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2018 Review of the Allocation of Timber Resources Allocation Order 2013 Contents 1. Introduction................................................... 2 2. Matters for consideration in reviewing the Allocation Order....3 2.1 The principles of ecologically sustainable development......3 2.2 Any report by the Secretary under section 8 (sustainable forest management criteria indicators)...........................4 2.3 The structure and condition of the forest and its impact on future timber resource availability..............................5 2.4 VicForests' compliance with the AO, including the conditions specified in the order...........................................8 2.5 The provisions of any Code of Practice.....................10 2.6 VicForests' compliance with any Code of Practice...........10 2.7 Existing VicForests timber commitments under managed licences and agreements..................................................12 3. Review recommendation......................................... 15 1

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Page 1: Introduction - djpr.vic.gov.au€¦  · Web view2018 Review of theAllocation of Timber Resources. Allocation Order 2013. Contents. 1.Introduction2. 2.Matters for consideration in

2018 Review of theAllocation of Timber Resources

Allocation Order 2013

Contents

1. Introduction............................................................................................................................2

2. Matters for consideration in reviewing the Allocation Order...................................................3

2.1 The principles of ecologically sustainable development........................................................3

2.2 Any report by the Secretary under section 8 (sustainable forest management criteria indicators)..........................................................................................................................................4

2.3 The structure and condition of the forest and its impact on future timber resource availability.........................................................................................................................................5

2.4 VicForests' compliance with the AO, including the conditions specified in the order...........8

2.5 The provisions of any Code of Practice................................................................................10

2.6 VicForests' compliance with any Code of Practice...............................................................10

2.7 Existing VicForests timber commitments under managed licences and agreements..........12

3. Review recommendation......................................................................................................15

Prepared October 2018

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1. IntroductionOn 1 October 2013, the Allocation Order 2013 (AO) was published in the Victorian Government Gazette No S 3431. The AO is made by the Minister for Agriculture (the Minister) under Part 3 of the Sustainable Forests (Timber) Act 2004 (the Act). On publication of the AO in the Victorian Government Gazette, property in the timber allocated by the AO is vested to VicForests. VicForests may only harvest and/or sell vested timber resources in accordance with the AO. The AO describes:

the forest stands within State forest to which VicForests has access; the location of those forest stands; the total extent and available areas of those forest stands; the maximum area available for timber harvesting in any five-year period; any additional activities that VicForests is permitted to undertake; and the conditions with which VicForests must comply in carrying out its functions under the AO.

The AO provides long-term access to Victoria's timber resources. It may be varied or reviewed by the Minister consistent with sections 17 and 18 of the Act. Under Section 18(2) of the Act, the Minister may review the allocation of timber resources at any time if:

the Minister considers that there has been a significant variation, as a result of fire, disease or other natural causes, in the timber resources in State forests which are available for timber harvesting in accordance with sustainable forest management; or

there has been any significant increase or reduction in the land base which is zoned as available for timber harvesting; or

the Minister considers that there has been any other event or matter which has a significant impact on the timber resources in State forests which are available for timber harvesting in accordance with sustainable forest management.

Since the AO was published on 1 October 2013, a number of changes affecting timber resources and timber harvesting have been made that form the basis for this review. These changes need to be considered in determining whether to amend or vary the AO.

1 http://www.gazette.vic.gov.au/gazette/Gazettes2013/GG2013S343.pdf

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2. Matters for consideration in reviewing the Allocation OrderThe Minister in accordance with section 19 of the Act, must have regard to a range of matters when undertaking a review of the AO. Each of these are addressed in the remainder of this section and include:

the principles of ecologically sustainable development; any report by the Secretary under section 8 of the Act; the structure and condition of the forest and its impact on future timber resource availability; VicForests' compliance with the AO, including the conditions specified in the order; the provisions of any Code of Practice; VicForests' compliance with any Code of Practice; and any existing timber commitments VicForests has under any managed licences and any

agreements VicForests has entered into.

2.1 The principles of ecologically sustainable development

Section 5 of the Act outlines the principles of ecologically sustainable development, which is defined as development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends.

The Department of Environment, Land Water and Planning (DELWP) and the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) are responsible for the sustainable management of Victoria’s State forests. This includes the conservation of flora and fauna, protection of water catchments and water quality, the provision of timber and other forest products, the management of fuel loads, the protection of natural assets, protection of archaeological and historic values, and the provision of recreational and educational opportunities.

The Victorian Auditor-General’s 2013 report, Managing Victoria’s Native Forest Timber Resources 2, noted that the former Department of Environment and Primary Industries (DEPI) and VicForests demonstrate many environmentally, socially and economically sustainable timber resource management practices, however the sustainability of timber resource management could be further improved. Victoria’s subsequent State of the Forests Report 20133 noted that the former DEPI had been delivering a landscape approach to sustainable forest management. This had been achieved by strengthening the auditing and compliance process and having a greater focus on monitoring the environmental and social outcomes of timber harvesting.

In 2017, the Victorian Environmental Assessment Council (VEAC) carried out an assessment of the conservation values of State forests in the Central Highlands, North East, Gippsland and East Gippsland Regional Forest Agreement areas. The Conservation Values of State Forests Assessment Report4 identified biodiversity and ecological values; identified the current and likely future threats to these values; and reported on public land use and management. The report highlights the many interacting and competing values of State forests, and shows that some of the areas making the highest contributions to forest biodiversity conservation are also some of the most productive forests for timber, acknowledging that in the past, protected area boundaries have tended to be a result of balancing biodiversity conservation with timber production.

2 https://www.audit.vic.gov.au/report/managing-victorias-native-forest-timber-resources 3 https://www.forestsandreserves.vic.gov.au/forest-management/state-of-the-forests-report 4 http://www.veac.vic.gov.au/investigation/assessment-of-conservation-values-of-state-forests

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Section 11 of the Act states that the relevant Minister may develop a Sustainability Charter that sets out forest management objectives consistent with the principles of ecologically sustainable development. The Sustainability Charter for Victoria’s State forests5 sets seven objectives to ensure the sustainability of public native forests and the native timber harvesting industry. VicForests’ Statement of Corporate Intent 2014-15 to 2016-176 outlines VicForests’ initiatives and actions to meet the Sustainability Charter’s objectives. Progress towards these objectives is summarised in VicForests’ Sustainability Reports from 2013-147, 2014-158 and 2015-169, and the reports show that the vast majority of VicForests’ initiatives, targets and actions have been achieved or partially achieved.

VicForests also has an Ecologically Sustainable Forest Management Policy10 that promotes the application and review of the highest standards for forest management practices through a process of continuous improvement. This includes certification under the internationally endorsed Responsible Wood Certification Scheme, formally called the Australian Forestry Standard (AFS), which has been specifically developed for Australia’s forests. The Responsible Wood Certification Scheme is endorsed by the Programme for the Endorsement of Forest Certification (PEFC) the global authority in forest certification. VicForests has also initiated the process of seeking Forest Stewardship Council (FSC) certification. Responsible Wood and FSC certification is voluntary and provides consumers with additional reassurance that the wood products they buy comes from sustainably managed forests using operations that comply with independently assessed, global benchmarks.

2.2 Any report by the Secretary under section 8 (sustainable forest management criteria indicators)

Section 8 of the Act states that the DELWP Secretary must report on the status, performance and achievement in relation to sustainable forest management criteria and indicators. This is done through the State of the Forests report on a five yearly basis. Victoria’s State of the Forests Report 201311 raises the following points:

The former DEPI issued a revised Advisory List of threatened vertebrate fauna in Victoria in 2013. The total number of forest dependent vertebrate fauna considered to be rare or threatened decreased by two species during the reporting period. The conservation status of 18 per cent of rare and threatened vertebrate fauna species changed with the revised Advisory List. Fourteen percent of species became more threatened. These were mostly amphibians and reptiles. Four percent of species became less threatened.

The area of State forest harvested between 2006-07 and 2011-12 ranged from 7,900 to 11,600 ha per year. This includes harvesting across all State forests, including fire salvage harvesting operations, and all silvicultural methods, including thinning and single tree selection. Of this, the area harvested by VicForests ranged from 3,700 to 5,100 ha each year. The area harvested represents (on average) less than 1 per cent of the total area available for harvesting.

5 https://www.forestsandreserves.vic.gov.au/forest-management/forest-sustainability 6 http://www.vicforests.com.au/static/uploads/files/2014-15-statement-of-corporate-intent-wfmochcgimhy.pdf 7 http://www.vicforests.com.au/static/uploads/files/sustainability-report-2014-wfwjjhwnvxkc.pdf 8 http://www.vicforests.com.au/static/uploads/files/vicforests-sustainability-report-2014-15-wfkeovraslwe.pdf 9 http://www.vicforests.com.au/about-vicforests/corporate-reporting-1/sustainability-report-2016 10 http://www.vicforests.com.au/static/uploads/files/ecologically-sustainable-forest-management-policy-wfyggwlvtjhb.pdf 11 https://www.forestsandreserves.vic.gov.au/forest-management/state-of-the-forests-report

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The area of coupes successfully regenerated each year in eastern Victoria by VicForests increased over the reporting period from 1,620 ha in 2007-08 to 6,320 ha in 2011-12. As at 30 June 2012 VicForests was within 1,100 ha (or 9 per cent) of its target to have no more than three years harvest area not adequately regenerated at any point in time.

2.3 The structure and condition of the forest and its impact on future timber resource availability

Impacts of zoning changes

The use of forest management zones (FMZs) is one way that DELWP ensures that the management of Victoria’s State forests meets the objectives set out in the Sustainability Charter12. The State forest estate in Victoria is managed through a comprehensive zoning system with each area of forest zoned as: Special Protection Zone (SPZ), Special Management Zone (SMZ), or General Management Zone (GMZ). SPZs are managed for particular conservation values, forming a network designed to complement the formal conservation reserve system (e.g. National Parks). Areas of forest that support threatened species and ecological communities are often placed in SPZ, where timber harvesting and other human-induced disturbances are excluded. Timber harvesting, recreational and other activities are permitted in GMZ, and under certain conditions in SMZ, in accordance with a comprehensive regulatory framework.

The FMZ layer (i.e. the geographic information used to create maps and define the FMZ area) is usually updated four times a year. Recent changes include the establishment of Special Protection Zones (SPZ) for Leadbeater’s Possum colonies as they are identified, and the establishment of an additional 6,700 hectares of SPZs for Owl Management Areas in the East Gippsland Forest Management Area. Other amendments include updates to zoning where mapped values were absent, values were present but not mapped, or aligning SPZs to roadlines. As the area allocated to VicForests is largely based on FMZs, it is recommended that the zoning changes be reflected in the AO in an accurate and timely manner.

The allocation of areas previously classified as ‘other’ forest type to VicForests

The AO 2013 does not include areas of State forest that were not classified as either Ash or Mixed Species forest types. These excluded areas, such as non-eucalypt species or undefined areas such as bare ground, were classified as ‘other’ forest type. While these areas do not provide significant additional timber resource to VicForests, not having these other forest types allocated to VicForests may present difficulties for on-ground operations. If the mapping of these areas is not sufficiently detailed, and there are suitable trees for harvest, there is a risk that unauthorised timber harvesting could occur in these unallocated other areas. To remove this potential risk it is recommended that in future these other forest types be allocated to VicForests as Non eucalypt. The area proposed to be added to the allocated resource is approximately 23,000 hectares (ha).

The re-allocation of areas of other State forest land previously allocated to VicForests

The AO 2013 does not include areas of State forest classified as ‘Other Parks and Reserves’ where timber harvesting is a permitted activity13. It is proposed that some of these areas be reinstated to the allocated resource. These areas formed part of the overall area allocated for timber harvesting when the SFTA was introduced in 2004.

12 https://www.forestsandreserves.vic.gov.au/forest-management/forest-sustainability 13 These areas were designated by the former Land Conservation Council (LCC) to be made available for timber production. The LCC recommendations have not changed, since their implementation in the late 1980s.

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These areas are important to VicForests and form part of its overall sustainable harvesting calculations. Prior to any timber production being undertaken in these areas, VicForests must consult the land manager (Parks Victoria or DELWP) to ensure any biodiversity or ecological impacts are appropriately managed. VicForests would be required to comply with any applicable planning standards or management recommendations set by the land manager.

Supporting the recovery of the Leadbeater’s Possum 14

In January 2014, the Leadbeater's Possum Advisory Group (LPAG), established by the former Minister for Environment and Climate Change and the Minister for Agriculture and Food Security, presented recommendations for consideration by the previous Government on ways to support the recovery of the Leadbeater's Possum while maintaining a sustainable timber industry. The previous Victorian Government accepted all the LPAG's recommendations and the current Victorian Government continues to implement the recommendations. In addition, in April 2015, the Government announced additional measures to support the recovery of the Leadbeater’s Possum15.

Specific actions in the Leadbeater’s Possum Action Statement16 and regulatory measures incorporated into the Code of Practice for Timber Production 201417 include:

establishing timber harvest exclusion zones of a 200 metre radius to protect each identified Leadbeater's Possum colony;

delaying harvesting for two years in areas of anticipated high probability of occupancy to allow surveys to be undertaken;

undertaking retention harvesting in at least 50 per cent of the area of Ash harvested within the Leadbeater’s Possum range;

excluding timber harvesting from within 100 m of modelled old growth Ash forests within the Leadbeater’s Possum range;

a revised definition of Zone 1A habitat (from 12 to 10 live mature or senescent hollow-bearing Ash trees per three hectare patch, to increase the chance of retaining suitable habitat); and

a target specifying that at least 30 per cent of the Ash forest within each Leadbeater’s Possum Management Unit be protected so that it can mature into old growth forest in the future.

LPAG estimated that these actions would remove from timber harvesting approximately 5 per cent of the Ash resource available to VicForests within the Leadbeater’s Possum range over the next 20 to 30 years18. VicForests later reported that it had excluded from timber harvesting over 1,500 ha of forest by applying a 200 metre buffer around all known Leadbeater’s Possum colonies19. In VicForests’ most recent resource outlook20, VicForests estimates that 60,000 m3 per annum of its estimated 88,000 m3 per annum ash sawlog reduction over the medium term is a result of actions to support the recovery of the Leadbeater’s Possum.

14 http://www.delwp.vic.gov.au/environment-and-wildlife/conserving-threatened-species-and-communities/leadbeaters-possum 15 http://www.premier.vic.gov.au/protecting-victorias-iconic-leadbeaters-possum 16https://www.environment.vic.gov.au/__data/assets/pdf_file/0009/33003/ Leadbeaters_Possum_Gymnobelideus_leadbeateri.pdf 17 https://www.forestsandreserves.vic.gov.au/forest-management/environmental-regulation-of-timber-harvesting 18 https://www.wildlife.vic.gov.au/__data/assets/pdf_file/0024/46446/Leadbeaters-Possum-Advisory-Group-Technical-Report.pdf 19 http://www.vicforests.com.au/static/uploads/files/vicforests-sustainability-report-2014-15-wfkeovraslwe.pdf 20 http://www.vicforests.com.au/planning-1/resource-outlook-2017

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Any future recommendations on Leadbeater’s Possum recovery actions will impact on resource availability in both the short and long term. It is recommended the AO be amended to account for the reduction in area available for timber harvesting as a result of protection measures for the Leadbeater’s Possum.

2013-14 fires

Between December 2013 and April 2014 more than 463,000 ha of public and private land was burnt, including some 300,000 ha of public land (mainly bush and forests in the Mallee and East Gippsland)21. Several large fires occurred in East Gippsland over January and February 2014 as a result of lightning strikes, some of which burnt for 70 days (see Figure 1). Noting that these fires covered both parks and reserves and State forests, the fires did not have a significant impact on the commercial timber resource22. VicForests estimates that approximately 45,000 ha of Mixed Species forest was burnt in East Gippsland during 2014 of which 4,500 ha were areas already planned for harvest23. VicForests estimates that its losses due to the fires were relatively minor, with some loss of recent regeneration and some lost planning effort, in terms of coupes that were planned for and not yet harvested24. VicForests continues to consider the impacts of these fires in meeting its existing timber supply commitments and when determining resource projections for future sawlog availability.

Figure 1 – Map outlining area burnt in 2013-14 bushfires.

21 https://files-em.em.vic.gov.au/public/EMV-web/Fire-Danger-Period-Operational-Review-2013-14.pdf 22 http://www.vicforests.com.au/static/uploads/files/vicforests-annual-report-2014-web-version-1-wfuvkfhkfsqs.pdf 23 http://www.vicforests.com.au/static/uploads/files/resource-outlook-2014-v4-1-final-wflqdiojpmqi.pdf 24 http://www.vicforests.com.au/static/uploads/files/sustainability-report-2014-wfwjjhwnvxkc.pdf

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2.4 VicForests' compliance with the AO, including the conditions specified in the order

Clause 18 of the AO titled “Planning and reporting of annual harvest and regeneration” states that VicForests must submit an annual report to the Secretary to DEPI (now DEDJTR) by 30 September each year describing the area of timber harvested and regeneration results for the preceding financial year for Ash and Mixed Species forest stand types. The report must include data demonstrating how VicForests is complying with the five-year harvest area limit. VicForests has provided five annual reports on the current AO, providing the following information with respect to the areas harvested and regeneration results for 2013-14, 2014-15, 2015-16, 2016-17 and 2017-18

Area of timber harvested

The AO Coupe Area25 for harvested Ash stand forest type was: 2,090 ha in 2013-14; 2,273 ha in 2014-15; 2,583 ha in 2015-16; 2,386 ha in 2016-17; and 1,988 ha in 2017-18.compared to the five-year harvest limit of 14,200 ha.

The AO Coupe Area for harvested Mixed Species stand forest type was: 2,034 ha in 2013-14; 2,820 ha in 2014-15: 2,847 ha in 2015-16; 3,003 ha in 2016-17; and 3,638 ha in 2017-18.compared to the five-year harvest limit of 70,000 ha.

These areas of timber harvested are within expected levels (see Figure 2). The AO Coupe Area for the five years of reporting against the AO is within the AO five-year harvest area limits (80 per cent for Ash and 20 per cent for Mixed Species stand forest types).

Figure 2 – Ash and Mixed Species stand forest types harvested over five years (with the five-year ash harvest limit shown).

The net area (or actual harvest area) of Ash and Mixed Species harvested respectively was:

25 The timber harvest area defined in the AO is the sum of coupe area where harvesting has started. This AO coupe area is the entire gross coupe area that includes both area available for harvest and area unavailable for harvest.

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1,313 ha and 1,609 ha in 2013-14; 1,373 ha and 1,662 ha in 2014-15; 1,457 ha and 1,397 ha in 2015-16; 1,177 ha and 1,496 ha in 2016-17; 939 ha and 2,106 ha in 2017-18.

Regeneration results

In 2013-14, 199 even-aged and uneven-aged coupes with a total gross coupe area of 7,018 ha were nominated for coupe finalisation. In addition, three thinning coupes and 10 roadline coupes, totalling 59 ha, were also nominated for finalisation.

In 2014-15, 222 even-aged and uneven-aged coupes with a total gross coupe area of 8,011 ha were nominated for coupe finalisation. In addition, four thinning coupes and five roadline coupes, totalling 85 ha, were also nominated for finalisation.

In 2015-16, 91 even-aged and uneven-aged coupes with a total gross coupe area of 3,220 ha were nominated for coupe finalisation. In addition, four thinning coupes and one roadline coupe, totalling 320 ha, were also nominated for finalisation.

In 2016-17, 135 even-aged and uneven-aged coupes with a total gross coupe area of 4,549 ha were nominated for coupe finalisation.

In 2017-18, 139 even-aged coupes with a total gross coupe area of 4,722 ha were nominated for coupe finalisation. In addition, five thinning coupes and two roadline coupes, totalling 343 ha, were also nominated for finalisation.

These areas of regeneration are within the expected levels. In 2012-13 VicForests submitted 5,726 ha of regenerated forest to DEPI for coupe finalisation. In 2014-15, VicForests harvested 3,034 ha and regenerated 3,459 ha26.

In addition to VicForests’ reporting against the AO, VicForests reported (in its Sustainability Report 2014-1527) on regeneration results that reconcile the cumulative regenerated area against the cumulative harvest area. This meets the recommendation of the Victorian Auditor-General in the 2013 report, Managing Victoria’s Native Forest Timber Resources28, and improves the accuracy of public reporting of the regeneration status of coupes managed by VicForests.

26 http://www.vicforests.com.au/static/uploads/files/vicforests-sustainability-report-2014-15-wfkeovraslwe.pdf 27 http://www.vicforests.com.au/static/uploads/files/vicforests-sustainability-report-2014-15-wfkeovraslwe.pdf 28 https://www.audit.vic.gov.au/report/managing-victorias-native-forest-timber-resources

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2.5 The provisions of any Code of Practice

The Code of Practice for Timber Production 2014 and Management Standards and Procedures for timber harvesting operations 201429, released on 28 October 2014, provide a clearer regulatory framework for timber harvesting in State forests (see Figure 3). Previously, the rules governing timber harvesting operations in Victoria existed across 80 different documents.

Figure 3 – Regulatory framework for timber harvesting.

The Management Standards and Procedures are a consolidated set of all the detailed operational prescriptions that the timber industry must follow in order to comply with the mandatory actions of the 2014 Code.

2.6 VicForests' compliance with any Code of Practice

DELWP is the environmental regulator of commercial timber harvesting activities in Victoria's State forests, including harvesting operations managed by VicForests. DELWP commissions independent auditors to undertake projects under the Forest Audit Program30 (FAP). This includes activities associated with different phases of the timber harvesting lifecycle including: planning, harvesting and coupe closure, and regeneration.

Forest Audit Program results

Audits have been commissioned by DELWP and its predecessors under the FAP since 2010.

2016 audit report

The 2016-17 audit focussed on coupes with a high potential for risk to water quality and to biodiversity values. The audit had three themes: the protection of soil, water and biodiversity values from adverse impacts associated with harvesting and in-coupe roading; the design, construction,

29 https://www.forestsandreserves.vic.gov.au/forest-management/environmental-regulation-of-timber-harvesting 30 http://delwp.vic.gov.au/parks-forests-and-crown-land/timber-harvesting/forest-audits https:// www.forestsandreserves.vic.gov.au/forest-management/forest-audits

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maintenance and closure of in-coupe roads; and forest regeneration.

The published report on the DELWP website from 2016-17 shows:

The audit assessed: 30 coupes covering some 490 hectares; some 12,400 metres of in-coupe roading; waterway crossings in seventeen coupes.

On average the audited coupes fully complied with 86 per cent of applicable environmental and roading criteria, with the level of compliance for individual coupes varying between 71 per cent and 100 per cent. A further six per cent of the criteria were audited as partially compliant – for criteria with no potential for environmental impact. (It should be noted that as this audit was a targeted audit, these results do not represent VicForests’ overall performance).

Most incidents of non-compliance with major potential environmental impact were associated with waterway crossings. The main issues associated with non-compliances were: management of road drainage on the entry to the waterway crossing; failure to provide for the passage to fish and other aquatic fauna; erosion at the outlet of the culvert; and rehabilitation following culvert removal.

The assessed environmental impact of the non-compliances ranged between negligible and major across the 43 recorded incidents, with moderate and major being the most common levels of potential impact. Non-compliances which were assessed to have major environmental impact were detected in eight of the 30 harvest coupes.

2015 audit reports

The audits focussed on a risk based approach to auditing targeting higher risk compliance priorities. The audits focused on construction and maintenance of coupe roads; construction and rehabilitation of waterway crossings; the protection of mandatory exclusion areas from the impacts of timber harvesting; and undertaking rainforest spot checks program to examine the performance of VicForests in the identification and protection of rainforest values.

The three published reports on the DELWP website from 2014-15 show:

The audit found a compliance score of 65 per cent was achieved with the audit criteria. In terms of environmental impact, no severe environmental risk ratings were identified; and 87

per cent of environmental risk ratings were in the lower categories of minor, negligible or no impact. There were 19 instances of more significant environmental impacts two major and 17 moderate.

The auditors considered that VicForests’ planning and design practices generally located roads to avoid higher risk environments and prevented unavoidable disturbance to soils and contamination of waterways with road sediments.

The auditors found the in-coupe roads were typically found to be constructed, used and rehabilitated with minimal impact on soil and water quality values.

The audit of 17 km of in-coupe roads, across 35 coupes, identified full compliance with audit criteria to be 80 per cent overall. Environmental impacts were assessed as “major” for 15 per cent of the non-compliances. These related to incidents on just two of the 35 audited coupes and were all connected with in-coupe road waterway

The audit of 30 coupes for the protection of mandatory exclusion areas from the impact of timber harvesting was 100 per cent compliant.

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2014 audit reports

The published reports on the DELWP website from 2013-14 show:

The assessment of 28 coupes, covering less than 10 per cent of the coupes harvested or proposed as regenerated in eastern Victorian, showed a compliance with the audit criteria of 91 per cent.

All thinned and regenerated coupes nominated for hand-back were recommended for approval. There was also good coupe infrastructure rehabilitation.

There were positive findings in terms of VicForests’ performance with respect to: the conservative protection of sensitive environments and correct identification of values; and monitoring and recording of incidents of contractor non-compliance.

One “major” environmental impact score was recorded where a waterway crossing on a permanent road presented a barrier to the passage of fish. While it was a single instance, two other similar instances having “moderate” risk ratings were also identified for VicForests’ coupes. The audit report included a recommendation to review the appropriateness of current regulatory requirements regarding types of stream crossing structures in relation to facilitating movement of fish through crossings.

Public reporting of non-compliance

In addition, members of the public are able to submit information reports to DELWP to highlight any potential issues of non-compliance with the regulatory framework. For example, in April 2015, DELWP (and VicForests) received a report of alleged breaches of rainforest protection prescriptions as in the Code of Practice for Timber Production 2014 in a timber harvesting coupe in Bendoc State forest, East Gippsland. DELWP conducted an investigation into the allegations and found that VicForests’ operations did not breach the Code. DELWP found that VicForests fully complied with the Code for two of the allegations by protecting an identified area of rainforest, and ensuring no impact on waterways. Investigators were unable to conclusively determine whether a breach of the Code had occurred regarding the third allegation of harvesting rainforest due to the level of disturbance and the small size of the area. DELWP provides an update on the status of all forest reports on threatened species and timber harvesting activities submitted since 1 January 2016 on its website31.

2.7 Existing VicForests timber commitments under managed licences and agreements

In 2017, VEAC carried out an assessment of the viability of and capacity for, current volumes and potential fibre and wood supply areas in State forests in the Central Highlands, North East, Gippsland and East Gippsland regional forest agreement areas. The Fibre and Wood Supply Assessment Report32 identified fibre and wood supply to industry from eastern Victoria, taking into consideration current contractual supply commitments; identified constraints to this supply; and reported on the viability of and capacity for wood and fibre supply over appropriate time scales.

The Fibre and Wood Supply Assessment Report found that VicForests’ modelling process is rigorous, the modelling assumptions are appropriate, and that the sustainable harvest levels are reasonable. The report notes that sustainable harvest levels in the State forests of eastern Victoria have been reduced by more than 50 per cent over the past decade. VEAC found this was due to the impacts of unexpected events, including major bushfires and Leadbeater’s Possum discoveries. Future pressures to wood supply levels may occur due to further bushfires, detection of additional new Leadbeater’s possum colonies, or climate change or other disturbances.

31 https://www.forestsandreserves.vic.gov.au/forest-management/forest-reports 32 http://www.veac.vic.gov.au/investigation/fibre-and-wood-supply-assessment

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The Fibre and Wood Supply Assessment Report provided a summary of sawlog and pulplog commitments by product type (ash or mixed species) and grade (See Figure 4). Pulplogs and E grade sawlogs account for over 50 per cent and nearly 20 per cent of the logs harvested (by volume), increasing over time as current sawlog contracts expire while the pulplog commitments continue with little reduction until 2030.

Figure 4 – Sawlog and pulplog commitments by product type and grade.

VicForests’ resource outlook forecasts how much ash and mixed species sawlog timber is able to be commercially supplied from eastern Victoria’s State forests. The resource outlook results from resource modelling that involves a complex range of systems and processes. The modelling looks at available forest, the timber within it, expected growth rates, and likely production levels at the time of harvest age.

VicForests’ most recent resource projections in 2016-1733 forecast a supply level of 153,000 m3 of ash sawlog per annum in the short term decreasing to 130,000 m3 from 2020-21 from the ash forests in eastern Victoria (see Figure 5). The medium term supply level represents a decrease of 88,000 m3

per annum since the 2013 Resource Outlook34. The reduction is attributed to a range of factors, with the key factor relating to actions to protect the Leadbeater’s Possum.

VicForests’ 2016-2017 resource outlook forecasts a mixed species sawlog supply in the range of 100,000 m3 to 115,000 m3 can be produced each year for the medium term from the forests in eastern Victoria (see Figure 6). These forecast levels of mixed species sawlogs are generally consistent with the 2013 resource outlook.

33 http://www.vicforests.com.au/planning-1/resource-outlook-2017 34 http://www.vicforests.com.au/static/uploads/files/resource-outlook-2014-v4-1-final-wflqdiojpmqi.pdf

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VicForests’ mixed species sawlog commitments remain below the sawlog supply. This is reflected in VicForests’ annual reporting of the area of mixed species forest harvested, which continues to be considerably lower that the AO area harvest limit.

Under the Forests (Wood Pulp Agreement) Act 1996, the Secretary of DEDJTR is bound to make available to Australian Paper, until 2030, a minimum annual supply of 350,000 m3 of pulpwood, of which at least 300,000 m3 per annum will be from mountain forests (Mountain Ash and/or Alpine Ash) inside the Forest Area.

Figure 5 – Ash sawlog outlook.

Figure 6 – Mixed species sawlog outlook.

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3. Review recommendationThis paper has been prepared to provide an outline of the legal requirements and analysis for undertaking a review of the AO. The analysis has highlighted that forest management zoning changes have resulted in changes to the areas available for timber harvesting, for example to protect the Leadbeater’s Possum and other threatened species. The review has also highlighted that areas available for timber harvesting have previously been excluded from the AO. It is therefore recommended that the AO be amended.

Hon Jaclyn Symes MPMinister for Agriculture

Date: / /

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