House debates

Monday, 28 May 2007

Forestry Marketing and Research and Development Services Bill 2007; Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Bill 2007

Second Reading

Debate resumed from 10 May, on motion by Mr McGauran:

That this bill be now read a second time.

6:35 pm

Photo of Stewart McArthurStewart McArthur (Corangamite, Liberal Party) Share this | | Hansard source

Prior to the break in this debate on the Forestry Marketing and Research and Development Services Bill 2007 and cognate bill, I noted that this legislation provides for the Forest and Wood Products Research and Development Corporation to be replaced by a proposed new company, Forest and Wood Products Australia. This new company will, for the first time, be able to use levy funds to promote the environmental values of the use of wood products and the use of wood products harvested from forests.

The new company will invest industry funds into research and development to support improvements in productivity and efficiency in the industry. The research work of the Forest and Wood Products Research and Development Corporation has been well respected by those in the industry, and we look forward to the new organisation delivering results to help improve the competitiveness of the forestry and wood products industry.

During the budget sitting week, I had the pleasure of escorting around the parliament Mr Stuart Bennett, Director of Midway Wood Products. Mr Bennett formerly managed a very successful timber mill at Birregurra in the Corangamite electorate and maintains an active involvement in the industry. Mr Bennett indicated to me that a need exists to do more work on plantation tree species, especially for hardwood and sawlogs. Mr Bennett stated that the improved genetics of pine trees had resulted in a 15 per cent boost to yield over time, demonstrating the benefits of research. This is an endorsement of the current R&D corporation and justification of the government’s policy to maintain support for forest and wood products research and development in the new company.

From a processing perspective, Mr Bennett advised that the quality of wood is better when sourced from plantations because the trees are the same age and of consistent type and are therefore less costly to process than timber sourced from forests. But, in a cautionary note, Mr Bennett made the point that it has not yet been proven that a suitable quantity of sawlogs will be grown in plantations to meet long-term demand. This is a key challenge for the domestic timber industry. Where will the industry source suitable timber supplies? I note that, in his second reading speeches on these bills, the Minister for Agriculture, Fisheries and Forestry confirmed industry support for the legislation, for the establishment of a new company and for its new, broadened roles.

The industry supports these measures because they will help timber workers and timber communities respond to challenges facing the sector. The challenges include: difficulties in attracting private investment for plantations, an undersupply of softwood and hardwood sawlogs, restrictions on harvesting from native forests and ongoing attacks on the industry from radical environmental extremists. Finally, the establishment of the new company, Forest and Wood Products Australia, through these bills will be necessary to support the forestry industry, because it is an industry under threat as you, Mr Deputy Speaker Quick, would know.

There has been a determined campaign waged against the forestry sector over many years which has sought to marginalise the industry and put the future of the industry and forest workers’ jobs at risk. Opponents of the sector have gone about the total destruction of the industry with a religious-like zeal. Not only have our foresters been forced out of many of the nation’s forests but there are also groups which now seek to wipe out the plantation sector. Mr Anthony Amis, representing the misnamed Friends of the Earth, recently wrote in the Age newspaper, dated 4 April 2007, attacking the plantation sector and blaming it for causing all kinds of ills from water pollution, air pollution and toxic waste to crumbling roads.

There could be no more renewable an industry than the timber industry, where you can grow a tree, cut it down and coppice another tree to grow in its place. This simple fact of life seems lost on Friends of the Earth, who want to force foresters out of forests, close down plantations and presumably source the future supply of Australia’s wood and paper needs from environmentally devastating and ethically bankrupt logging in the Amazon and sensitive environments in Third World nations.

While Friends of the Earth would see sensitive world forests bulldozed to supply Australian timber, the Prime Minister has recently announced the establishment of a Global Initiative on Forests and Climate. The Australian government has committed $200 million to kick off this measure to protect world forests. In announcing this initiative, the Prime Minister recognised that almost 20 per cent of global greenhouse gas emissions come from clearing the world’s forests. More than 4.4 million trees are removed every day world wide.

In contrast to the arm waving by Friends of the Earth, the Howard government’s $200 million commitment to this initiative will support new forest planting, limit destruction of the world’s remaining forests and promote sustainable forest management. This is a key, practical measure to help stop denuding forests in developing nations.

The government’s clear support for Australian timber workers and a sustainable forest industry can be contrasted with the Labor Party, which proposed a disastrous policy for Tasmanian forest industries at the last election. Former Labor leader Mark Latham sold out Tasmanian timber workers and their families during the 2004 election. It is good that this legislation allows the forestry industry to promote itself. Concerns about Labor’s policy remain within the forestry industry. Even some Labor MPs are concerned about Labor’s policy, as was taken to their national conference just a few weeks ago. Steve Lewis, writing in the Australian on Monday, 2 April 2007, reported:

One frontbencher expressed concern at the draft policy, which is based on “no overall loss of jobs in the industry” while leaving open the prospect of locking up further old-growth forests.

“You can’t have it both ways because Tasmanians can’t be conned,” the MP said.

That is right. The opposition leader cannot have it both ways. He tries to walk both sides of the street on most issues, but the Australian people know that is not possible. It is disappointing that the opposition environment spokesman is not contributing to this debate. It would be very helpful if the member for Kingsford Smith would come in here and speak in support of the timber workers, but we all know that he will not because he wants to close the timber industry down. The opposition spokesman wants to force timber workers out of native forests. That is why he will not step into this chamber and speak in favour of this particular legislation. Labor MPs know the opposition spokesman cannot be trusted on this issue. I, again, quote Steve Lewis in the Australian, of 3 April 2007:

Although Labor MPs believed Mark Latham’s 2004 Tasmanian forestry policy was dead and buried, Peter Garrett seems determined to resurrect at least part of it. Labor’s climate change spokesman says he is determined to hold on to that part of the draft policy platform which clearly states that Labor in office will consider further protection of Tasmania’s old growth forests.

In the context of the threats faced by the forestry and wood products industry, I note the comments by Tasmanian Premier, Paul Lennon, following the ALP national conference:

“I’m fed up with Tasmanian forestry workers and their families being election bait …

“I don’t want the looming federal election to be another period of uncertainty and worry for them …

Premier Lennon was obviously unimpressed with the federal Labor Party’s position, which, once again, has the potential to sell out timber workers. The Forest Industries Association of Tasmania is quite clear on what it thinks of Labor’s policy. FIAT Executive Director Terry Edwards told the Hobart Mercury on 30 May 2007 that if Labor’s policy is:

… exactly as it reads—additional reservation—then as happened at the last federal election we’ll be campaigning against the Labor Party.

It is disappointing that Labor is sending such negative signals to forest workers. It is a sign of just how much these new reforms are needed to allow the forestry industry, working cooperatively as a whole, to promote their industry and the benefits of sustainable timber harvesting.

I am pleased to speak on these bills in support of our forest industries, timber workers and their families. I personally have been a long-time supporter of sustainable forest industries and the use of good science in forestry. The Howard government has supported our timber industries and contributes to research and development which promotes improved tree species and a more competitive production timber system. I commend these bills to the House.

6:44 pm

Photo of Martin FergusonMartin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | | Hansard source

I welcome the opportunity to address the issue of the forestry industry and what I regard as an important bill, the Forestry Marketing and Research and Development Services Bill 2007. The opposition is also paying close attention to the outcome of the Senate committee’s consideration of this matter. In response to the comments by the member for Corangamite, it is interesting to note that the Minister for the Environment and Water Resources has not chosen to speak in this debate. Many in the industry are fearful of the minister’s real views because we all appreciate that he represents an inner-city, very Sydney-centric seat which is becoming more and more marginal. It contains what is best described as a large percentage of doctors’ wives, who have a particular view about the timber industry—which is, close it down at the first available opportunity. If the polls continue as they are currently, then we will wait and see what the environment minister’s real, private position is—if it is publicly declared—with respect to the future of the forestry industry, especially given his decision to close down the mining industry on Christmas Island. He has put at serious risk the future livelihood of many workers on Christmas Island in his endeavour to play to the gallery and say, ‘I am the saviour of rainforests in Australia.’

This debate cuts both ways. Just as I am very supportive of the community forestry agreement in Tasmania—which, I remind the member for Corangamite, provides for additional reserves—I am also concerned about the future of Christmas Island. It is an island that has very serious economic challenges ahead of it because of its long-term dependency on the superphosphate industry. It is our responsibility during this process of transition to work with the local community to, if possible, transfer some mining reserves to some forest reserves. It is very clear on the basis of the evidence to date that reforestation is working very successfully on Christmas Island. So as far as I am concerned, the member for Lingiari is correct. The minister for the environment, Mr Turnbull, representing a very inner-city seat, has chosen to basically put the future of Christmas Island at risk because he is not concerned about the long-term viability of the forestry industry in Australia; he is more concerned about potential Green preferences. I raise those issues here seriously because this is a very serious debate. That is why we support the proposal to establish a new company under the Corporations Act 2001 to be called Forest and Wood Products Australia. This new body will replace the former statutory authority, the Forest and Wood Products Research and Development Corporation. As its name implies, this was focused on research into and the development of the forestry industry—which is exceptionally important. The forestry industry is not an industry that is standing still; it is an industry which is vitally concerned with research and development. This new body will not only accept research and development responsibilities but will also be expanded to appropriately take on marketing and promotional activities as well. As a former shadow minister for forestry and someone who is vitally concerned with rural and regional communities in Australia, I think this initiative is long overdue.

I would like to see the industry expand, especially with respect to the growth in plantations in Northern Australia. Such an initiative—now that we have some stability with respect to the future of the managed investment schemes, which the member for Corangamite has such serious concerns about—might encourage investors in Aboriginal communities to pursue plantations, which would create long-term, viable employment opportunities and economic opportunities for those people in Indigenous communities, which are seriously suffering economically at the moment. Research and development, especially in those tropical regions, is therefore vitally important to the future capacity to expand the forestry industry in Australia. As we appreciate, the industry faces great challenges, some of which were touched on in passing by the member for Corangamite. We know that that is partly related to the fact that, because of public pressure, there is an ongoing campaign, based not on scientific evidence but on emotion, to lock more and more forests away from commercial forestry. Further loss of resources has occurred through bushfires. The industry faces threats to its markets through misguided campaigns against Australian forestry and timber products more generally. Sawmills and timber-processing facilities are struggling. They are struggling to keep going and to make the innovations and investments needed to maintain a viable industry for the future. Let us hope that this new company, Forest and Wood Products Australia, can play a driving role to advance the industry and secure that future.

The selection of its board is very important. Again I find myself supporting the comments of the member for Corangamite. The board must comprise members who represent all the stakeholders in the industry—with the appropriate qualifications, skills, knowledge, expertise and energy to drive the future of Australian forestry. They must also be prepared to stand up and be counted in terms of being committed to the industry. I therefore encourage the government to include the National Secretary for the CFMEU’s Forestry and Furnishing Products Division, Michael O’Connor. He has always fought courageously for the industry, its workers and its communities dotted around regional Australia. Sometimes, unfortunately, Michael O’Connor has found himself standing alone. It has sometimes been hard for some employers to have the courage to stand in the front line with him. Michael knows that in parts of rural Australia when the forestry industry goes so does the local community—the local doctor, the local school, the local sporting or netball team, the chemists and a variety of other facilities disappear from these communities if the forestry industry disappears. It is central to the future viability of many small and medium sized communities in rural, remote and regional Australia. So we have to make sure that we get on this board people who are committed to the industry and have the knowledge and expertise to actually drive it so that we can guarantee a viable future for the industry.

I would also add that Timber Communities Australia has been a strong, tireless and loyal advocate for the industry. Having a member representing that organisation would add strength and diversity to the board and recognise the significant contribution of that organisation to Australian forestry over many years. It has also been a courageous advocate for the future of this industry. That is about strength, because the industry has many enemies. The success of this new organisation may well make or break the industry. It will be essential for it to focus on internationally competitive, environmentally sustainable practices, innovation and the production of high-quality forest and timber products. Just as importantly, it will defend Australian forestry and timber products in domestic and international markets through its promotional and marketing activities.

As I have said many times before, no forestry policy will ever go far enough for the Green movement. They will simply shift the goalposts at every opportunity. There will be no end to this struggle in their minds. As far as they are concerned, nothing short of shutting down forestry, coal and airline industries in Australia will ever be good enough. It is forgotten that Australia’s forest and wood products industries contribute about two per cent of Australia’s GDP and directly employ more than 83,000 people. This is one of our largest manufacturing industries and it is the lifeblood of many rural and regional communities throughout Australia.

Although we are both a net producer and exporter of timber in volume terms, we unfortunately have a significant trade deficit in forest products of around $2 billion. So it is important that we grow both our domestic and export markets to offset that deficit. It is economically smart and clever for Australia. If collectively the industry, the unions and the timber communities do not conquer the agenda of the Greens and their fellow travellers, the truth is they will conquer our great forest industries and Australia will be the poorer for it. That is why it is absolutely essential for the friends of the industry to unite on issues like certification, fire management, catchment management and the role of forests in climate change policy. We, as a nation, have unfortunately spent the last 30 years increasingly locking Australia’s forests away from the forest industries in national parks. But the managers of our forest conservation assets could learn a lot from the forestry industry, and I hope this will also be a focus of Forest and Wood Products Australia when it comes to research and development, marketing and promotion.

Four years ago the Pilliga State Forest in New South Wales was one of the world’s finest timber resources for white cypress pine. White cypress pine needs to be managed. It needs to be thinned to allow it to grow, and it germinates only in rare events initiated by favourable climatic conditions. These germination events may be several decades apart, and when they occur the young seedlings come up so thick that, as legend would have it, ‘a dog cannot bark in it’. If the seedlings are not thinned they quickly reach a stage when their growth is curtailed. That means that trees in a forest might be 50 to 80 years of age but still only a few metres high and with diameters of only a few centimetres. In that situation they create a monoculture, and a monoculture in a forest is not desirable because it leaves no ground cover and creates perfect conditions for erosion and land degradation.

Let us deal with a bit of science. We understand that the Greens and their fellow travellers are not interested in such a complex debate. It goes to proper management: when such forests are managed, biodiversity flourishes and erosion and fires can be controlled and managed. There were an estimated 15,000 koalas living in the managed part of Pilliga State Forest before it was effectively locked up four years ago, and it was a favoured place for wildflower devotees. But in December last year, after four years of so-called conservation and no management, a hot fire destroyed the Pilliga, the koalas and the wildflowers. Gone are 420 jobs, which are so important to regional New South Wales, and, interestingly, a timber industry in north-western New South Wales worth $38.4 million. That is nothing to be sniffed at.

By the time Christmas arrived last year, 700,000 hectares of forest in eastern Australia, much of it in national parks, had gone up in smoke. By the end of summer more than one million hectares were lost—‘lock it up, forget it and do not manage it’, is the catchcry of many in the environmental movement—more than 16 times the annual average amount of forest harvested by our world-class forestry industry. What a comparison. But let us not deal with the facts. Some people do not want a factual debate, just an emotional debate—especially as we move closer to state and federal elections—so that they can do yet another dirty little Green deal with preferences. Interestingly too, 40 million tonnes of carbon dioxide was released into the atmosphere as a result of those fires. According to a CSIRO scientist, we also lost 370 million animals in this summer’s bushfires alone.

As the forests regenerate their thirst for water will be insatiable. At a time of a deep drought this is the No. 1 concern of most Australians. Where is the evidence that native animal and plant species are better protected in national parks than state or privately managed forests? There is none at all. But this unfortunately is not a one-off. Back in 2003 we lost more than three million hectares to bushfires in New South Wales, Victoria and the ACT. Thousands of hectares of mountain ash forests in our alpine regions were wiped out and there has been practically no regeneration of the species in national park areas, unlike commercial forestry areas which use proven silvicultural practices to ensure regeneration of all species harvested. The 2003 forest fires also released 130 million tonnes of CO2about a quarter of Australia’s total annual greenhouse emissions. Equally significant, studies predict a reduction of up to a fifth of the water flowing into the Murray-Darling Basin region as a result of the regeneration of those forests. It is estimated that the regrowth from the 2003 bushfires will use 430 billion litres of water a year for the next 50 years.

There is much more to this drought than people realise. The question has to be asked whether it is time to rethink our management strategies when it comes to national parks. If we believe in climate change we are going to have to confront issues such as the thinning of our national parks forests to save water in our catchments and prevent fires—a strategy that the forestry industry has employed for over a hundred years. We are going to have to confront the issue that perhaps cattle grazing in our alpine areas was good fire management practice and less environmentally harmful than the devastating fires that have ripped through our national parks in the absence of any active management.

The Greens are opposed to active management of our national parks, but the evidence when it comes to forest conservation is firmly stacking up on the side of the forestry industry. I hope this is the message Forest and Wood Products Australia can effectively deliver to our domestic and international markets, and to those in our community who have been subject to misinformation campaigns for way too long. It is time, too, for the industry to stand up for itself and, instead of jumping into bed with the green groups as the easy way out of secondary boycotts, take on the fight with the CFMEU’s forestry division and the timber communities in the interests of better national conservation and industry outcomes for Australia and the world at large. More also needs to be done in terms of social outcomes—not only in saving the dying timber communities in places like Baradine but also in building new opportunities, particularly in Indigenous communities like Port Keats-Wadeye, building on the success of ventures like those in the Tiwi Islands.

The industry also has a great opportunity to capitalise on the carbon sequestration benefits of forests and timber products. This is a huge challenge. The world’s forests and soils store more than a trillion tonnes of carbon, twice as much as is in the atmosphere, and they have the potential to absorb 10 to 20 per cent of total global emissions from now to 2050. In Australia, the annual net sink in forests and wood products is about 10 per cent of total greenhouse emissions. It is growing trees that sequester carbon most rapidly, generally early in their lifecycle. So managed forests are very important in terms of carbon absorption—hence the interest of the Indigenous community.

And it is time that green hypocrisy when it comes to the proper utilisation of wood waste was ended. About five million cubic metres of timber residues are generated from commercial forest harvest operations each year, very little of which is burnt for power generation. If an extra four million cubic metres of that waste was used, 30 per cent of the MRET would be met overnight. Yes—meeting an MRET through the forestry industry. That is a real challenge to the so-called environmental movement. But wood residues account for less than five per cent of MRET certificates, because wholesalers and retailers are too frightened of secondary boycotts by environmental NGOs to sell power generated from them; it is not politically correct. I hope Forest and Wood Products Australia have the courage to front up to this issue and do something about it. It is part of the greenhouse debate.

There are also new opportunities for wood residues and timber crops when it comes to alternative transport fuels. I am referring to lignocellulosic ethanol. There is a growing ethical debate about food versus fuel, with ethanol in Australia produced from starch, grain or sugar. In the United States and South America, diversion of land from food to biofuels production is already driving up the price of food. Mexican corn prices have doubled in the last year, forcing the government to put a ceiling on tortilla prices. Sugar prices have also doubled, and that is why Australian sugar producers are more interested at this moment in the sale of their cane for sugar than for ethanol. Countries all around the world are now considering biofuels production from various crop sources, and these will be grown on land that previously grew food—or else on newly-cleared forest land. Interestingly, 80 per cent of Brazil’s greenhouse gas emissions arise from the deforestation of the Amazon basin, mainly to grow sugar cane for—guess what—ethanol. This dilemma comes at a time when climate change is also perceived as a threat to world food supplies and when drought in Australia is of great concern to all of us. As a Science Alert reported a couple of weeks ago, the industrial production of biofuels threatens to create conflict over food for humans, feed for animals and feedstocks for liquid transport fuels. That is why production of lignocellulosic ethanol from waste and non-food crops is a very important future technology.

There are many exciting opportunities out there for the forestry industry in Australia. The opposition supports this bill and wishes Forest and Wood Products Australia every success in its future endeavours. We only hope that, by working together with the forestry industry, we can take the debate forward on the science rather than on emotion and the coming and going of state and territory elections over their regular four- and three-year cycles. We owe that to the timber communities. (Time expired)

7:04 pm

Photo of Kelvin ThomsonKelvin Thomson (Wills, Australian Labor Party) Share this | | Hansard source

I am pleased to have the opportunity to speak on the Forestry Marketing and Research and Development Services Bill 2007 and the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Bill 2007. The key elements of these bills are as follows. First, the main bill will establish a new forestry research and development and marketing company to replace the former Forest and Wood Products Research and Development Corporation. Second, it will allow the Commonwealth to provide matching funds for research and development projects undertaken by the new company.

Third, it will allow the new company to collect levies to fund its activities. This amount will be limited to the lesser of either 0.5 per cent of the gross value of production of the Australian forestry industry for the financial year, or 50 per cent of the amount spent by the new company on research and development activities that qualify under the funding contract in that financial year. There are also carryover provisions for research and development that is not 50 per cent matched. This will maintain research and development funding at the levels of the previous Forest and Wood Products Research and Development Corporation.

Fourth, the bill gives the minister broad powers to revoke the status of the new company if it is deemed to have contravened the act or the funding contract or a number of other specified instances which would call into question the legitimacy of the company’s activities. Fifth, it gives the minister the authority to direct activities of the new company in exceptional and urgent circumstances. And, sixth, it allows the minister to delegate any or all of his or her powers and functions under the bill to either the secretary of the department or an appropriate SES employee.

The transitional and consequential provisions include: transferring the assets and liabilities of the Forest and Wood Products and Research and Development Corporation to the new company, assets being estimated at $6.4 million; transferring staff from the Forest and Wood Products Research and Development Corporation to the new company; maintaining the terms and conditions of employment of staff in the new company; and retaining the Commonwealth as the liable party under the Safety, Rehabilitation and Compensation Act until staff commence with the new company. This also affects some existing entitlements for transferring Forest and Wood Products Research and Development Corporation employees. It is worth noting that the new company is not an approved authority for the purposes of the Superannuation Act 1976, the Superannuation Act 1990 or the Superannuation Act 2005. The transitional provisions allow the carryover of long service leave. They require final annual reports from the Forest and Wood Products Research and Development Corporation, and they allow unmatched research and development money to be carried over to the new company.

The current Forest and Wood Products Research and Development Corporation provides what has been described as a ‘national, integrated research and development focus for the Australian forest and wood products industry’. It is committed to research and development that promotes internationally competitive and environmentally sustainable practices.

The main bill establishes a company limited by guarantee under the Corporations Act which will assume the research and development functions currently being provided by the Forest and Wood Products Research and Development Corporation and incorporate new functions of marketing and promotion. The old Forest and Wood Products Research and Development Corporation could not undertake marketing and promotion activities, and the forestry industry has indicated its support for a new company to undertake this responsibility.

Some concerns have been raised about the bill. As the bill establishes a new entity undertaking new responsibilities, it is appropriate that it should be reviewed to ensure that it is properly established and that transitional arrangements are appropriate. It is appropriate to compare the outcomes of this process to the Uhrig template to determine if the administration of the new corporation is satisfactory. A review is also appropriate to consider the terms of the statutory funding agreement between the new corporation and the Commonwealth. A referral through a proper committee process will allow for the appropriate review and consultation to be undertaken.

The bill gives me an opportunity to say something about current and future directions of forestry research. Recently, I had the opportunity to discuss these forestry issues, particularly in relation to global warming, with some key people from the Food and Agriculture Organisation—Dr Wulf Killmann and Mr Jim Carle. We discussed global warming and carbon sinks. It should be noted that half the dry weight of biomass is carbon. Forests, like other ecosystems, are affected by climate change, be it a sea level rise that threatens coastal forests or changes in temperature and rainfall patterns. Some impacts will be negative; some will be positive. But forests themselves influence the climate and the climate change process. They absorb carbon in wood, leaves and soil and release it into the atmosphere when burned—for example, during forest fires or the clearing of forest land.

The United Nations Framework Convention on Climate Change obliges all member countries, of which Australia is one, to assess and report national greenhouse gas emissions, including emissions and removals of carbon reflected as stock changes in forests. The Intergovernmental Panel on Climate Change has created guidelines, methods and default values for all parameters needed to assess carbon stocks and their changes in forests. Quantifying the substantial roles of forests as carbon stores, as sources of carbon emissions and as carbon sinks has become one of the keys to understanding and modifying the global carbon cycle.

Unfortunately, the Food and Agriculture Organisation has found that many of the 229 countries and territories which are part of the Intergovernmental Panel on Climate Change have had difficulty in providing complete information concerning all pools of carbon—that is, above- and below-ground biomass, deadwood, litter and soil carbon to a depth of 30 centimetres. Many countries do not possess country specific information on the parameters necessary for calculating all carbon pools. As a consequence of missing data, it is not yet possible to aggregate country data to obtain complete regional or global totals for carbon in any pool. But it is worth pointing out that these totals and their changes over the years are very important for the global warming debate.

The Food and Agriculture Organisation has estimated that global forest vegetation stores some 283 gigatonnes in deadwood and estimates that soil down to 30 centimetres and litter contain 317 gigatonnes of carbon. It therefore estimated, as at 2005, the total carbon content of forest ecosystems at some 638 gigatonnes, more than the amount of carbon in the entire atmosphere. That is obviously very significant. Roughly half of total carbon is found in forest biomass and deadwood combined, and half in soils and litter combined.

In terms of trends, the Food and Agriculture Organisation has concluded that from 1990 to 2005 carbon in biomass decreased in Africa, Asia and South America, remained approximately constant in Oceania, and increased in Europe and North and Central America. Not all subregions followed this trend. More research in this area is essential, but the potential of forestry to play a role in tackling global warming by absorbing carbon from the atmosphere is clear.

How effectively is this potential being realised? The Kyoto Protocol to the United Nations Framework Convention on Climate Change expressly allows countries to meet their targets through the use of carbon sinks. The protocol allows parties to fulfil parts of their obligations through purchasing certified emissions reductions from carbon offset projects under the clean development mechanism involving forests. Conferences of the parties to the climate change convention have held meetings to address specific issues concerning the so-called land use, land use change and forestry activities. The parties to the convention have, perhaps unfortunately, reached different conclusions regarding the proper role of forests and appropriate national legislation to foster that role. As a result, national legislative activity on the issue of forests and climate change has been limited. One exception is Costa Rica, which has created a certified tradeable offset to attract developed nations looking to sponsor mitigation projects. The first project funded under this mechanism has involved forests. Indeed, New South Wales has changed its property laws to recognise a separate legal interest in the carbon sequestration potential of forest land.

A number of issues need to be resolved in relation to legislation to foster carbon sequestration in forests. For example: who can claim credit and receive payment for carbon sequestration and can that ownership be transferred? Who is responsible for carbon debits from deforestation, forest harvesting or natural calamities? How will the amount and duration of carbon credits be determined, recorded and verified? How can the government promote orderly sales or other transfers of ownership? How will national law allocate the risk of failure of carbon sequestration projects? Will the law assess liability for damaging a forest’s carbon sequestration potential?

Countries need to be thinking about how to encourage and integrate the use of forests as carbon sinks. Sequestering carbon in living forest biomass, soil and wood products, as well as substituting wood energy from sustainably managed forests for fossil fuels, are important mitigation measures.

Industry now adds about 6.3 gigatonnes of carbon dioxide to the atmosphere each year and the destruction of forests contributes at least another gigatonne. The current concentration of carbon dioxide in the atmosphere, some 370 parts per million, is about 35 per cent higher than it was in pre-industrial times, when it was 280 parts per million. It is therefore an appealing proposition to turn harmful emissions of carbon dioxide via photosynthesis into new forests, thereby replacing some of the 16 million hectares of natural forests that the planet loses annually.

There are various things that industry can do to increase its contribution to climate change mitigation through forestry. Dr Wulf Killmann says that 80 per cent of the energy performance of a pulp and paper mill is determined on the day machinery is purchased; that the forest products sector is probably one of the lowest investors in research of any of the resource based sectors; that there is a serious lack of funds for research and development; that the dryer section of the paper machine is the main user of energy followed by the concentration of the black liquor and that breakthrough technologies are needed that completely change the way mills dry paper and concentrate black liquor; and that, in the Nordic countries, research and development in a biorefinery is expected to reach hundreds of millions of dollars in the next few years.

The global forest products industry can play a significant role in combating climate change. Dr Wulf Killmann believes it has exceptional ability to become a net supplier of a range of energy products and it could, in combination with carbon capture and storage, become an important actor in removing carbon dioxide from the atmosphere. This will require optimising the use of raw material, increasing efficiency, producing bioenergy and expanding into biorefinery products. It also requires that forests be managed responsibly.

Jim Carle says that planted forests account for about seven per cent of global forest area—or about two per cent of global land area or slightly fewer than 300 million hectares. They provide more than half the industrial wood produced in the world and their extent and productivity are increasing. Compared with naturally regenerating forests, planted forests represent a higher investment per area unit and normally produce higher values through their products and services. They are also sometimes controversial, and achieving a balance among social, cultural, environmental and economic benefits is a challenge.

Planted forests can play a significant role in regulating water flows and improving water quality. They can be an important mechanism in rehabilitating catchments. As with naturally regenerating forests, they can regulate floods, reduce debris flows and stabilise land, thereby reducing soil erosion that would otherwise lead to excessive sedimentation in rivers and lakes. They can control soil and water salinity and improve soil stability to prevent landslides. It should not be assumed, however, that the impacts of planted forests are invariably positive. Inappropriate planting, particularly if using species with high water requirements, for example, can deplete water resources such as groundwater.

Then there is the issue of fire. While the release of heat-trapping emissions from fire is a natural phenomenon, the net release of carbon by wildfires, as a consequence of fire induced site degradation and lowered carbon sequestration potential, is contributing to global warming. Human population growth is associated with increasing rates of conversion of natural vegetation to agricultural and pastoral systems and with the development of residential areas, infrastructure and traffic. Land-use change is occurring in traditionally uninhabited or uncultivated areas, such as mountain slopes and floodplains. This is frequently a result of poverty, deforestation or vegetation conversion for production of cash crops for the global market.

In many regions of the world, the process is associated with the use of fire for land clearing and the increasing occurrence of uncontrolled fires. Many regions of the world have experienced a trend over the last decade towards excessive fire application in land-use systems and land-use change, and a trend towards more severe fires. The effects of fires include smoke and water pollution and impacts on human health and safety, loss of biodiversity, and site degradation with knock-on effects such as desertification, soil erosion or flooding. Fires burning under extreme conditions in some vegetation types, including organic terrain, can deplete terrestrial carbon and disturb the global carbon cycle.

The Food and Agriculture Organisation has been coordinating a multistakeholder process to prepare a global strategy to enhance international cooperation in fire management. This is in line with recommendations from the third International Wildland Fire Summit, which was held in Sydney in October 2003. The Food and Agriculture Organisation has developed a set of voluntary guidelines for fire management which cover the positive and negative social, cultural and economic impacts of natural and planned fires in forests, woodlands, rangelands, grasslands, agricultural and rural/urban landscapes. The fire management guidelines cover early warning, prevention, preparedness, safe and effective initial attack on incidences of fire and landscape restoration following it.

Naturally around the world there are many different situations, ranging from areas with few fires and little impact to areas in which fire is a key component of ecosystem health. Even in developed countries, people and communities move into fire-prone areas, causing problems for protection from fire. Of particular significance, and certainly this is true of Australia, are the areas in which fire plays an important role in the environment, either playing a role naturally in sustaining the ecosystem or providing for livelihoods through agricultural or other uses.

Jim Carle says that the need to protect lives, resources and property from the adverse effects of fire must be balanced against the need for the appropriate use and equilibrium of fire in the environment. He also says that the notion of the ‘good fire’ should continue to be advocated. Fire can be good for habitats, for resources, for reducing threats and for maintaining cultural values.

The projections for global warming indicate increasing impact in relation to fire regimes. The prospect of a global mean temperature rise from 1.6 to 5.4 degrees Celsius by 2100 represents a much more rapid change than any experienced over the past 10,000 years. Just as importantly, in turn more frequent droughts will give rise to more high-severity wildfires, leading to loss of vegetation cover, desertification and reduced terrestrial carbon sequestration. Both land use fires and wildfires in all ecosystems are affecting carbon pools and global carbon cycles. In turn, global warming affects the duration and severity of dry seasons, therefore impacting on the incidence and severity of fires. In light of global warming, fire management practices need to take into account observed and anticipated changes in fuel and vegetation type, burning conditions and additional fire risk.

Policies are needed to maximise the storage of carbon in ecosystems without increasing the likelihood of unwanted fire risk. We need to minimise the global warming emissions that occur as a result of large-scale, unwanted fire by restoring and maintaining ecologically appropriate fire regimes.

7:23 pm

Photo of Dick AdamsDick Adams (Lyons, Australian Labor Party) Share this | | Hansard source

The Forestry Marketing and Research and Development Services Bill 2007 and the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Bill 2007 will establish a company limited by guarantee under the Corporations Act 2001 to assume the research and development functions currently provided by the FWPRDC and will incorporate the new functions of marketing and promotion.

This legislation effectively replaces the old forestry R&D statutory authority, the Forest and Wood Products Research and Development Corporation, with a new R&D and marketing corporation called Forest and Wood Products Australia, FWPA. However, we need to ensure that the proposed administration of the new company will adequately represent the views of all affected parties within the forestry industry. We should make sure that everybody in this industry is given representation.

This legislation is not controversial. I believe it is important that marketing should be involved in any research and development strategy. By all reckoning, the timber industry needs all the promotion it can get. I would like to talk a little about the timber industry and the terrible misinformation that seems to be spread out and about, especially from Tasmania, without any real rhyme or reason.

The timber industry is a fine industry. It is an old industry with links back to the dawn of civilisation. Timber has been used over aeons for everything, from the home to transport to energy—to every part of the life of early man. It was and still is a very important and enduring part of our civilisation. Just think of the analogies nowadays and what trees are used for: there is the tree of life and the tree of knowledge; art gives the tree a vital part in every landscape; it is our muse and our balance in a chaotic environment; we talk about roots and the protection of spreading branches. So much of our life is dominated by trees and timber products. I would say that in some people’s minds there is a sacredness about trees that seems to ignore the very practical relationship between man and our forests, by growing them, cutting them down and growing them again. Trees are the ultimate sustainable product. They will survive long past man’s pitiable efforts to ‘save’ them from man.

Research and development over the years has developed timber and its products to great heights. Timber is used in some of our best designed furniture. In this Parliament House we see the magnificent timbers from around Australia fashioned into floors and fittings, contrasting beautifully with the natural stone and marble around the building. The timber inlays in the Marble Hall are some stunning examples of marquetry, which is now becoming fashionable again.

We have used tree and timber products as we have moved through the ages. Paper and paper making is so much part of our lives that people forget where it comes from. Paper is used for our newspapers, computer paper, art paper, labels and packaging on almost all our processed foods and many other household products, posters, books, magazines and notepads. In fact, as I looked at my desks, both here and at home, I thought that if paper did not exist I do not think I could survive. If we took paper out of our lives, it would be a very poor place indeed. Yet when someone suggests that they want to build a pulp mill in Tasmania, there is an uproar that it will ruin our lives because it might give out some emissions, put some effluent into the water or use a bit of the water. I say ‘might’ because there has so far been no proof of intention to do this. Surely, for the sake of being able to use our own trees and our own workers and being self-sufficient in the raw materials of our timber based products, we should at least allow the company to put its case without vilification at every turn.

Gunns has been part of our lives in Tasmania, as indeed has some of our timber. It is a Tasmanian company employing Tasmanians and developing some of our savings to help our economy. Its managing director is a long-term Tasmanian. He lives in the north and his office is in Launceston, and it is in his interests to ensure that his environment is not despoiled. He is no different from the rest of us.

Pulp mills are already in Tasmania and have been for some time. In fact, the family of a current Greens senator sold their land for the Wesley Vale pulp mill in the 1960s and now there are two pulp mills, a paper machine and an off-machine coater and manufacturers of a variety of office and specialty paper grades. Paper manufactured at Burnie is mostly plain paper for forms grade photocopying and offset printing and base grades which are then transported to Wesley Vale for coating. In 1989 there was an attempt to expand this pulp mill and there was such an outcry, led by the particular senator I referred to, that the proposal was dropped, and Tasmania had to wait nearly 20 years for someone to be brave enough to try for another one.

Pulp mills are a known factor to those who live around them, and we have had little trouble living with them since the 1930s. Like many other processing plants, there are problems from time to time but they are always fixable. I live in the town of Longford, where there is a meat processing plant. Local residents have for years lived next to the chimney plume which, in days gone by, used to exude an odour very like overcooked meal and meat. That problem has finally been solved. Although the plume is still there, and you can see when there is an inversion layer and you can see which way the wind is blowing, it has become a part of our lives and it harms nobody. Like people in Finland who live in a landscape full of pulp mills, these are benevolent giants in their communities, providing their jobs, their recreation and their economy. Why should ours be any different? With proper research and safeguards, any problems could be overcome. It does not have to divide communities. It is crazy to have scare campaigns running on emotion only. The facts seem to have mysteriously disappeared along with the science.

This is why we must ensure that there is ongoing independent research available for industries and their communities to make rational and informed decisions about the future. If there is a situation that could lead to a problem in the future then those people should be able to sit down and talk about it using up-to-date information and come to some useful and workable conclusion. I am not saying that this bill will necessarily provide all that but legislation should help people to help themselves in coming to terms with change and new directions. This bill gives us some hope that funds will be invested in research and development. I support the bill.

7:33 pm

Photo of Sussan LeySussan Ley (Farrer, Liberal Party, Parliamentary Secretary to the Minister for Agriculture, Fisheries and Forestry) Share this | | Hansard source

I thank all members of the House for their contributions to this debate on the Forestry Marketing and Research and Development Services Bill 2007 and the Forestry Marketing and Research and Development Services (Transitional and Consequential Provisions) Bill 2007. The forestry industry is important to Australia as it contributes significantly to our national economy and exports. Research and development makes a positive contribution to the productivity and sustainability of the Australian forestry industry. When combined with generic marketing and promotion, it will increase the competitiveness of Australia’s forest and wood products in the international market.

I thank the member for Hotham for his support for the continuation and expansion of forest research and development to include the promotion of Australia’s forestry industry, although I must correct him on one small point: the new arrangements do not result from the Uhrig review but rather from the expressed desires of the forestry industry to broaden the scope and capacity of the industry research and development provider to include marketing and promotion to its already strong track record on research and development. The Forestry Marketing and Research and Development Services Bill 2007 will provide the power for the government to declare an industry owned company as the industry services body for the forestry industry.

I also thank the member for Corangamite for his support and echo his comments that the development and promotion of a sustainable forest can only be beneficial to Australia and those Australians who depend on forestry for their livelihood. In fact, in my own electorate of Farrer the forestry industry is a major employer and economic driver.

Good research and development coupled with promotion and marketing is an important requirement for the industry to remain strong and competitive. This legislation is an important step forward for the Australian forestry industry. The establishment of public companies or industry services bodies to undertake the delivery of marketing, research and development and other services to the agricultural industries is not a new concept. The legislation follows the precedent set by other industries. It closely resembles other industries’ legislation but has been tailored to meet the specific requirements of the circumstances of the forestry industry and the operating arrangements of the Forest and Wood Products Research and Development Corporation. Under these new arrangements, there will be accountability to the levy payers as members of the company and to the government through the funding contract. The constitution of the new company, which is to be the industry services body, and the funding contract are being developed. The funding contract will be tabled in both houses of parliament after it is signed off. Recent practice has been to table the funding contracts in parliament after signing.

The legislation will provide for the establishment of a new industry services body for the forestry industry that will give industry the opportunity to better promote the environmental values of wood products as well as increase access to domestic and international markets. The industry services body will undertake generic marketing and promotion, research and development, and other industry services to the forestry industry. Integration of research and development and promotion will enable the forestry industry to be responsive in a unified voice to deal with the challenges currently facing the industry. It is hoped that the establishment of this new industry services body will also improve communication within the industry and with stakeholders and the government. By being able to better promote the industry and improve communication, access opportunities to the domestic and international markets for Australian forest and wood products will be maximised.

The company that is declared as the industry services body will be limited by guarantee under the Corporations Act 2001 and will assume the research and development activities that are currently provided by the statutory authority, Forest and Wood Products Research and Development Corporation. The company will have a skills based approach to its board membership and advisory committees. This will allow interested parties seeking positions within the company to be considered, based on their skills set and the desired skills set of the company. Members of the company will have the opportunity to nominate and vote for board members.

The accompanying bill provides for the one-off transfer of assets and liabilities and the corporation’s existing employees to allow the new industry services body to function from day one with funds and without any disruption to the current research and development work. The transferring employees will support the interim board of the industry services body which will be made up of most of the current serving board of the corporation to ensure a smooth transition from the corporation to the industry services body.

The Commonwealth values the outputs of research and development, and the legislation will provide for the Commonwealth to continue to match, dollar for dollar, funds spent by the industry services body on eligible research and development. The new industry services body will be accountable to the Commonwealth. It will be bound by a number of measures outlined in the legislation, the funding contract and the company constitution. Should a variety of circumstances occur such as the company constitution is changed in an unacceptable way, the industry services body fails to comply with the legislation or the funding contract, or the company ceases to carry on business, the minister will have the ability to suspend the payment of statutory levies and other relevant payments and/or declare that the company ceases to be the industry services body.

The transition from the existing statutory authority, Forest and Wood Products Research and Development Corporation, to the new industry services body provided for in this legislation will unite and strengthen Australia’s forestry industry to remain productive and sustainable into the future.

The Forestry Marketing and Research and Development Services Bill 2007 and the accompanying transition bill are the result of a partnership approach to forestry matters between the government and the forest industry. It aims to provide the industry with greater ownership and control to enable them to be responsive to the markets and to have the capacity to respond more effectively and efficiently to current and emerging challenges. Ultimately this will mean increased access to domestic and international markets and improved sustainability and profitability of the industry.

Once again, I thank those who spoke on the legislation. I have not mentioned the member for Wills, the member for Batman and the member for Lyons. I thank them, as well as the members for Corangamite and Hotham. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.