Chapter one - Introduction and industry overview
Terms of Reference
1.1
On 27
June 2002, the Senate referred the following matter to the
Rural and Regional Affairs and Transport References Committee for inquiry and
report by 12 December 2002:[2]
Taking into account the findings
of the Private Forests Consultative Committee’s review of ‘Plantations for Australia: The 2020 Vision’ which is due to report to the
Primary Industries Ministerial Council in November 2002:
(a)
whether there are
impediments to the achievement of the aims of ‘Plantations for Australia: The 2020 Vision’ strategy;
(b)
whether there are
elements of the strategy which should be altered in light of any impediments
identified;
(c)
whether there are
further opportunities to maximise the benefits from plantations in respect of
their potential to contribute environmental benefits, including whether there
are opportunities to:
(i)
better integrate
plantations into achieving salinity and water quality objectives and targets;
(ii)
optimize the
environmental benefits of plantations in low rainfall areas; and
(iii)
address the
provision of public good services (environmental benefits) at the cost of
private plantation growers;
(d)
whether there is
the need for government action to encourage longer rotation plantations,
particularly in order to supply sawlogs; and
(e)
whether other action is
desirable to maintain and expand a viable and sustainable plantation forest
sector, including the expansion of processing industries to enhance the
contribution to regional economic development.
1.2
On 25
September 2002 the Senate agreed to extend the time for
presentation of the report until the last sitting day in August 2003.[3] Subsequent
extensions to the reporting date were provided by the Senate, with the final
reporting date being 2 September 2004.
Conduct of the Inquiry
1.3
In July 2002, advertisements calling for submissions to
the inquiry were placed in The
Australian, The Sydney Morning Herald, Queensland Country Life, The Mercury
(Hobart), The Examiner (Launceston), The Land and the Stock Journal.
1.4
The inquiry was also advertised in the national press,
as well as the Albany Advertiser and The West Australian, in September 2002,
prior to the Committee’s hearing in Albany
on 11 October 2002.
1.5
Advertisements were also placed in The Advocate (Burnie), The
Examiner (Launceston) and The Mercury
(Hobart) in November
2002, prior to the Committee’s Launceston hearing on 29 November 2002.
1.6
In addition to advertising in the press, the Committee
also wrote directly to a number of interested persons and organisations advising
of the inquiry and inviting submissions. The Committee also extended the date
by which submissions would be received to allow all parties the maximum
opportunity to contribute and respond to the issues raised. Submissions
continued to be received throughout the inquiry.
1.7
The Committee received 90 written submissions[4] on the
reference. A list of submissions is provided in Appendix 1.
1.8
Approximately half of the submissions received were
from organisations, groups and individuals in Tasmania.
Submissions were also received from Western Australia,
Victoria, New South Wales,
Queensland and the ACT.
1.9
Following referral of the inquiry, the Committee held a
series of eight hearings in the following locations:
Albany 11 October 2002
Launceston 29 November 2002
Canberra 20 February 2003
Canberra 21 February 2003
Canberra 5 March 2003
Hobart 29 April 2003
Launceston 6 August 2003
Canberra 8 October 2003
1.10
The Committee notes that a hearing in Launceston on 6 August 2003 had to be
abandoned due to a lack of cooperation from the public, including a member of
the Tasmanian House of Assembly. The Committee took a decision to hold the
hearing in camera to receive the evidence from one witness, Mr
Bill Manning.
The Chair informed the hearing of this decision and Senator Brown
indicated his objection. The Chair's request to vacate the hearing room was met
with resistance. The Committee believes that such disorder detracts from its
work and is therefore regrettable.
1.11
Mr Manning
gave evidence in public in Canberra
on 8 October 2003.
1.12
The Committee anticipated completing its hearing
program following the hearing held in Hobart
at the end of April 2003. However, following the Committee’s consideration of
further submissions to the inquiry and the response to these submissions by the
Tasmanian Government, the Committee decided to pursue those matters as part of
its inquiry.
1.13
This part of the Committee's inquiry process proved to
be a lengthy procedure. As a result, the Committee did not complete its
hearings and various follow-up inquiries until the end of 2003.
1.14
The Committee worked with draft versions of the Plantations for Australia: The 2020 Vision
document until July 2003 when a copy of the final pre-print draft was made
available to the Committee. A final version of the 2020 Vision was released on the Plantations 2020 website in
November 2003.
1.15
The Hansard
transcript of all public hearings is available on the Hansard website at www.aph.gov.au.
1.16
The Committee took evidence from 52 witnesses,
including individuals with an interest in the plantation forestry industry,
representatives of industry organisations, conservation groups, local councils
and community organisations. The Committee also took evidence from representatives
of government bodies - both Commonwealth and State. A list of witnesses is
provided in Appendix 2.
1.17
During the inquiry, the Committee undertook several
days of inspections and briefings in Tasmania.
On 28 November 2002,
the Committee’s inspection tour included: forest operations at Ulverston; a
meeting with members of the Preolenna community at the Preolenna Hall; a visit
to a Timber Veneer Mill at Somerset
and a guided tour of the Moorleah, Preolenna and Meunna areas. Part of the
Committee's tour was hosted by representatives of Timber Communities Australia,
Private Forests Tasmania,
Gunns Plantations, Forest Enterprises Australia and Forestry Tasmania. The
afternoon's inspections were hosted by Ms
Colleen Bibley
and Mr Malcolm
Ryan.
1.18
The Committee notes that Mr
Alistair Graham,
who appeared before the Committee in Hobart
on behalf of the Tasmanian Conservation Trust,
suggested that the residents who met the Committee on its visit to Preolenna
had been bussed in. He indicated that only "three were residents; the rest
were not.".[5]
1.19
The Preolenna community responded to Mr
Graham's comments, and the Committee
subsequently took evidence on the matter. It was assured that "the 13
community members that were here [in Preolenna for the Committee's visit] were
not bussed in and we are certainly not play actors".[6] The Committee
is satisfied by these assurances and places no reliance on the initial evidence
in this regard.
1.20
On 30
April 2003 the Committee, hosted by Mr
Frank Strie
and Ms Margy Dockray, toured areas of Tasmanian forestry operations. The
itinerary involved travel via Nunamara, Patersonia, the Lisle
Valley and Scottsdale.
The Committee inspected a second-rotation pine plantation, a former cable
logging coupe on the eastern side of Weld Hill and several areas that had been
converted from native forest to plantation forestry coupes.
1.21
On 1 May
2003, the Committee undertook an inspection tour of areas
between Launceston and Lorrina, accompanied by Ms
Geraldine de Burgh
Day. During this tour, the Committee inspected a number of coupes that had been
clear-felled for plantation conversion, as well as an area of forest that had
been selectively logged in 2000 for use in the construction of a residence.
1.22
The Committee also visited the University
of Melbourne’s Forest Science
Centre at Creswick (Victoria) for an inspection
and briefing on 21 March 2003.
1.23
The subject of the Committee's inquiry - the plantation
forest industry - is one which is emerging as a significant contributor to the
world's increasing requirements for wood
and non-wood forest products. A recent research report prepared for the
Australian Bureau of Agricultural and Resource Economics (ABARE) indicated that
plantations represent less than 3 per cent of the world's forest resources. Yet
it is estimated that plantations supply approximately one-third of the world's
supply of industrial roundwood[7] and
approximately 10 per cent of the global fuelwood resource. The report also
acknowledges that despite the increased importance of plantations as a focus
for international forest policy, the exact role of plantations is not well
understood.[8]
1.24
It is a complex industry with some marked regional
differences. This section provides the context of the Committee's inquiry - an
overview of the industry in Australia
- and highlights significant recent trends.
Australia's
Plantation Estate
1.25
The majority of Australia's
plantation resource is concentrated along the southern and eastern coasts, Tasmania
and Western Australia.
1.26
Commercial plantation forests have been established at
an average 87,000 hectares per year over the last five years, with the majority
of this new development happening on land that was previously used for
agriculture.[9] Australia's
plantation estate (as at December 2002) totalled 1,627,800 hectares of which
987,900 hectares (61 per cent) are softwood species and 638,300 hectares (39 per
cent) are hardwood species. Note that WA (37%), Victoria
(23%) and Tasmania (22%) have the
majority of Australia's
hardwood plantations.
Table
1: Total area of plantations by State, December 2003
|
State
|
Hardwood
|
Softwood
|
Unknown
|
Total
|
Australian
Capital Territory
|
65
|
5,264
|
0
|
5,329
|
New
South Wales
|
50,
977
|
280,
251
|
0
|
331,
228
|
Northern
Territory
|
4,448
|
3,817
|
0
|
8,265
|
Queensland
|
30,
520
|
181,
088
|
1,247
|
212,855
|
South
Australia
|
37,119
|
120,493
|
261
|
157,
872
|
Tasmania
|
146,641
|
76,104
|
0
|
222,745
|
Victoria
|
154,
650
|
211,961
|
0
|
366,
611
|
Western
Australia
|
251,
542
|
109,
246
|
0
|
360,788
|
Total
|
675, 962
|
988,233
|
1,508
|
1,665,693
|
|
41%
|
59%
|
|
|
National Plantation Inventory Australia, 2004 Update, Bureau of Rural Sciences,
Canberra, March 2004, p. 2.
1.27
In Tasmania:
The reduction in the native forest estate over the six year
period from 1997/98 to 2002/2003 amounts to approximately 80,000 ha (2.55 of
the estimated 1996 native forest estate) as a result of conversion (mainly for
plantation or agriculture).[10]
1.28
Over half the wood supplied to Australian industry is
currently sourced from plantations. Significant increases in plantation wood
supply are projected over the next 20 years, particularly in relation to
hardwood and pulpwood. Mature softwood plantations are currently supplying
large-scale domestic processing facilities.[11]
1.29
Two-thirds of the wood produced in Australia
now comes from plantations (18.4 million m3
from softwood and hardwood plantations compared with 10.1 million m3 from native forests in 2002/03).
1.30
Most plantation wood is milled for sawntimber and
veneer (9.5 million m3 or
57% of softwood produced in 2002/03 was sawntimber or veneer, 4.9 million m3 was pulpwood, and 2.3 million m3 was used for other purposes). Most native
forest wood is chipped. In 2002/03, 6.7 million m3
(66%) was chiplogs and 3.0 million m3
(30%) was sawlogs and veneer.[12]
1.31
Plantation
wood production (softwood and hardwood) totalled 18.4 million m3 in 2002/03 compared with a projected
availability for the period 2001-04 of 17.7 million m3.[13]
For the five years beginning in 2005, plantation wood supplies are projected to
increase by 33% to 26.2 million m3
per annum. Supplies of plantation hardwood pulplogs will increase by 250% to
8.3 million m3 per annum, far exceeding
the woodchip volume currently taken from native forests.[14]
1.32
Although softwoods still make up the majority of Australia's
total plantation resource, the area of hardwood species has expanded rapidly.
The hardwood proportion of the plantation estate now stands at 41 per cent.[15]
1.33
The volume of timber harvested from Australian
plantations has increased during recent years, as large areas of softwood
planted during the 1960's and 1970's reach maturity. Plantation
softwood is the dominant raw material in many commodity and wood products that
traditionally used native hardwoods.[16] Substitution
of plantation timber for native timber has become a feature of the domestic
market and this trend is likely to continue into the future as the plantation
resource continues to develop.[17] Softwood
plantations are currently producing both sawlogs and pulp logs. These are
processed into products which include:
-
structural grade timbers;
-
appearance grade timbers;
-
industrial grade timbers;
-
wood-based panels (including plywood,
particleboard, MDF and LVL); and
1.34
Pinus radiata
constitutes approximately two thirds of Australia's
total area of softwood species. In Queensland,
other softwoods, including Araucaria
cunninghamii and P. caribaea and P. elliottii
have also been planted, and Western Australia
has a considerable P. pinaster resource.[19]
1.35
Australia's
hardwood plantations are primarily planted with Eucalyptus species, supplemented by a small proportion of tropical
rainforest and other hardwood species. Eucalyptus
globulus makes up over 60 per cent of plantings of hardwood species. Other
eucalypts make up approximately 19 per cent.[20] These
hardwood plantations have primarily been planted for the production of pulpwood.
However, higher grade logs are being grown in several locations and being used
in the solid wood industry. The majority of Australia's hardwood plantations are still in the early stages of
development. These volumes of fibre will not be available for a number of
years.[21]
1.36
During the early years of the plantation forestry
industry, many of the major costs associated with establishing and managing
plantations were met by governments. More recently, however, there has been an
increasing trend in Australia
toward the commercialisation or privatisation of government-owned assets. More
than 80 per cent of plantations in Australia
are currently owned and/or managed by approximately 16 organisations, including
both state government agencies and private sector businesses.[22]
Supply and Consumption of Wood and Wood Products
1.37
Domestic supply of wood and wood products has increased
over the last decade. Despite cyclical variations, there has also been a slight
increase in the total consumption of wood and wood products during the same
period. At the same time, however, the per
capita consumption of wood products has declined over the past 20 years. A
recent BRS State of the Forests Report attributes this
decline to population growth and some substitution of wood products in the
construction industry (largely with non-timber products that offer a range of
advantages other than price).[23]
1.38
The report also argues that there is a clear trend
towards import replacement in relation to the consumption of sawn timber and
wood-based panels. However, high value paper and paper products continue to
provide a significant share of domestic consumption. In 2001-02, the total
value of imports was $3578.4 million with 68 per cent attributed to paper,
paperboard, paper manufactures, wastepaper and pulp imports. Australia's
importation of paper and paper products in 2000-01 was more than double that in
1990-91, and it is expected that consumption will increase in the near future -
in line with rising incomes.[24] However, it
was argued that even if consumption of paper products was to increase, it does
not necessarily mean increased consumption of wood or wood fibre because the
industry is investing strongly in wood-saving technologies. For example, in
1970, the global paper industry used an average 0.8 tonnes of wood pulp to make
a tonne of paper; today it needs only 0.5 tonnes of wood pulp per tonne of
paper.[25]
1.39
Since Regional Forest Agreements were implemented in
1997 and controls on the export of woodchips lifted, exports of native forest
woodchips, whole logs and plantation logs and woodchips has increased.
1.40
Domestically, there has been an increasing supply of
sawnwood over the last ten years. There has also been a trend towards import
replacement; the proportion of demand met by domestic supply rose from 56 per
cent in 1990-91 to 79 per cent in 2000-01.[26] There has
also been an increase in Australia's
production of wood and wood-based panels during the last decade. Primarily,
this increase has been brought about by an expansion of exports, particularly
of particleboard and medium density fibreboard. In 2000-01, domestic supply of
wood and wood-based panels accounted for 83 per cent of domestic consumption,
following a peak of 87 per cent in 1997-98.[27]
1.41
Exports of wood-based panels have increased by
approximately 100 per cent since 2001. It is anticipated that any further
increases in the domestic demand for wood-based panels are likely to be met by
imports, because the size of mills required for economic production may exceed
the likely requirements of Australia's
small market.[28]
1.42
Paper and paperboard production has also increased
gradually during the past 10 years, but was outgrown by consumption. The
proportion of domestic supplies consumed locally was 70 per cent in 1990-91 and
dropped to 62 per cent in 2000-01. In 2000-01, printing and writing paper
accounted for about half the total volume of paper and paperboard imports. The
proportion of printing and writing paper imported (as a share of total paper
and paperboard imports) increased from 58 per cent in 1991-92 to 61 per cent in
2000-01.[29]
Changes within Australian Forest
Industries
1.43
There have been several major changes in Australian
forest industries since the early 1990's. The changes include an increasing use
of plantation timber (as an alternative to native forest timber) for commodity
wood products, a shift toward the privatisation of public resources and an
increase in both domestic and foreign investment (amounting to more than $6.5
billion) in the forestry industry - particularly the plantation sector.[30] The clearing
of native vegetation to establish plantations is a major issue, especially in Tasmania.
1.44
New investment in forest establishment and
wood-processing has occurred in each State and Territory and it is the further
expansion of Australia's
processing capacity which, it is argued, has the potential to have a positive
impact on regional and economic development:
Australia's
plantations are distributed across 15 regions and provide a wood resource for
decentralised industries as evidenced by established softwood processing
industries in a number of regions. Although eucalypt plantations grown on short
rotations (10-15 years) are currently the major component of new plantations
development, there is relatively little associated processing capacity, apart
from chipping for export. Expansion of softwood processing, and development of
hardwood processing industries could stimulate regional development and reduce
the national deficit in forest products trade currently running at
approximately $2 billion p.a.[31]
1.45
Australia's
forest industries have undergone sweeping changes in the last ten years and the
potential exists for even more radical change during the coming decade. The Forest
and Wood Products Research and Development Corporation's latest Research and
Development Plan (2003-2008) outlines the factors which will impact the
development of forest industries. These include:
-
Market Dynamics - the need to address the
needs of customers; to maintain existing markets and create new ones
(particularly with increased competition from other suppliers and non-wood
products); to promote the sustainability of wood products and to develop
non-wood markets (including salt, carbon, energy and biodiversity).
-
Industry Competitiveness/Image - issues
to be considered are the globalisation of the industry, the scale of production
and global sourcing, capital investment opportunities and new technology,
infrastructure development and supply chain solutions, resource expansion
(including access to land, finance and genetic resources) and human resource
issues (ie. attracting people with appropriate skills).
-
Demand/Supply Balance - the industry will
need to be mindful that there is an increasing softwood supply and an increase
in the number of hardwood plantations, that there is declining access to native
forests (and highest quality hardwood resources), that there is a higher
proportion of juvenile wood (which raises issues of fitness for purpose for
current and future products) and that there will also be competition from
non-wood products.
-
Developing Products - it will be
important to improve the performance and promote the quality of wood-based
composites; to optimise product performance and processing and to understand,
evaluate and control wood and fibre properties for current and future products.
-
Changing Wood and Fibre Uses - the uses
for wood and fibre have changed. The use of recycled fibre (paper and solid
wood) has increased and there is an increased availability of high performance
paper and paperboard.
-
Resources and the Environment - there has
been considerable change in this area: forestry is now being integrated with
traditional agriculture, there is increased land use planning to achieve
commercial and environmental benefits from planted forests and forestry is seen
as having the potential to deliver environmental services (including
amelioration of land and water degradation, carbon sequestration and
biodiversity enhancement).[32]
1.46
The Research and Development Plan also argued that, as
part of the inevitable, ongoing changes within Australia's
forest-based industries, the factors listed above need to be considered as part
of a framework that includes the overarching principles of environmental and
social sustainability. Issues such as sustainable forest management,
certification, labelling and chain of custody, increasing consumer awareness,
more efficient use of energy, reducing waste and increasing recyclable products
have also become important considerations.[33]
1.47
In addition to environmental and social sustainability,
the forestry industry has also been examining ways to become economically
sustainable. Historically, the expansion of plantation forests has primarily
been driven by domestic demand. Export opportunities to Asia,
carbon sequestration and land rehabilitation now have the potential to
influence the further development of the industry.
The Committee's Report
1.48
The focus of the Committee's report is the Plantations for Australia: The 2020 Vision
(2020 Vision or 'the Vision')
document. The Committee's terms of reference requires it to address a number of
questions and these questions form the basis for the structure of the report.
1.49
The preparation of the revised Plantations for Australia: The 2020 Vision in the period 2001-03 is
detailed in Chapter Two. The discussion includes an analysis of the review
undertaken by the Private Forestry Consultative Committee in redrawing the 1997
2020 Vision at the request of the
Forestry and Forest Products Committee. It also outlines the Primary Industries
Ministerial Council's consideration of the 2020
Vision and its approval in late 2002.
1.50
In Chapter Three the Committee defines the impediments
to achieving the 2020 Vision strategy
and examines the related vision targets and economic and regulatory issues.
1.51
Impediments are further considered in Chapter Four. The
focus of this discussion is on the environmental issues and social and
community issues that emerged during the inquiry.
1.52
Chapter Five examines the question as to whether there
are further opportunities which would maximise the potential for forest plantations'
to contribute to environmental benefits.
1.53
Chapter Six examines the future of plantation-sourced
sawlog, including the impediments to future investment in longer rotation
plantations.
1.54
The future viability and sustainability of forest
plantations is considered in Chapter Seven. The Committee notes the link
between the investment environment and markets and processing industries.
1.55
Chapter Eight examines
the impact of the plantation industry in Tasmania. The Committee's decision to devote a
chapter to Tasmania was made in the light of the substantial
evidence received during the inquiry relating to Tasmania.
1.56
In Chapter Nine, the Committee separately discusses Strategic
Element 5, particularly the issue of how the accountability of the proposed
review process in 2020 Vision might
be monitored and makes recommendations for the monitoring of the overall revised
2020 Vision achievement.
Acknowledgements
1.57
The Committee acknowledges the participation and
contribution of all those individuals and organisations who prepared
submissions or who appeared as witnesses during the hearing process.
1.58
In particular, the Committee acknowledges the
assistance provided to it by the Bureau of Rural Sciences, the Co-operative
Research Centre for Sustainable Production Forestry, and the Forest
and Wood Products Research and Development Corporation, and to those
individuals and organisations who provided material to the Committee in response
to questions taken on notice and subsequent correspondence with the Committee.