Ending use of the Otways to extract Residual logs for woodchips

Clearfell logging not only produces sawlogs, but also produces Residual logs as a result of virtually all standing trees being cleared. This technique justifies the issuing by the Department of Natural Resources and Environment of Residual licences for removal of the Residual logs. Residual logs are woodchipped with minimal employment.

The Residual logs that are removed from clearfelled coupes are reduced to woodchips at Midway Forest Products in Geelong.

Residual logs used for this purpose represent around 75% of all the timber extracted from the Otways under the clearfell logging regime.

Implementation of alternative harvesting practices such as selective logging for sawlogs would end the supply of Residual logs out of the Otways. This would render the forest unavailable for woodchipping.

Sawlogs (as distinguished from Residual logs used for woodchips)

DNRE issues licences to contractors who cut and supply sawlogs from native State forests in the Otways to sawmills. Two sawmills in Colac, Murnanes and Calco, have the major licences to receive the sawlogs. The quantity and kind of sawlogs that the mills are entitled to receive is based on annual allocations.

The annual timber allocations are based on sustainable yield figures which may vary over the timber supply period of the licences. Current sawlog licences for saw mills terminate in around 2007 whilst the allocations are due to be reviewed on 30 June 2002.

The licences provide that "The Secretary [of DNRE] will review the allocation to ensure that it is consistent with the current legislated sustainable yield rates." This is an annual review.

Section 52B (1) of Forest Act 1958 (Vic) states:

(1) Before 1 July in any year, the Secretary may determine, for any forest management area, a hardwood sawlog supply level for the year beginning 1 July.

In determining a level the Secretary must consider issues that include "past determined levels and anticipated levels", "unforeseen circumstances" etc.

Under section 52D(2) the sustainable yield rates (which, as stated above, are linked to the annual allocation of sawlogs) may be reviewed by the Minister at any time.

Section 52D(4) states -

(4) On a review the Minister must consider what, in the circumstances (including the structure and condition of the forest) existing at the time of the review, are the appropriate sustainable yield rates ...

A policy to end clearfell logging in the Otway Forest Management Area would mean a reduction of the sustainable yield rate. This would mean that there would need to be:

No liability to industry for reduction in supply of sawlogs

Providing the State government offers to supply the quantity of timber it has agreed to supply for the total current annual allocation of sawlogs for the Otway Forest Management Area (27,000 cubic metres), the State government would not be in breach of the terms and conditions of any sawlog licence and could not be sued for breach of agreement nor required to pay compensation as a result of any reduction in supply in subsequent years. The current annual allocation period expires on 30 June 2002.

Impact of ending clearfell logging on Licences

  1. Residual log licences would no longer be issued for the Otways
  2. Annual allocation of timber under sawlog licences would be adjusted due to changes in harvesting technique necessarily affecting the sustainable yield rate.

Policy does not repudiate the West Victoria Regional Forest Agreement

Under the West Victoria Regional Forest Agreement (March 2000) Clause 71(a) the available volume of D+ sawlogs is estimated to be 27,000 m3 per annum. The estimate was included in the West Victoria RFA which was executed by the Prime Minister John Howard and the Premier Steve Bracks on 31 March 2000. The sustainable yield figure is now under Departmental review and is believed to be a gross overestimation by DNRE of the true figure.

Clause 71(d) recognises that the expected available volume of D+ sawlogs includes a component of forest stands -

"which may be less desirable to harvest under existing market conditions, due to low yields, accessibility and product distribution".

The clause continues -

"The available volume is dependent on the capacity of the timber industry to harvest all areas contributing to the estimate."

The policy to end clearfell logging will not diminish the "land base" (see Clause 72(e) of the RFA) expected to deliver the sustainable yield as implementation of the policy does not require creation of new Reserves or Special Management Zones.

The policy will affect accessibility to timber and have a bearing on product distribution within designated logging areas, which in turn may affect the sustainable yield figure. However, such a consequence is not contrary to the West Victoria RFA and is covered under Clause 71(d).

As the proposed policy does not seek to create or alter Reserves but only has impact on accessibility to timber the policy cannot be construed as being contrary to the RFA. RFAs are not intended to impose particular logging or silvicultural practices. That is an issue for the Department and State Government only.

Compensation under the RFA

The Federal Government would not be liable under the RFA to pay any compensation.


The policy to end clearfell logging complies with the "Purpose of Agreement" on page 1 of the West Victoria RFA which cites obligations that take into account:

The policy is consistent with the National Forest Policy Statement.