THE NATIVE
FORESTS OF WESTERN VICTORIA
PRELIMINARY
EVALUATION OF THE
COMPREHENSIVE REGIONAL ASSESSMENT FOR THE
WESTERN REGION OF VICTORIA
(Western Region,
Forest Management, Timber Industry,
Plantations, Tourism, Water)
by
The Otway
Ranges Environment Network
(OREN)
September 13,
1999
This document
is printed on tree free electrons
CONTENTS
Appendices
:
2. Determinants
of Water Quality and Aspects of Water Production in the
Upper
Barwon Catchment System. Report by P.F. Clinnick,
Department
of Conservation, Forests and Lands. November 1985.
3. Breaches
of Timber Harvesting Regulations and Codes of Forest Practices
in the
Otway FMA.
1.Introduction
The Commonwealth
and Victorian State governments are jointly committed to the completion
of a Regional Forest Agreement (RFA) for the Western Region of Victoria
by December 1999. In this context, a Comprehensive Regional Assessment
(CRA) has been published "to provide a synthesis of the information
on which the RFA can be developed and agreed between the Victorian and
Commonwealth governments".
Following
a very short period of consultation with the community, a Directions Report
will be completed, which "builds upon information contained in the
CRA report and the results of consultations with the community".
This document
presents OREN's preliminary evaluation of the first nine chapters of the
CRA document. OREN has been unable to complete an evaluation of the remainder
of the CRA as critical information on bio-diversity has yet to be released
by the Steering Committee.
This evaluation
has been released as soon as possible to assist the Regional community
to understand the implications of the current RFA process and contribute
to the debate on an informed basis. An evaluation of the remaining chapters
of the CRA will be released once relevant information has been received
from the Steering Committee and analysed.
Inquiries
in relation to this document should be directed to the principal author,
Christopher Tipler, who can be contacted at the following address:
C/- OREN
Level 7,
412 Collins Street
Melbourne,
Vic. 3000
Telephone
(03) 9670 0455
Facsimile
(03) 9670-6326
This document
has been published on the OREN website at the following address:
www.oren.org.au
The CRA document
itself is also published on the Internet at the following address:
http://www.rfa.gov.au
2.
Summary
OVERVIEW OF THE CRA
The CRA document,
despite its volume, contains very little information that can be used
as a basis for formulating forest management policy. The document fails
to explore the important linkages between the various forest values in
the region and contains much misleading and inaccurate information. In
addition, the information needed to complete an assessment of bio-diversity
has still not been released.
In the above
context, the RFA timetable for the Western Region is completely unacceptable
to OREN, and to the wider regional community (particularly in light of
the fact that, until very recently, Geelong was excluded from the consultation
process). It is simply not possible, on the basis of the inadequate research
that has been completed to date, to formulate appropriate policy in relation
to the Western Region.
THE WESTERN REGION (CRA Chapter
2)
This chapter
of the CRA fails to explore the important subject of whether the Western
Region is, in effect, one region or three. In addition, the significance
of tourism to the region is not identified in the economic data presented,
and there is no examination of important demographic, economic and employment
trends in the region (which demonstrate that tourism is the main driver
of growth).
FOREST MANAGEMENT AND MANAGING
FOR
TIMBER PRODUCTION (CRA Chapters
3 AND 4)
This chapter
of the CRA is essentially an unquestioning statement of DNRE dogma and
contains many misleading statements. It fails to acknowledge readily available
evidence that Codes of Forest Practice in the region are routinely broken
(eg, the reclassification of Sawlogs to Residual logs).
In its review
of silviculture, the CRA does not question the application of clearfelling
techniques to Mixed Species forests, despite the fact that all of the
research supporting clearfelling relates only to Mountain Ash species.
In its discussion
of sustainable yield, the CRA fails to acknowledge that short rotations
are leading to the large scale destruction of bio-diverse forests and
it makes no attempt to acknowledge or discuss issues arising from the
fact that no production limits are set on Residual logs. The CRA also
does not consider the important issues of nutrient loss, wildfire, and
regeneration failure in its calculation of sustainable yields for the
Western Region.
TIMBER INDUSTRY (CRA Chapter
5)
Chapter 5
is the most disturbing and concerning chapter in the CRA, for several
reasons:
• It is
almost in its entirety thinly-veiled timber industry propaganda that
treats the facts very loosely in an attempt to cast the regional Hardwood
Logging, Woodchipping and Sawmilling industry in the most favourable
light possible. In a document purporting to be an assessment, intellectual
dishonesty of this sort is unacceptable.
• It contains
a number of important errors of fact, and the data presented in a
number of the tables does not reconcile.
• It makes
no attempt to come to grips with the fundamental issue, revealed by
the data, that the regional industry is not viable without massive
and continuing government subsidies. Rather, it attempts to argue,
against the evidence, that the industry has potential.
• It demonstrates
that the DNRE considers itself to be part of the Timber industry,
raising fundamental issues relating to stewardship of the forest.
The diagram
opposite reveals the logic which is driving the current 'treadmill of
destruction' in the Western Region. Every element of this argument is
supported in evidence, which we have summarised in Section 6 of this evaluation.
PLANTATIONS (CRA Chapter 6)
The wide-ranging
and unfocused discussion of softwood and hardwood plantation topics in
the CRA does not focus on any of the main issues relating to plantations
and their relationship to native forests in the region.
Importantly,
the CRA does not give any consideration to the extremely low level of
royalties charged for sawlogs, and particularly pulp logs, which will
make it most difficult for hardwood plantations to be established on a
viable basis.
TOURISM AND RECREATION (CRA
Chapter 8)
Despite the
importance of tourism to the region, and the significant adverse impact
of clearfell logging on tourism values, this chapter of the CRA is only
ten pages long (compared to 34 pages for Timber).
Whilst it
confirms OREN research demonstrating the large size and rapid growth of
tourism in the region, it does not give consideration to the growth potential
of tourism in the forest hinterland, nor does it consider the major adverse
impact of clearfell logging on tourism. Finally, no attempt is made to
estimate the wider multiplier effects of the Tourism industry, although
multiplier effects for Timber were calculated.
WATER AND CATCHMENTS (CRA
Chapter 9)
Despite
the availability of good quality research for both the Thomson Catchment
and the Otways, the CRA makes no attempt to explore the question of
the value of water versus the value of woodchips and timber.
Specifically,
the CRA ignores an important study for the Department of Conservation,
Forests and Lands in November 1985 which found that the value of water
lost through logging in the Otways was almost twice the value
of timber harvested.
Updating
the assumptions used in this study, to take into account present day
values for water and timber, would suggest that water values now
exceed timber values in the Otways by a factor of three, with the
result that logging in Otway catchments has a net cost to the community
(negative value added) of $18 million p.a.
IMPLICATIONS FOR POLICY
FLOWING FROM
OREN EVALUATION OF THE CRA
In this
evaluation OREN has presented new information that has profound implications
for the management of native forests in the Western Region. This information
is as follows:
(i)
We have provided a framework for a systemic analysis of forest values
which needs to be further developed by all parties involved.
(ii)
We have presented evidence that the Hardwood Logging, Woodchipping
and Sawmilling industry in the Otway FMA is not financially viable,
and is on an unsustainable 'treadmill of destruction'. The industry
exists today only because our native forest is being given away
on the assumption that it is a 'renewable resource' that has little
value to the community in alternative use. This assumption is wrong.
Logged on an eighty year rotation it is not a renewable resource,
and the true cost to the community of its use for woodchips and
sawn timber, in the Otway FMA alone, is a loss of at least $18 million
per annum (see page 31 for analysis of industry value-added).
(iii)
In this context, we have presented evidence that the value of water
lost through clearfell logging in the Otways is approximately three
times the value of timber harvested from forest catchments.
(iv)
We have demonstrated, using woodchips as an example, that hardwood
plantations are unlikely to be viable when they have to produce
logs on a commercial basis at a cost six times greater than the
royalties which currently apply to Residual logs. The same logic
applies to sawlogs.
(v)
We have demonstrated that large areas of bio-diverse native forest
are being lost in the Otways, by presenting maps showing the extent
of logging over the last thirty years, by revealing that most coupes
being logged do not meet minimum sawlog-economic criteria, and by
pointing out that silviculture research does not support clearfell
logging in mixed-species forests.
(vi)
We have presented evidence showing that tourism is the major driver
of demographic and employment growth in the region and has very
large multiplier effects. Clearfell logging of the Otway native
forest and tourism growth are fundamentally incompatible.
(vii)
Finally, we have presented evidence that the Otway native forest
is not being managed responsibly by the DNRE and we have pointed
out that, by its own admission in the CRA document, the Forestry
Division of the DNRE views itself as part of the Hardwood Logging,
Woodchipping and Sawmilling industry. This long overdue admission
of allegiance raises profound issues with respect to the stewardship
of native forests in the Western Region. The DNRE cannot be both
poacher and gamekeeper. The community now has evidence before it
of the need for independent review of, and control over, the management
of native forests in the Western Region in particular, and probably
in Victoria as a whole.
In OREN's
view the policy direction indicated by the above information is clear:
OREN Recommendations
• All
logging in forested water catchments in the Otways should cease immediately,
and permanently.
• Clearfell
logging in all other areas of the Otway FMA should also cease immediately.
• The
hardwood sawmilling industry should be given the necessary structural
adjustment funding to enable most sawmills to exit the industry.
• Sawlog
royalties should be independently reviewed and set at commercial levels.
• Calculations
of Sustainable Yield should be based on the entire bio-mass of the
forest, not on sawlogs alone.
• The
role of the DNRE in managing native forests must be clarified immediately.
Further recommendations will be put forward in relation
to Bio-Diversity when all of the CRA information has been published.
3.
OREN Approach
to Evaluation of the
Comprehensive
Regional Assessment and General
Observations
on the Adequacy of the CRA and on the
RFA Timetable
OREN's starting
point for evaluation of the CRA is the assumption that the CRA is supposed
to be a genuine attempt to provide a foundation for policy-making. To
do this it needs to provide:
(a) comprehensive,
accurate and unbiased information in relation to all of the relevant
policy variables;
(b) a
framework for analysing the significance of this information; and
(c) an
analysis, within this framework, of the main policy variables and
their interrelationships.
As the following
diagram attempts to show, the scope of the CRA is critical in determining
the outcome of the RFA process.
Exhibit 3.1
The Scope of
the CRA Document is Critical in
Determining
the Quality of Subsequent Policy Decisions
An understanding
of the relationships between the various forest values requires a 'systems'
approach in which the various forest-related activities and uses interact
to produce an outcome in terms of economic outputs (for tourism, water,
timber, etc) and ecological sustainability.
It is important
to note here that a system can only be meaningfully assessed in terms
of its outcomes. For example, we do not say that a car engine is a good
or bad engine by examining its constituent parts; we deem it to be good
or bad by reference to its power/torque output per unit of fuel input
and its reliability/longevity. Similarly, one cannot meaningfully assess
a forest values 'system' by viewing it merely as a set of essentially
disconnected components.
Exhibit 3.2
opposite presents a very simplified model of the Otway Forest values "system".
The system consists of a number of values - biodiversity, timber and woodchips,
hardwood plantations, tourism, water quantity, water quality, social amenity,
minerals, and other forest produce. Significant relationships between
these values are described by the small circles (or regulators). For example,
activities associated with the creation of timber and woodchip values
have a negative effect on tourism in terms of the impact on scenic quality
and tourist roads. Similarly, there are important pricing and employment
linkages between native forest timber harvesting and hardwood plantations.
In this model,
the system boundary is defined to include downstream effects within
the region for each value, but it excludes downstream effects outside
the region in each case. It is important to note also that this model
describes a system for the Otways, and it would be feasible to construct
a similar systems model for other FMAs in the Western Region, where the
relationships between values are likely to be very different. This raises
the very important question of whether the Western Region constitutes
one system or a set of quite different systems with different competing
values.
The above
discussion suggests that, at the minimum, the CRA document should seek
to define the system boundaries on a consistent basis, describe the relationship
between the key values in the system and present an assessment of the
trade-offs. Items that one would expect to see in such an analysis include:
• clear
definition of all the obvious linkages;
• an analysis
of the value of timber and woodchips versus the value of water;
• an analysis
of the impact of pricing policies for native forest produce on the
embryonic hardwood plantation industry;
• the
impact of native forest harvesting activities on tourism values.
Assessment
(i) No
meaningful analysis of 'trade-offs' provided.
Viewed in
the above context, the CRA is neither comprehensive, nor an assessment
in any meaningful sense. The document is essentially a collection of disconnected
facts and items of information, of variable (and often very poor) quality.
No attempt is made in the document to define the relationship between
the main forest values and to assess the trade-
Exhibit 3.2
Simplified
Model of the Otway Forest Values 'System'
Notes:
• Grey line indicates System boundary.
• Not
all linkages shown (eg, affect of mining activities on tourism and
water)
offs that
must inevitably occur between them.
(ii) System
boundaries not consistent.
Further, no
attempt is made to define the boundaries of the forest values system in
any consistent way. For example, Chapter 5 discusses the downstream effect
of native forest sawmilling activities, both within the region and beyond
the region, but no attempt is made to complete a similar analysis for
tourism, where the downstream implications are probably far greater.
(iii)
No consideration of important local differences within the Western
Region.
The CRA does
not recognise the very important differences that exist between the three
FMAs in the Western Region. The effect of this is to reduce the quality
of any analysis to the lowest common denominator (eg, for the Western
Region as a whole, woodchips account for around 75% of the total volume
of timber harvested from the forest, but in the Otway FMA, which is not
analysed separately, OREN research indicates that the woodchip percentage
is far higher. Similar observations could be made in relation to a range
of other important considerations, including flora and fauna, tourism
and water).
(iv) Lack
of Rigour and Impartiality.
A particularly
concerning aspect of the CRA document is the extent to which it is heavily
biased in favour of the woodchipping and timber values. This comes through
in a number of ways:
• in the
volume balance of the document; eg, 34 pages are devoted to timber,
yet the vital subject of forests and tourism receives only 10 pages;
• in the
completely uncritical presentation of DNRE 'dogma' in relation to
forest management;
• in the
use of inappropriate and misleading information, apparently in an
attempt to emphasise the importance of the hardwood logging, woodchipping
and timber industry;
• in the
inconsistent treatment of downstream effects (between timber and tourism),
and the use of old, inappropriate employment multipliers;
• in the
failure to provide comprehensive data in relation to flora and fauna.
(v) Inadequate
Treatment of Tourism, Water
Tourism and
water are clearly the two most important forest-related economic values
in the region, yet the CRA fails to recognise this. For example, the brief
tourism section contains no analysis of the extremely damaging effect
of clearfell logging on scenic quality. The chapter on water, for example,
ignores evidence showing that in the mid 1980s the value of water lost
as a result of logging in the Otways was twice the value of timber
harvested (OREN research indicates that lost water is now three times
more valuable).
(vi) Errors
in Data
In addition to the above, there are many errors in the document. Tables
containing important information don't add up (eg, page 49) and there
are inconsistencies in the information presented.
(vii)
RFA Process and Timetable
The RFA process for the Western Region involves a total elapsed time
of around nine months. In this absurdly short timeframe the regional
community is expected to deal with grossly inadequate research (the
CRA), engage in consultation with State and Federal officers who are
obviously just 'going through the motions' and formulate some sort of
considered response. It is impossible and both governments know it.
In addition to the timetable issue, Geelong (the largest population
centre in the region, with a vital interest in management of the Otway
native forests) was deliberately excluded from the RFA process until
very recently and the wider Geelong community has therefore had very
little opportunity to engage in the consultative process.
(viii)
Summary
In summary, the CRA document, despite its volume, contains very little
information that can be used as a basis for formulating forest management
policy and contains much misleading and inaccurate information. It is,
frankly, a half-hearted and amateurish piece of work that suggests the
authors, and the Steering Committee, are not serious in their desire
to have a robust and meaningful RFA process.
This perception is compounded by the absurdity of the RFA timetable
which gives the community almost no time to deal with the inadequacies
in research and analysis. One is left with the inevitable conclusion
that, unless the regional community provides the Committee with substantial
input over the next few weeks, the Directions Report is likely to recommend
a continuation of the status quo. Indeed the whole process seems to
be a mechanical sham; the Federal and State governments appear to have
no interest in, or commitment to, an outcome that genuinely seeks to
strike an appropriate balance of forest values. Given the highly
destructive nature of hardwood logging activities in the Otways and
the obvious adverse effect that these activities are having on water,
tourism and biodiversity values, this outcome would be completely unacceptable
to the regional community and will lead to continuing conflict over
the forest management.
In the following sections of this document, we provide
commentary and analysis of each of the major forest values covered in
the first nine chapters of the CRA document.
Table 4.1
Source: 1996 Census.
4.
The Western
Region
(CRA Chapter
2)
4.1 ONE REGION OR THREE?
One would
have expected the CRA to provide an assessment in this chapter of
important intra-regional differences which may have implications for
forest management policy. Disappointingly, there is no such analysis.
Yet the Western Region consists of a number of very different economies,
with very different determinants of employment and output. This is
evident from the table opposite (4.1), drawn from 1996 census data
for the Barwon region. Clearly, the forces shaping the City of Greater
Geelong are unique in the region due to this city's close connection
to Melbourne. Other regions - the coastline, parts of the Otway Forest
hinterland, and areas such as Ballarat, Hepburn Shire and the Grampians,
are heavily dependent on tourism. Other areas are driven economically
largely by agriculture, which also varies greatly by type of activity.
All of these factors are relevant when looking at forest management
policy. For example, areas that have high tourist traffic, or have
great tourist potential, are extremely sensitive to logging activities
which have serious adverse effects. Large population centres such
as Geelong, which draw their drinking water from forest catchments
in the region, have a legitimate concern about logging because of
its effects on water yields and water quality.
For the
above reasons, the failure of the CRA to provide an insightful analysis
of the economy of the region is a serious shortcoming.
4.2
CONTRIBUTION OF TOURISM TO THE REGIONAL ECONOMY
Table
2.2 on page 9 of the CRA presents an analysis of industry contribution
to gross State product, but the ABS classification used does not define
tourism as a separate industry. Rather, the significance of tourism
is buried in a number of industries including construction, wholesale
and retail trade, accommodation, cafes and restaurants, transport,
communications, finance, property, government administration, cultural
and recreational services, community services, personal services and
so on. In other words, the impact of tourism is pervasive, yet no
attempt has been made to make this explicit.
What
we do know is that, relative to the significance of tourism, the forestry
and logging section is extremely small indeed, as indicated in Table
2.3 on page 10. This point needs to be noted carefully by the Steering
Committee.
4.3
NO EXAMINATION OF IMPORTANT DEMOGRAPHIC, ECONOMIC AND EMPLOYMENT TRENDS
It is
remarkable that the CRA contains no analysis of regional and intra-regional
economic trends, in order to highlight the drivers of growth. Figure
4.3 below and Table 4.3 opposite reveal, for example, that 'traditional'
areas such as the Colac Otway Shire are going backwards both demographically
and economically, whereas areas such as the Surf Coast Shire are expanding
very rapidly. There are important implications here. Tourism is a
major driver of population and employment growth along the coast.
It is not unreasonable to conclude from the data that an opening up
of the forest hinterland would lead to similar beneficial effects
from tourist growth in areas that are currently in decline. Yet the
CRA makes no attempt to explore this vital question, or the extent
to which logging of native forests inhibits tourism development.
Figure
4.3
Barwon
Population: Average Annual Rate
of Change,
1991 to 1996.
Table 4.3
Total Employment
in the Barwon Region -
By Shire
Exhibit
5.1.1
Source: DNRE Log
Royalty data obtained under FOI request.
5.
Forest Management
and
Managing for
Timber Production
(CRA Chapters
3 and 4)
5.1 FOREST MANAGEMENT
Chapter
3 of the CRA on forest management and resource utilisation is essentially
an unquestioning statement of DNRE 'dogma'. As such it contains many
misleading statements, as the reality of forest management in the
Otways falls well short of stated policy. Specific observations on
this matter follow below.
5.1.1 Compliance with
the Code of Forest Practices (Pages 17 and 18 of the CRA)
The text
of the CRA implies that Codes of Practice have been professionally
and competently developed, and that they are observed and policed.
This is far from the truth. Over the period 1991/92 to 1998/99, there
have been 68 officially registered breaches of the Timber Harvesting
Regulations and Codes Of Forest Practices in the Otway FMA (see Appendix
3). To this recorded figure, one could add many other breaches that
were not recorded.
Although
the CRA states that breaches of particular conditions of licences
can result in penalties, the Committee should note that sawlogs are
routinely classified as Residual logs in the Otways, making a nonsense
of the sustainable yield limits determined under the Forests Act.
The charts opposite show the massive increase in residual logs which
has occurred over the last decade, and the sharp fall in the volume
of D grade sawlogs over the same period. Illegal reclassification
of sawlogs explains a significant proportion of these trends.
5.1.2
Forest Management Plans (Pages 18 and 19 of the CRA)
The CRA
states on pages 18 and 19 that, as a consequence of complying with
various Acts of Parliament, Forest Management Plans are required to
consider a range of matters including ecologically-sustainable management
and the maintenance of environmental values, water catchments, flora
and fauna protection, sustainable yield, biodiversity, public participation
in plan development and monitoring and review of management performance.
Whilst
it may be a requirement of the plans that these matters be considered,
in reality few of them ever are. OREN is currently finalising a research
study entitled "Breaches of the Otway Forest Management Plan",
which will be made available to the Steering Committee in the near
future.
In this
context, one can reasonably ask, why didn't the CRA complete an independent
assessment of these matters? More particularly, why were community
groups such as OREN not consulted to obtain some independent insight
into the status of forest management in the Otways?
5.1.3
Wood Utilisation and Coupe Planning (Page 19 of the CRA)
The CRA
states that "a three year schedule of coupes ... is prepared
for each FMA annually" and that "these plans are made available
for public comment prior to finalisation". Neither of these statements
are correct. The Wood Utilisation Plan often includes coupes which
have been scheduled at short notice without any prior consultation
with the community and coupes scheduled for a particular year are
routinely brought forward (e.g. Grey River Rd. 07/242/520/05). In
addition, it is difficult for members of the public to obtain copies
of the Wood Utilisation Plans, as they are only available at the DNRE
offices in Forrest and Gellibrand.
5.1.4
Silviculture (Pages 20 to 27 of the CRA)
This
section of the report is also a bland statement of current DNRE policy,
without any attempt at an evaluation of silvicultural practices.
One fundamental
question that should have been addressed is the application of clearfelling
techniques in forest types other than Mountain Ash. All of the research
supporting the clearfelling method of timber harvesting is based on
the particular characteristics of Eucalyptus Regnans, yet as the chart
opposite reveals, the vast majority of timber harvested in the Otways
is from Mixed Species forests, with pure stands of Ash being only
a relatively small proportion of the total.
Chart 5.1.4
WUP 1999/2000
- 2001/2002
Expected
Gross Volumes of Sawlogs (D+) by Forest Type
In reality,
clearfell logging is also the approach taken in Mountain Mixed Species
and Foothill Mixed Species forests, but the case for clearfelling
in these forests has not been established. Given the large-scale destruction
of biodiverse forest which occurs as a result of clearfelling, this
is a major question mark over current forest management prescriptions,
yet the CRA does not address it.
5.2
MANAGING FOR TIMBER PRODUCTION (CRA PAGES 31 TO 43)
As with
previous sections of the CRA, this chapter is also a bland statement
of current DNRE policy, without any attempt at independent assessment.
Yet there are many issues in relation to the determination of Sustainable
Yield, and the management of the production of various timber types.
5.2.1
Sustainable Yield Not an Ecological Concept
It is
important to note at the outset that sustainable yield, as defined,
has nothing whatever to do with ecological sustainability; it is purely
an economic concept. The maximisation of sustainable yield occurs
by logging hardwood forests on very short rotations of eighty years
or less. The problem here is that the maintenance of biodiversity
requires logging rotations of at least two hundred years. The inescapable
conclusion is that, in the Otways, the current Production Zone of
63,000 hectares is being turned progressively (and quite quickly)
from a forest into a plantation; under current policy the Otway State
Forest will be reduced in area from 93,000 hectares to the reserved
area of 30,000 hectares within the next fifty years.
The point
here is that what constitutes sustainable yield from a purely economic
standpoint does not constitute ecological sustainability from any
perspective.
If the
Steering Committee is in any doubt on this issue, it can refer to
the map opposite of the Eastern Otways, showing most of the
coupes logged since 1970. It has been prepared by OREN from official
data sources and is entirely accurate (but may exclude some coupes)1.
It reveals an appalling and systematic pattern of destruction that
has had a profound impact on flora and fauna. In this context, the
Committee should also refer to the charts in Section 6.6 of this evaluation
which reveal that most areas being logged in the Otways are below
minimum economic sawlog yield and are being made 'viable' only
through clearfelling and the resultant sale of woodchips. The pressure
on the forest flowing from this relentless push into areas of lower
quality is enormous and not sustainable.
5.2.2
Statements on Forest Regeneration are Incorrect
The text
on pages 22 and 23 of the CRA asserts that "Regeneration success
rates in low elevation mixed species forest, where even-aged silviculture
has been practiced, have been satisfactory ... regular observations
by forest officers indicate that coupes (where uneven-aged silviculture
is practiced) are generally adequately stocked". OREN challenges
these statements. We can take the Steering Committee to many coupes
which, years after logging, are showing no sign of effective forest
regeneration.
5.2.3
Sustainable Yield Methodology Flawed
The calculation
of sustainable yield in the Otways relates only to D+ sawlogs; it
excludes Residual logs, and there is no statutory limit on the quantity
of Residual logs that can be removed from the forest in a given period.
Page
34 of the CRA states that Residual logs are produced as a by-product
of harvesting for sawlogs, but this is simply not consistent with
the facts. The industry is now 'woodchip-driven'. The completely inadequate
DNRE supervisory regime is a significant factor contributing to this
problem, as is the fact that contractors are paid more for Residual
logs than they are for sawlogs2.
The net
effect is that the quantity of sawlog quality timber being taken from
the Otways is far greater than the production figures indicate and
it may well be the case that the legislated maximum sustainable yield
limits are being breached in the Otways.
In this
context, the whole chapter in the CRA on Sustainable Yield has very
little meaning or value.
NOTES:
1. A similar map for the Western Otways is also
available.
2 .
Refer Auditor-General's Special Report No. 22, p. 119.
5.2.4
Sustainable Yield Calculation Takes No Account of Nutrient Loss
One of
the most bizarre aspects of forest management practice in Victoria
is that sustainable yield calculations, and DNRE policy, take no account
of nutrient loss resulting from the complete removal of the forest
biomass through clearfelling.
Well
documented scientific research demonstrates that a substantial proportion
of the essential nutrients of eucalypts is contained in the stemwood,
as the table below reveals.
Table 5.2.4
Contribution
of Biomass Elements
To Eucalypt
Nutrition (%)
|
Main Nutrients
|
|
Nitrogen
|
Phosphorous
|
Calcium
|
Magnesium
|
Foliage
|
14
|
13
|
7
|
17
|
Bark
|
18
|
18
|
31
|
13
|
Understorey
|
4
|
3
|
2
|
2
|
Litter
|
15
|
8
|
21
|
16
|
Stemwood
|
31
|
27
|
7
|
12
|
Branches
|
18
|
31
|
32
|
40
|
TOTAL
|
100
|
100
|
100
|
100
|
Source:
Turner, J. and Lambert, M. Nutrient Cycling and Forest Management.
1996. (Contained
in 'Nutrition
of Eucalypts', CSIRO 1996.)
Yet, the DNRE view is that pulp logs and thinnings are 'waste'
or 'debris' that can be sold for almost no value without any consequence.
This attitude displays a complete lack of understanding of the principles
of ecology. In nature, growth basically equals decay. Any farmer
knows that if he cuts hay from his pastures year after year without
fertilising the soil he will soon be left with depleted soil and
a poor crop. Yet in the management of our forests this basic principle
of agriculture is completely ignored.
We ask,
why is it that the CRA did not consider this matter?
5.2.5
No Provision for Wildfire in Sustainable Yield Calculations
Notwithstanding
the history of major wildfires in the Otways, and the ever present
risk of such fires, no provision whatsoever is made for wildfire in
the sustainable yield calculations for the Otways. This is another
major flaw in the sustainable yield methodology deployed by the DNRE.
6.
Timber Industry
(CRA Chapter
5)
6.1 OVERVIEW OF INFORMATION PROVIDED
Chapter
5 is the most disturbing and concerning chapter in the CRA, for several
reasons:
•
It is almost in its entirety thinly-veiled timber industry propaganda
that treats the facts very loosely in an attempt to cast the regional
hardwood logging, woodchipping and sawmilling industry in the
most favourable light possible. In a document purporting to be
a government assessment, intellectual dishonesty of this sort
is unacceptable.
•
It contains a number of important errors of fact, and the data
presented in a number of the tables does not reconcile.
•
It makes no attempt to come to grips with the fundamental issue,
revealed by the data, that the regional industry is not viable
without massive and continuing government subsidies. Rather, it
attempts to argue, against the evidence, that the industry has
potential.
•
It reveals that the DNRE, the apparently 'independent' forest
manager, sees itself as part of the Timber industry.
6.2 LOG
PRICING AND ALLOCATION ARRANGEMENTS (CRA PAGES 46 AND 47)
•
The CRA asserts here that residual logs are "generally logs
which are either too small or to defective to meet current sawlog
specification". As we have indicated in an earlier section
of this evaluation, D grade sawlogs are routinely reclassified
as residual logs, in clear breach of policy and legislation. In
this context, the statement on page 47 that "the availability
of residual logs is directly tied to and determined by the sustainable
production of sawlogs" is incorrect. If the Steering Committee
is in any doubt on this matter it should refer to Appendix One
of this report and note the large number of coupes that have very
low sawlog yields.
•
Page 46 makes reference to the determination of royalty rates
for sawn timber, but it makes no reference to the determination
of royalty rates for woodchips. Given that woodchips now account
for more than 75% of the total volume of material taken from native
forests in the Western Region, this is a major omission.
Average
woodchip royalty rates in Victoria in 1997/98 were $3.60 per cubic
metre. OREN analysis of the cost of producing woodchips on a commercial
basis in Bluegum plantations (based on data extracted from recent
Timber Corp prospectuses) reveals that the comparable cost of
producing a cubic metre of woodchips commercially is in excess
of $20. This figure excludes the cost of harvesting and transport
to mill. It will be most difficult indeed for commercial plantations
to establish themselves and become viable when they have to compete
against a subsidised product which is 80% less expensive to procure.
Why
is it that the CRA contains no analysis at all of this most important
subject?
6.3 STRUCTURE
AND VALUE OF THE HARDWOOD-BASED INDUSTRIES (CRA PAGES 48 TO 51)
•
The text here asserts that the twenty-two hardwood sawmills in
the region are involved in a range of sawn timber processing activities
"including a high proportion of further processed products
such as kiln-dried and appearance grade products for both domestic
and export markets". This statement is inconsistent with
the facts presented in Table 5.9 (page 54) which reveal that appearance
grade timber is a minute fraction of total output.
•
The table on page 49 simply does not add up. When faced with analytical
work of such a low standard, the reader is entitled to ask "how
can one have confidence in any part of this CRA when the basic
information presented is wrong?"
•
On pages 48, 50 and 51, the CRA attempts to 'pump up' the very
small size of the hardwood logging, woodchipping and sawmilling
industry in a number of inappropriate and intellectually dishonest
ways:
•
by including NRE employment numbers in industry employment data.
This is nonsense; no credible macro-economic analysis includes
in the industry employment calculation public servants employed
at the community's expense to support the industry. At the same
time, however, the information provided confirms what conservationists
have long known - and the DNRE has denied - that the Forestry
Division of the DNRE sees itself as part of the Timber industry.
This raises profound issues of independence and stewardship
which are addressed elsewhere in this evaluation;
•
by including softwood-based industries in the employment discussion.
This is extraordinarily deceptive and misleading;
•
by using questionable State-wide employment multipliers. OREN
research demonstrates that there are no significant downstream
activities within the Western Region related to hardwood
logging and sawmilling. Accordingly, if multiplier effects exist,
they exist outside the region. When a wider view is taken of
potential multipliers, it is necessary to take into account
the fact that in the last fifteen years the range of hardwood
substitute products available to the community has increased
dramatically, to the point where in almost all areas, hardwood
has lost share dramatically to pine, to softwood-based fibreboard,
and to other materials. In this context, it is likely that the
State-wide multipliers both for revenue and employment are extremely
low. For this reason, reliance on very old multipliers calculated
in the 1980s by the NIEIR is inappropriate.
•
The underlying reality is that the hardwood logging, woodchipping
and sawmilling industry in the Western Region is a very small
one measured either in terms of employment or revenue generated.
In employment terms, it represents less than 2% of the regional
workforce, and in revenue terms, the percentage is likely to be
even lower. If this industry disappeared tomorrow, it would not
be missed. Indeed, given its highly destructive and negative
effects in relation to plantation-based industries, tourism, and
water, it is almost certainly the case that its disappearance
would lead to an improvement in the regional economy.
6.4
HARDWOOD SAWN TIMBER INDUSTRY (CRA PAGES 51 TO 55)
•
The data in Table 5.7 on page 52 does not reconcile with the table
on page 49.
•
Table 5.8 on page 53 reveals that, even after revenue from woodchips
is included, the hardwood sawmilling industry loses money. This
is an extremely important fact, leading one to ask why the viability
of the industry was not given careful consideration in the CRA.
This matter will be discussed further in the conclusions at the
end of this section.
•
The data on the last line of page 53 does not reconcile with the
data on page 49, and similarly, the data on page 54 (including
Table 5.9) does not reconcile with the data on page 49.
•
Table 5.10 on page 55 presents the results of a survey of future
expectations of sawmillers. One must ask why this data was included
in the CRA and, more particularly, why this information is not
placed in an historical context. The charts presented overleaf
for the Otway FMA reveal that over the last decade there has been
no increase at all in sawlog production, and specifically that
there has been no significant increase in the production of appearance
grade timbers. This is the case despite constant assertions over
Exhibit
6.4
the
years by the hardwood sawmilling industry that it was planning
to increase its sales of appearance grade and further processed
timber. This simply has not happened and a reasonable observer
would question why, in the light of the evidence, it is likely
to happen in the future.
•
It is also reasonable to ask, in this context, why a similar survey
of future expectations was not completed for the tourism industry
in the region. Again, what we are pointing to here is an unreasonable
bias in favour of an industry which is not viable.
6.5
OUTLOOK FOR WOOD PRODUCT INDUSTRIES AND INDUSTRY DEVELOPMENT OPPORTUNITIES
(CRA PAGES 56 TO 65)
•
This section of the CRA presents a generally bearish assessment
of competitive forces as far as hardwood product markets are concerned,
including :
•
a flat outlook for product prices;
•
increasing competition due to excess wood product manufacturing
capacity in other countries;
•
continuing strong competition from softwood;
•
continuing strong competition from softwood-based fibreboards.
Despite
these data, the CRA argues on pages 63 to 65 that the hardwood
industry has improved its value-adding capability and is in a
position to further develop. Specifically, the CRA concludes "these
development options have been successful for a number of firms
and there would appear to be scope for the sawmilling industry
processing logs from the West Region to extend their successful
application". OREN challenges this conclusion, which we believe
is inconsistent with the data. The constant efforts by the hardwood
sawmilling industry to present the industry in a growth context
are inappropriate - no industry based on the utilisation of
native forest material as its primary resource can be viewed as
a growth industry. At best, hardwood sawmilling is, and will continue
to be, a niche industry that only requires a niche resource. It
would be more realistic, however, to view the industry as one
that has a very finite life and which is no more appropriate to
the future than the hunting of whales or seals.
6.6
INDUSTRY PARADIGM NOT SUSTAINABLE
The data
contained in the CRA, combined with the results of OREN research and
a good working knowledge of the hardwood industry in the region, reveals
a paradigm which is not sustainable. The diagram overleaf is, in our
judgement,
an
accurate representation of the position and dynamics of the hardwood
logging, woodchipping and sawmilling industry, and the associated
DNRE regime. The paradigm represents a 'treadmill of destruction'
which is ultimately not sustainable, which is resulting in a negative
value added and which is having a major adverse impact on forest
biodiversity, water catchments, tourism, and the growth of a viable
plantation-based industry.
Each
of the circles or rectangles on the diagram is grounded in evidence,
which is presented below.
1/2
Industry Scale-Up
With government encouragement, there has been a substantial
level of investment in sawmilling and woodchipping capacity
and technology in the region, supported by development grants
and an uninspected belief that the industry has value-added
growth potential. The capital intensive sawmills resulting
from this process require a high throughput of logs to be
viable, and are also very wasteful. The technology thereby
contributes to increased pressure on the forest. The more
traditional style of sawmill, with a four-man bench, has much
more flexibility, and a capacity to cut usable timber from
small logs. These mills generate less waste (as indicated
on page 53 of the CRA), and also utilise all the waste in
running the mill.
3
Hardwood Markets Eroded
The virtual collapse of markets for sawn hardwood has been
well documented. The major markets for hardwood were house
framing, flooring and skirtings/architraves. These markets
have been almost completely taken over by pine or by MDF and
will not be recovered.
4
Failure of Industry Marketing Efforts
The Timber Promotion Council was established to carry out
hardwood industry marketing, funded by levies on log volumes.
The efforts of this body have not resulted in any tangible
improvement in value-added market position.
5
Financial Losses on Sawmilling Operations
Table 5.8 on 53 of the CRA reveals that, in 1997/98, the hardwood
sawmilling industry lost $2.5 million on sawmilling operations,
notwithstanding the fact that the royalties paid on sawlogs
(ie, the cost of raw material to the industry) do not reflect
the full opportunity cost to the community. If the industry
had to pay appropriate royalties for sawlogs, based on the
commercial cost of production, the losses on sawmilling would
be closer to $10 million p.a.1
6/7/8
Justification of Woodchipping
DNRE literature is replete with statements justifying clearfelling
as a preferred method of silviculture in Mountain Ash forests
notwithstanding the fact that current silvicultural research
indicates that alternative methods are just as viable (refer
CRA Page 25) and the fact that clearfelling in Mixed Species
forests has no research-based logic. Conveniently, the DNRE
also ignores the issue of nutrient loss resulting from biomass
removal (specifically ignoring scientific research on this
subject).2
9/10/11
Reclassification of Sawlogs to Residual Logs
This matter has been discussed elsewhere in this evaluation.
12
Logging of Low Sawlog Yield Coupes
State Government documents3 demonstrate
that to be sawlog-economic a minimum sawlog yield of 100m3
per hectare is required for Mountain Forests and 30m3
for Foothill Forests. The Figure opposite reveals that in
the forthcoming logging season in the Otway FMA, only a third
of Mountain Species coupes (calculated by area) will meet
the minimum requirement, and only half of Foothill Species
coupes will meet the minimum requirement.
1. In Section 10 of this report we
refer to an analysis by P. F. Clinnick in November 1985 which demonstrates
that the value of water in the Otways is twice the value of timber
removed from the forest. This analysis alone would suggest that
royalties should be double their current level. A recent report
by KPMG also concludes that current royalties are far too low.
2. Refer to The Nutrition of Eucalypts.
CSIRO. 1996. Several articles in this collection of scientific papers
demonstrate that the stemwood of eucalypts contains a significant
proportion of required nutrients.
3. Pulpwood Harvesting for Woodchips
in the Otways. Report of the Inter-Departmental Task Force, 1982.
13
Large Woodchip Sales
The CRA reveals that woodchips now represent 75% of the output
of hardwood forests in the Western Region. In the Otways, OREN
calculates that this figure is closer to 85%.
14
Royalty and Licence Fee Debts Not Collected
OREN has been advised from several sources that the State Government
is owed up to $10 million in arrears of royalties and licence
fees. This represents a further, hidden subsidy of the Logging,
Woodchipping and Sawmilling industry. In correspondence with
OREN (dated 27 May, 1999), the Minister for Conservation and
Land Management has admitted that debts exist, although she
claims that the figure is less than $10 million.
15
DNRE Provides Services Below Cost
The diagram overleaf presents OREN's estimates of the money
flows relating to the hardwood industry in the Otway FMA. These
estimates, based on accurate sources, indicate that the DNRE
is subsidising the industry in the Otways to the extent of approximately
$1.6 million per annum.
16
Low Royalties for Woodchips
We have earlier indicated that the cost of producing woodchips
on a commercial basis in Bluegum plantations, operated on a
ten year cycle, is in excess of $20 per m3. This
compares with an average woodchip royalty across the State of
$3.60, and an estimated woodchip royalty for the Otways of around
$3.00.
17
Industry Propped Up by Subsidies at Enormous Cost to the Regional
Community
Table 6.6.1 opposite calculates the Value Added of the Hardwood
Logging, Woodchipping and Sawmilling industry for the Otway
FMA in 1997/98. Value added is the revenue of the industry less
the cost of DNRE services to the industry, less the cost
of raw materials (logs) calculated on one of four different
bases. In this analysis the cost of logs valued on two bases
is shown: valued on the basis of lost water yield (this measure
is relevant in the catchment areas), and valued on the basis
of commercial cost of production. Two other bases for valuing
logs - adverse tourism impact, and loss of bio-diversity - are
highly relevant but OREN has not had time to explore them. The
assumptions supporting key data are provided overleaf. The
table reveals that, in the water catchment areas (40% of the
FMA), the industry has a negative value added of $18.4 million
p.a. (ie, the industry was subsidised by the community by this
amount). This loss may well be higher if negative Tourism
or Bio-Diversity effects exceed $24.4 million p.a. In the balance
of the Production Zone a small positive value added is recorded
only if Tourism and Bio-Diversity effects are ignored.
Table 6.6.1
Value Added
of Hardwood Logging,
Woodchipping
and Sawmilling in the Otway FMA
(1997/98)
|
Water Catchments
|
Balance of Production Zone
|
Total Production Zone
|
Area logged (h.a.)1
|
150
|
200
|
350
|
Log Volumes2 (m3)
B+
C
D
Residual
|
2758
8736
1383
35,800
|
3679
11650
1843
47727
|
64387
20386
3226
83527
|
Timber Revenues
• Sawn Timber3 ($ millions)
• Woodchips4 ($millions)
TOTAL REVENUE
|
4.3
3.3
7.6
|
5.8
4.5
10.3
|
10.1
7.8
17.9
|
Less Cost of Inputs ($ millions):
• DNRE Services5
• Raw Materials (Logs)
• Valued on basis of lost water yield6
• Valued on basis of commercial cost of production7
• Valued on the basis of adverse impact on Tourism
values
• Valued on the basis of loss of bio- diverse
forest
|
(1.6)
(24.4)
(1.9)
Not Calculated
Not Calculated
|
(2.1)
Not Applicable
(2.6)
Not Calculated
Not Calculated
|
(3.7)
(4.5)
Not Calculated
Not Calculated
|
• VALUE ADDED($ millions)
• HIGHEST
• LOWEST
|
4.1
(18.4)
|
5.6
Not Calculated
|
|
Assumptions
Underlying OREN Estimates
of Value Added
for Hardwood Logging, Woodchipping
and Sawmilling
in the Otway FMA
NOTES
1. In the 1999/2000 season the area of the Otway
FMA to be logged that lies in water catchments totals 355 hectares,
out of a total area allocated to licence of 921 hectares (WUP). This
represents approximately 40% of the total area. This percentage has
been applied to the recent average area actually logged of 350 hectares
(although the area currently being logged is greater than this).
2. Log
volumes have been allocated in accordance with area.
3. Sawn
timber revenue estimates are based on the following assumptions:
Log Grade
|
Recovery Rate
|
Sold As
|
Price Per M3
|
B+
|
40%
|
KD Dressed
|
$2,000
|
C
|
45%
|
Green
|
$500
|
D
|
45%
|
Green
|
$380
|
4. Woodchip Revenues are based on a price of $80
per tonne (which is well above prices currently being achieved). All
sawmill residue is assumed to be sold as woodchips at this price.
5. OREN
estimates of DNRE expenses in the Otway FMA are as follows:
• Payments
to harvesting contractors $1.0 million
• Roading
$0.4 million
• Operating
and Head Office expenses $2.3 million
TOTAL
$3.7 million
6. The value of lost water per hectare of $162,800 calculated
by P. F. Clinnick has been used here (see Appendix 2).
7. An
analysis of Timbercorp prospectuses indicates that the cost of producing
woodchips from Bluegum plantations over a ten year cycle is $20.83
per m3, excluding harvest costs. Clearly, producing sawlogs
from slower-growing species over an 80 year rotation would have a
far higher cost than this. Preliminary OREN estimates of appropriate
commercial royalties are:
Residual Logs
|
$25 per m3
|
|
|
B+ Sawlogs
|
$100 per m3
|
C Sawlogs
|
$75 per m3
|
D Sawlogs
|
$50 per m3
|
7.
Plantations
(CRA Chapter
6)
7.1 GENERAL
OBSERVATIONS
This
chapter of the CRA contains a wide-ranging and unfocused discussion
of softwood and hardwood plantation topics. It is difficult, however,
to see what the purpose of this discussion is, and how it can contribute
to the process of reaching decisions about the management of native
forests in the Western Region.
In this
regard, there would appear to be several critical questions:
(i)
To what extent will the growth of the existing and proposed
softwood and hardwood plantations in the region meet total market
needs for timber products, and therefore obviate the need to
log native forests?
(ii)
What is the appropriate policy stance on the extraction of timber
from native forests, versus timber from plantations - ie, if
plantations were entirely adequate to meet all market needs,
would logging of native forests then cease?
(iii)
Related to the above, what is the effect of the pricing of timber
from native forests (royalties) on the rate at which the plantation
industry is likely to grow?
(iv)
What are the employment linkages between the native forest industry
and the plantation industry? Would the accelerated transfer
of current employees involved in native forest logging, sawmilling
and woodchipping to the plantation industry, for example, enable
the latter industry to grow more quickly?
None of
these critical questions are addressed by the CRA.
7.2
IMPACT OF NATIVE FOREST SUBSIDIES ON
PLANTATION
VIABILITY
For Victoria
as a whole, in 1997/98, royalties charged per cubic metre by the State
Government for sawlogs ranged from $8.77 for D-Grade through to $40
for B-Grade. Preliminary analysis by OREN indicates that these royalties
are extremely low, and well below the cost of growing trees of equivalent
quality on a commercial basis (see note 7 opposite).
As we
have mentioned earlier in this report, the situation in relation to
Residual logs is even more concerning. We reiterate that the cost
of producing a cubic metre of Bluegum woodchips on a commercial basis,
excluding harvesting and transport to mill, exceeds $20 per cubic
metre. Yet equivalent material is sold by the State Government from
the Otways for around $3 per cubic metre. This level of subsidy has
two major effects:
(i)
it perpetuates the cycle of destruction under which forests
of lower and lower quality are being logged; and
(ii)
it inhibits the establishment and development of hardwood plantations.
8.
Management
of Forests
on Private
Land
The Otway
Forest Management area consists of 900,000 hectares of land, of which
700,000 hectares is privately owned. A significant proportion of this
is forested.
Given this
fact, it is surprising that the CRA pays almost no attention to the issue
of managing native forests on private land.
To date, OREN's
focus has been on native forest management, but we acknowledge the important
linkages that exist between outcomes in the native forest, and outcomes
in forests on private land and, consequently, the importance of having
comprehensive and adequate controls over the management of forests that
are privately held.
OREN would
like to discuss this important matter with the Steering Committee.
9.
Tourism and
Recreation
(CRA Chapter
8)
9.1 OVERVIEW OF INFORMATION PROVIDED
This
short chapter of the CRA presents important information evidencing
the very large size and growth of the tourism industry in the Western
Region and the significance to tourists in the region of sightseeing
and the natural environment (refer Table 8.2 on page 89). Surprisingly,
however, it makes no attempt to explore the obvious linkages that
exist between the logging of native forests and tourism, or to define
and quantify the downstream and multiplier effects of this large industry.
9.2
DOWNSTREAM AND MULTIPLIER EFFECTS OF TOURISM
Whilst
Chapter 5 tries very hard to magnify the wider benefits of the Timber
and Woodchipping industry, Chapter 8 is almost silent on the wider
impact of Tourism is the region. First, as we indicated in Section
4 of this assessment, Tourism underpins many, if not most, of the
industries in the region as defined by the Australian Statistician,
from Construction through to Personal Services. Its linkages are far
wider and more important than those of the Hardwood Logging and Sawmilling
industry.
Further,
Tourism within the region almost certainly has major flow-on effects
for the wider Victorian economy. Melbourne, for example, benefits
greatly from the flow of tourists visiting major attractions such
as the Otways, as it is a regional hub for these visitors. The CRA
makes no attempt to quantify these effects.
9.3
GROWTH AND EMPLOYMENT POTENTIAL OF TOURISM
IN THE OTWAY HINTERLAND
Section
8.4 of the CRA argues that the economic value for tourism and recreation
in State Forests in the region does not exceed $13 million. The CRA
does not discuss the fact that the growth of tourism in the forest
hinterland has been severely inhibited by logging activities. As a
result of the prevailing logging culture, tourist accommodation in
the Otway hinterland is very limited (see table overleaf), major towns
have few tourism attractions, and minor roads are often in a very
poor state of repair. It is also important to note here that logging
creates significant road safety issues for tourists.
9.4 IMPACT OF CLEARFELL
LOGGING ON TOURISM
Clearfell
logging, in particular, is having a major adverse impact on the tourism
potential of the Otways. Clearfelling produces scenes of utter devastation
which remain unsightly for years. Time and time again, members of
the community interested in tourism complain to OREN about the effect
that clearfell logging is having on their industry. The OREN report,
"Breaches OF The Otway Forest Management Plan", soon to
be released, details case studies of clearfell logging impacting on
Otway hinterland tourism values.
10.
Water and Catchments
(CRA Chapter
9)
10.1 OVERVIEW OF INFORMATION PROVIDED
This
chapter of the CRA provides useful and relevant information in relation
to the relationship between forests, forest management and water.
The CRA
acknowledges what is now generally accepted to be the case; that clearfell
logging reduces water yields in forested water catchments and that
there are significant issues in relation to the impact of logging
on water quality.
10.2
VALUE OF WATER VERSUS VALUE OF TIMBER AND WOODCHIPS
A major
deficiency of this chapter of the CRA is that it makes no attempt
to explore the question of the value of water versus the value of
woodchips/timber, notwithstanding the fact that there is good quality
research available on this subject relating both to the Thomson Catchment
and to the Otways.
With
respect to the Thomson, the consulting firm Read Sturgess & Associates
completed a study in June 1992 which demonstrated that the value of
water lost through clearfell logging in the Thomson is much greater
than the value of timber harvested. The diagram below summarises the
results of a net present value analysis by Read Sturgess, showing
that the no logging scenario generated a net present value to the
community of $147 million greater than the status quo scenario. The
results of this study are likely to be applicable to the Western Region,
and particularly to the Otways.
Figure
10.2
Value of
Catchment to the Community under
Alternate
Management Regimes
Read Sturgess & Associates. Evaluation
of the Economic Values of Wood and Water for the Thomson Catchment.
June 1992. Page 42.
In relation
to the Otways, a report prepared by the Department of Conservation,
Forests and Lands in November 1985 found that the value of the water
lost through logging was almost twice the value of timber harvested
from the same area. This study, by P.F. Clinnick, concluded "the
major effect of forest operations in the long term will be on water
yield. A simple economic analysis was conducted and revealed that
over a rotation period the value of water production was twice that
of timber".
The economic
analysis by Mr. Clinnick was based on the following assumptions (refer
to page 8 of his report, which is appended to this evaluation - see
Appendix 2):
•
an 80 year logging rotation
•
a water yield reduction due to logging of 4 megalitres per hectare
per year
•
a price for water of $509 per megalitre (based on Geelong Water
Board charges)
•
a sawlog and woodchip revenue yield per hectare of $87,500
It is
important to note that, if this analysis was to be conducted today,
the assumptions would almost certainly have moved in favour of water:
•
the appropriate charge for water per megalitre should probably
be increased, given the very difficult water situation in the
region
•
prices for sawn timber and woodchips have generally declined
OREN research
has shown that in 1997/98, the Hardwood, Sawmilling and Woodchipping
industry generated total revenue from the Otway FMA of approximately
$18 million. This estimate is consistent with data presented in the
CRA for the Western Region as a whole. The total area logged in the
Otway FMA in 1997/98 to generate this revenue was approximately 350
hectares, giving a total revenue per hectare of approximately $51,000.
On the assumption that the Clinnick estimate for the value of lost
water is unchanged (ie, $162,800), then the value of the water lost
through logging of native forest is now three times the value of timber
products harvested from the same forest.
A detailed
report entitled "Clearfell Logging In The Otway State Forest
And Its Effect On Water Resources In The Region" has already
been submitted to the RFA Task Force.
Value Added
of Hardwood Logging,
Woodchipping
and Sawmilling in the Otway FMA
(1997/98)
|
Water Catchments
|
Balance of Production Zone
|
Total Production Zone
|
Area logged (h.a.)1
|
150
|
200
|
350
|
Log Volumes2 (m3)
B+
C
D
Residual
|
2758
8736
1383
35,800
|
3679
11650
1843
47727
|
6438
20386
3226
83527
|
Timber Revenues
• Sawn Timber3 ($ millions)
• Woodchips4 ($millions)
TOTAL REVENUE
|
4.3
3.3
7.6
|
5.8
4.5
10.3
|
10.1
7.8
17.9
|
Less Cost of Inputs ($ millions):
• DNRE Services5
• Raw Materials (Logs)
• Valued on basis of lost water yield6
• Valued on basis of commercial cost of production7
• Valued on the basis of adverse impact on Tourism values
• Valued on the basis of loss of bio- diverse forest
|
(1.6)
(24.4)
(1.9)
Not Calculated
Not Calculated
|
(2.1)
Not Applicable
(2.6)
Not Calculated
Not Calculated
|
(3.7)
(4.5)
Not Calculated
Not Calculated
|
• VALUE ADDED($ millions)
• HIGHEST
• LOWEST
|
4.1
(18.4)
|
5.6
Not Calculated
|
|
Appendix 1
OTWAY FMA - WOOD UTILISATION PLAN
2000-2002
Analysis of Sawlog Yields per
Hectare
(Excludes Thinning Coupes)
|
Area (Hectares)
|
Sawlog Yield (m3)
|
ResidualYield (m3)
|
Sawlog Yield per
Hectare
|
Residual Yield
per Hectare
|
Mountain Ash Forest
Phillips South
No. 9 Ridge W
Bon Accord
Last Ridge
|
21
15
10
6 |
2500
1000
1000
2000 |
4000
2000
1000
2000 |
119
67
100
333 |
190
133
100
333 |
Total - Mountain Ash
|
52
|
6500
|
9000
|
125
|
175
|
Mountain Mixed Species
Rileys Ridge
Ciancio
Robinsons Rd BW
Aire Settlement
Crowes
Mt. McKenzie Hole
Junction Hole
McKenzie Longridge
Egans
Delaney Tk
Websters Hill
Jacksons Tk
Jacksons Caleo
Sayers Tk
Wild Dog Sth
Kincaid Rd
Coopers No. 1
Henrys
Mud Rd
Gail Clearing
Cumberland Tk
Middle Spur
Thompsons
Noonday-Kaang
Mt. Sabine Rd
Coldwater Ck
West Branch
Riley Ridge W
Riley Ridge E
Holywater Tk
Morris Tk
Chapple Ck
Camp Ck
Leahy Ck
Delaney Quattro
Asplin Ck
Plantation Hill
Sunnyside Rd Nth
Curtis Clearing
Callahan Ck
Seymour Ck
Newcombe
|
12
17
29
5
10
18
20
40
20
34
25
17
6
18
14
40
30
10
35
18
11
18
45
22
30
28
19
36
30
34
28
22
26
42
44
25
2
27
23
34
9
21 |
3000
3000
500
500
350
1500
3000
2300
1000
2000
2000
1400
600
700
1100
2000
1600
1000
2500
1200
1000
1100
2800
1500
1200
3500
2000
8000
9000
3000
2200
1500
2000
6000
5000
2000
250
2500
1500
4000
500
2400 |
5000
3000
200
2000
1000
3000
5000
4500
3500
5000
7000
3000
1500
2000
1500
4000
3200
3000
6000
2400
1500
2500
5600
2800
2500
5000
3500
12000
13000
7000
3500
2400
3000
8000
10000
4000
300
4000
3000
6000
1000
4000 |
267
176
17
100
35
83
150
58
50
59
80
82
100
39
79
50
53
100
71
67
91
61
62
68
40
125
105
222
300
94
79
68
85
143
114
80
125
93
65
118
55
114 |
417
176
7
400
100
167
250
113
175
147
280
176
250
111
107
100
106
300
171
133
136
139
124
127
83
179
184
333
433
206
125
109
115
190
227
160
150
148
130
176
111
190 |
|
Area (Hectares)
|
Sawlog Yield (m3)
|
ResidualYield (m3)
|
Sawlog Yield per
Hectare
|
Residual Yield
per Hectare
|
Mountain Mixed Species
(continued)
No. 1 Spur Tk
Head Cold
|
31
28 |
1300
2800 |
2400
4500 |
42
100 |
77
161 |
Total - Mountain Mixed Species
|
1053
|
98900
|
177300
|
94
|
168
|
Foothill Mixed Species
Wangerip
Link Tk West
Charleys Ck Sth
Goodlog
Escarpment Rd
Old Wonga Cnr
Neck Tk West Ext
Apollo Bay Rd 3
Bone Tk
Kennedy Pipeline
Link Tk
Charleys Ck Nth
Neck Tk
No Name
Quarry Top
Apollo Bay Rd 2
Ferguson
White House
|
15
40
44
46
29
19
35
31
64
61
38
43
34
48
14
19
39
100 |
2000
1000
1350
900
300
500
1800
1750
1000
1800
1000
1500
1000
800
1400
1100
600
3150 |
4500
4000
3000
4000
1200
2000
5000
3500
4000
3500
3000
3000
3000
3000
2000
3000
2700
7000 |
133
25
31
20
10
26
51
56
16
30
26
35
29
17
100
58
15
32 |
300
100
68
87
41
105
143
113
63
57
79
70
88
63
143
158
69
70 |
Total - Foothill Mixed Species
|
719
|
22950
|
61400
|
32
|
85
|
Total - All Species
|
1824
|
128350
|
247700
|
70
|
136
|
|
|