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Thursday, 16 August 2012
Page: 8912

Mrs PRENTICE (Ryan) (12:51): I rise to speak on the Illegal Logging Prohibition Bill 2011, a very important piece of legislation which we are debating today. This bill will seek to prohibit the importation and sale of all timber products which contain illegally logged timber, implement due diligence requirements for importers, ensure that there is a consistent definition of legally logged products on sale in Australia and establish enforcement powers and associated penalties for noncompliance with regulations. Illegal logging poses a significant challenge to the goal of sustainable management of the world's forests. Out of the approximately $4 billion of total timber products that Australia imports annually, the Department of Agriculture, Fisheries and Forestry estimates that about $400 million or 10 per cent of imported forest products are at risk of being sourced from illegal logging projects.

The OECD, the Organisation for Economic Cooperation and Development, estimates that in some developing countries the rate of illegal logging can be as high as 70 per cent. In places such as the Amazon River and Madagascar, there is global concern that we may see the destruction of tropical rainforests in these environmentally sensitive areas.

Every member of this House wants to ensure that we do what we can to protect the environment. We must recognise, however, that there are substantial trade-offs involved between, on the one hand, the protection of global forestry and, on the other, the employment prospects and quality of life concerns in developing countries. It is important for this House to constantly keep in mind on decisions made today their ramifications on the future global environment and future generations. But we must also not ignore the fact that there are hundreds of millions of impoverished people in countries around the world, many millions of whom undertake illegal logging just so they can live. This is not a desirable situation, but it is a situation that we must all accept.

It is therefore paramount that any move to address illegal logging in foreign countries is fully considered by the parliament, that all possible regulations be scrutinised by the parliament and not just by departmental bureaucrats. I am not confident that this bill has been scrutinised as thoroughly as possible and, as the member for Forrest outlined, the government followed a flawed process to develop this bill. They did not consult widely and we do not know what the actual regulations will be. Therefore, I do not support this bill in its current form.

The coalition will seek to move an amendment to defer the commencement date of the legislation such that the regulations imposed on the importation of timber products can be appropriately put into practice by local industry. My main concern with this bill is in its timing and the rushing through of burdensome regulations without properly consulting with all stakeholders, including foreign and local industry and other trade partners. It is quite concerning to me that the three recommendations of the trade subcommittee's majority report essentially contradict each other, and I will explain why.

The first recommendation urges that the government:

… continues to consult closely with the Governments of Canada, Indonesia, Malaysia, New Zealand and Papua New Guinea and other relevant stakeholders on implementation of the bill and the development of subordinate legislation.

The second recommendation urged the government to:

… facilitate Malaysia and Papua New Guinea’s representation on the Illegal Logging Working Group convened by the Department of Agriculture, Fisheries and Forestry.

These two recommendations are extremely important to the ultimate consequences of any regulations. The third recommendation states:

… that the Illegal Logging Prohibition Bill 2011 be passed.

There is no guarantee that recommendations 1 and 2 will be followed, so to me to recommend the passage of this bill seems disingenuous. This is why, in the coalition's minority report, we agreed with the first and second recommendations, but further proposed:

… that the Bill not be passed until the draft subordinate legislation has been finalised and has been the subject of extensive community … consultation—

and that the second reading debate be delayed.

The coalition has been very open about its concerns, with the Leader of the Opposition writing to the Prime Minister on 15 March 2012 requesting the government defer the onset of the legislation to ensure that the regulations can be further scrutinised through the committee process.

This Gillard government is notorious for its ability to alienate foreign countries, and the Labor government is doing so yet again. I am not surprised that comprehensive consultation has not occurred, because the responsible minister for this bill is none other than Senator Ludwig. In his capacity as Minister for Agriculture, Fisheries and Forestry, Senator Ludwig ignored the advice from his own department and ignored the issues in Australia's live animal exports industry and subsequently risked Australia's very important bilateral trade relationship with Indonesia when he, in an ill-thought-through knee-jerk reaction, imposed an immediate ban on all live animal exports to that country. That blunder by Senator Ludwig devastated the industry and cost the government millions of dollars. I would loathe for that situation to happen again, where the government does not consult properly leading to regrettable unintended consequences.

Today's bill threatens to harm our bilateral trade relationships with not just Indonesia but also Canada, Papua New Guinea and Malaysia, among many others. In their submissions to the Joint Standing Committee on Foreign Affairs, Defence and Trade's inquiry into this legislation, these countries were very clear. The Indonesian government's submission expressly said:

The implementation of the Bill is … likely to undermine the development of trade between Indonesia and Australia based on our respective mutual interests.

Indonesia noted the importance of forestry and the forest sector, and noted that the industry employs close to:

… four million Indonesians often in rural areas where other forms of employment do not exist.

Clearly Indonesia is willing to fight on this issue because it affects so many of its citizens. If Australia believed that another country was planning to impose deleterious unilateral trade restrictions on our exports, we would fight just as strongly.

Malaysia advised the committee that while they understand:

… that the objective of the Bill is laudable, Malaysia would like to see that the implementation of the Bill will not in any way hamper the good bilateral trade relationship particularly in timber products.

The Canadian government's submission warned that any third-party certification scheme and the reliance on strict chain-of-custody certification could lead to a 'barrier to trade' for exporters of timber products.

These are some of our most important trading partners. Indonesia is certainly Australia's largest neighbour and the single most important export market for our wheat and beef industries. We do not want to harm this important bilateral trade relationship any more than has already been achieved by the Gillard Labor government. The concern I have is that this unilateral effort and blanket policy will damage our bilateral relationships. As the member for Curtin mentioned earlier this morning, New Zealand, in their submission, noted:

The implementation of the Bill has the potential to have a significant negative impact on New Zealand's forestry industry: an industry almost entirely based on privately-owned plantation forests that are established specifically to be harvested. Australia is our second largest market for forestry products and imported NZ$824 million of these products in the year to December 2010.

As Judith Sloan commented in an article in the Australian on 15 May 2012 the point of trade policy, insofar as it actually relates to actual trade policy, should be used to promote international trade, and should not be used 'to pursue other objectives, such as environmental aims'.

In the case of New Zealand, we could be following a policy of bilateral engagement so that their concerns are acknowledged and respected. Instead, this prescriptive legislation has the possibility to damage our relationship with New Zealand and ultimately impose unnecessary costs on low-risk importers and low-risk countries.

We can look to examples such as the FLEGT—Forest Law Enforcement, Governance and Trade—Action Plan in the European Union. Countries wishing to export timber to the European Union enter into and negotiate processes and standards through bilateral voluntary partnership agreements. This ensures that only legally produced timber arrives into the European Union without being overly prescriptive, and to date six countries are implementing systems agreed to in their VPAs, another six countries are negotiating their VPAs, and approximately 15 countries from all corners of the globe have expressed interest with the European Union.

If you want to talk about real action, clearly the FLEGT Action Plan is achieving some success. If this government is worried about illegal logging in Indonesia, they should look at the voluntary partner agreement that Indonesia has already concluded with the European Union. It was one the first countries in the world to be involved with the FLEGT Action Plan process.

The coalition went to the 2010 election with a clear policy of real action for the prevention of illegal logging because we understand that illegal logging is a significant challenge to the global environment. However, we believe in deferring the time frame in which illegal logging measures will be fully rolled out to allow industry to adapt to any new measures. The coalition believes that all impacted stakeholders should be consulted closely in the drafting of any legislation and regulations, which to date is still a major concern.

Therefore, coalition support for this bill is contingent on acceptance by the government of our amendment to defer the onset of the legislation until 1 July 2013, with regulations not taking effect until 2015. I urge the government to address my concerns and those of the coalition and support our amendments.