Issue 91

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  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 1issuE 91 | 31.08.09 | PAgE

    By JIM BOWDEN

    INDUSTRY input into a proposed generic code of conduct on the trade of legally-verified wood products will be documented and ready for presentation to the Federal Forestry Minister by the end of September.Tony Burke commissioned the project along with other means such as border regulations and requirements for certification of legality of importers as part of a policy to promote the trade of legal timber.The draft code, now being structured after industry workshops in Sydney, Melbourne, Brisbane and Perth, is a collaborative effort by Australian industry, developed by project leaders

    the Timber Development Association and the Australian Timber Importers Federation.About 80 timber import-export merchants fewer than expected took part in the formulation of the code

    at the four workshops, the last in Perth on August 27.Mr Burke recently set up an inquiry into the extent of Australian illegal timber imports, but so far this has produced no reliable data; in fact, the amount of illegal timber entering the country is unlikely to be significant.The federal inquest on timber imports stems from a 2007 election promise by Kevin Rudd to encourage sourcing of forest products from sustainable forest practices and seek to ban the sale of illegally logged timber imports.This was based on a Government commissioned report now widely discredited that 9% of

    Advertising: Tel +61 7 3256 1779 Email: [email protected] issue 91 | 31.08.09 | Page 1

    6202

    Workshops bring industry closer to a Code of Conductthat will confront claims about illegal wood imports, but ..

    Wheres the wood?

    Cont Page 2

    s Bushfire inquiry covers up fuel reduction failure Resources expert joins Forest Products Commission Green certification it wont go away REDD: shifting the balance Workshops agree: one code of conduct for all commodities

    THIS ISSUE Carbon market: New Zealand dilemma Industry support wanes on plantations sell-off

    AFS/01-10-01www.forestrystandard.org.au

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 2

    imported timber, worth $400 million, is logged illegally, mainly in Indonesia and Papua New Guinea.The general opinion expressed by merchants at the workshops was that illegal timber imports were more likely to be less than 3%.Although workshop participants were cooperative, many saw the preparation of a code of conduct as an expensive waste of time and at worst damaging to the industry; they said it suggested, wrongly, that there was a thriving trade in illegal log buying in Australia.Tony Burke has admitted federal authorities have no way of telling if imported timber is legal or illegal.At the close of the Brisbane workshop on August 25, a statement by Greenpeace and the Worldwide Fund for Nature was circulating throughout the Australian and international press criticising Mr Burke for not delivering a policy on

    code of conduct workshops

    Cont Page 3

    FORESTRY: A CL IMATE OF CHANGE

    Register online at www.forestry.org.au/conference or contact the Conference Manager on +61 8 8125 2200 or email [email protected]

    FORES

    Register online att www forestry org au/conf

    IFACONFERENCE

    2009

    The conferenceThe Institute of Foresters of Australia 2009 Conference - the largest forestry conference in Australia to occur in the next four years

    The venueCaloundra, a premier holiday destination on Queenslands magni cent Sunshine Coast just north of Brisbane

    The dates6-10 September 2009

    The key speakersDr Ian Bevege, Professor Roger Stone, Professor John Innes, Penny Baalman, Dr David Brand, Kathryn Adams and Nick Roberts

    Topics include: Climate change scenarios Climate change impacts and

    adaptation challenges for forestry Climate change mitigation

    opportunities for forestry and forest based industries

    The changing role of forests Reshaping the forestry agenda Promoting innovation in forest

    management and processing.

    Full registration includes: Keynote addresses from

    well-credentialed forestry and climate change speakers

    Concurrent sessions featuring over 50 oral papers and poster presentations

    Climate change and forestry education panel discussions

    Diverse eld days and a range of partner day tour options

    Welcome reception and conference dinner with rst-class entertainment

    Exhibitions showcasing a wide range of forestry services and products.

    Day and student registration options available.

    From Page 1

    Getting down to business at the Code of Conduct workshop in Brisbane are project leader Stephen Mitchell of the Timber Development Association, Sydney; John Halkett, project team member and technical manger, Australian Timber Importers Federation, Sydney; Doug Bartlett, secretary, Timber Importer and Exporter Wholesalers Association, Brisbane; Peter Watt, Watts Wood & Mouldings, Salisbury, and Keith Duce, Duce Timber Windows & Doors.

    Chris Woodhouse, president, Queensland Timber Exporter and Importer Wholesalers Association and managing director, Woodhouse Timber Company, Darra, confers with Peter Camm, managing director, Kosney Corporation, Brendale.

    Taling code of conduct .. Gerry Gardiner, director, Asia Pacific Timber Marketing, Simon Dorries, general manger, Engineered Wood Products Association of Australasia, Mal Gotham, Pacific Wood Products, Springwood, and Nathan Roiko, Humes Doors.

    Roger Denley, Oregon Sales, Burpengary, chats with Emma Franks, resource planning manger, Parkside Group, Wondai.

    Legality of importshard to determine

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 3issuE 91 | 31.08.09 | PAgE

    banning illegal timber. The media release carried similar comments attributed to A3P, Timber Queensland and the Furnishing Industry Association of Australia.Show us where this illegal wood is, demanded Gerry Gardiner, a long-serving president of the Queensland Timber Importer and Exporter Wholesalers Association.I challenge the Minister and DAFF [Department of Agriculture, Fisheries and Forestry] that its three strikes and your out.One, there is no definition of legality; two, there is no evidence of the sourcing of timber from illegal logging; and three, the figures in the first report on illegal imports are dodgy and have been pilloried by experienced traders.Some workshop participants were sceptical about the whole code of conduct process: would it deliver on goals set by the timber industry or on political goals?If the process is driven to keep the greens on side and to get green preferences the code will be neutered; if it is accepted as appropriate to keep illegal wood out of the supply chain it has half a chance.All workshop participants agreed there should be one code for all commodities, not four or five for different wood and wood-based products.Referring to manufactured wood, Simon Dorries, general manger of the Engineered Wood Products Association of Australia, proffered that in the longer

    term the Australian Forestry Standard could develop a due diligence standard for verification of legality as a complimentary document to chain of custody.This would make it easier for an accredited certification body to go in an audit against those specifications, he said.Code of Conduct project leader Stephen Mitchell said while legality of forest harvesting and importation of wood-based products was a complex issue, substantial progress had already been made in addressing and reducing potential illegality risks.

    For a number of years, different industry sectors have worked to maximise the certainty that timber and wood-based products are sourced from legally harvested forests and plantations, he said.Project team member and ATIF technical manager John Halkett said the project would work towards a pan-industry code that tests issues such as country of origin risk, compliance with legal verification systems, audit procedures and enforcement mechanisms.This will help ensure that imports and Australian produced wood-based products pass acceptable legality assurance requirements, he said.The project involves consultation across a variety of industry sectors such as paper, furniture, window and door manufacturers

    as well as importers of sawn wood and composite wood products, such as plywood. Both Stephen Mitchell and John Halkett have a challenging task ahead of them if they are to present the draft generic Code of Conduct for public review by late September.It was emphasised at the workshops that a Code of Conduct would demonstrate the Australian timber industrys commitment to delivering quality and service, committed to the highest standards of professionalism and integrity in the conduct of their business, similar to a code developed successfully by the UK Timber Traders Federation.

    The code would establish principles by which industry members would not knowingly misrepresent facts or mislead any customers or suppliers concerning any aspects of the goods and services they provide. A Code of Conduct is basically a set of standards describing the behaviour you expect of your own people, John Halkett said.While no Code of Conduct or ethics management activity can guarantee the prevention of wrongdoing, such a code, coupled with appropriate supporting activities, is considered a best practice that can help sustain integrity in everyday business practice.

    code of conduct workshops

    Workshops agree: One code for all commoditiesFrom Page 2

    Demonstrating the industrys commitment to

    quality and service

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 4

    industry news

    Resources expert joins FPC in WA

    Karen Gadsby (second from right) is welcomed to the Forest Products Commission by Paul Biggs, Eva Skira, FPC chair, and Mike Gurry, deputy chairman.

    THE Forest Products Commission in Western Australia has welcomed the appointment of Karen Gadsby to its board of commissioners.Ms Gadsby is a former high-level executive with 10 years experience with a multinational resources company in the roles of GM finance, CFO and company secretary.FPC chair Ms Eva Skira said that with the challenges and opportunities ahead, Karen Gadsbys appointment provided the commission with valuable additional experience and specialist knowledge that would help to secure a strong future for Western Australias $1.1 billion forestry industry.Without a strong and

    sustainable forestry industry, we risk losing significant employment and economic opportunities, particularly as global demand for environmentally-friendly materials such as timber increase year-on-year, Ms Skira said.With Karens experience, FPC will continue on-mission to deliver environmental, social and economic benefits to the people of Western Australia.Ms Gadsby also serves as a non-executive director of Talisman Mining Ltd, Perth Home Care Services and Community First International. She previously held directorships in Melbourne with health insurer GMHBA, Western Health, and education

    services company AMES.Ms Gadsbys appointment follows the retirement of David Taylor as chairman, and the subsequent

    elevation of Eva Skira to the role. Michael Gurry is the new deputy chairman.

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 5issuE 91 | 31.08.09 | PAgE

    events

    National Association ofForest Industries Ltd

    (Est. 1987)PO Box 239,

    Deakin ACT 2600Tel: (02) 6285 3833.Fax: (02) 6285 3855

    Web: www.nafi.com.au

    SUSTAINABLE.RESPONSIBLE.

    The NationalAssociation of Forest

    Industries (NAFI)is striving for an

    ecologically sustainableAustralian societyachieved through

    dynamic,internationally

    competitive forestindustries.

    NAFIs mission is torepresent the interests

    of members bypromoting theenvironmental

    sustainability andthe prosperity ofAustralian forest

    industries.

    WHATS ON?SEPTEMBER 092-4: Wood 2009 and Bionergy 2009, Jyvaskyla, Finland. www.jklpaviljonki.fi/eng/events_ex hibitions.php

    4-5: Australian Timber Flooring Association Convention. Brisbane Exhibition and Convention Centre, Brisbane. Conference Secretariat: GEMS Event Management, Unit 15/118 Queens Road Five Dock, NSW 2046. Tel: 61 2 9744 5252. Fax: 61 2 9747 8366. Email: [email protected]

    6-10: IFA 2009 Conference Forestry: A climate of change, The Events Centre, Caloundra, Queensland.Inquires to Shanna Sheldrick or Merilyn Dayman. Tel: (08) 81252200. Email: [email protected] Visit www.alloccasionsgroup.com

    9-11: SawTech 2009 Sawing technologies to improve mill performance. Rotorua, NZ. www.sawtechevents.com

    13-18: 14th Fundamental Research Symposium, Oxford, UK, Call for papers by October3. [email protected]

    14-16: SawTech 2009. Melbourne www.sawtechevents.com

    16-18: World Bioenergy 2009 Clean Vehicles and Fuels 2009, Stockholm, Sweden. http://www.elmia.se/en/wbcvf/

    16-18: International Panel Products Symposium, Nantes, France. Leading technical conference on wood-based panels focusing on sustainability and sustainable buildings. Provisional

    program available online. Call for papers has closed. Contact conference organiser Caroline Potapa +44 (0)1372 802101. E: [email protected] com

    OCTOBER 098-9: New Zealand Pine Manufacturers Assn Inc. 19th AGM and conference Global Storm Clouds: Identifying the Silver Linings. Holiday Inn, Wellington. Tel: +64 3 544 1086. Fax: +64 3 541 0187. Email: [email protected]

    8-9: NZ Forest Owners Association/WPA conference. Seifrieds Winery and Vineyard Conference Centre, Redwood Road, Appleby, Nelson. Inaugural event focuses on global trends, the challenges presented by the current trading environment, and ways to improve productivity, increase energy efficiency and create new marketing opportunities. Keynote speakers: Minister for Forestry David Carter; Jim Carle, UNFAO; Andre de Freitas, head of FSC International. Register at www.forestwood.org.nz Contact conference manager Kylie Riley. Tel: 021 300 611. Email: [email protected]

    10: Frame and Truss Manufacturers Association national awards dinner. National Gallery of Victoria, Melbourne. Contact: Kersten Gentle, FTMA Executive Officer 0418 226 242 Web: www.ftmaaustralia.com.au

    13: FSC Australia industry breakfast forum. Co-presenters Timber Queensland and WPC Group. Special guest speaker Andre Giacini de Freitas FSC

    International executive director. Victoria Park Golf Course, Brisbane. Contact: Amanda Boyd. Tel: (03) 8636 2661. Email: [email protected]

    14: FSC Australia 2nd annual awards dinner. Atlantic at Central Pier, Docklands, Melbourne. Key speaker FSC International executive director Giacini de Freitas. Contact: Amanda Boyd. Tel: (03) 8636 2661. Email: [email protected]

    15-16: FICA Annual Conference 2009, Kingsgate Hotel, Whangarei, NZ. www.fica.org.nz

    16-18: HIA Build Green Expo - Melbourne Convention and Exhibition Centre. Exhibition and Events Association of Australia. Tel: +61 2 9413 9520. Web: www.eeaa.com.au

    16: Australian Timber Design Awards regional. Cullity Gallery, Perth. Contact Timber Development Association (NSW) Tel: Laurel Clarke on (02) 9279 2366. Email: [email protected] Web: www.timberawards.com.au

    18-25: XIII World Forestry Congress. Buenos Aires, Argentina. Forestry Department, FAO, Viale delle Terme di Caracella, 00100 Rome, Italy. www.fao.org/forestry/site/18508/en

    20: Australian Timber Design Awards regional. Melbourne Recital Centre. Contact Timber Development Association (NSW). Tel: Laurel Clarke on (02) 9279 2366. Email: [email protected] Web: www.timberawards.com.au

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 6

    THE Royal Commission into Victorias bushfires has recommended an overhaul of the way warnings are issued and changes to the controversial stay or go policy.It is now more than six months since 173 people died in the fires and industry lost more than 10% of its sustainable yield from native forests along with 20,000 ha of plantations.Delivering its interim report, the Royal Commission sketches out whats needed to avoid another disaster this summer. I might me missing something, but there is not one mention in the reports 51 recommendations about prescribed or controlled burning or any means of reducing forest fuel loads, despite all the data submitted by the Institute of Foresters of Australia and the Victorian Association of Forest Industries.Maybe its on the agenda somewhere down the bush track .. but that track is likely to get bloody hot as summer approaches!

    With the interim report from the Bushfires Royal Commission now out, the most stark revelations are those which are not stated, observes Craig Isherwood, national secretary of the Citizens Electoral Council of AustraliaBack in February, Mr Isherwood said that Victoria didnt need a royal commission; it had two royal commissions before into the Victorian bushfire disasters of 1939 and 1944 by revered Judge Leonard Stretton. The result was crystal clear: the bushfire disasters

    comment

    The power of products, people and knowledge

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    To receive the 2009 Conference Registration Brochure Email [email protected]

    or visit the official website

    Association inquiries contact ATFA 1300 361 693 Convention inquiries contact GEMS (02) 9744 5252

    BrisBane Convention CentreFriday, 4th september 12.00 noon to 6.30 pm

    saturday, 5th september 12.00 noon to 4.00 pm

    Australian Timber Flooring ConventionIncorporating the National Timber

    Flooring Conference & Trade Exhibition

    Whats on show

    Pre Finished Wood Flooring Solid Hardwood Flooring

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    Who should attend

    Floor Sanders Floor Layers Builders and Building Specifiers

    Retailers Floating Floor Layers Timber Merchants

    Associations Distributors

    Manufacturers Flooring Suppliers

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    FREE exhibition pre registration for visitors available at www.atfaconvention.com.au

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    2009 Australian Timber Flooring AwardsFor further information phone GEMS on 02 9744 5252

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    BrisBane Convention CentreFriday, 4th september - 12.00 noon to 7.00pm

    saturday, 5th september - 12.00 noon to 4.00pm

    Bushfire inquirycovers up fuelreduction failure

    the

    AN occasional column that will feature new and innovative wood and forest products .. and monitor any unfair or deceptive practices that malign the sustainable credentials of the Australasian timber industry. Contributions are invited.

    Watchdog

    Cont Page 9

    Judge Leonard Stretton .. prescribed burning of the forests ridiculously inadequate.

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 7issuE 91 | 31.08.09 | PAgE

    HOW does the government protect emitters from having to pay the open market price of carbon without unfairly penalising forest owners and others who produce carbon credits?It is one of the biggest dilemmas faced by the New Zealand Government as it revises its emission trading scheme (ETS).Forest owners say one answer is to pay emitters a taxpayer-funded subsidy equal to the difference between a New Zealand price for greenhouse gas emissions and the international carbon price.The international carbon price is providing land owners with the incentive they need to get on with large scale planting, says NZ Forest Owners Association president Peter Berg.If the Government prevents forest owners from accessing this market, there will be little investment in tree planting.Speaking at the Australia-New Zealand Climate Change and Business Conference in Melbourne last week, NZ Climate Change Minister Dr Nick Smith said the Government was very mindful in amending the New Zealand ETS of the importance of the investment signals being sent to the forest industry. A real problem is that while

    forest owners have been eligible for credits since January 2008, there is no market without buyers, he said.We have a difficult balancing job of getting emitting sectors into the ETS in a timely way, not imposing excessive costs on them, while providing a robust market for the forest sector to sell their credits.Mr Smith last month

    said attempting to cut greenhouse gas emissions by 40% by 2020 would cause too much economic hardship.The signal from Dr Smith came as he also reported that new data showed New Zealand had sufficient forests to offset increases in emissions since 1990 to meet Kyoto Protocol obligations.Estimates of New Zealands Kyoto liability have bounced around wildly from profits to multi-billion dollar payments due to different calculations. New satellite images show that New Zealand has enough trees to meets its current obligations.Because it believes exposure to the world carbon price would impose a high and unpredictable cost on many major NZ industries, the Government has been canvassing the idea of de-linking the country from the world carbon market and putting a cap on the price of carbon.Peter Berg says he appreciates that the

    Government wants to address this dilemma in a way that encourages further forestry investment, but he says this will occur only if forest owners have access to an open carbon market. If price caps were introduced I expect many investors would keep their chequebooks in their pockets and their existing carbon credits under mattress, as their income would be limited by the cap while their liabilities at harvest would be open-ended. There is also the principle that in a free enterprise economy businesses are entitled to sell their goods and services to those offering the best price, and this is the way most New Zealanders have always done business, he says.We firmly believe the attraction of true market prices will ensure there are plenty of high quality NZ forestry credits available to NZ emitters and/or the government, and that most of these credits will in practice be traded domestically.

    NZ dilemmaIf the Government preventsforest owners from accessingthe carbon market, there willbe little investment in planting

    cLimAte chAnGe conference

    Peter Berg .. Carbon forestry can make huge economic contribution.

    Dr Nick Smith .. investment signals being sent to forest industry.

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 8

    THE Bligh Governments plan to sell plantation assets managed by wholly state-owned corporation Forestry Plantations Queensland is likely to lose the support of the states $2.4 billion processing industry.Timber Queensland chief executive Rod McInnes says industry has been patiently waiting to see how the Government plans to sell off this public asset.We have offered initial tacit support for the sale, but while we wait FPQ is charging on using their monopoly supply power to force industry into unacceptable commercial arrangements and refuse to negotiate on those arrangements, Mr McInnes said.The current supply contracts ensure that the CEO of FPQ can set the price industry has to pay for logs and no merits review of that price is possible. That is totally unacceptable to industry. No one in their right mind would want to invest or expand existing investment in plantation processing in Queensland under these conditions, irrespective of who owns the plantation resource.Mr McInnes said that FPQ flatly refused to negotiate this issue and their Government masters apparently lacked the fortitude to direct them.Rather than increasing the potential value of the

    plantation assets, these antics by the current managers will just make any potential purchaser very aware that they will inherit an increasingly hostile customer base, he said.Resolving outstanding commercial issues between FPQ and its customers would not only allow the timber processing industry to continue to invest and provide security for the 20,000-plus jobs supported by industry in Queensland, it would provide an opportunity for industry to work with the Government to ensure any sale is in the best interests of all the stakeholders.Its time for some leadership from the Premier before its too late, Mr McInnes said.The Governments assets sell-off announced in June hoped to raise $15 billion for the cash-strapped state. The sale included FPQ, the Port of Brisbane, Queensland Motorways, Queensland Rails coal business and the Abbot Point Coal terminal in the states north.An approach to the Federal Government to explore ownership of the QR coal business has failed. An option remains open to put it to the private sector, but this was never the states course.All other assets for sale remain on the auction block.

    industry news

    industry supportwaning on statesplantation sell-off

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 9issuE 91 | 31.08.09 | PAgE

    then, as now, were caused by what the judge called ridiculously inadequate prescribed burning of the forests, and he mandated fire prevention must be the paramount consideration of the forester.Guess what was left out of this interim report? Mr Isherwood asks.He restates: For 40 years, fuel reduction burning was practiced as a scientific forestry management measure, until the intervention of, first, radical greenies in the Cain/Kirner Labor Government, and then, radical economic rationalists in the Kennett Government.Environmental concerns for biodiversity etc. were increasingly cited to stop fuel reduction burns in the Cain/Kirner years, and then Kennett slashed the departments budget and staff, and gutted its ability to do prescribed burns.In 1992, the Auditor-General found that the Department of Conservation and Environment [now Sustainability and Environment] had cut expenditure on fire prevention by 23% over five years, and in 2003 the Auditor-General found that the amount of prescribed burning had never met the departments targets.Heating up to the subject, Mr Isherwood continues: As I stated in February, prescribed burning doesnt stop bushfires, but it dramatically reduces the

    intensity of the type of wildfires that erupt on extreme fire danger days like Black Saturday.He pointed out that last December, two months before the Black Saturday bushfire disaster, the Brumby Government had already rejected the idea of tripling the area of prescribed burning from 130,000 ha to 385,000 ha, stating that the government supports a move away from focusing on hectare-based targets, which may lead to inappropriate planned burning programs.Mr Isherwood blasted the government: This is pollie-code, for we dont want to spend the money, to fund the personnel, machinery and infrastructure (which were dismantled in the 90s), and have a crash program to expand our capacity to triple the area we can safely perform controlled burns.Well, the reality is, that with the government now issuing warnings that the approaching fire season will be worse than the last, currently only 503 prescribed burns over 113,000 ha have been completed.Given that national parks alone have increased from 276,343 ha in 1975 to 3,230,741 ha in 2005 more than a 10-fold increase even controlled burning targets of 385,000 ha a year is a small target for bushfire control.Mr Isherwood concludes: The government continues to be criminally negligent, when it comes to bushfire control.

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    comment

    Criminally negligenton bushfire controlFrom Page 6

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 10

    AS a successful timber merchant are you going to need chain of custody?The answer, unequivocally, is yes eventuallyDriving the demand for green certification and it wont go away are state and federal government policies; Green Building Council Australia; green washing by large corporations; specifiers, architects, building designers; and market expectations that products produce minimal impact on the environment.It will be one in, all in as we also consider other drivers such as new Federal Government illegal logging policy; new GBCA Sustainable Timber Credit; and the inevitable entry of environmental rating schemes into the residential sector.For any timber certification scheme to gain recognition under the GBCA, there will have to be full compliance with two criteria chain of custody (criteria 1) and verification of legality

    (criteria 8).Quite simply, some time soon, if your cannot demonstrate CoC and legality, you cannot place your timber on Green Star-rated projectsWhat sort of volumes are available? As at August this year, 926,000 cub m on 39 sites (38 manufacturing and one merchant) have been EWPAA-AFS certified.Product cubic metre volumes include plywood 78,000; sawn pine 486,400; sawn hardwood 195,000; wood panels 167,000.

    Chain of custody, quite simply, is a management system which ensures that an unbroken link exists from the certified forest to your customer; ensures that products from certified

    forests can be identified; no illegal wood enters your distribution chain; and documentation identifying the origin of materials is verifiable.The two competing systems are Forest Stewardship Council (supported by green groups, GBCA, specifiers and state governments) and AFS (supported by industry forest growers/manufacturers state and federal government, some

    specifiers, exporters with GBCA undecided.The chain of custody links for FSC are forest manufacturer distributor merchant joinery builder. For AFS its forest manufacturers last point of reprocessing.Two basic methods to manage certified materials (AFS) are:The Separation and Marking System: Where certified materials can be identified and separated from non-certified materials. Can be physical i.e stored in different locations. Can be by branding or labeling. Can be electronic (certified product lines in database). Systems are in place to ensure that certified and non-certified materials are not mixed.The Inventory Control System: Typically used where input materials cannot be readily separated, e.g. paper

    green certification it wont go awaytABmA QueensLAnd c-o-c forum

    Driving forces for chain of custody in the timber yard

    Cont Page 11

    Extracts of a presentation by SIMON DORRIES, general manager, Engineered Wood Products Association of Australasia, to the TABMA Queensland chain of custody forum in Brisbane.

    Quite simply, some time soon, if your cannot

    demonstrate CoC and legality, you cannot place

    your timber on Green Star-rated projects

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 11issuE 91 | 31.08.09 | PAgE

    manufacture, MDF, veneers. Allows the certification of a specific proportion of production. 100% of volume can be claimed as certified when certified proportion exceeds 70%. Could potentially used in a distribution business where product is repackaged.Requirements of a chain of custody management system include:1. Training. Staff with key responsibility have undergone training specific to their responsibilities and can demonstrate sufficient understanding of CoC as it relates to their role. Records are maintained2. Verification of origin. Systems are in place to recognise incoming certified and non-certified materials; claims of certification by

    suppliers can be verified, e.g certificates; if necessary products are identified or databases for monitoring certified volumes updated; records are kept.3. Illegal operations and sources (the most time consuming and difficult taking up 70% of effort): The business must ensure that no illegal wood from any source enters anywhere within the supply chain. Not only must all supply be legal it must be demonstrated.All suppliers must undergo an assessment which identifies the level of risk that that wood from illegal/controversial sources is supplied: the risk is zero for certified suppliers. For non-certified suppliers risk is based upon the country of origin and risk in the supply chain.For low risk countries, all that

    is needed is a declaration from the supplier that the product is from legal origin. For high risk countries, legality in the supply must be verified. Documentation must be from regional forestry departments or local and national governments. If this cannot be provided, audits on the supplier are required.

    Procedures and methods for chain of custody certificates an be a formal certificate, AFS endorsed invoice and

    the ability to provide details on certified proportions etc.A quality management systems requires internal audits; management review; final inspections; identification of training needs; document control; handling of complaints; preventative and corrective action; records; and chain of custody manual and documentationA detailed CoC manual and documentation is required to meet requirements for certification.Pro-formas exist for AFS and all that is required is to update the company details and specific CoC systems used.

    tABmA QueensLAnd c-o-c forum

    A quality management systems requires

    internal audits

    C-o-C is simply a management system

    Chain of custody in the timber yard .. on way sooner than later.

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    From Page 10

    Suppliers must undergo an assessment which identifies level of risk

    AFS/01-10-01

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 12

    ifA conference septemBer 6-10

    REDD: shifting the balance

    The Australian Managed Investment Scheme

    (MIS) Forest Industry ReviewThe Review has been written to:AssistAustralianandinternationalsubscribers betterunderstandthiscomplexindustry.Providefrankandindependentcommentary perhapsnotavailablewithinAustralia.Suggestwheretheindustrymaybeheaded overthenextthreeyears.Identifyopportunitiesavailabletoinvestinthe aftermathofcompanycollapses.Identifyjustwhomightbelininguptoinvest.

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    Introduction MIS Definitions - Documents Tree Crop MIS Company History The Demise of Six MIS Tree Crop Companies MIS Forest Crop Companies Operating in H2 2009 The 2009 Fallout Future Challenges and Opportunities Conclusions Appendices

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    A renewed emphasis to incorporateforests into the global carbon market

    and eco product assets in the US, Australia, New Zealand, southeast Asia and the Pacific Islands.

    Extract of an address to be presented at the IFA national conference on Queenslands Sunshine Coast next month by DR DAVID BRAND, managing director, New Forests Pty Ltd.New Forests is an investment management and advisory services firm specialising in forestry assets and environmental markets, such as carbon, biodiversity and water.New Forests manages more than $250 million in sustainable forestry

    THE global economy appears to be on the verge of a breakthrough shift in the economics of production systems that drive deforestation and forest degradation. In his address to the national conference of the Institute of Foresters of Australia at Caloundra next month, Dr. David Brand concludes that not only is there a renewed emphasis on incorporating forests into the global carbon market, but that there is potential to incorporate the multiple benefits of ecosystem services as layered values embedded in sustainable production systems, such as within third-party certified global agri-business industries.. Growing trends for sustainability across sectors need to be linked with mechanisms to standardise ecosystem services products

    like carbon credits from REDD [reducing emissions from deforestation and forest degradation], bio-banks and water quality or watershed conservation banks. We can already see the potential instruments emerging in voluntary markets and in some national

    level regulatory experience, says Dr. Brand.The challenge now is to move ahead with implementation fast enough that the tide can be turned before there is little left to save.Dr Brand continues:There have been continuing

    attempts to set targets and policy mechanisms for conservation of ecosystems. The global goal of 10% protected areas in each bioregion is a major example, supported by the United Nations Convention on Biological Diversity, the IUCN and others. Conservation International has embraced the concept of protecting key hotspots, which are areas of unique endemism and biodiversity. The concept of protected areas works reasonably well in developed countries with substantial resources, but even there the protected areas tend to be over-represented in non-productive ecosystems (alpine, mountainous terrain, arctic regions, deserts, etc.) and under-represented in productive systems used for agriculture, grazing and Cont Page 13

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 13issuE 91 | 31.08.09 | PAgE

    human settlement.Given that most productive areas are largely under private ownership or management, it proves expensive and controversial for governments to use tax-payers dollars to acquire these areas for rehabilitation or conservation. Some NGOs have sought to augment formally protected areas in government ownership with informal conservation areas often established by the purchase of conservation easements or development rights from property owners.

    These philanthropic conservation funds have made substantial contributions to protected areas networks, but the general view is that they are not capable of out-competing private investment in development activities.A recent study by the Union of Concerned Scientists and the UK government suggested that funding of $US20-33 billion per annum would be needed to reduce deforestation by 50% over the next 10-20 years. That

    is 250% to 400% of the current combined funding of the World Bank, Overseas Development Assistance and Philanthropy. If we wish to completely stop all further rainforest conversion we would potentially be looking at funding of $50 billion per annum or more. One way to look at the problem of forest conservation finance is to explore the goals for emissions reduction in 2030 and work backwards.It has been suggested that global agreements should aim for 80% reductions in greenhouse gas emissions by 2050 and that this will require about 30 billion tonnes per annum of greenhouse gas reductions relative to business as usual by 2030. Analysis of that target suggests that at least 20% of the net emission reduction will need to come from rainforest conservation by 2030. That is six billion tonnes of carbon dioxide equivalent reductions per annum. At a global carbon price of $US20, that represents a revenue stream of $US100 billion per annum. If we securitised such a cash flow at a 10% real cash yield, it would represent an asset value of the worlds rainforests of $US1 trillion. That is about equal to 5%

    ifA conference septemBer 6-10

    From Page 12

    Cont Page 14

    Ending any furtherconversion ofrainforests wouldcost $50bn a year

    The challenge now is to move ahead with implementation fast

    enough that the tide can be turned before there is little

    left to save

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] PAgE | issuE 91 | 31.08.09 14

    of the institutional financial assets in the United States or about equal to the entire assets of the Australian superannuation industry.On the other hand, if we compare this with the value of agricultural commodities it is less daunting. For example, Malaysia exports around 15 million tonnes of crude palm oil for $US8 billion per annum. Globally, oil from oils seeds is about a $US50 billion industry (FAO). Meat, sugar, timber, and other commodities are even greater in value. The Union of Concerned Scientists recently suggested that global timber imports are $US160 billion per annum a 5% tax would generate $US8 billion per annum for REDD or other forest conservation initiatives.

    A tax is generally a blunt instrument as it affects both sustainable and unsustainable producers equally. A more effective approach would be to create certification or accreditation processes that allow sustainably produced goods to either trade at a premium, or to have lower costs associated with their lower environmental impacts. There are a number of these certification processes now in operations. The first and longest running is the Forest

    Stewardship Council, which certifies the sustainable management of forests and provides for chain of custody certification so that end users can differentiate between wood products coming from FSC certified forests and those that are not. There are now a series of commodity round-tables (e.g., soy, palm oil and sugar) that are proposing certification standards and mechanisms to differentiate sustainable production from unsustainable production.This is a critical first step, but not quite enough to achieve a no net loss end-game. Todays sustainable production systems are accredited to best practice in terms of maintaining high conservation value forests, minimising pesticide use, implementing fair employment practices, etc. They do not, however, require zero environmental impact. This means that as the global economy doubles and redoubles in size, consumption will continue to chip away at natural systems, albeit less rapidly than under unsustainable production systems. That is why the idea of actually embedding the ecosystem services products described above within production systems can more realistically move us towards an ultimate solution.The way this might work is that each bio-region would have an inventory of its ecosystems and state of the ecosystem services. In some cases, the goal might be to stabilise the

    system; in others it could be to rehabilitate and recover some ecosystem services to a higher level (e.g., as is needed in the Great Barrier Reef). In some rare cases it may even be acceptable to draw down further on the ecosystems before determining a stabilisation point. Whatever that point is, then the ecosystems providing those services could be commodified into REDD projects, bio-banks and water quality banks. The credits could then be attached to the commodities produced in those bio-regions to create a systematic sponsorship of the conservation functions by the production functions.

    As an example of this, the Malua BioBank can generate a commercially acceptable return from selling its Biodiversity Conservation Certificates (BCC) at $US10 per 100 square metres of forest rehabilitation and conservation management. When connecting the BCC credit to the palm oil commodity product, it adds just 1.5% to the current price.The bio-regions may be supporting not only local production commodity agribusiness and point source industries like mining, oil and gasbut could also service global industries like electricity generation via international REDD markets.

    In this case, the bio-banks could be established to sell multiple ecosystem commodities, including biodiversity certificates to agribusiness producers, REDD credits to overseas energy generators, and water quality credits to downstream water users. Over time as the global economy grows, the eco-commodities could become hugely valuable in line with their growing importance in supporting an ever larger global economy. The result would be landscapes that integrate production and conservation functions on a commercial basis.The IFA 2009 Conference, titled Forestry: A Climate of Change, is being held at Caloundra from September 6 to 10. Major sponsors include Forestry Plantations Queensland, Forest and Wood Products Australia, DERM Forest Products, Australian Plantation and Paper Industry Council, CSIRO, Forests NSW, Timber Queensland the Department of Agriculture, Fisheries and Forestry, Proptec and Jiffy.For further information contact the conference manager, Shanna Sheldrick, All Occasions Management. Tel: +61 8 8125 2200. Fax: +61 8 8125 2233 Email: [email protected] or visit the website at www.forestry.org.au/conferenceEditors note: Timber & Forestry enews has been given a selection of papers in advance of the IFA conference and will publish extracts from these leading up to the conference.

    From Page 13

    Eco-commodities could become hugelyvaluable as the global economy grows

    ifA conference septemBer 6-10

    Sustainable production systems are accredited to best practice, but they do

    not require zero environmental impact

    Integrating production and conservation functions on a

    commercial basis

  • Advertising: Tel +61 7 3256 1779 Email: [email protected] 15issuE 91 | 31.08.09 | PAgE

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Advertising: Tel +61 7 3256 1779 Email: [email protected] 1 ISSUE 91 | 31.08.09 | PAGE By JIM BOWDEN INDUSTRY input into a proposed generic ‘code of conduct’ on the trade of legally-verified wood products will be documented and ready for presentation to the Federal Forestry Minister by the end of September. Tony Burke commissioned the project along with other means such as border regulations and requirements for certification of legality of importers as part of a policy to “promote the trade” of legal timber. The draft code, now being structured after industry workshops in Sydney, Melbourne, Brisbane and Perth, is a collaborative effort by Australian industry, developed by project leaders the Timber Development Association and the Australian Timber Importers Federation. About 80 timber import- export merchants – fewer than expected – took part in the formulation of the code at the four workshops, the last in Perth on August 27. Mr Burke recently set up an inquiry into the extent of Australian illegal timber imports, but so far this has produced no reliable data; in fact, the amount of illegal timber entering the country is unlikely to be significant. The federal inquest on timber imports stems from a 2007 election promise by Kevin Rudd to ‘’encourage sourcing of forest products from sustainable forest practices and seek to ban the sale of illegally logged timber imports’’. This was based on a Government commissioned report now widely discredited – that 9% of Advertising: Tel +61 7 3256 1779 Email: c[email protected] ISSUE 91 | 31.08.09 | PAGE 1 6202 Workshops bring industry closer to a Code of Conduct that will confront claims about illegal wood imports, but .. Where’s the wood? Cont Page 2 s Bushfire inquiry covers up fuel reduction failure Resources expert joins Forest Products Commission Green certification – it won’t go away REDD: shifting the balance Workshops agree: one code of conduct for all commodities THIS ISSUE Carbon market: New Zealand dilemma Industry support wanes on plantations sell-off AFS/01-10-01 www.forestrystandard.org.au
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