Forest Products Industry

The Australian Forest Contractors Association has been placed into voluntary liquidation over a historical project debt owed to Forest and Wood Products Australia. Source: Timberbiz The Association says the decision follows an extended period of financial remediation, stakeholder consultation, and unsuccessful efforts to resolve a historical project-related liability and establish a viable long-term operating pathway for the Association. The Association says the “materially significant debt owed to FWPA, with no means of plan to repay” came to light at a Board meeting in October last year. In November the Board entered “good faith negotiations” with the FWPA to find a solution on repayment of the debt. However, the Board says that also in November, due to insufficient funds, it resolved to sell ForestFit, supplier agreements with administration contractors ceased and Board members took on some administrative tasks. The Board says consultation and feedback received from members and sponsors confirmed that, while there remained strong support for contractor representation and the issues AFCA has been advocating on, confidence in AFCA’s ability to continue effectively under its current structure had been significantly impacted by “historical legacy decisions and resulting actions”. Chairman Lloyd Martin said the feedback was that the damage to the credibility of AFCA, its effectiveness and its reputation “was irreparable”. He said major sponsors, who had been with the AFCA since the beginning, were beginning to question their involvement. And Mr Martin said around 30 per cent of the members surveyed had indicated they were considering withdrawing. In April AFCA received a legal demand for the money owed to FWPA. The Board concluded that voluntary liquidation represented the most responsible course of action to “transparently address the organisation’s liabilities and provide clarity for members, sponsors, and industry stakeholders”. The Board said that further information regarding the liquidation process would be communicated “as appropriate”. FWPA was contacted but declined to comment at this stage..

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