Industry Responds to Government Decision

• They are not based on conservation science.As your Ministers have stated publicly, the DFAs based on the Commonwealth criteria and the 'precautionary principle' provide adequate protection of the conservation value of Australia's forests. Additional restrictions on harvesting and sale of timber products we entirely unnecessary.
  
  The situation in the Wombat Forest is particularly ludicrous. Trees will be cut as planned to meet sawlog production commitments. The sale of logging residues is perfectly legal and encouraged on the domestic market but banned if they are to be exported The export ban will not "save" one tree. The ban will force the burning of thousands of tons of readily saleable material without achieving any environmental benefit: actually environmental detriment - a totally counter productive move.


• They are not based on forestry science.
  Sound forest management requires the removal of pulpwood at several stages in the life cycle of a production forest. Thinnings need to be removed in order to promote maximum sawlog production. Pulpiogs and logging residues require removal at the final harvesting stage in order to promote it'll regeneration, Your decision will actively discourage both thinning and the removal of residues, leading to poor forest management, reduced wood production, the requirement for increased burning of residues and greatly increased probability of wild bush fires.


• They are not based on economics.Australia will lose the opportunity to export approximately 4 million tonnes of chips valued at about $300m in 1996. This means a loss of rural jobs, a loss of trade revenue, increased rural unemployment and a loss of income to rural communities.


• They are not based on an analysis of social impact. Earlier this year, at the time of the Forest Industry Rally at Parliament House, the communities were given an undertaking that any job loss or disruption connected with the DFAs would be kept to an absolute minimum. Longer-term adjustment issues would be dealt with in the context of the Regional Forest Agreement process with full socio economic studies to be carried out.
  
  The decision on Friday is in direct breach of that undertaking - it involves significant gratuitous and unnecessary loss of jobs.


• They are not based upon maintaining confidence. In fact, they have undermined confidence of contractors, employees and owners of the companies. They have had a major impact on the suppliers and overseas customers. They have, in a stroke, rendered obsolete a wide range of recently completed investments in value adding.
  Reduced confidence is highlighting the sovereign risk which Australian resource industries increasingly face.

• they affect private land such that one licensee is required to curtail its programme of private forestry plantation, a plantation which is one of the largest and most scientifically based in Australia.


• they direct distant low quality pulpwood to producers in priority to close-in high quality material, thus being "value-subtracting" in effect, in contradiction to avowed Government intention.


• two licensees have been directed at the expense of their own raw material source to process another licensee's production, a government intervention of breathtaking departure from established practice. Concern exists to have one Licence holder responsible for another's compliance with Licence conditions.


• the redirection of source material will drive pulp yields below levels committed to in contract with tendencies towards;
  -breach of contract
  
  -loss of ground in price negotiations


• the priorities of fibre sources have been distorted such that, in some areas, a halt to silvicultural work has resulted, thus reducing, once and for all, the sustained yield capability of established forestry areas.


• they will impact on costs of sawlog material which will feed higher costs and prices into the true wood sector of the industry, through that into building and furniture, ultimately to the consumer price index.


• they will significantly reduce royalty earnings and increase the costs of the State Forest Services.


• they will throw many operators and companies with borrowings or leases etc, into breach of financial commitments which will compromise the industry's ability in future to finance new developments.


• they are negative to conventions to which the Australian Government is signatory, e.g. Convention on Climate Change.