Chapter 3
Conclusions and Recommendations
3.1
The committee notes the broad support for the bill, and commends the extensive,
and ongoing, process of consultation undertaken by Government with a wide
variety of stakeholders both domestically and in the international arena. This
has resulted in a bill that has substantially addressed concerns raised by
submitters during the Legislation Committee's inquiry into the exposure draft
of the bill. The ongoing consultation process will help ensure the development
of Regulations that balance good regulation with the cost of compliance.
3.2
The committee notes that this is the first legislation in the world
designed from the outset to address illegally logged timber. This demonstrates
the commitment that the Government is making to combating illegal logging, with
its multiple adverse environmental, social and economic effects.
3.3
The committee notes that the markets for wood and wood-based products
are in the process of rapid change. Australia's housing and construction,
interior fit-out, and secondary wood processing industries are increasingly
dependent on imported timber and wood-based raw materials, including an
increase in the import of manufactured products of uncertain origin. The
committee is concerned that this poses a significant challenge for importers
and regulators alike, as ascertaining the sometimes diverse origins and
legality of some of the more complex material will prove difficult. The
committee is of the view that it is imperative that the challenges of
regulating the import of increasing amounts of complex wood-based materials
receives due consideration during consultations regarding the Regulations.
3.4
The committee appreciates that timber exporting countries face a number
of complex challenges in ensuring the legality of exported timber. The
committee is of the view that consultations on this issue should be undertaken
through continued bilateral cooperation with timber exporting countries in the
region, and through multilateral engagement on forestry through existing
forums. This will be complemented by Australia's non-regulatory capacity
building programmes aimed at combating illegal logging.
3.5
The committee notes that Australia has significant obligations to combat
corruption under various treaties including the UN Convention Against
Corruption; OECD Convention on Combating Bribery of Foreign Public Officials in
International Business; and the UN Convention against Transnational Organised
Crime. The committee is of the view that, as part of these obligations, there
is a significant role that Australia can continue to play in assisting timber
exporting countries to improve their forest governance, as well as assisting
law enforcement agencies in those countries to develop data system and
strategies to combat corruption. The committee regards the ongoing consultation
process as an opportunity to examine the most effective contribution that due
diligence processes can make to Australia fulfilling its treaty obligations to
combat corruption.
3.6
The committee notes submitters' concerns regarding Australia's
international trade obligations, however it is reassured by the Explanatory
Memorandum noting that the bill does not contravene these obligations as 'like
measures for imported timber would also be applied to domestic timber'.[1]
The committee notes the importance of ensuring that the subordinate regulations
also remain consistent with Australia's trade obligations.
3.7
The committee also notes submitters comments that the bill attempts to
reach into the legal systems of other countries. However, the committee is of
the view that this is not the case. Rather, the bill introduces a prohibition
on importation of illegally logged timber into Australia, with attendant
requirements for importers to carry out due diligence. These two approaches can
be distinguished.
3.8
The committee recognises that the Government has explicitly taken a
broad approach to the definition of illegally logged, without being
prescriptive. The committee commends this approach, noting that a prescriptive
definition of illegally logged may have unintended consequences, or may result
in some elements of applicable legislation being overlooked or excluded through
omission. The committee is also of the view that this approach provides scope
and flexibility for importers and processors of raw logs to undertake appropriate
due diligence, which may be prescribed by regulations.
3.9
The committee notes that in the Legislation Committee's inquiry into the
exposure draft of the bill, the majority of submitters supported harmonisation
with the United States Lacey Act and European Union legislation to the fullest
extent possible. The committee remains of the view that is desirable that the bill
should to the greatest extent possible be aligned with other international
regimes.
3.10
Further, the committee finds that in establishing the Regulations, it
would be highly desirable for the Government to align closely with the measures
being introduced in the United States under the 2008 amendments to the Lacey
Act and the European Union Timber Regulation 2010. This would minimise the cost
of compliance, guard against product substitution, and help facilitate greater
compliance amongst exporting countries. The committee notes the concerns of
submitters in relation to possible unintended consequences of the Lacey Act,
but is of the view that caution should be applied in drawing conclusions based
on the yet to be concluded actions against the Gibson Guitar Corporation.
3.11
The committee notes that similar issues about the purpose of the bill,
and whether an objects clause should be included, were raised during the Legislation
Committee's inquiry into the exposure draft of the bill.[2]
The view of the committee at that time was that 'there would be no value added
in including an object clause in the draft bill'.[3]
clause 6 of the amended bill makes it clear that the purpose of the Act is to
'prohibit[s] the importation of illegally logged timber and the processing of illegally
logged raw logs' and 'requires importers of regulated timber products and
processors of raw logs to conduct due diligence in order to reduce the risk
that illegally logged timber is imported or processed'.[4]
The committee remains of the view that an object clause does not add anything
to clause 6.
3.12
The committee appreciates that many concerns raised by submitters relate
to uncertainty about the nature of the due diligence requirements that will be
prescribed by regulation. The committee is of the view that ongoing
consultations with stakeholders on the nature and content of the due diligence
requirements will be critical to ensuring that the requirements are robust, yet
flexible and responsive to emerging situations and developing knowledge and
technologies.
3.13
The committee is concerned that a number of submitters appear confused
by the difference between the immediate prohibition on illegal logging and the
subsequent due diligence requirements that will be addressed by regulations. It
appears that many of the submissions were based on a misunderstanding regarding
the burden of proof for a criminal conviction in such a case. The committee is
of the view that this matter needs to be clarified, in a timely manner, through
an information campaign that forms part of a broader outreach strategy. This
will be an important step in gaining broader support for the objectives of the
bill.
3.14
The committee emphasises again the importance of ensuring that due
diligence requirements are developed in a way that reflects the best regulatory
practice, while ensuring this is balanced by consideration of the cost and
burden of compliance on importers and processors. The committee is of the view
that using pre-existing laws, rules or processes, individual country
initiatives and national schemes including national timber legality
verification and forest certification schemes, where they are found to be
appropriate, will contribute greatly to reducing compliance costs.
3.15
The committee is of the view that significant and well-targeted outreach
efforts, domestically and internationally, to explain the purpose and operation
of the bill and accompanying Regulations will be critical to the successful
implementation of the bill. This will complement Australia's non-regulatory capacity
building initiatives designed to combat illegal logging in the region.
Recommendation 1
3.16
The committee recommends that the Illegal Logging Prohibition Bill 2011
be passed.
Senator
Glenn Sterle
Chair
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