Secret deal undercuts private timber producers
The Andrews Government has been accused of compromising its impartiality after doing everything in its power to keep details about a new timber supply deal it struck with a sawmill a secret.
National
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The state’s forestry agency is fighting to keep secret a multimillion-dollar timber supply deal it struck with a sawmill that is now part-owned by taxpayers.
Victorian Information Commissioner Sven Bluemmel ordered documents on the agreement between VicForests and Australian Sustainable Hardwoods be released this year due to public interest, after lawyers for smaller mills raised fears of competitive disadvantage.
Lawyers for the mills say as well as the Andrews Government’s 49 per cent interest in the mill, for which it paid more than $61 million in 2017, it effectively “controls the Board of Directors of Holdings” at ASH.
VicForests had blocked access to the documents, but Mr Bluemmel overturned the government agency’s decision, saying concerns about “commercial disadvantage” were outweighed by the public interest.
He noted the applicant’s argument that Victorians should know “what deal the state government … dealt itself”.
Rather than release the information, VicForests is fighting Mr Bluemmel’s decision at VCAT.
The timber sales agreement sets out how much native wood a mill is provided.
The latest deal with ASH was shrouded in secrecy and controversy, after an initial three-year offer of 200,000 cubic metres was increased to 240,000 cubic metres at the time private operators of the company were seeking a public bailout.
Premier Daniel Andrews had said in early 2017 — before the offer was increased — that anything above 200,000 cubic metres would mean “risking the future of Victoria’s timber industry”.
If the wood is not supplied to ASH, it gets compensation.
VicForests refused to tell the Herald Sun at what point that compensation would occur, or how the arrangement works now that taxpayers are investors in the sawmill.
Smaller businesses fear they are getting an inferior deal on timber sold to them, and lawyer Gerard Kennedy SC, from Macpherson Kelley, said this is why the ASH deal must be released.
“Our clients are reasonable persons. They have concluded that the state government has compromised its impartiality,” he said.
The fight over timber supply comes after the government announced it would end native timber logging in Victoria by 2030, with a reduction in supply offered to sawmills from 2024.
Mr Andrews has argued that the industry, which supplies thousands of direct and indirect jobs in regional Victoria, was unsustainable and should transition to plantations.
Timber workers say government efforts to find and protect Leadbeaters Possum colonies has slashed native forest harvesting, and that plantation supply can’t replace native hardwood.
VicForests chief executive Monique Dawson told the Herald Sun that the supply levels for ASH “were appropriate as they did not impact on other customers”.
She did not answer questions as to why the amount of timber was increased despite advice this would be detrimental to the industry, or what compensation taxpayers would face if supply wasn’t met.
The agency did confirm it would continue to fight the release of its agreement based on its commercial-in-confidence argument.
The workforce at ASH is aligned with the Labor-aligned CFMEU, which smaller operators say means it gets treated differently.
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A government spokesman said that “VicForests operates independently of the government in negotiating timber supply agreements”.
The government says that timber supply levels did not change when the government invested in the mill, and that despite the transition out of native timber VicForests will honour existing contracts.
“From mid-2024 to 2030, a competitive process – which includes Heyfield – will be used for native timber allocation with an independent auditor appointed to oversee the tender process,” the spokesman said.
Originally published as Secret deal undercuts private timber producers