This paper has been prepared at short notice in response to the growing conflict and public confusion over recent export woodchip license decisions, and related conflict over logging in forest areas on, or proposed for, the Register of the National Estate.

The paper offers comments on certain neglected issues, and a brief description of the elements in a solution to this conflict, that are technically, ecologically, socially and politically feasible.

Export woodchipping (commenced in 1968) was always to be a short-term and interim measure for a resource of lesser quality than the traditional sawlog, until investment in Australian pulp and paper mills was undertaken. There has been little progress on this transition to domestic value-adding. Instead low-value export woodchip production has become entrenched and the volumes have increased.

According to the Resource Assessment Commission (1991) there is a deficit of wood imports over exports, costing 1.6 billion dollars (7% of Australia's current account deficit). Woodchips for export in recent years have been around 350-440 million dollars pa.

Wood resource permissions are a state government matter and during the 1980s, sawlog removals declined by 2% pa while pulpwood/woodchip removals increased by 4% pa. Pulpwood/woodchip removals now constitute around 55% of all removals, compared to 14% in 1970.

Since export woodchipping commenced there have been constant allegations that sawlogs (especially marginal logs) have been diverted directly into woodchip machines.

There is considerable evidence that the sawmilling industry has been articulated to and made dependent upon the woodchip industry. Prime cases of this have arisen under the resource concessions given by the Tasmanian and NSW governments to North Broken Hill P/L and to Harris-Daishowa P/L respectively, where there has been no attempt to retrive sawmill material from logs prior to chipping.

In fact Harris-Daishowa is currently logging substantial volumes in East Gippsland and trucking the whole logs directly to its woodchip plant at Eden. These logs are by-passing sawmills that have recently made considerable investments that have enabled them to process low-quality logs as sawlogs. New purpose built sawmills have been designed to function as flitch recovery sawmills (a concept advocated by the ACF and the Tasmanian Conservation Trust as long ago as 1985). Their purpose is to saw open pulp/woodchip logs and salvage solid sections for value adding. This creates far more employment than simply woodchipping the logs for export.

These new developments have important implications for the current debate over woodchipping and logging in National Estate forests. It is vital that decision makers focus on these new technical solutions, as there is a declining volume and lower quality of sawlogs available to the Australian sawmilling industry.

While export woodchipping has expanded there has also been an expansion in the demands for the removal of logging from native forests. This has directly lead to the current situation of demands that up to 1300 coupes be excluded from current wood producing areas.

Most of these areas have been placed on the Register of the National Estate by formal environmental organisations. Thus they have become de facto land use decisions that have not been declared in National Parks or other conservation status by the relevant state government. The lever being used by the environment movement over these areas is of course the annual export woodchip licenses.

The Commonwealth's role in export woodchipping has been to provide export licensing. It has little direct power over logging procedures, logging area scheduling and resource rights. Here lies the current dilemma over its obligations to ensure that any of its actions (eg; allowing woodchip exports derived from National Estate forest areas) do not adversely affect National Estate forest values unless there are no prudent and feasible alternatives. The formulation and deciding of `prudent and feasible alternatives' is very much a state government matter.

The National Forest Policy Statement (1992) provides the best mechanism for resolving the on-going land use disputes. Its proposals for Regional Forest Agreements were to be interfaced with agreed long-term plans for sustainable wood production and a comprehensive system of conservation reserves.

Progress on these initiatives has been slow and this has been the fault of all levels of government and industry resistance. However, they need urgent attention. Sawmillers in East Gippsland report their willingness to urgently advance these policies, viewing them as a resolution to the ongoing conflict.

A response based on deferring, shifting or rescheduling logging away from National Estate areas can only be a short-term one, it does not solve the basis of conflict.

There has between a traditional distinction between a sawlog and a pulp/woodchip log. In the past it was relatively easy to make the classification in the forest at the point of logging. However, with declining supplies of high quality sawlogs it is now important that this distinction by removed and serious attempts made to salvage solid timber from all pulp/woodchip logs prior to sale to large woodchip companies. This can only be achieved outside of the forests in purpose built sawmills.

The technical strategy is to saw open all logs and then determine the parts for re-sawing into timber products and defect parts or residue which could be chipped, or may form the basis of new products in the future (egs; wood fuel briquettes, methynol, waste wood fibre fired co-generation; while sawdust which is currently burnt for a negative value can be used as an industrial fuel). One East Gippsland sawmills has recently won a contract to supply 13,000 m3 pa of sawdust to the Bega Cheese factory for its boiler).

Detailed research on sawn recovery from pulp/woodchip logs has been conducted by the CSIRO for a East Gippsland sawmill which has commenced investment in recovery systems (best described as flitch mills). This research suggests technical solutions and a model for the examination and possible re-writing of the 11 export woodchip licenses. As well it provides a model by which regional sustainable wood production can be achieved.

Also on offer, using this approach, is the progressive and planned movement of the industry into neglected and degraded forest areas. These forests have been selectively logged since the turn of the century (there is available to industry approximately 4.5 million m3 pa of low quality logs in such forests, which could not be considered as pristine old-growth forests due to past logging and fire history).

Opening up these degraded forests to commercial harvesting and wood processing "... in most cases provides the only chance to rehabilitate these degraded forests, by removal of the defective over-story and generating the cash flow to reinvest in regeneration practices" (Waugh 1991).

Such an approach should have as its central purpose the restoration of degraded and fundamentally altered eco-systems, providing them with future wood productivity and/or as conservation reserves reflecting their original eco-systems (prior to European settlement). An added advantage would be to provide the Government with additional resource availibility and thus create room to effect significant trades-off's in the current land use disputes.

Sawmilling produces wood waste residues in the form of defective solid section which can be woodchipped and sawdust. Finding markets for these residues is becoming critical to the economic survival of sawmills due to declining sawlog volumes and the lower quality of logs available.

While the environment movement has maintained its total opposition to woodchipping it has always supported the processing of genuine sawmill residues. In fact the environment movement has encouraged sawmills to utilise its waste as opposed to simply burning it for a negative value.

There needs to be a clear distinction made between export woodchips derived directly from the chipping of whole logs and export woodchips derived from the conversion of sawmill waste (and this needs quantification).

The Commonwealth should use its export control powers in a creative manner by making this distinction clear. It should also seriously consider, in the first instance, offering regional export licenses to sawmills or sawmill co-operatives for the production and export of their own waste (under Government monitoring).

It should also disallow export of woodchips produced from whole logs, when there is an existing regional capacity to have these logs processed in sawmills or flitch mills. It should allow export of the waste residues only where no domestic market exists.

Export woodchip licenses should be re-written to include :

1. A clear distinction between exports derived from genuine sawmill/flitch mill residues and exports derived from direct chipping of whole logs.

2. Where processors directly chip whole logs then a clause which provides a strict 18-24 month timeline, by which time the processor must install and use an approved salvage system for recovery of sawmill materials prior to chipping the waste log sections. If processors fail to implement such salvage systems they cannot expect any continued licensing by the Commonwealth. Even the 20% phase down pa should not apply. It is suggested that a specialist advisory team be established by the Prime Minister to advise the Government and woodchip processors and to facilitate the transition to sawn recovery from pulp/woodchip logs.

3. Where there is a regional sawmilling industry with the capacity to process pulp/woodchip logs through sawmills, then export licenses for genuine sawmill/flitch residues should in the first instance by offered to individual sawmills and/or regional sawmill co-operatives (such licenses to contain strict government monitoring to ensure all logs are given the maximum opportunity to be processed as sawlogs).

This measure should be immediately implemented in the case of the East Gippsland region where the operations of Harris-Daishowa in taking whole logs should be stopped by use of the export control powers.

4. All licenses to contain a clause allowing export only where no domestic markets exist for waste wood residues. This should be of wider application than just domestic pulp and paper manufacture.

Waugh, G. (1991) `Adding Value to Old-Growth Eucalypt Forests’, paper delivered at the Second Australian and New Zealand Institutes of Foresters Conference, Christchurch.

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