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Rural and Regional Affairs and Transport Legislation Committee
16/05/2011
Illegal Logging Prohibition Bill 2011

JOHNSON, Mr Grant, Senior Policy Analyst, Australian Forest Products Association

MATTHEW, Mr Gavin, Manager, Resources, Australian Plantation Products and Paper Industry Council

STANTON, Mr Richard, Chief Executive Officer, Resources, Australian Plantation Products and Paper Industry Council

STEPHENS, Mr Mick, Manager, Strategic Policy, Australian Forest Products Association

[10:07]

CHAIR: I now welcome the Australian Forest Products Association. Are there any comments you wish to make on the capacity in which you appear?

Mr Stanton : If I could just clarify briefly, as our submission says, we are in the process of merging organisations, and that is why we are here today.

CHAIR: Would anyone like to make a brief opening statement before we go to questions?

Mr Stephens : We would like to make a brief statement and then table that for the committee.

CHAIR: Please do.

Mr Stephens : On behalf of the Australian Forest Products Association we welcome the opportunity to address the Rural Affairs and Transport Legislation Committee inquiry into the draft illegal logging bill. As Richard has mentioned, AFPA was formed by the recent merger of the National Association of Forest Industries and the Australian Plantation Products and Paper Industry Council, and the association looks forward to providing a single national voice on behalf of the Australian forest, wood and pulp and paper industry.

From an international perspective, illegal logging is a serious economic, social and environmental issue, and AFPA supports efforts by the Australian government to address the issue of illegal logging, as it threatens the viability of Australia's own sustainable forest industry and the livelihoods of employees and communities that depend on the industry. It also undermines international efforts to address climate change, good governance and the stability of forest ecosystems. I think it is also important to acknowledge that the forest and wood and paper industry makes a significant contribution to the Australian economy, employing some 120,000 people, with a total sales turnover of around $23 billion. Paper and wood products are internationally traded, and Australia is a price taker with respect to forest products. Consequently, Australian paper and wood products manufacturers already face significant international competition, and illegally-sourced products from overseas simply distort the market and can place Australian producers at a competitive disadvantage. The Australian industry also operates within a strict regulatory and compliance regime which acts to ensure the legality and sustainability of its operations. In addition to the government regulation, approximately 90 per cent of timber produced in Australia is accredited under internationally-recognised voluntary third party certification schemes, which include the standards and chain of custody legal verification. You would have heard a little bit about those systems in the previous presentation from Australian Forestry Standard as one example. These standards and processes are in addition to the federal, state and territory compliance requirements for the growing and harvesting of wood.

Given that background, it is essential that illegal logging policy is effective in restricting the importation of illegally logged products while at the same time recognising the compliance regime already operating in Australia. From our perspective, the mechanism must not impose any unnecessary and costly requirements on domestic industry. The mechanism used to address illegal imports should be risk based and flexible with respect to the treatment of imported products and any requirements for domestic producers under World Trade Organisation rules. It is for these reasons that AFPA has significant concerns regarding the bill. Key deficiencies include a heavy reliance on a licensing and an industry-wide code of practice system that is complex, bureaucratic, inflexible and potentially duplicates voluntary third-party certification processes for domestic producers—which would increase costs and add additional complexity.

As an alternative we would suggest a more flexible and risk-based approach that would allow the relative risks of different products and domestically produced products to be assessed and evaluated with respect to the degree of likely risk. Rather than a rigid, industry-wide code of conduct, it would be far simpler, cheaper and more effective for companies to develop, as required, their own situation-specific due diligence systems and for these to be randomly audited by government. For example, such a system would recognise the low level of risk and high degree of legal verification required as part of third-party chain of custody certification in Australia. Such certified products could be recognised under the legal logging regulations as meeting the legal requirements at a quite a negligible cost.

AFPA maintains that it is essential that any efforts to stop the import of illegal timber products do not disadvantage Australian industry and, as much possible, place the responsibility on the exporters of timber products to Australia to ensure they are legally compliance. The forest industry supports an effective policy on halting trade in illegally logged products and is committed to working with the Australian government and other members in developing such a policy. With that background, we are more than happy to take questions and elaborate on these issues.

CHAIR: Thank you , Mr Stephens. Mr Stanton, did you wish to add any commentary?

Mr Stanton : I would only add that I endorse the comments of Mr Stephens and emphasise that this has been a longstanding issue of interest to our members, particularly in the wood processing and pulp and paper manufacturing industry—who, as Mr Stephens said, face significant competition from international producers who compete on what we would consider to be not a level playing field. Illegal logging is only one aspect of that but it is a very important one.

Senator COLBECK: One of the issues that have come up so far today with this new proposal is the imposed cost. Have you done any calculations on what your expectation of additional costs might be to your current processes?

Mr Stephens : My first response would be: it is unclear to quantify costs given. The legislation is enabling legislation. It talks about a lot of complex codes of conduct and processes, but we are really not sure what the final package might look at. So from that perspective it is quite difficult to quantify what those costs might be.

Mr Stanton : In adopting certification, the Australian industry as a whole, and individual companies, have incurred significant costs in meeting standards, being audited and all that type of thing. What we would like to see, and what we are proposing, is a system that is flexible enough to bring that system in—those costs that those players have already incurred—whether it be by adopting certification or some other system, as part of a system, rather than duplicating them and creating an alternative system and potentially competition and confusion.

Senator COLBECK: That is what I was coming to. Obviously a range of products come in and there are different risks in relation to those, but there are also risks in relation to the jurisdictions that they might be sourced from. How, in your view, should that be managed? My perception of the current draft as provided is that it would effectively apply a similar cost across all, with the additional bureaucracy of the government appointed people, the certifiers, and the certifying processes that existed within the country. How would that be best mitigated through existing processes?

Mr Stephens : Our alternative proposal is for a flexible and risk based approach. One of the drivers of that wd be to be effective but to minimise costs. Thinking of how that might work, in terms of high-risk or suspect sources you would need some additional steps or requirements to deal with that risk. In terms of low-risk scenarios, such as in the case of Australian legal compliance, the process would be more straightforward. Taking that kind of approach, where you relate it to the likely risks and then to the requirements you would need, would be one way of minimising costs where you could clearly demonstrate legal verification.

Senator COLBECK: How well designed, well placed and effective are the current regimes in tracking whether the product, particularly the existing highly manufactured stuff, is legally sourced? How effective are they in achieving that, in your view?

Mr Stanton : It is probably highly variable because different companies have put in different processes and use different standards or mechanisms to ensure that their wood supply is legal. With some of them, the standard is probably very high. We tend to talk about the sustainable forest management certification systems, which do much more than just certify legality as the highest standard. They are probably very good and very rigorous. A number of other companies who do not have access to wood that comes in certified may have their own systems of investigating the supply chains fully, and those systems may be very good. We could look at a number of other products where there may be virtually no investigation of the legality of the supply chain.

So, while we are talking here about a risk based, flexible mechanism, the important point to remember is that we are not talking about going soft here; we want to see a mandatory requirement on all importers and all domestic processors to have a system in place. That system, which each company could design to meet its own purposes, should be flexible, risk based, use a quality assurance system and be something about which the directors and managers of the company can say, 'Yes, we've looked at our specific supply chain and identified the best way to make sure that the wood in that is legal.' The onus should be on them to do that.

Senator COLBECK: So you want to see the creation of an offence and perhaps a declaration process where companies have to declare that they are doing what they said they would do and have to demonstrate that through SFM certification, through a broader industry based scheme like PEFC or FSC or through their own investigation. Senator O'Brien has correctly asked the question a few times: with liability in place, with a legislative framework in place, how do you utilise those systems to ensure that due diligence is taking place and to make a prosecution?

Mr Johnson : One of the things that we are proposing is for the government to, via a random audit process, assess the competence or otherwise and application or otherwise of due diligence systems. This would be a lot simpler and more effective in terms of the administrative burden, if you like, on government and would be equally effective. As Richard just said, organisations would be required to have due diligence systems, and a simple, random audit system should be sufficient to ensure compliance and effectiveness in meeting the requirements therein.

Mr Stanton : I think we would also envisage that, while the legislation or the regulations would not prescribe in detail, they would set some broad-based requirements of any due diligence system. For example, they would require that in covering all the products involved everything be documented and comprehensive; they would probably have third-party audit, some sort of reporting mechanism and some requirement that the directors sign off on it; in the case of importing, there would be a requirement to make declaration when you make your import, or, with a domestic process or an annual declaration, a requirement to have a system in place. So there would be a framework provided, but it would be flexible and allow each company to assess its risks and its own supply chain and put in place the most appropriate system, and it may be an existing certification system or it may be something different.

Senator COLBECK: We have heard that the government might be concerned about the transparency of those processes. Do you have a comment on that?

Mr Stanton : Again, I think that the legislation could provide a basic framework which would allow a certain adequate level of transparency such as an annual reporting-type mechanism without the need for a very detailed licensing system or a government tick-off on every individual code of practice or system that might be developed. But I appreciate that the government is going to have to have some mechanism whereby it can audit and decide whether to take action against companies.

Senator COLBECK: You indicated in your submission that you had not had the opportunity to comment on the draft before it was provided for this process. Do you think that there would have been the capacity to come up with something more effective if there had been that level of engagement that took you through some consultation around that process?

Mr Stephens : Yes, we do. If we had had adequate time for some consultation given the complexity of the issue and the standards and verification systems that are already in place—if we had had some meaningful conversations about how we could deal with some of the government objectives in transparency and effectiveness while taking into account our priorities of trying to minimise costs and ensure compliance with the government's intention—I am sure that we would not be having these discussions now and that we would be further down the track. The other thing is that the bill has a lot of delegated legislation and is talking about a lot of processes going to regulation, so, irrespective of our concerns with the lack of consultation to date, those opportunities to have meaningful consultation with industry post any headline legislation will be critical to making sure we have an effective bill.

Mr Johnson : Supporting what Mick was saying, the concern with the bill is that it is a one-size-fits-all approach. Whilst there is some scope for flexibility of response in the regulations, they are based around a code of practice-type system, and, as both Richard and Mick have said, there needs to be greater scope than just a code of practice. There are a range of ways of ensuring compliance with the aims and objectives of the bill other than simply requiring a code of practice.

The industry itself is very diverse. It has a great range of operators. You go from simple sawmills right up to very complex manufacturing operations that are very large, and you need to have a concomitant flexibility of response across a broad spectrum of industry. It could be too onerous and too complex for small sawmillers or small processors to have a whole code of practice, a code of practice administration ability, certification and third-party auditing and the whole process that comes in behind that as proposed by the bill. It is that sort of inflexibility that is causing us a good deal of concern.

Senator COLBECK: At a local level they would go through a whole range of processes just to get into a coupe in the first place. The forest practices systems that we have here in Australia are quite effective and very stringent as far as having to submit approval processes for all of those to actually harvest in the first place is concerned, so surely there should be some simple mechanism whereby that process can be recognised. I would hardly have thought that there was a need to put another layer into those current regimes, particularly in places where you know that there is low risk. Effectively what we are doing is applying another layer of bureaucracy and cost, even to places where there is low risk, when our real target is the high risk regions.

Mr Johnson : Yes.

Mr Stephens : Those are exactly our concerns. We talked about the legislative environment already in place. That is wood sourced from public state forests and from private forests with state codes of practice and enforcement requirements. The target is here illegal trade and illegal timber imports. Our main concern is that yes, we need to address that issue but we need to be really smart and careful about how we implement the system so that we are not simply putting additional costs on an already robust system in Australia.

Mr Johnson : A simple requirement could be, if you are a certified operator under a sustainable forest management regime, that you would simply have your name on a register, for instance. A simple reference to that register by the government would be read as or be deemed as being compliant with the whole range of processes because legality of operations is just a subcomponent of sustainable forest management certified forest operations. So a simple thing like the establishment of a register could be a very important part of what the government sets out to do and greatly simplify the administrative compliance requirements placed on industry. Once again that would also need to have flexibility built into it because it is simply not appropriate for small farm forest operations to be certified. They cannot be certified. It is too expensive and complex for them to do so. This goes to the general issue of complexity in considering how the government is best going to frame its response and it gets back to the issues we said at the outset, that the bill would have benefited, we feel, by more negotiation and more consultation with industry at all its levels.

Senator COLBECK: With this specific piece of legislation we are talking about assessing and certifying or being assured that timber products, in whatever form they arrive, are being sourced legally. One thing which concerns me is additional bureaucracy, the capacity to impose other values on the process. Mr Johnson, you have mentioned sustainable forest management certification processes, which I acknowledge, but the basis of this is trying to certify that the timber is produced legally. We might not be happy with what is happening in other jurisdictions but the thing we need to understand as part of this process is that it is produced legally. I was at a conference in New Zealand a couple of weeks ago where the Solomons were indicating that they would not be able to import to Australia under this legislation because they could not get FSC certification. My perception would be that that is not what this is all about. We might not be happy about forest practices that occur in the Solomons but that country has said 'This is legal' and this process is about dealing with that. How do you manage that other side of it, the fact that you have obviously people telling them, 'If you don't go down this track, you're out of the game'?

Mr Stanton : The model we have in mind I guess envisages putting the onus on the importer or the domestic processor to have in place a system. A lot of importers could be importing from a relatively low-risk country or have very simple supply chains where it is relatively easy for them to document and demonstrate the source of the wood, but if you were endeavouring to import a product from the Solomon Islands I think any system of assessing risk would say that that is a relatively high-risk situation. Therefore, there would be an onus on a company which wished to import product from the Solomon Islands to put in place a fairly rigorous system for ensuring that the wood they are accessing does meet the legal requirements. How they choose to do that, whether they engage a particular provider who says, 'We'll give you a legality certification service,' or whether they do it through the Solomon Islands government, however they choose to do it, the onus will be on them to do it. Some people may say, 'We don't want to be in that business any more, it's too complicated,' or they may say 'The only way we're prepared to do it is if it is FSC or PEFC certified,' which will constrain it to some extent; or if it is part of the core business and they have good contacts, I am sure they would be able to put in place systems to demonstrate their legality, as you mentioned. That will be up to each individual company wishing to import all process the wood to make those assessments.

Senator COLBECK: So, effectively, you are putting in a risk based system that applies risk to the directors or those responsible. They are going to have to make those decisions anyway and you might end up dealing with some of the other issues, whether that is necessarily an objective of the process or not, because it might be determined that the risk is too great and you look at something else.

Mr Stanton : In a lot of cases I think those people who are actually actively involved in those businesses are in a better position to make that determination than an Australian government official. It would be very difficult for a government official to range across all the different products and arbitrarily say, 'Yes, we can tick off on all these processes meeting the procedure.' Each individual company is in a better position to do that, and the government can then audit individual ones where there is a particularly high risk.

Senator COLBECK: And you are actually applying the liability where it ought to be in that process.

Mr Johnson : I would like to add to what Richard has just said. You will notice in our submission that there is a section at page 7 entitled 'Exporter or producer focus'. In Australia, the cost of legality compliance, if you like, is built into the cost structure of a process or a timber producer's operations. It would seem reasonable, and would be compliant with WT operations, that such a compliance process, in terms of the legality of the operations, would also be built in eventually into the cost of an exporter's operations.

In that context, it would seem appropriate that it be required of exporters to show some compliance with the legal regimes in their own country. In the first instance, it seems unfair that Australian importers or Australian companies somehow have to take responsibility for the enforcement of another country's legal regime. It would seem a reasonably simple requirement for an exporter of timber or related products to this country to provide a form, which could be developed in concert with the Australian government, showing origin, product, quantity, source—a range of things that would be required under legislation—so that it could simply be inspected at the border by Customs or quarantine or whoever. If that documentation did not accompany the consignment, it would not be accepted for import to this country. Even more sensibly, if you had a foreign based representative, they could assess the documentation before it was even shipped to this country so as not to waste everybody's time and effort. Unless that documentation is there, it will be deemed not to be a sensible operation to export to Australia because, in all likelihood, it would not be accepted. These types of processes could reasonably be included in the requirements of an exporter.

Senator MILNE: I would like to follow up on that last point. It seems to that one way of avoiding a lot of the cost of compliance in Australia is to require the declaration upfront with any consignment that comes in, and that is certainly part of the US Lacey Act and the EU regulations. As I understand it, within that is a requirement that says, 'Species, supplier, name and address of the recipient trader, country of origin, concession of harvest.' From what you have said, I take it that you would support such a thing being included in the bill. That way a lot of the liability for the importer is basically dealt with at the border with that documentation and it makes it easier for compliance because people can go back and trace the supply chain. Given what you have said, why do you think the government does not have that in this legislation, given that it is in the EU regulations and in the Lacey Act?

Mr Stephens : I can make an initial comment. We would certainly want to explore that option to put the onus on the exporting source. Given the previous comments about lack of consultation, we would need to think about that option. We are certainly open to putting the emphasis on the suspect sources rather than the onus on the importers.

Mr Stanton : I would like to make an additional two points on that declaration. Firstly, I do not think species is a huge deal, so I am not sure whether that needs to be in there. Secondly, the other thing that would be useful is a declaration that a system is in place to ensure that the wood is what the declaration says it is. So it is not just a matter of 'I declare that this is what it is'; it is also, 'I have a system in place that ensures to the best possible extent that I can back up that claim.'

Senator MILNE: Given what you have said, can you tell me whether you think that at the moment there are processors in Australia importing illegal timber products, either knowingly or unknowingly? Are we using illegally logged products in Australia right now?

Mr Stanton : I think there are companies importing products into Australia which have very good systems to ensure that the products that they import are not illegally sourced, but I think there is a large amount of other wood based material that is imported into Australia where there is virtually no system in place to check what the source of that was. A lot of it I am sure is legal, but probably some of it is not.

Senator MILNE: That goes to the issue of the compliance system that you are talking about in the country of origin. That again is a very uneven—let me put it that way—response. We all know, particularly from that Supreme Court case in PNG in 2008, that a large amount of timber concessions are granted illegally before we even start with anything else down the custody chain, especially in relation to indigenous peoples, traditional rights and that sort of thing. Do you have any comment to make about that, since the company concerned I think owns 60 subsidiary companies covering a huge amount and in fact has rights to a huge amount of timber or forest area in PNG?

Mr Stephens : We would not be able to comment on a specific situation like that, but we can make the broad comment that we support sustainable forest management and the international efforts to promote good forest management.

Mr Stanton : I would also add, though, that our members would expect the Australian government to put the onus on people who produce wood products in Australia or people who import wood products into Australia to do everything in their power to ensure that the wood that they are bringing into Australia is legally sourced and have a system in place to try and do that.

Senator MILNE: Yes, but consistent with that is that a declaration upfront would be beneficial in that process.

Senator O'BRIEN: You said very recently in your answers to questions by Senator Milne that you thought imported timber should be the subject of a certification process within the country of origin as to its provenance, legality and perhaps other factors. We have had two examples mentioned—SVLK in Indonesia and SGS in Papua New Guinea—as systems that currently exist. Do they comply with your views of acceptable systems for certification?

Mr Stanton : I think they could. They could be a mechanism that someone who wants to import timber into Australia could use to demonstrate that the wood that they have sourced, if it has been sourced under one of those systems, meets the requirement reasonably and that they have discharged their responsibility if they have ensured that the wood was obtained under such a system. It could do that.

Senator O'BRIEN: So, if the exporter in the country of origin of the product certified that they had been advised by a certification body, or the seller of the timber provided certification that a certification body had said, that this was a legally sourced timber, that would in your view satisfy an onus of proof for the importer to say, 'This is legally logged timber,' or, 'Within this product there is only legally sourced timber'?

Mr Stanton : I think ultimately you would have to look at each individual system and ask: is that system credible; is that system rigorous? But, assuming you had made that assessment, yes, that would be one possible mechanism for satisfying the requirement. I am not saying that anyone can set up a system and make claims about it without demonstrating that it really has what they say it has. I would not suggest that anyone should automatically accept a certification system on face value; they would need to investigate it and be reasonably confident.

Senator O'BRIEN: What if the country of origin's government said, 'This system is a system which we say will tell you whether the product is legally logged in accordance with our laws and practices'? Are we going to go beyond the sovereignty of the country's parliament to satisfy ourselves as to what we think is a satisfactory system?

Mr Stephens : That is a question for governments to sort out. If we are importing a product, putting that emphasis on the exporter and having that process in place—as Richard mentioned, those systems need to be accredited—is a plausible way forward. But really you are asking us about sovereignty issues, and we really cannot comment.

Senator O'BRIEN: You are commenting, aren't you, because this legislation in some respects goes to those issues?

Mr Stephens : The issue relates to international trade and our role in that marketplace.

Senator O'BRIEN: That is a good point. How do we satisfy our trade obligations in seeking to exclude product which a particular country says has been legally sourced and has been certified by a system that we say satisfies the tests of our legislature? Or is that something you have not thought about?

Mr Stanton : Under the system that we envisage, ultimately the onus would be on the person who is bringing that product into Australia to say: 'Okay, what assurances do I have? What system is in place to ensure that this wood that I am going to import into Australia has met the necessary requirements so I can be reasonably confident, whatever the legal test is, that it is what it claims to be?' If they say, 'I've looked at it and it is endorsed by the government of the relevant country,' that would probably be a relatively strong case to put.

Senator O'BRIEN: Would the onus of proof lie with the importer, or would they be able to satisfy that onus of proof simply by showing certification by a body authorised by the government of the source country?

Mr Stanton : I think the onus in the legislation can only be on people within the powers of the Australian government. But I think they can draw on other systems to meet that requirement. So, yes, they may accept what the Indonesian government says about the legality of a particular timber supply if they think that that meets their obligation here in Australia.

Senator O'BRIEN: Have you given any thought to how the prosecution on the one hand and an importing defender on the other might protect themselves or pursue the Commonwealth's interests in a prosecution under this sort of legislation? I am thinking down the track to the point where if you have legislation it has to be enforced. Enforcement means that there will be, no doubt, a contest of whether the legislation has been complied with in many cases.

Mr Stephens : It is a difficult question. The fact is that we are talking about a risk based system and what an importer or producer would be reasonably expected to do taking into account all information. In the scenario with signed legality from a foreign government, that would be taken in context with respect to other information or risks about the context of that commitment. That is all we are saying. The risk based approach is probably the best way forward given the complexity.

Mr Stanton : The really important thing is just that contemplation you are having. I understand it; I have thought about it myself. Just contemplating that, though, will be enough to drive behavioural change in people who import or process wood in Australia. They are not going to want to enter into that legal debate, so they are going to put in place some mechanism, whether it is withdrawing from that business, applying their own test, using an FSC certification system or whatever it is they choose to do. Putting in place legislation like this may not be 100 per cent perfect but it will drive behavioural change and it will also be mandatory on all players, whereas at the moment there are a number of companies—I know some of the ones that John Halkett represents—that are going out and making those hard decisions themselves, putting in place their systems, and the thing that is really frustrating them is there are a number of other people who are not doing anything because there is no obligation on them to do so. Sure, it might not be perfect, but I think it will drive behavioural change just as an initial step.

Senator O'BRIEN: By the same token, we should not implement laws that are fraught with such uncertainty that an importer does not know what risks they are encountering when they are going through the process of importing timber. We should not be seen to be putting in place a barrier to trade simply for the sake of it.

Mr Johnson : I could not agree more and we have given consideration to some of these issues. As Mick said, a risk based assessment process is very important and part of that could be that Commonwealth government could provide some assessment of the risk of various governments in terms of the onus on importers of timber products to this country—there could be high-risk countries, medium-risk countries and low-risk countries—so as to provide some overlay to assist in the process.

If you look at the European Union they have negotiated voluntary partnership agreements with various countries and then it is up to the member states of the EU to implement those processes as they see fit. I understand that the Australian government is talking in a bilateral sense with some countries and may well be well advanced to assist in this respect. If it is then I am sure industry would receive that information with open ears because it would assist us in developing various due diligence processes and also associated risk management processes that would help achieve the aims of the legislation. But there is definitely a role for government here and it should not be all outsourced to industry.

Senator O'BRIEN: Where there are non-government certifiers who argue their wares within this country as being a standard which an importer should require of its exporting partner overseas, what view do your two organisations—which are in the process of merging—have of the potential for the capture of the certification process by political and other pressures within this country?

Mr Stephens : I think the point was made about legality and that is the core intention of the bill. Sustainable forest management is a broader concept that talks about value systems around environmental, social and economic aspects of forest management. So there is a danger that legality gets confused with sustainable forest management. We are saying that those schemes are tools, particularly the chain of custody, for tracking and verifying the legality of timber. I think sustainable forest management is a different debate but we do note in our submission that communicating the difference between the concepts can be quite difficult. While they are tools, there is some potential that they may be captured but if they are the valid tools they are valid tools.

Senator O'BRIEN: Some submissions are suggesting that we ought to go to the point of having sustainability as the test and not just legality.

Mr Stephens : That is a concern.

Mr Johnson : This is also where capacity building is important to one of the foreign policy aims of our government. It is important to build the capacity in these countries so they can meet legality requirements first and then progressively build to an enhanced ability to meet sustainable forest management regime compliance, which is the basis of the management of forests in Australia and is so important for the future sustainability of forest operations.

Senator COLBECK: I am interested in the avenue that Senator O'Brien was going down. I mentioned it earlier and I am not sure that I can take it too much further, but I am concerned that we do not impose other values onto this process. I think it is really important that we do what we want to do in this but not allow it to be overtaken by the imposition of other values that particular interest groups might want to apply to it. I am not commenting on the validity or otherwise of those, but it is important that this is what it was intended to be and not some artificial trade barrier based on other values.

CHAIR: So there are no questions?

Senator COLBECK: They nodded their heads at me so I take that as a response.

CHAIR: You sounded very Senator Heffernan-esque there, Senator Colbeck, but we appreciate your thoughts.

Senator COLBECK: I do not want to go down that track.

CHAIR: Thank you, gentlemen.