Murray Watt’s ‘fix’ leaves logging industry and greenies stumped
The forestry sector is in limbo as federal law reforms threaten to trigger costly compensation claims and environmentalists prepare legal challenges.
From sawdust-encrusted sawmillers to anti-logging protesters in towering forests, combatants in Australia’s forests wars disagree on much but are united in uncertainty – and a sense their decades-long fight is at a crucial juncture.
The timber trade is accustomed to being a political football, famously playing a key role in deciding the fate of Mark Latham v John Howard in the 2004 federal election.
Native forest policy continues to influence the outcome in a string of marginal timber seats, particularly in Tasmania and NSW, as well as votes in green-tinged inner-city electorates across the nation.
But no one in the industry was expecting the policy bombshell dropped by the Albanese government in late November.
To secure Greens backing for federal Labor’s landmark environmental law reforms, federal Environment Minister Murray Watt agreed to a key demand: the removal of native forestry’s exemption from federal legislation.
Until now, Regional Forest Agreements with the states meant logging operations did not have to secure approvals under the federal Environment Protection and Biodiversity Conservation Act.
Instead, environmental values in the production forests were said to be dealt with under the RFAs, which set aside areas for conservation and provided state-administered forest practices.
Conservationists have long argued the set-up has overseen the destruction of vast swaths of public native forests across the nation and driven a number of species – from swift parrots to Leadbeater’s possums – towards extinction.
In a concession to the Greens, Watt agreed that under the reforms to Australia’s 25-year-old environment laws, forestry’s exemption would end in 18 months and RFAs would “comply with the same rules and standards as other industries”.
Conservationists were elated; the forestry industry clear-felled. It looked as if the Greens achieved their aim of ending all native forest logging.
Exposing logging operations to EPBC approvals, new national environmental standards and a freshly installed National Environment Protection Agency almost certainly would make native forestry unviable or even impossible.
“It would be very, very difficult to harvest in a biodiverse area to the satisfaction of the new requirements, on a coupe-by-coupe (logging area) basis,” Australian Forest Products Association chief executive Di Hallam says.
“It would be tricky to harvest a tree if there is a koala present (anywhere in a logging coupe). The risk might not equal the reward.”
However, in early December Watt flew to Tasmania for talks with irate timber groups.
In those discussions, and talks since, including in recent days, it has become clear the Albanese government – which promised at the last election to maintain native forest logging – has no intention of reneging on that pledge.
Labor believes those timber seats, particularly in electorally fickle Tasmania, are too important to risk.
Anthony Albanese triumphed in seats such as Braddon, Bass and Lyons at the last election by introducing a legislative fix to protect the salmon industry from an approvals review by Watt’s predecessor, Tanya Plibersek. The Prime Minister was not about to place those spectacular electoral gains at risk by selling out another class of workers to the Greens.
But how to reconcile the legislative changes agreed with the Greens, on the one hand, with the promises to industry and the political imperative on the other?
Watt, widely seen as an Albanese-appointed fixer, has a fix in mind. It goes something like this: Negotiate bilateral agreements with the states, under which they assess their own RFA logging against the new national environment standards, and have this accredited by Canberra.
In practical terms, it appears very much like a repeat of the RFA system the Greens thought they were overhauling.
In political terms, it appears a masterstroke – on paper delivering the changes agreed to with the Greens but continuing the logging of native forests indefinitely.
Industry is reassured and relieved but still extremely concerned and nervous. Will it work, and for how long? Can these bilateral deals be negotiated in time for the ending of the exemption in 18 months? And how much more potential now exists for lawfare by greenies?
Conservationists are furious.
“Our advice from the Environmental Defenders Office is that it’s still going to be up to the states to oversee the logging and to be the accreditation body for the logging – and that’s a really big problem,” Bob Brown Foundation campaign director Jenny Weber says. “This is about having the logging industry in control, yet again, and calling the shots. And giving them more money.
“RFAs are still going to be in place and approval powers for any (logging) activities will be devolved directly to the states.”
Watt is “very confident” the bilateral agreements can be achieved in time for the EPBC exemption sunset in 18 months.
He denies undoing the deal with the Greens via a backdoor stitch-up with industry.
“What we’ve done is deliver on what we said we would do,” Watt tells Inquirer in an exclusive interview, arguing the changes reflect those recommended by EPBC Act reviewer Graeme Samuel.
“Our actions have been entirely consistent with what we’ve said. From very early on, we made the point this is not about ending native forestry.
“I recognise the Greens have wanted to portray it that way for their own political reasons. It was never about that. It was about ensuring that forestry practices meet the same environmental standards as every other industry.”
Watt, a former forestry minister, rejects claims from conservationists that his solution will leave it up to the states to accredit their own logging operations as compliant with national environmental standards.
“The state will do its own assessment of whether its practices and requirements meet the national environmental standards,” he says. “But that system has to be accredited by the federal minister on advice from the federal EPA.
“And there is a provision for those processes to be audited every five years to make sure they maintain consistency with the national environmental standards.”
He concedes the final decision by the minister will be open to legal challenge: another potential avenue for green groups to engage in lawfare.
So will the system change anything in terms of logging operations and how they impact threatened species and environmental values?
Watt says it is “hard to know at this stage”.
“The industry and the Tasmanian government have always stated that they have high environmental standards and, assuming that is the case, they should not have any difficulty meeting national environmental standards,” he argues.
“But one of the reasons that it’s a little hard to say is that we are still in the process of drafting those standards.”
Hallam says those standards – relating to matters of national environmental significance (such as threatened species), environmental offsets, community consultation and First Nations people – should not hold any particular problems for industry, aside from some uncertainty over offsets.
Some within the industry say the uncertainty, however, is already affecting investment and workforce retention.
Watt says this should not be the case.
“I don’t see there’s any reason for people to be shutting down mills or operations or laying off workers when I’m confident we can work with the industry to meet these standards,” he insists. “Also, there is that 18-month period before changes are required.”
AFPA warns it will be challenging for the feds to lock in the required bilateral agreements with the states before the 18-month sunset clause exposes logging to federal approvals.
“The minute that exemption sunsets, in the absence of a bilateral agreement to accredit the RFAs … then the industry is subject to both state and commonwealth EPBC – and the chance of lawfare is doubled,” Hallam warns.
There are also concerns states – particularly NSW, which has flirted with ending native forestry – might be tempted to use the federal changes to trigger clauses in the RFAs that require the federal government to pay compensation to states for curtailing harvesting. This could be a way for the states to blame the feds for shutting down the industry while also making it pay the compensation.
“(NSW Environment Minister) Penny Sharpe would regard the need for an accredited RFA as a gift,” Hallam says.
“What is to stop the NSW government doing a go-slow on a bilateral negotiation and then the exemption sunsets and there’s no harvesting?”
Native forestry in Tasmania overall enjoys strong bipartisan support but the state is facing a debt crisis – and the collapse of native timber volumes from 2027.
Watt says he will resist any attempts by states to use the reforms to obtain federal compensation to shut down logging or deal with their existing problems.
“We don’t expect there to be a need for financial compensation because this is not about shutting down the industry or RFAs,” he argues.
“There are some questions for the (Tasmanian) state government about the future of native forestry related to sustainable yield … But these are completely unrelated to these reforms.
“We will be vigilant about ensuring state governments don’t use this as an opportunity to deal with problems that they’ve known about for some time.”
Industry is also concerned that a new federal carbon credit scheme could tempt state governments to use the situation to end native forestry to cash in on billions in payments to “stop or slow down” such logging.
Cash-strapped state treasuries may see this as a far better option than continuing a native forest industry supported by state agencies.
“It is incredibly tempting, certainly for the NSW government,” says Hallam, who rejects the science behind the proposed carbon method, accepted for “priority” development by federal Climate Change and Energy Minister Chris Bowen.
Watt argues it’s up to the states to decide whether they want to use their native forests for harvesting or carbon credits, but that his reforms should not be used as cover for the latter.
“That’s a matter for them to decide if that’s the way they want to manage their forests into the future,” he says.
“But they shouldn’t seek to use these reforms as an excuse to pursue other policies they may be already seeking.”
Among those most exposed to the ongoing risks of the new policy landscape are small native timber sawmillers, who in Tasmania are already having to trim their operations because of a sharp drop in available timber from 2027.
Along with the reforms, the Albanese government has announced $300m in support to modernise mills and increase value-adding.
These funds could be used by mills to “retool” so they could process plantation-grown, rather than native forest, timber.
However, the Tasmanian Sawmillers Association points out that some mills are too geographically distant from the high-quality plantations, and too deeply linked to markets for native timber, to take up the funds.
Association spokesman and southeast-based sawmiller Matthew Torenius says his business is one of these.
“We’re highly unlikely to be able to retool (for plantation timber), given our geographical location and access to resource,” he says. “And given the funds required to do a complete retool. You are essentially looking at a whole new business.”
The federal changes will affect not only native forestry on public land but also private land as well as potentially some plantations, Watt confirms.
With the exact impacts unclear, particularly if green groups successfully challenge any Watt “fix” in the courts, some industry figures warn the Albanese government may face substantial compensation bids by one or more states. “If there’s a major impact on the resource, then I’d be pushing the state government to put forward a compensation claim under the RFA provisions,” Torenius says.
Far from being over, Australia’s forest wars just became a whole lot more complex.
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