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The Centra Hotel, Melbourne
18 May 1998

Senator the Hon Ian Macdonald
Parliamentary Secretary to the
Minister for the Environment


Mr Chairman, ladies and gentleman, I am delighted to be with you today. I am delighted to be in the company of such a distinguished group of executives from Australian business and from government.

I see in the list of participants that there are representatives of a number of companies with whom the Government has had very close dealings in past months and years. We're very grateful for the support private industry does give to the Government, particularly the Environment Department and Environment Australia in working through the issues that are of importance to Australia and Australians.

In my capacity as Parliamentary Secretary to Senator Robert Hill, the Minister for the Environment, I have ministerial responsibility for the Bureau of Meteorology, but don't blame me for Melbourne's weather - nobody can do anything about that. However, if you came to Queensland, you would see what I can do for the weather!

I also have responsibility for Australia's Antarctic Division. I see that one of the companies represented here today has recently assisted, out of their field one might almost say, in helping the Australian Government in its positive action to get rid of pirates who are raping the Great Southern fisheries around Australia's sub-Antarctic Heard Island and Macdonald Islands.

It's great that I can be with you. An apology from Senator Hill who would have liked to have been involved in this conference as well but, as you can imagine, with the way things are in the Senate and the calls upon his time he was unable to get here.

There has been, ladies and gentleman, in recent times considerable debate, both within Australia and internationally, regarding the growing importance of environmental issues. At the same time there has been general acceptance, an acceptance I might say that has been emphasised and encouraged by our Government, of the need to address these environmental issues - not in isolation - but in concert with economic and social issues.

A fundamental component of this approach is partnerships. Partnerships between governments, and partnerships between governments and industry.

A feature of the Howard Government's Environment Priorities for 1998-99, as announced by Senator Hill the Minister for the Environment on 12 May, is that they are based on this approach. Senator Hill's Budget Statement "Investing in our Natural Heritage" features a number of initiatives whose success depends on stakeholders working cooperatively. These include the implementation of an enhanced greenhouse strategy, enacting new environment legislation - and that will be very important, implementing the first National Environment Protection Measure, and completing the majority of the remaining Regional Forest Agreements.

Our Government is committed to working cooperatively with industry and with State and Territory Governments to achieve the best possible outcomes for the people of Australia, now and in the foreseeable future.

I am very pleased to be here with you to have the opportunity to tell you something of our Government's initiatives relevant to Australia's pulp and paper industries, including the Plantations 2020 Vision, the Greenhouse Challenge program and our national waste minimisation policies for industry recycling.

Plantations 2020 Vision

The `Plantations 2020 Vision' is a partnership between Commonwealth, State and industry, launched in October last year with a target of trebling Australia's plantation estate by the year 2020 from 1 million hectares to three million hectares. The objective is to build up an internationally competitive, market oriented industry which is driven largely by increased private sector investment.

Australia already has the necessary land resources and an investment climate that ranks with the best in the world. High productivity provides Australia with a comparative advantage over many other nations with similar resources and there is very significant potential for expansion in prospective areas.

Achievement of the 2020 Vision will have many benefits. These include:

There will also be environmental benefits. Achieving the vision will help the nation reduce net greenhouse gas emissions. An expanded plantation resource will also provide other environmental benefits such as reducing soil salinity and rising water tables without compromising commercial attractiveness.

All governments can play their part by making sure their policy settings support plantations, for example, by removing regulatory impediments to plantation development.

For its part, the Commonwealth has lifted controls on the export of unprocessed plantation wood from Victoria, Tasmania, South Australia, Western Australia and New South Wales and will be removing those restraints from the remaining States and Territories subject to successful completion of an independent scientific assessment of codes of forest practice. This removes a significant impediment to investment in plantations. We are also collaborating with industry to provide investors with better information on log pricing, log specifications and market opportunities.

Essentially, achievement of the vision relies on the maintenance of strong Government and industry partnerships.

Greenhouse Issues

As the Chairman has mentioned, forestry plays an important role in Australia's efforts to reduce greenhouse gas emissions. Carbon dioxide is, as most of you will know, absorbed from the atmosphere and stored as carbon in growing vegetation. It is released back into the atmosphere when land is cleared and vegetation decays, or in the case of forests, when their products decay.

The pulp and paper industry can thus play a significant role in reducing Australia's greenhouse gas emissions through their afforestation work.

At the recent Kyoto climate change conference the Australian government successfully negotiated the inclusion of the absorption of carbon dioxide by commercial forests and other tree planting since 1990 in to the emissions reduction targets. The Kyoto agreement also includes provision for emissions trading. The pulp and paper industry will be encouraged by the Government to play an active role in the process of developing a robust carbon accounting system.

Perhaps at this stage I should intervene with a commercial for a conference which was drawn to my attention as I came in today. That is, the first international industry briefing on emissions trading which is taking place in Sydney on the 18th and 19th of June 1998. It is those sort of conferences that the Government looks forward to, to get the emissions trading on the track and to make sure that it is a very important part of Australia's business and environmental life in the years ahead.

The Pulp and Paper Manufacturers Federation of Australia is already addressing Greenhouse emissions by being one of the first participants in the Federal Government's Greenhouse Challenge partnership program. Since the time that the Federation became involved, three of its members - Australian Paper, Australian Newsprint Mills and Kimberly-Clark Australia - have developed their own cooperative agreements.

All these companies are greatly reducing their greenhouse gas emissions, two of them below 1990 levels. Much of this reduction is being achieved through vegetation carbon sinks, demonstrating that participants in the Greenhouse Challenge program will be well positioned to take advantage of the advent of emissions trading.

That is something that I encourage all of you in private industry to become involved in, if you are not already - because it is important for Australia, it's important for Australia to honour its Kyoto agreements, and it will be an important commercial and economic factor for private industry.

The government is committed to the Greenhouse Challenge program. The Prime Minister announced late last year a $180 million package of measures to build on Australia greenhouse gas reduction efforts which include an extra $27 million over the next five years to expand the Greenhouse Challenge program.

Several other measures in the package will specifically foster growth in plantation forestry and native revegetation to act as sinks for greenhouse gases.

The Bush for Greenhouse program, for example, aims to establish greenhouse gas sinks by facilitating the corporate funding of Natural Heritage Trust revegetation projects. This initiative offers companies who invest in the program the opportunity to obtain recognition for the carbon sequestered in the vegetation sink created.

This is another program which I urge those of you in private industry to find out about and get involved in. It helps with your activity, it helps the $1.25 billion which our Government has already invested in the Natural Heritage Trust. Overall, it will be good for Australian business, good for Australian jobs and, importantly, good for our environment and our atmosphere.

Industry Recycling

Ladies and gentleman, another issue relevant to the pulp and paper sector is that of recycling and waste management. Most people would agree that national industries need nationally consistent policies in order to operate effectively and efficiently, and the Commonwealth is committed to the development of national waste reduction policies.

One such initiative is the National Packaging Covenant which the Commonwealth is progressing through the Australia and New Zealand Environment Conservation Council (ANZECC), in collaboration with industry and local government.

The National Packaging Covenant will encompass the entire packaging chain and be based on the principle of product stewardship. This is a concept by which industry, governments, and consumers assume a greater responsibility for ensuring that the manufacture, use, reuse, recycling, and disposal of packaging has a minimum impact on the environment. The Government understands and is committed to the principle that no sector should bear a disproportionate burden of the costs. A continuing willingness on the part of your industry to embrace this concept will ensure the success of the Covenant. The Covenant, in turn, will ensure the long term viability and security of kerbside recycling schemes.

Industry representatives participating in the Covenant have argued strongly that they can only sign a voluntary agreement - like the Covenant - if it is supported by measures to prevent free riders from gaining a competitive advantage, by avoiding their product stewardship responsibilities. In response to these industry concerns, the National Environment Protection Council is developing a National Environment Protection Measure for used packaging materials. This will establish a regulatory safety net for Covenant participants by developing harmonised obligatory regimes in each jurisdiction.

Existing national Industry Waste Reduction Agreements, with which some of you will be familiar, will become Schedules to the Covenant. Through these agreements a number of paper and packaging companies have committed to measures such as achieving minimum recovery and recycling rates, paying minimum floor prices for collected materials, lightweighting, consumer education, and so on.

At the same time, our Government is acting to improve markets, and encourage investment, in our emerging recycling industries through initiatives such as the Hunter Centre for Resource Recovery, which was announced by the Prime Minister last year.

Regional Forest Agreements

As a Government, we have fully embraced the principles laid down in the 1992 National Forest Policy and we are committed to working cooperatively with State and Territory Governments, and with industry to achieve these goals. A primary vehicle for implementing the policy is the delivery of Regional Forest Agreements.

As well as providing for conservation of environment and heritage values, the RFAs ensure a viable, ecologically sustainable and value-added wood products industry based on the resource outside the reserve system.

We are already beginning to reap the benefits of the Regional Forest Agreements through increased certainty, resulting investment, employment, and the security of conservation.

Developing Regional Forest Agreements forms only one part of the Government's comprehensive forest policy approach. Other initiatives being pursued include the Wood and Paper Industry Strategy to encourage investment and down-stream processing; and a Structural Adjustment Package to provide financial assistance and retraining to assist workers and businesses affected by the Government's initiatives.

Finally, in the current climate of a collapse in world paper prices that the Chairman mentioned, and the downturn in Australia's exports of used paper to Asia, I should draw your attention to the recent decisive action taken by the Commonwealth Government to prevent overseas manufacturers from dumping cheap paper within Australia. This action will ensure that the Australian paper industry will no longer have to face unfair competition and low prices which undercut those prices charged by Australian manufacturers. The decision will improve marketing opportunities for Australian companies and save the jobs of Australian workers in these industries.


Ladies and gentleman, these directions towards the future have depended on partnerships between the Government and Industry. The Pulp and Paper industry has played a major role in the success of these initiatives, and their future role will ensure that this success is continued into the next century.

As a Government we have shown our commitment to ecologically sustainable development - that is, economic growth that is not at the expense of our unique natural heritage. We have achieved a number of important milestones while in office - it is a record of which the Government is proud and one we are determined to continue.

Senator Hill joins with me in wishing you success in this conference.

We are confident that Australia's best interests, in an economic, social and environmental sense, lie in gathering the knowledge, understanding and commitment of experts and practitioners both in industry and public policy to reach the goal that's right for Australia.

We appreciate the time that people like yourselves put into coming to these conferences, leaving obviously busy work in industry and in government. We appreciate you coming together to work through the ways in which we can expand the Australian Pulp and Paper Industry in a way that creates jobs, makes wealth and enhances our environment.

Ladies and gentleman, I wish you well in your deliberations in the next two days and I thank you for giving me the opportunity of speaking with you today.

Commonwealth of Australia