Tasmanian forest deal on the rocks

TONY EASTLEY: When the Prime Minister and the Tasmanian Premier signed a forestry agreement last year it appeared that an end was in sight to the protracted and bitter Tasmanian forestry debate.

This morning however the deal would appear to be in tatters.

Felicity Ogilvie reports from Hobart.

FELICITY OGILVIE: The timber company Ta Ann's announcement that it will cut up 40 jobs as a result of environmental groups lobbying against it has thrown the Tasmanian forest peace deal into disarray.

The joint Federal and State Government deal was supposed to resolve the debate about native forest logging in the state.

But with the Forest Industries Association pulling its support from the deal it looks to be on shaky ground.

It's up to politicians like the Federal Environment Minister Tony Burke to keep it alive.

TONY BURKE: Make no mistake - the conservation opportunity that we've all been talking about for a year has been there and been spoken about on the basis that a peace deal was on the table.

And the behaviour of certain conservation groups - and it's certainly not all of them - but the behaviour of groups such as Markets for Change has been appalling.

FELICITY OGILVIE: Politicians in Tasmania's Upper House aren't making it any easier to keep the deal alive. They've reacted by making a move that's left the peace deal as good as dead.

Most Upper House MPs are independents like Paul Harris and he's giving the State and Federal Governments this ultimatum.

PAUL HARRIS: That unless this eco terrorism stops overseas, this group of 12 MLCs is putting the governments on notice that we are deadly serious about not entertaining the prospect of locking up more of our forest into reserves.

FELICITY OGILVIE: Ta Ann's problems on the international markets started to emerge last year. A company which has been laying flooring at the London Olympics stopped buying timber products from Ta Ann after being told the wood came from high conservation value forest.

A senior manager at Ta Ann, Greg Hickey, says yesterday's job losses are the direct result of environmental groups lobbying markets in Japan.

GREG HICKEY: We've had about a 50 per cent drop in our market and it's primarily due to the incessant attacks by the NGOs.

FELICITY OGILVIE: Tim Birch is the chief executive of one of the groups that's been doing the lobbying - Markets for Change.

TIM BIRCH: It is absolutely clear that these forests - one the key reasons they are still being logged despite the agreement of there should be a moratorium in place - they are still being logged to supply Ta Ann with wood products.

And yet Ta Ann are advertising this wood product on the international market as being eco friendly and coming from plantations. That's simply not true.

FELICITY OGILVIE: Greg Hickey from Ta Ann says it's a misunderstanding.

GREG HICKEY: There isn't as we understand a word for regrowth in the Japanese culture. And so what they've tended to do is call that plantation.

But the story from us has been consistently that it is regrowth and plantation.

FELICITY OGILVIE: But if you're telling the Japanese buyers that it's regrowth but that's being translated as plantation, isn't that misinformation?

GREG HICKEY: No it's a misinterpretation of the term.

FELICITY OGILVIE: Greg Hickey says the 40 men and women who he had to sack yesterday were shocked and disappointed and Ta Ann has offered them counselling.

TONY EASTLEY: Felicity Ogilvie.