❓ Question regarding Sotico's announcement and its impact on forest management plans, specifically if it allows slowing down the plan development to address sustainability concerns raised by a recent report. Minister acknowledges the possibility but avoids commitment due to potential financial liabilities.
AnsweredQoN 73Legislative Council
QuestionView source ↗
I thank the minister for explaining his position vis-a-vis the Sotico Pty Ltd announcements; in particular, the planning for development of new forest management plans. I am aware from the background information the minister provided to the House that he intends to expedite the plans because of contractual commitments and his wish to revise that situation. Does this announcement from Sotico provide the minister and the Government with the necessary breathing space to slow down that position, particularly in light of the kind of concerns raised in the report by Professor Ian Ferguson that came out two weeks ago? That report raised a raft of new questions about the calculation of sustainable yield that make it even more difficult to expedite the determination of sustainable yield and, therefore, the resource allocation. Hon KIM CHANCE
AnswerView source ↗
I apologise, as I somewhat misunderstood the member’s question. The member is asking whether the situation will slow down the urgency to lock in the plan. The answer is that it can, but I am not entirely sure that it will. The reason I cannot be clearer than that relates to that part of the answer I have already given. The difficulty for the Government in negotiating the step-down contracts is that unless it has a plan in place it cannot legally contract to those volumes. It can do what it did with the Nannup proposition; that is, put a guarantee in place that if the forest management plan is unable to deliver the metreage built into the deal - in Nannup’s case that was 20 000 cubic metres - the State will be exposed to a liability. Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon KIM CHANCE replied: I apologise, as I somewhat misunderstood the member’s question. The member is asking whether the situation will slow down the urgency to lock in the plan. The answer is that it can, but I am not entirely sure that it will. The reason I cannot be clearer than that relates to that part of the answer I have already given. The difficulty for the Government in negotiating the step-down contracts is that unless it has a plan in place it cannot legally contract to those volumes. It can do what it did with the Nannup proposition; that is, put a guarantee in place that if the forest management plan is unable to deliver the metreage built into the deal - in Nannup’s case that was 20 000 cubic metres - the State will be exposed to a liability. Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
I apologise, as I somewhat misunderstood the member’s question. The member is asking whether the situation will slow down the urgency to lock in the plan. The answer is that it can, but I am not entirely sure that it will. The reason I cannot be clearer than that relates to that part of the answer I have already given. The difficulty for the Government in negotiating the step-down contracts is that unless it has a plan in place it cannot legally contract to those volumes. It can do what it did with the Nannup proposition; that is, put a guarantee in place that if the forest management plan is unable to deliver the metreage built into the deal - in Nannup’s case that was 20 000 cubic metres - the State will be exposed to a liability. Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon KIM CHANCE replied: I apologise, as I somewhat misunderstood the member’s question. The member is asking whether the situation will slow down the urgency to lock in the plan. The answer is that it can, but I am not entirely sure that it will. The reason I cannot be clearer than that relates to that part of the answer I have already given. The difficulty for the Government in negotiating the step-down contracts is that unless it has a plan in place it cannot legally contract to those volumes. It can do what it did with the Nannup proposition; that is, put a guarantee in place that if the forest management plan is unable to deliver the metreage built into the deal - in Nannup’s case that was 20 000 cubic metres - the State will be exposed to a liability. Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
I apologise, as I somewhat misunderstood the member’s question. The member is asking whether the situation will slow down the urgency to lock in the plan. The answer is that it can, but I am not entirely sure that it will. The reason I cannot be clearer than that relates to that part of the answer I have already given. The difficulty for the Government in negotiating the step-down contracts is that unless it has a plan in place it cannot legally contract to those volumes. It can do what it did with the Nannup proposition; that is, put a guarantee in place that if the forest management plan is unable to deliver the metreage built into the deal - in Nannup’s case that was 20 000 cubic metres - the State will be exposed to a liability. Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon Christine Sharp: In the situation in which the taker of two-thirds of the log allocations is voluntarily relinquishing some of that contractual commitment, would that not give the Government the scope to get the science right and to allow the development of the plans to take place at a more realistic pace? Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
Hon KIM CHANCE: It is at least a cogent argument that that is the case. However, I cannot commit the Government to that position. We will need to work that through. Every time the State enters into deals of that nature it is exposed to a contingent liability that could amount to a substantial amount of money. That decision will need to be made by the Government. The Government must decide whether it will be prepared to enter into more Nannup-type deals. It would be premature to give Hon Christine Sharp any specific position, because at this stage we do not know exactly how many cubic metres Sotico Pty Ltd will want to step down to. Until we know that, it will be extremely difficult. We can make assumptions but, even then, the Cabinet must make a clear decision on the matter. That is because it involves the State in a contingent liability simply because we cannot form a contract.
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