2.1
Views on the bill were broadly divided between representatives of the forestry industry, who supported the bill, and environmental advocacy organisations, who did not.
2.2
Generally, supporters of the bill asserted that the measures in the bill are necessary to ensure operational certainty for the native forestry industry following the Federal Court case Friends of Leadbeater’s Possum Inc v Victorests (No. 4) [2020] FCA 704 (‘VicForests’). Supporters also argued that the current RFA framework is appropriate, and that the proposed amendments to subsection 38(1) of the EPBC Act and subsection 6(4) of the RFA Act merely clarify how those provisions were always intended to operate.
2.3
Opponents of the bill argued that the proposed measures are not an appropriate response to the VicForests decision. This cohort also asserted that the RFA framework safeguards neither the environment nor the economic viability of the native forestry industry. Opponents of the bill also argued that the bill is inconsistent with the findings and recommendations of the Samuel Review. Finally, this cohort asserted that, rather than merely clarifying the intended operation of subsection 38(1) of the EPBC Act and subsection 6(4) of the RFA Act, the bill would expand the scope of those provisions, and in doing so remove a critical mechanism for Commonwealth oversight.
2.4
This chapter outlines some of the key issues highlighted in evidence before the committee, being issues regarding:
operational certainty for the native forestry industry following the decision in VicForests;
the effectiveness of the RFA framework in protecting the environment and ensuring the economic viability of the native forestry sector;
whether the measures proposed by the bill are consistent with the findings and recommendations of the Samuel Review; and
whether the proposed measures merely clarify the intent of subsection 38(1) of the EPBC Act and subsection 6(4) of the RFA Act, or make more significant changes to those provisions.
2.5
The chapter concludes with the committee’s views and recommendations.
Delivering operational certainty for the native forestry sector
2.6
Subsection 38(1) of the EPBC Act provides that Part 3 of the EPBC Act ‘does not apply to an RFA forestry operation that is undertaken in accordance with an RFA’. An identical provision appears in subsection 6(4) of the RFA Act.
2.7
As noted in Chapter 1, the Federal Court in VicForests found that subsection 38(1) of the EPBC Act requires that forestry operations comply with an RFA in order to be exempt from Part 3 of the EPBC Act. According to the Explanatory Memorandum, the decision highlighted ambiguities in the phrase ‘undertaken in accordance with an RFA’. The bill seeks to resolve these ambiguities by removing the phrase from subsection 38(1) of the EPBC Act and subsection 6(4) of the RFA Act.
2.8
VicForests appealed the decision in the VicForests case by application dated 10 September 2020. The Federal Court delivered its judgment on the appeal on 10 May 2021, finding in favour of VicForests. Relevant to the present inquiry, the Court ruled that forestry operations do not lose their exemption from Federal environmental law by breaking applicable state laws.
2.9
In a statement to the media, FoLP stated that the organisation is ‘actively looking to appeal to the High Court’.
Arguments that the proposed measures are necessary and appropriate to resolve the uncertainty created by the VicForests decision
2.10
Submitters and witnesses who expressed support for the proposed measures highlighted uncertainties facing the native forestry industry following VicForests, and asserted that the measures are necessary to resolve these uncertainties. For example, the AFPA observed:
Right now there are thousands of harvest and haulage workers, timber mill workers, and thousands of forestry-dependent workers across supply chains in regional towns who are anxious about the long-term future of their industry.
2.11
At the committee’s public hearing, representatives of the Australian Forest Contractors Association (AFCA) expressed similar concerns, stating:
In the past two years, the injunctions in place as a result of the ongoing court actions have had significant and wide-reaching impacts on harvest-and-haul businesses. There has remained uncertainty, and the issue remains unresolved. They are not able to access resource, and this uncertainty causes many and significant impacts to their businesses and their employees and flows through to these regional communities.
2.12
These concerns were echoed by the CFMEU, which asserted that in the absence of remedial action, the VicForests decision ‘has and will continue to have wide ranging negative ramifications on jobs and workers in the native hardwood forest industry’. According to the CFMEU, these ramifications include that tens of thousands of jobs and workers in the native hardwood timber industry are in jeopardy. Representatives of the CFMEU further stated at the committee’s public hearing:
What we have is a situation, since last year, where people who were expecting to go to work have not been able to work. So we've had an immediate loss of income from a whole range of families.
Particularly the forest contractors, the harvesting and haulage contractors, have been impacted immediately. I think everybody should be aware that some of these people, of course, were also impacted by COVID, and some of those communities were also impacted by bushfires. So it's a situation where it's already very stressful for people in New South Wales and Victoria, in particular, with the impact of bushfires. Some of them fought bushfires for weeks on end, working ridiculous hours to protect the forests and their community, and then, on top of that, as they came off the line, having got control of the fire situation, they faced being stood down because of this uncertainty with the injunctions et cetera.
2.13
Following the hearing, the committee received 1157 pieces of identical correspondence from the CFMEU mailbox, each signed by an individual. The correspondence expressed concern in relation to the uncertainty created by the VicForests decision and consequences for workers in the hardwood timber industry. It urged the Parliament to pass the bill as quickly as possible.
2.14
Other submitters and witnesses similarly focused on the need for timely and efficient resolution of the uncertainty created by VicForests. For example, the AFPA stated that while the measures proposed by the bill could be enacted as part of the Government’s broader EPBC Act reforms currently before the Parliament, to date the Government has not agreed with industry’s position that the Act needs to be urgently amended to address the uncertainty.
2.15
Supporters of the bill also indicated that industry cannot afford to wait for the uncertainty created by VicForests to be resolved through the courts. For example, Ms Monique Dawson, Chief Executive Officer (CEO), VicForests, stated in relation to VicForests’ appeal to the decision in the VicForests case:
The reality is that we don't know when we're going to get a judgement in this matter. We don't know whether or not it's going to be appealed to the High Court. It could be a matter of a year, two years or three years before we actually get certainty through the courts, and, frankly, it shouldn't be left to courts to interpret legislation. If there's an ambiguity, in my long experience as a public servant, it is ordinarily the role of the legislature to clarify legislation.
2.16
Submitters also indicated that their concerns stem from the potential for VicForests to encourage legal challenges to legitimate operations conducted in RFA areas. For example, the AFPA observed that since the decision in May 2020, there has been a legal challenge to the Tasmanian RFA by the Bob Brown Foundation. Midway stated that anti-forestry groups are using VicForests and the challenge to the Tasmanian RFA as ‘a call to arms to shut down the industry’. Representatives of VicForests echoed these concerns, stating:
The finding in [VicForests] has been used by ENGOs to very publicly say that any timber sourced from VicForests is illegal. That has created a significant issue in international markets for some of our customers, because those campaigns have been conducted offshore. So it is creating a significant impact on the reputation of Australia in terms of the ability for people to source timber from Australia.
2.17
In addition, supporters of the bill noted that Justice Mortimer (in VicForests) did not clearly articulate exactly which breaches of an RFA would result in the loss of the exemptions the EPBC Act and the RFA Act, noting that very minor breaches occur from time to time in the normal course of operations. Some of those submitters and witnesses queried whether the ambiguity highlighted in VicForests would—in effect—require all forestry operations to have approval under the EPBC Act, noting the consequences of imposing such a requirement.
2.18
Midway asserted that requiring forestry operations to seek approval under the EPBC Act would create ‘operationally unviable delays’ in planned harvesting operations, noting that these operations are already subject to significant environmental planning and approvals. The Forest Industries Federation WA (FIFWA) expressed similar views, stating:
If burdened with cumbersome approvals processes, there is the potential the market demand for such essential products would not be met by local timber. Typically this would result in an increased reliance on imports (potentially from countries with less stringent ecologically sustainable forest management practices in place). However, in the circumstances of a global pandemic, shipping times and networks can be greatly disrupted which could lead to market paucity for some goods and increased panic in the community.
2.19
Some supporters of the bill also highlighted the value of the forestry industry to the Australian economy. For example, the AFPA observed that the forest, wood and paper products sector is one of Australia’s largest manufacturing industries, with an annual turnover of around $24 billion. The AFPA also noted that approximately 120 000 people are directly employed along the industry value chain, with a further 180 000 supported through flow-on economic activity.
2.20
Submitters and witnesses also emphasised the importance of the hardwood timber industry, highlighting the differences between hardwood and softwood timber and their uses. For example, Mr Ross Hampton stated:
[H]ouse framing, which is what we were talking about a moment ago, is softwood timber, which is the vast majority of our timber in Australia, but the furniture around us—the floorboards under our feet here in Parliament House, the door behind you in your office—is all hardwood timber; it has completely different properties...We love our softwood in Australia—it's fantastic—but it's horses for courses.
The big problem in Victoria that I have identified is that there is allegedly a transition, the government says, to plantation timber. But the government do not explain where they're going to get their hardwood for Melbourne from in the future, because even if plantation timber could be rapidly grown in 10 years—it takes 30 years or more—it doesn't replace the same sort of work.
2.21
Ms Maree McCaskill, General Manager, Timber NSW, emphasised the importance of the hardwood timber industry in NSW:
[T]he industry is very valuable economically and a quite reasonable regional employer. It's important to note that many of the sawmills we operate are the only employers in the region in which they are. There is no alternative employment, because they're in very tiny places and often in lower socioeconomic or depressed areas.
If you closed the industry down, then you would be looking at anywhere between 2000 and 3000 direct employees, particularly on the North Coast of New South Wales, where high value sawlogs are. More appropriately, if you then look down the entire supply chain. you're probably looking at about 22 000 people, of whom more than 12 000 sit in the Sydney metropolitan area, Newcastle and Wollongong.
Arguments that the proposed measures are unnecessary or inappropriate
2.22
Opponents of the bill typically asserted that the proposed measures are not an appropriate response to the VicForests decision. For example, FoLP stated that the uncertainty highlighted by Justice Mortimer in VicForests could be resolved by repealing section 38 of the EPBC Act (and section 6 of the RFA Act) altogether. According to FoLP, this would leave industry in ‘no doubt’ that it is required to comply with national environmental legislation.
2.23
Some opponents of the bill also indicated that VicForests does not necessitate amendments to the EPBC Act or the RFA Act. These submitters and witnesses expressed support for a reading of the phrase ‘undertaken in accordance with an RFA’ which requires forestry operations to comply with the RFA rather than merely covered by the RFA. For example, NSW Young Lawyers note:
Under the existing law, forestry operators can continue to benefit from the section 38 exemption so long as their activities are undertaken ‘in accordance with’ the relevant RFA. As it stands, the [VicForests] decision may prompt forestry operators to review their compliance to ensure that they are meeting their obligations and do not ‘lose’ their exemption.
2.24
NSW Young Lawyers also stated that should the interaction between the EPBC Act and RFAs require clarification in legislation, legislators could consider introducing provisions which explicitly state that the exemption in subsection 38(1) of the EPBC Act ceases to apply where an operation is not compliant with the relevant RFA. Moreover, legislators could consider enacting appropriate regulatory and environmental mechanisms to ensure compliance with RFAs and protection of the environment.
2.25
Some submitters and witnesses also indicated that the phrase ‘in accordance with an RFA’ gives rise to an important right for interested members of the public to take action in circumstances where a forestry operation is not conducted in an environmentally responsible manner. The committee heard that the bill would have the effect of removing this right without providing a suitable alternative compliance and enforcement mechanism. For example, the World Wide Fund for Nature—Australia (WWF Australia) stated:
The Bill would also remove legitimate third-party enforcement rights for community organisations seeking to enforce the Act when State Government forestry agencies fail to abide by environmental protection provisions in forestry operation codes.
2.26
Some opponents of the bill queried the native forestry industry’s value to Australia’s economy. For example, FoLP stated:
The Victorian native forest industry has been in decline for more than a decade, in terms of production, sales and employment. The economic performance of VicForests has been poor at best, with so little profit that in most years (11 out of 16), no dividend has been paid to the state treasury. In its most recent Annual Report (2019-20), VicForests has declared a loss of more than $7.5m. This is not ‘economic success’. In 2019 the Victorian government publicly acknowledged that native forest logging is not sustainable, and announced that it will stop by 2030.
2.27
Ms Jutta Beher expressed similar views, noting that the logging industry is ‘heavily subsidised…[with] a large cost for taxpayers attached’. Ms Beher also noted that less tax-supported jobs—for example in science and tourism—rely on undisturbed forests.
2.28
Similarly, the Labour Environment Action Network (LEAN) acknowledged the significance of safeguarding existing timber industry workers, but argued that the measures proposed by the bill are not an appropriate means of doing so. Rather, timber industry workers should be transitioned to employment in more sustainable and environmentally responsible industries:
It is imperative that in light of the need for change in the future management of native forests covered by RFAs, existing workers, not timber industry bosses, are supported through a substantial transition package including payment of all entitlements and a commitment by Government to provide direct employment opportunities to all directly impacted workers in forest and carbon management and protection activities, and through the much needed expansion of plantation forests.
Suggestions for alternative measures—reconciling environmental protection with the operational realities of the forestry industry
2.29
By contrast to other submitters and witnesses who supported or opposed the bill, Timber NSW indicated that while there is a need to deliver certainty to the native forestry industry, more nuanced measures than those proposed by the bill may be required to balance environmental protection with the operational realities of the native forestry industry. For example, Mr Stuart Coppock, Legal and Policy Advisor to Timber NSW, stated at the committee’s public hearing:
What we have today is some legislation which was in Schedule 1 of the RFA Act. When it was drafted it reflected, if you look at the times and the events then, what was current knowledge, but the world has moved on. So you now end up with a problem, and it's not just in forestry; it's elsewhere. You end up with tape measure compliance through to the other end where you have standards.
…
The issue which has been clearly raised by the senator's bill is the issue of how you make compliance work in an industry which is field based—and, again, [native forestry is] not the only one. And you go back to the issue of tape measure compliance and you end up in the area of tolerances in a manufacturing sector. So this is a very complex and very difficult area.
2.30
In its submission, Timber NSW noted that subsection 38(1) of the EPBC Act as presently drafted is a ‘conditional waiver’. The provision provides forestry operations with an exemption from Part 3 of the EPBC Act, provided the operations meet the requirements of the State legislation, regulations, Codes and other instruments which underpin the relevant RFA. If those requirements are not met, the Commonwealth’s approval regime under the EPBC Act will become operational.
2.31
According to Timber NSW, subsection 38(1) of the EPBC Act, including the words ‘undertaken in accordance with an RFA’, is an important compliance component of the RFA framework. The provision also supports the Montreal Process Criteria: a set of internationally agreed forest monitoring criteria. However, in NSW the operating rules for timber harvesting have become highly prescriptive—which can give rise to compliance issues. Consequently, there is a ‘continuing challenge’ to draft words that reflect field and non-static working environments and operations while also ensuring that environmental safeguards are in place:
The issue of judgement is really something that legislatures have tried to tackle, and there is no perfect answer, which I said at the start. But to have a strict compliance with a tape measure—that is, it's 30 centimetres, and if you go 31 you're in breach of the RFA—personally, in my view, is a nonsense in a working environment. So that's the extreme.
The other extreme is where there are no regulations. In our submission we make it very clear at the start that we're not in that game and nor is the forestry industry, because if that is the case, there will be no forestry industry. We have jobs and people and businesses…extending from the country to the city. We want working forests which grow and are productive and have diversity.
2.32
Timber NSW stated there is a need to introduce into current subsection 38(1) a ‘give and take’ approach, which requires operations to be undertaken ‘in accordance with an RFA’ while also allowing for the flexibility necessary to enable the forestry industry to operate effectively. Timber NSW stated that this may take the form of a test of judgment—similar to the test which applies to company directors under the Corporations Act 2001 (Cth) and to professional advisers under the Civil Liability Act 2002 (NSW). They suggested that such a test may be incorporated into the EPBC Act by amending section 38 as follows:
Insert after section 38(2) the following:
(3) A person in exercising compliance with any RFA to conduct an RFA forestry operation must have regard to all the goals set out in any intergovernmental policy statement between the Commonwealth and the States and Territories in equal regard without exception.
(4) Non-compliance will not be found if the person:
(a) at the time the compliance was undertaken, acted in a manner that was widely accepted in Australia, by peer professional opinion, as the work that met compliance of a standard that comprised a competent professional practice in that field. A competent professional practice shall be the science of forestry and silviculture, and
(b) if a person makes a judgement to meet compliance with an RFA for an RFA forestry operation and the judgement is made in good faith for a proper purpose, and they inform themselves about the subject matter of the judgement to the extent reasonably believed to be appropriate, and rationally believe that the judgement was in the best interests of compliance with all the principles and goals on an equal footing in the RFA, then that person will be in compliance with the RFA and the RFA forestry operation.
2.33
During the hearing Mr Coppock also indicated that Commonwealth oversight of RFAs is important, stating that ‘[t]he Commonwealth, at the end of the day, has the lead hand in the RFA structure’. However, he also indicated that it is not necessary to increase Commonwealth oversight of RFAs as recommended by the Samuel Review.
The currency and effectiveness of Regional Forest Agreements
2.34
According to the Explanatory Memorandum, a core purpose of the bill is to preserve the Commonwealth’s original intention as regards RFAs and their relation to the EPBC Act. In this respect, the Explanatory Memorandum argues that the RFA framework (including relevant State and Territory regulations) is effective and appropriate:
The [RFA] framework is such that the Commonwealth accredits the State Government’s regulatory framework to ensure there is independent oversight of forestry operations and robust powers to conduct audits and impose sanctions if forestry operations breach regulations. All Regional Forest Agreements include accreditation of systems for achieving ecologically sustainable forest management.
A central objective of the Regional Forest Agreement framework and subsection 38(1) of the EPBC Act is to reduce uncertainty, duplication and fragmentation in government decision-making by producing a durable agreement on the management and use of forests. This not only facilitates timely land use planning and development approval decisions; it also protects environmental, heritage and cultural values and provides industry with secure access to forest resources.
Arguments that Regional Forest Agreements are fit for purpose
2.35
Most submitters and witnesses who expressed their support for the bill agreed with the assertions in the Explanatory Memorandum that current RFA arrangements are fit for purpose. For example, the Institute of Foresters of Australia and Australian Forest Growers emphasised that RFAs were developed to provide a long-term solution to the multiple use of forests, by setting obligations and commitments for forest management that deliver:
ecologically sustainable forest management;
an expanded and permanent forest conservation estate to provide for the protection of Australia’s unique forest biodiversity; and
certainty of resource access and supply to industry.
2.36
A number of supporters were careful to assert that forestry operations are not ‘exempt’ from environmental regulation or Commonwealth oversight. Rather, oversight has been delegated to the States via bilateral agreements. The States have in turn developed comprehensive regulatory frameworks which may be more onerous than the EPBC Act, while also being sufficiently responsive to the operational realities of the forestry industry.
2.37
This view was broadly echoed by Professor Peter Kanowski at the committee’s public hearing on the bill:
The responsibility for the protection of the environment and biodiversity in an RFA region is given effect by a state code of forest practice or a forest practices system, which implemented under the regional forest agreement. In layperson's language, at least, I wouldn't describe the situation as one in which there's an exemption. The exemption, in legal terms, from the provisions of the EPBC Act is because those responsibilities are instead delivered by a different piece of legislation.
2.38
Submitters and witnesses representing the forestry industry also emphasised the scope and rigour of environmental protections in State regulations, Codes and policies. For example, the Tasmanian Forest Products Association (TFPA) asserted that the Tasmanian RFA goes ‘a lot further’ than the protections in the EPBC Act, noting in particular that many threatened species listed in the Tasmanian RFA are not on included on Commonwealth registers. FIFWA similarly highlighted the safeguards that apply to forestry operations in WA:
[N]ative forest operations in WA are directed under a forest management plan…WA’s forest management plans are comprehensively prepared, based on robust science, reviews into specific matters of interest regarding economically sustainable forest management, and extensive public consultation.
WA’s forest management plans are independently audited by the Environment Protection Authority in the development phase, in the mid-term and at their conclusion. During the audit a number of State government agencies are assessed against key performance indicators – recognising the multi-disciplinary nature of ecologically sustainable forest management and importance of thorough governance.
2.39
At the committee’s hearing, VicForests provided evidence as to the regulatory and policy safeguards which apply to operations in Victoria, stating:
There are two acts in Victoria that lead to the creation of the code, which is under the Conservation, Forests and Lands Act, and then we operate under the Sustainable Forests (Timber) Act. Under [that] Act, we are required to comply with the code. The code of practice is a document which is 80 pages long and has very specific requirements about our obligations when we are conducting timber harvesting in Victoria's state forests. That is then supplemented by the management standards and procedures, which is a manual of 198 pages, which is incorporated into the code, so it has the same effect. They are both legislative instruments because they are, by force of law, required to be complied with.
The system that is in place for managing any allegations of breaches of those legislated obligations in Victoria is that the regulator can investigate; they can require us to provide any information that they need; they will conduct an audit or an inquiry into any allegations. In the event that any matter is upheld, they will provide directions to us—which could be directions to cease harvesting, so there could be a stop-work direction.
[O]ur audits are very good, from the regulator. Independent audits are conducted on an annual basis, and we are right at the top end of our targets, in that, for most of our audit requirements, the target is 60 per cent to 100 per cent, and we're at 98 per cent or 95 per cent. So we do very well on our audits.
Arguments that Regional Forest Agreements are not fit for purpose
2.40
A majority of submitters and witnesses who opposed the bill asserted that the current RFA framework—including State regulations and the exemptions set out in the RFA Act and EPBC Act—have failed to protect the environment or ensure the economic viability of the native forestry industry. This cohort cited evidence of damage to Australia’s ecosystems and decline in flora and fauna in support of these assertions. For example, representatives of the Wilderness Society stated:
Over the course of the regional forest agreements, we've…seen a decline in a number of endangered species, in terms of their status and their persistence, including the two animals that were the subject of the recent Friends of Leadbeater's Possum v VicForests court case. We've also seen an increasing reduction in old-growth-forest and rainforest values across Australia under logging operations that are given an exemption, a rolling conditional waiver, from national environment laws.
2.41
Professor David Lindenmayer asserted that the RFA framework has failed to deliver adequate environmental protection, stating:
1. The Regional Forest Agreements were designed to protect Australia’s forest biodiversity. They have clearly failed to do this...This is highlighted by significant declines in a number of Australian forest-dependent threatened species…
3. The Regional Forest Agreements were designed to ensure that areas of high conservation value are not logged…Recent analyses have shown that there have been major breaches of logging prescriptions in Victorian water catchments…This underscores the failure of not only codes of forest practice, but also overarching initiatives such as [RFAs]…
6. [RFAs] fail to account for the interacting effects of logging and fire on the decline in forest biodiversity…
8. The basis for the Regional Forest Agreements is extremely dated. For example, the agreements do not account for other key drivers of forest integrity such as the effects of climate change…This is highly problematic for species that are at risk not only from the effects of climate change but also the impacts of logging operations.
2.42
These views were echoed by representatives of the Environmental Defenders Office (EDO), who expressed concern in relation to State regimes:
Key failings include the inadequacies of state forestry regulatory regimes to protect matters of national environmental significance, poor monitoring, inadequate compliance and enforcement by state agencies, inadequate transparency in timely reviews, and the inability to adaptively manage the impacts of climate change and be amended in light of catastrophic events such as bushfires.
2.43
Opponents of the bill also asserted that the RFA framework has failed to protect the economic viability of the native forest industry or to deliver long-term economic certainty. For example, the Wilderness Society stated:
The needs of the industry have not been met, with sawmill closures, job losses and reductions in wood volume availability (due to mismanagement and the impacts of successive bushfires, which in themselves are now more frequent and severe due to the impact of logging).
2.44
ICON Science expressed similar views in its submission. At the committee’s public hearing, representatives of ICON Science further observed:
[O]ur threatened species cannot tolerate further erosion to their protection. Despite the regional forest agreements being explicitly designed to protect Australia's forest biodiversity, there have been significant declines in a large number of forest-dependent species…These declines are linked explicitly to the extent of logged forest in the landscape.
…[The bill] is not actually the right direction for the forestry industry. The industry needs more credibility in the environmental space…not less. This proposal will do little to stem the substantial public concern for threatened species in logged native forests. It will not make the problem go away. If anything, it will likely exacerbate it.
2.45
Submitters and witnesses who raised concern regarding potential flaws in the RFA framework also emphasised that the bill does not address these failings, but instead may exacerbate them by removing an important mechanism for Commonwealth oversight. For example, representatives of Doctors for the Environment Australia (DEA) stated:
It is our view that this bill represents blatant prioritisation of the interests of the forestry industry, irrespective of the costs. It does nothing to address the fundamental failings of RFAs to provide adequate protection to our forests and native species. Rather, ensuring that responsible entities cannot be held accountable under federal law, even when RFAs are breached, is likely to exacerbate RFA failings. It's also likely to be insufficient to address the issues facing the native forest industry.
2.46
LEAN expressed similar views in its submission, also expressing concern that the bill would weaken Commonwealth oversight.
2.47
Ms Margaret Blakers noted that if the bill were passed (thereby removing or at least weakening Commonwealth oversight of RFAs), other industries may seek similar state-based arrangements. According to the submitter, there would be ‘no logical reason to refuse them’.
Consistency with the findings and recommendations of the Samuel Review
2.48
The Explanatory Memorandum notes that the Interim Report of the Samuel Review recommended addressing the uncertainty around the operation of subsection 38(1) of the EPBC Act highlighted by VicForests.
2.49
In addition, the Explanatory Memorandum states that the Interim Report of the Samuel Review ‘made it clear’ that under a regional model of empowering the states, oversight functions would be the responsibility of the States through accredited frameworks (as occurs with RFAs).
Arguments that the bill is inconsistent with the findings and recommendations of the Samuel Review
2.50
Several submitters who opposed the bill asserted that the proposed measures are inconsistent with the letter or spirit of the Samuel Review’s findings and recommendations. For example, Lawyers for Forests Inc (LFF) observed that the that the Final Report of the Samuel Review found that Commonwealth oversight of environmental protections under RFAs is insufficient, and that ‘immediate reform’ is needed. LFF asserted that the bill ‘in no way supports this recommendation’. FoLP similarly asserted that the bill takes the opposite approach to that recommended by the Samuel Review, noting that while the Review recommended a significant increase in Commonwealth oversight, the measures in the bill amount to an ‘abrogation’ of the Commonwealth’s duty to protect MNES.
2.51
WWF Australia stated that the bill ignores the ‘fundamental shortcomings’ of in the interactions between RFAs and the EPBC Act which were identified in the Samuel Review, as well as the finding that the Commonwealth should increase the level of environmental protection afforded by RFAs. LEAN similarly argued that the Samuel Review was ‘crystal clear that RFAs are a failed policy and need urgent review’, noting that the Review highlighted the misalignment between RFAs and protections under the EPBC Act for MNES.
2.52
Some submitters also observed that the measures proposed by the bill may be premature in light of the substantial reforms to the EPBC Act recommended in the Samuel Review. For example, the Wide Bay Burnett Environment Council Inc (WBBEC) asserted that:
WBBEC does not consider the [bill] to be part of a meaningful response to the [Samuel Review] and is concerned that [the bill] was brought before Parliament before the Final Report from the Review was publicly available.
…
The [measures proposed in the bill] represent a significant change to existing environmental regulation, in that [they] attempts to circumvent the Environment Protection and Biodiversity Conservation Act, despite a Court ruling that the Act does in fact apply to forest areas subject to Regional Forest Agreements. WBBEC is concerned that [these measures are] premature, especially as the [EPBC] Act is to be subject to major amendment as a result of the Independent Review.
2.53
Finally, some submitters asserted that the bill attempts to ‘cherry pick’ aspects of the EPBC Act—in direct opposition to the recommendations of the Samuel Review. For example, DEA stated:
The Samuel report specifically warns that “governments should avoid the temptation to cherry pick from a highlight interconnected suite of recommendations”. Reform of the RFA framework must be seen as part of a much broader overhaul of environmental law in Australia if the decline of our iconic places and the extinction of our most threatened plants, animals and ecosystems are to be arrested.
Arguments that the bill is consistent with the findings and recommendations of the Samuel Review
2.54
Submitters and witnesses supporting the bill did not generally consider whether the bill is consistent with the Samuel Review. However, some evidence provided by this cohort did argue that the bill may be consistent with the findings of the review in certain respects. For example, representatives of the AFPA observed that:
[W]hat Samuel's review identifies is that something like the RFAs is an appropriate way to manage something as complex as forestry. We were perplexed by what Samuel's review actually wanted in terms of the management of forest industries, because the proposition in Samuel's review is actually the sort of thing that you find iterated in RFAs anyway.
2.55
Representatives of VicForests argued that the measures in the bill may not in fact reduce Commonwealth oversight. Rather, the measures would reinstate the understanding of the obligations and dispute management processes in the RFA. In this respect, VicForests stated:
Commonwealth officials have the ability to take steps under the [RFA] to manage issues if they believe there is a concern that matters of national environmental significance are not being managed.
2.56
Evidence provided by DAWE also indicated that the Commonwealth would retain at least a degree of oversight in relation to RFAs—for example via the ability to terminate an RFA.
Clarifying the intent of the EPBC Act
2.57
The Explanatory Memorandum states that the measures proposed by the bill will ‘affirm and clarify’ the Commonwealth’s intent regarding RFAs, to make it clear that forestry operations in a RFA region are exempt from Part 3 of the EPBC Act, and that compliance matters are to be dealt with via the applicable State regulatory framework. It also states that the intent of the Commonwealth and RFA signatory States has always been for subsection 38(1) of the EPBC Act to be interpreted as ‘any forestry operation that happens in an RFA area’.
Arguments that the bill merely clarifies the policy intent of the exemption in subsection 38(1) of the EPBC Act and subsection 6(1) of the RFA Act
2.58
Generally, submitters and witnesses supporting the bill also expressed their support for the views set out in the Explanatory Memorandum. For example, the AFPA asserted that the intent of the Commonwealth and the States has always been for subsection 38(1) to be interpreted to mean ‘any forestry operation that happens in an RFA area’. Representatives of the AFPA elaborated on this issue during the committee’s hearing, stating:
It's pretty clear to most people who have been around the industry for a long time and understand RFAs that the particular clause that [the amendments in the bill are] seeking to address has been misinterpreted, if I can put it that way. It's certainly been given a different interpretation from what it's been for the last couple of decades, and that's what's created the uncertainty. The amendment does nothing more, really, than seek to create clarity. It's not a change; it just puts back into place the certainty that has been there for the last couple of decades.
…
The decision was made some 20 years ago that [the RFA framework] was the best way to manage forest industries in Australia in a sustainable way that met those triple objectives of environmental, social and economic outcomes for our nation, and that’s been the case. All we’re asking for…is for that to continue as it was always intended.
2.59
Midway similarly observed that it has always been the intent of the parties to an RFA that the exemption in subsection 38(1) of the EPBC Act be interpreted to apply to any forestry operation conducted in an RFA area. Midway also noted that—contrary to the findings in VicForests—it has never been the intention of parties to an RFA that operations would cease to be ‘in accordance with an RFA’ for the purpose of the EPBC Act in the event an operation breaches state regulations. Midway pointed to dispute resolution procedures within RFAs which, according to Midway, indicate that the consequences of such breaches are to be resolved between the parties to the RFA.
2.60
Representatives of the CFMEU echoed these views during the committee’s public hearing. For example, Mr Michael O’Connor, National Secretary of the CFMEU Manufacturing Division, stated:
We believe that, if the bill…is passed, it will restore the original intention of the legislation, which was to provide certainty for the timber industry, for the forestry industry, for people's employment and for the communities that rely on the industry.
…I know what the original intention was because I was there during those debates, during those discussions, with successive ministers involved in the forestry industry and the timber industry.
Arguments that the bill creates or broadens exemptions from the EPBC Act
2.61
Some submitters and witnesses opposing the bill asserted that there is little or no evidence to support the claim that the intent of the Commonwealth and the RFA signatory States has always been for the exemption in subsection 38(1) to be interpreted so as to apply to any RFA forestry operation conducted in an RFA area. For example, LFF observed that the history of that provision and the accompanying Explanatory Memoranda ‘in no way suggest that the words “that is undertaken in accordance with an RFA” were supposed to be devoid of meaning’. In this respect, LFF stated:
When the EPBC Act was passed in 1999. the original wording of section 38(1) was very similar to the current wording. It read:
38 Approval not needed for forestry operations permitted by regional forest agreements
(1) A person may undertake RFA forestry operations without approval under Part 9 for the purposes of a provision of Part 3 if they are undertaken in accordance with a regional forest agreement.
The Explanatory Memorandum at the time expressly stated (with underlining added) “RFA forestry operations that are undertaken in accordance with a regional forest agreement do not require approval for the purposes of any provision in Part 3.”
In 2002 the EPBC Act was amended to the current wording, with the passing of the Regional Forest Agreements Act 2002. Again, the Explanatory Memorandum specifically referred to the words that this Bill seeks to remove. It stated (with underlining added), “This item repeals section 38 of the EPBC Act and provides that Part 3 of the Act does not apply to an RFA forestry operation that is undertaken in accordance with an RFA.
2.62
DAWE similarly indicated that the measures proposed by the bill may go further than simply clarifying the Commonwealth’s intent regarding the exemption in subsection 38(1) of the EPBC Act. In this respect, DAWE stated:
[The bill] seeks to increase the scope of the exemption for RFA forestry operations from approval requirements of the EPBC Act.
…
[The bill] would remove the Australian Government’s regulatory environmental protections, such as penalties and other remedies, under the EPBC Act if the forestry operation is not undertaken in accordance with the relevant RFA.
2.63
DAWE also noted comments by the (then) Environment, Communications, Information Technology and the Arts Committee on the EPBC Bill, which stated:
Activities which are in breach of an RFA and have a significant impact on a matter protected under the Bill will be subject to substantial civil penalties and remedies such as injunctions under clause 475 [now s 475 of the EPBC Act]. The Committee considers that the Bill therefore provides a strong incentive for compliance with RFAs.
Committee view
2.64
The committee has heard substantial evidence that the native forestry industry is and will remain distinct from plantation forestry, and adds significant value to regional communities as well as a broad spectrum of end users of hard wood products throughout Australia. Evidence also made clear that prior to the Federal Court decision of 10 May 2021—in relation to VicForests’ appeal to the decision in Friends of Leadbeater’s Possum Inc v VicForests (No. 4) [2020] FCA 704 (‘VicForests’)—the native forestry industry was facing considerable uncertainty, with the prospect of further financial impacts and job losses. Evidence suggests that much of this uncertainty stemmed from the potential for legal and other challenges to forestry operations in RFA areas. A substantial number of stakeholders urged the committee to pass the present bill as a matter of urgency, to deliver operational certainty for the sector.
2.65
Given the potential for a further appeal, the committee is of the view that there is a clear need to deliver certainty to the native forestry industry, and considers that the bill would likely achieve this aim by making clear that RFA forestry operations are exempt from Part 3 of the EPBC Act. However, in doing so the bill would remove Commonwealth oversight, leaving the regulation of forestry operations entirely to the States. This is not consistent with the broader approach being taken with the review of the EPBC Act.
2.66
The committee notes that views are divided on whether the RFA framework—including State-based regulatory regimes—are effective in terms of protecting the environment and ensuring the sustainability of the native forestry sector. The committee has heard from environmental advocacy groups that the RFA framework has failed to protect forest biodiversity or provide resource security to industry. Industry groups—recognising the need to ensure that forestry operations are conducted in an environmentally responsible manner—have argued that current State-based regulation is both comprehensive and robust, and indeed may go beyond the EPBC Act in terms of operational restrictions and environmental safeguards.
2.67
While the committee acknowledges that State-based environmental and other safeguards are often effective, the committee is concerned to ensure that the Commonwealth retains oversight of RFAs through the EPBC Act—consistent with the Final Report of the Samuel Review. Consequently, while the committee supports the overarching purpose of the bill in terms of delivering operational certainty to industry, it does not support the proposed amendments as currently drafted. In this respect, the committee notes that the amendments as currently drafted would provide regional forestry an unconditional exemption to the EPBC Act, unless the Government fails to use the time afforded by the 10 May 2021 decision to provide more certainty through improved governance under the RFA framework.
2.68
The committee is of the view that while the effect of current subsection 38(1) of the EPBC Act and subsection 6(4) of the RFA Act (which provide conditional waivers as opposed to exemptions) should be retained, those provisions require clarification in order to strike a balance between safeguarding the environment and enabling a sustainable and economically viable native forestry industry. The committee therefore considers that it would be appropriate to amend the EPBC Act and the RFA Act to insert a test of judgment, which would enable native forestry operations covered by an RFA to remain exempt from Part 3 of the EPBC Act despite minor breaches of often very prescriptive State-based regulations, so long as the operations are conducted in accordance with accepted environmental standards and accepted best practice. The committee considers that such measures should be developed and introduced as a matter of some urgency, so as to deliver necessary operational certainty to the native forestry industry and inform parties considering an appeal to the 10 May 2021 decision.
2.69
The committee recommends that the Australian Government expedite the necessary changes to the Regional Forest Agreements (RFA) framework to ensure that that the framework delivers operational certainty for the native forestry industry.
2.70
The committee recommends that the Australian Government expedite amendments to the Environment Protection and Biodiversity Conservation Act 1999 and the Regional Forest Agreements Act 2002 which introduce a test of judgment—similar to the test which applies to company directors under the Corporations Act 2001—in order to appropriately balance environmental protection with the operational realities of the field-based operations of the native forestry industry.
2.71
In the event that the Federal Court decision of 10 May 2021—in relation to VicForests’ appeal to the decision in Friends of Leadbeater’s Possum Inc v VicForests (No. 4) [2020] FCA 704—is appealed and at that time the Australian Government has not legislated the outcome required by Recommendation 1, the committee recommends that the Senate pass the bill.
Senator the Hon David Fawcett
Chair