Victoria moves towards winding up logging business VicForests

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Victoria’s state-owned logging business is on the verge of being dismantled and absorbed into other areas of the bureaucracy after the state government reclassified it and announced a review of its operations.

VicForests has been under financial pressure after recording a $52.4 million loss in the 2021-22 financial year, blaming legal battles that had stopped it from logging and forced it to pay compensation to clients for missed orders.

A native timber forest on the outskirts of Orbost which was partially logged three years ago after a bushfire.Credit: Joe Armao

The government-owned business harvests, sells and oversees the regrowth of timber from Victorian state forests. Its future became uncertain in May when it was announced that native logging would be banned from January 1, 2024 – six years earlier than planned.

On Wednesday, the government altered VicForests’ status as a state business corporation and made it a “reorganising body”, which allows its functions and staff to be moved around.

The move paves the way for the business to be split up and absorbed into different government departments.

In a letter to the Community and Public Sector Union, the Department of Energy, Environment and Climate Action said there would be no “direct changes” to staffing.

But it also included detailed information about job support for VicForests’ staff, including access to an online portal to apply for other roles in the public service and to receive new training.

“VicForests will keep operating as is until a formal decision about the future of the entity has been made,” the letter said.

“DEECA is currently working with VicForests to review its functions and activities, including consideration of how the critical skills of VicForests staff can be maximised.

“This work will help develop a better understanding of VicForests’ operations and obligations and inform the decision about the organisation’s future expected later this year.”

Golding’s view

The union has previously pushed for certainty for staff as they have waited for months to find out whether the business will be wound up and their jobs will continue.

A state government spokesperson said no decision had been about the future of the organisation and cited a Supreme Court ruling that had held up logging bans across the state.

“This transition removes VicForests’ commercial focus and reflects its changed operating environment following the Court of Appeal decision in June 2023,” they said.

But opposition agriculture spokeswoman Emma Kealy said the state was winding up the business.

Not all are pleased with the end of logging in native forests.

“Labor is pushing ahead with their plan to close the sustainable timber industry early,” she said.

“Labor has put politics ahead of good environmental outcomes and strong futures for local workers and their communities.”

When announcing the earlier-than-expected closure date in May, the Andrews government said timber workers would be supported to find new jobs and that their skills would be needed in areas such as forest management and bushfire-risk reduction.

At the time, Treasurer Tim Pallas said the decision was made after receiving legal advice that the government could not legislate to prevent the regular legal disputes that VicForests had lost against conservation groups.

Opal Australian Paper’s Maryvale paper mill in the La Trobe Valley.Credit: Eamon Gallagher

Multiple court battles severely restricted the business’ access to the timber coupes it used to supply customers and meant it could not honour contracts, which contributed to its $52.4 million loss.

This led to a shortfall in native timber that prompted Australian Paper’s Maryvale Mill in the Latrobe Valley – the last in the nation – to shut down its white paper operations.

The government has expanded its support package for the industry, but some timber contractors living in regional communities have already been forced to find work interstate.

Conservation groups have been critical of VicForests’ practices in the past and have accused the business of breaching regulations, including those introduced to protect endangered gliders.

Executive director of the Victorian National Parks Association, Matt Ruchel, welcomed the changes to VicForests as a “first step” but called for a clear timeline and plan for forest management.

“The brand is tarnished, there’s no social licence for the organisation,” Ruchel said.

“If you’re phasing out native forest logging it is hard to see if there’s a role for a similar agency because there’s no commercial driver.

The greater glider, once common across the eastern seaboard, is now endangered.Credit: Josh Bowell.

“We should be focusing on good ecological management and managing the forests for all they provide.”

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