February 15, 2014
I can’t remember where I encountered the Forest Legacy Group. It may of been on Facebook. I was touched by their sincere concern for the state of WA’s forests. The facts they presented were alarming.
CALM (the state Conservation and Land Management authority) handed over management of WA’s forests to the newly created Forest Products Commission in 2000. This handover was meant to separate the conservation & commercial interests of CALM.
The FPC claims:
in 2005/06 the forestry industry employed in excess of 5,500 people in regional areas of Western Australia and delivered economic benefits of up to one billion dollars annually to the State.
This claim is disputed by the Forest Legacy Group:
The FPC’s reported cumulative profit across all its operations to date is a meager $15 million.
This $15 million reported profit relies heavily on the use of accounting devices in which the FPC’s ‘biological assets’, our forests, are revalued on paper. Each year, the FPC revalues the native forests in its books and incorporates that theoretical revaluation into its profit and loss statements. These revaluations, amounting to $121 million, have had an overwhelming and distorting impact on FPC’s claimed financial performance. The impact of this is profound.
Without the theoretical revaluations the FPC has incorporated into its accounts, the agency has operated since formation at a $106 million loss.
When CALM handed over the forests to FPC, the FPC wrote in their accounting books that the value of the forests was zero dollars. The materials such as wood chips generated by the forest would be pure profit, without any loss on the books when forest was destroyed to produce these materials, as the forest was valued at zero.
This means FPC have been reporting their income without incorporating the true costs they incurred.
At intervals since 2000, the FPC have revalued the forest, and added this value into the FPC’s accounting books, meaning the FPC has gained capital, which is added into the profit column, meaning the FPC have been reporting profitable operations when they have simply been introducing artificial capital gains into their accounting.
When all is said and done, since 2000, the FPC have been operating at a loss of $9M / year. This loss has been incurred at the same time the FPC have been converting old growth forests into wood chips and railway sleepers, and replacing the lost forest with a monoculture of Karri. The regrown Karri is then harvested for wood chips. There is a net loss in biodiversity.
The Forest Legacy Group wants an audit into the FPC’s accounting practice, in order to show that FPC is costing WA money in order to reduce the biodiversity of our forests and the habitat of native wildlife like the numbat. They aim to show there is more financial value in stopping logging, conserving old growth forests, rebuilding native habitats, and improving tourism. Stopping the conversion of Karri forests into wood chips would provide an opportunity for plantation forest to be used for wood chips. Plantation forests have been unable to compete with the artificial economy of turning Karri into wood chips.
A disturbing fact.
The FPC say they do not log old growth forests. The FPC changed the definition of what old growth forest is. If there is a single sawn down tree in 1 hectare of forest, this area is not considered to be old growth forest. So, the FPC simply chops down a tree per hectare to change the classification of forest to suit their purposes.