Update on Australia’s Illegal Logging Prohibition legislation – “soft start” extended indefinitely

Australia’s Illegal Logging Legislation remains stalled. Requirements for Australian timber importers and processors to conduct exhaustive due diligence to establish the “legality” of each consignment of timber products came into force in November 2014. The legislation requires importers and processors to investigate whether timber was harvested in compliance with all applicable laws of the place of origin, including respecting the land use rights of local communities, and ensuring that foreign logging companies are up to date with all licensing and tax payments.

As has been pointed out in this newsletter, it is onerous and unreasonable to expect Australian timber importers – many of whom are small and medium-sized enterprises – to effectively police the compliance of multiple international suppliers with foreign laws. In addition, complex timber products such as paper, plywood and veneers may include timber originating from multiple locations – even multiple countries – in a single product. Following the letter of the law, the owner of an Australian furniture shop importing a single shipment of tables could face imprisonment if they fail to adequately investigate the legal compliance of multiple foreign forestry companies, and the ability of communities in different parts of the world to access their traditional lands.

The government has wisely elected to extend indefinitely the “soft start” period beyond its original end date of May 2016. The Department states that it will  continue to not pursue civil penalties against importers and processors who are found to have contravened the Regulation. The reason provided for this extension is to give the government time to consider the amendments proposed by KPMG following a review of the impact of the legislation in 2013-14, and to perform a Regulatory Impact Assessment, which was due to be undertaken during the first half of 2016.

It is hoped that the Regulatory Impact Assessment, when completed, will clearly demonstrate the high costs and negligible benefits inherent in the Illegal Logging Prohibition legislation. As was demonstrated as far back as 2005, even if the legislation succeeded in reducing the importation of illegally logged timber to Australia, this would have no significant impact on the global incidence of illegal logging.

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