Maroc - TIMBERBIZ.COM.AU - A La Une - Hier 23:42

OFO put under the microscope by timber committee

A prominent forestry company in Mount Gambier/Berrin has been put under the microscope following a five-year select committee review. Source: The Border Watch An extensive 83-page report was tabled to Parliament following extensive review, submissions and discussions. The Select Committee on Matters Relating to the Timber Industry was established in November 2022 following the recommendation of the interim report of the original select committee. The Lower Limestone Coast is responsible for $483m in forestry and logging output leading to 87% of the state’s overall forestry and logging output. OneFortyOne is one of the biggest forestry companies across the Green Triangle and after purchasing the Jubilee Highway Sawmill in 2017, the Australian Competition and Consumer COmmission concluded its proposed acquisition of the premises, and associated woodship export operations was unlikely to “substantially lessen” competition in any relevant market. The company’s Plantation Lease Agreement requires OneFortyOne to provide annual reports and while the company undertakes self-assessment for these reports, it may be reviewed by the Department of Primary Industries and Regions (PIRSA). The report stated neither OneFortyOne nor any other agencies provided complete copies of the lease agreement or its annual report to the committee while arguing OneFortyOne was compliant with the conditions of the lease. “The committee was presented with evidence that although OneFortyOne claims compliance with the letter of the contract, it was less than certain that OneFortyOne was compliant with the intentions behind the contract,” the report stated. In submissions received by the committee, the South Australia Timber Process Association claimed OneFortyOne had “offered tenders of sizes and timeframes” which local processors could not manage. “It was not practical for South Australian mills to purchase these large volumes, and particularly with little notice,” the report stated. “Therefore, OneFortyOne could export the volumes that were first offered to the local industry.” It said the association stated “OneFortyOne exported the highest volume of sawlog during the calendar years 2016 and 2017, taking full advantage of the fact that [local] industry was not able to use the log[s] advertised”. In the submission, the association also argued the purchase of the Jubilee Sawmill and the supply of logs by OneFortyOne to the mill could not be considered “arm’s length” transactions as required in the lease agreement. Despite this, OneFortyOne stated it took its compliance with the lease agreement seriously with the organisation establishing a “comprehensive internal compliance process”. “Under the terms of the PLantation Lease Agreement any sawlog over and above OneFortyOne’s contracts with domestic suppliers must be made available to domestic sawmills and exports on an equal basis and we have fulfilled this obligation,” they said. There was also an independent audit of the agreement for the 2018 calendar year. The audit found that the lease agreement was the “sole reference document” of deliverance with respect to the state’s dealings with OneFortyOne regarding the supply of forest product to domestic manufacturing. It also found that OneFortyOne complied in all material respects with its agreement. Throughout the report, the committee presented 17 recommendations including one requesting examination into the state government’s contract of the sale of the forward rotations of the forests as well as the plantation lease agreement. It also found there were varying opinions across the industry regarding OneFortyOne’s compliance with the conditions of the lease as well as the sale of the forward rotations of the forest. Topics covered in the report also included the volume of radiata pine log exported from the Limestone Coast, the economic benefit and employment opportunities gained through additional woof fibre-based industries and options for increasing the availability of logs to state processors. A OneFortyOne spokesperson said the company acknowledged the report of the select committee and recognised it concluded a process which commenced in 2019. The spokesperson said the process was one which the company had “fulsomely engaged with” and had made a “number of written and in person” submissions. “OneFortyOne takes its obligations under the Plantation Lease Agreement seriously and has a robust compliance framework in place to monitor compliance and provide assurance,” they said. “Each year, OneFortyOne provides the Government of South Australia (through the Department of Primary Industries and Regions SA- PIRSA) an annual compliance report on our obligations under the Plantation Lease Agreement. “A previous independent audit undertaken by the government has also confirmed OneFortyOne’s compliance with our obligations … we will continue to work with the Government of South Australia as we focus on the future of the forest and timber industry.”