A BILL is making its way through parliament that has serious implications for farmers and other land owners who wish to harvest timber on their properties. It also shows how much power the environmental NGOs have acquired and why negotiating with them over ‘sustainability’ is so dangerous.
The Illegal Logging Prohibition Bill has passed the House of Representatives and is currently before the Senate. It prohibits the importation of anything containing illegally logged timber (including paper) and the processing of illegally harvested, domestically grown raw logs. It also requires importers of regulated timber products and processors of raw logs to meet due diligence requirements as to their legality.
So significant are its implications that Australia’s main timber suppliers, New Zealand, Malaysia, Indonesia, Canada and Papua New Guinea have all expressed concern, with suggestions it may prompt retaliation under WTO rules. Indonesia is said to be particularly annoyed and it has been suggested this is contributing to problems with live cattle exports.
The impact of the bill falls mainly on saw millers and importers who must demonstrate that domestic logs and the timber in imported products containing wood were legally harvested. There is no presumption of innocence: in the Due Diligence regulations, the onus is on millers and importers to prove legality.
If you are found to have processed or imported illegal timber there are penalties up to five years imprisonment and very large fines. Even if you did not knowingly or intentionally do this, you can still be found guilty as all the courts have to find is you did it “recklessly” or were negligent. In addition there are civil penalties based on strict liability, meaning lack of intent is irrelevant. If you import or process anything illegally logged, unknowingly or deliberately, you are automatically guilty.
Innocent businesses can be entered and searched for monitoring purposes (not merely investigation and enforcement) in addition to being required to submit reports to show compliance.
The bill relies on the Orwellian assumption that it is possible for saw millers and importers to have knowledge of all the laws, regulations, codes, rules and treaties in the State and country of harvest, and to know that all such laws have been complied with.
As I discussed recently, WWF is seeking to use voluntary certification systems to “transform” markets by applying pressure to companies holding strategic positions in the supply chain such as dominant consumer goods manufacturers and retailers. Other NGOs such as Greenpeace, Markets for Change and the Rainforest Action Network are aggressively attacking brand names and leading products of major companies to incentivise them to sign up to such schemes.
It is by no means coincidental that WWF established a timber “sustainability” program that, amongst other things, involves supply chain certification. This has now been largely incorporated into the Forest Stewardship Council’s (FSC) certification scheme. Large retailers and consumer food companies in Europe and the US already demand compliance with FSC’s sustainability standards when sourcing timber, notwithstanding its impact on costs.
Even the World Bank has given exclusive endorsement to FSC certification schemes for forest products, effectively making compliance a pre-requisite for many sources of finance.
The European Union already has a similar regime to the Australian bill, imposing an obligation on timber importers that is difficult to meet except by participation in a certification scheme sponsored by a green NGO. This not only satisfies the global ambitions of the NGOs but also restricts entry to the European market of products that are cheaper than goods produced in the EU, a form of green protectionism that experts claim breaches WTO rules.
Some in the local timber industry similarly believe the Australian bill will protect them from imports. In fact, domestic millers will struggle to comply, with NGOs out to shut down hardwood logging while State forestry departments, which control most of the native forests, lack resources and are largely indifferent to the risks.
Farmers wanting to harvest trees on their property already face state laws and regulations. In NSW, for example, they must negotiate the Environmental Planning and Assessment Act and the Native Vegetation Act. They must also comply with federal legislation such as the Environment Protection and Biodiversity Conservation Act.
These are full of grey areas. When does a sapling become a tree, for example? When does allowable clearing of regrowth become illegal clearing of timber? A breach of any of these in the course of harvesting timber, even if no prosecution occurs, could make the saw miller liable for accepting the logs.
Perhaps all this might have some justification if there was a major problem with illegally harvested log imports, as asserted by environmental NGOs. But that is not the case. In reality, 90% of the volume of imported sawn timber imports comes from countries of negligible risk such as the EU, Canada, USA and New Zealand. Of the remaining 10%, a maximum of 30% is potentially illegal.
Furthermore domestic logs comprise 80% of Australia’s sawn timber usage. That means only 2% of Australia’s sawn timber is from high risk countries. Even if 30% of that is illegal, it equates to less than 1% of the total.
Even the explanatory memorandum to the bill puts it into perspective, stating that “Australia’s estimated share of the economic, social and environmental costs of global illegal logging [is] .. around $23 million per annum”. This is a paltry amount considering “social” costs are invariably an inflated guess.
This bill amounts to taking a giant sledgehammer to crack a tiny nut. It contravenes centuries of sound legal principles involving strict liability and the onus of proof, and offends our major trading partners and risks retaliation against our exports. It deserves to be buried and forgotten.
David Leyonhjelm is an agribusiness consultant with Baron Strategic Services. He may be contacted at email@example.com