Survivors ... Forestry chiefs Minister Green (right) and Bob Gordon

On 1 October this year the ABC reported that 22,000ha of the State forest was “tied up” and “in limbo” through its hosting of Gunns plantations.

The ABC reporter apparently did not record how Gunns came to convert and occupying 220 square kilometres of public forest with a mainly pulpwood crop, destined for its own use rather than for market.  Economic Development Minister David O’Byrne could not say what liability the Government stood to absorb. We don’t know why FT agreed to terms which allowed a private company to tie up a government on public land,  whether there were additional parties, such as MIS investors, involved, or why a corporation such as FT seemed to have no fiduciary duty of care to its public owners.

But this is only the latest in the succession of arresting anomalies that have emerged from the FT smoke since its creation.

The 2012 Forestry Tasmania figure show that 105,35ha of State Forest have been converted to plantation, with 56,010ha owned privately, 34,630 being managed by FT, and 14,710 being joint ventures of FT and private interests. What is the rationale for the public?

Perhaps most prominent of oddities is the disappearance of over 220,000ha from the State Forest since 2000, from 1.72million ha to its present 1.490,000 in its 2012 “stewardship” figures.  121,000 disappeared very quietly in the 2000-01 Annual Report to what was reported as “reclassification”. When I asked FT its fate, I was told it had gone to P&W management. When I asked P&W, they didn’t know where it was.

This was the same year as the bizarre “Land Swap”, where an alarmed Land Titles Office clerk leaked the fact that a huge land transaction was not a swap at all, but the surreptitious deeding of most of the State Forest plantation estate (already managed by FT)  to FT in freehold, with no evidence that FT had surrendered or paid anything in return.

While acknowledging he had been prodded into an investigation by the AFR, the Auditor-General reported in 2004 that he was satisfied that the “swap” was in order, though he admittedly couldn’t locate the land supposedly surrendered to the Crown by FT, nor explain how FT would have possessed sufficient taxable freehold forest to pay for the 77,809ha of mainly plantation that had been given to them.

While FT claimed its freehold windfall was still State Forest,  its Annual Reports showed the SF plantation estate had declined from 83,000ha in 1999/2000 to 24,000ha in the 2000-01.

Though it received little public notice, one of FT’s most audacious feats was its 2007 Heads of Agreement for Long Term Pulpwood Supply Agreement with Gunns.  Although lavishly concessional to Gunns, this agreement was annotated to be consolidated with the subsequent Pulpwood Supply Agreement, and to operate independently of the pulp mill project.

The biggest jaw-dropper in the Heads of Agreement was s7: 

.7 Road responsibilities and transfers.
Unless otherwise advised by FT, Gunns will be responsible for new roading within the Stumpage Zone to coupes they plan to log. In addition at such times the parties will review ownership of the existing roads associated with the new road, and effect transfers of ownership if they agree terms. This will likely see a gradual change in road ownership across the stumpage zone.

The parties agree to work together to further consider and advise, by December 2008 on a plan to rationalise road assets with a view to keeping harvesting and roading with the same entity in each of the respective supply zones.

Did anyone act on these fabulous terms?

This cavalier approach to gifting private sector friends contrasts vividly with FT’s usual fierceness in opposing environmental reserves and legislation.  The Crown Lands Assessment and Classification Project (CLAC)  ran from 2004-2008 deciding the disposition of 184,000 ha of unallocated Crown land to public sale or allocation to government bodies. As late as last week, the Crown Lands Department confirmed they can still not provide figures on the amount of CLAC land allocated to FT. 

At least once, FT did encounter independent scrutiny, in the form of the US forestry auditor James W Sewall Co who was contracted to examine FT’s books.  In their 2010 report they noted that FT had incorrectly claimed the then 1.492m ha State Forest land as a financial asset.  When the $300,000,000 valuation FT assigned to it was duly subtracted, and the plantation estate valued at zero, the State Forest was deemed to be essentially worthless. But still an enormous liability to the Australian and Tasmanian public.

The following year saw newspaper reports of negotiations between FT boss Bob Gordon and the Tasmanian Aborigines, reportedly without Tas Government authority or knowledge , with the view of gifting up to 570,000ha of high conservation value State Forest to the latter, then leasing it back to FT. Mr Gordon remains in his position. 

It’s easy to see why both major Tasmanian parties would prefer to see FT cop an uncontested accusation of “crass incompetence” from John Lawrence and others, rather than face a “forensic audit” of FT’s accounts.

• Crikey: Data crunch: how many (con) jobs are there in Tassie forestry?

Climate and politics academics

According to Rene Hidding, Tasmania’s Liberal spokesman for forestry, it is “insulting” to Tasmanians to inform them about the tiny contribution the forestry and logging industries make to that state’s employment. Presumably he thinks it would be better to deceive the people?

For all of the analysis about what the collapse of the state’s forest talks means politically, there has been very little discussion about what its demise means for the Tasmanian economy. Maybe it’s because the answer is so simple; the logging industry is virtually irrelevant to the state’s economy.

According to the most recent census, less than 0.5% of the Tasmanian workforce is employed in forestry and logging (growing, maintaining and harvesting native and plantation forests). In the five years between the 2006 and 2011 census, while the Tasmanian economy created more than 12,500 new jobs, full and part-time employment in forestry and logging fell from 1447 to 975.

To put the forest industry in perspective, it is useful to compare it to the healthcare industry, which is Tasmania’s largest employer with 24,000 employees. Healthcare created around a quarter of all the new jobs in Tasmania between the latest census and the previous one. Over the same period, employment and production in the forestry industry fell by around 30%. In short, it is small and getting smaller.

If these figures take you by surprise, you’re not alone. According to a survey conducted by The Australia Institute earlier this year, on average, Tasmanians think that logging and forestry account for around 20% of all employment. They also think the forest industry accounts for 36% of the state’s exports—the reality is around 5%.

How could this be? How could the average Tasmanian confuse an industry that employs one in 200 Tasmanians with an industry that employs one in five? The most likely explanation is that after 20 years of intense conflict between the environment movement and loggers, the Tasmanian populace has confused the size of the political fight about these issues with the size of its economic significance. (The passion from both sides on conservation issues has been on display again in recent days over whether more mining should be permitted in the Tarkine region.)

The industry is always quick to point out that logging creates lots of jobs in transport and other sectors, but this is true for all industries. The tens of thousands of people employed in retail, construction, and manufacturing create far more jobs for truck drivers than the logging industry does.

And it is not only the general public that are confused about the forces at play. The federal and Tasmanian governments, and even the environment groups involved in the negotiations, have spoken about their desire to create a sustainable native forest industry, as if they are the ones that will determine its future. Undoubtedly, forest policy, particularly the subsidies the industry receives from government, does play an important part in shaping it. However, the collapse of the industry in recent years has highlighted the significance of other factors, most of which are beyond the control of government.

The mining boom has driven up the value of the Australian dollar, which has, in turn, cruelled the competitiveness of other Australian exporters, including the native forest industry. The woes of the native forest industry have been further magnified by a shift in consumer preferences away from native forest products, increasing competition from plantations, depressed wood prices, and a contraction in demand in the major woodchip market (Japan).

If the Tasmanian government is to lead a debate about the economic future of Tasmania, it must first inform the public about where Tasmania currently is and be honest about what it can and can’t control. Major factors that are shaping the forestry industry are beyond its reach: the exchange rate, international forest product prices, the state of the Japanese economy, and domestic forest policies in wood exporting countries, to name a few.

But while the Tasmanian Government cannot control either Australia’s exchange rate or world markets, it can exert influence over the kind of industries they try to attract and the kinds of investments they make in Tasmania’s workforce and its communities. Put simply, every hundred million dollars the Tasmanian government spends propping up the logging industry of the past is a hundred million they can’t invest in the new industries of the future.

The lengthy negotiations between the loggers and environment movement, even if they had been successful, have no capacity to preserve the dwindling economic significance of the native forest industry. If the state government is serious about protecting the jobs of Tasmanians today and creating jobs for Tasmanians tomorrow it should invest its time, and the public’s money, in proportion to the job-creation potential of each industry. By that measure, it should spend less than 1% of its time thinking and talking about logging.

From Crikey here, where you will also find full links

• Or Download the article, with full links here:

• And the response, Jacki Schirmer on The Conversation: Still here: why Tasmanian forest industry job figures are misleading

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