Summary: Nippon Paper Industries and the Wood Pulp Agreement

The following summary of The Nippon Paper Industries and Wood Pulp Agreements report was compiled by members of the FoE Forest Collective, including one of the authors of the report, for its use as a resource in completing the Modernisation of the Victorian Regional Forest Agreements survey:

The Nippon Paper Industries and Wood Pulp Agreements report reviews the origin and history of successive legislative agreements under which pulp logs are supplied to Nippon Paper Industries Co. Ltd’s Maryvale pulp and paper processing mills in Gippsland. It provides an analysis and review of the forests impacted by the current Legislative Supply Agreement (LSA), otherwise referred to as the Forests (Wood Pulp Agreement) Act 1996.

This report focuses on the Mountain Forests covering large areas of Gippsland and its state forests. A spatial analysis of disturbance in the Mountain Forests has been carried out and the report also reviews academic and government literature concerning the forests’ capacity to supply wood to Maryvale.

The report covers the following points:

  • The Maryvale Mills were originally established in 1938 on the premise that they had a 50-year legislated supply of pulp logs from Victorian state forests, where most of the supply comes from the ‘Mountain Forests’, consisting of Mountain Ash and Alpine Ash;
  • The present LSA was passed in 1996 on the premise that the Maryvale Mills, then owned by AMCOR Ltd, reduce their dependence on sourcing pulp logs from native forests and substitute these with pulp logs from plantations;
  • In 2008, then owner PaperlinX Ltd announced its intention to exit native forests completely by 2017, having completed an upgrade of the Maryvale facilities and secured an additional supply of native forest pulp logs under a Timber Sales Agreement with VicForests;
  • In 2009, Nippon Paper Industries Co. Ltd acquired PaperlinX Ltd together with the LSA. It has made no move to reduce dependence on native forest wood. However, declining supply from within the LSA area is being compensated by additional supplies from elsewhere in Victoria at an unknown cost to the taxpayer;
  • No other company in the logging industry has been afforded the privilege of a legislative supply agreement, which will have endured for 94 years, if it survives as legislated, until 2030;
  • More than half of the forest allocated to logging within the LSA area has been burned since the passing of the LSA in 1996;
  • The Mountain Ash Ecosystem within the LSA is now red-listed by the IUCN as Critically Endangered, with logging as the primary driver compounded by bushfire (Burns, et al., 2014);
  • The LSA provides for the company and the government to share information and plan jointly for the supply of pulp logs. The Act has flexibility for the government to respond to major disturbance events, such as fire.

The report concludes that this is crunch time – the Mountain Forest ecosystem faces collapse and the LSA is unsustainable. It proposes urgent consideration of the following:

  • that all reviews carried out under Clause 12 of the Forests (Wood Pulp Agreement) Act 1996 be published;
  • that the annual Plan of Utilization agreed between Paper Australia Pty Ltd and the government be published for each year from 2013 when VicForests announced reductions in Ash sawlog supply;
  • that the proposed Plan of Utilization for 2018, due to be prepared by 30 April, be published; and
  • that the Victorian Government invoke the provisions of Clause 32 of the Act and potentially suspend the legislated supply of pulp logs, given that more than half of the state forest allocated to logging under the LSA has been impacted by recent fires.