Objective 2 of the Charter requires VicForests and the Department of Sustainability and Environment (DSE) to “Maintain and improve the capacity of forest ecosystems to produce wood [products]”.  The text accompanying this objective further elaborates on this duty, stating that “the use of Victoria’s State forests must be at a level that can be sustained without impairing the ability of the forest to regenerate”.  It also highlights the use of monitoring and identifies the need for an “internationally recognised” certification scheme to ensure that our forest products are sourced from well managed forests.

Certification of VicForests’ Timber

Apart from the Charter, which effectively imposes only voluntary guidelines, all timber harvested and sold by VicForests is currently certified under the Australian Forestry Standard AS 4708—2007  (“AFS”), as audited by SAI-Global Limited.  The certificate covers the Forestry Management System for “processes involved in the planning for, harvesting and haulage of native eucalypt forest and post harvest regeneration .”  Despite being awarded AFS certification (Certificate No. FMS20003) by SAI-Global in January of this year, it has come to our attention that VicForests is failing to comply with a number of key AFS requirements relating to forest regeneration.

Requirement under the AFS to Regenerate

Under Sections 4.3.5 and 4.4.4 of the AFS, VicForests as forest manager has a duty to undertake regeneration of harvested areas of forest.  Specifically, section 4.4.4 states that “the forest manager shall ensure that regeneration of native forests and establishment of plantations is effective and timely.”  Section 4.3.5 further requires that “the forest manager shall regenerate native forest with species and provenances native to the area, or from an equivalent locality, as far as reasonably practicable to maintain local gene pools and species mixes.”  These requirements, to regenerate logged forest and ensure a representative species mix, tie in well with Objective 2 of the Charter.  It is only by complying with these two provisions of the AFS that VicForests can ensure that the forest is managed sustainably, i.e. that its capacity to produce wood and other products is maintained in the long term.

Failure to Undertake Adequate Regeneration

The Monitoring Annual Harvesting Performance in Victoria’s State Forests 2007-08  (“MAHP Report”) details the failure of VicForests to adequately regenerate logged forest.  Specifically, Table 9 of the report states that in the period from the date of VicForests’ conception in August 2004 to 30 June 2008, 17,851 hectares of coupes were harvested.  Of this total area, approximately 15,807 hectares of forest have yet to be successfully regenerated.  Specifically, the report states that “overall 89% of harvested coupes are still outstanding and have not been handed back to DSE”.  This failure to regenerate represents an almost total failure and is unacceptable.

The MAHP Report (on page 30) outlines concerns expressed by the Expert Independent Advisory Panel that there has been “little progress in regards to reducing the large areas of outstanding backlog regeneration and ensuring coupes are regenerated and finalised by VicForests in a timely manner.”  The Report  states that regeneration is of fundamental importance and that “if areas that are harvested are not adequately regenerated then harvesting operations cannot be seen as being sustainable

Successful regeneration is a considerable component of both the AFS  and FSC certifications and in the context of those certifications, we believe that it is reasonable, based on the EIA review of the MAHP report, to consider the non forest regeneration as land conversion;

Furthermore, coupes that have lain fallow for over 3 years have limited capacity to regenerate with the biodiversity of the original native species as required by section 4.3.5 of the AFS.  The ability for existing species to regenerate is then further reduced by the additional burning that later accompanies attempts to establish failed regenerations. 

This year VicForests only handed back around 2,500 ha logged coupes. Annual forests logging rates according to the Dept. of Primary Industry (DPI) has been 4000-4,500 ha/yr, so it appears that VicForest have fallen short of targets.

2007 - 08        184 coupes submitted     150 coupes (3851.7 ha.) finalised  15 coupes (290.3 ha.) otherwise removed from TRP  19 coupes (340 ha.) rejected

2008 - 09        176 coupes submitted     123 coupes (2204 ha.) finalised    32 coupes (658 ha.) already accepted                               21 coupes (424 ha.) rejected

2009 - 10        303 coupes considered   270 coupes (5517 ha.) accepted   32 coupes (382 ha.) already accepted                               1 coupe (21 ha.) rejected

2010 - 11        252* coupes considered   252* coupes (3580 ha.) accepted   - 0 rejected

• the report says 251 but there seems to be an arithmetical error.

9 of the 12 thinning coupes field audited by DSE (in 2010-11) failed to meet at least one of the prescribed regeneration and rehabilitation standards. That's a 75% failure rate.

So, unless the DPI figure is inaccurate, they are still regenerating less than they log each year and falling further behind.

On our estimate the cumulative backlog would now be about 62%.

Effective regeneration is not being achieved - falling well behind regeneration targets.

According to the state Treasury review of VicForest in late 2010, the URS auditor states

“ Given the inevitable delay between harvest and handback of coupes, VicForest will always have some area of coupes it has not handed back. However, there is concern that VicForests is harvesting greater areas each year than it is regenerating which is resulting in an increased area of yet to be handed back coupes” 

In 2008-2009 this was equal to 15,935 ha and we understand, based on coupe finalistation figures, that this will have increased at an average of 2000-2500 ha per year since 2008-2009. The figures for backlog would now be in order of 20,000 ha. The costs of which according to the Treasury report of $600.00 per ha at first regeneration attempt would see around 12 million dollars required to fulfill this target. 

According to the VicForests annual report (p 13) says ~ Some 3824 hectares of regenerated area has been submitted to the DSE for transfer to the State. This process was not completed at year-end. Biological timber assets would be expected to reduce by $6.3 million, once this is completed.

So now this process is complete, take $6.3 million from VicForests' bottom line. This reduces their increase in total assets/equity to around $3 million, and without the Bushfire Recovery Grant of $5.8 million. VicForests is nearly $3 million in the red.

There is no money to complete the backlog which further supports that the entity known as VicForests is effectively insolvent.

Invalidity of the AFS Certification

VicForests carry the AFS certificate however the DSE and the state government have been forced to take the areas off VicForests and fund a private tender to fulfill VicForests obligation to regenerate the forests after logging. On the 30th of June 2011, $1.27 million was awarded to the tender program that “restore and improve degraded forest areas in East Gippsland’ resultant of failed regeneration

We believe that the failure to regenerate harvested coupes constitutes a highly significant breach of Objective 2 of the Charter and of the relevant AFS provisions as outlined above.  Furthermore, putting corrective actions in place now to address this backlog, will in no way address the “effectiveness” or “timeliness” of the regeneration at the time of certification.  We therefore believe that based on these breaches the previous and current certification of VicForests’ timber under the AFS is invalid and we request that AFS certification be immediately withdrawn. We also request that no further certification be awarded until such time as VicForests can demonstrate that its forest regeneration is “effective and timely” as required by the standard.

FSC Implications

Apart from the AFS certification, it has also come to our attention that VicForests has applied for Forest Stewardship Council (“FSC”) certification for its timber products on a number of occasions, the most recent being November 2008. In section 6.3.5 of the FSC, there is also a requirement for pre-harvest inventory of the “full complement of naturally occurring tree species” to be conducted, however, we do not believe that on the ground pre-logging assessments are being conducted by VicForests  or the DSE.

Despite being unsuccessful in attaining FSC certification, we understand that VicForests provides timber to Australian Paper, which currently sells forest products under the FSC Controlled Wood process (FSC-STD-40-005). Like the AFS, FSC is similarly designed to ensure that products labelled with the FSC logo are sourced from forests that are managed with Low Risk to conservation values (High Conservation Values) Thus, in a similar fashion to the AFS requirements, the FSC Controlled Wood standard also requires that timber harvested and sold under the logo is sourced from forests that are regenerated.