Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

The committee is considering the Illegal Logging Prohibition Bill 2012. The question is that amendment (1) on sheet 7202 be agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Just before question time, the minister was indicating that he would not be supporting the inclusion of sustainability in the objects clause.

I am very disappointed in that. The government was being consistent totally with what the Labor Party said it would do—and that was to provide for a transition to sustainability ‘in the long term trade in timber and wood products from sustainably managed forests’—and now the government has abandoned that.

I was very disappointed to hear Senator Colbeck saying that the inclusion of sustainability was somehow an attack on the logging industry. The logging industry are saying all the time that what they do is sustainable. It is questionable, of course, and we would argue that it is not sustainable. But, nevertheless, they would say that their principle is to behave in a sustainable manner and to manage forests in a sustainable way. However, I accept the fact that both the coalition and the government are refusing to include sustainability in this bill about preventing illegal logging.

But before we move on I ask the government: given that it is the government’s intention, as it says, to be able to transition within five years, and to meet the government’s policy objective, can the minister explain to me how that is going to happen if sustainability is not in the objects clause?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

I thank Senator Milne for her question and her comments. At the outset I indicate to the chamber that we are clearly of the view that this legislation, as drafted, does in fact comply with both our 2007 and our 2010 election commitments. I will quote them.

Labor will encourage sourcing of forest products from sustainable forest practices and seek to ban the sale of illegally logged timber imports.

The bill will send the right message to sophisticated criminal networks. It delivers on our 2007 and 2010 election commitments, and as such we will not be supporting the Greens amendment, as indicated.

The TEMPORARY CHAIRMAN: The question is that amendment (1) on sheet 7202 be agreed to.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move Greens amendment (4) on sheet 7202, standing in my name:

(4) Clause 7, page 5 (line 5), at the end of the definition of illegally logged, add "including, but not limited to, laws about the following matters:

  (a) rights to harvest timber within legally gazetted boundaries;

  (b) amounts payable in relation to rights to harvest and timber, including duties related to the harvest of timber;

  (c) harvesting timber, including environmental and forest legislation including forest management and biodiversity conservation where it is directly related to harvesting timber;

  (d) legal rights of third parties in relation to land use and tenure that are affected by harvesting timber;

  (e) customs and other tax duties in relation to the timber product sector;

  (f) trade in timber products.".

This is a very important aspect of the bill. It goes to the definition of ‘illegal logging’. If this is going to be an effective piece of legislation, our definition of ‘illegal logging’ has to be consistent with that of other people around the world; otherwise, we are just going to end up with leakage. So, if the EU says a product is not suitable for their market because they regard it as being illegally logged, and we on the other hand say, ‘No, actually our definition is different,’ we are then going to have material sent here that would not comply in the EU.

The current definition lacks clarity and certainty. It simply says:

illegally logged, in relation to timber, means harvested in contravention of laws in force in the place (whether or not in Australia) where the timber was harvested.

This is quite different; it is very vague. The EU has much more specific definitional requirements. The Greens amendment seeks to ensure that the definition of ‘illegally logged’ is consistent with the EU definition. That is why at the end of the definition of ‘illegally logged’ we want to include—and it would include but not be limited to—laws about the following matters: rights to harvest timber within legally gazetted boundaries; amounts payable in relation to rights to harvesting timber, including duties relating to the harvest of the timber; harvesting timber, including environmental and forest legislation including forest management and biodiversity conservation where it is directly related to harvesting timber; legal rights of third parties in relation to land use and tenure that are affected by harvesting timber; customs and other tax duties in relation to the timber product sector; and trade in timber products. That is exactly consistent with the EU.

Also, the legal rights of third parties in relation to land use and tenure are critical because we find in many of the areas where timber is being illegally logged the rights of indigenous people, in particular, are abused as licences are granted over areas to which they have actual traditional rights. They are thrown off the land and the timber is harvested for the profit of the company that has the licence, whether or not that has been legally granted.

So, to just say that ‘illegally logged’ means ‘harvested in contravention of laws in force in the place’ is way too vague. I reject the government’s reasoning here: that by becoming more prescriptive in the definition you might result in some elements of applicable legislation being overlooked or excluded through omission. That is one way of looking at it. On the other hand, when you go so vague it is going to be difficult to prove that something is illegally logged. So, I ask why the minister did not make it consistent with the EU definition. The EU have had this definition for some time. What is wrong with the EU definition and why would we not have adopted a definition consistent with it?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

The government did go through a process of considering all representations that were made around the question of a stricter definition. I understand there are a number of systems in place around the world, and the EU is one, but there are others. After consultation, particularly through the Senate committees, we believe we have a very clear definition in the bill. It says:

illegally logged, in relation to timber, means harvested in contravention of laws in force in the place (whether or not in Australia) where the timber was harvested.

The definition was supported by the two Senate committees that considered the bill, who noted:

… a prescriptive definition of illegally logged may have unintended consequences, or may result in some elements of applicable legislation being overlooked or excluded through omission.

The government is of the view that we have the balance right, and we will not be able to support the Greens amendments.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

By accepting such a vague definition we are going to end up with no cases actually ever able to be proven, because the laws in force in the place where the timber was harvested will be determined entirely by the level of corruption, or otherwise, in the administration concerned. It is as simple as that.

Are you going to tell me that in certain areas—in certain parts of Indonesia, for example—people are not going to hand out licences which will be consistent with the law of the place but nevertheless will be based on a corrupt regime? I still have not had an answer, and perhaps the minister can inform me why we would not go with the EU definition. What is wrong with going with a more specific definition that actually lays it out?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

The definition is a clear definition within the bill. In relation to timber, it means harvested in contravention of the laws in force in the place, whether or not in Australia, where the timber was harvested. This has been through two Senate committee inquiries that considered the bill and noted—and this is the challenge for us all—that:

… a prescriptive definition of illegally logged may have unintended consequences, or may result in some elements of applicable legislation being overlooked or excluded through omission.

So you can end up being far too prescriptive, which means that you find gaps, omissions and holes and you then have to backfill those and you end up with a very long, convoluted definition.

My view—and I think the Senate committee reports hold the same view—is that a clear, simple definition covers all of the issues that we have referred to. Over the next two years we will develop the regulations. Parts of the drafts are already out for discussion with the various stakeholders to ensure that the circumstances in which you describe do not occur. No-one wants to see illegally logged timber from any country get into this country. It is imperative that we have a system in place—the due diligence process—that ensures that.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would just ask the minister to tell me what is wrong with the EU definition.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

That is a matter for the EU. I am sure when you are in parliament with the EU you can ask them that question. What I am keen on doing is ensuring that the legislation for this country is relevant, simple, and concise and meets the expectations of stakeholders and is workable.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I hope that, when it is virtually impossible to bring a case, this will be reviewed. I have yet to see from the government or anyone else what is wrong with the EU definition. Nobody has actually been able to come up with that. They have been working with this for a while. However, I hear you saying that you are not going to accept a more defined and prescribed definition of illegally logged—and so be it.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I indicate that the opposition will not be supporting this particular amendment. It gives a clear demonstration of the problem that the government has got itself into with this bill, whereby the regulations are not fully available yet and so nobody really understands the fundamentals of how a breach of the act might occur. Hence we see the Greens again trying to expand the operations of the legislation versus what might occur in the regulations—which the minister has said are supposed to be available shortly and some of which are already available.

The fundamental difference between the European system, the FLEGT system, and what is being proposed here in Australia is that the European system is in fact a voluntary process, where countries make nation-to-nation arrangements that deal with the specifics of the relationships between the two countries. This is a catch-all piece of legislation that deals with everything in one hit. So there is a good reason to have a difference in the way that the definitions are put together in this context, because we are dealing with a number of pieces of legislation and a number of arrangements in a number of countries. For example, the land tenure issues in an individual country will be very different in one place to another place. In the EU circumstance, given that it is a voluntary process and those arrangements are dealt with under the umbrella of the FLEGT system on a nation-to-nation basis, there is a very good reason to have a process where you might be more specific in the way that you deal with it.

In this circumstance, the government is again reinforcing the reasons that the coalition is concerned about the way that this bill is being brought on. The fact is that we wanted the opportunity to be able to use the Senate process to scrutinise the regulations prior to the bill being enacted, so that we could make sure that these sorts of problems did not occur and we could cover off with them as part of the Senate process. Whether or not that occurs, I am not sure. I am not whether the minister is going to have them ready by 24 December—which was his commitment to Mr Abbott in the letter he wrote to him. I would hope that would be the case. One of the things that the coalition wanted to see was that the Senate had the opportunity to look at the regulations prior to the bill being enacted and the high-level effects coming into effect under the legislation. But, in this context, the opposition will not be supporting this particular amendment, amendment (4) on sheet 7202.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Greens amendments (3) and (9) to (18) on sheet 7202:

(3) Clause 7, page 4 (line 24), at the end of the definition of due diligence requirements, add:

  ; and (c) for supplying timber products—has the meaning given by section 18E.

(9) Clause 13, page 9 (line 12), before "A", insert "(1)".

(10) Clause 13, page 9 (after line 21), at the end of the clause, add:

  (2) The form of declaration prescribed by the regulations must require the person to include the following information:

     (a) the name of the person importing the timber product;

     (b) the name of the person who supplied the product to the person importing the product;

     (c) the botanical name and the common name for the timber used in the product;

     (d) the cost of the product to the person importing the product, in Australian dollars;

     (e) the country or countries of origin of the product;

     (f) the region or forest coupe, or any other information that identifies the site, where the timber for the product was logged;

     (g) details of the logging permit, logging approval or harvest concession in relation to the timber for the product, issued by the country or countries of origin;

     (h) the name and voyage number of the vessel on which the product is being imported;

     (i) the number of the shipping container in which the product is being imported;

     (j) any consignment identifier, bill of lading number or invoice number in relation to the product;

     (k) a description of the product;

     (l) the type of product being imported and the trade name, if any, of the product;

     (m) if the product is comprised of more than one kind of timber or is comprised of timber and one or more other materials—the kinds of timber and other materials that the product is comprised of;

     (n) the customs tariff classification to which the product belongs;

     (o) the quantity of product covered by the declaration;

     (p) the due diligence system, and any components of the system, in the country of origin used to verify that the timber for the product has not been illegally logged;

     (q) an assessment of the level of risk that the timber for the product has been illegally logged, as either a low, medium or high risk;

     (r) any other information prescribed by the regulations.

  (3) A declaration made by a person in accordance with this section must be published on the internet within 7 days of the Customs Minister receiving it.

(11) Clause 14, page 9 (lines 29 and 30), omit "may include requirements in relation to one or more of the following", substitute "must include requirements in relation to the following".

(12) Clause 14, page 10 (lines 1 to 9), omit paragraph (3)(a), substitute:

  (a) gathering information for the purposes of assessing that risk;

(13) Clause 14, page 10 (line 18), at the end of paragraph (3)(i), add ", including statements of compliance".

(14) Clause 14, page 10 (lines 20 to 29), omit subclauses (5) and (6), substitute:

  (5) The regulations must provide that evidence of compliance with the laws, rules or processes under laws, including certification schemes, in force in a State or Territory or another country may be taken into account as part of the evidence demonstrating compliance with due diligence requirements for importing regulated timber products.

(15) Clause 18, page 14 (lines 3 and 4), omit "may include requirements in relation to one or more of the following", substitute "must include requirements in relation to the following".

(16) Clause 18, page 14 (lines 5 to 13), omit paragraph (3)(a), substitute:

  (a) gathering information for the purposes of assessing that risk;

(17) Clause 18, page 14 (line 20), at the end of paragraph (3)(h), add ", including statements of compliance".

(18) Clause 18, page 14 (lines 22 to 29), omit subclauses (5) and (6), substitute:

  (5) The regulations must provide that evidence of compliance with the laws, rules or processes under laws, including certification schemes, in force in a State or Territory may be taken into account as part of the evidence demonstrating compliance with due diligence requirements for processing raw logs.

These amendments relate to due diligence and the declaration form that is required in relation to the import of timber in a determination of whether or not that timber has been illegally logged.

This is a critical provision as far as the Greens are concerned, because the current provisions relating to the declaration form are very unclear. When the officials from the Department of Agriculture, Fisheries and Forestry were in a working group meeting in August 2011 they proposed, without prejudice, a declaration form that was modelled on the Lacey Act.

It required information regarding the species and genus of the timber, the country of origin, the value of the import and other information critical to satisfying due diligence. But it is not clear what the declaration form in the current bill is going to be. It appears to be primarily a declaration of legality.

Whilst we support a declaration of legality, it is not clear what other information is going to be on that form. I am asking for the minister to be very specific about this level of information, because one of the very key things for the Greens is that you must be able to trace the timber in any timber product back to the coupe. If you cannot do that then you are never going to prove that it has been illegally logged. I make that point very strongly.

Most of the areas in the world from which you secure timber are going to have legal operations as well as illegal operations. Unless you can trace the actual timber back to the coupe, you might as well give up on this; it is just a piece of window dressing unless we can do that. The Greens are saying the form should include the following:

(a) the name of the person importing the timber product;

(b) the name of the person who supplied the product to the person importing the product;

(c) the botanical name and the common name for the timber used in the product;

(d) the cost of the product to the person importing the product, in Australian dollars;

(e) the country or countries of origin of the product;

And I say 'countries of origin' because timber is often logged in one country and sent to another country, where it is made into a product and then sold into a third country. So timber illegally logged in Indonesia could find its way through Singapore or into China and back into Australia as a piece of furniture or some other product. Unless you have the country or countries of origin, then it would be just a piece of furniture 'made in China' and the actual origin of the timber would not be known. The form should also include:

(f) the region or forest coupe, or any other information that identifies the site, where the timber for the product was logged;

As I indicated in my second reading speech, this is absolutely critical. I go back to 'forestry law 41' in Indonesia, which was a forestry law that protected forests. The mining industry in Australia got it overturned.

If you go down to the coupe level, that will tell you who has the licence to log. If it is illegal, that is one thing; but you also need to be able to know whether a deal was done, with local government or the national government or whatever, in order to give a licence to somebody. That would be consistent with the law but nevertheless would be illegal, because it was delivered in relation to bribery or because it actually sold off land that did not belong to the person involved in the first place. So you need to be able to go to the corruption as well as to the notion that it was illegal. They are the two things and that is why you have to be able to go back to the coupe.

The point is that with DNA testing, you can do this. One of the brilliant things about science now is that, if you go to the coupe level, you can actually do DNA testing. You can cut down a tree in the particular coupe and you can do the DNA testing. If it turns up in some piece of furniture, you can determine exactly where it came from, providing you do the original work in the first place. This is the issue for me. The form should also include:

(g) details of the logging permit, logging approval or harvest concession in relation to the timber for the product, issued by the country or countries of origin;

(h) the name and voyage number of the vessel on which the product is being imported;

(i) the number of the shipping container in which the product is being imported;

(j) any consignment identifier, …

(k) a description of the product;

(l) the type of product being imported and the trade name, …

(m) if the product is comprised of more than one kind of timber or is comprised of timber and one or more other materials—the kinds of timber and other materials that the product is comprised of;

(n) the customs tariff classification to which the product belongs;

(o) the quantity of product covered by the declaration;

(p) the due diligence system, and any components of the system, in the country of origin used to verify that the timber for the product has not been illegally logged;

(q) an assessment of the level of risk that the timber for the product has been illegally logged, as either a low, medium or high risk;

(r) any other information prescribed by the regulations.

That is the kind of brief you need if you are going to get serious about tracking products or illegal timber that comes into Australia. If you do not do that—and you just go with what appears we are going with, which is basically a certification system, just saying that due diligence could be satisfied by reliance on certification schemes or on the laws of the country in force at the time—then the standard being imposed on importers is a negligent standard. It requires that importers make informed decisions regarding the nature of the evidence that must be provided in order to reasonably assure legality. Allowing existing schemes to replace the obligations on importers, in my view, runs contrary to the bill.

So, from my point of view, we need to be very specific, and I would like the minister to stand up and tell us now: what is actually going to be on the declaration form? Will it go down to the forest coupe level? Will it have DNA identification? If no, why not?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

So as not to disappoint Senator Milne, I will be direct: it will not go down to the coupe level. Sometimes I think there are two debates going on. It is a due diligence process. What we want to ensure is, ultimately, that the industry is not so burdened by regulation that it cannot operate, even where it is positively seeking to import timber of any description from well-known sources. What we do want them to do, which is outlined in the bill, is to prohibit the importation of timber products—that is the first overarching thing we are doing by passing this bill. The second is allowing a process to run its course for the next two years, where the due diligence can be worked through with industry so as to achieve the outcome.

If you go to the second reading speech, the outcome is about the following:

Our own research and the work of the European Union indicate that the best way to minimise trade in illegally harvested product is to implement a due diligence framework. Importers and processors will be required to undertake a process of due diligence on those products to mitigate the risk that the timber has been illegally logged. The level of culpability for these products is negligence which differs from the standard subjective fault elements of intention, knowledge or recklessness. Negligence is an objective fault element which looks to the standard of care that a reasonable person would exercise …

It is important to ensure that the trade in timber products can continue and that the importers at the border—not those all the way down the supply chain—can provide a due diligence to the regulator to ensure that the timber is not illegally logged. There is also a compliance framework in place. There has to be a compliance framework so that we can then assess how it is running.

The third issue which I would bring to your attention is the system that you are suggesting is a prescriptive one which would, quite frankly, not work. It would mean that the burden on each importer to have all of that detail would effectively halt the trade. It is not the intention of this legislation to do that.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I would like to ask the minister if, under what he proposes, a piece of furniture comes into this country from the Congo, how would he know whether it was illegally logged or not?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Without naming or indicating countries, it is about the due diligence process. The importer will be required to undertake a due diligence to their satisfaction that it is not illegally logged timber. The compliance system in place will ensure whether or not the due diligence has been undertaken. The system is not new or novel. It works in a range of industries, and it works very effectively in a range of industries. It was one that the Senate committee looked at and adopted. It is one that I have been persuaded would operate fairly and effectively to ensure that we would do two things: we would minimise the risk of illegally logged timber entering Australia but still allow the trade to continue—that is, the trade in legally logged timber—without tying it up in that much red tape that it would prohibit the industry from operating.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Basically, you are saying that all an importer has to say is that, as far as they are concerned, they believe that it came from a legally logged coupe. Whether or not somebody bribed someone to give them a licence does not come into it. Even so, for example in the Karijini National Park in West Sumatra, we know that there is illegal logging going on. If you were an importer, how would you know otherwise if they say: 'Oh, no, it didn't come from there. It came from logging outside the park'? How is that importer going to know the difference?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Again, if you look at the way the legislation is constructed, it states:

Timber products, for which due diligence will be required, will be prescribed by regulations that will be developed … The government will use—

if you logically work through how due diligence works—

a number of inputs when finalising timber products to be prescribed by regulations including an economic assessment of the range of product types, value and volume of timber annually imported into Australia.

Importers of regulated timber products and processors of domestically grown raw logs will be required to undertake due diligence …

They will find that they have to comply with the framework on what they have to do to satisfy themselves that they have undertaken that due diligence. Undertaking that work will be based on a risk management approach. That risk management approach will assess various risks and take into account the issues that you have raised to ensure that the due diligence is well done, accurate and provides the regulator with sufficient information to also look at it. It will also be an area where the compliance program in place can test these due diligence statements as well.

It is important not to have a system that simply halts trade at the border of both illegally logged timber and legally logged timber. It is important that we do have a system. This system is one that has been recognised by the European Union. It is a system that is risk based. If you look at the majority of systems that we are putting in place today, they are risk based. They are not interventionist models. They are not prescriptive models. They work on the basis of a compliance framework finalising both the risk based system plus a compliance system to ensure that we minimise the risk of illegally logged timber. Would you then guarantee forever that you will not get illegally logged timber into Australia? It is about minimising the risk. There will always be some people who will take the risk. What we want to ensure is that they get caught.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I have a number of questions for the government that relate to Senator Milne's amendment. The minister says the bill is about minimising the risk of illegally logged timber. I will ask some general questions, if I may, before I go to the specific aspects of Senator Milne's amendment. Firstly, what is the government's best estimate of the amount of illegally logged timber that is coming into Australia at this time? Secondly, the government says that this bill is about a framework to minimise risk of illegally logged timber coming into this country. This is an issue in terms of not just deforestation and environmental damage but also costing Australian jobs. What does the government say should be the target? What is its goal, aspiration or policy aim? To what extent does the government say that this bill will reduce the level of illegally logged timber, and what is its broad policy aim for the next five to 10 years, for instance?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Broadly, if you look at the global trade, it is sometimes very hard to be accurate by individual countries. If you had a sense of that then you might have a different approach. You can do an assessment but it is very hard, until you put a framework in place, to look at the particular size and nature of illegally logged timber. The broad assessment would be that it is about $400 million, if we are to use a figure, but again I would not say with any degree of accuracy that that is the number. The legislation will look to ensure that we minimise it—

Senator Xenophon interjecting—

Yes, that is in Australia. The global figure is much bigger; it is about $60 billion. It is worthwhile to reiterate the three steps to the due diligence process. It is about identifying and gathering information to enable the risk of procuring illegally logged timber to be assessed, then assessing and identifying the risk of timber being illegally logged based on this information, and then mitigating this risk depending on the level identified. I always talk about a framework, so firstly you have the due diligence process in place, which is about identifying, gathering, and assessing and then having a compliance framework to ensure that the risk is minimised. We do not talk about a zero tolerance because it is a risk based framework. The aim is always for a zero tolerance but the risk based system will provide that the compliance framework is in place to ensure that illegally logged timber coming into Australia is minimised.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Further to that, can the minister advise where that figure of $400 million comes from? If the global trade in illegal logging is worth $60 billion, is that $400 million a ballpark figure? Does the government consider it could be greater than that? Let us assume that it is $400 million: if there is a framework, as the minister has outlined, to minimise the risk of illegally logged timber coming to Australia, can the minister advise what the government says would be the likely outcome of this bill? What is intended to be the policy outcome? Is it going to be $50 million or $100 million in three or four years' time? Will it be a more gradual process than that? That is quite important.

I should also say at this stage that earlier today I made reference to Clare Rewcastle Brown, who has been very active with Radio Free Sarawak, who has been outspoken on illegal logging, who cannot get back into the country of her birth, Malaysia, because of the matters she has raised both in her blog and on her program. I made references to publicly available information such as found in Wikipedia, but I should also point out that I have had conversations with Clare Rewcastle Brown earlier this year that I found very enlightening in terms of the work she does.

Going back to that figure of $400 million, does the government concede it could be greater than that? But assuming it is $400 million, what does the government hope the effect of this bill will be in approximate dollar terms in reducing the level of illegal logging coming into the country?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

If you put it into perspective, Australian imports about $4.4 billion of timber and wood products, excluding furniture, annually. Australia's proportion of illegally sourced timber products has been estimated to be about nine per cent—and it is an estimation of total imports—or $400 million, as I said. If you go to the revised EM, there are two reports that are noted on page 44. One is Poyry's 2010 report, Legal Forest Products Assurance—a risk assessment framework assessing the legality of timber and wood products imported into Australia, and that is where the figures are obtained. It might provide some assistance.

As to the impact, it is about adding to the global stock of countries that are working to end the trade of illegally logged timber. In doing that, it is not only about what will happen in Australia but also about joining with the EU as it moves to operate in March 2013. It is about joining with the Lacey Act in the US. It is joining with Australian efforts to combat illegally logged timber and, ultimately, it is about bringing an end to the trade of illegally logged timber. That clearly is the long-term goal. What we expect to achieve in the short to medium term is difficult to quantify. However, it would certainly be a matter of looking five years hence—should the legislation pass and the review is undertaken—and expecting to see a significant reduction from the estimate of nine per cent that is currently there.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I do want to get to Senator Milne's specific amendment in a minute, but these are preparatory matters that from my point of view are essential to lay the groundwork for the context of Senator Milne's amendment. What does the government say in relation to the comparison between this bill and the EU laws that will be in place by March 2013 and the Lacey Act in the US? Does the government say that this bill is more stringent or less stringent than the legislation in the European Union or, indeed, in the United States? What are the key differences between those pieces of legislation? I know that the Gibson guitar case has been referred to in the United States as to how that law has operated there.

In terms of being able to measure the success or otherwise of this piece of legislation, what auditing, what benchmarking, what analysis and what approach will be taken to measure this? If we pass a piece of legislation, and there is no way of knowing how effective it will be or not, you will have criticism from both sides of the fence on this—from the Australian Greens, who say that it is nowhere near stringent enough, and from the opposition, who say that it is tying up businesses in red tape. I am just trying to establish how we are going to measure the effectiveness of this piece of legislation. What auditing processes will there be to measure it? Or is it, to quote a former US defence secretary, a known unknown or an unknown unknown?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Far be it for me to quote ex-US defence secretaries. The important thing to look at, if you reflect on what you said, is that there is one extreme element that says that I have not gone far enough. That is not in this chamber. There is another extreme element that says that we should do nothing. I actually think that on the basis of that I have probably got the balance right. What we as a government have done is looked at the experience under the Lacey Act and drawn on the EU experience to make legislation that is both relevant and practical to Australia, that does not impede to such an extent that it does not operate, that means that at the border the importers can meet the diligence requirements and that the importers can meet the objects of the act to ensure that we do minimise the risk of importing illegally logged timber.

In respect of your auditing question: there will be audits. The way it will operate is that the regulator will do audits of the importers, of all of the relevant paper warfare that they do to ensure compliance with the legislation. That is how it works. That will be based on risk, using a risk matrix to determine where the risks lie and making sure that the audits target risk. Otherwise you will end up with a model that simply checks everything. If you check everything, you will be wedded to a paper warfare that does not actually combat illegally logged timber. It will just be producing ticks on sheets of paper. This matrix, a proper auditing process that targets risk, is about targeting where your high risks are and auditing those. Of course, the way audits work is that if there are issues that arise then usually there are more audits for those areas to ensure compliance. You do not simply audit it once, find a problem and move on. The risk matrix system usually encourages that you go back and continue to check those to make sure that they do comply.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I have just a couple more questions, if I may, and I will get to Senator Milne's amendments in a moment. Is the minister saying that the risk matrix that he refers to will be similar to the risk matrix we have, for instance, for biosecurity? Will it be one in 100 or one in 200? Will it be determined by intelligence as to where the source of the timber may be? Also, will details be made publicly available as to the number of the resources and the number of audits that take place? They are just some preliminary questions.

As to the specific amendments proposed by Senator Milne, is the minister saying that any of the parts of the information requested by the Australian Greens in this amendment—such as details of the volume permit, the name and voyage number of the vessel, any consignment identifier, a description of the product or the Customs tariff classification to which a product belongs—are in themselves unreasonable in the context of what is being proposed? I realise that Senator Milne's amendments are quite prescriptive, but is the government saying that what is being sought by Senator Milne through her amendments is in itself unreasonable or onerous, or is it saying that it proposes, at least in broad terms, to cover the matters raised by these amendments in the regulations?

Further to that—I do not want to throw in too many questions, but I am conscious that these are Senator Milne's amendments—does the minister concede that the matters sought by Senator Milne would actually close the loop in trying to determine whether a product is illegally logged or not? I am trying to understand the context of the effectiveness of this legislation without it having an undue regulatory burden but with it also being effective in terms of its intent.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

The easiest way to explain it without doing injustice to Senator Milne is that Senator Milne's model is an interventionist, prescriptive model. The model that is before the Senate today is a due diligence model. It is a framework. They are different, so they are like comparing oranges and applies, to give an analogy from our agriculture minister. Senator Milne's prescription would not operate in a risk framework system. Why? It is because if you adopted an interventionist, prescriptive model then you would have a whole different type of legislative underpinning for it. If you then tried to stick it into a risk based model like this one, it would sit there with a range of onerous requirements that could never be met by importers for legally logged timber, let alone illegally logged timber, and the system would not operate.

The way that this matrix system works is the same way it works for Customs, the same way it works for business and the same way it works for a range of other industries that manage risks. It is about identifying those risks, gathering the information about those risks and having a compliance framework to deal with those risks. You are effectively asking me to compare two different systems. I have rejected the earlier system, which was a prescriptive system, as being unworkable. I think the Senate committee also adopted that, or maybe it was around the other way. Maybe the Senate suggested that a risk based system was far more user-friendly, far more able to be operated and would also achieve the aim, which is critically important—that is, minimising the importation of illegally logged timber.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The minister has just completely undermined himself. Anyone who has dealt with the Rural and Regional Affairs and Transport Committee knows that the committee has very little confidence in the import risk assessment matrix when it comes to biosecurity. We have been through it a thousand times. You say that you identify the risk and it is all managed, and everything. Our experience is—and Senator Boswell will confirm this as well—that the risk assessment has been absolutely hopeless. We all know that.

On that, Minister, I do not know if you heard Background Briefing over the weekend. I was completely horrified to hear about the level of illegal import of birds into Australia. The fact is there was an aviary full of diseased birds and when the vet informed the owner of the aviary that the birds were diseased and that the disease could only have come in on an illegally imported bird, the aviary owner sold all the birds in the aviary all over Australia—presumably spreading that disease all over Australia. No action could be taken because the disease was not on the list of prohibited diseases in Australia. That is how the import risk assessment works for biosecurity. We have seen it.

If you tell me that this is going to be an import risk assessment of whether timber has been illegally logged then I can tell you now there will be zero prosecutions under this. What assessment are you going to make of the level of risk that timber coming from Indonesia has been illegally logged? What level of risk are you going to give timber coming from PNG having been illegally logged? What is the level of risk from the Congo? There is no way that you could import those things without saying that there would be a high level of risk.

Now that the DNA technology is available, you can trace where timber comes from. That is how they traced back the floorboards in the stadium at the London Olympics to timber logged out of Tasmania's forests. That is how they did it. That is how we can do it. If you are serious about illegally logged timber, that is what you would be doing—going to DNA testing not to a matrix of risk. There is so much corruption in these countries in handing out logging licences that they may well comply with the law, but the fact that they have been illegally allocated in the first place cannot be covered in your so-called risk matrix.

I will be fascinated after a short period of time to see whether there have been any prosecutions. Frankly, how is an importer of a lounge suite going to make an assessment about whether the structural timber in that lounge suite has been illegally logged? How are they possibly going to do that? I am intrigued as to how you can apply a risk matrix to that. Minister, I would like to specifically know: now that the technology exists, why would you not include DNA testing and coupe identification? In that way you would have an absolutely foolproof system—you would not be able to deny where the tree came from in the first place.

It seems to me that, if you are not going to go this way, we are going to end up with window-dressing around illegal imports of timber. When and if you try to prosecute an importer saying that they have imported illegal timber, they will simply say, 'When we did the risk analysis we determined that there was a low level of risk that it would be illegal.' How are you ever going to prove it is not, anyway? It seems to me that what we are seeing now with the refusal to do this is we will get a piece of legislation but it will not deal with the kinds of serious undertakings to stop the importation of illegal timber that you say you are trying to stop. I want to know why you think an import risk assessment matrix is superior to DNA testing at the coupe level, whereby you can take a sample of any product, any time, anywhere and away you go.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

For the due diligence, say, it does not rule out that the importer may utilise that type of technology. It is not technology specific. The difficulty always is that if you pick a particular technology—and you would be familiar with telephone interception legislation—over time you can get caught and find that it has been overtaken by new and different types. That is why it is a framework based on due diligence provided by the importer and audited by the regulator. If the importer wants to use that type of technology, it does not rule it out and it can be utilised to substantiate their due diligence. It is important to recognise here that it is not a requirement that everyone adopt a particular type of technology because it will not suit all circumstances.

Again, the importer of commercial quantities of furniture will have to go through a process of due diligence. On the risk matrix, I think you misunderstand how a risk matrix operates. It is the same one we use in policing. It is the same one we use in business. We utilise the same risk matrix. Again, you confuse an IRA with a risk matrix. They are two different things. I cannot help with why you confuse that, but you do. It is important to recognise that risks identified are the important part. You identify high risk, you identify moderate risk or you identify low risk, and your effort is in the high- risk area.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I reject the notion. The minister says, 'An importer could use that technology.' They cannot use that technology unless there is a record of a sample being taken at the point at which the coupe is identified. Otherwise, yes, you could get a DNA test that would tell you something about that piece of furniture, but it does not tell you where it came from if you do not have an original sample to measure it from. That is the whole point: to give yourself a benchmark against which any derived product can be measured.

It is quite clear that the government is going to go down this path which I think will be ineffective. The technology already exists to do a much better job in terms of due diligence, but it is obvious that the government is not going to support that happening.

I think we are going to end up with a piece of legislation where the due diligence and the declaration form are superseded and we are going to have a below-average kind of system. It would have helped us a great deal if we could have seen the form that we are going to use before debating this here, rather than just having a vague reference to it.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Further to Senator Milne's statement and line of questioning, can the minister indicate whether the DNA technology that can be used could form part of the risk matrix? In other words, could there be a requirement that there be DNA taken at the source of the logging and in the finished product in Australia? Is that something the minister would consider likely or unlikely? Does the minister concede that it would be a gold standard in ruling out whether a particular product was coming into Australia from a source of illegal logging?

My other question relates to matters I raised this morning regarding the serious allegations made by Clare Rewcastle Brown of corruption in the state government of Sarawak, led by Chief Minister Abdul Taib Mahmud. How does the government of Australia propose to engage? We are not talking about a rogue operator, where you can get the cooperation of another government; these are serious allegations of state based corruption, as Senator Milne has pointed out. The allegations are online that a former aide, who was an informant for the Sarawak Report and Radio Free Sarawak, was found dead in a Los Angeles hotel room with a plastic bag around his head in September 2011, just over a year ago. How do we engage with that, and do you concede the issue of DNA testing is the gold standard to determine risk?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I will separate the two concepts. One is the due diligence that is required by the importer and one is the risk matrix. They are distinct and different. When you talk about DNA as being part of the risk matrix you have fallen into error. It is not part of the risk matrix. It is for the importer to demonstrate whether or not it is legal timber, through due diligence. They may utilise that DNA testing, but they may also utilise a whole range of other legitimate ways to demonstrate that it is not illegally logged timber.

Secondly, regarding the risk of corruption more broadly, the Australian government works through a number of multilateral forums, including the United Nation's Commission on Crime Prevention and Criminal Justice, to combat illicit timber and forest products trafficking in the Asia-Pacific region. In 2010 the Attorney-General's Department and AUSTRAC delivered workshops on environmental crimes and money laundering which were attended by a number of Asia-Pacific nations. That is, broadly, the work that the Australian government does in these regions.

Specifically, the way this legislation will operate is that it will require due diligence by an importer to meet all of the requirements within the legislation. The auditing and the compliance system in place—in other words, the third part—will identify where there has been problems in the due diligence process. That is the answer to the two parts to the second question, which related to the international work that the government is doing in those fora and to how the compliance system will work on the ground.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

That brings us to a specific issue, to see how this works in practice. Has the Australian government made any representations to the federal government of Malaysia in relation to the many allegations of gross endemic corruption and violence involving the state government of Sarawak? There is a perception that the government of Australia may feel constrained in representations that it makes, in part by virtue of the free trade agreement. It also—and this is an issue that has been raised—may feel constrained to raise these uncomfortable matters with the federal government of Malaysia as a result of the so-called 'people-swap deal' on which this government has had numerous negotiations.

What is occurring in Sarawak is of grave concern. I have spoken to Clare Rewcastle Brown and she has expressed those concerns in the strongest possible terms. Have any representations been made to the government of Malaysia given our close relationship and friendship with the people of Malaysia? There are concerns that in the context of illegal logging there may be gross and systemic corruption at a state government level—has that ever been raised with the government of Malaysia?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

Much of that will fall outside of my portfolio, but I will take it on notice and see if I can provide a response. The EM itself explains the range of bilateral cooperation that this department has—Australia has signed bilateral agreements with China, Indonesia and PNG which include cooperation arrangements for combating illegal logging and promoting sustainable forest management. The government is seeking to strengthen the current level of cooperation with Indonesia to combat illegal logging, and has arrangements in place to work with Malaysia in this policy area. It has engaged in discussions to formalise cooperation with Vietnam and New Zealand on similar issues.

So work is being undertaken on that and also on ensuring those relationships to combat illegally logged timber are strengthened. But I do want to take the specific issue on notice. I think it would be an error for me to venture there without getting advice.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I do not want to hold up Senator Milne in relation to this but, finally, I was in Malaysia over the weekend. I met last Friday, at length, with the opposition leader, Anwar Ibrahim. There are real and serious concerns in that nation—in terms of those who could be facing elections at any time between now and towards the middle of next year—about irregularities in the electoral rolls and widespread electoral fraud, and that the elections could well be stolen. I am concerned about how the Australian government feels about how robust any system put in place with Malaysia would be where independent groups such as Bersih, the movement for clean and fair elections in Malaysia, have raised very serious concerns. These bilateral arrangements will only be as good as the willingness of both parties to enforce them and, given what Anwar Ibrahim himself told me just three days ago of his grave fears about the true will of the Malaysian people being reflected at the next election, it makes me worry about collateral issues such as illegal logging and the fulsome cooperation of the Malaysian government in respect of that.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I just want to know from the minister: will due diligence be satisfied by certification schemes? Will you take that as saying, 'That's due diligence; we're now satisfied because it has certification that the timber has not been illegally logged'? Will that be enough for your form?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

The importer can use a certification scheme as part of due diligence or in satisfaction of due diligence. But, again, they are audited and looked at to see whether or not they are a true reflection of what occurs. So, again, it is an area where, at face value, you would say it would satisfy due diligence. That is why you have an auditing and compliance system in place—to ensure that it is a legitimate certification, that certified documents are used, that the chain is there and that all of the requirements are met. It is not about us projecting into other countries to examine their systems. It is about ensuring the importer at the border has undertaken the requisite due diligence for the timber to be allowed to be imported into Australia.

In dealing with Senator Xenophon's broad question, again, I will narrow it to this: it is about ensuring we have a due diligence process in place to deal with the importation of illegally logged timber at the border. That is the nub of the issue. As to what happens in particular countries, I am sure you can ask the Minister for Foreign Affairs about our broad engagement with a range of countries across the globe. But the interest here is about minimising the importation of illegally logged timber, utilising a risk framework with due diligence placed on the importer—that is, the Australian importer—to ensure that they have taken the necessary steps to ensure that the timber is not illegally logged.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I just ask for clarification from the minister: I did ask whether due diligence could be satisfied by certification schemes. I understand that it could be part of what might be a due diligence test. What I am asking is: will the minister rule out that certification will replace other obligations, if you like, that may be on the form?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

It forms part of the due diligence process; it does not replace it. There is third-party certification by the FSC, the PEFC and the national certification scheme in Indonesia, the SVLK, which is being developed to meet EU requirements. They are all certification schemes. Should an importer utilise those, they will form part of their due diligence. It is not a case of ticking one box; it does not mean having one box ticked. It is due diligence.

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I would like to ask a question, following Senator Milne's question, about due diligence and certifying bodies. There are two, as far as I am aware. The Forest Stewardship Council and its ruling general assembly includes Greenpeace; the Wilderness Society; the Australian Conservation Foundation; Friends of the Earth; the World Wildlife fund, WWF; and other environmental non-government organisations, ENGOs. What place will those certifying bodies have in the legislation? How will they be written into legislation?

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

They are not written into the legislation as such. An importer could use them as part of their overall due diligence process. It is not the case that they play a role in the legislation. It is a matter for the importer to determine how they will meet that requirement. So they could either use FSC as a way of meeting their due diligence requirements or use a range of other measures to meet the due diligence requirements.

Sitting suspended from 18:30 to 19:30

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I indicate that the opposition will not be supporting these amendments. As the Minister for Agriculture, Fisheries and Forestry said—and I am trying desperately not to verbal him—these amendments effectively could shut the trade down, because they are all about Greens tape. They are about not utilising the process that was discussed during the Senate inquiry. They are about making the process so difficult and so complicated that it is effectively impossible to carry out trade.

For the information of the chamber I can indicate that the draft statement of compliance, or due diligence declaration, includes: the vessel name, the voyage number, the container number, the consignment identifier, a description of the product, some information about the origin or the country of harvest, the name and address of the timber or wood product supplier, the name and address of the importer, the quantity of the product, the value of the product and the due diligence system used to verify the legality of the product.

It is important to understand that a due diligence system, whether or not it be a certification scheme, is not just about ticking a box or having a certification scheme. It is about, if you have a certification scheme, complying with that, your audits saying you are complying with that, and there being processes that you undertake to verify what you are saying within your certification scheme. That could include FSC certification or PEFC certification. As I said in my contribution on the second reading, PEFC are putting into place as part of their certification systems a due diligence stream. As I understand it, at this point in time FSC have not announced whether or not they are going to do that. If they decide not to do that, it would be a fairly significant deficiency in their scheme. Quite frankly, I do not see how they can afford not to have a due diligence stream within their certification system if they are going to be serious players in the market in respect of supply chain certification. One of the important elements of any certification scheme is the chain of custody certification.

To reinforce my concerns about the potential costs of what the Greens are proposing—and it is clearly about imposing costs on timber traders and importers; they know what they are doing, which is trying to impose additional costs on the industry—I have an example of a business that has looked at one product line in a process of working out how it will comply with what is being proposed at this point in time. This business is looking at a fairly simple complex-wood product which is a three-ply. Across this business there are over 1,500 import consignments a year with an average of 42 individual product lines in each consignment. That is a total of 63,000 separate due diligence declarations that this business will have to fill out. Complying with the draft due diligence declaration took this business about 1.5 hours. The business says it can bring this time down with systems that will be put in place, but that is not the real issue. If you consider those 63,000 declarations at 1½ hours each and even consider that this can be taken down to half an hour each, that is still a significant workload being imposed. Just imagine what it would be like if the list that the Greens want to impose is put in place, rather than a systems based approach, which is what the committee recommended.

The real problem is that even though it is a relatively simple product, a three-ply product, and despite the fact that the supplier has full chain of custody certification from FSC for the mill and for one of the four concessions it controls, the business was still unable to identify the core of the veneer in terms of species or the concessions from which the logs were sourced. What Senator Milne is trying to impose again reinforces the concerns that the opposition has. It is about businesses having the systems in place to be able to comply with the legislation and giving them the time to do that. Even with full chain of custody certification from the Forest Stewardship Council, this business still cannot identify the core material for the plywood. That basically shuts that product out of the Australian market under the Greens proposal. It reinforces the opposition's concerns about ensuring that the systems are put in place to allow the compliance to occur. I do not think I need to say any more on this at this point in time. I have reinforced the concerns that we have and the proposition that we put to the government when Mr Abbott wrote to the Prime Minister earlier in the year. I have also indicated that we will not be supporting the Greens amendments.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

The question is that Greens amendments (3) and (9) to (18) be agreed to.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move amendments (2), (5), (7), (8) and (19) together:

(2) Clause 6, page 3 (lines 10 to 14), omit all the words from and including "This Act" to and including "processed.", substitute:

This Act prohibits the importation of illegally logged timber, the processing of illegally logged raw logs and the supply of regulated timber products.

This Act also requires importers of regulated timber products, processors of raw logs and suppliers of timber products to conduct due diligence in order to reduce the risk that illegally logged timber is imported, processed or supplied.

(5) Clause 7, page 6 (after line 1), after the definition of premises, insert:

processed timber product means a thing that is, is made from or includes, a raw log that has been processed.

(7) Clause 7, page 6 (after line 5), after the definition of Secretary, insert:

supply has the meaning given by section 7A.

(8) Page 6 (after line 8), after clause 7, insert:

7A Supplying timber products

  (1) A supply of a timber product includes a supply of the product by way of sale, exchange, gift, lease, loan, hire or hire purchase.

  (2) For the purposes of subsection (1), it is irrelevant whether the supply is:

     (a) for consideration; or

     (b) a wholesale or retail supply.

Note:   Offences under this Act relating to supplying timber products do not apply in relation to second hand products.

(19) Page 14 (after line 29), after Part 3, insert:

Part 3A—Supplying

Division 1—Supplying illegally logged timber

18A Supplying illegally logged timber

  (1) A person commits an offence if:

     (a) the person supplies a thing; and

     (b) the person is a constitutional corporation, or the person supplies the thing:

        (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

        (ii) in a Territory; or

        (iii) on behalf of a constitutional corporation; or

        (iv) to a constitutional corporation; or

        (v) on behalf of the Commonwealth or a Commonwealth authority; or

        (vi) to the Commonwealth or a Commonwealth authority; and

     (c) the thing is, is made from, or includes, illegally logged timber; and

     (d) the thing is not prescribed by the regulations for the purposes of this paragraph.

Penalty:   5 years imprisonment or 500 penalty units, or both.

  (2) Subsection (1) does not apply if the timber product is a second hand product at the time of the supply.

18B Supplying illegally logged timber in regulated timber products

  (1) A person commits an offence if:

     (a) the person supplies a thing; and

     (b) the person is a constitutional corporation, or the person supplies the thing:

        (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

        (ii) in a Territory; or

        (iii) on behalf of a constitutional corporation; or

        (iv) to a constitutional corporation; or

        (v) on behalf of the Commonwealth or a Commonwealth authority; or

        (vi) to the Commonwealth or a Commonwealth authority; and

     (c) the thing is, is made from, or includes, illegally logged timber; and

     (d) the thing is a regulated timber product; and

     (e) the thing is not prescribed by the regulations for the purposes of this paragraph.

Penalty:   5 years imprisonment or 500 penalty units, or both.

  (2) The fault element for paragraph (1)(c) is negligence.

  (3) Subsection (1) does not apply if the timber product is a second hand product at the time of the supply.

18C Forfeiture

  (1) A court may order all or any part of a thing to be forfeited to the Commonwealth if:

  (a) the court convicts a person of an offence against section 18A or 18B in respect of the thing or part; and

  (b) the thing or part is the property of the person.

  (2) The person is entitled to be heard in relation to the order.

  (3) The thing or part may be dealt with or disposed of in any manner that the Secretary thinks appropriate, but only after:

  (a) if the periods provided for lodging appeals against the order and the conviction have ended without such an appeal having been lodged—the end of those periods; or

  (b) if one or more such appeals have been lodged—the appeals lapse or are finally determined.

Division 2—Suppliers ' due diligence

18D Supplying a timber product

     A person commits an offence if:

  (a) the person supplies a thing; and

  (b) the person is a constitutional corporation, or the person supplies the thing:

  (i) in the course of, or for the purposes of, trade and commerce with other countries, or among the States or between a State and a Territory; or

  (ii) in a Territory; or

  (iii) on behalf of a constitutional corporation; or

  (iv) to a constitutional corporation; or

  (v) on behalf of the Commonwealth or a Commonwealth authority; or

  (vi) to the Commonwealth or a Commonwealth authority; and

  (c) the thing is a timber product; and

  (d) the person does not comply with the due diligence requirements for supplying the product.

Penalty:   300 penalty units.

18E Due diligence requirements for supplying timber products

     The due diligence requirements for the supply of a timber product by a person (the supplier) to another person are:

  (a) for an imported regulated timber product—the supplier must provide the other person with:

     (i) a copy of the declaration made to the Customs Minister under section 13 in relation to the product; and

     (ii) evidence of compliance with the due diligence requirements for importing regulated timber products; and

  (b) for a processed timber product—the supplier must provide the other person with evidence of compliance with the due diligence requirements for processing raw logs.

This range of amendments goes to the issue of traceability along the supply chain; they all refer to that. It is pretty clear that most of the pressure to ensure timber and wood product legality is driven from the retail end of the market. Requiring all subsequent traders to obtain and retain documentation to demonstrate legality will encourage more questions to be asked in the supply chain and will increase the speed with which supply chains respond to the new legislation and provide surety to those further down the supply chain, including consumers. So this is really about saying, 'Wherever you are in the supply chain of timber products, you need to get from your supplier an assurance so that you can then in turn assure the people to whom you are selling that the timber product is in fact not illegally sourced.'

The EU timber regulation has an obligation of traceability as a core element within its framework. Article 5 of that requires traders to keep records of all timber and wood products purchased and sold and make this available to authorities upon request so that illegal timber may be tracked within the market. This is an important enforcement tool, especially when considering the challenges of enforcing the central criminal offence of illegal timber importation.

I have to say that it has been pretty clear to me that this supply chain issue is rather crucial. That came home to me especially in relation to the example of not a timber product but tantalum from the Congo. It gets illegally shipped out of the Congo, flown into Belgium and transported to Russia, and so you lose track of where it actually came from. It ends up in mobile phones around the world. The mobile phone producers say that all the products in their phones are sustainable. Yet if you go back through the supply chain it all gets very murky once that tantalum arrives through the Belgian ports. So this issue of obligation of traceability is really important.

I recognise that the minister has resisted all calls to require mandatory labelling on the basis that it would be too onerous, despite the Labor Party election policy from 2007 clearly stating a commitment to requiring labelling at point of sale. In the absence of such a requirement for labelling, the Greens propose that there be a requirement for all traders in the supply chain to confirm the legality of the products they are trading in.

The amendments we are discussing are to insert a new part into the new bill, following part 3—Processing, titled 'Supplying'. The intent is to ensure that each subsequent purchaser or handler of imported timber or processed timber up to the point of retail sale must be provided with a copy of the declaration form, and due diligence documentation must be provided upon request. This really goes to the issue of the supply chain, to make sure that, right up and down the supply chain, people are basically second-checking what has come to them before they pass it on to the next person, so that, right up the supply chain, people are asking questions. I think that is an appropriate way to go, and that is why I think it is important that we get the same sort of commitment that has come through the EU timber regulation which has an obligation of traceability, and I do not see that in the current bill. That is why I have moved these amendments.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

We do fall on different sides of the fence on this particular issue. The government's view is that if you get it right at the border then the subsequent supply chain right down to the retailer is unnecessary. It is unnecessary for a couple of reasons. Firstly, the importer will have the opportunity of doing due diligence. We will hold the importer accountable for that due diligence. We will have a compliance framework on the importer at that point. As to the remaining supply chain, as you move down from the wholesaler and retailer, all the way down, say, to the hardware store at Cunnamulla, you would find that, if you started to put requirements on them, they would be second-best; they would not even have the same knowledge that the importer would have at the border. In fact, you would then be adding a compliance system plus a process onto—to use again the example of the retail outlet—the Cunnamulla hardware store.

This would be an unnecessary trade restraint and it certainly would be a burden on costs, because then you would be requiring them to do due diligence where that small hardware store in Cunnamulla would not have the ability to do that. A Bunnings, and a range of other large retailers, may be able to contemplate it. But it is about ensuring that there is appropriate legislation that is relevant and practical and able to be met at the border without providing unreasonable burdens along the supply chain and creating unfair outcomes for small, medium and large players or vertically integrated businesses, or small hardware stores at the end of the supply chain—which would not add one extra thing to the ability of the importer to do appropriate due diligence at the border and get it right there rather than have a second, third and fourth checker along the way. The auditor, the independent compliance, will do that work for us.

I would add, as to the issue around the EU: yes, they have fallen on the side of having a supply chain process. In my view, it will add costs to their supply chain but, if you look at their system, I think they would have debated this, as to whether or not they used this at the border. As you are well aware, the EU does not have borders in that sense, and therefore it is far more fluid. I think in those instances that is why they have fallen on the side of a broader system along the supply chain. We have a definite border. We have a definite place of importation. We know the importers. We know that we can put compliance at that point. We know we can put an auditing process at that point. Therefore, the additional cost, burden and regulation would be an onerous impost, and, quite frankly, on that basis, as I have explained, an unnecessary impost, and I would be criticised roundly I suspect. The Senate committee supports me in this view. They came to the same concluded view.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

The opposition will not be supporting this amendment. The minister is correct: the Senate committee did debate this particular matter, and quite frankly this is just another mechanism for environmental groups to put pressure at different points along the supply chain, and I do agree with the minister that it will just add green tape to the cost of doing business here in Australia and make Australian businesses less competitive, because of the additional impositions. Quite frankly, along with some of the other suggestions of the Greens, this is just as likely to actually halt the trade altogether. Although this might be what the Greens want to see occur, common sense indicates that if a piece of timber or a timber product is legal at the border it does not change its status as it works its way down the supply chain: it is a legal piece of timber. It is quite open for businesses up the supply chain as part of their chain of custody systems to actually request the certification, but that is a business decision for industry. It is not something for this place to impose on businesses.

As the minister has indicated, if a product is legal at the border, it is legal. There are opportunities at a business level to make those inquiries down the supply chain. That is what the process is about and that is what the certification at the border is for. But the opposition cannot support the imposition of layers and layers of green tape down the supply chain.

The TEMPORARY CHAIRMAN (19:53): The question is that the amendments moved by Senator Milne be agreed to.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move Greens amendment (20) on sheet 7202:

(20) Page 59 (after line 28), after Part 4, insert:

Part 4A—Review of administrative decisions

82A Extended standing for judicial review

  (1) This section extends (and does not limit) the meaning of the term person aggrieved in the Administrative Decisions (Judicial Review) Act 1977 for the purposes of the application of that Act in relation to:

     (a) a decision made under this Act or the regulations; or

     (b) a failure to make a decision under this Act or the regulations; or

     (c) conduct engaged in for the purpose of making a decision under this Act or the regulations.

  (2) An individual is taken to be a person aggrieved by the decision, failure or conduct if:

     (a) the individual is an Australian citizen or ordinarily resident in Australia or an external Territory; and

     (b) at any time in the 2 years immediately before the decision, failure or conduct, the individual has engaged in a series of activities in Australia or an external Territory for protection or conservation of, or research into, the environment, or relating to logging, illegally logged timber, or a related matter.

  (3) An organisation or association (whether incorporated or not) is taken to be a person aggrieved by the decision, failure or conduct if:

     (a) the organisation or association is incorporated, or was otherwise established, in Australia or an external Territory; and

     (b) at any time in the 2 years immediately before the decision, failure or conduct, the organisation or association has engaged in a series of activities in Australia or an external Territory for protection or conservation of, or research into, the environment, or relating to logging, illegally logged timber, or a related matter.

  (4) A term (except person aggrieved) used in this section and in the Administrative Decisions (Judicial Review) Act 1977 has the same meaning in this section as it has in that Act.

82B Applications on behalf of unincorporated organisations

  (1) A person acting on behalf of an unincorporated organisation that is a person aggrieved (for the purposes of the Administrative Decisions (Judicial Review) Act 1977) by:

     (a) a decision made under this Act or the regulations; or

     (b) a failure to make a decision under this Act or the regulations; or

     (c) conduct engaged in for the purpose of making a decision under this Act or the regulations;

may apply under that Act for a review of the decision, failure or conduct.

  (2) The Administrative Decisions (Judicial Review) Act 1977 applies in relation to the person as if he or she were a person aggrieved.

This amendment goes to the issue of standing. In line with best practice environmental legislation, broad standing should be made available to the public, including NGOs and timber industry competitors, to initiate action for civil breaches of the act.

There are compelling reasons for allowing public interest litigation under the bill. In 1995 the Australian Law Reform Commission considered standing law and concluded that:

Public interest litigation is an important mechanism for clarifying legal issues—

or enforcing laws—

to the benefit of the general community.

I would argue that this legislation is public interest legislation, and allowing public interest participation in the legislation, through standing, is not only appropriate but should be seen as a valuable measure to improve the act and achieve its objectives.

Some within the timber industry have raised concerns with open standing provisions in relation to this bill. A common argument against open standing is that it will open litigation floodgates. This argument was made in relation to the New South Wales Environment Planning and Assessment Act 1979. In 1990, former chief of the New South Wales Land and Environment Court Justice Jerrold Cripps noted that no such flood of litigation occurred and that the argument had been ‘wholly discredited’. In relation to the same act, Justice Murray Wilcox noted in 1987 that, because of cost provisions, litigation, even with open standing provisions, was not entered into ‘lightly or wantonly’, and that the actual litigation figures in New South Wales supported this.

Similar concerns regarding litigation floods were raised when the EPBC Act was passed. Section 487 allows any interested person to challenge decisions made under the act. In their first review of the act, the Senate Standing Committee on Environment, Communication and the Arts found that the level of litigation appeared to be ‘extremely low’. The signatories to the Common Platform also identified broad standing as a critical element to successful legislation.

This is why the Greens want standing provisions derived from those currently existing in the EPBC Act to be included in this legislation. It is nothing new. It is already there in the EPBC Act. If the minister is being open and honest with the Senate in saying that they want to make sure that the importation of illegal timber does not occur, why would he not allow standing for NGOs that want to take the matter to court, if indeed they do? In actual terms it is going to cost them money to do so, so they are not going to do it in a wanton or frivolous manner, and in fact they have not done so. The EPBC Act has been law in Australia since 1996 and the level of litigation has been extremely low, so the same would apply.

So, I ask the Senate to support the idea that we give standing under the act, consistent with the EPBC Act and with best practice environmental legislation, to allow broad standing to the public, including NGOs and timber industry competitors, because there is nothing more frustrating than someone who is behaving ethically in the system to know that somebody else is not and is making claims that they cannot substantiate. The people who know that the truth is being stretched are more likely to be in the industry, in the business, and more likely to be better informed.

So, in the interests of competition in the business world and in the interests of the public good, why would you not allow broader standing consistent with the EPBC Act? That is what this amendment seeks to do.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I thought long and hard about this amendment, but I landed on the other side of the fence again, unfortunately, for the following reasons. It is not environment legislation per se. I recognise that in environment legislation there are instances where there is open standing. In this instance, this contains very serious elements, or offences, that are criminal in nature. I have made it clear that where criminal elements are involved criminal offences should be prosecuted by the Commonwealth for breaches of the legislation. That is an important principle that I will not walk away from.

I do recognise the value in having open standing in various pieces of legislation, and, recognising the public interest litigation work done by that body, it is one area where I came to the view that it should not be included in this bill. It is also a case of dealing with—and I know that you dealt with this in part—vexatious claims that could be made and which could damage industry or business very easily and very quickly.

On those bases the government does not support the amendment that you have offered. However, I do think that it is a matter that should continue to be looked at and not simply rejected out of hand. I am open for it to be re-raised in the review period, because we will then have significant experience about how the legislation has operated and how the regulations have worked. I obviously cannot bind future governments, but I will make it plain at this point that, on balance, because of the nature of the offences—that they were criminal in nature—I landed fairly and squarely in the area of not having open standing in this particular bill. But the issues you raise are not lost on the government.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am very disappointed about that because the fact of the matter is that the people who are most likely to be tracking this are the NGOs, and they are the ones who have been campaigning for years to bring in legislation against the import of illegally logged forests around the region. It is going to be the NGOs who are the ones raising the issues, as Senator Xenophon raised earlier this evening, of the kind of corruption that is leading to murder and so on. Frequently letters are written to ministers all over the place and nothing is ever done about it. One of the ways to bring it into the criminal justice system is through civil action and then ending up in more serious criminal jurisdictions.

The issue for me is that the people most likely to be doing the work on this are going to be in the realm of civil society, through the NGOs. They are the people who are going to be tracking what is going on in Indonesia, PNG, Malaysia, the Solomons, Fiji or wherever. They are the ones who are going to be taking on their governments in relation to the corruption in allocating licences and bending the rules and so on. So I am extremely disappointed, Minister.

I take your point that you will look at it over the next short while, but I note that already the government has rejected the inclusion of sustainability in the objects clause, rejected a tightening of the definition of illegal logging consistent with what the EU does, rejected due diligence when it comes to actually going to the coupe level—identifying where the timber is coming from at the coupe level—rejected traceability through the supply chain and now has also rejected broad standing in the courts in relation to civil society. It does not give me much hope about any real rigour being applied when it comes to a supposed commitment to ban the import of illegally logged timber.

However, that is the government's view. We will hear from Senator Colbeck in a minute. It was the coalition who introduced the very flawed EPBC Act, but even the coalition had as part of the EPBC the capacity for public-interest litigation and this important mechanism for broadening standing under the law. So I would hope that the coalition would at the very least recognise that this is consistent with EPBC and will support at least this amendment.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I am sorry to disappoint Senator Milne, but I will not be supporting this amendment, particularly given the activities of organisations such as Markets for Change—which I note the former leader of the Greens in the Senate, Bob Brown, was appointed to the board of today—who really do not care much about the impact that they have on Australian business in the campaigns that they run. Given, as Senator Milne has said, that it is most likely to be the environmental groups that are chasing this sort of stuff down—I understand industry has been told that in their consultations with the government as well—and given the activities of organisations like Greenpeace and Markets for Change, I am very reluctant to support any particular measure that gives them an additional weapon to use against industry. So I cannot support this amendment.

I am very cognisant of the comments that the minister has made. I think that his consideration of that is very important. It was an issue that we talked about during the committee stage and we decided that it should not be supported as part of that process. But I have to say that the activities of extreme environmental groups in recent times have brought me down much harder on the side of caution in giving them additional privileges over and above those that they already have under Australian law. In that context, the opposition will not be supporting this amendment.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I find it interesting that Senator Colbeck should consider traceability as a 'weapon against industry'. I would have thought that if industry had nothing to hide, it would have no problem with traceability. I am delighted that Senator Brown has taken a position on the board of Markets for Change and that former Greens leader in Tasmania, Pegg Putt, is the new CEO. They will pursue this issue vigorously and make sure that the markets are very well informed as to where the timber products come from—right down to the coupe level.

That is the point that is being made here. They will track it to the coupe. The flooring at the London Olympics was rejected because the claims being made about where that timber came from were wrong. If Senator Colbeck thinks that the best way to protect industry is to prevent traceability then all he is doing is propping up something that is unsustainable in the longer term. That is not going to work. Trying to hide from traceability is not going to work.

As I said, I am disappointed that the government is not taking this on board. The NGOs will continue to watch what is going on around the world. When I come to the next amendment on enforcement and compliance, I will discuss that a little further.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

I just want to correct the record. Senator Milne indicated that we were talking about traceability. That is not what we are talking about. What we are talking about with this amendment is the access of environmental groups, the community more broadly and industry players to have standing in litigation; nothing to do with the traceability. It is about their capacity to participate in bringing action against a business who might be importing timber. So, Senator Milne, if you want to participate in the debate, do not mislead the Senate in respect of what I have said. We have talked about traceability, and I have put my discussion about traceability on the table quite clearly, and about the way that that should be managed. The coalition's view is very clear on that. We are not talking about traceability with this particular amendment; we are talking about standing in legal action. That is what I was talking about. I was not talking about traceability, and I stand by my remarks.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

Through the chair, of course, Senator Colbeck?

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

Yes, my apologies, Madam Chair; through you.

The TEMPORARY CHAIRMAN: The question is that amendment No. (20) be agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move amendments (21), (22), (23) and (6) together:

(6) Clause 7, page 6 (after line 1), after the definition of premises, insert:

quarter has the meaning given by subsection 83(5).

(21) Clause 83, page 60 (line 4), omit subclause (1), substitute:

  (1) The Secretary must publish the following information about the operation of this Act:

     (a) an annual compliance audit for each financial year in relation to imported regulated timber products;

     (b) aggregate data reports for each quarter in relation to imported regulated timber products;

     (c) any other report or information prescribed by the regulations for the purposes of this paragraph.

  (1A) The secretary may publish any other information about the operation of this Act that the Secretary considers relevant.

(22) Clause 83, page 60 (line 5), omit "Subsection (1) does not", substitute "Subsections (1) and (1A) do not".

(23) Clause 83, page 60 (after line 6), at the end of the clause, add:

  (3) An annual compliance audit in relation to imported regulated timber products must include, but is not limited to, information about the following:

     (a) the importers that have been audited;

     (b) the imported regulated timber products that have been audited, including a breakdown by timber species;

     (c) how many importations of such products have been audited, including a breakdown by country of origin;

     (d) the level of risk associated with the products that have been audited;

     (e) the level of accurate information provided on declarations made to the Customs Minister under section 13 relating to the products that have been audited;

     (f) the level of accurate and comprehensive compliance with due diligence requirements for importing regulated timber products for the products that have been audited;

     (g) non identifying information about any investigations that have been undertaken during the financial year in relation to such products;

     (h) non identifying information about the outcome of any investigations completed during the financial year in relation to such products;

     (i) non identifying information about the current status of any investigations that have not been completed by the end of the financial year.

  (4) An aggregate data report for a quarter in relation to imported regulated timber products must include, but is not limited to, information about the following:

     (a) the volume of the products imported in the quarter;

     (b) a breakdown of the products imported in the quarter by:

        (i) product type;

        (ii) timber species;

        (iii) country of origin;

        (iv) country of processing.

  (5) In this section:

quarter means a period of 3 months ending on 30 September, 31 December, 31 March or 30 June.

My series of amendments goes to the issue of enforcement and compliance. The government and the coalition have rejected all the amendments going to sustainability, definition of illegal logging, due diligence, traceability and now even the ability of the community to have standing in the courts. It really does come back to the government to explain how it is going to enforce the law and how it is going to seek compliance with the law, given the rejection of all the amendments which would have given more rigour to the bill.

The effectiveness of this legislation, as with any law, hinges upon its enforcement. Enforcing the act will undoubtedly prove challenging, given the inherent transborder element of the key offence of the bill—that is, the prohibition of the importation of illegal timber products. It is therefore important that the government demonstrate its commitment to enforcement by producing quarterly reports of aggregated data and annual compliance audits. That is the purpose of these amendments. I am seeking from the government an indication of how this is going to essentially be resourced. Is the government going to resource this sufficiently so that we will get quarterly reports of the data and annual compliance audits? Can I have from the minister an indication of that?

I just mentioned a moment ago the challenging nature of inherent transborder elements and, in particular, I want to go to one species, which goes to the issue of DNA testing that I mentioned earlier. There is a particular type of timber known as merbau. It is a tree that is used throughout the region. When I say 'throughout the region', that ranges from Tanzania and Madagascar, east through India and Queensland to the Pacific island of Samoa. It is in the Philippines. It is right throughout the region. Because it is durable and termite resistant, it is a highly valued material for flooring and other uses. It is advertised extensively for decking, for example. As a result, it is being widely overused. Extensive logging of this tree is going on. It is endangered in many places in South-East Asia and almost extinct in others. Extensive amounts of this timber were purchased for the venue of the 2008 summer Olympics in China, which is the largest importer of the wood. As I said, it is used for flooring. It is used in the United States and European markets in spite of the ban on illegally logged timber.

As I said, a lot of this timber is being transported around the region. Greenpeace claims that at the current rate of logging the tree will be wiped out within 35 years. Because it is such a desirable timber in terms of the product, and because it goes across so many borders, it will be one species where it will be very interesting to see how the government goes to the issue of compliance. I would suggest that this is one species where, if the government were open to doing some work in terms of research, investigating the DNA and then using it for testing would be extremely useful. It is very hard to see, given the extensive range of this tree, how we are ever going to get to the point of knowing what country a product that comes into Australia to be used for decking or flooring comes from, let alone whether it was logged illegally or otherwise.

I would ask the government to give some consideration to a research project on this timber. I would also ask the government what level of resourcing it will put into compliance and enforcement with regard to quarterly reports of aggregated data and compliance auditing.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

This really goes back to what I said when the committee stage commenced: it is a case where there is a due diligence process in place. This framework legislation will provide for the due diligence, it will provide for how that will operate, and then it will provide for the auditing and the compliance framework within the legislation. That is the framework legislation. Much of the detail around how that will be made operational will be a matter for the department. The powers are clearly within the framework. The powers are quite extensive for the regulator to ensure that they have sufficient powers to aid in the compliance. It will ensure that they can obtain the necessary evidence and prosecute cases which are brought to their attention or which they discover.

In addition to that, the compliance framework is also, as you would outline, one that, in terms of what information would be available, would be subject to commercial constraints and commercial sensitivities. I would expect—and this would be part of the ongoing development of the regulations—that things like the audit reports and that type of information which would be valuable to stakeholders other than commercial stakeholders who might be interested in commercial advantage. As to the broad information about how the department operates, my preference has always been—you can check my record on this—to err on the side of making whatever is available public on the web or in a format that is suitable for people to view.

However, I cannot commit to that at this point of time. It is a matter that should be properly developed with the stakeholders, with the regulator and then promulgated in the regulations. We then land in a place where the commercial-in-confidence matters are not disclosed but information should always be made available around the nature of the compliance framework and the nature of the audits for that information that helps stakeholders understand the process. Why do I fall on that side? Clearly, the strength of FOI legislation would also press me to that, but that is where I stand generally: open disclosure is far better than getting found out after the event.

More broadly, the government does hold information on behalf of the public and therefore the public should have access to it and it should be accessible in a reasonable way. But, in this instance, it is a matter on which we will need to have a conversation with the department on to put it in operation it through the regulations. We will also have a longer conversation with the stakeholders about the nature of the disclosures to ensure that the compliance framework works effectively.

Going back to the earlier issue, when the stakeholders, the NGOs, want to be able to provide information to the regulator about suspected breaches of the legislation, then in an easy way they can bring it to the attention of the regulator to undertake proper investigations of the importer and the due diligence statements that they have provided. With all of that, I again fall on the point of saying I understand the sentiments that you have expressed. I agree more broadly that open scrutiny is the way to go; however, at this juncture I cannot agree with your prescriptive amendment, but I do commit to ensuring that in the development of the regulations much of what you discussed will in fact be reflected in it.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I did ask the minister what extra level of resourcing will go to enforcement and compliance. I am interested to know whether the department is going to put on additional people or whether there are additional responsibilities. Where is the enforcement and compliance going to be centred within government and where is the additional resourcing? I also asked the minister to consider a research project in terms of establishing the DNA and then DNA testing for a species like merbau, which is going to be an extremely vexed issue because it goes across so many boundaries and jurisdictions. It will be virtually impossible for any due diligence to say where it actually came from.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I did not avoid the question—these are generally budget decisions and I cannot commit us to what the resourcing will be or how that budget will unfold. I can say that DAFF does have a very strong prosecution section that deals with biosecurity and many breaches of legislation, as people would understand. It has good experience and has people who can investigate the nature of these offences. In respect of a research and development project, it is not something that I am going to commit to on the run. However, there are R&D corporations that could undertake work of that nature and there is a range of industry bodies that may also want to undertake this body of work. Within DAFF there is ABARES and there may also be opportunities for them to consider. We would not want to simply jump to conclusions. You might want them to scope out the nature of the requirement and whether or not that requirement adds value or adds to an outcome. We can do that through discussions with stakeholders during the development of regulations. I am happy to continue to discuss these issues with you but it is important that we rather undertake research that is beneficial to industry, that provides an outcome that is user friendly. Ultimately you will cut the costs of red tape and add to the compliance as well.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I thank the minister and I will come back to him to have discussions about that matter because that is one species that I think is going to be particularly vexed in this conversation. It may be extremely beneficial to go there. As to the minister's claim that DAFF has a very strong prosecution unit, my experience of DAFF suggests to me that I would have zero confidence in that—I have to say, Minister: zero confidence. I heard the mention of your background briefing earlier. Where are the successful prosecutions of illegal imports and a whole range of biosecurity matters? One example that I have specific experience of is the breach of the Financial Management Act in relation to a grant that was made to the forest industry under the Tasmanian Community Forest Agreement process. Money left the department with nobody signing off on it. The Auditor-General said it was a breach of the Financial Management Act and it was recommended to DAFF that they prosecute accordingly. The answer was: 'Senator, we lost the paperwork.'

Given that that is my experience, Minister, I have zero confidence in your belief that DAFF has a strong prosecution unit. If that is the best you can do in overseeing, compliance and enforcement of the importation of illegal timber products, then I am sorry because it takes me absolutely nowhere in my level of confidence. Madam Chair, I am disappointed. I will continue the conversation with the minister both through the budget process for the resourcing that will be necessary for enforcement and compliance and in relation to a research project on some of the species that might be particularly vexed concerning timber products. However, given the experience that most people have had with DAFF and its prosecutions, I do not think the level of confidence in this place will be particularly high.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Fisheries and Forestry) Share this | Link to this | Hansard source

The opposition will not be supporting these amendments, although I have to say that we do have some sympathy for the Greens' concerns in relation to where the provisions stand at the moment. In that context, the government has only got itself to blame, from my perspective, because we did, as I have said a number times throughout this process, ask that the regulations be available for consideration by this place in conjunction with the commencement of the offences under this legislation. We did talk about the process of visibility of the reports during the committee stage. It was something that we gave some consideration to and, from recollection, we made some recommendations to the government about how that process might work, the cycle of reporting and the auditing of the process. As Senator Milne has said, it is important that people have confidence in the process and the system. My only hope is that that process is reflected in the regulations when we get to see them. I again express my concern that it does not look like Minister Ludwig will meet the commitment that he gave to Mr Abbott that the regulations would be available for discussion by 24 December. Having said that, I do not see any value in imposing in the umbrella legislation the process that the Greens are proposing as part of this amendment.

Question negatived.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move Australian Greens amendment (24) on sheet 7202:

(24) Page 60 (after line 15), after clause 84, insert:

84A Review of operation of regulations

  (1) The Minister must cause a review to be undertaken of the first 2 years of the operation of the regulations made under this Act.

  (2) The persons undertaking the review must give the Minister a written report of the review within 6 months after the end of 2 years after the commencement of the regulations.

  (3) The Minister must cause a copy of the report of the review to be laid before each House of the Parliament within 15 sitting days of that House after its receipt by the Minister.

Amendment (24) on sheet 7202 is the final amendment I move to this particular bill. It goes to the issue of a review of the operation of the regulations and it is basically a straightforward requirement for there to be a review of the first two years of the operation of the regulations, that the review is to be completed within six months of the end of the two-year period and that the review be tabled. It is to make sure that there is a timely review of the operation of the regulations under the act, that the persons undertaking the review give the minister a written report and that report be laid before each house of parliament within 14 sitting days of that house after it is received by the minister. This is so that, given that we are not seeing the regulations, we get to see a review of the regulations after the first two years of their operation under the act. Given the level of concern I have about how the regulations may operate, given that we have not seen them, I think it is critical that we have a timely review of those regulations.

Joe Ludwig (Queensland, Australian Labor Party, Minister for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

The government will not be supporting the amendment. I can add, though, that we are pretty close. Effectively, the government has proposed a five-year review. Given the way your amendment would operate, Senator Milne, we are only really arguing about one year, I think. It would have been one year earlier than our proposal. You are suggesting two plus two, making four years. We are suggesting five years on the basis that we have carefully considered it and that will allow sufficient time for the operation of the legislation. For those who want to make submissions, see how it has operated and continue to ensure its effectiveness, a five-year review is what I would call pretty standard in this type of legislation, particularly given the newness of it and how it will operate.

With those short words, I do not support the amendment but do say that the government has firmly committed to the five-year period and does recognise the need for a review of the legislation and how it operates. This is not for the reasons that you have suggested, Senator Milne, but for the reasons that we will encounter issues as we work through—I have no doubt about that—and that we will want to address them. Many of those can be addressed by regulation as we proceed through, but the fundamental legislation, which is the framework legislation, will need to operate for that period to give it some certainty for industry.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am extremely disappointed, Minister. We do not have the regulations in front of us. We are told that five years hence we will get the review that I am moving for. I do accept that that will be after four years, because of the way that this is going to be implemented, but you are asking the parliament to vote on regulations it has not seen. Given the failure of the government to agree to tightening up the legislation, I go back to what I said at the beginning: the Greens have been strong advocates of banning the import of illegally logged timber products. This is a critical issue and it goes to trying to maintain biodiversity around the world, trying to maintain natural forests around the world and trying to maintain sustainability. Yet we are seeing legislation which will be umbrella legislation, if you like, and it runs every risk of being nothing more than greenwashing.

When push comes to shove, it is very hard to see, with the vague way that this legislation has been put before us and without the benefit of the regulations, that we will ever see a successful prosecution. This is especially so since you have now denied the right of the community to have standing in the courts and for NGOs and timber industry competitors to be able to initiate action for civil breaches of the act. With the level of corruption that goes with the illegal logging of timber, particularly in our region but in Africa as well, and with the species around our region, it is very hard to see that this is actually going to slow down the import of illegally logged timber. However, it is a step in the right direction. It is a start, but I am disappointed that it is going to be another five years before we have a chance to really review the effectiveness of the legislation.

Question negatived.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

The question now is that the bill stand as printed.

Bill agreed to.

Bill reported without amendments; report adopted.