The Andrews Labor Government has legal grounds to suspend its controversial wood pulp contract, according to new legal advice from top silk Perry Herzfeld SC and barrister Daye Gang.
The barristers, who specialise in public law, have advised The Wilderness Society that the Andrews Government could suspend its wood pulp supply contract before 2030 without paying contractual penalties.
The contract currently guarantees the supply of 265,000 cubic metres of predominantly Mountain Ash timber from Wurundjeri, Taungurung and Gunaikurnai Country to the Maryvale Mill in the Latrobe Valley.
The mill is operated by Opal Australian Paper and its Japanese-owned parent company Nippon Paper Group, under a contract that allows Victoria’s forests to be pulped for low value products like cardboard boxes and packaging products until 2030.
Decades of overlogging, mismanagement, and bushfires have made the industry increasingly unviable, but the Andrews Government plans to keep logging until 2030 at the rate set in 2019 before the Black Summer fires.
Even before the 2019/20 fires, the state was quietly paying compensation to the Japanese paper giant under the decades long deal for failing to meet supply.
The Barristers advise that, based on publicly available information, the government could invoke the force majeure clause in the pulp contract, a common clause allowing either party to suspend a contract in the event of extraordinary circumstances.
In this case, the Black Summer bushfires caused such unprecedented damage that they impacted 46 of 70 threatened species listed under the Flora and Fauna Guarantee Act 1988.
Native forest logging is exempt from Commonwealth Environment law under the disastrous Regional Forest Agreements, but obligations to protect endangered species under Victoria’s Flora and Fauna Guarantee Act should still apply.
Despite this, iconic species have rapidly declined under the State’s native forest logging regime.
After the Black Summer fires, the federal government advised the state that logging is a “major” and “primary” threat to species such as Greater Gliders, Yellow Bellied Gliders and the Smoky Mouse. It called for protection of climate and fire refuges, and an end to clearfelling Greater Glider habitat. The State has not done so.
VicForests is also currently facing five cases in the Victorian Supreme Court brought by community groups fighting to protect threatened species from logging.
Judgments in three cases last year found VicForests breached laws to protect endangered species and it’s logging seriously threatens the State’s environment.
While VicForests is appealing the decisions, a cloud hangs over the legality of its logging operations, which supply the wood delivered to Nippon under the contract.
Court evidence in March 2023 revealed VicForests billed taxpayers more than $38 million for failing to meet timber supply contracts and the logging agency also posted a $52.4 million financial loss last year.
The Andrews Government has also refused to disclose information about compensation it is paying to the Japanese paper giant for failing to fulfil supply or source wood from other parts of the state to satisfy the agreement.
Environmental Justice Australia Special Counsel Danya Jacobs said:
“For decades, the government has sold off Victoria’s native forests for pulp wood to a multinational paper giant at a pittance, under this terrible deal that sold Victorians short while sacrificing our wildlife to the chopping block.
The legal advice shows the government has the right to exit this shocking, decades-long contract – and stop paying compensation unnecessarily to a multinational corporation while plundering what’s left of Victoria’s native forests until 2030.
The State Budget is tipped to show that Victoria is billions of dollars in debt – yet the government wants to throw away taxpayer dollars propping up a multinational logging company. It’s a total failure of public policy.
Public money should be going to regional communities developing industries of the future, not to big businesses destroying endangered species.“
Amelia Young, National Campaigns Director for The Wilderness Society said:
“2023 is the year to bring forward the planned 2030 exit. This legal advice shows it is possible. The impact of the bushfires and VicForests’ ongoing illegal logging shows it is necessary.
Winding up the wood pulp agreement is good public policy. Failing to do so means more wildlife extinctions, misleading workers and their families, and more delay in the creation of the Great Forest National Park.
The Andrews government must this year work with Nippon to gracefully step away from the out-of-date wood pulp agreement, as this legal advice shows it can.
The Victorian government must bring forward the 2030 exit date, and get on with creating the Great Forest National Park to protect species from extinction, and secure Melbourne’s drinking water supply.
The forests must be managed for all Victorians, not just a global pulp and paper company, as has been the case for far too long.”
The Parliamentary Budget Office calculates that ending native forest logging in 2023 would save Victoria $205 million over the next decade and prevent 14 million tonnes of carbon emission by 2030.
Approximately 1.3 million hectares of public native forest was burnt in Victoria alone in 2019/20.
The Black Summer bushfires compounded two decades of increasingly frequent and severe bushfires – since 1996 half of the forest area designated for the contract burnt and 40% of the forests intended to supply the contract were logged.
VicForests was unable to meet the supply guaranteed under the wood pulp contract even before the 2019/20 fires, and consistently failed to return profits to the State from its vast native forest logging operations.
Mountain Ash is Critically Endangered – more than 72,000 hectares of Mountain Ash forest was destroyed in the 2009 Black Saturday bushfires, and 88,000 hectares of Mountain Ash forest was impacted by the Black Summer bushfires.
Continued logging of Mountain Ash is putting Melbourne’s water supply at risk and destroying vital carbon sinks.
It is well established that logging causes more frequent, intense and severe bushfire events.
The destruction of the Black Summer fires drove already declining native animal populations toward heightened risk of extinction: including the Greater Glider which was federally listed as Endangered in 2022, after the fires impacted 40% of its remaining habitat.
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