potential for future compensation claims on the commonwealth as a result of the RFA process.

The question is whether it responsible for the Senate to vote on legislation that will certainly destroy areas of huge income potential which have the ability to create sustainable jobs in local areas, maintain water quality and generate wealth in return for one off destruction and export of a primary product? The Democrats do not believe so.

6. The RFA process will be mostly controlled by State governments who have vested or financial short term interests in the outcomes thereby leading to positions of conflict of interest.

The RFA agreements have been controlled, negotiated and will be managed by sections of state governments. However serious questions have been raised about their ability to provide objective assessment and regulation. One lot of evidence pointed to the WA EPA Bulletin 912 which had produced a landmark report stating that there was a significant conflict of interest in the Department of Conservation and Land Management and `as long as that is the case the public will have no confidence in the department or forest management in the RFA” [25]

In fact the conflict of interest is such that CALM is applying its forest management practices in such a way that it is breaching ministerial conditions that are set under the environment protection legislation of that state. Peter Robertson pointed out that recent court cases in WA had declared CALM was found to have breached its own laws.

In Tasmania, there is a serious competition problem as the state owned logging agency is also the provider of `independent' advice to the ministers making decisions in that area. There is no way that advice could be regarded as consistent with ecological sustainability and no way that the public could ever regard the advice as independent.

In other states royalties provide short term boosts (albeit very cheaply priced ones) to state coffers and there is a reluctance to unfavourably match those tangible amounts with less tangible ones such as the value of clean water from a forested catchment.

It is difficult to see why there is such secrecy around negotiated amounts for royalties and why there are claims it has to be `commercial in confidence'. The forests are on public land and are a common resource and there is a powerful argument that such secrecy encourages deal making behind closed doors to the detriment of the environment and the economy.

In conclusion, the RFA negotiations have been conducted by State departments with significant conflicts of interest and will be voted on by some Senators who it could be argued, have potential conflict of interests. It is difficult to see how a fair and objective process could have happened in such a climate and reasonable to assume that the RFA's can have little public confidence as a result.

7. The RFA process raises constitutional issues and poses potential legal and financial difficulties on the Commonwealth and the taxpayer

Although the final arbiter on the legality of legislation is, quite properly, the courts, it is also a proper function of the Senate to at least draw attention to potentially legally flawed legislation.

Legally, this legislation sets some interesting precedents. It says that some other Commonwealth legislation, normally assumed to be all encompassing and for the protection of values like heritage and the environment, shall not apply inside forests subject to RFAs. It also says that the community can know that an agreement has been reached but not what the specific terms of the agreement are, and that the normal powers of the community's representatives – we politicians – are going to be circumscribed in relation to these agreements.

Mr Corr certainly believed that the RFA legislation could face a valid challenge:

Mr Corr also thought that the difficulties being encountered in some states in reaching RFAs might mean the act was open to challenge on the basis that some states were receiving a preference in trade or commerce.

The committee sought an opinion from the Attorney-General's Department, the effect of which was that it was not believed that Mr Corr's fears were grounded. However, the final arbiter is the courts, an expensive option for the taxpayer.

The Democrats are of the view that the bill, which does enter some uncharted legal waters, deals with an area where legal challenges are likely. Such challenges may arise on even a quite narrow grounding, because the dispute has been a long and contentious one in the Australian community and recourse to the law in such situations can be a tactical move as much as a serious bid for remedy.

The Senate should bear this possibility in mind and consider whether it is appropriate for the bill to be put before the Senate with such uncertainty.

The legislation also potentially exposes the commonwealth to compensation where the compensation is linked to an RFA. It has been argued and referred to earlier in the report that if the RFA has been agreed upon but is fundamentally flawed the Commonwealth may be vulnerable to compensation or persuaded to avoid protecting some areas because of the threat of compensation.

It is hard to imagine how the States will avoid the opportunity presented for exploiting compensation from the commonwealth in as many forms as possible. The question must also be asked:- is it responsible for the Senate to pass this legislation with effectively a blank signed cheque from taxpayers to a declining industry to give compensation in a process that is not scientifically sound?

Can the government quantify the maximum amount that taxpayers are risking on this legislation? It is already claimed that the Government will be paying $70 million to the industry in Tasmania when they actually got an increase in the area available for logging and an increase in the quality of the areas available! [27]

Another legal conundrum could be predictable arguments from both the Labor and Coalition parties that even if the RFA process is flawed it will be dealt with independently of the bill. They will no doubt use this as an argument that the bill can pass and the RFA's themselves can be fixed up later. Just as environment and planning courts refuse to argue future possibilities, we would argue that it would be dangerous for the Parliament to rely on that assumption.

The RFA process must be put right and be acceptable to all groups before RFA legislation is put and passed by Parliament. Only then will the industry, Governments and the community [28] know they have certainty on the future uses of Australian native forests.

The RFA's have been touted by Governments as `the last word' on forests. It has been claimed that once the agreements are signed they are iron clad guarantees about what will happen in forest areas for many years. However this appears to be incorrect. Consultant Alistair Graham stated that after the Tasmanian RFA had been `signed by some of the highest ministers in the land, the officials are still blithely going on, chucking out thousands and thousands of hectares by changing the boundaries of the maps that were behind the documents, which the minister signed…'

He has commented that the boundaries changed so areas available to logging increased and areas for reserves decreased. Worryingly he also pointed out that the only reason it was known was that the Tasmanian Conservation Trust had a limited period of time that data to assess this was available to them and that `when those data licences expire no-one will have them and no-one will know what is going on'. [29]

It is unclear to the Democrats why such information about use of a public resource remains confidential to the state and industry groups and we would recommend that this data be made public in all areas where logging agreements are being considered and remain public after such agreements have been made. It is difficult to understand why the community would be refused access to such fundamental information on a permanent basis.

In Western Australia it is claimed that it is highly likely changes will occur. It is also claimed that those changes will result in increased claims for compensation from the commonwealth as the high log volumes allowed for by the RFA are simply not sustainable. [30]

How can the Commonwealth be confident that the RFA's will actually be implemented in a way that is consistent with the original document that was signed when states are already fiddling about with the agreements or making promises that they will?

Significant problems lie with the auditing of RFA's. One solution considered by the Democrats is that the RFA's be laid before both houses of parliament and be subjected to disallowance procedures. However this supposes the legislation be passed in its current or close to its current form. As the whole process is significantly problematic it might wise to consider this option in light of a bill that has addressed the significant concerns raised in the public process and in this report.

A further legal question has been raised with the Democrats with regard to the requirement by regulation to cease exports of woodchips from an area over which an RFA has not been signed by June 30, 1999. The question raised regards the constitutionality of this arrangement if the states are seen to be treated unequally. In other words if the Commonwealth allow Tasmania to export chips, but not NSW or WA is that discrimination between states and is it unconstitutional?

The Democrats do not claim to have the answer to this, however if it is an arguable case. Perhaps this is another legal context to examine the bill in.

If it is possible that the RFA legislation could be found to be unconstitutional, that there are a number of legal uncertainties and the commonwealth is exposed to unnecessary and potentially unlimited compensation, the Democrats argue the legislation needs to be withdrawn and examined to some resolution of these issues before the Senate can responsibly decide on the legislation to its satisfaction.

Conclusion

It has unfortunately become clear that the Government has focussed on propping up a declining industry while inhibiting a growing plantation industry. The RFA legislation will:-

Recommendations

That for all of the reasons listed the Democrats believe the RFA legislation is not ready for parliament at this stage. The legislation should be set aside until a genuine RFA process has been negotiated and until legal inconsistencies are evaluated and resolved.

The Democrats cannot support this legislation at this time with so much uncertainty attached to it , with its destructive job effects, its destructive effects on valuable native forest areas, its drain on the public purse and the potential for open ended compensation claims, and the unusual protection of decision making from review or scrutiny for extraordinary periods.

We further recommend that in any new deliberations on RFA's Governments note the positive contribution made by the WA Forest Alliance who submitted an alternative way the RFA process should operate [31]. Governments would be well advised to examine this closely as we believe it is a genuine, positive, and comprehensive contribution that would avoid many of the serious problems about the bill raised in the committee and public process.

The Democrats would support a full references committee inquiry into the Australia's forests and view favourably Senator Shayne Murphy's terms of reference as an appropriate starting point for committee negotiations.

Should RFA legislation ever be passed by the Senate the Democrats believe each RFA be laid before both Houses of Parliament and made a disallowable instrument.

We further recommend that when the process is re-examined and when RFA legislation is put before Parliament that this bill not be subject to any exemptions from any commonwealth environment legislation under any circumstances.

Signed

Senator John Woodley

Member

Senator Andrew Bartlett

Participating Member

24 February, 1999

Footnotes

[1] Tasmanian Conservationist, July 1997

[2] Peter Robertson, West Australian Forest Alliance evidence pp174

[3] Forest Protection Society submission 6 pp3, evidence from p 193

[4] Judy Clark hand out supplied to inquiry hearing 2 February 1999

[5] Senator Shayne Murphy evidence pp 76

[6] Judy Clark handout provided to inquiry

[7] Judy Clark handout supplied to inquiry dated 2 February 1999

[8] Judy Clark ibid

[9] Commonwealth of Australia 1992 National Forests Policy Statement

[10] Explanatory memorandum Regional Forests Agreement Legislation

[11] Judy Clark 1999 handout presented to inquiry as evidence

[12] Alistair Graham evidence pp 103

[13] Peter Robertson evidence pp 175

[14] Professor Harry Recher submission no 258 p1

[15] Blue Mountains Conservation Society submission 232 pp 1

[16] Professor Harry Recher submission no 258 p3

[17] Blue Mountains Conservation Society submission 232 p 1

[18] Professor Tony Norton submission 338 p 1

[19] TCT submission 30

[20] Darlene Mansell evidence pp 143

[21] Aboriginal Legal Service WA Submission no 68

[22] Professor Tony Norton submission 338 p 1

[23] Peter Robertson evidence pp 175

[24] Peter Sims evidence pp 106

[25] Peter Robertson evidence pp 175

[26] Gary Corr evidence p206

[27] Alistair Graham evidence 103

[28] Alistair Graham evidence pp111

[29] ibid

[30] Peter Robertson evidence 175

[31] WA Forest Alliance 1998 `The WAFA Proposal for a comprehensive, adequate and representative forest conservation reserve system and sustainable timber production in WA, evidence supplied to committee hearing.

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