Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Yesterday the National Secretary of the Construction, Forestry, Mining and Energy Union, Michael O'Connor, put out a press release on behalf of his union urging the House to pass the Illegal Logging Prohibition Bill 2011 without delay. He said:

Workers, their families and their communities are holding on for grim life in the face of imports that unfairly undercut them. They expect urgent action from their representatives.

He went on to say:

The cost advantage that imported manufactured illegally logged wood products unfairly enjoy over manufactured products that utilise legal timber is conservatively estimated to be 20 per cent of the total cost of production.

Wood products represent the second largest sector in Australia's manufacturing industry and cheap, imported products are costing workers their jobs and killing their communities.

We had bipartisan support for taking action on preventing imports of illegally logged timber and imported wood products that utilise it. We have had three separate inquiries, each of which has recommended action.

Further delays are not acceptable and not feasible for timber processing and wood products manufacturing workers, their families and their communities. Their livelihoods are on the line.

That is very powerful stuff. But as well as support from the CFMEU, there are additional reasons for the House to pass this bill without further delay.

Australian timber imports of the order of $400 million a year come from illegally logged timber, and it has been estimated that Australia's share of the social and environmental costs of illegal logging amounts to $23 million a year. According to the Australian Conservation Foundation, about 22 per cent of the wooden furniture imported into Australia every year—more than one in every five pieces of wooden furniture—is believed to be made from illegal timber. Australia is the largest importer of processed timber from Papua New Guinea, where the World Bank estimates 70 per cent of the logging is illegally conducted. Indonesia is losing more than two million hectares of forest per year to logging and burning. In 2006 the Indonesian government lost more than US$2 billion from untaxed illegal logging, artificially low forest royalties and illegal transfer pricing.

A 2006 World Bank report estimated the financial losses to the global timber market at US$10 billion a year and the revenue losses to producer countries at US$5 billion a year. Another study estimated that trade in illegally produced logs reduced global timber prices by between seven and 16 per cent.

Modelling of the financial consequences of illegal logging for the study gave the following results. Producers of legal forest products in non-risk and high-cost countries, like the United States, Europe and New Zealand, are worse off by around US$15 billion a year due to reduced production, lower prices and lost trade opportunities caused by illegal logging. High-cost legal producers in risk countries, such as China, Indonesia, Russia and Malaysia, receive profits and income that are around US$31 billion lower than they would be without illegal logging.

Illegal logging causes the displacement of forest dependent communities from their livelihoods, cultural identity and spiritual values and the removal of important carbon sinks. Illegal logging undermines good governance and development efforts in several of Australia's closest neighbours, especially Indonesia and Papua New Guinea.

A 2010 Centre for International Economics report for the Department of Agriculture, Fisheries and Forestry estimated that the global trade in illegally logged timber products was $15 billion a year, with the social and environmental costs of such illegal logging being US$60 billion a year. Around 10 per cent of the sawn wood imports into Australia come from what are deemed to be high-risk nations, or nations where a large proportion of timber production is illegal—notably Indonesia, Malaysia and Papua New Guinea.

1 believe we need to ensure that Australian imports of forestry products are consistent with the goals of Australian aid programs and our stated commitments to reduce greenhouse gases. According to the Australia Institute report Rough trade: how Australia's trade policies contribute to illegal logging in the Pacific region, Australian aid includes programs and projects to help Indonesia, Papua New Guinea and the Pacific Island nations to better manage their forestry resources for long-term sustainability, for maximum socioeconomic benefit for their citizens and to participate in the REDD—reduced emissions from deforestation and forest destruction, the innovative program rewarding carbon sequestration.

Illegal logging in these countries is more extensive than generally understood and is a serious impediment to achieving the goals of Australian aid programs. Continued illegal logging demonstrates that governments cannot protect their forest resources and it undermines their credibility for participation in the REDD mechanism. Aid program managers and policymakers must be aware of the pitfalls in implementing REDD and programs must be coordinated with a clampdown on illegal logging, or they will not work.

According to TEAR Australia, an estimated 10 per cent of all imported wood in Australia has been illegally logged. Illegal logging in neighbouring countries like PNG and Indonesia is a criminal offence—for good reason. It wreaks environmental destruction and displaces indigenous peoples and animal species who live in the forests. Illegal logging flouts the law for profit, cheating already impoverished communities out of a fair price for their timber. This product of this lucrative trade of corruption and crime ends up in Australian households, which unknowingly buy this cheap imported wood. As Australian consumers, we do not want to be implicated in the destruction of someone else's home to build our own homes.

James Cook University rainforest ecologist Professor William Laurance has called for tighter laws to halt illegal timber imports, insisting on stricter labelling of timber products to track the country of origin.

Vague labels such as 'made in China' are not helpful to consumers, according to Professor Laurance, and are likely to be misleading, given China's dominant role in the global illegal timber trade. Although manufactured in China, the products could be made from timber harvested illegally in Africa, South America, Asia or Papua New Guinea. Less than five per cent of tropical timber is currently eco-certified as being obtained from a sustainably harvested source. According to Professor Laurance:

The current eco-labelling accreditation schemes are a long way from perfect, and need to be improved. Then you have countries like Indonesia and Malaysia that have developed their own accreditation schemes, but in several instances, these have been shown to be fairly lax.

Professor Laurance said that China had developed an immense export market for wood and paper products, driving large-scale clearing of tropical forests in Sumatra and Borneo. He said:

During a recent visit to Sumatra, I witnessed the felling of large expanses of native rainforests, which are being chopped up and fed into the world's largest wood-pulp plant, located nearby, and replaced by monocultures of exotic acacia trees.

He said that China had done 'little to combat the scourge of illegal logging' and is estimated to have imported between 16 million and 24 million cubic metres of illegal timber every year over the past decade. Professor Laurance said:

That is an incredible figure, twice the amount imported annually by leading industrial nations.

Professor Laurance has said that, while Chinese government agencies had commissioned an analysis of China's role in the illegal timber trade, there was no national plan or laws to prevent the import of illegal timber.

According to a report by Interpol and the World Bank, illegal or 'predatory' logging is estimated to defraud developing nations of about $15 million each year in tax and timber royalty evasions. Last year, Greenpeace exposed an illegal timber scandal in Sydney city, which originated in the Malaysian rainforests of Borneo. Greenpeace exposed the use of illegal timber on the development site, Central Park. The developers took action. Frasers Property Australia promised to audit and remove any illegally logged timber from the worksite. Even better, it committed to using only the FSC certified timber thereafter.

The fact that a company who wanted to do the right thing was using illegal timber highlights the need for the legislation that is before the House to introduce effective laws to stop illegal timber ending up in Australia. Greenpeace investigations in Australia, coupled with on-the-ground investigations by British organisation Earthsight, have revealed that illegal timber stolen from rainforests in poor communities is presently bought and sold across Australia by Australian companies.

The plywood found at the Central Park development in Sydney's CBD came from timber concessions in Sarawak, where systematic and widespread incidents of illegal logging have been documented. One of the world's largest and most notorious logging companies, Samling, was found to be logging protected species, encroaching on areas designated as national parks, destroying rivers and fraudulently tagging logs. According to a Greenpeace report:

Samling is the largest Malaysian logging company operating in the state of Sarawak, on the island of Borneo in Malaysia, where it is logging in an area two-thirds the size of Wales. Samling has a history of illegal logging and abuse of indigenous people's rights in Malaysia, Guyana, Cambodia and Papua New Guinea. In 2009, the Norwegian Government published a report documenting illegal logging by Samling and instructed its state-owned pension fund to divest its significant shareholdings.

The people of Bongu Village in Madang, Papua New Guinea, have been locked in a bitter fight to keep their timber in the ground. Their forests are being illegally felled by a timber contractor to be exported to another country. The people of Bongu Village have been watching their livelihoods disappear. They are seeing the opportunities for their children to go to school and for their families to make a better life for themselves simply being turned into cheap furniture for our homes, paper for our offices and coverings for our floors. We have been robbing one of our closest neighbours of their livelihoods simply to satisfy our demand for cheap timber.

Bongu Village is just one of thousands of communities devastated by illegal logging. This bill seeks to restrict the flow of illegal timber into Australia. In essence, this bill seeks to stop the theft of community resources like those which have been stolen from Bongu Village. This bill is Australia doing its duty as a responsible consumer of timber products. It is the right thing to do for Australia and it is the right thing to do for communities in our neighbouring countries.

I also believe we need to address the issue of palm oil plantations if we are genuinely committed to stopping the theft of resources from communities within our neighbouring countries. I support the campaign of Zoos Victoria and others on this matter. I want to read a quote from an article by Father Ed Meli, a Catholic priest from Divine Word University in Papua New Guinea. He said:

I see people's livelihood destroyed in terms of their life's sustenance. Huge parts of the virgin forest cleared used to be where people do their gardening, hunting, and collecting of different food stuff and materials for building their local traditional houses and homes.

Father Meli is describing watching hectares of virgin forest cleared to make way for oil palm plantations in Silovuti, Papua New Guinea.

Just like the people of Bongu Village watching their livelihoods being destroyed by illegal logging, the people of Silovuti are watching their livelihoods disappear to satisfy Australia's demand for cheap palm oil. Just as we should be responsible consumers of timber, we should also be responsible consumers of palm oil. Palm oil is found in almost half the products on our supermarket shelves, yet it is not labelled. Without the labelling of palm oil we have no idea if we are fuelling the kind of destruction happening right now in places like Silovuti.

Labelling will help us create a consumer driven market for certified sustainable palm oil—a form of palm oil that is produced in a more environmentally, socially and economically responsible way. I support the mandatory labelling of palm oil in Australia and for Australia be one of the nations in the world that focuses on importing certified sustainable palm oil.

I welcome this bill to the parliament. It honours the government's 2010 election commitment to combat illegal logging by restricting the importation and sale of illegally logged timber in Australia. The bill creates greater business certainty for Australia's domestic timber producers and suppliers, and provides an assurance to consumers that the products they purchase are legally sourced. The bill will put Australia at the forefront of global action to combat illegal logging and associated trade, which, as I have pointed out, is responsible for significant environmental, social and economic impacts.

The Illegal Logging Prohibition Bill 2011 will make it an offence to import timber and process domestic raw logs that have been illegally harvested.

The aim of the prohibition is to restrict timber that has been illegally harvested from entering the Australian market. It will provide consumers with confidence that the timber they buy, whether it is furniture or product off the shelf from the local hardware store, does not contain illegally logged timber.

The government recognises that these measures are an essential first step towards a longer term goal of Australia sourcing timber products from sustainably managed forests, wherever they are in the world. I congratulate the Labor government for implementing its election commitment to restrict the importation of illegally logged timber through this bill. This bill is an important piece of legislation, and somewhat historic—I understand that only the United States has a similar piece of law in force. I commend the bill to the House.

Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

I support many of the words set down by the member for Wills in relation to the Illegal Logging Prohibition Bill 2011. I congratulate him on the fact that he is possibly the expert in the House on this issue and on the problem of criminal activity resulting in deforestation, destruction of community lives and unfair advantage in the Australian market.

Against that background, we support the principle of this bill very strongly. It is an issue in which I have been engaged for many years. I want to see an end to illegal logging, whether it is in Australia or overseas, for very simple reasons. Firstly, it is about criminal activity. Secondly, it is about destruction of community lives, where in many cases communities are up against not just well-funded but well-armed adversaries. Thirdly, it causes wholesale environmental devastation. The level of emissions can be high and the degree of destruction and the impact on vulnerable species can be total; it can be complete. I note that the member for Wentworth is at the table. Deforestation is something that he and I have been working on for some time. Deforestation accounts for up to 20 per cent of global emissions. So this is an area in which we can have a profound and significant impact.

For those reasons, we give deep, genuine and strong support to the principle behind the bill. The problem, as I have mentioned, is threefold. Firstly, there is criminal activity involved. Secondly, the impact on specific communities can be almost complete devastation. Communities in different parts of our region have been effectively destroyed, with no recourse because they have had not just finance but the application of, effectively, armed force against them. What is left is nothing. There is no benefit for them; it is a straight pillage of not just their resources but the entire community lifestyle.

The third element is about responsible treatment and a fair go for Australian producers and importers who act in the right way. During preparation for this bill I met with Bunnings. They are the largest importer of timber in Australia, as I understand it—I stand to be corrected, but that was the advice they gave me. They strongly support this bill. They are the ones who could, arguably, be the most adversely affected by it, but they strongly support it out of concern for a level playing field, for doing the right thing and for acting responsibly in custodianship of our products.

The difficulty with this legislation is not the intent but the construction. Unfortunately, it contains a blank cheque in terms of the fact that the regulations have not been released and will not be released. We have called for and would like to see the regulations in conjunction with the bill. Providing those would be the reasonable thing to do. If this bill proceeds in its current form, we will not be able to give support until such time as the regulations are available. There is reasonable and appropriate concern that we work with, not against, Indonesia, Papua New Guinea, Malaysia and other countries within our region.

But, if the bill does pass, we will not repeal it; we will simply seek to amend and improve it. This is exactly the same set of conditions I set out on behalf of the coalition in relation to the Carbon Farming Initiative. We were concerned about the inadequate amount of information and the failure to publish all the regulations. We did not believe it was ready to proceed until those elements were in place. But, if passed, we will maintain the bill and simply seek to improve it.

So we agree with the principle, although we have concerns as to the lack of consultation with our neighbours and therefore the ability to implement it effectively. We certainly have concerns about the blank cheque nature arising from the absence of regulations. We support the principle but we respectfully say to the government that, if they want complete unanimity about the passage of this bill, our requests are reasonable, fair, appropriate and prudent.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

It is good that the opposition have in-principle consideration, after three reports have called for action—but they still find ways of not supporting a very good bill. They always find something to do with process or whatever that is not quite up to their standard. I find that very disappointing, as will most timber workers and the timber industry generally, I believe.

The object of the Illegal Logging Prohibition Bill 2011 is to reduce the harmful environmental, social and economic impact of illegal logging by restricting the importation and sale of illegally logged timber products in Australia. The bill represents a major step by Australia to prevent the trade in illegal timber products both nationally and internationally. It will create greater certainty for Australia's domestic timber producers and suppliers and provide an assurance to consumers that the products they purchase are legally sourced.

We have to get our own industry back into some sort of economically sustainable condition so that we have enough local timber to supply our markets, put our foresters back to work and grow that industry. We should ask ourselves why we need such a bill. Australia has been under pressure for years now to ensure that our product is legal and certified to the highest world standard, which it is. But by certifying all export timber, it adds considerable cost to the processes. If we allow the import of timber that does not have that certification, we are doing damage to our own businesses and markets. Australia imports approximately $4.4 billion per annum of timber products—excluding furniture—or 0.034 per cent of global production. Of these imports, the proportion of illegally logged timber is estimated at nine per cent or around $400 million, so the damage to our industry will be quite significant if we keep allowing this to continue.

With the passing of this bill, it will be an offence to import timber products containing illegally logged timber, with a penalty of five years imprisonment for breaching the prohibition. Australia's share of the social and environmental costs of illegal logging, therefore, can be estimated to be about $23 million per annum. For many years illegal logging has been recognised as a significant global problem due to its impacts on forest degradation, climate change, habitat loss and community livelihoods in developing timber-producing countries. Deforestation and degradation of tropical forests in the Asia-Pacific through illegal logging also constitutes a threat to Australia promoting legal and sustainable forest management in the countries of this region. The problem is exacerbated through lack of measures in timber consumer countries to restrict or prohibit the importation of illegally logged timber and wood products. In response, major timber consumer countries such as the United States and the European Union are implementing measures to prevent trade in illegally logged timber and wood products. Timber producing countries such as Indonesia are also developing timber legality verification schemes to reduce illegal logging and demonstrate the legality of their timber products to their trading partners.

We have the idiotic situation in Australia where we are developing a highly sustainable and certified industry and our biggest critics, the Greens, are paying scant attention to the illegal logging going on overseas and driving our potential customers to go to places like Indonesia and Papua New Guinea for their supply. It makes no sense at all. While we are highly regulated in Australia, both for harvesting and for our exports, the local industry relies on self-regulation to verify the legal origins of imported timber and wood products. This is undertaken through a mix of voluntary procurement policies and procedures. In some cases, importers assess the risk of products being sourced illegally and put in place arrangements to verify that the products come from legally logged sources. The definition of 'illegally logged' in this instance means harvested in contravention of the law in force in the place, whether or not in Australia, where the timber was harvested. The challenge of prescribing individual requirements in a definition is complicated by the range of legislation, given the number of countries—85 in total—from which Australia imports timber products. An unintended consequence of the prescriptive definition of 'illegally logged' is that it may result in some elements of applicable legislation being overlooked or excluded through omission.

The current arrangements are considered by industry to be inefficient because not all businesses undertake any form of due diligence or legality verification and may obtain an unfair cost advantage by sourcing and selling cheap illegal timber. Legitimate operators are also uncertain what constitutes an adequate level of due diligence under the voluntary arrangements. This situation has led to inefficient, highly variable, potentially inadequate legality verification practices, with industry having a limited capacity to resolve this matter through self-regulation. A more structured approach is therefore required.

The Australian government's policy objective is 'to combat illegal logging and associated trade by establishing systems that will promote trade in legally logged timber and, in the long term, trade in timber and wood products from sustainably managed forests'. The government is seeking to meet this objective by identifying illegally logged timber, restricting its import into Australia and requiring disclosure of species, country of harvest and certification at the point of sale. Any regulation to identify and restrict the importation of illegal timber into Australia would similarly apply to the domestic industry. The idea is to identify the multiple elements described in this government's election commitment for what would be defined as illegally sourced timber.

To provide a workable definition that can be assessed using legality verification systems, it is proposed that legally sourced timber products are defined as those where timber suppliers have right of access to the forest, complied with the legal right to the harvest and paid all taxes and royalties. Establishing a framework for promoting trade in legally logged timber is an important step towards achieving the government's ultimate goal of promoting trade in timber and wood products from sustainably managed forests. The illegal logging policy objective provides a further demonstration of the government's commitment to the principle of environmentally protected and sustainable forest management.

Each country is different and standards vary depending on the degree of development. That is why this bill is important: we need to have a certification process that has world acceptance, not the lowest common denominator of assessment. We want to pull the standards up to ours, not diminish them to Third World standards. That way, we can not only ensure that any timber product that comes into Australia has the highest standard of sustainable timber verification in the world but also work towards assisting other countries to improve their standards of forestry to a properly sustainable level.

Why should Australian workers lose their jobs because we import wood from countries with unsustainable, unsafe practices and questionable workplaces, as can be seen in developing countries? These countries need to know that there are big gains to be made by replanting after harvesting, caring for the soil and training their workforce on safety issues, and who better than Australian timber workers to help them? In a press release yesterday, the National Secretary of the CFMEU, Mr Michael O'Connor, stated:

Workers, their families and their communities are holding on for grim life in the face of imports that unfairly undercut them. They expect urgent action from their representatives.

The cost advantage that imported manufactured illegally logged wood products unfairly enjoy over manufactured products that utilise legal timber is conservatively estimated to be 20 per cent of the total cost of production.

Wood products represent the second largest sector in Australia's manufacturing industry and cheap, imported products are costing workers their jobs and killing their communities.

We had bipartisan support for taking action on preventing imports of illegally logged timber and imported wood products that utilise it. We have had three separate inquiries, each of which has recommended action.

Further delays are not acceptable and not feasible for timber processing and wood products manufacturing workers, their families and their communities. Their livelihoods are on the line.

Mr O'Connor from the CFMEU is exactly right: Australia is certainly losing out. Australia has to compete on costs now, but if there is similar certification across the region then it evens out the competition so that all timber products from South-East Asia, and including ours, will compete on the quality of the wood and its use rather than its method or legality of harvest.

At a time when forestry and its products are being very carefully scrutinised, especially in Tasmania, this bill is important to ensure the standards we expect in Australia can be extended to all products that come into the country. As everyone well knows by now, Tasmania is going through massive structural change in the forest industry, brought on by some terrible practices of the Greens, who have brought disrepute on our state and our markets for completely selfish reasons. In fact the Greens have a lot to answer for in Tasmania, with the slump in the economy. So it is even more important that we get certification right. I believe we already have more than world's best practice, but if we have to turn more somersaults, spell out more clearly what we do and how we do it then so be it. But under no circumstances can we see workers lose their jobs because Australia is importing illegally logged timber with slack or lower standards of assessment of harvesting practices. Our neighbours to our north can and must come to a world-accepted standard; we need an accreditation process acceptable to all so that we can all go forward.

Timber is a renewable product with a very small carbon footprint. It has much advantage over many other products that we use in day-to-day activities. I fully support the intent of this bill and hope that it passes quickly so that it can give a lift to those who work in this very sustainable industry not only in Tasmania but right throughout Australia. If we allow proper process and make this bill work properly it will be of advantage to this great industry, the timber industry of Australia.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

I rise to speak on the Illegal Logging Prohibition Bill 2011 and note that the coalition has circulated an amendment to this bill which, in effect, is to delay the start-up of the proposed legislation and the penalties and regulations under it until such time as adequate consultation with industry and with our trading partners has occurred.

I regret to say that a hallmark of this government has been the spectacular inadequacy of its consultation processes with relevant parties before it acts, and then it acts to our country's detriment. The live cattle export ban is a signature example of this government's failure to consult, and then to act to our country's detriment.

During the last parliamentary sittings the Trade Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade delivered a report on this bill. A principal recommendation of the majority report, recommendation 3, states:

The Committee recommends that the Illegal Logging Prohibition Bill 2011 be passed.

I was a member of that committee and I was led to believe that there would be a caveat adding, 'subject to the penalties under the act and the regulations having effect from 1 January 2013'.

This was in order to give recognition to the idea that the legislation be aligned with the regulations. However, this caveat did not make it into the report as delivered to the parliament. The coalition members of the subcommittee recommended that the bill not be passed until the draft subordinate legislation had been finalised and had been the subject of further, extensive, community and international consultation. There was evidence to the committee of a lack of consultation, and that was recognised in part by the committee in recommendation 1, which said:

The Committee recommends that the Government continues to consult closely with the Governments of Canada, Indonesia, Malaysia, New Zealand and Papua New Guinea and other relevant stakeholders on implementation of the bill and the development of subordinate legislation.

This was just a diplomatic way for the Labor members of the committee to reflect the evidence that the government had not consulted properly, let alone closely. The second recommendation was:

The Committee recommends that the Government facilitate Malaysia and Papua New Guinea’s representation on the Illegal Logging Working Group convened by the Department of Agriculture, Fisheries and Forestry.

This was again a polite way to acknowledge the concerns of those countries that had been left out of the consultation process.

Considering all this, it was our view that the bill should not be brought on for second reading debate until the first parliamentary session of calendar year 2014 at the earliest. Given the evidence as to how long it would take—it was estimated that it would take between 18 and 24 months—to properly carry out the necessary consultations and draft the regulations, the coalition now seeks that the amendment as circulated, which has an implementation date of July 2015, be adopted. Obviously we cannot expect this to be agreed to, and that is why we are raising our concerns today. We have raised our concerns with the minister and with the government on numerous occasions, so they have been discussed extensively with the government.

The coalition took to the last election a promise that we would support satisfactory legislation to prohibit illegal logging. However, given the shortcomings and failings of the bill, we are seeking this amendment. If there is the opportunity to bring into effect the legislation and the regulations, the end result will be a better bill based on extensive stakeholder consultation and the necessary alignment of the legislation and regulations. The coalition has major reservations about the policy process that has been conducted and about the government's failure to consult adequately—or, in some instances, at all—with those most affected by the legislation. The critical reason that we insist on our amendment is that it will delay the coming into effect of the legislation until the regulations associated with the bill have been drafted and released for consultation at home and abroad. We are of the view that the legislation, while supportable in principle, demonstrates further the chaotic policy processes that typify this government—in particular, the Minister for Agriculture, Fisheries and Forestry, who is sponsoring the bill. It is no coincidence that this minister, who failed so spectacularly to consult adequately and follow due process during the live cattle export fiasco with Indonesia, is the same minister who has his fingerprints all over this bill.

To explain the problems with the government's policy process, I turn to the purpose of the bill. The coalition supports the purpose of the bill, which is to stop the importation to Australia of illegally logged wood from other countries; the problems have to do with how this is to be done and the lack of adequate consultation. According to the government, the bill provides for:

• a prohibition on illegally logged and timber and wood products (with an additional prohibition on the processing of illegally processed raw logs)

and

• a requirement for industry to carry out due diligence to mitigate the risk of importing illegal logged timber into Australia.

That is all well and good. However, there are major questions about the compatibility of this legislation with World Trade Organization rules. This in turn raises questions about adequate consultation with our foreign neighbours such as Indonesia, with whom Senator Ludwig, the minister for agriculture, has already done his utmost to destroy a relationship that successive governments have dedicated decades of work and effort to establish. I am surprised to find that the Minister for Trade and Competitiveness, who is always quick out of the blocks to condemn even the merest sniff of contravention of WTO rules, has not uttered a peep about this legislation.

This legislation also went before an inquiry of the Senate Rural and Regional Affairs and Transport Legislation Committee. The Indonesian government's submission to that inquiry was quite alarming. The Indonesian minister of trade personally wrote to the committee on 25 January this year, prefacing his remarks by stating that the government of Indonesia:

… fully supports the bill's overall objective to reduce the harmful environmental, social and economic impacts of illegal logging as well as to impose penalties on those who import illegal logged timber into Australia.

However, the minister then stated critically that the Indonesian government 'regrets that our cooperation has not been sought to date on the best means to address the aims set out.' The Indonesian government is right to be concerned by the cavalier attitude of the Labor government to our bilateral relationship with Indonesia. I well recall the Oceanic Viking debacle, which fatally undermined the cooperative relationship that the Howard government had established with the Indonesian government. As the Indonesian foreign ministry's director of diplomatic security, Dr Sujatmiko, said in a press in statement in late 2009:

This will be the last time we are helping Australia deal with its foreign refugee influx problem.

So the Labor government was put on notice.

The Indonesian trade minister in his submission to the trade subcommittee criticises the Australian government for not listing which timber products the bill applies to. This is an obviously important omission, and it indicates why the coalition is seeking a deferral of the starting date of the legislation. Offences are contained in the legislation, yet the basis of the offence—including which timber products the bill applies to; and these offences carry penalties—is all to be left to the regulations. So the evidence that came before the trade subcommittee was deeply concerning; parties could be prosecuted under the legislation, but the details of the offences would not be available until regulations were drafted.

It was admitted in evidence to the committee that prosecutions could occur, but people would not know the basis of those prosecutions—of the offences. The Australian Financial Review, reporting on 6 March 2012, referred to the chaotic approach and the impact this was having on our relationships with our neighbours. It said:

Australia’s relationship with Indonesia is under new strain, with Jakarta frustrated by the federal government’s “dysfunction” and neglect of its relationship with its near neighbour.

And that:

Indonesia’s Trade Minister, Gita Wirjawan, has blasted the Gillard government's lack of consultation over an illegal logging bill which he says threatens the future of Indonesia’s $5 billion export forestry industry. He is threatening to lodge a complaint with the World Trade Organisation if it proceeds.

The Indonesian minister maintained that they have a low cost alternative to the heavy regulation proposed in the Labor government's bill. He maintained the Indonesian timber legality and assurance system provides adequate protections. If the Australian government were to consult over this proposed course of action, there would be an opportunity to massively reduce the red tape and regulation.

The Indonesians are not alone in their observations. In their submission to the Senate inquiry of 20 December 2011, the Canadian government noted their concerns:

The implementation of the bill and subordinate legislation may impose unnecessary burdens on trade in forest products from countries with effective legislation supervision and discourage imports of timber products into Australia.

And that:

As a result of the imposition of greater burdens on imported timber products the implementation of the bill could favour processing of timber products in Australia to the detriment of Australian consumers.

The New Zealand government also made a submission to the Senate inquiry, stating that:

The implementation of the bill has the potential to have a significant negative impact on New Zealand's forestry industry, an industry almost entirely based on privately owned plantation forests that are established specifically to be harvested.

Further, well-known authority on WTO matters and former ambassador to the General Agreement on Tariffs and Trade Alan Oxley made a submission to the Senate inquiry, stating that the bill:

Fails to meet Australia's obligation under I.1 of the General Agreement on Tariffs and Trade 1994 not to create advantage for the like products from some parties to the Agreement and not others and is not covered by other provisions in the Agreement.

He went on in his submission of 10 January 2012:

It breaches Australia's obligations under Article XI.1 of the General Agreement on Tariffs and Trade 1994 not to use restrictions of any kind other than duties, taxes or other charges on the importation of any product and cannot be justified under other provisions of the Agreement.

He went on to say:

It fails to meet Australia's obligations under Article 7(1) of the ASEAN-Australia-New Zealand Free Trade Agreement which mirrors the terms of GATT 1994 XI.1.

Mr Oxley regards the bill as containing:

… particularly onerous and costly obligations on Australian producers to demonstrate product in Australia is legally produced.

And Mr Oxley notes that this is a critical issue for our trade not only with Indonesia and New Zealand but also with Canada. And, according to his submission, 'timber products are imported from Canada, members of the EU, Indonesia, Malaysia, New Zealand, Papua New Guinea, the Solomon Islands and Vietnam'. So Australia does not simply face potential action under the WTO from Indonesia and Canada but from a whole range of other countries.

There are a number of other legal opinions that have discussed the possible international trade implications of this legislation. Associate Professor Andrew Mitchell and Glyn Ayres of the Melbourne University Law School have recorded a number of reservations about the bill in their opinion of 10 January 2012. Another legal opinion has been supplied by well-respected Melbourne barrister Gavin Griffith QC and his colleague Benjamin Jellis, dated 22 December 2011. They state:

The scheme and content of the Bill is so deeply flawed in its conceptual approach, based as it is upon the use of Australian courts to enforce the laws of foreign trading partners, that it should be abandoned.

Finally, there is another joint legal opinion from Associate Professor Tim Stephens and Professor Ben Saul at the University of Sydney. It has to be said that these two academics are more relaxed with the general provisions of the bill. However, they note the bill has problems in international law:

Australia may need to demonstrate that it negotiated in good faith with affected countries to secure its conservation objectives before resorting to unilateral restrictive measures.

The Australian timber industry are rightfully concerned about the red tape burden of this legislation. In the 12 March 2012 edition of Timber and Forestry E News, it states that:

Thousands of containers of wood products shipped for consumers and landing on wharves around Australia every month are likely to be impounded under regulations in the Illegal Logging Bill.

The bottom line is that there are many flaws to the legislation put forward by the government. Our dissenting report to the trade sub-committee said that:

The Government has also indicated that the regulations will come into force two years after the Bill receives Royal Assent and also indicated that the regulations will be tabled in the Parliament within six months of Royal Assent to give exporters and importers time to establish due diligence. However, the Government also made it clear that parties could be open to prosecution during this two year stand-off. This lag between the Bill and the regulations is of genuine concern.

And the government:

…should not introduce the legislation until the enabling subordinate legislation is finalised, released for public comment and a satisfactory consultation period has taken place on both the legislation and the regulations.

For that reason the coalition has been reluctant to support the bill in these circumstances. We have done so because of our strong support for the principle— (Time expired)

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

Illegal logging and the international trade in illegally logged timber is a major driver of environmental damage. It costs governments—especially developing country governments—billions of dollars in lost revenue, promotes corruption and undermines the rule of law and good governance. Overall, it retards sustainable development in some of the poorest countries of the world. By definition, the scale of illegal logging is difficult to estimate, but it is believed that more than half of all logging activities in the most vulnerable forest regions—South-East Asia, Central Africa, South America and Russia—may be conducted illegally. Worldwide, estimates suggest that illegal activities may account for over a tenth of the total global timber trade, representing products worth at least $15 billion a year.

For too long, consumer countries, including Australia, have contributed to these problems by importing timber and wood products without ensuring that they are legally sourced. The breaking of laws on harvesting, processing and transporting timber or wood products is widespread in many timber-producing countries. By logging in protected areas, such as national parks, or having over allowed quotas, processing the logs without acquiring licences and exporting the products without paying export duties, companies may be able to generate much greater profits for themselves than by adhering to national laws and regulations.

The extent of illegal logging in some countries is so large, and law enforcement so poor, that the chances of detection and punishment are often very small and the incentives to operate illegally are correspondingly large. The impacts of these illegal activities are multiple. Environmentally, illegal logging depletes forests, destroys wildlife habitats and impairs the ability of land to absorb carbon dioxide emissions, with resultant impacts on climate change.

Physically, the destruction of forest cover can often have knock-on effects. For example, in December 2004 flash floods and landslides in the north-eastern Philippines killed over a thousand people. The government blamed illegal logging, which had denuded the mountain slopes.

In a budgetary sense, illegal logging loses governments revenue. A Chatham House briefing paper reports estimates from Indonesia that the government there is losing more than $1 billion a year in unpaid taxes and charges—and that is out of a total budget of about $40 billion in 2003.

Developmentally, future generations will suffer even more. World Bank studies in Cambodia in 1997 suggested that illegal extraction, worth between $0.5 billion and $1 billion, was over four million cubic metres a year—at least 10 times the size of the legal harvest, and a level of harvesting that is unsustainable.

Socially, illegal logging undermines respect for the rule of law and of government, and is frequently associated with corruption, particularly in the allocation of timber concessions.

From a trade related perspective, as illegally logged timber is invariably cheaper than legitimate products, it distorts global markets and undermines incentives for sustainable forest management. A study published by the American Forest and Paper Association in 2004 estimated that world prices were depressed by between seven and 16 per cent—depending on the product—by the prevalence of illegal products in the market. This explains why the Australian forestry industry is largely supportive of this bill.

Politically, revenues from illegal logging have been known to fund national and regional conflict, most recently in Liberia and the Democratic Republic of Congo. In Cambodia, for several years Khmer Rouge forces were sustained primarily by the revenue from logging areas under their control. When, under donor pressure, Thailand and the Cambodian government cooperated to close their joint border to log exports at the end of 1996, the insurgents opened peace negotiations.

That is a summary of the bad news about illegal logging. But the better news is that, in recent years, producer and consumer countries alike have paid increasing attention to illegal logging. One of the main initiatives includes measures to exclude illegal timber from international markets—notably the EU's Forest Law Enforcement, Governance and Trade Action Plan. This initiative centres on the exclusion of illegal products from EU markets. The major problem with this approach, of course, is that there are currently no means of distinguishing legal from illegal products at the border. The EU's solution is, therefore, a new timber licensing system designed to identify the legality of production and relying on credible—probably independent—verification of legal behaviour at every stage of the chain of custody of the products. This is similar in effect to systems already in place in several international agreements, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora and the Kimberley Process on conflict diamonds, which feature licence or permit systems and tracking mechanisms designed to exclude particular categories of products from international markets. This bill is similar in its intent.

It is important to first emphasise that that the Greens are strongly of the view that much of the legal native forest logging in Australia is clearly contrary to the national and global interest. Further, while this logging is supposed to be controlled by a suite of laws, regulations and policies, compliance with these laws is uneven across the various states, and assertions about failures to comply are frequent.

However, today we are discussing the importation of illegally logged timber, and it is the case that, compared to the domestic situation, the extent of illegal logging in developing nations is far worse and our ability to prevent its import is severely limited. The only regulation that exists at the moment in Australia to control importation of illegally logged timber is the Convention on International Trade in Endangered Species. This convention targets only a limited number of timber products that have been derived from endangered species and, therefore, large amounts of timber continue to be imported into Australia without any requirement for verifying its legality, other than through voluntary industry measures.

At the 2010 election the government committed to encouraging the sourcing of timber products from sustainable forest practices and to seek to ban the sale of illegally logged timber products through five identified measures. This bill represents the regulatory elements of the government's illegal logging policy, focusing on measures 3 and 4 of the policy. The government says that these regulatory controls will be complemented by investment in capacity-building and bilateral and multilateral engagement. That is appropriate and follows the European approach and, of course, the Greens will be scrutinising this investment.

In order to determine the most effective policy approach to implementing the regulatory aspects of this election commitment, a regulation impact statement was undertaken by the Department of Agriculture, Fisheries and Forestry. The regulation impact statement outlined three options that may achieve the objective of changing the behaviour of timber producers by directly limiting opportunities for the production and trading of illegal timber. These options were: quasi-regulation with codes of conduct enforced by industry; co-regulation, using a prohibition element and a requirement for due diligence; and explicit regulation requiring a minimum standard for verification of legality.

The bill reflects the due diligence co-regulation approach identified in option 2 of the regulation impact statement. The key regulatory elements of the bill are a prohibition on illegally logged timber and wood products, with an additional prohibition on the processing of illegally processed raw logs and a requirement for industry to carry out due diligence to mitigate the risk of importing illegally logged timber into Australia. We acknowledge that this represents a significant step by Australia to prevent the trade of illegal timber products both nationally and internationally and although it has been a long time coming we welcome the effort, although I do flag some concerns. Further we also acknowledge that stakeholder consultation during the course of developing this bill has been broad.

As described in our additional comments in the recent Senate Rural and Regional Affairs and Transport Legislation Committee report, the Greens are generally supportive of this bill but believe that, in a number of areas, the balance between providing clarity in the legislation and allowing for flexibility in drafting regulations has not been well struck.

Greater clarity will be important in the following areas. Firstly, it will be important in the definition of 'illegal logging'. Numerous stakeholders, including the timber industry, timber retailers, and environmental and social organisations agree that the definition of illegal logging should be expanded. The Greens are not persuaded by the government's reasoning that an unintended consequence of a prescriptive definition of 'illegally logged' may be that some elements of the applicable legislation are overlooked or excluded through omission, and we retain the view that the Australian definition should be consistent with the EU definition.

Secondly, as far as due diligence is concerned, the Greens can find no reason why the due diligence provisions relating to the declaration form should remain unclear. The bill should specify that the declaration form must include detailed information critical to satisfying due diligence. There would be a range of information from name of importer and name of supplier through to vessel name, voyage number and, of course, quantity of timber. We emphasise, in particular, that the due diligence requirements must provide for traceability to coupe level and an assessment of the risk of illegality due to corruption. There is evidence around the world of companies paying bribes to officials to secure the 'legal' allocation of logging rights. Corruption criteria must allow for scrutiny of the logging permit application process.

Thirdly, as to assessing and reporting compliance, the Greens agree with Greenpeace that, in order to determine the levels of compliance and assist in assessing the standards used in due diligence documentation on an ongoing basis, the bill would benefit from a requirement for regular, preferably quarterly, compliance audits and aggregate data reports. As noted by the committee report, having annual compliance audits was a measure proposed by DAFF following the legislation committee's report, and the minister's office did not appear opposed to its inclusion.

I flag that my Senate colleagues may move amendments in the other place reflecting these concerns but, subject to those comments, I commend the bill to the House.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I rise to speak on the Illegal Logging Prohibition Bill 2011 before the House and the amendment circulated by the coalition in this respect. I begin by saying that I have a great concern about this bill passing the House and the Senate. I support the move by the coalition with its amendment but, in any event, I do not support the thrust of this bill and the direction it is taking.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

But you'll do the right thing.

Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Link to this | Hansard source

I will take this opportunity to congratulate the former Speaker, the member for Scullin, on his announcement and on a fine career.

I do not support the direction of this bill. I think it is another example of the Green crusade, through trade policy, that we are increasingly seeing. We are seeing it through this bill. We saw it do most damage, of course, 12 months ago when the government shut down the live cattle export industry overnight because of a Green push, through a TV show. It damaged much of the important relationship between Australia and Indonesia, an extremely important trading partner. So much damage was done through that action, by government policy, because of the pursuit by the Greens of this industry. That is simply what it is—they are pursuing this industry, and now they are pursuing this industry through trade policy.

It has all the worst elements of a step back to before the 1980s. There are many on the Labor side who believe, as I do, in the Hawke-Keating action to unburden Australia of its trade protections. This is a new step—a new use, and an increasing use, of trade protections, through Green activism, to damage our trading relationships with extremely important trading partners.

I thought the speech of the deputy leader, the shadow minister for foreign affairs and trade, was a terrific enunciation of the problems with this bill, in that it creates problems with extremely important trading partners such as Canada, Indonesia, Papua New Guinea, New Zealand—you name it. This puts at risk our reputation, and puts us at risk of challenge under the WTO and its provisions.

We hear much from the trade minister about the coalition's supposed questions in some of these issues, and we have heard in the last few weeks from the trade minister on foreign investment; he has been out there writing op eds and what have you about the coalition's position. Yet the trade minister is strangely silent when it comes to inserting quite outrageous provisions in bills such as this which puts on, in effect, a trade protection against very important trading partners. And I think it shows up the trade minister for a singing and dancing sideshow of a trade minister, when he should be fighting—as, in fairness, the minister for regional development has been—against this play by the Greens to insert their activism through trade policy.

This has undoubtedly done further damage to an already damaged relationship with Indonesia. We have seen this week this House dealing with a bill to try to undo the damage of the Labor government's changes to border protection laws four years ago. Obviously, and importantly, the Indonesian relationship is vital in ensuring that our border protection is looked after and is competently managed. It can only be competently managed if the Indonesians are cooperating. Now, of course, if we continue to use legislative instruments, and we continue to take action such as shutting down the supply of food overnight, we will bear the consequences of those actions, quite obviously. Another sovereign state is entitled to react if Australian domestic law tries to manage or govern the actions of another government, and that is exactly what this bill is seeking to do with developing countries.

If the truth be told, the biggest issue with illegal logging is that it is occurring in developing nations; it is a challenge for developing nations. Rather than act like some sort of—dare I say it—Green deputy sheriff in the region, maybe we should be trying to work with these nations to ensure that they can continue to develop so that they have stronger internal, domestic structures, so they can themselves take action where appropriate, rather than trying to use Australian domestic law, through trade policies, to insert these Green purist pursuits, when the truth is that the real intention of the Greens is to shut these industries down.

We have seen it in Tasmania. I heard the honourable member from Tasmania speak on this bill just before and he made the point that the green activism and the forestry debate in Tasmania has done so much damage to his state. Of course it has, and now we are seeing it through our trade policy.

It is shameful that the Minister for Trade and Competitiveness in this Labor government, who claims to be an inheritor of the Hawke and Keating legacy, would stand by while this action is being taken. The minister for trade realistically should explain to this House why and how he thinks it is in Australia's trading interests to be pursuing these Greens policies through this bill and others. It is another example of the most insidious part of this Green-Labor coalition. On the second anniversary of the 'there will be no carbon tax under a government I lead' announcement, we have another example where the Labor government has completely lost its way in ensuring that good, open and free trading arrangements are put in place to the benefit of our country, not policies which damage our relationships with such important allies and trading partners in our region, such important countries to Australia's future.

Mr Deputy Speaker, you know very well that the Indonesians in particular will provide such a great opportunity for our country in the coming years. Why would we consistently and continually poke them in the eye when it comes to our trading arrangements with them by using Australian domestic actions and law to try to force change in their own sovereign country? It is a terrible, terrible piece of legislation and I cannot support it in the form in which it is drafted and as it appears before the House. I am not alone in that. There are other members on this side who hold grave concerns in relation to this bill.

The Indonesians themselves have made it very clear that they think this is a disastrous bill. As the deputy leader said earlier, on 6 March this year there was a story in the Financial Review which said:

Indonesia’s Trade Minister … blasted the Gillard governnment's lack of consultation over an illegal logging bill which he says threatens the future of Indonesia's $5 billion export forestry industry. He is threatening to lodge a complaint with the World Trade Organisation if it proceeds.

Similarly, submissions from Canada, New Zealand, Malaysia and Papua New Guinea to the Senate inquiry have also expressed concerns with the bill. There have been a range of legal experts in Australia and international trade experts who have said similar things and expressed similar concerns. Yet the trade minister stays unusually silent over there when it comes to these concerns. It is a real shame that the trade minister will not come in and express his concern along with us and have this bill changed or amended enormously before it goes ahead.

We make the point through our amendment that these concerns that have been raised by important trading partners, by neighbours and by developing countries in our region have not been the subject of the full consultation that is required at the very least before this bill proceeds. At the very least, the amendment that we put forward seeks to address that to some degree, giving the government additional time. But, as I say, I am still extremely reluctant and I am against the thrust of this bill because I think it ultimately does little if anything to reduce illegal logging in developing countries in our region. But, at the same time, because it is purely a protection measure in its nature, it will inevitably increase the cost of timber for consumers in Australia.

We know that that is an open policy position of the Greens, in fairness, to protect the Australian industry, and we heard the member for Melbourne outlining that just then. But we see the Labor Party completely split when it comes to these issues and whether to continue down the path that Hawke and Keating pursued in the 1980s and 1990s or whether to go back to the good old ways that the Secretary of the AWU, Mr Paul Howes, and the new Secretary of the ACTU, Mr David Oliver, would like the Labor Party to pursue. That is the old-fashioned protectionist economy, the settlement economy that existed in Australia prior to the 1980s. This is another reason that this bill should offend those of good economic conscience on the other side who believe that Australia's future best lies with an open and trading economy, because this bill completely offends those principles. Thus I cannot in good conscience support it.

It also has to be remembered that this is another example of Australia using its diplomatic power in the wrong way. I would have thought we want more than anything to develop better relations in the Pacific region. I know the government has put effort into that through the member for Corio, the Parliamentary Secretary for Pacific Island Affairs. That is an important step, an important issue for us to pursue. It is very important that Papua New Guinea, Fiji and other countries in our region continue to develop as we wish them to and that their populations continue to enjoy a better standard of living, more opportunities and all the great things that Australians get. We can and do play a very important role in that, but what we should not do with our role is misuse that power with bills such as this. We should not use domestic law to in effect threaten other countries—developing countries—or tell them what to do with their sovereign nations, how they should run their sovereign nations and how they should enforce good law in their own sovereign nations. There is indeed a better way to pursue this issue.

There are questions raised about the amount of illegal logging going on and how big a problem this is. The member for Melbourne asserts that it is an enormous problem, that it is causing great carnage. There are others who say that is not the case. In any event, this is clearly a development issue. It is not an issue of criminality; it is an issue of development in those regions. The more and the quicker we can encourage and assist by good economic development measures and good governance measures our developing neighbours to ensure they have very strong operational domestic laws and strong domestic economies, the better and quicker we will be able to address—or they will be able to address, more importantly—some of these concerns.

We can assist through that, and indeed we do. We do good work, and I think the member for Corio has done some good work in his efforts to ensure that in our region we are working for a way to have faster and better development in those countries.

But this is not the way to do it. This is wrong-headed, bad policy. This legislation will cause damage to our reputation with the World Trade Organisation. It runs counter to the pursuit of an open and trading economy that the Australian government has held to, in a bipartisan manner, for the last 30 years, as you well know, Deputy Speaker Leigh. There are of course always people who are concerned about open and trading economies and the pursuit of free trade mechanisms and agreements and so forth. But, ultimately, we know from the evidence and from the benefits of the rise in living standards Australians have enjoyed since those policies have been pursued in a bipartisan manner that they have led to far better outcomes in our country and in developing and developed countries around the world.

This bill runs counter to that, and that is why it is such a bad bill. It will not stop the practice of illegal logging. It will increase the cost of timber in Australia and it will damage our international relationships with very important trading partners at the wrong time, when they are already under pressure. It is a bad bill and it should not be supported.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

The Illegal Logging Prohibition Bill is intended to do a number of things: prohibit the importation and sale of all timber products containing illegally logged timber; prohibit the processing of illegally harvested domestically grown raw logs; require importers of regulated timber products and processors of raw logs to comply with due diligence requirements; require the accurate description of legally logged timber products for sale in Australia; establish enforcement powers and offences; impose penalties; and provide for a review after five years. However, none of the regulations are available to us at this time to consider.

What the government has not done, however, is give our trading partners, our domestic timber industry and timber importers the time they were promised to design and implement appropriate systems to go with this particular bill. There are many flaws with this bill, as we have heard throughout this debate. A number of them were outlined by the member for Curtin. That is why our support for this bill is contingent on the government accepting our amendment, which sets the commencement date of the legislation and regulations at July 2015.

This has to be a managed process, one that gives our partners, our domestic timber industry and our timber importers the time they were promised to design and implement the appropriate systems. It is no wonder that Australia's six major timber trading partners are so concerned, and we have heard the reasons for those concerns outlined today. There are not only those concerns but also those of our domestic timber industry and our domestic timber importers.

There are no regulations attached to the bill. We know from experience in this place that you cannot trust this government to get it right. We know that the devil is always in the detail. We have not even seen the regulations. We have seen disastrous pieces of legislation, disastrous processes and disastrous programs one after the other through the life of this government. The list is endless. I have heard today references, particularly in relation to this bill, to the live cattle fiasco. And we know that the same minister is involved. We can have very little confidence that the regulations will do what they are intended to do or will in fact be able to address any of the issues contained in this bill. We know that the government has failed to consult and, as a farmer and beef farmer, I know first-hand the damage that was done to Indonesia through the overnight decision on live cattle exports. We know how Indonesia views that. I also know of the increase in the price of protein in Indonesia, for people who can ill afford it, as a result of that decision.

The member for Curtin outlined very succinctly the WTO implications and the diplomatic and international law issues in relation to this bill. The parliament and our trading partners really do need to consider the regulations, their impact and their implications before they take effect. It will take time to implement traceability and compliance, the basic things that will have to be done to meet the requirements—which we do not even know about. Equally, Australian importers themselves will have to design and put in place traceability and due diligence processes as a result of this, particularly as current timber certification programs do not yet provide due diligence elements to their traceability certifications. This will be a completely new process.

The Joint Standing Committee on Foreign Affairs, Defence and Trade minority report confirms two major issues previously raised through the Rural and Regional Affairs and Transport Committee. These relate to concerns with regard to the detail—the devil in the detail—and that is why we have taken the position we have. There has been inadequate consultation. There are concerns regarding the ability of the government to develop the regulations in a timely manner. Will they be ready on times? We heard the member for Curtin say that they would not be—you can be prosecuted, but, no, we are not really sure what the terms and conditions of that are.

The inadequate consultation was raised in the minority report. The Department of Agriculture, Fisheries and Forestry estimates that they can produce the regulations within six months, but evidence submitted to the inquiry indicates that little progress had been made on the contents, and fundamental issues remain unresolved.

We on this side of the House are committed to addressing the trade of illegally sourced timber and timber products. It was in fact part of our 2010 forestry policy. But we do not underestimate the issues in managing and adapting to any changes facing industry and stakeholders, which is why our policy provided for a two-year transition period.

We also understood that all impacted stakeholders, many of whom we have heard from today, need to be consulted closely on the drafting of the legislation, the regulations—the things we are discussing today—and other related measures, which is exactly what this government has not done, yet again. It is just a pattern of behaviour: always finding the wrong answer to whatever the question is before us. That is the reason for our amendment.

Recommendations 1 and 2 of the Joint Committee on Foreign Affairs, Defence and Trade report acknowledged the flawed and inadequate consultation process associated with the development of this bill. And they made a recommendation that the government should continue to consult closely with the governments of Canada, Indonesia, Malaysia, New Zealand, Papua New Guinea and other relevant stakeholders on the implementation of the bill and the development of the subordinate legislation. That is very important: what are the requirements; how will they work; what are the obligations; what are the penalties. The joint standing committee also recommended that the government facilitate Malaysia and Papua New Guinea's representation on the Illegal Logging Working Group, convened by the Department of Agriculture, Fisheries and Forestry.

As I said, we are committed to addressing the trade in illegally sourced timber and timber products. But I just want to refer to the WA situation. In Western Australia we have largely led the way in dealing with deforestation issues. In fact, it was led by Sir Charles Court, who imposed some clearing restrictions in the sixties and seventies. Large-scale clearing is generally a thing of the past. But what we did see, which is another example of where the actions of a Labor government cannot be trusted, was that in 2001 the WA timber industry, and timber communities—it comes right down to the ground level, as it will in the nations we are dealing with on this issue—were thrown to the wolves by the Gallop Labor government. Change came dramatically, a bit like the live cattle export situation, and it was full of deception. That concerns me with this bill as well. The state Labor government told the wider community they would end old-growth logging but told the timber industry that this would have a minimal impact on their lives and the communities. What a deception. Timber companies were told that, despite most of the larger logs being excluded from harvest, the quality of sawn logs they would receive would not change—and, sadly, at the time many actually believed the Labor government in WA. The truth has now been brought home: there was a major impact in some of these communities, with job losses and impacts on the whole community, especially in the Manjimup region—and that was part of my electorate when I was first elected. That is what happened in Western Australia. So if this bill is progressed, and these issues are not well managed, what will it do in developing nations? What will it do to people on extremely limited incomes?

We do know that, under the current legislative regime, the Australian industry is very well managed. But for my electorate, again, I will place on the record that many in the south-west retain about 80 per cent of native forests. But members should note well that the areas that have an active timber industry over many years tend to retain significant areas of native forest, whereas in regions where the native forest is not valued, and is harvested for timber, little forest was left intact. It is this value placed on timber and forests that in many areas has resulted in its salvation.

It is a source of constant irritation, and I would say anger, to the timber industry that, despite being vilified by the Greens, and in recent times the Labor Party, they are in part actually responsible for the continued existence of so many of our remaining forests. We do know there has been a recent decline in deforestation in Australia. Compared to other nations around the world, our forests are relatively well managed.

As a result of this bill I have to raise the issue of developing nations and how they will be able to sustain not only their populations but also some of their forests into the future. For the billions of people living in or near poverty, the use of timber is often as a fuel source and a building material—it is not because of want but because of need. This is something we need to consider in this whole process. Poverty may be the reason the person is harvesting remaining forests. It may be to warm and shelter their family. They may have to harvest their last remaining forests to provide income for food or other necessities. It is going to be a pretty basic decision for some, and it is on a daily basis. So, until the living standards of the populations and the standard of governance rise significantly, it is clear that those forests in developing nations will remain under threat. The threats are significant, but I ask the House to remember that this bill only applies to illegal logging, and does not address the threat of unsustainable legal deforestation.

Our concerns with this bill are very valid. When I listen to the matter articulated by the member for Curtin, the shadow minister for foreign affairs and trade, this really does absolutely need to have scrutiny. The regulations do need to be provided. We do need to see the devil that could well be in the detail, and that is why I fully support the coalition amendments.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

As I have written publicly in two opinion pieces, one in the Herald Suntitled 'Greens can't see the wood from the trees' and the other in the Australian, 'Policy tainted by Greens agenda', I believe this is bad legislation, supported by bad policy, and should be opposed. There are five main reasons I think this bill should be opposed, but there are many more I could go into detail on. The first is that it sets a dangerous precedent. The second is that it will increase costs for Australian business and achieve nothing.

The third is that it is already damaging our trade relations, in particular our trade relations with our near neighbours. Fourth, it is the Gillard government's way of further embedding Bob Brown's legacy in Canberra. We have seen the damage that has done to Tasmania. Well, this is Bob Brown coming to Canberra and coming to our trade policy. And the last reason is that there is a better way to deal with this issue. There is an alternative which would not cause the damage to our trading relationships that this bill will, which would not cause our businesses to have extra costs and which would not embed Bob Brown's legacy here in Canberra. And that is the approach we should take.

As we would with any crime, all of us in this place would like to see illegal logging stopped. But this is the wrong way to go about it. This legislation embeds the principle that the Australian government will restrict imports if other countries do not apply our environmental standards. It is unilateral in nature. I warn all members of this House that once we head down this path other countries will be emboldened to use such laws against Australia. And who stands to lose the most if that occurs? It is our agricultural exporters.

I call on the member for Lyne and the member for New England and say to them that this is an issue that you should look extremely closely at and on which you should stand up for your electorates. In the longer term this bill, while it may make us feel a little bit better, will harm especially our rural industries. I hope they are looking at this closely—looking at all the arguments for and against, looking at all the evidence that has been presented to the committees that have looked into this bill—and are thinking about whether they should support it or not. If they did that, I would find it very hard indeed to see how they could support this piece of legislation. I would point them in particular to the last hearing held into this bill, which was of the trade subcommittee. Three compelling arguments were presented to that subcommittee as to why this bill should be opposed.

As soon as it enters into law, the Illegal Logging Prohibition Bill will cause uncertainty in Australia's timber trade, because importers will not know what the precise impact of the legislation will be until the regulations are enacted. It will basically chill timber trade between Australia and its regional partners, and that will cause those countries to look at their trading relationship with Australia. We heard evidence that the Gillard government's consultation process throughout its development and implementation of this bill has been flawed. One of the key criteria for implementing this legislation was to do the consultation properly. If the consultation had been done properly, we would not be here today; this legislation would not be before the House. But the government itself admitted that it has been making up its consultative approach as it goes along. It said:

As the more detailed process of developing the regulations is now underway, more in-depth consultation with stakeholders is being and will be undertaken to assist their development and to ensure they operate as intended.

So the evidence to the trade subcommittee from the government itself is that its consultation has been nothing short of a debacle and that it is still trying to work out how it is going to go about it, who it is going to include and what the basis for doing that consultation will be.

The second thing that became very clear from the trade subcommittee was that the content of the bill and the way it has been handled has already caused harm to our trading relationships and, if passed, the bill will lead to more harm occurring. The Indonesian government, already irritated by the way Australia placed a temporary ban on live cattle exports, made clear in its submission:

The implementation of the Bill is also likely to undermine the development of trade between Indonesia and Australia based on our respective mutual interests.

In this respect, reference is made to the recent efforts of the government of Indonesia to accommodate and resolve the problem faced by Australia during the self-imposed ban on beef exports to Indonesia. As someone who was previously a diplomat, I know that you need to read this language and see what the Indonesians are saying. They are saying to us: 'Australia, we are your largest beef export market. We are your largest wheat export market. And what you are doing by introducing this piece of legislation is jeopardising that.' That is what the Indonesians are saying, and we should respect them for saying it—for having the courage to tell us what this bill is all about—and we should heed that warning. We have already done irreparable damage to our trading relationship with Indonesia with the live cattle fiasco and we are trying to repair that damage.

Yet, here we are, only months down the track from that decision, and we are going to do something which is going to irritate—this is putting it mildly—the Indonesians again. Have we not listened and learned from what the live cattle debacle did to the domestic industry in Australia? Do we want to do worse again to our beef and wheat exporters and our other agricultural industries? We need to learn, and we are not learning by this piece of legislation.

The third issue about this piece of legislation—once gain, there was evidence presented on this—is that it is unsound in international law. Given that there were divided legal opinions on the bill surviving legal challenge in the WTO, why would we be looking to go down this path? As a country with credentials as an upholder of the rules and regulations of the World Trade Organisation, why would we jeopardise that reputation by heading down this path when there is divided legal opinion on this?

In its submission to the trade subcommittee the government of Canada noted this and made it very clear to Australia that we should think again about heading down this path. The government of Canada said:

While Canada has concerns related to some of the potential trade implications of the Bill, Canada is pleased that the Government of Australia is committed to ensuring that the Bill and associated regulations are consistent with international trade obligations, that they treat importers and domestic processors of timber equally, and that they are not trade distortive.

So, once again in diplomatic language, the Canadian government is telling us: 'You have serious WTO commitments which you need to honour. And you need to look at this closely with regards to those commitments.' 'And if there is divided legal opinion on whether you are doing the right thing,' the Canadian government is very politely telling us, 'you should think again.'

This is something which Papua New Guinea made clear in that same subcommittee hearing. The Papua New Guinea Forest Industries Association pointed out that the government of Indonesia has already foreshadowed the possibility that the bill will not meet WTO requirements and will remain challengeable under the WTO.

Expert legal opinion by Professor Andrew Mitchell of Melbourne University indicated that the agreement would pose problems with WTO compliance as well as compliance with the ASEAN-Australia-New Zealand Free Trade Agreement.

The evidence is there as to why we should pull back from this bill. When it comes to our domestic industry we have to remember that this bill makes it a criminal offence to import illegal timber. I draw the House's attention to the recent hearings in the US Congress on the Lacey Act, which, in 2008, included illegal logging under its remit, and to what that Lacey Act has done to small businesses in the US who have unwittingly imported illegal products into that country.

In particular there was testimony from a small US businessman who ended up in jail as a result of, through no fault of his own, importing illegal product into the US. The testimony is compelling. His business was destroyed. His marriage was destroyed. He is now on a campaign to point out the absolute dangers of unilateral pieces of legislation like the Lacey Act—and like this Illegal Logging Prohibition Bill—and the impacts that they can unwittingly have, especially on small business people in countries like the US and Australia.

I would hope that the trade minister would see the damage that this piece of legislation is going to do to our trading relations, especially in Asia. I would hope that he would see the principle that has been embedded in our trade policy because of this bill. I would appeal to him to remember his time with the Hawke and Keating governments and his boasting of what that period of Labor government did to improving our trade principles and our trade record, and say to him, 'Pull this legislation before it's too late.'

I also appeal to the member for Lyne and the member for New England to look very closely at this bill and think about their electorates and oppose it. It is bad policy. It is bad legislation. There is a much better way. We can liaise and cooperate with the countries where illegal logging is taking place. We can provide them with assistance. We can put the certification processes in place to help them. We can encourage them. And we can do that in a way which will fix illegal logging and will remain true to our trade principles.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Illegal Logging Prohibition Bill. Saying you are against illegal logging is really making a motherhood statement. Virtually all of us are against illegal logging. We are opposed to poverty, we are in favour of world peace and we are against illegal logging.

There are no arguments with attempts to halt illegal logging. There are lots of good reasons to do so: loss of biodiversity, loss of income to the country of origin and the fact that illegal logging is of itself a theft and that it entrenches corruption and it causes land management issues with degradation of soils unless, of course, they are replanted and managed correctly. If they are not, it becomes a major contributor to greenhouse gas emissions. So we are agreed that most if not all Australians are against illegal logging, so the question is not about our intent but what we do about the problem.

Well, one thing we should not do is play the role of colonial master by issuing edicts from Canberra or from Australia on the way other countries should run their affairs. We should strive at every opportunity to make sure we work in partnership with our near neighbours. It has been decreed by the government that this is the Asian century. In fact, they have appointed Ken Henry to author a white paper on Australia's future in Asia in this century. We need a mature relationship with Asia. That is why any changes we must make to our relationship with Asia must be made with understanding and preferably with the support of the nations affected. None of the nations targeted with this bill seeking to outlaw the importation of illegally logged timber support illegal logging, so it should be easy for us to reach a common position with them. We cannot do that without consultation of course. So what do we have? We have Canada, New Zealand, Malaysia, Indonesia and PNG, along with others, all expressing reservations before a Senate inquiry about the bill. Indonesia and Canada are strongly concerned and are not happy with the negotiations thus far. I quote from the Financial Review of 6 March 2012:

Indonesia's Trade Minister, Gita Wirjawan, has blasted the Gillard governnment's lack of consultation over an illegal logging bill which he says threatens the future of Indonesia's $5 billion export forestry industry. He is threatening to lodge a complaint with the World Trade Organisation if it proceeds.

It is worthwhile remembering that Indonesia is our second closest neighbour, it is the biggest Muslim nation in the world, it has a population approaching 240 million and, most importantly from my point of view, it is a functioning democracy. Indonesia should be one of our highest foreign policy priorities. Good relations with Indonesia are not just desirable; they are in fact essential.

I have mentioned the dangers of acting like colonial masters. When you look at our recent past it is not hard to see some stages when we have done that. Most notably, we made the live cattle decisions, we have issued intentions to make legislation affecting palm oil production, we have been crashing around like a drunken elephant in the area when it comes to people smuggling and we have been making declarations which affect other countries without actually firstly consulting with those countries and taking them with us on the journey.

If we look at the live cattle exports decision we see it has been a shameful exercise, given the way we have treated this most important neighbour of Australia. We have managed to offend them at every turn and we—I mean Australia, and in that case it was driven if not by government policies then by the ministers at least—have effectively halved the live cattle industry exports that are going from Australia to Indonesia. It was all because of a television program and, against departmental advice, there was a unilateral decision to stop the trade immediately. It disrupted meat supplies and offended national pride, it was a religious insult and, as I have said, it smacked of colonialism. All the years of careful nurturing of one of our most important relationships and it was all trashed overnight! The tremendous goodwill that we as Australians bought with our biggest ever single foreign aid project directed to rebuilding after the tsunami disaster was washed away in an instant. So let us not be led by the same minister down the same path again—consultation and cooperation are paramount. We should be able to achieve something good in this space, but we must do it with cooperation.

We run the risk of doing exactly the same here again, as it is not the only area where this government has got ambition confused with capability. We have seen it with the NBN, the South-East Asian Economic Community, the East Timor solution, the green loans and pink batts fiascos, cash for clunkers and, right now, we have just seen the latest policy reversal, on the use of Nauru as a processing centre. The modus operandi of this government is to make the big announcement and then try and work out what it means afterwards. There is a very grave danger that once again we are heading down that path.

It is worthwhile noting that a number of key producer countries, including Indonesia and Papua New Guinea, are developing legality verification, chain of custody and forest certification schemes as we speak. It is far better to be inside their tent helping them than to be throwing rocks from outside it. We need to be friends and to cooperate. But what these countries have asked for is time and consultation, to give them a chance to have a serious input and time to develop systems to comply. You would be aware, Deputy Speaker Thomson, that the coalition took to the last election a policy of outlawing the importation of illegal timbers. We will continue to support that policy. That policy also asked for a two-year consultation period while the regulations were developed. Once again, we are being asked to push through parliament this bill before the regulations are complete and before those countries know how they are likely to be affected. There is also the chance that our local industries will be quite significantly affected, and this revolves around certification. Those countries are developing certification processes, but the proposed legislation places the onus of proof on the retailers here in Australia to be able to provide evidence. It makes it an offence to import illegally logged timber. It does not make it an offence to knowingly import illegally logged timber—and therein lies a very real danger for our businesses.

Some of these countries are developing economies and we would be fools to think there is not some level of corruption in those economies. That means that, as these protocols are developed, if somebody were to illegally obtain a certification process that they offered to an Australian business, the Australian business could well be in contravention of our laws and not have any idea that they are in possession of illegally logged timber. You can imagine the case of a small piece of finely crafted timber with different inlays; it may be a product that is 95 per cent legal product and five per cent illegally logged product. Then, of course, the business becomes totally liable.

All we will need are a couple of highly public infringements to shut down the entire trade. This would have an effect on our businesses but it would also undermine the exports of countries from where we are sourcing our timber legally. That scenario could mean that the price of timber would reduce because markets would be reduced for these countries. If the price of timber reduces you can be sure that, as night follows day, it will lead to increased illegal logging because, as income falls, people tend to increase production. So that would be totally counterproductive, and I know that is not what the government would like to see happen.

We in the coalition are urging the government to show a bit of caution, to show a bit of consideration and to think through what can go wrong for once rather than just thinking through what can go right. Trust me, things that can go wrong are always out there and we should prepare ourselves for that possibility. So we in the coalition urge caution. We are pushing the government to delay implementation of this bill and to go back to the consideration and consultation process with the countries involved so that we can come up with a common purpose approach that they too can support and that they will know will be of benefit to their countries rather than a hindrance.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

It is a privilege to follow the members for Mayo, Wannon and Grey in putting some of the coalition's concerns in relation to the Illegal Prohibition on Logging Bill 2011. The name of the bill suggests it would be something we could all agree on in this place. But it is typical of the pattern of this government in developing legislation. Whatever sector the government are seeking to regulate or legislate, they rush in a piece of legislation with little to no consultation, are stunned by a set of factual and well-developed points on why the legislation will not work and are then caught in this scramble to somehow amend or deal with the problem they have created by not being thorough in the first place in developing their legislative response.

There is no doubt that, in relation to the illegal logging prohibition bill before us, that that is exactly the approach the government has adopted yet again. But, this time, there are more serious consequences that are not just of a domestic nature; there are also trade and international diplomatic relations consequences—another set of serious consequences from a poor government with a poor legislative program and an inability to get the settings right before they bring a bill into this chamber. Most seriously, Australia being a trading nation and relying so heavily on trade both in the past and in the foreseeable future, it is of grave concern to have some of our closest trading partners and nearest neighbours, including Indonesia and Papua New Guinea, expressing concern about this bill in such vocal and strident ways in evidence to the committee that considered these matters.

The coalition has, of course, sought to address some of the deficiencies here by moving amendments to delay and to allow sufficient time for parliamentary scrutiny of any regulations. But it is impossible to understand what the government is actually intending without having regulations to examine. We simply do not know. Of course we want to prevent illegal logging—that is the concern of lawmakers and legislators. As federal members of parliament, we as legislators are of course concerned with illegality but, to be concerned with illegality, we have to define what is legal behaviour and what is illegal behaviour. We cannot possibly know what the government intends, as our trading partners cannot possibly know what the government intends, will be legal or illegal behaviour.

So why are we moving to pass such a bill today? Why are we not having a thorough consultation and scrutiny process about the regulations so that everybody can understand what is legal and illegal and how they ought to operate and how they can make their business and investment decisions to enable sustained economic activity in this space. I think there is an answer to that question, but, inevitably with this government, it comes back to a political question. The member for Melbourne belled the cat, because the real agenda of this bill is, of course, the Australian Greens and the fact that this government is absolutely and utterly beholden for its political power to the Australian Greens. The member for Melbourne is one member in this place. The entire government is beholden to the one, the member for Melbourne, who in his speech sought to say that he would like to see the definition of illegal logging expanded in the legislation. So the real drivers of the government, the member for Melbourne here and the Australian Greens in the Senate, have belled the cat. Their agenda is to expand the definition of illegality; therefore, the government will have to listen to them in order to stay in power. That may be one reason why we are not seeing the regulations before us today. That is a serious question that I think the minister and the government must address before this bill is accepted by either the House or the Senate.

The government is in this constant arm wrestle with the Australian Greens. It is well known; it is in the public domain. We also heard the member for Melbourne call for the expansion of the due diligence requirements, so we can see that there is a real program and intention in the development of this legislation from the coalition allies and drivers of the government, the Australian Greens, to expand the terms of what is illegal logging and to make it more difficult for people to log. We know that the Australian Greens have an agenda to stop logging completely, whether it be plantation logging or any kind of forestry industry. We know that is their real agenda and we know that they want to make it more difficult. So the government has brought us in this chamber to a point where nobody can tell us what the real agenda of this bill is.

I think this is an entirely unsatisfactory situation, particularly when we have important trading partners like the Indonesians expressing their very clear concern, and I think it is worthwhile to repeat for people in the House who have not heard it yet, what this bill will do.

The Indonesians—in reporting in submissions to the Joint Standing Committee on Foreign Affairs, Defence and Trade—said quite clearly that they were very concerned about this bill. The deferral of the legislation until 2015 to provide time to ensure the legislation will not have unintended consequences will unnecessarily harm the mutual trade between our two nations. The member for Wannon was exactly right: that is diplomatic speak for, 'Please do not do this because you are going to create a major trading problem between our nations.'

We have heard from members of this House about the debacle that was created with the live export knee-jerk reaction of a minister and a government seeking to deal with television programs and play with our diplomatic relations as a consequence. That had serious consequences for the people in the live cattle industry. It had serious consequences for the diplomatic efforts between our two nations. It had serious ongoing consequences for our relationship with Indonesia and managing so many vital issues in the world today. This bill will have consequences.

The passage of any legislation in this regard will have consequences as well. So I think it is right for members of this place—especially those concerned with our trade relationships and trade policy and good-quality legislative outcomes of the chamber—to get up and express concern. Not only do I support that this must be deferred until the regulations are in place—a reasonable and practical response that our partners are seeking; I also express my grave concern about using trade policy in this manner to pursue the real objectives of the Australian Greens and the green movement in Australia and worldwide today. We know there are many international green groups and green groups within Australia who are seeking to use our trade policy as leverage in their ongoing environmental and social pursuit of their causes. That is what we are all being dragooned into here today.

It would be interesting to see if the government would bring in such a bill if they were not in coalition with the Australian Greens, if they did not have pressure from the member for Melbourne who wants to expand definitions and see greater definition of illegality in relation to logging all around the world. Remember that this is intricately connected with our diplomatic efforts in foreign aid. Papua New Guinea and Indonesia receive Australian taxpayers' dollars in the form of foreign aid. I support that in most cases. We also have to consider that they are developing nations with vastly different legal and other frameworks. It is inappropriate for the Australian parliament to dictate what Papua New Guinea or Indonesia should be doing when trying to develop and sustain their economies. We do not want them to be the recipient of our aid dollars forever into the future. We want to help them develop strong self-sustaining economies that allow them to produce the best wealth for their citizens. It is in our interests to have strong trading partners and regional neighbours that can sustain themselves and a strong economy. The bill says we are prohibiting illegal logging. That is a fantastic objective that everybody supports, but there are no regulations and there is no design that our trading partners understand about how the bill will work on the ground. That has serious consequences for our relationships. That is why I am here to raise these concerns about this bill, along with so many of my colleagues.

This is not an area that should be toyed with by the government. If they want to pursue a green agenda or placate the Australian Greens, surely the Clean Energy Finance Corporation $10 billion was enough. Why do we have to further damage our trade relationships with Indonesia and Papua New Guinea and other very important trading partners in our region simply for that objective? There are ways of dealing with the problem of illegal logging but they are not defined in this bill before us today. There are things that we ought to do to restrict illegal logging and to ensure that Australian businesses are not having to compete with illegal timber products flooding into Australia. There is a lot of speculation about the quantity and the nature of this problem.

We cannot—and I do not think we ever will—achieve legislation in this place which mandates what happens in countries like Indonesia in a way that is meaningful. Through partnership we can do what is already happening, and that is see the development of certification programs and improvements in the circumstances of locking in many of these countries. Australia is already pursuing those objectives, but this bill is obviously ill timed. It is completely and utterly without form or without any real ability for our trading partners or any member of this place to articulate what will happen in the regulation. We do not know. The department says it might take six months but we understand how slow the process of developing any regulation has been. We estimate it will take 18 to 24 months at a minimum if consultation is done properly and—to be frank—when we are dealing with trade matters, consultation ought to be done properly. It ought not to be a luxury or something that we discard so easily in so many pieces of legislation. Consultation matters with trading partners. Consultation with the industry matters. To see yet another piece of legislation which really will achieve no effective end, no real definition and no form places Australian importers and Australian businesses at risk of illegal behaviour without any real benefit to Australia and without doing anything about the problems related to illegal logging.

I have spent my time expressing the concerns about this bill. I thoroughly support the coalition's amendment, without which there is no way that I could support this legislation in the House today.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Illegal Logging Prohibition Bill 2011, a very important piece of legislation which we are debating today. This bill will seek to prohibit the importation and sale of all timber products which contain illegally logged timber, implement due diligence requirements for importers, ensure that there is a consistent definition of legally logged products on sale in Australia and establish enforcement powers and associated penalties for noncompliance with regulations. Illegal logging poses a significant challenge to the goal of sustainable management of the world's forests. Out of the approximately $4 billion of total timber products that Australia imports annually, the Department of Agriculture, Fisheries and Forestry estimates that about $400 million or 10 per cent of imported forest products are at risk of being sourced from illegal logging projects.

The OECD, the Organisation for Economic Cooperation and Development, estimates that in some developing countries the rate of illegal logging can be as high as 70 per cent. In places such as the Amazon River and Madagascar, there is global concern that we may see the destruction of tropical rainforests in these environmentally sensitive areas.

Every member of this House wants to ensure that we do what we can to protect the environment. We must recognise, however, that there are substantial trade-offs involved between, on the one hand, the protection of global forestry and, on the other, the employment prospects and quality of life concerns in developing countries. It is important for this House to constantly keep in mind on decisions made today their ramifications on the future global environment and future generations. But we must also not ignore the fact that there are hundreds of millions of impoverished people in countries around the world, many millions of whom undertake illegal logging just so they can live. This is not a desirable situation, but it is a situation that we must all accept.

It is therefore paramount that any move to address illegal logging in foreign countries is fully considered by the parliament, that all possible regulations be scrutinised by the parliament and not just by departmental bureaucrats. I am not confident that this bill has been scrutinised as thoroughly as possible and, as the member for Forrest outlined, the government followed a flawed process to develop this bill. They did not consult widely and we do not know what the actual regulations will be. Therefore, I do not support this bill in its current form.

The coalition will seek to move an amendment to defer the commencement date of the legislation such that the regulations imposed on the importation of timber products can be appropriately put into practice by local industry. My main concern with this bill is in its timing and the rushing through of burdensome regulations without properly consulting with all stakeholders, including foreign and local industry and other trade partners. It is quite concerning to me that the three recommendations of the trade subcommittee's majority report essentially contradict each other, and I will explain why.

The first recommendation urges that the government:

… continues to consult closely with the Governments of Canada, Indonesia, Malaysia, New Zealand and Papua New Guinea and other relevant stakeholders on implementation of the bill and the development of subordinate legislation.

The second recommendation urged the government to:

… facilitate Malaysia and Papua New Guinea’s representation on the Illegal Logging Working Group convened by the Department of Agriculture, Fisheries and Forestry.

These two recommendations are extremely important to the ultimate consequences of any regulations. The third recommendation states:

… that the Illegal Logging Prohibition Bill 2011 be passed.

There is no guarantee that recommendations 1 and 2 will be followed, so to me to recommend the passage of this bill seems disingenuous. This is why, in the coalition's minority report, we agreed with the first and second recommendations, but further proposed:

…that the Bill not be passed until the draft subordinate legislation has been finalised and has been the subject of extensive community … consultation—

and that the second reading debate be delayed.

The coalition has been very open about its concerns, with the Leader of the Opposition writing to the Prime Minister on 15 March 2012 requesting the government defer the onset of the legislation to ensure that the regulations can be further scrutinised through the committee process.

This Gillard government is notorious for its ability to alienate foreign countries, and the Labor government is doing so yet again. I am not surprised that comprehensive consultation has not occurred, because the responsible minister for this bill is none other than Senator Ludwig. In his capacity as Minister for Agriculture, Fisheries and Forestry, Senator Ludwig ignored the advice from his own department and ignored the issues in Australia's live animal exports industry and subsequently risked Australia's very important bilateral trade relationship with Indonesia when he, in an ill-thought-through knee-jerk reaction, imposed an immediate ban on all live animal exports to that country. That blunder by Senator Ludwig devastated the industry and cost the government millions of dollars. I would loathe for that situation to happen again, where the government does not consult properly leading to regrettable unintended consequences.

Today's bill threatens to harm our bilateral trade relationships with not just Indonesia but also Canada, Papua New Guinea and Malaysia, among many others. In their submissions to the Joint Standing Committee on Foreign Affairs, Defence and Trade's inquiry into this legislation, these countries were very clear. The Indonesian government's submission expressly said:

The implementation of the Bill is … likely to undermine the development of trade between Indonesia and Australia based on our respective mutual interests.

Indonesia noted the importance of forestry and the forest sector, and noted that the industry employs close to:

… four million Indonesians often in rural areas where other forms of employment do not exist.

Clearly Indonesia is willing to fight on this issue because it affects so many of its citizens. If Australia believed that another country was planning to impose deleterious unilateral trade restrictions on our exports, we would fight just as strongly.

Malaysia advised the committee that while they understand:

… that the objective of the Bill is laudable, Malaysia would like to see that the implementation of the Bill will not in any way hamper the good bilateral trade relationship particularly in timber products.

The Canadian government's submission warned that any third-party certification scheme and the reliance on strict chain-of-custody certification could lead to a 'barrier to trade' for exporters of timber products.

These are some of our most important trading partners. Indonesia is certainly Australia's largest neighbour and the single most important export market for our wheat and beef industries. We do not want to harm this important bilateral trade relationship any more than has already been achieved by the Gillard Labor government. The concern I have is that this unilateral effort and blanket policy will damage our bilateral relationships. As the member for Curtin mentioned earlier this morning, New Zealand, in their submission, noted:

The implementation of the Bill has the potential to have a significant negative impact on New Zealand's forestry industry: an industry almost entirely based on privately-owned plantation forests that are established specifically to be harvested. Australia is our second largest market for forestry products and imported NZ$824 million of these products in the year to December 2010.

As Judith Sloan commented in an article in the Australian on 15 May 2012 the point of trade policy, insofar as it actually relates to actual trade policy, should be used to promote international trade, and should not be used 'to pursue other objectives, such as environmental aims'.

In the case of New Zealand, we could be following a policy of bilateral engagement so that their concerns are acknowledged and respected. Instead, this prescriptive legislation has the possibility to damage our relationship with New Zealand and ultimately impose unnecessary costs on low-risk importers and low-risk countries.

We can look to examples such as the FLEGT—Forest Law Enforcement, Governance and Trade—Action Plan in the European Union. Countries wishing to export timber to the European Union enter into and negotiate processes and standards through bilateral voluntary partnership agreements. This ensures that only legally produced timber arrives into the European Union without being overly prescriptive, and to date six countries are implementing systems agreed to in their VPAs, another six countries are negotiating their VPAs, and approximately 15 countries from all corners of the globe have expressed interest with the European Union.

If you want to talk about real action, clearly the FLEGT Action Plan is achieving some success. If this government is worried about illegal logging in Indonesia, they should look at the voluntary partner agreement that Indonesia has already concluded with the European Union. It was one the first countries in the world to be involved with the FLEGT Action Plan process.

The coalition went to the 2010 election with a clear policy of real action for the prevention of illegal logging because we understand that illegal logging is a significant challenge to the global environment. However, we believe in deferring the time frame in which illegal logging measures will be fully rolled out to allow industry to adapt to any new measures. The coalition believes that all impacted stakeholders should be consulted closely in the drafting of any legislation and regulations, which to date is still a major concern.

Therefore, coalition support for this bill is contingent on acceptance by the government of our amendment to defer the onset of the legislation until 1 July 2013, with regulations not taking effect until 2015. I urge the government to address my concerns and those of the coalition and support our amendments.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on the Illegal Logging Prohibition Bill 2011. The stated aim of this bill is to reduce the harmful impacts of illegal logging by restricting the importation and sale of illegally logged timber products in Australia. As ever with legislation proposed by this government, it is one thing to ask whether the objective is a desirable one; it is quite another to ask whether the method of achieving the objective has been well thought through and carefully planned. This bill has a worthy title but it is dangerously lacking in detail about key aspects of implementation of the measures in the bill and as a consequence many parties in the timber industry, including people and companies in our major trading partner countries, will be left unsure about their legal obligations and unsure what they are required to do to comply with those obligations.

In the time available to me today I would like to make three points in relation to this bill: first, that the coalition is opposed to illegal logging and supports effective measures to prevent it; second, because key aspects of the proposed regulatory regime for illegal logging are not set out in this bill but instead will be left to the regulations, this is not a bill in a form which should be supported by this parliament at this time; and, thirdly, the government's woeful mishandling of this bill continues to damage our international trade relationships.

Let me turn firstly to the proposition that the coalition certainly supports effective measures to prevent illegal logging. We join with all reasonable people in believing that illegal logging is a significant challenge to the goal of sustainably managing the world's forests and that it damages both the environment and trade by legitimate businesses in timber based markets. It is a large market internationally. The World Bank estimates that illegal logging generates revenues of some US$10 billion to US$15 billion a year.

This was why in 2010 the coalition gave a commitment that we would legislate to make it an offence to import any timber product which had not been verified as being legally harvested. So the dispute here is not one about the question of principle; it is about the implementation as reflected in two critical conditions that we attached to the commitment we made in 2010. Firstly, we said that a transition period of two years would be provided to allow industry to adapt to the new measures and that the coalition would ensure that all impacted stakeholders were consulted in the drafting of the legislation and the regulations and other related measures. In the typically chaotic and shambolic processes adopted by the Gillard government, neither of these critical requirements has been met and therefore the legislation in the form that it appears before the House today is not a form which we could support.

I want to turn to the second issue which is of acute concern: that key aspects of the regulatory regime are not yet before the House. They are not contained in this bill; instead, we are told, they will be left to the regulations. The explanatory memorandum says that the bill:

... provides a high-level legislative framework to implement the government's policy to combat illegal logging.

It goes on to say that there will be subordinate legislative instruments to realise the government's policy objective. What is left to be dealt with in the regulations is extremely broad. It includes which timber products are to be regulated. It includes what will be the due diligence requirements that citizens and companies must meet if they are to mitigate the risk of being subject to civil or criminal penalties for importing or processing illegally logged timber. In other words, absolutely fundamental aspects of the regime are not dealt with in the bill and will be solely a matter for regulation.

This is very, very troubling, particularly when you understand the legislative scheme that is laid out here, the core of which is section 8 of the bill, which establishes an offence for importing a thing which 'is made from, or includes' illegally logged timber. If you commit that offence, you will be liable for imprisonment of up to five years, so the stakes are very, very high for citizens seeking to work out what they need to do to comply with the law. The definition of illegally logged timber is timber 'harvested in contravention of laws in force in the place, whether or not in Australia, where the timber was harvested'.

What this means, on the basis of the legislation in front of the House today, if passed into law, is that everybody in Australia who is involved in the business of selling furniture, knick-knacks and souvenirs or garden implements—everybody in that category—will be at risk of finding themselves going to jail for five years because they happened not to keep up with the change in the law in Indonesia, Burma, Malaysia or any other country around the world from which they happen to have imported products. I emphasise 'products', not 'timber', because they might very well be products which are primarily made up of other materials but happen to include some timber. On the definition, on the wording of section 8, on the face of this legislation, anybody in that position is potentially at risk of going to jail for five years in circumstances where they really have very little prospect of finding out whether or not the timber which is contained in the product they have imported is in fact in breach of the law in the country where it was harvested.

We are assured that there will be regulations which will make this all much clearer, but the effect of the way the bill is drafted and the scheme that the government is proposing is that the parliament today is being asked to approve a law which will have the effect that I have just described, which will put people in the business of importing products which happen to contain any timber at risk of going to jail for five years. This is a very troubling case of the full apparatus of state coercive power being applied in a way which could very easily trap people who have made an innocent mistake.

This piece of legislation runs for 61 pages. Between pages 7 and 14 the key offences are set out, along with the statement of broad principle that the parties will be required to carry out due diligence to protect themselves against committing these offences. But of course the bill does not tell us—and, when the legislation is passed in this form and takes effect, the legislation will not tell us—what you need to do to meet those due diligence requirements. You can read the bill from cover to cover and it does not tell you what you need to do to take advantage of the due diligence defence.

But what we do get between pages 17 and 61 of this bill is provision after provision after provision establishing all of the detailed obligations, provisions and powers that the government and its apparatus of inspectors will now have. There are monitoring powers. There will be new inspectors to be appointed. These inspectors will have powers under section 22 to enter premises to determine whether there has been compliance. I point out that those powers exist without the inspector being required to form any belief or suspicion as to noncompliance. The inspector simply has the power under section 22 to enter if he or she gets a warrant or if he or she gets the permission of the occupier of the premises. The pages and pages of powers which are granted to these inspectors include the power to operate electronic equipment on the premises that they enter and the power to secure evidential material, and all of this is just in division 2, which deals with monitoring. Then we have division 3, which deals with investigation, where these powers are not merely repeated but increased.

And, of course, there is another little provision in this bill that is of the kind that this government is very fond of, and that is a strict liability provision. That is to say that under section 74 it is clear that in prosecuting for a breach of this act the government, the prosecutor, does not need to demonstrate that the person before the court had any particular state of mind. You might have made an innocent mistake. That will not help you if you are facing a strict liability provision, and that is made clear under section 74.

All of this would be troubling enough if the regulations were to come into effect on the same date as the act takes effect and, of course, if we had the regulations in front of us to know what they say and to know what the due diligence defence actually involves, but that is not the case. Extraordinarily enough, these regulations will not come into effect until at least six months after the bill has taken effect and potentially longer. That will create enormous uncertainty for Australian citizens, for Australian businesses and for international businesses in knowing what you have to do to comply with this draconian piece of Australian legislation.

This was a point well made in a submission by Mr Thorry Gunnersen, who had this to say:

The Bill creates a crime without adequately defining that crime: There is no list of products to be regulated, the definition of "illegal logging" is broad and the regulations do not yet exist.

And here is something I found quite remarkable in the joint committee inquiry report. Even Greenpeace thought these arrangements were unsatisfactory. Even Greenpeace, according to the committee report, had this to say:

… 'too much information and detail is being left to the regulations resulting in uncertainty for business (and countries).'

When Greenpeace is saying that this is a set of regulatory provisions which is putting businesses at risk, which is putting commerce at risk, which is leaving citizens unsure of how to comply with their regulatory obligations, you know there is a serious problem with this set of provisions.

All of this, of course, is predicated on the government's ludicrous claim that it can get all this sorted out and get the regulations in place in six months. Anybody who has watched this government operate would be deeply sceptical of this claim.

Let's just go through how this is going to work, and it is made very clear in the report of the Senate inquiry. First of all, the provisions in the bill establishing a criminal offence to import timber which has been illegally logged will take effect from the date of royal assent. Secondly, at that point there will be no detail as to how the due diligence defence operates; in fact, it will not exist. Therefore, as a matter of law, if it can be shown that you have 'recklessly imported illegal timber'—that is to say, if you are aware of a substantial risk that the thing is made from or includes illegally logged timber—you are up for jail time of up to five years. So if you import a chair which happens to have wooden feet and it turns out that these wooden feet come from timber which has been illegally logged then you are at risk of going to jail for five years.

The bureaucrats, when they appeared before the Senate inquiry, grandly conceded that when the regulations are finally available there may 'be a subset that may exclude those sorts of products'. Every citizen can be relieved at this gracious concession from government! The reality is that the bill before the House today is creating a regime under which anybody who is in business in Australia importing any material which contains any wood at all ought to be terrified, because if that wood happens to have been logged in breach of the law of another country—something which in practical terms they have no way of finding out—they could find a government inspector knocking at their door and dragging away the product for analysis, a few weeks later they could find themselves charged, and a few months after that they could find themselves locked up in jail for five years. These are disturbingly draconian provisions, and, without the coalition's amendment that the onset of the legislation and the regulations not occur before 1 July 2015, we cannot support them.

The third point I want to make briefly, which has been aptly and ably pointed out by many of my colleagues, is that the government has comprehensively mishandled its relationship on this legislation with major trading partners, including countries like Indonesia and Malaysia, and countries like Canada and Papua New Guinea have made the point that there might well need to be a challenge under World Trade Organization procedures to what is in substance a unilateral trade measure.

This was terrible execution, very badly thought through. The objective we can support in principle, but this is a terrible bill in the way it is implemented. (Time expired)

Craig Emerson (Rankin, Australian Labor Party, Minister for Trade and Competitiveness) Share this | Link to this | Hansard source

The member for Bradfield has joined in the passing parade of coalition MPs who have alleged, based in part on a story in the Financial Review,that the relationship between Australia and Indonesia has been severely strained and damaged over this matter. I want to take this opportunity to set the record straight on that.

In terms of heritage, I have had a long association with the logging industry and also with conservation issues, going back to the days of Bob Hawke and Paul Keating. I was involved during the Tasmanian forest issue—a very vexed issue at that time—the issue of the wet tropics of north Queensland and, subsequently, as the director-general of the environment department, the logging issue in Queensland. I can say, against that background, that the Illegal Logging Prohibition Bill will support trade in legitimate forestry products. The government is developing the policy in accordance with our international obligations under the World Trade Organization—of course we would do that. The policy will be applied to imports from all countries equally and will also apply to illegally obtained Australian timber. In that sense it is nondiscriminatory. The policy makes a distinction between illegal and legal timber rather than between the countries of origin of the timber.

The bill will prevent the importation and sale of illegally logged timber and timber products in Australia. It is designed to support similar measures implemented by the European Union and the United States. So, far from it being a socialist plot and draconian legislation, this is part of a global effort to deal with the problem of illegal logging. It is part of the broader international effort to boost trade in legally logged timber and address the serious economic, social and environmental impacts of illegal logging.

The Indonesian government and other governments in the region have expressed their support for the eradication of the illegally logged timber trade, and obviously we are at one on that. There was extensive consultation with our counterparts in Indonesia, and that will continue. We have made the commitment in personal meetings—Senator Ludwig with his counterparts and I with my counterpart in Indonesia, the trade minister, Gita Wirjawan—that we will consult very closely on the development of the regulations. That is a source of great reassurance to them.

During this debate, the Deputy Leader of the Opposition gleefully read from a piece that was written in the Australian Financial Review titled 'Indonesia fed up with Canberra "dysfunction"'. The quoting from that piece has led me to come into the chamber to clarify the true situation. I would have let the water flow under the bridge, as we have done, having sought ourselves a clarification or retraction in respect of that particular piece. But, given that it has been invoked in the debate to seek to influence the way people vote in this chamber on that matter, I think everyone in this chamber and outside listening deserves a clarification. That clarification is provided in two documents. One is a press release from Gita Wirjawan, my counterpart, the trade minister of Indonesia. I will read some of that. It says:

Related to a news article published today by the Australian Financial Review titled 'Indonesia fed up with Canberra 'dysfunction'' the Ministry of Trade, Republic of Indonesia, would like to clarify that the statement in the news report quoting Indonesian Trade Minister Gita Wirjawan in the published article was not sourced, originated from the minister, nor the ministry. The ministry was never contacted with regard to the issue. There was never an interview that took place with the Indonesian Trade Minister in relation to the issue with the Australian Financial Review. The Ministry of Trade has communicated with the Australian Ambassador in Jakarta in clarifying factual information that no such comment has ever taken place in view of the Australian government in Canberra.

This was followed up by correspondence from the trade minister, Gita Wirjawan, to Michael Stutchbury, the editor of the Financial Review. I sought, on behalf of Gita Wirjawan, a retraction. I was told there would be no retraction, that they stood by their story. The letter to Michael Stutchbury about the article written by John Kerin includes the following:

I would like to raise your attention to a recent news article published by the Australian Financial Review entitled Indonesia fed up with Canberra 'dysfunction', published in its 6 March 2012 print edition. For your kind information, I was subsequently informed that the lead author of the above article, John Kerin, has interviewed sources in the ministry but insisted on keeping them confidential. Nonetheless, I believe the article along with my photograph as shown is slander and misleading to the readers. We would highly appreciate a retraction of the article.

It could not be clearer. You have the Indonesian trade minister protesting strongly in the Financial Review. As I said, we could get neither a clarification nor a retraction initiated not by this government but by the government of Indonesia. That is a decision that the Financial Review made. But to have that piece brought into this chamber and used as evidence against the illegal logging bill is obviously highly misleading. I am not saying it was wilfully misleading. Obviously, if the Deputy Leader of the Opposition had bothered to contact the Indonesian embassy in Australia or the Australian embassy in Indonesia, the Deputy Leader of the Opposition would have known that the trade minister of Indonesia was completely put out by this, that he had given no interview and that he was very upset that his photograph was in this story as if to give the impression that such an interview took place.

Speaker after speaker on the coalition side said how important it is that we must not do anything to damage the relationship with Indonesia. In this chamber yesterday every one of them voted in favour of a policy towing back boats into Indonesian waters with no agreement from Indonesia. It has been made abundantly clear time and time again that the Indonesian government would not accept such a policy. They have said it publicly; they have said it privately. So let us forget the cant hypocrisy from the coalition. The coalition talks about the importance of maintaining a good relationship with Indonesia, which this government has, and then walks into the chamber, every one of them, to vote for a policy that would destroy the relationship between the government of Australia and the government of Indonesia.

We want some truth to come out in these deliberations in this parliament. There has been a highly misleading article and an attempt by the trade minister himself personally to get a retraction. The Deputy Leader of the Opposition came into this chamber and read it out gleefully saying that it is a wonderful thing from their point of view that there is a bad relationship between this government and the Indonesian government. There is not; there is an excellent relationship, and we will continue to consult on the regulations in the bill. That is the undertaking we have given and that is the undertaking that has been accepted by the government of Indonesia. I would think that there might be an opportunity at some stage for the Deputy Leader of the Opposition herself to recant and to say that she is sorry for the embarrassment she has caused by quoting from an article for which the Indonesian trade minister unsuccessfully sought a retraction from the Australian Financial Review.

Sid Sidebottom (Braddon, Australian Labor Party, Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I thank all the honourable members for their contributions to this important debate. I wish to start by addressing the comments of those opposite. They relied heavily on an article published in the Financial Review earlier this year to support a perception that Indonesia is aggrieved at the level of consultation on this bill. As the Minister for Trade has already reported in this House, the Indonesian trade minister in fact issued a press release dismissing the veracity of the quotes attributed to him. The press release went further to say that neither he nor the Ministry of Trade were contacted by the journalist writing the article. It needs to be clear that the comments are inaccurate. The Gillard government would take the counsel of the Liberals more seriously if their foreign affairs spokesperson had not been characterised as both sleep inducing and arrogant by the Indonesians themselves. They are all over the shop on this issue.

The member for Flinders will support the legislation if it is delayed. The member for Mayo would like the bill tremendously amended but will support its passage if the member for Flinders' delays are agreed to by the parliament. At least the member for Forrest had the gumption to tell the parliament that the bill will implement their policy to provide a two-year window for the development and implementation of regulations. This bill will implement their policy. But it seems they are a divided lot over there, sending mixed messages about their commitment to this issue. I would like to make it clear what their policy is.

We will require Australian timber importers and domestic processing mills to undertake a process of due diligence to verify the legal origins of the timber product and to disclose species, country of harvest and any certification.

So they need to explain in this House and outside this House why they have abandoned this policy. The member for Lyne, who has not spoken today, has made representations on behalf of furniture manufacturers. The contribution of the Australian furniture association and other Australian business groups are taken seriously by the Gillard government. The Illegal Logging Prohibition Bill imposes strict penalties on the importation and processing of illegally harvested timber and timber products. I understand the department has distributed a list of products for consultation purposes to its illegal logging working group. Since the department distributed that list, there has been constructive feedback from the members of the group to the department and to the minister's office. Furniture, including furniture manufactured from particle board, will be regulated, as will pulp and paper.

The bill contains significant penalties. Individuals convicted under one of the two main offences in this bill can face up to five years in prison and/or a fine of $55,000, or $275,000 for a corporation. Importers and processors will be required to complete an annual statement of compliance and the department will audit compliance on a targeted risk basis and conduct random audits. While there will not be 'illegal timber enforcement officers' at the border, Australian law enforcement authorities frequently cooperate with governments in the region and beyond to combat serious international crime. The government is confident that this bill and the efforts of Australian importers will contribute substantially to those activities. The Illegal Logging Prohibition Bill 2011 represents a major step by Australia to support the legal trade of timber products. The bill fulfils the government's commitment to restrict the trade in illegally harvested timber and timber products.

On 22 March 2012, the Joint Standing Committee on Foreign Affairs, Defence and Trade held a third inquiry relating to possible international implications of the bill. The joint standing committee came to the same conclusion as the Senate Rural and Regional Affairs and Transport Legislation Committee inquiry, and that was that this bill be passed.

The joint committee report recommended that the government continue to consult with the governments of Canada, Indonesia, Malaysia, New Zealand and Papua New Guinea, which the government is already doing. The government has agreed to all of its recommendations and is busy implementing them. Regional workshops have been held in Port Moresby, Jakarta, Kuala Lumpur and Wellington. The Department of Agriculture, Fisheries and Forestry has held a workshop via web link with the government of Canada and their key industry representatives.

The joint committee report recommends that the government facilitates Malaysia and Papua New Guinea's representation on the Illegal Logging Stakeholder Working Group. The government has done just that. The government does not pretend that there are not some sensitivities amongst our trading partners. Can I say that Malaysian, Canadian, New Zealand, Papua New Guinean and Indonesian leaders each agreed with their APEC counterparts to 'work to implement appropriate measures to prohibit trade in illegally harvested forest products and undertake additional activities in APEC to combat illegal logging and associated trade'. We will continue that work and commitment.

There are roughly 50 members of the government's Illegal Logging Working Group. The government has consulted widely on this matter and will continue to do so, as we committed to do. Preliminary drafts of two regulations have been distributed for comment to these key trading partners and other members of a stakeholder working group. These draft regulations are also available on the department's website. The distribution of these draft documents demonstrates that the claims of those opposite that the government is not consulting are hollow.

Australia commends the commitment of trading partners to protect their forests by combating illegal logging and the associated trade. Of note is the work being undertaken in Indonesia on their Timber Legality Assurance System, known as SVLK, and in Malaysia on the Malaysian Timber Certification Scheme. Canada, the US, New Zealand, Indonesia, the EU and Malaysia have expressed their support for the bill's overall objectives to reduce the harmful environmental, social and economic impact of illegal logging.

Support for the bill has come from non-government organisations, such as the Uniting Church, Greenpeace, Transparency International and World Vision. The government has also received additional support from a number of timber product importing businesses including Bunnings, Kimberly-Clark and IKEA.

The government has worked towards alignment with measures being implemented by the US and EU to minimise the impact of the legislation on exporting businesses. This bill aligns Australia's efforts to combat illegal logging with international initiatives, including legislation already implemented in the United States and developments in the European Union. In May 2008, the United States made amendments to the Lacey Act—its act that regulates the trade of flora and fauna—to include the illegal trade of plants and plant products, including timber, to combat illegal logging. The US has included a requirement for a declaration at the border, similar to measures being implemented within Australia. The European Union Timber Regulation requires importers to undertake due diligence when first placing timber or timber products on the market. The European Commission is scheduled to apply its Timber Regulation in March 2013. Individual member states will be responsible for developing penalties under the EU regulations.

An APEC Experts Group on Illegal Logging and Associated Trade has recently been established, pursuant to a proposal from Chile, Indonesia and the United States, supported by Australia. Australia participated in meetings in February and May 2012. Australia also presented details of its proposed legislation to the Committee on Trade and Environment of the World Trade Organization on 14 November 2011.

The time to act on illegal logging is now, as committed to by both parties at the last election and before—not in three years time but now. The Illegal Logging Prohibition Bill 2011 delivers on the government's commitment to restrict the importation and sale of illegally logged timber in Australia.

The bill is consistent with Australia's international trade obligations under the World Trade Organization and relevant free trade agreements. It provides for even-handed treatment of suppliers of timber irrespective of their nationality. The bill will remove unfair competition posed by illegally logged timber for Australia's domestic timber producers and suppliers, establishing an even economic playing field for the purchase and sale of legally logged timber products.

I would like to conclude by citing the latest media release from the CFMEU, whose members and their jobs rely so much on the timber and fibre industry of Australia:

The amendment to the Illegal Logging Prohibition Bill tabled by the Coalition, if accepted by Parliament, could cost thousands of jobs in vulnerable timber communities, according to the CFMEU.

"Make no mistake about it, this amendment would cost Australian jobs, hurt Australian families and kill off Australian timber communities," CFMEU National Secretary Michael O'Connor said today.

"It is a clear case of the Coalition succumbing to pressure from those who benefit from illegal logging.

"Their amendment would delay the ban on illegal logging imports from coming into effect for at least two to three years.

"Workers in the timber and wood products manufacturing industry simply cannot afford such a delay. They would rightly view support for this amendment as a kick in the guts at a time when timber and manufacturing workers desperately need those in Canberra to stand up for them.

"Wood products represent the second largest sector in Australia's manufacturing industry and cheap, illegally-sourced imported products are strangling it.

"This amendment takes the interests of illegal loggers and their criminal syndicates overseas - as well as unscrupulous importers of timber and timber product —and places them above the interests of Australian workers.

"The Coalition needs to be clear: Do they want to look after the livelihoods of Australian workers who are getting unfairly undercut or not?

"Any supporters of this amendment should, quite frankly, be ashamed of themselves."

It was our commitment to introduce this legislation. It was the commitment of those opposite to introduce this legislation. Their amendment is now aimed at delaying it.

Question agreed to.

Bill read a second time.