GM Corporate Relations and Tourism
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Ken Jeffreys 28/08/2012
It is with a heavy heart that I write to inform you of the latest developments concerning the future of Forestry Tasmania.
In previous emails and in meetings with staff, Bob Gordon gave an undertaking to keep you as fully informed as possible about progress of the Tasmanian Forests Intergovernmental Agreement and the government’s consideration of the URS Strategic Review of Forestry Tasmania. My email today seeks to honour Bob’s commitment. I also feel comfortable about providing you with an update because the government itself, in response to staff demands for consultation during the URS review, wrote that it was up to management to communicate with employees about progress of the review.
You are aware that URS considered three options for Forestry Tasmania. The first was to keep Forestry Tasmania largely as it is with some modifications, the second was to split the commercial and non-commercial functions, with the non commercial functions transferred to the Department of Primary Industries, Parks, Water and the Environment and the third was to make Forestry Tasmania a government department.
URS ruled out the third option and concluded options one and two were comparable in terms of financial outcomes, but it marginally favoured option two. The consultant indicated its view might be different if the TFIA resulted in a substantial change in log harvest levels.
Over the past few weeks, the government through its elected representatives and its bureaucrats repeatedly informed Bob and I, and for that matter members of the Board, that it would land somewhere between options one and two and that FT would not be split up given the upheaval that would cause for little demonstrable benefit.
On the basis of those understandings, Bob took his scheduled leave, satisfied that a satisfactory outcome would be achieved. The additional assurance was in the Interim Agreement,which included the need for a viable commercial forest manager as part of the durability provisions. The negotiators specifically wanted to make sure FT had control over the wood production area - unlike Victoria where coupes are allocated by their Parks and Wildlife equivalent (DSE) for harvesting and regeneration and returned to DSE.
Last Wednesday, I attended a meeting at the Deputy Premier’s office to discuss how this outcome would be communicated to staff and the wider community. I was to be provided with a copy of a Ministerial Statement and a proposed media release.
However, on arrival I was informed the plans had changed, that cabinet had discussed the matter at its meeting the previous Monday, that the Greens had insisted on the immediate implementation of option two (splitting FT) and that the Deputy Premier and our minister had been “rolled”.
I was shown a draft letter addressed to the Board chairman, informing him of the decision and how that decision would be implemented.
As a result of reading the draft, and from other events, I formed the view last week that the government intended a public execution for Forestry Tasmania.
For example, it is not common knowledge that three FT board members, including our current chair, were due to retire on June 30. Two of those board members, including Mr Kloeden, agreed to continue to serve until September to allow the government extra time to finalise the replacement board appointees, and to appoint a new chairman.
These changes were part of routine business - board members serve their time and are replaced.
However, as events unfolded last week, it was clear to me that there was a high risk the government intended to portray this routine changeover as a pro-active action by the government to appoint a “new” board - suggesting by implication that there was something wrong with the old board.
Further, it would be announced that a Head of Agency would be appointed to the board - presumably because the government couldn’t trust the board it appointed to run the affairs of the company. This “politicisation” of the board runs counter to good corporate governance practice of maintaining an independent board operating at arms length from government.
As for the splitting up of FT, the government proposed to announce the formation of an Oversight Committee to manage the transfer of staff and land, amongst other things, from FT to DPIPWE. This oversight committee would consist of three Heads of Agency, with no FT representation. A Project Team, also consisting of bureaucrats with no FT representation, would be established to report to the Oversight Committee.
The Chairman and the Managing Director of FT would be relegated to an advisory committee, with no decision making powers.
It was also clear the government intended to implement as much of the change as possible before seeking parliamentary approval. The splitting up of Forestry Tasmania requires legislation, but rather than attempt to pass the legislation prior to implementing the changes, the government is seeking to begin the process before introducing legislation. If the parliament doesn’t approve the changes, then we will be in a position of having to try to unscramble the egg and put back together a dismembered FT.
In summary, previous government undertakings provided to Bob, I and others have been broken. I am not in a position to gauge whether this was the government’s intention all along, or whether in fact, the broken promises are a result, as claimed by the Minister’s Office, that the Minister was rolled in cabinet on Monday last week, because the Greens insisted on the public abolition of FT.
I know none of this will ease any of the uncertainty that you are all feeling. The government was to have announced the changes last Tuesday, it was then delayed until Thursday, and then delayed until Friday. I am not in a position to indicate when the announcement will be made.
As we have previously indicated, Forestry Tasmania’s Board and management will assist the government implement handing over reserves to Parks and Wildlife, even though FT does not necessarily believe there will be any financial advantage in doing so. FT has been primarily concerned with its ability to return a profit and to act commercially under the model adopted by government. The board has reservations that the model proposed will deliver that outcome.
As unsettling as this might be, the management team would appreciate you remaining at your post, to keep doing the things you are paid to and to the very best of of your ability. If you feel distressed at all by this issue, please make use of the Employee Assistance Program, which is a free service for staff, and completely confidential.
GM Corporate Relations and Tourism
Real jobs for Real people.
• Mercury: Forestry Tas set to be split
NICK CLARK | August 28, 2012 11.26am
FORESTRY Tasmania is to be split into commercial and non-commercial sections, a leaked FT internal memo reveals today.
In the memo FT communications director Ken Jeffreys describes the decision as a “public execution of FT”.
The split follows one of the two recommendations of a review for the Government by URS Forestry.
In the memo, Mr Jeffreys says Deputy Premier Bryan Green had been “rolled” in Cabinet by the Tasmanian Greens, which had insisted on the split option.
“Last Wednesday, I attended a meeting at the Deputy Premier’s office to discuss how this outcome would be communicated to staff and the wider community. I was to be provided with a copy of a Ministerial Statement and a proposed media release,” he said.
“However, on arrival I was informed the plans had changed, that Cabinet had discussed the matter at its meeting the previous Monday, that the Greens had insisted on the immediate implementation of option two (splitting FT) and that the Deputy Premier and our minister had been ‘rolled’.
“I was shown a draft letter addressed to the Board chairman informing him of the decision and how that decision would be implemented.”
A federal Labor MP is considering his political options as a result of the state government’s imminent carve-up of Forestry Tasmania.
A leaked Forestry Tasmania email claims the Government will transfer the company’s non-commercial functions to the Environment Department, despite assurances otherwise.
The Deputy Premier, Bryan Green, will address the parliament today.
Lyons Labor MHR Dick Adams says he is bewildered and angry and has accused the Tasmanian Greens of successfully dismantling Forestry Tasmania.
He also accused the Labor Government of helping them and of abandoning ALP philosophy.
In a statement, Mr Adams says he is devastated and is “considering his options”.
He has questioned how he can “be a member of a state organisation in which he has no confidence”, and “help to fund a government in which he’s lost all faith”.
• Hakan Ekstrom, Wood Resource Quarterly: Sawlog prices down worldwide
Sawlog prices trended downward worldwide in past 12 months; with the Global Sawlog Price Index falling 11% from the 2Q/11 to the 2Q/12, according to the Wood Resource Quarterly
Wood costs have fallen the past year for many sawmills in the major lumber-producing countries worldwide. The Global Sawlog Price Index was US$82.90 per cubic meter in the 2Q/12, which was 11.5% lower than in the 2Q/11, according to the Wood Resource Quarterly. Sawlog prices have declined the most in Europe the past year.
Download the full article: GTWMU_Global_sawlog_prices_2Q_2012.pdf
URS REPORT CONFIRMS NEED FOR FORESRY TAS RESTRUCTURE
Nick McKim MP
Wednesday, 29 August 2012
The Tasmanian Greens today said that a restructure of Forestry Tasmania was essential to ensure that no more public money is diverted from essential government services to prop up a failed government business enterprise.
Greens Leader Nick McKim MP said that the Greens’ preference was Option 3 in the Stage 2 Report of the URS Strategic Review of Forestry Tasmania, which would have returned both the commercial and non-commercial functions of Forestry Tasmania to government departments.
Mr McKim said that the Greens were prepared to accept Option 2, as recommended by URS, on the basis that it was a major improvement on the current structure.
“The second option proposed by URS is very clear about returning the native forest and reserves currently vested in Forestry Tasmania to their rightful owners, the Tasmanian people.”
“The URS Report has independently confirmed what the Greens have been saying about Forestry Tasmania for years.”
“The Minister for Forests has confirmed that Forestry Tasmania is losing up to $35 million per year, which is money that is being ripped out of public services like schools, hospitals, public housing, and services for Tasmanians living with disabilities.”
“We will not allow one single dollar allocated in this year’s contingency fund in the State Budget to flow to Forestry Tasmania, except to facilitate the restructure as recommended in URS.”
“The Greens will not support the contingency fund propping up a business-as-usual model for FT, or to subsidise woodchip exports.”
“Finally we now have a forest policy from the Liberal party. The only problem is that it involves wasting more taxpayer funds that could be spent on delivering essential services to the Tasmanian people.
“The Liberals are in the ridiculous position of supporting business as usual, which means sinking up to $35 million a year for the next five years into a failed GBE.”
Read the Stage 2 report on the Treasury website here:
Stage 1 Report is on the Forestry Tasmania website here: