Last updated: 2017-09-12
Notes from the Business of Trees on farms - production and biodiversity field day held at Cressy on Thursday 7th September are now available on our website.» Read more...
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In late 2013 the Tasmanian Government established a Panel to investigate and report on the existing Tasmanian privately-owned hardwood plantation estate and the best ways to enhance its value to landowners and the Tasmanian community.
The Panel was chaired by Martin Ferguson AO, the former Federal Minister for Resources and Energy. Other Panel members were Tom Fisk (CEO Private Forests Tasmania), Jan Davis (CEO Tasmanian Farmers and Graziers Association) and Norm McIlfatrick (Secretary, Department of Infrastructure, Energy and Resources).
The Panel provided a report to the then Minister for Energy and Resources, Hon Bryan Green MP.
During the public forums landowners with MIS plantations on their land via lease and forestry right arrangements (landlords) expressed concern that, although they were likely to ultimately receive title to the plantation after the various court and sale processes had run their course, they believed they were currently unable to insure the asset until the uncertainty about ownership status had been resolved.
Landowners were also uncertain if they could insure for potential clean-up costs if the plantation on their land (that they don’t own) is burnt and the plantation is not otherwise insured. It is highly likely that any other potential interest in a MIS plantation (e.g. responsible entity and woodlot investors) would rapidly disappear on its loss to fire, leaving the landlord with the clean-up problem.
Private Forests Tasmania has now asked a number of insurers experienced in forestry to provide advice on whether a landowner could insure under the two scenario’s outlined above. Not surprisingly, early discussions have revealed that insurance is not a straight forward proposition given the uncertainty over title to the trees. However, we have been advised it may possible and it is being actively investigated by the insurers.
November 2015 Update: As administrators/liquidators continue to wind-up the insolvent MIS entities such as FEA and Gunns, many landowners who had leased land to these companies are now acquiring freehold title to the plantations on their land. Although often acquired for a ‘peppercorn’, these timber assets may now have significant value and owners are reminded that plantation insurance is readily available. It is advisable to consider plantation insurance before we enter the fire season as insurers may place embargoes on writing new policies while there are active fires.
We know that the two brokers listed below are active in the plantation insurance area but there may be others. Your own insurance broker may be able to help you. The mention of any broker does not constitute an endorsement or recommendation by PFT.
17th November 2015 Update: Mr Michael Burns from Coverforce, an Australian insurance broker, works together with a leading Australian forestry insurer to arrange plantation timber insurance to a number of plantation owners.
Coverforce can seek plantation timber insurance quotations for landowners who own the plantations on their properties as well as seeking plantation timber insurance quotations for MIS plantations where the ownership of the trees is still awaiting resolution.
Coverforce can seek plantation timber insurance quotations covering a number of risks including fire, malicious acts, impact, windstorm and hail together with additional benefits comprising of removal of debris, plantation infrastructure (i.e. fencing), replanting costs and claims preparation costs.
Coverforce can also seek Public Liability insurance quotations for the purpose of protecting plantation owners for their legal liability to third parties to pay compensation in respect of personal injury and/or property damage occurring in relation to their activities (regarding the ownership of the plantations).
Coverforce are also an endorsed broker of the Australian Forest Growers (AFG).
See www.coverforce.com.au/forests for more information or Michael Burns can be contacted via email at firstname.lastname@example.org or phone 0409 822 379.
27th March 2014 Update: Advice has been received from Mr Darryl Hawke from Insurance Facilitators Pty Ltd, an experienced Australian plantation insurer, about some of the risk they could insure:
Landowners who were leasing land to now insolvent MIS companies could insure their interest in the trees on their land for the monies owed. They could also insure the tree crop for its current value, even with the ownership of the trees still uncertain; and
Landowners could insure for the cost of removal of debris only if the trees burn to the ground and this is likely in the region of $750/ha. Insurers would not pay for land preparation, fertiliser or sowing to pasture.
Any landowners wanting to follow up on this advice should phone Darryl on 0429 929 209 or email him at email@example.com. He is a plantation owner in his own right and consequently has a good understanding of the issues.
3rd April 2014 Update: Advice has been received from another plantation insurer, who wishes to remain anonymous, that their underwriter is 'not currently prepared to quote due to the issues surrounding the insurable interest in the plantations' and their assessment of 'fire maintenance issues'.
Please reqularly check this page. We will update it as new information comes to hand
Many documents connected to the various legal proceedings related to liquidation are available on the website of the legal firm, Arnold Bloch Liebler. See link below.
To keep in touch with TFGA landowner updates and communications in relation to the hardwood plantation issues follow this link
Landowners who have leased land to MIS plantation companies are now sometimes asked to sign documents to revoke the PTR declared on the land. In this circumstance, even though the PTR may have been a requirement of the MIS company, once declared it belongs with the land title (and hence the landowner). Therefore, a decision to revoke or not lies completely with the landowner. It should only be done if it suits the landowner. PFT can provide impartial advice to landlords who have been asked to facilitate the revocation of a PTR on their plantation land.
The building of bigger and better timber buildings in Australia is on a roll! Many in the forest industry are aware of the recently completed and remarkable 10 storey Forte apartment building and The Library at the Dock built in Melbourne's Dockland precinct.
Architecture and Design reports that the new Netball 'Centre of Excellence' at Homebush has been built with large format laminated veneer lumbur beams. They also report that Sydney architects, Fitzpatrick and Partners, have now prepared a concept design for what could be the tallest timber commercial building in Australia, using glue laminated timber.
The use of wood residues for heating by agencies from all levels of government has a great but largely unrealised potential in Tasmania and other cooler Australian regions. This escellent story from New Zealand was published in the weekly electronic forest industry newsletter 'WoodWeek' and it serves as an excellent reminder of what untapped potential there is to reap benefits in regional economic growth, employment and environment if we take this seriously.
PFT thanks John Stulen and WoodWeek (www.woodweek.com/dsp_subscribe.cfm) for permission to reproduce this story.
In late February 2014 a small group of Tasmanians attended the European Pellet Conference in Wels, Austria. One of the leading sources of up to date information in this area, Biomass Magazine reported on the concluding country-by-country market updates. The information provided by Annalisa Paniz, Italian Agriforestry Energy Association, is eye-catching from a Tasmanian perspective because we also use wood extensively for domestic heating:
[She] described an Italian pellet market with steadily growing demand, coinciding with decreasing pellet production. She reported that Italy is mainland Europe’s largest consumer of pellets, using over 3 million tons annually and growing between 200,000 and 300,000 tons each year. Strong residential pellet appliance sales in Italy have created strong demand, and Paniz estimates that there are nearly 2,000,000 pellet stoves and 200,000 pellet boilers installed in Italian homes. There are currently nearly 40 pellet producers in Italy, but Paniz reported that 90% of Italian pellet production is generated by about a dozen producers. Italian pellet production peaked in 2007 at nearly 750,000 tons but has fallen to about 300,000 tons since with domestic producers moving away from production and instead on the distribution of imported pellets. Austria and Germany are the largest suppliers of pellets to Italy, but bulk delivery of pellets by ship continues to increase and Paniz expects that at least 600,000 tons of pellets will arrive in Italy by ship in 2014. Italian ports, including Naples, are equipped with fines removal and bagging equipment.
“In many European countries forest biomass is considered an important renewable energy source; its use has increased significantly in the last 10 years, it is politically supported by the public and all political parties and it is partly subsidised by governments. In contrast forest biomass use for energy is insignificant in Tasmania (as it is in the rest of Australia) and gets little political or public support although a significant amount of harvesting and processing residues are currently burnt in the open or dumped in landfills.”
“Coming from Europe with a limited availability of wood it is sometimes hard to understand how little economic and ecological advantage Tasmania is currently gaining from its large natural forest resource. It is also surprising that using forest biomass for energy gets so little political support despite its vast potential. It appears that the long ongoing conflict on harvesting in old-growth forests has consumed much of the social capital which would have been needed to develop a future forest industry and more effective use of renewable energies. Hopefully the ‘Tasmanian Forest Agreement‘ which virtually ends harvesting in oldgrowth forests is the starting point for a new era based on plantations and native forest regrowth. The development of a profitable and sustainable future forest industry based on these resources is challenging and will require significant commitment. The use of residues and low quality timber for energy could be an important part of this future industry.”
Prof Andreas Rothe, 2013