❓ WA Parliament Question on Notice regarding the Forest Products Commission's financial performance, sandalwood harvesting practices, and future plans for sandalwood plantations. The questions probe profitability, government funding, and contract conditions.
AnsweredQoN 21Legislative Council
Asked
8 April 2025
Member
Portfolio
Agriculture and Food; Fisheries; Forestry; Small Business; Mid West
QuestionView source ↗
(1) For each of the past ten financial years to date: (a) what has been the overall
operating profit (or loss) of the Forest Products Commission (FPC); (b) what has been the operating profit (or loss) of
the FPC’s native forest operations; (c) what has been the operating profit (or loss) of
the FPC’s plantation operations; (d) what has been the operating profit (or loss) of
the FPC’s native sandalwood operations; and (e) what dividend has the FPC paid to the Western Australian (WA) Government or Treasury? (2) Since its inception, in which years has FPC
recorded an operating profit? (3) For each of those years in (2), what was the operating profit? (4) Since its inception, in which
years has FPC paid a dividend to the WA Government or Treasury? (5) for each of those years in (4), what was the dividend? (6) Since its inception, what has been the total of
payments from the WA Government to the FPC in the form of grants, subsidies, or
other payments? (7) What is the accumulated deficit of the FPC? (8) The Auditor General’s Report to
the Forest Products Commission Annual Report 2023-24 states, “In preparing the financial
statements, the [FPC] Commissioners are responsible for assessing the entity’s
ability to continue as a going concern; disclosing, as applicable, matters
related to going concern; using the going concern basis of accounting unless
the Western Australian Government has made policy or funding decisions
affecting the continued existence of the Commission”, and I ask: (a) does the Forest Products Commission Annual Report 2023-24 provide an
assessment by the Commissioners as to the FPC’s ability to continue as a going
concern; (b) if yes to (a), what is the Commissioners' assessment; and (c) if no going concern assessment has been
conducted, why not? (9) At page 65 of the Forest Products Commission Annual Report 2023-24, the FPC states, “The FPC has
received the right to harvest sandalwood in Western Australia for three years
in exchange for no cash or services when licence(s) are issued by the
Department of Biodiversity Conservation and Attractions (DBCA) and there are no
conditions to be fulfilled”, and I ask: (a) why does the FPC pay nothing for the right to
harvest native sandalwood from the wild; (b) given that other commercial entities exploiting
WA’s natural resources have to pay a royalty or some other form of financial
recognition of the value of the resource, why is the FPC exempt from this
requirement; and (c) why are there no conditions to be fulfilled by
the FPC in relation to wild sandalwood harvesting (for example the requirement
to ensure successful regeneration)? (10) In awarding production contracts for the
harvesting of sandalwood from the wild, does the FPC place conditions on those
contracts? (11) if yes to (10), what are the conditions? (12) if yes to (10), will the Minister table sample FPC production contracts including all conditions? (13) if no to (12), why not? (14) When does the FPC plan to commence the
harvesting and sale of the sandalwood (Santalum
spicatum) plantations under its management? (15) What annual tonnage does the FPC expect to be
producing and selling from its sandalwood (Santalum
spicatum) plantations for each of the next ten years?
operating profit (or loss) of the Forest Products Commission (FPC); (b) what has been the operating profit (or loss) of
the FPC’s native forest operations; (c) what has been the operating profit (or loss) of
the FPC’s plantation operations; (d) what has been the operating profit (or loss) of
the FPC’s native sandalwood operations; and (e) what dividend has the FPC paid to the Western Australian (WA) Government or Treasury? (2) Since its inception, in which years has FPC
recorded an operating profit? (3) For each of those years in (2), what was the operating profit? (4) Since its inception, in which
years has FPC paid a dividend to the WA Government or Treasury? (5) for each of those years in (4), what was the dividend? (6) Since its inception, what has been the total of
payments from the WA Government to the FPC in the form of grants, subsidies, or
other payments? (7) What is the accumulated deficit of the FPC? (8) The Auditor General’s Report to
the Forest Products Commission Annual Report 2023-24 states, “In preparing the financial
statements, the [FPC] Commissioners are responsible for assessing the entity’s
ability to continue as a going concern; disclosing, as applicable, matters
related to going concern; using the going concern basis of accounting unless
the Western Australian Government has made policy or funding decisions
affecting the continued existence of the Commission”, and I ask: (a) does the Forest Products Commission Annual Report 2023-24 provide an
assessment by the Commissioners as to the FPC’s ability to continue as a going
concern; (b) if yes to (a), what is the Commissioners' assessment; and (c) if no going concern assessment has been
conducted, why not? (9) At page 65 of the Forest Products Commission Annual Report 2023-24, the FPC states, “The FPC has
received the right to harvest sandalwood in Western Australia for three years
in exchange for no cash or services when licence(s) are issued by the
Department of Biodiversity Conservation and Attractions (DBCA) and there are no
conditions to be fulfilled”, and I ask: (a) why does the FPC pay nothing for the right to
harvest native sandalwood from the wild; (b) given that other commercial entities exploiting
WA’s natural resources have to pay a royalty or some other form of financial
recognition of the value of the resource, why is the FPC exempt from this
requirement; and (c) why are there no conditions to be fulfilled by
the FPC in relation to wild sandalwood harvesting (for example the requirement
to ensure successful regeneration)? (10) In awarding production contracts for the
harvesting of sandalwood from the wild, does the FPC place conditions on those
contracts? (11) if yes to (10), what are the conditions? (12) if yes to (10), will the Minister table sample FPC production contracts including all conditions? (13) if no to (12), why not? (14) When does the FPC plan to commence the
harvesting and sale of the sandalwood (Santalum
spicatum) plantations under its management? (15) What annual tonnage does the FPC expect to be
producing and selling from its sandalwood (Santalum
spicatum) plantations for each of the next ten years?
AnswerView source ↗
Answered
20 May 2025
Responded by
Minister for Agriculture and Food; Fisheries; Forestry; Small Business; Mid West
Response time
6 days
(1) (a) Operating profit / (loss) of the FPC for the past ten financial years were as follows:
Financial Year
Total
$000
2014-2015
8,962
2015-2016
16,954
2016-2017
10,379
2017-2018
18,498
2018-2019
32
2019-2020
890
2020-2021
(2,104)
2021-2022
(7,806)
2022-2023
6,110
2023-2024
(8,756)
(b) Operating profit / (loss) of the FPC’s native forest operations were as follows:
Financial Year
Native Forest $000
2014-2015
(3,534)
2015-2016
(920)
2016-2017
2,079
2017-2018
12,236
2018-2019
(1,759)
2019-2020
(1,697)
2020-2021
(1,958)
2021-2022
(11,405)
2022-2023
(13,536)
2023-2024
(18,085)
(c) Operating profit / (loss) of the FPC’s plantation operations were as follows:
Financial Year
Plantations $000
2014-2015
8,164
2015-2016
7,330
2016-2017
5,084
2017-2018
5,161
2018-2019
1,201
2019-2020
5,366
2020-2021
3,936
2021-2022
4,779
2022-2023
20,246
2023-2024
15,217
(d) Operating profit / (loss) of the FPC’s Sandalwood operations were as follows:
Financial Year
Sandalwood $000
2014-2015
10,951
2015-2016
17,106
2016-2017
10,479
2017-2018
7,033
2018-2019
5,979
2019-2020
3,315
2020-2021
1,224
2021-2022
3,392
2022-2023
1,712
2023-2024
(2,158)
(e) Dividend paid to the WA Government were as follows:
Financial Year
Dividend paid $000
2014-2015
2,153
2015-2016
562
2016-2017
2,530
2017-2018
3,617
2018-2019
1,044
2019-2020
-
2020-2021
-
2021-2022
-
2022-2023
-
2023-2024
-
(2) Please refer to Part (3) below.
(3) Since its inception, the years FPC recorded an operating profit were as follows:
Financial Year
Total $000
2001-2002
15,468
2002-2003
2,862
2005-2006
20,116
2006-2007
23,691
2007-2008
13,987
2009-2010
2,694
2010-2011
5,014
2011-2012
12,152
2012-2013
4,557
2013-2014
4,778
2014-2015
8,962
2015-2016
16,954
2016-2017
10,379
2017-2018
18,498
2018-2019
32
2019-2020
890
2022-2023
6,110
(4) Please refer to Part (5) below.
(5) Since its inception, the years FPC paid a dividend to the WA Government or Treasury were as follows:
Financial Year
Dividend paid $000
2003-2004
1,557
2004-2005
1,470
2006-2007
2,700
2007-2008
2,783
2011-2012
1,500
2012-2013
3,310
2013-2014
2,094
2014-2015
2,153
2015-2016
562
2016-2017
2,530
2017-2018
3,617
2018-2019
1,044
(6) Since 2001, grants, subsidies and other payments totalled $35.2 million (as at 30 June 2024) broken down by:
Grants $1.7 million
Subsidies $16.2 million
Other Payments $17.3 million
Total $35.2 million
(7) Accumulated deficit of $40.2 million (as at 30 June 2024) relates to the net result from continuing operations after income tax since inception (2001).
(8) (a) Yes
(8) (b) The Commissioners’ assessment of going concern is based on five-year budgets, cashflow projections, financial forecasts and long-term business plans.
(8) (c) N/A
(9)(a) The FPC is authorised to enter into Production Contracts for the harvesting of sandalwood under the Forest Products Act 2000 .
(9)(b-c) See response to 9(a).
(10) Yes
(11) Specific contract terms and conditions, peculiar to each are commercial in confidence.
Generally, the contracts include conditions relating to:
• Management of safety;
• The harvesting services to be conducted;
• Engagement of workers and sub-contracting;
• Conflicts of Interest;
• Confidentiality;
• Management of work sites;
• Recording of volume harvested;
• Indemnities and insurance; and
• Compliance with FPC procedures, including specifications for sandalwood harvested, and seed dispersal.
(12) No.
(13) Contract terms and conditions are commercial in confidence.
(14) The FPC has been undertaking a thinning program within its sandalwood plantations. Timing for the sale of sandalwood from plantations is dependent on market conditions.
(15) The FPC does not currently have any plans to sell sandalwood from its plantations during the next ten years.
Financial Year
Total
$000
2014-2015
8,962
2015-2016
16,954
2016-2017
10,379
2017-2018
18,498
2018-2019
32
2019-2020
890
2020-2021
(2,104)
2021-2022
(7,806)
2022-2023
6,110
2023-2024
(8,756)
(b) Operating profit / (loss) of the FPC’s native forest operations were as follows:
Financial Year
Native Forest $000
2014-2015
(3,534)
2015-2016
(920)
2016-2017
2,079
2017-2018
12,236
2018-2019
(1,759)
2019-2020
(1,697)
2020-2021
(1,958)
2021-2022
(11,405)
2022-2023
(13,536)
2023-2024
(18,085)
(c) Operating profit / (loss) of the FPC’s plantation operations were as follows:
Financial Year
Plantations $000
2014-2015
8,164
2015-2016
7,330
2016-2017
5,084
2017-2018
5,161
2018-2019
1,201
2019-2020
5,366
2020-2021
3,936
2021-2022
4,779
2022-2023
20,246
2023-2024
15,217
(d) Operating profit / (loss) of the FPC’s Sandalwood operations were as follows:
Financial Year
Sandalwood $000
2014-2015
10,951
2015-2016
17,106
2016-2017
10,479
2017-2018
7,033
2018-2019
5,979
2019-2020
3,315
2020-2021
1,224
2021-2022
3,392
2022-2023
1,712
2023-2024
(2,158)
(e) Dividend paid to the WA Government were as follows:
Financial Year
Dividend paid $000
2014-2015
2,153
2015-2016
562
2016-2017
2,530
2017-2018
3,617
2018-2019
1,044
2019-2020
-
2020-2021
-
2021-2022
-
2022-2023
-
2023-2024
-
(2) Please refer to Part (3) below.
(3) Since its inception, the years FPC recorded an operating profit were as follows:
Financial Year
Total $000
2001-2002
15,468
2002-2003
2,862
2005-2006
20,116
2006-2007
23,691
2007-2008
13,987
2009-2010
2,694
2010-2011
5,014
2011-2012
12,152
2012-2013
4,557
2013-2014
4,778
2014-2015
8,962
2015-2016
16,954
2016-2017
10,379
2017-2018
18,498
2018-2019
32
2019-2020
890
2022-2023
6,110
(4) Please refer to Part (5) below.
(5) Since its inception, the years FPC paid a dividend to the WA Government or Treasury were as follows:
Financial Year
Dividend paid $000
2003-2004
1,557
2004-2005
1,470
2006-2007
2,700
2007-2008
2,783
2011-2012
1,500
2012-2013
3,310
2013-2014
2,094
2014-2015
2,153
2015-2016
562
2016-2017
2,530
2017-2018
3,617
2018-2019
1,044
(6) Since 2001, grants, subsidies and other payments totalled $35.2 million (as at 30 June 2024) broken down by:
Grants $1.7 million
Subsidies $16.2 million
Other Payments $17.3 million
Total $35.2 million
(7) Accumulated deficit of $40.2 million (as at 30 June 2024) relates to the net result from continuing operations after income tax since inception (2001).
(8) (a) Yes
(8) (b) The Commissioners’ assessment of going concern is based on five-year budgets, cashflow projections, financial forecasts and long-term business plans.
(8) (c) N/A
(9)(a) The FPC is authorised to enter into Production Contracts for the harvesting of sandalwood under the Forest Products Act 2000 .
(9)(b-c) See response to 9(a).
(10) Yes
(11) Specific contract terms and conditions, peculiar to each are commercial in confidence.
Generally, the contracts include conditions relating to:
• Management of safety;
• The harvesting services to be conducted;
• Engagement of workers and sub-contracting;
• Conflicts of Interest;
• Confidentiality;
• Management of work sites;
• Recording of volume harvested;
• Indemnities and insurance; and
• Compliance with FPC procedures, including specifications for sandalwood harvested, and seed dispersal.
(12) No.
(13) Contract terms and conditions are commercial in confidence.
(14) The FPC has been undertaking a thinning program within its sandalwood plantations. Timing for the sale of sandalwood from plantations is dependent on market conditions.
(15) The FPC does not currently have any plans to sell sandalwood from its plantations during the next ten years.
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