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

I have sought permission from the very generous and popular Chief Government Whip in the Senate, Senator Anne McEwen, to incorporate in Hansard the last page of my speech on the Illegal Logging Prohibition Bill 2012 and she has agreed.

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

I will just confirm that, Senator Boswell.

Leave granted.

The incorporated page of the speech read as follows—

In most cases, they can massively out-spend the companies they choose to campaign against, companies who must comply with taxation and other rules that simply do not apply to the E.N.G.Os.

I believe the Australian public, and this Parliament, need to be alerted to what is at stake here. Australia’s agricultural, forestry and fisheries industries have a gross value of production of some 50 billion dollars. That is a huge amount of money. It is a very attractive target for E.N.G.O. strategies designed to extort money from primary industries and other businesses in the supply chain to allow them to continue harvesting and marketing their products.

Clearly, environmental non-government organisations like WWF, Greenpeace and others intend to move from one primary industry sector to the next to the next, “green mailing” or otherwise forcing them to comply with their favoured sustainability certification schemes.

Their tactics should alarm all Australians.

I believe their tactics raise important questions. They are questions fundamentally important for the way government operates … for the maintenance of a genuine, informed democracy … and for the role of science in guiding and informing decision-making.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I was about to say to Senator Boswell, 'It's amazing what flattery can do for you!'—then I was going to start my speech by flattering both Senator Boswell and Senator Colbeck for their contribution on this bill before the chamber relating to illegal logging. But I am not flattering in the way of seeking any return: it is always good to follow people of the calibre of Senator Colbeck and Senator Boswell in a debate on these quite technical subjects. Senator Colbeck will make a great minister dealing with this area in a new government and I know that Senator Boswell has had a long passion not only for sustainable forestry but for exposing how some of the radical green groups are destroying Australian industry.

I want to speak on this bill and oppose it on several grounds, some of which have been covered by my colleagues. But I will start with a broad historical approach to this. When I was the forestry minister many years ago, trying to stop the importation of illegally logged timber was paramount in the work that my department and I were doing. In fact, the coalition had promised it, as I recall, in the 2001 election and again in the 2004 election—and, I suspect, since then. We have been determined to try to do something about importing timber that has been illegally logged. As I found out at the time, the concept was easy to grasp; putting the rules into place in the form of legislation was exceedingly more difficult. The Labor Party have tried but, as with most things when it comes to governance by the Labor Party, their attempts have been fraught with problems. Hence this bill before us, which we will be opposing for all the reasons mentioned by Senator Colbeck and by Senator Boswell, some of which I will elaborate on now.

The thing that disturbs me most about illegal logging and the importation into other countries including Australia is that there should not be any call for importation of any sort of timber into Australia. Australia has some of the most significant forestry assets in the world, and forestry was an industry that was entirely sustainable. But the Greens political party has succeeded over a period of time in destroying what was a major industry for Australia, a big work creator for Australia and an industry that was fully sustainable.

I remember Richo, then Senator Richardson, as environment minister coming up to Ravenshoe behind Cairns in the early nineties and standing before a forest and saying, 'We are bringing in World Heritage listing to save this pristine forest'. You could just hear him above the boos and hisses from the large crowd gathered there. Unfortunately for Senator Richardson and for the Labor Party at the time —and I think Richo later acknowledged this in his book Whatever It Takesthe pristine forest that he wanted to save had been logged for 100 years, and it had been logged so sustainably that Richo, the Greens, the Wilderness Society and the ACF thought that it was a pristine forest. It had been well managed, it had been harvested sustainably and it had produced some of the most magnificent timbers. Richo said this in his book Whatever It Takesit is a bit old these days but I still recommend that anyone should have a read of it. It just shows how interested in power the Labor Party is. It is not interested in governance; it is just interested in power, and Richo made that quite clear in his book Whatever It Takes. But he did refer to this. This had nothing to do with saving the pristine forest and nothing to do with environment; it was all about getting Greens second preference votes in Sydney and Melbourne, and Richo was very open about that.

But this is how the Greens work. Here was an industry that employed so many people. I was encouraged back in the days when I was minister to have the CFMEU—well, the ‘F’ part of the CFMEU—work hand in glove with the Howard government to save the Tasmanian timber industry. I thought we had achieved that. Everyone will recall that magnificent rally in the 2004 election when John Howard was mobbed by forestry workers, and I have to say the forestry part of the CFMEU assisted in arranging that function. As a result of that, we won two seats in Tasmania and we had saved the industry.

But the Greens never give up. When other ministers came along and the government changed, they were back in their own old ways of trying to shut down this sustainable industry. They have continued with the fishing industry; they have almost succeeded there. So we import a lot of timber now that we do not have to. We already import most of our fish but, thanks to the Greens, we will import practically all of it. I am told that just today former Senator Brown has been appointed to the board of Markets for Change, the group that is quite open about shutting down the timber industry in Australia. So we will have all imported timber. Of course, the Labor Party fall for this because they need the Greens votes to keep Ms Gillard in power as Prime Minister. It is as simple as that.

I understand this group, Markets for Change, is trying to commercially penalise Harvey Norman, one of the very few Australian retailers that actually supports the Australian manufacturing industry. Most other furniture retailers in Australia import their furniture from China. The one who makes a virtue of using Australian manufacturing is Harvey Norman, because it creates jobs for Australian unionists and workers. But what happens? Ex-Senator Brown and the Greens want to shut him down. Why? Because he is using Australian timber in some of his furniture products.

This bill would not be needed if Australia had continued its vibrant, sustainable native forest industry. Any reasonable observer who gets in a plane in Cairns and flies to Hobart will see magnificent stands of Australian forest, most of which have been logged for 100 years, but you would not know it.

They have been sustainably managed over many years. They have created jobs.

We used to export timber. Now we are in a situation where, thanks to the Greens, Australians are buying timber from countries in South-East Asia and the Pacific, who we all know are illegally logging. So, thanks very much, Greens political party, you have contributed to the raping and pillaging of some very special tropical timbers in countries in South-East Asia and in the Pacific! But it does not matter; the Greens have had their way!—they have shut down yet another Australian industry.

If I could be bothered talking to any of them at close quarters I would like to understand, one day, what the underlying theme of the Greens is. Do they want Australia to be a totally mendicant state, where we just rely on borrowed money and government handouts for our living? Because you would think that the Greens are determined to shut down any industry Australia has. I have mentioned the fishing industry; it is on its knees. I have mentioned the forestry industry; it is on its knees. The Greens are attempting to shut down the manufacturing industry. It is because of the Greens—because Ms Gillard wanted to be Prime Minister and needed their support—that we have this carbon tax that is continuing to send Australian manufacturing jobs offshore. Yet the Labor Party is the great party of the workers! Most of their senators were formerly members of unions. They are supposed to be looking after the jobs of workers, but they have introduced a tax that sends manufacturing jobs offshore.

The one competitive advantage Australia used to have in the manufacturing area and in our cost-of-living area was that we had the greatest supply of cheap energy anywhere in the world. That cheap energy allowed us to compete. But again the Greens, and the Labor Party because they have no courage, have introduced this tax which will effectively, in time, shut down the coal industry.

Some people still believe in the fools' paradise: they think foreign investors are rushing into Australia to invest in our vast mineral products. Well, they should really have a look at the facts. Most of the international investors are now avoiding Australia. You will not see it happen tomorrow or next week or next month, but it is happening. The investment is going into Africa, which investors now find is more secure than Australia. Investment is going into South America, where they have comparable minerals to Australia but do not have taxes like the carbon tax and the minerals resource rent tax. So there is another industry that the Greens have been instrumental in shutting down.

All credit to the Greens. They have these views and they have been enormously successful because there is a party that is weak and lacking courage—the Labor Party—who are not prepared to stand up and look after Australian jobs or do something about the enormous cost-of-living increases we are having in Australia at the moment.

Do you know that in 2001—I think that was when it was—China used to consume, if my memory is accurate, about 1.2 billion tonnes of coal every year. By 2015 China are going to be consuming 7.5 billion tonnes of coal every year. Thanks to the Labor Party and the Greens, Australia's carbon tax is putting up costs of living and sending more jobs overseas. It is supposed to reduce Australia's carbon emissions by five per cent by 2020. Isn't that going to save the world, when China is increasing its coal usage from 1.2 billion tonnes a year to 7.5 billion tonnes a year by 2015! How ridiculous! How could the Labor Party fall for the Greens' line? They know, I guess, that eventually the cycle will change—you will get a Liberal government back, which will reverse these things. The first thing we will do is abolish the carbon tax. It distresses me as an Australian—forget about my politics or the political party I am involved in—that these industries go overseas and that we continue to tax ourselves. Again, with this Illegal Logging Prohibition Bill the sentiment is right, but it should not be necessary. If we had a vibrant industry in Australia this bill would not have been necessary.

I will move to the detail of the bill. As a member of the Senate Standing Committee for the Scrutiny of Bills I alert the Senate to a number of concerns that committee had to this particular bill. There are very substantial penalties imposed by regulation—five years imprisonment. The Committee for the Scrutiny of Bills rightly said that those sorts of penalty provisions should be included in the primary legislation, not in some regulations that might, at some time in the future, be promulgated. The Committee for the Scrutiny of Bills had a number of other concerns, including the reversal of the onus of proof on strict liability offences. These concerns were raised by the committee, which is helping me come to my conclusion that this bill should be defeated.

I am also concerned about the impact that this legislation will have on the timber importation industry in Australia. I think it is a matter of fact that 97.5 per cent of the total volume of timber product imported into Australia is sourced from supplier countries where legality is not an issue. We acknowledge that 2.5 per cent of imports might be from illegally harvested forests and yet to try to address that problem we bring in the proverbial sledgehammer. That is not to say we should not keep trying but this bill, regrettably, is not going to do that. In its present form the bill is inefficient and it is bureaucratic, and it has been suggested in evidence given to the Senate committee that it is quite unworkable. As I mentioned, it is an overreaction to the possibility of illegal product entering Australia. As I understand it, those figures came from ABARES.

The timber-importing industry itself has been working with governments, since my time in government, to restrict the import of timber products sourced from illegal logging activity. But any instrument that does that must be workable, efficient and cost effective and, regrettably, this bill and the regulations—most of which we have not seen—do not seem to be the way to go.

The bill is certainly inconsistent with the government's commitment to cutting green tape and improving international trade efficiencies and arrangements. The Labor Party in opposition waxed lyrical and long about the need to reduce green and red tape. We all know their record. They have reduced red tape by a figure of, let's say, one, at the same time as they have increased regulations by a figure of about seven. So they have got rid of one and brought in seven. That is the Labor Party's commitment to a reduction in red and green tape.

There are real concerns that the timber product imported from high-risk countries is sourced from illegally logged material, but it is only a very small amount and there needs to be a better way to actually address those particular issues than the way this bill and the regulations do.

There is the issue of working more closely with our neighbours in Indonesia and PNG. We know that the Labor Party take a very cavalier attitude to Indonesia. You have only to look at how they stopped the import of a very substantial part of the protein consumption by the Indonesian people by cutting off the live cattle export without any warning to the Indonesians. We know what the Indonesians, rightly, think about that. We would be offended and we well understand why the Indonesians themselves are offended. Because this bill is poorly thought through—it takes the Big Brother approach to our neighbours in South-East Asia—it is also fraught with problems and should this legislation go ahead it is also likely to offend our nearest neighbours.

The time allotted for this speech is, regrettably, coming to an end but, for those and many other reasons I would have liked to have spoken on, I will be opposing this bill.

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

I indicate that I will be supporting the Illegal Logging Prohibition Bill 2012, notwithstanding that I have reservations about how effective it will be. Clearly, it is far from perfect. There is an old saying that 'The perfect should not be the enemy of the good' and I think that, on balance, this bill will do some good. If the opposition—and I say this respectfully—share the view that the issue of illegal logging should be addressed, then what alternative approach is there in respect of this so that it can be dealt with effectively rather than simply opposing the bill? That is what I got from Senator Macdonald's contribution and I respect his position on this. I do agree with Senator Macdonald that we do need to work closely with our neighbours, with Indonesia and Papua New Guinea. We have seen significant reports of corruption over the years in relation to illegal logging. Obviously, a cooperative approach, engaging with those governments, is the preferred course. But with good friends—as Papua New Guinea and Indonesia are to Australia; it is a mutual friendship, formed with very strong ties—we sometimes need to be not so much undiplomatic but more straightforward in our views and concerns about illegal logging.

Obviously, the committee stage of this bill will give us an opportunity to look at the potential effectiveness of this bill. I think this bill is, at least, a step forward. There has been wide consultation with the industry in relation to the bill. Industry is broadly supportive, although there are concerns about issues of red tape and effectiveness. I believe that we need to put this in context in terms of the evidence that has been heard by the committee and what is on the public record. This bill requires due diligence requirements to mitigate the risk of importing or processing illegally logged timber and, to me, that is important because without that sort of due diligence then the trade in illegally logged timber will continue unabated. We need to be aware of the impact of illegal logging, the level of corruption involved and the importance of tackling this issue. I see this bill as one of a number of steps and measures in tackling illegal logging.

At this point I think it is worth referring to the work that has been undertaken by Clare Rewcastle Brown. She is a British investigative journalist. She was born in the Malaysian state of Sarawak. She is the founder of the Sarawak Report website and Radio Free Sarawak. In terms of her biographical details she is the sister-in-law of former British Prime Minister Gordon Brown, so she is also known by virtue of her relationship by marriage to the former British Prime Minister.

During a visit to Sarawak in 2005 to speak at an environmental conference, Ms Clare Rewcastle Brown was asked by local journalists and others who were concerned about the impact of illegal logging to help publicise issues of deforestation. When she began to investigate this issue, she was not able to enter the state of Sarawak; she was blacklisted, despite being born in Sarawak. She also received death threats. In February 2010, she founded the Sarawak Report. This is a blog that seeks to highlight the issues of illegal logging and the destruction of the tropical rainforests of Sarawak. They have made a number of serious allegations of corruption against the state government, which is led by Chief Minister Abdul Taib Mahmud. These are matters that have been widely publicised due to her advocacy and that of the radio station, Radio Free Sarawak, which broadcasts into Sarawak to publicise these issues. Their DJ is Peter John Jaban, who is well known to the people of Sarawak.

These are issues that are in the public interest to publicise. The level of corruption associated with illegal logging is quite staggering. The profits made are staggering. This bill sets out a framework so that we can at least begin to tackle it.

It is also worth reflecting on a report about Sarawak on the ABC's 7:30 program last year on 14 April by Mike Sexton, an Adelaide based reporter. Mr Sexton made the point that Sarawak is blessed with natural resources, including stunning tropical rainforests. But during the 30-year reign of Taib Mahmud much of the forest has been cleared by logging and replaced with palm oil plantations. The deforestation has marginalised wildlife—most notably the orangutan, which is now an endangered species—and destroyed the lifestyle of the indigenous people, who traditionally live in communal homes known as long houses. Mr Sexton pointed out that the Sarawak government strenuously disputes the claims made by the radio station, arguing that it has a sustainable forestry industry and that it has delivered wealth and advancement, such as hydroelectric schemes. The home minister says that a police investigation has begun into what he calls 'the broadcast of malicious lies'. Obviously, the Sarawak government contests the claims made, although there have been investigations by the Malaysian Anti-Corruption Commission and there have been continued reports of threats and intimidation.

Most disturbingly, Clare Rewcastle Brown and Peter John Jaban decided to go public after one of their informants, a former Taib aide, was found dead in suspicious circumstances. These matters that I am referring to are on the public record. It is important to put into context the seriousness of illegal logging, the money that can be made doing it and the corruption involved. This bill will go some way towards demanding a level of accountability, due diligence and some basic levels of regulation, which will be of some considerable use. But it should be a building block for other measures to tackle illegal logging.

It is relevant in the context of considering this bill that the Australian timber industry has suffered because of illegal logging overseas. It has suffered because it cannot compete with cheap, illegally logged imports. That has cost Australian jobs and damaged the Australian industry significantly. I also note that, for instance, the Australian Network News recently, on 17 October 2012, had a story about the Premier of the Solomon Islands Guadalcanal province, Anthony Veke, calling on the government to act on illegal logging after a foreign logger was shot one weekend. This is an issue not just in Malaysia. It has been raised in Indonesia, Papua New Guinea and the Solomon Islands. This is an important and fundamental issue that this bill at least makes a genuine attempt to tackle.

Earlier this year, I was fortunate enough to meet with Tan Sri Bernard Giluk Dompok, who is the Minister of Plantation Industries and Commodities of the government of Malaysia. I discussed with him the concerns expressed by many with respect to the issue of labelling palm oil. This is not about getting people to not harvest palm oil but to ensure that it is sustainable. That means having a labelling system in force that will encourage greater production of sustainable palm oil, which is environmentally desirable. Several years ago, I introduced a bill, along with my colleagues Senator Bob Brown from the Australian Greens and Senator Barnaby Joyce from the Nationals—an unusual unity ticket if there ever was one—that sought to have palm oil products labelled. That is something that I still think is desirable. I am happy for other oils to be labelled also. I note that the opposition has shown some sympathy for that. The government has yet to act. It is important that this move should not be one against palm oil per se but about the way that palm oil is harvested. We need to make sure that it does not take place at the expense of forests being harvested illegally. The meeting that I had with Mr Dompok was a useful one.

I also had a meeting with Dr Jalaluddin Harun, who is the Director-General of the Malaysian Timber Industry Board. I must say that I was quite impressed with the approach of Dr Harun and his colleagues to the value adding of timber products. It is something that I have discussed with Michael O'Connor, the National Secretary of the CFMEU, who is quite excited at the potential for value adding of timber products, which would create jobs and is the future of a sustainable Australian timber industry.

So I think it is fair to say that the innovations through the Malaysian Timber Industry Board are very encouraging in terms of value adding, and that is clearly a relevant factor.

Going back to the issue of illegal logging, it is fair to say that there is widespread corruption. The allegations in Sarawak are incredibly serious—allegations of death threats, allegations of lives being lost—and that is very disturbing. I think this piece of legislation, by requiring due diligence to mitigate the risk of importing or processing illegally logged timber, will be useful. But I also think it would be useful for the Australian government to engage, as Senator Macdonald suggested—and I think quite wisely—with governments of those countries in the region where illegal logging is still a significant issue. But if it is the case that illegal logging in the state of Sarawak, for instance, is being sanctioned at the highest levels through the Sarawak government, then that is something Australia has to be outspoken about, and I hope this bill provides a vehicle for accountability of illegal logging that is taking place.

So I support this bill, and I look forward to the committee stages. And whilst this bill is far from perfect, I believe it contains a number of useful measures for accountability, for transparency and for due diligence that are long overdue.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I wish to make clear and confirm the statements of the shadow minister, Senator Colbeck, that the coalition is strongly committed to addressing the trade of illegally sourced timber and timber products coming into this country. Contingent on the government being prepared to accept amendments that will put a reasonable time frame on this legislation, the coalition would go forward in supporting it, but in its present form and within the present time frame it will not.

I also understand that the industry itself is strongly in favour of continuing to work with the government to restrict the import of timber products sourced from illegal logging activity. But, again, industry is pleading with government for a round of consultation, both within Australia and with the countries that import timber and timber products, to ensure that the legislation is workable and that we can maintain good relations with those countries with whom we trade. The concern, both from this side and from industry, is that the bill in its present form is not going to achieve that—that it is bureaucratic and probably unworkable. And that is the role of people in this chamber: to assist the government to end up with legislation in final form that actually does make it workable and not so bureaucratic that it cannot be introduced without unnecessary imposts on industry.

I want to investigate for a moment the size and scale of the issue, if we can rely on ABARES data—and I am sure we can—as well as the relationship with our regional neighbours, particularly Malaysia, Indonesia, Papua New Guinea and to some extent China. They are the ones who will be most adversely affected should we not deal with this legislation and this consultation process in an expeditious and statesmanlike way—and we are at risk of not doing that. One of the concerns expressed to me by industry representatives is the whole question of due diligence in how they comply with the legislative requirement. Once again, we will be examining what the role of government and of government departments will be in that due diligence process. Once again, we just cannot leave this to industry without ministerial and bureaucratic involvement, and I wish to address that issue if I can. The bill is seen by many to be inconsistent with this government's commitment to cutting green tape and improving international trade efficiencies. Concern has been expressed that sufficient time has not been given to suppliers, particularly in South-East Asia, and that the timber product legality systems that have been under development would be accepted under the bill. And of course we then find ourselves at variance with some other countries of the world who import quite legally and for whom there is no question about the probity of the source of the timber and timber products. So the bill runs the risk of making timber products in this country less competitive against other building materials that are, as we know, less environmentally friendly.

But returning to the scale of the issue itself: ABARES data suggests that about 10 per cent of timber products imported into this country come from those countries that would be under some question mark—Indonesia, Papua New Guinea, Malaysia and to some extent China. If another basic assumption is correct—that up to a quarter, or 25 per cent, may be the subject of illegal logging—then we are looking at an issue involving 2½ per cent of the timber and timber products that come into the country. By definition, then—and by deduction—we know that 97½ per cent of the total volume of timber product into Australia, if you accept that figure of possibly a quarter being the subject of questionable source, is legally introduced into this country. And there is not and never has been an issue. So if we are dealing with legislation that is in some way going to put at risk that relationship with those countries, that is something we should examine, and I propose to do so.

The Joint Committee on Foreign Affairs, Defence and Trade examined this very issue. I will quote from two submissions made, respectively, by New Zealand and the United States—countries that are not under any suspicion in this. The New Zealand Institute of Forestry said:

The lack of definition of “regulated timber products” (until prescribed in regulations) adds to the difficulty of interpreting the definition of “illegally logged” and to the development of due diligence processes between importers and their exporting counterparts in other countries.

New Zealand are the largest of the importers of timber and timber products into this country, and I think the point they make should be reasonably taken on board by legislators here in Australia.

If I can, at the same time, refer to a brief quotation in their submission from the American Hardwood Export Council, they said: 'The council believes many of the trade related objections to the bill could be dealt with through outreach activities.' So we have evidence from countries with whom we have safely dealt for many years—countries that are under no threat, under no impost and under no cloud—saying to us that there are other mechanisms we can use.

I now turn to this relationship with countries in our region over whom there is the suspicion or the knowledge of illegal timber or timber products coming into this country—specifically, Indonesia, Malaysia, Papua New Guinea and to some extent China. It is only in the last few weeks that we have had the government referring to Australia as being in the Asian century. This provides us with the opportunity to define what we mean by that statement and what role we want to take. I do not think it is to the advantage of this country in its relationship with those in the region to be using a sledgehammer to crack a nutmeg in the way that we are.

I refer to submissions to the Joint Standing Committee on Foreign Affairs, Defence and Trade. The submission from the Ministry of Trade of the Republic of Indonesia makes a couple of very important points that this chamber should consider. It states:

The negative impact on trade should also not be underestimated bearing in mind that timber products commonly have long and complex chains of supply with mixed sources from different locations and different kinds of timber.

It goes on to say:

It is for this reason that the GOI has recommended the deferral of the legislation until 2015 to provide time to ensure the legislation will not have unintended consequences that will unnecessarily harm the mutual trade between our two nations. Furthermore, the three years of adjournment will provide time for proper consultation between both countries including detail clarification as well as period of adjustment for the Indonesian producers/exporters to comply with the regulation.

Again, that is a plea from our nearest neighbour—one of our largest trading partners—with whom the trading relationship over the last 12 months has been strained.

There are ample opportunities there in which we should move cautiously, in which we should take on board the advice of those who have submitted to the government and to various committees examining this particular situation—we are dealing with a circumstance possibly involving 2½ per cent of the product that is introduced into this country.

I come then to the imposition on Australian industry and Australian importers of timber and timber products. The proposed regulatory apparatus associated with this bill appears, in fact, to be contrary to the government's free-trade direction and commitment to reducing green tape. Estimates have been made that the cost of regulatory compliance as a percentage of the imported wholesale value of timber products to Australian larger importers, assuming an efficient legality verification compliance mechanism is in place—and I will come back to that—would be of the order of 2½ to 4½ per cent. That is for larger importers.

The percentage cost of compliance for smaller- and medium-sized businesses importing complex, composite products—with long supply chains right back to the grower at the point of harvest or from other countries or importing myriad product types, with each product or shipment being very small—will be immeasurably higher. In this economic climate there is such pain in the business community, reflecting itself in a lack of confidence or investment, regrettably in a circumstance of not adding new employment; indeed, they are having to put some employees off. The last thing we want to do is introduce unnecessary burdens that will further put those circumstances at stress and at risk.

It is not yet completely clear how the due diligence process will work. This is a point of immeasurable concern to industry. How does an importer comply? Is it sufficient to rely on the advice of the exporter or of a middle business associated with the exercise in the supply chain? The answer is no. The Australian importer must have their own due diligence, must satisfy themselves that there has been compliance with local laws in countries such as Indonesia, Malaysia, Papua New Guinea and China.

I ask the question, in the absence of better advice from the minister and the department: just how does an importer satisfy themselves and therefore satisfy independent scrutiny that they have undertaken that due diligence? None of that information, that due diligence process, has been released by the minister or by the department. Therefore, importing businesses in Australia are not unreasonably concerned. My own experience, limited as it is, was to observe the logging industries in Sarawak and Sabah. I can assure you, having seen what I saw and having followed up on some of the comments of Senator Xenophon a few moments ago—and I have no reason to disbelieve him, having observed what I did—as an importer, I would not like the task of going right back through the supply chain to observe for myself the compliance. Therefore, how do we deal with this matter better? We deal with it by allowing an extended period of time for consultation and we allow for a better process, a process of multilateral negotiations and liaison, a process of examining what has been undertaken successfully in Europe and the United States. We know that there have been failures in legislation and in procedures, even in such a developed country as the United States, when it comes to compliance.

The spirit of the legislation is fine but the timing is not appropriate. The mechanism by which the government is going about the process without adequate consultation and without examining alternative mechanisms is putting at risk our relationships with our nearest neighbours. They are the countries with whom, if we are to engage in the Asian century, we need to be engaging. I urge caution and I urge delay. I urge that we go through a process of consultation so that we can look at alternative ways of assisting these countries to comply. In the same way we can assist our own importing companies to ensure that, when the legislation is passed in whatever form, there are processes for due diligence that they know about, that they can comply with and that will not end up causing their businesses to fail or be significantly reduced to the extent that they become uncompetitive and allow other less environmentally friendly products to be used in the building and construction industry.

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

I thank senators for their contribution during the second reading debate. In summing up I note a report published earlier this year by the World Bank—and I think we should not miss this sentence—which stated:

Every two seconds, an area of forest the size of a football field is clear-cut by illegal loggers around the globe.

It went on to say that large-scale illegal operations are carried out by sophisticated criminal networks. Illegal logging is a social, environmental and economic issue globally, and we should not delay. Those opposite are, in effect, calling for a delay. Bear in mind that a delay means that every time we stand in this place we are saying that we support those who are part of sophisticated criminal networks that illegally log.

In 2007 the Labor Party made an election commitment to restrict the import of illegally logged timber into Australia. In 2010 both the Labor government and the coalition made election commitments to pass legislation restricting the import of illegally logged timber. What I hear now from the opposition, particularly Senator Back's helpful contribution, is that they not only want delay but are worried about a raft of issues that were addressed, by and large, in the Senate committee, by the department through workshops, through much industry dialogue and by industry itself calling for the ban of illegally logged timber. We now have the coalition walking away from that commitment. That is disappointing. It is not something I would have expected you would want the coalition to walk away from.

It is effectively a motherhood statement that we are all opposed to illegally logged timber entering Australia. It is in essence a very simple statement. It is, I suspect, difficult for Senator Colbeck to speak against the bill when, through the Senate Standing Committees on Rural and Regional Affairs and Transport, he made—and I want to recognise this—a substantial contribution to improve the bill's effectiveness and reach in this area. The government took cognisance of that, recognised the contribution that he made and accepted much of the recommendations that were put forward. The Illegal Logging Prohibition Bill, which is before us today, fulfils the government's commitment, and is another clear example of this Labor government delivering on the mandate it was given in the 2010 election to introduce this legislation. It is a bill that will support global efforts to combat illegal logging and to promote trade in legal timber. It will support our importers and our domestic processors who are already doing the right thing.

I note the concerns of those opposite about the development of regulations. I think both Senator Back and Senator Colbeck said something about correspondence between the government and the opposition on this matter. The government made an offer to the coalition about the regulations and the coalition rejected that. The government's position has always been that the regulations would be available for public comment six months from the bill passing, and I reiterate that today. The government will continue to engage with trading partners and importers and with state governments and domestic processors when developing and finalising the regulations. Again, to correct Senator Colbeck's comments about the regulations, I can advise that preliminary discussion drafts of two regulations have been distributed for comment to key trading partners and to other stakeholders. These draft regulations are available on the department's website for viewing. The distribution of these draft documents is the first step in the detailed consultation process through which the government will actively seek comment from domestic and international stakeholders as the package of regulations is developed.

The bill aligns Australia's efforts to combat illegal logging with international initiatives including legislation introduced in 2008 by the United States and developments in the European Union. The European Union are implementing a new timber regulation that requires importers to undertake due diligence when first placing timber or timber products on the market. The European Commission is scheduled to apply its timber regulation in March 2013. Australia's proposed legislation is closely aligned with the views of other countries in the Asia-Pacific region, which is reflected in the 2011 Asia-Pacific Economic Cooperation leaders declaration made in Honolulu which stated that economies would:

… work to implement appropriate measures to prohibit trade in illegally harvested forest products and undertake additional activities in APEC to combat illegal logging and associated trade.

An APEC expert group on illegal logging and associated trade has recently been established pursuant to a proposal from Chile, Indonesia and the United States and supported by Australia, and Australia participated in meetings in February and May 2012. The bill is consistent with Australia's international trade requirements under the World Trade Organization and relevant free trade agreements. The government will continue to source advice relating to Australia's international trade law obligations as the regulations are developed. Australia presented details of its proposed legislation to the Committee on Trade and Environment of the World Trade Organization on 14 November 2011.

The bill will regulate timber products at two key points of entry onto the Australian timber market—at the border, for imported timber products, and at timber-processing plants where domestic raw logs are processed for the first time. The bill will restrict the importation and sale of illegally logged timber in Australia in three main ways. First, it will prohibit the importation of all timber products that contain illegally logged timber and the processing of raw logs that have been illegally logged. The high-level prohibition enters into force on the day after royal assent of this bill. The prohibition will act as a strong deterrent and send a clear signal of Australia's intention to take action to combat illegal logging. To prosecute under this prohibition, a high bar has been set. The government will need to be able to prove that the illegally logged timber was imported or processed either intentionally with knowledge or recklessly. Second, it will require importers of regulated timber products and domestic processors of raw logs to undertake due diligence to mitigate the risk of those products containing illegally logged timber. Timber products for which due diligence will be required will be prescribed by regulations that are being worked with key stakeholders. Requirements for due diligence will come into force two years after the bill becomes law, which gives businesses sufficient time to establish and implement their due diligence systems and processes. Individual country initiatives and national schemes, including national timber legality verification and forest certification schemes like those being developed with Indonesia, can be one of the tools used by businesses in Australia to demonstrate that timber products have been legally harvested. Third, the bill establishes a comprehensive monitoring, investigation and enforcement regime to ensure compliance with all elements of the bill.

In conclusion, by restricting the trade of illegally logged timber products, this bill will restore the balance as to the legally harvested timber market. The bill will remove unfair competition posed by illegally logged timber for Australia's domestic timber producers and suppliers to establish an even economic playing field for the purchase and sale of legally logged timber products. What the bill does not do is place requirements on Australia's trading partners or their exporters. Australian importers will likely be seeing information from their suppliers about the timber they are purchasing, to minimise the risk of importing illegally logged timber. Information that may be sought will be the focus of future work and consultation. Guidance material will be developed to support those interested in the requirements under the bill. The Illegal Logging Prohibition Bill 2012 delivers on the government's commitment to restrict the importation and sale of illegally logged timber in Australia. It delivers on the promise, despite those who were opposed to what is in effect a very easy concept, that we—as a government and as individuals, traders and suppliers in the market—should not support illegally logged timber. The bill will promote the trade of legally logged timber and will be good for jobs in all well-regulated timber-producing markets. With those few words I commend the bill to the Senate.

Question agreed to.

Bill read a second time.