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Monday, 19 November 2012
Page: 8934


Senator MILNE (TasmaniaLeader of the Australian Greens) (12:00): I rise to support the Illegal Logging Prohibition Bill 2012, which starts the process of dealing with illegal logging around the world and seeks to stem the trade in illegally logged timber. This is something the Greens have been passionate about for a long time, and I am interested in Senator Colbeck's remarks because the coalition are always standing up at rallies where we are arguing for an end to native forest logging in Australia, saying, 'Why don't you do something about the illegally logged timber elsewhere?' We are doing something about timber illegally logged elsewhere, and it is the coalition now who are worried about the conservation outcomes of stopping illegal logging and do not want to support the bill. So let it be on the record the next time they get up and say, 'What about the people trying to stop native forest logging here not wanting to stop it elsewhere?' I think we have the coalition on record: they are not going to participate in trying to deal with illegally logged timber.

Senator Colbeck says a number of countries have expressed some views about the bill, but in March this year the World Bank put out a report called Justice for forests: Improving criminal justice efforts to combat illegal logging. They said:

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe. A new World Bank report released today shows how countries can effectively fight illegal logging through the criminal justice system, punish organized crime, and trace and confiscate illegal logging profits.

The report, Justice for Forests: Improving Criminal Justice Efforts to Combat Illegal Logging, affirms that to be effective, law enforcement needs to look past low-level criminals and look at where the profits from illegal logging go. By following the money trail, and using tools developed in more than 170 countries to go after ‘dirty money,’ criminal justice can pursue criminal organizations engaged in large-scale illegal logging and confiscate ill-gotten gains.

The World Bank estimates that illegal logging in some countries accounts for as much as 90 percent of all logging and generates approximately US$10-15 billion annually in criminal proceeds. Mostly controlled by organized crime, this money is untaxed and is used to pay corrupt government officials at all levels. The new report provides policy and operational recommendations for policy makers and forestry and law enforcement actors to integrate illegal logging into criminal justice strategies, foster international and domestic cooperation among policy makers, law enforcement authorities and other key stakeholders, and make better use of financial intelligence.

We need to fight organized crime in illegal logging the way we go after gangsters selling drugs or racketeering,” said Jean Pesme, Manager of the World Bank Financial Market Integrity team that helps countries implement effective legal and operational frameworks to combat illicit financial flows.

Despite compelling evidence showing that illegal logging is a global epidemic, most forest crimes go undetected, unreported, or are ignored. In addition, estimates of criminal proceeds generated by forest crimes do not capture their enormous environmental, economic and societal costs— biodiversity threats, increased carbon emissions and undermined livelihoods of rural peoples, with organized crime profiting at the expense of the poor.

Preventive actions against illegal logging are critical. We also know that they are insufficient,” said Magda Lovei, Sector Manager at the World Bank. “When implemented, the recommendations of this publication can have a strong deterrent effect that has been missing in many actions taken against illegal loggers.”

Organized crime networks behind large scale illegal logging have links to corruption at the highest levels of government. The investigation of forest crimes is made even more complex by the international dimension of these operations. Recognizing these challenges, this study calls for law enforcement actions that are focused on the “masterminds” behind these networks—and the corrupt officials who enable and protect them.

That was the World Bank on 20 March 2012. I heard Senator Colbeck's contribution, but I am also very well aware of just what a disaster is going on around the world. Recently in the Jakarta Postthere was an article by a police chief in West Sumatra saying:

Illegal logging is one of the illegal activities on top of our priority list for us to eradicate.

There we have in West Sumatra a local police chief saying, 'We have to do something about it. It is one of our top priorities.' The article noted that the police had uncovered 44 illegal logging cases as of September this year, so it is pretty prolific in Sumatra, for example.

In the Congo, there was a recent report from Reuters saying:

Derelict ports in Congo's riverside capital … are piled high with logs ready to be shipped out to China and Europe as part of the lucrative timber trade.

More than a million cubic metres of illegal wood was ready to be transported and was identified in those ports.

That just gives you some idea of the scale of illegal logging. It is difficult to estimate, but it is believed that more than one-half of all logging activities in the most vulnerable forest regions—South-East Asia, Central Africa, South America and Russia—may be conducted illegally. Worldwide estimates suggest that illegal activities may account for over one-tenth of the global timber trade, representing products worth at least $15 billion a year.

For too long consumer countries including Australia have contributed to these problems by importing timber and wood products without ensuring that they are legally sourced. You only have to go around and look in many of the outdoor-living shops to see furniture that you know has been made from imported timbers and which has no certification to say where the timber has come from for that outdoor setting. There is nothing about it at all, and that is where we need to get serious.

The breaking of laws on harvesting, processing and transporting timber or wood products is widespread in many major timber-producing countries. By logging in protected areas such as national parks, overallocating quotas, processing the logs without acquiring licences and exporting the products without paying export duties, companies may be able to generate much greater profits for themselves than they would by adhering to national laws and regulations.

I have to say the Australian government facilitated logging of Indonesian protected forests. That was under the Howard government, when the Howard government facilitated the mining industry having a lobbying office in our embassy in Jakarta. The idea was that our mining industry was facilitating the overturning of forestry law 41 in Indonesia. That law was to protect the forests. With protected forests, we would not be able to have open-cut mines. But the Australian government, on behalf of the mining industry, went in and threatened to take the Indonesian government to international tribunals asking for compensation for those mining companies which had been given leases under what I would regard as the corrupt years of previous Indonesian administrations. Of course, the result was the Indonesians changed and overturned forestry law 41, allowing Australian mining companies to go in and clear-fell for open-cut mining in massive areas of Indonesia's protected forests. So we do not have a glamorous record ourselves in relation to encouraging logging of protected forests in Indonesia. But we know that the corrupt logging goes on. As I have just said, it often comes down to how the licences were acquired for either logging or mining.

Not only do you have environmental impact in terms of depleting forests, losing habitat for critically endangered species, destroying wildlife habitat generally and impairing the ability of land to absorb carbon dioxide emissions, with the resultant climate change impacts; you also have the ongoing effects. In December 2004, for example, there were flash floods and landslides in the north-east of the Philippines which killed over 1,000 people. The government blamed illegal logging which had denuded the mountain slopes. That is not just a story for the Philippines; it often happens in Asia in particular, but we have also seen it in other parts of the world.

There are budgetary implications because illegal logging means that governments do not get the revenue that they ought to have. A Chatham House briefing paper report estimated that in Indonesia the government is losing more than $1 billion a year from unpaid taxes and charges in relation to illegal logging. Future generations will suffer even more. World Bank studies in Cambodia have suggested that illegal extraction at least 10 times the size of the legal harvest has left a level of forest logging that is completely unsustainable in that country.

In terms of social impacts, when you have illegal logging it undermines the respect for the rule of law and it is frequently associated with forcing local communities out of the forest areas in which they live or on which they depend for their livelihoods. So you get illegal groups moving in or licences issued corruptly. They push the local people out of their forest areas. The local people get nothing from the flattening of their forests. You also get trade related issues because illegally logged timber is cheaper than legitimate products. It distorts global markets and undermines incentives for sustainable forest management. A study published by the American Forest and Paper Association—and I admit it is dated, being from 2004—estimated that world prices were depressed by between seven and 16 per cent by the presence of illegal products in the market. That is why the forest industry in Australia did come out in support of the bill when the government first announced it. I understand they have mixed views about it, but essentially they understand that illegal timber coming into Australia drops the value of forest products and that has a knock-on effect for them.

Politically, revenues from illegal logging have been known to fund national and regional conflict in, for example, Liberia, the Congo and Cambodia, where for several years the Khmer Rouge forces were sustained primarily from the revenue from logging areas under their control. So there are all kinds of reasons why Australia would want to do more to deal with the issue of illegal logging, and that is all bad news.

The better news is that in recent years producer and consumer countries have been paying increasing attention to illegal logging. One of the main initiatives includes measures to exclude illegal timber from international markets, notably the European Union's Forest Law Enforcement, Governance and Trade Action Plan. That initiative centred on the exclusion of illegal products from the EU markets. That is the intent of what we are trying to do here in Australia.

Whilst this bill is a step in the right direction, it does not go far enough. Senator Colbeck is right to say that the Greens have a number of amendments which would strengthen this bill. At the moment, the only regulation that exists in Australia to control importation of illegally logged timber is the Convention on International Trade in Endangered Species of Wild Flora and Fauna, and that convention targets only a limited number of timber products that have been derived from an endangered species; therefore, large amounts of timber continue to be imported without any requirement to verify its legality other than through voluntary industry measures.

When in 2010 at the election the Labor Party committed to encourage the sourcing of timber products from sustainable forest practices and sought to ban the sale of illegally logged timber products, the Greens were very supportive. It is long overdue and we need to get on with it. However, there are some serious shortcomings, and the first is the definition of illegal logging. We are not persuaded by the government's reasoning that if you go to a prescriptive definition then you might through that exclude something by omission. We do not believe that is the case and we retain the view that the Australian definition should be consistent with the European Union definition. If we are going to deal with a global problem, we need globally consistent definitions of what constitutes illegal timber; otherwise you are going to have a situation where what is rejected by the EU will be put into Australia and allowed here under a different definition.

Secondly, in relation to due diligence, we do not believe that the due diligence provisions should remain unclear. The DAFF officials, in a working group meeting in August 2011, indicated that the declaration should include, amongst other things, the following information critical to satisfying due diligence: the name of the importer, the name of the supplier, the botanical name and common name of the timber product, the value of the import, the country of origin, the region and the coupe. The coupe is really important because it is no use saying it is from that region if you do not know which coupe it came from. Knowing the region is not enough because illegal products will almost always be sourced from areas where there is also legal logging. If you just say the region, that is no good at all—you have to be able to trace to the coupe. The reason to trace to the coupe is that then you can trace how that licence was given and how it was secured. That goes to the issue of corruption. It also goes to the issue of tracing the money. We argue that the due diligence requirements must provide for traceability to coupe level and an assessment of the risk of illegality due to corruption. That is a critical thing. The government has not got that there, and I encourage the senator in response to tell me, in the absence of traceability to the coupe, how you are going to deal with knowing whether a timber is sourced from an illegal source and how you are going to deal with corruption.

The other thing we are going to deal with is compliance. We believe that, in order to determine the levels of compliance and assist in assessing the standards used in due diligence, we need to have regular compliance audits and aggregated data reports. That is, I think, essential to where we need to be. We also need to give NGOs and timber industry competitors the ability to initiate action and have standing under the law in relation to the act. I think it is all very well to have a bill like this, but you have to be able to allow a large number of actors to be able to have standing in the courts when it comes to assessing it.

The Greens will be moving a number of amendments in the committee stage to strengthen this piece of legislation. Whilst it is a step in the right direction, I am desperately concerned that, if the amendments are not supported by the government, you are going to end up in a situation where Australia has a weaker definition than the EU. It has no traceability provisions to the coupe level, which is so necessary if you are going to, as the World Bank said, 'get to the Mr Bigs of the operation'. The 'Mr Bigs of the operation' are the people who secure the licences and get the money, and that is going to the issue of corruption in the host country. We know corruption exists and that is a large part of the timber trade, just as it has been a large part of the trade in animals, both live and animal products. We have to get down to actual detail here. When you go into a store to buy an outdoor setting or buy another thing, you should be able to see on in it some certification of where that timber has come from because, as it is now, illegally sourced or logged timber is shipped to China or somewhere else, where it is made into a lounge suite. That lounge suite or whatever is imported and a person would have no idea that the timber was illegally sourced somewhere, moved somewhere else where it was processed and then ended up in Australia. We need to have that on the labelling because it is critical that that is there for the consumer, but also for the importer, because that importer then knows exactly what they are doing. In the absence of that labelling, the importer may well be acting in good faith and they are not going to be able to satisfy the customer that product actually is certified as having come from a legal source. So there are a number of issues with the bill and I look forward to the debate in the committee stage.