Question on Notice regarding the Investment Security Guarantee (ISG) offered to timber processors, questioning the justification, changes to the guarantee period, and legal binding nature.

AnsweredQoN 1905Legislative Council
Asked
2 April 2004
Portfolio
Agriculture, Forestry and Fisheries

QuestionView source ↗

(1) How does the Government justify commercially its decision to offer a so-called Investment Security Guarantee (ISG) which commits the State to paying up to $46 m to timber processors who have already been given contracts guaranteeing a ten-year supply of timber from State forests, if for any reason the State is unable or unwilling to continue the same level of supply after 10 years?
(2) Why did the Government recently change its plan to guarantee the same level of supply for a further ten years after the ten-year contract term, to a guarantee applying only to the eleventh year?
(3) In what form can the Government provide a guarantee relating to supply of native timber for a period longer than the 10-year life of Forest Management Plan which governs the supply of the resource in question?
(4) Will the guarantee be legally binding?

AnswerView source ↗

Answered
13 May 2004
Responded by
Minister for Agriculture, Forestry and Fisheries
Response time
41 days
2. The Investment Security Guarantees were reduced from 20-year to 11-year agreements on the request of the timber industry. 3. In the form given – i.e. the commitment to an agreed formula-based payment if for any reason a mill’s contracted supply of logs cannot be delivered. 4. Yes.
3. In the form given – i.e. the commitment to an agreed formula-based payment if for any reason a mill’s contracted supply of logs cannot be delivered. 4. Yes.
4. Yes.

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