In an indication of the value placed on forests by the State Government, a confidential letter to the Newmerella Logging Company in East Gippsland - one of the largest mills in the state - sets royalty rates ranging from nine cents a cubic metre to a high of $1.38. A cubic metre of wood weighs roughly one tonne. By comparison, the National Association of Forest Industries estimates the price for equivalent low-grade plantation logs at between $8 and $10 a cubic metre.
Critics claim low royalties on native forest logging amounts to a subsidy, which is pricing environment-friendly alternatives such as plantation timber and recycled paper out of the pulp market.
The letter from the Department of Natural Resources and Environment sets the company's royalties for 1997. Newmerella's director, Mr Trevor Andrews, said yesterday that royalty rates had risen by about three or four per cent since then. Ms Serena Williams, a spokeswoman for the Conservation Minister, Mrs Marie Tehan, said last night that timber prices were audited by the Auditor-General, whose reports were publicly available.
But the Newmerella revelation is likely to harden the opposition of conservationists to the Regional Forests Agreement process. Community and green groups argue that the agreements, which lift export limits on woodchips, are propping up the industry and have resulted in unsustainable logging. Sustainable yield limits are set on sawlog volumes, but not the "residual" logs that are chipped for paper products.
The sawlog industry, under pressure from plantations which now supply the bulk of the construction market, is trying to build up niche markets such as feature floorboards and furniture.
But most wood from native forests is still being chipped, or pulped. While in most logging areas of East Gippsland about half the wood ends up in paper products, the proportion from some areas is up to 90 per cent, according to the executive director of the Victorian Association of Forest Industries, Mr Graeme Gooding. In the Otways, where a forest agreement is yet to signed, about 87 per cent of timber is pulped, according to department figures.
Mr Andrews said that due to a worldwide pulp glut, the Newmerella mill had stopped woodchipping last year. Residual logs are being processed by a Cann River mill and the Japanese pulp giant Harris Daishowa, based in Eden. "They can't even sell what they've got," Mr Andrews said.
Mr Gooding said the Newmerella royalty would apply to low-quality logs. He estimated that high-grade pulp logs from the Central Highlands were worth about $10 a tonne to the Government, including road charges which vary from $4 to $6. The road charge, which covers construction and maintenance of forestry roads, was set at a flat $3.73 for Newmerella.
Environment Victoria's forest campaign co-ordinator, Mr Rod Anderson, said the forest agreements, far from protecting forests, had led to a massive increase in woodchipping, while there was already ample plantation timber to meet all Australian needs. "We know that in just about all native forests, the industry is woodchip-driven but we don't often get it documented," said Mr Anderson. "Without woodchips, the industry in native sawmills wouldn't survive. Sawmilling is a byproduct of woodchips."
He could not understand why the Government was selling timber so cheaply.
Part of the answer may be political - protecting jobs in National Party
electorates - and "it partly relates to the collapse in Asia and the woodchippers
being very choosy", he said. "But this price isn't new, so that isn't the
complete answer."