10th November 2023
The Nature Conservation Council of New South Wales (NCC) has today released a new report from Frontier Economics which reveals for the first time that hundreds of millions of taxpayer dollars have been gifted to the taxpayer owned logging business Forestry Corporation NSW (Forestry Corp) over the past five years.
The report finds the taxpayer-owned logging business received $246.9 million worth of grants since 2019/20 financial year, while the hardwood division (which is responsible for native forest logging) made a loss of $28.2 million over the same period.
"Our government is wasting millions of dollars propping up this dying and destructive industry", NCC Chief Executive Officer Jacqui Mumford said today.
"In what other instance is it acceptable for a company to run at an almost $30 million loss after being given $250 million in taxpayer money?"
"This money could provide at least 150 extra firefighters or nurses in regional towns"
The report comes at a time of increased scrutiny over Forestry Corporation NSW. The taxpayer owned agency is facing prosecutions for several incidents and has recently been exposed for having failed to find endangered Southern Greater Gliders before beginning logging after it 'surveyed' for the nocturnal animal during the day.
In budget estimates this month CEO of the Environmental Protection Authority Tony Chappel revealed they are considering changing the rules which currently allow Forestry Corp to survey for nocturnal animals during the day. (see below)
This comes after NCC lodged a series of Breach Reports that found Forestry Corp is logging forests with the highest known numbers of the endangered Southern Greater Glider. See here.
Key findings from the Frontier Economics Report Public native forest logging: a large and growing taxpayer burden
The report finds state-owned logging companies, and the private industry itself, are being propped up through generous government subsidies and cross-subsidisation from the profitable plantation sector.
"Public native forest logging (NFL) has poor financial performance across all Australian jurisdictions. This places an unnecessary economic burden and risk to state governments, whilst also having a negative impact upon native forests and the wildlife that call them home.
"The continuation of this industry exposes governments and the taxpayer to an increasing level of financial risk.
"There are long-standing market changes that have reduced the demand for native forest products and put downward pressure on prices. The most significant of these are:
- the increase in competition in the domestic structural timber market from plantation softwoods,
- the increase in competition in solid wood markets from domestic and imported engineered wood products,
- and the increase in competition in export woodchip markets from domestic and foreign plantations." (Pg.6)
Statements attributable to NCC Chief Executive Officer Jacqui Mumford
"The NSW Government needs to come to terms with the fact that native forest logging is a dying industry and make a plan for a transition.
"How much more taxpayer money has to be wasted and endangered animals killed before this reality sinks in?
"Forests are the lungs of the earth. They are essential to clean air, a sustainable climate and healthy ecosystems where plants and animals can thrive.
"We've already destroyed far too much of the NSW bush. The remaining homes for our precious wildlife should be protected, not pulped."
Excerpt from Committee No.7 Planning and Environment, Climate Change, Energy, The Environment, Heritage (2nd November)
The CHAIR: I remain gravely concerned from what I've seen. In relation to the broad area surveys that Forestry Corporation is required to undertake, do you have any purview over how they're undertaken, and do you have any concerns around those or how they could be improved?
TONY CHAPPEL: I think yes would be the answer to both of those questions. Part of the stop work order that has been referred to at Tallaganda relates to those issues-that the IFOA is an outcomes-based instrument-but I think our observation is sometimes the way the Forestry Corporation seeks to operationalise those outcomes lacks, in our view, sufficient rigour. It needs to be developed in a competent manner. That's, I think, at the heart of some of our concerns in Tallaganda regarding the way surveys were conducted for den trees and so on. We proposed to Forestry Corporation some adjustments to protocols to both install further precautionary measures within the proposed Great Koala National Park area, but also improve how Forestry Corporation identify and protect important threatened species habitat. So we'll be aiming to finalise those in the near term.
The CHAIR: Mr Chappel, do you have the power to amend the protocols-as in, the EPA?
TONY CHAPPEL: The conditions of the IFOA are set by the two Ministers, but the IFOA provides that the EPA can adjust or update protocols to deliver adaptive management to some extent within those conditions that are set. The conditions can only be adjusted or remade by a process that involves the consent of both Ministers, but the EPA is empowered to adjust protocols.
The CHAIR: So you can amend protocols?
TONY CHAPPEL: That's what we're proposing to do in both of the contexts I just referred to.
The CHAIR: There is real concern around when we do recommend an improvement in forest practice that it is done through site-specific operating conditions, and that they are unenforceable. If the EPA has the power to amend protocols and there is the case to do so, then the public interest would dictate that that is a good regulatory approach.
TONY CHAPPEL: Yes, I think that's fair. The site-specific conditions where they are implemented are enforceable, but they have to be requested by the Forestry Corporation. The protocol changes that have been made in the koala hubs, for example, are enforceable prohibitions on harvesting. I guess the caveat to freedom of action here as the regulator is we are obligated to consider any impact on timber supply, through the IFOA, of any adjustment. That's obviously an important consideration, but we'll make adjustments based on evidence where we assess they're required, and that's a process we're now undertaking.
The CHAIR: You would be aware that Forestry Corporation's barrister in the Land and Environment Court a few weeks ago stood and said several times, "If the EPA wants to change the protocols, they will. They can. They have the power to do so."
TONY CHAPPEL: I am aware of that. We've put to Forestry Corporation the form of some potential protocol amendments and we're obviously engaging with them. We need to do that with the full visibility of any impacts and understanding of that. We'll take that into account. We're also working with our colleagues in the Department of Primary Industries to get any feedback they might want to offer, but ultimately I think there's a strong case for clarifying some of the requirements that the IFOA sets out for various threatened species that have been up-listed or severely impacted by fire since the IFOA was made.
Statement ends
