Big timber not quite out of the woods

Industry finds itself at the crossroads over native forests and woodchipping

Peter Mitchell

PETER Mitchell, general manager of the Eden woodchip mill, used to have a longstanding, high-octane victory salute to break the tension at the end of an often-heated stand-off with protesters against his native-forest operation.

Mitchell would get out his chainsaw and cut off the legs of a 6m-high tripod made by protesters from forest saplings and used as a roadblock to stop logging trucks entering his Japanese-owned mill.

It proved a crowd-pleaser for frustrated logging truck drivers and a final insult for the self-styled "green police" such as Lisa, Sooty, Adrian, Tony, Lucy and Jack the Hammer, doing their best for the trees. But after this year's so-called "summer slam" to protest against destruction of the forests of southeast NSW and northeast Victoria, Mitchell has put away his chainsaw and says he won't be doing it again. "I was revving the chainsaw and this young woman had her arms wrapped tightly around the leg of the tripod, the blade was inches from her face and she was not going to let go," Mitchell says.

"I thought, hold on a minute, what am I doing?"

Mitchell's loss of determination could be a metaphor for the shaken confidence of big timber, which finds itself at a crossroads over native forests.

It is a crossroads created by the convergence of a prolonged market downturn in Japan, Australia's traditional market for woodchips, long-term mismanagement by state government-owned forest managers and a glut of timber from tax-scheme-driven plantations.

It poses a most uncertain outcome for the industry, the state forests and the conservation movement.

The timber industry's immediate predicament is best illustrated by the financial constraints that have forced industry alpha-male Gunns Ltd to abandon woodchipping in Tasmania's native forests, close the Deanmill operation in the heart of Western Australia's jarrah timber country and seek to restructure itself around plantation wood.

The tactics used by conservation groups against Gunns in Tasmania -- targeting its financial backers and investors have spread to Victoria where Australian Paper Mills is under siege for its use of native-forest woodchips from East Gippsland to make Reflex paper.

After less than one month of pressure from environment groups led by the Wilderness Society, more than 400 companies have pledged they will not use Reflex.

Leading Reflex sellers Australia Post and Officeworks are being pressured at board level to drop the brand and Australian Paper has suspended the feedback section on its Facebook page after being flooded with angry questions.

The ferocity of the protest is a new and alarming territory for Australian Paper.

But it is very familiar for South East Fibre Exports at Eden, where bulldozers were this week moving a mountain of chipped native forest on to the conveyer belt for export to parent company Nippon in Japan to make paper, none of which will return to the Australian market.

Because of its Japanese ownership and the fact none of the paper product from the mill makes its way back to Australia, the Eden mill so far has been immune from the sort of campaign being mounted against Australian Paper and its Reflex brand.

But with the Nippon group's recent takeover of the Maryvale paper mill, things are about to change.

"We need $80,000 to go in and make Nippon Paper the bad boy now," says fashion designer Prue Acton, who has taken a lead role against the continued wood chipping in the forests of southeast NSW and northeast Victoria.

Her main concern is the effect woodchip harvesting has had on the character of native forests and the dramatic decline in the local koala population.

"Nippon Paper [supplies] 'koala woodchips'," Acton says of the threat to koala habitat. "Nippon Paper [is] about to supply 'koala wood pellets'."

Acton says she is not a member of the Greens and does support a hardwood timber industry based on native forests, but not woodchips.

"Once the woodchip is out, you can have a look at the forests and the plantations and work out the best way forward," she says.

"The only reason they are able to hold on is because we give the pulp logs away. "The taxpayer is basically subsidising the transfer of the forest to Japan to turn it into paper."

State government trading enterprise Forests NSW reported a pre-tax loss of $4.11 million in 2009-10 compared with a loss of $4.67m the previous year.

After tax the 2009-10 loss was $233.38m, including the reversal of a tax asset relating to pre-1994 plantation establishment costs.

Campaigner Heather Kenway says Forests NSW is aware that the saw log industry is nearly finished, with multi-aged forests of different generations almost gone, so that some industry restructuring is unavoidable.

The question is how much and how quickly.

"It is obvious that Australia's state forestry agencies could do better financially, pushing for credits from regrowing logged forests for carbon and water values," Kenway says. "And we can try talking to them about that in the context of getting funding for forest restoration included in the carbon pricing arrangements that are being developed this year by the federal government."

Acton rejects industry claims that the woodchip industry can be justified on the basis of regional job creation.

"There are very few jobs left," she says.

"The market prefers plantation. There comes a time when you really have got to face facts.

"The contractors already are facing facts and moving into carting plantations. The loggers, who now take seven seconds to cut down a tree strip it and cut it into lengths with a $2m machine, can move into plantation."

For Mitchell, Acton's views reflect her privileged life.

"It's all right for someone like Ms Acton, who has made her money from her involvement with cotton, coming here and saying she doesn't care about other people's jobs," Mitchell says.

"I would hate to see Eden become no longer a working town."

Mitchell represents people such as Matt Pope, who joined his father's logging business seven years ago as a mechanic and, recently married with a child on the way in June, is hoping there is a future.

To keep the woodchipper turning, Mitchell is at the forefront of a trend that is closely watched from Tasmania to the southwest of WA that could have far-reaching implications for Australian timber.

Ironically, next year the UN year of the forest, could be the time Australia's native forests are catapulted out of the woodchipper and into the furnace.

South East Fibre Industries has caused a storm of protest with its plans to burn the waste from the woodchipper to generate electricity, to supply its own electricity and export any surplus to the grid.

It can receive a Commonwealth government renewable energy credit for electricity produced from mill waste but not whole logs brought to the mill.

Mitchell has further stirred the pot with an application to use the waste heat from turning sawdust from the woodchip plant and surrounding saw mills into pellets that can be used for heating and, in large scale, to coal-fired power stations.

The use of forest resources for bio-energy is a vexed issue for environmental groups.

It does not take much imagination to see how given the right subsidies and renewable energy policy settings bio-energy from "forest waste" could become a rerun of the woodchip experience through which the industry has become dominated by what was supposed to be a side operation.

Contrary to popular belief, it is not the left-overs that are taken to the mill to be chipped but almost 90 per cent of all forest logs.

The Eden mill may prefer trees with a smaller trunk size but its holding yard is stuffed with trunks measuring 1.5m to 2m in width that are, ironically, of a lesser quality for woodchipping and sold as a lower-grade resource to China.