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Thursday, 29 May 1997
Page: 4017

Senator PARER (Minister for Resources and Energy)(4.02 p.m.) —The government opposes this disallowance motion. I want to open by making the point that this government is working on a wide range of fronts to give proper and practical effect to the national forest policy statement. Indeed, if the states were asked collectively how they thought we were doing in comparison to the previous government I am sure we would receive a resounding thumbs up. We have moved swiftly and decisively to put in place a wide range of initiatives, including the prompt finalisation of the regional forest agreement process based on rigorous, scientific, comprehensive regional assessment of the nation's native forests. The assessments cover the economic, social environmental and cultural values of our native forests; the development of a system of criteria and indicators of sustainable forest management which will be used in monitoring the performance of RFAs; and the provision of more realistic transitional woodchip export licensing arrangements that will carry through until the completion of RFAs by the year 2000.

The new woodchip licensing arrangements were put in place last year because areas which may be required for the comprehensive, adequate and representative reserve system to be established under the RFAs are already protected through interim agreements with the states. The ongoing implementation of the $32 million wood and paper industry strategy is intended to encourage investment, value adding and jobs growth in the industry. A joint government-industry plantation 2020 vision to provide a framework under which investment in plantation timber is encouraged is being finalised. The goal is to treble the existing area of land devoted to plantations by the year 2020.

There has been the progressive removal of export controls on plantation sourced wood from states where codes of forest practice have been assessed as adequately protecting environmental values. The controls have already been lifted in Victoria and Tasmania. The allocation of an additional $22 million under the Natural Heritage Trust for the farm forestry program is intended to encourage timber production on cleared agricultural land.

The making of the Export Control (Regional Forest Agreements) Regulations in April is another plank in this raft of positive measures being actively pursued by the government. The opposition's move to link the future of these regulations to its support for union calls to establish a wood and paper industry council lacks credibility. The two cannot be reasonably linked. However, I can inform the Senate that the government will establish such a council. Indeed, I can confirm it will be up and running by mid-July.

Senator Murphy made, in his speech, a number of statements, assertions and observations to which I am happy to respond. First was his criticism that the wood and paper industry council had not been established. While I have addressed this already, I would make the point again that we have not been idle. The government has been examining market opportunities for the forest industries and the potential for us to build a strong manufacturing base in Australia. It is part of the RFA process. A good example of this is the study conducted recently by Margules Groome Poyry in Tasmania. Senator Murphy mentioned it earlier. It has clearly identified significant growth opportunities for the Tasmanian forest industries which, if realised, would provide a major boost to the state's economy and job creation. Of course, the RFA process is all about achieving this outcome. That is why the study was done.

The Commonwealth will be pressing very hard for the Tasmanian government to ensure industry has access to the wood resources necessary to make these value-adding opportunities a reality. But we will not use our export powers to force this to happen. The export powers have never been used this way and Senator Murphy would know that. They have never been anything more than a blunt, ill-conceived and ineffective instrument. The sovereign risk they have created has significantly damaged investment in the industry.

The government does agree with Senator Murphy's view that we need to maximise the value added to our wood resources domestically to deliver the best social and economic outcomes. Where we differ, however, is as to how this can be achieved. We intend to do it by working cooperatively with the industry and the states, not by beating them about the head and effectively sabotaging their operations. It took a lot of effort to restore Australia's international reputation and begin recovering the markets lost by the decision of the previous government to impose commercially stupid export restrictions.

Senator Murphy has alleged that no work has been done to develop an overarching national strategy for the development of the forest industry but, as I have already indicated, he has chosen to ignore the very good preliminary work done in the RFAs. The wood and paper industry council, when established, will be given the role of coordinating the strategy nationally, drawing in the information gathered in the RFAs and providing guidance for industry development.

The Commonwealth will play a constructive role in this process—as we have done in the past 12 months—but I have to make the point that, at the end of the day, you cannot force industry to invest. Our major role will be to ensure 20-year access to resources through the RFAs, something the previous government could not deliver.

Senator Murphy indicated he had received a letter from the Tasmanian Country Sawmillers Federation expressing support for the retention of controls over woodchip exports. What Senator Murphy has not told the Senate is that concerns expressed by the sawmillers can only be addressed by the Tasmanian government. The Commonwealth does not manage the forests. Tasmanian forests are owned by the state and managed by a state agency. We are involved in the RFA process because we want to ensure our forests are managed sustainably. The issue of how the Tasmanian government chooses to make the state's wood resources available to industry is a matter for it, although obviously we encourage the state to give preference to domestic processes. This is one of the points that the Commonwealth will be making very strongly in the upcoming negotiations with Tasmania over the regional forestry agreement.

Forestry Tasmania has commercial contracts of sale to supply pulpwood logs to each of the woodchip export companies based in Tasmania. These contracts have specific clauses that ensure a preference for domestic processing of suitable logs. Forestry Tasmania also has had commercial contracts of sale to supply pulpwood logs and of course veneer logs and sawlogs for domestic processes.

Category 3 logs, to which Senator Murphy referred, are sold to businesses that have approached Forestry Tasmania with commercial proposals for the processing of these relatively low-grade logs. Forestry Tasmania currently has a number of such contracts of sale.

Senator Murphy also referred to a Queensland based business known as Asia Pacific Resources and to its principal, Mr Al Corbet. This business approached Forestry Tasmania in 1993 with a proposal to process category 3 logs at a new site near Hobart. Forestry Tasmania provided significant assistance to the proponent; however, Asia Pacific Resources was unable to deliver its agreed commitments for establishing and commissioning the new processing facility. This failure to perform was despite an agreed extension to the original terms of the agreement with Forestry Tasmania. On this basis, the contract of sale for category 3 logs to Asia Pacific Resources lapsed.

The Supreme Court of Tasmania has recently ruled in favour of Forestry Tasmania in a dispute with Asia Pacific Resources over the currency of the contract. A longstanding and proven timber business, Tasmanian Timber Engineering, has now developed a firm proposal with Forestry Tasmania for the purchase of the resources that were the subject of Asia Pacific Resources' failed proposal.

I would now like to turn to the role of the regional forest agreements in achieving sustainable forest management. As senators will be aware, regional forest agreements will protect native forests through two key measures—firstly, by establishing a world-class forest reserve system that protects biodiversity, rare and endangered species, a substantial proportion of old-growth forests and wilderness and, secondly, by ensuring that the whole of the forest estate is managed in an ecologically and economically sustainable way for the benefit of this generation and future generations.

RFAs, as exemplified by the East Gippsland RFA completed in February, provide for ongoing monitoring and a review of forest management practices within an agreed framework to ensure they are up to scratch. RFAs provide the community with the confidence that our forests are being well managed. They are based on excellent science and represent a responsible balance between environmental protection and economic development—a balance that has been absent in this country for too many years.

As well as providing secure conservation outcomes, RFAs provide security for the forest industries and the local communities dependent upon them. The 20-year agreements, reviewed every five years, will help generate the confidence to make investments in the industry that has been missing for so long, with obvious benefits for regional employment. This security comes from knowing that each RFA will establish a process for working out the long-term sustainable yield of the working forest, providing a basis for investment and, importantly, from knowing that, once the Commonwealth is confident that the forest management systems are sustainable, the Commonwealth will sign off on this in each RFA.

It needs to be noted that the export controls are ineffective in achieving both environmental protection and industry development goals. The export licensing system implemented in the past could not hope to achieve the level of certainty and security that is being achieved through the RFAs.

The Resource Assessment Commission and the Industry Commission have both criticised the use of export controls to achieve environmental outcomes as being inappropriate and damaging to the interests of the national economy. These and other reviews have realised that controls on exports do nothing to protect important forest values. Such controls do nothing to stop rare or vulnerable habitat or other important forest areas being harvested or cleared. Controls on exports have no impact, for example, on the clearing of land for agriculture or on the harvesting of forests for processing domestically. The substantial shortcomings of the export control approach are now being rectified by the government through the RFA process. As has been said already, RFAs will ensure areas containing important forest values are protected through the national forest reserve system and that the areas available for commercial harvesting are managed sustainably.

I would now like to discuss the relationship between the Export Control (Regional Forest Agreements) Regulations, subject to this motion of disallowance, and the actual RFAs. With RFAs in place, conservationists, industry and the community in general can be confident that environmental and heritage values are being carefully balanced with economic and social values. It is a win-win outcome, with gains for regional industry, communities and jobs and substantial gains for the environment as the reserve system is expanded and ecologically sustainable forest management is secured.

Export controls are, at best, superfluous in a region where an RFA is in force. The Export Control (Regional Forest Agreements) Regulations, therefore, remove such controls for a particular region while ever that region is subject to an RFA. In such circumstances, access to timber will be controlled by the relevant state authorities within the protections and limits agreed between the Commonwealth and the specific state under the RFA in question.

Should an RFA cease to have effect, export controls under the Export Control (Unprocessed Wood) Regulations and the Export Control (Hardwood Wood Chips) (1996) Regulations will be reactivated automatically. Under the hardwood woodchips regulations, no export of hardwood woodchips will be allowed from 1 January 2000 unless these woodchips are sourced from a region covered by an RFA.

These regulations will help secure the industry investment which is so critical to economic development, and the job creation in rural and regional areas. They will provide the industry's security that accompanies the security for conservation outcomes that are being achieved in RFAs through the CAR reserve system and ecologically sustainable forest management. As the regional forest agreements come into place over the next two years, industry will be able to make decisions about future investment, secure in the know ledge that the government will not seek, yet again, to move the goalposts.

The government looks forward to the support of the opposition to defeat this disallowance motion as the regulations are consistent with the intent of the national forest policy statement and the RFA process, which were, of course, developed and initiated by the previous Labor government. They represent good policy and are deserving of ongoing bipartisan support.