Hard and soft

I am embarrassed by my deck. It is well designed, sturdily built and a congenial place on a balmy evening. The problem is that the deck is made with tropical hardwood, logged from a rainforest in South-East Asia. Not only have I added to Australia’s yawning trade deficit, I have also contributed to the decline of the globe’s equatorial lungs. Australia’s timber industry frequently uses tropical timber imports to justify the continued logging of native forests in Tasmania, Victoria and New South Wales. (Queensland and Western Australia are both phasing out native forest logging; South Australia never had a large native forest estate to start with). Better the sustainable harvesting of native timber at home, so the argument goes, than the wanton destruction of rainforests elsewhere. If we ‘lock up’ our own native forests in national parks, then a greater proportion of rainforests in Malaysia, Indonesia and Papua New Guinea will be sacrificed for decks in Australian backyards. It is a compelling argument but one that obscures the complexity of the sawn timber industry in Australia, which is increasingly based on the harvesting of softwood (mainly pinus radiata) from plantations, rather than the cutting of hardwoods in native forests. In The Forest Wars, Judith Ajani traces the history of Australia’s softwood estate, established in the late 1960s with Commonwealth funding, after decades of persistent lobbying by state foresters. Frequently, these softwood plantations came at the expense of existing stands of native eucalypts, which were cleared with minimal debate to make way for scientific ‘afforestation’. As plantation pines matured to harvest in the 1990s, the resulting supply of softwood replaced hardwood (mostly eucalypts) from native forests in most general building applications (such as house framing), while the by-product of thinnings and small logs unsuitable for milling fed an emerging softwood pulp industry producing paper for tissues, newsprint and packaging. According to Ajani this structural shift in the timber business lies at the heart of Australia’s forest wars. She says that the clash between tree-hugging greenies and chainsaw wielding loggers so often played out in the media is of far less consequence in shaping the industry than changes in supply and demand. ‘Native forest sawn timber would still have been displaced by plantations even if the environmentalists had concentrated solely on protecting deserts and marine environments,’ she writes. The relative decline of milled timber from Australia’s native forests did not mean the end of logging, because another industry sprang up to take its place: woodchips for export to Japan. The industry began as a value-adding exercise. Historically ‘inferior produce’ from native forests was regarded as waste; logs too small to create sawn timber were burned or windrowed. But as Japan’s consumption of high-quality printing and writing papers exploded, so too did its demand for hardwood pulp. Beginning with volumes of less than a million tonnes of green chips a year under Prime Minister Billy McMahon, the export trade expanded steadily under Gough Whitlam, Malcolm Fraser, Bob Hawke, Paul Keating and John Howard, reaching a peak of more than seven million tonnes in 2004. In the early 1970s chip logs accounted for just twenty-seven per cent of the native forest logging in Victoria. Today, eighty per cent of East Gippsland’s logging supplies chip exporters. Ajani argues that Japanese buyers paid a premium for Australian wood chips ($15 per green tonne) in order to lock in long-term contracts and encourage new sources of supply in other parts of the world. State governments meanwhile sold their native forests cheaply ($2.25 per tonne, or less), creating the conditions for Australian chip exporters to make ‘very handsome profits’. In Ajani’s view, this amounted to a massive subsidy for the woodchip industry. Chip exports also bolstered the native forest sawn timber industry in its competition with softwood plantations by creating new economies of scale. While hardwood logs are still milled for high-value finished timber, native-forest logging, Ajani argues, is now driven by chip exports. The woodchip tail is wagging the timber industry dog. This is where the bizarre nature of Australia’s forest wars becomes apparent. If a political leader moves to protect native forests from being chipped for pulp, as Mark Latham did in 2004, then blue-singlet workers and their trade union representatives are quick to protest and condemn, even when that means siding with the enemy. But in terms of an economic return to Australia, wood chips are a relatively low-value product: a raw material export with little or no value adding that generates relatively few jobs. The major employer in the timber industry is the softwood plantation sector, with its downstream milling and processing to manufacture building and paper products. Exact figures are hard to come by, but Ajani estimates that eighty per cent of industry jobs are in the softwood plantation and processing sectors. Yet the plantation sector has almost no political voice in Australia. Industry associations (such as the National Association of Forest Industries) and trade unions (such as the Construction, Forestry, Mining and Energy Union) seem entirely preoccupied with protecting native forest logging and wood chip exports from environmental protests. In 2004, when Mark Latham was making his disastrous foray into the Tasmanian forests as Opposition leader, the plantation softwood company Auspine publicly backed the idea of ending native forest logging on the island, pointing to ‘the forest industry’s potential to employ many more people if the state government improved its softwood plantation management’. This did not impress rival timber company Gunns, which had grown rich on the profits of logging native forests for woodchips. Gunns’s managing director, John Gay, warned at the time that Auspine’s actions had been ‘extremely damaging’ to the company and to its ‘future in Tasmania’. In a ‘remarkable coincidence’, Auspine subsequently lost a $2.5 million sawmill contract with Gunns. From their peak around 2004, exports of native forest woodchips have fallen off sharply in recent years. On face value, this might appear to reflect the success of environmental campaigns. Despite the cheers of Tasmanian timber workers prior to the last federal election, Howard was actually pushed a long way down the path of forest protection by Latham. Howard excised ‘170,000 hectares for conservation, or 16 per cent of public native forests then available for logging’; Latham had planned to excise twenty-three per cent. Ajani says the difference between Howard’s and Latham’s conservation measures was ‘close to meaningless’. Yet in keeping with her general argument, Ajani says such environmental wins are less significant to the recent decline in woodchip exports than the emergence of new sources of plantation hardwoods, which have pushed down the price of chips and reduced Australia’s share of the Japanese pulp market. Commercial high-rotation eucalypt plantations are coming on stream in South Africa, Chile and Australia. Former Deputy Prime Minister John Anderson lit the fuse on blue-gum plantations in Australia ten years ago by offering tax concessions for managed investment schemes. The resulting explosion of plantations in fertile farming regions has angered many farmers who accuse the blue-gum industry of pushing up land prices and soaking up water. Ajani sees further problems ahead. She argues that unless state governments end their effective subsidies for native forest logging, then many new blue-gum plantations may struggle to generate a reasonable return at harvest. This leads Ajani to conclude that, with the right pricing mechanisms in place, Australia’s existing plantations could readily ‘substitute for native forest logging without any more tree planting’. Native forest logging could end without detriment to the timber industry or decline in employment (though clearly jobs would be lost in some sectors and gained in others). The result would not be a resource ‘locked up’, says Ajani, but forests liberated to do what they do best: soak up carbon dioxide, protect water catchments, conserve biodiversity and simply exist as sites of great natural beauty. Ajani’s conclusion is highly contested. The fundamental criticism is that high rotation hardwood plantations do not provide timber for milling. It takes several decades for eucalypts to grow to an age where they can be harvested for high-quality sawn timber. Australia’s new generation of blue gum plantations will be harvested for chips after just ten or twelve years. Yet there is still a significant market for milled hardwoods for high-quality decorative finishes and specialist purposes. In short, the problem remains that an end to native forest logging in Australia could increase imports of tropical rainforest timbers from South-East Asia. Supporters of continued logging in Australia’s native forests argue that the practice is sustainable and well managed, especially compared to what goes on in Malaysia, Indonesia and Papua New Guinea. According to industry, less than ten per cent of Victoria’s native forests are available for logging, and only 0.14 per cent of that area is harvested in any one year. The industry works on rotations of between eighty and 120 years, which, it says, allows time for the forests to do all the things Ajani wants, as well as provide highquality timber. Ajani’s critics point out that converting native forests to national parks and conservation areas is one thing; effectively managing those reserved areas is quite another. The forestry industry maintains that sustainable harvesting of native forests offers far greater protection from bush fires, feral animals and exotic weeds than the best efforts of under-resourced parks and wildlife services. Whatever side of the forestry debate you come down on, Ajani’s book will give you plenty of food for thought. Her central argument about the changing economic structure of the timber industry from hardwood to softwoods, and from native forests to plantations, is backed up by recent developments: Tasmania’s Gunns Ltd, a company built on the back of native forest logging, recently acquired a majority stake in its softwood plantation rival Auspine.

Peter Mares

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