What Agreement?

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Created on Tuesday, 27 November 2012 11:00

Written by Julian Amos

To more clearly understand the events of last week, it is helpful to return to the document known as the Intergovernment Agreement (IGA), signed by the Commonwealth and the State Governments in August 2011.  This document was inspired by the deliberations of a self-appointed group representing various interests in the forestry debate, from industry and the conservation movement (the parties).  These parties originally came together to resolve issues surrounding the Gunns pulpmill, however they soon determined a broader purpose, which was coined “the Tasmanian problem”. 

The IGA provided a number of guarantees.  For industry, it guaranteed, like agreements beforehand, a level of wood supply and peace.  For the conservation movement it provided for a further significant transfer of forest into reserves.

Noble as its intentions were, the Agreement could not deliver both – the resource was simply not big enough. This was shown by the failure of the Verification Panel, set up by the IGA headed by Jonathan West, to satisfy both demands.

The governments then called on the parties to the earlier deliberations to reconvene and see whether they could work out a compromise.  For industry it meant a further reduction in wood supply, and for the conservation groups a reduction in their claims.  To assist these deliberations, the Federal Government advised it was prepared to fund a buyout of sawmill quotas, thus assisting the industry to reduce its demands.

After a considerable amount of deliberation, an agreement - including a range of “durability” clauses - was reached between a number of the parties, the announcement was made with the appropriate fanfare, and legislation presented to Parliament.

Sounds good so far - or does it?

At the start of this process, under the Tasmanian Regional Forest Agreement, industry had a guaranteed wood supply of 300,000 cub m per annum of sawlog, 265,000 tonnes (cub m) per annum of peeler billets (for Ta Ann), and access to 12,500 cub m per annum of specialty timbers.  The decision by Gunns to withdraw from native forest operations meant a reduction in the existing demand for sawlog to around 155,000 cub m., a decision having been made for Gunns to be compensated in cash and debt forgiveness for “handing back” its contracted amount.  A poor decision, one that has been commented on previously.

These figures were guaranteed by the IGA.

The buyback provisions have enabled a number of operating sawmillers to express an interest in exiting the industry, thus enabling the existing sawlog supply arrangements to fall further, to around 137,000 cub m., and this is the figure now agreed upon.

I use the word “existing” advisedly – the resource is there but none of the present millers have access to it, or contracts for it.

The requirement of Ta Ann for 265,000 tonnes has been reduced to some 160,000 tonnes.  Compensation for this reduction still needs to be determined.  Who pays?

And the access to specialty timbers has been reduced significantly from 12,500 cub m per annum.

For the conservation movement, the initial ask of 572,000 hectares of “high conservation value” (HCV) forest was to be determined by an Independent Verification Panel.  An area of 430,000 hectares was to be immediately set aside, while the overall claim was being verified.  It needs to be noted here that the West panel did not deliver in its verification of this claim.

The agreement provides for 395,000 hectares to be immediately made into reserves, with a further 108,000 hectares in 2 years time, as long as there has been “peace” in the intervening periods.  That makes 503,000 hectares.  Still no definition of HCV.

A further gain has been 21,000 hectares to be reserved after existing logging has been completed and 37.000 hectares where limited access only will be provided for specialty timbers.  However, the conservation movement do not consider these to be gains.  If not, then why add it?

As a bonus, they get the breakup of FT.

And an agreement from all parties to now support FSC certification of the remaining forest, with forest practices no different to what has occurred to date.  It says a lot for the corrupt nature of FSC certification.

So, back to the parties.  One party (Timber Communities Australia) has not signed as yet - it needs a plebiscite of its members before so signing - and the TSA (Tasmanian Sawmillers Association) has signed it, only to discover it also needs a plebiscite of its members.  It remains to be seen whether these plebiscites will deliver.  I suspect the TCA vote will be a negative, and some TSA members have expressed concern regarding the payout provisions.

The conservationists at the table don’t represent the broader movement.  Although signing off on the durability (ie peace) provisions, a number of groups (eg the Tasmanian Conservation Trust) have expressed concern over the agreement, protest groups have already stated they will not be bound by the terms of the “agreement” and continue protesting for the cessation of all native forest logging, and one of the signatories, Vica Bayley of the Wilderness Society, is scheduled to speak at a forthcoming Tarkine rally in Hobart.  Peace in our time?  Hardly!

And sitting above all this is a government which has stated it will not make decisions regarding its (ie our) resource, but will be guided by the (self-appointed) parties.  However, in a rush to meet a deadline for the receipt of Federal funds (for regional development projects, as yet undetermined) it has pushed legislation through the Lower House of Parliament, without having the full support of the parties.

What happens if the TCA vote is a negative – too bad!  What if the durability clauses don’t hold - too bad!  What happens if the compensation for sawmill buyouts is insufficient – too bad!  What happened to their workforce – too bad!  What happens if conservation groups not party to the “agreed” position continue to agitate for more areas to be reserved – too bad!  What happens with the Guarantee for Ta Ann – too bad!  What about the users of specialty timbers  -  too bad!  And the private forest owners – too bad!

How much compensation will be required? Who knows?  And what if the Legislative Council in its wisdom decides to not accept the legislation?  Which is highly likely, at this stage.

I can see it now, a government hellbent on making no decision of its own, having abrogated its responsibility to an unelected cartel of self-interest, blaming all and sundry for not delivering on its desire to access the paltry federal funds being placed on the table, and passing the buck for whatever economic and social fallout.

In negotiating parlance, what government has done is confused objective (ie a viable industry, and peace), with strategy (the IGA).  Strategy has become the objective – and has failed.  Why? Because it has weakened industry and not delivered peace.  A flawed process, a flawed outcome, a flawed piece of legislation.

As commentator Bruce Felmingham has indicated:  Real leadership is in short supply.      

Circling the Wagons

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Created on Wednesday, 07 November 2012 11:00

Written by Julian Amos

An Agreement – at what price?

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Created on Tuesday, 20 November 2012 11:00

Written by Julian Amos

Will there be a Forest Agreement?  There may well be legislation, but what will that legislation really represent?  Will all participants to the peace process be signatories to any agreement?  Will such an agreement deliver peace in our time?  A guarantee against further protest? 

Lets recap.  The formal peace talks have been abandoned.  The ENGOs walked out at the end of October, stating that some sawmillers were being unreasonable.  The sawmillers stated they had compromised enough.  The  October 31 deadline came and went.  Now everyone has left the table.

What has happened since?  First of all, FIAT suggested a further approach trading a further reduction in volume of sawlog in exchange for stronger “durability” clauses, and provided it to the CFMEU to circulate.  We are still awaiting a response to this approach from other participants in the peace process.

Now FIAT represents some industry interests, but not all industry interests.  So it remains unclear whether the remaining industry would support such a deal.  Will it cover Ta Ann’s need for regrowth logs for both Smithton and Judbury?  Will it satisfy the needs of timber communities, and those dealing in special timbers?  And the ENGOs have been remarkably quiet.  I suspect the durability clauses have been very difficult to swallow and thus the delay in responding.

Meanwhile, to prove that the durability clauses are de facto an impossibility, we have seen two protests against Ta Ann by groups excluded from the process, Groundswell in Smithton, and Huon Valley Environment Centre in the south.  Both groups are not parties to the peace process, and both have stated they will maintain their campaigns until there is no more native forest logging.  So no compromise will be forthcoming from those groups.

And then there has been the appointment of Bob Brown to the board of Markets for Change, and the elevation of Peg Putt to be its CEO.  This organisation has campaigned strongly against Ta Ann in the market place, besmirching its name and stating – erroneously and mischievously – that TA Ann has been cutting old growth forest.

The appointment  of Bob Brown to the Board signals an escalation of conflict.  When asked whether he would support a peace deal negotiated by ENGOs he said “It depends on the deal”.  He is also on the record demanding a cessation of all native forest logging, so no deal that involves native forest logging will be suitable to him.

Both individuals have criticised the peace process, again stating that any agreement less than the ambit claim will not be acceptable.

Let’s call “Markets for Change” for what it is.  Rogue.   If any organisatioon can be so branded, then “Markets for Change” is a rogue outfit.  It is not accountable or responsible to any group, and has as its charter to close down industry that it does not consider appropriate.  Never mind any certification schemes, it will act as its own judge and jury.

Ms Putt has taken exception to the term eco-terrorist, claiming that terrorists murder people and she doesn’t.  Without delving too much into the enormous damage she is causing Tasmanians by doing them out of a job, the word “terrorist” is actually defined as “to force by coercion or fear”.  And that is exactly what she is doing in the market place.  The words suit her to a tee.  She claims, again wrongly, that all she does is have a conversation with Ta Ann’s customers.  She does so much more than that, actively campaigning against the company, lobbying its customers, and causing a collapse in market demand for this company’s  product.  An economic terrorist she truly is.

Such a view also reflects the Greens Senator Milne’s position.   In response to the comment that a mining venture would take up less than 1% of the area of the Tarkine, she said “The Tarkine is like the Mona Lisa, one blemish would destroy the entire painting”.  An absurd analogy.

Added to this is the approach of the Greens to data emanating from the Australian Institute, quoting census data claiming that less than 1000 people are still employed in the forest sector.  Everyone knows those figures are incorrect.  The real figure is over 3500, a figure verified by Schirmer earlier this week.  I will guarantee there will be no apologia from McKim for getting his facts wrong, or any change in his position as a result of this data.  In other words, the position is being driven by an ideology, and does not seek any practical solution.

The government is keen for the participants to the peace process to cut a deal.  Some may well wish to do so, but will that be enough.  It is a forlorn hope.  From the comments above, it can be seen that there will be no lasting negotiated agreement.  For such people, and for such organisations, compromise is anathema, an alien term.   Their mantra is “all or nothing”.  Negotiating with them is a waste of time.

There is a more serious issue arising for Labor.  The rally in Burnie produced the intriguing spectacle of the Premier and the Deputy Premier arguing that Labor supported mining, but being booed by the pro-mining crowd  - because they did not believe them.

It must have been quite a shock to the pair, who have previously stated their position to maintain the Tarkine region as a multi-use area, and who have expressed their support for the mining industry in the State.

Typically, the Greens have decried such a decision as promoting short-term jobs at the expense of the integrity of the area, a nonsense claim considering  the area has been mined and logged for over a century, but no matter.  Such criticism resonates – both ways - and it resonated last Saturday with those that attended the rally.

As the saying goes, “when you sup with the devil, you need a long spoon”.  For too long, the spoon has been short, and Labor has been tarred with the Green brush.  The compromises Labor has made over forestry, and their continuing defence of their Green partners in government (recall the silly comments of McKim in support of protestors, likening them to Gandhi and Mandela last week) has destroyed its credibility with working people, as evidenced at the Burnie rally.

Mining and forestry are two industries that rely on resource availability, and are concerned about resource security.  Both have been stalwarts of the Tasmanian economy for decades.  Both have employed thousands of Tasmanians.  Both are now under attack.

The Premier will need to do more than say “We support the mining industry” to regain credibility with her base. 

Collapse of IGA Peace Talks

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Created on Monday, 29 October 2012 11:00

Written by Julian Amos

The IGA Peace Talks Collapse

On Friday,the talks had recommenced.  Come Saturday morning, they had broken down.   Far too glib to blame the pizza, or lack of it.

What this means is that industry continues to be supplied with its contracted annual amount of 155,000 cub metres of sawlog, and the claim by the conservationists for a further 572,000 hectares of reserves has failed.  No new reserves.  This is as it should  be.

The IGA was all about ensuring that, however much extra forest was placed in reserves, the contracted amount of sawlog would be retained (see Clause 17).  This could not be achieved. There was no chance that the conservationists would accept any less than their ambit claim – their colleagues on the outside had already advised that - which meant a deal was impossible.  From the outset, this was the case.

Any increase in reserves effectively meant industries closing. All the modeling showed this to be so.  Sawmillers were not going to exit the industry, just because the conservationists wanted more ground.  The exit of Gunns from native forest operations meant the contracted amount of sawlog had already fallen from an annual supply of 300,000 cub metres to 155,000 cub metres.    

A ploy to reduce the contracted amount of sawlogs, by seeking from sawmillers a voluntary exit in exchange for dollars, was always bound to fail because the initial IGA agreement inferred that any contracted amount freed up would be available for re-allocation.  Why the Federal Government spent time pursuing this path is beyond me.

A couple of matters require further scrutiny.

The conservationists blame the sawmillers for not being flexible.  Excuse me! As if their demands are purity itself and all others are tainted.  It doesn’t get much more arrogant than this.  Where was their flexibility?

Further, we now have the spectacle of Lyndon Schneiders, a mainland spokesperson for the Wilderness Society, claiming that the oldgrowth sawmillers are to blame, and that the campaign will now target their customers to convince them not to buy Tasmanian wood.  This is economic terrorism, nothing less.

Already the propaganda war has started. Who is at fault – Schneiders says it is the old growth sawmillers.  And  “we” are going to teach “them” a lesson.  Goodness me!  Let it be placed on the record that there are no oldgrowth sawmillers as such.  There are hardwood sawmillers but their take is over 85% regrowth product.  However, there is no doubt they will be demonised by the coming conservationist campaign.

Already Ta Ann have been targeted, even while the talks were in progress, and Ta Ann only takes regrowth wood – their process is limited to taking the younger regrowth wood.

Federal Minister Tony Burke bemoans the fact that $100 million of Federal funds will now not flow into the Tasmanian economy.  What exactly is he talking about?  On my figuring there were three amounts of money presently on the table:

An amount of $120 million for regional development programs, to be allocated over 15 years.  To date, some $20 million has been allocated.  This money, some $7 million pa, was to be directed to one-off regional development projects, unrelated to forestry.  If the projects stack up, this should continue to be the case irrespective of the IGA talks.

An amount of $7 million per annum for an indeterminate time, but probably limited to 5 years, to manage the extra reserves.  Now not required, since no new reserves.

And an amount of $15 million to assist sawmillers exit the industry, also not required.

There was also an amount of $45 million made available some time back to contractors to exit the industry, in the aftermath of Gunns withdrawal from native forest, and some other retraining funds available at that time.  These funds are not a matter for the current round of negotiations.

In exchange for these sums, industry was meant to fall on its collective sword with gratitude while closing down an industry worth over $700 million per year to the Tasmanian economy.  It was $1.5 billion before the Gunns debacle.  You do the sums.

Minister Nick McKim blames Forestry Tasmania for undermining the talks, bemoaning the fact that industry has already received $100 million (undetailed) while the conservationists have gained nothing.  McKim should be challenged about the $100 million he cites, since I suspect it is moneys that went to support Gunns departure from native forest, and again unrelated to the present discussions.  However, one could also argue that the Greens’ agenda, to oversee Gunns’ collapse and to gut FT, is pretty much on track.

And finally, we always seem to overlook the fact that almost 50% of our forest estate is already in reserves, with the remainder being managed on a sustainable basis.  Claims that the Tasmanian forests are being destroyed ring hollow against such facts.  Still, that won’t stop the tree sitters and the forest protestors from running such propaganda.

The reality is the Tasmanian government abrogated its responsibility to determine forest policy when it established the round table process back in 2010.  Two years later, who knows how many dollars have been spent, so much energy expended, and so much suffering in our rural communities, we are now - back at the beginning.  The Bartlett dream of peace in our time is now a nightmare, and the mess of its own creating sits firmly back in the government’s lap.  This time, Government, don’t drop the ball.  Government cannot sit back and allow others to determine the policy for it.  It is – still – an employer of people and a source of economic activity for the State.  It deserves our support.

One lesson, hard learnt, is that the politics of appeasement does not satisfy the insatiable appetite for more.  If we don’t learn from history, we are doomed to repeat it.